<PAGE>
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 June 30, 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 Christina Centre, Wilmington, 19801-2919
Delaware
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (302) 594-3350
One Rodney Square, Wilmington, Delaware
----------------------------------------------------------------------------
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 August 14, 1995
---------------------------- -------------------------------
Common Stock, $.10 par value 1,504,938 shares
<PAGE>
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 six months ended June 30,
1995 and 1994 3
Condensed consolidated balance
sheets - June 30, 1995 and
December 31, 1994 4
Condensed consolidated statements
of cash flows - six months ended
June 30, 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
-2-<PAGE>
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 Six Months Ended
June 30, June 30,
1995 1994 1995 1994
---- ---- ---- ----
Revenues
Revenue earned from
purchased accounts
receivable $ 402 $ 311 $ 783 $ 592
Interest income from
affiliates 42 21 83 39
Interest income from
investments 33 23 69 36
Other income 2 1 4 3
---- ---- ---- ----
Total 479 356 939 670
---- ---- ---- ----
Expenses
Interest 260 176 513 326
Provision for doubtful
accounts, net of
recoveries 152 124 280 243
Other expenses 1 3 3 4
---- ---- ---- ----
Total 413 303 796 573
---- ---- ---- ----
Income before taxes 66 53 143 97
Income tax provision 23 19 50 34
---- ---- ---- ----
Net income 43 34 93 63
Retained earnings at 1,621 1,561 1,571 1,532
beginning of period ----- ----- ----- -----
Retained earnings at $1,664 $1,595 $1,664 $1,595
end of period ===== ===== ===== =====
See notes to condensed consolidated financial statements.
-3-<PAGE>
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
(Unaudited)
June 30, December 31,
1995 1994
---------- ------------
Assets
Cash and cash equivalents $1,373 $ 460
Accounts receivable 14,218 14,020
Less reserve for doubtful
accounts 548 498
------ ------
13,670 13,522
Loans and deposits with
affiliates 2,850 2,650
Deferred charges and other
assets 309 236
------ ------
Total assets $18,202 $16,868
====== ======
Liabilities and shareholder's
equity
Short-term debt $13,150 $11,525
Current portion of long-term
debt 388 405
Long-term debt 2,366 2,282
------ ------
Total debt 15,904 14,212
Due to affiliates 278 707
Accrued interest and other
liabilities 121 121
------ ------
Total liabilities 16,303 15,040
------ ------
Deferred discount revenue 73 95
------ ------
Shareholder's equity:
Common stock 1 1
Capital surplus 161 161
Retained earnings 1,664 1,571
------ ------
Total shareholder's equity 1,826 1,733
------ ------
Total liabilities and
shareholder's equity $18,202 $16,868
====== ======
See notes to condensed consolidated financial statements.
-4- <PAGE>
AMERICAN EXPRESS CREDIT CORPORATION
(a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
(Unaudited)
Six Months Ended
June 30,
----------------
1995 1994
---- ----
Cash Flows from Operating Activities:
Net income $ 93 $ 63
Adjustments to reconcile net income to net
cash and cash equivalents provided by
operating activities:
Provision for doubtful accounts, net of
recoveries 280 243
Amortization of deferred underwriting fees
and bond discount/premium 1 1
Changes in operating assets and
liabilities:
Increase in deferred tax assets (10) (5)
Increase in interest receivable and
operating assets (98) (3)
Increase in accrued interest
and other liabilities - 3
Increase (decrease) in due to affiliates 28 (14)
(Decrease) increase in deferred discount
revenue (22) 16
----- -----
Net cash provided by operating activities 272 304
----- -----
Cash Flows from Investing Activities:
Increase in accounts receivable (442) (477)
Purchase of net secured receivables from an
affiliate - (85)
Recoveries of accounts receivable previously
written off 84 88
Increase in loans and deposits with
affiliates (200) -
Decrease in due to affiliates from purchased
receivables (480) (704)
----- -----
Net cash and cash equivalents used in
investing activities (1,038) (1,178)
----- -----
Cash Flows from Financing Activities:
Net (decrease) increase in short-term debt
with maturity less than ninety days (5,723) 5,434
Proceeds from issuance of debt 9,174 2,294
Repayment of debt (1,772) (5,260)
----- -----
Net cash and cash equivalents provided by
financing activities 1,679 2,468
----- -----
<PAGE>
Net increase in cash and cash equivalents 913 1,594
Cash and cash equivalents at beginning of
period 460 257
----- -----
Cash and cash equivalents at end of period $1,373 $1,851
===== =====
See notes to condensed consolidated financial statements.
-5-
<PAGE>
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 June 30, 1995 and the
consolidated results of its operations, changes in its retained earnings
and cash flows for the six-month periods ended June 30, 1995 and 1994.
Results of operations reported for interim periods are not necessarily
indicative of results for the entire year.
2. In June 1995, Credco issued long-term senior notes in the amount of $250
million at 6 3/4 percent due June 1, 2001.
3. For the six-month periods ended June 30, 1995 and 1994, Credco paid $613
million and $341 million of interest, respectively. Income taxes paid
for each of the six-month periods ended June 30, 1995 and 1994 were $57
million and $55 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 six-month periods ended June
30, 1995 and 1994 was 1.28 and 1.30, respectively.
Credco purchased $57 billion and $53 billion of Cardmember receivables
during the six-month periods ended June 30, 1995 and 1994, respectively. At
June 30, 1995 and 1994, Credco owned $13 billion and $12 billion,
respectively, of non-interest-bearing receivables. At June 30, 1995 and
1994, non-interest-bearing receivables included $1.6 billion and $1.4
billion, respectively, of gross participation interests, arising from
American Express Travel Related Services Company, Inc.'s asset
securitization program. In addition, at June 30, 1995 and 1994, Credco
owned extended payment plan receivables totaling $1.5 billion and $1.3
billion, respectively.
For each of the six-month periods ended June 30, 1995 and 1994, the average
life of Cardmember receivables owned by Credco was 43 days.
Credco's write-offs, net of recoveries, as a percentage of the volume of
Cardmember receivables purchased for the six-month periods ended June 30,
1995 and 1994 were .41 percent and .43 percent, respectively.
-6- <PAGE>
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 six-month period ended June 30, 1995, compared
with the six-month period ended June 30, 1994 (in millions):
Revenue earned from purchased accounts receivable-
changes attributable to:
Volume of receivables purchased $ 42
Discount and interest rates 149
----
Total $ 191
====
Interest income from affiliates - changes attributable to:
Volume of average investments outstanding $ 13
Interest rates 31
----
Total $ 44
====
Interest expense - changes attributable to:
Volume of average debt outstanding $ 42
Interest rates 145
----
Total $ 187
====
Provision for doubtful accounts - changes attributable to:
Volume of receivables purchased $ 23
Provision rates and volume of recoveries 14
----
Total $ 37
====
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.
-7-<PAGE>
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 August 14, 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
ratio of earnings to fixed filed herewith.
charges.
Exhibit 27. Financial data schedule. Electronically
filed herewith.
-8-<PAGE>
EXHIBIT 12
AMERICAN EXPRESS CREDIT CORPORATION
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(millions)
Six Months
Ended
June 30, Year Ended December 31,
(Unaudited)
--------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
Earnings:
Income before
extraordinary
charge $ 93 $ 63 $139 $137 $138 $174 $191
Income tax
provision 50 34 75 64 70 87 99
Interest expense 513 326 736 599 728 946 1,022
---- ---- ---- ---- ---- ----- -----
Total earnings $656 $423 $950 $800 $936 $1,207 $1,312
==== ==== ==== ==== ==== ===== =====
Fixed charges -
interest expense $513 $326 $736 $599 $728 $946 $1,022
==== ==== ==== ==== ==== ===== =====
Ratio of earnings
to fixed charges 1.28 1.30 1.29 1.34* 1.29 1.28 1.28
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.
-9-<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Company's Consolidated Balance Sheet at June 30, 1995
and Consolidated Statement of Income for the six months ended
June 30, 1995 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,373
<SECURITIES> 0
<RECEIVABLES> 14,218
<ALLOWANCES> 548
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,202
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 1
0
0
<OTHER-SE> 1,825
<TOTAL-LIABILITY-AND-EQUITY> 18,202
<SALES> 0
<TOTAL-REVENUES> 939
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 280
<INTEREST-EXPENSE> 513
<INCOME-PRETAX> 143
<INCOME-TAX> 50
<INCOME-CONTINUING> 93
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
