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☑ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017 |
☐ |
New York
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13-4922250
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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200 Vesey Street
New York, New York
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10285
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Shares (par value $0.20 per Share)
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New York Stock Exchange
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Large accelerated filer
☑
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Accelerated filer
☐
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Non-accelerated filer
☐
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Smaller reporting company
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Emerging growth company
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(Do not check if a smaller reporting company)
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Form 10-K Item Number |
Page | |||
PART I | ||||
1. | Business | |||
1 | ||||
2 | ||||
4 | ||||
5 | ||||
15 | ||||
16 | ||||
16 | ||||
1A. | Risk Factors | 16 | ||
1B. | Unresolved Staff Comments | 30 | ||
2. | Properties | 30 | ||
3. | Legal Proceedings | 31 | ||
4. | Mine Safety Disclosures | 32 | ||
PART II | ||||
5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 33 | ||
6. | Selected Financial Data | 35 | ||
7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) | 36 | ||
36 | ||||
39 | ||||
46 | ||||
55 | ||||
63 | ||||
65 | ||||
71 | ||||
74 | ||||
7A. | Quantitative and Qualitative Disclosures about Market Risk | 79 | ||
8. | Financial Statements and Supplementary Data | 79 | ||
Management’s Report on Internal Control Over Financial Reporting |
79 | |||
80 | ||||
82 | ||||
83 | ||||
88 | ||||
9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 139 | ||
9A. | Controls and Procedures | 139 | ||
9B. | Other Information | 139 |
·
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Charge card, credit card and other payment and financing products
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·
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Merchant acquisition and processing, servicing and settlement, and point-of-sale marketing and information products and services for merchants
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·
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Network services
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·
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Other fee services, including fraud prevention services and the design and operation of customer loyalty programs
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·
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Expense management products and services
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·
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Travel-related services
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·
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Stored value/prepaid products
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·
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Designing innovative products and features that appeal to our target customer base and meet their spending and borrowing needs
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·
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Using incentives to drive spending on our various card products and engender loyal Card Members, including our Membership Rewards
®
program, cash-back reward features and participation in loyalty programs sponsored by our cobrand and other partners
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·
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Providing exceptional customer care, digital and mobile services and an array of benefits and experiences across card products to address travel and other needs and increase Card Member engagement
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·
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Developing a wide range of partner relationships, including with other corporations and institutions that sponsor certain of our cards under cobrand arrangements
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·
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Independent Operator Arrangements, in which partners can be licensed to issue local currency cards in their countries and serve as the merchant acquirer and processor for local merchants
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·
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Network Card License Arrangements, in which partners can be licensed to issue American Express-branded cards primarily in countries where we have a proprietary card-issuing and/or merchant acquiring business
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·
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Joint Venture Arrangements, in which we join with a third party to establish a separate business to sign new merchants and issue American Express-branded cards
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·
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The features, value and quality of the products and services, including customer care, rewards programs, partnerships, benefits and digital and mobile services, and the costs associated with providing such features and services
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·
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The number, spending characteristics and credit performance of customers
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·
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The quantity, diversity and quality of the establishments where the cards can be used
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·
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The attractiveness of the value proposition to card issuers, merchant acquirers, cardholders and merchants (including the relative cost of using or accepting the products and services, and capabilities such as fraud prevention and data analytics)
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·
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The number and quality of other payment cards and other forms of payment available to customers
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·
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The success of marketing and promotional campaigns
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·
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Reputation and brand recognition
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·
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The speed of innovation and investment in systems, technologies, and product and service offerings
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·
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The nature and quality of expense management tools, electronic payment methods and data capture and reporting capabilities, particularly for business customers
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·
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The security of cardholder and merchant information
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DOUGLAS E. BUCKMINSTER —
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Group President, Global Consumer Services
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JEFFREY C. CAMPBELL —
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Executive Vice President and Chief Financial Officer
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L. KEVIN COX —
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Chief Human Resources Officer
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PAUL D. FABARA —
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President, Global Services Group
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MARC D. GORDON —
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Executive Vice President and Chief Information Officer
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MICHAEL J. O’NEILL —
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Executive Vice President, Corporate Affairs and Communications
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DENISE PICKETT —
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President, Global Risk, Banking & Compliance and Chief Risk Officer
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ELIZABETH RUTLEDGE —
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Chief Marketing Officer
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LAUREEN E. SEEGER —
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Executive Vice President and General Counsel
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STEPHEN J. SQUERI —
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Chairman and Chief Executive Officer
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ANRÉ WILLIAMS —
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Group President, Global Merchant and Network Services
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ITEM 5. |
(a) |
Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP. As of December 31, 2017, we had 22,262 common shareholders of record. You can find price and dividend information concerning our common stock in Note 27 to our “Consolidated Financial Statements.” For information on dividend restrictions, see “Dividends and Other Capital Distributions” under “Supervision and Regulation” and Note 23 to our “Consolidated Financial Statements.” You can find information on securities authorized for issuance under our equity compensation plans under the caption “Executive Compensation — Equity Compensation Plans” to be contained in our definitive 2018 proxy statement for our Annual Meeting of Shareholders, which is scheduled to be held on May 7, 2018. The information to be found under such caption is incorporated herein by reference. Our definitive 2018 proxy statement for our Annual Meeting of Shareholders is expected to be filed with the Securities and Exchange Commission (SEC) in March 2018 (and, in any event, not later than 120 days after the close of our most recently completed fiscal year).
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Year-end Data
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2012
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2013
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2014
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2015
|
2016
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2017
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||||||||||||||||||
American Express
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$
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100.00
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$
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159.84
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$
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165.70
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$
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125.57
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$
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136.34
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$
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185.70
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||||||||||||
S&P 500 Index
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$
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100.00
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$
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132.37
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$
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150.48
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$
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152.55
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$
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170.78
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$
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208.05
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||||||||||||
S&P Financial Index
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$
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100.00
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$
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135.59
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$
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156.17
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$
|
153.72
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$
|
188.69
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$
|
230.47
|
Total Number of Shares Purchased
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(c)
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Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
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|||||||||||||
October 1-31, 2017
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||||||||||||||||
Repurchase program
(a)
|
4,040,661
|
$
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91.78
|
4,040,661
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94,655,567
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|||||||||||
Employee transactions
(b)
|
―
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―
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N/A
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N/A
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||||||||||||
November 1-30, 2017
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||||||||||||||||
Repurchase program
(a)
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3,932,622
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$
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94.78
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3,932,622
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90,722,945
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|||||||||||
Employee transactions
(b)
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4,907
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$
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95.22
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N/A
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N/A
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|||||||||||
December 1-31, 2017
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||||||||||||||||
Repurchase program
(a)
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5,720,526
|
$
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98.79
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5,720,526
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85,002,419
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|||||||||||
Employee transactions
(b)
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―
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―
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N/A
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N/A
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||||||||||||
Total
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||||||||||||||||
Repurchase program
(a)
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13,693,809
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$
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95.57
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13,693,809
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85,002,419
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|||||||||||
Employee transactions
(b)
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4,907
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$
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95.22
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N/A
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N/A
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(a) |
On September 26, 2016, the Board of Directors authorized the repurchase of up to 150 million shares of common stock from time to time, subject to market conditions and the Federal Reserve’s non-objection to our capital plans. This authorization replaced the prior repurchase authorization and does not have an expiration date.
|
(b) |
Includes: (i) shares surrendered by holders of employee stock options who exercised options (granted under our incentive compensation plans) in satisfaction of the exercise price and/or tax withholding obligation of such holders and (ii) restricted shares withheld (under the terms of grants under our incentive compensation plans) to offset tax withholding obligations that occur upon vesting and release of restricted shares. Our incentive compensation plans provide that the value of the shares delivered or attested to, or withheld, be based on the price of our common stock on the date the relevant transaction occurs.
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(c) |
Share purchases under publicly announced programs are made pursuant to open market purchases or privately negotiated transactions (including employee benefit plans) as market conditions warrant and at prices we deem appropriate.
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2017
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2016
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2015
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2014
|
2013
|
||||||||||||||||
Operating Results
($ in Millions)
|
||||||||||||||||||||
Total revenues net of interest expense
|
$
|
33,471
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$
|
32,119
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$
|
32,818
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$
|
34,188
|
$
|
32,870
|
||||||||||
Provisions for losses
(a)
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2,759
|
2,026
|
1,988
|
2,044
|
1,832
|
|||||||||||||||
Expenses
(b)
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23,298
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21,997
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22,892
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23,153
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23,150
|
|||||||||||||||
Pretax income
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7,414
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8,096
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7,938
|
8,991
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7,888
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|||||||||||||||
Income tax provision
|
4,678
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2,688
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2,775
|
3,106
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2,529
|
|||||||||||||||
Net income
|
$
|
2,736
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$
|
5,408
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$
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5,163
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$
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5,885
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$
|
5,359
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||||||||||
Return on average equity
(c)
|
13.1
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%
|
26.0
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%
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24.0
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%
|
29.1
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%
|
27.8
|
%
|
||||||||||
Return on average assets
(c)
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1.6
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%
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3.4
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%
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3.3
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%
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3.8
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%
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3.5
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%
|
||||||||||
Balance Sheet
($ in Millions)
|
||||||||||||||||||||
Cash and cash equivalents
|
$
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32,927
|
$
|
25,208
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$
|
22,762
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$
|
22,288
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$
|
19,486
|
||||||||||
Card Member loans and receivables HFS
|
―
|
―
|
14,992
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―
|
―
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|||||||||||||||
Accounts receivable, net
|
56,689
|
50,073
|
46,695
|
47,000
|
47,185
|
|||||||||||||||
Loans, net
|
74,300
|
65,461
|
58,799
|
70,104
|
66,585
|
|||||||||||||||
Investment securities
|
3,159
|
3,157
|
3,759
|
4,431
|
5,016
|
|||||||||||||||
Total assets
|
181,159
|
158,893
|
161,184
|
159,103
|
153,375
|
|||||||||||||||
Customer deposits
|
64,452
|
53,042
|
54,997
|
44,171
|
41,763
|
|||||||||||||||
Travelers Cheques outstanding and other prepaid products
|
2,593
|
2,812
|
3,247
|
3,673
|
4,240
|
|||||||||||||||
Short-term borrowings
|
3,278
|
5,581
|
4,812
|
3,480
|
5,021
|
|||||||||||||||
Long-term debt
|
55,804
|
46,990
|
48,061
|
57,955
|
55,330
|
|||||||||||||||
Shareholders’ equity
|
$
|
18,227
|
$
|
20,501
|
$
|
20,673
|
$
|
20,673
|
$
|
19,496
|
||||||||||
Average shareholders' equity to average total assets ratio
|
12.4
|
%
|
13.1
|
%
|
13.5
|
%
|
13.1
|
%
|
12.6
|
%
|
||||||||||
Common Share Statistics
|
||||||||||||||||||||
Earnings per share:
|
||||||||||||||||||||
Net income attributable to common shareholders:
(d)
|
||||||||||||||||||||
Basic
|
$
|
2.98
|
$
|
5.67
|
$
|
5.07
|
$
|
5.58
|
$
|
4.91
|
||||||||||
Diluted
|
2.97
|
5.65
|
5.05
|
5.56
|
4.88
|
|||||||||||||||
Cash dividends declared per common share
|
1.34
|
1.22
|
1.13
|
1.01
|
0.89
|
|||||||||||||||
Dividend payout ratio
(e)
|
45.0
|
%
|
21.5
|
%
|
22.3
|
%
|
18.1
|
%
|
18.1
|
%
|
||||||||||
Book value per common share
|
19.38
|
20.93
|
19.71
|
20.21
|
18.32
|
|||||||||||||||
Market price per share:
|
||||||||||||||||||||
High
|
100.53
|
75.74
|
93.94
|
96.24
|
90.79
|
|||||||||||||||
Low
|
74.74
|
50.27
|
67.57
|
78.41
|
58.31
|
|||||||||||||||
Close
|
$
|
99.31
|
$
|
74.08
|
$
|
69.55
|
$
|
93.04
|
$
|
90.73
|
||||||||||
Average common shares outstanding
(millions)
:
|
||||||||||||||||||||
Basic
|
883
|
933
|
999
|
1,045
|
1,082
|
|||||||||||||||
Diluted
|
886
|
935
|
1,003
|
1,051
|
1,089
|
|||||||||||||||
Shares outstanding at period end
(millions)
|
859
|
904
|
969
|
1,023
|
1,064
|
|||||||||||||||
Other Statistics
|
||||||||||||||||||||
Number of employees at period end
(thousands)
:
|
||||||||||||||||||||
United States
|
20
|
21
|
21
|
22
|
26
|
|||||||||||||||
Outside the United States
|
35
|
35
|
34
|
32
|
37
|
|||||||||||||||
Total
|
55
|
56
|
55
|
54
|
63
|
|||||||||||||||
Number of shareholders of record
|
22,262
|
23,572
|
24,704
|
25,767
|
22,238
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, did not reflect provisions for Card Member loans and receivables related to our cobrand partnerships with JetBlue Airways Corporation (JetBlue) and Costco Wholesale Corporation (Costco) in the United States (the HFS portfolios).
|
(b) |
Beginning December 1, 2015 through to the sale completion dates, included the valuation allowance adjustment associated with the HFS portfolios.
|
(c) |
Return on average equity and return on average assets are calculated by dividing one-year period of net income by one-year average of total shareholders’ equity or total assets, respectively.
|
(d) |
Represents net income, less earnings allocated to participating share awards and dividends on preferred shares.
|
(e) |
Calculated on year’s dividends declared per common share as a percentage of the year’s net income available per common share.
|
• |
Discount revenue, our largest revenue source, represents fees generally charged to merchants for accepting our cards as payment for goods or services sold. The fees charged, or merchant discount, which is generally expressed as a percentage of the charge amount, varies with, among other factors, the industry in which the merchant does business, the charge amount and the merchant’s overall charge volume, the method of submission of charges, the timing and method of payment to the merchant and, in certain instances, the geographic scope for the related card acceptance agreement (e.g., domestic or global). In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for “non-swiped” card transactions or for transactions using cards issued outside the United States at merchants located in the United States;
|
• |
Interest on loans, principally represents interest income earned on outstanding balances;
|
• |
Net card fees, represent revenue earned from annual card membership fees, which varies based on the type of card and the number of cards for each account;
|
• |
Other fees and commissions, represent Card Member delinquency fees, foreign currency conversion fees charged to Card Members, loyalty coalition-related fees, travel commissions and fees, service fees and fees related to our Membership Rewards program; and
|
• |
Other revenue, represents revenues arising from contracts with partners of our Global Network Services (GNS) business (including commissions and signing fees), cross-border Card Member spending, insurance premiums, ancillary merchant-related fees, prepaid card and Travelers Cheque-related revenue, revenues related to the American Express Global Business Travel Joint Venture (the GBT JV) transition services agreement and earnings from equity method investments (including the GBT JV).
|
• |
A $2.6 billion tax charge related to the Tax Act.
|
• |
A $1.1 billion ($677 million after tax) gain on the sale of Card Member loans and receivables related to our cobrand partnership with Costco in the second quarter;
|
• |
$410 million ($266 million after tax) of net restructuring charges; and
|
• |
A $127 million ($79 million after tax) gain on the sale of Card Member loans and receivables related to our cobrand partnership with JetBlue in the first quarter.
|
• |
A $419 million ($335 million after tax) charge related to the Prepaid Services business, which was driven primarily by the impairment of goodwill and technology, and certain restructuring costs.
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages and per share amounts)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Total revenues net of interest expense
|
$
|
33,471
|
$
|
32,119
|
$
|
32,818
|
$
|
1,352
|
4
|
%
|
$
|
(699
|
)
|
(2
|
)%
|
|||||||||||||
Provisions for losses
|
2,759
|
2,026
|
1,988
|
733
|
36
|
38
|
2
|
|||||||||||||||||||||
Expenses
|
23,298
|
21,997
|
22,892
|
1,301
|
6
|
(895
|
)
|
(4
|
)
|
|||||||||||||||||||
Pretax income
|
7,414
|
8,096
|
7,938
|
(682
|
)
|
(8
|
)
|
158
|
2
|
|||||||||||||||||||
Income tax provision
|
4,678
|
2,688
|
2,775
|
1,990
|
74
|
(87
|
)
|
(3
|
)
|
|||||||||||||||||||
Net income
|
2,736
|
5,408
|
5,163
|
(2,672
|
)
|
(49
|
)
|
245
|
5
|
|||||||||||||||||||
Earnings per common share — diluted
(a)
|
$
|
2.97
|
$
|
5.65
|
$
|
5.05
|
$
|
(2.68
|
)
|
(47
|
)%
|
$
|
0.60
|
12
|
%
|
|||||||||||||
Return on average equity
(b)
|
13.1
|
%
|
26.0
|
%
|
24.0
|
%
|
||||||||||||||||||||||
Effective tax rate (ETR)
|
63.1
|
%
|
33.2
|
%
|
35.0
|
%
|
||||||||||||||||||||||
Impact of Tax Act charge on ETR
|
34.7
|
%
|
||||||||||||||||||||||||||
ETR, excluding the Tax Act charge
(c)
|
28.4
|
%
|
(a) |
Earnings per common share — diluted was reduced by the impact of (i) earnings allocated to participating share awards and other items of $21 million, $43 million and $38 million for the years ended December 31, 2017, 2016 and 2015, respectively, and (ii) dividends on preferred shares of $81 million, $80 million and $62 million for the years ended December 31, 2017, 2016 and 2015.
|
(b) |
Return on average equity (ROE) is computed by dividing (i) one-year period net income ($2.7 billion, $5.4 billion and $5.2 billion for 2017, 2016 and 2015, respectively) by (ii) one-year average total shareholders’ equity ($20.8 billion, $20.8 billion and $21.5 billion for 2017, 2016 and 2015, respectively).
|
(c) |
The effective tax rate for 2017 excluding the $2.6 billion charge related to the Tax Act is a non-GAAP measure. Management believes the effective tax rate excluding the impacts of the Tax Act is useful in evaluating the company’s tax rate in comparison with the prior-year periods. Refer to Note 21 of the “Consolidated Financial Statements” for additional information.
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Discount revenue
|
$
|
19,186
|
$
|
18,680
|
$
|
19,297
|
$
|
506
|
3
|
%
|
$
|
(617
|
)
|
(3
|
)%
|
|||||||||||||
Net card fees
|
3,090
|
2,886
|
2,700
|
204
|
7
|
186
|
7
|
|||||||||||||||||||||
Other fees and commissions
|
3,022
|
2,753
|
2,866
|
269
|
10
|
(113
|
)
|
(4
|
)
|
|||||||||||||||||||
Other
|
1,732
|
2,029
|
2,033
|
(297
|
)
|
(15
|
)
|
(4
|
)
|
―
|
||||||||||||||||||
Total non-interest revenues
|
27,030
|
26,348
|
26,896
|
682
|
3
|
(548
|
)
|
(2
|
)
|
|||||||||||||||||||
Total interest income
|
8,553
|
7,475
|
7,545
|
1,078
|
14
|
(70
|
)
|
(1
|
)
|
|||||||||||||||||||
Total interest expense
|
2,112
|
1,704
|
1,623
|
408
|
24
|
81
|
5
|
|||||||||||||||||||||
Net interest income
|
6,441
|
5,771
|
5,922
|
670
|
12
|
(151
|
)
|
(3
|
)
|
|||||||||||||||||||
Total revenues net of interest expense
|
$
|
33,471
|
$
|
32,119
|
$
|
32,818
|
$
|
1,352
|
4
|
%
|
$
|
(699
|
)
|
(2
|
)%
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Charge card
|
$
|
795
|
$
|
696
|
$
|
737
|
$
|
99
|
14
|
%
|
$
|
(41
|
)
|
(6
|
)%
|
|||||||||||||
Card Member loans
|
1,868
|
1,235
|
1,190
|
633
|
51
|
45
|
4
|
|||||||||||||||||||||
Other
|
96
|
95
|
61
|
1
|
1
|
34
|
56
|
|||||||||||||||||||||
Total provisions for losses
(a)
|
$
|
2,759
|
$
|
2,026
|
$
|
1,988
|
$
|
733
|
36
|
%
|
$
|
38
|
2
|
%
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, did not reflect the HFS portfolios.
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Marketing and promotion
|
$
|
3,217
|
$
|
3,650
|
$
|
3,109
|
$
|
(433
|
)
|
(12
|
)%
|
$
|
541
|
17
|
%
|
|||||||||||||
Card Member rewards
|
7,608
|
6,793
|
6,996
|
815
|
12
|
(203
|
)
|
(3
|
)
|
|||||||||||||||||||
Card Member services and other
|
1,439
|
1,133
|
1,018
|
306
|
27
|
115
|
11
|
|||||||||||||||||||||
Total marketing, promotion, rewards and Card Member services and other
|
12,264
|
11,576
|
11,123
|
688
|
6
|
453
|
4
|
|||||||||||||||||||||
Salaries and employee benefits
|
5,258
|
5,259
|
4,976
|
(1
|
)
|
―
|
283
|
6
|
||||||||||||||||||||
Other, net
(a)
|
5,776
|
5,162
|
6,793
|
614
|
12
|
(1,631
|
)
|
(24
|
)
|
|||||||||||||||||||
Total expenses
|
$
|
23,298
|
$
|
21,997
|
$
|
22,892
|
$
|
1,301
|
6
|
%
|
$
|
(895
|
)
|
(4
|
)%
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, included the valuation allowance adjustment associated with the HFS portfolios.
|
Change
|
Change
|
|||||||||||||||||||
Years Ended December 31,
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Card billed business:
(billions)
|
||||||||||||||||||||
United States
|
$
|
708.3
|
$
|
700.4
|
$
|
721.8
|
1
|
%
|
(3
|
)%
|
||||||||||
Outside the United States
|
376.9
|
337.1
|
317.9
|
12
|
6
|
|||||||||||||||
Worldwide
|
$
|
1,085.2
|
$
|
1,037.5
|
$
|
1,039.7
|
5
|
―
|
||||||||||||
Proprietary
|
$
|
900.6
|
$
|
863.8
|
$
|
875.3
|
4
|
%
|
(1
|
)%
|
||||||||||
Global Network Services
|
184.6
|
173.7
|
164.4
|
6
|
6
|
|||||||||||||||
Worldwide
|
$
|
1,085.2
|
$
|
1,037.5
|
$
|
1,039.7
|
5
|
―
|
||||||||||||
Total cards-in-force:
(millions)
|
||||||||||||||||||||
United States
|
50.0
|
47.5
|
57.6
|
5
|
(18
|
)
|
||||||||||||||
Outside the United States
|
62.8
|
62.4
|
60.2
|
1
|
4
|
|||||||||||||||
Worldwide
|
112.8
|
109.9
|
117.8
|
3
|
(7
|
)
|
||||||||||||||
Proprietary
|
64.6
|
61.3
|
70.4
|
5
|
(13
|
)
|
||||||||||||||
Global Network Services
|
48.2
|
48.6
|
47.4
|
(1
|
)
|
3
|
||||||||||||||
Worldwide
|
112.8
|
109.9
|
117.8
|
3
|
(7
|
)
|
||||||||||||||
Basic cards-in-force:
(millions)
|
||||||||||||||||||||
United States
|
39.4
|
37.4
|
44.8
|
5
|
(17
|
)
|
||||||||||||||
Outside the United States
|
52.2
|
51.7
|
49.5
|
1
|
4
|
|||||||||||||||
Worldwide
|
91.6
|
89.1
|
94.3
|
3
|
(6
|
)
|
||||||||||||||
Average basic Card Member spending:
(dollars)
(a)
|
||||||||||||||||||||
United States
|
$
|
20,317
|
$
|
18,808
|
$
|
18,066
|
8
|
4
|
||||||||||||
Outside the United States
|
$
|
14,277
|
$
|
13,073
|
$
|
12,971
|
9
|
1
|
||||||||||||
Worldwide Average
|
$
|
18,519
|
$
|
17,216
|
$
|
16,743
|
8
|
3
|
||||||||||||
Card Member loans:
(billions)
|
||||||||||||||||||||
United States
|
$
|
64.5
|
$
|
58.3
|
$
|
51.5
|
11
|
13
|
||||||||||||
Outside the United States
|
8.9
|
7.0
|
7.1
|
27
|
(1
|
)
|
||||||||||||||
Worldwide
|
$
|
73.4
|
$
|
65.3
|
$
|
58.6
|
12
|
11
|
||||||||||||
Average discount rate
|
2.43
|
%
|
2.45
|
%
|
2.46
|
%
|
||||||||||||||
Average fee per card
(dollars)
(a)
|
$
|
49
|
$
|
44
|
$
|
39
|
11
|
%
|
13
|
%
|
(a) |
Average basic Card Member spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees divided by average worldwide proprietary cards-in-force.
|
2017
|
2016
|
|||||||||
Percentage Increase (Decrease)
|
Percentage Increase (Decrease) Assuming No Changes in FX Rates
|
(a)
|
Percentage Increase (Decrease)
|
Percentage Increase (Decrease) Assuming No Changes in FX Rates
|
(a)
|
|||||
Worldwide
(b)
|
||||||||||
Total billed business
|
5
|
%
|
4
|
%
|
―
|
%
|
1
|
%
|
||
Proprietary billed business
|
4
|
4
|
(1)
|
(1)
|
||||||
GNS billed business
(c)
|
6
|
5
|
6
|
10
|
||||||
Airline-related volume
|
3
|
3
|
(4)
|
(3)
|
||||||
(8% of worldwide billed business for both 2017 and 2016)
|
||||||||||
United States
(b)
|
||||||||||
Billed business
|
1
|
(3)
|
||||||||
Proprietary consumer card billed business
(d)
|
(2)
|
(7)
|
||||||||
Proprietary small business and corporate services billed business
(e)
|
6
|
2
|
||||||||
T&E-related volume
|
||||||||||
(25% of U.S. billed business for both 2017 and 2016)
|
―
|
(3)
|
||||||||
Non-T&E-related volume
|
||||||||||
(75% of U.S. billed business for both 2017 and 2016)
|
1
|
(3)
|
||||||||
Airline-related volume
|
||||||||||
(7% of U.S. billed business for both 2017 and 2016)
|
―
|
(7)
|
||||||||
Outside the United States
(b)
|
||||||||||
Billed business
|
12
|
11
|
6
|
10
|
||||||
Japan, Asia Pacific & Australia (JAPA) billed business
|
13
|
12
|
14
|
14
|
||||||
Latin America & Canada (LACC) billed business
|
10
|
9
|
(6)
|
6
|
||||||
Europe, the Middle East & Africa (EMEA) billed business
|
12
|
10
|
2
|
8
|
||||||
Proprietary consumer card billed business
(c)
|
13
|
13
|
4
|
8
|
||||||
Proprietary small business and corporate services billed business
(e)
|
14
|
%
|
12
|
%
|
3
|
%
|
7
|
%
|
(a) |
The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current year apply to the corresponding prior year period against which such results are being compared).
|
(b) |
Captions in the table above not designated as “proprietary” or “GNS” include both proprietary and GNS data.
|
(c) |
Included in the ICNS segment.
|
(d) |
Included in the USCS segment.
|
(e) |
Included in the GCS segment.
|
As of or for the Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Worldwide Card Member loans
(a)
|
||||||||||||||||||||
Total loans
(billions)
|
$
|
73.4
|
$
|
65.3
|
$
|
58.6
|
12
|
%
|
11
|
%
|
||||||||||
Loss reserves:
|
||||||||||||||||||||
Beginning balance
|
1,223
|
1,028
|
1,201
|
19
|
(14
|
)
|
||||||||||||||
Provisions
(b)
|
1,868
|
1,235
|
1,190
|
51
|
4
|
|||||||||||||||
Net write-offs — principal only
(c)
|
(1,181
|
)
|
(930
|
)
|
(967
|
)
|
27
|
(4
|
)
|
|||||||||||
Net write-offs — interest and fees
(c)
|
(227
|
)
|
(175
|
)
|
(162
|
)
|
30
|
8
|
||||||||||||
Transfer of reserves on HFS loan portfolios
|
―
|
―
|
(224
|
)
|
―
|
#
|
||||||||||||||
Other
(d)
|
23
|
65
|
(10
|
)
|
(65
|
)
|
#
|
|||||||||||||
Ending balance
|
$
|
1,706
|
$
|
1,223
|
$
|
1,028
|
39
|
19
|
||||||||||||
Ending reserves — principal
|
$
|
1,622
|
$
|
1,160
|
$
|
975
|
40
|
19
|
||||||||||||
Ending reserves — interest and fees
|
$
|
84
|
$
|
63
|
$
|
53
|
33
|
19
|
||||||||||||
% of loans
|
2.3
|
%
|
1.9
|
%
|
1.8
|
%
|
||||||||||||||
% of past due
|
177
|
%
|
161
|
%
|
164
|
%
|
||||||||||||||
Average loans
(billions)
(a)
|
$
|
66.7
|
$
|
59.9
|
$
|
67.9
|
11
|
%
|
(12
|
)%
|
||||||||||
Net write-off rate — principal only
(e)
|
1.8
|
%
|
1.6
|
%
|
1.4
|
%
|
||||||||||||||
Net write-off rate — principal, interest and fees
(e)
|
2.1
|
%
|
1.8
|
%
|
1.7
|
%
|
||||||||||||||
30+ days past due as a % of total
(e)
|
1.3
|
%
|
1.2
|
%
|
1.1
|
%
|
||||||||||||||
Worldwide Card Member receivables
(a)
|
||||||||||||||||||||
Total receivables
(billions)
|
$
|
54.0
|
$
|
47.3
|
$
|
44.1
|
14
|
%
|
7
|
%
|
||||||||||
Loss reserves:
|
||||||||||||||||||||
Beginning balance
|
467
|
462
|
465
|
1
|
(1
|
)
|
||||||||||||||
Provisions
(b)
|
795
|
696
|
737
|
14
|
(6
|
)
|
||||||||||||||
Net write-offs
(c)
|
(736
|
)
|
(674
|
)
|
(713
|
)
|
9
|
(5
|
)
|
|||||||||||
Other
(f)
|
(5
|
)
|
(17
|
)
|
(27
|
)
|
(71
|
)
|
(37
|
)
|
||||||||||
Ending balance
|
$
|
521
|
$
|
467
|
$
|
462
|
12
|
%
|
1
|
%
|
||||||||||
% of receivables
|
1.0
|
%
|
1.0
|
%
|
1.0
|
%
|
||||||||||||||
Net write-off rate — principal only
(e)
|
1.6
|
%
|
1.5
|
%
|
1.8
|
%
|
||||||||||||||
Net write-off rate — principal and fees
(e)
|
1.7
|
%
|
1.8
|
%
|
2.0
|
%
|
||||||||||||||
30+ days past due as a % of total
(e)
|
1.4
|
%
|
1.4
|
%
|
1.5
|
%
|
||||||||||||||
Net loss ratio as a % of charge volume — GCP
|
0.10
|
%
|
0.09
|
%
|
0.09
|
%
|
||||||||||||||
90+ days past billing as a % of total — GCP
|
0.9
|
%
|
0.9
|
%
|
0.9
|
%
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, did not reflect the HFS portfolios.
|
(b) |
Reflects provisions for principal, interest and/or fees on Card Member loans and receivables. Refer to Table 3 footnote (a).
|
(c) |
Write-offs, less recoveries.
|
(d) |
2016 included reserves associated with Card Member loans reclassified from HFS to held for investment. Refer to Changes in Card Member loans reserve for losses under Note 4 to the “Consolidated Financial Statements” for additional information.
|
(e) |
We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because we consider uncollectible interest and/or fees in our reserves for credit losses, a net write-off rate including principal, interest and/or fees is also presented. The net write-off rates and 30+ days past due as a percentage of total for Card Member receivables relate to USCS, ICNS and Global Small Business Services (GSBS) Card Member receivables. The twelve months ended December 31, 2015 reflect the impact of a change in the timing of charge-offs for Card Member loans and receivables in certain modification programs from 180 days past due to 120 days past due.
|
(f) |
2015 included the impact of the transfer of the HFS receivables portfolio, which was not significant.
|
Years Ended December 31,
|
||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
|||||||||
Net interest income
|
$
|
6,441
|
$
|
5,771
|
$
|
5,922
|
||||||
Exclude:
|
||||||||||||
Interest expense not attributable to our Card Member loan portfolio
(a)
|
1,170
|
984
|
952
|
|||||||||
Interest income not attributable to our Card Member loan portfolio
(b)
|
(636
|
)
|
(403
|
)
|
(357
|
)
|
||||||
Adjusted net interest income
(c)
|
$
|
6,975
|
$
|
6,352
|
$
|
6,517
|
||||||
Average Card Member loans including HFS loan portfolios
(billions)
(d)
|
$
|
66.7
|
$
|
65.8
|
$
|
69.0
|
||||||
Net interest income divided by average Card Member loans
|
9.7
|
%
|
8.8
|
%
|
8.6
|
%
|
||||||
Net interest yield on average Card Member loans
(c)
|
10.5
|
%
|
9.6
|
%
|
9.4
|
%
|
(a) |
Primarily represents interest expense attributable to maintaining our corporate liquidity pool and funding Card Member receivables.
|
(b) |
Primarily represents interest income attributable to Other loans, interest-bearing deposits and our Travelers Cheque and other stored-value investment portfolio.
|
(c) |
Adjusted net interest income and net interest yield on average Card Member loans are non-GAAP measures. Refer to “Glossary of Selected Terminology” for the definitions of these terms. We believe adjusted net interest income is useful to investors because it represents the interest expense and interest income attributable to our Card Member loan portfolio and is a component of net interest yield on average Card Member loans, which provides a measure of profitability of our Card Member loan portfolio. Net interest yield on average Card Member loans reflects adjusted net interest income divided by average Card Member loans, computed on an annualized basis. Net interest income divided by average Card Member loans, computed on an annualized basis, a GAAP measure, includes elements of total interest income and total interest expense that are not attributable to the Card Member loan portfolio, and thus is not representative of net interest yield on average Card Member loans.
|
(d) |
Beginning December 1, 2015 through to the sale completion dates, for the purposes of the calculation of net interest yield on average Card Member loans, average Card Member loans included the HFS loan portfolios.
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Non-interest revenues
|
$
|
7,923
|
$
|
7,874
|
$
|
8,479
|
$
|
49
|
1
|
%
|
$
|
(605
|
)
|
(7
|
)%
|
|||||||||||||
Interest income
|
5,755
|
5,082
|
5,198
|
673
|
13
|
(116
|
)
|
(2
|
)
|
|||||||||||||||||||
Interest expense
|
742
|
536
|
488
|
206
|
38
|
48
|
10
|
|||||||||||||||||||||
Net interest income
|
5,013
|
4,546
|
4,710
|
467
|
10
|
(164
|
)
|
(3
|
)
|
|||||||||||||||||||
Total revenues net of interest expense
|
12,936
|
12,420
|
13,189
|
516
|
4
|
(769
|
)
|
(6
|
)
|
|||||||||||||||||||
Provisions for losses
|
1,630
|
1,065
|
1,064
|
565
|
53
|
1
|
―
|
|||||||||||||||||||||
Total revenues net of interest expense after provisions for losses
|
11,306
|
11,355
|
12,125
|
(49
|
)
|
―
|
(770
|
)
|
(6
|
)
|
||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
5,695
|
5,416
|
5,382
|
279
|
5
|
34
|
1
|
|||||||||||||||||||||
Salaries and employee benefits and other operating expenses
|
2,808
|
2,058
|
3,066
|
750
|
36
|
(1,008
|
)
|
(33
|
)
|
|||||||||||||||||||
Total expenses
|
8,503
|
7,474
|
8,448
|
1,029
|
14
|
(974
|
)
|
(12
|
)
|
|||||||||||||||||||
Pretax segment income
|
2,803
|
3,881
|
3,677
|
(1,078
|
)
|
(28
|
)
|
204
|
6
|
|||||||||||||||||||
Income tax provision
|
912
|
1,368
|
1,322
|
(456
|
)
|
(33
|
)
|
46
|
3
|
|||||||||||||||||||
Segment income
|
$
|
1,891
|
$
|
2,513
|
$
|
2,355
|
$
|
(622
|
)
|
(25
|
)%
|
$
|
158
|
7
|
%
|
|||||||||||||
Effective tax rate
|
32.5
|
%
|
35.2
|
%
|
36.0
|
%
|
As of or for the Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Card billed business
(billions)
|
$
|
337.0
|
$
|
345.3
|
$
|
370.1
|
(2
|
)%
|
(7
|
)%
|
||||||||||
Charge card billed business as a % of total
|
36.4
|
%
|
34.7
|
%
|
32.4
|
%
|
||||||||||||||
Total cards-in-force
|
34.9
|
32.7
|
40.7
|
7
|
(20
|
)
|
||||||||||||||
Basic cards-in-force
|
25.0
|
23.3
|
28.6
|
7
|
(19
|
)
|
||||||||||||||
Average basic Card Member spending
(dollars)
|
$
|
13,950
|
$
|
13,447
|
$
|
13,441
|
4
|
―
|
||||||||||||
Total segment assets
(billions)
|
$
|
94.2
|
$
|
87.4
|
$
|
92.7
|
8
|
(6
|
)
|
|||||||||||
Card Member loans:
(a)
|
||||||||||||||||||||
Total loans
(billions)
|
$
|
53.7
|
$
|
48.8
|
$
|
43.5
|
10
|
12
|
||||||||||||
Average loans
(billions)
|
$
|
48.9
|
$
|
44.4
|
$
|
51.1
|
10
|
%
|
(13
|
)%
|
||||||||||
Net write-off rate — principal only
(b)
|
1.8
|
%
|
1.5
|
%
|
1.4
|
%
|
||||||||||||||
Net write-off rate — principal, interest and fees
(b)
|
2.1
|
%
|
1.8
|
%
|
1.6
|
%
|
||||||||||||||
30+ days past due loans as a % of total
|
1.3
|
%
|
1.1
|
%
|
1.0
|
%
|
||||||||||||||
Calculation of Net Interest Yield on Average Card Member loans:
|
||||||||||||||||||||
Net interest income
|
$
|
5,013
|
$
|
4,546
|
$
|
4,710
|
||||||||||||||
Exclude:
|
||||||||||||||||||||
Interest expense not attributable to our Card Member loan portfolio
(c)
|
120
|
80
|
72
|
|||||||||||||||||
Interest income not attributable to our Card Member loan portfolio
(d)
|
(101
|
)
|
(24
|
)
|
(15
|
)
|
||||||||||||||
Adjusted net interest income
(e)
|
$
|
5,032
|
$
|
4,602
|
$
|
4,767
|
||||||||||||||
Average Card Member loans including HFS loan portfolios
(billions)
(f)
|
$
|
48.9
|
$
|
49.4
|
$
|
52.1
|
||||||||||||||
Net interest income divided by average Card Member loans
|
10.3
|
%
|
9.2
|
%
|
9.0
|
%
|
||||||||||||||
Net interest yield on average Card Member loans
(e)
|
10.3
|
%
|
9.3
|
%
|
9.2
|
%
|
||||||||||||||
Card Member receivables:
(a)
|
||||||||||||||||||||
Total receivables
(billions)
|
$
|
13.1
|
$
|
12.3
|
$
|
11.8
|
7
|
%
|
4
|
%
|
||||||||||
Net write-off rate — principal only
(b)
|
1.3
|
%
|
1.4
|
%
|
1.6
|
%
|
||||||||||||||
Net write-off rate — principal and fees
(b)
|
1.4
|
%
|
1.6
|
%
|
1.8
|
%
|
||||||||||||||
30+ days past due as a % of total
|
1.1
|
%
|
1.2
|
%
|
1.4
|
%
|
(a) |
Refer to Table 7 footnote (a).
|
(b) |
Refer to Table 7 footnote (e).
|
(c) |
Refer to Table 8 footnote (a).
|
(d) |
Refer to Table 8 footnote (b).
|
(e) |
Refer to Table 8 footnote (c).
|
(f) |
Refer to Table 8 footnote (d).
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Non-interest revenues
|
$
|
5,052
|
$
|
4,785
|
$
|
4,627
|
$
|
267
|
6
|
%
|
$
|
158
|
3
|
%
|
||||||||||||||
Interest income
|
1,029
|
922
|
945
|
107
|
12
|
(23
|
)
|
(2
|
)
|
|||||||||||||||||||
Interest expense
|
251
|
219
|
235
|
32
|
15
|
(16
|
)
|
(7
|
)
|
|||||||||||||||||||
Net interest income
|
778
|
703
|
710
|
75
|
11
|
(7
|
)
|
(1
|
)
|
|||||||||||||||||||
Total revenues net of interest expense
|
5,830
|
5,488
|
5,337
|
342
|
6
|
151
|
3
|
|||||||||||||||||||||
Provisions for losses
|
367
|
325
|
300
|
42
|
13
|
25
|
8
|
|||||||||||||||||||||
Total revenues net of interest expense after provisions for losses
|
5,463
|
5,163
|
5,037
|
300
|
6
|
126
|
3
|
|||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
2,341
|
2,177
|
1,980
|
164
|
8
|
197
|
10
|
|||||||||||||||||||||
Salaries and employee benefits and other operating expenses
|
2,029
|
2,168
|
2,153
|
(139
|
)
|
(6
|
)
|
15
|
1
|
|||||||||||||||||||
Total expenses
|
4,370
|
4,345
|
4,133
|
25
|
1
|
212
|
5
|
|||||||||||||||||||||
Pretax segment income
|
1,093
|
818
|
904
|
275
|
34
|
(86
|
)
|
(10
|
)
|
|||||||||||||||||||
Income tax provision
|
181
|
163
|
220
|
18
|
11
|
(57
|
)
|
(26
|
)
|
|||||||||||||||||||
Segment income
|
$
|
912
|
$
|
655
|
$
|
684
|
$
|
257
|
39
|
%
|
$
|
(29
|
)
|
(4
|
)%
|
|||||||||||||
Effective tax rate
|
16.6
|
%
|
19.9
|
%
|
24.3
|
%
|
As of or for the Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Card billed business
(billions)
|
||||||||||||||||||||
Proprietary
|
$
|
119.7
|
$
|
105.9
|
$
|
102.1
|
13
|
%
|
4
|
%
|
||||||||||
GNS
|
184.6
|
173.7
|
164.4
|
6
|
6
|
|||||||||||||||
Total
|
$
|
304.3
|
$
|
279.6
|
$
|
266.5
|
9
|
5
|
||||||||||||
Total cards-in-force
|
||||||||||||||||||||
Proprietary
|
15.7
|
15.0
|
14.6
|
5
|
3
|
|||||||||||||||
GNS
|
48.2
|
48.6
|
47.4
|
(1
|
)
|
3
|
||||||||||||||
Total
|
63.9
|
63.6
|
62.0
|
―
|
3
|
|||||||||||||||
Proprietary basic cards-in-force
|
10.8
|
10.3
|
9.9
|
5
|
4
|
|||||||||||||||
Average proprietary basic Card Member spending
(dollars)
|
$
|
11,225
|
$
|
10,386
|
$
|
10,308
|
8
|
1
|
||||||||||||
Total segment assets
(billions)
|
$
|
38.9
|
$
|
35.7
|
$
|
35.1
|
9
|
2
|
||||||||||||
Card Member loans:
(a)
|
||||||||||||||||||||
Total loans
(billions)
|
$
|
8.7
|
$
|
7.0
|
$
|
7.1
|
24
|
(1
|
)
|
|||||||||||
Average loans
(billions)
|
$
|
7.4
|
$
|
6.8
|
$
|
7.0
|
9
|
%
|
(3
|
)%
|
||||||||||
Net write-off rate ― principal only
(b)
|
2.1
|
%
|
2.0
|
%
|
1.9
|
%
|
||||||||||||||
Net write-off rate ― principal, interest and fees
(b)
|
2.5
|
%
|
2.5
|
%
|
2.4
|
%
|
||||||||||||||
30+ days past due loans as a % of total
|
1.4
|
%
|
1.6
|
%
|
1.6
|
%
|
||||||||||||||
Calculation of Net Interest Yield on Average Card Member Loans:
|
||||||||||||||||||||
Net interest income
|
$
|
778
|
$
|
703
|
$
|
710
|
||||||||||||||
Exclude:
|
||||||||||||||||||||
Interest expense not attributable to our Card Member loan portfolio
(c)
|
61
|
44
|
56
|
|||||||||||||||||
Interest income not attributable to our Card Member loan portfolio
(d)
|
(13
|
)
|
(7
|
)
|
(18
|
)
|
||||||||||||||
Adjusted net interest income
(e)
|
$
|
826
|
$
|
740
|
$
|
748
|
||||||||||||||
Average Card Member loans
(billions)
|
$
|
7.4
|
$
|
6.8
|
$
|
7.0
|
||||||||||||||
Net interest income divided by average Card Member loans
|
10.5
|
%
|
10.3
|
%
|
10.1
|
%
|
||||||||||||||
Net interest yield on average Card Member loans
(e)
|
11.1
|
%
|
10.9
|
%
|
10.6
|
%
|
||||||||||||||
Card Member receivables:
(a)
|
||||||||||||||||||||
Total receivables
(billions)
|
$
|
7.8
|
$
|
6.0
|
$
|
5.6
|
30
|
%
|
7
|
%
|
||||||||||
Net write-off rate ― principal only
(b)
|
2.0
|
%
|
2.0
|
%
|
2.1
|
%
|
||||||||||||||
Net write-off rate ― principal and fees
(b)
|
2.1
|
%
|
2.2
|
%
|
2.3
|
%
|
||||||||||||||
30+ days past due as a % of total
|
1.3
|
%
|
1.3
|
%
|
1.5
|
%
|
(a) |
Refer to Table 7 footnote (a).
|
(b) |
Refer to Table 7 footnote (e).
|
(c) |
Refer to Table 8 footnote (a).
|
(d) |
Refer to Table 8 footnote (b).
|
(e) |
Refer to Table 8 footnote (c).
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Non-interest revenues
|
$
|
9,463
|
$
|
9,007
|
$
|
8,930
|
$
|
456
|
5
|
%
|
$
|
77
|
1
|
%
|
||||||||||||||
Interest income
|
1,361
|
1,209
|
1,175
|
152
|
13
|
34
|
3
|
|||||||||||||||||||||
Interest expense
|
540
|
401
|
365
|
139
|
35
|
36
|
10
|
|||||||||||||||||||||
Net interest income
|
821
|
808
|
810
|
13
|
2
|
(2
|
)
|
―
|
||||||||||||||||||||
Total revenues net of interest expense
|
10,284
|
9,815
|
9,740
|
469
|
5
|
75
|
1
|
|||||||||||||||||||||
Provisions for losses
|
744
|
604
|
588
|
140
|
23
|
16
|
3
|
|||||||||||||||||||||
Total revenues net of interest expense after provisions for losses
|
9,540
|
9,211
|
9,152
|
329
|
4
|
59
|
1
|
|||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
3,724
|
3,398
|
3,142
|
326
|
10
|
256
|
8
|
|||||||||||||||||||||
Salaries and employee benefits and other operating expenses
|
2,817
|
2,868
|
2,846
|
(51
|
)
|
(2
|
)
|
22
|
1
|
|||||||||||||||||||
Total expenses
|
6,541
|
6,266
|
5,988
|
275
|
4
|
278
|
5
|
|||||||||||||||||||||
Pretax segment income
|
2,999
|
2,945
|
3,164
|
54
|
2
|
(219
|
)
|
(7
|
)
|
|||||||||||||||||||
Income tax provision
|
972
|
1,036
|
1,142
|
(64
|
)
|
(6
|
)
|
(106
|
)
|
(9
|
)
|
|||||||||||||||||
Segment income
|
$
|
2,027
|
$
|
1,909
|
$
|
2,022
|
$
|
118
|
6
|
%
|
$
|
(113
|
)
|
(6
|
)%
|
|||||||||||||
Effective tax rate
|
32.4
|
%
|
35.2
|
%
|
36.1
|
%
|
As of or for the Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Card billed business
(billions)
|
$
|
438.1
|
$
|
408.0
|
$
|
398.6
|
7
|
%
|
2
|
%
|
||||||||||
Total cards-in-force
|
14.0
|
13.6
|
15.1
|
3
|
(10
|
)
|
||||||||||||||
Basic cards-in-force
|
14.0
|
13.6
|
15.1
|
3
|
(10
|
)
|
||||||||||||||
Average basic Card Member spending
(dollars)
|
$
|
31,729
|
$
|
28,515
|
$
|
26,860
|
11
|
6
|
||||||||||||
Total segment assets
(billions)
|
$
|
52.6
|
$
|
46.5
|
$
|
45.1
|
13
|
3
|
||||||||||||
Card Member loans
(billions)
|
$
|
11.1
|
$
|
9.5
|
$
|
8.0
|
17
|
19
|
||||||||||||
Card Member receivables
(billions)
|
$
|
33.1
|
$
|
29.0
|
$
|
26.7
|
14
|
9
|
||||||||||||
Card Member loans:
(a)
|
||||||||||||||||||||
Total loans - GSBS
(billions)
|
$
|
11.0
|
$
|
9.5
|
$
|
8.0
|
16
|
19
|
||||||||||||
Average loans - GSBS
(billions)
|
$
|
10.3
|
$
|
8.6
|
$
|
9.7
|
20
|
%
|
(11
|
)%
|
||||||||||
Net write-off rate (principal only) - GSBS
(b)
|
1.6
|
%
|
1.4
|
%
|
1.3
|
%
|
||||||||||||||
Net write-off rate (principal, interest and fees) - GSBS
(b)
|
1.9
|
%
|
1.7
|
%
|
1.5
|
%
|
||||||||||||||
30+ days past due as a % of total - GSBS
|
1.2
|
%
|
1.1
|
%
|
1.1
|
%
|
||||||||||||||
Calculation of Net Interest Yield on Average Card Member Loans:
|
||||||||||||||||||||
Net interest income
|
$
|
821
|
$
|
809
|
$
|
810
|
||||||||||||||
Exclude:
|
||||||||||||||||||||
Interest expense not attributable to our Card Member loan portfolio
(c)
|
409
|
312
|
286
|
|||||||||||||||||
Interest income not attributable to our Card Member loan portfolio
(d)
|
(113
|
)
|
(111
|
)
|
(94
|
)
|
||||||||||||||
Adjusted net interest income
(e)
|
$
|
1,117
|
$
|
1,010
|
$
|
1,002
|
||||||||||||||
Average Card Member loans including HFS loan portfolios
(billions)
(f)
|
$
|
10.3
|
$
|
9.7
|
$
|
9.9
|
||||||||||||||
Net interest income divided by average Card Member loans
|
8.0
|
%
|
8.3
|
%
|
8.2
|
%
|
||||||||||||||
Net interest yield on average Card Member loans
(e)
|
10.8
|
%
|
10.4
|
%
|
10.1
|
%
|
||||||||||||||
Card Member receivables:
(a)
|
||||||||||||||||||||
Total receivables - GCP
(billions)
|
$
|
17.0
|
$
|
14.8
|
$
|
13.8
|
15
|
%
|
7
|
%
|
||||||||||
90 days past billing as a % of total - GCP
(g)
|
0.9
|
%
|
0.9
|
%
|
0.9
|
%
|
||||||||||||||
Net loss ratio (as a % of charge volume) - GCP
|
0.10
|
%
|
0.09
|
%
|
0.09
|
%
|
||||||||||||||
Total receivables - GSBS
(billions)
|
$
|
16.1
|
$
|
14.3
|
$
|
12.9
|
13
|
%
|
11
|
%
|
||||||||||
Net write-off rate (principal only) - GSBS
(b)
|
1.6
|
%
|
1.5
|
%
|
1.8
|
%
|
||||||||||||||
Net write-off rate (principal, interest and fees) - GSBS
(b)
|
1.8
|
%
|
1.7
|
%
|
2.1
|
%
|
||||||||||||||
30+ days past due as a % of total - GSBS
|
1.6
|
%
|
1.6
|
%
|
1.7
|
%
|
(a) |
Refer to Table 7 footnote (a).
|
(b) |
Refer to Table 7 footnote (e).
|
(c) |
Refer to Table 8 footnote (a).
|
(d) |
Refer to Table 8 footnote (b).
|
(e) |
Refer to Table 8 footnote (c).
|
(f) |
Refer to Table 8 footnote (d).
|
(g) |
For GCP Card Member receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes.
|
Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Non-interest revenues
|
$
|
4,333
|
$
|
4,235
|
$
|
4,471
|
$
|
98
|
2
|
%
|
$
|
(236
|
)
|
(5
|
)%
|
|||||||||||||
Interest income
|
1
|
1
|
1
|
―
|
―
|
―
|
―
|
|||||||||||||||||||||
Interest expense
|
(262
|
)
|
(237
|
)
|
(211
|
)
|
(25
|
)
|
11
|
(26
|
)
|
12
|
||||||||||||||||
Net interest income
|
263
|
238
|
212
|
25
|
11
|
26
|
12
|
|||||||||||||||||||||
Total revenues net of interest expense
|
4,596
|
4,473
|
4,683
|
123
|
3
|
(210
|
)
|
(4
|
)
|
|||||||||||||||||||
Provisions for losses
|
15
|
25
|
31
|
(10
|
)
|
(40
|
)
|
(6
|
)
|
(19
|
)
|
|||||||||||||||||
Total revenues net of interest expense after provisions for losses
|
4,581
|
4,448
|
4,652
|
133
|
3
|
(204
|
)
|
(4
|
)
|
|||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
182
|
232
|
294
|
(50
|
)
|
(22
|
)
|
(62
|
)
|
(21
|
)
|
|||||||||||||||||
Salaries and employee benefits and other operating expenses
|
2,010
|
1,921
|
1,977
|
89
|
5
|
(56
|
)
|
(3
|
)
|
|||||||||||||||||||
Total expenses
|
2,192
|
2,153
|
2,271
|
39
|
2
|
(118
|
)
|
(5
|
)
|
|||||||||||||||||||
Pretax segment income
|
2,389
|
2,295
|
2,381
|
94
|
4
|
(86
|
)
|
(4
|
)
|
|||||||||||||||||||
Income tax provision
|
815
|
837
|
882
|
(22
|
)
|
(3
|
)
|
(45
|
)
|
(5
|
)
|
|||||||||||||||||
Segment income
|
$
|
1,574
|
$
|
1,458
|
$
|
1,499
|
$
|
116
|
8
|
%
|
$
|
(41
|
)
|
(3
|
)%
|
|||||||||||||
Effective tax rate
|
34.1
|
%
|
36.5
|
%
|
37.0
|
%
|
As of or for the Years Ended December 31,
|
Change
|
Change
|
||||||||||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2015
|
2017 vs. 2016
|
2016 vs. 2015
|
|||||||||||||||
Loyalty Coalition revenue
|
$
|
453
|
$
|
410
|
$
|
378
|
10
|
%
|
8
|
%
|
||||||||||
Average discount rate
|
2.43
|
%
|
2.45
|
%
|
2.46
|
%
|
||||||||||||||
Total segment assets
(billions)
|
$
|
29.0
|
$
|
24.3
|
$
|
23.5
|
19
|
%
|
3
|
%
|
• |
A solid and flexible equity capital profile;
|
• |
A broad, deep and diverse set of funding sources to finance our assets and meet operating requirements; and
|
• |
Liquidity programs that enable us to continuously meet expected future financing obligations and business requirements for at least a twelve-month period, even in the event we are unable to continue to raise new funds under our traditional funding programs during a substantial weakening in economic conditions.
|
Basel III Standards 2017
(a)
|
Ratios as of December 31, 2017
|
||||||
Risk-Based Capital
|
|||||||
Common Equity Tier 1
|
5.8
|
%
|
|||||
American Express Company
|
9.0
|
%
|
|||||
American Express Centurion Bank
|
12.7
|
||||||
American Express Bank, FSB
|
12.9
|
||||||
Tier 1
|
7.3
|
||||||
American Express Company
|
10.1
|
||||||
American Express Centurion Bank
|
12.7
|
||||||
American Express Bank, FSB
|
12.9
|
||||||
Total
|
9.3
|
||||||
American Express Company
|
11.8
|
||||||
American Express Centurion Bank
|
14.0
|
||||||
American Express Bank, FSB
|
14.2
|
||||||
Tier 1 Leverage
|
4.0
|
||||||
American Express Company
|
8.6
|
||||||
American Express Centurion Bank
|
10.2
|
||||||
American Express Bank, FSB
|
11.7
|
||||||
Supplementary Leverage Ratio
(b)
|
3.0
|
%
|
|||||
American Express Company
|
7.4
|
||||||
American Express Centurion Bank
|
8.1
|
||||||
American Express Bank, FSB
|
9.7
|
%
|
(a) |
Transitional Basel III minimum capital requirement and additional capital conservation buffer as defined by the Federal Reserve for calendar year 2017 for advanced approaches institutions.
|
(b) |
The minimum supplementary leverage ratio (SLR) requirement of 3 percent is effective January 1, 2018.
|
American Express Company
($ in Billions)
|
December 31,
2017
|
|||
Risk-Based Capital
|
||||
Common Equity Tier 1
|
$
|
13.2
|
||
Tier 1 Capital
|
14.7
|
|||
Tier 2 Capital
(a)
|
2.4
|
|||
Total Capital
|
17.1
|
|||
Risk-Weighted Assets
|
145.9
|
|||
Average Total Assets to calculate the Tier 1 Leverage Ratio
|
171.2
|
|||
Total Leverage Exposure to calculate SLR
|
$
|
198.8
|
(a) |
Tier 2 capital is the sum of the allowance for loan and receivable losses (limited to 1.25 percent of risk-weighted assets) and $600 million of subordinated notes adjusted for capital held by insurance subsidiaries.
|
($ in Billions)
|
December 31,
2017
|
|||
Estimated Common Equity Tier 1 Ratio under Fully Phased-In Basel III
(a)
|
8.8
|
%
|
||
Estimated Tier 1 Capital Ratio under Fully Phased-In Basel III
(a)
|
9.9
|
|||
Estimated Tier 1 Leverage Ratio under Fully Phased-In Basel III
(b)
|
8.5
|
|||
Estimated Supplementary Leverage Ratio under Fully Phased-In Basel III
(b)
|
7.3
|
%
|
||
Estimated Risk-Weighted Assets under Fully Phased-In Basel III
(c)
|
$
|
146.7
|
||
Estimated Average Total Assets to calculate the Tier 1 Leverage Ratio
(b)
|
171.0
|
|||
Estimated Total Leverage Exposure to calculate SLR under Fully Phased-In Basel III
(d)
|
$
|
198.7
|
(a) |
The Fully Phased-in Basel III Common Equity Tier 1 and Tier 1 risk-based capital ratios, non-GAAP measures, are calculated as Common Equity Tier 1 or Tier 1 capital under Fully Phased-in Basel III rules, as applicable, divided by risk-weighted assets under Fully Phased-in Basel III rules. Refer to Table 20 for a reconciliation of Common Equity Tier 1 and Tier 1 capital under Fully Phased-in Basel III rules to Common Equity Tier 1 and Tier 1 capital under Transitional Basel III rules.
|
(b) |
The Fully Phased-in Basel III Tier 1 and SLRs, non-GAAP measures, are calculated by dividing Fully Phased-in Basel III Tier 1 capital by our average total assets and Fully Phased-in total leverage exposure for SLR purposes under Fully Phased-in Basel III, respectively.
|
(c) |
Estimated Fully Phased-in Basel III risk-weighted assets, a non-GAAP measure, reflect our Basel III risk-weighted assets, with all transition provisions fully phased in. This includes incremental risk weighting applied to deferred tax assets and significant investments in unconsolidated financial institutions, as well as exposures to past due accounts, equities and sovereigns.
|
(d) |
Estimated Fully Phased-in Basel III Leverage Exposure, a non-GAAP measure, reflects average total consolidated assets with adjustments for Tier 1 capital deductions on a fully phased-in basis, off-balance sheet derivatives, undrawn conditionally and unconditionally cancellable commitments and other off-balance sheet liabilities.
|
(Billions)
|
CET1
|
Tier 1
|
||||||
Risk-Based Capital under Transitional Basel III
|
$
|
13.2
|
$
|
14.7
|
||||
Adjustments related to:
|
||||||||
AOCI
|
(0.1
|
)
|
(0.1
|
)
|
||||
Transition provisions for intangible assets
|
(0.2
|
)
|
(0.2
|
)
|
||||
Estimated CET1 and Tier 1 Risk-Based Capital under Fully Phased-in Basel III
|
$
|
12.9
|
$
|
14.4
|
(Billions)
|
2017
|
2016
|
||||||
Short-term borrowings
|
$
|
3.3
|
$
|
5.6
|
||||
Long-term debt
|
55.8
|
47.0
|
||||||
Total debt
|
59.1
|
52.6
|
||||||
Customer deposits
|
64.5
|
53.0
|
||||||
Total debt and customer deposits
|
$
|
123.6
|
$
|
105.6
|
Credit Agency
|
American Express Entity
|
Short-Term Ratings
|
Long-Term Ratings
|
Outlook
|
||||
DBRS
|
|
All rated entities
|
R-1 (middle)
|
A (high)
|
Stable
|
|||
Fitch
|
|
All rated entities
|
F1
|
A
|
Stable
|
|||
Moody’s
|
|
TRS and rated operating subsidiaries
(a)
|
Prime 1
|
A2
|
Stable
|
|||
Moody's
|
|
American Express Company
|
Prime 2
|
A3
|
Stable
|
|||
S&P
|
TRS
(a)
|
N/A
|
A-
|
Stable
|
||||
S&P
|
|
Other rated operating subsidiaries
|
A-2
|
A-
|
Stable
|
|||
S&P
|
|
American Express Company
|
A-2
|
BBB+
|
Stable
|
(a) |
American Express Travel Related Services Company, Inc.
|
(Billions)
|
2017
|
|||
American Express Company:
|
||||
Fixed Rate Senior Notes (weighted-average coupon of 2.58%)
|
$
|
5.0
|
||
Floating Rate Senior Notes (3-month LIBOR plus 45 basis points)
|
0.9
|
|||
American Express Credit Corporation:
|
||||
Fixed Rate Senior Notes (weighted-average coupon of 2.56%)
|
7.3
|
|||
Floating Rate Senior Notes (3-month LIBOR plus 45 basis points)
|
1.2
|
|||
American Express Credit Account Master Trust:
|
||||
Fixed Rate Class A Certificates (weighted-average coupon of 1.90%)
|
8.1
|
|||
Fixed Rate Class B Certificates (weighted-average coupon of 2.21%)
|
0.2
|
|||
Floating Rate Class A Certificates (1-month LIBOR plus 33 basis points)
|
1.8
|
|||
Floating Rate Class B Certificates (1-month LIBOR plus 41 basis points)
|
-
|
|||
Total
|
$
|
24.5
|
|
Maintaining diversified funding sources (refer to the “Funding Strategy” section for more details);
|
|
Maintaining unencumbered liquid assets and off-balance sheet liquidity sources;
|
|
Projecting cash inflows and outflows under a variety of economic and market scenarios;
|
|
Establishing clear objectives for liquidity risk management, including compliance with regulatory requirements; and
|
|
Incorporating liquidity risk management as appropriate into our capital adequacy framework.
|
(Billions)
|
2017
|
2016
|
2015
|
|||||||||
Total cash provided by (used in):
|
||||||||||||
Operating activities
|
$
|
13.5
|
$
|
8.3
|
$
|
10.7
|
||||||
Investing activities
|
(18.2
|
)
|
1.9
|
(8.2
|
)
|
|||||||
Financing activities
|
12.2
|
(7.6
|
)
|
(1.8
|
)
|
|||||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
0.2
|
(0.2
|
)
|
(0.2
|
)
|
|||||||
Net increase in cash and cash equivalents
|
$
|
7.7
|
$
|
2.4
|
$
|
0.5
|
Payments due by year
(a)
|
||||||||||||||||||||
(Millions)
|
2018
|
2019-2020
|
2021-2022
|
2023 and thereafter
|
Total
|
|||||||||||||||
Long-term debt
|
$
|
11,934
|
$
|
28,926
|
$
|
10,527
|
$
|
5,535
|
$
|
56,922
|
||||||||||
Interest payments on long-term debt
(b)
|
1,195
|
1,532
|
691
|
1,545
|
4,963
|
|||||||||||||||
Certificates of deposit
|
5,256
|
8,278
|
3,460
|
―
|
16,994
|
|||||||||||||||
Other long-term liabilities
(c) (d)
|
340
|
112
|
13
|
21
|
486
|
|||||||||||||||
Operating lease obligations
|
131
|
222
|
129
|
831
|
1,313
|
|||||||||||||||
Purchase obligations
(e)
|
454
|
294
|
141
|
7
|
896
|
|||||||||||||||
Deemed repatriation tax
(f)
|
8
|
286
|
268
|
1,141
|
1,703
|
|||||||||||||||
Total
|
$
|
19,318
|
$
|
39,650
|
$
|
15,229
|
$
|
9,080
|
$
|
83,277
|
(a) |
The table above excludes approximately $0.8 billion of tax liabilities related to the uncertainty in income taxes as inherent complexities and the number of tax years currently open for examination in multiple jurisdictions do not permit reasonable estimates of payments, if any, to be made over a range of years. Refer to Note 21 to the “Consolidated Financial Statements” for additional information.
|
(b) |
Estimated interest payments were calculated using the effective interest rates as of December 31, 2017, and includes the effect of existing interest rate swaps. Actual cash flows may differ from estimated payments.
|
(c) |
As of December 31, 2017, there were no minimum required contributions, and no contributions are currently planned, for the U.S. American Express Retirement Plan. For the U.S. American Express Retirement Restoration Plan and non-U.S. defined benefit pension and postretirement benefit plans, contributions in 2017 are anticipated to be approximately $48 million, and this amount has been included within other long-term liabilities. Remaining obligations under defined benefit pension and postretirement benefit plans aggregating $578 million have not been included in the table above as the timing of such obligations is not determinable. Additionally, other long-term liabilities do not include $7.8 billion of Membership Rewards liabilities, which are not considered long-term liabilities as Card Members in good standing can redeem points immediately, without restrictions, and because the timing of point redemption is not determinable.
|
(d) |
As of December 31, 2017, we had committed to provide funding related to certain tax credit investments resulting in a $373 million unfunded commitment included in other long-term liabilities. In addition to this amount, there was a further $66 million of contractual off-balance sheet obligations that have not been included in the table above as the timing of such obligations is not determinable. Refer to Note 7 to the “Consolidated Financial Statements” for additional information.
|
(e) |
The purchase obligation amounts represent either the early termination fees or non-cancelable minimum contractual obligations, as applicable, by period under contracts that were in effect as of December 31, 2017.
|
(f) |
Represents our estimated obligation under the Tax Act to pay the deemed repatriation tax on certain non-US earnings over eight years, which has been calculated on a provisional basis. Refer to Note 21 to the “Consolidated Financial Statements” for additional information.
|
|
Interest rate risk due to changes in the relationship between interest rates on our assets (such as loans, receivables and investment securities) and our interest rates on our liabilities (such as debt and deposits); and
|
|
Foreign exchange risk related to transactions, funding, investments and earnings in currencies other than the U.S. dollar.
|
|
our ability to grow in the future, which will depend in part on the following: revenues growing consistently with current expectations, which could be impacted by, among other things, the factors identified in the subsequent bullet; credit performance remaining consistent with current expectations; the impact of any future contingencies, including, but not limited to, litigation-related settlements, judgments or expenses, the imposition of fines or civil money penalties, an increase in Card Member reimbursements, restructurings, impairments and changes in reserves; the ability to continue to realize benefits from restructuring actions and manage operating expense growth; the amount we spend on Card Member engagement and our ability to drive growth from such investments; changes in interest rates beyond current expectations (including the impact of hedge ineffectiveness and deposit rate increases); a greater impact from certain cobrand agreements than expected, which could be affected by volumes and Card Member engagement; the impact of regulation and litigation, which could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with partners, merchants and Card Members; our tax rate remaining in line with current expectations, which could be impacted by, among other things, changes in interpretations and assumptions we have made and actions we may take as a result of the Tax Act, our geographic mix of income, further changes in tax laws and regulation, unfavorable tax audits and other unanticipated tax items; and the impact of accounting changes and reclassifications;
|
|
our ability to grow revenues net of interest expense and maintain billings momentum, which could be impacted by, among other things, weakening economic conditions in the United States or internationally, a decline in consumer confidence impacting the willingness and ability of Card Members to sustain and grow spending, continued growth of Card Member loans, a greater erosion of the average discount rate than expected, the strengthening of the U.S. dollar, more cautious spending by large and global corporate Card Members, the willingness of Card Members to pay higher card fees, lower spending on new cards acquired than estimated; and will depend on factors such as our success in addressing competitive pressures and implementing our strategies and business initiatives, including growing profitable spending from existing and new Card Members, increasing penetration among middle market and small business clients, expanding our international footprint and increasing merchant acceptance;
|
|
changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may impact the prices we charge merchants that accept our cards, competition for cobrand relationships, competition from new and non-traditional competitors and the success of marketing, promotion or rewards programs;
|
|
the erosion of the average discount rate by a greater amount than anticipated, including as a result of changes in the mix of spending by location and industry, merchant negotiations (including merchant incentives, concessions and volume-related pricing discounts), competition, pricing regulation (including regulation of competitors’ interchange rates in the European Union and elsewhere), a greater shift of existing merchants into the OptBlue program and other factors;
|
|
our delinquency and write-off rates and growth of provisions for losses being higher than current expectations, which will depend in part on changes in the level of loan balances and delinquencies, mix of loan balances, loans and receivables related to new Card Members and other borrowers performing as expected, credit performance of new and enhanced lending products, unemployment rates, the volume of bankruptcies and recoveries of previously written-off loans;
|
|
our ability to continue to grow loans faster than the industry, which may be affected by increasing competition, brand perceptions and reputation, our ability to manage risk in a growing Card Member loan portfolio, and the behavior of Card Members and their actual spending and borrowing patterns, which in turn may be driven by our ability to issue new and enhanced card products, offer attractive non-card lending products, capture a greater share of existing Card Members’ spending and borrowings, reduce Card Member attrition and attract new customers;
|
|
our net interest yield on average Card Member loans not remaining consistent with current levels, which will be influenced by, among other things, interest rates, changes in consumer behavior that affect loan balances, such as paydown rates, Card Member acquisition strategy, product mix, cost of funds, credit actions, including line size and other adjustments to credit availability, potential pricing changes and deposit rates, which could be impacted by, among other things, changes in benchmark interest rates, competitive pressure and regulatory constraints;
|
|
rewards expense and cost of Card Member services growing inconsistently from expectations, which will depend in part on Card Member behavior as it relates to their spending patterns, including the level of spend in bonus categories, and the redemption of rewards and offers, as well as the degree of interest of Card Members in the value proposition we offer; increasing competition, which could result in greater rewards offerings; our ability to enhance card products and services to make them attractive to Card Members; and the amount we spend on the promotion of enhanced services and rewards categories and the success of such promotion;
|
|
the actual amount to be spent on Card Member engagement, which will be based in part on management’s assessment of competitive opportunities; overall business performance and changes in macroeconomic conditions; the actual amount of advertising and Card Member acquisition costs; our ability to continue to shift Card Member acquisition to digital channels; contractual obligations with business partners and other fixed costs and prior commitments; management’s ability to identify attractive investment opportunities and make such investments, which could be impacted by business, regulatory or legal complexities; and our ability to realize efficiencies, optimize investment spending and control expenses to fund such spending;
|
|
our ability to manage operating expense growth, which could be impacted by the need to increase significant categories of operating expenses, such as consulting or professional fees, including as a result of increased litigation, compliance or regulatory-related costs, or fraud costs; continuing to implement and achieve benefits from reengineering plans, which could be impacted by factors such as an inability to mitigate the operational and other risks posed by potential staff reductions and underestimating hiring and other employee needs; higher than expected employee levels; the impact of changes in foreign currency exchange rates on costs; the payment of civil money penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements; impairments of goodwill or other assets; management’s decision to increase or decrease spending in such areas as technology, business and product development and sales forces; greater than expected inflation; the impact of accounting changes and reclassifications; and the level of M&A activity and related expenses;
|
|
our ability to satisfy our commitments to certain of our cobrand partners as part of the ongoing operations of the business, which will be impacted in part by competition, brand perceptions and reputation, and our ability to develop and market value propositions that appeal to current cobrand Card Members and new customers and offer attractive services and rewards programs, which will depend in part on ongoing investment in marketing and promotion expenses, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, and infrastructure to support new products, services and benefits;
|
|
changes affecting our plans regarding the return of capital to shareholders through dividends and share repurchases, which will depend on factors such as the pace at which we are able to rebuild our capital levels, including from earnings and a lower effective tax rate; the approval of our capital plans by our primary regulators; the amount we spend on acquisitions of companies; and our results of operations and economic environment in any given period;
|
|
implementation of legislation and additional guidance or context from the Internal Revenue Service, the U.S. Treasury Department, state and foreign taxing authorities, the Financial Accounting Standards Board or others regarding the Tax Act, and any future changes or amendments to that legislation;
|
|
changes in global economic and business conditions, consumer and business spending, the availability and cost of capital, unemployment rates, geopolitical conditions, foreign currency rates and interest rates, all of which may significantly affect demand for and spending on American Express cards, delinquency rates, loan balances and other aspects of our business and results of operations;
|
|
changes in capital and credit market conditions, including sovereign creditworthiness, which may significantly affect our ability to meet our liquidity needs, expectations regarding capital and liquidity ratios, access to capital and cost of capital, including changes in interest rates; changes in market conditions affecting the valuation of our assets; or any reduction in our credit ratings or those of our subsidiaries, which could materially increase the cost and other terms of our funding or restrict our access to the capital markets;
|
|
legal and regulatory developments, including with regard to broad payment system regulatory regimes, actions by the CFPB and other regulators and the stricter regulation of financial institutions, which could require us to make fundamental changes to many of our business practices, including our ability to continue certain GNS and other partnerships; exert further pressure on the average discount rate and GNS volumes; result in increased costs related to regulatory oversight, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or civil money penalties; materially affect our capital or liquidity requirements, results of operations or ability to pay dividends or repurchase our stock; or result in harm to the American Express brand;
|
|
uncertainty relating to the ultimate outcome of the antitrust lawsuit filed against us by the U.S. Department of Justice and certain state attorneys general, including the review of the case by the U.S. Supreme Court and the impact on existing private merchant cases and potentially additional litigation and/or arbitrations;
|
|
our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, ability to securitize and sell receivables and the performance of receivables previously sold in securitization transactions;
|
|
changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including merchants that represent a significant portion of our business, such as the airline industry, or our partners in GNS or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations; and
|
|
factors beyond our control such as fire, power loss, disruptions in telecommunications, severe weather conditions, natural disasters, health pandemics, terrorism, cyber-attacks or fraud, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan balances and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.
|
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets;
|
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Years Ended December 31
(Millions, except per share amounts)
|
2017
|
2016
|
2015
|
|||||||||
Revenues
|
||||||||||||
Non-interest revenues
|
||||||||||||
Discount revenue
|
$
|
19,186
|
$
|
18,680
|
$
|
19,297
|
||||||
Net card fees
|
3,090
|
2,886
|
2,700
|
|||||||||
Other fees and commissions
|
3,022
|
2,753
|
2,866
|
|||||||||
Other
|
1,732
|
2,029
|
2,033
|
|||||||||
Total non-interest revenues
|
27,030
|
26,348
|
26,896
|
|||||||||
Interest income
|
||||||||||||
Interest on loans
|
8,138
|
7,205
|
7,309
|
|||||||||
Interest and dividends on investment securities
|
89
|
131
|
157
|
|||||||||
Deposits with banks and other
|
326
|
139
|
79
|
|||||||||
Total interest income
|
8,553
|
7,475
|
7,545
|
|||||||||
Interest expense
|
||||||||||||
Deposits
|
779
|
598
|
475
|
|||||||||
Long-term debt and other
|
1,333
|
1,106
|
1,148
|
|||||||||
Total interest expense
|
2,112
|
1,704
|
1,623
|
|||||||||
Net interest income
|
6,441
|
5,771
|
5,922
|
|||||||||
Total revenues net of interest expense
|
33,471
|
32,119
|
32,818
|
|||||||||
Provisions for losses
|
||||||||||||
Charge card
|
795
|
696
|
737
|
|||||||||
Card Member loans
|
1,868
|
1,235
|
1,190
|
|||||||||
Other
|
96
|
95
|
61
|
|||||||||
Total provisions for losses
|
2,759
|
2,026
|
1,988
|
|||||||||
Total revenues net of interest expense after provisions for losses
|
30,712
|
30,093
|
30,830
|
|||||||||
Expenses
|
||||||||||||
Marketing and promotion
|
3,217
|
3,650
|
3,109
|
|||||||||
Card Member rewards
|
7,608
|
6,793
|
6,996
|
|||||||||
Card Member services and other
|
1,439
|
1,133
|
1,018
|
|||||||||
Salaries and employee benefits
|
5,258
|
5,259
|
4,976
|
|||||||||
Other, net
|
5,776
|
5,162
|
6,793
|
|||||||||
Total expenses
|
23,298
|
21,997
|
22,892
|
|||||||||
Pretax income
|
7,414
|
8,096
|
7,938
|
|||||||||
Income tax provision
|
4,678
|
2,688
|
2,775
|
|||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
||||||
Earnings per Common Share — (Note 22)
(a)
|
||||||||||||
Basic
|
$
|
2.98
|
$
|
5.67
|
$
|
5.07
|
||||||
Diluted
|
$
|
2.97
|
$
|
5.65
|
$
|
5.05
|
||||||
Average common shares outstanding for earnings per common share:
|
||||||||||||
Basic
|
883
|
933
|
999
|
|||||||||
Diluted
|
886
|
935
|
1,003
|
(a) |
Represents net income less (i) earnings allocated to participating share awards of $21 million, $43 million and $38 million for the years ended December 31, 2017, 2016 and 2015, respectively, and (ii) dividends on preferred shares of $81 million, $80 million and $62 million for the years ended December 31, 2017, 2016 and 2015, respectively.
|
Years Ended December 31
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
||||||
Other comprehensive income (loss):
|
||||||||||||
Net unrealized securities losses, net of tax
|
(7
|
)
|
(51
|
)
|
(38
|
)
|
||||||
Foreign currency translation adjustments, net of tax
|
301
|
(218
|
)
|
(545
|
)
|
|||||||
Net unrealized pension and other postretirement benefits, net of tax
|
62
|
19
|
(32
|
)
|
||||||||
Other comprehensive income (loss):
|
356
|
(250
|
)
|
(615
|
)
|
|||||||
Comprehensive income
|
$
|
3,092
|
$
|
5,158
|
$
|
4,548
|
December 31
(Millions, except share data)
|
2017
|
2016
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
||||||||
Cash and due from banks
|
$
|
5,148
|
$
|
3,278
|
||||
Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2017, $48; 2016, $115)
|
27,709
|
20,779 | ||||||
Short-term investment securities
|
70
|
1,151
|
||||||
Total cash and cash equivalents
|
32,927
|
25,208
|
||||||
Accounts receivable
|
||||||||
Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2017, $8,919; 2016, $8,874), less reserves: 2017, $521; 2016, $467
|
53,526 | 46,841 | ||||||
Other receivables, less reserves: 2017, $31; 2016, $45
|
3,163
|
3,232
|
||||||
Loans
|
||||||||
Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2017, $25,695; 2016, $26,129), less reserves: 2017, $1,706; 2016, $1,223
|
71,693 | 64,042 | ||||||
Other loans, less reserves: 2017, $80; 2016, $42
|
2,607
|
1,419
|
||||||
Investment securities
|
3,159
|
3,157
|
||||||
Premises and equipment, less accumulated depreciation and amortization: 2017, $5,455; 2016, $5,145
|
4,329
|
4,433
|
||||||
Other assets (includes restricted cash of consolidated variable interest entities: 2017, $62; 2016, $38)
|
9,755
|
10,561
|
||||||
Total assets
|
$
|
181,159
|
$
|
158,893
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Customer deposits
|
$
|
64,452
|
$
|
53,042
|
||||
Travelers Cheques and other prepaid products
|
2,593
|
2,812
|
||||||
Accounts payable
|
14,657
|
11,190
|
||||||
Short-term borrowings
|
3,278
|
5,581
|
||||||
Long-term debt (includes debt issued by consolidated variable interest entities: 2017, $18,560; 2016, $15,113)
|
55,804
|
46,990
|
||||||
Other liabilities
|
22,148
|
18,777
|
||||||
Total liabilities
|
$
|
162,932
|
$
|
138,392
|
||||
Contingencies and Commitments (Note 13)
|
||||||||
Shareholders’ Equity
|
||||||||
Preferred shares, $1.66
2/3
par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2017 and 2016 (Note 17)
|
―
|
|
―
|
|||||
Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 859 million shares as of December 31, 2017 and 904 million shares as of December 31, 2016
|
172 | 181 | ||||||
Additional paid-in capital
|
12,210
|
12,733
|
||||||
Retained earnings
|
8,273
|
10,371
|
||||||
Accumulated other comprehensive loss
|
||||||||
Net unrealized securities gains, net of tax of: 2017,$1; 2016, $5
|
―
|
7
|
||||||
Foreign currency translation adjustments, net of tax of: 2017, $(363); 2016, $24
|
(1,961
|
)
|
(2,262
|
)
|
||||
Net unrealized pension and other postretirement benefits, net of tax of: 2017, $(179); 2016, $(186)
|
(467
|
)
|
(529
|
)
|
||||
Total accumulated other comprehensive loss
|
(2,428
|
)
|
(2,784
|
)
|
||||
Total shareholders’ equity
|
18,227
|
20,501
|
||||||
Total liabilities and shareholders’ equity
|
$
|
181,159
|
$
|
158,893
|
Years Ended December 31
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Provisions for losses
|
2,759
|
2,026
|
1,988
|
|||||||||
Depreciation and amortization
|
1,321
|
1,095
|
1,043
|
|||||||||
Deferred taxes and other
|
783
|
(1,132
|
)
|
507
|
||||||||
Stock-based compensation
|
282
|
254
|
234
|
|||||||||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
|
||||||||||||
Other receivables
|
473
|
(281
|
)
|
(714
|
)
|
|||||||
Other assets
|
(62
|
)
|
192
|
2,058
|
||||||||
Accounts payable and other liabilities
|
5,505
|
1,139
|
794
|
|||||||||
Travelers Cheques and other prepaid products
|
(257
|
)
|
(410
|
)
|
(367
|
)
|
||||||
Net cash provided by operating activities
|
13,540
|
8,291
|
10,706
|
|||||||||
Cash Flows from Investing Activities
|
||||||||||||
Sales of available-for-sale investment securities
|
2
|
88
|
12
|
|||||||||
Maturities and redemptions of available-for-sale investment securities
|
2,494
|
2,429
|
2,091
|
|||||||||
Sales of other investments
|
―
|
10
|
―
|
|||||||||
Purchase of investments
|
(2,612
|
)
|
(2,162
|
)
|
(1,713
|
)
|
||||||
Net (increase) decrease in Card Member loans and receivables, including held for sale
|
(16,853
|
)
|
3,220
|
(6,967
|
)
|
|||||||
Purchase of premises and equipment, net of sales: 2017, $1; 2016, $2; 2015, $42
|
(1,062
|
)
|
(1,375
|
)
|
(1,341
|
)
|
||||||
Acquisitions/dispositions, net of cash acquired
|
(211
|
)
|
(487
|
)
|
(155
|
)
|
||||||
Net (increase) decrease in restricted cash
|
(31
|
)
|
145
|
(120
|
)
|
|||||||
Net cash (used in) provided by investing activities
|
(18,273
|
)
|
1,868
|
(8,193
|
)
|
|||||||
Cash Flows from Financing Activities
|
||||||||||||
Net increase (decrease) in customer deposits
|
11,385
|
(1,935
|
)
|
10,878
|
||||||||
Net (decrease) increase in short-term borrowings
|
(2,300
|
)
|
888
|
1,395
|
||||||||
Proceeds from long-term borrowings
|
32,764
|
8,824
|
9,923
|
|||||||||
Payments of long-term borrowings
|
(24,082
|
)
|
(9,848
|
)
|
(19,246
|
)
|
||||||
Issuance of American Express preferred shares
|
―
|
―
|
841
|
|||||||||
Issuance of American Express common shares
|
129
|
177
|
193
|
|||||||||
Repurchase of American Express common shares and other
|
(4,400
|
)
|
(4,498
|
)
|
(4,575
|
)
|
||||||
Dividends paid
|
(1,251
|
)
|
(1,207
|
)
|
(1,172
|
)
|
||||||
Net cash provided by (used in) financing activities
|
12,245
|
(7,599
|
)
|
(1,763
|
)
|
|||||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
207
|
(114
|
)
|
(276
|
)
|
|||||||
Net increase in cash and cash equivalents
|
7,719
|
2,446
|
474
|
|||||||||
Cash and cash equivalents at beginning of year
|
25,208
|
22,762
|
22,288
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
32,927
|
$
|
25,208
|
$
|
22,762
|
||||||
Supplemental cash flow information
|
||||||||||||
Non-cash investing activities
|
||||||||||||
Transfer of Card Member loans and receivables, during the fourth quarter of 2015, to Card Member loans and receivables held for sale, net of reserves
|
$
|
―
|
$
|
―
|
$
|
14,524
|
(Millions, except per share amounts)
|
Total
|
Preferred Shares
|
Common Shares
|
Additional Paid-in Capital
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
||||||||||||||||||
Balances as of December 31, 2014
|
$
|
20,673
|
$
|
―
|
$
|
205
|
$
|
12,874
|
$
|
(1,919
|
)
|
$
|
9,513
|
|||||||||||
Net income
|
5,163
|
―
|
―
|
―
|
―
|
5,163
|
||||||||||||||||||
Other comprehensive loss
|
(615
|
)
|
―
|
―
|
―
|
(615
|
)
|
―
|
||||||||||||||||
Preferred shares issued
|
841
|
―
|
―
|
841
|
―
|
―
|
||||||||||||||||||
Repurchase of common shares
|
(4,509
|
)
|
―
|
(12
|
)
|
(714
|
)
|
―
|
(3,783
|
)
|
||||||||||||||
Other changes, primarily employee plans
|
310
|
―
|
1
|
347
|
―
|
(38
|
)
|
|||||||||||||||||
Cash dividends declared preferred
|
(62
|
)
|
―
|
―
|
―
|
―
|
(62
|
)
|
||||||||||||||||
Cash dividends declared common, $1.13 per share
|
(1,128
|
)
|
―
|
―
|
―
|
―
|
(1,128
|
)
|
||||||||||||||||
Balances as of December 31, 2015
|
20,673
|
―
|
194
|
13,348
|
(2,534
|
)
|
9,665
|
|||||||||||||||||
Net income
|
5,408
|
―
|
―
|
―
|
―
|
5,408
|
||||||||||||||||||
Other comprehensive loss
|
(250
|
)
|
―
|
―
|
―
|
(250
|
)
|
―
|
||||||||||||||||
Repurchase of common shares
|
(4,421
|
)
|
―
|
(14
|
)
|
(924
|
)
|
―
|
(3,483
|
)
|
||||||||||||||
Other changes, primarily employee plans
|
308
|
―
|
1
|
309
|
―
|
(2
|
)
|
|||||||||||||||||
Cash dividends declared preferred
|
(80
|
)
|
―
|
―
|
―
|
―
|
(80
|
)
|
||||||||||||||||
Cash dividends declared common, $1.22 per share
|
(1,137
|
)
|
―
|
―
|
―
|
―
|
(1,137
|
)
|
||||||||||||||||
Balances as of December 31, 2016
|
20,501
|
―
|
181
|
12,733
|
(2,784
|
)
|
10,371
|
|||||||||||||||||
Net income
|
2,736
|
―
|
―
|
―
|
―
|
2,736
|
||||||||||||||||||
Other comprehensive gain
|
356
|
―
|
―
|
―
|
356
|
―
|
||||||||||||||||||
Repurchase of common shares
|
(4,314
|
)
|
―
|
(10
|
)
|
(742
|
)
|
―
|
(3,562
|
)
|
||||||||||||||
Other changes, primarily employee plans
|
212
|
―
|
1
|
219
|
―
|
(8
|
)
|
|||||||||||||||||
Cash dividends declared preferred
|
(81
|
)
|
―
|
―
|
―
|
―
|
(81
|
)
|
||||||||||||||||
Cash dividends declared common, $1.34 per share
|
(1,183
|
)
|
―
|
―
|
―
|
―
|
(1,183
|
)
|
||||||||||||||||
Balances as of December 31, 2017
|
$
|
18,227
|
$
|
―
|
$
|
172
|
$
|
12,210
|
$
|
(2,428
|
)
|
$
|
8,273
|
Significant Accounting Policy
|
Note
Number
|
Note Title
|
Page
|
|||
Accounts Receivable
|
|
Note 3
|
|
Loans and Accounts Receivable
|
|
Page 94
|
Loans
|
|
Note 3
|
|
Loans and Accounts Receivable
|
|
Page 94
|
Reserves for Losses
|
Note 4
|
|
Reserves for Losses
|
Page 101
|
||
Investment Securities
|
|
Note 5
|
Investment Securities
|
|
Page 103
|
|
Asset Securitizations
|
|
Note 6
|
|
Asset Securitizations
|
|
Page 104
|
Membership Rewards
|
|
Note 10
|
|
Other Liabilities
|
|
Page 110
|
Stock-based Compensation
|
|
Note 11
|
|
Stock Plans
|
|
Page 111
|
Retirement Plans
|
Note 12
|
|
Retirement Plans
|
Page 113
|
||
Legal Contingencies
|
Note 13
|
|
Contingencies and Commitments
|
Page 113
|
||
Derivative Financial Instruments and Hedging Activities
|
|
Note 14
|
|
Derivatives and Hedging Activities
|
|
Page 115
|
Fair Value Measurements
|
|
Note 15
|
Fair Values
|
|
Page 118
|
|
Income Taxes
|
|
Note 21
|
Income Taxes
|
|
Page 127
|
|
Regulatory Matters and Capital Adequacy
|
Note 23
|
Regulatory Matters and Capital Adequacy
|
Page 130
|
|||
Reportable Operating Segments
|
|
Note 25
|
Reportable Operating Segments and Geographic Operations
|
|
Page 133
|
Increase (Decrease)
|
||||||||
December 31
(Millions)
|
2017
|
2016
|
||||||
Revenues
|
||||||||
Discount revenue
|
$
|
3,707
|
$
|
3,699
|
||||
Other
|
(278
|
)
|
(253
|
)
|
||||
Expenses
|
||||||||
Marketing and promotion
|
2,350
|
2,420
|
||||||
Card Member rewards
|
$
|
1,079
|
$
|
1,026
|
(Millions)
|
2017
|
2016
|
||||||
U.S. Consumer Services
(a)
|
$
|
53,668
|
$
|
48,758
|
||||
International Consumer and Network Services
|
8,651
|
6,971
|
||||||
Global Commercial Services
|
11,080
|
9,536
|
||||||
Card Member loans
|
73,399
|
65,265
|
||||||
Less: Reserve for losses
|
1,706
|
1,223
|
||||||
Card Member loans, net
|
$
|
71,693
|
$
|
64,042
|
||||
Other loans, net
(b)
|
$
|
2,607
|
$
|
1,419
|
(a) |
Includes approximately $25.7 billion and $26.1 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of December 31, 2017 and 2016, respectively.
|
(b) |
Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $80 million and $42 million as of December 31, 2017 and 2016, respectively.
|
(Millions)
|
2017
|
2016
|
||||||
U.S. Consumer Services
(a)
|
$
|
13,143
|
$
|
12,302
|
||||
International Consumer and Network Services
|
7,803
|
5,966
|
||||||
Global Commercial Services
|
33,101
|
29,040
|
||||||
Card Member receivables
|
54,047
|
47,308
|
||||||
Less: Reserve for losses
|
521
|
467
|
||||||
Card Member receivables, net
|
$
|
53,526
|
$
|
46,841
|
||||
Other receivables, net
(b)
|
$
|
3,163
|
$
|
3,232
|
(a) |
Includes $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of both December 31, 2017 and 2016.
|
(b) |
Other receivables primarily represent amounts related to (i) GNS partner banks for items such as royalty and franchise fees, (ii) certain merchants for billed discount revenue, (iii) tax-related receivables, and (iv) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $31 million and $45 million as of December 31, 2017 and 2016, respectively.
|
2017
(Millions)
|
Current
|
30-59
Days Past Due
|
60-89
Days Past Due
|
90+
Days Past Due
|
Total
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
52,961
|
$
|
201
|
162
|
344
|
$
|
53,668
|
||||||||||||
International Consumer and Network Services
|
8,530
|
37
|
28
|
56
|
8,651
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
10,892
|
43
|
31
|
59
|
11,025
|
|||||||||||||||
Global Corporate Payments
(a)
|
(b)
|
(b)
|
(b)
|
―
|
55
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
12,993
|
53
|
33
|
64
|
$
|
13,143
|
|||||||||||||
International Consumer and Network Services
|
7,703
|
29
|
21
|
50
|
7,803
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
15,868
|
91
|
54
|
106
|
16,119
|
|||||||||||||||
Global Corporate Payments
(a)
|
(b)
|
(b)
|
(b)
|
148
|
16,982
|
|||||||||||||||
2016
(Millions)
|
Current
|
30-59
Days Past Due
|
60-89
Days Past Due
|
90+
Days Past Due
|
Total
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
48,216
|
$
|
156
|
$
|
119
|
$
|
267
|
$
|
48,758
|
||||||||||
International Consumer and Network Services
|
6,863
|
32
|
24
|
52
|
6,971
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
9,378
|
34
|
23
|
49
|
9,484
|
|||||||||||||||
Global Corporate Payments
(a)
|
(b)
|
(b)
|
(b)
|
―
|
52
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
12,158
|
$
|
45
|
$
|
30
|
$
|
69
|
$
|
12,302
|
||||||||||
International Consumer and Network Services
|
5,888
|
22
|
15
|
41
|
5,966
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
14,047
|
77
|
47
|
102
|
14,273
|
|||||||||||||||
Global Corporate Payments
(a)
|
(b)
|
(b)
|
(b)
|
135
|
14,767
|
(a) |
For Global Corporate Payments (GCP) Card Member loans and receivables in GCS, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if the Company initiates collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan and receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
|
(b) |
Delinquency data for periods other than 90 days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.
|
2017
|
2016
|
||||||||||||
Net Write-Off Rate
|
Net Write-Off Rate
|
||||||||||||
Principal
Only
(a)
|
|
Principal,
Interest, &
Fees
(a)
|
|
30+
Days Past Due
as a % of
Total
|
Principal
Only
(a)
|
|
Principal,
Interest, &
Fees
(a)
|
|
30+
Days Past Due
as a % of
Total
|
||||
Card Member Loans:
|
|||||||||||||
U.S. Consumer Services
|
1.8
|
%
|
2.1
|
%
|
1.3
|
%
|
1.5
|
%
|
1.8
|
%
|
1.1
|
%
|
|
International Consumer and Network Services
|
2.1
|
%
|
2.5
|
%
|
1.4
|
%
|
2.0
|
%
|
2.5
|
%
|
1.6
|
%
|
|
Global Small Business Services
|
1.6
|
%
|
1.9
|
%
|
1.2
|
%
|
1.4
|
%
|
1.7
|
%
|
1.1
|
%
|
|
Card Member Receivables:
|
|||||||||||||
U.S. Consumer Services
|
1.3
|
%
|
1.4
|
%
|
1.1
|
%
|
1.4
|
%
|
1.6
|
%
|
1.2
|
%
|
|
International Consumer and Network Services
|
2.0
|
%
|
2.1
|
%
|
1.3
|
%
|
2.0
|
%
|
2.2
|
%
|
1.3
|
%
|
|
Global Small Business Services
|
1.6
|
%
|
1.8
|
%
|
1.6
|
%
|
1.5
|
%
|
1.7
|
%
|
1.6
|
%
|
|
2017
|
2016
|
||||||||||||
Net Loss
Ratio as
a % of
Charge
Volume
|
90+
Days Past Billing
as a % of
Receivables
|
Net Loss
Ratio as
a % of
Charge
Volume
|
90+
Days Past Billing
as a % of
Receivables
|
||||||||||
Card Member Receivables:
|
|||||||||||||
Global Corporate Payments
|
0.10
|
%
|
0.9
|
%
|
0.09
|
%
|
0.9
|
%
|
(a) |
The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company considers uncollectible interest and/or fees in estimating its reserves for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
|
As of December 31, 2017
|
|||||||||||||||||||||||||||||||||
Accounts Classified
as a TDR
(c)
|
|||||||||||||||||||||||||||||||||
(Millions)
|
Over 90 days Past Due & Accruing Interest
|
(a) |
|
Non-Accruals
|
(b) |
|
In Program
|
(d) |
|
Out of Program
|
(e) |
|
Total Impaired Balance
|
Unpaid Principal Balance
|
Allowance for TDRs
|
||||||||||||||||||
Card Member Loans:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
|
$
|
233
|
$
|
168
|
$
|
178
|
$
|
131
|
$
|
710
|
$
|
639
|
$
|
49
|
||||||||||||||||||
International Consumer and Network Services
|
56
|
―
|
―
|
―
|
56
|
55
|
―
|
||||||||||||||||||||||||||
Global Commercial Services
|
38
|
31
|
31
|
27
|
127
|
118
|
8
|
||||||||||||||||||||||||||
Card Member Receivables:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
15
|
9
|
24
|
24
|
1
|
||||||||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
37
|
19
|
56
|
56
|
2
|
||||||||||||||||||||||||||
Total
|
|
$
|
327
|
$
|
199
|
$
|
261
|
$
|
186
|
$
|
973
|
$
|
892
|
$
|
60
|
||||||||||||||||||
As of December 31, 2016
|
|||||||||||||||||||||||||||||||||
Accounts Classified
as a TDR
(c)
|
|||||||||||||||||||||||||||||||||
(Millions)
|
Over 90 days Past Due & Accruing Interest
|
(a) |
|
Non-Accruals
|
(b) |
|
In Program
|
(d) |
|
Out of Program
|
(e) |
|
Total Impaired Balance
|
Unpaid
Principal
Balance
|
Allowance for TDRs
|
||||||||||||||||||
Card Member Loans:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
|
$
|
178
|
$
|
139
|
$
|
165
|
$
|
129
|
$
|
611
|
$
|
558
|
$
|
51
|
||||||||||||||||||
International Consumer and Network Services
|
52
|
―
|
―
|
―
|
52
|
51
|
―
|
||||||||||||||||||||||||||
Global Commercial Services
|
30
|
30
|
26
|
26
|
112
|
103
|
9
|
||||||||||||||||||||||||||
Card Member Receivables:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
11
|
6
|
17
|
17
|
7
|
||||||||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
28
|
10
|
38
|
38
|
21
|
||||||||||||||||||||||||||
Total
|
|
$
|
260
|
$
|
169
|
$
|
230
|
$
|
171
|
$
|
830
|
$
|
767
|
$
|
88
|
||||||||||||||||||
As of December 31, 2015
|
|||||||||||||||||||||||||||||||||
Accounts Classified
as a TDR
(c)
|
|||||||||||||||||||||||||||||||||
(Millions)
|
Over 90 days Past Due & Accruing Interest
|
(a) |
|
Non-Accruals
|
(b) |
|
In Program
|
(d) |
|
Out of Program
|
(e) |
|
Total Impaired Balance
|
Unpaid
Principal
Balance
|
Allowance for TDRs
|
||||||||||||||||||
Card Member Loans:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
|
$
|
140
|
$
|
124
|
$
|
149
|
$
|
89
|
$
|
502
|
$
|
463
|
$
|
44
|
||||||||||||||||||
International Consumer and Network Services
|
52
|
―
|
―
|
―
|
52
|
51
|
―
|
||||||||||||||||||||||||||
Global Commercial Services
|
24
|
26
|
23
|
18
|
91
|
85
|
9
|
||||||||||||||||||||||||||
Card Member Receivables:
|
|||||||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
11
|
3
|
14
|
14
|
8
|
||||||||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
16
|
3
|
19
|
19
|
12
|
||||||||||||||||||||||||||
Total
|
|
$
|
216
|
$
|
150
|
$
|
199
|
$
|
113
|
$
|
678
|
$
|
632
|
$
|
73
|
(a) |
The Company’s policy is generally to accrue interest through the date of write-off (typically 180 days past due). The Company establishes reserves for interest that it believes will not be collected. Amounts presented exclude Card Member loans classified as a TDR.
|
(b) |
Non-accrual loans not in modification programs primarily include certain Card Member loans placed with outside collection agencies for which the Company has ceased accruing interest. Amounts presented exclude Card Member loans classified as a TDR.
|
(c) |
Accounts classified as a TDR include $15 million, $20 million and $20 million that are over 90 days past due and accruing interest and $5 million, $11 million and $18 million that are non-accruals as of December 31, 2017, 2016 and 2015, respectively.
|
(d) |
In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
|
(e) |
Out of Program TDRs include $141 million, $132 million and $84 million of Card Member accounts that have successfully completed a modification program and $45 million, $39 million and $29 million of Card Member accounts that were not in compliance with the terms of the modification programs as of December 31, 2017, 2016 and 2015, respectively.
|
2017
(Millions)
|
Average Balance
|
Interest Income Recognized
|
||||||
Card Member Loans:
|
||||||||
U.S. Consumer Services
|
$
|
643
|
$
|
68
|
||||
International Consumer and Network Services
|
56
|
17
|
||||||
Global Commercial Services
|
120
|
17
|
||||||
Card Member Receivables:
|
||||||||
U.S. Consumer Services
|
20
|
―
|
||||||
Global Commercial Services
|
45
|
―
|
||||||
Total
|
$
|
884
|
$
|
102
|
||||
2016
(Millions)
|
Average Balance
|
Interest Income
Recognized
|
||||||
Card Member Loans:
|
||||||||
U.S. Consumer Services
|
$
|
559
|
$
|
53
|
||||
International Consumer and Network Services
|
53
|
15
|
||||||
Global Commercial Services
|
103
|
13
|
||||||
Card Member Receivables:
|
||||||||
U.S. Consumer Services
|
14
|
―
|
||||||
Global Commercial Services
|
28
|
―
|
||||||
Total
|
$
|
757
|
$
|
81
|
||||
2015
(Millions)
|
Average Balance
|
Interest Income
Recognized
|
||||||
Card Member Loans:
|
||||||||
U.S. Consumer Services
|
$
|
569
|
$
|
48
|
||||
International Consumer and Network Services
|
54
|
14
|
||||||
Global Commercial Services
|
104
|
11
|
||||||
Card Member Receivables:
|
||||||||
U.S. Consumer Services
|
13
|
―
|
||||||
Global Commercial Services
|
20
|
―
|
||||||
Total
|
$
|
760
|
$
|
73
|
2017
|
Number of Accounts
(in thousands)
|
Outstanding Balances
($ in millions)
(a)
|
Average Interest Rate Reduction
(% points)
|
Average Payment Term Extensions
(# of months)
|
||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
33
|
$
|
224
|
10
|
(b)
|
|||||||||||
Card Member Receivables
|
6
|
83
|
(c)
|
28
|
||||||||||||
Total
|
39
|
$
|
307
|
|||||||||||||
2016
|
Number of Accounts
(in thousands)
|
Outstanding Balances
($ in millions)
(a)
|
Average Interest Rate Reduction
(% points)
|
Average Payment Term Extensions
(# of months)
|
||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
31
|
$
|
220
|
9
|
(b)
|
|||||||||||
Card Member Receivables
|
9
|
123
|
(c)
|
18
|
||||||||||||
Total
|
40
|
$
|
343
|
|||||||||||||
2015
|
Number of Accounts
(in thousands)
|
Outstanding Balances
($ in millions)
(a)
|
Average Interest Rate Reduction
(% points)
|
Average Payment Term Extensions
(# of months)
|
||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
40
|
$
|
285
|
9
|
(b)
|
|||||||||||
Card Member Receivables
|
12
|
147
|
(c)
|
12
|
||||||||||||
Total
|
52
|
$
|
432
|
(a) |
Represents the outstanding balance immediately prior to modification. The outstanding balance includes principal, fees and accrued interest on Card Member loans and principal and fees on Card Member receivables. Modifications did not reduce the principal balance.
|
(b) |
For Card Member loans, there have been no payment term extensions.
|
(c) |
The Company does not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.
|
Number of Accounts
|
Aggregated Outstanding Balances Upon Default
(a)
|
|||||||
2017
|
(thousands)
|
(millions)
|
||||||
Troubled Debt Restructurings That Subsequently Defaulted:
|
||||||||
Card Member Loans
|
6
|
$
|
39
|
|||||
Card Member Receivables
|
3
|
7
|
||||||
Total
|
9
|
$
|
46
|
|||||
Number of Accounts
|
Aggregated Outstanding Balances Upon Default
(a)
|
|||||||
2016
|
(thousands)
|
(millions)
|
||||||
Troubled Debt Restructurings That Subsequently Defaulted:
|
||||||||
Card Member Loans
|
7
|
$
|
41
|
|||||
Card Member Receivables
|
3
|
4
|
||||||
Total
|
10
|
$
|
45
|
|||||
Number of Accounts
|
Aggregated Outstanding Balances Upon Default
(a)
|
|||||||
2015
|
(thousands)
|
(millions)
|
||||||
Troubled Debt Restructurings That Subsequently Defaulted:
|
||||||||
Card Member Loans
|
8
|
$
|
52
|
|||||
Card Member Receivables
|
3
|
5
|
||||||
Total
|
11
|
$
|
57
|
(a) |
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Balance, January 1
|
$
|
1,223
|
$
|
1,028
|
$
|
1,201
|
||||||
Provisions
(a)
|
1,868
|
1,235
|
1,190
|
|||||||||
Net write-offs
|
||||||||||||
Principal
(b)
|
(1,181
|
)
|
(930
|
)
|
(967
|
)
|
||||||
Interest and fees
(b)
|
(227
|
)
|
(175
|
)
|
(162
|
)
|
||||||
Transfer of reserves on HFS loan portfolios
|
―
|
―
|
(224
|
)
|
||||||||
Other
(c)
|
23
|
65
|
(10
|
)
|
||||||||
Balance, December 31
|
$
|
1,706
|
$
|
1,223
|
$
|
1,028
|
(a) |
Provisions for principal, interest and fee reserve components.
|
(b) |
Principal write-offs are presented less recoveries of $409 million, $379 million and $418 million, and include net write-offs from TDRs of $30 million, $34 million and $41 million, for the years ended December 31, 2017, 2016 and 2015, respectively. Recoveries of interest and fees were not significant.
|
(c) |
Includes foreign currency translation adjustments of $8 million, $(10) million and $(20) million, and other adjustments of $15 million, $8 million and $10 million for the years ended December 31, 2017, 2016 and 2015, respectively. The year ended December 31, 2016 included reserves of $67 million associated with $265 million of retained Card Member loans reclassified from HFS to held for investment as a result of retaining certain loans in connection with the respective sales of JetBlue and Costco cobrand card portfolios.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Card Member loans evaluated individually for impairment
(a)
|
$
|
367
|
$
|
346
|
$
|
279
|
||||||
Related reserves
(a)
|
$
|
57
|
$
|
60
|
$
|
53
|
||||||
Card Member loans evaluated collectively for impairment
(b)
|
$
|
73,032
|
$
|
64,919
|
$
|
58,294
|
||||||
Related reserves
(b)
|
$
|
1,649
|
$
|
1,163
|
$
|
975
|
(a) |
Represents loans modified as a TDR and related reserves.
|
(b) |
Represents current loans and loans less than 90 days past due, loans over 90 days past due and accruing interest, and non-accrual loans. The reserves include the quantitative results of analytical models that are specific to individual pools of loans, and reserves for internal and external qualitative risk factors that apply to loans that are collectively evaluated for impairment.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Balance, January 1
|
$
|
467
|
$
|
462
|
$
|
465
|
||||||
Provisions
(a)
|
795
|
696
|
737
|
|||||||||
Net write-offs
(b)
|
(736
|
)
|
(674
|
)
|
(713
|
)
|
||||||
Other
(c)
|
(5
|
)
|
(17
|
)
|
(27
|
)
|
||||||
Balance, December 31
|
$
|
521
|
$
|
467
|
$
|
462
|
(a) |
Provisions for principal and fee reserve components.
|
(b) |
Principal and fee write-offs are presented less recoveries of $359 million, $391 million and $401 million, including net write-offs from TDRs of $(2) million, $16 million and $60 million, for the years ended December 31, 2017, 2016 and 2015, respectively.
|
(c) |
Includes foreign currency translation adjustments of $12 million, $(12) million and $(16) million, and other adjustments of $(17) million, $(5) million and $(11) million for the years ended December 31, 2017, 2016 and 2015, respectively. Additionally, 2015 included the impact of the transfer of the HFS receivables portfolio, which was not significant.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Card Member receivables evaluated individually for impairment
(a)
|
$
|
80
|
$
|
55
|
$
|
33
|
||||||
Related reserves
(a)
|
$
|
3
|
$
|
28
|
$
|
20
|
||||||
Card Member receivables evaluated collectively for impairment
|
$
|
53,967
|
$
|
47,253
|
$
|
44,100
|
||||||
Related reserves
(b)
|
$
|
518
|
$
|
439
|
$
|
442
|
(a) |
Represents receivables modified as a TDR and related reserves.
|
(b) |
The reserves include the quantitative results of analytical models that are specific to individual pools of receivables, and reserves for internal and external qualitative risk factors that apply to receivables that are collectively evaluated for impairment.
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||||||||||||||||||||||||
Description of Securities
(Millions)
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||||||||||||||||||||||||||||
State and municipal obligations
|
$
|
1,369
|
$
|
11
|
$
|
(3
|
)
|
$
|
1,377
|
$
|
2,019
|
$
|
28
|
$
|
(11
|
)
|
$
|
2,036
|
$
|
2,813
|
$
|
85
|
$
|
(5
|
)
|
$
|
2,893
|
|||||||||||||||||||||
U.S. Government agency obligations
|
11
|
―
|
―
|
11
|
12
|
―
|
―
|
12
|
2
|
―
|
―
|
2
|
||||||||||||||||||||||||||||||||||||
U.S. Government treasury obligations
|
1,051
|
3
|
(9
|
)
|
1,045
|
465
|
3
|
(8
|
)
|
460
|
406
|
4
|
(1
|
)
|
409
|
|||||||||||||||||||||||||||||||||
Corporate debt securities
|
28
|
―
|
―
|
28
|
19
|
―
|
―
|
19
|
29
|
1
|
―
|
30
|
||||||||||||||||||||||||||||||||||||
Mortgage-backed securities
(a)
|
67
|
2
|
―
|
69
|
92
|
3
|
―
|
95
|
117
|
4
|
―
|
121
|
||||||||||||||||||||||||||||||||||||
Foreign government bonds and obligations
|
581
|
―
|
―
|
581
|
486
|
1
|
(1
|
)
|
486
|
250
|
6
|
(1
|
)
|
255
|
||||||||||||||||||||||||||||||||||
Equity securities
(b)
|
51
|
―
|
(3
|
)
|
48
|
51
|
―
|
(2
|
)
|
49
|
51
|
―
|
(2
|
)
|
49
|
|||||||||||||||||||||||||||||||||
Total
|
$
|
3,158
|
$
|
16
|
$
|
(15
|
)
|
$
|
3,159
|
$
|
3,144
|
$
|
35
|
$
|
(22
|
)
|
$
|
3,157
|
$
|
3,668
|
$
|
100
|
$
|
(9
|
)
|
$
|
3,759
|
(a) |
Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
|
(b) |
Equity securities comprise investments in common stock and various mutual funds.
|
2017
|
2016
|
|||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Less than 12 months
|
12 months or more
|
|||||||||||||||||||||||||||||
Description of Securities
(Millions)
|
Estimated Fair Value
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Gross Unrealized Losses
|
||||||||||||||||||||||||
State and municipal obligations
|
$
|
157
|
$
|
(3
|
)
|
$
|
―
|
$
|
―
|
$
|
153
|
$
|
(11
|
)
|
$
|
―
|
$
|
―
|
||||||||||||||
U.S. Government treasury obligations
|
650
|
(3
|
)
|
175
|
(6
|
)
|
298
|
(8
|
)
|
―
|
―
|
|||||||||||||||||||||
Equity securities
|
―
|
―
|
36
|
(2
|
)
|
―
|
―
|
32
|
(2
|
)
|
||||||||||||||||||||||
Total
|
$
|
807
|
$
|
(6
|
)
|
$
|
211
|
$
|
(8
|
)
|
$
|
451
|
$
|
(19
|
)
|
$
|
32
|
$
|
(2
|
)
|
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Ratio of Fair Value to
Amortized Cost
(Dollars in millions)
|
Number of Securities
|
Estimated Fair Value
|
Gross Unrealized Losses
|
Number of Securities
|
Estimated Fair Value
|
Gross Unrealized Losses
|
Number of Securities
|
Estimated Fair Value
|
Gross Unrealized Losses
|
|||||||||||||||||||||||||||
2017:
|
||||||||||||||||||||||||||||||||||||
90%–100%
|
34
|
$
|
807
|
$
|
(6
|
)
|
13
|
$
|
211
|
$
|
(8
|
)
|
47
|
$
|
1,018
|
$
|
(14
|
)
|
||||||||||||||||||
Total as of December 31, 2017
|
34
|
$
|
807
|
$
|
(6
|
)
|
13
|
$
|
211
|
$
|
(8
|
)
|
47
|
$
|
1,018
|
$
|
(14
|
)
|
||||||||||||||||||
2016:
|
||||||||||||||||||||||||||||||||||||
90%–100%
|
33
|
$
|
411
|
$
|
(13
|
)
|
6
|
$
|
32
|
$
|
(2
|
)
|
39
|
$
|
443
|
$
|
(15
|
)
|
||||||||||||||||||
Less than 90%
|
4
|
40
|
(6
|
)
|
―
|
―
|
―
|
4
|
40
|
(6
|
)
|
|||||||||||||||||||||||||
Total as of December 31, 2016
|
37
|
$
|
451
|
$
|
(19
|
)
|
6
|
$
|
32
|
$
|
(2
|
)
|
43
|
$
|
483
|
$
|
(21
|
)
|
(Millions)
|
Due within
1 year
|
Due after 1
year but
within 5 years
|
Due after 5
years but
within 10 years
|
Due after
10 years
|
Total
|
|||||||||||||||
State and municipal obligations
(a)
|
$
|
18
|
$
|
87
|
$
|
98
|
$
|
1,174
|
$
|
1,377
|
||||||||||
U.S. Government agency obligations
|
―
|
―
|
―
|
11
|
11
|
|||||||||||||||
U.S. Government treasury obligations
|
30
|
879
|
125
|
11
|
1,045
|
|||||||||||||||
Corporate debt securities
|
4
|
24
|
―
|
―
|
28
|
|||||||||||||||
Mortgage-backed securities
(a)
|
―
|
―
|
―
|
69
|
69
|
|||||||||||||||
Foreign government bonds and obligations
|
573
|
4
|
―
|
4
|
581
|
|||||||||||||||
Total Estimated Fair Value
|
$
|
625
|
$
|
994
|
$
|
223
|
$
|
1,269
|
$
|
3,111
|
||||||||||
Total Cost
|
$
|
625
|
$
|
1,000
|
$
|
222
|
$
|
1,260
|
$
|
3,107
|
||||||||||
Weighted average yields
(b)
|
3.65
|
%
|
1.95
|
%
|
4.39
|
%
|
4.47
|
%
|
3.49
|
%
|
(a) |
The expected payments on state and municipal obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.
|
(b) |
Average yields for investment securities have been calculated using the effective yield on the date of purchase. Yields on tax-exempt investment securities have been computed on a tax-equivalent basis using the U.S. federal statutory tax rate of 35 percent. Effective January 1, 2018, the U.S. federal statutory tax rate was reduced to 21 percent. Refer to Note 21 for additional information.
|
(Millions)
|
2017
|
2016
|
||||||
Lending Trust
|
$
|
55
|
$
|
35
|
||||
Charge Trust
|
7
|
3
|
||||||
Total
|
$
|
62
|
$
|
38
|
(Millions)
|
2017
|
2016
|
||||||
Goodwill
|
$
|
3,009
|
$
|
2,927
|
||||
Deferred tax assets, net
(a)
|
1,647
|
2,336
|
||||||
Tax credit investments
|
1,023
|
824
|
||||||
Other intangible assets, at amortized cost
|
899
|
868
|
||||||
Prepaid expenses
|
684
|
696
|
||||||
Restricted cash
(b)
|
336
|
286
|
||||||
Derivative assets
(a)
|
124
|
555
|
||||||
Other
|
2,033
|
2,069
|
||||||
Total
|
$
|
9,755
|
$
|
10,561
|
(a) |
Refer to Notes 14 and 21 for a discussion of derivative assets and deferred tax assets, net, as of December 31, 2017 and 2016. For 2017 and 2016, $98 million and $81 million, respectively, of foreign deferred tax liabilities is reflected in Other liabilities. Derivative assets reflect the impact of master netting agreements and cash collateral.
|
(b) |
Includes restricted cash available to settle obligations related to certain Card Member credit balances and customer deposits, as well as coupon and maturity obligations of consolidated VIEs.
|
(Millions)
|
USCS
|
ICNS
|
GCS
|
GMS
|
Corporate & Other
|
Total
|
||||||||||||||||||
Balance as of January 1, 2016
|
$
|
122
|
$
|
620
|
$
|
1,715
|
$
|
291
|
$
|
1
|
$
|
2,749
|
||||||||||||
Acquisitions
|
―
|
―
|
―
|
201
|
―
|
201
|
||||||||||||||||||
Dispositions
|
―
|
―
|
―
|
―
|
―
|
―
|
||||||||||||||||||
Other
(a)
|
―
|
(16
|
)
|
(3
|
)
|
(3
|
)
|
(1
|
)
|
(23
|
)
|
|||||||||||||
Balance as of December 31, 2016
|
$
|
122
|
$
|
604
|
$
|
1,712
|
$
|
489
|
$
|
―
|
$
|
2,927
|
||||||||||||
Acquisitions
|
4
|
15
|
―
|
―
|
―
|
19
|
||||||||||||||||||
Dispositions
|
―
|
―
|
―
|
―
|
―
|
―
|
||||||||||||||||||
Other
(a)
|
1
|
41
|
12
|
9
|
―
|
63
|
||||||||||||||||||
Balance as of December 31, 2017
|
$
|
127
|
$
|
660
|
$
|
1,724
|
$
|
498
|
$
|
―
|
$
|
3,009
|
(a) |
Primarily includes foreign currency translation.
|
2017
|
2016
|
|||||||||||||||||||||||
(Millions)
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
||||||||||||||||||
Customer relationships
|
$
|
1,863
|
$
|
(1,073
|
)
|
$
|
790
|
$
|
1,625
|
$
|
(895
|
)
|
$
|
730
|
||||||||||
Other
|
242
|
(133
|
)
|
109
|
260
|
(122
|
)
|
138
|
||||||||||||||||
Total
|
$
|
2,105
|
$
|
(1,206
|
)
|
$
|
899
|
$
|
1,885
|
$
|
(1,017
|
)
|
$
|
868
|
(Millions)
|
2018
|
2019
|
2020
|
2021
|
2022
|
|||||||||||||||
Estimated amortization expense
|
$
|
221
|
$
|
183
|
$
|
156
|
$
|
126
|
$
|
98
|
(Millions)
|
2017
|
2016
|
||||||
U.S.:
|
||||||||
Interest-bearing
|
$
|
63,666
|
$
|
52,316
|
||||
Non-interest-bearing (includes Card Member credit balances of: 2017, $358 million; 2016, $331 million)
|
395
|
367
|
||||||
Non-U.S.:
|
||||||||
Interest-bearing
|
34
|
58
|
||||||
Non-interest-bearing (includes Card Member credit balances of: 2017, $344 million; 2016, $285 million)
|
357
|
301
|
||||||
Total customer deposits
|
$
|
64,452
|
$
|
53,042
|
(Millions)
|
2017
|
2016
|
||||||
U.S. retail deposits:
|
||||||||
Savings accounts ― Direct
|
$
|
31,915
|
$
|
30,980
|
||||
Certificates of deposit:
(a)
|
||||||||
Direct
|
290
|
291
|
||||||
Third-party (brokered)
|
16,684
|
11,925
|
||||||
Sweep accounts ―Third-party (brokered)
|
14,777
|
9,120
|
||||||
Other deposits:
|
||||||||
U.S. non-interest bearing deposits
|
37
|
36
|
||||||
Non-U.S. deposits
|
47
|
74
|
||||||
Card Member credit balances ― U.S. and non-U.S.
|
702
|
616
|
||||||
Total customer deposits
|
$
|
64,452
|
$
|
53,042
|
(a) |
The weighted average remaining maturity and weighted average interest rate at issuance on the total portfolio of U.S. retail certificates of deposit issued through direct and third-party programs were 45 months and 2.15 percent, respectively, as of December 31, 2017.
|
(Millions)
|
U.S.
|
Non-U.S.
|
Total
|
|||||||||
2018
|
$
|
5,236
|
$
|
20
|
$
|
5,256
|
||||||
2019
|
4,604
|
―
|
4,604
|
|||||||||
2020
|
3,674
|
―
|
3,674
|
|||||||||
2021
|
1,310
|
―
|
1,310
|
|||||||||
2022
|
2,150
|
―
|
2,150
|
|||||||||
After 5 years
|
―
|
―
|
―
|
|||||||||
Total
|
$
|
16,974
|
$
|
20
|
$
|
16,994
|
(Millions)
|
2017
|
2016
|
||||||
U.S.
|
$
|
114
|
$
|
117
|
||||
Non-U.S.
|
11
|
7
|
||||||
Total
|
$
|
125
|
$
|
124
|
2017
|
2016
|
|||||||||||||||||
(Millions, except percentages)
|
Outstanding Balance
|
Year-End Stated Rate on Debt
|
(a) |
|
Outstanding Balance
|
Year-End Stated Rate on Debt
|
(a) |
|
||||||||||
Commercial paper
(b)
|
$
|
1,168
|
1.54
|
%
|
$
|
2,993
|
1.13
|
%
|
||||||||||
Other short-term borrowings
(c)
|
2,110
|
2.34
|
2,588
|
1.28
|
||||||||||||||
Total
|
$
|
3,278
|
2.05
|
%
|
$
|
5,581
|
1.20
|
%
|
(a) |
For floating-rate issuances, the stated interest rates are weighted based on the outstanding balances and rates in effect as of December 31, 2017 and 2016.
|
(b) |
Average commercial paper outstanding was $1,076 million and $491 million in 2017 and 2016, respectively.
|
(c) |
Includes overdrafts with banks of $132 million and $369 million as of December 31, 2017 and 2016, respectively. In addition, balances include certain book overdrafts (i.e., primarily timing differences arising in the ordinary course of business), short-term borrowings from banks, as well as interest-bearing amounts due to merchants in accordance with merchant service agreements.
|
2017
|
2016
|
|||||||||||||
(Millions, except percentages)
|
Original Contractual Maturity Dates
|
Outstanding Balance
(a)
|
Year-End Stated Rate on Debt
|
(b) |
Year-End Effective Interest Rate with Swaps
|
(b) (c) |
Outstanding Balance
(a)
|
Year-End Stated Rate on Debt
|
(b) |
Year-End Effective Interest Rate with Swaps
|
(b) (c) | |||
American Express Company
|
||||||||||||||
(Parent Company only) | ||||||||||||||
Fixed Rate Senior Notes
|
2018 - 2042
|
$
|
10,377
|
3.85
|
%
|
3.17
|
%
|
$
|
6,932
|
5.13
|
%
|
4.24
|
%
|
|
Floating Rate Senior Notes
|
2018 - 2022
|
1,750
|
1.93
|
―
|
850
|
1.51
|
―
|
|||||||
Subordinated Notes
|
2024
|
598
|
3.63
|
2.66
|
598
|
3.63
|
1.92
|
|||||||
American Express Credit Corporation
|
||||||||||||||
Fixed Rate Senior Notes
|
2018 - 2027
|
19,652
|
2.24
|
2.27
|
16,201
|
1.98
|
1.44
|
|||||||
Floating Rate Senior Notes
|
2018 - 2022
|
4,550
|
2.09
|
―
|
4,350
|
1.52
|
―
|
|||||||
American Express Centurion Bank
|
||||||||||||||
Fixed Rate Senior Notes
|
―
|
―
|
―
|
1,306
|
5.99
|
4.83
|
||||||||
Floating Rate Senior Notes
|
2018
|
125
|
1.89
|
―
|
125
|
1.26
|
―
|
|||||||
American Express Bank, FSB
|
||||||||||||||
Fixed Rate Senior Notes
|
―
|
―
|
―
|
1,000
|
6.00
|
―
|
||||||||
Floating Rate Senior Notes
|
―
|
―
|
―
|
300
|
0.96
|
―
|
||||||||
American Express Lending Trust
|
||||||||||||||
Fixed Rate Senior Notes
|
2019 - 2022
|
8,099
|
1.90
|
―
|
3,500
|
1.41
|
―
|
|||||||
Floating Rate Senior Notes
|
2018 - 2022
|
5,800
|
2.03
|
―
|
7,025
|
1.20
|
―
|
|||||||
Fixed Rate Subordinated Notes
|
2020 - 2022
|
206
|
2.21
|
―
|
-
|
-
|
―
|
|||||||
Floating Rate Subordinated Notes
|
2018 - 2022
|
192
|
2.05
|
―
|
316
|
1.34
|
―
|
|||||||
American Express Charge Trust II
|
||||||||||||||
Floating Rate Senior Notes
|
2018 - 2020
|
4,200
|
1.79
|
―
|
4,200
|
1.12
|
―
|
|||||||
Floating Rate Subordinated Notes
|
2018
|
87
|
2.11
|
―
|
87
|
1.34
|
―
|
|||||||
Other
|
||||||||||||||
Fixed Rate Instruments
(d)
|
2021 - 2033
|
23
|
5.59
|
―
|
24
|
5.62
|
―
|
|||||||
Floating Rate Borrowings
|
2018 - 2020
|
256
|
0.42
|
―
|
%
|
247
|
0.44
|
―
|
%
|
|||||
Unamortized Underwriting Fees
|
(111)
|
(71
|
||||||||||||
Total Long-Term Debt
|
$
|
55,804
|
2.44
|
%
|
$
|
46,990
|
2.39
|
%
|
(a) |
The outstanding balances include (i) unamortized discount and premium, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps. Under fair value hedge accounting, the outstanding balances on these fixed-rate notes are adjusted to reflect the impact of changes in fair value due to changes in interest rates. Refer to Note 14 for more details on the Company’s treatment of fair value hedges.
|
(b) |
For floating-rate issuances, the stated and effective interest rates are weighted based on the outstanding balances and rates in effect as of December 31, 2017 and 2016.
|
(c) |
Effective interest rates are only presented when swaps are in place to hedge the underlying debt.
|
(d) |
Includes $23 million and $24 million as of December 31, 2017 and 2016, respectively, related to capitalized lease transactions.
|
(Millions)
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
|||||||||||||||||||||
American Express Company (Parent Company only)
|
$
|
3,850
|
$
|
641
|
$
|
2,000
|
$
|
―
|
$
|
3,525
|
$
|
3,523
|
$
|
13,539
|
||||||||||||||
American Express Credit Corporation
|
3,654
|
7,150
|
6,600
|
2,939
|
2,050
|
2,000
|
24,393
|
|||||||||||||||||||||
American Express Centurion Bank
|
125
|
―
|
―
|
―
|
―
|
―
|
125
|
|||||||||||||||||||||
American Express Lending Trust
|
2,885
|
3,488
|
5,924
|
―
|
2,001
|
―
|
14,298
|
|||||||||||||||||||||
American Express Charge Trust II
|
1,287
|
―
|
3,000
|
―
|
―
|
―
|
4,287
|
|||||||||||||||||||||
Other
|
133
|
35
|
88
|
12
|
―
|
12
|
280
|
|||||||||||||||||||||
$
|
11,934
|
$
|
11,314
|
$
|
17,612
|
$
|
2,951
|
$
|
7,576
|
$
|
5,535
|
$
|
56,922
|
|||||||||||||||
Unamortized Underwriting Fees
|
(111
|
)
|
||||||||||||||||||||||||||
Unamortized Discount and Premium
|
(825
|
)
|
||||||||||||||||||||||||||
Impacts due to Fair Value Hedge Accounting
|
(182
|
)
|
||||||||||||||||||||||||||
Total Long-Term Debt
|
$
|
55,804
|
(Millions)
|
2017
|
2016
|
||||||
Membership Rewards liability
|
$
|
7,751
|
$
|
7,060
|
||||
Book overdraft balances
|
2,837
|
2,255
|
||||||
Employee-related liabilities
(a)
|
2,277
|
2,055
|
||||||
Repatriation tax liability
(b)
|
1,703
|
―
|
||||||
Card Member rebate and reward accruals
(c)
|
1,564
|
1,382
|
||||||
Deferred card and other fees, net
|
1,554
|
1,411
|
||||||
Other
(d)
|
4,462
|
4,614
|
||||||
Total
|
$
|
22,148
|
$
|
18,777
|
(a) |
Employee-related liabilities include employee benefit plan obligations and incentive compensation.
|
(b) |
Refer to Note 21 for additional information.
|
(c) |
Card Member rebate and reward accruals include payments to third-party reward partners and cash-back rewards.
|
(d) |
Other includes accruals for general operating expenses, client incentives, merchant rebates, payments to third-party card-issuing partners, marketing and promotion, restructuring and reengineering reserves, QAH unfunded commitments and derivatives.
|
(Millions)
|
2017
|
2016
|
||||||
Deferred card and other fees
(a)
|
$
|
1,996
|
$
|
1,767
|
||||
Deferred direct acquisition costs
|
(280
|
)
|
(204
|
)
|
||||
Reserves for membership cancellations
|
(162
|
)
|
(152
|
)
|
||||
Deferred card and other fees, net
|
$
|
1,554
|
$
|
1,411
|
(a) |
Includes deferred fees for Membership Rewards program participants.
|
Stock Options
|
RSAs/RSUs
|
|||||||||||||||
(Shares in thousands)
|
Shares
|
Weighted-Average Exercise Price
|
Shares
|
Weighted-
Average
Grant
Price
|
||||||||||||
Outstanding as of December 31, 2016
|
10,272
|
$
|
47.68
|
7,500
|
$
|
69.22
|
||||||||||
Granted
|
869
|
87.19
|
2,670
|
77.80
|
||||||||||||
Exercised/vested
|
(3,766
|
)
|
34.48
|
(2,335
|
)
|
75.85
|
||||||||||
Forfeited
|
(102
|
)
|
67.57
|
(620
|
)
|
68.80
|
||||||||||
Expired
|
(11
|
)
|
86.11
|
―
|
―
|
|||||||||||
Outstanding as of December 31, 2017
|
7,262
|
58.92
|
7,215
|
$
|
70.29
|
|||||||||||
Options vested and expected to vest as of December 31, 2017
|
7,194
|
58.86
|
||||||||||||||
Options exercisable as of December 31, 2017
|
3,399
|
$
|
45.93
|
Outstanding
|
Exercisable
|
Vested and Expected to Vest
|
||||||||||
Weighted-average remaining contractual life
(in years)
|
5.8
|
3.1
|
5.7
|
|||||||||
Aggregate intrinsic value
(millions)
|
$
|
293
|
$
|
181
|
$
|
291
|
2017
|
2016
|
2015
|
||||||||||
Dividend yield
|
1.8
|
%
|
1.9
|
%
|
1.1
|
%
|
||||||
Expected volatility
(a)
|
24
|
%
|
25
|
%
|
37
|
%
|
||||||
Risk-free interest rate
|
2.3
|
%
|
1.5
|
%
|
1.7
|
%
|
||||||
Expected life of stock option (
in years
)
(b)
|
6.9
|
|
6.3
|
6.7
|
||||||||
Weighted-average fair value per option
|
$
|
18.18
|
|
$
|
13.67
|
$
|
29.20
|
(a) |
The expected volatility is based on both weighted historical and implied volatilities of the Company’s common stock price.
|
(b) |
The expected life of stock options was determined using both historical data and expectations of option exercise behavior.
|
October 31, 2017
|
||||
Dividend yield
|
1.58
|
%
|
||
Expected volatility
(a)
|
21.41
|
%
|
||
Risk-free interest rate
|
2.26
|
%
|
||
Expected life of stock option (
in years
)
|
7
|
|||
Fair value per option
|
$
|
19.18
|
(a) |
The expected volatility is based on both weighted historical and implied volatilities of the Company’s common stock price.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Restricted stock awards
(a)
|
$
|
170
|
$
|
178
|
$
|
190
|
||||||
Stock options
(a)
|
21
|
14
|
12
|
|||||||||
Liability-based awards
|
92
|
60
|
32
|
|||||||||
Total stock-based compensation expense
(b)
|
$
|
283
|
$
|
252
|
$
|
234
|
(a) |
As of December 31, 2017, the total unrecognized compensation cost related to unvested RSAs/RSUs and options of $178 million and $21 million, respectively, will be recognized ratably over the weighted-average remaining vesting period of 2.1 years.
|
(b) |
The total income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation arrangements for the years ended December 31, 2017, 2016 and 2015 was $102 million, $89 million and $83 million, respectively.
|
(Millions)
|
||||
2018
|
$
|
131
|
||
2019
|
124
|
|||
2020
|
98
|
|||
2021
|
72
|
|||
2022
|
57
|
|||
Thereafter
|
831
|
|||
Total
|
$
|
1,313
|
|
Interest rate risk due to changes in the relationship between interest rates on the Company’s assets (such as loans, receivables and investment securities) and interest rates on the Company’s liabilities (such as debt and deposits); and
|
|
Foreign exchange risk related to earnings, funding, transactions and investments in currencies other than the U.S. dollar.
|
Other Assets Fair Value
|
Other Liabilities Fair Value
|
|||||||||||||||
(Millions)
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Fair value hedges - Interest rate contracts
(a)
|
$
|
11
|
$
|
111
|
$
|
34
|
$
|
69
|
||||||||
Net investment hedges - Foreign exchange contracts
|
117
|
347
|
89
|
35
|
||||||||||||
Total derivatives designated as hedging instruments
|
128
|
458
|
123
|
104
|
||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Foreign exchange contracts, including certain embedded derivatives
(b)
|
82
|
308
|
95
|
176
|
||||||||||||
Total derivatives, gross
|
210
|
766
|
218
|
280
|
||||||||||||
Less: Cash collateral netting
(c) (d)
|
(6
|
)
|
(54
|
)
|
(45
|
)
|
(68
|
)
|
||||||||
Derivative asset and derivative liability netting
(e)
|
(80
|
)
|
(157
|
)
|
(80
|
)
|
(157
|
)
|
||||||||
Total derivatives, net
|
$
|
124
|
$
|
555
|
$
|
93
|
$
|
55
|
(a) |
Effective January 2017, the Central Clearing Party (CCP) changed the legal characterization of variation margin payments for centrally cleared derivatives to be settlement payments, as opposed to collateral. As of December 31, 2017, there was no unsettled derivative asset or liability with the CCP. The Company also maintained several bilateral interest rate contracts that are not subject to the CCP’s rule change and amounts related to such contracts are shown gross of any collateral exchanged.
|
(b) |
Includes foreign currency derivatives embedded in certain operating agreements.
|
(c) |
Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to reclaim cash collateral or the obligation to return cash collateral.
|
(d) |
The Company held no non-cash collateral as of December 31, 2017. As of December 31, 2016, t
he Company received non-cash collateral from a counterparty in the form of security interests in U.S. Treasury securities, with a fair value of $18 million, none of which was sold or repledged. Such non-cash collateral economically reduced the Company’s risk exposure to $537 million as of December 31, 2016, but did not reduce the net exposure on the Company’s Consolidated Balance Sheets.
Additionally, the Company posted $146 million and $169 million as of December 31, 2017 and 2016, respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are recorded within Other receivables on the Consolidated Balance Sheets and are not netted against the derivative balances.
|
(e) |
Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Other expenses:
|
||||||||||||
Interest rate derivative contracts
|
$
|
(246
|
)
|
$
|
(184
|
)
|
$
|
(83
|
)
|
|||
Hedged items
|
206
|
163
|
93
|
|||||||||
Net hedge ineffectiveness (losses) gains
|
$
|
(40
|
)
|
$
|
(21
|
)
|
$
|
10
|
|
Level 1 ― Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.
|
|
Level 2 ― Inputs other than quoted prices 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 markets that are not active;
|
- |
Inputs other than quoted prices that are observable for the asset or liability; and
|
- |
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
Level 3 ― Inputs that are unobservable and reflect the Company’s own estimates about the estimates market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). The Company did not measure any financial instruments presented on the Consolidated Balance Sheets at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2017 and 2016, although the disclosed fair value of certain assets that are not carried at fair value, as presented later in this Note, are classified within Level 3.
|
2017
|
2016
|
|||||||||||||||||||||||||||||||
(Millions)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||
Investment securities:
(a)
|
||||||||||||||||||||||||||||||||
Equity securities and other
|
$
|
48
|
$
|
1
|
$
|
47
|
$
|
―
|
$
|
49
|
$
|
1
|
$
|
48
|
$
|
―
|
||||||||||||||||
Debt securities
|
3,111
|
1,045
|
2,066
|
―
|
3,108
|
460
|
2,648
|
―
|
||||||||||||||||||||||||
Derivatives
(a)
|
210
|
―
|
210
|
―
|
765
|
―
|
765
|
―
|
||||||||||||||||||||||||
Total Assets
|
3,369
|
1,046
|
2,323
|
―
|
3,922
|
461
|
3,461
|
―
|
||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||
Derivatives
(a)
|
218
|
―
|
218
|
―
|
280
|
―
|
280
|
―
|
||||||||||||||||||||||||
Total Liabilities
|
$
|
218
|
$
|
―
|
$
|
218
|
$
|
―
|
$
|
280
|
―
|
280
|
―
|
(a) |
Refer to Note 5 for the fair values of investment securities and to Note 14 for the fair values of derivative assets and liabilities, on a further disaggregated basis.
|
Carrying
|
Corresponding Fair Value Amount
|
|||||||||||||||||||
2017
(Billions)
|
Value
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value
|
||||||||||||||||||||
Cash and cash equivalents
(a)
|
$
|
33
|
$
|
33
|
$
|
32
|
$
|
1
|
$
|
―
|
||||||||||
Other financial assets
(b)
|
57
|
57
|
―
|
57
|
―
|
|||||||||||||||
Financial assets carried at other than fair value
|
||||||||||||||||||||
Loans, net
(c)
|
74
|
75
|
―
|
―
|
75
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Financial liabilities for which carrying values equal or approximate fair value
|
76 | 76 |
―
|
|
76 |
―
|
||||||||||||||
Financial liabilities carried at other than fair value
|
||||||||||||||||||||
Certificates of deposit
(d)
|
17
|
17
|
―
|
17
|
―
|
|||||||||||||||
Long-term debt
(c)
|
$
|
56
|
$
|
57
|
$
|
―
|
$
|
57
|
$
|
―
|
||||||||||
Carrying
|
Corresponding Fair Value Amount
|
|||||||||||||||||||
2016
(Billions)
|
Value
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value
|
||||||||||||||||||||
Cash and cash equivalents
(a)
|
$
|
25
|
$
|
25
|
$
|
22
|
$
|
3
|
$
|
―
|
||||||||||
Other financial assets
(b)
|
51
|
51
|
―
|
51
|
―
|
|||||||||||||||
Financial assets carried at other than fair value
|
||||||||||||||||||||
Loans, net
(c)
|
65
|
66
|
―
|
―
|
66
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Financial liabilities for which carrying values equal or approximate fair value
|
67 | 67 |
―
|
67 |
―
|
|||||||||||||||
Financial liabilities carried at other than fair value
|
||||||||||||||||||||
Certificates of deposit
(d)
|
12
|
12
|
―
|
12
|
―
|
|||||||||||||||
Long-term debt
(c)
|
$
|
47
|
$
|
48
|
$
|
―
|
$
|
48
|
$
|
―
|
(a) |
Level 2 amounts reflect time deposits and short-term investments.
|
(b) |
Includes Card Member receivables (including fair values of Card Member receivables of $8.9 billion and $8.8 billion held by a consolidated VIE as of December 31, 2017 and 2016, respectively), Other receivables, restricted cash and other miscellaneous assets.
|
(c) |
Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $25.6 billion and $26.0 billion as of December 31, 2017 and 2016, respectively, and the fair values of long-term debt were $18.6 billion and $15.2 billion as of December 31, 2017 and 2016, respectively.
|
(d) |
Presented as a component of customer deposits on the Consolidated Balance Sheets.
|
(Millions, except where indicated)
|
|
2017
|
|
2016
|
2015
|
|
Common shares authorized
(billions)
(a)
|
|
3.6
|
|
3.6
|
3.6
|
|
Shares issued and outstanding at beginning of year
|
|
904
|
|
969
|
1,023
|
|
Repurchases of common shares
|
|
(50)
|
|
(70)
|
(59)
|
|
Other, primarily stock option exercises and restricted stock awards granted
|
|
5
|
|
5
|
5
|
|
Shares issued and outstanding as of December 31
|
|
859
|
|
904
|
969
|
(a) |
Of the common shares authorized but unissued as of December 31, 2017, approximately 29 million shares are reserved for issuance under employee stock and employee benefit plans.
|
Series B
|
Series C
|
|||||||
Issuance date
|
November 10, 2014
|
March 2, 2015
|
||||||
Securities issued
|
750 Preferred Shares; represented by 750,000 depositary shares
|
850 Preferred Shares; represented by 850,000 depositary shares
|
||||||
Aggregate liquidation preference
|
$750 million
|
$850 million
|
||||||
Fixed dividend rate per annum
|
5.20%
|
|
4.90%
|
|
||||
Semi-annual fixed dividend payment dates
|
Beginning May 15, 2015
|
Beginning September 15, 2015
|
||||||
Floating dividend rate per annum
|
3 month LIBOR+ 3.428%
|
3 month LIBOR+ 3.285%
|
||||||
Quarterly floating dividend payment dates
|
Beginning February 15, 2020
|
Beginning June 15, 2020
|
||||||
Fixed to floating rate conversion date
(a)
|
November 15, 2019
|
March 15, 2020
|
(a) |
The date on which dividends convert from a fixed-rate calculation to a floating rate calculation.
|
(Millions)
, net of tax
|
Net Unrealized Gains (Losses) on Investment Securities
|
Foreign Currency Translation Adjustments
|
Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||
Balances as of December 31, 2014
|
$
|
96
|
$
|
(1,499
|
)
|
$
|
(516
|
)
|
$
|
(1,919
|
)
|
|||||
Net unrealized losses
|
(37
|
)
|
―
|
―
|
(37
|
)
|
||||||||||
Decrease due to amounts reclassified into earnings
|
(1
|
)
|
(1
|
)
|
―
|
(2
|
)
|
|||||||||
Net translation loss of investments in foreign operations
|
―
|
(1,122
|
)
|
―
|
(1,122
|
)
|
||||||||||
Net gains related to hedges of investments in foreign operations
|
―
|
578
|
―
|
578
|
||||||||||||
Pension and other postretirement benefit
|
―
|
―
|
(32
|
)
|
(32
|
)
|
||||||||||
Net change in accumulated other comprehensive loss
|
(38
|
)
|
(545
|
)
|
(32
|
)
|
(615
|
)
|
||||||||
Balances as of December 31, 2015
|
58
|
(2,044
|
)
|
(548
|
)
|
(2,534
|
)
|
|||||||||
Net unrealized losses
|
(45
|
)
|
―
|
―
|
(45
|
)
|
||||||||||
(Decrease) increase due to amounts reclassified into earnings
|
(6
|
)
|
4
|
―
|
(2
|
)
|
||||||||||
Net translation loss of investments in foreign operations
|
―
|
(503
|
)
|
―
|
(503
|
)
|
||||||||||
Net gains related to hedges of investment in foreign operations
|
―
|
281
|
―
|
281
|
||||||||||||
Pension and other postretirement benefit
|
―
|
―
|
19
|
19
|
||||||||||||
Net change in accumulated other comprehensive (loss) income
|
(51
|
)
|
(218
|
)
|
19
|
(250
|
)
|
|||||||||
Balances as of December 31, 2016
|
7
|
(2,262
|
)
|
(529
|
)
|
(2,784
|
)
|
|||||||||
Net unrealized losses
|
(7
|
)
|
―
|
―
|
(7
|
)
|
||||||||||
Decrease due to amounts reclassified into earnings
|
―
|
(7
|
)
|
―
|
(7
|
)
|
||||||||||
Net translation gain of investments in foreign operations
(a)
|
―
|
678
|
―
|
678
|
||||||||||||
Net losses related to hedges of investment in foreign operations
|
―
|
(370
|
)
|
―
|
(370
|
)
|
||||||||||
Pension and other postretirement benefit
|
―
|
―
|
62
|
62
|
||||||||||||
Net change in accumulated other comprehensive (loss) income
|
(7
|
)
|
301
|
62
|
356
|
|||||||||||
Balances as of December 31, 2017
|
$
|
―
|
$
|
(1,961
|
)
|
$
|
(467
|
)
|
$
|
(2,428
|
)
|
(a) |
Includes $289 million of recognized tax benefits in the year ended December 31, 2017 (refer to Note 21).
|
Tax expense (benefit)
|
||||||||||||
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Investment securities
|
$
|
(4
|
)
|
$
|
(27
|
)
|
$
|
(20
|
)
|
|||
Foreign currency translation adjustments
(a)
|
(172
|
)
|
(15
|
)
|
(124
|
)
|
||||||
Net investment hedges
|
(215
|
)
|
139
|
340
|
||||||||
Pension and other postretirement benefit
|
7
|
37
|
―
|
|||||||||
Total tax impact
|
$
|
(384
|
)
|
$
|
134
|
$
|
196
|
Gains (losses) recognized in earnings
|
|||||||||
Description
(Millions)
|
Income Statement Line Item
|
2017
|
2016
|
||||||
Available-for-sale securities
|
|||||||||
Reclassifications for previously unrealized net gains on investment securities
|
Other non-interest revenues
|
$
|
―
|
$
|
9
|
||||
Related income tax expense
|
Income tax provision
|
―
|
(3
|
)
|
|||||
Reclassification to net income related to available-for-sale securities
|
―
|
6
|
|||||||
Foreign currency translation adjustments
|
|||||||||
Reclassification of realized losses on translation adjustments and related net investment hedges
|
Other expenses
|
(7
|
)
|
(4
|
)
|
||||
Related income tax benefit
|
Income tax provision
|
14
|
―
|
||||||
Reclassification to net income related to foreign currency translation adjustments
|
7
|
(4
|
)
|
||||||
Total
|
$
|
7
|
$
|
2
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Delinquency fees
|
$
|
888
|
$
|
762
|
$
|
788
|
||||||
Foreign currency conversion fee revenue
|
851
|
809
|
852
|
|||||||||
Loyalty coalition-related fees
|
453
|
410
|
379
|
|||||||||
Travel commissions and fees
|
354
|
338
|
349
|
|||||||||
Service fees
|
309
|
291
|
361
|
|||||||||
Other
(a)
|
167
|
143
|
137
|
|||||||||
Total Other fees and commissions
|
$
|
3,022
|
$
|
2,753
|
$
|
2,866
|
(a) |
Other primarily includes fees related to Membership Rewards programs.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Global Network Services partner revenues
|
$
|
615
|
$
|
654
|
$
|
640
|
||||||
Other
(a)
|
1,117
|
1,375
|
1,393
|
|||||||||
Total Other revenues
|
$
|
1,732
|
$
|
2,029
|
$
|
2,033
|
||||||
(a) |
Other includes revenues arising from net revenue earned on cross-border Card Member spending, insurance premiums earned from Card Member travel and other insurance programs, merchant-related fees, Prepaid card and Travelers Cheque-related revenues, revenues related to the GBT JV transition services agreement, earnings from equity method investments (including the GBT JV) and other miscellaneous revenue and fees.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Professional services
|
$
|
2,070
|
$
|
2,583
|
$
|
2,750
|
||||||
Occupancy and equipment
|
2,019
|
1,838
|
1,854
|
|||||||||
Communications
|
276
|
302
|
345
|
|||||||||
Gain on sale of HFS portfolios
(a)
|
―
|
(1,218
|
)
|
―
|
||||||||
Other
(b)
|
1,411
|
1,657
|
1,844
|
|||||||||
Total Other expenses
|
$
|
5,776
|
$
|
5,162
|
$
|
6,793
|
(a) |
Refer to Note 2 for additional information.
|
(b) |
Other expense primarily includes general operating expenses, goodwill and technology impairment costs (refer to Note 2), Card and merchant-related fraud losses, foreign currency-related gains and losses (including the favorable impact from the reassessment of the functional currency of certain UK legal entities in the year ended December 31, 2015) and insurance costs. In addition, beginning December 1, 2015 through to the portfolio sale completion dates, included the valuation allowance adjustment associated with the HFS portfolios.
|
(Millions)
|
Severance
|
Other
(a)
|
Total
|
|||||||||
Liability balance as of December 31, 2014
|
$
|
435
|
$
|
35
|
$
|
470
|
||||||
Restructuring charges, net of $61 in revisions
(b)
|
(33
|
)
|
7
|
(26
|
)
|
|||||||
Payments
|
(141
|
)
|
(14
|
)
|
(155
|
)
|
||||||
Other non-cash
(c)
|
(23
|
)
|
(5
|
)
|
(28
|
)
|
||||||
Liability balance as of December 31, 2015
|
238
|
23
|
261
|
|||||||||
Restructuring charges, net of $81 in revisions
(b)
|
305
|
24
|
329
|
|||||||||
Payments
|
(171
|
)
|
(21
|
)
|
(192
|
)
|
||||||
Other non-cash
(c)
|
(12
|
)
|
(3
|
)
|
(15
|
)
|
||||||
Liability balance as of December 31, 2016
|
360
|
23
|
383
|
|||||||||
Restructuring charges
(d)
|
34
|
8
|
42
|
|||||||||
Payments
|
(219
|
)
|
(16
|
)
|
(235
|
)
|
||||||
Other non-cash
(c)
|
11
|
(2
|
)
|
9
|
||||||||
Liability balance as of December 31, 2017
(e)
|
$
|
186
|
$
|
13
|
$
|
199
|
(a) |
Other primarily includes facility exit and contract termination costs.
|
(b) |
Revisions primarily relate to higher than anticipated redeployments of displaced employees to other positions within the Company, business changes and modifications to existing initiatives.
|
(c) |
Consists primarily of foreign exchange impacts and other non-cash charges.
|
(d) |
Net revisions to existing restructuring reserves were immaterial for the year ended December 31, 2017.
|
(e) |
The majority of cash payments related to the remaining restructuring liabilities are expected to be completed in 2018, and to a lesser extent certain contractual long-term severance arrangements and lease obligations are expected to be completed in 2019 and 2023, respectively.
|
2017
|
Cumulative Restructuring Expense Incurred To Date On
In-Progress Restructuring Programs
|
|||||||||||||||
(Millions)
|
Total Restructuring Charges, net revisions
|
Severance
|
Other
|
Total
|
||||||||||||
USCS
|
$
|
(8
|
)
|
$
|
54
|
$
|
―
|
$
|
54
|
|||||||
ICNS
|
(6
|
)
|
132
|
―
|
132
|
|||||||||||
GCS
|
(10
|
)
|
85
|
8
|
93
|
|||||||||||
GMS
|
5
|
40
|
―
|
40
|
||||||||||||
Corporate & Other
|
61
|
322
|
81
|
403
|
(a) | |||||||||||
Total
|
$
|
42
|
$
|
633
|
$
|
89
|
$
|
722
|
(b) |
(a) |
Corporate & Other includes certain severance and other charges of $336 million related to companywide support functions which were not allocated to the Company’s reportable operating segments, as these were corporate initiatives, which is consistent with how such charges were reported internally.
|
(b) |
As of December 31, 2017, the total expenses to be incurred for previously approved restructuring activities that were in progress are not expected to be materially different than the cumulative expenses incurred to date for these programs.
|
|
Impacts of Deemed Repatriation:
The Tax Act imposed a one-time transition tax on unrepatriated post-1986 accumulated earnings and profits of certain foreign subsidiaries (E&P). To calculate this tax, the Company must determine the cumulative amount of E&P, as well as the amount of foreign taxes paid on such earnings. In addition, the Company made a decision to no longer assert that the accumulated post-1986 E&P of its non-U.S. subsidiaries that are subject to this one-time transition tax are intended to be permanently reinvested outside the United States. As a result, the Company recorded a deferred tax liability for the state income and foreign withholding tax consequences of any future cash dividends paid from such E&P. The Company has recorded reasonable estimates based on data available for both the deemed repatriation tax for 2017 of $1.7 billion and the deferred state income and foreign withholding taxes on potential future distributions of these earnings of $0.3 billion. Until the Company fully completes its analysis, the accounting for these items is provisional.
|
|
Remeasurement of Deferred Tax Assets and Liabilities:
The Company has recorded a deferred charge of $0.6 billion related to the remeasurement of its U.S. federal net deferred tax assets for 2017. This charge reflects the change in the corporate tax rate from 35 percent to 21 percent, effective January 1, 2018, as well as other provisions of the Tax Act. Certain components of the remeasurement are reasonable estimates based on available information. Until the Company fully completes its analysis of all components, the accounting for the remeasurement of the Company’s net deferred tax assets is provisional.
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Current income tax expense:
|
||||||||||||
U.S. federal
(a)
|
$
|
3,408
|
$
|
2,179
|
$
|
2,107
|
||||||
U.S. state and local
|
259
|
272
|
335
|
|||||||||
Non-U.S.
|
386
|
342
|
416
|
|||||||||
Total current income tax expense
|
4,053
|
2,793
|
2,858
|
|||||||||
Deferred income tax (benefit) expense:
|
||||||||||||
U.S. federal
(b)
|
541
|
(45
|
)
|
(23
|
)
|
|||||||
U.S. state and local
|
(7
|
)
|
(8
|
)
|
(5
|
)
|
||||||
Non-U.S.
|
91
|
(52
|
)
|
(55
|
)
|
|||||||
Total deferred income tax (benefit) expense
|
625
|
(105
|
)
|
(83
|
)
|
|||||||
Total income tax expense
|
$
|
4,678
|
$
|
2,688
|
$
|
2,775
|
(a) |
2017 includes a charge of $1.7 billion related to the Tax Act deemed repatriation tax on certain non-U.S. earnings.
|
(b) |
2017 includes charges related to the Tax Act of $0.6 billion due to the remeasurement of certain federal net deferred tax assets to the lower federal tax rate of 21 percent and $0.3 billion due to deferred state income and foreign withholding tax consequences of future cash distributions from non-U.S. subsidiaries.
|
2017
|
2016
|
2015
|
|||||||
U.S. statutory federal income tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
|||
(Decrease) increase in taxes resulting from:
|
|||||||||
Tax-exempt income
|
(1.7)
|
(1.7)
|
(1.7)
|
||||||
State and local income taxes, net of federal benefit
|
2.3
|
2.7
|
2.8
|
||||||
Non-U.S. subsidiaries’ earnings
(a)
|
(5.7)
|
(2.0)
|
(1.8)
|
||||||
Tax settlements
(b)
|
(0.7)
|
(0.6)
|
(0.2)
|
||||||
Non deductible expenses
(c)
|
―
|
―
|
0.9
|
||||||
U.S. Tax Act
(d)
|
34.8
|
―
|
―
|
||||||
Other
|
(0.9)
|
(0.2)
|
―
|
||||||
Actual tax rates
|
63.1
|
%
|
33.2
|
%
|
35.0
|
%
|
(a) |
Results for all years primarily included tax benefits associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely. In addition, 2017 included tax benefits of $156 million, which decreased the actual tax rate by 2.1 percent, related to the realization of certain foreign tax credits.
|
(b) |
Relates to the resolution of tax matters in various jurisdictions.
|
(c) |
Relates to the nondeductible portion of the Prepaid Services goodwill impairment in 2015.
|
(d) |
Relates to the $2.6 billion charge for the impacts of the Tax Act.
|
(Millions)
|
2017
|
2016
|
||||||
Deferred tax assets:
|
||||||||
Reserves not yet deducted for tax purposes
|
$
|
2,724
|
$
|
3,889
|
||||
Employee compensation and benefits
|
403
|
595
|
||||||
Other
|
409
|
592
|
||||||
Gross deferred tax assets
|
3,536
|
5,076
|
||||||
Valuation allowance
|
(46
|
)
|
(54
|
)
|
||||
Deferred tax assets after valuation allowance
|
3,490
|
5,022
|
||||||
Deferred tax liabilities:
|
||||||||
Intangibles and fixed assets
|
1,057
|
1,691
|
||||||
Deferred revenue
|
306
|
441
|
||||||
Deferred interest
|
183
|
305
|
||||||
Investment in joint ventures
|
137
|
209
|
||||||
Other
|
259
|
121
|
||||||
Gross deferred tax liabilities
|
1,942
|
2,767
|
||||||
Net deferred tax assets
|
$
|
1,548
|
$
|
2,255
|
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Balance, January 1
|
$
|
974
|
$
|
870
|
$
|
909
|
||||||
Increases:
|
||||||||||||
Current year tax positions
|
200
|
167
|
81
|
|||||||||
Tax positions related to prior years
|
39
|
117
|
177
|
|||||||||
Decreases:
|
||||||||||||
Tax positions related to prior years
(a)
|
(289
|
)
|
(81
|
)
|
(256
|
)
|
||||||
Settlements with tax authorities
|
(77
|
)
|
(76
|
)
|
(15
|
)
|
||||||
Lapse of statute of limitations
|
(26
|
)
|
(22
|
)
|
(26
|
)
|
||||||
Effects of foreign currency translations
|
―
|
(1
|
)
|
―
|
||||||||
Balance, December 31
|
$
|
821
|
$
|
974
|
$
|
870
|
(a) |
Decrease due to the resolution with the IRS of an uncertain tax position in January 2017, which resulted in the recognition of $289 million in AOCI.
|
(Millions, except per share amounts)
|
2017
|
2016
|
2015
|
|||||||||
Numerator:
|
||||||||||||
Basic and diluted:
|
||||||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
||||||
Preferred dividends
|
(81
|
)
|
(80
|
)
|
(62
|
)
|
||||||
Net income available to common shareholders
|
2,655
|
5,328
|
5,101
|
|||||||||
Earnings allocated to participating share awards
(a)
|
(21
|
)
|
(43
|
)
|
(38
|
)
|
||||||
Net income attributable to common shareholders
|
$
|
2,634
|
$
|
5,285
|
$
|
5,063
|
||||||
Denominator:
(a)
|
||||||||||||
Basic: Weighted-average common stock
|
883
|
933
|
999
|
|||||||||
Add: Weighted-average stock options
(b)
|
3
|
2
|
4
|
|||||||||
Diluted
|
886
|
935
|
1,003
|
|||||||||
|
||||||||||||
Basic EPS
|
$
|
2.98
|
$
|
5.67
|
$
|
5.07
|
||||||
Diluted EPS
|
$
|
2.97
|
$
|
5.65
|
$
|
5.05
|
(a) |
The Company’s unvested restricted stock awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator.
|
(b) |
The dilutive effect of unexercised stock options excludes from the computation of EPS 0.6 million, 2.4 million and 0.5 million of options for the years ended December 31, 2017, 2016 and 2015, respectively, because inclusion of the options would have been anti-dilutive.
|
(Millions, except percentages)
|
CET 1
capital
|
Tier 1
capital
|
Total
capital
|
CET 1
Capital ratio
|
Tier 1
capital ratio
|
Total capital ratio
|
Tier 1 leverage ratio
|
||||||||||||||||||||||
December 31, 2017:
(a)
|
|||||||||||||||||||||||||||||
American Express Company
|
$
|
13,189
|
$
|
14,721
|
$
|
17,142
|
9.0
|
%
|
10.1
|
%
|
11.8
|
%
|
8.6
|
%
|
|||||||||||||||
American Express Centurion Bank
|
5,954
|
5,954
|
6,547
|
12.7
|
12.7
|
14.0
|
10.2
|
||||||||||||||||||||||
American Express Bank, FSB
|
6,065
|
6,065
|
6,653
|
12.9
|
12.9
|
14.2
|
11.7
|
||||||||||||||||||||||
December 31, 2016:
(a)
|
|||||||||||||||||||||||||||||
American Express Company
|
$
|
16,134
|
$
|
17,665
|
$
|
19,893
|
12.3
|
%
|
13.5
|
%
|
15.2
|
%
|
11.6
|
%
|
|||||||||||||||
American Express Centurion Bank
|
6,134
|
6,134
|
6,600
|
16.5
|
16.5
|
17.8
|
16.2
|
||||||||||||||||||||||
American Express Bank, FSB
|
6,681
|
6,681
|
7,194
|
16.3
|
16.3
|
17.5
|
13.9
|
||||||||||||||||||||||
Well-capitalized ratios
(b)
|
6.5
|
%
|
8.0
|
%
|
10.0
|
%
|
5.0
|
%
(c)
|
|||||||||||||||||||||
Basel III Standards 2017
(d)
|
5.8
|
%
|
7.3
|
%
|
9.3
|
%
|
4.0
|
%
|
(a) |
As a Basel III advanced approaches institution in parallel run, capital ratios are reported using Basel III capital definitions, inclusive of transition provisions, and risk-weighted assets using the Basel III standardized approach.
|
(b) |
As defined by the regulations issued by the Federal Reserve, OCC and FDIC for the year ended December 31, 2017.
|
(c) |
Represents requirements for banking subsidiaries to be considered “well-capitalized” pursuant to regulations issued under the Federal Deposit Insurance Corporation Improvement Act. There is no CET1 capital ratio or Tier 1 leverage ratio requirement for a bank holding company to be considered “well-capitalized.”
|
(d) |
Transitional Basel III minimum capital requirement and additional capital conservation buffer as defined by the Federal Reserve for calendar year 2017 for advanced approaches institutions. The additional capital conservation buffer does not apply to Tier 1 leverage ratio.
|
(Billions)
|
2017
|
2016
|
||||||
On-balance sheet:
|
||||||||
Individuals
(a)
|
$
|
112
|
$
|
98
|
||||
Institutions
(b)
|
20
|
18
|
||||||
Financial Services
(c)
|
35
|
28
|
||||||
U.S. Government and agencies
(d)
|
3
|
3
|
||||||
Total on-balance sheet
|
170
|
147
|
(a) |
Primarily reflects loans and receivables from global consumer and small business Card Members, which are governed by individual credit risk management.
|
(b) |
Primarily reflects loans and receivables from global corporate Card Members, which are governed by institutional credit risk management.
|
(c) |
Represents banks, broker-dealers, insurance companies and savings and loan associations.
|
(d) |
Represent debt obligations of the U.S. Government and its agencies, states and municipalities and government-sponsored entities.
|
(Billions)
|
2017
|
2016
|
||||||
On-balance sheet:
|
||||||||
U.S.
|
$
|
102
|
$
|
93
|
||||
Non-U.S.
|
25
|
20
|
||||||
On-balance sheet
|
127
|
113
|
||||||
Unused lines-of-credit:
(a)
|
||||||||
U.S.
|
224
|
203
|
||||||
Non-U.S.
|
49
|
39
|
||||||
Total unused lines-of-credit
|
$
|
273
|
$
|
242
|
(a) |
Total unused credit available to Card Members does not represent potential future cash requirements, as a significant portion of this unused credit will likely not be drawn. Because the Company’s charge card products generally have no preset spending limit, the associated credit limit on charge products is not quantifiable, and therefore is not reflected in unused credit available to Card Members.
|
|
USCS issues a wide range of proprietary consumer cards and provides services to consumers in the United States, including travel services.
|
|
ICNS issues a wide range of proprietary consumer cards outside the United States and enters into partnership agreements with third-party card issuers and acquirers, licensing the American Express brand and extending the reach of the global network. It also provides travel services outside the United States.
|
|
GCS issues a wide range of proprietary corporate and small business cards and provides payment and expense management services globally. In addition, GCS provides commercial financing products.
|
|
GMS operates a global payments network that processes and settles proprietary and non-proprietary card transactions. GMS acquires merchants and provides multi-channel marketing programs and capabilities, services and data analytics, leveraging the Company’s global integrated network. GMS also operates loyalty coalition businesses in certain countries around the world.
|
(Millions, except where indicated)
|
USCS
|
ICNS
|
GCS
|
GMS
|
Corporate & Other
|
(a) |
Consolidated
|
|||||||||||||||||
2017
|
||||||||||||||||||||||||
Non-interest revenues
|
$
|
7,923
|
$
|
5,052
|
$
|
9,463
|
$
|
4,333
|
$
|
259
|
$
|
27,030
|
||||||||||||
Interest income
|
5,755
|
1,029
|
1,361
|
1
|
407
|
8,553
|
||||||||||||||||||
Interest expense
|
742
|
251
|
540
|
(262
|
)
|
841
|
2,112
|
|||||||||||||||||
Total revenues net of interest expense
|
12,936
|
5,830
|
10,284
|
4,596
|
(175
|
)
|
33,471
|
|||||||||||||||||
Total provisions
|
1,630
|
367
|
744
|
15
|
3
|
2,759
|
||||||||||||||||||
Pretax income (loss) from continuing operations
|
2,803
|
1,093
|
2,999
|
2,389
|
(1,870
|
)
|
7,414
|
|||||||||||||||||
Income tax provision (benefit)
|
912
|
181
|
972
|
815
|
1,798
|
4,678
|
||||||||||||||||||
Net income (loss)
|
1,891
|
912
|
2,027
|
1,574
|
(3,668
|
)
|
2,736
|
|||||||||||||||||
Total assets
(billions)
|
$
|
94
|
$
|
39
|
$
|
53
|
$
|
29
|
$
|
(34
|
)
|
$
|
181
|
|||||||||||
2016
|
||||||||||||||||||||||||
Non-interest revenues
|
$
|
7,874
|
$
|
4,785
|
$
|
9,007
|
$
|
4,235
|
$
|
447
|
$
|
26,348
|
||||||||||||
Interest income
|
5,082
|
922
|
1,209
|
1
|
261
|
7,475
|
||||||||||||||||||
Interest expense
|
536
|
219
|
401
|
(237
|
)
|
785
|
1,704
|
|||||||||||||||||
Total revenues net of interest expense
|
12,420
|
5,488
|
9,815
|
4,473
|
(77
|
)
|
32,119
|
|||||||||||||||||
Total provisions
(b)
|
1,065
|
325
|
604
|
25
|
7
|
2,026
|
||||||||||||||||||
Pretax income (loss) from continuing operations
|
3,881
|
818
|
2,945
|
2,295
|
(1,843
|
)
|
8,096
|
|||||||||||||||||
Income tax provision (benefit)
|
1,368
|
163
|
1,036
|
837
|
(716
|
)
|
2,688
|
|||||||||||||||||
Net income (loss)
|
2,513
|
655
|
1,909
|
1,458
|
(1,127
|
)
|
5,408
|
|||||||||||||||||
Total assets
(billions)
|
$
|
87
|
$
|
36
|
$
|
47
|
$
|
24
|
$
|
(35
|
)
|
$
|
159
|
|||||||||||
2015
|
||||||||||||||||||||||||
Non-interest revenues
|
$
|
8,479
|
$
|
4,627
|
$
|
8,930
|
$
|
4,471
|
$
|
389
|
$
|
26,896
|
||||||||||||
Interest income
|
5,198
|
945
|
1,175
|
1
|
226
|
7,545
|
||||||||||||||||||
Interest expense
|
488
|
235
|
365
|
(211
|
)
|
746
|
1,623
|
|||||||||||||||||
Total revenues net of interest expense
|
13,189
|
5,337
|
9,740
|
4,683
|
(131
|
)
|
32,818
|
|||||||||||||||||
Total provisions
(b)
|
1,064
|
300
|
588
|
31
|
5
|
1,988
|
||||||||||||||||||
Pretax income (loss) from continuing operations
|
3,677
|
904
|
3,164
|
2,381
|
(2,188
|
)
|
7,938
|
|||||||||||||||||
Income tax provision (benefit)
|
1,322
|
220
|
1,142
|
882
|
(791
|
)
|
2,775
|
|||||||||||||||||
Net income (loss)
|
2,355
|
684
|
2,022
|
1,499
|
(1,397
|
)
|
5,163
|
|||||||||||||||||
Total assets
(billions)
|
$
|
93
|
$
|
35
|
$
|
45
|
$
|
24
|
$
|
(36
|
)
|
$
|
161
|
(a) |
Corporate & Other includes adjustments and eliminations for intersegment activity.
|
(b) |
Beginning December 1, 2015 through to the sale completion dates, in the USCS and GCS segments, total provisions did not include credit costs related to Card Member loans and receivables HFS, which were reported in Other expenses through a valuation allowance adjustment.
|
(Millions)
|
United States
|
EMEA
|
(a) |
JAPA
|
(a) |
LACC
|
(a) |
Other Unallocated
|
(b) |
Consolidated
|
||||||||||||||
2017
|
||||||||||||||||||||||||
Total revenues net of interest expense
|
$
|
24,737
|
$
|
3,583
|
$
|
3,204
|
$
|
2,396
|
$
|
(449
|
)
|
$
|
33,471
|
|||||||||||
Pretax income (loss) from continuing operations
|
7,071
|
898
|
602
|
610
|
(1,767
|
)
|
7,414
|
|||||||||||||||||
2016
|
||||||||||||||||||||||||
Total revenues net of interest expense
|
$
|
24,133
|
$
|
3,248
|
$
|
3,052
|
$
|
2,274
|
$
|
(588
|
)
|
$
|
32,119
|
|||||||||||
Pretax income (loss) from continuing operations
|
8,202
|
482
|
559
|
597
|
(1,744
|
)
|
8,096
|
|||||||||||||||||
2015
|
||||||||||||||||||||||||
Total revenues net of interest expense
|
$
|
24,927
|
$
|
3,293
|
$
|
2,791
|
$
|
2,412
|
$
|
(605
|
)
|
$
|
32,818
|
|||||||||||
Pretax income (loss) from continuing operations
|
7,500
|
544
|
587
|
693
|
(1,386
|
)
|
7,938
|
(a) |
EMEA represents Europe, the Middle East and Africa; JAPA represents Japan, Asia/Pacific and Australia; and LACC represents Latin America, Canada and the Caribbean.
|
(b) |
Other Unallocated includes net costs which are not directly allocable to specific geographic regions, including costs related to the net negative interest spread on excess liquidity funding and executive office operations expenses.
|
Years Ended December 31
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Revenues
|
||||||||||||
Non-interest revenues
|
||||||||||||
Other
|
358
|
391
|
400
|
|||||||||
Total non-interest revenues
|
358
|
391
|
400
|
|||||||||
Interest income
|
258
|
196
|
172
|
|||||||||
Interest expense
|
493
|
515
|
526
|
|||||||||
Total revenues net of interest expense
|
123
|
72
|
46
|
|||||||||
Expenses
|
||||||||||||
Salaries and employee benefits
|
362
|
388
|
341
|
|||||||||
Other
|
553
|
510
|
443
|
|||||||||
Total expenses
|
915
|
898
|
784
|
|||||||||
Pretax loss
|
(792
|
)
|
(826
|
)
|
(738
|
)
|
||||||
Income tax benefit
|
(354
|
)
|
(327
|
)
|
(268
|
)
|
||||||
Net loss before equity in net income of subsidiaries and affiliates
|
(438
|
)
|
(499
|
)
|
(470
|
)
|
||||||
Equity in net income of subsidiaries and affiliates
|
3,174
|
5,907
|
5,633
|
|||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
As of December 31
(Millions)
|
2017
|
2016
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
4,726
|
$
|
5,229
|
||||
Investment securities
|
1
|
1
|
||||||
Equity in net assets of subsidiaries and affiliates
|
18,191
|
20,522
|
||||||
Accounts receivable, less reserves
|
103
|
513
|
||||||
Premises and equipment, less accumulated depreciation: 2017, $9; 2016, $96
|
5
|
30
|
||||||
Loans to subsidiaries and affiliates
|
11,664
|
7,620
|
||||||
Due from subsidiaries and affiliates
|
1,962
|
867
|
||||||
Other assets
|
252
|
277
|
||||||
Total assets
|
36,904
|
35,059
|
||||||
Liabilities and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Accounts payable and other liabilities
|
3,076
|
1,531
|
||||||
Due to subsidiaries and affiliates
|
175
|
619
|
||||||
Short-term debt of subsidiaries and affiliates
|
2,731
|
4,044
|
||||||
Long-term debt
|
12,695
|
8,364
|
||||||
Total liabilities
|
18,677
|
14,558
|
||||||
Shareholders’ Equity
|
||||||||
Preferred Shares
|
―
|
―
|
||||||
Common shares
|
172
|
181
|
||||||
Additional paid-in capital
|
12,210
|
12,733
|
||||||
Retained earnings
|
8,273
|
10,371
|
||||||
Accumulated other comprehensive loss
|
(2,428
|
)
|
(2,784
|
)
|
||||
Total shareholders’ equity
|
18,227
|
20,501
|
||||||
Total liabilities and shareholders’ equity
|
$
|
36,904
|
$
|
35,059
|
Years Ended December 31
(Millions)
|
2017
|
2016
|
2015
|
|||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income
|
$
|
2,736
|
$
|
5,408
|
$
|
5,163
|
||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Equity in net income of subsidiaries and affiliates
|
(3,174
|
)
|
(5,903
|
)
|
(5,633
|
)
|
||||||
Dividends received from subsidiaries and affiliates
|
5,755
|
4,999
|
5,331
|
|||||||||
Other operating activities, primarily with subsidiaries and affiliates
|
659
|
(102
|
)
|
332
|
||||||||
Net cash provided by operating activities
|
5,976
|
4,402
|
5,193
|
|||||||||
Cash Flows from Investing Activities
|
||||||||||||
Purchase of investments
|
―
|
―
|
(3.00
|
)
|
||||||||
Purchase of premises and equipment
|
―
|
(1
|
)
|
(29
|
)
|
|||||||
Loans to subsidiaries and affiliates
|
(4,044
|
)
|
4,142
|
(3,952
|
)
|
|||||||
Investments in subsidiaries and affiliates
|
―
|
(25
|
)
|
―
|
||||||||
Net cash provided by (used in) investing activities
|
(4,044
|
)
|
4,116
|
(3,984
|
)
|
|||||||
Cash Flows from Financing Activities
|
||||||||||||
Proceeds from long-term debt
|
5,900
|
―
|
―
|
|||||||||
Payments on long-term debt
|
(1,500
|
)
|
(1,350
|
)
|
―
|
|||||||
Short-term debt of subsidiaries and affiliates
|
(1,313
|
)
|
(2,879
|
)
|
986
|
|||||||
Issuance of American Express preferred shares
|
―
|
―
|
841
|
|||||||||
Issuance of American Express common shares and other
|
129
|
176
|
192
|
|||||||||
Repurchase of American Express common shares
|
(4,400
|
)
|
(4,430
|
)
|
(4,480
|
)
|
||||||
Dividends paid
|
(1,251
|
)
|
(1,206
|
)
|
(1,172
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(2,435
|
)
|
(9,689
|
)
|
(3,633
|
)
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(503
|
)
|
(1,171
|
)
|
(2,424
|
)
|
||||||
Cash and cash equivalents at beginning of year
|
5,229
|
6,400
|
8,824
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
4,726
|
$
|
5,229
|
$
|
6,400
|
(Millions, except per share amounts)
|
2017
|
2016
|
||||||||||||||||||||||||||||||
Quarters Ended
|
12/31
|
9/30
|
6/30
|
3/31
|
12/31
|
9/30
|
6/30
|
3/31
|
||||||||||||||||||||||||
Total revenues net of interest expense
|
$
|
8,839
|
$
|
8,436
|
$
|
8,307
|
$
|
7,889
|
$
|
8,022
|
$
|
7,774
|
$
|
8,235
|
$
|
8,088
|
||||||||||||||||
Pretax income
|
1,821
|
1,827
|
1,949
|
1,817
|
1,161
|
1,735
|
3,016
|
2,184
|
||||||||||||||||||||||||
Net income (loss)
|
(1,197
|
)
|
1,356
|
1,340
|
1,237
|
825
|
1,142
|
2,015
|
1,426
|
|||||||||||||||||||||||
Earnings Per Common Share — Basic:
|
||||||||||||||||||||||||||||||||
Net income attributable to common shareholders
(a)
|
$
|
(1.41
|
)
|
$
|
1.51
|
$
|
1.47
|
$
|
1.34
|
$
|
0.88
|
$
|
1.21
|
$
|
2.11
|
$
|
1.45
|
|||||||||||||||
Earnings Per Common Share — Diluted:
|
||||||||||||||||||||||||||||||||
Net income attributable to common shareholders
(a)
|
(1.41
|
)
|
1.50
|
1.47
|
1.34
|
0.88
|
1.20
|
2.10
|
1.45
|
|||||||||||||||||||||||
Cash dividends declared per common share
|
0.35
|
0.35
|
0.32
|
0.32
|
0.32
|
0.32
|
0.29
|
0.29
|
||||||||||||||||||||||||
Common share price:
|
||||||||||||||||||||||||||||||||
High
|
100.53
|
90.77
|
85.39
|
82.00
|
75.74
|
66.71
|
67.34
|
68.18
|
||||||||||||||||||||||||
Low
|
$
|
90.04
|
$
|
83.33
|
$
|
75.51
|
$
|
74.74
|
$
|
59.50
|
$
|
58.25
|
$
|
57.15
|
$
|
50.27
|
(a) |
Represents net income, less (i) earnings allocated to participating share awards of $2 million, $11 million, $11 million and $10 million for the quarters ended December 31, September 30, June 30 and March 31, 2017, respectively, and $6 million, $9 million, $17 million and $11 million for the quarters ended December 31, September 30, June 30 and March 31, 2016, respectively, and (ii) dividends on preferred shares of $20 million, $21 million, $19 million and $21 million for the quarters ended December 31, September 30, June 30 and March 31, 2017, respectively, and $19 million, $21 million, $19 million and $21 million for the quarters ended December 31, September 30, June 30 and March 31, 2016, respectively.
|
·
|
Information included under the caption “Corporate Governance at American Express — Our Board’s Independence”
|
·
|
Information included under the caption “Corporate Governance at American Express —Board Committees — Board Committee Responsibilities”
|
·
|
Information included under the caption “Proxy Summary and Voting Roadmap – Item 1 Election of Directors For a Term of One Year – Director Attendance”
|
·
|
Information included under the caption “Corporate Governance at American Express —Compensation of Directors”
|
·
|
Information included under the caption “Stock Ownership Information”
|
·
|
Information included under the caption “Corporate Governance at American Express — Item 1 — Election of Directors for a Term of One Year”
|
·
|
Information included under the caption “Executive Compensation”
|
·
|
Information under the caption “Corporate Governance at American Express — Certain Relationships and Transactions”
|
·
|
Information under the caption “Stock Ownership Information — Section 16(a) Beneficial Ownership Reporting Compliance”
|
1. |
Financial Statements
:
|
2. |
Financial Statement Schedules
:
|
3. |
Exhibits
:
|
AMERICAN EXPRESS COMPANY
|
/s/ JEFFREY C. CAMPBELL
|
Jeffrey C. Campbell
|
Executive Vice President and
Chief Financial Officer |
/s/ STEPHEN J. SQUERI
|
/s/ ANNE LAUVERGEON
|
Stephen J. Squeri
Chairman, Chief Executive Officer and Director |
Anne Lauvergeon
Director |
/s/ JEFFREY C. CAMPBELL
|
/s/ MICHAEL O. LEAVITT
|
Jeffrey C. Campbell
Executive Vice President and Chief Financial Officer |
Michael O. Leavitt
Director |
/s/ LINDA ZUKAUCKAS
|
/s/ THEODORE J. LEONSIS
|
Linda Zukauckas
Executive Vice President and Corporate Controller |
Theodore J. Leonsis
Director |
(Principal Accounting Officer)
|
|
/s/ CHARLENE BARSHEFSKY
|
/s/ RICHARD C. LEVIN
|
Charlene Barshefsky
Director |
Richard C. Levin
Director |
/s/ JOHN J. BRENNAN
|
/s/ SAMUEL J. PALMISANO
|
John J. Brennan
Director |
Samuel J. Palmisano
Director |
/s/ URSULA M. BURNS
|
/s/ DANIEL L. VASELLA
|
Ursula M. Burns
Director |
Daniel L. Vasella
Director |
/s/ PETER CHERNIN
|
/s/ ROBERT D. WALTER
|
Peter Chernin
Director |
Robert D. Walter
Director |
/s/ RALPH DE LA VEGA
|
/s/ RONALD A. WILLIAMS
|
Ralph de la Vega
Director |
Ronald A. Williams
Director |
2017
|
2016
|
2015
|
||||||||||||||||||||||||||||||||||
Years Ended December 31,
|
Average
|
Interest
|
Average
|
Average
|
Interest
|
Average
|
Average
|
Interest
|
Average
|
|||||||||||||||||||||||||||
(Millions, except percentages)
|
Balance
(a)
|
Income
|
Yield
|
Balance
(a)
|
Income
|
Yield
|
Balance
(a)
|
Income
|
Yield
|
|||||||||||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits in other banks
(b)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
$
|
24,510
|
$
|
277
|
1.1
|
%
|
$
|
21,282
|
$
|
116
|
0.5
|
%
|
$
|
19,255
|
$
|
50
|
0.3
|
%
|
||||||||||||||||||
Non-U.S.
|
1,773
|
17
|
1.0
|
1,884
|
11
|
0.6
|
2,137
|
16
|
0.7
|
|||||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell
|
||||||||||||||||||||||||||||||||||||
Non-U.S.
|
80
|
6
|
7.5
|
110
|
5
|
4.5
|
188
|
6
|
3.2
|
|||||||||||||||||||||||||||
Short-term investment securities
|
||||||||||||||||||||||||||||||||||||
U.S.
|
182
|
1
|
0.5
|
170
|
―
|
―
|
12
|
―
|
―
|
|||||||||||||||||||||||||||
Non-U.S.
|
1,070
|
7
|
0
.7
|
551
|
4
|
0.7
|
393
|
3
|
0.8
|
|||||||||||||||||||||||||||
Card Member loans, including loans HFS
(c)(d)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
58,853
|
6,884
|
11.7
|
58,900
|
6,160
|
10.5
|
61,911
|
6,258
|
10.1
|
|||||||||||||||||||||||||||
Non-U.S.
|
7,847
|
1,038
|
13.2
|
6,828
|
907
|
13.3
|
7,093
|
930
|
13.1
|
|||||||||||||||||||||||||||
Other loans
(c)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
1,887
|
195
|
10.3
|
1,077
|
110
|
10.2
|
891
|
93
|
10.4
|
|||||||||||||||||||||||||||
Non-U.S.
|
148
|
27
|
18.2
|
150
|
28
|
18.7
|
154
|
28
|
18.2
|
|||||||||||||||||||||||||||
Taxable investment securities
(e)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
1,216
|
24
|
2.0
|
721
|
12
|
1.7
|
607
|
10
|
1.7
|
|||||||||||||||||||||||||||
Non-U.S.
|
547
|
17
|
3.1
|
543
|
15
|
2.8
|
535
|
14
|
2.7
|
|||||||||||||||||||||||||||
Non-taxable investment securities
(e)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
1,510
|
48
|
4.9
|
2,390
|
104
|
6.9
|
3,083
|
133
|
6.9
|
|||||||||||||||||||||||||||
Other assets
(f)
|
||||||||||||||||||||||||||||||||||||
Primarily U.S.
|
1
|
12
|
n.m.
|
1
|
3
|
n.m.
|
1
|
4
|
n.m.
|
|||||||||||||||||||||||||||
Total interest-earning assets
(g)
|
$
|
99,624
|
$
|
8,553
|
8.6
|
%
|
$
|
94,607
|
$
|
7,475
|
8.0
|
%
|
$
|
96,260
|
$
|
7,545
|
7.9
|
%
|
||||||||||||||||||
U.S.
|
88,159
|
7,441
|
84,541
|
6,505
|
85,760
|
6,548
|
||||||||||||||||||||||||||||||
Non-U.S.
|
11,465
|
1,112
|
10,066
|
970
|
10,500
|
997
|
(a) |
Averages based on month-end balances.
|
(b) |
Amounts include (i) average interest-bearing restricted cash balances of $868 million, $358 million and $818 million for 2017, 2016 and 2015, respectively, which are included in other assets on the Consolidated Balance Sheets, and (ii) the associated interest income.
|
(c) |
Average non-accrual loans were included in the average Card Member loan balances in amounts of $187 million, $173 million and $202 million in U.S. for 2017, 2016 and 2015, respectively. Average other loan balances for U.S. include average non-accrual loans of $3 million, $5 million and $1 million for 2017, 2016 and 2015, respectively. Average non-accrual loans are considered to determine the average yield on loans.
|
(d) |
Amounts for 2016 and 2015 included average Card Member loans HFS of $5,828 million and $1,143 million, respectively, and the associated interest income. During the first half of 2016, the Company completed the sales of substantially all of its outstanding Card Member loans HFS. Refer to Note 2 to the “Consolidated Financial Statements” for additional information.
|
(e) |
Average yields for both taxable and non-taxable investment securities have been calculated using amortized cost balances and do not include changes in fair value recorded in other comprehensive loss. Average yield on non-taxable investment securities is calculated on a tax-equivalent basis using the U.S. federal statutory tax rate of 35 percent. Effective January 1, 2018, the U.S. federal statutory tax rate was reduced to 21 percent.
|
(f) |
Amounts include (i) average equity securities balances, which are included in investment securities on the Consolidated Balance Sheets, and (ii) the associated income.
|
(g) |
The average yield on total interest-earning assets is adjusted for the impacts of the items mentioned in footnote (e).
|
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Years Ended December 31,
(Millions, except percentages)
|
Average Balance
(a)
|
Average Balance
(a)
|
Average Balance
(a)
|
|||||||||
Non-interest-earning assets
|
||||||||||||
Cash and due from banks
|
||||||||||||
U.S.
|
$
|
2,393
|
$
|
2,653
|
$
|
2,501
|
||||||
Non-U.S.
|
489
|
478
|
565
|
|||||||||
Card Member receivables, net, including receivables HFS
(b)
|
+
|
|||||||||||
U.S.
|
21,262
|
22,622
|
22,126
|
|||||||||
Non-U.S.
|
27,621
|
22,102
|
21,667
|
|||||||||
Other receivables, net
|
||||||||||||
U.S.
|
1,722
|
1,720
|
1,678
|
|||||||||
Non-U.S.
|
1,103
|
1,093
|
1,032
|
|||||||||
Reserves for Card Member and other loans losses
|
||||||||||||
U.S.
|
(1,264
|
)
|
(961
|
)
|
(1,004
|
)
|
||||||
Non-U.S.
|
(177
|
)
|
(150
|
)
|
(153
|
)
|
||||||
Other assets
(c)
|
+
|
|||||||||||
U.S.
|
10,726
|
10,189
|
10,218
|
|||||||||
Non-U.S.
|
3,889
|
3,947
|
3,837
|
|||||||||
Total non-interest-earning assets
|
67,764
|
63,693
|
62,467
|
|||||||||
U.S.
|
34,839
|
36,223
|
35,519
|
|||||||||
Non-U.S.
|
32,925
|
27,470
|
26,948
|
|||||||||
Total assets
|
$
|
167,388
|
$
|
158,300
|
$
|
158,727
|
||||||
U.S.
|
122,998
|
120,764
|
121,279
|
|||||||||
Non-U.S.
|
44,390
|
37,536
|
37,448
|
|||||||||
Percentage of total average assets attributable to non-U.S. activities
|
26.5
|
%
|
23.7
|
%
|
23.6
|
%
|
(a) |
Averages based on month-end balances.
|
(b) |
Amounts for 2016 and 2015 included average Card Member receivables HFS of $51 million and $10 million, respectively. During the first half of 2016, the Company completed the sale of substantially all of its outstanding Card Member receivables HFS. Refer to Note 2 to the “Consolidated Financial Statements” for additional information.
|
(c) |
Includes premises and equipment, net of accumulated depreciation and amortization.
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||||||||||||
Years Ended December 31,
|
Average
|
Interest
|
Average
|
Average
|
Interest
|
Average
|
Average
|
Interest
|
Average
|
|||||||||||||||||||||||||||
(Millions, except percentages)
|
Balance
(a)
|
Expense
|
Rate
|
Balance
(a)
|
Expense
|
Rate
|
Balance
(a)
|
Expense
|
Rate
|
|||||||||||||||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||||||||||||||
Customer deposits
|
||||||||||||||||||||||||||||||||||||
U.S.
|
||||||||||||||||||||||||||||||||||||
Savings
|
$
|
42,134
|
$
|
471
|
1.1
|
%
|
$
|
39,975
|
$
|
334
|
0.8
|
%
|
$
|
36,706
|
$
|
283
|
0.8
|
%
|
||||||||||||||||||
Time
|
14,701
|
301
|
2.0
|
13,450
|
258
|
1.9
|
10,171
|
185
|
1.8
|
|||||||||||||||||||||||||||
Demand
|
215
|
3
|
1.4
|
162
|
1
|
0.6
|
185
|
1
|
0.5
|
|||||||||||||||||||||||||||
Non-U.S.
|
||||||||||||||||||||||||||||||||||||
Other time and savings
|
17
|
1
|
5.9
|
10
|
1
|
10.0
|
21
|
2
|
9.5
|
|||||||||||||||||||||||||||
Other demand
|
18
|
3
|
16.7
|
74
|
4
|
5.4
|
87
|
4
|
4.6
|
|||||||||||||||||||||||||||
Short-term borrowings
|
||||||||||||||||||||||||||||||||||||
U.S.
|
1,188
|
15
|
1.3
|
1,017
|
6
|
0.6
|
1,416
|
4
|
0.3
|
|||||||||||||||||||||||||||
Non-U.S.
|
2,145
|
18
|
0.8
|
2,048
|
19
|
0.9
|
2,198
|
15
|
0.7
|
|||||||||||||||||||||||||||
Long-term debt and other
(b)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
51,366
|
1,281
|
2.5
|
46,521
|
1,057
|
2.3
|
51,623
|
1,094
|
2.1
|
|||||||||||||||||||||||||||
Non-U.S.
|
725
|
19
|
2.6
|
931
|
24
|
2.6
|
1,271
|
35
|
2.8
|
|||||||||||||||||||||||||||
Total interest-bearing liabilities
|
$
|
112,509
|
$
|
2,112
|
1.9
|
%
|
$
|
104,188
|
$
|
1,704
|
1.6
|
%
|
$
|
103,678
|
$
|
1,623
|
1.6
|
%
|
||||||||||||||||||
U.S.
|
109,604
|
2,071
|
101,125
|
1,656
|
100,101
|
1,567
|
||||||||||||||||||||||||||||||
Non-U.S.
|
2,905
|
41
|
3,063
|
48
|
3,577
|
56
|
||||||||||||||||||||||||||||||
Non-interest-bearing liabilities
|
||||||||||||||||||||||||||||||||||||
Travelers Cheques and other prepaid products
|
||||||||||||||||||||||||||||||||||||
U.S.
|
2,501
|
2,779
|
3,160
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
78
|
86
|
110
|
|||||||||||||||||||||||||||||||||
Accounts payable
|
||||||||||||||||||||||||||||||||||||
U.S.
|
6,788
|
7,005
|
7,238
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
5,254
|
4,757
|
4,589
|
|||||||||||||||||||||||||||||||||
Customer Deposits
(c)
|
||||||||||||||||||||||||||||||||||||
U.S.
|
351
|
372
|
386
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
331
|
311
|
324
|
|||||||||||||||||||||||||||||||||
Other liabilities
|
||||||||||||||||||||||||||||||||||||
U.S.
|
13,880
|
13,429
|
13,435
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
4,876
|
4,568
|
4,313
|
|||||||||||||||||||||||||||||||||
Total non-interest-bearing liabilities
|
34,059
|
33,307
|
33,555
|
|||||||||||||||||||||||||||||||||
U.S.
|
23,520
|
23,585
|
24,219
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
10,539
|
9,722
|
9,336
|
|||||||||||||||||||||||||||||||||
Total liabilities
|
146,568
|
137,495
|
137,233
|
|||||||||||||||||||||||||||||||||
U.S.
|
133,124
|
124,710
|
124,320
|
|||||||||||||||||||||||||||||||||
Non-U.S.
|
13,444
|
12,785
|
12,913
|
|||||||||||||||||||||||||||||||||
Total shareholders' equity
|
20,820
|
20,805
|
21,494
|
|||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
167,388
|
$
|
158,300
|
$
|
158,727
|
||||||||||||||||||||||||||||||
Percentage of total average liabilities attributable to non-U.S. activities
|
9.2
|
%
|
9.3
|
%
|
9.4
|
%
|
||||||||||||||||||||||||||||||
Interest rate spread
|
6.7
|
%
|
6.4
|
%
|
6.3
|
%
|
||||||||||||||||||||||||||||||
Net interest income and net average yield on interest-earning assets
(d)
|
$
|
6,441
|
6.5
|
%
|
$
|
5,771
|
|
6.2
|
%
|
$
|
5,922
|
6.2
|
%
|
(a) |
Averages based on month-end balances.
|
(b) |
Interest expense primarily reflects interest on long-term financing and interest incurred on derivative instruments in qualifying hedging relationships on the hedged debt instruments.
|
(c) |
U.S. non-interest-bearing Customer deposits include average Card Member credit balances of $314 million, $328 million and $326 million for 2017, 2016 and 2015
,
respectively. Non-U.S. non-interest-bearing Customer deposits include average Card Member credit balances of $318 million, $297 million and $311 million for 2017, 2016 and 2015, respectively
.
|
(d) |
Net average yield on interest-earning assets is defined as net interest income divided by average total interest-earning assets as adjusted for the items mentioned in footnote (e) from the previous table.
|
2017 Versus 2016
|
2016 Versus 2015
|
|||||||||||||||||||||||
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||||
due to change in:
|
due to change in:
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Years Ended December 31,
(Millions)
|
Volume
|
Rate
|
Net Change
|
Volume
|
Rate
|
Net Change
|
||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||
Interest-bearing deposits in other banks
|
||||||||||||||||||||||||
U.S.
|
$
|
18
|
$
|
143
|
$
|
161
|
$
|
5
|
$
|
61
|
$
|
66
|
||||||||||||
Non-U.S.
|
(1
|
)
|
7
|
6
|
(2
|
)
|
(3
|
)
|
(5
|
)
|
||||||||||||||
Federal funds sold and securities purchased under agreements to resell
|
||||||||||||||||||||||||
Non-U.S.
|
(1
|
)
|
2
|
1
|
(2
|
)
|
1
|
(1
|
)
|
|||||||||||||||
Short-term investment securities
|
||||||||||||||||||||||||
U.S.
|
―
|
1
|
1
|
―
|
―
|
―
|
||||||||||||||||||
Non-U.S.
|
4
|
(1
|
)
|
3
|
1
|
―
|
1
|
|||||||||||||||||
Card Member loans, including loans HFS
|
||||||||||||||||||||||||
U.S.
|
(5
|
)
|
729
|
724
|
(304
|
)
|
206
|
(98
|
)
|
|||||||||||||||
Non-U.S.
|
135
|
(4
|
)
|
131
|
(35
|
)
|
12
|
(23
|
)
|
|||||||||||||||
Other loans
|
||||||||||||||||||||||||
U.S.
|
83
|
2
|
85
|
19
|
(2
|
)
|
17
|
|||||||||||||||||
Non-U.S.
|
―
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
1
|
―
|
|||||||||||||||
Taxable investment securities
|
||||||||||||||||||||||||
U.S.
|
9
|
3
|
12
|
2
|
―
|
2
|
||||||||||||||||||
Non-U.S.
|
―
|
2
|
2
|
―
|
1
|
1
|
||||||||||||||||||
Non-taxable investment securities
|
||||||||||||||||||||||||
U.S.
|
(37
|
)
|
(19
|
)
|
(56
|
)
|
(29
|
)
|
―
|
(29
|
)
|
|||||||||||||
Other assets
|
||||||||||||||||||||||||
Primarily U.S.
|
―
|
9
|
9
|
―
|
(1
|
)
|
(1
|
)
|
||||||||||||||||
Change in interest income
|
205
|
873
|
1,078
|
(346
|
)
|
276
|
(70
|
)
|
||||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||
Customer deposits
|
||||||||||||||||||||||||
U.S.
|
||||||||||||||||||||||||
Savings
|
18
|
119
|
137
|
25
|
26
|
51
|
||||||||||||||||||
Time
|
24
|
19
|
43
|
60
|
13
|
73
|
||||||||||||||||||
Demand
|
―
|
2
|
2
|
―
|
―
|
―
|
||||||||||||||||||
Non-U.S.
|
||||||||||||||||||||||||
Other time and savings
|
1
|
(1
|
)
|
―
|
(1
|
)
|
―
|
(1
|
)
|
|||||||||||||||
Other demand
|
(3
|
)
|
2
|
(1
|
)
|
(1
|
)
|
1
|
―
|
|||||||||||||||
Short-term borrowings
|
||||||||||||||||||||||||
U.S.
|
1
|
8
|
9
|
(1
|
)
|
3
|
2
|
|||||||||||||||||
Non-U.S.
|
1
|
(2
|
)
|
(1
|
)
|
(1
|
)
|
5
|
4
|
|||||||||||||||
Long-term debt and other
|
||||||||||||||||||||||||
U.S.
|
110
|
114
|
224
|
(108
|
)
|
71
|
(37
|
)
|
||||||||||||||||
Non-U.S.
|
(5
|
)
|
―
|
(5
|
)
|
(9
|
)
|
(2
|
)
|
(11
|
)
|
|||||||||||||
Change in interest expense
|
147
|
261
|
408
|
(36
|
)
|
117
|
81
|
|||||||||||||||||
Change in net interest income
|
$
|
58
|
$
|
612
|
$
|
670
|
$
|
(310
|
)
|
$
|
159
|
$
|
(151
|
)
|
(a) |
Refer to footnotes from “Distribution of Assets, Liabilities and Shareholders’ Equity” for additional information.
|
December 31,
(Millions)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Loans
(a) (b)
|
||||||||||||||||||||
U.S. loans
|
||||||||||||||||||||
Card Member
(c)
|
$
|
64,542
|
$
|
58,242
|
$
|
51,446
|
$
|
62,592
|
$
|
58,530
|
||||||||||
Other
(d)
|
2,554
|
1,350
|
1,073
|
726
|
411
|
|||||||||||||||
Non-U.S. loans
|
||||||||||||||||||||
Card Member
(c)
|
8,857
|
7,023
|
7,127
|
7,793
|
8,708
|
|||||||||||||||
Other
(d)
|
133
|
111
|
201
|
206
|
210
|
|||||||||||||||
Total loans
|
$
|
76,086
|
$
|
66,726
|
$
|
59,847
|
$
|
71,317
|
$
|
67,859
|
||||||||||
Card Member receivables
(a) (b)
|
||||||||||||||||||||
U.S. Card Member receivables
|
||||||||||||||||||||
Consumer
(e)
|
26,754
|
24,768
|
23,255
|
22,468
|
21,842
|
|||||||||||||||
Commercial
(f)
|
10,868
|
9,685
|
8,961
|
9,082
|
8,480
|
|||||||||||||||
Non-U.S. Card Member receivables
|
||||||||||||||||||||
Consumer
(e)
|
10,311
|
7,772
|
7,101
|
7,800
|
7,930
|
|||||||||||||||
Commercial
(f)
|
6,114
|
5,083
|
4,816
|
5,501
|
5,911
|
|||||||||||||||
Total Card Member receivables
|
$
|
54,047
|
$
|
47,308
|
$
|
44,133
|
$
|
44,851
|
$
|
44,163
|
(a) |
As of December 31, 2017, the Company had approximately $273 billion of unused credit available to Card Members as part of established lending product agreements. Total unused credit available to Card Members does not represent potential future cash requirements, as a significant portion of this unused credit will likely not be drawn. The Company’s charge card products generally have no preset spending limit, the associated credit limit on charge products is not quantifiable, and therefore is not reflected in unused credit available to Card Members.
|
(b) |
As of December 31, 2017, the Company’s exposure to any concentration of gross loans and Card Member receivables combined, which exceeds 10 percent of total loans and Card Member receivables is further split between $112 billion for individuals and $18 billion for commercial. Loans and Card Member receivables concentrations are defined as loans and Card Member receivables due from multiple borrowers engaged in similar activities that would cause these borrowers to be impacted similarly to certain economic or other related conditions. Refer to Note 24 to the “Consolidated Financial Statements” for additional information on concentrations.
|
(c) |
Primarily represents loans to individuals and small businesses.
|
(d) |
Other loans primarily represent personal and commercial financing products.
|
(e) |
Represents receivables from individual and small business charge card customers.
|
(f) |
Represents receivables from corporate charge card clients.
|
December 31,
(Millions)
|
2017
|
|||||||||||||||
Within
|
1-5
|
After
|
||||||||||||||
1 year
(a)(b)
|
years
(b)(c)
|
5 years
(c)
|
Total
|
|||||||||||||
Loans
|
||||||||||||||||
U.S. loans
|
||||||||||||||||
Card Member
|
$
|
64,413
|
$
|
129
|
$
|
―
|
$
|
64,542
|
||||||||
Other
|
978
|
1,389
|
187
|
2,554
|
||||||||||||
Non-U.S. loans
|
||||||||||||||||
Card Member
|
8,856
|
―
|
1
|
8,857
|
||||||||||||
Other
|
91
|
42
|
―
|
133
|
||||||||||||
Total loans
|
$
|
74,338
|
$
|
1,560
|
$
|
188
|
$
|
76,086
|
||||||||
Loans due after one year at fixed interest rates
|
$
|
1,523
|
$
|
61
|
$
|
1,584
|
||||||||||
Loans due after one year at variable interest rates
|
37
|
127
|
164
|
|||||||||||||
Total loans
|
$
|
1,560
|
$
|
188
|
$
|
1,748
|
||||||||||
Card Member receivables
|
||||||||||||||||
U.S. Card Member receivables
|
||||||||||||||||
Consumer
|
$
|
26,722
|
$
|
32
|
$
|
―
|
$
|
26,754
|
||||||||
Commercial
|
10,868
|
―
|
―
|
10,868
|
||||||||||||
Non-U.S. Card Member receivables
|
||||||||||||||||
Consumer
|
10,311
|
―
|
―
|
10,311
|
||||||||||||
Commercial
|
6,114
|
―
|
―
|
6,114
|
||||||||||||
Total Card Member receivables
|
$
|
54,015
|
$
|
32
|
$
|
―
|
$
|
54,047
|
(a) |
Card Member loans have no stated maturity and are therefore included in the due within one year category. However, many of the Company’s Card Members will revolve their balances, which may extend their repayment period beyond one year for balances outstanding as of December 31, 2017
.
|
(b) |
Card Member receivables are immediately due upon receipt of Card Member statements, have no stated interest rate and are included within the due within one year category. Receivables due after one year represent modification programs classified as Troubled Debt Restructurings (TDRs), wherein the terms of a receivable have been modified for Card Members that are experiencing financial difficulties and a long-term concession (more than 12 months) has been granted to the borrower.
|
(c) |
Card Member and other loans due after one year primarily represent installment loans and TDRs
.
|
December 31,
(Millions)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Loans
|
||||||||||||||||||||
Non-accrual loans
(a)
|
||||||||||||||||||||
U.S.
|
$
|
203
|
$
|
173
|
$
|
154
|
$
|
241
|
$
|
294
|
||||||||||
Non-U.S.
|
―
|
―
|
―
|
―
|
4
|
|||||||||||||||
Total non-accrual loans
|
203
|
173
|
154
|
241
|
298
|
|||||||||||||||
Loans contractually 90 days past-due and still accruing interest
(b)
|
||||||||||||||||||||
U.S.
|
273
|
208
|
164
|
162
|
174
|
|||||||||||||||
Non-U.S.
|
56
|
52
|
52
|
58
|
54
|
|||||||||||||||
Total loans contractually 90 days past-due and still accruing interest
|
329
|
260
|
216
|
220
|
228
|
|||||||||||||||
Restructured loans
(c)
|
||||||||||||||||||||
U.S.
|
367
|
346
|
279
|
286
|
351
|
|||||||||||||||
Non-U.S.
|
―
|
―
|
―
|
―
|
5
|
|||||||||||||||
Total restructured loans
|
367
|
346
|
279
|
286
|
356
|
|||||||||||||||
Total non-performing loans
|
$
|
899
|
$
|
779
|
$
|
649
|
$
|
747
|
$
|
882
|
||||||||||
Card Member receivables
|
||||||||||||||||||||
Restructured Card Member receivables
(c)
|
||||||||||||||||||||
U.S.
|
80
|
55
|
33
|
48
|
50
|
|||||||||||||||
Total restructured Card Member receivables
|
$
|
80
|
$
|
55
|
$
|
33
|
$
|
48
|
$
|
50
|
(b) |
The Company’s policy is generally to accrue interest through the date of write-off (typically 180 days past due). The Company establishes reserves for interest that it believes will not be collected. Amounts presented exclude loans classified as a TDR.
|
(c) |
In instances where the Card Member is experiencing financial difficulty, the Company may modify, through various programs, Card Member loans and receivables in order to minimize losses and improve collectability, while providing Card Members with temporary or permanent financial relief. The Company has classified Card Member loans and receivables in these modification programs as TDRs and continues to classify Card Member accounts that have exited a modification program as a TDR, with such accounts identified as “Out of Program TDRs.” Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (possibly as low as zero percent, in which case the loan is characterized as non-accrual in the Company’s TDR disclosures), (ii) placing the Card Member on a fixed payment plan not to exceed 60 months and (iii) suspending delinquency fees until the Card Member exits the modification program. Refer to Note 3 to the “Consolidated Financial Statements” for additional information.
|
(a) |
The Company determines the original effective interest rate as the interest rate in effect prior to the imposition of any penalty interest rate.
|
Banks and
|
Gross
|
Total
|
|||||||||||||||||||||||||||||||
Governments
|
other
|
Total
|
foreign-
|
exposure
|
|||||||||||||||||||||||||||||
Years Ended December 31,
|
and official
|
financial
|
cross-border
|
office
|
(net of
|
Cross-border
|
|||||||||||||||||||||||||||
(Millions)
|
institutions
|
institutions
|
NBFIs
|
Other
|
outstandings
|
liabilities
|
liabilities)
|
commitments
|
|||||||||||||||||||||||||
Australia
|
2017
|
$
|
―
|
$
|
259
|
$
|
―
|
$
|
3,594
|
$
|
3,853
|
$
|
504
|
$
|
3,349
|
$
|
6,635
|
||||||||||||||||
2016
|
―
|
389
|
―
|
2,986
|
3,375
|
453
|
2,922
|
5,567
|
|||||||||||||||||||||||||
2015
|
―
|
193
|
―
|
2,786
|
2,979
|
419
|
2,560
|
5,410
|
|||||||||||||||||||||||||
Canada
|
2017
|
$
|
355
|
$
|
992
|
$
|
40
|
$
|
2,730
|
$
|
4,117
|
$
|
1,032
|
$
|
3,085
|
$
|
12,174
|
||||||||||||||||
2016
|
1,284
|
1,028
|
35
|
2,408
|
4,755
|
977
|
3,778
|
11,590
|
|||||||||||||||||||||||||
2015
|
356
|
705
|
36
|
2,433
|
3,530
|
1,383
|
2,147
|
11,845
|
|||||||||||||||||||||||||
United Kingdom
|
2017
|
$
|
68
|
$
|
1,286
|
$
|
86
|
$
|
4,568
|
$
|
6,008
|
$
|
3,884
|
$
|
2,124
|
$
|
15,578
|
||||||||||||||||
2016
|
77
|
2,213
|
63
|
3,390
|
5,743
|
3,222
|
2,521
|
11,919
|
|||||||||||||||||||||||||
2015
|
107
|
2,068
|
32
|
3,422
|
5,629
|
3,174
|
2,455
|
12,293
|
|||||||||||||||||||||||||
Mexico
|
2017
|
$
|
85
|
$
|
97
|
$
|
7
|
$
|
2,229
|
$
|
2,418
|
$
|
556
|
$
|
1,862
|
$
|
1,125
|
||||||||||||||||
2016
|
106
|
167
|
6
|
1,820
|
2,099
|
531
|
1,568
|
961
|
|||||||||||||||||||||||||
2015
|
98
|
61
|
8
|
1,890
|
2,057
|
552
|
1,505
|
1,053
|
|||||||||||||||||||||||||
Japan
|
2017
|
$
|
4
|
$
|
74
|
$
|
177
|
$
|
3,082
|
$
|
3,337
|
$
|
3,106
|
$
|
231
|
$
|
2,290
|
||||||||||||||||
2016
|
5
|
55
|
130
|
2,504
|
2,694
|
2,526
|
168
|
87
|
|||||||||||||||||||||||||
2015
|
4
|
56
|
92
|
2,058
|
2,210
|
2,071
|
139
|
79
|
|||||||||||||||||||||||||
Other countries
(a)
|
2017
|
$
|
156
|
$
|
142
|
$
|
14
|
$
|
4,255
|
$
|
4,567
|
$
|
591
|
$
|
3,976
|
$
|
682
|
||||||||||||||||
2016
|
137
|
135
|
13
|
3,229
|
3,514
|
466
|
3,048
|
562
|
|||||||||||||||||||||||||
2015
|
77
|
96
|
5
|
3,177
|
3,355
|
503
|
2,852
|
613
|
(a) |
Cross-border outstandings between 0.75 percent and 1.0 percent of consolidated total assets are included in Other Countries. For comparability, countries that meet the threshold for any year presented are included for all years. Countries included are France, Italy and the Netherlands.
|
Years Ended December 31,
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Card Member loans
|
||||||||||||||||||||
Allowance for loan losses at beginning of year
|
||||||||||||||||||||
U.S. loans
|
$
|
1,068
|
$
|
882
|
$
|
1,036
|
$
|
1,083
|
$
|
1,274
|
||||||||||
Non-U.S. loans
|
155
|
146
|
165
|
178
|
197
|
|||||||||||||||
Total allowance for losses
|
1,223
|
1,028
|
1,201
|
1,261
|
1,471
|
|||||||||||||||
Card Member lending provisions
(a)
|
||||||||||||||||||||
U.S. loans
|
1,655
|
1,056
|
1,032
|
944
|
916
|
|||||||||||||||
Non-U.S. loans
|
213
|
179
|
158
|
194
|
199
|
|||||||||||||||
Total Card Member lending provisions
|
1,868
|
1,235
|
1,190
|
1,138
|
1,115
|
|||||||||||||||
Write-offs
|
||||||||||||||||||||
U.S. loans
|
(1,572
|
)
|
(1,262
|
)
|
(1,321
|
)
|
(1,346
|
)
|
(1,463
|
)
|
||||||||||
Non-U.S. loans
|
(245
|
)
|
(222
|
)
|
(226
|
)
|
(269
|
)
|
(280
|
)
|
||||||||||
Total write-offs
|
(1,817
|
)
|
(1,484
|
)
|
(1,547
|
)
|
(1,615
|
)
|
(1,743
|
)
|
||||||||||
Recoveries
|
||||||||||||||||||||
U.S. loans
|
356
|
325
|
359
|
356
|
368
|
|||||||||||||||
Non-U.S. loans
|
53
|
54
|
59
|
72
|
84
|
|||||||||||||||
Total recoveries
|
409
|
379
|
418
|
428
|
452
|
|||||||||||||||
Net write-offs
(b)
|
(1,408
|
)
|
(1,105
|
)
|
(1,129
|
)
|
(1,187
|
)
|
(1,291
|
)
|
||||||||||
Transfer of reserves on HFS loans portfolios
|
||||||||||||||||||||
U.S. loans
|
―
|
―
|
(224
|
)
|
―
|
―
|
||||||||||||||
Other
(c)
|
||||||||||||||||||||
U.S. loans
|
―
|
67
|
―
|
(1
|
)
|
(12
|
)
|
|||||||||||||
Non-U.S. loans
|
23
|
(2
|
)
|
(10
|
)
|
(10
|
)
|
(22
|
)
|
|||||||||||
Total other
|
23
|
65
|
(10
|
)
|
(11
|
)
|
(34
|
)
|
||||||||||||
Allowance for loan losses at end of year
|
||||||||||||||||||||
U.S. loans
|
1,507
|
1,068
|
882
|
1,036
|
1,083
|
|||||||||||||||
Non-U.S. loans
|
199
|
155
|
146
|
165
|
178
|
|||||||||||||||
Total allowance for losses
|
$
|
1,706
|
$
|
1,223
|
$
|
1,028
|
$
|
1,201
|
$
|
1,261
|
||||||||||
Principal only net write-offs / average Card Member loans outstanding
(d) (e)
|
1.8
|
% | 1.6 |
%
|
1.4
|
%
|
1.5 | % | 1.8 |
%
|
||||||||||
Principal, interest and fees net write-offs / average Card Member loans outstanding
(d) (e)
|
2.1 |
%
|
1.8 |
%
|
1.7
|
%
|
1.8 |
%
|
2.0 |
%
|
(a) |
Refer to Note 4 to the “Consolidated Financial Statements” for a discussion of management’s process for evaluating the allowance for loan losses.
|
(b) |
Net write-offs include principal, interest and fees balances.
|
(c) |
Includes foreign currency translation adjustments and other items. The year ended December 31, 2016
,
included reserves of $67 million associated with $265 million of retained Card Member loans reclassified from HFS to held for investment
as a result of retaining certain loans in connection with the respective sales of JetBlue and Costco cobrand card portfolios
. The year ended December 31, 2014
,
included an adjustment related to reserves for card related fraud losses of $(6) million, which was reclassified to Other liabilities.
|
(d) |
The net write-off rate presented is on a worldwide basis and is based on principal losses only (i.e., excluding interest and fees) to be consistent with industry convention. In addition, because the Company considers uncollectible interest and fees in estimating its reserves for credit losses, a net write-off rate including principal, interest and fees is also presented. The year ended December 31, 2015, reflected the impact of a change in the timing of charge-offs for Card Member loans in certain modification programs from 180 days past due to 120 days past due, which was fully recognized during the three months ended March 31, 2015.
|
Years Ended December 31,
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Other loans
|
||||||||||||||||||||
Allowance for loan losses at beginning of year
|
||||||||||||||||||||
U.S. loans
|
$
|
39
|
$
|
17
|
$
|
8
|
$
|
8
|
$
|
8
|
||||||||||
Non-U.S. loans
|
3
|
3
|
4
|
5
|
12
|
|||||||||||||||
Total allowance for losses
|
42
|
20
|
12
|
13
|
20
|
|||||||||||||||
Provisions for other loan losses
(a)
|
||||||||||||||||||||
U.S. loans
|
71
|
56
|
21
|
5
|
3
|
|||||||||||||||
Non-U.S. loans
|
1
|
1
|
1
|
3
|
4
|
|||||||||||||||
Total provisions for other loan losses
|
72
|
57
|
22
|
8
|
7
|
|||||||||||||||
Write-offs
|
||||||||||||||||||||
U.S. loans
|
(37
|
)
|
(39
|
)
|
(15
|
)
|
(7
|
)
|
(7
|
)
|
||||||||||
Non-U.S. loans
|
(3
|
)
|
(2
|
)
|
(3
|
)
|
(7
|
)
|
(13
|
)
|
||||||||||
Total write-offs
|
(40
|
)
|
(41
|
)
|
(18
|
)
|
(14
|
)
|
(20
|
)
|
||||||||||
Recoveries
|
||||||||||||||||||||
U.S. loans
|
5
|
5
|
3
|
2
|
4
|
|||||||||||||||
Non-U.S. loans
|
1
|
1
|
1
|
3
|
3
|
|||||||||||||||
Total recoveries
|
6
|
6
|
4
|
5
|
7
|
|||||||||||||||
Net write-offs
|
(34
|
)
|
(35
|
)
|
(14
|
)
|
(9
|
)
|
(13
|
)
|
||||||||||
Other
(b)
|
||||||||||||||||||||
Non-U.S. loans
|
―
|
―
|
―
|
―
|
(1
|
)
|
||||||||||||||
Total other
|
―
|
―
|
―
|
―
|
(1
|
)
|
||||||||||||||
Allowance for loan losses at end of year
|
||||||||||||||||||||
U.S. loans
|
78
|
39
|
17
|
8
|
8
|
|||||||||||||||
Non-U.S. loans
|
2
|
3
|
3
|
4
|
5
|
|||||||||||||||
Total allowance for losses
|
$
|
80
|
$
|
42
|
$
|
20
|
$
|
12
|
$
|
13
|
||||||||||
Net write-offs/average other loans outstanding
(c)
|
1.7
|
%
|
2.9
|
%
|
1.3
|
%
|
1.2
|
%
|
2.3
|
%
|
(a) |
Provisions for other loan losses are determined based on a specific identification methodology and models that analyze specific portfolio statistics.
|
(b) |
Includes primarily foreign currency translation adjustments.
|
(c) |
The net write-off rate presented is on a worldwide basis and is based on write-offs of principal, interest and fees. Average other loans outstanding are based on month
-
end balances.
|
Years Ended December 31,
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Card Member receivables
|
||||||||||||||||||||
Allowance for losses at beginning of year
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
$
|
266
|
$
|
268
|
$
|
276
|
$
|
216
|
$
|
273
|
||||||||||
Commercial
|
53
|
51
|
53
|
35
|
37
|
|||||||||||||||
Total U.S. receivables
|
319
|
319
|
329
|
251
|
310
|
|||||||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
95
|
93
|
93
|
98
|
86
|
|||||||||||||||
Commercial
|
53
|
50
|
43
|
37
|
32
|
|||||||||||||||
Total non-U.S. receivables
|
148
|
143
|
136
|
135
|
118
|
|||||||||||||||
Total allowance for losses
|
467
|
462
|
465
|
386
|
428
|
|||||||||||||||
Provisions for losses
(a)
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
413
|
366
|
420
|
451
|
336
|
|||||||||||||||
Commercial
|
114
|
69
|
76
|
98
|
53
|
|||||||||||||||
Total U.S. provisions
|
527
|
435
|
496
|
549
|
389
|
|||||||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
201
|
176
|
169
|
172
|
188
|
|||||||||||||||
Commercial
|
67
|
85
|
72
|
71
|
71
|
|||||||||||||||
Total non-U.S. provisions
|
268
|
261
|
241
|
243
|
259
|
|||||||||||||||
Total provisions for losses
|
795
|
696
|
737
|
792
|
648
|
|||||||||||||||
Write-offs
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
(633
|
)
|
(637
|
)
|
(698
|
)
|
(618
|
)
|
(662
|
)
|
||||||||||
Commercial
|
(139
|
)
|
(112
|
)
|
(123
|
)
|
(120
|
)
|
(92
|
)
|
||||||||||
Total U.S. write-offs
|
(772
|
)
|
(749
|
)
|
(821
|
)
|
(738
|
)
|
(754
|
)
|
||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
(227
|
)
|
(215
|
)
|
(204
|
)
|
(211
|
)
|
(227
|
)
|
||||||||||
Commercial
|
(96
|
)
|
(101
|
)
|
(89
|
)
|
(92
|
)
|
(90
|
)
|
||||||||||
Total non-U.S. write-offs
|
(323
|
)
|
(316
|
)
|
(293
|
)
|
(303
|
)
|
(317
|
)
|
||||||||||
Total write-offs
|
$
|
(1,095
|
)
|
$
|
(1,065
|
)
|
$
|
(1,114
|
)
|
$
|
(1,041
|
)
|
$
|
(1,071
|
)
|
(a) |
Refer to Note 4 to the “Consolidated Financial Statements” for a discussion of management’s process for evaluating the allowance for receivable losses.
|
Years Ended December 31,
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
Card Member receivables
|
||||||||||||||||||||
Recoveries
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
$
|
233
|
$
|
269
|
$
|
271
|
$
|
230
|
$
|
279
|
||||||||||
Commercial
|
45
|
43
|
45
|
41
|
38
|
|||||||||||||||
Total U.S. recoveries
|
278
|
312
|
316
|
271
|
317
|
|||||||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
56
|
56
|
57
|
58
|
57
|
|||||||||||||||
Commercial
|
25
|
23
|
28
|
29
|
28
|
|||||||||||||||
Total non-U.S. recoveries
|
81
|
79
|
85
|
87
|
85
|
|||||||||||||||
Total recoveries
|
359
|
391
|
401
|
358
|
402
|
|||||||||||||||
Net write-offs
(a)
|
(736
|
)
|
(674
|
)
|
(713
|
)
|
(683
|
)
|
(669
|
)
|
||||||||||
Other
(b)
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
(2
|
)
|
―
|
(1
|
)
|
(3
|
)
|
(10
|
)
|
|||||||||||
Commercial
|
―
|
2
|
―
|
(1
|
)
|
(1
|
)
|
|||||||||||||
Total U.S. other
|
(2
|
)
|
2
|
(1
|
)
|
(4
|
)
|
(11
|
)
|
|||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
(6
|
)
|
(15
|
)
|
(22
|
)
|
(24
|
)
|
(6
|
)
|
||||||||||
Commercial
|
3
|
(4
|
)
|
(4
|
)
|
(2
|
)
|
(4
|
)
|
|||||||||||
Total non-U.S. other
|
(3
|
)
|
(19
|
)
|
(26
|
)
|
(26
|
)
|
(10
|
)
|
||||||||||
Total other
|
(5
|
)
|
(17
|
)
|
(27
|
)
|
(30
|
)
|
(21
|
)
|
||||||||||
Allowance for losses at end of year
|
||||||||||||||||||||
U.S. receivables
|
||||||||||||||||||||
Consumer
|
277
|
266
|
268
|
276
|
216
|
|||||||||||||||
Commercial
|
73
|
53
|
51
|
53
|
35
|
|||||||||||||||
Total U.S. receivables
|
350
|
319
|
319
|
329
|
251
|
|||||||||||||||
Non-U.S. receivables
|
||||||||||||||||||||
Consumer
|
119
|
95
|
93
|
93
|
98
|
|||||||||||||||
Commercial
|
52
|
53
|
50
|
43
|
37
|
|||||||||||||||
Total non-U.S. receivables
|
171
|
148
|
143
|
136
|
135
|
|||||||||||||||
Total allowance for losses
|
$
|
521
|
$
|
467
|
$
|
462
|
$
|
465
|
$
|
386
|
||||||||||
Net write-offs/average Card Member receivables outstanding
(c) (d)
|
1.5
|
%
|
1.5
|
%
|
1.6
|
%
|
1.5
|
%
|
1.6
|
%
|
(a) |
Net write-offs include principal and fees balances.
|
(b) |
Includes foreign currency translation adjustments and other adjustments. Additionally, 2015 included the impact of transfer of the HFS receivables portfolio, which was not significant and 2014, included an adjustment related to reserves for card-related fraud losses of $(7) million, which was reclassified to Other liabilities.
|
(c) |
The net write-off rate presented is on a worldwide basis and is based on write-offs of principal and fees. The year ended December 31, 2015, reflected the impact of a change in the timing of charge-offs for Card Member receivables in certain modification programs from 180 days past due to 120 days past due, which was fully recognized during the three months ended March 31, 2015.
|
(d) |
Averages Card Member receivables outstanding are based on month-end balances.
|
December 31,
|
|||||||||||||||||||||||||||||||||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||||||||||||||||||||||||||
Allowance for losses
|
|||||||||||||||||||||||||||||||||||||||||||||
at end of year applicable to
|
Amount
|
Percentage
|
(a)
|
Amount
|
Percentage
|
(a)
|
Amount
|
Percentage
|
(a)
|
Amount
|
Percentage
|
(a)
|
Amount
|
Percentage
|
(a)
|
||||||||||||||||||||||||||||||
Loans
|
|||||||||||||||||||||||||||||||||||||||||||||
U.S. loans
|
|||||||||||||||||||||||||||||||||||||||||||||
Card Member
|
$
|
1,507
|
85
|
%
|
$
|
1,068
|
85
|
%
|
$
|
882
|
84
|
%
|
$
|
1,036
|
85
|
%
|
$
|
1,083
|
85
|
%
|
|||||||||||||||||||||||||
Other
|
78
|
4
|
39
|
3
|
17
|
2
|
8
|
1
|
8
|
1
|
|||||||||||||||||||||||||||||||||||
Non-U.S. loans
|
|||||||||||||||||||||||||||||||||||||||||||||
Card Member
|
199
|
11
|
155
|
12
|
146
|
14
|
165
|
14
|
178
|
14
|
|||||||||||||||||||||||||||||||||||
Other
|
2
|
―
|
3
|
―
|
3
|
―
|
4
|
―
|
5
|
―
|
|||||||||||||||||||||||||||||||||||
$
|
1,786
|
100
|
%
|
$
|
1,265
|
100
|
%
|
$
|
1,048
|
100
|
%
|
$
|
1,213
|
100
|
%
|
$
|
1,274
|
100
|
%
|
||||||||||||||||||||||||||
Card Member receivables
|
|||||||||||||||||||||||||||||||||||||||||||||
U.S. Card Member receivables
|
|||||||||||||||||||||||||||||||||||||||||||||
Consumer
|
$
|
277
|
53
|
%
|
$
|
266
|
57
|
%
|
$
|
268
|
58
|
%
|
$
|
276
|
59
|
%
|
$
|
216
|
56
|
%
|
|||||||||||||||||||||||||
Commercial
|
73
|
14
|
53
|
11
|
51
|
11
|
53
|
12
|
35
|
9
|
|||||||||||||||||||||||||||||||||||
Non-U.S. Card Member receivables
|
|||||||||||||||||||||||||||||||||||||||||||||
Consumer
|
119
|
23
|
95
|
21
|
93
|
20
|
93
|
20
|
98
|
25
|
|||||||||||||||||||||||||||||||||||
Commercial
|
52
|
10
|
53
|
11
|
50
|
11
|
43
|
9
|
37
|
10
|
|||||||||||||||||||||||||||||||||||
$
|
521
|
100
|
%
|
$
|
467
|
100
|
%
|
$
|
462
|
100
|
%
|
$
|
465
|
100
|
%
|
$
|
386
|
100
|
%
|
(a) |
Percentage of allowance for losses on loans and Card Member receivables in each category to the total allowance.
|
By remaining maturity as of December 31, 2017
|
|||||||||
Over 3
|
Over 6
|
||||||||
months
|
months
|
||||||||
3 months
|
but within
|
but within
|
Over
|
||||||
(Millions)
|
or less
|
6 months
|
12 months
|
12 months
|
Total
|
||||
U.S. time certificates of deposit ($100,000 or more)
|
|
$77
|
|
$12
|
|
$26
|
|
$84
|
$199
|
10.14
|
American Express Key Employee Charitable Award Program for Education (incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1990).
|
10.15
|
American Express Directors’ Charitable Award Program (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1990).
|
10.16
|
American Express Company Salary/Bonus Deferral Plan (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1988).
|
10.17
|
|
10.18
|
|
10.19
|
|
10.2
0
|
|
10.21
|
|
10.22
|
|
10.23
|
|
10.24
|
|
10.25
|
|
10.26
|
|
10.27
|
|
10.28
|
|
10.29
|
|
10.3
0
|
|
10.31
|
|
10.32
|
|
10.33
|
|
10.34
|
|
10.35
|
|
10.36
|
|
10.37
|
|
10.38
|
|
10.39
|
|
10.4
0
|
|
10.41
|
|
10.42
|
|
10.43
|
|
10.44
|
|
10.45
|
|
10.46
|
|
10.47
|
|
*10.48
|
|
*12
|
Computation in Support of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
*21
|
|
*23
|
|
*31.1
|
|
*31.2
|
|
*32.1
|
|
*32.2
|
|
*101.INS
|
XBRL Instance Document
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
1.
|
Provision of Aircraft and Crew.
Subject to Aircraft availability, AETRSC agrees to provide to User the Aircraft and flight crew on a time sharing basis in accordance with the provisions of FAR Part 91, including §§ 91.501(b)(6), 91.501 (c)(1) and 91.501(d) of the FARs. AETRSC shall provide, at its sole expense, qualified flight crew for all flight operations under this Agreement. If AETRSC is no longer the operator of any of the Aircraft, Schedule A shall be deemed amended to delete any reference to such Aircraft and this Agreement shall be terminated as to such Aircraft, but shall remain in full force and effect with respect to each of the other Aircraft identified thereon, if any. No such termination shall affect any of the rights and obligations of the parties accrued or incurred prior to such termination. If AETRSC becomes the operator of any aircraft not listed on Schedule A hereto, Schedule A shall be modified to include such aircraft as an Aircraft covered by this Agreement, and thereafter this Agreement shall remain in full force and effect with respect to such Aircraft and each of the other Aircraft identified thereon, if any.
|
2.
|
Term.
The term of this Agreement (the “Term”) shall commence on the date hereof and shall continue until terminated by either party on written notice to the other party, such termination to become effective 30 days from the date of the notice,
provided
that this Agreement may be terminated on such shorter notice as may be required to comply with applicable law, regulations, the requirements of any financial institution with a security or other interest in the Aircraft, insurance requirements, or in the event the insurance required hereunder is not in full force and effect. This Agreement shall terminate immediately in the event that User is no longer the Chief Executive Officer of American Express Company. Notwithstanding the foregoing, any provisions directly or indirectly related to User’s payment obligations for flights completed prior to the date of termination and the limitation of liability provisions in Section 10 shall survive the termination of this Agreement.
|
3.
|
Reimbursement of Expenses.
For each flight conducted under this Agreement, User shall pay AETRSC an amount (as determined by AETRSC) equal to the actual expenses of operating such flight (to include non-occupied legs needed for positioning the Aircraft), not to exceed the sum of the following expenses as permitted pursuant to FAR 91.501(d):
|
(a)
|
Fuel, oil, lubricants, and other additives;
|
(b)
|
Travel expenses of the crew, including food, lodging, and ground transportation;
|
(c)
|
Hangar and tie-down costs away from the Aircraft’s base of operation;
|
(d)
|
Insurance obtained for the specific flight as per section 8(b);
|
(e)
|
Landing fees, airport taxes, and similar assessments;
|
(f)
|
Customs, foreign permit, and similar fees directly related to the flight;
|
(g)
|
In-flight food and beverages;
|
(h)
|
Passenger ground transportation;
|
(i)
|
Flight planning and weather contract services; and
|
(j)
|
An additional charge equal to one hundred percent (100%) of the expenses listed in subsection (a) above.
|
4.
|
Invoicing and Payment.
All payments to be made to AETRSC by User hereunder shall be paid in the manner set forth in this Section 4. AETRSC will pay, or cause to be paid, all expenses related to the operation of the Aircraft hereunder in the ordinary course. Within 30 days of the end of each trip, AETRSC shall provide or cause to be provided to User an invoice showing all personal use of the Aircraft by User pursuant to this Agreement during that trip and a complete accounting detailing all amounts payable by User pursuant to Section 3 for that trip (plus applicable domestic or international air transportation excise taxes, and any other fees, taxes or charges assessed on passengers by and remitted to a government agency or airport authority). User shall pay all amounts due under the invoice in a manner reasonably acceptable to AETRSC not later than 30 days after receipt thereof. In the event AETRSC has not received supplier invoices for reimbursable charges relating to such flight prior to such invoicing, AETRSC shall issue supplemental invoice(s) for such charge(s) to User, and User shall pay each supplemental invoice within 30 days after receipt thereof.
|
5.
|
Flight Requests.
User shall provide the Flight Operations Dispatch Office of AETRSC with flight requests for User’s personal travel to be undertaken pursuant to this Agreement and proposed flight schedules as far in advance of User’s desired departure as possible, and at least 24 hours prior to User’s planned departure or as may be required by law. The advanced notice requirement in this Section 5 may be waived by AETRSC in its discretion. All flight requests for travel under this Agreement shall be in accordance with all reasonable policies established by AETRSC. Flight requests shall be in a form, whether oral or written, mutually convenient to and agreed upon by the parties. AETRSC shall have sole and exclusive authority over the scheduling of the Aircraft. AETRSC shall not be liable to User or any other person for loss, injury, or damage occasioned by the delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason. In addition to requested schedules and departure times, User shall provide at least the following information for each proposed flight reasonably in advance of the desired departure time as required by AETRSC or its flight crew:
|
(a)
|
departure point;
|
(b)
|
destination;
|
(c)
|
date and time of flight;
|
(d)
|
number and identity of anticipated passengers;
|
(e)
|
nature and extent of luggage and/or cargo expected to be carried;
|
(f)
|
date and time of return flight, if any; and
|
(g)
|
any other information concerning the proposed flight that may be pertinent to or required by AETRSC, its flight crew or governmental entities.
|
6.
|
Operational Authority and Control.
AETRSC shall be responsible for the physical and technical operation of the Aircraft and the safe performance of all flights under this Agreement, and shall retain full authority and control, including exclusive operational control and exclusive possession, command and control of the Aircraft for all flights under this Agreement. AETRSC shall furnish at its expense a fully qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement and included on the insurance policies that AETRSC is required to maintain hereunder. In accordance with applicable FARs, the qualified flight crew provided by AETRSC will exercise all required and/or appropriate duties and responsibilities in regard to the safety of each flight conducted hereunder. The pilot-in-command shall have absolute discretion in all matters concerning the preparation of the Aircraft for flight and the flight itself, the load carried and its distribution, the decision whether or not a flight shall be undertaken, the route to be flown, the place where landings shall be made, and all other matters relating to operation of the Aircraft. User specifically agrees that the flight crew shall have final and complete authority to delay or cancel any flight for any reason or condition that in the sole judgment of the pilot-in-command could compromise the safety of the flight, and to take any other action that in the sole judgment of the pilot-in-command is necessitated by considerations of safety. No such action of the pilot-in-command shall create or support any liability to User or any other person for loss, injury, damage or delay. AETRSC’s operation of the Aircraft hereunder shall be strictly within the guidelines and policies established by AETRSC and FAR Part 91.
|
7.
|
Aircraft Maintenance.
AETRSC shall, at its own expense, cause the Aircraft to be inspected, maintained, serviced, repaired, overhauled and tested in accordance with FAR Part 91, so that the Aircraft will remain in good operating condition and in a condition consistent with its airworthiness certification and shall take such requirements into account in scheduling the Aircraft hereunder, including but not limited to compliance with applicable airworthiness directives and service bulletins. Performance of maintenance, preventative maintenance or inspection shall not be delayed or postponed for the purpose of scheduling the Aircraft unless such maintenance or inspection can safely be conducted at a later time in compliance with applicable laws, regulations and requirements, and such delay or postponement is consistent with the sound discretion of the pilot-in-command. In the event that any non-standard maintenance is required during the term and will interfere with User’s requested or scheduled flights, AETRSC, or AETRSC’s pilot-in-command, shall notify User of the maintenance required, the effect on the ability to comply with User’s requested or scheduled flights and the manner in which the parties will proceed with the performance of such maintenance and conduct of such flights(s). In no event shall AETRSC be liable to User or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft under this Agreement, whether or not maintenance-related.
|
8. |
Insurance.
|
(a) |
AETRSC, at its expense, will maintain or cause to be maintained in full force and effect throughout the Term of this Agreement an aviation liability and hull insurance policy including: (i) aviation liability insurance against bodily injury and property damage claims arising out of the use of the Aircraft in an amount not less than $250,000,000 for each occurrence; and (ii) hull insurance for the Aircraft in amounts determined by AETRSC at its sole discretion. The aviation liability coverage shall include User as an additional insured and include a severability of interest provision providing that the insurance shall apply separately to each insured against whom a claim is made, except as respects the limits of liability. The aviation liability and hull insurance coverage shall include provisions whereby the insurer(s) waive all rights of subrogation they may have or acquire against User, and shall permit the use of the Aircraft by AETRSC for compensation or hire as provided in §91.501 of the FARs.
|
(b) |
AETRSC shall use reasonable commercial efforts to provide such additional insurance for specific flights under this Agreement as User may reasonably request. User acknowledges that any trips scheduled to areas not currently covered by existing policies may require AETRSC to purchase additional insurance to comply with applicable regulations, and AETRSC shall be required to maintain or cause to be maintained such additional insurance. The cost of all flight-specific insurance shall be borne by User as provided in Section 3(d).
|
9. |
Use of Aircraft.
User warrants that:
|
10. |
Limitation of Liability.
NEITHER AETRSC (NOR ITS AFFILIATES) MAKES, HAS MADE OR SHALL BE DEEMED TO MAKE OR HAVE MADE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO ANY AIRCRAFT TO BE USED HEREUNDER OR ANY ENGINE OR COMPONENT THEREOF INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, AIRWORTHINESS, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR TITLE.
|
|
If to AETRSC:
|
|
American Express Travel Related Services Company, Inc.
Attn: Vice President of Aviation
1 Express Drive
Newburgh, New York 12550
Phone: [redacted]
Facsimile: [redacted]
E-mail: [redacted]
|
|
If to User:
|
|
Stephen J. Squeri
c/o American Express Company
200 Vesey Street, [redacted]
New York, New York 10285
Phone: [redacted]
Facsimile: [redacted]
Email: [redacted]
|
17. |
Governing Law and Consent to Jurisdiction
. This Agreement shall be governed by the law of the State of New York without regard to its choice of law principles, other than Section 5-1401 and Section 5-1402 of the New York General Obligations Law. The parties hereby consent and agree to submit to the exclusive jurisdiction and venue of any state or federal court in New York, New York, in any proceedings hereunder, and each hereby waives any objection to any such proceedings based on improper venue or forum non conveniens or similar principles. The parties hereto hereby further consent and agree to the exercise of such personal jurisdiction over them by such courts with respect to any such proceedings, waive any objection to the assertion or exercise of such jurisdiction and consent to process being served in any such proceedings in the manner provided for the giving of notices hereunder.
|
18. |
Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions shall not be affected or impaired.
|
19. |
Amendment or Modification.
This Agreement may be amended, modified or terminated only in writing duly executed by the parties hereto.
|
20. |
Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement, binding on all the parties notwithstanding that all the parties are not signatories to the same counterpart. Each party may transmit its signature by facsimile, and any faxed counterpart of this Agreement shall have the same force and effect as a manually-executed original.
|
21. |
Truth-in-Leasing Compliance.
AETRSC, on behalf of User, shall (i) deliver a copy of this Agreement to the Federal Aviation Administration, Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, Oklahoma 73125 within 24 hours of its execution, (ii) notify the appropriate Flight Standards District Office at least 48 hours prior to the first flight under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time for such flight, and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.
|
22. |
TRUTH-IN-LEASING STATEMENT PURSUANT TO SECTION 91.23 OF THE FEDERAL AVIATION REGULATIONS.
|
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
By: /s/ Richard J. Walsh
Name: Richard J. Walsh
Title: Vice President
|
|
STEPHEN J. SQUERI
/s/ Stephen J. Squeri
|
Address:
|
|
American Express Travel Related Services Company, Inc.
Attn: Vice President of Aviation
1 Express Dr. New York, NY 10285
Newburgh, NY 12550
Phone: [redacted]
Facsimile: [redacted]
Email: [redacted]@aexp.com
|
Address:
|
|
Stephen J. Squeri
c/o American Express Company
200 Vesey St., [redacted]
New York, NY 10285
Phone: [redacted]
Facsimile: [redacted]
Email: [redacted]@aexp.com
|
1. |
Mail a copy of the lease to the following address via certified mail, return receipt requested, immediately upon execution of the lease (14 C.F.R. 91.23 requires that the copy be sent within twenty-four hours after it is signed):
|
2. |
Telephone or fax the nearest Flight Standards District Office at least forty-eight hours prior to the first flight under this lease.
|
3. |
Carry a copy of the lease in the aircraft at all times.
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
Earnings:
|
||||||||||||||||||||
Pretax income
|
$
|
7,414
|
$
|
8,096
|
$
|
7,938
|
$
|
8,991
|
$
|
7,888
|
||||||||||
Interest expense
(a)
|
2,112
|
1,704
|
1,623
|
1,707
|
1,958
|
|||||||||||||||
Other adjustments
(b)
|
118
|
101
|
118
|
402
|
133
|
|||||||||||||||
Total earnings
|
$
|
9,644
|
$
|
9,901
|
$
|
9,679
|
$
|
11,100
|
$
|
9,979
|
||||||||||
Fixed charges:
|
||||||||||||||||||||
Interest expense
|
$
|
2,112
|
$
|
1,704
|
$
|
1,623
|
$
|
1,707
|
$
|
1,958
|
||||||||||
Other adjustments
(c)
|
51
|
56
|
62
|
79
|
93
|
|||||||||||||||
Total fixed charges
|
$
|
2,163
|
$
|
1,760
|
$
|
1,685
|
$
|
1,786
|
$
|
2,051
|
||||||||||
Preferred stock dividends
(d)
|
219
|
80
|
62
|
―
|
―
|
|||||||||||||||
Total fixed charges and preferred stock dividends
|
2,382
|
1,840
|
1,747
|
1,786
|
2,051
|
|||||||||||||||
Ratio of earnings to fixed charges
|
4.46
|
5.63
|
5.74
|
6.22
|
4.87
|
|||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends
|
4.05
|
5.38
|
5.54
|
6.22
|
4.87
|
(a) |
Included in interest expense is interest expense related to the Card Member lending, Card Member charge card and other activities in the Consolidated Statements of Income. Interest expense does not include interest on liabilities recorded under GAAP governing accounting for uncertainty in income taxes. The Company’s policy is to classify such interest in income tax provision in the Consolidated Statements of Income.
|
(b) |
For purposes of the “earnings” computation, “other adjustments” include adding the amortization of capitalized interest, the distributed net income of affiliates accounted for under the equity method, the non-controlling interest in the earnings of majority-owned subsidiaries with fixed charges, and the interest component of rental expense, and subtracting undistributed net income of affiliates accounted for under the equity method.
|
(c) |
For purposes of the “fixed charges” computation, “other adjustments” include capitalized interest costs and the interest component of rental expense.
|
(d) |
Preferred stock dividends represent pre-tax earnings that would be required to cover any preferred stock dividends, computed using our effective tax rate for the period.
|
Country Name
|
Jurisdiction
|
|||||||||||||||||||||||||
Name
|
|
|
||||||||||||||||||||||||
American Express Company
|
|
United States
|
|
New York
|
||||||||||||||||||||||
|
|
56th Street AXP Campus LLC
|
|
United States
|
|
Arizona
|
||||||||||||||||||||
|
American Express Bank LLC
|
|
Russian Federation
|
|
Russia
|
|||||||||||||||||||||
|
American Express Banking Corp.
|
|
United States
|
|
New York
|
|||||||||||||||||||||
|
American Express Travel Related Services Company, Inc.
|
|
United States
|
|
New York
|
|||||||||||||||||||||
|
|
|
Accertify, Inc.
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
American Express Bank (Mexico) S.A. Institucion de Banca Multiple
|
|
Mexico
|
|
Mexico
|
||||||||||||||||||||
|
|
|
American Express Bank Services, S.A. de C.V.
|
|
Mexico
|
|
Mexico
|
|||||||||||||||||||
|
|
American Express Bank, FSB
|
|
United States
|
|
Federal, United States
|
||||||||||||||||||||
|
|
|
American Express Receivables Financing Corporation IV LLC
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
American Express Centurion Bank
|
|
United States
|
|
Utah
|
||||||||||||||||||||
|
|
|
American Express Receivables Financing Corporation III LLC
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
American Express Company (Mexico) S.A. de C.V.
|
|
Mexico
|
|
Mexico
|
||||||||||||||||||||
|
|
|
American Express Insurance Services, Agente de Seguros, S.A. de C.V.
|
|
Mexico
|
|
Mexico
|
|||||||||||||||||||
|
|
|
American Express Servicios Profesionales, S. de R.L. de C.V.
|
|
Mexico
|
|
Mexico
|
|||||||||||||||||||
|
|
American Express Credit Corporation
|
|
United States
|
|
Delaware
|
||||||||||||||||||||
|
|
|
American Express Credit Mexico, LLC
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
|
|
Fideicomiso Empresarial Amex
|
|
Mexico
|
|
Mexico
|
||||||||||||||||||
|
|
|
American Express Luxembourg S.a r.l
|
|
Luxembourg
|
|
Luxembourg
|
|||||||||||||||||||
|
|
|
American Express Overseas Credit Corporation Limited
|
|
Jersey
|
|
Jersey
|
|||||||||||||||||||
|
|
|
|
AEOCC Funding Australia Limited
|
|
Jersey
|
|
Jersey
|
||||||||||||||||||
|
|
|
|
AEOCC Management Company Limited
|
|
Jersey
|
|
Jersey
|
||||||||||||||||||
|
|
|
|
American Express Funding (Luxembourg) S.a.r.l
|
|
Luxembourg
|
|
Luxembourg
|
||||||||||||||||||
|
|
|
|
American Express Overseas Credit Corporation N.V.
|
|
Netherlands (Antilles)
|
|
Netherlands (Antilles)
|
||||||||||||||||||
|
|
|
|
|
AE Hungary Holdings Limited Liability Company
|
|
Hungary
|
|
Hungary
|
|||||||||||||||||
|
|
|
|
|
|
American Express Canada Credit Corporation
|
|
Canada
|
|
Nova Scotia
|
||||||||||||||||
|
|
|
|
|
American Express Netherlands B.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||||||
|
|
|
|
|
|
American Express Canada Finance Limited
|
|
Canada
|
|
British Columbia
|
||||||||||||||||
|
|
|
|
|
|
|
American Express Jersey Finance Limited
|
|
Jersey
|
|
Jersey
|
|||||||||||||||
|
|
|
Credco Receivables Corp.
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
American Express International (NZ), Inc.
|
|
United States
|
|
Delaware
|
||||||||||||||||||||
|
|
American Express Limited
|
|
United States
|
|
Delaware
|
||||||||||||||||||||
|
|
|
American Express (Malaysia) SDN. BHD.
|
|
Malaysia
|
|
Malaysia
|
|||||||||||||||||||
|
|
|
American Express Brasil Assessoria Empresarial Ltda.
|
|
Brazil
|
|
Brazil
|
|||||||||||||||||||
|
|
|
American Express de Espana, S.A. (Sociedad Unipersonal)
|
|
Spain
|
|
Spain
|
|||||||||||||||||||
|
|
|
|
American Express Card Espana, S.A.U.
|
|
Spain
|
|
Spain
|
||||||||||||||||||
|
|
|
|
American Express Viajes, S.A. (Sociedad Unipersonal)
|
|
Spain
|
|
Spain
|
||||||||||||||||||
|
|
|
|
Amex Asesores de Seguros, S.A. (Sociedad Unipersonal)
|
|
Spain
|
|
Spain
|
||||||||||||||||||
-1-
|
||||||||||||||||||||||||||
Name
|
|
Country Name
|
|
Jurisdiction
|
||||||||||||||||||||||
|
|
|
|
|
|
American Express European Holdings B.V.
|
|
Netherlands
|
|
Netherlands
|
||||||||||||||||
|
|
|
|
Alpha Card S.C.R.L./C.V.B.A.
|
|
Belgium
|
|
Belgium
|
||||||||||||||||||
|
|
|
|
|
Alpha Card Merchant Services S.C.R.L./C.V.B.A.
|
|
Belgium
|
|
Belgium
|
|||||||||||||||||
|
|
|
American Express International, Inc.
|
|
United States
|
|
Delaware
|
|||||||||||||||||||
|
|
|
|
AE Exposure Management Limited
|
|
Jersey
|
|
Jersey
|
||||||||||||||||||
|
|
|
|
American Express (India) Private Limited
|
|
India
|
|
India
|
||||||||||||||||||
|
|
|
|
|
American Express Business Solutions (India) Private Limited
|
|
India
|
|
India
|
|||||||||||||||||
|
|
|
|
American Express (Thai) Company Limited
|
|
Thailand
|
|
Thailand
|
||||||||||||||||||
|
|
|
|
American Express Advanced Services Europe Limited
|
|
United Kingdom
|
|
England and Wales
|
||||||||||||||||||
|
|
|
|
American Express Asia Network Consulting (Beijing) Limited Company
|
|
China
|
|
China
|
||||||||||||||||||
|
|
|
|
American Express Continental, LLC
|
|
United States
|
|
Delaware
|
||||||||||||||||||
|
|
|
|
|
American Express Australia Limited
|
|
Australia
|
|
Victoria
|
|||||||||||||||||
|
|
|
|
|
|
American Express Wholesale Currency Services Pty Limited
|
|
Australia
|
|
New South Wales
|
||||||||||||||||
|
|
|
|
|
|
Centurion Finance Limited
|
|
New Zealand
|
|
New Zealand
|
||||||||||||||||
|
|
|
|
|
American Express Dutch Capital, LLC
|
|
United States
|
|
Delaware
|
|||||||||||||||||
|
|
|
|
|
American Express Holdings Limited
|
|
United Kingdom
|
|
England and Wales
|
|||||||||||||||||
|
|
|
|
|
|
American Express Insurance Services Europe Limited
|
|
United Kingdom
|
|
England and Wales
|
||||||||||||||||
|
|
|
|
|
|
American Express Services Europe Limited
|
|
United Kingdom
|
|
England and Wales
|
||||||||||||||||
|
|
|
|
|
|
Cake Technologies Ltd
|
|
United Kingdom
|
|
England and Wales
|
||||||||||||||||
|
|
|
|
|
American Express Travel Holdings Netherlands B.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||||||
|
|
|
|
|
|
American Express, spol. s r.o.
|
|
Czech Republic
|
|
Czech Republic
|
||||||||||||||||
|
|
|
|
|
Amex Funding Management (Europe) Limited
|
|
Jersey
|
|
Jersey
|
|||||||||||||||||
|
|
|
|
|
|
Loyalty Partner Holdings S.A.
|
|
Luxembourg
|
|
Luxembourg
|
||||||||||||||||
|
|
|
|
|
|
|
LB Luxembourg Two S.a.r.l.
|
|
Luxembourg
|
|
Luxembourg
|
|||||||||||||||
|
|
|
|
|
|
|
|
Loyalty Partner GmbH
|
|
Germany
|
|
Germany
|
||||||||||||||
|
|
|
|
|
|
|
|
|
Loyalty Partner Solutions GmbH
|
|
Germany
|
|
Germany
|
|||||||||||||
|
|
|
|
|
|
|
|
|
LP Management Verwaltung GmbH
|
|
Germany
|
|
Germany
|
|||||||||||||
|
|
|
|
|
|
|
|
|
Payback GmbH
|
|
Germany
|
|
Germany
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
emnos GmbH
|
|
Germany
|
|
Germany
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
emnos Iberia S.L.
|
|
Spain
|
|
Spain
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
emnos S.a.r.l.
|
|
France
|
|
France
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
emnos UK Ltd.
|
|
United Kingdom
|
|
United Kingdom
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
emnos USA Corp.
|
|
United States
|
|
Delaware
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
Loyalty Partner Polska Sp. z o.o.
|
|
Poland
|
|
Poland
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Loyalty Partner Polska Sp. z o.o. Sp. komandytowa
|
|
Poland
|
|
Poland
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
PAYBACK Austria GmbH
|
|
Austria
|
|
Austria
|
||||||||||||
|
|
|
|
|
Amex Funding Management Holdings Limited
|
|
Jersey
|
|
Jersey
|
|||||||||||||||||
|
|
|
|
|
|
Amex (Middle East) B.S.C. (closed)*
|
|
Bahrain
|
|
Bahrain
|
||||||||||||||||
|
|
|
|
|
|
|
American Express Saudi Arabia (C) JSC*
|
|
Saudi Arabia
|
|
Saudi Arabia
|
|||||||||||||||
|
|
|
|
|
|
|
Amex Al Omania LLC*
|
|
Oman
|
|
Oman
|
|||||||||||||||
|
|
|
|
|
|
|
Amex Egypt Company Limited Liability Company*
|
|
Egypt
|
|
Egypt
|
|||||||||||||||
|
|
|
|
|
Amex Global Holdings C.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||||||
|
|
|
|
|
Amex NL Holdings 99, LLC
|
|
United States
|
|
Delaware
|
|||||||||||||||||
|
|
|
|
|
|
American Express Holdings Netherlands CV
|
|
Netherlands
|
|
Netherlands
|
||||||||||||||||
|
|
|
|
|
Loyalty Partner Holdings B.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||||||
|
|
|
|
|
|
Loyalty Partner Singapore Pte Ltd.
|
|
Singapore
|
|
Singapore
|
||||||||||||||||
|
|
|
|
|
|
|
Loyalty Solutions & Research Pte Ltd.
|
|
India
|
|
India
|
|||||||||||||||
|
|
|
|
|
|
PAYBACK Italia S.r.l.
|
|
Italy
|
|
Italy
|
||||||||||||||||
|
|
|
|
|
Loyalty Partner Services Mexico, S. de R.L. de C.V.
|
|
Mexico
|
|
Mexico
|
|||||||||||||||||
|
|
|
|
|
Payback Mexico S. de R.L. de C.V.
|
|
Mexico
|
|
Mexico
|
|||||||||||||||||
-2-
|
||||||||||||||||||||||||||
Name
|
|
Country Name
|
|
Jurisdiction
|
||||||||||||||||||||||
|
|
|
|
|
American Express Denmark A/S
|
|
Denmark
|
|
Denmark
|
|||||||||||||||||
|
|
|
|
American Express Europe LLC
|
|
United States
|
|
Delaware
|
||||||||||||||||||
|
|
|
|
American Express Group Services Limited
|
|
United Kingdom
|
|
England and Wales
|
||||||||||||||||||
|
|
|
|
American Express International (Taiwan), Inc.
|
|
Taiwan
|
|
Taiwan
|
||||||||||||||||||
|
|
|
|
American Express International Holdings, LLC
|
|
United States
|
|
Delaware
|
||||||||||||||||||
|
|
|
|
|
American Express Argentina S.A.
|
|
Argentina
|
|
Argentina
|
|||||||||||||||||
|
|
|
|
|
American Express Holdings (France) SAS
|
|
France
|
|
France
|
|||||||||||||||||
|
|
|
|
|
|
American Express France SAS
|
|
France
|
|
France
|
||||||||||||||||
|
|
|
|
|
|
|
American Express Canada Holdings B.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||||
|
|
|
|
|
|
|
|
American Express Holding AB
|
|
Sweden
|
|
Sweden
|
||||||||||||||
|
|
|
|
|
|
|
|
American Express Travel Holdings Netherlands Cooperatief U.A.
|
|
Netherlands
|
|
Netherlands
|
||||||||||||||
|
|
|
|
|
|
|
|
|
GBT III B.V.
|
|
Netherlands
|
|
Netherlands
|
|||||||||||||
|
|
|
|
|
|
|
|
Amex Broker Assicurativo s.r.l.
|
|
Italy
|
|
Italy
|
||||||||||||||
|
|
|
|
|
|
|
|
Amex Canada Inc.
|
|
Canada
|
|
Ontario
|
||||||||||||||
|
|
|
|
|
|
|
American Express Carte France SA
|
|
France
|
|
France
|
|||||||||||||||
|
|
|
|
|
|
|
American Express Services SA
|
|
France
|
|
France
|
|||||||||||||||
|
|
|
|
|
|
|
|
American Express Paris SAS
|
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France
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France
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American Express Management
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France
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France
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American Express France Finance SNC
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France
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France
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American Express Japan Co., Ltd.
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Japan
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Japan
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American Express Payment Services Limited
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United Kingdom
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England and Wales
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American Express Services India Private Limited
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India
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India
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American Express Swiss Holdings GmbH
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Switzerland
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Switzerland
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Swisscard AECS GmbH*
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Switzerland
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Switzerland
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American Express TLS HK Limited
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Hong Kong
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Hong Kong
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Amex General Insurance Agency, Inc.
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Taiwan
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Taiwan
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Amex Life Insurance Marketing, Inc.
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Taiwan
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Taiwan
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Amex Taiwan Trust
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United States
|
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Delaware
|
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PT American Express Indonesia
|
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Indonesia
|
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Indonesia
|
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American Express Marketing & Development Corp.
|
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United States
|
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Delaware
|
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American Express Prepaid Card Management Corporation
|
|
United States
|
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Arizona
|
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|
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American Express Receivables Financing Corporation II
|
|
United States
|
|
Delaware
|
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|
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American Express Receivables Financing Corporation VIII LLC
|
|
United States
|
|
Delaware
|
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|
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Amex Bank of Canada
|
|
Canada
|
|
Federal, Canada
|
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Amex Services, Inc.
|
|
United States
|
|
Delaware
|
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|
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Asesorías e Inversiones American Express Chile Limitada
|
|
Chile
|
|
Chile
|
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|
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Bansamex, S.A.*
|
|
Spain
|
|
Spain
|
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|
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Cavendish Holdings, Inc.
|
|
United States
|
|
Delaware
|
||||||||||||||||||||
|
|
InAuth, Inc.
|
|
United States
|
|
Delaware
|
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|
|
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InAuth UK Ltd.
|
|
United Kingdom
|
|
United Kingdom
|
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|
|
Travellers Cheque Associates Limited*
|
|
United Kingdom
|
|
England and Wales
|
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|
AMEX Assurance Company
|
|
United States
|
|
Illinois
|
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|
Amexco Insurance Company
|
|
United States
|
|
Vermont
|
|||||||||||||||||||||
|
Rexport, Inc.
|
|
United States
|
|
Delaware
|
/s/ Stephen J. Squeri
|
|
Stephen J. Squeri
|
|
Chief Executive Officer
|
/s/ Jeffrey C. Campbell
|
|
Jeffrey C. Campbell
|
|
Chief Financial Officer
|