NOTE 22
Significant Credit Concentrations
Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to American Express' total credit exposure. The Company's customers operate in diverse industries, economic sectors and geographic regions.
The following table details the Company's maximum credit exposure by category, including the credit exposure associated with derivative financial instruments, as of December 31:
| (Billions) | 2013 | 2012 | ||||
| On-balance sheet: | ||||||
| Individuals(a) | $ | 98 | $ | 95 | ||
| Financial institutions(b) | 22 | 25 | ||||
| U.S. Government and agencies(c) | 4 | 5 | ||||
| All other(d) | 17 | 16 | ||||
| Total on-balance sheet(e) | 141 | 141 | ||||
| Unused lines-of-credit ― individuals(f) | $ | 265 | $ | 253 | ||
As of December 31, 2013 and 2012, the Company's most significant concentration of credit risk was with individuals, including Card Member receivables and loans. These amounts are generally advanced on an unsecured basis. However, the Company reviews each potential customer's credit application and evaluates the applicant's financial history and ability and willingness to repay. The Company also considers credit performance by customer tenure, industry and geographic location in managing credit exposure.
The following table details the Company's Card Member loans and receivables exposure (including unused lines-of-credit on Card Member loans) in the U.S. and outside the U.S. as of December 31:
| (Billions) | 2013 | 2012 | ||||
| On-balance sheet: | ||||||
| U.S. | $ | 89 | $ | 85 | ||
| Non-U.S. | 22 | 23 | ||||
| On-balance sheet(a)(b) | 111 | 108 | ||||
| Unused lines-of-credit ― individuals: | ||||||
| U.S. | 219 | 208 | ||||
| Non-U.S. | 46 | 45 | ||||
| Total unused lines-of-credit ― individuals | $ | 265 | $ | 253 | ||
Exposure to the Airline Industry
The Company has multiple important co-brand, rewards and corporate payment arrangements with airlines. The Company's largest airline partner is Delta and this relationship includes exclusive co-brand credit card partnerships and other arrangements including Membership Rewards, merchant acceptance, travel and corporate payments programs. American Express' Delta SkyMiles Credit Card co-brand portfolio accounts for approximately 5 percent of the Company's worldwide billed business and less than 15 percent of worldwide Card Member loans. Refer to Notes 4 and 8 for further information on receivables and other assets recorded by the Company relating to these relationships.
In recent years, the airline industry has undergone bankruptcies, restructurings, consolidations and other similar events. Historically, the Company has not experienced significant revenue declines when a particular airline scales back or ceases operations due to a bankruptcy or other financial challenges because volumes generated by that airline are typically shifted to other participants in the industry that accept the Company's card products. The Company's exposure to business and credit risk in the airline industry is primarily through business arrangements where the Company has remitted payment to the airline for a Card Member purchase of tickets that have not yet been used or “flown”. The Company mitigates this risk by delaying payment to the airlines with deteriorating financial situations, thereby increasing cash withheld to protect the Company in the event the airline is liquidated. To date, the Company has not experienced significant losses from airlines that have ceased operations.