Summary
American Express Company (AXP) filed an 8-K on December 16, 2002, to report a correction related to its third-quarter 2002 financial data. The company experienced a temporary delay in capturing data for accounts that entered bankruptcy due to a system change for tracking past-due accounts sent to collection agencies. This delay caused some bankrupt accounts to be incorrectly reported as delinquent instead of being charged off as per AXP's policy at September 30, 2002. The impact of this data capture issue is described as having no impact on GAAP net income or provisions for losses, with only an insignificant impact on GAAP credit reserves. However, the filing provides revised "managed basis" statistics, which include both securitized and non-securitized accounts. These revisions show minor adjustments to loss reserves and net write-off rates for both the Charge Card and U.S. Lending portfolios, primarily affecting reported figures for the quarter ended September 30, 2002.
Key Highlights
- 1Correction of data reporting for bankrupt accounts due to a system change in the third quarter of 2002.
- 2The issue had no impact on GAAP net income or loss provisions, with only an insignificant impact on GAAP credit reserves.
- 3Revised "managed basis" statistics are provided for the quarter ended September 30, 2002, impacting loss reserves and delinquency percentages.
- 4Minor adjustments were made to Charge Card receivables, including a slight decrease in loss reserves from $939 million to $934 million.
- 5U.S. Lending portfolio saw minor revisions, including an increase in net charge-offs/other and a slight decrease in ending loss reserves from $1,202 million to $1,193 million.
- 6The company notes subsequent actual performance data for the first two months of Q4 2002, indicating continued economic weakness.
- 7Similar data adjustments were reported by the American Express Master Trust and American Express Credit Account Master Trust in separate filings.