UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------
FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File No. 1-6908
AMERICAN EXPRESS CREDIT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 11-1988350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE CHRISTINA CENTRE, 301 NORTH WALNUT STREET 19801-2919
SUITE 1002, WILMINGTON, DELAWARE (Zip Code)
(Address of principal executive offices)
Registrant's telephone number including area code: (302) 594-3350.
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report.)
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND HAS THEREFORE OMITTED CERTAIN ITEMS FROM THIS REPORT IN
ACCORDANCE WITH THE REDUCED DISCLOSURE FORMAT PERMITTED UNDER GENERAL
INSTRUCTIONS H(2).
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES [_] NO [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 14, 2003
- ---------------------------- --------------------------------
Common Stock, $.10 par value 1,504,938 shares
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
FORM 10-Q
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed consolidated statements
of income and retained earnings - three and nine
months ended September 30, 2003 and 2002 3
Condensed consolidated balance
sheets - September 30, 2003 and
December 31, 2002 4
Condensed consolidated statements of
cash flows - nine months ended
September 30, 2003 and 2002 5
Notes to condensed consolidated
financial statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
ITEM 4. CONTROLS AND PROCEDURES 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
EXHIBIT INDEX E-1
-2-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
PART I
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS
(Millions)
(Unaudited)
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
- --------------------------------------------------------------------------------
REVENUES
Revenue earned from purchased
accounts receivable $ 465 $ 479 $1,389 $1,486
Interest income from investments 16 23 54 62
Interest income from affiliates 7 12 24 35
Other -- 2 10 4
- --------------------------------------------------------------------------------
Total 488 516 1,477 1,587
- --------------------------------------------------------------------------------
EXPENSES
Interest expense - other 197 201 593 615
Provision for losses, net
of recoveries 187 211 521 632
Interest expense - affiliates 13 28 46 76
Other 9 11 29 37
- --------------------------------------------------------------------------------
Total 406 451 1,189 1,360
- --------------------------------------------------------------------------------
Pretax income 82 65 288 227
Income tax provision 28 22 99 77
- --------------------------------------------------------------------------------
Net income 54 43 189 150
Retained earnings at beginning of period 2,631 2,375 2,496 2,268
- --------------------------------------------------------------------------------
Retained earnings at end of period $2,685 $2,418 $2,685 $2,418
- --------------------------------------------------------------------------------
See notes to condensed consolidated financial statements.
-3-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions, except share data)
(Unaudited)
SEPTEMBER 30, DECEMBER 31,
2003 2002
- -----------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 710 $ 1,924
Investments 1,776 1,901
Charge cardmember receivables, less credit reserves:
2003, $547; 2002, $498 18,512 16,671
Lending receivables, less credit reserves:
2003, $225; 2002, $243 4,970 4,615
Loans and deposits with affiliates 1,659 2,047
Deferred charges and other assets 425 507
- -----------------------------------------------------------------------------------
Total assets $28,052 $27,665
- -----------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY
Short-term debt - other $ 8,770 $11,366
Short-term debt with affiliates 3,129 3,779
Current portion of long-term debt 2,920 5,751
Current portion of long-term debt with affiliates 918 --
Long-term debt with affiliates 456 943
Long-term debt - other 7,900 1,174
------- -------
Total debt 24,093 23,013
Due to affiliates 455 1,418
Accrued interest and other liabilities 867 919
- -----------------------------------------------------------------------------------
Total liabilities 25,415 25,350
- -----------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY
Common stock-authorized 3 million shares of $.10
par value; issued and outstanding 1.5 million
shares 1 1
Capital surplus 161 161
Retained earnings 2,685 2,496
Other comprehensive loss, net of tax:
Net unrealized securities gains/(losses) 1 (11)
Net unrealized derivatives losses (211) (332)
- -----------------------------------------------------------------------------------
Accumulated other comprehensive loss (210) (343)
- -----------------------------------------------------------------------------------
Total shareholder's equity 2,637 2,315
- -----------------------------------------------------------------------------------
Total liabilities and shareholder's equity $28,052 $27,665
- -----------------------------------------------------------------------------------
See notes to condensed consolidated financial statements.
-4-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions)
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
2003 2002
- -----------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 189 $ 150
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Provision for losses 521 632
Changes in operating assets and liabilities:
Deferred tax assets (24) 93
Interest receivable and other operating assets 89 104
Due to affiliates 291 49
Other 79 209
- -----------------------------------------------------------------------------------
Net cash provided by operating activities 1,145 1,237
- -----------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in accounts receivable (596) 560
Recoveries of accounts receivable previously written off 150 179
Purchase of participation interest in seller's interest in
accounts receivable from affiliate (2,051) (1,518)
Sale of participation interest in seller's interest in accounts
receivable to affiliate 106 1,866
Sale of net accounts receivable to affiliate 137 1,543
Purchase of net accounts receivable from affiliate (462) (563)
Purchase of investments (87) (579)
Maturity of investments 230 95
Loans and deposits due from affiliates 388 6
Due to affiliates (1,256) (1,668)
- -----------------------------------------------------------------------------------
Net cash used in investing activities (3,441) (79)
- -----------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in short-term debt with affiliates
with maturities of ninety days or less (650) 1,918
Net decrease in short-term debt - other with
maturities of ninety days or less (1,787) (5,601)
Issuance of debt 9,710 9,237
Redemption of debt (6,191) (6,315)
- -----------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 1,082 (761)
- -----------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (1,214) 397
- -----------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 1,924 408
- -----------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 710 $ 805
- -----------------------------------------------------------------------------------
See notes to condensed consolidated financial statements.
-5-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The condensed consolidated financial statements should be read in
conjunction with the Annual Report on Form 10-K of American Express Credit
Corporation, including its subsidiaries where appropriate (the "Company" or
"Credco"), for the year ended December 31, 2002. Significant accounting
policies disclosed therein have not changed. Credco 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").
The condensed consolidated financial statements are unaudited; however, in
the opinion of management, they include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of the
consolidated financial position of Credco at September 30, 2003 and the
consolidated results of its operations and changes in its retained earnings
for the three- and nine-month periods ended September 30, 2003 and 2002 and
cash flows for the nine-month periods ended September 30, 2003 and 2002.
Results of operations reported for interim periods are not necessarily
indicative of results for the entire year. Certain prior year amounts have
been reclassified to conform to the current year presentation.
Recently Issued Accounting Standards
In November 2002, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 45 "Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others"
(FIN 45) which provides accounting and disclosure requirements for certain
guarantees. As a result of the adoption of this pronouncement, there was no
material impact to Credco's financial statements.
In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." This Statement amends and clarifies accounting for
derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133. The Statement is effective for contracts
entered into or modified and hedging relationships designated after June
30, 2003, and to certain preexisting contracts. The adoption of this
Statement did not have a material impact on Credco's financial statements.
2. INVESTMENT SECURITIES
The following is a summary of investments at September 30, 2003 and
December 31, 2002:
September 30, December 31,
(Millions) 2003 2002
------------- ------------
Available for Sale, at fair value (cost September 30, 2003-$1,775;
December 31, 2002-$1,918) $1,776 $1,901
------ ------
3. COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) is defined as the aggregate change in
shareholder's equity, excluding changes in ownership interests. For Credco,
it is the sum of net income and changes in 1) unrealized gains or losses
-6-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
on available for sale securities and 2) unrealized gains or losses on
derivatives. The components of comprehensive income (loss), net of related
tax, for the three and nine months ended September 30, 2003 and 2002 were
as follows:
Three Months Nine Months
Ended Ended
(Millions) September 30, September 30,
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
Net income $ 54 $ 43 $189 $150
Change in:
Net unrealized securities gains (losses) -- (17) 12 (14)
Net unrealized derivatives gains (losses) 97 (47) 121 (73)
---- ---- ---- ----
Total $151 $(21) $322 $ 63
---- ---- ---- ----
4. ASSET SECURITIZATIONS
In the first nine months of 2003, the American Express Credit Account
Master Trust (the "Master Trust") securitized $3.5 billion of lending
receivables through the public issuances of two classes of investor
certificates and privately placed collateral interests in the assets of the
Master Trust. At the time of these issuances, Credco Receivables Corp.
("CRC"), a wholly-owned subsidiary of Credco, sold an aggregate of $110
million of gross seller's interest in lending receivables ($106 million,
net of reserves) to American Express Receivables Financing Corporation II
("RFCII"), a wholly-owned subsidiary of TRS. In addition, at the time of
the issuances, CRC purchased from the Master Trust, as an investment, an
aggregate of $87 million of Class C Certificates issued by the Master
Trust, collateralized by the revolving credit receivables held by the
Master Trust.
In connection with the June 2003 maturity of $1.0 billion of investor
certificates previously issued by the Master Trust, $95 million of Class C
Certificates, previously issued by the Master Trust, which were held by CRC
as investments, matured.
In the first nine months of 2003, $2.1 billion of investor certificates
previously issued by the American Express Master Trust (the "Trust") to
securitize charge cardmember receivables matured. In connection with these
maturities, $135 million of Class B Certificates, previously issued by the
Trust, which were held by CRC as investments, matured. At the time of these
maturities, CRC purchased $2.13 billion gross seller's interest in charge
cardmember receivables ($2.05 billion, net of reserves) from American
Express Receivables Financing Corporation ("RFC"), a wholly-owned
subsidiary of TRS.
5. TAXES AND INTEREST
For the nine-month periods ended September 30, 2003 and 2002, Credco paid
$146 million and $16 million, respectively, of income taxes. Interest paid
was $650 million and $573 million for the nine-month periods ended
September 30, 2003 and 2002, respectively.
-7-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As part of the Company's ongoing funding activities, during the nine months
ended September 30, 2003, American Express Credit Corporation, including its
subsidiaries where appropriate (the "Company" or "Credco"), issued approximately
$4.5 billion of floating rate medium-term notes with maturities of one to three
years, a portion of which can be extended by the holders up to an additional
four years. In May 2003, Credco issued $1.0 billion of fixed rate notes due 2008
and $500 million of floating rate notes due 2006. Additionally, in June 2003,
Credco issued, through a private placement, $1.0 billion of floating rate
extendible notes with an initial maturity of one year, subject to extension by
the holders up to an additional four years. These issuances reflect the
continued change in the Company's approach toward managing liquidity by placing
a higher reliance on medium-term notes and a lesser reliance on commercial
paper. Proceeds from the sale of these securities have contributed toward an
overall reduction in commercial paper outstanding from $11.2 billion at December
31, 2002 to $8.6 billion at September 30, 2003. Committed bank line coverage of
net short-term debt was 106% at December 31, 2002 and September 30, 2003.
In October 2003, Credco issued $600 million of floating rate medium-term notes
with maturities of two years.
Credco had the ability to issue approximately $12.2 billion of debt securities
and warrants to purchase debt securities available for issuance under a shelf
registration statement filed with the Securities and Exchange Commission as of
September 30, 2003.
At September 30, 2003, Credco had the ability to issue $5.5 billion of debt
under a Euro Medium-Term Note program for the issuance of debt outside the
United States to non-U.S. persons. This program was established by Credco;
American Express Travel Related Services Company, Inc. ("TRS"), a wholly-owned
subsidiary of American Express Company ("American Express"); American Express
Centurion Bank ("Centurion Bank"), a wholly-owned subsidiary of TRS; American
Express Overseas Credit Corporation Limited ("AEOCC"), a wholly-owned subsidiary
of Credco; and American Express Bank Ltd., a wholly-owned indirect subsidiary of
American Express. The maximum aggregate principal amount of debt instruments
outstanding at any one time under the program will not exceed $6.0 billion.
Committed credit line facilities at September 30, 2003 and 2002 totaled $8.5
billion and $10.0 billion, respectively. In April 2003, Credco and American
Express renegotiated their committed credit line facilities. Total available
credit lines are $10.85 billion, including $2.0 billion allocated to American
Express and $8.5 billion allocated to Credco. Credco has the right to borrow up
to a maximum amount of $10.5 billion, with a commensurate reduction in the
amount available to American Express. The remainder of these credit lines is
allocated to Centurion Bank. These facilities expire in increments from 2004
through 2007. Based upon the maximum amount of available borrowing, Credco's
committed bank line coverage of its net short-term debt was 131% at September
30, 2003.
On October 20, 2003, Standard & Poor's rating services affirmed American
Express' A+ and its subsidiaries' (including Credco's) credit ratings and
revised its ratings outlook to stable from negative citing American Express'
diversified businesses and geographic markets, strong brand recognition, solid
capitalization and strong capital generation.
-8-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
RESULTS OF OPERATIONS
Credco's decrease in revenues for the nine-month period ended September 30,
2003, is primarily attributable to lower discount and interest rates, partially
offset by an increase in the volume of receivables purchased. Interest income
decreased for the nine-month period ended September 30, 2003 as lower interest
rates were partially offset by an increase in the volume of average investments
outstanding. Interest expense decreased for the nine-month period ended
September 30, 2003 primarily as a result of a decline in interest rates.
Provision for losses decreased from the prior year due primarily to a decrease
in provision rates and volume of recoveries.
The following is an analysis of the decrease in key revenue and expense accounts
for the nine-month period ended September 30, 2003, compared with the nine-month
period ended September 30, 2002 (Millions):
Nine-
Month
Period
------
Revenue earned from purchased accounts receivable - changes attributable to:
Volume of receivables purchased 163
Discount and interest rates (260)
----
Total (97)
====
Interest income from investments - changes attributable to:
Volume of average investments outstanding 11
Interest rates (19)
----
Total (8)
====
Interest income from affiliates - changes attributable to:
Volume of average investments outstanding (1)
Interest rates (10)
----
Total (11)
====
Interest expense other - changes attributable to:
Volume of average debt outstanding 49
Interest rates (71)
----
Total (22)
====
Provision for losses - changes attributable to:
Volume of receivables purchased 67
Provision rates and volume of recoveries (178)
----
Total (111)
====
Interest expense affiliates - changes attributable to:
Volume of average debt outstanding (20)
Interest rates (10)
----
Total (30)
====
-9-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
Credco purchases cardmember receivables without recourse from TRS. During the
nine-month periods ended September 30, 2003 and 2002, Credco purchased $148
billion and $137 billion, respectively, of charge cardmember and lending
receivables. Non-interest-bearing charge cardmember receivables are purchased at
face amount less a specified discount agreed upon from time to time, and
interest-bearing lending receivables are generally purchased at face amount.
Non-interest-bearing receivables are purchased under Receivables Agreements that
generally provide that the discount rate shall not be lower than a rate that
yields earnings of at least 1.25 times fixed charges on an annual basis. The
ratio of earnings to fixed charges for the nine-month periods ended September
30, 2003 and 2002 was 1.45 and 1.33, respectively. The ratio of earnings to
fixed charges for American Express, the parent of TRS, for the nine-month
periods ended September 30, 2003 and 2002 was 3.37 and 2.87, respectively. The
Receivables Agreements also provide that consideration will be given from time
to time to revising the discount rate applicable to purchases of new receivables
to reflect changes in money market interest rates or significant changes in the
collectibility of the receivables. Pretax income depends primarily on the volume
of charge cardmember and lending receivables purchased, the discount rates
applicable thereto, the relationship of total discount to Credco's interest
expense and the collectibility of receivables purchased.
Charge Cardmember Receivables
At September 30, 2003 and 2002, Credco owned $19.1 billion and $15.6 billion,
respectively, of charge cardmember receivables and participation in charge
cardmember receivables, representing 79 percent and 77 percent of the total
receivables owned at September 30, 2003 and 2002, respectively. The charge
cardmember receivables owned at September 30, 2003 and 2002 include $3.9 billion
and $1.8 billion, respectively, of participation interests owned by Credco
Receivables Corp. ("CRC"), a wholly-owned subsidiary of Credco. CRC owns a
participation in the seller's interest in charge cardmember receivables that
have been conveyed to the American Express Master Trust (the "Trust"). During
2003, $2.1 billion of investor certificates previously issued by the Trust
matured and alternate funding is being provided through CRC's purchase of $2.13
billion gross seller's interest in charge cardmember receivables ($2.05 billion,
net of reserves) from American Express Receivables Financing Corporation
("RFC"), a wholly-owned subsidiary of TRS.
Nine months ended September 30, (Millions, except percentages and where indicated) 2003 2002
- ------------------------------------------------------------------------------------------------------
Total charge cardmember receivables $19,059 $15,562
90 days past due as a % of total 2.2% 2.7%
Loss reserves $ 547 $ 495
as a % of receivables 2.9% 3.2%
as a % of 90 days past due 128% 116%
Write-offs, net of recoveries $ 345 $ 457
Net loss ratio (1) 0.24% 0.35%
Average life of charge cardmember receivables (in days) (2) 33 34
(1) Credco's write-offs, net of recoveries, expressed as a percentage of the
volume of charge cardmember receivables purchased by Credco in each of the
periods indicated.
(2) Represents the average life of charge cardmember receivables owned by
Credco, based upon the ratio of the average amount of both billed and
unbilled receivables owned by Credco at the end of each month, during the
periods indicated, to the volume of charge cardmember receivables purchased
by Credco.
Lending Receivables
At September 30, 2003 and 2002, Credco owned extended payment plan receivables
and loans ("lending receivables") totaling $5.2 billion and $4.7 billion,
respectively, representing 21 percent and 23 percent of all interests in
receivables owned by Credco at September 30, 2003 and 2002, respectively. These
receivables consist of certain interest-bearing and discounted extended payment
plan receivables comprised principally of
-10-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
American Express credit card, Sign & Travel and Extended Payment Option
receivables, lines of credit and loans to American Express Bank customers and
interest-bearing equipment financing installment loans and leases. At September
30, 2003, there was no participation interest in lending receivables owned by
CRC. The lending receivables owned at September 30, 2002 include $191 million of
participation interest owned by CRC. This represents a participation interest in
the seller's interest in lending receivables that have been conveyed to the
American Express Credit Account Master Trust (the "Master Trust"), formed in
1996 to securitize lending receivables.
Nine months ended September 30, (Millions, except percentages and where indicated) 2003 2002
- --------------------------------------------------------------------------------------------------------
Total lending receivables $5,195 $4,662
Past due lending receivables as a % of total:
30-89 days 3.0% 4.1%
90+ days 1.5% 1.7%
Loss reserves $ 225 $ 227
as a % of lending receivables 4.3% 4.9%
as a % of past due 97% 84%
Write-offs, net of recoveries $ 242 $ 236
Net write-off rate (1) 6.38% 7.15%
(1) Credco's write-offs, net of recoveries, expressed as a percentage of the
average amount of lending receivables owned by Credco at the beginning of
the year and at the end of each month in each of the periods indicated.
The following is an analysis of the credit reserves for charge cardmember and
lending receivables (Millions):
2003 2002
----- -----
Balance, January 1 $ 741 $ 847
Provision for losses 671 811
Accounts written off (738) (872)
Other 98 (64)
----- -----
Balance, September 30 $ 772 $ 722
===== =====
This report contains forward-looking statements, which are subject to risks and
uncertainties, including those identified below, which could cause actual
results to differ materially from such statements. The words "believe",
"expect", "anticipate", "optimistic", "intend", "evaluate", "plan", "aim",
"will", "should", "could", "likely" and similar expressions are intended to
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date on
which they are made. Credco undertakes no obligation to update publicly or
revise any forward-looking statements. Factors that could cause actual results
to differ materially from Credco's forward-looking statements include, but are
not limited to:
o credit trends and the rate of bankruptcies, which can affect spending
on card products and debt payments by individual and corporate
customers;
o Credco's ability to accurately estimate the provision for losses in
Credco's outstanding portfolio of charge cardmember and lending
receivables;
o fluctuations in foreign currency exchange rates;
o negative changes in Credco's credit ratings, which could result in
decreased liquidity and higher borrowing costs;
o the effect of fluctuating interest rates, which could affect Credco's
borrowing costs; and
o the impact on American Express Company's business from the recent war
in Iraq and its aftermath and other geopolitical uncertainty.
-11-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
OTHER REPORTING MATTERS
Accounting Developments
- -----------------------
In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46),
which addresses consolidation by business enterprises of variable interest
entities (VIEs). In October 2003, the FASB issued a statement delaying the
effective date of the consolidation provisions of FIN 46 from July 1, 2003 to
December 31, 2003 for VIEs created prior to February 1, 2003. Detailed
interpretations of FIN 46 continue to emerge and the FASB's statement delaying
its implementation indicated the FASB intends to issue further interpretations
over the next few months. Accordingly, the Company decided to delay its planned
third quarter 2003 adoption of FIN 46 until the revised effective date of
December 31, 2003. Preliminarily, the impact to Credco's financial statements is
not expected to be material.
ITEM 4. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures.
The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Company's 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, the Company's
Chief Executive Officer and Chief Financial Officer have concluded that, as
of the end of such period, the Company's disclosure controls and procedures
are effective.
(b) Internal Control Over Financial Reporting.
There have not been any changes in the Company's 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 fiscal quarter to which this
report relates that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.
-12-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
12.1 Computation in support of ratio of earnings to fixed charges
of American Express Credit Corporation.
12.2 Computation in support of ratio of earnings to fixed charges
of American Express Company.
31.1 Certification of Walker C. Tompkins, Jr. pursuant to Rule
13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended.
31.2 Certification of Walter S. Berman pursuant to Rule 13a-14(a)
promulgated under the Securities Exchange Act of 1934, as
amended.
32.1 Certification of Walker C. Tompkins, Jr. 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 Walter S. Berman pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
None
-13-
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN EXPRESS CREDIT CORPORATION
(Registrant)
DATE: November 14, 2003 By /s/ Walker C. Tompkins, Jr.
-----------------------------------
Walker C. Tompkins, Jr.
President and Chief Executive
Officer
DATE: November 14, 2003 /s/ Erich Komdat
-----------------------------------
Erich Komdat
Vice President and Chief Accounting
Officer
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AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Description How Filed
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Exhibit 12.1 Computation in Support of Ratio of Electronically filed herewith.
Earnings to Fixed Charges of American
Express Credit Corporation.
Exhibit 12.2 Computation in Support of Ratio of Electronically filed herewith.
Earnings to Fixed Charges of American
Express Company.
Exhibit 31.1 Certification of Walker C. Tompkins, Electronically filed herewith.
Jr. pursuant to Rule 13a-14(a).
Exhibit 31.2 Certification of Walter S. Berman Electronically filed herewith.
pursuant to Rule 13a-14(a).
Exhibit 32.1 Certification of Walker C. Tompkins, Electronically filed herewith.
Jr. pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
Exhibit 32.2 Certification of Walter S. Berman Electronically filed herewith.
pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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