American Express 2012 Annual Report Download - page 24

AMERICAN EXPRESS COMPANY
2012 FINANCIAL REVIEW
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31,
(Millions, except percentages and where indicated) 2012 2011 2010
Change
2012 vs. 2011
Change
2011 vs. 2010
Worldwide cardmember receivables
Total receivables (billions) $ 42.8 $ 40.9 $ 37.3 5 % 10 %
Loss reserves
Beginning balance $ 438 $ 386 $ 546 13 % (29)%
Provisions(a) 601 603 439 — % 37 %
Other additions(b) 141 167 156 (16)% 7 %
Net write-offs(c) (640) (560) (598) 14 % (6)%
Other deductions(d) (112) (158) (157) (29)% 1 %
Ending balance $ 428 $ 438 $ 386 (2)% 13 %
% of receivables 1.0% 1.1% 1.0%
Net write-off rate — principal — USCS(e) 1.9% 1.7% 1.6%
Net write-off rate — principal and fees — USCS(e) 2.1% 1.9% 1.8%
30 days past due as a % of total — USCS 1.8% 1.9% 1.5%
Net loss ratio as a % of charge volume — ICS/GCS 0.10% 0.09% 0.16%
90 days past billing as a % of total — ICS/GCS 0.9% 0.9% 0.9%
Worldwide cardmember loans
Total loans (billions) $ 65.2 $ 62.6 $ 60.9 4 % 3 %
Loss reserves
Beginning balance $ 1,874 $ 3,646 $ 3,268 (49)% 12 %
Adoption of GAAP consolidation standard(f) —— 2,531 — % #
Provisions (a) 1,031 145 1,445 # (90)%
Other additions(b) 118 108 82 9 % 32 %
Net write-offs — principal(c) (1,280) (1,720) (3,260) (26)% (47)%
Net write-offs — interest and fees(c) (157) (201) (359) (22)% (44)%
Other deductions(d) (115) (104) (61) 11 % 70 %
Ending balance $ 1,471 $ 1,874 $ 3,646 (22)% (49)%
Ending Reserves — principal $ 1,423 $ 1,818 $ 3,551 (22)% (49)%
Ending Reserves — interest and fees $48$ 56 $ 95 (14)% (41)%
%ofloans 2.3% 3.0% 6.0%
%ofpastdue 182% 206% 287%
Average loans (billions) $ 61.5 $ 59.1 $ 58.4 4 % 1 %
Net write-off rate — principal only(e) 2.1% 2.9% 5.6%
Net write-off rate — principal, interest and fees(e) 2.3% 3.3% 6.2%
30 days past due as a% of total 1.2% 1.5% 2.1%
Net interest income divided by average loans(g) 7.5% 7.4% 8.0%
Net interest yield on cardmember loans(g) 9.1% 9.1% 9.7%
# denotes a variance greater than 100 percent.
(a) Provisions for principal (resulting from authorized transactions) and fee reserve components.
(b) Provisions for unauthorized transactions.
(c) Consists of principal (resulting from authorized transactions) interest and/or fees, less recoveries.
(d) For cardmember receivables, includes net write-offs resulting from unauthorized transactions of $(141) million, $(161) million and $(148) million for the years ended
December 31, 2012, 2011 and 2010, respectively; foreign currency translation adjustments of $2 million, $(2) million and $1 million for the years ended December 31,
2012, 2011 and 2010, respectively; cardmember bankruptcy reserves of $18 million, nil and nil for the years ended December 31, 2012, 2011 and 2010, respectively;
and other items of $9 million, $5 million and $(10) million for the years ended December 31, 2012, 2011 and 2010, respectively. For cardmember loans, includes net
write-offs for unauthorized transactions of $(116) million, $(103) million and $(78) million for the years ended December 31, 2012, 2011 and 2010, respectively;
foreign currency translation adjustments of $7 million, $(2) million and $23 million for the years ended December 31, 2012, 2011 and 2010, respectively; cardmember
bankruptcy reserves of $4 million, nil and nil for the years ended December 31, 2012, 2011 and 2010, respectively; and other items of $(10) million, $1 million and
$(6) million for the years ended December 31, 2012, 2011 and 2010, respectively. Cardmember bankruptcy reserves were classified as other liabilities in prior periods.
(e) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition,
because the Company’s practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest
and/or fees is also presented.
(f) Upon the adoption of accounting standards related to transfers of financial assets and consolidation of VIEs, which resulted in the consolidationoftheAmerican
Express Credit Account Master Trust beginning January 1, 2010, $29.0 billion of additional cardmember loans along with a $2.5 billion loan loss reserve were
recorded on the Company’s Consolidated Balance Sheets.
(g) Refer to the following table for the calculation of net interest yield on cardmember loans, a non-GAAP measure, net interest income divided by average loans, a GAAP
measure, and the Company’s rationale for presenting net interest yield on cardmember loans.
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