Delaware
|
11-1988350
|
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
|
incorporation or organization)
|
||
200 Vesey Street, New York, New York
|
10285
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant’s telephone number, including area code: (212) 640-2000
|
||
None
|
Large accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
|
Emerging growth company
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
2.375 percent Medium-Term Senior Notes
Series F, due May 26, 2020
|
AXP/20
|
New York Stock Exchange
|
0.625 percent Senior Notes, due 2021
|
AXP/21
|
New York Stock Exchange
|
Class
|
Outstanding at May 3, 2019
|
||
Common Stock (par value $0.10 per share)
|
1,504,938 Shares
|
Table of Contents | ||||||
AMERICAN EXPRESS CREDIT CORPORATION
|
||||||
FORM 10-Q
|
||||||
INDEX
|
||||||
Part I.
|
Page No.
|
|||||
Item 1.
|
||||||
1
|
||||||
2
|
||||||
3
|
||||||
4
|
||||||
Consolidated Statements of Shareholder’s Equity – three months ended March 31, 2019 and 2018 | 5 | |||||
6
|
||||||
Item 2.
|
15
|
|||||
Item 4.
|
22
|
|||||
Part II.
|
||||||
Item 1A.
|
24
|
|||||
Item 5.
|
24
|
|||||
Item 6.
|
24
|
|||||
25
|
||||||
E-1
|
||||||
Three Months Ended March 31 (Millions)
|
2019
|
2018
|
||||||
Revenues
|
||||||||
Discount revenue earned from purchased Card Member receivables and Card Member loans
|
$
|
303
|
$
|
214
|
||||
Interest income from affiliates and other
|
110
|
89
|
||||||
Finance revenue
|
19
|
15
|
||||||
Total revenues
|
432
|
318
|
||||||
Expenses
|
||||||||
Provisions for losses
|
63
|
64
|
||||||
Interest expense
|
169
|
131
|
||||||
Interest expense to affiliates
|
104
|
29
|
||||||
Other, net
|
(23
|
)
|
(14
|
)
|
||||
Total expenses
|
313
|
210
|
||||||
Pretax income
|
119
|
108
|
||||||
Income tax provision (benefit)
|
16
|
(21
|
)
|
|||||
Net income
|
$
|
103
|
$
|
129
|
Three Months Ended March 31 (Millions)
|
2019
|
2018
|
||||||
Net income
|
$
|
103
|
$
|
129
|
||||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustments, net of tax
|
7
|
10
|
||||||
Other comprehensive income
|
7
|
10
|
||||||
Comprehensive income
|
$
|
110
|
$
|
139
|
March 31,
|
December 31,
|
||||||||
(Millions, except share data)
|
2019
|
2018
|
|||||||
Assets
|
|||||||||
Cash and cash equivalents
|
$
|
65
|
|
$
|
102
|
||||
Card Member receivables, less reserves: 2019, $175; 2018, $167
|
25,832
|
24,429
|
|||||||
Card Member loans, less reserves: 2019, $6; 2018, $5
|
637
|
636
|
|||||||
Loans to affiliates and other
|
14,235
|
14,136
|
|||||||
Due from affiliates
|
19
|
210
|
|||||||
Other assets
|
274
|
529
|
|||||||
Total assets
|
$
|
41,062
|
|
$ |
40,042
|
||||
Liabilities and Shareholder’s Equity
|
|||||||||
Liabilities
|
|||||||||
Short-term debt
|
$
|
93
|
|
$ |
826
|
||||
Short-term debt to affiliates
|
6,352
|
5,899
|
|||||||
Long-term debt
|
18,259
|
20,447
|
|||||||
Long-term debt to affiliates
|
10,581
|
7,523
|
|||||||
Total debt
|
35,285
|
34,695
|
|||||||
Due to affiliates
|
3,059
|
2,869
|
|||||||
Accrued interest and other liabilities
|
412
|
282
|
|||||||
Total liabilities
|
$
|
38,756
|
|
$ |
37,846
|
||||
Shareholder’s Equity
|
|||||||||
Common stock, $0.10 par value, authorized 3 million shares; issued
|
|||||||||
and outstanding 1.5 million shares as of March 31, 2019 and December 31, 2018
|
―
|
―
|
|||||||
Additional paid-in capital
|
161
|
161
|
|||||||
Retained earnings
|
3,198
|
3,095
|
|||||||
Accumulated other comprehensive loss
|
|||||||||
Foreign currency translation adjustments, net of tax of: 2019, $19; 2018, $34
|
(1,053
|
)
|
(1,060
|
)
|
|||||
Total accumulated other comprehensive loss
|
(1,053
|
)
|
(1,060
|
)
|
|||||
Total shareholder’s equity
|
2,306
|
2,196
|
|||||||
Total liabilities and shareholder’s equity
|
$
|
41,062
|
|
$ |
40,042
|
Three Months Ended March 31(Millions)
|
2019
|
2018
|
|||||||||||||||||||||
Cash Flows from Operating Activities
|
|||||||||||||||||||||||
Net income
|
$
|
103
|
$
|
129
|
|||||||||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|||||||||||||||||||||||
Provisions for losses
|
63
|
64
|
|||||||||||||||||||||
Amortization of underwriting expense
|
6
|
7
|
|||||||||||||||||||||
Deferred taxes
|
(3
|
) |
(42
|
)
|
|||||||||||||||||||
Changes in operating assets and liabilities:
|
|||||||||||||||||||||||
Interest, taxes and other amounts due to/from affiliates
|
18
|
23
|
|||||||||||||||||||||
Other operating assets and liabilities
|
153
|
(290
|
)
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
340
|
(109
|
)
|
||||||||||||||||||||
Cash Flows from Investing Activities
|
|||||||||||||||||||||||
Net increase in Card Member receivables and Card Member loans
|
(1,396
|
) |
(4,527
|
)
|
|||||||||||||||||||
Net decrease in loans to affiliates and other
|
130
|
1,365
|
|||||||||||||||||||||
Net increase in due to/from affiliates
|
358
|
1,083
|
|||||||||||||||||||||
Net cash used in investing activities
|
(908
|
) |
(2,079
|
)
|
|||||||||||||||||||
Cash Flows from Financing Activities
|
|||||||||||||||||||||||
Net decrease in short-term debt
|
(733
|
) |
(1,166
|
)
|
|||||||||||||||||||
Net increase in short-term debt to affiliates(a)
|
453
|
3,796
|
|||||||||||||||||||||
Principal payments of long-term debt
|
(2,250
|
) |
(447
|
)
|
|||||||||||||||||||
Proceeds from long-term debt to affiliates(a)
|
8,379
|
―
|
|||||||||||||||||||||
Principal payments of long-term debt to affiliates(a)
|
(5,318
|
) |
―
|
||||||||||||||||||||
Net cash provided by financing activities
|
531
|
2,183
|
|||||||||||||||||||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash
|
2
|
(1
|
)
|
||||||||||||||||||||
Net decrease in cash, cash equivalents and restricted cash
|
(35
|
) |
(6
|
)
|
|||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period
|
195
|
296
|
|||||||||||||||||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
160
|
$
|
290
|
|||||||||||||||||||
Supplemental cash flow information
|
|||||||||||||||||||||||
Cash, cash equivalents and restricted cash reconciliation
|
Mar-19
|
Dec-18
|
Mar-18
|
Dec-17
|
|||||||||||||||||||
Cash and cash equivalents per Consolidated Balance Sheets | $ | 65 | $ | 102 | $ | 191 | $ | 196 | |||||||||||||||
Restricted cash included in Other assets per Consolidated Balance Sheets(b) | 95 | 93 | 99 | 100 | |||||||||||||||||||
Total cash, cash equivalents and restricted cash | $ | 160 | $ | 195 | $ | 290 | $ | 296 | |||||||||||||||
(a)
|
Pursuant to the revision of the master note arrangement with American Express Company during the fourth quarter of 2018, Credco has changed the classification of the net borrowings from short-term debt to affiliates to long-term debt to affiliates.
|
(b)
|
Represents cash deposited with Amex Bank of Canada relating to the purchase of Card Member receivables and the collateralized loan arrangement for transfer of Card Member loans.
|
Accumulated
|
||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||
Three months ended March 31, 2019
|
Common
|
Paid-in
|
Comprehensive
|
Retained
|
||||||||||||||||
(Millions)
|
Total
|
Stock
|
Capital
|
Loss
|
Earnings
|
|||||||||||||||
Balances as of December 31, 2018
|
$
|
2,196
|
$
|
―
|
$
|
161
|
$
|
(1,060
|
)
|
$
|
3,095
|
|||||||||
Net income
|
103
|
―
|
―
|
―
|
103
|
|||||||||||||||
Other comprehensive income
|
7
|
―
|
―
|
7
|
―
|
|||||||||||||||
Balances as of March 31, 2019
|
$
|
2,306
|
$
|
―
|
$
|
161
|
$
|
(1,053
|
)
|
$
|
3,198
|
|||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||
Three months ended March 31, 2018
|
Common
|
Paid-in
|
Comprehensive
|
Retained
|
||||||||||||||||
(Millions)
|
Total
|
Stock
|
Capital
|
Loss
|
Earnings
|
|||||||||||||||
Balances as of December 31, 2017
|
$
|
1,871
|
$
|
―
|
$
|
161
|
$
|
(998
|
)
|
$
|
2,708
|
|||||||||
Net income
|
129
|
―
|
―
|
―
|
129
|
|||||||||||||||
Other comprehensive income
|
10
|
―
|
―
|
10
|
―
|
|||||||||||||||
Balances as of March 31, 2018
|
$
|
2,010
|
$
|
―
|
$
|
161
|
$
|
(988
|
)
|
$
|
2,837
|
(Millions)
|
2019
|
2018
|
||||||
Global Consumer Services Group(a)
|
$
|
8,902
|
$
|
8,485
|
||||
Global Commercial Services(b)
|
17,105
|
16,111
|
||||||
Card Member receivables(c)
|
26,007
|
24,596
|
||||||
Less: Reserve for losses
|
175
|
167
|
||||||
Card Member receivables, net(d)
|
$
|
25,832
|
$
|
24,429
|
(a)
|
Comprised of U.S. and International Consumer Services.
|
(b)
|
Comprised of Corporate and Small Business Services.
|
(c)
|
Net of deferred discount revenue totaling $87 million and $68 million as of March 31, 2019 and December 31, 2018, respectively.
|
(d)
|
Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial.
|
(Millions)
|
2019
|
2018
|
||||||
Global Consumer Services Group(a)
|
$
|
643
|
$
|
641
|
||||
Less: Reserve for losses
|
6
|
5
|
||||||
Card Member loans, net(b)
|
$
|
637
|
$
|
636
|
(a)
|
Comprised of International Consumer Services.
|
(b)
|
Card Member loans modified in a TDR program were immaterial.
|
30-59
|
60-89
|
|||||||||||||||||||
Days
|
Days
|
90+ Days
|
||||||||||||||||||
2019 (Millions)
|
Current
|
Past Due
|
Past Due
|
Past Due
|
Total
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
Global Consumer Services Group
|
$
|
8,840
|
$
|
23
|
$
|
13
|
$
|
26
|
$
|
8,902
|
||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
1,981
|
8
|
4
|
8
|
2,001
|
|||||||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
95
|
15,104
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
Global Consumer Services Group
|
$
|
638
|
$
|
2
|
$
|
1
|
$
|
2
|
$
|
643
|
||||||||||
30-59
|
60-89
|
|||||||||||||||||||
Days
|
Days
|
90+ Days
|
||||||||||||||||||
2018 (Millions)
|
Current
|
Past Due
|
Past Due
|
Past Due
|
Total
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
Global Consumer Services Group
|
$
|
8,432
|
$
|
17
|
$
|
12
|
$
|
24
|
$
|
8,485
|
||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
1,787
|
7
|
4
|
7
|
1,805
|
|||||||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
103
|
14,306
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
Global Consumer Services Group
|
$
|
636
|
$
|
2
|
$
|
1
|
$
|
2
|
$
|
641
|
(a)
|
For Global Corporate Payments Card Member receivables in Global Commercial Services, 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 collection procedures are initiated 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. See also (b).
|
(b)
|
Delinquency data for periods other than 90+ days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.
|
2019
|
2018
|
|||||||||||||||||
30+ Days
|
30+ Days
|
|||||||||||||||||
Net
|
Past Due
|
Net
|
Past Due
|
|||||||||||||||
Write-off
|
as a % of
|
Write-off
|
as a % of
|
|||||||||||||||
Rate
|
(a) |
|
Total
|
Rate
|
(a) |
|
Total
|
|||||||||||
Card Member Receivables:
|
||||||||||||||||||
Global Consumer Services Group
|
1.20
|
% |
|
0.70
|
%
|
1.25
|
% |
|
1.00
|
%
|
||||||||
Global Small Business Services
|
1.47
|
% |
|
1.00
|
%
|
1.42
|
% |
|
1.30
|
%
|
||||||||
Card Member Loans:
|
||||||||||||||||||
Global Consumer Services Group
|
1.25
|
% |
|
0.78
|
%
|
1.40
|
% |
|
0.89
|
%
|
2019
|
2018
|
|||||||
Net Loss
|
90+ Days
|
Net Loss
|
90+ Days
|
|||||
Ratio as a
|
Past
|
Ratio as a
|
Past
|
|||||
% of
|
Billing
|
% of
|
Billing
|
|||||
Charge
|
as a % of
|
Charge
|
as a % of
|
|||||
Volume
|
(b) |
Receivables
|
Volume
|
(b) |
Receivables
|
|||
Card Member Receivables:
|
||||||||
Global Corporate Payments
|
0.06
|
% |
0.63
|
% |
0.07
|
% |
0.86
|
% |
(a)
|
Represents the amount of Card Member receivables or Card Member loans owned by Credco that are written off, net of recoveries, expressed as a percentage of the average Card Member receivables or Card Member loans balances in each of the periods indicated.
|
(b)
|
Represents the amount of Card Member receivables owned by Credco that are written off, net of recoveries, expressed as a percentage of the volume of Card Member receivables purchased by Credco in each of the periods indicated.
|
(Millions)
|
2019
|
2018
|
||||||
Balance, January 1
|
$
|
167
|
$
|
145
|
||||
Provisions
|
60
|
62
|
||||||
Other credits(a)
|
9
|
28
|
||||||
Net write-offs(b)
|
(61
|
)
|
(56
|
)
|
||||
Balance, March 31
|
$
|
175
|
$
|
179
|
(a)
|
Primarily reserve balances related to new groups of, and participation interests in, Card Member receivables purchased from affiliates, totaling $1.6 billion and $4.3 billion for the three months ended March 31, 2019 and 2018, respectively.
|
(b)
|
Net of recoveries of $31 million and $28 million for the three months ended March 31, 2019 and 2018, respectively.
|
(Millions)
|
2019
|
2018
|
||||||
Balance, January 1
|
$
|
5
|
$
|
5
|
||||
Provisions
|
3
|
2
|
||||||
Net write-offs(a)
|
(2
|
)
|
(1
|
)
|
||||
Balance, March 31
|
$
|
6
|
$
|
6
|
(a)
|
Net of recoveries of $0.3 million for both the three months ended March 31, 2019 and 2018.
|
Other Assets
|
Other Liabilities
|
|||||||||||||||
Fair Value
|
Fair Value
|
|||||||||||||||
(Millions)
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Fair value hedges - Interest rate contracts (a)(b)
|
$
|
―
|
$
|
―
|
$
|
6
|
$
|
―
|
||||||||
Net investment hedges - Foreign exchange contracts
|
19
|
57
|
40
|
10
|
||||||||||||
Total derivatives designated as hedging instruments
|
19
|
57
|
46
|
10
|
||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Foreign exchange contracts
|
30
|
220
|
114
|
6
|
||||||||||||
Total derivatives, gross
|
49
|
277
|
160
|
16
|
||||||||||||
Less: Derivative asset and derivative liability netting (c)
|
(27
|
)
|
(11
|
)
|
(27
|
)
|
(11
|
)
|
||||||||
Total derivatives, net
|
$
|
22
|
$
|
266
|
$
|
133
|
$
|
5
|
(a)
|
For Credco’s centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral.
|
(b)
|
Credco posted $44 million and $55 million as of March 31, 2019 and December 31, 2018, respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are recorded within Other assets on Credco’s Consolidated Balance Sheets and are not netted against the derivative balances.
|
(c)
|
Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparties under an enforceable master netting arrangement.
|
Gains (losses)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Millions)
|
2019
|
2018
|
||||||
Fixed-rate long-term debt
|
$
|
(67)
|
|
$
|
115
|
|||
Derivatives designated as hedging instruments
|
65
|
(95
|
)
|
|||||
Total
|
$
|
(2)
|
|
$
|
20
|
(Millions)
|
2019
|
2018
|
||||||
Assets:
|
||||||||
Derivatives, gross (a)
|
$
|
49
|
$
|
277
|
||||
Total assets
|
49
|
277
|
||||||
Liabilities:
|
||||||||
Derivatives, gross (a)
|
160
|
16
|
||||||
Total liabilities
|
$
|
160
|
$
|
16
|
(a)
|
Refer to Note 4 for the fair values of derivative assets and liabilities, on a further disaggregated basis.
|
Carrying
|
Corresponding Fair Value Amount
|
|||||||||||||||||||
2019 (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)
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
―
|
$
|
―
|
||||||||||
Other financial assets(b)
|
26.0
|
26.0
|
0.1
|
25.9
|
―
|
|||||||||||||||
Financial assets carried at other than fair value
|
||||||||||||||||||||
Card Member loans, net
|
0.6
|
0.6
|
―
|
―
|
0.6
|
|||||||||||||||
Loans to affiliates and other
|
14.2
|
14.3
|
―
|
7.6
|
6.7
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Financial liabilities for which carrying values equal
|
||||||||||||||||||||
or approximate fair value
|
8.9
|
8.9
|
―
|
8.9
|
―
|
|||||||||||||||
Financial liabilities carried at other than fair value
|
||||||||||||||||||||
Long-term debt
|
18.3
|
18.5
|
―
|
18.5
|
―
|
|||||||||||||||
Long-term debt to affiliates
|
$
|
10.6
|
$
|
10.6
|
$
|
―
|
$
|
10.6
|
$
|
―
|
Carrying
|
Corresponding Fair Value Amount
|
|||||||||||||||||||
2018 (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)
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
―
|
$
|
―
|
||||||||||
Other financial assets(b)
|
24.9
|
24.9
|
0.1
|
24.8
|
―
|
|||||||||||||||
Financial assets carried at other than fair value
|
||||||||||||||||||||
Card Member loans, net
|
0.6
|
0.6
|
―
|
―
|
0.6
|
|||||||||||||||
Loans to affiliates and other
|
14.1
|
14.1
|
―
|
7.4
|
6.7
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Financial liabilities for which carrying values equal
|
||||||||||||||||||||
or approximate fair value
|
9.0
|
9.0
|
―
|
9.0
|
―
|
|||||||||||||||
Financial liabilities carried at other than fair value
|
||||||||||||||||||||
Long-term debt
|
20.4
|
20.5
|
―
|
20.5
|
―
|
|||||||||||||||
Long-term debt to affiliates
|
$
|
7.5
|
$
|
7.3
|
$
|
―
|
$
|
7.3
|
$
|
―
|
(a)
|
Amounts reflect interest-bearing deposits.
|
(b)
|
Level 1 amounts reflect interest-bearing restricted cash and Level 2 amounts primarily reflect Card Member receivables.
|
Foreign Currency
|
||||
Translation
|
||||
Adjustments
|
||||
2019 (Millions), net of tax
|
Gains (Losses)
|
|||
Balances as of December 31, 2018
|
$
|
(1,060
|
)
|
|
Net translation gain of investments in foreign operations
|
64
|
|||
Net losses related to hedges of investment in foreign operations
|
(57
|
)
|
||
Net change in accumulated other comprehensive loss
|
7
|
|||
Balances as of March 31, 2019
|
$
|
(1,053
|
)
|
|
Foreign Currency
|
||||
Translation
|
||||
Adjustments
|
||||
2018 (Millions), net of tax
|
Gains (Losses)
|
|||
Balances as of December 31, 2017
|
$
|
(998
|
)
|
|
Net translation gain of investments in foreign operations
|
53
|
|||
Net losses related to hedges of investments in foreign operations
|
(43
|
)
|
||
Net change in accumulated other comprehensive loss
|
10
|
|||
Balances as of March 31, 2018
|
$
|
(988
|
)
|
Tax (benefit) expense
|
|||||||||
Three Months Ended
|
|||||||||
March 31,
|
|||||||||
(Millions)
|
2019
|
2018
|
|||||||
Net translation on investments in foreign operations
|
|
$
|
3
|
$
|
(8
|
)
|
|||
Net hedges of investments in foreign operations
|
(18
|
)
|
(14
|
)
|
|||||
Total tax impact
|
|
$
|
(15
|
)
|
$
|
(22
|
)
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2019
|
2018
|
2019 vs. 2018
|
|||||||||||||
Discount revenue earned from purchased Card Member receivables and Card Member loans
|
$
|
303
|
$
|
214
|
$
|
89
|
42
|
%
|
||||||||
Interest income from affiliates and other
|
110
|
89
|
21
|
24
|
||||||||||||
Finance revenue
|
19
|
15
|
4
|
27
|
||||||||||||
Total revenues
|
$
|
432
|
$
|
318
|
$
|
114
|
36
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(Millions, except percentages)
|
2019
|
2018
|
2019 vs. 2018
|
|||||||||||||
Provisions for losses
|
$
|
63
|
$
|
64
|
$
|
(1
|
)
|
(2
|
)%
|
|||||||
Interest expense
|
169
|
131
|
38
|
29
|
||||||||||||
Interest expense to affiliates
|
104
|
29
|
75
|
#
|
||||||||||||
Other, net
|
(23
|
)
|
(14
|
)
|
(9
|
)
|
64
|
|||||||||
Total expenses
|
$
|
313
|
$
|
210
|
$
|
103
|
49
|
%
|
(Millions, except percentages and where indicated)
|
2019
|
2018
|
||||||
Total gross Card Member receivables(a)
|
$
|
26,007
|
$
|
24,864
|
||||
Loss reserves ― Card Member receivables(a)
|
$
|
175
|
$
|
179
|
||||
Loss reserves as a % of receivables
|
0.7
|
%
|
0.7
|
%
|
||||
Average life of Card Member receivables (# in days)(b)
|
29
|
28
|
(a)
|
Refer to Notes 2 and 3 to the Consolidated Financial Statements for further discussion.
|
(b)
|
Represents the average life of Card Member receivables owned by Credco, based upon the ratio of the average amount of both billed and unbilled receivables owned by Credco at the end of each month, during the periods indicated, to the volume of Card Member receivables purchased by Credco.
|
(Millions)
|
2019
|
2018
|
||||||
American Express Limited
|
$
|
3,847
|
$
|
3,847
|
||||
American Express Services Europe Limited
|
3,551
|
3,552
|
||||||
American Express Australia Limited
|
1,888
|
1,839
|
||||||
Amex Bank of Canada
|
1,302
|
1,334
|
||||||
American Express International, Inc.
|
1,255
|
1,243
|
||||||
Amex Global Holdings C.V.
|
888
|
888
|
||||||
American Express Company (Mexico) S.A. de C.V.
|
496
|
463
|
||||||
American Express International, Inc.– Branch – Singapore
|
379
|
383
|
||||||
American Express Bank (Mexico) S.A.
|
376
|
348
|
||||||
Alpha Card S.C.R.L./C.V.B.A
|
107
|
114
|
||||||
American Express Saudi Arabia (C) JSC
|
74
|
53
|
||||||
American Express International (NZ), Inc.
|
72
|
72
|
||||||
Total(a)
|
$
|
14,235
|
$
|
14,136
|
(a)
|
As of both March 31, 2019 and December 31, 2018, approximately $7.2 billion were collateralized by the underlying Card Member receivables and Card Member loans transferred with recourse.
|
(Millions)
|
2019
|
2018
|
||||||
AE Exposure Management Limited
|
$
|
5,272
|
$
|
5,122
|
||||
American Express Europe LLC
|
816
|
517
|
||||||
American Express Holdings Netherlands CV
|
192
|
192
|
||||||
Accertify, Inc.
|
72
|
68
|
||||||
Total
|
$
|
6,352
|
$
|
5,899
|
(Millions)
|
2019
|
2018
|
||||||
American Express Company(a)
|
$
|
10,273
|
$
|
7,240
|
||||
Amex Funding Management (Europe) Limited(b)
|
308
|
283
|
||||||
Total
|
$
|
10,581
|
$
|
7,523
|
●
|
A broad, deep and diverse set of funding sources to finance its assets and meet operating requirements; and
|
●
|
Liquidity programs that enable Credco to continuously meet expected future financing obligations and business requirements for at least a twelve-month period, in the event it is unable to continue to raise new funds under its traditional funding programs during a substantial weakening in economic conditions.
|
Credit Agency
|
Short-Term Ratings
|
Long-Term Ratings
|
Outlook
|
|||
Fitch
|
F1
|
A
|
Stable
|
|||
Moody’s
|
Prime-1
|
A2
|
Stable
|
|||
S&P
|
A-2
|
A-
|
Stable
|
(Billions)
|
2019
|
2018
|
||||||
Long-term debt outstanding (a)
|
$
|
18.3
|
$
|
20.4
|
||||
Average long-term debt (b)
|
$
|
20.3
|
$
|
22.8
|
(a)
|
The outstanding balances include (i) unamortized discount, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps.
|
(b)
|
Average long-term debt outstanding during the three months ended March 31, 2019 and the year ended December 31, 2018, respectively.
|
●
|
Maintaining diversified funding sources;
|
●
|
Maintaining unencumbered liquid assets and off-balance sheet liquidity sources;
|
●
|
Projecting cash inflows and outflows under a variety of economic and market scenarios;
|
●
|
Establishing clear objectives for liquidity risk management, including compliance with regulatory requirements; and
|
●
|
Incorporating liquidity risk management as appropriate into American Express’ capital adequacy framework.
|
·
|
credit trends, which will depend in part on the economic environment, including, among other things, the housing market and the rates of bankruptcies, which can affect spending on card products and debt payments by individual and corporate customers;
|
·
|
the effectiveness of Credco’s risk management policies and procedures, including Credco’s ability to accurately estimate the provisions for losses in Credco’s outstanding portfolio of Card Member receivables and Card Member loans, and operational risk;
|
·
|
fluctuations in foreign currency exchange rates;
|
·
|
negative changes in Credco’s credit ratings, which could result in decreased liquidity and higher borrowing costs;
|
·
|
changes in laws or government regulations affecting American Express’ business, including the potential impact of regulations adopted by regulators relating to certain credit and charge card practices;
|
·
|
the effect of fluctuating interest rates, which could affect Credco’s borrowing costs and have an adverse effect on the market price of notes issued by Credco;
|
·
|
the impact on American Express’ business resulting from continuing geopolitical uncertainty;
|
·
|
the impact on American Express’ business of changes in the substantial and increasing worldwide competition in the payments industry;
|
·
|
the impact on American Express’ business resulting from a failure in or breach of operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm;
|
·
|
the impact on American Express’ business that could result from litigation such as class actions or proceedings brought by governmental and regulatory agencies;
|
·
|
Credco’s ability to satisfy its liquidity needs and execute on its funding plans, which will depend on, among other things, Credco’s future business growth, the impact of global economic, political and other events on market capacity, Credco’s credit ratings, demand for securities offered by Credco, performance by Credco’s counterparties under its bank credit facilities and other lending facilities, and regulatory changes; and
|
·
|
Credco’s tax rate remaining in line with current expectations, which could be impacted by, among other things, Credco’s geographic mix of income, further changes in tax laws and regulation, unfavorable tax audits and other unanticipated tax items; and the impact of accounting changes.
|
Date: May 3, 2019
|
|
|
By
|
|
/s/ David L. Yowan
|
|
|
|
|
David L. Yowan
|
|||
|
|
|
Chief Executive Officer
|
|||
Date: May 3, 2019
|
|
|
By
|
|
/s/ Leah A. Schweller
|
|
|
|
|
Leah A. Schweller
|
|||
|
|
|
Chief Accounting Officer
|
Exhibit No.
|
Description
|
How Filed
|
||
31.1
|
Electronically filed herewith.
|
|||
31.2
|
Electronically filed herewith.
|
|||
32.1
|
Electronically filed herewith.
|
|||
32.2
|
Electronically filed herewith.
|
|||
101.INS
|
XBRL Instance Document
|
Electronically filed herewith.
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Electronically filed herewith.
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Electronically filed herewith.
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Electronically filed herewith.
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Electronically filed herewith.
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Electronically filed herewith.
|
||
E-1
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of American Express Credit Corporation;
|
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.
|
Date: May 3, 2019
|
|
|
|
/s/ David L. Yowan
|
||
|
|
|
David L. Yowan
|
|||
|
|
|
Chief Executive Officer
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of American Express Credit Corporation;
|
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.
|
Date: May 3, 2019
|
|
|
|
/s/ Anderson Y. Lee
|
|
|
|
|
Anderson Y. Lee
|
||
|
|
|
Chief Financial Officer
|
(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.
|
Pursuant to the revision of the master note arrangement with American Express Company during the fourth quarter of 2018, Credco has changed the classification of the net borrowings from short-term debt to affiliates to long-term debt to affiliates .
Represents cash deposited with Amex Bank of Canada relating to the purchase of Card Member receivables and the collateralized loan arrangement for transfer of Card Member loans
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 03, 2019 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AMERICAN EXPRESS CREDIT CORPORATION | |
Entity Central Index Key | 0000004969 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,504,938 | |
Entity Emerging Growth Company | false | |
Entity Small Busines | false |
Consolidated Statements of Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenues | ||
Discount revenue earned from purchased Card Member receivables and Card Member loans | $ 303 | $ 214 |
Interest income from affiliates and other | 110 | 89 |
Finance revenue | 19 | 15 |
Total revenues | 432 | 318 |
Expenses | ||
Provisions for losses | 63 | 64 |
Interest expense | 169 | 131 |
Interest expense to affiliates | 104 | 29 |
Other, net | (23) | (14) |
Total expenses | 313 | 210 |
Pretax income | 119 | 108 |
Income tax provision (benefit) | 16 | (21) |
Net income | $ 103 | $ 129 |
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Consolidated Statement of Comprehensive Income [Abstract] | ||
Net income | $ 103 | $ 129 |
Other comprehensive income: | ||
Foreign currency translation adjustments, net of tax | 7 | 10 |
Other comprehensive income | 7 | 10 |
Comprehensive income | $ 110 | $ 139 |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets | ||
Card Member receivables, reserves | $ 175 | $ 167 |
Card Member loans, reserves | $ 6 | $ 5 |
Shareholder's Equity | ||
Common stock, par value | $ 0.1 | $ 0.1 |
Common stock, authorized | 3.0 | 3.0 |
Common stock, issued | 1.5 | 1.5 |
Common stock, outstanding | 1.5 | 1.5 |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustments, tax | $ 19 | $ 34 |
Consolidated Statement of Cash Flows (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Cash Flows [Abstract] | ||||||
Cash and cash equivalents per Consolidated Balance Sheets | $ 65 | $ 102 | $ 191 | $ 196 | ||
Restricted cash included in Other assets per Consolidated Balance Sheets | [1] | 95 | 93 | 99 | 100 | |
Total Cash, cash equivalents and restricted cash | $ 160 | $ 195 | $ 290 | $ 296 | ||
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Consolidated Statement of Shareholder's Equity - USD ($) $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Retained Earnings [Member] |
---|---|---|---|---|---|
Beginning balance at Dec. 31, 2017 | $ 1,871 | $ 161 | $ (998) | $ 2,708 | |
Net income | 129 | $ 0 | 129 | ||
Other comprehensive income | 10 | 10 | |||
Ending balance at Mar. 31, 2018 | 2,010 | 161 | (988) | 2,837 | |
Beginning balance at Dec. 31, 2018 | 2,196 | 161 | (1,060) | 3,095 | |
Net income | 103 | $ 0 | 103 | ||
Other comprehensive income | 7 | 7 | |||
Ending balance at Mar. 31, 2019 | $ 2,306 | $ 161 | $ (1,053) | $ 3,198 |
Basis of Presentation |
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Mar. 31, 2019 | |
Disclosure Text Block Abstract | |
Basis of Presentation | 1. Basis of Presentation The Company Credco is a wholly owned subsidiary of American Express Travel Related Services Company, Inc. (TRS), which is a wholly owned subsidiary of American Express Company (American Express). Credco is engaged in the business of financing certain non-interest-earning Card Member receivables arising from the use of the American Express charge cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-earning revolving loans generated by Card Member spending on American Express credit cards issued in non-U.S. markets. Credco executes material transactions with its affiliates. The agreements between Credco and its affiliates provide that the parties intend that the transactions thereunder be conducted on an arm’s-length basis; however, there can be no assurance that the terms of these arrangements are the same as would be negotiated between independent, unrelated parties. American Express provides Credco with financial support with respect to maintenance of its minimum required 1.25 fixed charge coverage ratio, which is achieved by charging appropriate discount rates on the purchases of receivables Credco makes from, and the interest rates on the loans Credco provides to, TRS and other American Express subsidiaries. Each monthly period, the discount and interest rates are determined to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio. The revenue earned by Credco from purchasing Card Member receivables and Card Member loans at a discount is reported as discount revenue on the Consolidated Statements of Income. The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in Credco’s Annual Report on Form 10-K for the year ended December 31, 2018. If not materially different, certain note disclosures included therein have been omitted from these Consolidated Financial Statements. 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. These accounting estimates reflect the best judgment of management, but actual results could differ. Recently-Issued-and-adopted-Accounting-Standards Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance for the recognition of credit losses on financial instruments, effective January 1, 2020. 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. The guidance also requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. Credco continues to evaluate the impact the new guidance will have on Credco’s financial position and results of operations. The CECL model will alter the assumptions used in estimating credit losses on Card Member receivables and loans, and Credco may have material changes to its credit reserves as the new guidance involves earlier recognition of expected losses for the life of the assets. However, the extent of the impact will depend on the characteristics of Credco’s loan portfolio, macroeconomic conditions and forecasted information at the date of adoption. American Express continues to drive its cross-functional implementation efforts and has substantially completed development of CECL models. Continuing through 2019, American Express is validating and analyzing model output during CECL parallel runs, and developing the business processes, policies and controls that satisfy the requirements of the new standard. Recently Adopted Accounting Standards In February 2018, as a result of the enactment of the Tax Cuts and Jobs Act (the Tax Act), the FASB issued new accounting guidance on the reclassification of certain tax effects from accumulated other comprehensive income (AOCI) to retained earnings. Credco adopted the new guidance effective January 1, 2019 and did not elect the optional reclassification.
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Card Member Receivables and Card Member Loans |
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Loans Notes Trade And Other Receivables Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Card Member Receivables and Card Member Loans | 2. Card Member Receivables and Card Member Loans American Express’ charge and lending payment card products result in the generation of Card Member receivables and Card Member loans, respectively. Card Member receivables as of March 31, 2019 and December 31, 2018 consisted of:
Card Member loans as of March 31, 2019 and December 31, 2018 consisted of:
Card Member Receivables and Card Member Loans 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 receivables and Card Member loans as of March 31, 2019 and December 31, 2018:
Credit Quality Indicators for Card Member Receivables and Card Member Loans The following tables present the key credit quality indicators as of or for the three months ended March 31:
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Reserves for Losses |
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Reserves for Losses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves for Losses | 3. Reserves for Losses Reserves for losses relating to Card Member receivables and Card Member loans represent management’s best estimate of the probable inherent losses in Credco’s outstanding portfolio of receivables and loans, as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments. 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:
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:
Net of recoveries of $0.3 million for both the three months ended March 31, 2019 and 2018 |
Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | 4. Derivatives and Hedging Activities Credco uses derivative financial instruments to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, 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 Credco’s market risk management. Credco does not transact in derivatives for trading purposes. In relation to Credco’s credit risk, certain of Credco’s bilateral derivative agreements include provisions that allow counterparties to terminate the agreement in the event of a downgrade of Credco’s debt credit rating below investment grade and settle the outstanding net liability position. As of March 31, 2019, these derivatives were not in a material net liability position. Based on Credco’s assessment of the credit risk of its derivative counterparties as of March 31, 2019 and December 31, 2018, no credit risk adjustment to the derivative portfolio was required. A majority of Credco’s derivative assets and liabilities as of March 31, 2019 and December 31, 2018 are subject to master netting agreements with its derivative counterparties. Credco has no derivative amounts subject to enforceable master netting arrangements that are not offset on the Consolidated Balance Sheets. The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of March 31, 2019 and December 31, 2018:
Fair Value Hedges Credco 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. Credco has $12.5 billion and $13.8 billion of its fixed-rate debt obligations designated in fair value hedging relationships as of March 31, 2019 and December 31, 2018, respectively. The following table presents the gains and losses recognized in Interest expense associated with the fair value hedges of Credco’s fixed-rate long-term debt:
The carrying values of the hedged liabilities, recorded within Long-term debt on the Consolidated Balance Sheets, were $12.4 billion and $13.5 billion as of March 31, 2019 and December 31, 2018, respectively, including offsetting amounts of $116 million and $184 million for the respective periods, related to the cumulative amount of fair value hedging adjustments. Credco recognized a net increase of $32 million and $4 million in Interest expense on long-term debt for the three months ended March 31, 2019 and 2018, respectively, primarily related to the net settlements (interest accruals) on Credco’s interest rate derivatives designated as fair value hedges. Net Investment Hedges Credco had notional amounts of approximately $2.9 billion of foreign currency derivatives designated as net investment hedges as of both March 31, 2019 and December 31, 2018. The gain or loss on net investment hedges, net of taxes, recorded in AOCI as part of the cumulative translation adjustment, were losses of $57 million and $43 million for the three months ended March 31, 2019 and 2018, respectively. No amounts associated with net investment hedges were reclassified from AOCI into income for the three months ended March 31, 2019 and 2018. 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 gains of $23 million and $15 million for the three months ended March 31, 2019 and 2018, respectively, and are recognized in Other expenses. |
Fair Values |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values | 5. Fair Values Financial Assets and Financial Liabilities Carried at Fair Value The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy as Level 2, as of March 31, 2019 and December 31, 2018:
Refer to Note 4 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 value for Credco’s financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of March 31, 2019 and December 31, 2018. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of March 31, 2019 and December 31, 2018, and require management judgment. These figures may not be indicative of future fair values, nor can the fair value of Credco be estimated by aggregating the amounts presented.
Nonrecurring Fair Value Measurements During the three months ended March 31, 2019 and during the year ended December 31, 2018, Credco did not have any assets that were measured at fair value due to impairment on a nonrecurring basis. |
Changes in Accumulated Other Comprehensive Income |
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Changes In Accumulated Other Comprehensive Income Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Accumulated Other Comprehensive Income | 6. 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 Foreign Currency Translation Adjustments for the three months ended March 31, 2019 and 2018 were as follows:
The following table shows the tax impact for the three months ended March 31 for the changes in Foreign Currency Translation Adjustments presented above:
No amounts were reclassified out of AOCI into the Consolidated Statements of Income for the three months ended March 31, 2019 and 2018. |
Income Taxes |
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Mar. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes The results of operations of Credco are included in the consolidated U.S. federal income tax return of American Express. Under an agreement with American Express, provision for income taxes is recognized on a separate company basis. If benefits for net operating losses, future tax deductions and foreign tax credits cannot be recognized on a separate company basis, such benefits are then recognized based upon a share, derived by formula, of those deductions and credits that are recognizable on an American Express consolidated reporting basis. The effective tax rate was 13.4 percent and (19.4) percent for the three months ended March 31, 2019 and 2018, respectively. The tax rate for the three months ended March 31, 2018 includes a $24 million discrete tax benefit related to the Tax Act that reduced the reported effective tax rate by 22.2 percent. The tax rate in each of the periods reflects the geographic mix of expenses in the United States that generates a tax benefit at the U.S. statutory rate and foreign earnings taxed at lower rates, and the favorable impact of the tax benefit related to Credco’s ongoing funding activities outside the United States. Credco’s provision for income taxes for interim financial periods is not based on an estimated annual effective rate due to volatility in certain components of revenues and expenses that prevents Credco from projecting a reliable estimate of full year pretax income. A discrete calculation of the provision for income taxes is recorded for each interim period. Credco is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which it has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In 2018, Credco settled its U.S. federal income tax audits for tax years 2008-2014, and the statute of limitations for these years remain open through 2019. Tax years from 2015 onwards are open for examination by the IRS. Credco believes it is reasonably possible that its unrecognized tax benefits could decrease by an immaterial amount within the next 12 months, 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 attribution of taxable income to a particular jurisdiction or jurisdictions. The resolution of such items would not have a material impact on Credco’s effective tax rate. |
Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2019 | |
Summary Of Significant Accounting Policies [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. These accounting estimates reflect the best judgment of management, but actual results could differ. |
Derivatives And Hedging Activities Policy [Abstract] | |
Derivatives Financial Instruments and Hedging Activities | Credco uses derivative financial instruments to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, 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 |
Card Member Receivables and Card Member Loans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable And Loans Tables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Card Member receivables detail | Card Member receivables as of March 31, 2019 and December 31, 2018 consisted of:
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Card Member loans detail | Card Member loans as of March 31, 2019 and December 31, 2018 consisted of:
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Aging of Card Member receivables and loans | The following table presents the aging of Card Member receivables and Card Member loans as of March 31, 2019 and December 31, 2018:
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Credit quality indicators for receivables and loans | The following tables present the key credit quality indicators as of or for the three months ended March 31:
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Reserves for Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves For Losses Tables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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:
Net of recoveries of $0.3 million for both the three months ended March 31, 2019 and 2018 |
Derivatives and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2019 and December 31, 2018:
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Effect of fair value hedges on results of operations | The following table presents the gains and losses recognized in Interest expense associated with the fair value hedges of Credco’s fixed-rate long-term debt:
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Fair Values (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value assets and liabilities measured on recurring basis | The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy as Level 2, as of March 31, 2019 and December 31, 2018:
Refer to Note 4 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 value for Credco’s financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of March 31, 2019 and December 31, 2018.
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Changes in Accumulated Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of comprehensive income (loss), net of tax | Changes in Foreign Currency Translation Adjustments for the three months ended March 31, 2019 and 2018 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 Foreign Currency Translation Adjustments presented above:
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Summary of Significant Accounting Policies Textuals (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Summary Of Significant Accounting Policies Textuals [Abstract] | |
Ratio of combined earnings and fixed earnings to fixed charges required to maintain availability of credit line | 1.25 |
Card Member Receivables and Card Member Loans (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounts Receivable [Abstract] | ||||
Card Member receivables | $ 26,007 | $ 24,596 | ||
Less: Reserve for losses | 175 | 167 | $ 179 | $ 145 |
Card Member receivables, net | 25,832 | 24,429 | ||
Global Consumer Services Group [Member] | ||||
Accounts Receivable [Abstract] | ||||
Card Member receivables | 8,902 | 8,485 | ||
Global Commercial Services [Member] | ||||
Accounts Receivable [Abstract] | ||||
Card Member receivables | $ 17,105 | $ 16,111 |
Card Member Receivables and Card Member Loans 1 (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Card Member loans | ||||
Less: Reserve for losses | $ 6 | $ 5 | $ 6 | $ 5 |
Card Member loans, net | 637 | 636 | ||
Global Consumer Services Group [Member] | ||||
Card Member loans | ||||
Card Member loans | 643 | 641 | ||
Less: Reserve for losses | 6 | 5 | ||
Card Member loans, net | $ 637 | $ 636 |
Card Member Receivables and Card Member Loans 2 (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Card Member receivables Total Aging | $ 26,007 | $ 24,596 |
Global Consumer Services Group [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Card Member receivables Total Aging | 8,902 | 8,485 |
Card Member loans Total aging | 643 | 641 |
Global Consumer Services Group [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 8,840 | 8,432 |
Global Consumer Services Group [Member] | Card Member Receivables [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 23 | 17 |
Global Consumer Services Group [Member] | Card Member Receivables [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 13 | 12 |
Global Consumer Services Group [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 26 | 24 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 638 | 636 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 2 | 2 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 1 | 1 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 2 | 2 |
Global Commercial Services [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Card Member receivables Total Aging | 17,105 | 16,111 |
Global Small Business Services [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Card Member receivables Total Aging | 2,001 | 1,805 |
Global Small Business Services [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 1,981 | 1,787 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 8 | 7 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 4 | 4 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 8 | 7 |
Global Corporate Payments [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Card Member receivables Total Aging | 15,104 | 14,306 |
Global Corporate Payments [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | $ 95 | $ 103 |
Card Member Receivables and Card Member Loans 3 (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
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Global Consumer Services Group [Member] | Card Member Receivables [Member] | Net Write-Off Rate [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.012 | 0.0125 |
Global Consumer Services Group [Member] | Card Member Receivables [Member] | 30+ Days Past Due as a % of Total [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.007 | 0.01 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | Net Write-Off Rate [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.0125 | 0.014 |
Global Consumer Services Group [Member] | Card Member Loans [Member] | 30+ Days Past Due as a % of Total [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.0078 | 0.0089 |
Global Small Business Services [Member] | Card Member Receivables [Member] | Net Write-Off Rate [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.0147 | 0.0142 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 30+ Days Past Due as a % of Total [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.01 | 0.013 |
Global Corporate Payments [Member] | Card Member Receivables [Member] | Net Loss Ratio as a % of Charge Volume [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.0006 | 0.0007 |
Global Corporate Payments [Member] | Card Member Receivables [Member] | 90+ days past billing as a percentage of receivables [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Credit Quality Indicators | 0.0063 | 0.0086 |
Card Member Receivables and Card Member Loans Textuals (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Deferred discount revenue on Card Member receivable | $ 87 | $ 68 |
Reserves (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Changes in the Card Member receivable reserve for losses | ||
Balance, January 1 | $ 167 | $ 145 |
Provisions | 60 | 62 |
Other credits | 9 | 28 |
Net write-offs | (61) | (56) |
Balance, March 31 | $ 175 | $ 179 |
Reserves 1 (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Changes in the Card Member loans reserve for losses [Line Items] | ||
Balance, January 1 | $ 5 | $ 5 |
Provisions | 3 | 2 |
Net Write-Offs | (2) | (1) |
Balance, March 31 | $ 6 | $ 6 |
Reserves Textuals (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Reserves For Losses (Textuals) [Abstract] | ||
Participation interests in Card Member receivables purchased from affiliates | $ 1,600.0 | $ 4,300.0 |
Allowance for Card Member Receivables, Recoveries of Bad Debts | 31.0 | 28.0 |
Allowance for Card Member Loans, Recoveries of Bad Debts | $ 0.3 | $ 0.3 |
Derivatives and Hedging Activities (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | $ 49 | $ 277 |
Derivative asset and derivative liability netting | (27) | (11) |
Total derivatives assets, net | 22 | 266 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 19 | 57 |
Other Assets [Member] | Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 0 | 0 |
Other Assets [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 19 | 57 |
Other Assets [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 30 | 220 |
Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liabilities | 160 | 16 |
Derivative asset and derivative liability netting | (27) | (11) |
Total derivatives liabilities, net | 133 | 5 |
Other Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liabilities | 46 | 10 |
Other Liabilities [Member] | Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liabilities | 6 | 0 |
Other Liabilities [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liabilities | 40 | 10 |
Other Liabilities [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liabilities | $ 114 | $ 6 |
Derivatives and Hedging Activities 1 (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Derivative Instruments, Gains (Losses) [Line Items] | ||
Fixed-rate long-term debt | $ (67) | $ 115 |
Derivatives designated as hedging instruments | 65 | (95) |
Total | $ (2) | $ 20 |
Derivatives and Hedging Activities Textuals (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Derivatives And Hedging Activities Textuals [Abstract] | |||
Net increase in interest expense on long term debt. | $ 32.0 | $ 4.0 | |
Derivative [Line Items] | |||
Notional amount of long-term debt | 12,400.0 | $ 13,500.0 | |
Loss on net investment hedges | 57.0 | 43.0 | |
Amounts reclassified from AOCI into income | 0.0 | 0.0 | |
Margin on interest rate swap not netted | 44.0 | 55.0 | |
Gain in Changes of Fair Value of Derivatives not designated as hedges | 23.0 | $ 15.0 | |
Cumulative Fair Value hedging adjustments of hedged item in fair value hedge | 116.0 | 184.0 | |
Notional Amount of Foreign Currency Derivatives | 2,900.0 | 2,900.0 | |
Fair Value Hedging [Member] | |||
Derivative [Line Items] | |||
Notional amount of long-term debt | $ 12,500.0 | $ 13,800.0 |
Fair Value (Details) - Level 2 [Member] - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets [Abstract] | ||
Derivatives, gross | $ 49 | $ 277 |
Total assets | 49 | 277 |
Liabilities [Abstract] | ||
Derivatives, gross | 160 | 16 |
Total liabilities | $ 160 | $ 16 |
Fair Value 1 (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | $ 65 | $ 102 | $ 191 | $ 196 |
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 637 | 636 | ||
Loans to affiliates and other | 14,235 | 14,136 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 18,259 | 20,447 | ||
Long Term Debt with Affiliates | 10,581 | 7,523 | ||
Carrying Value [Member] | ||||
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | 100 | 100 | ||
Other financial assets | 26,000 | 24,900 | ||
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 600 | 600 | ||
Loans to affiliates and other | 14,200 | 14,100 | ||
Financial Liabilities: | ||||
Financial liabilities for which carrying values equal or approximate fair value | 8,900 | 9,000 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 18,300 | 20,400 | ||
Long Term Debt with Affiliates | 10,600 | 7,500 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | 100 | 100 | ||
Other financial assets | 26,000 | 24,900 | ||
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 600 | 600 | ||
Loans to affiliates and other | 14,300 | 14,100 | ||
Financial Liabilities: | ||||
Financial liabilities for which carrying values equal or approximate fair value | 8,900 | 9,000 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 18,500 | 20,500 | ||
Long Term Debt with Affiliates | 10,600 | 7,300 | ||
Level 1 [Member] | ||||
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | 100 | 100 | ||
Other financial assets | 100 | 100 | ||
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 0 | 0 | ||
Loans to affiliates and other | 0 | 0 | ||
Financial Liabilities: | ||||
Financial liabilities for which carrying values equal or approximate fair value | 0 | 0 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 0 | 0 | ||
Long Term Debt with Affiliates | 0 | 0 | ||
Level 2 [Member] | ||||
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | 0 | 0 | ||
Other financial assets | 25,900 | 24,800 | ||
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 0 | 0 | ||
Loans to affiliates and other | 7,600 | 7,400 | ||
Financial Liabilities: | ||||
Financial liabilities for which carrying values equal or approximate fair value | 8,900 | 9,000 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 18,500 | 20,500 | ||
Long Term Debt with Affiliates | 10,600 | 7,300 | ||
Level 3 [Member] | ||||
Financial assets for which carrying values equal or approximate fair value | ||||
Cash and cash equivalents per Consolidated Balance Sheets | 0 | 0 | ||
Other financial assets | 0 | 0 | ||
Financial assets carried at other than fair value [Abstract] | ||||
Card Member loans, less reserves | 600 | 600 | ||
Loans to affiliates and other | 6,700 | 6,700 | ||
Financial Liabilities: | ||||
Financial liabilities for which carrying values equal or approximate fair value | 0 | 0 | ||
Financial liabilities carried at other than fair value [Abstract] | ||||
Total Long-term Debt | 0 | 0 | ||
Long Term Debt with Affiliates | $ 0 | $ 0 |
Fair Value Textuals (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | ||
Assets measured at fair value for impairment | $ 0 | $ 0 |
Changes In Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Changes in other comprehensive income | ||
Balances as of start of period | $ (1,060.0) | |
Balances as of end of period | (1,053.0) | |
Foreign Currency Translation Adjustment [Member] | ||
Changes in other comprehensive income | ||
Balances as of start of period | (1,060.0) | $ (998.0) |
Net translation gain of investments in foreign operations | 64.0 | 53.0 |
Net losses related to hedges of investment in foreign operations | (57.0) | (43.0) |
Net change in accumulated other comprehensive loss | 7.0 | 10.0 |
Balances as of end of period | $ (1,053.0) | $ (988.0) |
Changes in Accumulated Other Comprehensive Income (Loss) 1 (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Other comprehensive loss | ||
Net translation on investments in foreign operations | $ 3 | $ (8) |
Net hedges of investments in foreign operations | (18) | (14) |
Total tax impact | $ (15) | $ (22) |
Changes in Accumulated Other Comprehensive Income (Loss) Textuals (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Accumulated Other Comprehensive Loss Income (Textuals) [Abstract] | ||
Amount of gain loss reclassified from accumulated other comprehensive income to income | $ 0 | $ 0 |
Income Taxes Textuals (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Income Taxes (Textuals) [Line Items] | |||
U.S. Tax Act Discrete Tax (Benefit) charge | $ 24 | ||
Effective tax rate | 13.40% | (19.40%) | |
Reduction in Effective Tax Rate | 22.20% | ||
Income Tax Contingency [Line Items] | |||
Open tax years by major tax jurisdiction | 2015 | ||
Internal Revenue Service (IRS) [Member] | Earliest Year [Member] | |||
Income Tax Contingency [Line Items] | |||
Open tax years by major tax jurisdiction | 2015 | ||
Tax Audit Settlement Years | 2008 | ||
Internal Revenue Service (IRS) [Member] | Latest Year [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax Audit Settlement Years | 2014 |
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