Company Quick10K Filing
American Express Credit
Price-0.00 EPS257
Shares2 P/E-0
MCap-0 P/FCF-0
Net Debt13,319 EBIT441
TEV13,319 TEV/EBIT30
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-27
10-Q 2016-09-30 Filed 2016-11-07
10-Q 2016-06-30 Filed 2016-08-08
10-Q 2016-03-31 Filed 2016-05-09
10-K 2015-12-31 Filed 2016-03-14
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-10
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-06
10-Q 2014-03-31 Filed 2014-05-06
10-K 2013-12-31 Filed 2014-03-11
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-06-30 Filed 2013-08-06
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-08
10-Q 2012-09-30 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-08
10-K 2011-12-31 Filed 2012-03-15
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-08-10
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-31
10-Q 2010-09-30 Filed 2010-11-10
10-Q 2010-06-30 Filed 2010-08-12
10-Q 2010-03-31 Filed 2010-05-17
10-K 2009-12-31 Filed 2010-03-31
8-K 2019-02-14
8-K 2018-10-25
8-K 2018-07-25
8-K 2018-04-25
8-K 2018-02-20
8-K 2015-09-14
8-K 2015-07-31
8-K 2015-05-26
8-K 2015-04-28
8-K 2015-02-13

AEXC 10Q Quarterly Report

Part I. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
Item 1. Financial Statements
Item 4. Controls and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 6. Exhibits
EX-10.1 exhibit101credco.htm
EX-31.1 credcoq313ex311.htm
EX-31.2 credcoq313ex312.htm
EX-32.1 credcoq313ex321.htm
EX-32.2 credcoq313ex322.htm

American Express Credit Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
45362718902012201420172020
Assets, Equity
0.50.2-0.0-0.3-0.5-0.82012201420172020
Rev, G Profit, Net Income
4.32.71.0-0.6-2.3-3.92012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2020
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)
Delaware11-1988350
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
200 Vesey Street, New York, New York
10285
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 640-2000        
None
(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
0.625 percent Senior Notes, due November 22, 2021AXP/21New York Stock Exchange

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 INSTRUCTION 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.            
þ Yes     o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
þ Yes  o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   
Yes    þ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

ClassOutstanding at May 8, 2020
Common Stock (par value $0.10 per share)1,504,938  Shares  




Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
FORM 10-Q
INDEX
Page No.
12  
13  
14  
15  
16  
17  
 
27  
28  
30  
31  
Throughout this report the term “Credco” refers to American Express Credit Corporation and its subsidiaries on a consolidated basis, unless stated or the context implies otherwise.



Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
Overview
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). Both American Express and TRS are bank holding companies.
Credco is engaged in the business of financing certain non-interest-earning Card Member receivables arising from the use of the American Express charge cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-earning revolving loans generated by Card Member spending on American Express credit cards issued in non-U.S. markets.
Certain of the statements in this Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to the “Cautionary Note Regarding Forward-Looking Statements” section.
Business Environment
Management’s discussion of the results of Credco is in the context of the wider business environment for American Express.
In early March 2020, COVID-19, a disease caused by a novel strain of the coronavirus, was characterized as a pandemic by the World Health Organization. Since December 2019, COVID-19 has spread rapidly, with most countries and territories worldwide reporting confirmed cases of COVID-19, and a high concentration of cases in the United States and other countries in which American Express operates. The rapid spread has resulted in authorities around the world implementing numerous measures to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. The pandemic and these containment measures have had, and are expected to continue to have, a substantial negative impact on businesses around the world and on global, regional and national economies.
During the first two months of 2020, while COVID-19 was primarily limited to specific countries in Asia and Europe, American Express continued to see solid growth in line with previous quarters. During the second half of March, the sharp contraction of the global economy triggered a dramatic decline in its business volumes, which continued into April. To the extent that American Express continues to see significant year-over-year declines, its future results will be materially impacted.
American Express billed business for the quarter was down only modestly as the COVID-19 impacts discussed above became more impactful as the quarter drew to a close. During the first two months of the quarter, its worldwide billed business increased 5 percent over the prior year, followed by a 25 percent year-over-year decline in billings for the month of March, resulting in an overall year-over-year decline of 6 percent for the quarter. International billings declined by 11 percent (7 percent on an FX adjusted basis) due to the earlier impact of COVID-19 in Asia and Europe.1 Commercial billed business declined by 6 percent year-over-year, primarily driven by a dramatic drop in T&E spending as corporations reduced spending and governments implemented travel restrictions.
Provisions for credit losses increased, for American Express and Credco, due to a significant reserve build that reflected the deterioration of the estimated global macroeconomic outlook as a result of COVID-19 impacts. The latest macroeconomic outlook reflects a more significant deterioration in United States Gross Domestic Product (GDP) and unemployment than when Credco closed its books for the first quarter. If those forecasts were to hold or worsen by the time Credco closes its second quarter financials, it would expect to have another large reserve build.
To support its customers, American Express is offering financial and other assistance to help them through this difficult period, adding product benefits to reflect today’s environment, and continuing to provide the high level of customer service they expect and rely on. During the quarter, American Express created a Customer Pandemic Relief Program for customers who have been impacted by COVID-19.
1 The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared).
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Credco ended the quarter with broad and well-diversified funding sources and a strong capital and liquidity profile, which provides it with significant flexibility to maintain a strong balance sheet in periods of uncertainty or stress.
Looking ahead, there is great uncertainty as to when the economy will improve. Financial performance for the remainder of the year will depend on (i) when and how strongly Card Member spending rebounds as the global economy recovers, and (ii) how long the challenges of high unemployment levels and business shutdowns last. At this time American Express and Credco cannot determine the answers to these questions.
American Express framework for managing through this challenging economic environment is built on four principles: supporting its colleagues and winning as a team; protecting its customers and its brand; structuring the company for growth in the future; and remaining financially strong. American Express will remain focused on what it can control in the short term while identifying opportunities across its businesses to position itself for growth in the longer term.
See Risk Factors for information on additional impacts of COVID-19 and related containment efforts as well as other matters that could have a material adverse effect on Credco’s results of operations and financial condition.
Critical Accounting Estimates
Please see the “Critical Accounting Estimates” section of Credcos Annual Report on Form 10-K for the year ended December 31, 2019 for a full description of all of Credcos critical accounting estimates. The critical accounting estimate related to Reserves for Card Member Credit Losses presented below has been updated to reflect the adoption of the CECL methodology.
Reserves for Card Member Credit Losses
American Express has in place an enterprise-wide credit risk management process and manages the overall credit risk exposure associated with the Card Member receivables and loans, including those purchased by Credco.
Reserves for Card Member credit losses represent managements best estimate of the expected credit losses in Credco’s outstanding portfolio of Card Member receivables and loans as of the balance sheet date. The CECL methodology, which became effective January 1, 2020, requires management to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period (R&S Period) beyond the balance sheet date.
In estimating expected credit losses American Express uses a combination of statistically-based models that include a significant amount of judgment, primarily related to the determination of the appropriate R&S Period, the methodology to incorporate current and future economic conditions, and the determination of the probability of and exposure at default, all of which are ultimately used in measuring the quantitative components of its reserves. American Express uses these models and assumptions, combined with historical loss experience, to calculate the reserve rates that are applied to the outstanding receivables or loans balances, to produce its reserves for expected credit losses. Beyond the R&S Period, American Express estimates expected credit losses using its historical loss rates. American Express also considers whether to adjust the quantitative reserves for certain external and internal qualitative factors, which consequentially may increase or decrease the reserves for credit losses on Card Member receivables and Card Member loans.
The R&S Period, which is approximately 3 years, represents the maximum time-period beyond the balance sheet date over which American Express can reasonably estimate credit losses, using all available portfolio information, current economic conditions and forecasts of future economic conditions. American Express obtains its forecasts of future economic conditions from an independent third party, and in determining the relevant R&S Period for Card Member receivables and loans, it also considers information arising from other internal processes, as well as its own past loss experience. Card Member loan products do not have a contractual term and balances can revolve if minimum required payments are made, causing some balances to remain outstanding beyond the R&S Period. Card Member receivable products are contractually required to be paid in full; therefore, American Express has assumed the balances will be either paid or written-off within the R&S Period.

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Within the R&S Period, American Express models use past loss experience and current and future economic conditions to estimate the probability of default, exposure at default and expected recoveries to estimate net losses at default. A significant area of judgment relates to how management applies future Card Member payments to the reporting period balances when determining the exposure at default. The nature of revolving loan products inherently includes a relationship between future payments and spend behavior which creates complexity in the application of how future payments are either partially or entirely attributable to the existing balance at the end of the reporting period. Using historical customer behavior and other factors, Credco has assumed that future payments are first allocated to interest and fees associated with the reporting period balance and future spend. Credco then allocates a portion of the payment to the estimated higher minimum payment amount due because of any future spend. Any remaining portion of the future payment would then be allocated to the remaining balance.
As noted above, CECL requires that the R&S Period include an assumption about current and future economic conditions. Management incorporates multiple economic scenarios (e.g., baseline, better and worse) obtained from an independent third party. The expected credit losses calculated from each economic scenario are weighted to reflect uncertainty around the baseline economic scenario. Management determines the weighting of each scenario based on its detailed review of the externally sourced information and comparing other economic information it uses throughout other processes.
Macroeconomic Sensitivity
Reserves for credit losses are sensitive to various inputs and assumptions, which may differ by portfolio. Macroeconomic forecasts are critical inputs into American Express’ models and inherently contain multiple variables, of which the U.S. unemployment rate and U.S. GDP growth rate are the most significant to its estimated expected credit losses. Both variables moved dramatically during the quarter and drove a significant credit reserve build. At December 31, 2019, the U.S. unemployment rate and GDP growth quarter-over-quarter was 3.5 percent and 2.1 percent, respectively. At March 31, 2020, American Express’ weighted economic scenarios, obtained from an independent third party, primarily assumed in the second quarter, the U.S. unemployment rate peaks between approximately 9 percent to 13 percent and U.S. GDP declines quarter-over-quarter approximately 18 percent to 25 percent, seasonally adjusted to annualized rates. The combination of the material movements in these variables, together with overall changes in Credco’s portfolios related to volume and mix, resulted in a build to Credco’s reserves for credit losses of $55 million. These macroeconomic forecasts, under different conditions or using different assumptions or estimates, could result in significantly different changes in reserves for credit losses. It is difficult to estimate how potential changes in specific factors might affect the overall reserves for credit losses and current results may not reflect the potential future impact of macroeconomic forecast changes.
Refer to the “Business Environment” and Table 3 in MD&A and Note 1 and Note 3 to the “Consolidated Financial Statements” for a further description of the impact of CECL, both at implementation and for the quarter ended March 31, 2020.
The process of estimating these reserves requires a high degree of judgment. To the extent American Express’ expected credit loss models are not indicative of future performance, Credco’s actual losses could differ significantly from its judgments and expectations, resulting in either higher or lower future provisions for credit losses in any period.
Results of Operations for the Three Months Ended March 31, 2020 and 2019
Net income depends largely on the volume of Card Member receivables and Card Member loans purchased, the discount rate used to determine purchase price, interest earned, interest expense, collectability of purchased Card Member receivables and Card Member loans, and income taxes.
As a result of the adoption of Current Expected Credit Loss (CECL) on January 1, 2020, there is a lack of comparability in both the reserves and provisions for credit losses for the periods presented. Results for reporting periods beginning after January 1, 2020 are presented using the CECL methodology while comparative information continues to be reported in accordance with the incurred loss methodology in effect for prior periods. Refer to Note 3 to the “Consolidated Financial Statements” for further information.
Credco’s consolidated net income decreased by $81 million to $22 million, as compared to net income of $103 million for the same period in 2019. The year-over-year decrease in net income is primarily driven by lower discount revenue earned from Card Member receivables, lower interest income from affiliates and higher provision for credit losses, partially offset by decline in interest expense.
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Table 1: Total Revenues Summary
Three Months Ended March 31,Change
(Millions, except percentages)2020  2019  2020 vs. 2019
Discount revenue earned from purchased
 Card Member receivables and Card Member loans$207  $303  $(96) (32)%
Interest income from affiliates and other37  110  (73) (66) 
Finance revenue22  19   16  
Total revenues$266  $432  $(166) (38)%

Total revenues
Discount revenue decreased, due to lower volumes of and lower discount rates on Card Member receivables purchased.
Interest income decreased, primarily due to lower average interest rates and decrease in average loan balances.
Table 2: Total Expenses Summary
Three Months Ended March 31,Change
2020 vs. 2019
(Millions, except percentages)20202019
Provisions for credit losses$103  $63  $40  63 %
Interest expense79  169  (90) (53) 
Interest expense to affiliates53  104  (51) (49) 
Other, net(11) (23) 12  (52) 
Total expenses$224  $313  $(89) (28)%

Total expenses
Provisions for credit losses increased, primarily driven by significant reserve builds, which reflect the deterioration of the estimated global macroeconomic outlook, including unemployment and GDP, as a result of COVID-19 impacts.
Interest expense decreased, primarily due to scheduled debt maturities during the period.
Interest expense to affiliates decreased, primarily due to a decrease in average debt balances and lower interest rates.
Other, net expenses increased, primarily driven by lower forward point gains.

Income taxes
The effective tax rate was 47.6 percent and 13.4 percent for the three months ended March 31, 2020 and 2019, respectively. The tax rate for the three months ended March 31, 2020 includes an $18 million discrete tax charge related to the attribution of taxable income to jurisdictions outside the U.S. Refer to Note 7 to the “Consolidated Financial Statements” for additional information.
Card Member receivables and Card Member loans
As of March 31, 2020 and December 31, 2019, Credco owned $9.4 billion and $25.6 billion, respectively, of gross Card Member receivables. Card Member receivables represent amounts due on American Express charge card products and are recorded at the time they are purchased from the seller. Included in Card Member receivables are Credco Receivables Corporation’s (CRC) purchases of participation interests from American Express Receivables Financing Corporation VIII LLC (RFC VIII) in conjunction with TRS’ securitization program. As of March 31, 2020 and December 31, 2019, CRC owned approximately $3.7 billion and $8.1 billion, respectively, of such participation interests.

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Effective February 1, 2020, TRS removed U.S. Consumer and  Small Business Card Member receivables from the American Express Issuance Trust II (the Charge Trust) and substantially replaced them with U.S. Corporate Card Member receivables. To effect this change, on January 7, 2020, Credco sold $5.2 billion of U.S. Corporate Card Member receivables to TRS. On February 1, 2020, TRS transferred $5.2 billion of U.S. Corporate Card Member receivables to the Charge Trust and removed U.S. Consumer and Small Business Card Member receivables from the Charge Trust. Since Credco maintains participation interests in the Charge Trust, these transactions resulted in Credco (i) no longer having a $7.2 billion interest in U.S. Consumer and Small Business Card Member receivables and (ii) having an interest in the U.S. Corporate Card Member receivables in the Charge Trust. Settlement of these transactions was undertaken through borrowings from American Express Company and thus Long-term debt to affiliates has also decreased by $7.2 billion.
On April 20, 2020, TRS added approximately $1.7 billion of U.S. Corporate Card Member receivables to the Charge Trust in order to increase the assets of the Trust.
Since the amount of U.S. Corporate card receivables to be added to the Charge Trust was not determined in the month of March 2020, TRS and Credco agreed that those receivables would be funded by Credco through a secured loan to TRS. This resulted in the March activity of $4.6 billion being reported as Loans to affiliates and other.
The net volume of Card Member receivables and Card Member loans purchased during the three months ended March 31, 2020 and 2019 was approximately $41 billion and $78 billion, respectively.
As of March 31, 2020 and December 31, 2019, Credco owned gross Card Member loans totaling $606 million and $697 million, respectively. These loans generally represent revolving amounts due on American Express lending card products.
The following table summarizes selected information related to the Card Member receivables portfolio as of March 31:
Table 3: Selected Information Related to Card Member Receivables
(Millions, except percentages and where indicated)  2020   2019 
Total gross Card Member receivables (a)
 $9,406    $26,007   
Loss reserves - Card Member receivables (a)
 $69    $175   
Loss reserves as a % of receivables  0.7  %  0.7  %
Average life of Card Member receivables (# in days) (b)
  42     29   

(a)Refer to Notes 1, 2 and 3 to the Consolidated Financial Statements for further discussion.
(b)Represents the average life of Card Member 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 Card Member receivables purchased by Credco.
Loans to Affiliates and Other
Credco’s loans to affiliates and other represent floating-rate interest-bearing borrowings by American Express Company, wholly owned subsidiaries of TRS and the joint ventures that issue American Express cards in certain countries. The components of loans to affiliates and other as of March 31, 2020 and December 31, 2019 were as follows:

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Table 4: Loans to Affiliates and Other
(Millions)20202019
American Express Travel Related Services Company, Inc.(a)
$4,554  $—  
American Express Services Europe Limited3,080  4,206  
American Express Australia Limited1,884  2,052  
American Express Company1,285  —  
Amex Bank of Canada1,036  1,587  
Amex Global Holdings C.V.888  888  
American Express Company (Mexico) S.A. de C.V.434  534  
American Express International, Inc., Singapore Branch332  413  
American Express Bank (Mexico) S.A.329  404  
American Express International (NZ), Inc.
60  70  
Alpha Card S.C.R.L./C.V.B.A54  120  
American Express Saudi Arabia (C) JSC23  71  
Total (b)
$13,959  $10,345  
(a)Represents the Card Member receivables for the month of March 2020 financed in the form of a secured loan. (Refer to Note 1 to the Consolidated Financial Statements for additional information).
(b)As of March 31, 2020 and December 31, 2019, approximately $10.8 billion and $8.2 billion, respectively, were collateralized by the underlying Card Member receivables and Card Member loans transferred with recourse.
Due from/to Affiliates
As of March 31, 2020 and December 31, 2019, amounts due from affiliates were $2.1 billion and $0.7 billion, respectively. As of March 31, 2020 and December 31, 2019, amounts due to affiliates were $2.4 billion and $2.1 billion, respectively. These amounts relate primarily to timing differences from the purchase of Card Member receivables, net of remittances from TRS and its subsidiaries, as well as from operating activities. As of both March 31, 2020 and December 31, 2019, due to affiliates also includes an amount pertaining to tax liability related to the Tax Cuts and Jobs Act of 2017.
Restricted Cash with Affiliates
As of March 31, 2020 and December 31, 2019, the amount of interest-bearing restricted cash was $108 million and $116 million, respectively, which represents cash deposited with Amex Bank of Canada relating to the purchase of Card Member receivables and the collateralized loan arrangement for transfer of Card Member loans. It is included under “Other assets” on the Consolidated Balance Sheets.
Short-term Debt to Affiliates
Short-term debt to affiliates consists primarily of interest-bearing master notes payable on demand. Components of short-term debt to affiliates as of March 31, 2020 and December 31, 2019 were as follows:

Table 5: Short-term Debt to Affiliates
(Millions)20202019
AE Exposure Management Limited$5,875  $5,731  
American Express Europe LLC2,096  219  
American Express Holdings Netherlands CV192  192  
Accertify, Inc.82  82  
American Express Swiss Holdings GmbH  
Total$8,246  $6,225  


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Long-term Debt to Affiliates
Long-term debt to affiliates consists primarily of master note agreements with original contractual maturity dates of one year or greater and are not payable on demand. Components of long-term debt to affiliates as of March 31, 2020 and December 31, 2019 were as follows:
Table 6: Long-term Debt to Affiliates
(Millions)20202019
American Express Company (a)
$653  $8,959  
Amex Funding Management (Europe) Limited (b)
328  333  
Total$981  $9,292  
(a)Amounts payable by November 2023.
(b)Amounts payable by September 2021.
Service Fees to Affiliates
Credco’s affiliates do not explicitly charge Credco a service fee for the servicing of receivables purchased. Instead Credco receives a lower discount rate on the receivables purchased than would be the case if servicing fees were charged. If a servicing fee had been charged by these affiliates from which Credco purchases receivables, fees to affiliates for servicing receivables would have been approximately $65 million and $69 million for the three months ended March 31, 2020 and 2019, respectively. Correspondingly, discount revenue would have increased by approximately the same amounts in these periods.
CONSOLIDATED CAPITAL RESOURCES AND LIQUIDITY
Credco’s balance sheet management objectives are to maintain:
A broad, deep and diverse set of funding sources to finance its assets and meet operating requirements; and
Liquidity programs that enable Credco to continuously meet expected future financing obligations and business requirements for at least a twelve-month period, in the event it is unable to continue to raise new funds under its traditional funding programs during a substantial weakening in economic conditions.
Credco is closely monitoring the rapidly changing macroeconomic environment and is actively managing its balance sheet to reflect evolving circumstances.
Funding Strategy
American Express has in place an enterprise-wide funding policy. The principal funding objective is to maintain broad and well-diversified funding sources to allow American Express, including Credco, to meet its maturing obligations, cost-effectively finance current and future asset growth in its global businesses as well as to maintain a strong liquidity profile.
Credco has historically relied on intercompany borrowings and the debt capital markets to fulfill a substantial amount of its funding needs. It has a variety of funding sources available to access the debt capital markets, including senior unsecured debt and commercial paper. Credco continues to assess its funding needs and investor demand and could change the mix of its existing sources as well as add new sources to its funding mix. Credco’s funding plans can vary due to various risks and uncertainties, such as the disruption of financial markets or reductions in market capacity and demand for securities offered by Credco as well as any regulatory changes or changes in its long-term or short-term credit ratings. Many of these risks and uncertainties are beyond Credco’s control.
Credco’s funding strategy is designed, among other things, to maintain appropriate and stable unsecured debt ratings from the major credit rating agencies: Fitch Ratings (Fitch), Moody’s Investor Services (Moody’s) and Standard & Poor’s (S&P). Such ratings help support Credco’s access to cost-effective unsecured funding as part of its overall funding strategy.



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Table 7: Unsecured Debt Ratings
Credit AgencyShort-Term RatingsLong-Term RatingsOutlook
FitchF1A
Negative
Moody’sPrime-1A2Negative
S&PA-2A-Stable
Downgrades in the ratings of Credco’s unsecured debt could result in higher funding costs, as well as higher fees related to borrowings under its unused lines of credit. Declines in credit ratings could also reduce Credco’s borrowing capacity in the unsecured term debt and commercial paper markets. The overall level of the funding provided by Credco to other American Express affiliates is impacted by a variety of factors, among them Credco’s ratings. To the extent that Credco is subject to a higher cost of funds, whether due to an adverse ratings action or otherwise, the affiliates could continue to use, or could increase their use of, alternative sources of funding for their receivables that offer better pricing.
Short-term Funding Programs
Short-term borrowings, such as commercial paper, is defined as debt with original contractual maturity of twelve months or less. Credco’s issuance and sale of commercial paper is primarily utilized for working capital needs. The amount of short-term borrowings issued in the future will depend on Credco’s funding strategy, its needs and market conditions. As of March 31, 2020 and December 31, 2019, Credco had $1.6 billion and $3.0 billion, respectively, of commercial paper outstanding. The average commercial paper outstanding was $2.41 billion and $0.30 billion for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively.

Long-term Debt Programs
Long-term debt is raised through the offering of debt securities both in and outside the United States. Long-term debt is generally defined as any debt with an original contractual maturity greater than twelve months. During the three months ended March 31, 2020, Credco did not issue any unsecured debt securities. Credco had the following long-term debt outstanding as of March 31, 2020 and December 31, 2019:

Table 8: Long-Term Debt Outstanding
(Billions)20202019
Long-term debt outstanding (a)
$11.1  $13.5  
Average long-term debt (b)
$11.9  $16.4  
(a)The outstanding balances include (i) unamortized discount, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps.
(b)Average long-term debt outstanding during the three months ended March 31, 2020 and the year ended December 31, 2019, respectively.
Credco has the ability to issue debt securities under the shelf registration statement filed with the Securities and Exchange Commission (SEC). The latest shelf registration statement filed with the SEC is for an unspecified amount of debt securities. As of March 31, 2020 and December 31, 2019, Credco had $11.0 billion and $13.5 billion of debt securities outstanding, respectively, issued under the SEC registration statement. Credco may redeem from time to time certain debt securities within 31 days prior to the original contractual maturity dates in accordance with the optional redemption provisions of those debt securities.
Credco has also established a program in Australia for the issuance of debt securities of up to approximately $3.6 billion (AUD 6 billion). As of March 31, 2020 and December 31, 2019, the entire amount of notes were available for issuance under this program and there were no outstanding notes as of such dates.

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During the three months ended March 31, 2020 and 2019, Credco did not pay any dividends to TRS. When considering the amount of dividends it pays, Credco takes into account the amount of capital required to maintain capital strength, support business growth and meet the expectations of debt investors, including the covenants of debt instruments issued by Credco that impose the requirement for Credco to maintain a minimum consolidated net worth of $50 million. To the extent excess capital is available, it may be distributed to TRS, Credco’s parent company, via dividends. There are no significant restrictions on the ability of Credco to obtain funds from its subsidiaries by dividend or loan. As of March 31, 2020, Credco was in compliance with all restrictive covenants contained in its debt agreements.
Liquidity Management
The liquidity objective of American Express and its subsidiaries, including Credco, is to maintain access to a diverse set of on-and off-balance sheet liquidity sources and seek to maintain liquidity sources in amounts sufficient to meet their expected future financial obligations and business requirements for liquidity for a period of at least twelve months in the event they are unable to raise new funds under their regular funding programs during a substantial weakening in economic conditions.
The liquidity management strategy includes a number of elements, including, but not limited to:
Maintaining diversified funding sources;
Maintaining unencumbered liquid assets and off-balance sheet liquidity sources;
Projecting cash inflows and outflows under a variety of economic and market scenarios;
Establishing clear objectives for liquidity risk management, including compliance with regulatory requirements; and
Incorporating liquidity risk management as appropriate into American Express’ capital adequacy framework.
While the expansion of the COVID-19 pandemic has led to significant volatility in funding markets, Credco believes that it currently maintains sufficient liquidity sources to meet all liquidity requirements. As of March 31, 2020, Credco had cash and cash equivalents of $35 million. In addition to its actual holdings of cash and cash equivalents, Credco maintains access to additional liquidity, in the form of cash and cash equivalents held by certain affiliates, through intercompany loan agreements, access to securitizations of Card Member receivables through sales of receivables to TRS for securitization by RFC VIII and the Charge Trust, and a committed bank credit facility.
Committed Bank Credit Facility
Credco maintained a U.S. dollar-denominated committed syndicated bank credit facility as of March 31, 2020 of $3.5 billion with a maturity date of October 15, 2022. As of March 31, 2020, no amounts were drawn on this facility. Credco may, from time to time, use this facility in the ordinary course of business to fund working capital needs. Any undrawn portion of this facility could serve as backstop for the amount of commercial paper outstanding. The availability of this facility is subject to Credco’s compliance with certain financial covenants that require maintenance of a 1.25 minimum required fixed charge coverage ratio. The fixed charge coverage ratio for Credco was 1.32 and 1.54 for the three months ended March 31, 2020 and year ended December 31, 2019, respectively.
The committed syndicated bank credit facility does not contain a material adverse change clause, which might otherwise preclude borrowing under the credit facility, nor is it dependent on Credco’s credit rating.
OTHER MATTERS
Certain Legislative, Regulatory and Other Developments
Government Responses to COVID-19 Pandemic
In response to the COVID-19 pandemic, authorities around the world have implemented numerous measures to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. In addition to these measures, which have substantially curtailed household and business activity, fiscal and monetary policy measures have been deployed for the stated purpose of attempting to mitigate the adverse effects on the economy. In the United States, this has included the enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and a number of emergency lending and liquidity facilities established by the Federal Reserve.
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There have also been various governmental actions taken or proposed to provide forms of relief, such as limiting debt collections efforts and encouraging or requiring extensions, modifications or forbearance with respect to certain loans and fees.
Governmental actions taken in response to the COVID-19 pandemic have not always been coordinated or consistent across jurisdictions but, in general, have been expanding in scope and intensity. The efficacy and ultimate effect of these actions is not known. Credco continues to monitor federal, state and international regulatory developments in relation to COVID-19 and their potential impact on its operations.
Cautionary Note Regarding Forward-Looking Statements
Various statements have been made in this Quarterly Report on Form 10-Q that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may also be made in Credco’s other reports filed with or furnished to the SEC and in other documents. In addition, from time to time, Credco, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “estimate,” “predict,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements. Credco cautions you that the risk factors described below as well as those in Credco’s Annual Report on Form 10-K for the year ended December 31, 2019 and the “Risk Factors” section in this Quarterly Report are not exclusive. There may also be other risks that Credco is unable to predict at this time that may cause actual results to differ materially from those in 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 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, the following:
a further deterioration in global economic and business conditions, consumer and business spending generally; an inability or unwillingness of Card Members to pay amounts owed to American Express; uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19; prolonged measures to contain the spread of COVID-19 or premature easing of such containment measures, both of which could further exacerbate the effects on its business activities and results of operations, Card Members and partners; Credco’s inability to manage risk in an uncertain and fast-changing environment; further market volatility and changes in capital and credit market conditions and the availability and cost of capital; issues impacting brand perceptions and its reputation; changes in foreign currency rates and benchmark interest rates; an inability of its business partners to meet their obligations to American Express and its customers due to slowdowns or disruptions in their businesses or otherwise; pricing changes, product mix and credit actions, including line size and other adjustments to credit availability; and telecommunications failures, internet outages or cybersecurity incidents impacting transaction authorization, clearing and settlement systems;
the amount of future credit reserve builds, which will depend in part on changes in consumer behavior that affect loan and receivable balances (such as paydown rates) and delinquency and write-off rates; macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies; the impact of the Current Expected Credit Loss (CECL) methodology; collections capabilities and recoveries of previously written-off loans and receivables; the enrollment in, and effectiveness of, hardship programs and troubled debt restructurings; and governmental actions that provide forms of relief with respect to certain loans and fees, such as limiting debt collections efforts and encouraging or requiring extensions, modifications or forbearance;
factors beyond Credco’s control such as fire, power loss, disruptions in telecommunications, severe weather conditions, natural and man-made disasters, or terrorism, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances and other aspects of its business and results of operations or disrupt its global network systems and ability to process transactions;
the effectiveness of Credco’s risk management policies and procedures, including ability to accurately estimate the provisions for losses in Credco’s outstanding portfolio of Card Member receivables and Card Member loans, and operational risk;
fluctuations in foreign currency exchange rates;
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negative changes in Credco’s credit ratings, which could result in decreased liquidity and higher borrowing costs;
changes in laws or government regulations affecting American Express’ business, including the potential impact of regulations adopted by regulators relating to certain credit and charge card practices;
the effect of fluctuating interest rates, which could affect Credco’s borrowing costs and have an adverse effect on the market price of notes issued by Credco;
the impact on American Express’ business of changes in the substantial and increasing worldwide competition in the payments industry;
the impact on American Express’ business resulting from a failure in or breach of operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm;
the impact on American Express’ business that could result from litigation such as class actions or from government regulation or supervision; and
Credco’s ability to satisfy its liquidity needs and execute on its funding plans, which will depend on, among other things, Credco’s future business growth, the impact of global economic, political and other events on market capacity, Credco’s credit ratings, demand for securities offered by Credco, performance by Credco’s counterparties under its bank credit facilities and other lending facilities, and regulatory changes.

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ITEM 1. FINANCIAL STATEMENTS

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended March 31, (Millions)20202019
Revenues
Discount revenue earned from purchased Card Member receivables and Card Member loans$207  $303  
Interest income from affiliates and other37  110  
Finance revenue22  19  
Total revenues266  432  
Expenses
Provisions for credit losses103  63  
Interest expense79  169  
Interest expense to affiliates53  104  
Other, net(11) (23) 
Total expenses224  313  
Pretax income42  119  
Income tax provision 20  16  
Net income$22  $103  

See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended March 31, (Millions)20202019
Net income$22  $103  
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of tax(137) 7  
Other comprehensive (loss) income(137) 7  
Comprehensive (loss) income$(115) $110  
See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(Millions, except share data)March 31,
2020
December 31,
2019
Assets
Cash and cash equivalents$35  $33  
Card Member receivables, less reserves for credit losses: 2020, $69; 2019, $162
9,337  25,395  
Card Member loans, less reserves for credit losses: 2020, $18; 2019, $10
588  687  
Loans to affiliates and other13,959  10,345  
Due from affiliates2,095  652  
Other assets1,107  245  
Total assets$27,121  $37,357  
Liabilities and Shareholder’s Equity
Liabilities
Short-term debt$1,574  $3,216  
Short-term debt to affiliates8,246  6,225  
Long-term debt11,074  13,469  
Long-term debt to affiliates981  9,292  
Total debt21,875  32,202  
Due to affiliates2,392  2,133  
Accrued interest and other liabilities263  435  
Total liabilities$24,530  $34,770  
Shareholder’s Equity
Common stock, $0.10 par value, authorized 3 million shares; issued and
  outstanding 1.5 million shares as of March 31, 2020 and December 31,
  2019
    
Additional paid-in capital161  161  
Retained earnings3,654  3,513  
Accumulated other comprehensive loss
Foreign currency translation adjustments, net of tax of: 2020, $154; 2019, $25
(1,224) (1,087) 
Total accumulated other comprehensive loss(1,224) (1,087) 
Total shareholder’s equity2,591  2,587  
Total liabilities and shareholder’s equity$27,121  $37,357  

See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31 (Millions)20202019
Cash Flows from Operating Activities
Net income$22  $103  
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for credit losses103  63  
Amortization of underwriting expense4  6  
Deferred taxes(6) (3) 
Changes in operating assets and liabilities:
Interest, taxes and other amounts due to/from affiliates(4) 18  
Other operating assets and liabilities108  153  
Net cash provided by operating activities227  340  
Cash Flows from Investing Activities
Net decrease (increase) in Card Member receivables and Card Member loans (a)
10,640  (1,396) 
Net (increase) decrease in loans to affiliates and other (a)
(4,364) 130  
Net (increase) decrease in due to/from affiliates(1,199) 358  
Net cash provided by (used in) investing activities5,077  (908) 
Cash Flows from Financing Activities
Net decrease in short-term debt(1,642) (733) 
Net increase in short-term debt to affiliates
2,021  453  
Principal payments of long-term debt(2,450) (2,250) 
Proceeds from long-term debt to affiliates
8,006  8,379  
Principal payments of long-term debt to affiliates (a)
(11,235) (5,318) 
Net cash (used in) provided by financing activities(5,300) 531  
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash(10) 2  
Net decrease in cash, cash equivalents and restricted cash(6) (35) 
Cash, cash equivalents and restricted cash at beginning of period149  195  
Cash, cash equivalents and restricted cash at end of period$143  $160  

Cash, cash equivalents and restricted cash reconciliationMar-20Dec-19Mar-19Dec-18
Cash and cash equivalents per Consolidated Balance Sheets$35  $33  $65  $102  
Restricted cash included in Other assets per Consolidated Balance Sheets (b)
108  116  95  93  
Total cash, cash equivalents and restricted cash  $143  $149  $160  $195  
Supplemental cash flow information20202019
Non-cash Investing activity
Sale of U.S Corporate Card Member receivables to TRS (a)
$5,196  $—  
Lending to American Express Company (a)
(119) —  
Non-cash Financing activity
Settlement of borrowings with American Express Company (a)
$(5,077) $—  
(a)During the quarter, TRS removed U.S Consumer and Small Business Card Member receivables from the American Express Issuance Trust II (the Charge Trust) and substantially replaced them with U.S Corporate Card Member receivables. To effect this change, on January 7, 2020, Credco sold $5.2 billion of U.S. Corporate Card Member receivables to TRS. Settlement of this transaction was undertaken through borrowings from American Express Company.
(b)Represents cash deposited with Amex Bank of Canada relating to the purchase of Card Member receivables and the collateralized loan arrangement for transfer of Card Member loans.

See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY
(Unaudited)

Three months ended March 31, 2020 (Millions)TotalCommon
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Balances as of December 31, 2019$2,587  $  $161  $(1,087) $3,513  
Cumulative effect of change in accounting principle - Reserve for Credit Losses (a)
119  —  —  —  119  
Net income22  —  —  —  22  
Other comprehensive loss(137) —  —  (137)   
Balances as of March 31, 2020$2,591  $  $161  $(1,224) $3,654  

Three months ended March 31, 2019 (Millions)TotalCommon
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Balances as of December 31, 2018$2,196  $  $161  $(1,060) $3,095  
Net income103  —  —  —  103  
Other comprehensive income7  —  —  7    
Balances as of March 31, 2019$2,306  $  $161  $(1,053) $3,198  
(a)Represents $140 million, net of tax of $21 million, relating to the impact as of January 1, 2020, of adopting the new accounting guidance for the recognition of credit losses on certain financial instruments.
See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation
The Company
American Express Credit Corporation (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).
Credco is engaged in the business of financing certain non-interest-earning Card Member receivables arising from the use of the American Express charge cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-earning revolving loans generated by Card Member spending on American Express credit cards issued in non-U.S. markets.
Credco executes material transactions with its affiliates. The agreements between Credco and its affiliates provide that the parties intend that the transactions thereunder be conducted on an arm’s-length basis; however, there can be no assurance that the terms of these arrangements are the same as would be negotiated between independent, unrelated parties.
Credco is required to maintain its fixed charge coverage ratio at a minimum of 1.25, which is achieved by charging appropriate discount rates on the purchase of receivables Credco makes from, and the interest rates on the loans Credco provides to, TRS and other American Express subsidiaries. Each monthly period, the discount and interest rates are determined to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio, whilst maintaining the intention for these transactions to occur on an arm’s-length basis. Should it be required, American Express would provide Credco with financial support with respect to maintenance of its minimum fixed charge coverage ratio. The revenue earned by Credco from purchasing Card Member receivables and Card Member loans at a discount is reported as Discount revenue earned from purchased Card Member receivables and Card Member loans on the Consolidated Statements of Income.
The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in Credco’s Annual Report on Form 10-K for the year ended December 31, 2019. If not materially different, certain note disclosures included therein have been omitted from these Consolidated Financial Statements.
The interim Consolidated Financial Statements included in this report have not been audited. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim Consolidated Financial Statements, have been made. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.
The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These accounting estimates reflect the best judgment of management, but actual results could differ.
Recently Issued and Adopted Accounting Standards
In March 2020, the Financial Accounting Standards Board issued new accounting guidance related to the effects of reference rate reform on financial reporting. The guidance, effective for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., LIBOR) with a new alternative reference rate. The guidance is applicable to receivables, loans, debt, derivatives and hedge accounting elections and other contractual arrangements. Credco adopted the guidance as of March 31, 2020, with no material impact on Credco’s financial position, results of operations and cash flows. There were no significant changes to its accounting policies, business processes or internal controls as a result of adopting the new guidance.

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AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Effective January 1, 2020, Credco adopted the new credit reserving methodology, applicable to certain financial instruments, known as the Current Expected Credit Loss (CECL) methodology under a modified retrospective transition. The CECL methodology requires measurement of expected credit losses for the estimated life of the financial instrument, not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information. Upon implementation, Card Member receivable reserves decreased by $147 million and Card Member loan reserves increased by $7 million, along with the associated current and deferred tax impact of $21 million, and cumulative effect adjustment to the opening balance of retained earnings, net of tax, of $119 million. There were no material changes to Credco’s business processes or internal controls as a result of adopting the new guidance. Refer to Note 3 for additional information on how management estimates reserves for credit losses in accordance with CECL methodology.
Other Information
Effective February 1, 2020, TRS removed U.S. Consumer and Small Business Card Member receivables from the Charge Trust and substantially replaced them with U.S. Corporate Card Member receivables. To effect this change, on January 7, 2020, Credco sold $5.2 billion of U.S. Corporate Card Member receivables to TRS. On February 1, 2020, TRS transferred $5.2 billion of U.S. Corporate Card Member receivables to the Charge Trust and removed U.S. Consumer and Small Business Card Member receivables from the Charge Trust. Since Credco maintains participation interests in the Charge Trust, these transactions resulted in Credco (i) no longer having a $7.2 billion interest in U.S. Consumer and Small Business Card Member receivables and (ii) having an interest in the U.S. Corporate Card Member receivables in the Charge Trust. Settlement of these transactions was undertaken through borrowings from American Express Company and thus Long-term debt to affiliates has also decreased by $7.2 billion.
On April 20, 2020, TRS added approximately $1.7 billion of U.S. Corporate Card Member receivables to the Charge Trust in order to increase the assets of the Trust.
Since the amount of U.S. Corporate card receivables to be added to the Charge Trust was not determined in the month of March 2020, TRS and Credco agreed that those receivables would be funded by Credco through a secured loan to TRS. This resulted in the March activity of $4.6 billion being reported as Loans to affiliates and other.
2. Card Member Receivables and Card Member Loans
American Express’ charge and lending payment card products result in the generation of Card Member receivables and Card Member loans. Reserves for reporting periods beginning after January 1, 2020 are presented using the CECL methodology, while comparative information continues to be reported in accordance with the incurred loss methodology in effect for prior periods.
Card Member receivables as of March 31, 2020 and December 31, 2019 consisted of:
(Millions)20202019
Global Consumer Services Group (a)(c)
$2,060  $9,847  
Global Commercial Services (b)(c)
7,346  15,710  
Card Member receivables (d)
9,406  25,557  
Less: Reserve for credit losses69  162  
Card Member receivables, net (e)
$9,337  $25,395  

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AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(a)Comprised of International Consumer Services as of March 31, 2020 and U.S. and International Consumer Services as of December 31, 2019.
(b)Comprised of Corporate and Small Business Services. Card Member receivables as of March 31, 2020 do not include Card Member receivables funded through a secured loan to TRS. Refer to Note 1 for additional information.
(c)On February 1, 2020, $7.2 billion of U.S. Consumer and Small Business Card Member receivables were transferred out of the Charge Trust resulting in a reduction of the same amount in Credco’s participation interest in such receivables. Refer to Note 1 for additional information.
(d)Net of deferred discount revenue totaling $24 million and $75 million as of March 31, 2020 and December 31, 2019, respectively.
(e)Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial.
Card Member loans as of March 31, 2020 and December 31, 2019 consisted of:
(Millions)20202019
Global Consumer Services Group (a)
$606  $697  
Less: Reserve for credit losses18  10  
Card Member loans, net (b)
$588  $687  
(a)Comprised of International Consumer Services.
(b)Card Member loans modified in a TDR program were immaterial.
Card Member Receivables and Card Member Loans Aging
Generally, a Card Member account is considered past due if payment is not received within 30 days after the billing statement date. The following table presents the aging of Card Member receivables and Card Member loans as of March 31, 2020 and December 31, 2019:
2020 (Millions)Current30-59
Days
Past Due
60-89
Days
Past Due
90+
Days
Past Due
Total
Card Member Receivables:
Global Consumer Services Group$2,026  $12  $7  $15  $2,060  
Global Commercial Services
Global Small Business Services947  6  3  7  963  
Global Corporate Payments (a)
(b)(b)(b)106  6,383  
Card Member Loans:
Global Consumer Services Group$597  $3  $2  $4  $606  

2019 (Millions)Current30-59
Days
Past Due
60-89
Days
Past Due
90+
Days
Past Due
Total
Card Member Receivables:
Global Consumer Services Group$9,766  $29  $16  $36  $9,847  
Global Commercial Services
Global Small Business Services1,996  10  5  9  2,020  
Global Corporate Payments (a)
(b)(b)(b)105  13,690  
Card Member Loans:
Global Consumer Services Group$689  $3  $2  $3  $697  
(a)Global Corporate Payments (GCP) reflects global, large and middle market corporate accounts. Delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if collection procedures are initiated on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
(b)Delinquency data for periods other than 90+ days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.
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AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Credit Quality Indicators for Card Member Receivables and Card Member Loans
The following tables present the key credit quality indicators as of or for the three months ended March 31:
20202019
Net Write-Off Rate (a)
30+ Days Past Due as a % of Total
Net Write-Off Rate (a)
30+ Days Past Due as a % of Total
Card Member Receivables:
Global Consumer Services Group1.11 %1.65 %1.20 %0.70 %
Global Small Business Services1.60 %1.66 %1.47 %1.00 %
Global Corporate Payments0.97 %(b) (c) (b) 
Card Member Loans:
Global Consumer Services Group1.78 %1.49 %1.25 %0.78 %
(a)