Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AMERICAN EXPRESS CREDIT CORPORATION | |
Entity Central Index Key | 4,969 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,504,938 |
Consolidated Statements of Inco
Consolidated Statements of Income and Retained Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Discount revenue earned from purchased Card Member receivables and loans | $ 199 | $ 119 | $ 558 | $ 352 |
Interest income from affiliates and other | 75 | 51 | 198 | 158 |
Finance revenue | 12 | 10 | 35 | 29 |
Total revenues | 286 | 180 | 791 | 539 |
Expenses | ||||
Provisions for losses | 60 | 37 | 176 | 105 |
Interest expense | 139 | 80 | 359 | 239 |
Interest expense to affiliates | 17 | 5 | 39 | 16 |
Other, net | (15) | (12) | 14 | (13) |
Total expenses | 201 | 110 | 588 | 347 |
Pretax income | 85 | 70 | 203 | 192 |
Income tax provision | 13 | 10 | 15 | 24 |
Net income | 72 | 60 | 188 | 168 |
Retained earnings at beginning of period | 3,427 | 3,222 | 3,311 | 3,114 |
Retained earnings at end of period | $ 3,499 | $ 3,282 | $ 3,499 | $ 3,282 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 72 | $ 60 | $ 188 | $ 168 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | 51 | 1 | 373 | (31) |
Other comprehensive income (loss) | 51 | 1 | 373 | (31) |
Comprehensive income | $ 123 | $ 61 | $ 561 | $ 137 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 1,341 | $ 1,211 |
Card Member receivables, less reserves | 22,350 | 18,108 |
Card Member loans, less reserves | 492 | 471 |
Loans to affiliates and other | 12,367 | 10,659 |
Due from affiliates | 116 | 997 |
Other assets | 272 | 490 |
Total assets | 36,938 | 31,936 |
Liabilities | ||
Short-term debt | 337 | 2,993 |
Short-term debt to affiliates | 7,290 | 4,559 |
Long-term debt | 24,239 | 20,512 |
Total debt | 31,866 | 28,064 |
Due to affiliates | 2,075 | 1,517 |
Accrued interest and other liabilities | 227 | 146 |
Total liabilities | 34,168 | 29,727 |
Shareholder's Equity | ||
Common stock, $0.10 par value, authorized 3 million shares; issued and outstanding 1.5 million shares | 0 | 0 |
Additional paid-in-capital | 161 | 161 |
Retained earnings | 3,499 | 3,311 |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustments, net of tax | (890) | (1,263) |
Total accumulated other comprehensive loss | (890) | (1,263) |
Total shareholder's equity | 2,770 | 2,209 |
Total liabilities and shareholder's equity | $ 36,938 | $ 31,936 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Card Member receivables, reserves | $ 158 | $ 110 |
Card Member loans, reserves | $ 5 | $ 5 |
Shareholder's Equity | ||
Common stock, par value | $ 0.1 | $ 0.1 |
Common stock, authorized | 3 | 3 |
Common stock, issued | 1.5 | 1.5 |
Common stock, outstanding | 1.5 | 1.5 |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustments, tax | $ (80) | $ 329 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Cash Flows from Operating Activities | |||
Net income | $ 188 | $ 168 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provisions for losses | 176 | 105 | |
Amortization of underwriting expenses | 20 | 17 | |
Deferred taxes | (65) | 4 | |
Changes in operating assets and liabilities: | |||
Interest, taxes and other amounts due from/to affiliates | 299 | 31 | |
Other operating assets and liabilities | (490) | 376 | |
Net cash provided by operating activities | 128 | 701 | |
Cash Flows from Investing Activities | |||
Net (increase) decrease in Card Member receivables and loans, including held for sale | [1] | (4,063) | 1,379 |
Net decrease in loans to affiliates and other | 1,058 | 3,485 | |
Net (decrease) increase in due to/from affiliates | (685) | 363 | |
Net cash (used in) provided by investing activities | (3,690) | 5,227 | |
Cash Flows from Financing Activities | |||
Net decrease in short-term debt | (2,656) | (1,491) | |
Net increase (decrease) in short-term debt to affiliates | 2,701 | (718) | |
Issuance of long-term debt | 8,443 | 1,743 | |
Principal payments on long-term debt | (4,900) | (4,961) | |
Net cash provided by (used in) financing activities | 3,588 | (5,427) | |
Effect of foreign currency exchange rates on cash and cash equivalents | 104 | 11 | |
Net increase in cash and cash equivalents | 130 | 512 | |
Cash and cash equivalents at beginning of period | 1,211 | 173 | |
Cash and cash equivalents at end of period | $ 1,341 | $ 685 | |
[1] | Refer to Note 1 for additional information. |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Textuals) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Non cash investing activities | |||
Replacement of due from affiliate balance with new loan arrangement with affiliates | [1] | $ 2,129 | $ 0 |
[1] | To more effectively manage inter-affiliate funding, Credco entered into new loan agreements in July 2017 with American Express Limited and American Express International, Inc. The new loans were funded by the assignment of its existing loan to American Express Company and outstanding due from affiliate balance with TRS. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Text Block [Abstract] | |
Basis of Presentation | 1 . Basis of Presentation The Company American Express Credit Corporation (Credco), together with its subsidiaries, is a wholly owned subsidiary of American Express Travel Related Services Company, Inc. (TRS), which is a wholly owned subsidiary of American Express Company (American Express). Credco is engaged in the business of financing non-interest-earning Card Member receivables arising from the use of American Express charge cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-earning revolving loans generated by Card Member spending on American Express credit cards issued in non-U.S. markets, although interest-earning revolving loans are primarily funded by subsidi aries of TRS other than Credco. Credco executes material transactions with its affiliates. The agreements between Credco and its affiliates provide that the parties intend that the transactions thereunder be conducted on an arm’s length basis; however, there can be no assurance that the terms of these arrangements are the same as would be negotiated between independent, unrelated parties. American Express provides Credco with financial support with respect to maintenance of its minimum overall 1.25 fixed charge c overage ratio, which is achieved by charging appropriate discount rates on the purchases of receivables Credco makes from, and the interest rates on the loans Credco provides to, TRS and other American Express subsidiaries. Each monthly period, the discoun t and interest rates are determined to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio. The revenue earned by Credco from purchasing Card Member receivables and loans at a discount is reported as discount r evenue on the Consolidated Statements of Income and Retained Earnings. The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in Credco’s Annual Report on Form 10-K for the year ended December 31, 201 6 (Form 10-K). If not materially different, certain footnote disclosures included therein have been omitted from this Quarterly Report on Form 10-Q. The interim consolidated financial information in this report has not been audited. I n the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period consolidated financial information, have been made. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumpt ions that affect the reported amounts of assets, liabilities, revenues and expenses. These accounting estimates reflect the best judgment of management, but actual results could differ. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued new accounting guidance on revenue recognition. The accounting standard establishes the principles to apply to determine the amount and timing of revenue recognition, specifying the accounting for certain costs related to revenue, and requiring additional disclosures about the nature, amount, timing and uncertainty of revenue s and related cash flows. The guidance, as amended, supersedes most of the current revenue recognition requirements, and is effective January 1, 2018. Upon adoption of the new reven ue recognition guidance, Credco will use the full retrospective method, whi ch applies the new standard to each prior reporting period presented. Credco has made significant progress in determining the impact on its Consolidated Financial Statements and underlying operational processes. Credco does not expect a significant impact to net income upon adoption . Similarly, upon adoption of the new standard, the impact on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows will not be material . Credco is also in the process of implementing changes to its account ing policies, business processes, systems and internal controls to support the recognition , measurement and disclosure requirements under the new standard. In January 2016, the FASB issued new accounting guidance on the recognition and measurement of finan cial assets and financial liabilities. The guidance, which is effective January 1, 2018, makes targeted changes to current GAAP, specifically to the classification and measurement of equity securities, and to certain disclosure requirements associated with the fair value of financial instruments. Credco expects that adopting this guidance will have an immaterial impact on its financial position, results of operations and cash flows, as well as on its accounting policies, business processes, systems and inte rnal controls. In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reser ving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on hist orical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information . The guidance requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting p eriod of adoption . Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the CECL model will al ter the assumptions used in estimating credit losses on Card Member receivables and loans, among other financial instruments, and may result in material increases to Credco’s credit reserves as the new guidance involves earlier recognition of expected losses for the life of the assets . American Express has established a n enterprise -wide, cross-discipline governance structure to implement the new standard. American Express is currently identifying key interpretive issues, and is evaluating existing credit loss forecasting models and processes in relation to the new guidance to determine what modifications may be required. In August 2017, the FASB issued new accounting guidance providing targeted improvements to the account ing for hedging activities, which is effective January 1, 2019, with early adoption permitted in any interim period or fiscal year before the effective date. The guidance introduces a number of amendments, several of which are optional, that are designed to simplify the application of hedge accounting, improve financial statement transparency and more closely align hedge accounting with an entity’s risk management strategies. Credco is evaluating the impact this guidance will have on its financial position , results of operations and cash flows, as well as the impact the standard will have on its accounting policies, business processes, systems and internal controls. Other Information During the fourt h quarter of 2015, American Express determined it would sell Card Member loans and receivables related to certain of its cobrand partnerships. As a result of the determination, Credco classified Card Member receivables related to the Costco portfolio purch ased from American Express Receivables Financing Corporation VIII LLC (RFC VIII) in the form of participation interest as Card Member receivables held for sale (HFS) on its Consolidated Balance Sheets as of December 31, 2015 and March 31, 2016. During the second quarter of 2016, American Express completed the sales of substantially all of its outstanding Card Member loans and receivables HFS, and consequently Credco also sold back all of its participation interests in Card Member receivables HFS to RFC VIII . |
Card Member Receivables and Loa
Card Member Receivables and Loans | 9 Months Ended |
Sep. 30, 2017 | |
Card Member Receivables and Loans [Abstract] | |
Card Member Receivables and Loans | 2 . Card Member Receivables and Loans American Express’ charge and credit card products result in the generation of Card Member receivables and Card Member loans, respectively. The net volume of Card Member receivables purchased during the nine months ended September 30 , 2017 and 2016 was approximately $ 189 billion and $ 161 billion, respectively. As of September 30 , 2017 and December 31, 2016 , Credco Receivables Corporation (CRC) owned approximately $ 6.4 billion and $ 4.0 billion, respectively, of participation interests in Card Member receivables purchased without recourse from RFC VIII. Card Member receivables as of September 30 , 2017 and December 31, 2016 c onsisted of : (Millions) 2017 2016 U.S. Consumer Services $ 5,472 $ 3,518 International Consumer and Network Services (a) 1,608 1,526 Global Commercial Services (b) 15,428 13,174 Card Member receivables (c) 22,508 18,218 Less: Reserve for losses 158 110 Card Member receivables, net (d) $ 22,350 $ 18,108 Comprised of International consumer card business. Comprised of Corporate and Small Business Services. Net of deferred discount revenue totaling $ 45 million and $ 27 million as of September 30 , 2017 and December 31, 2016 , respectively. Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial. The net volume of Card Member loans purchased during the nine months ended September 30 , 2017 and 2016 was $ 3.3 billion a nd $ 3.0 billion, respectively. Card Member loans as of September 30 , 2017 and December 31, 2016 consisted of: (Millions) 2017 2016 International Consumer and Network Services (a) $ 497 $ 476 Less: Reserve for losses 5 5 Card Member loans, net (b) $ 492 $ 471 Comprised of International consumer card business. Card Member loans modified in a TDR program were immaterial. Card Member Receivables and Loans Aging Generally, a Card Member account is considered past due if payment is not received within 30 days after the billing statement date. The following table presen ts the aging of C ard Member receivables and Card Member loans as of September 30 , 2017 and December 31, 2016 : 30-59 60-89 Days Days 90+ Days 2017 (Millions) Current Past Due Past Due Past Due Total Card Member Receivables: U.S. Consumer Services $ 5,428 $ 18 $ 8 $ 18 $ 5,472 International Consumer and Network Services 1,590 7 3 8 1,608 Global Commercial Services Global Small Business Services 1,716 9 3 7 1,735 Global Corporate Payments (a) (b) (b) (b) 122 13,693 Card Member Loans: International Consumer and Network Services $ 493 $ 1 $ 1 $ 2 $ 497 30-59 60-89 Days Days 90+ Days 2016 (Millions) Current Past Due Past Due Past Due Total Card Member Receivables: U.S. Consumer Services $ 3,501 $ 9 $ 3 $ 5 $ 3,518 International Consumer and Network Services 1,506 6 4 10 1,526 Global Commercial Services Global Small Business Services 1,202 9 2 5 1,218 Global Corporate Payments (a) (b) (b) (b) 108 11,956 Card Member Loans: International Consumer and Network Services $ 472 $ 1 $ 1 $ 2 $ 476 For G lobal Corporate Payments Card Member receivables in Global Commercial Services , 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 collection procedures are initiated on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 day s past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes . See also (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. Credit Quality Indicators for Card Member Receivables and Loans The following table s pres ent the key credit quality indicators as of or for the nine months ended September 30 : 2017 2016 30+ Days 30+ Days Net Past Due Net Past Due Write-off as a % of Write-off as a % of Rate (a) Total Rate (a) Total Card Member Receivables: U.S. Consumer Services 0.81 % 0.80 % 0.59 % 0.69 % International Consumer and Network Services 1.53 % 1.12 % 1.95 % 1.35 % Global Small Business Services 1.01 % 1.10 % 1.01 % 0.76 % Card Member Loans: International Consumer and Network Services 1.41 % 0.80 % 1.24 % 0.70 % 2017 2016 Net Loss 90+ Days Net Loss 90+ Days Ratio as a Past Ratio as a Past % of Billing % of Billing Charge as a % of Charge as a % of Volume (b) Receivables Volume (b) Receivables Card Member Receivables: Global Corporate Payments 0.07 % 0.89 % 0.06 % 0.77 % Represents the amount of Card Member receivables or Card Member loans owned by Credco that are written off, net of recoveries, expressed as a percentage of the average Card Member receivables or Card Member loans balances in each of the periods indicated. Represents the amount of Card Member receivables owned by Credco that are written off, net of recoveries, expressed as a percentage of the volume of Card Member receivables purchased by Credco in each of the periods indicated. |
Reserves for Losses
Reserves for Losses | 9 Months Ended |
Sep. 30, 2017 | |
Reserves for Losses [Abstract] | |
Reserves for Losses | 3 . Reserves for Losses Reserves for losses relating to Card Member receivables and loans represent management’s best estimate of the probable inherent losses in Credco’s outstanding portfolio of receivables and loans, as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments. Changes in Card Member Receivables Reserve for Losses The following table presents changes in the Card Member receivables reserve for losses for the nine months ended September 30 : (Millions) 2017 2016 Balance, January 1 $ 110 $ 114 Provisions 171 101 Other credits (a) 35 13 Net write-offs (b) (142) (105) Other debits (c) (16) (17) Balance, September 30 $ 158 $ 106 Primarily reserve balances related to participation interests in Card Member receivables purchased from affiliates. P articipation interests in Card Member receivables purchased totaled $ 6.0 billion and $ 3.4 billion for the nine months ended September 30 , 2017 and 2016 , respectively. Net of recoveries of $ 70 million and $ 71 million for the nine months ended September 30 , 2017 and 2016 , respectively. Primarily reserve balances re lated to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled $ 2.6 billion and $ 4.7 billion for the nine months ended September 30, 2017 and 2016 , respectively. Changes in Card Member Loans Reserve for Losses The following table presents changes in the Card Member loans reserve for losses for the nine months ended September 30 : (Millions) 2017 2016 Balance, January 1 $ 5 $ 4 Provisions 5 4 Net write-offs (a) (5) (4) Balance, September 30 $ 5 $ 4 Net of recoveries of $ 1.0 million for both the nine months ended September 30 , 2017 and 2016 . |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 4 . Derivatives and Hedging Activities Credco uses derivative financial instruments (derivatives) to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, and are carried at fair value on the Consolidated Balance Sheets. These instruments enable end users to increase, reduce or alter ex posure to various market risks and, for that reason, are an integral component of Credco’s market risk management. Credco does not transact in derivatives for trading purposes. In relation to Credco’s credit risk, under the terms of the derivative agreemen ts it has with its various counterparties, Credco is not required to either immediately settle any outstanding liability balances or post collateral upon the occurrence of a specified credit risk-related event. Based on its assessment of the credit risk of Credco’s derivative counterparties as of September 30 , 2017 and December 31, 2016 , no credit risk adjustment to the derivative portfolio was required . The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of September 30 , 2017 and December 31, 2016 : Other Assets Other Liabilities Fair Value Fair Value (Millions) 2017 2016 2017 2016 Derivatives designated as hedging instruments: Fair value hedges - Interest rate contracts (a) $ ― $ 22 $ 8 $ 69 Net investment hedges - Foreign exchange contracts 18 151 63 1 Total derivatives designated as hedging instruments 18 173 71 70 Derivatives not designated as hedging instruments: Foreign exchange contracts 50 128 50 28 Total derivatives, gross 68 301 121 98 Less: Cash collateral netting (b)(c) ― (2) ― (49) Derivative asset and derivative liability netting (d) (38) (27) (38) (27) Total derivatives, net (e) $ 30 $ 272 $ 83 $ 22 Effective January 2017, the Central Clearing Party changed the legal characterization of variation margin payments for centrally cleared derivatives to be settlement payments, as opposed to collateral. Accordingly, the amounts disclosed for 2017 related to centrally cleared derivatives are based on gross assets of $ 1 million and liabilities of $ 87 million net of variation margin of $ 1 million and $ 79 million respectively. Represents the offsetting of the fair value of bilateral interest rate contracts w ith the right to reclaim cash collateral or the obligation to return cash collateral. Credco held no non-cash collateral as of September 30, 2017 and December 31, 2016, respectively. To mitigate counterparty credit risk related to derivatives, Credco may a ccept non-cash collateral from its derivatives counterparties. Additionally, Credco posted $ 135 million and $ 144 million as of September 30 , 2017 and December 31, 2016 , respectively, as initial margin on its centrally c leared interest rate swaps; such amounts are recorded within Other assets on Credco’s Consolidated Balance Sheets and are not netted against the derivative balances. Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement. Credco has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and net derivative liabilities are presented within Other assets and Accrued interest and Other liabilities, respectively, on Credco’s Consolidated Balance Sheets. A majority of Credco’s derivative assets and liabilities as of September 30, 2017 and December 31, 2016 are subject to master netting agreements with its derivative counterparties. Credco has no derivative amounts subject to enforceable master netting arrangements that are not offset on the Consolidated Balance Sheets. Fair Value Hedges Credco is exposed to interest rate risk associated with its fixed-rate long-term debt obligations. At the time of issuance, certain fixed-rate debt obligations are designated in fa ir value hedging relationships us ing interest rate swaps to economically convert the fixed interest rate to a floating interest rate . Credco has $ 16.2 billion and $ 14.8 billion of its fixed-rate debt obligations designated in fair value hedg ing relationships as of September 30 , 2017 and December 31, 2016 , respectively. The following table summarizes the gains ( losses ) recognized in Other expenses associated with Credco’s fair value hedges for the three and nine months ended September 30 : Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2017 2016 2017 2016 Interest rate derivative contracts $ (11) $ (90) $ (40) $ 115 Hedged items 20 100 11 (101) Net hedge ineffectiveness $ 9 $ 10 $ (29) $ 14 Credco also recognized a net reduction in interest expense on long-term debt of $ 8 million and $ 32 million for the three months ended September 30 , 2017 and 2016 , respectively, and $ 47 million and $ 100 million for the nine months ended September 30 , 2017 and 2016 , respectively, primarily related to the net settlements (interest accruals) on Credco’s interest rate derivatives designated as fair value hedges. Net Investment Hedges The effective portion of the gain or loss on net investment hedges, net of taxes, recorded in accumulated other comprehensive income (loss) (AOCI) as part of the cumula tive translation adjustment, were losses of $ 95 million and $ 29 million for the three months ended September 30 , 2017 and 2016 , respectively , and losses of $ 263 million and $ 28 million for the nine months ended September 30 , 2017 and 2016 , respectively , with any ineffective portion recognized in Other expens es during the period. No ineffectiveness or other amounts associated with net investment hedges were reclassified from AOCI into income for the three and nine months ended September 30, 2017 a nd 2016 . Derivatives Not Designated as Hedges The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in net gain s of $ 8 million and $ 3 million for the three months ended September 30 , 2017 and 2016 , respe ctively, and net gains of $ 19 million and $ 1 million for the nine months ended September 30 , 2017 and 2016 , respectively , and are recognized in Other expenses. |
Fair Values
Fair Values | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Values | 5 . Fair Values Financial Assets and Financial Liabilities Carried at Fair Value The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy as Level 2 , as of September 30 , 2017 and December 31, 2016 : (Millions) 2017 2016 Assets: Derivatives (a) $ 68 $ 301 Total assets 68 301 Liabilities: Derivatives (a) 121 98 Total liabilities $ 121 $ 98 Refer to Note 4 for the fair values of de rivative assets and liabilities, on a further disaggregated basis. Financial Assets and Financial Liabilities Carried at Other Than Fair Value The following table summarizes the estimated fair values of Credco’s financial assets and financial liabilities that are not required to be carried at fair value on a recurring basis, as of September 30 , 2017 and December 31, 2016 . The fair values of these financial instruments are estimates based upon the market conditi ons and perceived risks as of September 30 , 2017 and December 31, 2016 , and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of Credco be estimated by aggregating the amounts presented. Carrying Corresponding Fair Value Amount 2017 (Billions) Value Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 1.3 $ 1.3 $ 0.2 $ 1.1 $ ― Other financial assets 22.6 22.6 ― 22.6 ― Financial assets carried at other than fair value Card Member loans, net 0.5 0.5 ― ― 0.5 Loans to affiliates and other 12.4 12.2 ― 9.1 3.1 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 9.8 9.8 ― 9.8 ― Financial liabilities carried at other than fair value Long-term debt $ 24.2 $ 24.6 $ ― $ 24.6 $ ― Carrying Corresponding Fair Value Amount 2016 (Billions) Value Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 1.2 $ 1.2 $ 0.2 $ 1.0 $ ― Other financial assets 19.3 19.3 ― 19.3 ― Financial assets carried at other than fair value Card Member loans, net 0.5 0.5 ― ― 0.5 Loans to affiliates and other 10.7 10.7 ― 7.9 2.8 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 9.1 9.1 ― 9.1 ― Financial liabilities carried at other than fair value Long-term debt $ 20.5 $ 20.7 $ ― $ 20.7 $ ― Level 1 amounts reflect interest-bearing deposits in banks and Level 2 amount reflects time deposits and short-term investments . Nonrecurring Fair Value Measurements During the nine months ended September 30 , 2017 and during the year ended December 31, 2016 , Credco did not have any assets that were measured at fair value due to impairment on a nonrecurring basis. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entity [Abstract] | |
Variable Interest Entity | 6 . Variable Interest Entity Credco has established a Variable Interest Entity ( VIE ) , American Express Canada Credit Corporation (AECCC), used primarily to lend funds to affiliates, through the issuance of notes in Canada under a medium-term note program. All notes issued under this program are fully guaranteed by Credco. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and, therefore, consolidates the entity. Total assets as of September 30 , 2017 and December 31, 2016 were $ 1.9 billion and $ 1.7 billion, respectively , the majority of which were eliminated in consolidation. Total liabilities as of September 30 , 2017 and December 31, 2016 were $ 1.9 billion and $ 1.7 billion , respectively . As of September 30 , 2017 and December 31, 2016 , $ 1.4 billion and $ 1.3 billion , respectively, of liabilities were eliminated in consolidation. The assets of the VIE ar e not used solely to settle the obligations of the VIE. The note holders of the VIE have recourse to Credco. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2017 | |
Changes In Accumulated Other Comprehensive Income Disclosure [Abstract] | |
Changes In Accumulated Other Comprehensive Loss | 7 . Changes in Accumulated Other Comprehensive Income AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in Foreign Currency Translation Adjustments for the three and nine months ended September 30 , 2017 and 2016 were as follows: Foreign Currency Translation Three Months Ended September 30, 2017 (Millions) , net of tax Adjustments Balances as of June 30, 2017 $ (941) Net translation gain of investments in foreign operations 146 Net losses related to hedges of investment in foreign operations (95) Net change in accumulated other comprehensive loss 51 Balances as of September 30, 2017 $ (890) Foreign Currency Translation Nine Months Ended September 30, 2017 (Millions) , net of tax Adjustments Balances as of December 31, 2016 $ (1,263) Net translation gain of investments in foreign operations (a) 636 Net losses related to hedges of investment in foreign operations (263) Net change in accumulated other comprehensive loss 373 Balances as of September 30, 2017 $ (890) (a) Includes $289 million of recognized tax benefits (Refer to Note 8). Foreign Currency Translation Three Months Ended September 30, 2016 (Millions) , net of tax Adjustments Balances as of June 30, 2016 $ (1,188) Net translation gain of investments in foreign operations 30 Net losses related to hedges of investment in foreign operations (29) Net change in accumulated other comprehensive loss 1 Balances as of September 30, 2016 $ (1,187) Foreign Currency Translation Nine Months Ended September 30, 2016 (Millions) , net of tax Adjustments Balances as of December 31, 2015 $ (1,156) Net translation loss of investments in foreign operations (3) Net losses related to hedges of investment in foreign operations (28) Net change in accumulated other comprehensive loss (31) Balances as of September 30, 2016 $ (1,187) The following table shows the tax impact for the three and nine months ended September 30 for the changes in Foreign Currency Translation Adjustments presented above : Tax (benefit) expense Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2017 2016 2017 2016 Foreign currency translation adjustments (a) $ (64) $ (17) $ (409) $ 32 Total tax impact $ (64) $ (17) $ (409) $ 32 Includes $289 million of tax benefits recognized in the nine months ended September 30, 2017 (Refer to Note 8 ). No amounts were reclassified out of AOCI into the Consolidated Statements of Income and Retained Earnings for the three and nine months ended September 30 , 2017 and 2016 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 8 . Income Taxes The results of operations of Credco are included in the consolidated U.S. federal income tax return of American Express. Under an agreement with American Express, provision for income taxes is recognized on a separate company basis. If benefits for net operating losses, future tax deductions and foreign tax credits cannot be recognized on a separate company basis, such benefits are then recognized based upon a share, derived by formula, of those deductions and credits that are recognizable on an American Express consolidated reporting basis. The effective tax rate was 15.3 percent and 1 4 .3 percent for the three months ended September 30, 2017 and 2016 , respectively, and 7.4 percent and 1 2 . 5 percent for the nine months ended September 30, 2017 and 2016 , respectively. The changes in tax rates primarily reflected the geographic mix of expenses in the United States attracting a 35 percent statutory benefit and foreign earnings taxed at lower rates, which are indefinitely reinvested. The tax rate in e ach of the periods reflects the favorable impact of the tax benefit related to Credco’s ongoing funding activities outside the United States. Credco’s provision for income taxes for interim financial periods is not based on an estimated annual effective ra te due to volatility in certain components of revenues and expenses that prevents Credco from projecting a reliable estimate of full year pretax income. A discrete calculation of the provision for income taxes is recorded for each interim period. American Express is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which American Express has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In February 2017, American Express received notification that all matters outstanding with the IRS for tax years 1997-2007 were resolved. The resolution of such matters did not impact Credco’s effective tax rate. American Express is currently under examination with the IRS for tax years 2008 through 2014. During the nine months ended September 30, 2017 , Credco’s unrecognized tax benefits decreased by $ 288 million. The decrease was primarily due to the resolution with the IRS of an uncertain tax position in January 2017, and resulted in the recognition of $ 289 million in shareholder’s equity, specifically within AOCI. Interest relating to unrecognized tax benefits a lso decreased by approximately $ 41 million due to the resolution of this uncertain tax position. The decrease in accrued interest had no impact on either the income tax provision or AOCI. Credco believes it is reasonably possible that its unrecognized tax benefits could decrease by an immaterial amount within the next 12 months principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to t he attribution of taxable income to a particular jurisdiction or jurisdictions. The resolution of such items would not have a material impact on Credco’s effective tax rate. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumpt ions that affect the reported amounts of assets, liabilities, revenues and expenses. These accounting estimates reflect the best judgment of management, but actual results could differ. |
Derivatives And Hedging Activities Policy [Abstract] | |
Derivatives | Credco uses derivative financial instruments (derivatives) to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, and are carried at fair value on the Consolidated Balance Sheets. The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. |
Variable Interest Entity [Abstract] | |
Variable Interest Entity | Credco has established a Variable Interest Entity ( VIE ) , American Express Canada Credit Corporation (AECCC), used primarily to lend funds to affiliates, through the issuance of notes in Canada under a medium-term note program. All notes issued under this program are fully guaranteed by Credco. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and, therefore, consolidates the entity. |
Card Member Receivables and L17
Card Member Receivables and Loans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable And Loans Tables [Abstract] | |
Card Member receivables detail | Card Member receivables as of September 30 , 2017 and December 31, 2016 c onsisted of (Millions) 2017 2016 U.S. Consumer Services $ 5,472 $ 3,518 International Consumer and Network Services (a) 1,608 1,526 Global Commercial Services (b) 15,428 13,174 Card Member receivables (c) 22,508 18,218 Less: Reserve for losses 158 110 Card Member receivables, net (d) $ 22,350 $ 18,108 Comprised of International consumer card business. Comprised of Corporate and Small Business Services. Net of deferred discount revenue totaling $ 45 million and $ 27 million as of September 30 , 2017 and December 31, 2016 , respectively. Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial. |
Card Member loans detail | Card Member loans as of September 30 , 2017 and December 31, 2016 consisted of: (Millions) 2017 2016 International Consumer and Network Services (a) $ 497 $ 476 Less: Reserve for losses 5 5 Card Member loans, net (b) $ 492 $ 471 Comprised of International consumer card business. Card Member loans modified in a TDR program were immaterial. |
Aging of Card Member receivables and loans | The following table presen ts the aging of C ard Member receivables and Card Member loans as of September 30 , 2017 and December 31, 2016 : 30-59 60-89 Days Days 90+ Days 2017 (Millions) Current Past Due Past Due Past Due Total Card Member Receivables: U.S. Consumer Services $ 5,428 $ 18 $ 8 $ 18 $ 5,472 International Consumer and Network Services 1,590 7 3 8 1,608 Global Commercial Services Global Small Business Services 1,716 9 3 7 1,735 Global Corporate Payments (a) (b) (b) (b) 122 13,693 Card Member Loans: International Consumer and Network Services $ 493 $ 1 $ 1 $ 2 $ 497 30-59 60-89 Days Days 90+ Days 2016 (Millions) Current Past Due Past Due Past Due Total Card Member Receivables: U.S. Consumer Services $ 3,501 $ 9 $ 3 $ 5 $ 3,518 International Consumer and Network Services 1,506 6 4 10 1,526 Global Commercial Services Global Small Business Services 1,202 9 2 5 1,218 Global Corporate Payments (a) (b) (b) (b) 108 11,956 Card Member Loans: International Consumer and Network Services $ 472 $ 1 $ 1 $ 2 $ 476 For G lobal Corporate Payments Card Member receivables in Global Commercial Services , 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 collection procedures are initiated on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 day s past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes . See also (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. |
Credit quality indicators for receivables and loans | The following table s pres ent the key credit quality indicators as of or for the nine months ended September 30 : 2017 2016 30+ Days 30+ Days Net Past Due Net Past Due Write-off as a % of Write-off as a % of Rate (a) Total Rate (a) Total Card Member Receivables: U.S. Consumer Services 0.81 % 0.80 % 0.59 % 0.69 % International Consumer and Network Services 1.53 % 1.12 % 1.95 % 1.35 % Global Small Business Services 1.01 % 1.10 % 1.01 % 0.76 % Card Member Loans: International Consumer and Network Services 1.41 % 0.80 % 1.24 % 0.70 % 2017 2016 Net Loss 90+ Days Net Loss 90+ Days Ratio as a Past Ratio as a Past % of Billing % of Billing Charge as a % of Charge as a % of Volume (b) Receivables Volume (b) Receivables Card Member Receivables: Global Corporate Payments 0.07 % 0.89 % 0.06 % 0.77 % Represents the amount of Card Member receivables or Card Member loans owned by Credco that are written off, net of recoveries, expressed as a percentage of the average Card Member receivables or Card Member loans balances in each of the periods indicated. Represents the amount of Card Member receivables owned by Credco that are written off, net of recoveries, expressed as a percentage of the volume of Card Member receivables purchased by Credco in each of the periods indicated. |
Reserves for Losses (Tables)
Reserves for Losses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reserves For Losses Tables [Abstract] | |
Changes in the Card Member receivable reserve for losses | The following table presents changes in the Card Member receivables reserve for losses for the nine months ended September 30 : (Millions) 2017 2016 Balance, January 1 $ 110 $ 114 Provisions 171 101 Other credits (a) 35 13 Net write-offs (b) (142) (105) Other debits (c) (16) (17) Balance, September 30 $ 158 $ 106 Primarily reserve balances related to participation interests in Card Member receivables purchased from affiliates. P articipation interests in Card Member receivables purchased totaled $ 6.0 billion and $ 3.4 billion for the nine months ended September 30 , 2017 and 2016 , respectively. Net of recoveries of $ 70 million and $ 71 million for the nine months ended September 30 , 2017 and 2016 , respectively. Primarily reserve balances re lated to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled $ 2.6 billion and $ 4.7 billion for the nine months ended September 30, 2017 and 2016 , respectively. |
Changes in the Card Member loans reserve for losses | The following table presents changes in the Card Member loans reserve for losses for the nine months ended September 30 : (Millions) 2017 2016 Balance, January 1 $ 5 $ 4 Provisions 5 4 Net write-offs (a) (5) (4) Balance, September 30 $ 5 $ 4 Net of recoveries of $ 1.0 million for both the nine months ended September 30 , 2017 and 2016 . |
Derivatives and Hedging Activ19
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivatives And Hedging Activities Tables [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of September 30 , 2017 and December 31, 2016 : Other Assets Other Liabilities Fair Value Fair Value (Millions) 2017 2016 2017 2016 Derivatives designated as hedging instruments: Fair value hedges - Interest rate contracts (a) $ ― $ 22 $ 8 $ 69 Net investment hedges - Foreign exchange contracts 18 151 63 1 Total derivatives designated as hedging instruments 18 173 71 70 Derivatives not designated as hedging instruments: Foreign exchange contracts 50 128 50 28 Total derivatives, gross 68 301 121 98 Less: Cash collateral netting (b)(c) ― (2) ― (49) Derivative asset and derivative liability netting (d) (38) (27) (38) (27) Total derivatives, net (e) $ 30 $ 272 $ 83 $ 22 Effective January 2017, the Central Clearing Party changed the legal characterization of variation margin payments for centrally cleared derivatives to be settlement payments, as opposed to collateral. Accordingly, the amounts disclosed for 2017 related to centrally cleared derivatives are based on gross assets of $ 1 million and liabilities of $ 87 million net of variation margin of $ 1 million and $ 79 million respectively. Represents the offsetting of the fair value of bilateral interest rate contracts w ith the right to reclaim cash collateral or the obligation to return cash collateral. Credco held no non-cash collateral as of September 30, 2017 and December 31, 2016, respectively. To mitigate counterparty credit risk related to derivatives, Credco may a ccept non-cash collateral from its derivatives counterparties. Additionally, Credco posted $ 135 million and $ 144 million as of September 30 , 2017 and December 31, 2016 , respectively, as initial margin on its centrally c leared interest rate swaps; such amounts are recorded within Other assets on Credco’s Consolidated Balance Sheets and are not netted against the derivative balances. Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement. Credco has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and net derivative liabilities are presented within Other assets and Accrued interest and Other liabilities, respectively, on Credco’s Consolidated Balance Sheets. |
Effect of fair value hedges on results of operations | The following table summarizes the gains ( losses ) recognized in Other expenses associated with Credco’s fair value hedges for the three and nine months ended September 30 : Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2017 2016 2017 2016 Interest rate derivative contracts $ (11) $ (90) $ (40) $ 115 Hedged items 20 100 11 (101) Net hedge ineffectiveness $ 9 $ 10 $ (29) $ 14 |
Fair Values (Tables)
Fair Values (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Values (Tables) [Abstract] | |
Fair value assets and liabilities measured on recurring basis | The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy as Level 2 , as of September 30 , 2017 and December 31, 2016 : (Millions) 2017 2016 Assets: Derivatives (a) $ 68 $ 301 Total assets 68 301 Liabilities: Derivatives (a) 121 98 Total liabilities $ 121 $ 98 Refer to Note 4 for the fair values of de rivative assets and liabilities, on a further disaggregated basis. |
Estimated fair value of financial assets and financial liabilities | The following table summarizes the estimated fair values of Credco’s financial assets and financial liabilities that are not required to be carried at fair value on a recurring basis, as of September 30 , 2017 and December 31, 2016 . Carrying Corresponding Fair Value Amount 2017 (Billions) Value Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 1.3 $ 1.3 $ 0.2 $ 1.1 $ ― Other financial assets 22.6 22.6 ― 22.6 ― Financial assets carried at other than fair value Card Member loans, net 0.5 0.5 ― ― 0.5 Loans to affiliates and other 12.4 12.2 ― 9.1 3.1 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 9.8 9.8 ― 9.8 ― Financial liabilities carried at other than fair value Long-term debt $ 24.2 $ 24.6 $ ― $ 24.6 $ ― Carrying Corresponding Fair Value Amount 2016 (Billions) Value Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 1.2 $ 1.2 $ 0.2 $ 1.0 $ ― Other financial assets 19.3 19.3 ― 19.3 ― Financial assets carried at other than fair value Card Member loans, net 0.5 0.5 ― ― 0.5 Loans to affiliates and other 10.7 10.7 ― 7.9 2.8 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 9.1 9.1 ― 9.1 ― Financial liabilities carried at other than fair value Long-term debt $ 20.5 $ 20.7 $ ― $ 20.7 $ ― Level 1 amounts reflect interest-bearing deposits in banks and Level 2 amount reflects time deposits and short-term investments . |
Changes in Accumulated Other 21
Changes in Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Components of comprehensive income (loss), net of tax | Changes in Foreign Currency Translation Adjustments for the three and nine months ended September 30 , 2017 and 2016 were as follows: Foreign Currency Translation Three Months Ended September 30, 2017 (Millions) , net of tax Adjustments Balances as of June 30, 2017 $ (941) Net translation gain of investments in foreign operations 146 Net losses related to hedges of investment in foreign operations (95) Net change in accumulated other comprehensive loss 51 Balances as of September 30, 2017 $ (890) Foreign Currency Translation Nine Months Ended September 30, 2017 (Millions) , net of tax Adjustments Balances as of December 31, 2016 $ (1,263) Net translation gain of investments in foreign operations (a) 636 Net losses related to hedges of investment in foreign operations (263) Net change in accumulated other comprehensive loss 373 Balances as of September 30, 2017 $ (890) (a) Includes $289 million of recognized tax benefits (Refer to Note 8). Foreign Currency Translation Three Months Ended September 30, 2016 (Millions) , net of tax Adjustments Balances as of June 30, 2016 $ (1,188) Net translation gain of investments in foreign operations 30 Net losses related to hedges of investment in foreign operations (29) Net change in accumulated other comprehensive loss 1 Balances as of September 30, 2016 $ (1,187) Foreign Currency Translation Nine Months Ended September 30, 2016 (Millions) , net of tax Adjustments Balances as of December 31, 2015 $ (1,156) Net translation loss of investments in foreign operations (3) Net losses related to hedges of investment in foreign operations (28) Net change in accumulated other comprehensive loss (31) Balances as of September 30, 2016 $ (1,187) |
Accumulated Other Comprehensive Loss Income - Tax Effect | The following table shows the tax impact for the three and nine months ended September 30 for the changes in Foreign Currency Translation Adjustments presented above : Tax (benefit) expense Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2017 2016 2017 2016 Foreign currency translation adjustments (a) $ (64) $ (17) $ (409) $ 32 Total tax impact $ (64) $ (17) $ (409) $ 32 Includes $289 million of tax benefits recognized in the nine months ended September 30, 2017 (Refer to Note 8 ). |
Card Member Receivables and L22
Card Member Receivables and Loans (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts Receivable [Abstract] | ||||
Card Member receivables | $ 22,508 | $ 18,218 | ||
Less: Reserve for losses | 158 | 110 | $ 106 | $ 114 |
Card Member receivables, net | 22,350 | 18,108 | ||
U.S. Consumer Services [Member] | ||||
Accounts Receivable [Abstract] | ||||
Card Member receivables | 5,472 | 3,518 | ||
Global Commercial Services [Member] | ||||
Accounts Receivable [Abstract] | ||||
Card Member receivables | 15,428 | 13,174 | ||
International Consumer and Network Services [Member] | ||||
Accounts Receivable [Abstract] | ||||
Card Member receivables | $ 1,608 | $ 1,526 |
Card Member Receivables and L23
Card Member Receivables and Loans (Details 1) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Card Member loans | ||||
Less: Reserve for losses | $ 5 | $ 5 | $ 4 | $ 4 |
Card Member loans, less reserves | 492 | 471 | ||
International Consumer and Network Services [Member] | ||||
Card Member loans | ||||
Card Member loans | 497 | 476 | ||
Less: Reserve for losses | 5 | 5 | ||
Card Member loans, less reserves | $ 492 | $ 471 |
Card Member Receivables and L24
Card Member Receivables and Loans (Details 2) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
U.S. Consumer Services [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | $ 5,428 | $ 3,501 |
Total aging | 5,472 | 3,518 |
U.S. Consumer Services [Member] | Card Member Receivables [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 18 | 9 |
U.S. Consumer Services [Member] | Card Member Receivables [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 8 | 3 |
U.S. Consumer Services [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 18 | 5 |
International Consumer and Network Services [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 1,590 | 1,506 |
Total aging | 1,608 | 1,526 |
International Consumer and Network Services [Member] | Card Member Receivables [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 7 | 6 |
International Consumer and Network Services [Member] | Card Member Receivables [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 3 | 4 |
International Consumer and Network Services [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 8 | 10 |
International Consumer and Network Services [Member] | Card Member Loans [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 493 | 472 |
Total aging | 497 | 476 |
International Consumer and Network Services [Member] | Card Member Loans [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 1 | 1 |
International Consumer and Network Services [Member] | Card Member Loans [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 1 | 1 |
International Consumer and Network Services [Member] | Card Member Loans [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 2 | 2 |
Global Corporate Payments [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total aging | 13,693 | 11,956 |
Global Corporate Payments [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 122 | 108 |
Global Small Business Services [Member] | Card Member Receivables [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 1,716 | 1,202 |
Total aging | 1,735 | 1,218 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 9 | 9 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 60 To 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | 3 | 2 |
Global Small Business Services [Member] | Card Member Receivables [Member] | 90+ Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Period past due | $ 7 | $ 5 |
Card Member Receivables and L25
Card Member Receivables and Loans (Details 3) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
U.S. Consumer Services [Member] | Card Member Receivables [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Net Write-off Rate | 0.81% | 0.59% |
30+ Days Past Due as a % of Total | 0.80% | 0.69% |
International Consumer and Network Services [Member] | Card Member Receivables [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Net Write-off Rate | 1.53% | 1.95% |
30+ Days Past Due as a % of Total | 1.12% | 1.35% |
International Consumer and Network Services [Member] | Card Member Loans [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Net Write-off Rate | 1.41% | 1.24% |
30+ Days Past Due as a % of Total | 0.80% | 0.70% |
Global Corporate Payments [Member] | Card Member Receivables [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Net Loss Ratio as a % of Charge Volume | 0.07% | 0.06% |
90+ Days Past Billing as a % of Receivables | 0.89% | 0.77% |
Global Small Business Services [Member] | Card Member Receivables [Member] | ||
Credit Quality Indicator for Receivables and Loans | ||
Net Write-off Rate | 1.01% | 1.01% |
30+ Days Past Due as a % of Total | 1.10% | 0.76% |
Card Member Receivables and L26
Card Member Receivables and Loans (Details Textuals) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Net volume of Card Member receivables purchased | $ 189,000 | $ 161,000 | |
Net volume of Card Member loans purchased | 3,300 | $ 3,000 | |
Deferred discount revenue on Card Member receivable | 45 | $ 27 | |
RFC VIII [Member] | |||
Related Party Transaction [Line Items] | |||
Participation Interests In Card Member Receivables Purchased | $ 6,400 | $ 4,000 |
Reserves (Details)
Reserves (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in the Card Member receivable reserve for losses | ||
Balance, January 1 | $ 110 | $ 114 |
Provisions | 171 | 101 |
Other credits | 35 | 13 |
Net write-offs | (142) | (105) |
Other debits | (16) | (17) |
Balance, September 30 | $ 158 | $ 106 |
Reserves (Details 1)
Reserves (Details 1) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in the Card Member loans reserve for losses | ||
Balance, January 1 | $ 5 | $ 4 |
Provisions | 5 | 4 |
Net write-offs | (5) | (4) |
Balance, September 30 | $ 5 | $ 4 |
Reserves (Details Textuals)
Reserves (Details Textuals) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Reserves For Losses (Textuals) [Abstract] | ||
Participation interests in Card Member receivables purchased from affiliates | $ 6,000 | $ 3,400 |
Allowance for Card Member Receivables, Recoveries of Bad Debts | 70 | 71 |
Allowance for Card Member Loans, Recoveries of Bad Debts | 1 | 1 |
Participation Interest in Card Member Receivables Sold to Affiliates | $ 2,600 | $ 4,700 |
Derivatives and Hedging Activ30
Derivatives and Hedging Activities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | $ 68 | $ 301 |
Total fair value of derivative liability | 121 | 98 |
Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 68 | 301 |
Cash collateral netting | 0 | (2) |
Derivative asset and derivative liability netting | (38) | (27) |
Total derivatives assets | 30 | 272 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 18 | 173 |
Other Assets [Member] | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 50 | 128 |
Other Assets [Member] | Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 0 | 22 |
Other Assets [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative assets | 18 | 151 |
Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liability | 121 | 98 |
Cash collateral netting | 0 | (49) |
Derivative asset and derivative liability netting | (38) | (27) |
Total derivatives liabilities | 83 | 22 |
Other Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liability | 71 | 70 |
Other Liabilities [Member] | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liability | 50 | 28 |
Other Liabilities [Member] | Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liability | 8 | 69 |
Other Liabilities [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value of derivative liability | $ 63 | $ 1 |
Derivatives and Hedging Activ31
Derivatives and Hedging Activities (Details 1) - Other Expense [Member] - Interest Rate Contract [Member] - Fair Value Hedging [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest rate derivative contract | $ (11) | $ (90) | $ (40) | $ 115 |
Hedged item | 20 | 100 | 11 | (101) |
Net hedge ineffectiveness | $ 9 | $ 10 | $ (29) | $ 14 |
Derivatives and Hedging Activ32
Derivatives and Hedging Activities (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Derivatives And Hedging Activities Textuals [Abstract] | |||||
Net reduction in interest expense on long term debt | $ 8 | $ 32 | $ 47 | $ 100 | |
Derivative [Line Items] | |||||
Margin on interest rate swap not netted | 135 | 135 | $ 144 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net hedge ineffectiveness | 0 | 0 | 0 | 0 | |
Fair Value Hedging [Member] | |||||
Derivative [Line Items] | |||||
Notional amount of long-term debt | 16,200 | 16,200 | $ 14,800 | ||
Net Investment Hedging [Member] | |||||
Derivative [Line Items] | |||||
Effective portion of loss (gain) on hedges | 95 | 29 | 263 | 28 | |
Ineffectiveness reclassified from AOCI into income | 0 | 0 | 0 | 0 | |
Other expense [Member] | |||||
Derivative [Line Items] | |||||
Loss (gain) in Changes of Fair Value of Derivatives not designated as hedges | (8) | $ (3) | (19) | $ (1) | |
Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | |||||
Derivative [Line Items] | |||||
Derivative Liability | 87 | 87 | |||
Derivative Assets, Cleared Collateral, Offset | 1 | 1 | |||
Derivative Liabilities, Cleared Collateral, Offset | 79 | 79 | |||
Total derivatives assets | $ 1 | $ 1 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets [Abstract] | ||
Derivatives | $ 68 | $ 301 |
Total assets | 68 | 301 |
Liabilities [Abstract] | ||
Derivatives | 121 | 98 |
Total liabilities | $ 121 | $ 98 |
Fair Value (Details 1)
Fair Value (Details 1) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | $ 492 | $ 471 |
Loans to affiliates and other | 12,367 | 10,659 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | 24,239 | 20,512 |
Carrying Value [Member] | ||
Financial assets for which carrying values equal or approximate fair value | ||
Cash and cash equivalents | 1,300 | 1,200 |
Other financial assets | 22,600 | 19,300 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | 500 | 500 |
Loans to affiliates and other | 12,400 | 10,700 |
Financial Liabilities: | ||
Financial liabilities for which carrying values equal or approximate fair value | 9,800 | 9,100 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | 24,200 | 20,500 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ||
Financial assets for which carrying values equal or approximate fair value | ||
Cash and cash equivalents | 1,300 | 1,200 |
Other financial assets | 22,600 | 19,300 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | 500 | 500 |
Loans to affiliates and other | 12,200 | 10,700 |
Financial Liabilities: | ||
Financial liabilities for which carrying values equal or approximate fair value | 9,800 | 9,100 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | 24,600 | 20,700 |
Level 1 [Member] | ||
Financial assets for which carrying values equal or approximate fair value | ||
Cash and cash equivalents | 200 | 200 |
Other financial assets | 0 | 0 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | 0 | 0 |
Loans to affiliates and other | 0 | 0 |
Financial Liabilities: | ||
Financial liabilities for which carrying values equal or approximate fair value | 0 | 0 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | 0 | 0 |
Level 2 [Member] | ||
Financial assets for which carrying values equal or approximate fair value | ||
Cash and cash equivalents | 1,100 | 1,000 |
Other financial assets | 22,600 | 19,300 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | 0 | 0 |
Loans to affiliates and other | 9,100 | 7,900 |
Financial Liabilities: | ||
Financial liabilities for which carrying values equal or approximate fair value | 9,800 | 9,100 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | 24,600 | 20,700 |
Level 3 [Member] | ||
Financial assets for which carrying values equal or approximate fair value | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Financial assets carried at other than fair value [Abstract] | ||
Card Member loans, less reserves | 500 | 500 |
Loans to affiliates and other | 3,100 | 2,800 |
Financial Liabilities: | ||
Financial liabilities for which carrying values equal or approximate fair value | 0 | 0 |
Financial liabilities carried at other than fair value [Abstract] | ||
Long-term Debt | $ 0 | $ 0 |
Fair Value (Details Textuals)
Fair Value (Details Textuals) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value for impairment | $ 0 | $ 0 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Total assets | $ 36,938 | $ 31,936 |
Total liabilities | 34,168 | 29,727 |
Variable Interest Entity, Primary Beneficiary [Member] | American Express Canada Credit Corporation Member [Member] | ||
Variable Interest Entity [Line Items] | ||
Total assets | 1,900 | 1,700 |
Total liabilities | 1,900 | 1,700 |
Liabilities eliminated in consolidation | $ 1,400 | $ 1,300 |
Changes In Accumulated Other 37
Changes In Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in other comprehensive income | ||||
Balances as of start of period | $ (1,263) | |||
Balances as of end of period | $ (890) | (890) | ||
Foreign Currency Translation Adjustment [Member] | ||||
Changes in other comprehensive income | ||||
Balances as of start of period | (941) | $ (1,188) | (1,263) | $ (1,156) |
Net translation gain (loss) of investment in foreign operations | 146 | 30 | 636 | (3) |
Net (losses) related to hedges of investment in foreign operations | (95) | (29) | (263) | (28) |
Net change in accumulated other comprehensive loss | 51 | 1 | 373 | (31) |
Balances as of end of period | $ (890) | $ (1,187) | $ (890) | $ (1,187) |
Changes in Accumulated Other 38
Changes in Accumulated Other Comprehensive Income (Loss) (Details 1) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Foreign currency translation adjustments | $ (64) | $ (17) | $ (409) | $ 32 |
Total tax impact | $ (64) | $ (17) | (409) | $ 32 |
Tax Benefits Recognized in the period | $ 288 |
Changes in Accumulated Other 39
Changes in Accumulated Other Comprehensive Income (Loss) (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Loss Income (Textuals) [Abstract] | ||||
Amount of gain loss reclassified from accumulated other comprehensive income to income | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes (Details Textuals)
Income Taxes (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes (Textuals) [Abstract] | ||||
Decrease in Unrecognized tax benefits, amounts recorded to equity | $ 289 | $ 289 | ||
U.S. statutory federal income tax rate | 35.00% | |||
Unrecognized tax benefits income tax penalties and interest accrued | $ (41) | $ (41) | ||
Effective tax rate | 15.30% | 14.30% | 7.40% | 12.50% |
Tax Benefits Recognized in the period | $ 288 | |||
Internal Revenue Service (IRS) [Member] | Earliest Year [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax years by major tax jurisdiction | 2,008 | |||
Internal Revenue Service (IRS) [Member] | Latest Year [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax years by major tax jurisdiction | 2,014 |