American Express 2011 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2011 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 113

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 with the Company. 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 revised
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 are monitored.
Cardmember loans are presented on the Consolidated Balance
Sheets net of reserves for losses and unamortized net card fees
and include accrued interest and fees receivable. 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, 2011 and 2010 consisted of:
(Millions) 2011 2010
U.S. Card Services(a) $ 53,686 $ 51,565
International Card Services 8,901 9,255
Global Commercial Services 34 30
Cardmember loans, gross(b) 62,621 60,850
Less: Cardmember loans reserves for losses 1,874 3,646
Cardmember loans, net $ 60,747 $ 57,204
Other loans, net(c) $ 419 $ 412
(a) Includes approximately $33.8 billion and $34.7 billion of gross cardmember
loans available to settle obligations of a consolidated VIE as of December 31,
2011 and 2010, respectively.
(b) Cardmember loan balance includes unamortized net card fees of $140
million and $134 million as of December 31, 2011 and 2010, respectively.
(c) Other loans primarily represent small business installment loans and a store
card portfolio whose billed business is not processed on the Company’s
network. Other loans are presented net of reserves for losses of $18 million
and $24 million as of December 31, 2011 and 2010, respectively.
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, 2011 and 2010:
2011 (Millions) Current
30-59
Days
Past
Due
60-89
Days
Past
Due
90+
Days
Past
Due Total
Cardmember Loans:
U.S. Card Services $ 52,930 $ 218 $ 165 $ 373 $ 53,686
International Card
Services 8,748 52 32 69 8,901
Cardmember
Receivables:
U.S. Card Services $ 20,246 $ 122 $ 81 $ 196 $ 20,645
International Card
Services(a) (b) (b) (b) 63 7,222
Global Commercial
Services(a) (b) (b) (b) 109 12,829
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 (ICS) and Global
Commercial Services (GCS), 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 to 89 days past due can
be derived as the difference between the Total and the 90+ Days Past Due
balances.
66