UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 15, 2009
AMERICAN EXPRESS COMPANY
(Exact name of registrant as specified in its charter)
New York 1-7657 13-4922250
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation Identification No.)
or organization)
200 Vesey Street, World Financial Center
New York, New York 10285
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 640-2000
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a- 12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 REGULATION FD DISCLOSURE
American Express Company (the "Company") is hereby furnishing below owned and
managed basis delinquency and write-off statistics for the lending portfolio
of its U.S. Card Services ("USCS") operating segment for the months ended June
30, July 31 and August 31, 2009. As previously stated in its reports filed
with the Securities and Exchange Commission (the "Commission"), the Company
believes that its managed basis presentation provides the Company's investors
with a more comprehensive portrayal of the key dynamics of the Company's U.S.
cardmember lending business over time.
American Express Company
U.S. Card Services
Delinquency and Write-off Statistics
As of and for the months ended June 30, July 31 and August 31, 2009
(Billions, except percentages)
June 30, July 31, Aug. 31,
2009 2009 2009
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Cardmember lending - owned basis (A):
Total Loans $23.6 $23.1 $24.3
30 days past due loans as a % of total 4.4% 4.3% 4.1%
Average loans $25.3 $23.3 $23.7
Net write-off rate 9.9% 9.9% 10.2%
Cardmember lending - managed basis (B):
Total Loans $54.0 $52.9 $53.0
30 days past due loans as a % of total 4.4% 4.2% 4.1%
Average loans $54.3 $53.4 $52.9
Net write-off rate 9.9% 9.2% 9.0%
(A) "Owned," a GAAP basis measurement, reflects only cardmember
loans included in the Company's consolidated balance sheets. For the
month ended August 31, 2009, the increase in the owned basis net
write-off rate was driven by the mechanics of the calculation
relating to the transfer to the American Express Credit Account
Master Trust (the "Lending Trust") on August 20, 2009, of
approximately $3 billion of loans generated from cardmember accounts
newly designated for addition to the Lending Trust, as well as
maturities taking place during the month of certificates previously
issued by the Lending Trust.
(B) The managed basis presentation assumes that there have been
no off-balance sheet securitization transactions, i.e., all
securitized cardmember loans and related income effects are
reflected as if they were in the Company's balance sheets and income
statements, respectively. The difference between the "owned basis"
(GAAP) information and "managed basis" information is attributable
to the effects of securitization activities. The Company presents
U.S. Card Services information on a managed basis because that is
the way the Company's management views and manages the business.
Management believes that a full picture of trends in the Company's
cardmember lending business can only be derived by evaluating the
performance of both securitized and non-securitized cardmember loans
and that use of a managed basis presentation presents a more
comprehensive portrayal of the key dynamics of the cardmember
lending business over time.
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The statistics presented above provide information that is additional to the
data reported by the American Express Credit Account Master Trust (the
"Lending Trust") in its monthly Form 10-D report filed with the Commission.
The loans that have been securitized through the off-balance sheet Lending
Trust do not possess identical characteristics with those of the total (i.e.,
managed) portfolio of USCS loans, which reflects the aggregate of securitized
and owned loans. Thus, the reported credit performance of the Lending Trust
may, on a month-to-month basis, be better or worse than the credit performance
of the managed portfolio. Reported differences may arise as a result of, among
other things, differences in the mix and vintage of loans between the Lending
Trust and the managed portfolio (including, among other things, the larger
proportion of small business loans in the owned portfolio), the number of days
in the reporting period covered by the Form 10-D being filed by the Lending
Trust, the use of end-of-period principal loan balances to calculate write-off
statistics in the Lending Trust compared to the use of average loan balances
over the reporting period used in the managed statistics, as well as other
mechanics of the calculation for the owned net write-off rate, which is
impacted by the additions, issuances and maturities relating to the
securitization trust within a particular period. In addition, the reporting
period for the managed portfolio is based on a calendar month, as compared to
the reporting period covered by the Form 10-D reports for the Lending Trust,
which is generally based on a monthly period beginning on or around the 25th
day of each calendar month.
Set forth below is certain information regarding the credit performance of the
Lending Trust for its three most recent monthly reporting periods, as reported
in its Form 10-D report filed with respect to each such period.
American Express Credit Account Master Trust
(Billions, except percentages)
May 27, 2009 June 26, 2009 July 27, 2009
through through through
June 25, 2009 July 26, 2009 Aug. 25, 2009*
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Ending total principal balance $33.8 $33.2 $35.9
Defaulted amount,
net of recoveries $ 0.3 $ 0.3 $ 0.3
Annualized default rate,
net of recoveries 10.2% 8.9% 8.5%
Total 30+ days delinquent $ 1.5 $ 1.5 $ 1.5
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* The decrease in the annualized default rate, net of recoveries, for the
period was attributable in large part to the mechanics of the calculation,
which was impacted by the acquisition by the Lending Trust on August 20, 2009,
of approximately $3 billion of loans generated from cardmember accounts newly
designated for addition to the Lending Trust.
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FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements, which are subject to risks
and uncertainties. Forward-looking statements contain words such as "believe,"
"expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may,"
"should," "could," "would," "likely" and similar expressions. 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. The Company undertakes
no obligation to update or revise any forward-looking statements. Factors that
could cause actual results to differ materially from these forward-looking
statements include, but are not limited to, the following: the Company's
ability to manage credit risk related to consumer and small business loans and
other credit trends, which will depend in part on the economic environment,
including, among other things, the housing market, the rates of bankruptcies
and unemployment, which can affect spending on card products and debt payments
by individuals and small business customers, and on the effectiveness of the
Company's credit models; the impact of the Company's efforts to deal with
delinquent cardmembers in the current challenging economic environment, which
may affect payment patterns of cardmembers, the actual level of cardmember
delinquencies in the future and the perception of the Company's services,
products and brands; the Company's near-term write-off rates, including those
for the third and fourth quarters of 2009, which will depend in part on
changes in the level of the Company's loan balances, delinquency rates of
cardmembers and bankruptcy filings and unemployment rates; and the actual
amount to be spent by the Company on marketing, promotion, rewards and
cardmember services based on management's assessment of competitive
opportunities and other factors affecting its judgment, and during the
remainder of 2009, the extent of provision benefit, if any, from lower than
expected write offs. A further description of these and other risks and
uncertainties can be found in the Company's Annual Report on Form 10-K for the
year ended December 31, 2008, its Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 2009, and its other reports filed with
the SEC.
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SIGNATURE
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 hereunto duly authorized.
AMERICAN EXPRESS COMPANY
(REGISTRANT)
By: /s/ Carol V. Schwartz
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Name: Carol V. Schwartz
Title: Secretary
Date: September 15, 2009
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