American Express 2015 Annual Report Download - page 94

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
We have identified both on- and off-balance sheet transactions, arrangements, obligations and other relationships
that may have a material current or future effect on our financial condition, changes in financial condition, results of
operations, or liquidity and capital resources.
CONTRACTUAL OBLIGATIONS
The table below identifies transactions that represent our contractually committed future obligations. Purchase
obligations include our agreements to purchase goods and services that are enforceable and legally binding and that
specify significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price
provisions; and the approximate timing of the transaction.
TABLE 27: COMMITTED FUTURE OBLIGATIONS BY YEAR
Payments due by year (a)
(Millions) 2016 2017-2018 2019-2020 2021 and thereafter Total
Long-term debt .................................................. $6,814 $28,608 $10,262 $ 3,176 $48,860
Interest payments on long-term debt (b) ............................. 864 1,016 331 1,360 3,571
Certificates of deposit ............................................ 2,493 6,810 4,841 — 14,144
Other long-term liabilities (c) ....................................... 184 70 17 22 293
Operating lease obligations ........................................ 165 278 187 863 1,493
Purchase obligations (d) ........................................... 397 165 61 30 653
Cobrand obligations (e) ............................................ 212 138 63 204 617
Total ........................................................... $11,129 $37,085 $15,762 $5,655 $ 69,631
(a) The table above excludes approximately $0.9 billion of tax liabilities related to the uncertainty in income taxes as inherent complexities and the
number of tax years currently open for examination in multiple jurisdictions do not permit reasonable estimates of payments, if any, to be made
over a range of years.
(b) Estimated interest payments were calculated using the effective interest rate in place as of December 31, 2015, and includes the effect of
existing interest rate swaps. Actual cash flows may differ from estimated payments.
(c) As of December 31, 2015, there were no minimum required contributions, and no contributions are currently planned, for the U.S. American
Express Retirement Plan. For the U.S. American Express Retirement Restoration Plan and non-U.S. defined benefit pension and postretirement
benefit plans, contributions in 2016 are anticipated to be approximately $44 million, and this amount has been included within other long-term
liabilities. Remaining obligations under defined benefit pension and postretirement benefit plans aggregating $726 million have not been
included in the table above as the timing of such obligations is not determinable. Additionally, other long-term liabilities do not include $6.7
billion of Membership Rewards liabilities, which are not considered long-term liabilities as Card Members in good standing can redeem points
immediately, without restrictions, and because the timing of point redemption is not determinable.
(d) The purchase obligation amounts represent either the early termination fees or non-cancelable minimum contractual obligations, as applicable,
by period under contracts that were in effect as of December 31, 2015.
(e) Represents obligations to make payments under contractual agreements with certain cobrand partners. We expect to fully satisfy these
obligations over the remaining term of these agreements as part of the ongoing operations of our business.
In addition to the contractual obligations noted in Table 27, we have off-balance sheet arrangements that include
guarantees, indemnifications and certain other off-balance sheet arrangements.
GUARANTEES
Our principal guarantees are associated with Card Member services to enhance the value of owning an American
Express card. As of December 31, 2015, we had guarantees totaling approximately $48 billion related to Card Member
protection plans, as well as other guarantees and indemnifications provided in the ordinary course of business. Refer
to Note 16 to the “Consolidated Financial Statements” for further discussion regarding our guarantees.
CERTAIN OTHER OFF-BALANCE SHEET ARRANGEMENTS
As of December 31, 2015, we had approximately $297 billion of unused credit available to Card Members as part of
established lending product agreements. Total unused credit available to Card Members does not represent potential
future cash requirements, as a significant portion of this unused credit will likely not be drawn. Our charge card products
generally have no pre-set limit, and therefore are not reflected in unused credit available to Card Members.
To mitigate counterparty credit risk related to derivatives, we accepted non-cash collateral in the form of security
interests in U.S. Treasury securities from its derivatives counterparties with a fair value of nil and $91 million as of
December 31, 2015 and 2014, respectively, none of which was sold or repledged.
Refer to Notes 7 and 13 to the “Consolidated Financial Statements” for discussion regarding our other off-balance
sheet arrangements.
83