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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
[ ] 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 Identification No.)
incorporation or organization)
One Rodney Square, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (302) 594-3350
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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6 1/8% Senior Debentures due June 15, 2000 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a)
AND (b) OF FORM 10-K AND HAS THEREFORE OMITTED CERTAIN ITEMS FROM THIS
REPORT IN ACCORDANCE WITH THE REDUCED DISCLOSURE FORMAT PERMITTED UNDER
INSTRUCTION J.
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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
American Express Company, through a wholly-owned subsidiary, owns all of the
outstanding common stock of the Registrant. Accordingly, there is no market
for the Registrant's common stock. At March 30, 1994, 1,504,938 shares were
outstanding.
Documents Incorporated by Reference
- -----------------------------------------------------------------------------
None
PART I
Item 1. BUSINESS.
Introduction
American Express Credit Corporation (including its subsidiaries, where
appropriate, "Credco") was incorporated in Delaware in 1962 and was acquired
by American Express Company ("American Express") in December 1965. On
January 1, 1983, Credco became a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc. (including its subsidiaries, where
appropriate, "TRS"), a wholly-owned subsidiary of American Express.
Credco is primarily engaged in the business of purchasing most
Cardmember receivables arising from the use of the American Express R Card,
including the American Express R Gold Card, Platinum Card R and Corporate Card
issued in the United States, and certain related extended payment plan
receivables, and in designated currencies outside the United States. Credco
also purchases certain receivables arising from the use of the Optima sm Card.
The American Express Card and the Optima Card are referred to herein as the
"Card".
American Express Card Business
The Card is issued by TRS. Cards are currently issued in 32 currencies.
The Card, which is issued to individuals for their personal account or
through a corporate account established by their employer, permits Cardmembers
to charge purchases of goods and services in the United States and in most
countries around the world at establishments that have agreed to accept the
Card. As of December 31, 1993, there were 3.6 million establishments
worldwide that have agreed to accept the Card. TRS accepts from each
participating establishment the charges arising from Cardmember purchases at a
discount that varies with the type of participating establishment, the volume
of charges, the timing and method of payment to the establishment and the
method of submission.
At December 31, 1993 there were 35.4 million American Express Cards in
force worldwide. In 1993, Card billed business was $124 billion.
Except in the case of the Optima Card, the Card is primarily designed
for use as a method of payment and not as a means of financing purchases of
goods and services and carries no pre-set spending limit. Charges are
approved based on a Cardmember's past spending and payment patterns,
credit history and personal resources. Except in the case of the Optima Card
and certain extended payment plans such as the Sign & Travel R account,
payment of the full amount billed each month is due from the Cardmember upon
receipt of the bill, and no finance charges are assessed. Card accounts that
are past due by a given number of days are subject, in most cases, to a
delinquency assessment.
-1-
The Optima Card is a revolving credit card which is marketed to
individuals in the United States and several other countries.
The American Express Card and consumer lending businesses are subject to
extensive regulation in the United States under a number of federal laws and
regulations. Federal legislation regulates abusive debt collection practices.
In addition, a number of states and foreign countries also have similar consumer
credit protection and disclosure laws. Outside the United States, certain
countries similarly regulate the provision of credit and protection of
Cardmembers' rights. These laws and regulations have not had, and are not
expected to have, a material adverse effect on the Card and consumer lending
businesses, either in the United States or on a worldwide basis.
General Nature of Credco's Business
Credco purchases certain Cardmember receivables arising from the use of the
Card throughout the world pursuant to agreements (the "Receivables Agreements")
with TRS. Net income primarily depends on the volume of receivables arising
from the use of the Card purchased by Credco, the discount rates applicable
thereto, the relationship of total discount to Credco's interest expense and
the collectibility of the receivables purchased. The average life and
collectibility of accounts receivable generated by the use of the Card are
affected by factors such as general economic conditions, overall levels of
consumer debt and the number of new Cards issued.
Credco purchases Cardmember receivables without recourse. Amounts
resulting from unauthorized charges (for example, those made with a lost
or stolen Card) are excluded from the definition of "receivables" under the
Receivables Agreements and are not eligible for purchase by Credco. If the
unauthorized nature of the charge is discovered after purchase by Credco, the
charge is repurchased from Credco.
Credco generally purchases non-interest-bearing Cardmember receivables
at face amount less a specified discount agreed upon from time to time and
interest-bearing Cardmember receivables at face amount. The Receivables
Agreements generally require that non-interest-bearing receivables be
purchased at discount rates which yield to Credco earnings of not less than
1.25 times its fixed charges on an annual basis. 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 rates or significant changes in the collectibility of
receivables. Since January 1, 1989, the annual average discount rates have
varied between 1.04 and 1.78 percent, and averaged 1.04 percent for 1993.
New groups of Cardmember receivables are generally purchased net of reserve
balances applicable thereto.
Extended payment plan receivables are primarily funded by subsidiaries of
TRS other than Credco; however, Credco purchases certain extended payment
plan receivables. At both December 31, 1993 and 1992, extended payment plan
receivables owned by Credco totalled $1.1 billion, representing 8.8 percent and
9.6 percent, respectively, of all receivables owned by Credco. These extended
payment plan receivables consist of deferred merchandise receivables and
certain interest-bearing extended payment plan receivables comprised
principally of Optima and Sign & Travel accounts.
-2-
In August 1992, a trust was formed by TRS to purchase certain Cardmember
receivables as part of an asset securitization program. In September 1993 and
August 1992, Credco sold back to TRS $1 billion and $2.4 billion, respectively,
of gross receivables that arose from designated domestic Cardmember accounts.
TRS conveyed, through a subsidiary, American Express Receivables Financing
Corporation ("RFC"), these receivables, together with the right to receive
subsequent receivables arising from such Cardmember accounts, to a Master
Trust. In 1993 and 1992, Credco purchased $380 million and $1.3 billion,
respectively, of gross participation interests in RFC's seller's interest,
representing an undivided interest in the securitized receivables owned by the
Trust. Participation interests in securitized receivables represented 15.4
percent and 13.5 percent of Credco's total accounts receivable at December 31,
1993 and 1992, respectively.
The Card Issuers, at their expense and as agents for Credco, perform
accounting, clerical and other services necessary to bill and collect all
Cardmember receivables owned by Credco. The Receivables Agreements provide
that, without prior written consent of Credco, the credit standards used to
determine whether a Card is to be issued to an applicant may not be
materially reduced and that the policy as to the cancellation of Cards for
credit reasons may not be materially liberalized.
The Receivables Agreements may be terminated at any time by the parties
thereto. Alternatively, such parties may agree to reduce the required
1.25 fixed charge coverage ratio, which could result in lower discount rates
and, consequently, lower revenue and net income of Credco.
Volume of Business
The following table shows the volume of Cardmember receivables purchased
by Credco net of Cardmember receivables sold to affiliates during each of the
years indicated, together with the receivables owned by Credco at the end of
such years (in millions):
Volume of Cardmember Cardmember Receivables Owned
Receivables Purchased at December 31,
Year Domestic Foreign Total Domestic Foreign Total
- ---- -------- ------- -------- -------- ------- -------
1993 $80,202 $14,635 $ 94,837 $10,758 $2,210 $12,968
1992 81,311 13,041 94,352 10,412 1,287 11,699
1991 80,844 18,934 99,778 10,581 1,639 12,220
1990 87,323 16,117 103,440 11,278 1,790 13,068
1989 76,432 14,152 90,584 10,089 644 10,733
The transactions in connection with TRS's asset securitization program
described above reduced the volume of domestic Cardmember receivables
purchased and the amount owned by Credco at December 31, 1993 and 1992.
In July 1993, Credco began purchasing certain foreign currency
Cardmember receivables which had been sold to an affiliate during the period
from December 1991 through June 1993. In December 1993, Credco repurchased
participation interests in a portion of its receivables which had previously
been sold to an affiliate during the period from December 1991 through
November 1993. These transactions increased the volume of foreign Cardmember
receivables purchased and the amount owned by Credco at December 31, 1993.
-3-
The average life of Cardmember receivables owned by Credco for each of the
five years ending December 31, 1993 (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 years indicated to the volume of Cardmember receivables
purchased by Credco, net of Cardmember receivables sold to affiliates) was 43
days.
The following table shows the aging of billed Cardmember receivables:
December 31,
-----------------------
1993 1992
-------------------------------------------------------
Current 80.5% 77.8%
30 to 59 days 14.0 15.5
60 to 89 days 2.0 2.3
90 days and over 3.5 4.4
Loss Experience
Credco generally writes off against its reserve for doubtful accounts the
total balance in an account for which any portion remains unpaid 12 months
from the date of original billing. Accounts are written off earlier if
deemed uncollectible.
The following table sets forth Credco's write-offs, net of recoveries for
the year, expressed as a percentage of the volume of Cardmember receivables
purchased by Credco, net of Cardmember receivables sold to affiliates, in
each of the years indicated:
Year
- -----------------------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
.57% .70% .81% .70% .57%
Sources of Funds
Credco's business is financed by short-term borrowings consisting
principally of commercial paper, borrowings under bank lines of credit and
sales of medium- and long-term debt, as well as through operations. The
weighted average interest costs on an annual basis of all borrowings,
after giving effect to commitment fees under lines of credit and the cost
of interest rate swaps, during the following years were:
Weighted Average
Year Interest Cost
---- ----------------
1993 4.61%
1992 5.80
1991 7.54
1990 8.85
1989 9.44
-4-
From time to time, American Express and certain of its subsidiaries
purchase Credco's commercial paper at prevailing rates, enter into variable
rate note agreements at interest rates generally above the 13-week treasury
bill rate and provide lines of credit. The largest amount of borrowings from
American Express or its subsidiaries at any month end during the five years
ended December 31, 1993 was $2.5 billion. At December 31, 1993, the amount
borrowed was $588 million. See notes 4 and 5 in "Notes to Consolidated
Financial Statements" appearing herein for information about Credco's debt,
including Credco's lines of credit from various banks and long-term debt.
Foreign Operations
See notes 2, 7 and 10 in "Notes to Consolidated Financial Statements"
appearing herein for information about Credco's foreign exchange risks and
operations in different geographical regions.
Employees
On December 31, 1993, Credco had 60 employees.
Item 2. PROPERTIES.
Credco neither owns nor leases any material physical properties.
Item 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which Credco or its
subsidiaries is a party or of which any of their property is the subject.
Credco knows of no such proceedings being contemplated by government
authorities or other parties.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Omitted pursuant to General Instruction J(2)(c) to Form l0-K.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS.
American Express, through a wholly-owned subsidiary, TRS, owns all of the
outstanding common stock of Credco. Therefore, there is no market for
Credco's common stock.
Credco paid a dividend of $125 million and $250 million to TRS in December,
1993 and 1992, respectively.
For information about limitations on Credco's ability to pay dividends,
see note 6 in "Notes to Consolidated Financial Statements" herein.
-5-
Item 6. SELECTED FINANCIAL DATA.
The following summary of certain consolidated financial information of
Credco was derived from audited financial statements for the five years ended
December 31, 1993.
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(dollars in millions)
Income Statement Data
Revenues 1,282 1,605 2,070 2,131 1,731
Interest expense 599 728 946 1,022 898
Provision for doubtful
accounts, net of
recoveries 475 661 855 811 565
Income tax provision 64 70 87 99 71
Extraordinary charge net
of taxes 22 - - - -
Net income 115 138 174 191 190
Balance Sheet Data
Accounts receivable 12,968 11,699 12,220 13,068 10,733
Reserve for doubtful
accounts (542) (603) (731) (719) (550)
Total assets 14,943 13,631 14,127 14,222 12,610
Short-term debt 9,738 7,581 7,918 7,450 5,506
Current portion of
long-term debt 692 969 768 823 771
Long-term debt 1,776 2,303 3,136 3,403 3,795
Shareholder's equity 1,662 1,672 1,784 1,610 1,422
Dividends
Cash Dividends 125 250 - - -
-6-
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
Credco's receivables portfolio consists of charge card receivables,
participation interests in charge card receivables and extended payment plan
receivables purchased without recourse from American Express Travel Related
Services Company, Inc. and certain of its subsidiaries ("TRS") throughout
the world. At December 31, 1993 and 1992, respectively, Credco owned $11.8
billion and $10.6 billion of charge card receivables and participations in
charge card receivables, representing 91.2 percent and 90.4 percent of the
total receivables owned, and $1.1 billion of extended payment plan receivables,
representing 8.8 percent and 9.6 percent of the total receivables owned.
At December 31, 1993 and 1992, $2 billion of variable rate loans made to
American Express Centurion Bank ("Centurion Bank") were outstanding, which are
secured by Optima receivables owned by Centurion Bank. The loan agreements
require Centurion Bank to maintain, as collateral, Optima receivables equal to
the outstanding loan balance plus an amount equal to three times the receivable
reserve as applicable to such Optima receivables.
Credco's assets are financed through a combination of short-term debt, long-
term senior notes, equity capital and retained earnings. Daily funding
requirements are met primarily by the sale of commercial paper. Credco has
readily sold the volume of commercial paper necessary to meet its funding needs
as well as to cover the daily maturities of commercial paper issued. The
average amount of commercial paper outstanding was $8.7 billion for 1993 and
$7.7 billion for 1992.
An alternate source of borrowing consists of committed credit line facilities.
The aggregate commitment of these facilities is generally maintained at 50
percent of short-term debt, net of short-term investments and cash
equivalents. At December 31, 1993 and 1992, Credco, through its wholly-owned
subsidiary, American Express Overseas Credit Corporation Limited ("AEOCC"),
had outstanding borrowings of $58.4 million and $9.7 million, respectively,
under these committed lines of credit. In addition, Credco, through AEOCC,
had short-term borrowings under uncommitted lines of credit totalling $65
million and $37.2 million at December 31, 1993 and 1992, respectively.
During 1993, Credco issued $606 million of medium- and long-term debt. The
proceeds were used to reduce short-term debt incurred primarily in connection
with the purchase of Cardmember receivables. During 1993, 1992 and 1991, the
average long-term debt outstanding was $2.8 billion, $3.7 billion and $4.0
billion, respectively. At December 31, 1993, Credco had $810 million of
medium- and long-term debt which may be issued under shelf registrations filed
with the Securities and Exchange Commission.
Credco has realigned its long-term debt financing strategy to better match its
its liabilities with its assets. In connection with this realigned strategy,
during 1993 Credco reduced its high coupon long-term debt through the
defeasance of $498 million of long-term debt and the retirement of an
additional $153.8 million of long-term debt through a series of open market
purchases. These transactions resulted in an extraordinary charge net of
income tax, of $22 million. In addition, Credco canceled an interest rate
swaption resulting in additional interest expense of $13 million.
-7-
Credco paid dividends to TRS of $125 million and $250 million in December,
1993 and 1992, respectively.
Results of Operations
Credco purchases Cardmember receivables without recourse from TRS.
Non-interest-bearing Cardmember receivables are purchased at face amount less
a specified discount agreed upon from time to time, and interest-bearing
Cardmember receivables are 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 was 1.34, 1.29 and 1.28 in 1993, 1992 and 1991,
respectively. The ratio of earnings to fixed charges in 1993 calculated in
accordance with the Receivables Agreements after the impact of the
extraordinary charge was 1.28. 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 receivables.
Pretax income depends primarily on the volume of Cardmember receivables
purchased, the discount rates applicable thereto, the relationship of total
discount to Credco's interest expense and the collectibility of the
receivables purchased. The average life of Cardmember receivables was 43 days
for each of the years ended December 31, 1993, 1992 and 1991.
During 1993 and 1992 Credco sold participation interests in a portion of its
receivables to an affiliate. These transactions were partly responsible for
the decreased revenues from purchased Cardmember receivables which was offset
by decreased interest expense and provision for doubtful accounts.
Credco's operating results for the year ended December 31, 1993 include a
$6 million one-time benefit from the change in the U.S. federal income tax
rate (from 34 percent to 35 percent) in Credco's deferred tax assets.
-8-
The following is an analysis of the (decrease) increase in key revenue and
expense accounts (in millions):
- -----------------------------------------------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------
Revenue earned from purchased accounts
receivable-changes attributable to:
Volume of receivables purchased $ 24 $ (89) $ (50)
Discount rate (334) (333) (29)
- -----------------------------------------------------------------------------
Total $(310) $(422) $ (79)
- -----------------------------------------------------------------------------
Interest income from affiliates-changes
attributable to:
Average loan $ (7) $ 19 $ 28
Interest rates (14) (51) (49)
- -----------------------------------------------------------------------------
Total $ (21) $ (32) $ (21)
- -----------------------------------------------------------------------------
Interest income from investments-changes
attributable to:
Average investments $ 14 $ 34 $ 65
Interest rates (11) (40) (27)
- -----------------------------------------------------------------------------
Total $ 3 $ (6) $ 38
- -----------------------------------------------------------------------------
Interest expense-changes attributable to:
Average debt $ 24 $ 1 $ 88
Interest rates (153) (219) (164)
- -----------------------------------------------------------------------------
Total $(129) $(218) $ (76)
- -----------------------------------------------------------------------------
Provision for doubtful accounts-changes
attributable to:
Volume of receivables purchased $ 9 $ (57) $ (27)
Provision rates and volume of recoveries (195) (137) 71
- -----------------------------------------------------------------------------
Total $(186) $(194) $ 44
- -----------------------------------------------------------------------------
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
1. Financial Statements.
See "Index to Financial Statements" at page F-1 hereof.
2. Supplementary Financial Information.
(a) Selected quarterly financial data. See note 11 in
"Notes to Consolidated Financial Statements."
-9-
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Omitted pursuant to General Instruction J(2)(c) to Form 10-K.
Item 11. EXECUTIVE COMPENSATION.
Omitted pursuant to General Instruction J(2)(c) to Form 10-K.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Omitted pursuant to General Instruction J(2)(c) to Form 10-K.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Omitted pursuant to General Instruction J(2)(c) to Form 10-K.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) 1. Financial Statements:
See "Index to Financial Statements" at page F-1 hereof.
2. Financial Statement Schedules:
See "Index to Financial Statements" at page F-1 hereof.
3. Exhibits:
See "Exhibit Index" hereof.
(b) Reports on Form 8-K:
None.
-10-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 March 30, 1994 /s/ Vincent P. Lisanke
-------------- -------------------------------
Vincent P. Lisanke
President and
Chief Executive Officer
Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
DATE March 30, 1994 /s/ Vincent P. Lisanke
-------------- --------------------------------
Vincent P. Lisanke
President, Chief Executive
Officer and Director
DATE March 30, 1994 /s/ Walter S. Berman
-------------- --------------------------------
Walter S. Berman
Chairman of the Board
and Director (principal financial
officer)
DATE March 30, 1994 /s/ C. J. Martin
-------------- --------------------------------
C. J. Martin
Vice President-Finance
(principal accounting
officer)
DATE March 30, 1994 /s/ Michael P. Monaco
-------------- --------------------------------
Michael P. Monaco
Director
-11-
AMERICAN EXPRESS CREDIT CORPORATION
INDEX TO FINANCIAL STATEMENTS
COVERED BY REPORT OF INDEPENDENT AUDITORS
(Item 14(a))
Page Number
--------------------------
Form 10-K
Financial Statements
Report of independent auditors............... F - 2
Consolidated statements of income for the
three years ended December 31, 1993 ......... F - 3
Consolidated statements of retained earnings
for the three years ended December 31, 1993 . F - 3
Consolidated balance sheets at December 31,
1993 and 1992 ............................... F - 4
Consolidated statements of cash flows for
the three years ended December 31, 1993...... F - 5
Notes to consolidated financial statements .. F - 6 to F - 14
Schedules:
VIII - Valuation and qualifying accounts for
the years ended December 31, 1993,
1992 and 1991 ....................... F - 15
IX - Short-term borrowings at and for the
years ended December 31, 1993, 1992
and 1991 ............................. F - 16
All other schedules are omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or notes thereto.
F - 1
REPORT OF INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
The Board of Directors
American Express Credit Corporation
We have audited the accompanying consolidated balance sheets of American
Express Credit Corporation as of December 31, 1993 and 1992, and the
related consolidated statements of income, retained earnings and cash flows
for each of the three years in the period ended December 31, 1993. Our audits
also included the financial statement schedules listed in the Index at Item
14(a). These financial statements and schedules are the responsibility of
American Express Credit Corporation's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American Express Credit Corporation at December 31, 1993 and 1992, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
Ernst & Young
New York, New York
February 3, 1994
F - 2
AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(millions)
Year Ended December 31, 1993 1992 1991
Revenues
Revenue earned from purchased
accounts receivable $1,139 $1,449 $1,871
Interest income from affiliates 70 91 123
Interest income from investments 67 64 70
Other income 6 1 6
Total $1,282 1,605 2,070
Expenses
Interest 599 728 946
Provision for doubtful accounts, net
of recoveries of $175, $201 and $217 475 661 855
Operating expenses 7 8 8
Total 1,081 1,397 1,809
Income before taxes 201 208 261
Income tax provision 64 70 87
Income before extraordinary charges 137 138 174
Extraordinary charges for early
retirement of debt (net of income
taxes of $12 million) 22 - -
Net income $ 115 $ 138 $ 174
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(millions)
Year Ended December 31, 1993 1992 1991
Retained earnings at beginning of year $1,542 $1,654 $1,480
Dividend paid to TRS (125) (250) -
Net income 115 138 174
Retained earnings at end of year $1,532 $1,542 $1,654
See notes to consolidated financial statements.
F - 3
AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(millions)
December 31, 1993 1992
Assets
Cash and cash equivalents $ 257 $ 126
Accounts receivable 12,968 11,699
Less reserve for doubtful accounts 542 603
12,426 11,096
Loans and deposits with affiliates 2,000 2,140
Deferred charges and other assets 260 269
Total assets $14,943 $13,631
Liabilities and Shareholder's Equity
Short-term debt $ 9,738 $ 7,581
Current portion of long-term debt 692 969
Long-term debt 1,776 2,303
Due to affiliates 932 895
Accrued interest and other liabilities 97 140
Total liabilities 13,235 11,888
Deferred discount revenue 46 71
Shareholder's equity:
Common stock-authorized 3,000,000
shares of $.10 par value; issued
and outstanding 1,504,938 shares 1 1
Capital surplus 129 129
Retained earnings 1,532 1,542
Total shareholder's equity 1,662 1,672
Total liabilities and shareholder's
equity $14,943 $13,631
See notes to consolidated financial statements.
F - 4
AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
Year Ended December 31, 1993 1992 1991
Cash Flows From Operating Activities:
Net Income $ 115 $ 138 $ 174
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary charge for early retirement of debt 34 - -
Provision for doubtful accounts, net of recoveries 475 661 855
Amortization of deferred underwriting fees and
bond discount/premium 5 4 8
(Decrease) in deferred discount revenue (26) (23) (14)
Decrease (increase) in deferred tax assets 46 6 (37)
(Increase) decrease in interest receivable
and operating assets (33) 24 (13)
(Decrease) in accrued interest and other
liabilities (43) (1) (9)
(Decrease) increase in due to affiliates (16) (5) 50
Net cash provided by operating activities 557 804 1,014
Cash Flows From Investing Activities:
Proceeds from maturities of investments - - 10
Increase in accounts receivable (2,488) (1,874) (489)
Sale of participation interests in accounts
receivable to an affiliate - 297 292
Sale of net accounts receivable to an affiliate 914 2,202 -
Repurchase of participation interests from
affiliates (435) (1,207) -
Recoveries of accounts receivable previously
written off 175 201 217
Repayment from affiliates of loans and deposits 141 - 168
Loans and deposits made to affiliates - (140) (660)
Increase (decrease) in due to affiliates 62 692 (451)
Net cash (used in) provided by investing
activities (1,631) 171 (913)
Cash Flows From Financing Activities:
Increase (decrease) in short-term debt, net 6 197 (806)
Proceeds from issuance of debt 9,071 4,750 6,103
Redemption of debt (7,747) (5,871) (5,166)
Dividend paid to TRS (125) (250) -
Net cash provided by (used in) financing
activities 1,205 (1,174) 131
Effect of exchange rate changes on cash and
cash equivalents - (2) -
Net increase (decrease) in
cash equivalents 131 (201) 232
Cash and cash equivalents at beginning of year 126 327 95
Cash and cash equivalents at end of year $ 257 $ 126 $ 327
See notes to consolidated financial statements.
F - 5
AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
American Express Credit Corporation and its subsidiaries ("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"). American Express Overseas Credit Corporation Limited and
its subsidiaries ("AEOCC") and Credco Receivables Corp. ("CRC") are wholly owned
subsidiaries of Credco.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Credco and all its subsidiaries. All significant intercompany transactions
have been eliminated.
Revenue Earned from Purchased Accounts Receivable
A portion of discount revenue earned on purchases of non-interest-bearing
Cardmember receivables equal to the provision for doubtful accounts is
recognized as income at the time of purchase; the remaining portion is
deferred and recorded as income ratably over the period that the receivables
are outstanding.
Finance charge income on interest-bearing extended payment plan receivables
is recognized as it is earned. Credco ceases accruing this income after
six contractual payments are past due, or earlier, if deemed uncollectible.
Accruals that cease generally are not resumed.
Reserve for Doubtful Accounts
The reserve for doubtful accounts is established at the time receivables are
purchased and is based on historical collection experience and evaluation of
the current status of existing receivable balances. Credco generally writes
off against its reserve for doubtful accounts the total balance in an account
for which any portion remains unpaid twelve months from the date of original
billing for non-interest-bearing Cardmember receivables and after six
contractual payments are past due for interest-bearing Cardmember receivables.
Accounts are written off earlier if deemed uncollectible.
Fair Values of Financial Instruments
The fair values of financial instruments are estimates based upon current
market conditions and perceived risks at December 31, 1993 and 1992 and require
varying degrees of management judgment.
The fair values of long-term debt and off-balance sheet financial instruments
are included in the related footnotes. For all other financial instruments,
the carrying amounts in the Consolidated Balance Sheets approximate the fair
values.
F-6
Interest Rate Transactions
Credco enters into various interest rate agreements as a means of hedging its
interest rate exposure. The net interest receivable or payable in these
agreements is recorded as an adjustment to interest expense and is recognized
in earnings over the life of the agreements.
Foreign Currency
Foreign currency assets and liabilities are translated into their U.S. dollar
equivalents based on rates of exchange prevailing at the end of each year.
Revenue and expense accounts are translated at exchange rates prevailing
during the year. Credco enters into various foreign exchange transactions as
a means of hedging foreign exchange exposure. Foreign exchange contracts
generally are marked-to-market, with the unrealized gain or loss offset by
the gain or loss on the hedged position. The net foreign exchange losses for
1993, 1992 and 1991 were not significant.
Cash and Cash Equivalents
Credco has defined cash and cash equivalents as cash and short-term
investments with a maturity of ninety days or less at the time of purchase.
3. Accounts Receivable
At December 31, 1993 and 1992, respectively, Credco owned $11.8 billion and
$10.6 billion of charge card receivables and participations in charge card
receivables, representing 91.2 percent and 90.4 percent of the total
receivables owned. In 1992, Credco purchased participation interests in the
seller's interest in Cardmember receivables owned by a Master Trust which was
formed by TRS as part of an asset securitization program. In September 1993,
Credco purchased additional participation interests. At December 31, 1993 and
1992, Credco owned approximately $2 billion and $1.6 billion, respectively, of
participation interests in receivables, representing 15.4 percent and 13.5
percent, respectively, of its total accounts receivable.
Credco purchases certain billed and unbilled Cardmember receivables arising
from extended payment plans from certain TRS subsidiaries. Credco owned
$1.1 billion of these receivables as of December 31, 1993 and 1992,
representing 8.8 percent and 9.6 percent, respectively, of its total accounts
receivable. Finance charges on such interest-bearing extended payment plan
receivables ranged from .75 percent to 1.75 percent per month of the unpaid
receivable balance as of December 31, 1993. These finance charges, which are
included in revenues, were $136 million, $149 million and $140 million for
1993, 1992 and 1991, respectively.
F-7
4. Short-term Debt
At December 31, short-term debt consisted of (millions):
1993 1992
Commercial paper $8,810 $6,977
Borrowings from affiliates 588 390
Borrowings under lines of credit 123 47
Borrowing agreements with bank trust departments
and others 217 167
Total short-term debt $9,738 $7,581
Credco has various facilities available to obtain short-term credit,
including the issuance of commercial paper and agreements with banks.
Credco had unused committed credit lines totalling $4.4 billion and $3.4
billion at December 31, 1993 and 1992, respectively. Credco pays fees to the
financial institutions that provide these credit line facilities. The fair
value of the unused lines of credit is not significant at December 31, 1993
and 1992.
At December 31, 1993 and 1992, Credco, through AEOCC, had short-term
borrowings under uncommitted lines of credit totalling $65 million and
$37.2 million, respectively, and borrowings under committed lines of credit
totalling $58.4 million and $9.7 million, respectively.
Credco's annual weighted average short-term interest rate was 3.57 percent,
4.73 percent and 6.75 percent for the years ended December 31, 1993, 1992 and
1991, respectively. These rates include the cost of maintaining credit line
facilities for the periods and the effect of interest rate swaps.
Credco paid $347 million, $354 million and $590 million of interest on
short-term debt obligations in 1993, 1992 and 1991, respectively.
F-8
5. Long-term Debt
At December 31, long-term debt consisted of (millions):
1993 1992
Senior notes, 6.125% to 11.625% due through 2005 $1,287 $1,714
Japanese yen senior bonds and loans,
4.9% to 8% due through 1996 218 252
Pound sterling note, 10% due 1994 - 60
Canadian dollar note, 9% due 1994 - 47
Borrowing agreements with bank trust departments - 10
Other senior notes 7 10
Medium-term notes 270 218
Net unamortized bond discount (6) (8)
Total long-term debt $1,776 $2,303
Current portion:
Senior notes, 7.375% to 11.625% $ 400 $ 481
Canadian dollar notes, 9% to 11.7% 45 74
Pound sterling notes, 9.625% to 10% 60 75
Japanese yen bonds, 5.875% to 6.9 33 110
Other senior notes - 2
Medium-term notes 154 227
Total current portion of long-term debt $ 692 $ 969
The book value of variable rate long-term debt that reprices within a
year approximates fair value. The fair value of other long-term debt is
based on quoted market price or discounted cash flow. The aggregate
fair value of Credco's long-term debt including the current portion
outstanding at December 31, 1993 and 1992 was $2.6 billion and $3.4
billion, respectively.
Aggregate annual maturities of debt for the five years ending December 31,
1998 are as follows (millions): 1994, $692; 1995, $403; 1996, $409; 1997,
$211; 1998, $753.
Credco paid $290 million, $332 million and $358 million of interest on
long-term debt obligations in 1993, 1992 and 1991, respectively.
During 1993, Credco issued the following long- and medium-term debt:
$300 million 6 1/8 percent Senior Notes due June 15, 2000; $100 million
Step-up Senior Notes due August 10, 2005, which are callable on August 10,
2000, bearing interest at 6.25 percent for the first seven years and 7.45
percent for the remaining five years; and $206 million of medium-term notes
at various rates and maturities.
Credco has realigned its long-term debt financing strategy to better match
its liabilities with its assets. In connection with this realigned strategy,
during 1993 Credco reduced its high coupon long-term debt through the
defeasance of $498 million of long-term debt and the retirement of an
additional $153.8 million of long-term debt through a series of open market
purchases. These transactions resulted in an extraordinary charge net of
income tax, of $22 million. In addition, Credco canceled an interest rate
swaption resulting in additional interest expense of $13 million.
F-9
6. Restrictions as to Dividends and Limitations on Indebtedness
The most restrictive limitation on dividends imposed by the debt instruments
issued by Credco is the requirement that Credco maintain a minimum
consolidated net worth of $50 million. There are no limitations on the
amount of debt that can be issued by Credco. The most restrictive of the
debt instruments issued by AEOCC and its subsidiaries requires that AEOCC
maintain a minimum consolidated net worth of $50 million. The net worth
of AEOCC included in the December 31, 1993 Consolidated Balance Sheet
was $404 million.
7. Commitments and Contingencies
Credco uses certain financial instruments with off-balance sheet market risks
in order to hedge market risks inherent in the valuation of items reflected
in the Consolidated Balance Sheet. Credco utilizes a variety of financial
instruments to achieve this objective. These instruments include interest
rate swap agreements, forward interest rate agreements, foreign exchange
forward contracts, and foreign currency interest rate swap agreements. The
fair values of the financial instruments are estimates based upon current
market conditions and perceived risks and require varying degrees of
management judgment. If the counterparty in any of these transactions fails
to perform its obligations, Credco's exposure to market risk is limited to
the movement of interest and foreign exchange rates. The creditworthiness
of the counterparties is monitored on an ongoing basis.
Interest rate swap agreements generally involve the exchange of fixed or
floating rate interest payment obligations on a specified principal amount
without the exchange of the underlying notional amount. The notional amount of
interest rate swaps outstanding as of December 31, 1993 and 1992, respectively,
was $2.7 billion and $2.3 billion, ($502 million and $1.3 billion of which was
with an affiliate). The fair value of these interest rate swaps was a net
liability of $36 million and $48 million (net liability of $11.6 million and
$25 million with an affiliate) at December 31, 1993 and 1992, respectively.
These agreements have varying maturities through August 2000.
The following is a summary of notional amounts of interest rate
swaps with varying expirations over the next seven years (billions):
1993 1992
Short-term debt converted from variable
to fixed $1.7 $1.7
Short-term variable rate debt
converted to different variable rates - 0.1
Long-term debt converted from fixed to
variable 1.0 0.5
F-10
Forward interest rate agreements are contracts to receive or pay the
difference between a specific agreed upon interest rate and the reference
rate for a specified period of time in the future. The notional amount of
forward rate agreements outstanding at December 31, 1992 was $113
million. The fair value of these forward interest rate agreements was a net
liability of $1.1 million at December 31, 1992. There were no forward interest
rate agreements outstanding at December 31, 1993.
Foreign exchange forward contracts are agreements entered into, generally
with a bank, to buy or sell foreign currency on a future date at a specified
foreign exchange rate. Credco had foreign exchange forward contracts
totalling $750 million and $701 million ($237 million and $332 million of
which was with an affiliate) outstanding at December 31, 1993 and 1992,
respectively. The fair value of these foreign exchange forward contracts was
not significant at December 31, 1993 and 1992. These agreements have varying
maturities through March 1994.
Foreign currency interest rate swap agreements are contracts to exchange
currency and interest payments for a specific period of time. These swaps
result in effective borrowing rates different from the stated rates on the
debt which they hedge. The contract amounts of these swaps outstanding at
December 31, 1993 and 1992 totalled $706 million and $900 million,
respectively. The fair value of these foreign currency interest rate swaps
was a $2 million net liability and a $19 million net liability at December 31,
1993 and 1992, respectively. These agreements have varying maturities
through October 1998.
8. Transactions with Affiliates
In 1993, 1992 and 1991 Credco purchased Cardmember receivables without
recourse from TRS and certain of its subsidiaries totalling approximately
$95 billion, $94 billion and $100 billion, respectively. Receivables
Agreements for non-interest-bearing receivables generally provide that Credco
purchase such receivables at a discount rate which yields earnings to Credco
equal to at least 1.25 times its fixed charges on an annual basis.
The agreements require TRS, at its expense, to perform accounting, clerical
and other services necessary to bill and collect all Cardmember receivables
owned by Credco. Since settlements under the agreements occur monthly, an
amount due from, or payable to, such affiliates may arise at the end of the
month.
In August 1992, a trust was formed by TRS to purchase certain Cardmember
receivables as part of an asset securitization program. In September 1993 and
August 1992, Credco sold back to TRS $1 billion and $2.4 billion, respectively,
of gross receivables that arose from designated domestic Cardmember accounts.
TRS conveyed, through a subsidiary, American Express Receivables Financing
Corporation ("RFC"), these receivables, together with the right to receive
subsequent receivables arising from such Cardmember accounts, to a Master
Trust. In 1993 and 1992, Credco, through a subsidiary, purchased $380 million
and $1.3 billion, respectively, of participation interests in the seller's
interest in the trust, representing an undivided interest in the securitized
receivables conveyed to the trust.
In July 1993, Credco began repurchasing certain foreign currency Cardmember
receivables which had been sold to an affiliate during the period from
December 1991 through June 1993. In December 1993 Credco repurchased the
participation interests in a portion of its receivables which had been
previously sold to an affiliate during the period from December 1991
through November 1993. In 1992, TRS entered into an agreement with Credco to
F-11
indemnify Credco for unrealized losses related to certain foreign exchange and
interest rate swap agreements, arising out of a decision by TRS to fund certain
related foreign currency receivables through affiliates other than Credco. In
1993, Credco reduced its interest expense by $9.8 million for its recovered
losses. As a result of the repurchase of the foreign currency Cardmember
receivables and the participation interests in receivables described above,
this agreement between Credco and TRS was terminated in December 1993.
Other transactions with American Express and its subsidiaries for the years
ended December 31 were as follows (millions):
1993 1992 1991
Cash and cash equivalents at December 31 3 $ 27 $ 227
Maximum month-end level of cash and cash
equivalents during the year 229 475 440
Secured loans to American Express Centurion
Bank at December 31 2,000 2,000 2,000
Other loans and deposits to TRS subsidiaries
at December 31 - 140 -
Maximum month-end level of loans and deposits to
TRS subsidiaries during the year 2,001 2,140 2,000
Borrowings at December 31 588 390 173
Maximum month-end level of borrowings during
the year 2,451 1,439 1,435
Interest income 70 91 123
Other income 6 7 6
Interest expense 48 78 37
At December 31, 1993, 1992 and 1991 Credco held $2 billion of variable rate
secured loans from American Express Centurion Bank ("Centurion Bank"), a
wholly-owned subsidiary of TRS. These loans are secured by certain interest
- -bearing extended payment plan receivables owned by Centurion Bank. Interest
income from these variable rate loans was $67 million, $81 million and $110
million for 1993, 1992 and 1991, respectively.
Credco's employees are covered by benefit plans of American Express, which
adopted SFAS No. 106, "Employer's Accounting for Postretirement Benefits Other
Than Pensions," using the immediate recognition transition option, effective
as of January 1, 1992. Adoption of SFAS No. 106 had no material effect on
Credco's financial statements.
In 1994, American Express announced a plan to spin-off Lehman Brothers Holdings
Inc. ("Lehman") to its shareholders as a special dividend. References to an
affiliate contained in the footnotes include subsidiaries of Lehman.
9. Income Taxes
The Financial Accounting Standards Board issued SFAS No. 109, "Accounting for
Income Taxes," which supersedes SFAS No. 96. Credco adopted SFAS No. 109 as
of January 1, 1992. The adoption of SFAS No. 109 did not materially affect
Credco's results.
The taxable income of Credco is included in the consolidated U.S. federal
income tax return of American Express. Under an agreement with TRS, taxes
are recognized on a stand-alone basis. If benefits for all future tax
deductions, foreign tax credits and net operating losses cannot be
recognized on a stand-alone basis, such benefits are then recognized based
upon a share, derived by formula, of those deductions and credits that are
recognizable on a TRS consolidated reporting basis.
F-12
Deferred income tax assets and liabilities result from the recognition of
temporary differences. Temporary differences are differences between the tax
bases of assets and liabilities and their reported amounts in the financial
statements that will result in differences between income for tax purposes and
income for financial statement purposes in future years. The current and
deferred components of the provision (benefit) for income taxes consist of the
following (millions):
1993 1992 1991
Current $ 18 $64 $124
Deferred 46 6 (37)
--- --- ---
Total income tax provision before
extraordinary item $ 64 $70 $ 87
Income tax benefit from extraordinary item (12) - -
--- --- ---
Total income tax provision $ 52 $70 $87
The components of the provision for deferred income taxes for the year
ended December 31, 1991 is provision for losses of $(8) million, net income
from affiliates of $(32) million and cash basis adjustment and other, net,
of $3 million.
Credco's net deferred tax assets consisted of the following (million):
1993 1992
Gross deferred tax assets:
Reserve for loan losses $181 $226
Total gross deferred tax assets 181 226
Gross deferred tax liabilities:
Foreign exchange contacts (5) (3)
Other (2) (3)
Total gross deferred tax liabilities (7) (6)
Net deferred tax assets $174 $220
Credco has not recorded a valuation allowance.
Federal tax overpayments of $14 million and accrued federal taxes payable of
$1 million at December 31, 1993 and 1992, respectively, are included in Due to
affiliates.
F-13
Income taxes paid to TRS during 1993, 1992 and 1991 were approximately $21
million, $75 million and $73 million, respectively.
The U.S. statutory tax rate and effective tax rate for 1992 and 1991 was
approximately 34 percent. In 1993, the U.S. federal tax rate increased
from 34 percent to 35 percent, resulting in a one-time benefit of $6 million
in Credco's deferred tax assets. As a result of this one-time benefit,
the income tax provision for continuing operations for 1993 is different
than that computed using the U.S. statutory tax rate of 35 percent.
10. Geographic Segments
Credco is principally engaged in the business of purchasing Cardmember
receivables arising from the use of the American Express Card in the United
States and foreign locations. The following presents information about
operations in different geographic areas (millions):
1993 1992 1991
Revenues
United States $ 1,134 $ 1,425 $ 1,706
International 148 180 364
Consolidated $ 1,282 $ 1,605 $ 2,070
Income before taxes
United States $ 173 $ 192 $ 187
International 28 16 74
Consolidated $ 201 $ 208 $ 261
Identifiable assets
United States $12,787 $12,233 $12,242
International 2,156 1,398 1,885
Consolidated $14,943 $13,631 $14,127
11. Quarterly Financial Data (Unaudited)
Summarized quarterly financial data is as follows (millions):
Quarter Ended 12/31 9/30 6/30 3/31
1993
Revenues $295 $321 $336 $330
Income before taxes 40 64 39 58
Net income 26 35 25 29
1992
Revenues $340 $389 $431 $445
Income before taxes 50 46 54 58
Net income 33 30 36 39
F-14
AMERICAN EXPRESS CREDIT CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(in millions)
1993 1992 1991
---- ---- ----
Reserve for doubtful accounts:
Balance at beginning of year $ 603 $ 731 $ 719
Additions:
Provision for doubtful accounts
charged to income (1) 650 862 1,072
Other credits (2) 55 121 10
Deductions:
Accounts written off 704 864 1,023
Other charges (3) 62 240 47
Foreign translation - 7 -
----- ----- -----
Balance at end of year $ 542 $ 603 $ 731
===== ===== =====
Reserve for doubtful accounts as a
percentage of Cardmember receivables
owned at year end 4.18% 5.15% 5.98%
===== ===== =====
(1) Before recoveries on accounts previously written off of (millions):
1993-$175, 1992-$201 and 1991-$217.
(2) Reserve balances applicable to new groups of Cardmember receivables
purchased from TRS and certain of its subsidiaries.
(3) Reserve balances applicable to certain groups of Cardmember receivables
and participation interests sold to affiliates.
F-15
AMERICAN EXPRESS CREDIT CORPORATION
SCHEDULE IX - SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(millions)
Maximum Average
Year-end amount out- amount Weighted
weighted standing at out- average
Balance average any month- standing interest
at end interest end during during the rate during
of period rate the period period(1) the period(2)
--------- -------- ----------- ---------- -------------
Commercial paper
1993 $8,810 4.13% $9,302 $8,707 3.58%
1992 6,977 3.85 8,340 7,733 4.77
1991 7,504 5.15 9,181 8,211 6.65
Interest-bearing
borrowings from
affiliates
1993 $ 588 3.24% $2,451 $1,207 3.29%
1992 390 3.47 1,414 853 3.88
1991 173 5.17 1,215 112 6.39
Borrowings under
lines of credit(3)
1993 $ 123 5.59% $ 174 $ 149 6.25%
1992 47 7.89 135 100 9.78
1991 153 8.71 220 112 11.71
Borrowing agreements
with bank trust
departments
and others
1993 $ 217 3.21% $ 227 $ 155 3.28%
1992 167 3.43 167 121 3.80
1991 88 4.05 150 133 5.90
(1) The average borrowings were computed using the daily amounts
outstanding.
(2) Interest rates were determined by dividing the actual interest
expense for the year by the average daily debt outstanding.
(3) AEOCC borrowings under foreign lines of credit including borrowings
with an affiliate.
F-16
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Exhibit No. Description
3(a) Registrant's Certificate of Incorporated by
Incorporation, as amended reference to
Exhibit 3(a) to
Registrant's
Registration
Statement on Form S-1
dated February 25, 1972
(File No. 2-43170).
3(b) Registrant's By-Laws, amended Incorporated by
and restated as of November 24, reference to Exhibit
1980 3(b) to Registrant's
Annual Report on Form
10-K for the year
ended December 31,
1985.
4(a) Registrant's Debt Securities Incorporated by ref-
Indenture dated as of erence to Exhibit 4(s)
September 1, 1987 to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(b) Form of Note with optional Incorporated by
redemption provisions reference to Exhibit
4(t) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(c) Form of Debenture with Incorporated by
optional redemption and reference to Exhibit
sinking fund provisions 4(u) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(d) Form of Original Issue Incorporated by
Discount Note with reference to Exhibit
optional redemption 4(v) to Registrant's
provision Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(e) Form of Zero Coupon Note Incorporated by
with optional redemption reference to Exhibit
provisions 4(w) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(f) Form of Variable Rate Note Incorporated by
with optional redemption and reference to Exhibit
repayment provisions 4(x) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(g) Form of Extendible Note Incorporated by
with optional redemption reference to Exhibit
and repayment provisions 4(y) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(h) Form of Fixed Rate Incorporated by
Medium-Term Note reference to Exhibit
4(z) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(i) Form of Floating Rate Incorporated by
Medium-Term Note reference to Exhibit
4(aa) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(j) Form of Warrant Agreement Incorporated by
reference to Exhibit
4(bb) to Registrant's
Registration Statement
on Form S-3 dated
September 2, 1987
(File No. 33-16874).
4(k) Form of Supplemental Indenture Incorporated by
reference to Exhibit
4(cc) to Registrant's
Registration Statement
on Form S-3 dated
September 2, l987
(File No. 33-16874).
4(l) The Registrant hereby agrees to
furnish the Commission, upon request,
with copies of the instruments
defining the rights of holders of
each issue of long-term debt of the
Registrant for which the total
amount of securities authorized
thereunder does not exceed 10%
of the total assets of the
Registrant
10(a) Receivables Agreement Incorporated by
dated as of January 1, 1983 reference to Exhibit
between the Registrant and 10(b) to Registrant's
American Express Travel Annual Report on Form
Related Services Company, 10-K for the year
Inc. ended December 31,
1987.
10(b) Secured Loan Agreement Incorporated by
dated as of June 30, 1988 reference to Exhibit
between the Registrant 10(b) to Registrant's
and American Express Annual Report on
Centurion Bank Form 10-K for the
year ended December
31, 1988.
10(c) Participation Agreement Incorporated by
dated as of August 3, 1992 reference to Exhibit
between American Express 10(c) to Registrant's
Receivables Financing Annual Report on
Corporation and Credco Form 10-K for the year
Receivables Corp. ended December 31, 1992.
12 Statement re computation of ratios Electronically filed
herewith.
23 Consent of Independent Auditors Electronically filed
herewith.