Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
“Management’s Report on Internal Control over Financial Reporting,” which sets forth management’s evaluation of internal control over financial reporting, and the “Report of Independent Registered Public Accounting Firm” on the effectiveness of our internal control over financial reporting as of December 31, 2021 are set forth in “Financial Statements and Supplementary Data.”
ITEM 9B. OTHER INFORMATION
Not applicable.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEMS 10, 11, 12 and 13. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE; EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS; CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We expect to file with the SEC in March 2022 (and, in any event, not later than 120 days after the close of our last fiscal year), a definitive proxy statement, pursuant to SEC Regulation 14A in connection with our Annual Meeting of Shareholders to be held May 3, 2022, which involves the election of directors. The following information to be included in such proxy statement is incorporated herein by reference:
• Information included under the caption “Corporate Governance at American Express — Our Corporate Governance Framework — Our Board’s Independence”
• Information included under the caption “Corporate Governance at American Express — Our Board Committees — Board Committee Responsibilities”
• Information included under the caption “Corporate Governance at American Express — Our Corporate Governance Framework — Director Attendance”
• Information included under the caption “Corporate Governance at American Express — Compensation of Directors”
• Information included under the caption “Stock Ownership Information”
• Information included under the caption “Corporate Governance at American Express — Item 1 — Election of Directors for a Term of One Year”
• Information included under the caption “Executive Compensation”
• Information under the caption “Corporate Governance at American Express — Certain Relationships and Transactions”
In addition, the information regarding executive officers called for by Item 401(b) of Regulation S-K may be found under the caption “Information About Our Executive Officers” in this Report.
We have adopted a set of Corporate Governance Principles, which together with the charters of the four standing committees of the Board of Directors (Audit and Compliance; Compensation and Benefits; Nominating, Governance and Public Responsibility; and Risk), our Code of Conduct (which constitutes our code of ethics) and the Code of Business Conduct for the Members of the Board of Directors, provide the framework for our governance. A complete copy of our Corporate Governance Principles, the charters of each of the Board committees, the Code of Conduct (which applies not only to our Chief Executive Officer, Chief Financial Officer and Controller, but also to all our other colleagues) and the Code of Business Conduct for the Members of the Board of Directors may be found by clicking on the “Corporate Governance” link found on our Investor Relations website at http://ir.americanexpress.com. We also intend to disclose any amendments to our Code of Conduct, or waivers of our Code of Conduct on behalf of our Chief Executive Officer, Chief Financial Officer or Controller, on our website. You may also access our Investor Relations website through our main website at www.americanexpress.com by clicking on the “Investor Relations” link, which is located at the bottom of the Company’s homepage. (Information from such sites is not incorporated by reference into this report.) You may also obtain free copies of these materials by writing to our Corporate Secretary at our headquarters.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information set forth under the heading “Item 2 — Ratification of Appointment of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP Fees and Services,” which will appear in our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held May 3, 2022, is incorporated herein by reference.
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PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a)
1. Financial Statements :
See the “Index to Consolidated Financial Statements” under “Financial Statements and Supplementary Data.”
2. Financial Statement Schedules :
All schedules are omitted since the required information is either not applicable, not deemed material, or shown in the Consolidated Financial Statements.
3. Exhibits :
The following exhibits are filed as part of this report. The exhibit numbers preceded by an asterisk (*) indicate exhibits electronically filed herewith. All other exhibit numbers indicate exhibits previously filed and are hereby incorporated herein by reference. Exhibits numbered 10.1 through 10.40 are management contracts or compensatory plans or arrangements.
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3.1 Company's Amended and Restated Certificate of Incorporation as amended through August 2 , 202 1 (incorporated by reference to Exhibit 3.1 of the Company's Q u a rterly R eport on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 2021) .
3.2 Company's By-Laws, as amended through September 26, 2016 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated September 26, 2016 ( f iled September 27, 2016) ) .
4.1 The instruments defining the rights of holders of long-term debt securities of the Company and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company hereby agrees to furnish copies of these instruments to the SEC upon request.
4.2 Description of American Express Company’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.2 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2020).
10.1 American Express Company Deferred Compensation Plan for Directors and Advisors, as amended and restated effective April 1, 2018 (incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended March 31, 2018).
10.2 American Express Company 2007 Pay-for-Performance Deferral Program Document (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated November 20, 2006 (filed November 22, 2006)).
10.3 Description of amendments to 1994–2006 Pay-for-Performance Deferral Programs (incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2006).
10.4 American Express Company 2006 Pay-for-Performance Deferral Program Guide (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated November 21, 2005 (filed November 23, 2005)).
10.5 American Express Company 2005 Pay-for-Performance Deferral Program Guide (incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2004).
10.6 Description of American Express Company Pay-for-Performance Deferral Program (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated November 22, 2004 (filed January 28, 2005)).
10.7 Amendment to the Pre-2008 Nonqualified Deferred Compensation Plans of American Express Company (incorporated by reference to Exhibit 10.19 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2008).
10.8 American Express Company Retirement Plan for Non-Employee Directors, as amended (incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1988).
10.9 Certificate of Amendment of the American Express Company Retirement Plan for Non-Employee Directors dated March 21, 1996 (incorporated by reference to Exhibit 10.11 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1995).
10.10 American Express Key Executive Life Insurance Plan, as amended (incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the fiscal year ended December 31, 1991).
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10.11 Amendment to American Express Company Key Executive Life Insurance Plan (incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 1994).
10.12 Amendment to American Express Company Key Executive Life Insurance Plan, effective as of January 22, 2007 (incorporated by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2006).
10.13 Amendment to American Express Company Key Executive Life Insurance Plan, effective as of January 1, 2011 (incorporated by reference to Exhibit 10.24 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2010).
10.14 American Express Key Employee Charitable Award Program for Education (incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1990).
10.15 American Express Directors' Charitable Award Program (incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1990).
10.16 American Express Company Salary/Bonus Deferral Plan (incorporated by reference to Exhibit 10.20 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1988).
10.17 Amendment to American Express Company Salary/Bonus Deferral Plan (incorporated by reference to Exhibit 10.4 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 1994).
10.18 American Express Senior Executive Severance Plan, as amended and restated effective May 1, 2018 (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended June 30, 2018).
10.19 Amendments of (i) the American Express Salary/Bonus Deferral Plan and (ii) the American Express Key Executive Life Insurance Plan (incorporated by reference to Exhibit 10.37 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 1997).
10.20 Second Amendment and Restatement of the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (as amended and restated effective as of January 1, 2012) (incorporated by reference to Exhibit 10.28 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2011).
10.21 Third Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated March 29, 2012) (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended March 31, 2012).
10.22 Fourth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated October 24, 2012) (incorporated by reference to Exhibit 10.31 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2012).
10.23 Fifth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated May 1, 2013) (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended March 31, 2013).
10.24 Sixth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated August 16, 2013) (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 2013).
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10.25 Seventh Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated September 26, 2013) (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 2013).
10.26 Eighth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated December 1, 2013) (incorporated by reference to Exhibit 10.36 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2013).
10.27 Ninth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated December 14, 2016) (incorporated by reference to Exhibit 10.30 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2016).
10.28 Tenth Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated December 17, 2018) (incorporated by reference to Exhibit 10.28 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2018).
* 10.29 Eleventh Amendment to the American Express Retirement Restoration Plan (f/k/a Supplemental Retirement Plan) (dated December 9, 2021).
10.30 American Express Company 2003 Share Equivalent Unit Plan for Directors, as amended and restated, effective January 1, 2015 (incorporated by reference to Exhibit 10.38 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2015).
10.31
Description of Compensation Payable to Non-Management Directors effective January 1, 2015 (incorporated by reference to Exhibit 10.39 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2014).
10.32 American Express Company 2007 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated April 23, 2007 (filed April 27, 2007)).
10.33 American Express Company 2007 Incentive Compensation Plan Master Agreement (as amended and restated effective January 23, 2012) (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated January 23, 2012 (filed January 27, 2012)).
10.34 Form of nonqualified stock option award agreement for executive officers under the American Express Company 2007 Incentive Compensation Plan (for awards made after January 26, 2016) (incorporated by reference to Exhibit 10.43 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2015).
10.35 American Express Company 2016 Incentive Compensation Plan (as amended and restated effective May 5, 2020) (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated May 5, 2020 (filed May 7, 2020) ).
10.36 Form of nonqualified stock option award agreement for executive officers under the American Express Company 2016 Incentive Compensation Plan (for awards made after May 2, 2016) (incorporated by reference to Exhibit 10.41 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2016).
10.37 Form of restricted stock unit award agreement for executive officers under the American Express Company 2016 Incentive Compensation Plan (for awards made after May 2, 2016) (incorporated by reference to Exhibit 10.42 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2016).
10.38 Form of award agreement for executive officers in connection with Performance Grant awards (a/k/a Executive Annual Incentive Awards) under the American Express Company 2016 Incentive Compensation Plan (for awards made after May 2, 2016) (incorporated by reference to Exhibit 10.43 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2016).
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10.39 Amendment to the Form of nonqualified stock option award agreement and Form of restricted stock unit award for executive officers under the American Express Company 2016 Incentive Compensation Plan (for awards made after January 29, 2020) (incorporated by reference to Exhibit 10.41 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2019).
10.40 Form of notice agreement in connection with Annual Incentive Awards under the American Express Company 2016 Incentive Compensation Plan (incorporated by reference to Exhibit 10.42 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2019).
10.41 Restated Letter Agreement, dated May 6, 2019, between American Express Company and Berkshire Hathaway Inc., on behalf of itself and its subsidiaries (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (Commission File No. 1-7657), dated May 6, 2019 (filed May 6, 2019) ).
10.42 Time Sharing Agreement, dated February 13, 2018, by and between American Express Travel Related Services Company, Inc. and Stephen J. Squeri (incorporated by reference to Exhibit 10.48 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2017).
10.43 Amendment No. 1, dated March 29, 2019, to the Time Sharing Agreement, dated February 13, 2018, by and between American Express Travel Related Services Company, Inc. and Stephen J. Squeri (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended March 31, 2019).
10.44 Amendment No. 2, dated July 26, 2019, to the Time Sharing Agreement, dated February 13, 2018, by and between American Express Travel Related Services Company, Inc. and Stephen J. Squeri (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (Commission File No. 1-7657) for the quarter ended September 30, 2019).
10.45 Amendment No. 3, dated December 15, 2020, to the Time Sharing Agreement, dated February 13, 2018, by and between American Express Travel Related Services Company, Inc. and Stephen J. Squeri (incorporated by reference to Exhibit 10.46 of the Company's Annual Report on Form 10-K (Commission File No. 1-7657) for the year ended December 31, 2020).
* 10.46 Amendment No. 4, dated December 2 8 , 2021, to the Time Sharing Agreement, dated February 13, 2018, by and between American Express Travel Related Services Company, Inc. and Stephen J. Squeri.
* 21 Subsidiaries of the Company.
* 23 Consent of PricewaterhouseCoopers LLP.
* 31.1 Certification of Stephen J. Squeri, Chief Executive Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
* 31.2 Certification of Jeffrey C. Campbell, Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
* 32.1 Certification of Stephen J. Squeri, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* 32.2 Certification of Jeffrey C. Campbell, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* 101.INS XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
* 101.SCH XBRL Taxonomy Extension Schema Document
* 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
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* 101.LAB XBRL Taxonomy Extension Label Linkbase Document
* 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* 101.DEF XBRL Taxonomy Extension Definition Linkbase Document
* 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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ITEM 16. FORM 10-K SUMMARY
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN EXPRESS COMPANY
/s/ JEFFREY C. CAMPBELL
Jeffrey C. Campbell
Vice Chairman and Chief Financial Officer
February 11, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated.
/s/ STEPHEN J. SQUERI /s/ THEODORE J. LEONSIS
Stephen J. Squeri
Chairman, Chief Executive Officer and Director Theodore J. Leonsis
Director
/s/ JEFFREY C. CAMPBELL /s/ KAREN L. PARKHILL
Jeffrey C. Campbell
Vice Chairman and Chief Financial Officer Karen L. Parkhill
Director
/s/ JESSICA LIEBERMAN QUINN /s/ CHARLES E. PHILLIPS, JR.
Jessica Lieberman Quinn
Executive Vice President and Corporate Controller
(Principal Accounting Officer) Charles E. Phillips, Jr.
Director
/s/ THOMAS J. BALTIMORE, JR.
/s/ LYNN A. PIKE
Thomas J. Baltimore, Jr.
Director
Lynn A. Pike
Director
/s/ CHARLENE BARSHEFSKY /s/ DANIEL L. VASELLA
Charlene Barshefsky
Director Daniel L. Vasella
Director
/s/ JOHN J. BRENNAN /s/ LISA W. WARDELL
John J. Brennan
Director Lisa W. Wardell
Director
/s/ PETER CHERNIN /s/ RONALD A. WILLIAMS
Peter Chernin
Director Ronald A. Williams
Director
/s/ RALPH DE LA VEGA /s/ CHRISTOPHER D. YOUNG
Ralph de la Vega
Director Christopher D. Young
Director
/s/ MICHAEL O. LEAVITT
Michael O. Leavitt
Director
February 11, 2022
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Appendix
STATISTICAL DISCLOSURE BY BANK HOLDING COMPANIES
The accompanying supplemental information should be read in conjunction with the “MD&A”, “Consolidated Financial Statements” and notes thereto.
Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential
The following tables provide a summary of our consolidated average balances including major categories of interest-earning assets and interest-bearing liabilities along with an analysis of net interest earnings. Consolidated average balances, interest, and average yields are segregated between U.S. and non-U.S. offices. Assets, liabilities, interest income and interest expense are attributed to the United States and outside the United States based on the location of the office recording such items.
2021 2020 2019
Years Ended December 31,
(Millions, except percentages)
Average
Balance (a)
Interest
Income Average
Yield Average
Balance (a)
Interest
Income Average
Yield Average
Balance (a)
Interest
Income Average
Yield
Interest-earning assets
Interest-bearing deposits in other banks
U.S. $ 25,583 $ 34 0.1 % $ 31,446 $ 100 0.3 % $ 22,169 $ 517 2.3 %
Non-U.S. 2,291 54 2.4 2,367 51 2.2 2,085 48 2.3
Federal funds sold and securities purchased under agreements to resell
U.S. — — — — — — 19 3 15.8
Non-U.S. 196 10 5.1 184 11 6.0 56 6 10.7
Short-term investment securities
U.S. 360 — — 658 7 1.1 409 11 2.7
Non-U.S. 106 — — 97 1 1.0 93 1 1.1
Card Member loans (b)
U.S. 66,436 7,553 11.4 65,559 8,196 12.5 72,422 9,452 13.1
Non-U.S. 9,614 1,086 11.3 9,018 1,196 13.3 10,362 1,400 13.5
Other loans (b)
U.S. 2,341 181 7.7 4,078 342 8.4 4,101 413 10.1
Non-U.S. 126 30 23.8 139 45 32.4 170 43 25.3
Taxable investment securities (c)
U.S. 13,765 62 0.5 14,002 100 0.7 6,335 147 2.3
Non-U.S. 634 16 2.5 612 21 3.4 589 27 4.6
Non-taxable investment securities (c)
U.S. 87 3 4.7 128 5 5.1 237 11 5.9
Other assets (d)
Primarily U.S. 16 4 n.m 38 8 n.m. 17 5 n.m.
Total interest-earning assets (e)
$ 121,555 $ 9,033 7.4 % $ 128,326 $ 10,083 7.9 % $ 119,064 $ 12,084 10.2 %
U.S. 108,588 7,837 115,909 8,758 105,709 10,559
Non-U.S. 12,967 1,196 12,417 1,325 13,355 1,525
n.m. Denotes rates determined to not be meaningful.
(a) Averages based on month-end balances.
(b) Average non-accrual loans were included in the average Card Member loan balances in amounts of $121 million, $275 million and $307 million in U.S. for 2021, 2020 and 2019, respectively. Average other loan balances for U.S. include average non-accrual loans of $1 million, $3 million and $7 million for 2021, 2020 and 2019, respectively. Average non-accrual loans are considered to determine the average yield on loans.
(c) Average yields for both taxable and non-taxable investment securities have been calculated using amortized cost balances and do not include changes in fair value recorded in other comprehensive loss. Average yield on non-taxable investment securities is calculated on a tax-equivalent basis using the U.S. federal statutory tax rate of 21 percent for 2021, 2020 and 2019.
(d) Amounts include (i) average equity securities balances, which are included in investment securities on the Consolidated Balance Sheets, and (ii) the associated income.
(e) The average yield on total interest-earning assets is adjusted for the impacts of the items mentioned in footnote (c).
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Table of Contents
Years Ended December 31,
(Millions, except percentages)
2021
Average Balance (a)
2020
Average Balance (a)
2019
Average Balance (a)
Non-interest-earning assets
Cash and due from banks
U.S. $ 2,729 $ 2,205 $ 2,842
Non-U.S. 868 823 732
Card Member receivables, net
U.S. 30,039 27,414 27,724
Non-U.S. 16,632 16,009 28,040
Reserves for credit losses on Card Member and other loans
U.S. (3,964) (4,682) (2,057)
Non-U.S. (369) (526) (258)
Other assets (b)
U.S. 16,589 14,680 12,689
Non-U.S. 5,514 5,830 5,593
Total non-interest-earning assets 68,038 61,753 75,305
U.S. 45,393 39,617 41,198
Non-U.S. 22,645 22,136 34,107
Total assets $ 189,593 $ 190,079 $ 194,369
U.S. 153,981 155,526 146,908
Non-U.S. 35,612 34,553 47,461
Percentage of total average assets attributable to non-U.S. activities 18.8 % 18.2 % 24.4 %
(a) Averages based on month-end balances.
(b) Includes premises and equipment, net of accumulated depreciation and amortization.
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Table of Contents
2021 2020 2019
Years Ended December 31,
(Millions, except percentages) Average
Balance (a)
Interest
Expense Average
Rate Average
Balance (a)
Interest
Expense Average
Rate Average
Balance (a)
Interest
Expense Average
Rate
Interest-bearing liabilities
Customer deposits
U.S.
Savings $ 78,084 $ 314 0.4 % $ 69,796 $ 697 1.0 % $ 59,087 $ 1,247 2.1 %
Time 6,092 139 2.3 9,898 237 2.4 12,179 298 2.4
Demand 692 2 0.3 752 5 0.7 447 9 2.0
Non-U.S.
Time 8 — — 11 1 9.1 16 1 6.3
Other deposits 11 3 27.3 11 3 27.3 10 4 40.0
Short-term borrowings
U.S. 3 — — 769 18 2.3 407 22 5.4
Non-U.S. 1,983 12 0.6 2,017 11 0.5 2,621 15 0.6
Long-term debt and other (b)
U.S. 38,157 808 2.1 48,690 1,123 2.3 57,936 1,859 3.2
Non-U.S. 326 5 1.5 336 3 0.9 325 9 2.8
Total interest-bearing liabilities $ 125,356 $ 1,283 1.0 % $ 132,280 $ 2,098 1.6 % $ 133,028 $ 3,464 2.6 %
U.S. 123,028 1,263 129,905 2,080 130,056 3,435
Non-U.S. 2,328 20 2,375 18 2,972 29
Non-interest-bearing liabilities
Accounts payable
U.S. 4,289 4,642 7,116
Non-U.S. 5,107 4,737 6,202
Customer deposits (c)
U.S. 494 766 385
Non-U.S. 569 682 387
Other liabilities
U.S. 22,925 18,954 18,360
Non-U.S. 6,943 6,016 6,079
Total non-interest-bearing liabilities 40,327 35,797 38,529
U.S. 27,708 24,362 25,861
Non-U.S. 12,619 11,435 12,668
Total liabilities 165,683 168,077 171,557
U.S. 150,736 154,267 155,917
Non-U.S. 14,947 13,810 15,640
Total shareholders' equity 23,910 22,002 22,812
Total liabilities and shareholders' equity
$ 189,593 $ 190,079 $ 194,369
Percentage of total average liabilities attributable to non-U.S. activities
9.0 % 8.2 % 9.1 %
Interest rate spread 6.4 % 6.3 % 7.6 %
Net interest income and net average yield on interest-earning assets (d)`
$ 7,750 6.4 % $ 7,985 6.2 % $ 8,620 7.2 %
(a) Averages based on month-end balances.
(b) Interest expense primarily reflects interest on long-term financing and interest incurred on derivative instruments in qualifying hedging relationships on the hedged debt instruments.
(c) U.S. non-interest-bearing Customer deposits include average Card Member credit balances of $470 million, $742 million and $353 million for 2021, 2020 and 2019, respectively. Non-U.S. non-interest-bearing Customer deposits include average Card Member credit balances of $568 million, $679 million and $381 million for 2021, 2020 and 2019, respectively.
(d) Net average yield on interest-earning assets is defined as net interest income divided by average total interest-earning assets as adjusted for the items mentioned in footnote (c) from the table on A-1.
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Changes in Net Interest Income − Volume and Rate Analysis (a)
The following table presents the amount of changes in interest income and interest expense due to changes in both average volume and average rate. Major categories of interest-earning assets and interest-bearing liabilities have been segregated between U.S. and non-U.S. offices. Average volume/rate changes have been allocated between the average volume and average rate variances on a consistent basis based upon the respective percentage changes in average balances and average rates.
2021 Versus 2020 2020 Versus 2019
Increase (Decrease)
due to change in: Increase (Decrease)
due to change in:
Years Ended December 31, (Millions)
Average
Volume Average
Rate Net Change Average
Volume Average
Rate Net Change
Interest-earning assets
Interest-bearing deposits in other banks
U.S. $ (19) $ (47) $ (66) $ 216 $ (633) $ (417)
Non-U.S. (2) 5 3 6 (3) 3
Federal funds sold and securities purchased under agreements to resell
U.S. — — — (3) — (3)
Non-U.S. 1 (2) (1) 14 (9) 5
Short-term investment securities
U.S. (3) (4) (7) 7 (11) (4)
Non-U.S. — (1) (1) — — —
Card Member loans
U.S. 110 (753) (643) (896) (360) (1,256)
Non-U.S. 79 (189) (110) (182) (22) (204)
Other loans
U.S. (146) (15) (161) (2) (69) (71)
Non-U.S. (4) (11) (15) (8) 10 2
Taxable investment securities
U.S. (1) (37) (38) 177 (224) (47)
Non-U.S. 1 (6) (5) 1 (7) (6)
Non-taxable investment securities
U.S. (2) — (2) (7) 1 (6)
Other assets
Primarily U.S. (5) 1 (4) 6 (3) 3
Change in interest income 9 (1,059) (1,050) (671) (1,330) (2,001)
Interest-bearing liabilities
Customer deposits
U.S.
Savings 83 (466) (383) 226 (776) (550)
Time (91) (7) (98) (56) (5) (61)
Demand — (3) (3) 6 (10) (4)
Non-U.S.
Time — (1) (1) — — —
Other deposits — — — — (1) (1)
Short-term borrowings
U.S. (18) — (18) 20 (24) (4)
Non-U.S. — 1 1 (3) (1) (4)
Long-term debt and other
U.S. (243) (72) (315) (297) (439) (736)
Non-U.S. — 2 2 — (6) (6)
Change in interest expense (269) (546) (815) (104) (1,262) (1,366)
Change in net interest income $ 278 $ (513) $ (235) $ (567) $ (68) $ (635)
(a) Refer to footnotes from “Distribution of Assets, Liabilities and Shareholders’ Equity” for additional information.
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Table of Contents
Maturities and Sensitivities to Changes in Interest Rates
The following table presents contractual maturities of loans and Card Member receivables by customer type, and segregated between U.S. and non-U.S. based on domicile of the borrowers, and distribution between fixed and floating interest rates for loans due after one year based upon the stated terms of the loan agreements.
December 31, (Millions)
2021
Within
1 year (a)
1-5
years (b) (c)
5-15
years (c)
After
15 years (c)
Total
Loans
U.S. loans
Card Member $ 76,500 $ 378 $ — $ — $ 76,878
Other 554 1,997 98 34 2,683
Non-U.S. loans
Card Member 11,684 — — — 11,684
Other 163 65 — — 228
Total loans $ 88,901 $ 2,440 $ 98 $ 34 $ 91,473
Loans due after one year at fixed interest rates
Card Member $ 378 $ — $ — $ 378
Other 2,038 — 34 2,072
Loans due after one year at variable interest rates
Card Member — — — —
Other 24 98 — 122
Total loans $ 2,440 $ 98 $ 34 $ 2,572
Card Member receivables
U.S. $ 38,284 $ 128 $ — $ — $ 38,412
Non-U.S. 15,233 — — — 15,233
Total Card Member receivables $ 53,517 $ 128 $ — $ — $ 53,645
(a) Card Member loans have no stated maturity and are therefore included in the due within one year category. However, many of our Card Members will revolve their balances, which may extend their repayment period beyond one year for balances outstanding as of December 31, 2021. Card member receivables are due upon receipt of Card Member statements and have no stated interest rate and are therefore included in the due within one year category.
(b) Card Member loans and receivables due after one year represent Troubled Debt Restructurings (TDRs). Card Members experiencing financial difficulties are offered modification programs wherein a long-term concession (more than 12 months) has been granted to the borrower and are classified as TDRs.
(c) Other loans due after one year primarily represents installment loans.
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Table of Contents
Credit Quality Indicators for Loans and Card Member Receivables
The following table summarizes the ratio of all loans and Card Member receivables categories.
Years Ended December 31,
(Millions, except percentages and where indicated)
2021 2020
Card Member loans
Net write-offs — principal less recoveries $ 672 $ 1,795
Net write-offs — interest and fees less recoveries $ 207 $ 375
Average Card Member loans (billions) (a)
$ 76.1 $ 74.6
Principal only net write-offs / average Card Member loans outstanding (b)
0.9 % 2.4 %
Principal, interest and fees net write-offs / average Card Member loans outstanding (b)
1.2 % 2.9 %
Other loans
Net write-offs $ 21 $ 111
Average Other loans (billions) (a)
$ 2.5 $ 4.2
Net write-offs/average other loans outstanding (b)
0.9 % 2.6 %
Card Member receivables
Net write-offs — principal and fees less recoveries $ 129 $ 881
Average Card Member receivables (billions) (a)
$ 46.8 $ 43.9
Net write-offs / average Card Member receivables outstanding (b)
0.3 % 2.0 %
Reserve for credit losses $ 3,421 $ 5,849
Non-accrual loans (c)
$ 96 $ 176
Reserve for credit losses to total loans and Card Member receivables (d)
2.4 % 4.9 %
Non-accrual loans to total loans (e)
0.1 % 0.2 %
Reserve for credit losses to non-accrual loans (f)
3476.3 % 3171.4 %
(a) Averages are based on month-end balances for the periods presented.
(b) The net write-off rate presented is on a worldwide basis and is based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(c) Non-accrual loans not in modification programs primarily include certain loans placed with outside collection agencies for which we have ceased accruing interest. Amounts presented exclude loans classified as TDR. Lower non-accrual loans are primarily driven by higher enrollments under In House TDR programs and lower delinquencies.
(d) Represents the reserve for credit losses as a percentage of total loans and Card Member receivables. Refer to “Maturities and Sensitivities to Changes in Interest Rates” for total outstanding balances of loans and Card Member receivables.
(e) Represents percentage of non-accrual loans to total loans.
(f) Represents the total reserve for credit losses on Card Member loans and other loans as a percentage of total non-accrual loans. Refer to “Allocation of reserve for credit losses” for reserve related to Card Member loans and other loans.
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Allocation of Reserve for Credit Losses
The following table shows the reserve for credit losses allocated to each of loans and Card Member receivables by customer type, and between U.S. and non-U.S. borrowers.
December 31, 2021 2020
(Millions, except percentages)
Reserve for credit losses at end of year applicable to
Amount Percentage (a)
Amount Percentage (a)
Loans
U.S. loans
Card Member $ 3,067 91 % $ 4,820 86 %
Other 50 1 228 4
Non-U.S. loans
Card Member 238 8 524 10
Other 2 — 10 —
$ 3,357 100 % $ 5,582 100 %
Card Member receivables
U.S. $ 54 84 % $ 216 81 %
Non-U.S. 10 16 51 19
$ 64 100 % $ 267 100 %
(a) Percentage of reserve for credit losses on loans and Card Member receivables in each category to the total reserve.
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Table of Contents
Uninsured Time Certificates of Deposit
The following table presents the amount of uninsured time certificates of deposit issued by us in our U.S. and non-U.S. offices, further segregated by time remaining until maturity. For any account holder with aggregate deposits in excess of insured limits, the uninsured deposits are calculated proportionately as a percentage of total deposits for each category of deposits held as of the reporting date.
By remaining maturity as of December 31, 2021
(Millions) 3 months
or less Over 3 months
but within 6 months Over 6 months
but within 12 months Over
12 months Total
U.S. (a)
$ 73 $ 30 $ 18 $ 93 $ 214
Non U.S. (b)
$ 1 $ 1 $ 3 $ — $ 5
(a) We offer deposits within our U.S. bank subsidiary, AENB. These funds are currently insured up to $250,000 per account holder through the FDIC.
(b) Includes time deposits in certain of our Non-U.S. offices, that exceed the insurance limit as defined by the regulatory rules in individual markets.
A-8