New York
|
13-4922250
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
200 Vesey Street, New York, New York
|
10285
|
|
(Address of principal executive offices)
|
(Zip Code)
|
None
|
Large accelerated filer
|
Accelerated filer
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
Smaller reporting company
Emerging growth company
|
Class
|
Outstanding at April 18, 2018
|
||
Common Shares (par value $0.20 per share)
|
860,362,205 Shares
|
Part I.
|
Page No.
|
|||||
Item 1.
|
||||||
1
|
||||||
2
|
||||||
3
|
||||||
4
|
||||||
5
|
||||||
Item 2.
|
30
|
|||||
Item 3.
|
57
|
|||||
Item 4.
|
57
|
|||||
Part II.
|
||||||
Item 1.
|
60
|
|||||
Item 1A.
|
60
|
|||||
Item 2.
|
61
|
|||||
Item 5.
|
62
|
|||||
Item 6.
|
62
|
|||||
63
|
||||||
E-1
|
Three Months Ended March 31 (Millions, except per share amounts)
|
2018
|
2017
|
||||||
Revenues
|
||||||||
Non-interest revenues
|
||||||||
Discount revenue
|
$
|
5,889
|
$
|
5,387
|
||||
Net card fees
|
830
|
748
|
||||||
Other fees and commissions
|
781
|
711
|
||||||
Other
|
377
|
361
|
||||||
Total non-interest revenues
|
7,877
|
7,207
|
||||||
Interest income
|
||||||||
Interest on loans
|
2,326
|
1,862
|
||||||
Interest and dividends on investment securities
|
21
|
23
|
||||||
Deposits with banks and other
|
115
|
60
|
||||||
Total interest income
|
2,462
|
1,945
|
||||||
Interest expense
|
||||||||
Deposits
|
270
|
149
|
||||||
Long-term debt and other
|
351
|
294
|
||||||
Total interest expense
|
621
|
443
|
||||||
Net interest income
|
1,841
|
1,502
|
||||||
Total revenues net of interest expense
|
9,718
|
8,709
|
||||||
Provisions for losses
|
||||||||
Charge card
|
242
|
213
|
||||||
Card Member loans
|
499
|
337
|
||||||
Other
|
34
|
23
|
||||||
Total provisions for losses
|
775
|
573
|
||||||
Total revenues net of interest expense after provisions for losses
|
8,943
|
8,136
|
||||||
Expenses
|
||||||||
Marketing and business development
|
1,345
|
1,285
|
||||||
Card Member rewards
|
2,347
|
2,061
|
||||||
Card Member services
|
409
|
317
|
||||||
Salaries and employee benefits
|
1,326
|
1,264
|
||||||
Other, net
|
1,434
|
1,370
|
||||||
Total expenses
|
6,861
|
6,297
|
||||||
Pretax income
|
2,082
|
1,839
|
||||||
Income tax provision
|
448
|
588
|
||||||
Net income
|
$
|
1,634
|
$
|
1,251
|
||||
Earnings per Common Share (Note 15):(a)
|
||||||||
Basic
|
$
|
1.86
|
$
|
1.36
|
||||
Diluted
|
$
|
1.86
|
$
|
1.35
|
||||
Average common shares outstanding for earnings per common share:
|
||||||||
Basic
|
859
|
899
|
||||||
Diluted
|
861
|
903
|
||||||
Cash dividends declared per common share
|
$
|
0.35
|
$
|
0.32
|
(a) |
Represents net income less (i) earnings allocated to participating share awards of $13 million and $10 million for the three months ended March 31, 2018 and 2017, respectively, and (ii) dividends on preferred shares of $21 million for both the three months ended March 31, 2018 and 2017.
|
Three Months Ended March 31 (Millions)
|
2018
|
2017
|
||||||
Net income
|
$
|
1,634
|
$
|
1,251
|
||||
Other comprehensive income (loss):
|
||||||||
Net unrealized debt securities (losses) gains, net of tax
|
(11
|
)
|
6
|
|||||
Foreign currency translation adjustments, net of tax
|
30
|
316
|
||||||
Net unrealized pension and other postretirement benefits, net of tax
|
28
|
(8
|
)
|
|||||
Other comprehensive income
|
47
|
314
|
||||||
Comprehensive income
|
$
|
1,681
|
$
|
1,565
|
March 31,
|
December 31,
|
|||||||
(Millions, except share data)
|
2018
|
2017
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
||||||||
Cash and due from banks
|
$
|
3,627
|
$
|
5,148
|
||||
Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2018, $49; 2017, $48)
|
27,315
|
27,709
|
||||||
Short-term investment securities
|
150
|
70
|
||||||
Total cash and cash equivalents
|
31,092
|
32,927
|
||||||
Accounts receivable
|
||||||||
Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2018, $7,807; 2017, $8,919), less reserves: 2018, $565; 2017, $521
|
53,676
|
53,526
|
||||||
Other receivables, less reserves: 2018, $31; 2017, $31
|
3,194
|
3,209
|
||||||
Loans
|
||||||||
Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2018, $24,058; 2017, $25,695), less reserves: 2018, $1,786; 2017, $1,706
|
71,034
|
71,693
|
||||||
Other loans, less reserves: 2018, $91; 2017, $80
|
2,872
|
2,607
|
||||||
Investment securities
|
3,388
|
3,159
|
||||||
Premises and equipment, less accumulated depreciation and amortization: 2018, $5,732; 2017, $5,455
|
4,271
|
4,329
|
||||||
Other assets (includes restricted cash of consolidated variable interest entities: 2018, $147; 2017, $62)
|
10,429
|
9,746
|
||||||
Total assets
|
$
|
179,956
|
$
|
181,196
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Customer deposits
|
$
|
66,665
|
$
|
64,452
|
||||
Travelers Cheques and other prepaid products
|
2,435
|
2,555
|
||||||
Accounts payable
|
14,038
|
14,657
|
||||||
Short-term borrowings
|
1,852
|
3,278
|
||||||
Long-term debt (includes debt issued by consolidated variable interest entities: 2018, $15,800; 2017, $18,560)
|
52,461
|
55,804
|
||||||
Other liabilities
|
22,892
|
22,189
|
||||||
Total liabilities
|
$
|
160,343
|
$
|
162,935
|
||||
Contingencies (Note 8)
|
||||||||
Shareholders’ Equity
|
||||||||
Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of March 31, 2018 and December 31, 2017
|
―
|
―
|
||||||
Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 860 million shares as of March 31, 2018 and 859 million shares as of December 31, 2017
|
172
|
172
|
||||||
Additional paid-in capital
|
12,225
|
12,210
|
||||||
Retained earnings
|
9,597
|
8,307
|
||||||
Accumulated other comprehensive loss
|
||||||||
Net unrealized debt securities losses, net of tax of: 2018, $(2); 2017, $1
|
(11
|
)
|
―
|
|||||
Foreign currency translation adjustments, net of tax of: 2018, $(415); 2017,$(363)
|
(1,931
|
)
|
(1,961
|
)
|
||||
Net unrealized pension and other postretirement benefits, net of tax of: 2018, $(176); 2017, $(179)
|
(439
|
)
|
(467
|
)
|
||||
Total accumulated other comprehensive loss
|
(2,381
|
)
|
(2,428
|
)
|
||||
Total shareholders’ equity
|
19,613
|
18,261
|
||||||
Total liabilities and shareholders’ equity
|
$
|
179,956
|
$
|
181,196
|
Three Months Ended March 31 (Millions)
|
2018
|
2017
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
1,634
|
$
|
1,251
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provisions for losses
|
775
|
573
|
||||||
Depreciation and amortization
|
348
|
296
|
||||||
Deferred taxes and other
|
(254
|
)
|
18
|
|||||
Stock-based compensation
|
84
|
89
|
||||||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
|
||||||||
Other receivables
|
122
|
786
|
||||||
Other assets
|
(85
|
)
|
351
|
|||||
Accounts payable and other liabilities
|
(431
|
)
|
(2,072
|
)
|
||||
Travelers Cheques and other prepaid products
|
(130
|
)
|
(132
|
)
|
||||
Net cash provided by operating activities
|
2,063
|
1,160
|
||||||
Cash Flows from Investing Activities
|
||||||||
Maturities and redemptions of investment securities
|
886
|
860
|
||||||
Purchases of investments
|
(1,215
|
)
|
(1,294
|
)
|
||||
Net decrease in Card Member receivables and loans(a)
|
348
|
1,450
|
||||||
Purchase of premises and equipment, net of sales: 2018, nil; 2017, nil
|
(237
|
)
|
(277
|
)
|
||||
Acquisitions/dispositions, net of cash acquired
|
(475
|
)
|
(28
|
)
|
||||
Net cash (used in) provided by investing activities
|
(693
|
)
|
711
|
|||||
Cash Flows from Financing Activities
|
||||||||
Net increase in customer deposits
|
2,206
|
735
|
||||||
Net decrease in short-term borrowings
|
(1,489
|
)
|
(1,941
|
)
|
||||
Proceeds from long-term borrowings
|
3,984
|
8,420
|
||||||
Payments of long-term borrowings
|
(7,203
|
)
|
(3,801
|
)
|
||||
Issuance of American Express common shares
|
11
|
31
|
||||||
Repurchase of American Express common shares
|
(134
|
)
|
(926
|
)
|
||||
Dividends paid
|
(324
|
)
|
(313
|
)
|
||||
Net cash (used in) provided by financing activities
|
(2,949
|
)
|
2,205
|
|||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
(178
|
)
|
107
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
(1,757
|
)
|
4,183
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
33,264
|
25,494
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
31,507
|
$
|
29,677
|
Mar-18 | Dec-17 |
Mar-17
|
Dec-16
|
|||||||||||||
Cash and cash equivalents per Consolidated Balance Sheets
|
$
|
31,092
|
$
|
32,927
|
$
|
29,366
|
$
|
25,208
|
||||||||
Restricted cash included in Other assets per Consolidated Balance Sheets
|
415
|
337
|
311
|
286
|
||||||||||||
Total cash, cash equivalents and restricted cash
|
$
|
31,507
|
$
|
33,264
|
$
|
29,677
|
$
|
25,494
|
Increase (Decrease)
|
||||||||||||||||||||||||
Three months ended
|
Year Ended December
|
|||||||||||||||||||||||
(Millions)
|
December 31, 2017
|
September 30, 2017
|
June 30, 2017
|
March 31, 2017
|
2017
|
2016
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
Discount revenue
|
$
|
981
|
$
|
930
|
$
|
928
|
$
|
868
|
$
|
3,707
|
$
|
3,699
|
||||||||||||
Other
|
(78
|
)
|
(71
|
)
|
(64
|
)
|
(65
|
)
|
(278
|
)
|
(253
|
)
|
||||||||||||
Expenses
|
||||||||||||||||||||||||
Marketing and business development
|
617
|
591
|
593
|
549
|
2,350
|
2,420
|
||||||||||||||||||
Card Member rewards
|
$
|
286
|
$
|
268
|
$
|
271
|
$
|
254
|
$
|
1,079
|
$
|
1,026
|
(Millions)
|
2018
|
2017
|
||||||
U.S. Consumer Services(a)
|
$
|
52,655
|
$
|
53,668
|
||||
International Consumer and Network Services
|
8,667
|
8,651
|
||||||
Global Commercial Services
|
11,498
|
11,080
|
||||||
Card Member loans
|
72,820
|
73,399
|
||||||
Less: Reserve for losses
|
1,786
|
1,706
|
||||||
Card Member loans, net
|
$
|
71,034
|
$
|
71,693
|
||||
Other loans, net(b)
|
$
|
2,872
|
$
|
2,607
|
(a) |
Includes approximately $24.1 billion and $25.7 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of March 31, 2018 and December 31, 2017, respectively. The balance as of March 31, 2018 also includes the acquired Hilton portfolio (refer to Note 2).
|
(b) |
Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $91 million and $80 million as of March 31, 2018 and December 31, 2017, respectively.
|
(Millions)
|
2018
|
2017
|
||||||
U.S. Consumer Services (a)
|
$
|
11,659
|
$
|
13,143
|
||||
International Consumer and Network Services
|
7,071
|
7,803
|
||||||
Global Commercial Services
|
35,511
|
33,101
|
||||||
Card Member receivables
|
54,241
|
54,047
|
||||||
Less: Reserve for losses
|
565
|
521
|
||||||
Card Member receivables, net
|
$
|
53,676
|
$
|
53,526
|
||||
Other receivables, net (b)
|
$
|
3,194
|
$
|
3,209
|
(a) |
Includes $7.8 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of March 31, 2018 and December 31, 2017, respectively.
|
(b) |
Other receivables primarily represent amounts related to (i) GNS partners for items such as royalty and franchise fees, (ii) tax-related receivables, (iii) certain merchants for billed discount revenue, and (iv) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $31 million and $31 million as of March 31, 2018 and December 31, 2017, respectively.
|
2018 (Millions)
|
Current
|
30-59 Days Past Due
|
60-89 Days Past Due
|
90+ Days Past Due
|
Total
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
51,922
|
$
|
201
|
$
|
156
|
$
|
376
|
$
|
52,655
|
||||||||||
International Consumer and Network Services
|
8,524
|
46
|
31
|
66
|
8,667
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
11,278
|
45
|
33
|
71
|
11,427
|
|||||||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
1
|
71
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
U.S. Consumer Services
|
11,510
|
48
|
35
|
66
|
11,659
|
|||||||||||||||
International Consumer and Network Services
|
6,967
|
33
|
22
|
49
|
7,071
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
$
|
15,931
|
$
|
93
|
$
|
68
|
$
|
126
|
$
|
16,218
|
||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
$
|
163
|
$
|
19,293
|
|||||||||||||
2017 (Millions)
|
Current
|
30-59 Days Past Due
|
60-89 Days Past Due
|
90+ Days Past Due
|
Total
|
|||||||||||||||
Card Member Loans:
|
||||||||||||||||||||
U.S. Consumer Services
|
$
|
52,961
|
$
|
201
|
$
|
162
|
$
|
344
|
$
|
53,668
|
||||||||||
International Consumer and Network Services
|
8,530
|
37
|
28
|
56
|
8,651
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
10,892
|
43
|
31
|
59
|
11,025
|
|||||||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
―
|
55
|
|||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||
U.S. Consumer Services
|
12,993
|
53
|
33
|
64
|
13,143
|
|||||||||||||||
International Consumer and Network Services
|
7,703
|
29
|
21
|
50
|
7,803
|
|||||||||||||||
Global Commercial Services
|
||||||||||||||||||||
Global Small Business Services
|
$
|
15,868
|
$
|
91
|
$
|
54
|
$
|
106
|
$
|
16,119
|
||||||||||
Global Corporate Payments(a)
|
(b)
|
(b)
|
(b)
|
$
|
148
|
$
|
16,982
|
(a) |
For Global Corporate Payments (GCP) Card Member loans and receivables in Global Commercial Services (GCS), delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan and receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
|
(b) |
Delinquency data for periods other than 90 days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.
|
2018
|
2017
|
|||||||||||||||||||||||
Net Write-Off Rate
|
Net Write-Off Rate
|
|||||||||||||||||||||||
Principal Only(a)
|
Principal, Interest & Fees(a)
|
30+ Days Past Due as a % of Total
|
Principal Only(a)
|
Principal, Interest & Fees(a)
|
30+ Days Past Due as a % of Total
|
|||||||||||||||||||
Card Member Loans:
|
||||||||||||||||||||||||
U.S. Consumer Services
|
2.0
|
%
|
2.4
|
%
|
1.4
|
%
|
1.7
|
%
|
2.0
|
%
|
1.2
|
%
|
||||||||||||
International Consumer and Network Services
|
2.1
|
%
|
2.6
|
%
|
1.6
|
%
|
2.0
|
%
|
2.5
|
%
|
1.7
|
%
|
||||||||||||
Global Small Business Services
|
1.6
|
%
|
1.9
|
%
|
1.3
|
%
|
1.6
|
%
|
1.8
|
%
|
1.2
|
%
|
||||||||||||
Card Member Receivables:
|
||||||||||||||||||||||||
U.S. Consumer Services
|
1.3
|
%
|
1.5
|
%
|
1.3
|
%
|
1.5
|
%
|
1.7
|
%
|
1.3
|
%
|
||||||||||||
International Consumer and Network Services
|
2.0
|
%
|
2.2
|
%
|
1.5
|
%
|
2.1
|
%
|
2.3
|
%
|
1.5
|
%
|
||||||||||||
Global Small Business Services
|
1.7
|
%
|
1.9
|
%
|
1.8
|
%
|
1.8
|
%
|
2.0
|
%
|
1.6
|
%
|
2018 | 2017 | |||||||||||||||
Net Loss Ratio as a % of Charge Volume
|
90+ Days Past Billing as a % of Receivables
|
Net Loss Ratio as a % of Charge Volume
|
90+ Days Past Billing as a % of Receivables
|
|||||||||||||
Card Member Receivables:
|
||||||||||||||||
Global Corporate Payments
|
0.10
|
%
|
0.8
|
%
|
0.11
|
%
|
0.7
|
%
|
(a) |
We present 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 we consider uncollectible interest and/or fees in estimating its reserves for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
|
As of March 31, 2018
|
||||||||||||||||||||||||||||
Accounts Classified as a TDR(c)
|
||||||||||||||||||||||||||||
2018 (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. Consumer Services
|
$
|
254
|
$
|
182
|
$
|
209
|
$
|
125
|
$
|
770
|
$
|
691
|
$
|
52
|
||||||||||||||
International Consumer and Network Services
|
66
|
―
|
―
|
―
|
66
|
65
|
―
|
|||||||||||||||||||||
Global Commercial Services
|
46
|
35
|
38
|
25
|
144
|
134
|
8
|
|||||||||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
19
|
10
|
29
|
29
|
1
|
|||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
48
|
21
|
69
|
69
|
3
|
|||||||||||||||||||||
Total
|
$
|
366
|
$
|
217
|
$
|
314
|
$
|
181
|
$
|
1,078
|
$
|
988
|
$
|
64
|
As of December 31, 2017
|
||||||||||||||||||||||||||||
Accounts Classified as a TDR(c)
|
||||||||||||||||||||||||||||
2017 (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. Consumer Services
|
$
|
233
|
$
|
168
|
$
|
178
|
$
|
131
|
$
|
710
|
$
|
639
|
$
|
49
|
||||||||||||||
International Consumer and Network Services
|
56
|
―
|
―
|
―
|
56
|
55
|
―
|
|||||||||||||||||||||
Global Commercial Services
|
38
|
31
|
31
|
27
|
127
|
118
|
8
|
|||||||||||||||||||||
Card Member Receivables:
|
||||||||||||||||||||||||||||
U.S. Consumer Services
|
―
|
―
|
15
|
9
|
24
|
24
|
1
|
|||||||||||||||||||||
Global Commercial Services
|
―
|
―
|
37
|
19
|
56
|
56
|
2
|
|||||||||||||||||||||
Total
|
$
|
327
|
$
|
199
|
$
|
261
|
$
|
186
|
$
|
973
|
$
|
892
|
$
|
60
|
(a) |
Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe will not be collected. Amounts presented exclude Card Member 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 we have ceased accruing interest. Amounts presented exclude Card Member loans classified as a TDR.
|
(c) |
Accounts classified as a TDR include $15 million and $15 million that are over 90 days past due and accruing interest and $4 million and $5 million that are non-accruals as of March 31, 2018 and December 31, 2017, respectively.
|
(d) |
In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
|
(e) |
Out of Program TDRs include $137 million and $141 million of Card Member accounts that have successfully completed a modification program and $44 million and $45 million of Card Member accounts that were not in compliance with the terms of the modification programs as of March 31, 2018 and December 31, 2017, respectively.
|
2018
|
2017
|
|||||||||||||||
Interest
|
Interest
|
|||||||||||||||
Average
|
Income
|
Average
|
Income
|
|||||||||||||
(Millions)
|
Balance
|
Recognized
|
Balance
|
Recognized
|
||||||||||||
Card Member Loans:
|
||||||||||||||||
U.S. Consumer Services
|
$
|
740
|
$
|
21
|
$
|
616
|
$
|
16
|
||||||||
International Consumer and Network Services
|
61
|
5
|
53
|
4
|
||||||||||||
Global Commercial Services
|
136
|
5
|
116
|
4
|
||||||||||||
Card Member Receivables:
|
||||||||||||||||
U.S. Consumer Services
|
27
|
―
|
18
|
―
|
||||||||||||
Global Commercial Services
|
63
|
―
|
40
|
―
|
||||||||||||
Total
|
$
|
1,027
|
$
|
31
|
$
|
843
|
$
|
24
|
Three Months Ended
March 31, 2018
|
||||||||||||||||
Number of
|
Outstanding
|
Average Interest
|
Average Payment
|
|||||||||||||
Accounts
|
Balances(a)
|
Rate Reduction
|
Term Extensions
|
|||||||||||||
(in thousands)
|
($ in millions)
|
(% Points)
|
(# of Months)
|
|||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
11
|
$
|
81
|
11
|
(b)
|
|||||||||||
Card Member Receivables
|
1
|
29
|
(c)
|
28
|
||||||||||||
Total
|
12
|
$
|
110
|
Three Months Ended
March 31, 2017
|
||||||||||||||||
Number of
|
Outstanding
|
Average Interest
|
Average Payment
|
|||||||||||||
Accounts
|
Balances(a)
|
Rate Reduction
|
Term Extensions
|
|||||||||||||
(in thousands)
|
($ in millions)
|
(% Points)
|
(# of Months)
|
|||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||
Card Member Loans
|
8
|
$
|
57
|
13
|
(b)
|
|||||||||||
Card Member Receivables
|
2
|
28
|
(c)
|
22
|
||||||||||||
Total | 10 | $ | 85 |
(a) |
Represents the outstanding balance immediately prior to modification. The outstanding balance includes principal, fees and accrued interest on Card Member loans and principal and fees on Card Member receivables. Modifications did not reduce the principal balance.
|
(b) |
For Card Member loans, there have been no payment term extensions.
|
(c) |
We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.
|
2018
|
2017
|
|||||||||||||||
Number of
Accounts
|
Aggregated
Outstanding
Balances
Upon Default(a)
|
Number of
Accounts
|
Aggregated
Outstanding
Balances
Upon Default(a)
|
|||||||||||||
(thousands)
|
(millions)
|
(thousands)
|
(millions)
|
|||||||||||||
Troubled Debt Restructurings That
|
||||||||||||||||
Subsequently Defaulted:
|
||||||||||||||||
Card Member Loans
|
2
|
$
|
9
|
2
|
$
|
11
|
||||||||||
Card Member Receivables
|
1
|
2
|
1
|
1
|
||||||||||||
Total
|
3
|
$
|
11
|
3
|
$
|
12
|
(a) |
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables.
|
(Millions)
|
2018
|
2017
|
||||||
Balance, January 1
|
$
|
1,706
|
$
|
1,223
|
||||
Provisions(a)
|
499
|
337
|
||||||
Net write-offs(b)
|
||||||||
Principal
|
(358
|
)
|
(272
|
)
|
||||
Interest and fees
|
(71
|
)
|
(51
|
)
|
||||
Other(c)
|
10
|
11
|
||||||
Balance, March 31
|
$
|
1,786
|
$
|
1,248
|
(a) |
Provisions for principal, interest and fee reserve components.
|
(b) |
Principal write-offs are presented less recoveries of $106 million and $100 million, and include net write-offs from TDRs of $7 million and $12 million, for the three months ended March 31, 2018 and 2017, respectively. Recoveries of interest and fees were not significant.
|
(c) |
Includes foreign currency translation adjustments of $6 million and $7 million and other adjustments of $4 million and $4 million for the three months ended March 31, 2018 and 2017, respectively.
|
(Millions)
|
2018
|
2017
|
||||||
Card Member loans evaluated individually for impairment(a)
|
$
|
397
|
$
|
367
|
||||
Related reserves (a)
|
$
|
60
|
$
|
57
|
||||
Card Member loans evaluated collectively for impairment(b)
|
$
|
72,423
|
$
|
73,032
|
||||
Related reserves (b)
|
$
|
1,726
|
$
|
1,649
|
(a) |
Represents loans modified as a TDR and related reserves.
|
(b) |
Represents current loans and loans less than 90 days past due, loans over 90 days past due and accruing interest, and non-accrual loans. The reserves include the quantitative results of analytical models that are specific to individual pools of loans, and reserves for internal and external qualitative risk factors that apply to loans that are collectively evaluated for impairment.
|
(Millions)
|
2018
|
2017
|
||||||
Balance, January 1
|
$
|
521
|
$
|
467
|
||||
Provisions(a)
|
242
|
213
|
||||||
Net write-offs(b)
|
(199
|
)
|
(194
|
)
|
||||
Other(c)
|
1
|
5
|
||||||
Balance, March 31
|
$
|
565
|
$
|
491
|
(a) |
Provisions for principal and fee reserve components.
|
(b) |
Principal and fee write-offs are presented less recoveries of $88 million and $93 million, including net write-offs (recoveries) from TDRs of $(2) million and $6 million, for the three months ended March 31, 2018 and 2017, respectively.
|
(c) |
Includes foreign currency translation adjustments of $10 million and $9 million and other adjustments of $(9) million and $(4) million for the three months ended March 31, 2018 and 2017, respectively.
|
(Millions)
|
2018
|
2017
|
||||||
Card Member receivables evaluated individually for impairment(a)
|
$
|
98
|
$
|
80
|
||||
Related reserves (a)
|
$
|
4
|
$
|
3
|
||||
Card Member receivables evaluated collectively for impairment
|
$
|
54,143
|
$
|
53,967
|
||||
Related reserves (b)
|
$
|
561
|
$
|
518
|
(a) |
Represents receivables modified as a TDR and related reserves.
|
(b) |
The reserves include the quantitative results of analytical models that are specific to individual pools of receivables, and reserves for internal and external qualitative risk factors that apply to receivables that are collectively evaluated for impairment.
|
2018
|
2017
|
|||||||||||||||||||||||||||||||
Gross
|
Gross
|
Estimated
|
Gross
|
Gross
|
Estimated
|
|||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Fair
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||||||||||||||||
Description of Securities (Millions)
|
Cost
|
Gains
|
Losses
|
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||||||||||
Available-for-sale debt securities:
|
||||||||||||||||||||||||||||||||
State and municipal obligations
|
$
|
1,122
|
$
|
8
|
$
|
(5
|
)
|
$
|
1,125
|
$
|
1,369
|
$
|
11
|
$
|
(3
|
)
|
$
|
1,377
|
||||||||||||||
U.S. Government agency obligations
|
10
|
―
|
―
|
10
|
11
|
―
|
―
|
11
|
||||||||||||||||||||||||
U.S. Government treasury obligations
|
1,678
|
4
|
(21
|
)
|
1,661
|
1,051
|
3
|
(9
|
)
|
1,045
|
||||||||||||||||||||||
Corporate debt securities
|
29
|
―
|
―
|
29
|
28
|
―
|
―
|
28
|
||||||||||||||||||||||||
Mortgage-backed securities (a)
|
63
|
2
|
(1
|
)
|
64
|
67
|
2
|
―
|
69
|
|||||||||||||||||||||||
Foreign government bonds and obligations
|
451
|
―
|
―
|
451
|
581
|
―
|
―
|
581
|
||||||||||||||||||||||||
Equity securities (b)
|
51
|
―
|
(3
|
)
|
48
|
51
|
―
|
(3
|
)
|
48
|
||||||||||||||||||||||
Total
|
$
|
3,404
|
$
|
14
|
$
|
(30
|
)
|
$
|
3,388
|
$
|
3,158
|
$
|
16
|
$
|
(15
|
)
|
$
|
3,159
|
(a) |
Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
|
(b) |
Equity securities comprise investments in common stock and mutual funds.
|
2018
|
2017
|
|||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Less than 12 months
|
12 months or more
|
|||||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
Gross
|
|||||||||||||||||||||||||||||
Description of Securities (Millions)
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
Estimated Fair Value
|
Unrealized Losses
|
||||||||||||||||||||||||
State and municipal obligations
|
$
|
144
|
$
|
(4
|
)
|
$
|
―
|
$
|
―
|
$
|
157
|
$
|
(3
|
)
|
$
|
―
|
$
|
―
|
||||||||||||||
U.S. Government treasury obligations
|
811
|
(14
|
)
|
173
|
(7
|
)
|
650
|
(3
|
)
|
175
|
(6
|
)
|
||||||||||||||||||||
Equity securities(a)
|
―
|
N/A
|
―
|
N/A
|
―
|
―
|
36
|
(2
|
)
|
|||||||||||||||||||||||
Total
|
$
|
955
|
$
|
(18
|
)
|
$
|
173
|
$
|
(7
|
)
|
$
|
807
|
$
|
(6
|
)
|
$
|
211
|
$
|
(8
|
)
|
(a) |
Effective January 1, 2018, unrealized gains and losses on equity securities are recorded in the Consolidated Statements of Income and are no longer assessed for other-than-temporary impairment.
|
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Ratio of Fair Value to
|
Gross
|
Gross
|
Gross
|
|||||||||||||||||||||||||||||||||
Amortized Cost
|
Number of
|
Estimated
|
Unrealized
|
Number of
|
Estimated
|
Unrealized
|
Number of
|
Estimated
|
Unrealized
|
|||||||||||||||||||||||||||
(Dollars in millions)
|
Securities
|
Fair Value
|
Losses
|
Securities
|
Fair Value
|
Losses
|
Securities
|
Fair Value
|
Losses
|
|||||||||||||||||||||||||||
2018:
|
||||||||||||||||||||||||||||||||||||
90%–100%
|
30
|
$
|
955
|
$
|
(18
|
)
|
5
|
$
|
173
|
$
|
(7
|
)
|
35
|
$
|
1,128
|
$
|
(25
|
)
|
||||||||||||||||||
Total as of March 31, 2018
|
30
|
$
|
955
|
$
|
(18
|
)
|
5
|
$
|
173
|
$
|
(7
|
)
|
35
|
$
|
1,128
|
$
|
(25
|
)
|
||||||||||||||||||
2017:
|
||||||||||||||||||||||||||||||||||||
90%–100%
|
34
|
$
|
807
|
$
|
(6
|
)
|
13
|
$
|
211
|
$
|
(8
|
)
|
47
|
$
|
1,018
|
$
|
(14
|
)
|
||||||||||||||||||
Total as of December 31, 2017
|
34
|
$
|
807
|
$
|
(6
|
)
|
13
|
$
|
211
|
$
|
(8
|
)
|
47
|
$
|
1,018
|
$
|
(14
|
)
|
Estimated
|
||||||||
(Millions)
|
Cost
|
Fair Value
|
||||||
Due within 1 year
|
$
|
465
|
$
|
465
|
||||
Due after 1 year but within 5 years
|
1,653
|
1,639
|
||||||
Due after 5 years but within 10 years
|
218
|
214
|
||||||
Due after 10 years
|
1,017
|
1,022
|
||||||
Total
|
$
|
3,353
|
$
|
3,340
|
(Millions)
|
2018
|
2017
|
||||||
Lending Trust
|
$
|
145
|
$
|
55
|
||||
Charge Trust
|
2
|
7
|
||||||
Total
|
$
|
147
|
$
|
62
|
(Millions)
|
2018
|
2017
|
||||||
U.S.:
|
||||||||
Interest bearing
|
$
|
65,913
|
$
|
63,666
|
||||
Non-interest bearing (includes Card Member credit balances of: 2018, $319 million; 2017, $358 million)
|
353
|
395
|
||||||
Non-U.S.:
|
||||||||
Interest bearing
|
42
|
34
|
||||||
Non-interest bearing (includes Card Member credit balances of: 2018, $344 million; 2017, $344 million)
|
357
|
357
|
||||||
Total customer deposits
|
$
|
66,665
|
$
|
64,452
|
(Millions)
|
2018
|
2017
|
||||||
U.S. retail deposits:
|
||||||||
Savings accounts – Direct
|
$
|
34,544
|
$
|
31,915
|
||||
Certificates of deposit:(a)
|
||||||||
Direct
|
325
|
290
|
||||||
Third-party (brokered)
|
16,453
|
16,684
|
||||||
Sweep accounts – Third-party (brokered)
|
14,591
|
14,777
|
||||||
Other deposits:
|
||||||||
U.S. non-interest bearing deposits
|
34
|
37
|
||||||
Non-U.S. deposits
|
55
|
47
|
||||||
Card Member credit balances ― U.S. and non-U.S.
|
663
|
702
|
||||||
Total customer deposits
|
$
|
66,665
|
$
|
64,452
|
(a) |
The weighted average remaining maturity and weighted average interest rate at issuance on the total portfolio of U.S. retail certificates of deposit issued through direct and third-party programs were 39 months and 2.16 percent, respectively, as of March 31, 2018.
|
(Millions)
|
U.S.
|
Non-U.S.
|
Total
|
|||||||||
2018
|
$
|
4,984
|
$
|
16
|
$
|
5,000
|
||||||
2019
|
4,610
|
11
|
4,621
|
|||||||||
2020
|
3,693
|
―
|
3,693
|
|||||||||
2021
|
1,317
|
―
|
1,317
|
|||||||||
2022
|
2,149
|
―
|
2,149
|
|||||||||
After 5 years
|
25
|
―
|
25
|
|||||||||
Total
|
$
|
16,778
|
$
|
27
|
$
|
16,805
|
(Millions)
|
2018
|
2017
|
||||||
U.S.
|
$
|
126
|
$
|
114
|
||||
Non-U.S.
|
17
|
11
|
||||||
Total
|
$
|
143
|
$
|
125
|
Other Assets Fair Value
|
Other Liabilities Fair Value
|
|||||||||||||||
(Millions)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Fair value hedges - Interest rate contracts(a)
|
$
|
3
|
$
|
11
|
$
|
95
|
$
|
34
|
||||||||
Net investment hedges - Foreign exchange contracts
|
71
|
117
|
167
|
89
|
||||||||||||
Total derivatives designated as hedging instruments
|
74
|
128
|
262
|
123
|
||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Foreign exchange contracts, including certain embedded derivatives(b)
|
77
|
82
|
117
|
95
|
||||||||||||
Total derivatives, gross
|
151
|
210
|
379
|
218
|
||||||||||||
Less: Cash collateral netting(c)(d)
|
―
|
(6
|
)
|
(94
|
)
|
(45
|
)
|
|||||||||
Derivative asset and derivative liability netting(e)
|
(85
|
)
|
(80
|
)
|
(85
|
)
|
(80
|
)
|
||||||||
Total derivatives, net
|
$
|
66
|
$
|
124
|
$
|
200
|
$
|
93
|
(a) |
For centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral. Accordingly, the amounts disclosed for centrally cleared derivatives are based on gross assets and gross liabilities, net of variation margin. We also maintained several bilateral interest rate contracts that are shown gross of any collateral exchanged.
|
(b) |
Includes foreign currency derivatives embedded in certain operating agreements.
|
(c) |
Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to reclaim cash collateral or the obligation to return cash collateral.
|
(d) |
We posted $125 million and $146 million as of March 31, 2018 and December 31, 2017, respectively, as initial margin on our centrally cleared interest rate swaps; such amounts are recorded within Other receivables on the Consolidated Balance Sheets and are not netted against the derivative balances.
|
(e) |
Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.
|
Gains (losses)
|
||||||||
(Millions)
|
2018
|
2017
|
||||||
Interest expense(a)
|
Other expenses
|
|||||||
Hedged items
|
$
|
210
|
$
|
50
|
||||
Derivatives designated as hedging instruments
|
(191
|
)
|
(75
|
)
|
||||
Total
|
$
|
19
|
$
|
(25
|
)
|
(a) |
We adopted new accounting guidance providing targeted improvements to the accounting for hedging activities effective January 1, 2018. In compliance with the standard, amounts previously recorded in Other expenses have been prospectively recorded in Total interest expense. Refer to Note 1 for additional information.
|
2018
|
2017
|
|||||||||||||||||||||||||||||||
(Millions)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||
Investment securities:(a)
|
||||||||||||||||||||||||||||||||
Equity securities
|
$
|
48
|
$
|
1
|
$
|
47
|
$
|
―
|
$
|
48
|
$
|
1
|
$
|
47
|
$
|
―
|
||||||||||||||||
Debt securities
|
3,340
|