New York
|
13-4922250
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
200 Vesey Street, New York, New York
|
10285
|
|
(Address of principal executive offices)
|
(Zip Code)
|
None
|
Large accelerated filer
|
Accelerated filer
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
Smaller reporting company
Emerging growth company
|
Class
|
Outstanding at April 21, 2017
|
||
Common Shares (par value $0.20 per share)
|
893,779,186 Shares
|
Part I.
|
Page No.
|
|||||
Item 1.
|
||||||
1
|
||||||
2
|
||||||
3
|
||||||
4
|
||||||
5
|
||||||
Item 2.
|
26
|
|||||
Item 3.
|
54
|
|||||
Item 4.
|
54
|
|||||
Part II.
|
||||||
Item 1.
|
57
|
|||||
Item 1A.
|
57
|
|||||
Item 2.
|
58
|
|||||
Item 5.
|
59
|
|||||
Item 6.
|
59
|
|||||
60
|
||||||
E-1
|
Three Months Ended March 31 (Millions, except per share amounts)
|
2017
|
2016
|
||||||
Revenues
|
||||||||
Non-interest revenues
|
||||||||
Discount revenue
|
$
|
4,519
|
$
|
4,643
|
||||
Net card fees
|
748
|
699
|
||||||
Other fees and commissions
|
713
|
680
|
||||||
Other
|
409
|
486
|
||||||
Total non-interest revenues
|
6,389
|
6,508
|
||||||
Interest income
|
||||||||
Interest on loans
|
1,860
|
1,938
|
||||||
Interest and dividends on investment securities
|
23
|
36
|
||||||
Deposits with banks and other
|
60
|
31
|
||||||
Total interest income
|
1,943
|
2,005
|
||||||
Interest expense
|
||||||||
Deposits
|
149
|
150
|
||||||
Long-term debt and other
|
294
|
275
|
||||||
Total interest expense
|
443
|
425
|
||||||
Net interest income
|
1,500
|
1,580
|
||||||
Total revenues net of interest expense
|
7,889
|
8,088
|
||||||
Provisions for losses
|
||||||||
Charge card
|
213
|
169
|
||||||
Card Member loans
|
337
|
227
|
||||||
Other
|
23
|
38
|
||||||
Total provisions for losses
|
573
|
434
|
||||||
Total revenues net of interest expense after provisions for losses
|
7,316
|
7,654
|
||||||
Expenses
|
||||||||
Marketing and promotion
|
700
|
727
|
||||||
Card Member rewards
|
1,807
|
1,703
|
||||||
Card Member services and other
|
321
|
282
|
||||||
Salaries and employee benefits
|
1,264
|
1,338
|
||||||
Other, net
|
1,407
|
1,420
|
||||||
Total expenses
|
5,499
|
5,470
|
||||||
Pretax income
|
1,817
|
2,184
|
||||||
Income tax provision
|
580
|
758
|
||||||
Net income
|
$
|
1,237
|
$
|
1,426
|
||||
Earnings per Common Share (Note 15): (a)
|
||||||||
Basic
|
$
|
1.34
|
$
|
1.45
|
||||
Diluted
|
$
|
1.34
|
$
|
1.45
|
||||
Average common shares outstanding for earnings per common share:
|
||||||||
Basic
|
899
|
961
|
||||||
Diluted
|
903
|
963
|
||||||
Cash dividends declared per common share
|
$
|
0.32
|
$
|
0.29
|
(a) |
Represents net income less (i) earnings allocated to participating share awards of $10 million and $11 million for the three months ended March 31, 2017 and 2016, respectively, and (ii) dividends on preferred shares of $21 million for both the three months ended March 31, 2017 and 2016.
|
Three Months Ended March 31 (Millions)
|
2017
|
2016
|
||||||
Net income
|
$
|
1,237
|
$
|
1,426
|
||||
Other comprehensive income (loss):
|
||||||||
Net unrealized securities gains, net of tax
|
6
|
2
|
||||||
Foreign currency translation adjustments, net of tax
|
316
|
4
|
||||||
Net unrealized pension and other postretirement benefit (losses) gains, net of tax
|
(8
|
)
|
26
|
|||||
Other comprehensive income
|
314
|
32
|
||||||
Comprehensive income
|
$
|
1,551
|
$
|
1,458
|
March 31,
|
December 31,
|
|||||||
(Millions, except share data)
|
2017
|
2016
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
||||||||
Cash and due from banks
|
$
|
2,459
|
$
|
3,278
|
||||
Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2017, $74; 2016, $115)
|
25,497
|
20,779
|
||||||
Short-term investment securities
|
1,410
|
1,151
|
||||||
Total cash and cash equivalents
|
29,366
|
25,208
|
||||||
Accounts receivable
|
||||||||
Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2017, $7,810; 2016, $8,874), less reserves: 2017, $491; 2016, $467
|
47,154
|
46,841
|
||||||
Other receivables, less reserves: 2017, $40; 2016, $45
|
2,812
|
3,232
|
||||||
Loans
|
||||||||
Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2017, $24,438; 2016, $26,129), less reserves: 2017, $1,248; 2016, $1,223
|
62,320
|
64,042
|
||||||
Other loans, less reserves: 2017, $51; 2016, $42
|
1,635
|
1,419
|
||||||
Investment securities
|
3,561
|
3,157
|
||||||
Premises and equipment, less accumulated depreciation and amortization: 2017, $5,405; 2016, $5,145
|
4,433
|
4,433
|
||||||
Other assets (includes restricted cash of consolidated variable interest entities: 2017, $55; 2016, $38)
|
10,104
|
10,561
|
||||||
Total assets
|
$
|
161,385
|
$
|
158,893
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Customer deposits
|
$
|
53,790
|
$
|
53,042
|
||||
Travelers Cheques and other prepaid products
|
2,706
|
2,812
|
||||||
Accounts payable
|
11,700
|
11,190
|
||||||
Short-term borrowings
|
3,600
|
5,581
|
||||||
Long-term debt (includes debt issued by consolidated variable interest entities: 2017, $16,757; 2016, $15,113)
|
51,647
|
46,990
|
||||||
Other liabilities
|
17,007
|
18,777
|
||||||
Total liabilities
|
140,450
|
138,392
|
||||||
Contingencies (Note 8)
|
||||||||
Shareholders’ Equity
|
||||||||
Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of March 31, 2017 and December 31, 2016
|
―
|
―
|
||||||
Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 895 million shares as of March 31, 2017 and 904 million shares as of December 31, 2016
|
179
|
181
|
||||||
Additional paid-in capital
|
12,593
|
12,733
|
||||||
Retained earnings
|
10,633
|
10,371
|
||||||
Accumulated other comprehensive loss
|
||||||||
Net unrealized securities gains, net of tax of: 2017, $8; 2016, $5
|
13
|
7
|
||||||
Foreign currency translation adjustments, net of tax of: 2017, $(307); 2016, $24
|
(1,946
|
)
|
(2,262
|
)
|
||||
Net unrealized pension and other postretirement benefit losses, net of tax of: 2017, $(195); 2016, $(186)
|
(537
|
)
|
(529
|
)
|
||||
Total accumulated other comprehensive loss
|
(2,470
|
)
|
(2,784
|
)
|
||||
Total shareholders’ equity
|
20,935
|
20,501
|
||||||
Total liabilities and shareholders’ equity
|
$
|
161,385
|
$
|
158,893
|
Three Months Ended March 31 (Millions)
|
2017
|
2016
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
1,237
|
$
|
1,426
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provisions for losses
|
573
|
434
|
||||||
Depreciation and amortization
|
296
|
261
|
||||||
Deferred taxes and other
|
8
|
218
|
||||||
Stock-based compensation
|
89
|
70
|
||||||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
|
||||||||
Other receivables
|
795
|
427
|
||||||
Other assets
|
349
|
232
|
||||||
Accounts payable and other liabilities
|
(2,069
|
)
|
(296
|
)
|
||||
Travelers Cheques and other prepaid products
|
(118
|
)
|
(243
|
)
|
||||
Net cash provided by operating activities
|
1,160
|
2,529
|
||||||
Cash Flows from Investing Activities
|
||||||||
Sales of available-for-sale investment securities
|
―
|
45
|
||||||
Maturities and redemptions of available-for-sale investment securities
|
860
|
226
|
||||||
Purchases of investments
|
(1,294
|
)
|
(345
|
)
|
||||
Net decrease in Card Member receivables and loans, including held for sale
|
1,450
|
4,039
|
||||||
Purchase of premises and equipment, net of sales: 2017, nil; 2016, $1
|
(277
|
)
|
(302
|
)
|
||||
Acquisitions/dispositions, net of cash acquired
|
(28
|
)
|
(155
|
)
|
||||
Net (increase) decrease in restricted cash
|
(11
|
)
|
132
|
|||||
Net cash provided by investing activities
|
700
|
3,640
|
||||||
Cash Flows from Financing Activities
|
||||||||
Net increase in customer deposits
|
735
|
773
|
||||||
Net decrease in short-term borrowings
|
(1,941
|
)
|
(2,217
|
)
|
||||
Issuance of long-term debt
|
8,420
|
35
|
||||||
Principal payments on long-term debt
|
(3,801
|
)
|
(1,036
|
)
|
||||
Issuance of American Express common shares
|
31
|
11
|
||||||
Repurchase of American Express common shares
|
(926
|
)
|
(1,188
|
)
|
||||
Dividends paid
|
(313
|
)
|
(302
|
)
|
||||
Net cash provided by (used in) financing activities
|
2,205
|
(3,924
|
)
|
|||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
93
|
38
|
||||||
Net increase in cash and cash equivalents
|
4,158
|
2,283
|
||||||
Cash and cash equivalents at beginning of period
|
25,208
|
22,762
|
||||||
Cash and cash equivalents at end of period
|
$
|
29,366
|
$
|
25,045
|
(Millions)
|
2017
|
2016
|
||||||
U.S. Consumer Services(a)
|
$
|
46,714
|
$
|
48,758
|
||||
International Consumer and Network Services
|
6,814
|
6,971
|
||||||
Global Commercial Services
|
10,040
|
9,536
|
||||||
Card Member loans
|
63,568
|
65,265
|
||||||
Less: Reserve for losses
|
1,248
|
1,223
|
||||||
Card Member loans, net
|
$
|
62,320
|
$
|
64,042
|
||||
Other loans, net(b)
|
$
|
1,635
|
$
|
1,419
|
(a) |
Includes approximately $24.4 billion and $26.1 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of March 31, 2017 and December 31, 2016, respectively.
|
(b) |
Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $51 million and $42 million as of March 31, 2017 and December 31, 2016, respectively.
|
(Millions)
|
2017
|
2016
|
||||||
U.S. Consumer Services (a)
|
$
|
10,918
|
$
|
12,302
|
||||
International Consumer and Network Services
|
5,543
|
5,966
|
||||||
Global Commercial Services
|
31,184
|
29,040
|
||||||
Card Member receivables
|
47,645
|
47,308
|
||||||
Less: Reserve for losses
|
491
|
467
|
||||||
Card Member receivables, net
|
$
|
47,154
|
$
|
46,841
|
||||
Other receivables, net (b)
|
$
|
2,812
|
$
|
3,232
|
(a) |
Includes $7.8 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of March 31, 2017 and December 31, 2016, respectively.
|
(b) |
Other receivables primarily represent amounts related to (i) Global Network Services (GNS) partner banks for items such as royalty and franchise fees, (ii) certain merchants for billed discount revenue, and (iii) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $40 million and $45 million as of March 31, 2017 and December 31, 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
|
$
|
46,158
|
$
|
160
|
$
|
120
|
$
|
276
|
$
|
46,714
|
||||||||||
International Consumer and Network Services
|
6,698
|
37
|
25
|
54
|
6,814
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
$
|
9,850
|
$
|
37
|
$
|
28
|
$
|
56
|
$
|
9,971
|
||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
$
|
1
|
$
|
69
|
|||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
10,778
|
$
|
48
|
$
|
32
|
$
|
60
|
$
|
10,918
|
||||||||||
International Consumer and Network Services
|
5,462
|
25
|
17
|
39
|
5,543
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
$
|
14,351
|
$
|
84
|
$
|
52
|
$
|
104
|
$
|
14,591
|
||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
$
|
122
|
$
|
16,593
|
|||||||||||||
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 Global Commercial Services (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.
|
(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
|
1.7
|
%
|
2.0
|
%
|
1.2
|
%
|
1.5
|
%
|
1.7
|
%
|
1.0
|
%
|
||
International Consumer and Network Services
|
2.0
|
%
|
2.5
|
%
|
1.7
|
%
|
1.9
|
%
|
2.4
|
%
|
1.8
|
%
|
||
Global Small Business Services
|
1.6
|
%
|
1.8
|
%
|
1.2
|
%
|
1.4
|
%
|
1.6
|
%
|
1.0
|
%
|
||
Card Member Receivables:
|
||||||||||||||
U.S. Consumer Services
|
1.5
|
%
|
1.7
|
%
|
1.3
|
%
|
1.8
|
%
|
2.0
|
%
|
1.4
|
%
|
||
International Consumer and Network Services
|
2.1
|
%
|
2.3
|
%
|
1.5
|
%
|
2.2
|
%
|
2.4
|
%
|
1.5
|
%
|
||
Global Small Business Services
|
1.8
|
%
|
2.0
|
%
|
1.6
|
%
|
1.8
|
%
|
2.1
|
%
|
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
|
0.11
|
%
|
0.7
|
%
|
0.08
|
%
|
0.7
|
%
|
(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 March 31, 2017
|
||||||||||||||||||||||||||||
Accounts Classified as a TDR(c)
|
||||||||||||||||||||||||||||
2017 (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
|
$
|
179
|
$
|
150
|
$
|
160
|
$
|
132
|
$
|
621
|
$
|
565
|
$
|
50
|
||||||||||||||
International Consumer and Network Services
|
54
|
―
|
―
|
―
|
54
|
53
|
―
|
|||||||||||||||||||||
Global Commercial Services
|
33
|
34
|
26
|
27
|
120
|
111
|
10
|
|||||||||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
11
|
7
|
18
|
18
|
8
|
|||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
29
|
13
|
42
|
42
|
20
|
|||||||||||||||||||||
Total
|
$
|
266
|
$
|
184
|
$
|
226
|
$
|
179
|
$
|
855
|
$
|
789
|
$
|
88
|
As of December 31, 2016
|
||||||||||||||||||||||||||||
Accounts Classified as a TDR(c)
|
||||||||||||||||||||||||||||
2016 (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
|
(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 $20 million and $20 million that are over 90 days past due and accruing interest and $9 million and $11 million that are non-accruals as of March 31, 2017 and December 31, 2016, respectively.
|
(d) |
In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
|
(e) |
Out of Program TDRs include $139 million and $132 million of Card Member accounts that have successfully completed a modification program and $40 million and $39 million of Card Member accounts that were not in compliance with the terms of the modification programs as of March 31, 2017 and December 31, 2016, respectively.
|
2017
|
2016
|
|||||||||||||||
Interest
|
Interest
|
|||||||||||||||
Average
|
Income
|
Average
|
Income
|
|||||||||||||
(Millions)
|
Balance
|
Recognized
|
Balance
|
Recognized
|
||||||||||||
Card Member Loans:
|
||||||||||||||||
U.S. Consumer Services
|
$
|
616
|
$
|
16
|
$
|
505
|
$
|
12
|
||||||||
International Consumer and Network Services
|
53
|
4
|
53
|
4
|
||||||||||||
Global Commercial Services
|
116
|
4
|
92
|
3
|
||||||||||||
Card Member Receivables:
|
||||||||||||||||
U.S. Consumer Services
|
18
|
―
|
14
|
―
|
||||||||||||
Global Commercial Services
|
40
|
―
|
22
|
―
|
||||||||||||
Total
|
$
|
843
|
$
|
24
|
$
|
686
|
$
|
19
|
Three Months Ended
March 31, 2017
|
||||||||||||||||
Number of
|
Outstanding
|
Average Interest
|
Average Payment
|
|||||||||||||
Accounts
|
Balances(a)
|
Rate Reduction
|
Term Extensions
|
|||||||||||||
(in thousands)
|
($ in millions)
|
(% Points)
|
(# of Months)
|
|||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
8
|
$
|
57
|
13
|
(b)
|
|||||||||||
Card Member Receivables
|
2
|
28
|
(c)
|
22
|
||||||||||||
Total
|
10
|
$
|
85
|
|||||||||||||
Three Months Ended
March 31, 2016
|
||||||||||||||||
Number of
|
Outstanding
|
Average Interest
|
Average Payment
|
|||||||||||||
Accounts
|
Balances(a)
|
Rate Reduction
|
Term Extensions
|
|||||||||||||
(in thousands)
|
($ in millions)
|
(% Points)
|
(# of Months)
|
|||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
8
|
$
|
57
|
13
|
(b)
|
|||||||||||
Card Member Receivables
|
3
|
38
|
(c)
|
16
|
||||||||||||
Total
|
11
|
$
|
95
|
(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.
|
(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.
|
2017
|
2016
|
|||||||||||||||
Number of
Accounts
|
Aggregated
Outstanding
Balances
Upon Default(a)
|
Number of
Accounts
|
Aggregated
Outstanding
Balances
Upon Default(a)
|
|||||||||||||
(thousands)
|
(millions)
|
(thousands)
|
(millions)
|
|||||||||||||
Troubled Debt Restructurings That Subsequently Defaulted:
|
||||||||||||||||
Card Member Loans
|
2
|
$
|
11
|
1
|
$
|
9
|
||||||||||
Card Member Receivables
|
1
|
1
|
1
|
1
|
||||||||||||
Total
|
3
|
$
|
12
|
2
|
$
|
10
|
(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
|
||||||
Balance, January 1
|
$
|
1,223
|
$
|
1,028
|
||||
Provisions(a)
|
337
|
227
|
||||||
Net write-offs(b)
|
||||||||
Principal
|
(272
|
)
|
(214
|
)
|
||||
Interest and fees
|
(51
|
)
|
(40
|
)
|
||||
Other(c)
|
11
|
11
|
||||||
Balance, March 31
|
$
|
1,248
|
$
|
1,012
|
(a) |
Provisions for principal, interest and fee reserve components.
|
(b) |
Principal write-offs are presented less recoveries of $100 million and $88 million, and include net write-offs from TDRs of $12 million and $13 million, for the three months ended March 31, 2017 and 2016, respectively. Recoveries of interest and fees were de minimis.
|
(c) |
Includes foreign currency translation adjustments of $7 million and $2 million and other adjustments of $4 million and $2 million for the three months ended March 31, 2017 and 2016, respectively. The three months ended March 31, 2016 also includes reserves of $7 million associated with $20 million of retained Card Member loans reclassified from HFS to held for investment.
|
(Millions)
|
2017
|
2016
|
||||||
Card Member loans evaluated individually for impairment(a)
|
$
|
345
|
$
|
346
|
||||
Related reserves (a)
|
$
|
60
|
$
|
60
|
||||
Card Member loans evaluated collectively for impairment(b)
|
$
|
63,223
|
$
|
64,919
|
||||
Related reserves (b)
|
$
|
1,188
|
$
|
1,163
|
(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
|
||||||
Balance, January 1
|
$
|
467
|
$
|
462
|
||||
Provisions(a)
|
213
|
169
|
||||||
Net write-offs(b)
|
(194
|
)
|
(186
|
)
|
||||
Other(c)
|
5
|
1
|
||||||
Balance, March 31
|
$
|
491
|
$
|
446
|
(a) |
Provisions for principal and fee reserve components.
|
(b) |
Principal and fee components are presented less recoveries of $93 million and $101 million, including net write-offs from TDRs of $6 million and $10 million, for the three months ended March 31, 2017 and 2016, respectively.
|
(c) |
Includes foreign currency translation adjustments of $9 and $2 million and other adjustments of $(4) million and $(1) million for the three months ended March 31, 2017 and 2016, respectively.
|
(Millions)
|
2017
|
2016
|
||||||
Card Member receivables evaluated individually for impairment(a)
|
$
|
60
|
$
|
55
|
||||
Related reserves (a)
|
$
|
28
|
$
|
28
|
||||
Card Member receivables evaluated collectively for impairment
|
$
|
47,585
|
$
|
47,253
|
||||
Related reserves (b)
|
$
|
463
|
$
|
439
|
(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
|
|||||||||||||||||||||||||||||||
Gross
|
Gross
|
Estimated
|
Gross
|
Gross
|
Estimated
|
|||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Fair
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||||||||||||||||
Description of Securities (Millions)
|
Cost
|
Gains
|
Losses
|
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||||||||||
State and municipal obligations
|
$
|
1,686
|
$
|
24
|
$
|
(4
|
)
|
$
|
1,706
|
$
|
2,019
|
$
|
28
|
$
|
(11
|
)
|
$
|
2,036
|
||||||||||||||
U.S. Government agency obligations
|
12
|
―
|
―
|
12
|
12
|
―
|
―
|
12
|
||||||||||||||||||||||||
U.S. Government treasury obligations
|
1,135
|
7
|
(6
|
)
|
1,136
|
465
|
3
|
(8
|
)
|
460
|
||||||||||||||||||||||
Corporate debt securities
|
19
|
―
|
―
|
19
|
19
|
―
|
―
|
19
|
||||||||||||||||||||||||
Mortgage-backed securities (a)
|
87
|
3
|
―
|
90
|
92
|
3
|
―
|
95
|
||||||||||||||||||||||||
Equity securities
|
1
|
―
|
―
|
1
|
1
|
―
|
―
|
1
|
||||||||||||||||||||||||
Foreign government bonds and obligations
|
549
|
1
|
(1
|
)
|
549
|
486
|
1
|
(1
|
)
|
486
|
||||||||||||||||||||||
Other (b)
|
50
|
―
|
(2
|
)
|
48
|
50
|
―
|
(2
|
)
|
48
|
||||||||||||||||||||||
Total
|
$
|
3,539
|
$
|
35
|
$
|
(13
|
)
|
$
|
3,561
|
$
|
3,144
|
$
|
35
|
$
|
(22
|
)
|
$
|
3,157
|
(a) |
Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
|
(b) |
Other comprises investments in various mutual funds.
|
2017
|
2016
|
|||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Less than 12 months
|
12 months or more
|
|||||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
Gross
|
|||||||||||||||||||||||||||||
Description of Securities (Millions)
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
||||||||||||||||||||||||
State and municipal obligations
|
$
|
98
|
$
|
(4
|
)
|
$
|
―
|
$
|
―
|
$
|
153
|
$
|
(11
|
)
|
$
|
―
|
$
|
―
|
||||||||||||||
U.S. Government treasury obligations
|
299
|
(6
|
)
|
―
|
―
|
298
|
(8
|
)
|
―
|
―
|
||||||||||||||||||||||
Other
|
―
|
―
|
32
|
(2
|
)
|
―
|
―
|
32
|
(2
|
)
|
||||||||||||||||||||||
Total
|
$
|
397
|
$
|
(10
|
)
|
$
|
32
|
$
|
(2
|
)
|
$
|
451
|
$
|
(19
|
)
|
$
|
32
|
$
|
(2
|
)
|
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Ratio of Fair Value to
|
Gross
|
Gross
|
Gross
|
|||||||||||||||||||||||||||||||||
Amortized Cost
|
Number of
|
Estimated
|
Unrealized
|
Number of
|
Estimated
|
Unrealized
|
Number of
|
Estimated
|
Unrealized
|
|||||||||||||||||||||||||||
(Dollars in millions)
|
Securities
|
Fair Value
|
Losses
|
Securities
|
Fair Value
|
Losses
|
Securities
|
Fair Value
|
Losses
|
|||||||||||||||||||||||||||
2017:
|
||||||||||||||||||||||||||||||||||||
90%–100%
|
21
|
$
|
397
|
$
|
(10
|
)
|
6
|
$
|
32
|
$
|
(2
|
)
|
27
|
$
|
429
|
$
|
(12
|
)
|
||||||||||||||||||
Total as of March 31, 2017
|
21
|
$
|
397
|
$
|
(10
|
)
|
6
|
$
|
32
|
$
|
(2
|
)
|
27
|
$
|
429
|
$
|
(12
|
)
|
||||||||||||||||||
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
|
)
|
Estimated
|
||||||||
(Millions)
|
Cost
|
Fair Value
|
||||||
Due within 1 year
|
$
|
689
|
$
|
690
|
||||
Due after 1 year but within 5 years
|
990
|
992
|
||||||
Due after 5 years but within 10 years
|
365
|
369
|
||||||
Due after 10 years
|
1,446
|
1,462
|
||||||
Total
|
$
|
3,490
|
$
|
3,513
|
(Millions)
|
2017
|
2016
|
||||||
Lending Trust
|
$
|
52
|
$
|
35
|
||||
Charge Trust
|
3
|
3
|
||||||
Total
|
$
|
55
|
$
|
38
|
(Millions)
|
2017
|
2016
|
||||||
U.S.:
|
||||||||
Interest bearing
|
$
|
53,123
|
$
|
52,316
|
||||
Non-interest bearing (includes Card Member credit balances of: 2017, $286 million; 2016, $331 million)
|
322
|
367
|
||||||
Non-U.S.:
|
||||||||
Interest bearing
|
34
|
58
|
||||||
Non-interest bearing (includes Card Member credit balances of: 2017, $299 million; 2016, $285 million)
|
311
|
301
|
||||||
Total customer deposits
|
$
|
53,790
|
$
|
53,042
|
(Millions)
|
2017
|
2016
|
||||||
U.S. retail deposits:
|
||||||||
Savings accounts – Direct
|
$
|
31,420
|
$
|
30,980
|
||||
Certificates of deposit:(a)
|
||||||||
Direct
|
284
|
291
|
||||||
Third-party (brokered)
|
11,617
|
11,925
|
||||||
Sweep accounts – Third-party (brokered)
|
9,802
|
9,120
|
||||||
Other retail deposits:
|
||||||||
Non-U.S. deposits and U.S. non-interest bearing deposits
|
82
|
110
|
||||||
Card Member credit balances ― U.S. and non-U.S.
|
585
|
616
|
||||||
Total customer deposits
|
$
|
53,790
|
$
|
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 47 months and 1.96 percent, respectively, as of March 31, 2017.
|
(Millions)
|
U.S.
|
Non-U.S.
|
Total
|
|||||||||
2017
|
$
|
3,401
|
$
|
8
|
$
|
3,409
|
||||||
2018
|
3,445
|
8
|
3,453
|
|||||||||
2019
|
2,398
|
―
|
2,398
|
|||||||||
2020
|
2,543
|
―
|
2,543
|
|||||||||
2021
|
107
|
―
|
107
|
|||||||||
After 5 years
|
7
|
―
|
7
|
|||||||||
Total
|
$
|
11,901
|
$
|
16
|
$
|
11,917
|
(Millions)
|
2017
|
2016
|
||||||
U.S.
|
$
|
106
|
$
|
117
|
||||
Non-U.S.
|
7
|
7
|
||||||
Total
|
$
|
113
|
$
|
124
|
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)
|
$
|
57
|
$
|
111
|
$
|
―
|
$
|
69
|
||||||||
Net investment hedges - Foreign exchange contracts
|
53
|
347
|
196
|
35
|
||||||||||||
Total derivatives designated as hedging instruments
|
110
|
458
|
196
|
104
|
||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Foreign exchange contracts, including certain embedded derivatives(b)
|
120
|
308
|
216
|
176
|
||||||||||||
Total derivatives, gross
|
230
|
766
|
412
|
280
|
||||||||||||
Less: Cash collateral netting(c)(d)
|
(30
|
)
|
(54
|
)
|
―
|
(68
|
)
|
|||||||||
Derivative asset and derivative liability netting(e)
|
(94
|
)
|
(157
|
)
|
(94
|
)
|
(157
|
)
|
||||||||
Total derivatives, net(f)
|
$
|
106
|
$
|
555
|
$
|
318
|
$
|
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 March 31, 2017 centrally cleared derivatives are fully collateralized. 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) |
Primarily represents the offsetting of bilateral interest rate contracts and the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from derivatives executed with the same counterparty under an enforceable master netting arrangement.
|
(d) |
The Company held no non-cash collateral as of March 31, 2017. As of December 31, 2016, the 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 $173 million and $169 million as of March 31, 2017 and December 31, 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.
|
(f) |
The Company has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and net derivative liabilities are presented within Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets.
|
Three Months Ended March 31,
|
||||||||
(Millions)
|
2017
|
2016
|
||||||
Interest rate derivative contracts
|
$
|
75
|
$
|
165
|
||||
Hedged items
|
(50
|
)
|
(171
|
)
|
||||
Net hedge ineffectiveness gains (losses)
|
$
|
25
|
$
|
(6
|
)
|
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
|
$
|
49
|
$
|
1
|
$
|
48
|
$
|
―
|
$
|
49
|
$
|
1
|
$
|
48
|
$
|
―
|
||||||||||||||||
Debt securities
|
3,512
|
1,136
|
2,376
|
―
|
3,108
|
460
|
2,648
|
―
|
||||||||||||||||||||||||
Derivatives(a)
|
230
|
―
|
230
|
―
|
765
|
―
|
765
|
―
|
||||||||||||||||||||||||
Total Assets
|
3,791
|
1,137
|
2,654
|
―
|
3,922
|
461
|
3,461
|
―
|
||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||
Derivatives(a)
|
412
|
―
|
412
|
―
|
280
|
―
|
280
|
―
|
||||||||||||||||||||||||
Total Liabilities
|
$
|
412
|
$
|
―
|
$
|
412
|
$
|
―
|
$
|
280
|
$
|
―
|
$
|
280
|
$
|
―
|
(a) |
Refer to Note 5 for the fair values of investment securities and to Note 9 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)
|
$
|
29
|
$
|
29
|
$
|
27
|
$
|
2
|
$
|
―
|
||||||||||
Other financial assets(b)
|
50
|
50
|
―
|
50
|
―
|
|||||||||||||||
Financial assets carried at other than fair value
|
||||||||||||||||||||
Loans, net(c)
|
64
|
65
|
―
|
―
|
65
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Financial liabilities for which carrying values equal or approximate fair value
|
65
|
65
|
―
|
65
|
―
|
|||||||||||||||
Financial liabilities carried at other than fair value
|
||||||||||||||||||||
Certificates of deposit(d)
|
12
|
12
|
―
|
12
|
―
|
|||||||||||||||
Long-term debt(c)
|
$
|
52
|
$
|
53
|
$
|
―
|
$
|
53
|
$
|
―
|
||||||||||
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 $7.8 billion and $8.8 billion held by a consolidated VIE as of March 31, 2017 and December 31, 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 $24.3 billion and $26.0 billion as of March 31, 2017 and December 31, 2016, respectively, and the fair values of long-term debt were $16.8 billion and $15.2 billion as of March 31, 2017 and December 31, 2016, respectively.
|
(d) |
Presented as a component of customer deposits on the Consolidated Balance Sheets.
|
Maximum potential
|
||||||||||||||||
undiscounted future
|
||||||||||||||||
payments(a)
|
Related liability(b)
|
|||||||||||||||
(Billions)
|
(Millions)
|
|||||||||||||||
Type of Guarantee
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Return and Merchant Protection
|
$
|
45
|
$
|
42
|
$
|
37
|
$
|
37
|
||||||||
Other(c)
|
6
|
6
|
49
|
49
|
||||||||||||
Total
|
$
|
51
|
$
|
48
|
$
|
86
|
$
|
86
|
(a) |
Represents the notional amounts that could be lost under the guarantees and indemnifications if there were a total default by the guaranteed or indemnified parties. The maximum potential undiscounted future payments for Merchant Protection are measured using management’s best estimate of the maximum exposure, which is based on all eligible claims in relation to annual billed business volumes.
|
(b) |
Included in Other liabilities on the Consolidated Balance Sheets.
|
(c) |
Primarily includes guarantees related to the Company’s purchase protection, real estate and business dispositions.
|
2017 (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, 2016
|
$
|
7
|
$
|
(2,262
|
)
|
$
|
(529
|
)
|
$
|
(2,784
|
)
|
|||||
Net unrealized gains
|
6
|
―
|
―
|
6
|
||||||||||||
Decrease due to amounts reclassified into earnings
|
―
|
―
|
―
|
―
|
||||||||||||
Net translation gain of investments in foreign operations(a)
|
―
|
545
|
―
|
545
|
||||||||||||
Net losses related to hedges of investments in foreign operations
|
―
|
(229
|
)
|
―
|
(229
|
)
|
||||||||||
Pension and other postretirement benefit costs
|
―
|
―
|
(8
|
)
|
(8
|
)
|
||||||||||
Net change in accumulated other comprehensive loss
|
6
|
316
|
(8
|
)
|
314
|
|||||||||||
Balances as of March 31, 2017
|
$
|
13
|
$
|
(1,946
|
)
|
$
|
(537
|
)
|
$
|
(2,470
|
)
|
|||||
(a) Includes $289 million of tax benefits recognized in the three months ended March 31, 2017 (Refer to Note 14).
|
||||||||||||||||
2016 (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, 2015
|
$
|
58
|
$
|
(2,044
|
)
|
$
|
(548
|
)
|
$
|
(2,534
|
)
|
|||||
Net unrealized gains
|
4
|
―
|
―
|
4
|
||||||||||||
Decrease due to amounts reclassified into earnings
|
(2
|
)
|
―
|
―
|
(2
|
)
|
||||||||||
Net translation gain of investments in foreign operations
|
―
|
96
|
―
|
96
|
||||||||||||
Net losses related to hedges of investments in foreign operations
|
―
|
(92
|
)
|
―
|
(92
|
)
|
||||||||||
Pension and other postretirement benefit gains
|
―
|
―
|
26
|
26
|
||||||||||||
Net change in accumulated other comprehensive loss
|
2
|
4
|
26
|
32
|
||||||||||||
Balances as of March 31, 2016
|
$
|
60
|
$
|
(2,040
|
)
|
$
|
(522
|
)
|
$
|
(2,502
|
)
|
Tax expense (benefit)
|
||||||||
(Millions)
|
2017
|
2016
|
||||||
Investment securities
|
$
|
3
|
$
|
(1
|
)
|
|||
Foreign currency translation adjustments(a)
|
(191
|
)
|
15
|
|||||
Net investment hedges
|
(140
|
)
|
(53
|
)
|
||||
Pension and other postretirement benefits
|
(9
|
)
|
19
|
|||||
Total tax impact
|
$
|
(337
|
)
|
$
|
(20
|
)
|
(a) |
Includes $289 million of tax benefits recognized in the three months ended March 31, 2017 (Refer to Note 14).
|
Gains (losses) recognized in earnings
|
|||||||||
Amount
|
|||||||||
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
|
$
|
―
|
$
|
4
|
||||
Related income tax expense
|
Income tax provision
|
―
|
(2
|
)
|
|||||
Reclassification to net income related to available-for-sale securities
|
―
|
2
|
|||||||
Total
|
$
|
―
|
$
|
2
|
(Millions)
|
2017
|
2016
|
||||||
Delinquency fees
|
$
|
214
|
$
|
200
|
||||
Foreign currency conversion fee revenue
|
199
|
196
|
||||||
Loyalty coalition-related fees
|
102
|
94
|
||||||
Travel commissions and fees
|
84
|
80
|
||||||
Other(a)
|
114
|
110
|
||||||
Total Other fees and commissions
|
$
|
713
|
$
|
680
|
(a) |
Other primarily includes service fees and fees related to Membership Rewards programs.
|
(Millions)
|
2017
|
2016
|
||||||
Global Network Services partner revenues
|
$
|
156
|
$
|
145
|
||||
Other(a)
|
253
|
341
|
||||||
Total Other revenues
|
$
|
409
|
$
|
486
|
(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, revenues related to the GBT JV transition services agreement, prepaid card and Travelers Cheque-related revenues, earnings from equity method investments (including the GBT JV) and other miscellaneous revenue and fees.
|
(Millions)
|
2017
|
2016
|
||||||
Professional services
|
$
|
512
|
$
|
604
|
||||
Occupancy and equipment
|
475
|
465
|
||||||
Communications
|
63
|
83
|
||||||
Gain on sale of JetBlue HFS portfolio(a)
|
―
|
(127
|
)
|
|||||
Other(b)
|
357
|
395
|
||||||
Total Other expenses
|
$
|
1,407
|
$
|
1,420
|
(a) |
Refer to Note 2 for additional information.
|
(b) |
Other expense primarily includes general operating expenses, Card and merchant-related fraud losses, foreign currency-related gains and losses, certain loyalty coalition-related expenses and insurance costs. In addition, for the three months ended March 31, 2016, Other expenses includes the valuation allowance adjustment associated with loans and receivables HFS.
|
(Millions, except per share amounts)
|
2017
|
2016
|
||||||
Numerator:
|
||||||||
Basic and diluted:
|
||||||||
Net income
|
$
|
1,237
|
$
|
1,426
|
||||
Preferred dividends
|
(21
|
)
|
(21
|
)
|
||||
Net income available to common shareholders
|
$
|
1,216
|
$
|
1,405
|
||||
Earnings allocated to participating share awards(a)
|
(10
|
)
|
(11
|
)
|
||||
Net income attributable to common shareholders
|
$
|
1,206
|
$
|
1,394
|
||||
Denominator:(a)
|
||||||||
Basic: Weighted-average common stock
|
899
|
961
|
||||||
Add: Weighted-average stock options (b)
|
4
|
2
|
||||||
Diluted
|
903
|
963
|
||||||
Basic EPS
|
$
|
1.34
|
$
|
1.45
|
||||
Diluted EPS
|
$
|
1.34
|
$
|
1.45
|
(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 1.2 million and 1.5 million of options for the three months ended March 31, 2017 and 2016, respectively, because inclusion of the options would have been anti-dilutive.
|
Corporate &
|
||||||||||||||||||||||||
(Millions, except where indicated)
|
USCS
|
ICNS
|
GCS
|
GMS
|
Other(a)
|
Consolidated
|
||||||||||||||||||
2017
|
||||||||||||||||||||||||
Non-interest revenues
|
$
|
1,857
|
$
|
1,195
|
$
|
2,271
|
$
|
1,017
|
$
|
49
|
$
|
6,389
|
||||||||||||
Interest income
|
1,308
|
235
|
319
|
―
|
81
|
1,943
|
||||||||||||||||||
Interest expense
|
146
|
53
|
109
|
(58
|
)
|
193
|
443
|
|||||||||||||||||
Total revenues net of interest expense
|
3,019
|
1,377
|
2,481
|
1,075
|
(63
|
)
|
7,889
|
|||||||||||||||||
Net income (loss)
|
$
|
469
|
$
|
218
|
$
|
418
|
$
|
363
|
$
|
(231
|
)
|
$
|
1,237
|
|||||||||||
Total assets (billions)
|
$
|
81
|
$
|
36
|
$
|
48
|
$
|
25
|
$
|
(29
|
)
|
$
|
161
|
|||||||||||
Total equity (billions)
|
$
|
7
|
$
|
3
|
$
|
7
|
$
|
3
|
$
|
1
|
$
|
21
|
||||||||||||
2016
|
||||||||||||||||||||||||
Non-interest revenues
|
$
|
2,029
|
1,140
|
2,190
|
1,041
|
108
|
6,508
|
|||||||||||||||||
Interest income
|
1,391
|
227
|
321
|
―
|
66
|
2,005
|
||||||||||||||||||
Interest expense
|
140
|
54
|
95
|
(59
|
)
|
195
|
425
|
|||||||||||||||||
Total revenues net of interest expense
|
3,280
|
1,313
|
2,416
|
1,100
|
(21
|
)
|
8,088
|
|||||||||||||||||
Net income (loss)
|
$
|
694
|
$
|
188
|
$
|
485
|
$
|
357
|
$
|
(298
|
)
|
$
|
1,426
|
|||||||||||
Total assets (billions)
|
$
|
86
|
$
|
34
|
$
|
47
|
$
|
24
|
$
|
(32
|
)
|
$
|
159
|
|||||||||||
Total equity (billions)
|
$
|
7
|
$
|
3
|
$
|
7
|
$
|
2
|
$
|
2
|
$
|
21
|
(a) |
Corporate & Other includes adjustments and eliminations for intersegment activity.
|
• |
Discount revenue, our largest revenue source, represents fees generally charged to merchants for accepting our cards as payment for goods or services sold;
|
• |
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 foreign currency conversion fees charged to Card Members, Card Member delinquency fees, loyalty coalition-related fees, travel commissions and fees, service fees and fees related to our Membership Rewards program; and
|
• |
Other revenue, primarily 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 earned from Card Members, ancillary merchant-related fees, revenues related to the GBT JV transition services agreement, prepaid card and Travelers Cheque-related revenue and earnings from equity method investments (including the GBT JV).
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages and per share amounts)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Total revenues net of interest expense
|
$
|
7,889
|
$
|
8,088
|
$
|
(199
|
)
|
(2
|
)%
|
|||||||
Provisions for losses
|
573
|
434
|
139
|
32
|
||||||||||||
Expenses
|
5,499
|
5,470
|
29
|
1
|
||||||||||||
Net income
|
1,237
|
1,426
|
(189
|
)
|
(13
|
)
|
||||||||||
Earnings per common share — diluted(a)
|
$
|
1.34
|
$
|
1.45
|
$
|
(0.11
|
)
|
(8
|
)%
|
|||||||
Return on average equity(b)
|
25.1
|
%
|
23.6
|
%
|
(a) |
Earnings per common share — diluted was reduced by the impact of (i) earnings allocated to participating share awards and other items of $10 million and $11 million for the three months ended March 31, 2017 and 2016, respectively, and (ii) dividends on preferred shares of $21 million for both the three months ended March 31, 2017 and 2016.
|
(b) |
Return on average equity (ROE) is computed by dividing (i) one-year period net income ($5.2 billion and $5.1 billion for March 31, 2017 and 2016, respectively) by (ii) one-year average total shareholders’ equity ($20.8 billion and $21.5 billion for March 31, 2017 and 2016, respectively).
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Discount revenue
|
$
|
4,519
|
$
|
4,643
|
$
|
(124
|
)
|
(3
|
)%
|
|||||||
Net card fees
|
748
|
699
|
49
|
7
|
||||||||||||
Other fees and commissions
|
713
|
680
|
33
|
5
|
||||||||||||
Other
|
409
|
486
|
(77
|
)
|
(16
|
)
|
||||||||||
Total non-interest revenues
|
6,389
|
6,508
|
(119
|
)
|
(2
|
)
|
||||||||||
Total interest income
|
1,943
|
2,005
|
(62
|
)
|
(3
|
)
|
||||||||||
Total interest expense
|
443
|
425
|
18
|
4
|
||||||||||||
Net interest income
|
1,500
|
1,580
|
(80
|
)
|
(5
|
)
|
||||||||||
Total revenues net of interest expense
|
$
|
7,889
|
$
|
8,088
|
$
|
(199
|
)
|
(2
|
)%
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Charge card
|
$
|
213
|
$
|
169
|
$
|
44
|
26
|
%
|
||||||||
Card Member loans
|
337
|
227
|
110
|
48
|
||||||||||||
Other
|
23
|
38
|
(15
|
)
|
(39
|
)
|
||||||||||
Total provisions for losses(a)
|
$
|
573
|
$
|
434
|
$
|
139
|
32
|
%
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, does not reflect the HFS portfolios.
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Marketing and promotion
|
$
|
700
|
$
|
727
|
$
|
(27
|
)
|
(4
|
)%
|
|||||||
Card Member rewards
|
1,807
|
1,703
|
104
|
6
|
||||||||||||
Card Member services and other
|
321
|
282
|
39
|
14
|
||||||||||||
Total marketing, promotion, rewards, Card Member services and other
|
2,828
|
2,712
|
116
|
4
|
||||||||||||
Salaries and employee benefits
|
1,264
|
1,338
|
(74
|
)
|
(6
|
)
|
||||||||||
Other, net(a)
|
1,407
|
1,420
|
(13
|
)
|
(1
|
)
|
||||||||||
Total expenses
|
$
|
5,499
|
$
|
5,470
|
$
|
29
|
1
|
%
|
(a) |
Beginning December 1, 2015 through to the portfolio sale completion dates, includes the valuation allowance adjustment associated with the HFS portfolios.
|
As of or for the
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
2017
|
2016
|
2016
|
||||||||||
Card billed business: (billions)
|
||||||||||||
United States
|
$
|
165.4
|
$
|
176.3
|
(6
|
)%
|
||||||
Outside the United States
|
86.9
|
77.5
|
12
|
|||||||||
Worldwide
|
$
|
252.3
|
$
|
253.8
|
(1
|
)
|
||||||
Total cards-in-force: (millions)
|
||||||||||||
United States
|
48.2
|
57.9
|
(17
|
)
|
||||||||
Outside the United States
|
63.0
|
60.7
|
4
|
|||||||||
Worldwide
|
111.2
|
118.6
|
(6
|
)
|
||||||||
Basic cards-in-force: (millions)
|
||||||||||||
United States
|
38.1
|
45.1
|
(16
|
)
|
||||||||
Outside the United States
|
52.2
|
50.0
|
4
|
|||||||||
Worldwide
|
90.3
|
95.1
|
(5
|
)
|
||||||||
Average basic Card Member spending: (dollars)(a)
|
||||||||||||
United States
|
$
|
4,859
|
$
|
4,249
|
14
|
|||||||
Outside the United States
|
3,283
|
3,082
|
7
|
|||||||||
Worldwide Average
|
$
|
4,387
|
$
|
3,952
|
11
|
|||||||
Card Member loans: (billions)
|
||||||||||||
United States
|
$
|
56.6
|
$
|
50.7
|
12
|
|||||||
Outside the United States
|
7.0
|
6.7
|
4
|
|||||||||
Worldwide
|
$
|
63.6
|
$
|
57.4
|
11
|
|||||||
Average discount rate
|
2.45
|
%
|
2.44
|
%
|
||||||||
Average fee per card (dollars)(a)
|
$
|
48
|
$
|
40
|
20
|
%
|
(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.
|
Three Months Ended
|
|||||
March 31, 2017
|
|||||
Percentage Increase
|
|||||
Percentage
|
(Decrease) Assuming
|
||||
Increase
|
No Changes in
|
||||
(Decrease)
|
FX Rates(a)
|
||||
Worldwide(b)
|
|||||
Total billed business
|
(1)
|
%
|
―
|
%
|
|
Proprietary billed business
|
(2)
|
(2)
|
|||
GNS billed business(c)
|
7
|
6
|
|||
Airline-related volume (9% of worldwide billed business)
|
1
|
2
|
|||
United States(b)
|
|||||
Billed business
|
(6)
|
||||
Proprietary consumer card billed business(d)
|
(13)
|
||||
Proprietary small business and corporate services billed business(e)
|
2
|
||||
T&E-related volume (27% of U.S. billed business)
|
(5)
|
||||
Non-T&E-related volume (73% of U.S. billed business)
|
(7)
|
||||
Airline-related volume (8% of U.S. billed business)
|
(4)
|
||||
Outside the United States(b)
|
|||||
Billed business
|
12
|
13
|
|||
Japan, Asia Pacific & Australia (JAPA) billed business
|
16
|
14
|
|||
Latin America & Canada (LACC) billed business
|
10
|
9
|
|||
Europe, the Middle East & Africa (EMEA) billed business
|
7
|
12
|
|||
Proprietary consumer card billed business(c)
|
8
|
11
|
|||
Proprietary small business and corporate services billed business(e)
|
13
|
%
|
14
|
%
|
(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 period 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
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2016
|
|||||||||
Worldwide Card Member loans: (a)
|
||||||||||||
Total loans (billions)
|
$
|
63.6
|
$
|
57.4
|
11
|
%
|
||||||
Loss reserves:
|
||||||||||||
Beginning balance
|
$
|
1,223
|
$
|
1,028
|
19
|
|||||||
Provisions (b)
|
337
|
227
|
48
|
|||||||||
Net write-offs — principal only (c)
|
(272
|
)
|
(214
|
)
|
27
|
|||||||
Net write-offs — interest and fees (c)
|
(51
|
)
|
(40
|
)
|
28
|
|||||||
Other
|
11
|
11
|
―
|
|||||||||
Ending balance
|
$
|
1,248
|
$
|
1,012
|
23
|
|||||||
Ending reserves — principal
|
$
|
1,179
|
$
|
959
|
23
|
|||||||
Ending reserves — interest and fees
|
$
|
69
|
$
|
53
|
30
|
|||||||
% of loans
|
2.0
|
%
|
1.8
|
%
|
||||||||
% of past due
|
158
|
%
|
161
|
%
|
||||||||
Average loans (billions)(a)
|
$
|
63.9
|
$
|
57.4
|
11
|
|||||||
Net write-off rate — principal only (d)
|
1.7
|
%
|
1.5
|
%
|
||||||||
Net write-off rate — principal, interest and fees (d)
|
2.0
|
%
|
1.8
|
%
|
||||||||
30+ days past due as a % of total (d)
|
1.2
|
%
|
1.1
|
%
|
||||||||
Worldwide Card Member receivables: (a)
|
||||||||||||
Total receivables (billions)
|
$
|
47.6
|
$
|
44.5
|
7
|
|||||||
Loss reserves:
|
||||||||||||
Beginning balance
|
$
|
467
|
$
|
462
|
1
|
|||||||
Provisions (b)
|
213
|
169
|
26
|
|||||||||
Net write-offs (c)
|
(194
|
)
|
(186
|
)
|
4
|
|||||||
Other
|
5
|
1
|
#
|
|||||||||
Ending balance
|
$
|
491
|
$
|
446
|
10
|
%
|
||||||
% of receivables
|
1.0
|
%
|
1.0
|
%
|
||||||||
Net write-off rate — principal only (d)
|
1.7
|
%
|
1.9
|
%
|
||||||||
Net write-off rate — principal and fees (d)
|
2.0
|
%
|
2.1
|
%
|
||||||||
30+ days past due as a % of total (d)
|
1.5
|
%
|
1.5
|
%
|
||||||||
Net loss ratio as a % of charge volume — GCP
|
0.11
|
%
|
0.08
|
%
|
||||||||
90+ days past billing as a % of total — GCP
|
0.7
|
%
|
0.7
|
%
|
(a) |
Beginning December 1, 2015 through to the sale completion dates, does 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) |
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.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
||||||
Net interest income
|
$
|
1,500
|
$
|
1,580
|
||||
Exclude:
|
||||||||
Interest expense not attributable to our Card Member loan portfolio
|
252
|
238
|
||||||
Interest income not attributable to our Card Member loan portfolio
|
(130
|
)
|
(103
|
)
|
||||
Adjusted net interest income (a)
|
$
|
1,622
|
$
|
1,715
|
||||
Average loans including HFS loan portfolios (billions)(b)
|
$
|
63.9
|
$
|
70.8
|
||||
Net interest income divided by average loans
|
9.4
|
%
|
8.9
|
%
|
||||
Net interest yield on Card Member loans (a)
|
10.3
|
%
|
9.7
|
%
|
(a) |
Adjusted net interest income and net interest yield on Card Member loans are non-GAAP measures. Refer to “Glossary of Selected Terminology” for definitions of these terms. We believe adjusted net interest income is useful to investors because it is a component of net interest yield on Card Member loans, which provides a measure of profitability of our Card Member loan portfolio.
|
(b) |
Beginning December 1, 2015 through to the sale completion dates, for the purposes of the calculation of net interest yield on Card Member loans, average loans included the HFS loan portfolios.
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Revenues
|
||||||||||||||||
Non-interest revenues
|
$
|
1,857
|
$
|
2,029
|
$
|
(172
|
)
|
(8
|
)%
|
|||||||
Interest income
|
1,308
|
1,391
|
(83
|
)
|
(6
|
)
|
||||||||||
Interest expense
|
146
|
140
|
6
|
4
|
||||||||||||
Net interest income
|
1,162
|
1,251
|
(89
|
)
|
(7
|
)
|
||||||||||
Total revenues net of interest expense
|
3,019
|
3,280
|
(261
|
)
|
(8
|
)
|
||||||||||
Provisions for losses
|
294
|
190
|
104
|
55
|
||||||||||||
Total revenues net of interest expense after provisions for losses
|
2,725
|
3,090
|
(365
|
)
|
(12
|
)
|
||||||||||
Expenses
|
||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
1,297
|
1,348
|
(51
|
)
|
(4
|
)
|
||||||||||
Salaries and employee benefits and other operating expenses
|
728
|
655
|
73
|
11
|
||||||||||||
Total expenses
|
2,025
|
2,003
|
22
|
1
|
||||||||||||
Pretax segment income
|
700
|
1,087
|
(387
|
)
|
(36
|
)
|
||||||||||
Income tax provision
|
231
|
393
|
(162
|
)
|
(41
|
)
|
||||||||||
Segment income
|
$
|
469
|
$
|
694
|
$
|
(225
|
)
|
(32
|
)%
|
|||||||
Effective tax rate
|
33.0
|
%
|
36.2
|
%
|
As of or for the
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2016
|
|||||||||
Card billed business (billions)
|
$
|
77.5
|
$
|
89.0
|
(13
|
)%
|
||||||
Total cards-in-force
|
33.2
|
40.9
|
(19
|
)
|
||||||||
Basic cards-in-force
|
23.7
|
28.8
|
(18
|
)
|
||||||||
Average basic Card Member spending (dollars)
|
$
|
3,297
|
$
|
3,092
|
7
|
|||||||
Total segment assets (billions)
|
$
|
81.2
|
$
|
86.3
|
(6
|
)
|
||||||
Segment capital (billions)
|
$
|
7.1
|
$
|
7.4
|
(4
|
)
|
||||||
Return on average segment capital (a)
|
31.9
|
%
|
31.8
|
%
|
||||||||
Card Member loans: (b)
|
||||||||||||
Total loans (billions)
|
$
|
46.7
|
$
|
42.4
|
10
|
|||||||
Average loans (billions)
|
$
|
47.2
|
$
|
42.5
|
11
|
|||||||
Net write-off rate – principal only (c)
|
1.7
|
%
|
1.5
|
%
|
||||||||
Net write-off rate – principal, interest and fees (c)
|
2.0
|
%
|
1.7
|
%
|
||||||||
30+ days past due loans as a % of total
|
1.2
|
%
|
1.0
|
%
|
||||||||
Calculation of Net Interest Yield on Card Member loans:
|
||||||||||||
Net interest income
|
$
|
1,162
|
$
|
1,251
|
||||||||
Exclude:
|
||||||||||||
Interest expense not attributable to our Card Member loan portfolio
|
23
|
19
|
||||||||||
Interest income not attributable to our Card Member loan portfolio
|
(18
|
)
|
(5
|
)
|
||||||||
Adjusted net interest income (d)
|
$
|
1,167
|
$
|
1,265
|
||||||||
Average loans including HFS loan portfolios (billions)(e)
|
$
|
47.2
|
$
|
53.8
|
||||||||
Net interest income divided by average loans
|
9.8
|
%
|
9.3
|
%
|
||||||||
Net interest yield on Card Member loans(d)
|
10.0
|
%
|
9.5
|
%
|
||||||||
Card Member receivables: (b)
|
||||||||||||
Total receivables (billions)
|
$
|
10.9
|
$
|
10.3
|
6
|
%
|
||||||
Net write-off rate – principal only (c)
|
1.5
|
%
|
1.8
|
%
|
||||||||
Net write-off rate – principal and fees (c)
|
1.7
|
%
|
2.0
|
%
|
||||||||
30+ days past due as a % of total
|
1.3
|
%
|
1.4
|
%
|
(a) |
Return on average segment capital is calculated by dividing (i) one-year period segment income ($2.3 billion and $2.4 billion for the twelve months ended March 31, 2017 and 2016, respectively) by (ii) one-year average segment capital ($7.2 billion and $7.5 billion for the twelve months ended March 31, 2017 and 2016, respectively).
|
(b) |
Refer to Table 7 footnote (a).
|
(c) |
Refer to Table 7 footnote (d).
|
(d) |
Adjusted net interest income and net interest yield on 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 is a component of net interest yield on Card Member loans, which provides a measure of profitability of our Card Member loan portfolio.
|
(e) |
Refer to Table 8 footnote (b).
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Revenues
|
||||||||||||||||
Non-interest revenues
|
$
|
1,195
|
$
|
1,140
|
$
|
55
|
5
|
%
|
||||||||
Interest income
|
235
|
227
|
8
|
4
|
||||||||||||
Interest expense
|
53
|
54
|
(1
|
)
|
(2
|
)
|
||||||||||
Net interest income
|
182
|
173
|
9
|
5
|
||||||||||||
Total revenues net of interest expense
|
1,377
|
1,313
|
64
|
5
|
||||||||||||
Provisions for losses
|
66
|
71
|
(5
|
)
|
(7
|
)
|
||||||||||
Total revenues net of interest expense after provisions for losses
|
1,311
|
1,242
|
69
|
6
|
||||||||||||
Expenses
|
||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
505
|
481
|
24
|
5
|
||||||||||||
Salaries and employee benefits and other operating expenses
|
514
|
506
|
8
|
2
|
||||||||||||
Total expenses
|
1,019
|
987
|
32
|
3
|
||||||||||||
Pretax segment income
|
292
|
255
|
37
|
15
|
||||||||||||
Income tax provision
|
74
|
67
|
7
|
10
|
||||||||||||
Segment income
|
$
|
218
|
$
|
188
|
$
|
30
|
16
|
%
|
||||||||
Effective tax rate
|
25.3
|
%
|
26.3
|
%
|
As of or for the
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2016
|
|||||||||
Card billed business (billions)
|
||||||||||||
Proprietary
|
$
|
26.6
|
$
|
24.7
|
8
|
%
|
||||||
GNS
|
43.4
|
40.5
|
7
|
|||||||||
Total
|
$
|
70.0
|
$
|
65.2
|
7
|
|||||||
Total cards-in-force
|
||||||||||||
Proprietary
|
15.3
|
14.8
|
3
|
|||||||||
GNS
|
49.0
|
47.7
|
3
|
|||||||||
Total
|
64.3
|
62.5
|
3
|
|||||||||
Proprietary basic cards-in-force
|
10.5
|
10.1
|
4
|
|||||||||
Average proprietary basic Card Member spending (dollars)
|
$
|
2,542
|
$
|
2,455
|
4
|
|||||||
Total segment assets (billions)
|
$
|
36.1
|
$
|
34.3
|
5
|
|||||||
Segment capital (billions)
|
$
|
2.7
|
$
|
2.5
|
8
|
|||||||
Return on average segment capital (a)
|
26.4
|
%
|
23.6
|
%
|
||||||||
Card Member loans: (b)
|
||||||||||||
Total loans (billions)
|
$
|
6.8
|
$
|
6.6
|
3
|
|||||||
Average loans (billions)
|
$
|
6.9
|
$
|
6.8
|
1
|
|||||||
Net write-off rate – principal only (c)
|
2.0
|
%
|
1.9
|
%
|
||||||||
Net write-off rate – principal, interest and fees (c)
|
2.5
|
%
|
2.4
|
%
|
||||||||
30+ days past due loans as a % of total
|
1.7
|
%
|
1.8
|
%
|
||||||||
Calculation of Net Interest Yield on Card Member loans:
|
||||||||||||
Net interest income
|
$
|
182
|
$
|
173
|
||||||||
Exclude:
|
||||||||||||
Interest expense not attributable to our Card Member loan portfolio
|
10
|
11
|
||||||||||
Interest income not attributable to our Card Member loan portfolio
|
(3
|
)
|
(3
|
)
|
||||||||
Adjusted net interest income (d)
|
$
|
189
|
$
|
181
|
||||||||
Average loans (billions)
|
$
|
6.9
|
$
|
6.8
|
||||||||
Net interest income divided by average loans
|
10.6
|
%
|
10.3
|
%
|
||||||||
Net interest yield on Card Member loans (d)
|
11.1
|
%
|
10.8
|
%
|
||||||||
Card Member receivables: (b)
|
||||||||||||
Total receivables (billions)
|
$
|
5.5
|
$
|
5.6
|
(2
|
)%
|
||||||
Net write-off rate – principal only (c)
|
2.1
|
%
|
2.2
|
%
|
||||||||
Net write-off rate – principal and fees(c)
|
2.3
|
%
|
2.4
|
%
|
||||||||
30+ days past due loans as a % of total
|
1.5
|
%
|
1.5
|
%
|
(a) |
Return on average segment capital is calculated by dividing (i) one-year period segment income ($685 million and $676 million for the twelve months ended March 31, 2017 and 2016, respectively) by (ii) one-year average segment capital ($2.6 billion and $2.9 billion for the twelve months ended March 31, 2017 and 2016, respectively).
|
(b) |
Refer to Table 7 footnote (a).
|
(c) |
Refer to Table 7 footnote (d).
|
(d) |
Adjusted net interest income and net interest yield on 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 is a component of net interest yield on Card Member loans, which provides a measure of profitability of our Card Member loan portfolio.
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Revenues
|
||||||||||||||||
Non-interest revenues
|
$
|
2,271
|
$
|
2,190
|
$
|
81
|
4
|
%
|
||||||||
Interest income
|
319
|
321
|
(2
|
)
|
(1
|
)
|
||||||||||
Interest expense
|
109
|
95
|
14
|
15
|
||||||||||||
Net interest income
|
210
|
226
|
(16
|
)
|
(7
|
)
|
||||||||||
Total revenues net of interest expense
|
2,481
|
2,416
|
65
|
3
|
||||||||||||
Provisions for losses
|
208
|
160
|
48
|
30
|
||||||||||||
Total revenues net of interest expense after provisions for losses
|
2,273
|
2,256
|
17
|
1
|
||||||||||||
Expenses
|
||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
938
|
766
|
172
|
22
|
||||||||||||
Salaries and employee benefits and other operating expenses
|
705
|
729
|
(24
|
)
|
(3
|
)
|
||||||||||
Total expenses
|
1,643
|
1,495
|
148
|
10
|
||||||||||||
Pretax segment income
|
630
|
761
|
(131
|
)
|
(17
|
)
|
||||||||||
Income tax provision
|
212
|
276
|
(64
|
)
|
(23
|
)
|
||||||||||
Segment income
|
$
|
418
|
$
|
485
|
$
|
(67
|
)
|
(14
|
)%
|
|||||||
Effective tax rate
|
33.7
|
%
|
36.3
|
%
|
As of or for the
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2016
|
|||||||||
Card billed business (billions)
|
$
|
102.8
|
$
|
98.5
|
4
|
%
|
||||||
Total cards-in-force
|
13.7
|
15.2
|
(10
|
)
|
||||||||
Basic cards-in-force
|
13.7
|
15.2
|
(10
|
)
|
||||||||
Average basic Card Member spending (dollars)
|
$
|
7,533
|
$
|
6,509
|
16
|
|||||||
Total segment assets (billions)
|
$
|
48.3
|
$
|
46.7
|
3
|
|||||||
Segment capital (billions)
|
$
|
7.2
|
$
|
7.2
|
―
|
|||||||
Return on average segment capital (a)
|
25.4
|
%
|
28.0
|
%
|
||||||||
Card Member loans (billions)
|
$
|
10.0
|
$
|
8.3
|
20
|
|||||||
Card Member receivables (billions)
|
$
|
31.2
|
$
|
28.6
|
9
|
|||||||
Card Member loans: (b)
|
||||||||||||
Total loans - GSBS (billions)
|
$
|
10.0
|
$
|
8.3
|
20
|
|||||||
Average loans - GSBS (billions)
|
$
|
9.6
|
$
|
8.1
|
19
|
|||||||
Net write-off rate (principal only) - GSBS (c)
|
1.6
|
%
|
1.4
|
%
|
||||||||
Net write-off rate (principal, interest and fees) - GSBS (c)
|
1.8
|
%
|
1.6
|
%
|
||||||||
30+ days past due as a % of total - GSBS
|
1.2
|
%
|
1.0
|
%
|
||||||||
Calculation of Net Interest Yield on Card Member loans:
|
||||||||||||
Net interest income
|
$
|
210
|
$
|
226
|
||||||||
Exclude:
|
||||||||||||
Interest expense not attributable to our Card Member loan portfolio
|
83
|
72
|
||||||||||
Interest income not attributable to our Card Member loan portfolio
|
(27
|
)
|
(28
|
)
|
||||||||
Adjusted net interest income(d)
|
$
|
266
|
$
|
270
|
||||||||
Average loans including HFS loan portfolios (billions)(e)
|
$
|
9.7
|
$
|
10.3
|
||||||||
Net interest income divided by average loans
|
8.7
|
%
|
8.8
|
%
|
||||||||
Net interest yield on Card Member loans (d)
|
11.1
|
%
|
10.5
|
%
|
||||||||
Card Member receivables: (b)
|
||||||||||||
Total receivables - GCP (billions)
|
$
|
16.6
|
$
|
15.4
|
8
|
|||||||
90+ days past billing as a % of total - GCP (f)
|
0.7
|
%
|
0.7
|
%
|
||||||||
Net loss ratio (as a % of charge volume) - GCP
|
0.11
|
%
|
0.08
|
%
|
||||||||
Total receivables - GSBS (billions)
|
$
|
14.6
|
$
|
13.2
|
11
|
%
|
||||||
Net write-off rate (principal only) - GSBS (c)
|
1.8
|
%
|
1.8
|
%
|
||||||||
Net write-off rate (principal and fees) - GSBS (c)
|
2.0
|
%
|
2.1
|
%
|
||||||||
30+ days past due as a % of total - GSBS
|
1.6
|
%
|
1.6
|
%
|
(a) |
Return on average segment capital is calculated by dividing (i) one-year period segment income ($1.8 billion and $2.0 billion for the twelve months ended March 31, 2017 and 2016, respectively) by (ii) one-year average segment capital ($7.3 billion and $7.1 billion for the twelve months ended March 31, 2017 and 2016, respectively).
|
(b) |
Refer to Table 7 footnote (a).
|
(c) |
Refer to Table 7 footnote (d).
|
(d) |
Adjusted net interest income and net interest yield on 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 is a component of net interest yield on Card Member loans, which provides a measure of profitability of our Card Member loan portfolio.
|
(e) |
Refer to Table 8 footnote (b).
|
(f) |
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.
|
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2017
|
2016
|
2017 vs. 2016
|
|||||||||||||
Revenues
|
||||||||||||||||
Non-interest revenues
|
$
|
1,017
|
$
|
1,041
|
$
|
(24
|
)
|
(2
|
)%
|
|||||||
Interest expense
|
(58
|
)
|
(59
|
)
|
1
|
(2
|
)
|
|||||||||
Net interest income
|
58
|
59
|
(1
|
)
|
(2
|
)
|
||||||||||
Total revenues net of interest expense
|
1,075
|
1,100
|
(25
|
)
|
(2
|
)
|
||||||||||
Provisions for losses
|
3
|
8
|
(5
|
)
|
(63
|
)
|
||||||||||
Total revenues net of interest expense after provisions for losses
|
1,072
|
1,092
|
(20
|
)
|
(2
|
)
|
||||||||||
Expenses
|
||||||||||||||||
Marketing, promotion, rewards, Card Member services and other
|
32
|
58
|
(26
|
)
|
(45
|
)
|
||||||||||
Salaries and employee benefits and other operating expenses
|
473
|
463
|
10
|
2
|
||||||||||||
Total expenses
|
505
|
521
|
(16
|
)
|
(3
|
)
|
||||||||||
Pretax segment income
|
567
|
571
|
(4
|
)
|
(1
|
)
|
||||||||||
Income tax provision
|
204
|
214
|
(10
|
)
|
(5
|
)
|
||||||||||
Segment income
|
$
|
363
|
$
|
357
|
$
|
6
|
2
|
%
|
||||||||
Effective tax rate
|
36.0
|
%
|
37.5
|
%
|
As of or for the
|
Change
|
|||||||||||
Three Months Ended
|
2017
|
|||||||||||
March 31,
|
vs.
|
|||||||||||
(Millions, except percentages and where indicated)
|
2017
|
2016
|
2016
|
|||||||||
Loyalty Coalition revenue
|
$
|
102
|
$
|
94
|
9
|
%
|
||||||
Average discount rate
|
2.45
|
%
|
2.44
|
%
|
||||||||
Total segment assets (billions)
|
$
|
24.5
|
$
|
23.7
|
3
|
%
|
||||||
Segment capital (billions)
|
$
|
2.7
|
$
|
2.4
|
13
|
%
|
||||||
Return on average segment capital(a)
|
59.1
|
%
|
62.7
|
%
|
(a) |
Return on average segment capital is calculated by dividing (i) one-year period segment income ($1.5 billion for both the twelve months ended March 31, 2017 and 2016) by (ii) one-year average segment capital ($2.5 billion and $2.4 billion for the twelve months ended March 31, 2017 and 2016, respectively).
|
• |
A solid and flexible equity capital profile;
|
• |
A broad, deep and diverse set of funding sources to finance our assets and meet operating requirements; and
|
• |
Liquidity programs that enable us to continuously meet expected future financing obligations and business requirements for at least a twelve-month period, even in the event we are unable to continue to raise new funds under our traditional funding programs during a substantial weakening in economic conditions.
|
Basel III
|
Ratios as of
|
||||||
Standards
|
March 31,
|
||||||
2017(a)
|
2017
|
||||||
Risk-Based Capital
|
|||||||
Common Equity Tier 1
|
5.8
|
%
|
|||||
American Express Company
|
12.7
|
%
|
|||||
American Express Centurion Bank
|
17.7
|
||||||
American Express Bank, FSB
|
14.3
|
||||||
Tier 1
|
7.3
|
||||||
American Express Company
|
13.9
|
||||||
American Express Centurion Bank
|
17.7
|
||||||
American Express Bank, FSB
|
14.3
|
||||||
Total
|
9.3
|
||||||
American Express Company
|
15.6
|
||||||
American Express Centurion Bank
|
19.0
|
||||||
American Express Bank, FSB
|
15.6
|
||||||
Tier 1 Leverage
|
4.0
|
||||||
American Express Company
|
11.5
|
||||||
American Express Centurion Bank
|
17.4
|
||||||
American Express Bank, FSB
|
12.2
|
||||||
Supplementary Leverage Ratio(b)
|
3.0
|
%
|
|||||
American Express Company
|
9.9
|
||||||
American Express Centurion Bank
|
13.3
|
||||||
American Express Bank, FSB
|
10.1
|
%
|
(a) |
Transitional Basel III minimum capital requirement and additional capital conservation buffer as defined by the Federal Reserve for calendar year 2017 for advanced approaches institutions.
|
(b) |
The minimum supplementary leverage ratio (SLR) requirement of 3 percent is effective January 1, 2018.
|
American Express Company
|
March 31,
|
|||
($ in Billions)
|
2017
|
|||
Risk-Based Capital
|
||||
Common Equity Tier 1
|
$
|
16.3
|
||
Tier 1 Capital
|
17.8
|
|||
Tier 2 Capital(a)
|
2.2
|
|||
Total Capital
|
20.0
|
|||
Risk-Weighted Assets
|
128.6
|
|||
Average Total Assets to calculate the Tier 1 Leverage Ratio
|
155.0
|
|||
Total Leverage Exposure to calculate SLR
|
$
|
180.5
|
(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 $600 million of subordinated notes adjusted for capital held by insurance subsidiaries.
|
March 31,
|
||||
($ in Billions)
|
2017
|
|||
Estimated Common Equity Tier 1 Ratio under Fully Phased-In Basel III(a)
|
12.3
|
%
|
||
Estimated Tier 1 Capital Ratio under Fully Phased-In Basel III (a)
|
13.5
|
|||
Estimated Tier 1 Leverage Ratio under Fully Phased-In Basel III(b)
|
11.3
|
|||
Estimated Supplementary Leverage Ratio under Fully Phased-In Basel III
|
9.7
|
%
|
||
Estimated Risk-Weighted Assets under Fully Phased-In Basel III(c)
|
$
|
130.3
|
||
Estimated Average Total Assets to calculate the Tier 1 Leverage Ratio(b)
|
154.8
|
|||
Estimated Total Leverage Exposure to calculate SLR under Fully Phased-In Basel III (d)
|
$
|
180.4
|
(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 supplementary leverage ratios, 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 supplementary leverage ratio 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
|
$
|
16.3
|
$
|
17.8
|
||||
Adjustments related to:
|
||||||||
AOCI
|
(0.1
|
)
|
(0.1
|
)
|
||||
Transition provisions for intangible assets
|
(0.2
|
)
|
(0.2
|
)
|
||||
Other
|
―
|
―
|
||||||
Estimated CET1 and Tier 1 Risk-Based Capital under Fully Phased-in Basel III
|
$
|
16.0
|
$
|
17.5
|
(Billions)
|
March 31, 2017
|
December 31, 2016
|
||||||
Short-term borrowings
|
$
|
3.6
|
$
|
5.6
|
||||
Long-term debt
|
51.6
|
47.0
|
||||||
Total debt
|
55.2
|
52.6
|
||||||
Customer deposits
|
53.8
|
53.0
|
||||||
Total debt and customer deposits
|
$
|
109.0
|
$
|
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
|
Negative
|
||
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.
|
• |
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;
|
• |
Incorporating liquidity risk management as appropriate into our capital adequacy framework.
|
(Billions)
|
2017
|
2016
|
||||||
Total cash provided by (used in):
|
||||||||
Operating activities
|
$
|
1.2
|
$
|
2.5
|
||||
Investing activities
|
0.7
|
3.7
|
||||||
Financing activities
|
2.2
|
(3.9
|
)
|
|||||
Effect of foreign currency exchange rates on cash and cash equivalents and other
|
0.1
|
―
|
||||||
Net increase in cash and cash equivalents
|
$
|
4.2
|
$
|
2.3
|
• |
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, 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, the strengthening of the U.S. dollar, a greater erosion of the average discount rate than expected, a greater impact on discount revenue from cash back and cobrand partner and client incentive payments, more cautious spending by large and global corporate Card Members and lower spending on new cards acquired than estimated; our success in addressing competitive pressures and implementing strategies and business initiatives, including growing profitable spending from new and existing Card Members, increasing penetration among middle market and small business clients, expanding our international footprint and increasing merchant acceptance; the level of spend in bonus categories on rewards-based and/or cash-back cards and redemptions of Card Member rewards and offers; the impact of any future contingencies, including, but not limited to, litigation-related settlements, judgments or expenses, impairments, the imposition of fines or civil money penalties, an increase in Card Member reimbursements and changes in reserves; write-downs of deferred tax assets as a result of tax law or other changes; credit performance remaining consistent with current expectations; continued growth of Card Member loans; the ability to continue to realize benefits from restructuring actions and operating leverage at levels consistent with current expectations; 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 potential deposit rate increases); 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, our geographic mix of income being weighted more to higher tax jurisdictions than expected, changes in tax laws and regulation and unfavorable tax audits and other unanticipated tax items; the impact of accounting changes and reclassifications; and our ability to continue executing the share repurchase program;
|
• |
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 and the success of marketing, promotion or rewards programs;
|
• |
the actual amount to be spent on marketing and promotion, as well as the timing of any such spending, which will be based in part on management’s assessment of competitive opportunities; overall business performance; 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;
|
• |
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 and actual usage and redemption of rewards, 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 to continue to expand our global lounge collection; and the amount we spend on the promotion of enhanced services and rewards categories and the success of such promotion;
|
• |
our ability to reduce our overall cost base, which will depend in part on the timing and financial impact of reengineering plans, which could be impacted by factors such as our inability to mitigate the operational and other risks posed by potential staff reductions, our inability to develop and implement technology resources to realize cost savings and underestimating hiring and other employee needs; our ability to reduce annual operating expenses, which could be impacted by, among other things, the factors identified below; our ability to optimize marketing and promotion expenses, which could be impacted by higher advertising and Card Member acquisition costs, competitive pressures that may require additional expenditures or limit our ability to reduce costs and an inability to continue to shift Card Member acquisition to digital channels; and the availability of opportunities to invest at a higher level due to favorable business results and changes in macroeconomic conditions;
|
• |
the ability to reduce annual operating expenses, 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; our ability to develop, implement and achieve substantial benefits from reengineering plans; 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 depending on overall business performance; greater than expected inflation; our ability to balance expense control and investments in the business; the impact of accounting changes and reclassifications; and the level of M&A activity and related expenses;
|
• |
our delinquency and write-off rates and growth of provision expense 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, unemployment rates, the volume of bankruptcies and recoveries of previously written-off loans;
|
• |
our ability to execute against our lending strategy to grow loans, 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;
|
• |
the possibility that we will not execute on our plans to significantly increase merchant coverage, which will depend in part on the success of OptBlue merchant acquirers in signing merchants to accept American Express, which could be impacted by the pricing set by the merchant acquirers, the value proposition offered to small merchants and the efforts of OptBlue merchant acquirers to sign merchants for American Express acceptance, as well as the awareness and willingness of Card Members to use American Express cards at small merchants and of those merchants to accept American Express cards;
|
• |
changes affecting our ability or desire to return capital to shareholders through dividends and share repurchases, which will depend on factors such as approval of our capital plans by our primary regulators, the amount we spend on acquisitions of companies and our results of operations and capital needs in any given period;
|
• |
deposit rates increasing faster or slower than current expectations due to market pressures, regulatory constraints or changes in benchmark interest rates, which could affect net interest yield and our cost of funding;
|
• |
changes in global economic and business conditions, consumer and business spending, the availability and cost of capital, unemployment rates, geopolitical conditions (including potential impacts resulting from the U.S. Administration and the proposed exit of the United Kingdom from the European Union), 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, restrict our access to the capital markets or result in contingent payments under contracts;
|
• |
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; 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; result in harm to the American Express brand; potential actions by the FDIC and credit rating agencies applicable to securitization trusts, which could impact our asset securitization program; or potential changes to the taxation of our businesses, the allowance of deductions for significant expenses, or the incidence of consumption taxes on our transactions, products and services;
|
• |
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, cyberattacks or fraud, all of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan balances and results of operations or disrupt our global network systems and ability to process transactions.
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(c)
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||||||||||
January 1-31, 2017
|
||||||||||||||||
Repurchase program(a)
|
3,999,747
|
$
|
76.07
|
3,999,747
|
131,388,031
|
|||||||||||
Employee transactions(b)
|
―
|
―
|
N/A
|
N/A
|
||||||||||||
February 1-28, 2017
|
||||||||||||||||
Repurchase program(a)
|
1,749,740
|
$
|
78.85
|
1,749,740
|
129,638,291
|
|||||||||||
Employee transactions(b)
|
855,075
|
$
|
76.86
|
N/A
|
N/A
|
|||||||||||
March 1-31, 2017
|
||||||||||||||||
Repurchase program(a)
|
5,116,427
|
$
|
79.07
|
5,116,427
|
124,521,864
|
|||||||||||
Employee transactions(b)
|
7,322
|
$
|
76.85
|
N/A
|
N/A
|
|||||||||||
Total
|
||||||||||||||||
Repurchase program(a)
|
10,865,914
|
$
|
77.93
|
10,865,914
|
124,521,864
|
|||||||||||
Employee transactions(b)
|
862,397
|
$
|
76.86
|
N/A
|
N/A
|
(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.
|
(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.
|
|
|
AMERICAN EXPRESS COMPANY
|
||||
|
|
|
(Registrant)
|
|||
Date: April 27, 2017
|
|
|
By
|
|
/s/ Jeffrey C. Campbell
|
|
|
|
|
Jeffrey C. Campbell
|
|||
|
|
|
Executive Vice President and
|
|||
|
|
|
Chief Financial Officer
|
|||
Date: April 27, 2017
|
|
|
By
|
|
/s/ Linda Zukauckas
|
|
|
|
|
Linda Zukauckas
|
|||
|
|
|
Executive Vice President and
|
|||
|
|
|
Corporate Controller
|
|||
|
|
|
(Principal Accounting Officer)
|
Exhibit
|
Description
|
12
|
Computation in Support of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
31.1
|
Certification of Kenneth I. Chenault pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
31.2
|
Certification of Jeffrey C. Campbell pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
32.1
|
Certification of Kenneth I. Chenault pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Jeffrey C. Campbell pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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
|
Three Months Ended
|
||||||||||||||||||||||||
March 31,
|
Years Ended December 31,
|
|||||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Pretax income
|
$
|
1,817
|
$
|
8,096
|
$
|
7,938
|
$
|
8,991
|
$
|
7,888
|
$
|
6,451
|
||||||||||||
Interest expense(a)
|
443
|
1,704
|
1,623
|
1,707
|
1,958
|
2,226
|
||||||||||||||||||
Other adjustments(b) |
27
|
101 | 118 | 402 | 133 | 117 | ||||||||||||||||||
Total earnings
|
$
|
2,287
|
$
|
9,901
|
$
|
9,679
|
$
|
11,100
|
$
|
9,979
|
$
|
8,794
|
||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest expense
|
$
|
443
|
$
|
1,704
|
$
|
1,623
|
$
|
1,707
|
$
|
1,958
|
$
|
2,226
|
||||||||||||
Other adjustments(c) | 12 | 56 | 62 | 79 | 93 | 102 | ||||||||||||||||||
Total fixed charges
|
455
|
1,760
|
1,685
|
1,786
|
2,051
|
2,328
|
||||||||||||||||||
Preferred stock dividends
|
21
|
80
|
62
|
―
|
―
|
―
|
||||||||||||||||||
Total fixed charges and preferred stock dividends
|
$
|
476
|
$
|
1,840
|
$
|
1,747
|
$
|
1,786
|
$
|
2,051
|
$
|
2,328
|
||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends
|
4.80
|
5.38
|
5.54
|
6.22
|
4.87
|
3.78
|
(a) |
Included in interest expense is interest expense related to the Card Member lending activities, international banking operations, and 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 net loss of affiliates accounted for under the equity method whose debt is not guaranteed by the Company, 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.
|
1. |
I have reviewed this quarterly report on Form 10-Q of American Express Company;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1. |
I have reviewed this quarterly report on Form 10-Q of American Express Company;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Represents net income less (i) earnings allocated to participating share awards of $ 10 million and $ 11 million for the three months ended March 31 , 2017 and 2016 , respectively, and (ii) dividends on preferred shares of $ 21 million for both the three months ended March 31 , 2017 and 2016 .
Represents net income less (i) earnings allocated to participating share awards of $ 10 million and $ 11 million for the three months ended March 31 , 2017 and 2016 , respectively, and (ii) dividends on preferred shares of $ 21 million for both the three months ended March 31 , 2017 and 2016 .
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 21, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMERICAN EXPRESS COMPANY | |
Trading Symbol | AXP | |
Entity Central Index Key | 0000004962 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 893,779,186 |
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||
Non-interest revenues | |||||||
Discount revenue | $ 4,519 | $ 4,643 | |||||
Net card fees | 748 | 699 | |||||
Other fees and commissions | 713 | 680 | |||||
Other | 409 | 486 | |||||
Total non-interest revenues | 6,389 | 6,508 | |||||
Interest income | |||||||
Interest on loans | 1,860 | 1,938 | |||||
Interest and dividends on investment securities | 23 | 36 | |||||
Deposits with banks and other | 60 | 31 | |||||
Total interest income | 1,943 | 2,005 | |||||
Interest expense | |||||||
Deposits | 149 | 150 | |||||
Long-term debt and other | 294 | 275 | |||||
Total interest expense | 443 | 425 | |||||
Net interest income | 1,500 | 1,580 | |||||
Total revenues net of interest expense | 7,889 | 8,088 | |||||
Provisions for losses | |||||||
Charge card | 213 | 169 | |||||
Card Member loans | 337 | 227 | |||||
Other | 23 | 38 | |||||
Total provisions for losses | 573 | 434 | |||||
Total revenues net of interest expense after provisions for losses | 7,316 | 7,654 | |||||
Expenses | |||||||
Marketing and promotion | 700 | 727 | |||||
Card Member Rewards | 1,807 | 1,703 | |||||
Card Member services and other | 321 | 282 | |||||
Salaries and employee benefits | 1,264 | 1,338 | |||||
Other, net | 1,407 | 1,420 | |||||
Total expenses | 5,499 | 5,470 | |||||
Pretax income | 1,817 | 2,184 | |||||
Income tax provision | 580 | 758 | |||||
Income from continuing operations | 1,237 | 1,426 | |||||
Net income | $ 1,237 | $ 1,426 | |||||
Earnings Per Common Share, Basic (Note 15) [Abstract] | |||||||
Net income attributable to common shareholders | [1] | $ 1.34 | $ 1.45 | ||||
Earnings Per Common Share, Diluted (Note 15) [Abstract] | |||||||
Net income attributable to common shareholders | [2] | $ 1.34 | $ 1.45 | ||||
Average common shares outstanding for earnings per common share: | |||||||
Basic | 899 | 961 | |||||
Diluted | 903 | 963 | |||||
Cash dividends declared per common share | $ 0.32 | $ 0.29 | |||||
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Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Consolidated Statements of Income [Abstract] | ||
Earnings allocated to participating share awards | $ 10 | $ 11 |
Dividends Preferred Stock | $ 21 | $ 21 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 1,237 | $ 1,426 |
Other comprehensive income (loss): | ||
Net unrealized securities gains, net of tax | 6 | 2 |
Foreign currency translation adjustments, net of tax | 316 | 4 |
Pension and other postretirement benefit gains | (8) | 26 |
Other comprehensive income (loss) | 314 | 32 |
Comprehensive income | $ 1,551 | $ 1,458 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Increase decrease in debt exchange [Line Items] | ||
Sale of premises and equipment | $ 0 | $ 1 |
Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The Company American Express Company (the Company) is a global services company that provides customers with access to products, insights and experiences that enrich lives and build business success. The Company’s principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses around the world. Business travel-related services are offered through the non-consolidated joint venture, American Express Global Business Travel (the GBT JV). The Company’s various products and services are sold globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations. These products and services are sold through various channels, including direct mail, online applications, in-house and third-party sales forces and direct response advertising. The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the Annual Report). If not materially different, certain footnote disclosures included therein have been omitted from this Quarterly Report on Form 10-Q. The interim consolidated financial information in this report has not been audited. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period consolidated financial information, have been made. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. These accounting estimates reflect the best judgment of management, but actual results could differ. Certain reclassifications of prior period amounts have been made to conform to the current period presentation. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued new accounting guidance on revenue recognition. The accounting standard establishes the principles to apply to determine the amount and timing of revenue recognition, specifying the accounting for certain costs related to revenue, and requiring additional disclosures about the nature, amount, timing and uncertainty of revenues and related cash flows. The guidance, as amended, supersedes most of the current revenue recognition requirements, and is effective January 1, 2018. Upon adoption of the new revenue recognition guidance, the Company anticipates using the full retrospective method, which applies the new standard to each prior reporting period presented. The Company has been working on the implementation of the standard since its issuance in 2014 and has made significant progress in evaluating the potential impact on its Consolidated Financial Statements. There will be changes to the recognition timing and classification of revenues and expenses; however, the Company does not expect a significant impact to pretax income upon adoption. The Company is also in the process of implementing changes to its accounting policies, business processes, systems and internal controls to support the recognition and disclosure requirements under the new standard. In January 2016, the FASB issued new accounting guidance on the recognition and measurement of financial assets and financial liabilities. The guidance, which is effective January 1, 2018, makes targeted changes to current GAAP, specifically to the classification and measurement of equity securities, and to certain disclosure requirements associated with the fair value of financial instruments. The Company continues to evaluate the impact this guidance will have on its financial position, results of operations and cash flows, and in preparation for the implementation, is evaluating the impact the guidance will have on its cost method investments, as well as the impact the standard will have on its accounting policies, business processes, systems and internal controls. In February 2016, the FASB issued new accounting guidance on leases. The guidance, which is effective January 1, 2019, with early adoption permitted, requires virtually all leases to be recognized on the Consolidated Balance Sheets. The Company currently anticipates adopting the standard effective January 1, 2019, using the modified retrospective approach, which requires recording existing operating leases on the Consolidated Balance Sheets upon adoption and in the comparative period. The Company is in the process of identifying changes to its accounting policies, business processes, systems, and internal controls in preparation for the implementation. Specifically, the Company is currently reviewing its lease portfolio and is evaluating and interpreting the requirements under the guidance, including the available accounting policy elections, in order to determine the impacts to the Company’s financial position, results of operations and cash flows upon adoption. In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. The Company does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the CECL model will alter the assumptions used in estimating credit losses on Card Member loans and receivables, among other financial instruments (e.g., investments in available-for-sale debt securities), and may result in material changes to the Company’s credit reserves. |
Divestitures |
3 Months Ended |
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Mar. 31, 2017 | |
Business Combination Disclosure [Abstract] | |
Divestitures | 2. Business Events During the fourth quarter of 2015, it was determined the Company would sell the Card Member loans and receivables related to its cobrand partnerships with JetBlue Airways Corporation (JetBlue) and Costco Wholesale Corporation (Costco) in the United States (the HFS portfolios). As a result, the HFS portfolios were presented as held for sale (HFS) on the Consolidated Balance Sheets within Card Member loans and receivables HFS as of December 31, 2015. During the first quarter of 2016, the Company completed the sale of its JetBlue HFS portfolio and recognized a gain of $127 million as an expense reduction in Other expenses. The impact of the sale is reported within the investing section of the Consolidated Statements of Cash Flows as a net decrease in Card Member receivables and loans, including held for sale. As of March 31, 2016, the Company continued to reflect the Costco HFS portfolio within Card Member loans and receivables held for sale on the Consolidated Balance Sheets. The Company sold substantially all of the Costco HFS portfolio in the second quarter of 2016. From the point of classification as HFS through the sale completion dates, the Company continued to recognize discount revenue, interest income and other revenues and expenses related to the HFS portfolios in the respective line items on the Consolidated Statements of Income, with changes in the valuation of the HFS portfolios recognized in Other expenses. |
Loans and Accounts Receivable |
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Loans Notes Trade And Other Receivables Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Accounts Receivable | 3. Loans and Accounts Receivable The Company’s lending and charge payment card products result in the generation of Card Member loans and Card Member receivables, respectively. This Note is presented excluding amounts associated with the Card Member loans and receivables HFS as of March 31, 2016; the Company did not have any Card Member loans and receivables HFS as of March 31, 2017 and December 31, 2016. Card Member loans by segment and Other loans as of March 31, 2017 and December 31, 2016 consisted of:
Card Member accounts receivable by segment and Other receivables as of March 31, 2017 and December 31, 2016 consisted of:
Card Member Loans and Card Member Receivables Aging Generally, a Card Member account is considered past due if payment is not received within 30 days after the billing statement date. The following table presents the aging of Card Member loans and receivables as of March 31, 2017 and December 31, 2016:
Credit Quality Indicators for Card Member Loans and Receivables The following tables present the key credit quality indicators as of or for the three months ended March 31:
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. Impaired Card Member Loans and Receivables Impaired Card Member loans and receivables are individual larger balance or homogeneous pools of smaller balance loans and receivables for which it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the Card Member agreement. In certain cases, these Card Member loans and receivables are included in one of the Company’s various Troubled Debt Restructuring (TDR) modification programs. The following tables provide additional information with respect to the Company’s impaired Card Member loans and receivables. Impaired Card Member receivables are not significant for International Consumer and Network Services (ICNS) as of March 31, 2017 and December 31, 2016; therefore, this segment’s receivables are not included in the following tables.
The following table provides information with respect to the Company’s average balances of, and interest income recognized from, impaired Card Member loans and the average balances of impaired Card Member receivables for the three months ended March 31:
Card Member Loans and Receivables Modified as TDRs The following table provides additional information with respect to the U.S. Consumer Services (USCS) and GCS Card Member loans and receivables modified as TDRs for the three months ended March 31, 2017 and 2016. The ICNS Card Member loans and receivables modifications were not significant; therefore, this segment is not included in the following TDR disclosures.
The following table provides information with respect to the USCS and GCS Card Member loans and receivables modified as TDRs that subsequently defaulted within 12 months of modification, for the three months ended March 31, 2017 and 2016. A Card Member is considered in default of a modification program after one and up to two consecutive missed payments, depending on the terms of the modification program. For all Card Members that defaulted from a modification program, the probability of default is factored into the reserves for Card Member loans and receivables.
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables. |
Reserves for Losses |
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Reserves For Losses Card Member Loans and Receivables Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for Losses | 4. Reserves for Losses Reserves for losses relating to Card Member loans and receivables represent management’s best estimate of the probable inherent losses in the Company’s outstanding portfolio of loans and receivables as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments. This Note is presented excluding amounts associated with the Card Member loans and receivables HFS as of March 31, 2016; the Company did not have any Card Member loans and receivables HFS as of March 31, 2017 and December 31, 2016. Changes in Card Member Loans Reserve for Losses The following table presents changes in the Card Member loans reserve for losses for the three months ended March 31:
Card Member Loans Evaluated Individually and Collectively for Impairment The following table presents Card Member loans evaluated individually and collectively for impairment and related reserves as of March 31, 2017 and December 31, 2016:
Changes in Card Member Receivables Reserve for Losses The following table presents changes in the Card Member receivables reserve for losses for the three months ended March 31:
Card Member Receivables Evaluated Individually and Collectively for Impairment The following table presents Card Member receivables evaluated individually and collectively for impairment, and related reserves, as of March 31, 2017 and December 31, 2016:
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | 5. Investment Securities Investment securities principally include debt securities the Company classifies as available-for-sale and carries at fair value on the Consolidated Balance Sheets, with unrealized gains and losses recorded in accumulated other comprehensive income (loss) (AOCI), net of income taxes. Realized gains and losses are recognized upon disposition of the securities using the specific identification method. The following is a summary of investment securities as of March 31, 2017 and December 31, 2016:
The following table provides information about the Company’s investment securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2017 and December 31, 2016:
The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of March 31, 2017 and December 31, 2016:
The gross unrealized losses are attributed to overall wider credit spreads for specific issuers, adverse changes in market benchmark interest rates, or a combination thereof, all compared to those prevailing when the investment securities were acquired. Overall, for the investment securities in gross unrealized loss positions, (i) the Company does not intend to sell the investment securities, (ii) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (iii) the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairment during the periods presented. Contractual maturities for investment securities with stated maturities as of March 31, 2017 were as follows:
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. |
Asset Securitizations |
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Asset Securitizations [Abstract] | |||||||||||||||||||||||||||||
Asset Securitizations | 6. Asset Securitizations The Company periodically securitizes Card Member loans and receivables arising from its card businesses through the transfer of those assets to securitization trusts. The trusts then issue debt securities collateralized by the transferred assets to third-party investors. The following table provides information on the restricted cash held by the American Express Credit Account Master Trust (the Lending Trust) and the American Express Issuance Trust II (the Charge Trust, collectively the Trusts) as of March 31, 2017 and December 31, 2016, included in Other assets on the Consolidated Balance Sheets:
These amounts relate to collections of Card Member loans and receivables to be used by the Trusts to fund future expenses and obligations, including interest on debt securities, credit losses and upcoming debt maturities. American Express Travel Related Services Company, Inc. (TRS), in its role as servicer of the Trusts, has the power to direct the most significant activity of the Trusts, which is the collection of the underlying Card Member loans and receivables. In addition, TRS directly and indirectly (through its consolidated subsidiaries) holds all of the variable interests in both Trusts, with the exception of the debt securities issued to third-party investors. As of March 31, 2017, TRS’ direct and indirect ownership of variable interests was $10.5 billion for the Lending Trust and $4.8 billion for the Charge Trust. These variable interests held by TRS provide it with the right to receive benefits and the obligation to absorb losses, which could be significant to both the Lending Trust and the Charge Trust. Based on these considerations, TRS is the primary beneficiary of both Trusts and therefore consolidates both Trusts. Under the respective terms of the Lending Trust and the Charge Trust agreements, the occurrence of certain triggering events associated with the performance of the assets of each Trust could result in payment of trust expenses, establishment of reserve funds, or, in a worst-case scenario, early amortization of debt securities. During the three months ended March 31, 2017 and the year ended December 31, 2016, no such triggering events occurred. |
Customer Deposits |
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Deposit Liabilities Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer Deposits | 7. Customer Deposits As of March 31, 2017 and December 31, 2016, customer deposits were categorized as interest bearing or non-interest bearing as follows:
Customer deposits by deposit type as of March 31, 2017 and December 31, 2016 were as follows:
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 47 months and 1.96 percent, respectively, as of March 31, 2017. The scheduled maturities of certificates of deposit as of March 31, 2017 were as follows:
As of March 31, 2017 and December 31, 2016, certificates of deposit in denominations of $250,000 or more, in the aggregate, were as follows:
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Contingencies |
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Contingencies Disclosure [Abstract] | |
Contingencies | 8. Contingencies In the ordinary course of business, the Company and its subsidiaries are subject to various pending and potential legal actions, arbitration proceedings, claims, investigations, examinations, information gathering requests, subpoenas, inquiries and matters relating to compliance with laws and regulations (collectively, legal proceedings). The Company discloses its material legal proceedings under Part II, Item 1. “Legal Proceedings” in this Quarterly Report on Form 10-Q and Part I, Item 3. “Legal Proceedings” in the Annual Report. In addition to the matters disclosed under “Legal Proceedings,” the Company is being challenged in a number of countries regarding its application of value-added taxes (VAT) to certain of its international transactions, which are in various stages of audit, or are being contested in legal actions (collectively, VAT matters). While the Company believes it has complied with all applicable tax laws, rules and regulations in the relevant jurisdictions, the tax authorities may determine that the Company owes additional VAT. In certain jurisdictions where the Company is contesting the assessments, it was required to pay the VAT assessments prior to contesting. The Company’s legal proceedings range from cases brought by a single plaintiff to class actions with millions of putative class members. These legal proceedings involve various lines of business of the Company and a variety of claims (including, but not limited to, common law tort, contract, application of tax laws, antitrust and consumer protection claims), some of which present novel factual allegations and/or unique legal theories. While some matters pending against the Company specify the damages claimed by the plaintiff or class, many seek an unspecified amount of damages or are at very early stages of the legal process. Even when the amount of damages claimed against the Company are stated, the claimed amount may be exaggerated and/or unsupported. As a result, some matters have not yet progressed sufficiently through discovery and/or development of important factual information and legal issues to enable the Company to estimate an amount of loss or a range of possible loss, while other matters have progressed sufficiently such that the Company is able to estimate an amount of loss or a range of possible loss. The Company has recorded reserves for certain of its outstanding legal proceedings. A reserve is recorded when it is both (a) probable that a loss has occurred and (b) the amount of loss can be reasonably estimated. There may be instances in which an exposure to loss exceeds the recorded reserve. The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable. For those disclosed material legal proceedings and VAT matters where a loss is reasonably possible in future periods, whether in excess of a related reserve for legal or tax contingencies or where there is no such reserve, and for which the Company is able to estimate a range of possible loss, the current estimated range is zero to $440 million in excess of any reserves related to those matters. This range represents management’s estimate based on currently available information and does not represent the Company’s maximum loss exposure; actual results may vary significantly. As such legal proceedings evolve, the Company may need to increase its range of possible loss or reserves. Based on its current knowledge, and taking into consideration its litigation-related liabilities, the Company believes it is not a party to, nor are any of its properties the subject of, any legal proceeding that would have a material adverse effect on the Company’s consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, it is possible that the outcome of legal proceedings, including the possible resolution of merchant claims, could have a material impact on the Company’s results of operations. |
Derivatives and Hedging Activities |
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Derivatives and Hedging Activities | 9. Derivatives and Hedging Activities The Company uses derivative financial instruments (derivatives) to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates, foreign exchange rates, and equity index or price, and are carried at fair value on the Consolidated Balance Sheets. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of the Company’s market risk management. The Company does not transact in derivatives for trading purposes. In relation to the Company’s credit risk, under the terms of the derivative agreements it has with its various counterparties, the Company is not required to either immediately settle any outstanding liability balances or post collateral upon the occurrence of a specified credit risk-related event. Based on its assessment of the credit risk of the Company’s derivative counterparties as of March 31, 2017 and December 31, 2016, no adjustment to the derivative portfolio was required. The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of March 31, 2017 and December 31, 2016:
A majority of the Company’s derivative assets and liabilities as of March 31, 2017 and December 31, 2016 are subject to master netting agreements with its derivative counterparties. The Company has no derivative amounts subject to enforceable master netting arrangements that are not offset on the Consolidated Balance Sheets. Fair Value Hedges The Company is exposed to interest rate risk associated with its fixed-rate long-term debt obligations. At the time of issuance, certain fixed-rate debt obligations are designated in fair value hedging relationships, using interest rate swaps, to economically convert the fixed interest rate to a floating interest rate. The Company has $19.9 billion and $17.7 billion of fixed-rate debt obligations designated as fair value hedges as of March 31, 2017 and December 31, 2016, respectively. The following table summarizes the gains (losses) recognized in Other expenses associated with the Company’s fair value hedges for the three months ended March 31:
The Company also recognized a net reduction in interest expense on long-term debt of $44 million and $59 million for the three months ended March 31, 2017 and 2016, respectively, primarily related to the net settlements (interest accruals) on the Company’s interest rate derivatives designated as fair value hedges. Net Investment Hedges The effective portion of the loss on net investment hedges, net of taxes, recorded in AOCI as part of the cumulative translation adjustment, was $229 million and $92 million for the three months ended March 31, 2017 and 2016, respectively. The net hedge ineffectiveness recognized was nil for the three months ended March 31, 2017 and 2016, thus no amounts related to foreign exchange contracts were reclassified from AOCI into Other expenses for the three months ended March 31, 2017 and 2016. Derivatives Not Designated as Hedges The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in net losses of $17 million and $14 million for the three months ended March 31, 2017 and 2016, respectively, and are recognized in Other expenses. The changes in the fair value of an embedded derivative resulted in gains of $1 million and $8 million for the three months ended March 31, 2017 and 2016, respectively, which are recognized in Card Member services and other expense. |
Fair Values |
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Fair Value (Disclosures) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values | 10. Fair Values Financial Assets and Financial Liabilities Carried at Fair Value The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy, as of March 31, 2017 and December 31, 2016:
Refer to Note 5 for the fair values of investment securities and to Note 9 for the fair values of derivative assets and liabilities, on a further disaggregated basis. Financial Assets and Financial Liabilities Carried at Other Than Fair Value The following table summarizes the estimated fair values of the Company’s financial assets and financial liabilities that are not required to be carried at fair value on a recurring basis, as of March 31, 2017 and December 31, 2016. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of March 31, 2017 and December 31, 2016, and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of the Company be estimated by aggregating the amounts presented.
Nonrecurring Fair Value Measurements The Company has certain assets that are subject to measurement at fair value on a nonrecurring basis. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if determined to be impaired. During the three months ended March 31, 2017 and during the year ended December 31, 2016, the Company did not have any material assets that were measured at fair value due to impairment. |
Guarantees |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees | 11. Guarantees The Company provides Card Member protection plans that cover losses associated with purchased products, as well as certain other guarantees and indemnifications in the ordinary course of business. In relation to its maximum potential undiscounted future payments as shown in the table that follows, to date the Company has not experienced any significant losses related to guarantees or indemnifications. The Company’s initial recognition of these instruments is at fair value. In addition, the Company establishes reserves when a loss is probable and the amount can be reasonably estimated. The following table provides information related to such guarantees and indemnifications as of March 31, 2017 and December 31, 2016:
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Changes in Accumulated Other Comprehensive (Loss) Income |
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Changes In Accumulated Other Comprehensive (Loss) Income | 12. Changes In Accumulated Other Comprehensive Income AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component for the three months ended March 31, 2017 and 2016 were as follows:
The following table shows the tax impact for the three months ended March 31 for the changes in each component of AOCI presented above:
Includes $289 million of tax benefits recognized in the three months ended March 31, 2017 (Refer to Note 14). The following table presents the effects of reclassifications out of AOCI and into the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016:
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Non-Interest Revenue and Expense Detail |
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Other Income And Other Expense Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Interest Revenue and Expense Detail | 13. Non-Interest Revenue and Expense Detail The following is a detail of Other fees and commissions for the three months ended March 31:
Other primarily includes service fees and fees related to Membership Rewards programs. The following is a detail of Other revenues for the three months ended March 31:
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, revenues related to the GBT JV transition services agreement, prepaid card and Travelers Cheque-related revenues, earnings from equity method investments (including the GBT JV) and other miscellaneous revenue and fees. The following is a detail of Other expenses for the three months ended March 31:
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Income Taxes |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The effective tax rate was 31.9 percent and 34.7 percent for the three months ended March 31, 2017 and 2016, respectively. The changes in tax rates primarily reflected the geographic mix of business and the level of pretax income in relation to recurring permanent tax benefits. In addition, the effective tax rate in the current year reflected the resolution of certain prior years’ tax items. The Company is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which the Company has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In February 2017, the Company received notification that all matters outstanding with the IRS for tax years 1997-2007 were resolved. The resolution of such matters did not have a material impact on the Company’s effective tax rate. The Company is currently under examination with the IRS for tax years 2008 through 2014. The Company believes it is reasonably possible that its unrecognized tax benefits could decrease within the next 12 months by as much as $104 million, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the deductibility of certain expenses or losses and the attribution of taxable income to a particular jurisdiction or jurisdictions. Of the $104 million of unrecognized tax benefits, approximately $71 million relates to amounts that, if recognized, would impact the effective tax rate in a future period. During the three months ended March 31, 2017, the Company’s unrecognized tax benefits decreased by $331 million. The decrease was primarily due to the resolution with the IRS of an uncertain tax position in January, 2017, and resulted in the recognition of $289 million in shareholders’ equity, specifically within AOCI. |
Earnings Per Common Share (EPS) |
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Earnings Per Common Share (EPS) | 15. Earnings Per Common Share (EPS) The computations of basic and diluted EPS for the three months ended March 31 were as follows:
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Reportable Operating Segment |
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Reportable Operating Segments | 16. Reportable Operating Segments The Company is a global services company that is principally engaged in businesses comprising four reportable operating segments: USCS, ICNS, GCS and GMS. Corporate functions and certain other businesses and operations are included in Corporate & Other. The following table presents certain selected financial information for the Company’s reportable operating segments and Corporate & Other as of or for the three months ended March 31, 2017 and 2016:
Corporate & Other includes adjustments and eliminations for intersegment activity. |
Significant Accounting Policies (Policies) |
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Policy (Text Block) [Abstract] | |
Basis of Presentation | The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. These accounting estimates reflect the best judgment of management, but actual results could differ. |
Investments | Investment securities principally include debt securities the Company classifies as available-for-sale and carries at fair value on the Consolidated Balance Sheets, with unrealized gains and losses recorded in accumulated other comprehensive income (loss) (AOCI), net of income taxes. Realized gains and losses are recognized upon disposition of the securities using the specific identification method. |
Contingencies | The Company has recorded reserves for certain of its outstanding legal proceedings. A reserve is recorded when it is both (a) probable that a loss has occurred and (b) the amount of loss can be reasonably estimated. There may be instances in which an exposure to loss exceeds the recorded reserve. The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable. |
Derivatives | The Company uses derivative financial instruments (derivatives) to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates, foreign exchange rates, and equity index or price, and are carried at fair value on the Consolidated Balance Sheets. The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. |
Guarantees | The Company’s initial recognition of these instruments is at fair value. In addition, the Company establishes reserves when a loss is probable and the amount can be reasonably estimated. |
Loans and Accounts Receivable (Tables) |
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Card Member loans segment detail | Card Member loans by segment and Other loans as of March 31, 2017 and December 31, 2016 consisted of:
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Card Member receivables segment detail | Card Member accounts receivable by segment and Other receivables as of March 31, 2017 and December 31, 2016 consisted of:
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Aging of Card Member loans and receivables | The following table presents the aging of Card Member loans and receivables as of March 31, 2017 and December 31, 2016:
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Credit quality indicators for loans and receivables | The following tables present the key credit quality indicators as of or for the three months ended March 31:
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. |
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Impaired Card Member loans and receivables | The following tables provide additional information with respect to the Company’s impaired Card Member loans and receivables. Impaired Card Member receivables are not significant for International Consumer and Network Services (ICNS) as of March 31, 2017 and December 31, 2016; therefore, this segment’s receivables are not included in the following tables.
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Interest income recognized and average balance of impaired Card Member loans and receivables | The following table provides information with respect to the Company’s average balances of, and interest income recognized from, impaired Card Member loans and the average balances of impaired Card Member receivables for the three months ended March 31:
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Troubled debt restructurings | The following table provides additional information with respect to the U.S. Consumer Services (USCS) and GCS Card Member loans and receivables modified as TDRs for the three months ended March 31, 2017 and 2016. The ICNS Card Member loans and receivables modifications were not significant; therefore, this segment is not included in the following TDR disclosures.
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Troubled debt restructurings that subsequently defaulted | The following table provides information with respect to the USCS and GCS Card Member loans and receivables modified as TDRs that subsequently defaulted within 12 months of modification, for the three months ended March 31, 2017 and 2016. A Card Member is considered in default of a modification program after one and up to two consecutive missed payments, depending on the terms of the modification program. For all Card Members that defaulted from a modification program, the probability of default is factored into the reserves for Card Member loans and receivables.
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables. |
Reserves For Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves For Losses Tables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Card Member loans reserve for losses | The following table presents changes in the Card Member loans reserve for losses for the three months ended March 31:
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Card Member loans and related reserves evaluated separately and collectively for impairment | The following table presents Card Member loans evaluated individually and collectively for impairment and related reserves as of March 31, 2017 and December 31, 2016:
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Changes in the Card Member receivable reserve for losses | The following table presents changes in the Card Member receivables reserve for losses for the three months ended March 31:
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Card Member receivables and related reserves evaluated separately and collectively for impairment | The following table presents Card Member receivables evaluated individually and collectively for impairment, and related reserves, as of March 31, 2017 and December 31, 2016:
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Investment Securities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available for Sale Securities by Type | The following is a summary of investment securities as of March 31, 2017 and December 31, 2016:
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Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table provides information about the Company’s investment securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2017 and December 31, 2016:
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Available for Sale Securities Ratio of Fair Value to Amortized Cost | The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of March 31, 2017 and December 31, 2016:
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Contractual maturities of investment securities | Contractual maturities for investment securities with stated maturities as of March 31, 2017 were as follows:
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Asset Securitizations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||
Cash And Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||
Restricted cash held by trusts | The following table provides information on the restricted cash held by the American Express Credit Account Master Trust (the Lending Trust) and the American Express Issuance Trust II (the Charge Trust, collectively the Trusts) as of March 31, 2017 and December 31, 2016, included in Other assets on the Consolidated Balance Sheets:
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Customer Deposits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer Deposits (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits By Component Alternative | As of March 31, 2017 and December 31, 2016, customer deposits were categorized as interest bearing or non-interest bearing as follows:
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Deposits By Type | Customer deposits by deposit type as of March 31, 2017 and December 31, 2016 were as follows:
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 47 months and 1.96 percent, respectively, as of March 31, 2017. |
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Time Deposits By Maturity | The scheduled maturities of certificates of deposit as of March 31, 2017 were as follows:
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Time Deposits $250,000 Or More | As of March 31, 2017 and December 31, 2016, certificates of deposit in denominations of $250,000 or more, in the aggregate, were as follows:
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Derivatives and Hedging Activities (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments in statement of financial position, fair value | The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of March 31, 2017 and December 31, 2016:
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Effect of fair value hedges on results of operations | The following table summarizes the gains (losses) recognized in Other expenses associated with the Company’s fair value hedges for the three months ended March 31:
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Fair Values (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value assets and liabilities measured on recurring basis | The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy, as of March 31, 2017 and December 31, 2016:
Refer to Note 5 for the fair values of investment securities and to Note 9 for the fair values of derivative assets and liabilities, on a further disaggregated basis. |
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Estimated fair value of financial assets and financial liabilities | The following table summarizes the estimated fair values of the Company’s financial assets and financial liabilities that are not required to be carried at fair value on a recurring basis, as of March 31, 2017 and December 31, 2016. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of March 31, 2017 and December 31, 2016, and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of the Company be estimated by aggregating the amounts presented.
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Guarantees (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information related to guarantees | The following table provides information related to such guarantees and indemnifications as of March 31, 2017 and December 31, 2016:
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Changes in Accumulated Other Comprehensive (Loss) Income (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Comprehensive Income, net of tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of comprehensive income (loss), net of tax | AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component for the three months ended March 31, 2017 and 2016 were as follows:
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Accumulated Other Comprehensive Loss Income - Tax Effect | The following table shows the tax impact for the three months ended March 31 for the changes in each component of AOCI presented above:
Includes $289 million of tax benefits recognized in the three months ended March 31, 2017 (Refer to Note 14). |
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Reclassification out of accumulated other comprehensive (loss) income | The following table presents the effects of reclassifications out of AOCI and into the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016:
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Non-Interest Revenue and Expense Detail (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Cost And Expense Disclosure Operating (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of other commissions and fees | The following is a detail of Other fees and commissions for the three months ended March 31:
Other primarily includes service fees and fees related to Membership Rewards programs. |
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Details of other revenues | The following is a detail of Other revenues for the three months ended March 31:
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, revenues related to the GBT JV transition services agreement, prepaid card and Travelers Cheque-related revenues, earnings from equity method investments (including the GBT JV) and other miscellaneous revenue and fees. |
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Detail of other, net expense | The following is a detail of Other expenses for the three months ended March 31:
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Earnings Per Common Share (EPS) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Reconciliation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted EPS | The computations of basic and diluted EPS for the three months ended March 31 were as follows:
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Reportable Operating Segment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating segment information | The following table presents certain selected financial information for the Company’s reportable operating segments and Corporate & Other as of or for the three months ended March 31, 2017 and 2016:
Corporate & Other includes adjustments and eliminations for intersegment activity. |
Business Events (Details Textuals) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Business Events (Line Items) | ||
Gain on sale of held for sale (HFS) portfolio | $ 0 | $ (127) |
Other Expense [Member] | ||
Business Events (Line Items) | ||
Gain on sale of held for sale (HFS) portfolio | $ 0 | $ (127) |
Loans and Accounts Receivable (Details 6) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
M
|
Mar. 31, 2016
USD ($)
M
|
|
Troubled Debt Restructurings | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 10,000 | 11,000 |
Aggregated Outstanding Balance | $ 85 | $ 95 |
Card Member Loans [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 8,000 | 8,000 |
Aggregated Outstanding Balance | $ 57 | $ 57 |
Average basis point reduction in interest rate by class of Card Member loans | 13.00% | 13.00% |
Card Member Receivables [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 2,000 | 3,000 |
Aggregated Outstanding Balance | $ 28 | $ 38 |
Average payment term extension | M | 22 | 16 |
Loans and Accounts Receivable (Details 7) pure in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
|
Troubled Debt Restructurings That Subsequently Defaulted [Domain] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 3 | 2 |
Aggregated Outstanding Balance Upon Payment Default | $ 12 | $ 10 |
Card Member Loans [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 2 | 1 |
Aggregated Outstanding Balance Upon Payment Default | $ 11 | $ 9 |
Card Member Receivables [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Accounts | 1 | 1 |
Aggregated Outstanding Balance Upon Payment Default | $ 1 | $ 1 |
Reserves for Losses (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Changes in the Card Member loans reserve for losses | ||
Balance, January 1 | $ 1,223 | $ 1,028 |
Card Member loans - provisions | 337 | 227 |
Card Member loans net write-offs - principal | (272) | (214) |
Card Member loans net write-offs - interest and fees | (51) | (40) |
Card Member loans reserves for losses - other | 11 | 11 |
Balance, September 30 | $ 1,248 | $ 1,012 |
Reserves For Losses (Details 1) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Card Member Loans And Related Reserves Evaluated Separately And Collectively For Impairment [Abstract] | ||
Card Member loans evaluated individually for impairment | $ 345 | $ 346 |
Reserves on Card Member loans evaluated individually for impairment | 60 | 60 |
Card Member loans evaluated collectively for impairment | 63,223 | 64,919 |
Reserves on Card Member loans evaluated collectively for impairment | $ 1,188 | $ 1,163 |
Reserves for Losses (Details 2) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Changes in the Card Member receivables reserve for losses | ||
Balance, January 1 | $ 467 | $ 462 |
Card Member receivables - provisions | 213 | 169 |
Card Member receivables - net write-offs | (194) | (186) |
Card Member receivables reserves for losses - other | 5 | 1 |
Balance, September 30 | $ 491 | $ 446 |
Reserves for Losses (Details 3) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Card Member Receivables And Related Reserves Evaluated Separately and Collectively For Impairment [Abstract] | ||
Card Member receivables evaluated individually for impairment | $ 60 | $ 55 |
Reserves on Card Member receivables evaluated individually for impairment | 28 | 28 |
Card Member receivables evaluated collectively for impairment | 47,585 | 47,253 |
Reserves on Card Member receivables evaluated collectively for impairment | $ 463 | $ 439 |
Investment Securities (Details 3) $ in Millions |
Mar. 31, 2017
USD ($)
|
---|---|
Available For Sale Securities Debt Maturities Amortized Cost [Abstract] | |
Due within 1 year | $ 689 |
Due after 1 year but within 5 years | 990 |
Due after 5 years but within 10 years | 365 |
Due after 10 years | 1,446 |
Total | 3,490 |
Estimated Fair Value | |
Estimated Fair Value, Due within 1 year | 690 |
Estimated Fair Value, Due after 1 year but within 5 years | 992 |
Estimated Fair Value, Due after 5 years but within 10 years | 369 |
Estimated Fair Value, Due after 10 years | 1,462 |
Total | $ 3,513 |
Investment Securities (Details Textuals) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Investment Securities (Details) [Abstract] | ||
Other-than-temporary impairments recognized during the period | $ 0 | $ 0 |
Asset Securitizations (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets from Trusts [Line Items] | ||
Restricted cash | $ 55 | $ 38 |
American Express Charge Trust [Member] | ||
Assets from Trusts [Line Items] | ||
Restricted cash | 52 | 35 |
American Express Lending Trust [Member] | ||
Assets from Trusts [Line Items] | ||
Restricted cash | $ 3 | $ 3 |
Asset Securitizations (Details Textuals) $ in Billions |
Mar. 31, 2017
USD ($)
|
---|---|
American Express Charge Trust [Member] | |
Securitized Trusts [Line Items] | |
Direct and Indirect ownership of variable interests | $ 4.8 |
American Express Lending Trust [Member] | |
Securitized Trusts [Line Items] | |
Direct and Indirect ownership of variable interests | $ 10.5 |
Customer Deposits (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
U.S.: | ||
Interest-bearing | $ 53,123 | $ 52,316 |
Non-interest-bearing | 322 | 367 |
Non-U.S.: | ||
Interest-bearing | 34 | 58 |
Non-interest-bearing | 311 | 301 |
Total customer deposits | 53,790 | 53,042 |
Card Member Credit Balances [Member] | ||
U.S.: | ||
Non-interest-bearing | 286 | 331 |
Non-U.S.: | ||
Non-interest-bearing | $ 299 | $ 285 |
Customer Deposits (Details 1) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
U.S. retail deposits: | ||
Savings accounts - Direct | $ 31,420 | $ 30,980 |
Certificates of deposit - Direct | 284 | 291 |
Certificates of deposit - Third party | 11,617 | 11,925 |
Sweep accounts - Third party | 9,802 | 9,120 |
Other retail deposits: | ||
Non-U.S. deposits and U.S. non-interest bearing deposits | 82 | 110 |
Card Member credit balances - U.S. and non-U.S. | 585 | 616 |
Total customer deposits | $ 53,790 | $ 53,042 |
Customer Deposits (Details 2) $ in Millions |
Mar. 31, 2017
USD ($)
|
---|---|
Time Deposits By Maturity | |
2017 | $ 3,409 |
2018 | 3,453 |
2019 | 2,398 |
2020 | 2,543 |
2021 | 107 |
After 5 years | 7 |
Total | 11,917 |
United States [Member] | |
Time Deposits By Maturity | |
2017 | 3,401 |
2018 | 3,445 |
2019 | 2,398 |
2020 | 2,543 |
2021 | 107 |
After 5 years | 7 |
Total | 11,901 |
Non United States [Member] | |
Time Deposits By Maturity | |
2017 | 8 |
2018 | 8 |
2019 | 0 |
2020 | 0 |
2021 | 0 |
After 5 years | 0 |
Total | $ 16 |
Customer Deposits (Details 3) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Time Deposits $250,000 Or More [Line Items] | ||
Time Deposits, $100,000 or More | $ 113 | $ 124 |
United States [Member] | ||
Time Deposits $250,000 Or More [Line Items] | ||
Time Deposits, $100,000 or More | 106 | 117 |
Non Us [Member] | ||
Time Deposits $250,000 Or More [Line Items] | ||
Time Deposits, $100,000 or More | $ 7 | $ 7 |
Customer Deposits (Details Textuals) |
Mar. 31, 2017
M
|
---|---|
Customer Deposits Textuals [Abstract] | |
Weighted Average Rate Domestic Deposit Certificates Of Deposit | 1.96% |
Weighted Average Maturity Certificates of Deposits | 47 |
Contingencies (Details Textuals) $ in Millions |
Mar. 31, 2017
USD ($)
|
---|---|
Loss Contingencies [Line Items] | |
Loss Contingency Estimate Of Possible Loss | $ 0 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency Estimate Of Possible Loss | $ 440 |
Derivatives and Hedging Activities (Details 1) - Other Expense [Member] - Interest Rate Contracts [Member] - Fair Value Hedging [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative contract | $ 75 | $ 165 |
Hedged item | (50) | (171) |
Net hedge ineffectiveness | $ 25 | $ (6) |
Derivatives and Hedging Activities (Details 2) - Other Expense [Member] - Foreign exchange contracts [Member] - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 5 | $ 0 |
Amount Of Ineffectiveness On Net Investment Hedges | $ 0 | $ 1 |
Fair Values (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Investment securities: | ||
Equity securities and other | $ 49 | $ 49 |
Debt securities | 3,512 | 3,108 |
Derivatives | 230 | 765 |
Total assets | 3,791 | 3,922 |
Level 1 [Member] | ||
Investment securities: | ||
Equity securities and other | 1 | 1 |
Debt securities | 1,136 | 460 |
Derivatives | 0 | 0 |
Total assets | 1,137 | 461 |
Level 2 [Member] | ||
Investment securities: | ||
Equity securities and other | 48 | 48 |
Debt securities | 2,376 | 2,648 |
Derivatives | 230 | 765 |
Total assets | 2,654 | 3,461 |
Level 3 [Member] | ||
Investment securities: | ||
Equity securities and other | 0 | 0 |
Debt securities | 0 | 0 |
Derivatives | 0 | 0 |
Total assets | $ 0 | $ 0 |
Fair Values (Details 1) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Liabilities [Abstract] | ||
Derivatives | $ 412 | $ 280 |
Total liabilities | 412 | 280 |
Level 1 [Member] | ||
Liabilities [Abstract] | ||
Derivatives | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 [Member] | ||
Liabilities [Abstract] | ||
Derivatives | 412 | 280 |
Total liabilities | 412 | 280 |
Level 3 [Member] | ||
Liabilities [Abstract] | ||
Derivatives | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Fair Values (Details Textuals) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items] | ||
Assets measured at fair value for impairment | $ 0 | $ 0 |
Guarantees (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Type of Guarantee | ||
Maximum potential amount of undiscounted future payments | $ 51,000 | $ 48,000 |
Amount of related liability | 86 | 86 |
Return And Merchant Protection [Member] | ||
Type of Guarantee | ||
Maximum potential amount of undiscounted future payments | 45,000 | 42,000 |
Amount of related liability | 37 | 37 |
Other Guarantees [Member] | ||
Type of Guarantee | ||
Maximum potential amount of undiscounted future payments | 6,000 | 6,000 |
Amount of related liability | $ 49 | $ 49 |
Non-Interest Revenue and Expense Detail (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Details Of Certain Statements Of Income Lines Details [Abstract] | ||
Foreign currency conversion fee revenue | $ 199 | $ 196 |
Delinquency fees | 214 | 200 |
Loyalty Partner-related fees | 102 | 94 |
Travel commissions and fees | 84 | 80 |
Other | 114 | 110 |
Total Other fees and commissions | $ 713 | $ 680 |
Non-Interest Revenue and Expense Detail (Details 1) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Details Of Certain Statements Of Income Lines Details [Abstract] | ||
Global Network Services partner revenues | $ 156 | $ 145 |
Other | 253 | 341 |
Total other revenues | $ 409 | $ 486 |
Non-Interest Revenue and Expense Detail (Details 2) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Details Of Certain Statements Of Income Lines Details [Abstract] | ||
Professional services | $ 512 | $ 604 |
Occupancy and equipment | 475 | 465 |
Communications | 63 | 83 |
Gain on sale of held for sale (HFS) portfolio | 0 | (127) |
Other | 357 | 395 |
Total other, net | $ 1,407 | $ 1,420 |
Income Taxes (Details Textuals) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income Taxes (Textuals) | ||
Unrecognized tax benefits as a result of potential resolutions of prior years' tax | $ 104 | |
Decrease in Unrecognized tax benefits, amounts recorded to equity | $ 331 | |
Actual tax rates | 31.90% | 34.70% |
Tax Benefit Recognized in the period | $ 289 | |
Unrecognized tax benefits that, if recognized, could impact effective tax rate. | $ 71 | |
Internal Revenue Service (IRS) [Member] | Earliest Year [Member] | ||
Income Tax Contingency [Line Items] | ||
Open tax years by major tax jurisdiction | 2008 | |
Internal Revenue Service (IRS) [Member] | Latest Year [Member] | ||
Income Tax Contingency [Line Items] | ||
Open tax years by major tax jurisdiction | 2014 |
Earnings Per Common Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||
Basic and diluted: | |||||||
Net income | $ 1,237 | $ 1,426 | |||||
Preferred dividends | (21) | (21) | |||||
Net income available to common stockholders - basic | 1,216 | 1,405 | |||||
Net income available to common stockholders - diluted | 1,216 | 1,405 | |||||
Earnings allocated to participating share awards | (10) | (11) | |||||
Net income attributable to common shareholders | $ 1,206 | $ 1,394 | |||||
Denominator: | |||||||
Basic | 899.0 | 961.0 | |||||
Add: Weighted-average stock options | 4.0 | 2.0 | |||||
Diluted | 903.0 | 963.0 | |||||
Earnings Per Common Share, Basic (Note 15) [Abstract] | |||||||
Net income attributable to common shareholders | [1] | $ 1.34 | $ 1.45 | ||||
Earnings Per Common Share, Diluted (Note 15) [Abstract] | |||||||
Net income attributable to common shareholders | [2] | $ 1.34 | $ 1.45 | ||||
Stock options [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Antidilutive securities excluded from computation of earnings per Share, amount | 1.2 | 1.5 | |||||
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