American Express 2015 Annual Report Download - page 126

Reserves for Card Member loans and receivables modified as TDRs are determined as the difference between the
cash flows expected to be received from the Card Member (taking into consideration the probability of subsequent
defaults), discounted at the original effective interest rates, and the carrying value of the related Card Member loan or
receivable balance. The Company determines the original effective interest rate as the interest rate in effect prior to
the imposition of any penalty interest rate. All changes in the impairment measurement are included in the Provisions
for losses in the Consolidated Statements of Income.
The following tables provide additional information with respect to the Company’s impaired Card Member loans
and receivables. Impaired Card Member loans are not significant for GCS and impaired Card Member receivables are
not significant for International Card Services (ICS) and GCS; therefore, these segments are not included in the
following tables.
As of December 31, 2015
Accounts Classified as a
TDR (c)
(Millions)
Over 90
days Past
Due &
Accruing
Interest (a)
Non-
Accruals (b)
In
Program (d)
Out of
Program (e)
Total
Impaired
Balance
Unpaid
Principal
Balance Allowance for TDRs
Card Member Loans:
U.S. Card Services ................... $164 $150 $ 172 $107 $593 $548 $53
International Card Services ............ 52 — — — 52 51 —
Card Member Receivables:
U.S. Card Services ................... — — 27 6 33 33 20
Total ............................... $216 $150 $199 $ 113 $678 $632 $ 73
As of December 31, 2014
(Millions)
Over 90
days Past
Due &
Accruing
Interest (a)
Non-
Accruals (b)
In
Program
TDRs (c) (d)
Total
Impaired
Balance
Unpaid
Principal
Balance Allowance for TDRs
Card Member Loans:
U.S. Card Services ................... $161 $241 $286 $688 $646 $ 67
International Card Services ............ 57 — — 57 56 —
Card Member Receivables:
U.S. Card Services ................... — — 48 48 48 35
Total ............................... $218 $241 $334 $793 $750 $102
As of December 31, 2013
(Millions)
Over 90
days Past
Due &
Accruing
Interest (a)
Non-
Accruals (b)
In
Program
TDRs (c) (d)
Total
Impaired
Balance
Unpaid
Principal
Balance Allowance for TDRs
Card Member Loans:
U.S. Card Services ................... $167 $294 $ 351 $ 812 $ 775 $ 78
International Card Services ............ 54 4 5 63 62 —
Card Member Receivables:
U.S. Card Services ................... — — 50 50 49 38
Total ............................... $221 $298 $406 $925 $886 $116
(a) The Company’s policy is generally to accrue interest through the date of write-off (typically 180 days past due). The Company establishes
reserves for interest that it believes will not be collected. Amounts presented exclude loans classified as a TDR.
(b) Non-accrual loans not in modification programs primarily include certain Card Member loans placed with outside collection agencies for which
the Company has ceased accruing interest.
(c) Accounts classified as a TDR include $20 million, $26 million and $29 million that are over 90 days past due and accruing interest and $18
million, $34 million and $43 million that are non-accrual as of December 31, 2015, 2014 and 2013, respectively.
(d) In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
(e) Out of Program TDRs include $84 million of Card Member accounts that have successfully completed a modification program and $29 million
of Card Member accounts that were not in compliance with the terms of the modification programs.
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