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 ~~September 30, 2017~~March 31, 2018

orOR

☐ 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)

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.)

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.

☑ Yes ~~��~~ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

☑ Yes ☐ 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 filer ☐		Accelerated filer ☐
Non-accelerated filer ☑		Smaller 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☑ 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 ~~November 3, 2017~~ May 4, 2018
Common Stock (par value $0.10 per share)			1,504,938 Shares

~~Table of Contents~~

Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
FORM 10-Q
INDEX

Part I.	Financial Information			Page No.

		Item 1.	Financial Statements

			Consolidated Statements of Income and Retained Earnings – Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~	1

			Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~	2

			Consolidated Balance Sheets – ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017	3

			Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~	4

			Notes to Consolidated Financial Statements	5

		Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)	1716

		Item 4.	Controls and Procedures	2422

Part II.	Other Information

		Item 1A.	Risk Factors	2624

		Item 5.	Other Information	2624

		Item 6.	Exhibits	2624

Signatures				2725

Exhibit Index				E-1

Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
(Millions) 2017 2016 2017 2016
Revenues
Discount revenue earned from purchased Card Member receivables and loans $ 199 $ 119 $ 558 $ 352
Interest income from affiliates and other 75 51 198 158
Finance revenue 12 10 35 29
Total revenues 286 180 791 539
Expenses
Provisions for losses 60 37 176 105
Interest expense 139 80 359 239
Interest expense to affiliates 17 5 39 16
Other, net
(15
) (12 ) 14 (13 )
Total expenses 201 110 588 347
Pretax income 85 70 203 192
Income tax provision 13 10 15 24
Net income 72 60 188 168
Retained earnings at beginning of period 3,427 3,222 3,311 3,114
Retained earnings at end of period $ 3,499 $ 3,282 $ 3,499 $ 3,282

Three Months Ended March 31 (Millions)	2018			2017
Revenues
Discount revenue earned from purchased Card Member receivables and loans	$	214		$	185
Interest income from affiliates and other		89			55
Finance revenue		15			12
Total revenues		318			252
Expenses
Provisions for losses		64			62
Interest expense		131			97
Interest expense to affiliates		29			9
Other, net		(14	)		18
Total expenses		210			186
Pretax income		108			66
Income tax (benefit) provision		(21	)		7
Net income		129			59
Retained earnings at beginning of period		2,708			3,311
Retained earnings at end of period	$	2,837		$	3,370

See Notes to Consolidated Financial Statements.

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AMERICAN EXPRESS CREDIT CORPORATION
C~~ONSOLIDATED~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended March 31 (Millions)	2018		2017
Net income	$	129	$	59
Other comprehensive income:
Foreign currency translation adjustments, net of tax		10		308
Other comprehensive income		10		308
Comprehensive income	$	139	$	367

See Notes to Consolidated Financial Statements.

Three Months Ended Nine Months Ended
September 30, September 30,
(Millions) 2017 2016 2017 2016
Net income $ 72 $ 60 $ 188 $ 168
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax 51 1 373 (31 )
Other comprehensive income (loss) 51 1 373 (31 )
Comprehensive income $ 123 $ 61 $ 561 $ 137

Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	March 31,			December 31,
(Millions, except share data)	2018			2017
Assets
Cash and cash equivalents	$	191		$	196
Card Member receivables, less reserves: 2018, $179; 2017, $145		24,685			20,131
Card Member loans, less reserves: 2018, $6; 2017, $5		558			556
Loans to affiliates and other		13,344			14,527
Due from affiliates		16			189
Other assets		277			290
Total assets	$	39,071		$	35,889
Liabilities and Shareholder’s Equity
Liabilities
Short-term debt	$	142		$	1,308
Short-term debt to affiliates		9,812			5,997
Long-term debt		23,640			24,153
Long-term debt to affiliates		281			270
Total debt		33,875			31,728
Due to affiliates		2,931			1,988
Accrued interest and other liabilities		255			302
Total liabilities	$	37,061		$	34,018
Shareholder’s Equity
Common stock, $0.10 par value, authorized 3 million shares; issued and outstanding 1.5 million shares		―			―
Additional paid-in capital		161			161
Retained earnings		2,837			2,708
Accumulated other comprehensive loss
Foreign currency translation adjustments, net of tax of: 2018, $(5); 2017, $17		(988	)		(998	)
Total accumulated other comprehensive loss		(988	)		(998	)
Total shareholder’s equity		2,010			1,871
Total liabilities and shareholder’s equity	$	39,071		$	35,889

See Notes to Consolidated Financial Statements.

Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
C~~ONSOLIDATED BALANCE SHEETS~~CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

September 30, December 31,
(Millions, except share data) 2017 2016
Assets
Cash and cash equivalents $ 1,341 $ 1,211
Card Member receivables, less reserves: 2017, $158; 2016, $110 22,350 18,108
Card Member loans, less reserves: 2017, $5; 2016, $5 492 471
Loans to affiliates and other 12,367 10,659
Due from affiliates 116 997
Other assets 272 490
Total assets $ 36,938 $ 31,936
Liabilities and Shareholder’s Equity
Liabilities
Short-term debt $ 337 $ 2,993
Short-term debt to affiliates 7,290 4,559
Long-term debt 24,239 20,512
Total debt 31,866 28,064
Due to affiliates 2,075 1,517
Accrued interest and other liabilities 227 146
Total liabilities $ 34,168 $ 29,727
Shareholder’s Equity
Common stock, $0.10 par value, authorized 3 million shares; issued and outstanding 1.5 million shares ― ―
Additional paid-in capital 161 161
Retained earnings 3,499 3,311
Accumulated other comprehensive loss
Foreign currency translation adjustments, net of tax of: 2017, $(80); 2016, $329 (890 ) (1,263 )
Total accumulated other comprehensive loss (890 ) (1,263 )
Total shareholder’s equity 2,770 2,209
Total liabilities and shareholder’s equity $ 36,938 $ 31,936

Three Months Ended March 31 (Millions)	2018			2017
Cash Flows from Operating Activities
Net income	$	129		$	59
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provisions for losses		64			62
Amortization of underwriting expense		7			6
Deferred taxes		(42	)		(20	)
Changes in operating assets and liabilities:
Interest, taxes and other amounts due to/from affiliates		23			229
Other operating assets and liabilities		(290	)		27
Net cash (used in) provided by operating activities		(109	)		363
Cash Flows from Investing Activities
Net increase in Card Member receivables and loans		(4,527	)		(1,511	)
Net decrease (increase) in loans to affiliates and other		1,365			(572	)
Net increase (decrease) in due to/from affiliates		1,083			(75	)
Net cash used in investing activities		(2,079	)		(2,158	)
Cash Flows from Financing Activities
Net decrease in short-term debt		(1,166	)		(1,566	)
Net increase in short-term debt to affiliates		3,796			400
Proceeds from long-term debt		―			4,480
Principal payments of long-term debt		(447	)		(1,500	)
Net cash provided by financing activities		2,183			1,814
Effect of foreign currency exchange rates on cash and cash equivalents		(1	)		15
Net (decrease) increase in cash, cash equivalents and restricted cash		(6	)		34
Cash, cash equivalents and restricted cash at beginning of period		296			1,211
Cash, cash equivalents and restricted cash at end of period	$	290		$	1,245


Supplementary cash flow information
		Mar-18		Dec-17		Mar-17		Dec-16
Cash and cash equivalents per Consolidated Balance Sheets	$	191	$	196	$	1,245	$	1,211
Restricted cash included in Other assets per Consolidated Balance Sheets ^(a)		99		100		―		―
Total cash, cash equivalents and restricted cash	$	290	$	296	$	1,245	$	1,211

(a)	Represents cash placed with Amex Bank of Canada relating to the collateralized loan arrangement for transfer of Card Member loans and the purchase of Card Member Receivables.

See Notes to Consolidated Financial Statements.

Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
C~~ONSOLIDATED STATEMENTS OF CASH FLOWS~~
~~(Unaudited)~~

Nine Months Ended September 30 (Millions)
2017 2016
Cash Flows from Operating Activities
Net income $ 188 $ 168
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for losses 176 105
Amortization of underwriting expense 20 17
Deferred taxes (65 ) 4
Changes in operating assets and liabilities:
Interest, taxes and other amounts due from/to affiliates 299 31
Other operating assets and liabilities (490 ) 376
Net cash provided by operating activities 128 701
Cash Flows from Investing Activities
Net (increase) decrease in Card Member receivables and loans, including held for sale ^(a)
(4,063 ) 1,379
Net decrease in loans to affiliates and other 1,058 3,485
Net (decrease) increase in due to/from affiliates (685 ) 363
Net cash (used in) provided by investing activities (3,690 ) 5,227
Cash Flows from Financing Activities
Net decrease in short-term debt (2,656 ) (1,491 )
Net increase (decrease) in short-term debt to affiliates 2,701 (718 )
Issuance of long-term debt 8,443 1,743
Principal payments on long-term debt (4,900 ) (4,961 )
Net cash provided by (used in) financing activities 3,588 (5,427 )
Effect of foreign currency exchange rates on cash and cash equivalents 104 11
Net increase in cash and cash equivalents 130 512
Cash and cash equivalents at beginning of period 1,211 173
Cash and cash equivalents at end of period $ 1,341 $ 685

Supplemental cash flow information
Non-cash investing activities
Replacement of due from affiliate balance with new loan arrangement with affiliates ^(b)
$ 2,129 $ ―

~~(a)~~

~~Refer to Note 1 for additional information.~~

~~(b)~~

To more effectively manage inter-affiliate funding, Credco entered into new loan agreements in July 2017 with American Express Limited and American Express International, Inc. The new loans were funded by the assignment of its existing loan to American Express Company and outstanding due from affiliate balance with TRS.

~~See Notes to Consolidated Financial Statements.~~

~~Table of Contents~~

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

1. Basis of Presentation

The Company

American Express Credit Corporation (Credco), together with its subsidiaries, 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 non-interest-earning Card Member receivables arising from the use of 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, although interest-earning revolving loans are primarily funded by subsidiaries of TRS other than Credco.

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.

American Express provides Credco with financial support with respect to maintenance of its minimum overall 1.25 fixed charge coverage ratio, which is achieved by charging appropriate discount rates on the purchases 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. The revenue earned by Credco from purchasing Card Member receivables and loans at a discount is reported as discount revenue on the Consolidated Statements of Income and Retained Earnings.

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, ~~2016~~2017 (Form 10-K). If not materially different, certain footnote disclosures included therein have been omitted from this Quarterly Report on Form 10-Q.

The interim consolidated financial information in this report has not been audited. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period consolidated financial information, 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.

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

Recently Issued Accounting Standards

In ~~May 2014,~~June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance on revenue recognition. The accounting standard establishes the principles to apply to determine the amount and timing of revenue recognition, specifying the accounting for certain costs related to revenue, and requiring additional disclosures about the nature, amount, timing and uncertainty of revenues and related cash flows. The guidance, as amended, supersedes most of the current revenue recognition requirements, and is effective January 1, 2018.

Upon adoption of the new revenue recognition guidance, Credco will use the full retrospective method, which applies the new standard to each prior reporting period presented. Credco has made significant progress in determining the impact on its Consolidated Financial Statements and underlying operational processes. Credco does not expect a significant impact to net income upon adoption. Similarly, upon adoption of the new standard, the impact on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows will not be material. Credco is also in the process of implementing changes to its accounting policies, business processes, systems and internal controls to support the recognition, measurement and disclosure requirements under the new standard.

In January 2016, the FASB issued new accounting guidance on the recognition and measurement of financial assets and financial liabilities. The guidance, which is effective January 1, 2018, makes targeted changes to current GAAP, specifically to the classification and measurement of equity securities, and to certain disclosure requirements associated with the fair value of financial instruments. Credco expects that adopting this guidance will have an immaterial impact on its financial position, results of operations and cash flows, as well as on its accounting policies, business processes, systems and internal controls.

~~In June 2016, the FASB~~ issued new accounting guidance for recognition of credit losses on financial instruments, ~~which is~~ effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information. The guidance also requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the CECL model will alter the assumptions used in estimating credit losses on Card Member receivables and loans, ~~among other financial instruments,~~ and may result in material increases to Credco’s credit reserves as the new guidance involves earlier recognition of expected losses for the life of the assets. American Express has established an enterprise-wide, cross-discipline governance structure to implement the new ~~standard. American Express is currently identifying~~standard, and continue to identify and conclude on key interpretive issues ~~and is~~along with evaluating American Express’ existing credit loss forecasting models and processes in relation to the new guidance to determine what modifications may be required.

In February 2018, as a result of the enactment of the Tax Cuts and Jobs Act (the Tax Act), the FASB issued new accounting guidance on the reclassification of certain tax effects from accumulated other comprehensive income (loss) (AOCI) to retained earnings. The optional guidance is effective January 1, 2019, with early adoption permitted. Credco is evaluating whether it will adopt the new guidance along with any impacts on Credco’s financial position, results of operations and cash flows, none of which are expected to be material.

Recently Adopted Accounting Standards

In January 2016, the FASB issued new accounting guidance on the recognition and measurement of financial assets and financial liabilities, which was effective and adopted by Credco as of January 1, 2018. The guidance makes targeted changes to GAAP; specifically to the classification and measurement of equity securities, and to certain disclosure requirements associated with the fair value of financial assets and liabilities. The adoption of the guidance did not have a material impact on Credco’s financial position, results of operations and cash flows. Credco implemented changes to its accounting policies, business processes and internal controls in support of the new guidance. Such changes were not material.

In November 2016, the FASB issued new accounting guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents, effective January 1, 2018. The guidance provides specifically that amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents on the statement of cash flows. Credco holds a restricted cash balance such that it becomes a material change to the way balances are presented on the statement of cash flows. Beginning with the quarter ended March 31, 2018, Credco’s consolidated statements of cash flows reflect the adoption of the standard using the full retrospective method, which applies the new standard to each prior reporting period presented.

In August 2017, the FASB issued new accounting guidance providing targeted improvements to the accounting for hedging activities, ~~which is~~ effective January 1, 2019, with early adoption permitted in any interim period or fiscal year before the effective date. The guidance introduces a number of amendments, several of which are optional, that are designed to simplify the application of hedge accounting, improve financial statement transparency and more closely align hedge accounting with an entity’s risk management strategies. Effective January 1, 2018, Credco ~~is evaluating~~adopted the ~~impact this~~ guidance ~~will have~~with no material impact on its financial position, results of operations and cash flows, ~~as well as the impact the standard will have on~~along with associated changes to its accounting policies, business processes ~~systems~~ and internal ~~controls.~~

~~Other Information~~

~~During the fourth quarter of 2015, American Express determined it would sell Card Member loans and receivables related to certain of its cobrand partnerships. As a result~~controls in support of the determination, Credco classified Card Member receivables related to the Costco portfolio purchased from American Express Receivables Financing Corporation VIII LLC (RFC VIII) in the form of participation interest as Card Member receivables held for sale (HFS) on its Consolidated Balance Sheets as of December 31, 2015 and March 31, 2016.new guidance. Such changes were not material.

During the second quarter of 2016, American Express completed the sales of substantially all of its outstanding Card Member loans and receivables HFS, and consequently Credco also sold back all of its participation interests in Card Member receivables HFS to RFC VIII.

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

2. Card Member Receivables and Loans

American Express’ charge and ~~credit~~lending payment card products result in the generation of Card Member receivables and Card Member loans, respectively.

The net volume of Card Member receivables purchased during the nine months ended September 30, 2017 and 2016 was approximately $189 billion and $161 billion, respectively. As of September 30, 2017 and December 31, 2016, Credco Receivables Corporation (CRC) owned approximately $6.4 billion and $4.0 billion, respectively, of participation interests in Card Member receivables purchased without recourse from RFC VIII.

Card Member receivables as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 consisted of:

(Millions) 2017 2016
U.S. Consumer Services $ 5,472 $ 3,518
International Consumer and Network Services^(a)
1,608 1,526
Global Commercial Services^(b)
15,428 13,174
Card Member receivables^(c)
22,508 18,218
Less: Reserve for losses 158 110
Card Member receivables, net^(d)
$ 22,350 $ 18,108

(Millions)	2018		2017
U.S. Consumer Services	$	5,958	$	3,557
International Consumer and Network Services^(a)		2,380		1,827
Global Commercial Services^(b)		16,526		14,892
Card Member receivables^(c)		24,864		20,276
Less: Reserve for losses		179		145
Card Member receivables, net^(d)	$	24,685	$	20,131

(a)	Comprised of International consumer card business.

(b)	Comprised of Corporate and Small Business Services.

(c)	Net of deferred discount revenue totaling ~~$45~~$65 million and ~~$27~~$43 million as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively.

(d)	Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial.

~~The net volume of Card Member loans purchased during the nine months ended September 30, 2017 and 2016 was $3.3 billion and $3.0 billion, respectively.~~

Card Member loans as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 consisted of:

(Millions)	2017		2016		2018		2017
International Consumer and Network Services^(a)	$	497	$	476	$	564	$	561
Less: Reserve for losses		5		5		6		5
Card Member loans, net^(b)	$	492	$	471	$	558	$	556

(a)	Comprised of International consumer card business.

(b)	Card Member loans modified in a TDR program were immaterial.

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

Card Member Receivables and 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 ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

				30-59		60-89
			Days		Days		90+ Days
2017(Millions)	Current		Past Due		Past Due		Past Due		Total
2018(Millions)											Current			30-59 Days Past Due		60-89 Days Past Due	90+ Days Past Due		Total
Card Member Receivables:
U.S. Consumer Services	$	5,428	$	18	$	8	$	18	$	5,472	$	5,908	$	18	$	11	$	21	$	5,958
International Consumer and Network Services		1,590		7		3		8		1,608		2,347		12		6		15		2,380
Global Commercial Services
Global Small Business Services		1,716		9		3		7		1,735		1,895		10		5		10		1,920
Global Corporate Payments^(a)	(b)		(b)		(b)			122		13,693	(b)		(b)		(b)			125		14,606
Card Member Loans:
International Consumer and Network Services	$	493	$	1	$	1	$	2	$	497	$	559	$	2	$	1	$	2	$	564

				30-59		60-89
	��		Days		Days		90+ Days
2016(Millions)	Current		Past Due		Past Due		Past Due		Total
Card Member Receivables:
U.S. Consumer Services	$	3,501	$	9	$	3	$	5	$	3,518
International Consumer and Network Services		1,506		6		4		10		1,526
Global Commercial Services
Global Small Business Services		1,202		9		2		5		1,218
Global Corporate Payments^(a)	(b)		(b)		(b)			108		11,956
Card Member Loans:
International Consumer and Network Services	$	472	$	1	$	1	$	2	$	476


2017(Millions)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Card Member Receivables:
U.S. Consumer Services	$	3,531	$	10	$	6	$	10	$	3,557
International Consumer and Network Services		1,805		8		5		9		1,827
Global Commercial Services
Global Small Business Services		1,397		5		4		6		1,412
Global Corporate Payments^(a)	(b)		(b)		(b)			112		13,480
Card Member Loans:
International Consumer and Network Services	$	557	$	1	$	1	$	2	$	561

(a)

For Global Corporate Payments Card Member receivables in Global Commercial Services, 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 Loans

The following tables present the key credit quality indicators as of or for the ~~nine~~three months ended ~~September 30:~~March 31:

2017 2016
30+ Days 30+ Days
Net Past Due Net Past Due
Write-off as a % of Write-off as a % of
Rate ^(a) Total Rate ^(a) Total
Card Member Receivables:
U.S. Consumer Services 0.81 % 0.80 % 0.59 % 0.69 %
International Consumer and Network Services 1.53 % 1.12 % 1.95 % 1.35 %
Global Small Business Services 1.01 % 1.10 % 1.01 % 0.76 %
Card Member Loans:
International Consumer and Network Services 1.41 % 0.80 % 1.24 % 0.70 %

	2018						2017
	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:
U.S. Consumer Services		1.11	%		0.84	%		0.57	%		0.78	%
International Consumer and Network Services		1.60	%		1.39	%		1.82	%		1.22	%
Global Small Business Services		1.42	%		1.30	%		0.88	%		1.18	%
Card Member Loans:
International Consumer and Network Services		1.40	%		0.89	%		0.84	%		0.87	%

	2017				2016
	Net Loss		90+ Days		Net Loss		90+ Days
	Ratio as a		Past Billing		Ratio as a		Past Billing
	% of		as a % of		% of		as a % of			2018					2017
	Charge Volume	^(b)	Receivables		Charge Volume	^(b)	Receivables				Net Loss Ratio as a % of Charge Volume	^(b)	90+Days Past Billing as a % of Receivables			Net Loss Ratio as a % of Charge Volume	^(b)	90+Days Past Billing as a % of Receivables
Card Member Receivables:
Global Corporate Payments	0.07	%	0.89	%	0.06	%		0.77	%		0.07	%	0.86	%		0.08	%	0.74	%

(a)	Represents the amount of Card Member receivables or Card Member loans owned by Credco that are written off, net of recoveries, expressed as a percentage of the average Card Member receivables or Card Member loans balances in each of the periods indicated.

(b)	Represents the amount of Card Member receivables owned by Credco that are written off, net of recoveries, expressed as a percentage of the volume of Card Member receivables purchased by Credco in each of the periods indicated.

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

3. Reserves for Losses

Reserves for losses relating to Card Member receivables and loans represent management’s best estimate of the probable inherent losses in Credco’s outstanding portfolio of receivables and loans, as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments.

Changes in Card Member Receivables Reserve for Losses

The following table presents changes in the Card Member receivables reserve for losses for the ~~nine~~three months ended ~~September 30:~~March 31:

(Millions) 2017 2016
Balance, January 1 $ 110 $ 114
Provisions 171 101
Other credits^(a)
35 13
Net write-offs^(b)
(142 ) (105 )
Other debits^(c)
(16 ) (17 )
Balance, September 30 $ 158 $ 106

(Millions)	2018			2017
Balance, January 1	$	145		$	110
Provisions		62			60
Other credits^(a)		28			10
Net write-offs^(b)		(56	)		(47	)
Other debits^(c)		―			(5	)
Balance, March 31	$	179		$	128

(a)

Primarily reserve balances ~~related~~applicable to ~~participation interests in~~new groups of Card Member receivables purchased from TRS and certain of its subsidiaries and participation interests from affiliates. ~~Participation interests in~~New groups of Card Member receivables purchased totaled ~~$6.0~~$4.3 billion and ~~$3.4~~$2.6 billion for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

(b)	Net of recoveries of ~~$70~~$28 million and ~~$71~~$23 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

(c)

Primarily reserve balances related to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled ~~$2.6 billion~~nil and ~~$4.7~~$1.0 billion for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

Changes in Card Member Loans Reserve for Losses

The following table presents changes in the Card Member loans reserve for losses for the ~~nine~~three months ended ~~September 30:~~March 31:

(Millions)	2017			2016			2018			2017
Balance, January 1	$	5		$	4		$	5		$	5
Provisions		5			4			2			2
Net write-offs ^(a)		(5	)		(4	)		(1	)		(2	)
Balance, September 30	$	5		$	4
Balance, March 31							$	6		$	5

(a)	Net of recoveries of ~~$1.0~~$0.3 million and $0.2 million for ~~both~~ the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016.~~respectively.

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

4. Derivatives and Hedging Activities

Credco uses derivative financial instruments (derivatives) to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, and are carried at fair value on the Consolidated Balance Sheets. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of Credco’s market risk management. Credco does not transact in derivatives for trading purposes.

In relation to Credco’s credit risk, under the terms of the derivative agreements it has with its various counterparties, Credco is not required to either immediately settle any outstanding liability balances or post collateral upon the occurrence of a specified credit risk-related event. Based on its assessment of the credit risk of Credco’s derivative counterparties as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, no credit risk adjustment to the derivative portfolio was required.

The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

	Other Assets						Other Liabilities						Other Assets						Other Liabilities
	Fair Value						Fair Value						Fair Value						Fair Value
(Millions)	2017			2016			2017			2016			2018			2017			2018			2017
Derivatives designated as hedging instruments:
Fair value hedges - Interest rate contracts^(a)	$	―		$	22		$	8		$	69		$	―		$	―		$	―		$	―
Net investment hedges - Foreign exchange contracts		18			151			63			1			33			54			33			38
Total derivatives designated as hedging instruments		18			173			71			70			33			54			33			38
Derivatives not designated as hedging instruments:
Foreign exchange contracts		50			128			50			28			12			9			68			57
Total derivatives, gross		68			301			121			98			45			63			101			95
Less: Cash collateral netting^(c)(b)		―			(2	)		―			(49	)		―			―			―			―
Derivative asset and derivative liability netting^(d)(c)		(38	)		(27	)		(38	)		(27	)		(21	)		(26	)		(21	)		(26	)
Total derivatives, net^(e)	$	30		$	272		$	83		$	22		$	24		$	37		$	80		$	69

(a)

~~Effective January 2017, the Central Clearing Party changed the legal characterization of~~For centrally cleared derivatives, variation margin payments ~~for centrally cleared derivatives to be~~are legally characterized as settlement payments as opposed to collateral. Accordingly, the amounts ~~disclosed~~ for ~~2017 related to~~ centrally cleared derivatives are based on gross assets ~~of $1 million~~ and gross liabilities, ~~of $87 million~~ net of variation ~~margin of $1 million and $79 million, respectively.~~margin.

(b)	~~Represents the offsetting of the fair value of bilateral interest rate contracts with the right to reclaim cash collateral or the obligation to return cash collateral.~~

~~(c)~~

Credco ~~held no non-cash collateral~~posted $98 million and $115 million as of ~~September 30, 2017~~March 31, 2018 and December 31, 2016, respectively. To mitigate counterparty credit risk related to derivatives, Credco may accept non-cash collateral from its derivatives counterparties. Additionally, Credco posted $135 million and $144 million as of September 30, 2017, ~~and December 31, 2016,~~ respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are recorded within Other assets on Credco’s Consolidated Balance Sheets and are not netted against the derivative balances.

~~(d)~~(c)

Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.

~~(e)~~

Credco has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and net derivative liabilities are presented within Other assets and Accrued interest and Other liabilities, respectively, on Credco’s Consolidated Balance Sheets.

A majority of Credco’s derivative assets and liabilities as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 are subject to master netting agreements with its derivative counterparties. Credco has no derivative amounts subject to enforceable master netting arrangements that are not offset on the Consolidated Balance Sheets.

Fair Value Hedges

Credco is exposed to interest rate risk associated with its fixed-rate long-term debt obligations. At the time of issuance, certain fixed-rate debt obligations are designated in fair value hedging relationships using interest rate swaps to economically convert the fixed interest rate to a floating interest rate. Credco has $16.2 billion ~~and $14.8 billion~~ of its fixed-rate debt obligations designated in fair value hedging relationships as of ~~September 30, 2017~~both March 31, 2018 and December 31, ~~2016,~~2017, respectively.

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

The following table ~~summarizes~~represents the ~~gains (losses) recognized in Other expenses~~total amounts of income and expense line items associated with ~~Credco’s~~ fair value hedges of Credco’s fixed-rate long-term debt on the Consolidated Statements of Income and Retained Earnings for the three ~~and nine~~ months ended ~~September 30:~~March 31:

Three Months Ended Nine Months Ended
September 30, September 30,
(Millions) 2017 2016 2017 2016
Interest rate derivative contracts $ (11 ) $ (90 ) $ (40 ) $ 115
Hedged items 20 100 11 (101 )
Net hedge ineffectiveness $ 9 $ 10 $ (29 ) $ 14

	Gains (losses)
(Millions)	2018			2017
	Interest Expense^(a)			Other Expenses
Hedged items	$	115		$	29
Derivatives designated as hedging instruments		(95	)		(50	)
Total	$	20		$	(21	)

(a)

Credco adopted new accounting guidance providing targeted improvements to the accounting for hedging activities effective January 1, 2018. In compliance with the standard, amounts previously recorded in Other expenses have been prospectively recorded in Interest expense. Refer to Note 1 for additional information.

The carrying values of the hedged liabilities, recorded within Long-term debt on the Consolidated Balance Sheets, were $15.9 billion and $16.0 billion as of March 31, 2018 and December 31, 2017, respectively, including offsetting amounts of $270 million and $155 million for the respective periods, related to the cumulative amount of fair value hedging adjustments.

Credco ~~also~~ recognized a net increase of $4 million and a net reduction of $22 million in interest expense on long-term debt ~~of $8 million and $32 million~~ for the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and $47 million and $100 million for the nine months ended September 30, 2017 and 2016,~~ respectively, primarily related to the net settlements (interest accruals) on Credco’s interest rate derivatives designated as fair value hedges.

Net Investment Hedges

The ~~effective portion of the gain or loss~~losses on net investment hedges, net of taxes, recorded in ~~accumulated other comprehensive income (loss) (AOCI)~~AOCI as part of the cumulative translation adjustment, were ~~losses of $95~~$43 million and ~~$29~~$128 million for the three months ended ~~September 30,~~March 31, 2018 and 2017, and 2016, respectively, and losses of $263 million and $28 million for the nine months ended September 30, 2017 and 2016, respectively, with any ineffective portion recognized in Other expenses during the period.respectively. No ~~ineffectiveness or other~~ amounts associated with net investment hedges were reclassified from AOCI into income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 and ~~2016.~~2017.

Derivatives Not Designated as Hedges

The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in net gains of $8$15 million and $3$4 million for the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and net gains of $19 million and $1 million for the nine months ended September 30, 2017 and 2016,~~ respectively, and are recognized in Other expenses.

5. Fair Values

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy as Level 2, as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

(Millions) 2017 2016
Assets:
Derivatives^(a)
$ 68 $ 301
Total assets 68 301
Liabilities:
Derivatives^(a)
121 98
Total liabilities $ 121 $ 98

(Millions)	2018		2017
Assets:
Derivatives^(a)	$	45	$	63
Total assets		45		63
Liabilities:
Derivatives^(a)		101		95
Total liabilities	$	101	$	95

(a)	Refer to Note 4 for the fair values of derivative assets and liabilities, on a further disaggregated basis.

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

Financial Assets and Financial Liabilities Carried at Other Than Fair Value

The following table summarizes the estimated fair ~~values of~~value for Credco’s financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016.~~2017. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017 and require ~~management’s~~management judgment. These figures may not be indicative of future fair values, nor can ~~the~~Credco’s fair value ~~of Credco~~ be estimated by aggregating the amounts presented.

Carrying Corresponding Fair Value Amount
2017 (Billions)
Value Total Level 1 Level 2 Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value
Cash and cash equivalents ^(a)
$ 1.3 $ 1.3 $ 0.2 $ 1.1 $ ―
Other financial assets 22.6 22.6 ― 22.6 ―
Financial assets carried at other than fair value
Card Member loans, net 0.5 0.5 ― ― 0.5
Loans to affiliates and other 12.4 12.2 ― 9.1 3.1
Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value 9.8 9.8 ― 9.8 ―
Financial liabilities carried at other than fair value
Long-term debt $ 24.2 $ 24.6 $ ― $ 24.6 $ ―

	Carrying		Corresponding Fair Value Amount								Carrying		Corresponding Fair Value Amount
2016 (Billions)	Value		Total		Level 1		Level 2		Level 3
2018 (Billions)											Value		Total		Level 1		Level 2		Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value(a)
Cash and cash equivalents ^(a)	$	1.2	$	1.2	$	0.2	$	1.0	$	―	$	0.2	$	0.2	$	0.2	$	―	$	―
Other financial assets		19.3		19.3		―		19.3		―		25.0		25.0		0.1		24.9		―
Financial assets carried at other than fair value
Card Member loans, net		0.5		0.5		―		―		0.5		0.6		0.6		―		―		0.6
Loans to affiliates and other		10.7		10.7		―		7.9		2.8		13.3		13.2		―		8.5		4.7
Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value		9.1		9.1		―		9.1		―		12.2		12.2		―		12.2		―
Financial liabilities carried at other than fair value
Long-term debt	$	20.5	$	20.7	$	―	$	20.7	$	―		23.6		23.8		―		23.8		―
Long-term debt with affiliates											$	0.3	$	0.3	$	―	$	0.3	$	―

	Carrying		Corresponding Fair Value Amount
2017 (Billions)	Value		Total		Level 1		Level 2		Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value^(a)
Cash and cash equivalents	$	0.2	$	0.2	$	0.2	$	―	$	―
Other financial assets		20.6		20.6		0.1		20.5		―
Financial assets carried at other than fair value
Card Member loans, net		0.6		0.6		―		―		0.6
Loans to affiliates and other		14.5		14.4		―		10.0		4.4
Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value		8.6		8.6		―		8.6		―
Financial liabilities carried at other than fair value
Long-term debt		24.2		24.5		―		24.5		―
Long-term debt with affiliates	$	0.3	$	0.3	$	―	$	0.3	$	―

(a)

Level 1 amounts reflect interest-bearing deposits ~~in banks~~ and Level 2 ~~amount reflects~~amounts primarily reflect time deposits and ~~short-term investments.~~Card Member receivables.

Nonrecurring Fair Value Measurements

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 and during the year ended December 31, ~~2016,~~2017, Credco did not have any assets that were measured at fair value due to impairment on a nonrecurring basis.

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

6. Variable Interest Entity

Credco ~~has~~ established a Variable Interest Entity, ~~(VIE),~~ American Express Canada Credit Corporation (AECCC), ~~used~~ primarily to ~~lend funds to affiliates, through the issuance of~~issue notes in Canada under a medium-term note ~~program. All~~program and lend the proceeds to affiliates. The notes issued under ~~this~~the medium-term note program are fully guaranteed by Credco. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and, therefore, consolidates the entity. ~~Total assets as~~

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017, total assets of AECCC were ~~$1.9 billion~~$8 million and ~~$1.7 billion,~~$466 million, respectively, ~~the majority~~and total liabilities were nil and $457 million, respectively, none of which were eliminated in consolidation. ~~Total liabilities as~~In March 2018, the funds lent by AECCC were repaid by the affiliates and used to satisfy the scheduled maturity of September 30, 2017 and December 31, 2016 were $1.9 billion and $1.7 billion, respectively. As of September 30, 2017 and December 31, 2016, $1.4 billion and $1.3 billion, respectively, of liabilities were eliminated in consolidation. The assets ofnotes issued under the ~~VIE are not used solely to settle the obligations of the VIE. The~~medium-term note ~~holders of the VIE have recourse to Credco.~~program.

~~Table of Contents~~

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

7. Changes in Accumulated Other Comprehensive Income

AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in Foreign Currency Translation Adjustments for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~ were as follows:

Foreign
Currency
Translation
Three Months Ended September 30, 2017 (Millions), net of tax
Adjustments
Balances as of June 30, 2017 $ (941 )
Net translation gain of investments in foreign operations 146
Net losses related to hedges of investment in foreign operations (95 )
Net change in accumulated other comprehensive loss 51
Balances as of September 30, 2017 $ (890 )

Foreign
Currency
Translation
Nine Months Ended September 30, 2017 (Millions), net of tax
Adjustments
Balances as of December 31, 2016 $ (1,263 )
Net translation gain of investments in foreign operations ^(a)
636
Net losses related to hedges of investment in foreign operations (263 )
Net change in accumulated other comprehensive loss 373
Balances as of September 30, 2017 $ (890 )

(a) Includes $289 million of recognized tax benefits (Refer to Note 8).

Foreign
Currency
Translation
Three Months Ended September 30, 2016 (Millions), net of tax
Adjustments
Balances as of June 30, 2016 $ (1,188 )
Net translation gain of investments in foreign operations 30
Net losses related to hedges of investment in foreign operations (29 )
Net change in accumulated other comprehensive loss 1
Balances as of September 30, 2016 $ (1,187 )

Foreign
Currency
Translation
Nine Months Ended September 30, 2016 (Millions), net of tax
Adjustments
Balances as of December 31, 2015 $ (1,156 )
Net translation loss of investments in foreign operations (3 )
Net losses related to hedges of investment in foreign operations (28 )
Net change in accumulated other comprehensive loss (31 )
Balances as of September 30, 2016 $ (1,187 )

2018 (Millions), net of tax	Foreign Currency Translation Adjustments
Balances as of December 31, 2017	$	(998	)
Net translation gain of investments in foreign operations		53
Net losses related to hedges of investment in foreign operations		(43	)
Net change in accumulated other comprehensive loss		10
Balances as of March 31, 2018	$	(988	)


2017 (Millions), net of tax	Foreign Currency Translation Adjustments
Balances as of December 31, 2016	$	(1,263	)
Net translation gain of investments in foreign operations^(a)		436
Net losses related to hedges of investment in foreign operations		(128	)
Net change in accumulated other comprehensive loss		308
Balances as of March 31, 2017	$	(955	)

(a)	Includes $289 million of recognized tax benefits due to the resolution of uncertain tax position.

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

The following table shows the tax impact for the three ~~and nine~~ months ended ~~September 30~~March 31 for the changes in Foreign Currency Translation Adjustments presented above:

	Tax (benefit) expense
	Three Months Ended						Nine Months Ended
	September 30,						September 30,					Tax expense (benefit)
(Millions)	2017			2016			2017			2016		2018			2017
Foreign currency translation adjustments ^(a)	$	(64	)	$	(17	)	$	(409	)	$	32	$	(8	)	$	(242	)
Net investment hedges													(14	)		(76	)
Total tax impact	$	(64	)	$	(17	)	$	(409	)	$	32	$	(22	)	$	(318	)

(a)	Includes $289 million of tax benefits recognized due to the resolution of uncertain tax position in the ~~nine~~three months ended ~~September 30, 2017 (Refer to Note 8).~~March 31, 2017.

No amounts were reclassified out of AOCI into the Consolidated Statements of Income and Retained Earnings for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 and ~~2016.~~2017.

8. Income Taxes

The results of operations of Credco are included in the consolidated U.S. federal income tax return of American Express. Under an agreement with American Express, provision for income taxes is recognized on a separate company basis. If benefits for net operating losses, future tax deductions and foreign tax credits cannot be recognized on a separate company basis, such benefits are then recognized based upon a share, derived by formula, of those deductions and credits that are recognizable on an American Express consolidated reporting basis.

The effective tax rate was ~~15.3~~(19.4) percent and ~~14.3~~10.6 percent for the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and 7.4 percent and 12.5 percent~~respectively. The tax rate for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 includes a $24 million discrete tax benefit related to a revision to the provisional tax charge recorded in 2017 ~~and 2016, respectively.~~that reduced the reported effective tax rate by 22.2 percent. The ~~changes~~change in tax rates ~~primarily reflected~~also reflects a reduction in the U.S. statutory corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018, as a result of the Tax Act. The revision to the provisional tax charge results from additional analysis of the foreign withholding tax consequences of future cash dividends paid from non-U.S. subsidiaries. Credco is still analyzing the impacts of the Tax Act; therefore, the 2017 tax charge continues to be provisional.

The tax rate in each of the periods reflects the geographic mix of expenses in the United States ~~attracting~~that generates a ~~35 percent~~tax benefit at the U.S. statutory ~~benefit~~rate and foreign earnings taxed at lower rates, ~~which are indefinitely reinvested.~~

~~The tax rate in each of the periods reflects~~and the favorable impact of the tax benefit related to Credco’s ongoing funding activities outside the United States. Credco’s provision for income taxes for interim financial periods is not based on an estimated annual effective rate due to volatility in certain components of revenues and expenses that prevents Credco from projecting a reliable estimate of full year pretax income. A discrete calculation of the provision for income taxes is recorded for each interim period.

American Express is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which American Express has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In February 2017, American Express received notification that all matters outstanding with the IRS for tax years 1997-2007 were resolved. The resolution of such matters did not impact Credco’s effective tax rate. American Express is currently under examination with the IRS for tax years 2008 through 2014.

During the nine months ended September 30, 2017, Credco’s unrecognized tax benefits decreased by $288 million. The decrease was primarily due to the resolution with the IRS of an uncertain tax position in January 2017, and resulted in the recognition of $289 million in shareholder’s equity, specifically within AOCI. Interest relating to unrecognized tax benefits also decreased by approximately $41 million due to the resolution of this uncertain tax position. The decrease in accrued interest had no impact on either the income tax provision or AOCI.

Credco believes it is reasonably possible that its unrecognized tax benefits could decrease by an immaterial amount within the next 12 months, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the attribution of taxable income to a particular jurisdiction or jurisdictions. The resolution of such items would not have a material impact on Credco’s effective tax rate.

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Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)~~2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

Overview

Credco is engaged in the business of financing non-interest-earning Card Member receivables arising from the use of ~~the~~ American Expresscharge 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, although interest-earning revolving loans are primarily funded by subsidiaries of TRS other than Credco.

Certain of the statements in this Form 10-Q report 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 Overview

Management’s discussion of the results of Credco is in the context of the wider business environment for American Express.

American Express’ results for the ~~third~~first quarter reflect ~~significant progress against~~a solid start to the year as it continues to invest across its ~~current priorities of accelerating revenue growth, optimizing investments and resetting~~four key focus areas – strengthening its leadership position with premium consumers, extending its strong position in the ~~cost base.~~

~~Although~~commercial payments space, making American Express ~~has~~an essential part of its customers’ digital lives and strengthening its global, integrated network.

While American Express continues to see some headwinds from a rising interest rate environment, regulation in ~~markets~~countries around the world and intense competition, ~~American Express~~it remains focused on delivering differentiated value to its merchants, customers and business partners, while delivering appropriate returns to its shareholders.

Effective December 1, 2015, American Express transferred the Card Member loans and receivables related to its cobrand partnerships with JetBlue Airways Corporation and Costco Wholesale Corporation in the United States to Card Member loans and receivables held for sale (HFS) on its Consolidated Balance Sheets, the sales of which were completed on March 18, 2016 and June 17, 2016, respectively. For the periods from December 1, 2015 through the sale completion dates, the primary impacts beyond the HFS classification on the Consolidated Balance Sheets were to provisions for losses and credit metrics, which do not reflect amounts related to these HFS loans and receivables, as credit costs were reported in Other expenses through a valuation allowance adjustment. Since Credco owns participation interests in receivables purchased from American Express Receivables Financing Corporation VIII LLC (RFC VIII), Credco also sold back all of its participation interests in Card Member receivables HFS to RFC VIII.

Results of Operations for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~

Net income depends largely on the volume of Card Member receivables and loans purchased, the discount rate used to determine purchase price, interest earned, interest expense, collectability of purchased Card Member receivables and loans and income taxes.

Credco’s consolidated net income increased ~~$20~~by $70 million ~~or 12 percent~~ to ~~$188~~$129 million, as compared to ~~$168~~net income of $59 million for the same period in ~~2016.~~2017. The ~~year-over-year~~year over year increase in net income is ~~primarily due to higher Discount~~driven by an increase in discount revenue earned from ~~purchased~~ Card Member receivables and loans and higher ~~Interest~~interest income from affiliates and other, ~~and lower Income tax expense,~~ partially offset by higher ~~Interest expense, higher Provisions for losses and higher Other expenses.~~

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interest expense.

Table 1: Total Revenues Summary

Nine Months Ended September 30, Change
(Millions, except percentages) 2017 2016 2017 vs. 2016
Discount revenue earned from purchased Card Member receivables and loans $ 558 $ 352 $ 206 59 %
Interest income from affiliates and other 198 158 40 25
Finance revenue 35 29 6 21
Total revenues $ 791 $ 539 $ 252 47 %

Three Months Ended March 31,					Change
(Millions, except percentages)	2018		2017		2018 vs. 2017
Discount revenue earned from purchased Card Member receivables and loans	$	214	$	185	$	29	16	%
Interest income from affiliates and other		89		55		34	62
Finance revenue		15		12		3	25
Total revenues	$	318	$	252	$	66	26	%

Total revenues

Discount revenue increased, due to higher discount rates as well as higher volumes of receivables purchased.

Interest income increased, primarily due to higher interest ~~rates.~~rates and higher average loan balances.

Finance revenue increased, primarily due to higher average outstanding Card Member loan ~~balances during 2017.~~balances.

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Table 2: Total Expense Summary

Nine Months Ended September 30,						Change
Three Months Ended March 31,															Change
(Millions, except percentages)	2017		2016			2017 vs. 2016				2018			2017		2018 vs. 2017
Provisions for losses ^(a)	$	176	$	105		$	71	68	%	$	64		$	62	$	2		3	%
Interest expense		359		239			120	50			131			97		34		35
Interest expense to affiliates		39		16			23	#			29			9		20		#
Other, net		14		(13	)		27	#			(14	)		18		(32	)	#
Total expenses	$	588	$	347		$	241	69	%	$	210		$	186	$	24		13	%

# Denotes a variance greater than 100 percent

~~(a)~~

~~Effective December 1, 2015, does not reflect provisions related to the HFS portfolio.~~

Total expenses

~~Provisions for losses increased, primarily due to higher net write-offs and higher delinquencies.~~

Interest expense increased, primarily due to higher LIBOR rates and ~~higher~~ average debt ~~balances.~~balances, partially offset by fair value hedge ineffectiveness gains previously reported in Other expense.

Interest expense to affiliates increased, primarily due to higher LIBOR ~~rates.~~rates and average debt balances.

Other expenses ~~increased, primarily~~decreased, driven by ~~higher expenses associated with hedging~~a fair value hedge ineffectiveness loss of ~~fixed-rate debt of $42~~$21 million ~~partially offset by~~in the prior period, now reported in Interest expense, and higher forward point gains of ~~$17~~$11 million.

Income taxes

The effective tax rates were (19.4) percent and 10.6 percent for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016 were 7.4 percent and 12.5 percent,~~ respectively. The change in the tax rates ~~for both periods reflect the geographic mix of expenses in the United States attracting~~primarily reflects a ~~35 percent statutory benefit and foreign earnings taxed at lower rates, which are indefinitely reinvested.~~

~~The effective tax rates in each of the periods also reflect the favorable impact of the~~$24 million discrete tax benefit related to ~~Credco’s ongoing funding activities outside~~a revision to the ~~United States.~~provisional tax charge recorded in 2017, and a reduction in the U.S. statutory corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018, as a result of the Tax Cuts and Jobs Act (the Tax Act). Refer to Note 8 to the Consolidated Financial Statements for additional information.

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Card Member Receivables and Card Member Loans

The net volume of Card Member receivables and loans purchased during the three months ended March 31, 2018 and 2017 was approximately $74 billion and $62 billion, respectively.

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, Credco owned ~~$22.5~~$24.9 billion and ~~$18.2~~$20.3 billion, respectively, of gross Card Member receivables. Card Member receivables represent amounts due on American Express charge ~~cards~~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 ~~the~~ participation interests from RFC VIII in conjunction with TRS’ securitization program. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, CRC owned approximately ~~$6.4~~$6.9 billion and ~~$4.0~~$4.1 billion, respectively, of such participation interests.

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, Credco owned gross Card Member loans totaling ~~$497~~$564 million and ~~$476~~$561 million, respectively. These loans generally represent revolving amounts due on American Express ~~credit cards.~~lending card products.

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The following table summarizes selected information related to the Card Member receivables portfolio ~~as of or~~ for the ~~nine~~three months ended ~~September 30:~~March 31:

Table 3: Selected Information Related to Card Member Receivables

(Millions, except percentages and where indicated) 2017 2016
Total gross Card Member receivables ^(a)
$ 22,508 $ 16,096
Loss reserves – Card Member receivables ^(a)
$ 158 $ 106
Loss reserves as a % of receivables 0.70 % 0.66 %
Average life of Card Member receivables (# in days) ^(b)
29 30

(Millions, except percentages and where indicated)	2018			2017
Total gross Card Member receivables^(a)	$	24,864		$	19,866
Loss reserves ― Card Member receivables^(a)	$	179		$	128
Loss reserves as a % of receivables		0.7	%		0.6	%
Average life of Card Member receivables (# in days)^(b)		28			29

(a)	Refer to Notes 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~~.

Credco.

Loans to Affiliates and Other

Credco’s loans to affiliates and other represent floating-rate interest-bearing borrowings by ~~American Express Company, other~~ 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 ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 were as follows:

Table 4: Loans to Affiliates and Other

(Millions)	2017		2016		2018		2017
American Express Limited	$	3,847	$	―	$	3,847	$	3,847
American Express Services Europe Limited		2,746		2,484		2,981		2,747
Amex Bank of Canada		1,667		1,593
American Express Australia Limited		1,485		1,290		1,661		1,616
American Express International, Inc.		1,085		―		1,213		1,180
American Express Co. (Mexico) S.A. de C.V.		849		765
Amex Bank of Canada						1,142		1,737
Amex Global Holdings C.V.						888		888
American Express Company (Mexico) S.A. de C.V.						855		812
American Express Bank (Mexico) S.A.		353		291		357		325
Alpha Card S.C.R.L./C.V.B.A.		123		―
Alpha Card S.C.R.L./C.V.B.A						142		138
American Express International, Inc.– Branch – Singapore		110		107		121		124
American Express International (NZ) Inc.		80		85
Amex (Saudi Arabia) Limited		22		―
American Express International (NZ), Inc.						83		80
Amex Funding Management (Europe) Limited						20		38
American Express Saudi Arabia (C) JSC						34	��	34
American Express Company		―		4,044		―		961
Total^(a)	$	12,367	$	10,659	$	13,344	$	14,527

(a)	As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, approximately ~~$3.8~~$5.3 billion and ~~$3.3~~$5.0 billion, respectively, were collateralized by the underlying Card Member receivables and loans transferred with recourse.

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Due from/to Affiliates

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, amounts due from affiliates were ~~$0.1 billion~~$16 million and ~~$1.0 billion,~~$189 million, respectively. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, amounts due to affiliates were ~~$2.1~~$2.9 billion and ~~$1.5~~$2.0 billion, respectively. These amounts relate primarily to timing differences from the purchase of Card Member receivables, net of remittances from TRS, as well as from operating activities. As of both March 31, 2018 and December 31, 2017, due to affiliates also includes an amount pertaining to tax liability on account of the Tax Act.

Restricted Cash with Affiliates

As of March 31, 2018 and December 31, 2017, the amount of interest-bearing restricted cash was $99 million and $100 million, respectively, which represents cash placed with Amex Bank of Canada relating to the collateralized loan arrangement for transfer of Card Member loans and the purchase of Card Member receivables. It has been included under “Other assets” on the Consolidated Balance Sheets.

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Short-term Debt to Affiliates

Short-term debt to affiliates consists primarily of interest-bearing master notes ~~for which there is no stated term.~~repayable on demand. Credco does not expect any changes to its short-term funding strategies with affiliates. Components of short-term debt to affiliates as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 were as follows:

Table 5: Short-term Debt to Affiliates

(Millions)	2017		2016		2018		2017
AE Exposure Management Ltd.	$	3,660	$	3,361
AE Exposure Management Limited					$	4,684	$	4,548
American Express Company		1,855		―		3,247		―
American Express Europe LLC		1,004		515		1,181		765
American Express Swiss Holdings		451		376
American Express Holdings (Netherlands) C.V.		192		192
Amex Funding Management (Europe) Limited		82		73
American Express Swiss Holdings GmbH						463		444
American Express Holdings Netherlands CV						192		192
Accertify, Inc.		46		42		45		48
Total	$	7,290	$	4,559	$	9,812	$	5,997

Long-term Debt to Affiliates

Long-term debt to affiliates represents an unsecured amount due to LB Luxembourg Two S.a.r.l amounting to $281 million and $270 million as of March 31, 2018 and December 31, 2017, respectively, payable by December 2020.

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 ~~$176~~$63 millionand ~~$190~~$58 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively. Correspondingly, discount revenue would have increased by approximately the same amounts in these periods.

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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, even in the event it is unable to continue to raise new funds under its traditional funding programs during a substantial weakening in economic conditions.

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 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 debentures and commercial paper. One of the principal tenets of Credco’s funding strategy is to issue debt with a wide range of maturities to distribute its refinancing requirements across future periods. 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 plan is subject 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: Dominion Bond Rating Services (DBRS), 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 6: Unsecured Debt Ratings

Credit Agency	Short-Term Ratings	Long-Term Ratings	Outlook
DBRS	R-1 (middle)	A (high)	Stable
Fitch	F1	A	Stable
Moody’s	Prime 1	A2	Stable
S&P	A-2	A-	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 ~~borrowing,~~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 ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, Credco had ~~$0.3 billion~~nil and ~~$3.0~~$1.2 billion, respectively, of commercial paper outstanding. The average commercial paper outstanding was ~~$1.3~~$0.7 billion and ~~$0.5~~$1.1 billion for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 and the year ended December 31, ~~2016,~~2017, respectively.

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Long-term Debt Programs

During 2018, Credco has not issued any unsecured debt securities. 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. Credco had the following long-term debt outstanding as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

Table 7: Long-Term Debt Outstanding

(Billions) 2017 2016
Long-term debt outstanding^(a)
$ 24.2 $ 20.5
Average long-term debt^(b)
$ 24.3 $ 21.4

(Billions)	2018		2017
Long-term debt outstanding^(a)	$	23.6	$	24.2
Average long-term debt^(b)	$	24.4	$	24.3

(a)

The outstanding balances include (i) unamortized discount, premium and fees, (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 ~~nine~~three and twelve months ended ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively.

Credco has the ability to issue debt securities under a shelf ~~registration~~registrations 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 ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, Credco had ~~$23.9~~$24.0 billion and ~~$20.2~~$23.9 billion, respectively, of debt securities outstanding, issued under the SEC registration statement. Credco may redeem from time to time certain debt securities on or after 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 ~~$4.7~~$4.6 billion (AUD $6 billion). During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, no notes were issued under this program. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the entire amount of approximately ~~$4.7~~$4.6 billion and ~~$4.3~~$4.7 billion, respectively, of notes was available for issuance under this program and there were no outstanding notes as of such dates.

Credco ~~has~~ also established a medium-term note program in Canada ~~providing~~provided for the issuance of notes by American Express Canada Credit Corporation (AECCC), an indirect wholly owned subsidiary of Credco. The prospectus for this program expired in September 2014. All notes issued by AECCC under this program are guaranteed by Credco. For the nine months ended September 30, 2017, no notes were issued under this program. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, AECCC had ~~$0.5 billion~~nil and ~~$0.4~~$0.5 billion, respectively, of medium-term notes outstanding under this program. AECCC’s financial results are included in the consolidated financial results of Credco.

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The covenants of debt instruments issued by Credco impose the requirement that Credco maintain a minimum consolidated net worth of $50 million, which limits the amount of dividends Credco can pay to its parent. During the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ Credco did not pay any cash 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. 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. Additionally, there are no limitations on the amount of debt that can be issued by Credco, provided it maintains the minimum required fixed charge coverage ratio of 1.25. As of ~~September 30, 2017,~~March 31, 2018, Credco was in compliance with all restrictive covenants contained in its debt agreements.

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Liquidity Management

American Express, including Credco, incurs liquidity risk that arises in the course of its activities. The liquidity objective is to maintain access to a diverse set of on- and off-balance sheet liquidity sources. American Express and its subsidiaries, including Credco, seek to maintain liquidity sources, even in the event they are unable to raise new funds under their regular funding programs during a substantial weakening in economic conditions, in amounts sufficient to meet their expected future financial obligations and business requirements for liquidity for a period of at least twelve months. General principles and the overall framework for managing liquidity risk across American Express on an enterprise-wide basis are set out in American Express’ Liquidity Risk Policy.

The liquidity risk exposure could arise from a wide variety of scenarios. The liquidity management strategy thus 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.

Credco regularly accesses liquidity through its various funding programs, and maintains a variety of contingent sources of cash and financing, such as access to securitizations of Card Member receivables through sales of receivables to TRS for securitization by RFC VIII and the American Express Issuance Trust II, as well as a committed bank facility.

As of ~~September 30, 2017,~~March 31, 2018, Credco had cash and cash equivalents of approximately ~~$1.3~~$0.2 billion. 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.

Committed Bank Credit Facility

Credco maintained a U.S. dollar denominated committed syndicated bank credit facility as of ~~September 30, 2017~~March 31, 2018 of ~~$3.0 billion. On October 16, 2017, Credco increased the committed syndicated bank credit facility size to~~ $3.5 billion, ~~and extended the facility by two years to mature~~which expires on October 16, 2020. As of ~~September 30, 2017,~~March 31, 2018, no amounts were drawn on this facility. The capacity of the facility mainly served to further enhance Credco’s contingent funding resources. The availability of this facility is subject to Credco’s compliance with certain financial covenants that require maintenance of a 1.25 ratio of earnings to fixed charges. The ratio of earnings to fixed charges for Credco was ~~1.51~~1.68 for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018. The ratio of earnings to combined fixed charges and preferred stock dividends for American Express for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 was ~~4.43.~~4.15.

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.

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ITEM 4.

~~ITEM 4.~~ CONTROLS AND PROCEDURES

Credco’s management, with the participation of Credco’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Credco’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, Credco’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, Credco’s disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in Credco’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to Credco’s management, including Credco’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have not been any changes in Credco’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during Credco’s fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, Credco’s internal control over financial reporting.

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Cautionary Note Regarding Forward-Looking Statements

Various statements have been made in this Quarterly Report on this ~~Third~~First Quarter ~~2017~~2018 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 Securities and Exchange Commission (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,” “estimate,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements. Credco cautions you that the risk factors described ~~above and~~ in Credco’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 (the ~~2016~~2017 Form 10-K) and other factors described below 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:

·	credit trends, which will depend in part on the economic environment, including, among other things, the housing market and the rates of bankruptcies, which can affect spending on card products and debt payments by individual and corporate customers;

·	the effectiveness of Credco’s risk management policies and procedures, including Credco’s ability to accurately estimate the provisions for losses in Credco’s outstanding portfolio of Card Member receivables and loans, and operational risk;

·	fluctuations in foreign currency exchange rates;

·	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 ~~bank~~ 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 resulting from continuing geopolitical ~~uncertainty (including potential impacts resulting from the U.S. Administration and the proposed exit of the United Kingdom from the European Union);~~uncertainty;

·	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 cyber attacks, 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 proceedings brought by governmental and regulatory agencies (including the lawsuit filed against American Express by the U.S. Department of Justice and certain states’ attorneys general and the review of the case by the U.S. Supreme Court);

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; ~~and~~

Credco’s tax rate remaining in line with current expectations, which could be impacted by, among other things, changes in interpretations and assumptions Credco has made and actions Credco may take as a result of the Tax Act, Credco’s geographic mix of income, ~~being weighted more to higher tax jurisdictions than expected,~~further changes in tax laws and regulation, ~~and~~ unfavorable tax audits and other unanticipated tax ~~items.~~items; and the impact of accounting changes and reclassifications; and

the implementation of legislation and additional guidance or context from the Internal Revenue Service, the U.S. Treasury Department, state and foreign taxing authorities, the Financial Accounting Standards Board or others regarding the Tax Act, and any future changes or amendments to that legislation.

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PART II.

OTHER INFORMATION

ITEM 1A.

RISK FACTORS

~~PART II. OTHER INFORMATION~~

~~ITEM 1A. RISK FACTORS~~

For a discussion of Credco’s risk factors, see Part I, Item 1A. “Risk Factors” of the ~~2016~~2017 Form 10-K. There are no material changes from the risk factors set forth in the ~~2016~~2017 Form 10-K. However, the risks and uncertainties that Credco faces are not limited to those set forth in the ~~2016~~2017 Form 10-K. Additional risks and uncertainties not presently known to Credco or that it currently believes to be immaterial may also adversely affect Credco’s business.

ITEM 5.

~~ITEM 5.~~ OTHER INFORMATION

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) to the Exchange Act, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure is generally required even where the activities, transactions or dealings were conducted outside the United States by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.

American Express Global Business Travel (GBT) and certain entities that may be considered affiliates of GBT have informed American Express that during the ~~third~~ quarter ~~of 2017~~ended March 31, 2018, approximately 7340 visas were obtained from Iranian embassies and consulates around the world in connection with certain travel arrangements on behalf of ~~clients.~~clients and reservations were booked at two hotels that may be owned, directly or indirectly, or may otherwise be affiliated with, the Government of Iran. GBT had negligible gross revenues and net profits attributable to these transactions and intends to continue to engage in these activities on a limited basis so long as such activities are permitted under U.S. law.

ITEM 6.

EXHIBITS

~~ITEM 6. EXHIBITS~~

The list of exhibits required to be filed with this report are listed on page E-1 hereof, under “Exhibit Index,” which is incorporated herein by reference.

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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: ~~November 3, 2017~~May 4, 2018	By	/s/ David L. Yowan
		David L. Yowan
		Chief Executive Officer

Date: ~~November 3, 2017~~May 4, 2018	By	/s/ Leah A. Schweller
		Leah A. Schweller
		Chief Accounting Officer

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EXHIBIT INDEX

Pursuant to Item 601 of Regulation S-K

Exhibit No.	Description	How Filed

4.1	Form of Permanent Registered Fixed Rate Global Note	Incorporated by reference to Exhibit 4(j) to Registrant's Registration Statement on Form S-3 filed on March 20, 2018 (File No. 333-223796).

4.2	Form of Permanent Registered Floating Rate Global Note	Incorporated by reference to Exhibit 4(k) to Registrant's Registration Statement on Form S-3 filed on March 20, 2018 (File No. 333-223796).

12.1	Computation in Support of Ratio of Earnings to Fixed Charges of American Express Credit Corporation.	Electronically filed herewith.

12.2	Computation in Support of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends of American Express Company.	Electronically filed herewith.

31.1	Certification of David L. Yowan, Chief Executive Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.	Electronically filed herewith.

31.2	Certification of Anderson Y. Lee, Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.	Electronically filed herewith.

32.1	Certification of David L. Yowan, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Electronically filed herewith.

32.2	Certification of Anderson Y. Lee, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Electronically filed herewith.

101.INS	XBRL Instance Document	Electronically filed herewith.

101.SCH	XBRL Taxonomy Extension Schema Document	Electronically filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Electronically filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Electronically filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Electronically filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Electronically filed herewith.

E-1

~~E-1~~

	2017				2016
			30+ Days				30+ Days
	Net		Past Due		Net		Past Due
	Write-off		as a % of		Write-off		as a % of
	Rate	^(a)	Total		Rate	^(a)	Total
Card Member Receivables:
U.S. Consumer Services	0.81	%	0.80	%	0.59	%	0.69	%
International Consumer and Network Services	1.53	%	1.12	%	1.95	%	1.35	%
Global Small Business Services	1.01	%	1.10	%	1.01	%	0.76	%
Card Member Loans:
International Consumer and Network Services	1.41	%	0.80	%	1.24	%	0.70	%

	Foreign
	Currency
	Translation
Three Months Ended September 30, 2017 (Millions), net of tax	Adjustments
Balances as of June 30, 2017	$	(941	)
Net translation gain of investments in foreign operations		146
Net losses related to hedges of investment in foreign operations		(95	)
Net change in accumulated other comprehensive loss		51
Balances as of September 30, 2017	$	(890	)

	Foreign
	Currency
	Translation
Nine Months Ended September 30, 2017 (Millions), net of tax	Adjustments
Balances as of December 31, 2016	$	(1,263	)
Net translation gain of investments in foreign operations ^(a)		636
Net losses related to hedges of investment in foreign operations		(263	)
Net change in accumulated other comprehensive loss		373
Balances as of September 30, 2017	$	(890	)

(a) Includes $289 million of recognized tax benefits (Refer to Note 8).

	Foreign
	Currency
	Translation
Three Months Ended September 30, 2016 (Millions), net of tax	Adjustments
Balances as of June 30, 2016	$	(1,188	)
Net translation gain of investments in foreign operations		30
Net losses related to hedges of investment in foreign operations		(29	)
Net change in accumulated other comprehensive loss		1
Balances as of September 30, 2016	$	(1,187	)


	Foreign
	Currency
	Translation
Nine Months Ended September 30, 2016 (Millions), net of tax	Adjustments
Balances as of December 31, 2015	$	(1,156	)
Net translation loss of investments in foreign operations		(3	)
Net losses related to hedges of investment in foreign operations		(28	)
Net change in accumulated other comprehensive loss		(31	)
Balances as of September 30, 2016	$	(1,187	)