American Express 2010 Annual Report Download - page 81

Accounts receivable as of December 31, 2010 and 2009 were
as follows:
(Millions) 2010 2009
U.S. Card Services
(a)
$ 19,155 $ 17,750
International Card Services 6,673 5,944
Global Commercial Services
(b)
11,259 9,844
Global Network & Merchant Services
(c)
179 205
Cardmember receivables, gross
(d)
37,266 33,743
Less: Cardmember reserve for losses 386 546
Cardmember receivables, net $ 36,880 $ 33,197
Other receivables, net
(e)
$ 3,554 $ 5,007
(a) Includes $7.7 billion and $7.8 billion of gross cardmember receivables
available to settle obligations of a consolidated VIE as of December 31,
2010 and 2009, respectively.
(b) Includes $0.5 billion of gross cardmember receivables available to settle
obligations of a consolidated VIE as of December 31, 2010 and 2009.
(c) Includes receivables primarily related to the Company’s International
Currency Card portfolios.
(d) Includes approximately $11.7 billion and $10.4 billion of cardmember
receivables outside the United States as of December 31, 2010 and
2009, respectively.
(e) Other receivables primarily represent amounts for tax-related receivables,
amounts due from the Company’s travel customers and suppliers, purchased
joint venture receivables, third-party issuing partners, amounts due from certain
merchants for billed discount revenue, accrued interest on investments and other
receivables due to the Company in the ordinary course of business. As of
December 31, 2009, these amounts also include $1.9 billion of cash held in an
unconsolidated VIE required for daily settlement requirements. Beginning
January1,2010,thisVIEisconsolidatedbytheCompanyandcashheldby
this consolidated VIE is considered restricted cash included in other assets on the
Company’s Consolidated Balance Sheets. Refer to Note 7 for additional details.
CARDMEMBER AND OTHER LOANS
Cardmember loans, representing amounts due from lending
payment product customers, are recorded at the time a
cardmember enters into a point-of-sale transaction with a
merchant or when a charge card customer enters into an
extended payment arrangement. The Company’s lending
portfolios primarily include revolving loans to cardmembers
obtained through either their credit card accounts or the
lending on charge feature of their charge card accounts. These
loans have a range of terms such as credit limits, interest rates,
fees and payment structures, which can be adjusted over time
based on new information about cardmembers and in
accordance with applicable regulations and the respective
product’s terms and conditions. Cardmembers holding
revolving loans are typically required to make monthly
payments greater than or equal to certain pre-established
amounts. The amounts that cardmembers choose to revolve
are subject to finance charges. When cardmembers fall behind
their required payments, their accounts will be monitored.
Cardmember loans are presented on the Consolidated
Balance Sheets net of reserves for losses and unamortized net
card fees and include accrued interest receivable and fees. The
Company’s policy generally is to cease accruing for interest
receivable on a cardmember loan at the time the account is
written off. The Company establishes reserves for interest that
the Company believes will not be collected.
Loans as of December 31, 2010 and 2009 consisted of:
(Millions) 2010 2009
U.S. Card Services
(a)
$ 51,565 $ 23,507
International Card Services 9,255 9,241
Global Commercial Services 30 24
Cardmember loans, gross
(b)
60,850 32,772
Less: Cardmember loans reserve for losses 3,646 3,268
Cardmember loans, net $ 57,204 $ 29,504
Other loans, net
(c)
$ 412 $ 506
(a) As of December 31, 2010, includes approximately $34.7 billion of gross
cardmember loans available to settle obligations of a consolidated VIE. As of
December 31, 2009, includes approximately $8.0 billion for an undivided,
pro-rata interest in an unconsolidated VIE (historically referred to as
“seller’s interest”). Refer to Note 7 for additional details.
(b) Cardmember loan balance is net of unamortized net card fees of $134 million
and $114 million as of December 31, 2010 and 2009, respectively.
(c) Other loans primarily represent small business installment loans, a store card
portfolio whose billed business is not processed on the Company’s network and
small business loans associated with the acquisition of CPS.
CARDMEMBER LOANS AND CARDMEMBER
RECEIVABLES AGING
Generally a cardmember account is considered past due if
payment is not received within 30 days after the billing
statement date. The following table represents the aging of
cardmember loans and receivables as of December 31, 2010:
(Millions) Current
30-59
Days
Past
Due
60-89
Days
Past
Due
90+
Days
Past
Due Total
Cardmember Loans:
U.S. Card Services $ 50,508 $ 282 $ 226 $ 549 $ 51,565
International Card
Services 9,044 66 48 97 9,255
Cardmember
Receivables:
U.S. Card Services $ 18,864 $ 104 $ 55 $ 132 $ 19,155
International Card
Services
(a)
(b) (b) (b) 64 6,673
Global Commercial
Services
(a)
(b) (b) (b) 96 11,259
(a) For cardmember receivables in International Card Services and Global
Commercial Services, delinquency data is tracked based on days past
billing status rather than days past due. A cardmember account is
considered 90 days past billing if payment has not been received within
90 days of the cardmember’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 cardmember
receivable balance is considered as 90 days past billing. These amounts
are shown above as 90+ Days Past Due for presentation purposes.
(b) Historically, data for periods prior to 90 days past billing are not available
due to system constraints. Therefore, it has not been utilized for risk
management purposes. The balances that are current — 89 days past due
can be derived as the difference between the Total and the 90+ Days Past
Due balances.
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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS