American Express 2011 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 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
The following table provides information with respect to the
Company’s interest income recognized and average balances of
impaired cardmember loans and receivables for the years ended
December 31:
2011
(Millions)
Interest
Income
Recognized
Average
Balance
U.S. Card Services – Cardmember Loans $ 67 $ 1,498
International Card Services – Cardmember Loans 26 98
U.S. Card Services – Cardmember Receivables – 145
Total(a) $ 93 $ 1,741
2010
(Millions)
Interest
Income
Recognized
Average
Balance
U.S. Card Services – Cardmember Loans $ 101 $ 2,256
International Card Services – Cardmember Loans 30 142
U.S. Card Services – Cardmember Receivables – 110
Total(a) $ 131 $ 2,508
(a) These disclosures are not significant for cardmember receivables in ICS and
GCS.
CARDMEMBER LOANS AND RECEIVABLES MODIFIED
AS TDRS
The following table provides additional information with respect
to the cardmember loans and receivables modified as TDRs
during the year ended December 31, 2011:
(Accounts in thousands,
Dollars in millions)
Number of
Accounts
Aggregated
Pre-
Modification
Outstanding
Balances(a)(b)
Aggregated
Post-
Modification
Outstanding
Balances(a)(b)
Troubled Debt
Restructurings:
U.S. Card Services –
Cardmember Loans 147 $ 1,110 $ 1,064
U.S. Card Services –
Cardmember Receivables 50 402 388
Total(c) 197 $ 1,512 $ 1,452
(a) The outstanding balance includes principal and accrued interest.
(b) The difference between the pre- and post-modification outstanding balances
is solely attributable to amounts charged off for cardmember loans and
receivables being resolved through the Company’s short-term settlement
programs.
(c) These disclosures are not significant for cardmember loans modifications in
ICS.
As described previously, the Company’s cardmember loans and
receivables modification programs may include (i) reducing the
interest rate, (ii) reducing the outstanding balance,
(iii) suspending delinquency fees and (iv) placing the
cardmember on a fixed payment plan not exceeding 60 months.
Upon entering the modification program, the cardmember’s
ability to make future purchases is either cancelled, or in certain
cases suspended until the cardmember successfully exits the TDR
program.
The Company has evaluated the primary financial effects of the
impact of the changes to an account upon modification as
follows:
폷Interest Rate Reduction: For the year ended December 31,
2011, the average interest rate reduction was 11 percentage
points, which did not have a significant impact on interest and
fees on loans in the Consolidated Statements of Income. The
Company does not offer interest rate reduction programs for
USCS cardmember receivables as these receivables are
non-interest bearing.
폷Outstanding Balance Reduction: The table above presents the
financial effects on the Company as a result of reducing the
outstanding balance for Short-Term Settlement Programs. The
difference between the pre- and post-modification outstanding
balances represents the amount that either has been written off
or will be written off upon successful completion of the
settlement program.
폷Payment Term Extension: For the year ended December 31,
2011, the average payment term extension was approximately
15 months for USCS cardmember receivables. For USCS
cardmember loans, there have been no extension of payment
terms.
The following table provides information with respect to the
cardmember loans and receivables modified as TDRs on which
there was a default within 12 months of modification during the
year ended December 31, 2011. A cardmember will default from
a modification program after between one and up to three
consecutive missed payments, depending on the terms of the
modification program.
(Accounts in thousands,
Dollars in millions)
Number of
Accounts
Aggregated
Outstanding
Balances
Upon Default(a)
Troubled Debt Restructurings
That Subsequently Defaulted:
U.S. Card Services –
Cardmember Loans 46 $ 343
U.S. Card Services –
Cardmember Receivables 645
Total(b) 52 $ 388
(a) The outstanding balance includes principal and accrued interest.
(b) During the periods presented, the ICS cardmember loan
modifications on which there was a default from the modification
program within 12 months of modification were not significant.
69