American Express 2009 Annual Report Download - page 47

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2009 FINANCIAL REVIEW
AMERICAN EXPRESS COMPANY
The Company’s committed facilities expire as follows:
(Billions)
2010 $ 2.0
2011 3.4
2012 6.8
Total $12.2
The availability of the credit lines is subject to the Company’s
compliance with certain financial covenants, including the
maintenance by the Company of consolidated tangible net
worth of at least $4.1 billion, the maintenance by Credco of a
1.25 ratio of combined earnings and fixed charges to fixed
charges, and the compliance by the Banks with applicable
regulatory capital adequacy guidelines. As of December 31,
2009, the Company’s consolidated tangible net worth was
approximately $11.6 billion, Credco’s ratio of combined
earnings and fixed charges to fixed charges was 1.59 and
Centurion Bank and FSB each exceeded their regulatory
capital adequacy guidelines.
Committed bank credit facilities do not contain material
adverse change clauses, which may preclude borrowing under
the credit facilities. The facilities may not be terminated
should there be a change in the Company’s credit rating.
In consideration of all the funding sources described
above, the Company believes it would have access to liquidity
to satisfy all maturing funding obligations for at least a
12-month period in the event that access to the secured and
unsecured fixed income capital markets is completely
interrupted for that length of time. These events are not
considered likely to occur.
Parent Company Funding
Parent Company long-term debt outstanding was
$10.2 billion and $7.9 billion as of December 31, 2009 and
2008, respectively. During 2009, the Parent Company issued
$1.25 billion of 7.25 percent fixed-rate Senior Notes due 2014
and $1.75 billion of 8.13 percent fixed-rate Senior Notes
due 2019.
The Parent Company is authorized to issue commercial
paper. This program is supported by a $1.25 billion multi-
purpose committed bank credit facility. The credit facility will
expire in 2010 and 2012 in the amounts of $500 million and
$750 million, respectively. There was no Parent Company
commercial paper outstanding during 2009 and 2008, and no
borrowings have been made under its bank credit facility.
OFF-BALANCE SHEET
ARRANGEMENTS AND
CONTRACTUAL OBLIGATIONS
The Company has identified both on- and off-balance sheet
transactions, arrangements, obligations, and other
relationships that may have a material current or future effect
on its financial condition, changes in financial condition,
results of operations, or liquidity and capital resources.
45