American Express 2010 Annual Report Download - page 48

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Committed Bank Credit Facilities
The Company maintained committed bank credit facilities as of
December 31, 2010, as follows:
(Billions)
Parent
Company Credco
Centurion
Bank FSB Total
(a)
Committed
(b)
$ 0.8 $ 9.0 $ 0.4 $ 0.4 $ 10.6
Outstanding $—$4.1$—$—$4.1
(a) Does not include the $3.0 billion Secured Borrowing Capacity described
above of which $2.5 billion was drawn as of December 31, 2010.
(b) Committed lines were supplied by 32 financial institutions as of year end.
The Company’s committed facilities expire as follows:
(Billions)
2011 $ 3.3
2012 7.3
Total $ 10.6
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,
2010, the Company’s consolidated tangible net worth was
approximately $13.1 billion, Credco’s ratio of combined
earnings and fixed charges to fixed charges was 1.54 and
Centurion Bank and FSB each exceeded their regulatory
capital adequacy guidelines. The drawn balance of $4.1 billion
as of December 31, 2010 was used to fund the Company’s
business activities in the normal course. The remaining
capacity of the facilities mainly served to further enhance the
Company’s contingent funding resources.
The Company’s committed bank credit facilities do not
contain material adverse change clauses, which might
otherwise 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 long-term 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 $10.3 billion
and $10.2 billion as of December 31, 2010 and
2009, respectively.
The Parent Company is authorized to issue commercial paper.
This program is supported by a $0.8 billion multi-purpose
committed bank credit facility. The credit facility will expire
in 2012. There was no Parent Company commercial paper
outstanding during 2010 and 2009 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.
46
AMERICAN EXPRESS COMPANY
2010 FINANCIAL REVIEW