UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________
FORM 10-Q
____________________
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
( ) 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, 19801
Delaware
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (302) 594-3350
None
-----------------------------------------------------------------------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 10, 1995
- ---------------------------- ---------------------------
Common Stock, $.10 par value 1,504,938 shares
PAGE
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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 months ended March 31, 1995
and 1994 3
Condensed consolidated balance
sheets - March 31, 1995 and
December 31, 1994 4
Condensed consolidated statements
of cash flows - three months ended
March 31, 1995 and 1994 5
Notes to condensed consolidated
financial statements 6
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
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AMERICAN EXPRESS CREDIT CORPORATION
( a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
PART I
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS
(millions)
(Unaudited)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
Revenues
Revenue earned from purchased
accounts receivable $ 381 $ 281
Interest income from affiliates 41 18
Interest income from investments 36 13
Other income 2 2
---- ----
Total 460 314
---- ----
Expenses
Interest 253 150
Provision for doubtful accounts,
net of recoveries 128 119
Other expenses 2 1
---- ----
Total 383 270
---- ----
Income before taxes 77 44
Income tax provision 27 15
---- ----
Net income 50 29
Retained earnings at beginning of
period 1,571 1,532
----- -----
Retained earnings at end of period $1,621 $1,561
===== =====
See notes to condensed consolidated financial statements.
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PAGE
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AMERICAN EXPRESS CREDIT CORPORATION
( a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
(Unaudited)
March 31, December 31,
1995 1994
---------- ------------
Assets
Cash and cash equivalents $ 1,405 $ 460
Accounts receivable 13,200 14,020
Less reserve for doubtful
accounts 517 498
------ ------
12,683 13,522
Loans to affiliates 2,650 2,650
Deferred charges and other
assets 274 236
------ ------
Total assets $17,012 $16,868
====== ======
Liabilities and shareholder's
equity
Short-term debt $12,093 $11,525
Current portion of long-term
debt 437 405
Long-term debt 2,117 2,282
------ ------
Total debt 14,647 14,212
Due to affiliates 349 707
Accrued interest and other
liabilities 145 121
------ ------
Total liabilities 15,141 15,040
------ ------
Deferred discount revenue 88 95
------ ------
Shareholder's equity:
Common stock 1 1
Capital surplus 161 161
Retained earnings 1,621 1,571
------ ------
Total shareholder's equity 1,783 1,733
------ ------
Total liabilities and
shareholder's equity $17,012 $16,868
====== ======
See notes to condensed consolidated financial statements.
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PAGE
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AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
(Unaudited)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
Cash Flows from Operating Activities:
Net income $ 50 $ 29
Adjustments to reconcile net income to net
cash and cash equivalents provided by
operating activities:
Provision for doubtful accounts, net of
recoveries 128 119
Amortization of deferred underwriting fees
and bond discount/premium 1 -
Changes in operating assets and
liabilities:
Increase in deferred tax assets (5) (2)
Decrease (increase) in interest
receivable and operating assets 150 (8)
(Decrease) increase in accrued interest
and other liabilities (7) 27
Increase (decrease) in due to affiliates 29 (3)
(Decrease) increase in deferred discount
revenue (7) 10
----- -----
Net cash provided by operating activities 339 172
----- -----
Cash Flows from Investing Activities:
Decrease in accounts receivable 753 362
Purchase of net secured receivables from
an affiliate - (85)
Recoveries of accounts receivable previously
written off 42 44
Decrease in due to affiliates from purchased
receivables (406) (368)
----- -----
Net cash and cash equivalents provided by
(used in) investing activities 389 (47)
----- -----
Cash Flows from Financing Activities:
Net (decrease) increase in short-term debt
with maturity less than ninety days (2,375) 3,230
Proceeds from issuance of debt 2,776 1,309
Repayment of debt (184) (3,042)
----- -----
Net cash and cash equivalents provided by
financing activities 217 1,497
----- -----
<PAGE>
Net increase in cash and cash equivalents 945 1,622
Cash and cash equivalents at beginning
of period 460 257
----- -----
Cash and cash equivalents at end of period $ 1,405 $ 1,879
===== =====
See notes to condensed consolidated financial statements.
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PAGE
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AMERICAN EXPRESS CREDIT CORPORATION
( a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements should be read in
conjunction with the Annual Report of American Express Credit
Corporation, including its subsidiaries where appropriate, (``Credco'')
on Form 10-K for the year ended December 31, 1994. Significant
accounting policies disclosed therein have not changed.
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 March 31, 1995 and
December 31, 1994 and the consolidated results of its operations,
changes in its retained earnings and cash flows for the three-month
periods ended March 31, 1995 and 1994. Results of operations reported
for interim periods are not necessarily indicative of results for the
entire year.
2. For the three-month periods ended March 31, 1995 and 1994, Credco paid
$305 million and $156 million of interest, respectively. Income taxes
paid for each of the three-month periods ended March 31, 1995 and 1994
were $0.8 million and $17 million, respectively.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Credco's 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 ratio of earnings to fixed charges for the three-month periods ended
March 31, 1995 and 1994 was 1.30 and 1.29, respectively.
Credco purchased $27 billion and $26 billion of Cardmember receivables
during the three-month periods ended March 31, 1995 and 1994, respectively.
At March 31, 1995 and 1994, Credco owned $12 billion and $11 billion,
respectively, of non-interest-bearing receivables. At both March 31, 1995
and 1994, non-interest-bearing receivables included $1.4 billion of gross
participation interests arising out of American Express Travel Related
Services Company, Inc.'s asset securitization program. In addition, at
March 31, 1995 and 1994, Credco owned extended payment plan receivables
totaling $1.5 billion and $1.3 billion, respectively.
For the three-month periods ended March 31, 1995 and 1994, the average life
of Cardmember receivables owned by Credco was 43 and 42 days, respectively.
Credco's write-offs, net of recoveries, as a percentage of the volume of
Cardmember receivables purchased for the three-month periods ended March
31, 1995 and 1994 were .41 percent and .43 percent, respectively.
-6-
PAGE
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AMERICAN EXPRESS CREDIT CORPORATION
( a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
The following is an analysis of the increase (decrease) in key revenue and
expense accounts for the three-month period ended March 31, 1995, compared
with the three-month period ended March 31, 1994 (in millions):
Revenue earned from purchased accounts receivable-
changes attributable to:
Volume of receivables purchased $ 21
Discount and interest rates 79
----
Total $100
====
Interest income from affiliates - changes attributable to:
Volume of average investments outstanding $ 6
Interest rates 17
----
Total $ 23
====
Interest expense - changes attributable to:
Volume of average debt outstanding $ 18
Interest rates 85
----
Total $103
====
Provision for doubtful accounts - changes attributable to:
Volume of receivables purchased $ 8
Provision rates and volume of recoveries 1
----
Total $ 9
====
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12. Computation in support of ratio of earnings to
fixed charges.
27. Financial data schedule.
(b) Reports on Form 8-K
None.
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PAGE
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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 May 10, 1995 /s/Vincent P. Lisanke
------------------------------
Vincent P. Lisanke
(President, Chief
Executive Officer
and Chief Accounting
Officer)
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Description How Filed
----------- ---------
Exhibit 12. Computation in support of Electronically filed herewith.
ratio of earnings to fixed
charges.
Exhibit 27. Financial data schedule. Electronically filed herewith.
-8-
PAGE
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EXHIBIT 12
AMERICAN EXPRESS CREDIT CORPORATION
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(millions)
<TABLE>
<CAPTION>
Three Months
Ended
March 31, Year Ended
(Unaudited) December 31,
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
Earnings:
Income before
extraordinary
charge $ 50 $ 29 $139 $137 $138 $174 $191
Income tax provision 27 15 75 64 70 87 99
Interest expense 253 150 736 599 728 946 1,022
---- ---- ---- ---- ---- ----- -----
Total earnings $330 $194 $950 $800 $936 $1,207 $1,312
==== ==== ==== ==== ==== ===== =====
Fixed charges -
interest expense $253 $150 $736 $599 $728 $946 $1,022
==== ==== ==== ==== ==== ===== =====
Ratio of earnings
to fixed charges 1.30 1.29 1.29 1.34* 1.29 1.28 1.28
</TABLE>
Note: Gross rentals on long-term leases were minimal in amount
in each of the periods shown.
* The ratio of earnings to fixed charges calculated in accordance
with the Receivables Agreements after the impact of the
extraordinary charges of $34 million (pretax) was 1.28.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Credco's
Condensed Consolidated Balance Sheet at March 31, 1995 and Condensed
Consolidated Statement of Income for the year ended March 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,405
<SECURITIES> 0
<RECEIVABLES> 13,200
<ALLOWANCES> 517
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,012
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 1
0
0
<OTHER-SE> 1,782
<TOTAL-LIABILITY-AND-EQUITY> 17,012
<SALES> 0
<TOTAL-REVENUES> 460
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2
<LOSS-PROVISION> 128
<INTEREST-EXPENSE> 253
<INCOME-PRETAX> 77
<INCOME-TAX> 27
<INCOME-CONTINUING> 50
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
