American Express 2015 Annual Report Download - page 140

NOTE 10
OTHER LIABILITIES
The following is a summary of Other liabilities as of December 31:
(Millions) 2015 2014
Membership Rewards liability ........................................................... $ 6,721 $ 6,521
Employee-related liabilities (a) ............................................................ 2,097 2,258
Card Member rebate and reward accruals (b) ............................................... 2,238 2,073
Deferred card and other fees, net ........................................................ 1,343 1,308
Book overdraft balances ................................................................ 409 647
Other (c) .............................................................................. 4,764 5,044
Total ................................................................................. $17,572 $17,851
(a) Employee-related liabilities include employee benefit plan obligations and incentive compensation.
(b) Card Member rebate and reward accruals include payments to third-party reward partners and cash-back reward costs.
(c) Other includes accruals for general operating expenses, client incentives, merchant rebates, payments to third-party card-issuing partners,
advertising and promotion, restructuring and reengineering reserves, QAH unfunded commitments and derivatives.
MEMBERSHIP REWARDS
The Membership Rewards program allows enrolled Card Members to earn points that can be redeemed for a
broad range of rewards including travel, entertainment, retail certificates and merchandise. The Company records a
balance sheet liability that represents management’s best estimate of the cost of points earned that are expected to
be redeemed in the future. The weighted average cost (WAC) per point and the Ultimate Redemption Rate (URR) are
key assumptions used to estimate the Membership Rewards liability.
The expense for Membership Rewards points is included in marketing, promotion, rewards and Card Member
services expenses. The Company periodically evaluates its liability estimation process and assumptions based on
developments in redemption patterns, cost per point redeemed, partner contract changes and other factors.
DEFERRED CARD AND OTHER FEES, NET
The carrying amount of deferred card and other fees, net of deferred direct acquisition costs and reserves for
membership cancellations as of December 31, was as follows:
(Millions) 2015 2014
Deferred card and other fees (a) ............................................................ $1,652 $ 1,615
Deferred direct acquisition costs .......................................................... (173) (176)
Reserves for membership cancellations .................................................... (136) (131)
Deferred card and other fees, net ........................................................ $1,343 $1,308
(a) Includes deferred fees for Membership Rewards program participants.
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