INFORMATION MEMORANDUM

American Express Travel Related Services Company, Inc. (Incorporated in the State of New York, United States of America) American Express Bank Ltd. (Incorporated in the State of Connecticut, United States of America) American Express Credit Corporation (Incorporated in the State of Delaware, United States of America) American Express Overseas Credit Corporation Limited (Incorporated as a limited liability company under the laws of the Island of Jersey) American Express Centurion Bank (Incorporated in the State of Utah, United States of America) Program for the Issuance of Debt Instruments

Application has been made to the Luxembourg Stock Exchange for debt instruments (the "Instruments") issued under the program (the "Program") described in the Information Memorandum to be listed on the Luxembourg Stock Exchange during the period of twelve months from the date of this document. Instruments may also be issued under the Program which are listed on a stock exchange other than the Luxembourg Stock Exchange. The Instruments have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The Instruments will be issued only in bearer form and are subject to United States tax law requirements. The Instruments may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons, subject to certain exceptions. This Information Memorandum supersedes the previous Information Memorandum dated June 27, 2002. Any Instruments issued under the Program after the date hereof are issued subject to the provisions set out herein. This does not affect any Instrument issued prior to the date hereof.

Arranger for the Program ABN AMRO

Dealers ABN AMRO Barclays Capital BNP PARIBAS Credit Suisse First Boston Dresdner Kleinwort Wasserstein Goldman Sachs International Lehman Brothers Morgan Stanley Tokyo-Mitsubishi International pic Westpac Banking Corporation The date of this Information Memorandum is December 22, 2003 Each of American Express Travel Related Services Company, Inc. ("TRS"), American Express Bank Ltd. ("AEB"), American Express Credit Corporation ("Credco"), American Express Overseas Credit Corporation Limited ("AEOCC") and American Express Centurion Bank ("AECB") (each an "Issuer" and together the "Issuers") accepts responsibility for the information contained in the Information Memorandum. Various forward-looking statements are made in this Information Memorandum, which generally include the words "believe", "expect", "anticipate", "optimistic", "plan", "intend", "aim", "will", "should", "could", "likely" and similar expressions. Certain factors that may cause actual results to differ materially from these forward-looking statements, including American Express' (the "Company") goals referred to herein, are discussed on pages 108-111. The Information Memorandum should be read and construed with any amendment or supplement thereto and with any other documents incorporated by reference and, in relation to any Series (as defined herein) of Instruments, should be read and construed together with the relevant Pricing Supplement(s) (as defined herein). The Issuers each confirm that the information contained in the Information Memorandum with respect to such Issuer and the Instruments is true, accurate and complete in all material respects and is not misleading; that the opinions and intentions expressed therein relating to such Issuer are honestly held and based on reasonable assumptions; that there are no other facts in relation to the information contained or incorporated by reference in the Information Memorandum the omission of which would, in the context of the Program or the issue of the Instruments, make any statement therein or opinions or intentions expressed therein misleading in any material respect; and that all reasonable enquiries have been made to verify the foregoing. The Issuers have further confirmed to the Dealers that this Information Memorandum (together with the relevant Pricing Supplement) contains all such information as may be required by all applicable laws, rules and regulations. No person has been authorized by any of the Issuers to give any information or to make any representation not contained in or not consistent with the Information Memorandum or any other document entered into in relation to the Program or any information supplied by any of the Issuers or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorized by any of the Issuers or any Dealer. No representation or warranty is made or implied by the Dealers or any of their respective affiliates, and neither the Dealers nor any of their respective affiliates make any representation or warranty or accept any responsibility, as to the accuracy or completeness of the information contained in the Information Memorandum. Neither the delivery of the Information Memorandum or any Pricing Supplement nor the offering, sale or delivery of any Instrument shall, in any circumstances, create any implication that the information contained in the Information Memorandum is true subsequent to the date thereof or the date upon which the Information Memorandum has been most recently amended or supplemented or that there has been no adverse change in the financial situation of any of the Issuers since the date thereof or, as the case may be, the date upon which the Information Memorandum has been most recently amended or supplemented or the balance sheet date of the most recent relevant financial statements which are deemed to be incorporated into the Information Memorandum by reference or that any other information supplied in connection with the Program is correct at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The distribution of the Information Memorandum and any Pricing Supplement and the offering, sale and delivery of the Instruments in certain jurisdictions may be restricted by law. Persons into whose possession the Information Memorandum or any Pricing Supplement comes are required by the Issuers and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Instruments and on the distribution of the Information Memorandum and/or any Pricing Supplement and other offering material relating to the Instruments, see "Subscription and Sale". Neither the Information Memorandum nor any Pricing Supplement may be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. The Issuers have not authorized any offer of Instruments to the public in the United Kingdom within the meaning of the Public Offer of Securities Regulations 1995 (the "Regulations"). Instruments may not lawfully be offered or sold to persons in the United Kingdom except in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Regulations or otherwise in compliance with all applicable provisions of the Regulations. Neither the Information Memorandum nor any Pricing Supplement constitutes an offer or an invitation to subscribe for or purchase any Instruments and should not be considered as a recommendation by any of the Issuers, the Dealers or any of them that any recipient of the Information Memorandum or any Pricing Supplement should subscribe for or purchase any Instruments. Each recipient of the Information Memorandum or any Pricing Supplement shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuers. All references in the Information Memorandum to "U.S.$", "$", "U.S. dollars", "United States dollars" or "USD" are to the lawful currency of the United States of America and references to the "U.S." are to the United States of America. DOCUMENTS INCORPORATED BY REFERENCE

Credco, one of the Issuers, is subject to the informational requirements of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the United States Securities and Exchange Commission (the "SEC"). All such reports and other information may be inspected and copied at prescribed rates at the Public Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 and from its Web site at: http://www.sec.gov. AECB submits quarterly to the Federal Deposit Insurance Corporation (the "FDIC") on behalf of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") certain reports regarding its financial condition and results of operations (each, a "Call Report" and collectively, the "Call Reports") entitled "Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices". Each Call Report consists of a Balance Sheet, Income Statement, Changes in Equity Capital and other supporting schedules as of the end of the period to which such Call Report relates. The Call Reports are prepared in accordance with regulatory instructions issued by the Federal Financial Institutions Examination Council. Because of the special supervisory, regulatory and economic policy needs served by the Call Reports, such regulatory instructions do not in all cases follow generally accepted accounting principles or the opinions and statements of the Accounting Principles Board of the American Institute of Certified Public Accountants or the Financial Accounting Standards Board. While the Call Reports are supervisory and regulatory documents, not primarily accounting documents, and do not provide a complete range of financial disclosure about the Issuer, the Call Reports nevertheless provide important information concerning the financial condition of the Issuer. The publicly available portions of the Call Reports with respect to the Issuer are on file with, and publicly available at, the FDIC, 250 E. Street, S.W., Washington, D.C. 20219. All such Call Reports may be obtained by calling the FDIC at (800) 945-2186 or may be obtained from its Web site at: http://www.fdic.gov. The following documents shall be deemed to be incorporated in, and to form part of, the Information Memorandum: (1) Credco's Annual Report on Form 10-K, for the year ended December 31, 2002 and Credco's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, as filed with the SEC under the Exchange Act; (2) any reports filed by Credco with the SEC pursuant to Section 13(a), 14 or 15(d) of the Exchange Act and the rules and regulations thereunder subsequent to the date of the Information Memorandum, for so long as the Program remains in effect or any Instruments shall be outstanding; (3) Publicly available portions of AECB's Call Report for the year ended December 31, 2002 and for the quarter ended September 30, 2003, as filed with the FDIC and, for so long as the Program remains in effect or any Instruments shall be outstanding, any other Call Report filed with the FDIC after the date hereof; (4) the most recently published audited annual consolidated financial statements and any interim financial statements (whether audited or unaudited) published subsequently to such annual financial statements of the Issuers. The Issuers do not prepare any annual non-consolidated financial statements. (5) Management's Discussion and Analysis of the Results of Operations and Liquidity and Capital Resources of Travel Related Services and American Express Bank contained in American Express Company's Annual Report on Form 10-K for the year ended December 31, 2002 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, and in all Annual and Quarterly Reports filed by American Express Company with the SEC pursuant to Section 13(a), 14 or 15(d) of the Exchange Act after the date hereof, for so long as the Program remains in effect or any Instruments shall be outstanding. American Express Company's SEC filings present American Express Company's financial information on an operating segment basis as required and defined by U.S. Generally Accepted Accounting Principles. Financial information disclosed herein is presented on a legal entity basis. For example, AEB's annual report as of and for the year ended December 31, 2002 includes operating results of AEB's "non-banking" units which are included in the TRS operating segment information included in American Express Company's filings; and (6) all amendments and supplements to the Information Memorandum or the relevant Pricing Supplement prepared by the Issuers from time to time, save that any statement contained in the Information Memorandum or in any of the documents incorporated by reference in, and forming part of, the Information Memorandum shall be deemed to be modified or superseded for the purpose of the Information Memorandum to the extent that a statement contained in any supplement or amendment thereto or in any document subsequently incorporated by reference modifies or supersedes such statement. Each of the Issuers has undertaken, in connection with the listing of the Instruments, that if, while Instruments of that Issuer are outstanding and listed on the Luxembourg Stock Exchange, there shall occur any change in the Terms and Conditions of the Program or there shall occur any adverse change in the business or financial position of such Issuer that is material in the context of issuance under the Program which is not reflected in the Information Memorandum (or any of the documents incorporated by reference in the Information Memorandum) such Issuer will prepare or procure the preparation of an amendment or supplement to the Information Memorandum or, as the case may be, publish a new Information Memorandum for use in connection with any subsequent offering by the Issuer of Instruments to be listed on the Luxembourg Stock Exchange. A copy of the Information Memorandum or any document incorporated by reference in the Information Memorandum are available, free of charge, at the offices of the Paying Agent. TABLE OF CONTENTS Page SUMMARY OF THE PROGRAM 7 TERMS AND CONDITIONS OF THE INSTRUMENTS 11 PRO FORMA PRICING SUPPLEMENT 39 USE OF PROCEEDS 46 AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC 47 Directors and Officers of TRS 64 Capitalization of TRS 65 Selected Financial Information of TRS 66 TRS — Management's Discussion and Analysis of Financial Condition and Results of Operations 68 AMERICAN EXPRESS BANK LTD 71 Directors and Officers of AEB 75 Capitalization of AEB 76 Selected Financial Information of AEB 77 AEB — Management's Discussion and Analysis of Financial Condition and Results of Operations 79 AMERICAN EXPRESS CREDIT CORPORATION 80 Directors and Officers of Credco 83 Capitalization of Credco 84 Selected Financial Information of Credco 85 Credco — Management's Discussion and Analysis of Financial Condition and Results of Operations 87 AMERICAN EXPRESS OVERSEAS CREDIT CORPORATION LIMITED 89 Directors and Officers of AEOCC 91 Capitalization of AEOCC 92 Selected Financial Information of AEOCC 93 AEOCC — Management's Discussion and Analysis of Financial Condition and Results of Operations 95 AMERICAN EXPRESS CENTURION BANK 96 Directors and Officers of AECB 103 AECB — Management's Discussion and Analysis of Financial Condition and Results of Operations 104 Capitalization of AECB 105 Selected Financial Information of AECB 106 IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS 108 UNITED STATES TAXATION 112 UNITED KINGDOM TAXATION 115 SUBSCRIPTION AND SALE 117 GENERAL INFORMATION 120 PRINCIPAL OFFICES OF THE ISSUERS 122

IN CONNECTION WITH THE ISSUE OF ANY TRANCHE (AS DEFINED HEREIN) OF INSTRUMENTS UNDER THE PROGRAM, THE DEALER (IF ANY) WHO IS SPECIFIED IN THE RELEVANT PRICING SUPPLEMENT AS THE STABILIZING INSTITUTION (OR ANY PERSON ACTING FOR THE STABILIZING INSTITUTION) MAY OVER-ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE INSTRUMENTS OF THE SERIES OF WHICH SUCH TRANCHE FORMS PART AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL FOR A LIMITED PERIOD. HOWEVER, THERE MAY BE NO OBLIGATION ON THE STABILIZING INSTITUTION (OR ANY AGENT OF THE STABILIZING INSTITUTION) TO DO THIS. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME AND MUST BE BOUGHT TO AN END AFTER A LIMITED PERIOD. SUCH STABILIZING SHALL BE IN COMPLIANCE WITH ALL APPLICABLE LAWS, REGULATIONS AND RULES. SUMMARY OF THE PROGRAM

The following is a brief summary only and should be read in conjunction with the rest of this document and, in relation to any Instruments, in conjunction with the relevant Pricing Supplement and, to the extent applicable, the "Terms and Conditions of the Instruments" set out herein.

Issuers: American Express Travel Related Services Company, Inc. ("TRS"), American Express Bank Ltd., acting through its head office or through the branch specified in the relevant Pricing Supplement ("AEB"), American Express Credit Corporation ("Credco"), American Express Overseas Credit Corporation Limited ("AEOCC") and American Express Centurion Bank ("AECB"). Arranger: ABN AMRO Bank N.V. Dealers: ABN AMRO Bank N.V., Barclays Bank PLC, BNP Paribas, Credit Suisse First Boston (Europe) Limited, Dresdner Bank Aktiengesellschaft, Goldman Sachs International, Lehman Brothers International (Europe), Morgan Stanley & Co. International Limited, Tokyo-Mitsubishi International pic., Westpac Banking Corporation and any other dealer appointed from time to time by the Issuers either generally in respect of the Program or in relation to a particular Tranche (as defined below) of Instruments. Fiscal Agent: Deutsche Bank AG London Luxembourg Listing Agent: Deutsche Bank Luxembourg S.A. Program Amount: U.S.$6,000,000,000 (and, for this purpose, any Instruments denominated in another currency shall be translated into United States dollars at the date of the agreement to issue such Instruments, using the spot rate of exchange for the purchase of such currency against payment of U.S. dollars being quoted by the Fiscal Agent on the date on which the Relevant Agreement in respect of the relevant Tranche (as defined below) was made, or such other rate as the relevant Issuer and the Relevant Dealer may agree) in aggregate principal amount of Instruments outstanding at any one time. The maximum aggregate principal amount of Instruments which may be outstanding under the Program may be increased from time to time, subject to compliance with the relevant provisions of the Dealership Agreement as defined under "Subscription and Sale".

Pursuant to the Control of Borrowing (Jersey) Order 1958 and the consent issued to AEOCC thereunder dated November 27, 1996, AEOCC may not have outstanding Instruments in an aggregate principal amount exceeding US$1,000,000,000. Issuance in Series: Instruments will be issued in series (each, a "Series"). Each Series may comprise one or more tranches ("Tranches" and each, a "Tranche") issued on different issue dates. The Instruments of each Series will all be subject to identical terms, except that (i) the issue date and the amount of the first payment of interest may be different in respect of different Tranches and (ii) a Series may comprise Instruments in more than one denomination. The Instruments of each Tranche will be subject to identical terms in all respects save that a Tranche may comprise Instruments of different denominations. Form of Instruments: Instruments will be issued in bearer form. In respect of each Tranche of Instruments, the relevant Issuer will deliver a temporary global Instrument to the Fiscal Agent. Such global Instrument will be deposited on or before the relevant issue date therefor with a depositary or a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") and/or any other relevant clearing system. Each Temporary Global Instrument will be exchangeable for a Permanent Global Instrument or, if so specified in the relevant Pricing Supplement, for Instruments in definitive bearer form in accordance with its terms. Each Permanent Global Instrument will be exchangeable for Instruments in definitive bearer form in accordance with its terms. Instruments in definitive bearer form will, if interest- bearing, either have interest coupons ("Coupons") attached and, if appropriate, a talon ("Talon") for further Coupons or have a grid for recording the payment of interest endorsed thereon and will, if the principal thereof is repayable by installments, have a grid for recording the payment of principal endorsed thereon or, if so specified in the relevant Pricing Supplement, have payment receipts ("Receipts") attached. Instruments with a maturity of more than 183 days and any related Coupons and Talons will bear the following legend on their face: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the United States Internal Revenue Code." The sections referred to in the legend provide that a U.S. person will not, with certain exceptions, be permitted to deduct any loss, and will not be eligible for capital gain treatment with respect to any gain, realized on any sale or other disposition of the Instruments or the Coupons. Instruments with a maturity of 183 days or less and any related Coupons and Talons will bear the following legend on their face: "By accepting this obligation, the holder represents and warrants that it is not a United States person (other than an exempt recipient described in section 6049(b)(4) of the Internal Revenue Code and regulations thereunder) and that it is not acting for or on behalf of a United States person (other than an exempt recipient described in section 6049{b)(4) of the Internal Revenue Code and regulations thereunder)." The term "United States person," as used in this paragraph, has the meaning set forth in the United States Internal Revenue Code and the U.S. Treasury regulations thereunder. Currencies: Instruments may be denominated in any currency or currencies subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. Payments in respect of Instruments may, subject to compliance as aforesaid, be made in and/or linked to, any currency or currencies other than the currency in which such Instruments are denominated. Each Dealer has agreed that any issue of Instruments denominated in Swiss Francs will be in compliance with the

8 guidelines of the Swiss National Bank regarding issues of Swiss Franc denominated debt securities. Status: Instruments will be issued on an unsubordinated or, subordinated basis, as specified in the relevant Pricing Supplement. The Instruments are unsecured and uninsured indebtedness for borrowed money of the relevant Issuer. Unsubordinated Instruments will rank pan passu in right of payment with all other unsecured and unsubordinated obligations of the relevant Issuer, subject to preferences provided by law. Issue Price: Instruments may be issued at any price and on either a fully or partly paid basis, as specified in the relevant Pricing Supplement. Maturities: Any maturity up to thirty years, subject, in relation to specific currencies, to compliance with all applicable legal and/or regulatory and/or central bank requirements. Any Instruments in respect of which the issue proceeds are received by the Issuer in the United Kingdom and which have a maturity of less than one year from their date of issue must (a) have a minimum redemption value of £100,000 (or its equivalent in other currencies) and be issued only to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses; or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses or (b) be issued in other circumstances which do not constitute a contravention of section 19 of the Financial Services and Markets Act 2000 (the "FSMA") by the Issuer. Redemption; Instruments may be redeemable at par or at such other Redemption Amount (detailed in a formula or otherwise) as may be specified in the relevant Pricing Supplement. Early Redemption: Early redemption will be permitted for taxation reasons as mentioned in "Terms and Conditions of the Instruments — Early Redemption for Taxation Reasons", but will otherwise be permitted only to the extent specified in the relevant Pricing Supplement. Interest: Instruments may be interest-bearing or non-interest-bearing. Interest (if any) may accrue at a fixed or floating rate and may vary during the lifetime of the relevant Series. Denominations: Instruments will be issued in such denominations as may be specified in the relevant Pricing Supplement, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. Instruments with a maturity of 183 days or less will have a minimum denomination of $500,000 (or its equivalent, at the spot rate on the date of issue, in the currency in which the Instruments are denominated). Taxation: Payments in respect of Instruments will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the United States of America or, in the case of AEOCC, the Island of Jersey or, in either case, any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the relevant Issuer will (subject to exceptions described hereinafter and to the right of redemption described hereinafter) pay such additional amounts as will result in the holders of Instruments or Coupons receiving such amounts as they would have received in respect of such Instruments or Coupons had no such withholding or deduction been required. Governing Law: The Instruments and all related contractual documentation will be governed by, and construed in accordance with, the laws of the State of New York. Listing: Each Series may be listed on the Luxembourg Stock Exchange and/or any other stock exchange as may be agreed between the relevant Issuer and the relevant Dealer and specified in the relevant Pricing Supplement or may be unlisted. Terms and Conditions: A Pricing Supplement will be prepared in respect of each Tranche of Instruments a copy of which will, in the case of Instruments to be listed on the Luxembourg Stock Exchange, be delivered to the Luxembourg Stock Exchange on or before the date of issue of such Instruments. The terms and conditions applicable to each Tranche will be those set out herein under "Terms and Conditions of the Instruments" as supplemented, modified or replaced by the relevant Pricing Supplement. Enforcement of Instruments In the case of Instruments in global form, individual investors' Global Form: rights will be governed by the Issue and Paying Agency Agreement, a copy of which will be available for inspection at the specified office of the Fiscal Agent. Clearing Systems: Euroclear, Clearstream, Luxembourg and/or, any other clearing system as may be specified in the relevant Pricing Supplement. Redenomination: If the Specified Currency of an issue of Instruments is a currency of one of the member states of the European Union, the relevant Issuer may specify in the applicable Pricing Supplement that such Instruments will include a redenomination clause providing for the redenomination of the Specified Currency in euro, and, if so specified, the wording of the redenomination clause will be set out in full in the applicable Pricing Supplement. Selling Restrictions: For a description of certain restrictions on offers, sales and deliveries of Instruments and on the distribution of offering material in the United States of America, the United Kingdom, Japan and Switzerland, see under "Subscription and Sale".

10 TERMS AND CONDITIONS OF THE INSTRUMENTS

The following are the Terms and Conditions of the Instruments which as supplemented, modified or replaced in relation to any Instruments by the relevant Pricing Supplement, will be applicable to each Series of Instruments: The Instruments are issued pursuant to and in accordance with an amended and restated issue and paying agency agreement (as amended, supplemented or replaced, the "Issue and Paying Agency Agreement") dated June 27, 2002, and made between American Express Travel Related Services Company, Inc. ("TRS"), American Express Bank Ltd. ("AEB"), American Express Credit Corporation ("Credco"), American Express Overseas Credit Corporation Limited ("AEOCC") and American Express Centurion Bank ("AECB") (each an "Issuer" and together the "Issuers"), Deutsche Bank AG London (as successor to Bankers Trust Company) in its capacity as fiscal agent (the "Fiscal Agent1', which expression shall include any successor to Deutsche Bank AG London in its capacity as such) and the paying agents named therein (the "Paying Agents", which expression shall include the Fiscal Agent and any substitute or additional paying agents appointed in accordance with the Issue and Paying Agency Agreement). Copies of the Issue and Paying Agency Agreement are available for inspection during normal business hours at the specified office of each of the Paying Agents. All persons from time to time entitled to the benefit of obligations under any Instruments shall be deemed to have notice of, and shall be bound by, all of the provisions of the Issue and Paying Agency Agreement insofar as they relate to the relevant Instruments. The Instruments are issued in series (each, a "Series"), and each Series may comprise one or more tranches ("Tranches" and each, a "Tranche") of Instruments. Each Tranche will be the subject of a pricing supplement (each, a "Pricing Supplement"), a copy of which will be available for inspection during normal business hours at the specified office of the Fiscal Agent and available free of charge at the office of the Paying Agent in Luxembourg. In the case of a Tranche of Instruments in relation to which application has not been made for listing on any stock exchange, copies of the Pricing Supplement will be available for inspection only by a Holder of such Instruments. References in these Terms and Conditions to Instruments are to Instruments of the relevant Series and any references to Coupons (as defined in Condition 1.06) and Receipts (as defined in Condition 1.07) are to Coupons and Receipts relating to Instruments of the relevant Series. References in these Terms and Conditions to the Pricing Supplement are to the Pricing Supplement or Pricing Supplement(s) prepared in relation to the Instruments of the relevant Tranche or Series and references to the Issuer are to the Issuer of such Tranche or Series. References to Holders of Coupons will also be deemed to include Holders of Talons. In respect of any Instruments, references herein to these Terms and Conditions are to these terms and conditions as supplemented or modified or (to the extent thereof) replaced by the Pricing Supplement.

1. Form and Denomination 1.01 Instruments are issued in bearer form and are serially numbered. 1.02 Each Tranche of Instruments is represented upon issue by a temporary global Instrument (a "Temporary Global Instrument"). Interests in the Temporary Global Instrument may be exchanged for: (i) interests in a permanent global Instrument (a "Permanent Global Instrument"); or (ii) if so specified in the Pricing Supplement, definitive instruments in bearer form ("Definitive Instruments"). Exchanges of interests in a Temporary Global Instrument for Definitive Instruments or, as the case may be, a Permanent Global Instrument will be made only on or after the Exchange Date (as specified in the Pricing Supplement) and provided certification as to non-U.S. beneficial ownership thereof (or as to ownership thereof by or through a financial institution in compliance with the applicable provisions of

11 U.S. law) as required by U.S. Treasury regulations (in substantially the form set out in the Temporary Global Instrument or in such other form as is customarily issued in such circumstances by the relevant clearing system) has been received. 1.03 The bearer of any Temporary Global Instrument shall not (unless, upon due presentation of such Temporary Global Instrument for exchange (in whole but not in part only) for a Permanent Global Instrument or for delivery of Definitive Instruments, such exchange or delivery is improperly withheld or refused and such withholding or refusal is continuing at the relevant payment date) be entitled to receive any payment in respect of the Instruments represented by such Temporary Global Instrument which falls due on or after the Exchange Date or be entitled to exercise any option on a date after the Exchange Date. 1.04 Subject to Condition 1.03 above, if any date on which a payment of interest is due on the Instruments of a Tranche occurs whilst any of the Instruments of that Tranche are represented by a Temporary Global Instrument, the related interest payment will be made on the Temporary Global Instrument only to the extent that certification as to the non-U.S. beneficial ownership thereof as required by U.S. Treasury regulations (in substantially the form set out in the Temporary Global Instrument or in such other form as is customarily issued in such circumstances by the relevant clearing system) has been received by Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") or any other relevant clearing system. 1.05 Interests in a Permanent Global Instrument will be exchanged by the Issuer in whole but not in part only at the option of the Holder of such Permanent Global Instrument, for Definitive Instruments, (a) if an Event of Default (as defined in Condition 7) occurs in respect of any Instrument of the relevant Series; or (b) if either Euroclear or Clearstream, Luxembourg or any other relevant clearing system (including Sicovam) is closed for business for a continuous period of fourteen days (other than by reason of public holidays) or announces an intention to cease business permanently or in fact does so; or (c) at the option of the Holder of such Permanent Global Instrument upon such Holder's request, in all cases at the cost and expense of the Issuer, unless otherwise specified in the Pricing Supplement. In order to exercise the option contained in paragraph (c) of the preceding sentence, the Holder must, not less than forty-five days before the date upon which the delivery of such Definitive Instruments is required, deposit the relevant Permanent Global Instrument with the Fiscal Agent at its specified office with the form of exchange notice endorsed thereon duly completed. If the Issuer does not make the required delivery of Definitive Instruments by 6.00 p.m. (London time) on the day on which the relevant notice period expires or, as the case may be, the thirtieth day after the day on which such Permanent Global Instrument becomes due to be exchanged and, in the case of (a) above, such Instrument is not duly redeemed (or the funds required for such redemption are not available to the Fiscal Agent for the purposes of effecting such redemption and remain available for such purpose) by 6.00 p.m. (London time) on the thirtieth day after the day at which such Instrument became immediately redeemable then each Holder (as defined in Condition 2.01) or its successors or assigns may, without the consent and to the exclusion of the bearer thereof, file any claim, take any action or institute any proceeding to enforce, directly against the Issuer, the obligation of the Issuer to pay any amount due in respect of each Instrument represented by the Permanent Global Instrument which is credited to such Holders' securities account with a clearing agent as fully as though such Instrument were evidenced by a Definitive Instrument without the production of a Permanent Global Instrument, provided that the bearer thereof shall not theretofore have filed a claim, taken action or instituted proceedings to enforce the same in respect of such instrument. 1.06 Interest-bearing Definitive Instruments have attached thereto at the time of their initial delivery coupons ("Coupons"), presentation of which will be a prerequisite to the payment of interest save in certain circumstances specified herein. Interest-bearing Definitive Instruments, if so specified in the Pricing Supplement, have attached thereto at the time of their initial delivery, a talon ("Talon") for further coupons and the expression "Coupons" shall, where the context so requires, include Talons. 1.07 Instruments, the principal amount of which is repayable by installments ("Installment Instruments") which are Definitive Instruments, have attached thereto at the time of their initial delivery, payment receipts ("Receipts") in respect of the installments of principal.

12 Denomination of Instruments 1.08 Instruments are in the denomination or denominations (each of which denomination is integrally divisible by each smaller denomination) specified in the Pricing Supplement. Instruments of one denomination may not be exchanged for Instruments of any other denomination.

Currency of Instruments 1.09 The Instruments are denominated in such currency as may be specified in the Pricing Supplement. Any currency may be so specified, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements.

Partly Paid Instruments 1.10 Instruments may be issued on a partly paid basis ("Partly Paid Instruments") if so specified in the Pricing Supplement. The subscription moneys therefor shall be paid in such number of installments ("Partly Paid Installments") in such amounts, on such dates and in such manner as may be specified in the Pricing Supplement. The first such installment shall be due and payable on the date of issue of the Instruments. For the purposes of these Terms and Conditions, in respect of any Partly Paid Instrument, ("Paid Up Amount") means the aggregate amount of all Partly Paid Installments in respect thereof as shall have fallen due and been paid up in full in accordance with the Terms and Conditions. Not less than 14 days nor more than 31 days prior to the due date for payment of any Partly Paid Installment (other than the first such Installment) the Issuer shall publish a notice in accordance with Condition 14 stating the due date for payment thereof and stating that failure to pay any such Partly Paid Installment on or prior to such date will entitle the Issuer to forfeit the Instruments with effect from such date ("Forfeiture Date") as may be specified in such notice (not being less than 14 days after the due date for payment of such Partly Paid Installment), unless payment of the relevant Partly Paid Installment together with any interest accrued thereon is paid prior to the Forfeiture Date. The Issuer shall procure that any Partly Paid Installments paid in respect of any Instruments subsequent to the Forfeiture Date in respect thereof shall be returned promptly to the persons entitled thereto. The Issuer shall not be liable for any interest on any Partly Paid Installment so returned. Interest shall accrue on any Partly Paid Installment which is not paid on or prior to the due date for payment thereof at the Interest Rate (in the case of non-interest-bearing Instruments, at the rate applicable to overdue payments) and shall be calculated in the same manner and on the same basis as if it were interest accruing on the Instruments for the period from and including the due date for payment of the relevant Partly Paid Installment up to but excluding the Forfeiture Date. For the purpose of the accrual of interest, any payment of any Partly Paid Installment made after the due date for payment shall be treated as having been made on the day preceding the Forfeiture Date (whether or not a Business Day as defined in Condition 5.09). Unless an Event of Default (or an event which with the giving of notice, the lapse of time or the making or giving of any determination or certification would constitute an Event of Default) shall have occurred and be continuing, on the Forfeiture Date, the Issuer shall be entitled to forfeit all of the Instruments in respect of which any Partly Paid Installment shall not have been duly paid, whereupon the Issuer shall be entitled to retain all Partly Paid Installments previously paid in respect of such Instruments and shall be discharged from any obligation to repay such amount or to pay interest thereon, or (where such Instruments are represented by a Temporary Global Instrument or a Permanent Global Instrument) to exchange any interests in such Instrument for interests in a Permanent Global Instrument or to deliver Definitive Instruments in respect thereof, but shall have no other rights against any person entitled to the Instruments which have been so forfeited. Without prejudice to the right of the Issuer to forfeit any Instruments, for so long as any Partly Paid Installment remains due but unpaid, and except in the case where an Event of Default shall have occurred and be continuing no interests in a Temporary Global Instrument may be exchanged for interests in a Permanent Global Instrument. Until such time as all the subscription moneys in respect of Partly Paid Instruments shall have been paid in full and except in the case where an Event of Default shall have occurred and be continuing or if

13 any of Euroclear or Clearstream, Luxembourg or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of public holidays) or announces an intention to cease business permanently or in fact does so, no interests in a Temporary Global Instrument or a Permanent Global Instrument may be exchanged for Definitive Instruments.

2. Title and Transfer 2.01 Title to definitive Instruments, Receipts and Coupons passes by delivery. References herein to the "Holders" of Instruments or of Receipts or Coupons are to the bearers of such definitive Instruments or such Receipts or Coupons. Each person who is shown in the records of Euroclear or Clearstream, Luxembourg or any other relevant clearing system as entitled to a particular number of Instruments by way of an interest in a Temporary Global Instrument or Permanent Global Instrument will be treated by the Issuer, the Fiscal Agent and any Paying Agent as the holder of such number of instruments, and the expression "Holders" shall be construed accordingly. 2.02 The Holder of any Instrument or Coupon will (except as otherwise required by applicable law or regulatory requirement) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest thereof or therein, any writing thereon, or any theft or loss thereof) and no person shall be liable for so treating such Holder.

3. Status of the Instruments 3A Status — Unsubordinated Instruments 3A.01 This Condition 3A is applicable in relation to Instruments specified in the relevant Pricing Supplement as being unsubordinated or not specified as being subordinated. 3A.02 The Instruments constitute direct, unsubordinated and unsecured indebtedness for borrowed money of the Issuer and rank pari passu without any preference among themselves and at least pari passu in right of payment with all other unsubordinated and unsecured indebtedness for borrowed money of the Issuer, present and future (save for certain mandatory exceptions provided by law).

3B Status — Subordinated Instruments 3B.01 This Condition 3B is applicable to Instruments issued by AEB and AECB specified in the Pricing Supplement as being subordinated ("Subordinated Instruments"). Subordinated Instruments may also be issued by any other Issuer, upon the terms and containing the subordination provisions specified in the relevant Pricing Supplement. Subordinated Instruments issued by AEB and AECB will be subject to such other provisions, if any, as specified in the relevant Pricing Supplement. 3B.02 Subordinated Instruments and Additional Amounts (as defined below) of the Issuer, if any, will be unsecured and subordinated in right of payment to all present and future Senior Indebtedness (as defined below) and will rank pari passu without any preference among themselves. "Senior Indebtedness" means the Issuer's obligations to its depositors (including uninsured depositors), its obligations under banker's acceptances and letters of credit, its obligations in respect of customers' credit balances, and its obligations to its other creditors, including any obligations to any Federal Reserve Bank and the Federal Deposit Insurance Corporation, whether now outstanding or hereafter incurred (except any other obligations which rank on a parity with or junior to the Subordinated Instruments). There will be no restrictions on the Issuer's ability to incur additional Senior Indebtedness from time to time. No payment pursuant to the Subordinated Instruments or related Coupons may be made, and no holder of the Subordinated Instruments or related Coupons shall be entitled to demand or receive any such payment, unless all amounts of principal, premium, if any, and interest then due but unpaid on all Senior Indebtedness of the Issuer have been paid in full or duly provided for and, at the time of such payment or immediately after giving effect thereto, there does not exist with respect to any such Senior Indebtedness any event of default permitting the holders thereof to accelerate the maturity thereof or any event which, with notice or lapse of time or both, would become such an event of default. Upon any distribution of the assets of the Issuer upon dissolution, winding-up, liquidation or reorganisation, the holders of Senior Indebtedness of the Issuer will be entitled to receive payment in full of principal,

14 premium, if any, and interest before any payment is made on the Subordinated Instruments. By reason of such subordination, in the event of the insolvency of the Issuer, holders of Senior Indebtedness might receive more, ratably, and holders of the Subordinated Instruments might receive less, ratably, than the other creditors of the Issuer. The subordination of the Subordinated Instruments will not prevent the occurrence of any event of default in respect of the Subordinated Instruments. See Condition 7 for limitations on the rights of acceleration.

4. Negative Pledge 4.01 This Condition 4 is applicable in relation to Instruments (other than Subordinated Instruments) issued by TRS, Credco, AEOCC or AECB only. 4.02 So long as any Instruments remain outstanding, the Issuer will not, and will not permit any Material Subsidiary of the Issuer (as defined below) to, create, assume, or suffer to exist any Lien securing any indebtedness for borrowed money on any asset now owned or hereafter acquired by it, except: (a) Liens on real property to secure the payment of all or any part of the purchase price of such real property or the cost of construction thereof or the cost of improvements thereon or to secure any debt incurred prior to, at the time of or after the acquisition of such real property for the purpose of financing all or any part of the purchase price thereof, the costs of construction thereof or the costs of improvements thereto; (b) Liens on property existing at the time of acquisition of such property by the Issuer or any Material Subsidiary or to secure the payment of all or any part of the purchase price of such property or the cost of construction thereof or to secure any debt incurred prior to, at the time of, or within 270 days following the acquisition of such property for the purpose of financing all or any part of the purchase price thereof, the costs of construction thereof, or the costs of improvements to such property, provided that such Lien attaches to such property concurrently with or within 270 days after the acquisition thereof by the Issuer or such Material Subsidiary or, in the case of construction of or improvements to property, within 270 days after the Issuer or such Material Subsidiary incurs the debt secured by such Lien; (c) Liens on any assets of a corporation existing at the time such corporation is merged into or consolidated with the Issuer or a Material Subsidiary or at the time of the sale, lease or other disposition of the properties of such corporation to the Issuer or a Material Subsidiary and not created in contemplation of such event; (d) Liens arising out of capitalized lease obligations; (e) Liens on any assets of any corporation at the time such corporation becomes a Material Subsidiary and not created in contemplation of such event; (f) Liens on any asset of the Issuer or any Material Subsidiary in favor of the United States of America or any State thereof or any department, agency or instrumentality or political subdivision of the United States of America or any state thereof, or in favor of any other country or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any contract or statute; (g) Liens in favor of any customer to secure partial, progress, advance or other payments for goods produced for, or services rendered to, such customer by the Issuer or any Material Subsidiary in the ordinary course of business not exceeding the amount of such payments; (h) Liens for taxes, assessments and governmental charges or levies not required to be paid at any time and Liens resulting from or arising out of legal proceedings being contested in good faith or not involving amounts claimed at any time aggregating in excess of US$20,000,000; (i) Liens created by the Issuer or any Material Subsidiary as security for indebtedness owing to American Express Company or to a wholly-owned Subsidiary of American Express Company or Liens arising from any Non-Recourse Receivables Transaction or the sale or disposition of notes, accounts receivable or other rights to receive payment by the Issuer or any Material Subsidiary to American Express Company or to any wholly-owned Subsidiary of American

15 Express Company including without limitation Liens granted by the Issuer or any Material Subsidiary to secure its obligations in connection with the collection of such notes, accounts receivable or other rights to receive payment; (j) Liens arising out of any extension, renewal or replacement of any Lien permitted by clauses (a), (b), (c), (d) and (e) or any debt secured thereby; provided that the principal amount of debt secured thereby shall not be increased and that any such extension, renewal or replacement Lien shall not extend to or cover any property of the Issuer or any Material Subsidiary other than the property specified in such clauses and improvements and accessions thereto; (k) Liens arising out of deposits with, or the giving of security to, or as required by any governmental agency or any body created or approved by law or governmental regulation, which are required as a condition to the transaction of any business (including the issuance of travelers' cheques or money orders or the insuring of risk) or the obtaining or exercise of any privilege or license or to enable the Issuer or any Material Subsidiary to maintain self- insurance or to participate in any arrangements established by law to cover any insurance risks or in connection with workmen's compensation, unemployment insurance, old age pensions, social security or similar matters; (1) Liens incurred by the Issuer or any Material Subsidiary in connection with any transaction (including an agreement with respect thereto) now existing or hereafter entered into which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction or any other similar transaction (including any option with respect to any of these transactions) and any combination of these transactions, parallel loans, back-to-back loans or other similar arrangements or contracts, in each case entered into in the ordinary course of business for the purpose of asset and liability management; (m) Liens (in addition to those Liens permitted under the other clauses herein) on real property of the Issuer or any Material Subsidiary so long as the aggregate amount of the debt secured by such Liens does not exceed, in the case of property other than the World Financial Center, 200 Vesey Street, New York, New York (the "World Financial Center"), U.S.$300,000,000 in the aggregate at any one time outstanding, and in the case of the World Financial Center, the excess of (A) 80 percent of the fair market value of the World Financial Center as determined by an independent real estate appraiser of recognized standing as of a date not more than two years prior to the date on which any such Lien is created or incurred over (B) the outstanding principal amount of any debt secured by Liens on the World Financial Center permitted by clause (a) above; (n) Liens on shares of capital stock of an acquired company incurred in connection with the acquisition thereof until such time as such acquired company shall become a wholly-owned Subsidiary of the Issuer; (o) Liens arising out of the financing by the Issuer or any Material Subsidiary of the Issuer of accounts receivable or other rights to receive payment arising in connection with the business conducted by the Issuer or any Material Subsidiary of the Issuer, including, without limitation, the business of issuing American Express® Cards; (p) Liens arising by operation of law such as carriers', workmen's, mechanics', materialmen's or other similar Liens; (q) Liens on deposits of the Issuer or any Material Subsidiary with banks so long as such deposits are made in connection with loans made by such banks to American Express Company or any wholly-owned Subsidiary of American Express, provided that the amount of any such deposit does not exceed the amount of the related loan and that the Issuer or such Material Subsidiary, as the case may be, is by agreement with the bank fully subrogated to the rights of

16 the bank to receive payments under such loan, in the event and to the extent such deposit is used to reimburse the bank under such loan; (r) Liens on cash, cash equivalents or securities issued or fully guaranteed by the United States Government or any agency of the United States Government owned by the Issuer or any Material Subsidiary created to secure obligations owing by the Issuer or any affiliate of the Issuer to American Express Centurion Bank, or to any of its successors or to other Subsidiaries of TRS that are subject to federal or state banking regulation, so long as they are wholly-owned by TRS, or to any of their wholly-owned Subsidiaries in connection with the card or merchandise services business; (s) Liens on any assets of a corporation or on the stock thereof existing at the time such corporation is merged into or consolidated with the Issuer or a Material Subsidiary or at the time of the sale, lease or other disposition of the assets or stock of such corporation to the Issuer or a Material Subsidiary if created to secure payment of the purchase price paid by the Issuer or such Material Subsidiary in connection with such merger, consolidation, sale, lease or other disposition; (t) other Liens (whether or not on real property) so long as the aggregate of all debt secured thereby does not, at any time on or after the date which is six months after the date of incurrence of any such Lien, exceed in the aggregate at any one time outstanding, 10 percent of consolidated shareholder's equity of the Issuer and its consolidated Subsidiaries as of the end of the previous fiscal year, as shown on the most recent annual consolidated balance sheet of the Issuer and its consolidated Subsidiaries. 4.03 For the purposes of these Terms and Conditions: "Material Subsidiary" means at any time with respect to Credco, AECB and TRS; any Subsidiary of such Issuer which, together with its consolidated Subsidiaries, has consolidated assets at such time in excess of U.S.$1 billion. "Material Subsidiary" means at any time with respect to AEOCC, any Subsidiary of such Issuer as to which the Issuer's and its other Subsidiaries' investment in and advances to the Subsidiary exceed 10 percent of the total assets of the Issuer and its consolidated Subsidiaries as of the most recently completed fiscal year or as to which the Issuer's and its other Subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds 10 percent of the total assets of the Issuer and its Subsidiaries consolidated as of the end of the most recently completed fiscal year; "Subsidiary" means as to any person any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such person; and "Non-Recourse Receivables Transaction" means a sale, transfer, pledge, or assignment of accounts receivable in respect of which the transferee has expressly agreed that it has no recourse against the transferor or any of its affiliates.

5. Interest Interest 5.01 Instruments may be interest-bearing or non-interest-bearing, as specified in the Pricing Supplement. Words and expressions appearing in this Condition 5 and not otherwise defined herein or in the Pricing Supplement shall have the meanings given to them in Condition 5.09.

Interest-bearing Instruments 5.02 Unless otherwise specified in the Pricing Supplement, Instruments which are specified in the Pricing Supplement as being interest-bearing shall bear interest from their Interest Commencement Date at the Interest Rate payable in arrears on each Interest Payment Date.

17 Floating Rate Instruments 5.03 If the Pricing Supplement specifies the Interest Rate applicable to the Instruments as being Floating Rate it shall also specify which page (the "Relevant Screen Page") on the Reuters Screen or Moneyline Telerate or any other information vending service shall be applicable. If such a page is so specified, the Interest Rate applicable to the relevant Instruments for each Interest Accrual Period shall be determined by the Calculation Agent on the following basis: (i) the Calculation Agent will determine the offered rate for deposits (or, as the case may require, the arithmetic mean (rounded, if necessary, to the nearest ten thousandth of a percentage point, 0.00005 being rounded upwards) of the offered rates for deposits) in the relevant currency for a period of the duration of the relevant Interest Accrual Period on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date; (ii) if, on any Interest Determination Date, no such rate for deposits so appears (or, as the case may be, if fewer than two such rates for deposits so appear) or if the Relevant Screen Page is unavailable, the Calculation Agent will request appropriate quotations and will determine the arithmetic mean (rounded as aforesaid) of the rates at which deposits in the relevant currency are offered by four major banks in the London interbank market, selected by the Calculation Agent, at approximately the Relevant Time on the Interest Determination Date to prime banks in the London interbank market for a period of the duration of the relevant Interest Accrual Period and in an amount that is representative for a single transaction in the relevant market at the relevant time; (iii) if, on any Interest Determination Date, only two or three rates are so quoted, the Calculation Agent will determine the arithmetic mean (rounded as aforesaid) of the rates so quoted; or (iv) if fewer than two rates are so quoted, the Calculation Agent will determine the arithmetic mean (rounded as aforesaid) of the rates quoted by four major banks in the Relevant Financial Center (or, in the case of Instruments denominated in ECU or euro, in such financial center or centers as the Calculation Agent may select) selected by the Calculation Agent, at approximately 11.00 a.m. (Relevant Financial Center time (or local time at such other financial center or centers as aforesaid)) on the first day of the relevant Interest Accrual Period for loans in the relevant currency to leading European banks for a period for the duration of the relevant Interest Accrual Period and in an amount that is representative for a single transaction in the relevant market at the relevant time, and the Interest Rate applicable to such Instruments during each Interest Accrual Period will be the sum of the relevant margin (the "Relevant Margin") specified in the Pricing Supplement and the rate (or, as the case may be, the arithmetic mean (rounded as aforesaid) of the rates) so determined provided, however, that, if the Calculation Agent is unable to determine a rate (or, as the case may be, an arithmetic mean of rates) in accordance with the above provisions in relation to any Interest Accrual Period, the Interest Rate applicable to such Instruments during such Interest Accrual Period will be the sum of the Relevant Margin and the rate (or, as the case may be, the arithmetic mean (rounded as aforesaid) of the rates) determined in relation to such Instruments in respect of the last preceding Interest Accrual Period.

ISDA Rate Instruments 5.04 If the Pricing Supplement specifies the Interest Rate applicable to the Instruments as being ISDA Rate, each Instrument shall bear interest as from such date, and at such rate or in such amounts, and such interest will be payable on such dates, as would have applied (regardless of any event of default or termination event or tax event thereunder) if the Issuer had entered into an interest rate swap transaction with the Holder of such Instrument under the terms of an agreement to which the ISDA Definitions applied and under which: — the Fixed Rate Payer, Fixed Amount Payer, Fixed Price Payer, Floating Rate Payer, Floating Amount Payer or, as the case may be, the Floating Price Payer is the Issuer (as specified in the Pricing Supplement); — the Effective Date is the Interest Commencement Date;

18 — the Termination Date is the Maturity Date; — the Calculation Agent is the Calculation Agent as defined in Condition 5.09; — the Calculation Periods are the Interest Accrual Periods; — the Period End Dates are the Interest Period End Dates; — the Payment Dates are the Interest Payment Dates; — the Reset Dates are the Interest Period End Dates; — the Calculation Amount is the principal amount of such Instrument; — the Day Count Fraction applicable to the calculation of any amount is that specified in the Pricing Supplement or, if none is so specified, as may be determined in accordance with the ISDA Definitions; — the Applicable Business Day Convention applicable to any date is that specified in the Pricing Supplement or, if none is so specified, as may be determined in accordance with the ISDA Definitions; and — the other terms are as specified in the Pricing Supplement.

Maximum or Minimum Interest Rate 5.05 If any Maximum or Minimum Interest Rate is specified in the Pricing Supplement, then the Interest Rate shall in no event be greater than the maximum or be less than the minimum so specified.

Accrual of Interest 5.06 Interest shall accrue on the Outstanding Principal Amount of each Instrument during each Interest Accrual Period from the Interest Commencement Date. Interest will cease to accrue from the due date for redemption therefor (or, in the case of an Installment Instrument, in respect of each installment of principal, on the due date for payment of the relevant Installment Amount) unless upon due presentation or surrender thereof (if required), payment in full of the Redemption Amount (as defined in Condition 6.10) or the relevant Installment Amount is improperly withheld or refused or default is otherwise made in the payment thereof in which case interest shall continue to accrue on the principal amount in respect of which payment has been improperly withheld or refused or default has been made (as well after as before any demand or judgment) at the Interest Rate then applicable or such other rate as may be specified for this purpose in the Pricing Supplement ("Default Interest Rate") until the date on which, upon due presentation or surrender of the relevant Instrument (if required), the relevant payment is made or, if earlier (except where presentation or surrender of the relevant Instrument is not required as a precondition of payment), the seventh day after the date on which, the Fiscal Agent having received the funds required to make such payment, notice is given to the Holders of the Instruments in accordance with Condition 14 that the Fiscal Agent has received the required funds (except to the extent that there is failure in the subsequent payment thereof to the relevant Holder).

Interest Amount(s), Calculation Agent and Reference Banks 5.07 If a Calculation Agent is specified in the Pricing Supplement, the Calculation Agent, as soon as practicable after the Relevant Time on each Interest Determination Date (or such other time on such date as the Calculation Agent may be required to calculate any Redemption Amount or Installment Amount, obtain any quote or make any determination or calculation) will determine the Interest Rate and calculate the amount(s) of interest payable (the "Interest Amount(s)") in respect of each Denomination of the Instruments for the relevant Interest Accrual Period, calculate the Redemption Amount or Installment Amount, obtain such quote or make such determination or calculation, as the case may be, and cause the Interest Rate and the Interest Amounts for each Interest Period and the relevant Interest Payment Date or, as the case may be, the Redemption Amount or any Installment Amount to be notified to the Fiscal Agent, the Issuer, the Holders in accordance with Condition 14 and, if the Instruments are listed on a stock exchange and the rules of such exchange so require, such exchange as soon as possible after their determination or calculation but in no event later than the fourth London

19 Banking Day thereafter or, if earlier in the case of notification to the stock exchange, the time required by the rules of the relevant stock exchange. The Interest Amounts and the Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of an Interest Accrual Period or the Interest Period. If the Instruments become due and payable under Condition 7, the Interest Rate and the accrued interest payable in respect of the Instruments shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Interest Rate or the Interest Amount so calculated need be made. The determination of each Interest Rate, Interest Amount, Redemption Amount and Installment Amount, the obtaining of each quote and the making of each determination or calculation by the Calculation Agent shall (in the absence of manifest error) be final and binding upon the Issuer and the Holders and neither the Calculation Agent nor any Reference Bank shall have any liability to the Holders in respect of any determination, calculation, quote or rate made or provided by it. The Issuer will ensure that there shall at all times be such Reference Banks as may be required for the purpose of determining the Interest Rate applicable to the Instruments and a Calculation Agent, if provision is made for one in the Terms and Conditions. If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish the Interest Rate for any Interest Accrual Period or to calculate the Interest Amounts or any other requirements, the Issuer will appoint the London office of a leading bank engaged in the London interbank market to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.

Calculations and Adjustments 5.08 The amount of interest payable in respect of any Instrument for any period shall be calculated by multiplying the product of the Interest Rate and the Outstanding Principal Amount by the Day Count Fraction, save that if the Pricing Supplement specifies a specific amount in respect of such period, the amount of interest payable in respect of such Instrument for such period will be equal to such specified amount. Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable in respect of such Interest Period will be the sum of the amounts of interest payable in respect of each of those Interest Accrual Periods. For the purposes of any calculations referred to in these Terms and Conditions (unless otherwise specified in the Pricing Supplement), (a) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005 percent being rounded up to 0.00001 percent), (b) all Japanese Yen amounts used in or resulting from such calculations will be rounded downwards to the next lower whole Japanese Yen amount and (c) all amounts denominated in any other currency used in or resulting from such calculations will be rounded to the nearest two decimal places in such currency, with 0.005 being rounded upwards.

Definitions 5.09 "Applicable Business Day Convention" means the "Business Day Convention" which may be specified in the Pricing Supplement as 'applicable to any date in respect of the Instruments unless the Pricing Supplement specifies "No Adjustment" in relation to any date in which case such date shall not be adjusted in accordance with any Business Day Convention. Different Business Day Conventions may apply, or be specified in relation to, the Interest Payment Dates, Interest Period End Dates and any other date or dates in respect of any Instruments. "Banking Day" means, in respect of any city, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in that city. "Business Day" means a day: (i) in relation to Instruments denominated or payable in euro, on which the TARGET System is open; (ii) in relation to Instruments payable in any other currency, on which commercial banks are open for business and foreign exchange markets settle payments in the Relevant Financial Center in respect of the relevant currency; and

20 (iii) in any case, on which commercial banks are open for business and foreign exchange markets settle payments in any place specified in the relevant Pricing Supplement. "Business Day Convention" means a convention for adjusting any date if it would otherwise fall on a day that is not a Business Day and the following Business Day Conventions, where specified in the Pricing Supplement in relation to any date applicable to any Instruments, shall have the following meanings: (i) "Following Business Day Convention" means that such date shall be postponed to the first following day that is a Business Day; (ii) "Modified Following Business Day Convention" or "Modified Business Day Convention" means that such date shall be postponed to the first following day that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day; (iii) "Preceding Business Day Convention" means that such date shall be brought forward to the first preceding day that is a Business Day; and (iv) "FRN Convention" or "Eurodollar Convention" means that each such date shall be the date which numerically corresponds to the preceding such date in the calendar month which is the number of months specified in the Pricing Supplement after the calendar month in which the preceding such date occurred provided that: (a) if there is no such numerically corresponding day in the calendar month in which any such date should occur, then such date will be the last day which is a Business Day in that calendar month; (b) if any such date would otherwise fall on a day which is not a Business Day, then such date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and (c) if the preceding such date occurred on the last day in a calendar month which was a Business Day, then all subsequent such dates will be the last day which is a Business Day in the calendar month which is the specified number of months after the calendar month in which the preceding such date occurred. "Calculation Agent" means such agent as may be specified in the Pricing Supplement as the Calculation Agent. "Day Count Fraction" means, in respect of the calculation of an amount for any period of time ("Calculation Period"), such day count fraction as may be specified in the Pricing Supplement and: (i) if "Actual/Actual (ISMA)" is so specified, means: (a) where the Calculation Period is equal to or shorter than the Regular Period during which it falls, the actual number of days in the Calculation Period divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and (b) where the Calculation Period is longer than one Regular Period, the sum of: (A) the actual number of days in such Calculation Period falling in the Regular Period in which it begins divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and (B) the actual number of days in such Calculation Period falling in the next Regular Period divided by the product of (a) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; (ii) if "Actual/365" or "Actual/Actual" (ISDA) is so specified, means the actual number of days in the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period

21 falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); (iii) if "Actual/365 (Fixed)" is so specified, means the actual number of days in the Calculation Period divided by 365; (iv) if "Actual/360" is so specified, means the actual number of days in the Calculation Period divided by 360; (v) if "30/360" is so specified, means the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)); and (vi) if "30E/360" or "Eurobond Basis" is so specified means, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months, without regard to the date of the first day or last day of the Calculation Period unless, in the case of the final Calculation Period, the date of final maturity is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month). "Euro zone" means the zone comprising the Member States of the European Union which adopt or have adopted the euro as their lawful currency in accordance with the Treaty establishing the European Community, as amended. "Interest Accrual Period" means, in respect of an Interest Period, each successive period beginning on and including an Interest Period End Date and ending on but excluding the next succeeding Interest Period End Date during that Interest Period provided always that the first Interest Accrual Period shall commence on and include the Interest Commencement Date and the final Interest Accrual Period shall end on but exclude the date of final maturity. "Interest Commencement Date" means the date of issue of the Instruments (as specified in the Pricing Supplement) or such other date as may be specified as such in the Pricing Supplement. "Interest Determination Date" means, in respect of any Interest Accrual Period, the date falling such number (if any) of Banking Days in such city(ies) as may be specified in the Pricing Supplement prior to the first day of such Interest Accrual Period, or if none is specified: (i) in the case of Instruments denominated in Pounds Sterling, the first day of such Interest Accrual Period; or (ii) in any other case, the date falling two London Banking Days prior to the first day of such Interest Accrual Period. "Interest Payment Date" means the date or dates specified as such in, or determined in accordance with the provisions of, the Pricing Supplement and, if an Applicable Business Day Convention is specified in the Pricing Supplement, as the same may be adjusted in accordance with the Applicable Business Day Convention or if the Applicable Business Day Convention is the FRN Convention and an interval of a number of calendar months is specified in the Pricing Supplement as being the Interest Period, each of such dates as may occur in accordance with the FRN Convention at such specified period of calendar months following the date of issue of the Instruments (in the case of the first Interest Payment Date) or the previous Interest Payment Date (in any other case). "Interest Period" means each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date provided always that the first Interest Period shall commence on and include the Interest Commencement Date and the final Interest Period shall end on but exclude the date of final maturity.

22 "Interest Period End Date" means the date or dates specified as such in, or determined in accordance with the provisions of, the Pricing Supplement and, if an Applicable Business Day Convention is specified in the Pricing Supplement, as the same may be adjusted in accordance with the Applicable Business Day Convention or, if the Applicable Business Day Convention is the FRN Convention and an interval of a number of calendar months is specified in the Pricing Supplement as the Interest Accrual Period, such dates as may occur in accordance with the FRN Convention at such specified period of calendar months following the Interest Commencement Date (in the case of the first Interest Period End Date) or the previous Interest Period End Date (in any other case) or, if none of the foregoing is specified in the Pricing Supplement, means the date or each of the dates which correspond with the Interest Payment Date(s) in respect of the Instruments. "Interest Rate" means the rate or rates (expressed as a percentage per annum) or amount or amounts (expressed as a price per unit of relevant currency) of interest payable in respect of the Instruments specified in, or calculated or determined in accordance with the provisions of, the Pricing Supplement. "ISDA Definitions" means the 2000 ISDA Definitions (as amended and updated as at the date of issue of the first Tranche of the Instruments of the relevant Series (as specified in the Pricing Supplement) as published by the International Swaps and Derivatives Association, Inc. (formerly the International Swap Dealers Association, Inc.)). "Moneyline Telerate" means, when used in connection with any designated page and any designated information, the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying such information). "Outstanding Principal Amount" means, in respect of an Instrument, its principal amount less, in respect of any Installment Instrument, any principal amount on which interest shall have ceased to accrue in accordance with Condition 5.06 or, in the case of a Partly Paid Instrument, the Paid Up Amount of such Instrument or otherwise as indicated in the Pricing Supplement. "Reference Banks" means such banks as may be specified in the Pricing Supplement as the Reference Banks or, if none are specified, "Reference Banks" has the meaning given in the ISDA Definitions, mutatis mutandis. "Relevant Financial Center" means such financial center or centers as may be specified in relation to the relevant currency for the purposes of the definition of "Business Day" in the ISDA Definitions, as modified or supplemented in the Pricing Supplement, provided however that: (i) in relation to euro, it means the principal financial centre of such Member State of the European Communities as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; and (ii) in relation to Australian dollars, it means Melbourne and, in relation to New Zealand dollars, it means Wellington. "Relevant Time" means the time as of which any rate is to be determined as specified in the Pricing Supplement or, if none is specified, at which it is customary to determine such rate. "Regular Period" means: (i) in the case of Notes where interest is scheduled to be paid only by means of regular payments, each period from and including the Interest Commencement Date to but excluding the first Interest Payment Date and each successive period from and including one Interest Payment Date to but excluding the next Interest Payment Date; (ii) in the case of Notes where, apart from the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls; and

23 (iii) in the case of Notes where, apart from one Interest Period other than the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls other than the Interest Payment Date falling at the end of the irregular Interest Period. "Reuters Screen" means, when used in connection with a designated page and any designated information, the display page so designated on the Renter Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying such information). "TARGET System" means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) system.

Non-Interest-Bearing Instruments 5.10 If any Maturity Redemption Amount (as defined in Condition 6.01) in respect of any Instrument which is non-interest-bearing is not paid when due, interest shall accrue on the overdue amount at a rate per annum (expressed as a percentage per annum) equal to the Amortisation Yield defined in, or determined in accordance with the provisions of, the Pricing Supplement or at such other rate as may be specified for this purpose in the Pricing Supplement until the date on which, upon due presentation or surrender of the relevant Instrument (if required), the relevant payment is made or, if earlier (except where presentation or surrender of the relevant Instrument is not required as a precondition of payment), the seventh day after the date on which, the Fiscal Agent having received the funds required to make such payment, notice is given to the Holders of the Instruments in accordance with Condition 14 that the Fiscal Agent has received the required funds (except to the extent that there is failure in the subsequent payment thereof to the relevant Holder). The amount of any such interest shall be calculated in accordance with the provisions of Condition 5.08 as if the Interest Rate was the Amortisation Yield, the Outstanding Principal Amount was the overdue sum and the Day Count Fraction was as specified for this purpose in the Pricing Supplement or, if not so specified, 30E/360 (as defined in Condition 5.09).

6. Redemption and Purchase Redemption at Maturity 6.01 Unless previously redeemed, or purchased and cancelled or unless such Instrument is stated in the Pricing Supplement as having no fixed maturity date, each Instrument shall be redeemed at its maturity redemption amount (the "Maturity Redemption Amount") (which shall be its Outstanding Principal Amount or such other redemption amount as may be specified in or determined in accordance with the Pricing Supplement) (or, in the case of Installment Instruments, in such number of installments and in such amounts ("Installment Amounts") as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement) on the date or dates (or, in the case of Instruments which bear interest at a floating rate of interest, on the date or dates upon which interest is payable) specified in the Pricing Supplement.

Early Redemption for Taxation Reasons 6.02 (i) If in relation to any Series of Instruments as a result of any actual or proposed change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of the Island of Jersey or of the United States of America or any political subdivision or authority thereof or agency therein or thereof having the power to tax, or any change or proposed change or amendment in the application, interpretation, administration or enforcement of such laws, regulations or rulings, which becomes effective or issued on or after the date of issue of such Instruments or any other date specified in the Pricing Supplement, (such laws, regulations or rulings with respect to the United States being hereinafter collectively referred to as "United States Law"), there is a substantial likelihood that the Issuer will or may be required to pay any Additional Amounts as provided in Condition 8, and such obligation cannot be avoided by the Issuer taking reasonable measures available to it (which measures in the good faith opinion of the Issuer will not have an adverse impact on the Issuer's business) and such circumstances are evidenced by the delivery by the Issuer to the Fiscal Agent of a certificate signed by two authorized officers of the Issuer stating that the said circumstances prevail and describing the facts leading thereto.

24 the Issuer may, at its option and having given no less than 30 nor more than 60 days' notice (ending, in the case of Instruments which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Instruments in accordance with Condition 14 (which notice shall be irrevocable), redeem all (but not some only) of the outstanding Instruments comprising the relevant Series at their early tax redemption amount (the "Early Redemption Amount (Tax)") (which shall be their Outstanding Principal Amount or, in the case of Instruments which are non-interest-bearing, their Amortized Face Amount (as defined in Condition 6.11) or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with interest accrued and unpaid (if any) thereon, provided, however, that no such notice of redemption may be given earlier than 90 days (or, in the case of Instruments which bear interest at a floating rate a number of days which is equal to the aggregate of the number of days falling within the then current interest period applicable to the Instruments plus 60 days) prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts were a payment in respect of the Instruments then due. The Issuer may not exercise such option in respect of any Instrument which is the subject of the prior exercise by the Holder thereof of its option to require the redemption of such Instrument under Condition 6.06. (ii) (A) If, as a result of a change in current or future United States Law, the Issuer shall determine that any payment by the Issuer or any of the Paying Agents in respect of any Instrument or Coupon would be subject to any certification, documentation, identification, information or other reporting requirement of any kind the effect of which requirement is the disclosure to the Issuer, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner of such Instrument or Coupon who is, for United States federal income tax purposes, a foreign corporation, a non-resident alien individual, a foreign estate or trust or a foreign partnership to the extent one or more partners is, as to the United States, a foreign corporation, a non-resident alien individual or a foreign estate or trust (a "United States Alien") (other than a requirement (a) that would not be applicable to a payment by the Issuer or any one of the Paying Agents to a custodian, nominee or other agent of the beneficial owner, or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien, provided that, in any case referred to in clauses (a) or (b) payment by the custodian, nominee or agent to the beneficial owner is not otherwise subject to any such requirement, or (c) that would not be applicable to a payment by at least one other Paying Agent, or (d) that would be applicable only to a payment by a custodian, nominee or other agent of the beneficial owner to the beneficial owner), the Issuer, at its option, either (x) shall redeem all (but not some only) of the outstanding Instruments at any time, or on a day upon which interest is payable in the case of Instruments which bear interest at a floating rate or (y) if the conditions of paragraph (D) below are satisfied, shall pay the Additional Amounts specified in paragraph (D) below but provided that if any Holder fails to present its Instrument, together with all appurtenant Coupons, if any, for redemption as specified in clause (x) above, such Holder will not be entitled to any Additional Amounts. (B) The Issuer shall select its option pursuant to paragraph (A) above as soon as practicable and publish prompt notice thereof (the "Determination Notice") stating (x) the effective date of such certification, documentation, identification, information or other reporting requirement, (y) whether the Issuer will redeem the Instruments or, if the conditions of paragraph (D) below are satisfied, pay the Additional Amounts specified in paragraph (D) below, and (z) (if applicable) the last date by which the redemption of the Instruments must take place, as provided below. If the Instruments are to be redeemed pursuant to this paragraph (B), such redemption shall take place on such date, not later than one year after the publication of the Determination Notice, as the Issuer, subject as provided above and in paragraph (C) below, shall elect by notice to the Fiscal Agent at least 45 days before the date fixed for redemption. Notice of such redemption of the Instruments will be given to the Holders of the Instruments no less than 30 nor more than 60 days' notice prior to the date fixed for redemption by publication in accordance with Condition 14.

25 (C) Notwithstanding the foregoing, the Issuer shall not be obliged so to redeem the Instruments if the Issuer shall subsequently determine not fewer than 30 days prior to the date fixed for redemption that subsequent payments on the Instruments and Coupons would not be subject to any such certification, documentation, identification, information or other reporting requirement, in which case the Issuer shall give prompt notice of such subsequent determination by publication in accordance with Condition 14 and any earlier redemption notice shall be revoked and of no further effect. (D) Notwithstanding the foregoing, and as long as such certification, documentation, identification, information or other reporting requirement would be fully satisfied by payment of backup withholding tax or similar charge, the Issuer may elect to pay such Additional Amounts as may be necessary so that every net payment following the effective date of such requirement by the Issuer or any of the Paying Agents in respect of any Instrument or any Coupon of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity, other than status as a United States Alien, of such beneficial owner be disclosed to the Issuer, any Paying Agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge will not be less than the amount provided for in such Instrument or Coupon to be then due and payable, provided that the backup withholding tax or similar charge is not a charge which: (i) would not be applicable in the circumstances set forth in the parenthetical clause of (A) above; (ii) is imposed as a result of the fact that the Company or any paying agent has actual knowledge that the beneficial owner of such Note or Coupon is a U.S. person (as denned in the U.S. Internal Revenue Code of 1986, as amended (the "Code")); or (iii) is imposed as a result of presentation of such Note or Coupon for payment more than 10 days after the date on which such payment becomes due and payable or on which payment thereof is duly provided for, whichever occurs later. If the Issuer elects to pay Additional Amounts pursuant to this paragraph, and the Issuer is obligated to pay such Additional Amounts, the Issuer shall, on giving not fewer than 30 days prior notice in accordance with Condition 14, have the right to redeem all (but not some only) of the outstanding Instruments at any time. If the Issuer elects to pay Additional Amounts pursuant to this paragraph and the condition specified in the first sentence of this paragraph should no longer be satisfied, then the Issuer shall redeem the Instruments pursuant to the provisions of paragraph (B) but subject to paragraph (C). (E) Instruments redeemed pursuant to this Condition 6.02(ii), will be redeemed at their Early Redemption Amount (Tax) referred to in Condition 6.02(i), together with accrued interest (if any) to but excluding the date fixed for redemption.

Optional Early Redemption (Call) 6.03 If this Condition 6.03 is specified in the Pricing Supplement as being applicable, then the Issuer may, having given the appropriate notice and subject to such conditions as may be specified in the Pricing Supplement, redeem all (but not, unless and to the extent that the Pricing Supplement specifies otherwise, some only) of the Instruments of the relevant Series at their call early redemption amount (the "Early Redemption Amount (Call)") (which shall be their Outstanding Principal Amount or, in the case of Instruments which are non-interest-bearing, their Amortised Face Amount (as defined in Condition 6.11) or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with accrued and unpaid interest (if any) thereon on the date specified in such notice to but excluding the date fixed for redemption. The Issuer may not exercise such option in respect of any Instrument which is the subject of the prior exercise by the Holder thereof of its option to require the redemption of such Instrument under Condition 6.06.

26 6.04 The appropriate notice referred to in Condition 6.03 is a notice given by the Issuer to the Holders of the Instruments of the relevant Series in accordance with Condition 14, which notice shall be irrevocable and shall specify: — the Series of Instruments subject to redemption; — whether such Series is to be redeemed in whole or in part only and, if in part only, the aggregate principal amount of and (except in the case of a Temporary Global Instrument or Permanent Global Instrument) the serial numbers of the Instruments of the relevant Series which are to be redeemed; — the due date for such redemption, which shall be not less than 30 days nor more than 60 days after the date on which such notice is given and which shall be such date or the next of such dates ("Call Option Date(s)") or a day falling within such period ("Call Option Period"), as may be specified in the Pricing Supplement and which is, in the case of Instruments which bear interest at a floating rate, a date upon which interest is payable; and — the Early Redemption Amount (Call) at which such Instruments are to be redeemed.

Partial Redemption 6.05 If the Instruments of a Series are to be redeemed in part only on any date in accordance with Condition 6.03: — in the case of Instruments other than a Temporary Global Instrument or Permanent Global Instrument, the Instruments to be redeemed shall be drawn by lot in such European city as the Fiscal Agent may specify, or identified in such other manner or in such other place as the Fiscal Agent may approve and deem appropriate and fair; — in the case of a Temporary Global Instrument or a Permanent Global Instrument, the Instruments to be redeemed shall be selected in accordance with the rules of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system; and subject always to compliance with all applicable laws and the requirements of any stock exchange on which the relevant Instruments may be listed.

Optional Early Redemption (Put) 6.06 If this Condition 6.06 is specified in the Pricing Supplement as being applicable, then the Issuer shall, upon the exercise of the relevant option by the Holder of any Instrument of the relevant Series, and subject to such conditions, if any, as may be specified in the Pricing Supplement redeem such Instrument on the date specified in the relevant Put Notice (as defined below) at its put early redemption amount (the "Early Redemption Amount (Put)") (which shall be its Outstanding Principal Amount or, if such Instrument is non-interest-bearing, its Amortised Face Amount (as defined in Condition 6.11) or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with accrued and unpaid interest (if any) thereon to but excluding the date fixed for redemption. In order to exercise such option, the Holder must, not less than forty-five days before the date on which such redemption is required to be made as specified in the Put Notice (which date shall be such date or the next of the dates ("Put Date(s)") or a day falling within such period ("Put Period") as may be specified in the Pricing Supplement), deposit the relevant Instrument (together, in the case of an interest-bearing Definitive Instrument, with all unmatured Coupons appertaining thereto other than any Coupon maturing on or before the date of redemption (failing which the provisions of Condition 9A.06 apply)) during normal business hours at the specified office of any Paying Agent together with a duly completed early redemption notice ("Put Notice") in the form which is available from the specified office of any of the Paying Agents specifying, in the case of a Temporary Global Instrument or Permanent Global Instrument, the aggregate principal amount in respect of which such option is exercised (which must be the minimum denomination specified in the Pricing Supplement or an integral multiple thereof). No Instrument so deposited and option exercised may be withdrawn (except as provided in the Issue and Paying Agency Agreement).

27 The holder of an Instrument may not exercise such option in respect of any Instrument which is the subject of an exercise by the Issuer of its option to redeem such Instrument under either Condition 6.02 or 6.03.

Purchase of Instruments 6.07 Subject to any conditions specified in the Pricing Supplement with respect to Subordinated Instruments, the Issuer or any of its subsidiaries may at any time purchase Instruments in the open market or otherwise and at any price provided that all unmatured Receipts and Coupons appertaining thereto are purchased therewith.

Cancellation of Redeemed and Purchased Instruments 6.08 All unmatured Instruments and Coupons redeemed or purchased otherwise than in the ordinary course of business of dealing in securities or as a nominee in accordance with this Condition 6 will be cancelled forthwith and may not be reissued or resold.

Further Provisions Applicable to Redemption Amount and Installment Amounts 6.09 The provisions of Condition 5.07 and the last paragraph of Condition 5.08 shall apply to any determination or calculation of the Redemption Amount or any Installment Amount required by the Pricing Supplement to be made by the Calculation Agent (as defined in Condition 5.09). 6.10 References herein to "Redemption Amount" shall mean, as appropriate, the Maturity Redemption Amount, the final Installment Amount, Early Redemption Amount (Tax), Early Redemption Amount (Call), Early Redemption Amount (Put) and Early Termination Amount or such other amount in the nature of a redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement. 6.11 In the case of any Instrument which is non-interest-bearing, the "Amortised Face Amount" shall be an amount equal to the sum of: (i) the Issue Price specified in the Pricing Supplement; and (ii) the product of the Amortisation Yield being applied to the Issue Price from (and including) the Issue Date specified in the Pricing Supplement to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Instrument becomes due and repayable. Where such calculation is to be made for a period which is not a whole number of years, the calculation in respect of the period of less than a full year shall be made on the basis of the Day Count Fraction (as defined in Condition 5.09) specified in the Pricing Supplement for the purposes of this Condition 6.11. 6.12 If any Redemption Amount (other than the Maturity Redemption Amount) is improperly withheld or refused or default is otherwise made in the payment thereof, the Amortised Face Amount shall be calculated as provided in Condition 6.11 but as if references in subparagraph (ii) to the date fixed for redemption or the date upon which such Instrument becomes due and repayable were replaced by references to the earlier of: (i) the date on which, upon due presentation or surrender of the relevant Instrument (if required), the relevant payment is made; or (ii) (except where presentation or surrender of the relevant Instrument is not required as a precondition of payment), the seventh day after the date on which, the Fiscal Agent having received the funds required to make such payment, notice is given to the Holders of the Instruments in accordance with Condition 14 of that circumstance (except to the extent that there is a failure in the subsequent payment thereof to the relevant Holder).

28 7. Events of Default Unsubordinated Instruments 7.01 The following events or circumstances as modified by, and/or such other events as may be specified in, the Pricing Supplement shall be Events of Default (each an "Event of Default") in relation to the Instruments of any Series of Unsubordinated Instruments, namely: (i) the Issuer fails to pay any amount of principal in respect of, or premium, if any, on the Instruments of the relevant Series or any of them on the due date for payment thereof, and such failure to pay principal or premium continues unremedied for a period of 2 days, or fails to pay any amount of interest in respect of the Instruments of the relevant Series or any of them on the due date for payment thereof, and such failure to pay interest continues unremedied for a period of 30 days; or (ii) the Issuer defaults in the performance or observance of any other of its material obligations under the Instruments of the relevant Series or the Issue and Paying Agency Agreement and such default remains unremedied for 60 days after written notice requiring such default to be remedied has been delivered to the Issuer at the specified office of the Fiscal Agent by the Holders of at least 25 percent in aggregate principal amount of the Instruments of such Series then outstanding; or (iii) default in the payment when due and continuance of such default beyond any applicable grace period thereto by the Issuer with respect to any principal of, premium or interest on any debt outstanding in principal amount of U.S.$25,000,000 or more in the aggregate (exclusive of the Instruments) of the Issuer or any Material Subsidiary (as defined in Condition 4); or the occurrence, and continuance beyond any applicable grace period thereto, of any other event or condition under any agreement or instrument relating to such debt, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause the acceleration of the maturity of such debt; or any such debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such debt shall be required to be made, in each case prior to the stated maturity of such debt; and written notice declaring any event described in this paragraph (iii) to be an Event of Default has been delivered to the Issuer at the specified office of the Fiscal Agent by the Holders of at least 25 percent in aggregate principal amount of the Instruments of the relevant Series then outstanding; or (iv) the entry by a court or a governmental authority having jurisdiction in the premises of (A) a decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law, or any similar applicable law of Jersey (including a declaration of en desastre in the case of AEOCC), or (B) a decree or order adjudging the Issuer a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer, under any applicable U.S. federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or substantially all of its assets, or ordering the winding up or liquidation of the affairs of the Issuer, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (v) the commencement by the Issuer of a voluntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law, or any similar applicable law of Jersey (including a declaration of en desastre in the case of AEOCC) or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of such petition or to the

29 appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or substantially all of its assets, or to an order for the winding up or liquidation of the affairs of the Issuer.

Subordinated Instruments 7.02 The following events or circumstances as modified by, and/or such other events as may be specified in, the Pricing Supplement shall be Events of Default (each an "Event of Default") in relation to the Instruments of any Series of Subordinated Instruments, namely:- (i) the entry by a court having jurisdiction in the premises of (a) a decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or (b) a decree or order adjudging the Issuer a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer under any applicable U.S. federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or of any substantial part of its property, or ordering the liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (ii) the commencement by the Issuer of a voluntary case or proceedings under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of it in an involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable U.S. federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Issuer or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Issuer in furtherance of any such action. 7.03 The Issuer may, without the consent of the holders of the Instruments, consolidate with, merge into, or sell, convey, transfer or lease its properties and assets as an entirety, or substantially as an entirety, to any person provided that the successor assumes all obligations of the Issuer under the Instruments, the Coupons and the Issue and Paying Agency Agreement. 7.04 If any Event of Default shall occur in relation to any Series of Instruments, any Holder of an Instrument of the relevant Series may, by written notice to the Issuer, at the specified office of the Fiscal Agent, declare that such Instrument and (if the Instrument is interest-bearing) all interest then accrued but unpaid on such Instrument shall be due and payable upon the date such written notice thereof is received by the Fiscal Agent, unless prior to such date all Events of Default in respect of all the Instruments of the relevant Series have been cured or waived, whereupon the same shall become immediately due and payable at its early termination amount (the "Early Termination Amount") (which shall be its Outstanding Principal Amount or, if such Instrument is non-interest-bearing, its Amortised Face Amount (as defined in Condition 6.11) or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with all interest (if any) accrued and unpaid thereon to but excluding the date of payment, without presentment, demand, protest or other notice of any kind, all of which the Issuer expressly waives anything contained in such Instrument to the contrary notwithstanding. With respect to the Instruments of any Series of Subordinated Instruments, there is no right of acceleration of the payment of principal in the case of a default in the payment of principal, interest, additional interest, if any, and premium, if any, on the Instruments or in the performance of any other covenant of the Issuer in the Instruments or the Issue and Paying Agency Agreement.

30 8. Taxation 8.01 All amounts payable (whether in respect of principal, interest or otherwise) in respect of the Instruments will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the United States or, in the case of Instruments issued by AEOCC, the Island of Jersey or, in either case, any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Issuer will pay such additional amounts (the "Additional Amounts") as may be necessary in order that the net amounts receivable by the Holder after such withholding or deduction for or on account of such payment shall equal the respective amounts which would have been receivable by such Holder in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable in relation to any payment in respect of any Instrument or Coupon for or on account of: (i) any tax, duty, assessment or other governmental charge which would not have been imposed but for (x) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the United States or, as applicable, the Island of Jersey, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in trade or business or present therein, or having or having had a permanent establishment therein, or (y) the presentation of an Instrument or Coupon for payment on a date more than 10 days after the Relevant Date (as defined below); or (ii) any estate, inheritance, gift, sales, transfer, excise, personal property or similar tax, assessment or other governmental charge; or (iii) any tax, duty, assessment or other governmental charge imposed by reason of such Holder's past or present status as a passive foreign investment company, a controlled foreign corporation, a personal holding company or foreign personal holding company with respect to the United States, as a private foundation or other tax exempt organization for United States federal income tax purposes, or as a corporation which accumulates earnings to avoid United States federal income tax; or (iv) any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal of or interest on any Instrument or Coupon; or (v) any withholding or deduction which is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive; or (vi) any tax, duty, assessment or other governmental charge which would not have been imposed but for the presentation for payment of such Instrument or Coupon by or on behalf of a Noteholder who would have been able to avoid such withholding or deduction by presenting the relevant Instrument or Coupon to a Paying Agent in another Member State of the European Union. (vii) any tax, duty, assessment or other governmental charge required to be withheld by any paying agent appointed by the Issuer from any payment of principal of or interest on any Instrument or Coupon if such payment can be made without withholding by any other paying agent appointed by the Issuer; or (viii) any tax, duty, assessment or other governmental charge that would not have been so imposed but for (x) failure of a beneficial owner of any Instrument or Coupon appertaining thereto to provide or cause to be provided such certification, information or documentation that the Issuer may require, on or before the date that the Issuer may require, in accordance with

31 income tax laws and regulations of the United States or any political subdivision or taxing authority thereof or therein, to establish the status of such Holder as a United States Alien or otherwise to establish entitlement to an exemption from such tax, assessment or charge in respect of such payment or (y) a determination by a taxing authority or a court of competent jurisdiction in the United States that a certification or other proof provided to establish an exemption from such tax, assessment or charge is not acceptable; or (ix) any tax, duty, assessment or other governmental charge imposed on (A) such Holder that (x) is the actual or constructive owner of 10 percent or more of the total combined voting power of all shares of the Issuer entitled to vote as determined under section 871(h)(3)(B) of the Code, or (y) is a controlled foreign corporation for United States tax purposes that is related to the Issuer through stock ownership; or (B) the interest that is contingent interest described in section 871(h)(4) of the Code, related primarily to interest based on or determined by reference to income, profits, cash flow and other comparable attributes of the obligor or a party related to the obligor; or (x) any amount payable under any present backup withholding provision of the United States tax laws or regulations thereunder; or (xi) any combination of items (i) through (x); nor shall any Additional Amounts be paid to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such Instrument or Coupon to the extent that a beneficiary or settlor with respect to such fiduciary, or a member of such partnership or a beneficial owner thereof would not have been entitled to the payment of such Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Instrument or Coupon. 8.02 For the purposes of these Terms and Conditions, the "Relevant Date" means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Fiscal Agent on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders, notice to that effect shall have been duly given to the Holders of the Instruments of the relevant Series in accordance with Condition 14. 8.03 If the Issuer becomes subject generally at any time to any taxing jurisdiction other than or in addition to the United States, or, in the case of AEOCC, the Island of Jersey and where the Issuer is AEB acting through a branch or subsidiary located in a jurisdiction other than the United States, references in Condition 6.02 and Condition 8.01 to the United States shall be read and construed as references to the United States and/or to such other jurisdiction(s). 8.04 The Issuer shall pay all stamp and other duties, if any, which may be imposed by the United Kingdom or any political subdivision thereof or taxing authority therein with respect to the execution and delivery of the Issue and Paying Agency Agreement or the issuance of any Instruments or Coupons. 8.05 Any reference in these Terms and Conditions to "principal" and/or "interest" in respect of the Instruments shall be deemed also to refer to any additional amounts which may be payable under this Condition 8. Unless the context otherwise requires, any reference in these Terms and Conditions to "principal" shall include any premium payable in respect of an Instrument, any Installment Amount or Redemption Amount and any other amounts in the nature of principal payable pursuant to these Terms and Conditions and "interest" shall include all amounts payable pursuant to Condition 5 and any other amounts in the nature of interest payable pursuant to these Terms and Conditions.

9. Payments 9A.01 Payment of amounts (other than interest) due in respect of Instruments will be made against presentation and (save in the case of partial payment or payment of an Installment Amount (other than the final Installment Amount)) surrender of the relevant Instruments at the specified office of any of the Paying Agents, outside the United States.

32 Payment of Installment Amounts (other than the final Installment Amount) in respect of an Installment Instrument which is a Definitive Instrument with Receipts will be made against presentation of the Instrument together with the relevant Receipt and surrender of such Receipt. The Receipts are not and shall not in any circumstances be deemed to be documents of title and if separated from the Instrument to which they relate will not represent any obligation of the Issuer. Accordingly, the presentation of an Instrument without the relative Receipt or the presentation of a Receipt without the Instrument to which it appertains shall not entitle the Holder to any payment in respect of the relevant Installment Amount. 9A.02 Payment of amounts in respect of interest on Instruments will be made: (i) in the case of a Temporary Global Instrument or Permanent Global Instrument, against presentation of the relevant Temporary Global Instrument or Permanent Global Instrument at the specified office of any of the Paying Agents outside (unless Condition 9A.03 applies) the United States and, in the case of a Temporary Global Instrument, upon due certification as required therein; (ii) in the case of Definitive Instruments without Coupons attached thereto at the time of their initial delivery, against presentation of the relevant Definitive Instruments at the specified office of any of the Paying Agents outside (unless Condition 9A.03 applies) the United States; and (iii) in the case of Definitive Instruments delivered with Coupons attached thereto at the time of their initial delivery, against surrender of the relevant Coupons or, in the case of interest due otherwise than on a scheduled date for the payment of interest, against presentation of the relevant Definitive Instruments, in either case at the specified office of any of the Paying Agents outside (unless Condition 9A.03 applies) the United States. 9A.03 Payments of amounts due in respect of interest on the Instruments and exchanges of Talons for Coupon sheets in accordance with Condition 9A.06 will not be made at the specified office of any Paying Agent in the United States (as defined in the Code and Regulations thereunder) unless (a) payment in full of amounts due in respect of interest on such Instruments when due or, as the case may be, the exchange of Talons at all the specified offices of the Paying Agents outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions and (b) such payment or exchange is permitted by applicable United States law. If paragraphs (a) and (b) of the previous sentence apply, the Issuer shall forthwith appoint a further Paying Agent with a specified office in New York City. 9A.04 If the due date for payment of any amount due in respect of any Instrument is not a Relevant Financial Center Day and a local banking day (each as defined in Condition 9B.02), then the Holder thereof will not be entitled to payment thereof until the next day which is such a day, or as otherwise specified in the Pricing Supplement, and from such day and thereafter will be entitled to receive payment by cheque on any local banking day, and will be entitled to payment by transfer to a designated account on any day which is a local banking day, a Relevant Financial Center Day and a day on which commercial banks and foreign exchange markets settle payments in the relevant currency in the place where the relevant designated account is located and no further payment on account of interest or otherwise shall be due in respect of such delay or adjustment unless there is a subsequent failure to pay in accordance with these Terms and Conditions in which event interest shall continue to accrue as provided in Condition 5.06 or, if appropriate, Condition 5.10. 9A.05 Each Definitive Instrument initially delivered with Coupons, Talons or Receipts attached thereto should be presented and, save in the case of partial payment of the Redemption Amount, surrendered for final redemption together with all unmatured Receipts, Coupons and Talons relating thereto, failing which: (i) if the Pricing Supplement specifies that this paragraph (i) of Condition 9A.05 is applicable (and, in the absence of specification, this paragraph (i) shall apply to Definitive Instruments which bear interest at a fixed rate or rates or in fixed amounts) and subject as hereinafter provided, the amount of any missing unmatured Coupons (or, in the case of a payment not being made in full, that portion of the amount of such missing Coupon which the Redemption

33 Amount paid bears to the total Redemption Amount due) (excluding, for this purpose, but without prejudice to paragraph (iii) below, Talons) will be deducted from the amount otherwise payable on such final redemption, the amount so deducted being payable against surrender of the relevant Coupon at the specified office of any of the Paying Agents at any time within ten years of the Relevant Date applicable to payment of such Redemption Amount; (ii) if the Pricing Supplement specifies that this paragraph (ii) of Condition 9A.05 is applicable (and, in the absence of specification, this paragraph (ii) shall apply to Instruments which bear interest at a floating rate or rates or in variable amounts) all unmatured Coupons (excluding, for this purpose, but without prejudice to paragraph (iii) below, Talons) relating to such Definitive Instruments (whether or not surrendered therewith) shall become void and no payment shall be made thereafter in respect of them; (iii) in the case of Definitive Instruments initially delivered with Talons attached thereto, all unmatured Talons (whether or not surrendered therewith) shall become void and no exchange for Coupons shall be made thereafter in respect of them; and (iv) in the case of Definitive Instruments initially delivered with Receipts attached thereto, all Receipts relating to such Instruments in respect of a payment of an Installment Amount which (but for such redemption) would have fallen due on a date after such due date for redemption (whether or not surrendered therewith) shall become void and no payment shall be made thereafter in respect of them. The provisions of paragraph (i) of this Condition 9A.05 notwithstanding, if any Definitive Instruments should be issued with a maturity date and an Interest Rate or Rates such that, on the presentation for payment of any such Definitive Instrument without any unmatured Coupons attached thereto or surrendered therewith, the amount required by paragraph (i) to be deducted would be greater than the Redemption Amount otherwise due for payment, then, upon the due date for redemption of any such Definitive Instrument, such unmatured Coupons (whether or not attached) shall become void (and no payment shall be made in respect thereof) as shall be required so that, upon application of the provisions of paragraph (i) in respect of such Coupons as have not so become void, the amount required by paragraph (i) to be deducted would not be greater than the Redemption Amount otherwise due for payment. Where the application of the foregoing sentence requires some but not all of the unmatured Coupons relating to a Definitive Instrument to become void, the relevant Paying Agent shall determine which unmatured Coupons are to become void, and shall select for such purpose Coupons maturing on later dates in preference to Coupons maturing on earlier dates. 9A.06 In relation to Definitive Instruments initially delivered with Talons attached thereto, on or after the due date for the payment of interest on which the final Coupon comprised in any Coupon sheet matures, the Talon comprised in the Coupon sheet may be surrendered at the specified office of any Paying Agent outside (unless Condition 9A.03 applies) the United States in exchange for a further Coupon sheet (including any appropriate further Talon), subject to the provisions of Condition 9 below. Each Talon shall, for the purpose of these Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprised in the relative Coupon sheet matures.

9B Payments — General Provisions 9B.01 Payments of amounts due (whether principal, interest or otherwise) in respect of Instruments will be made in the currency in which such amount is due (a) by cheque or (b) at the option of the payee, by transfer to an account denominated in the relevant currency specified by the payee. However, payments will not be made by mail to a United States address or by transfer to an account maintained by the payee in the United States. Payments will, without prejudice to the provisions of Condition 8, be subject in all cases to any applicable fiscal or other laws and regulations. 9B.02 For the purposes of these Terms and Conditions: (i) "Relevant Financial Center Day" means, in the case of any currency other than euro, a day on which commercial banks and foreign exchange markets settle payments in the Relevant

34 Financial Center and in any other place specified in the Pricing Supplement or in the case of euro, a day on which the TARGET System is operating; and (ii) "local banking day" means a day (other than a Saturday or Sunday) on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place of presentation of the relevant Instrument or, as the case may be, Coupon.

10. Prescription 10.01 Claims against the Issuer for payment of principal and interest in respect of Instruments will be prescribed and become void unless made, in the case of principal, within ten years or, in the case of interest, five years after the Relevant Date (as defined in Condition 8.02) for payment thereof. 10.02 In relation to Definitive Instruments initially delivered with Talons attached thereto, there shall not be included in any Coupon sheet issued upon exchange of a Talon any Coupon which would be void upon issue pursuant to Condition 9A.05 or the due date for the payment of which would fall after the due date for the redemption of the relevant Instrument or which would be void pursuant to this Condition 10 or any Talon the maturity date of which would fall after the due date for redemption of the relevant Instrument.

11. The Paying Agents and the Calculation Agent 11.01 The initial Paying Agents and their respective initial specified offices are specified below. The Calculation Agent in respect of any Instruments shall be specified in the Pricing Supplement. The Issuer reserves the right at any time to vary or terminate the appointment of any Paying Agent (including the Fiscal Agent) or the Calculation Agent and to appoint additional or other Paying Agents or another Calculation Agent provided that it will at all times maintain (i) a Fiscal Agent, (ii) a Paying Agent (which may be the Fiscal Agent) with a specified office in a continental European city, (iii) so long as the Instruments are listed on the Luxembourg Stock Exchange and/or any other stock exchange, a Paying Agent (which may be the Fiscal Agent) with a specified office in Luxembourg and/or in such other place as may be required by the rules of such other stock exchange, (iv) in the circumstances described in Condition 9A.03, a Paying Agent with a specified office in New York City, and (v) a Calculation Agent where required by the Pricing Supplement applicable to any Instruments (in the case of (i), (ii) and (iii) with a specified office located in such place (if any) as may be required by the relevant Pricing Supplement). The Paying Agents and the Calculation Agent reserve the right at any time to change their respective specified offices to some other specified office in the same city. Each Issuer undertakes that, if European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27,2000 is brought into force, it will ensure that it maintains a paying agent in an EU member state that will not be obliged to withhold or deduct tax pursuant to such Directive. Notice of all changes in the identities or specified offices of any Paying Agent or the Calculation Agent will be given promptly by the Issuer to the Holders in accordance with Condition 14. 11.02 The Paying Agents and the Calculation Agent act solely as agents of the Issuer and, save as provided in the Issue and Paying Agency Agreement or any other agreement entered into with respect to its appointment, do not assume any obligations towards or relationship of agency or trust for any Holder of any Instrument, Receipt or Coupon and each of them shall only be responsible for the performance of the duties and obligations expressly imposed upon it in the Issue and Paying Agency Agreement or other agreement entered into with respect to its appointment or incidental thereto.

12. Replacement of Instruments If any Instrument, Receipt or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Fiscal Agent or such Paying Agent or Paying Agents as may be specified for such purpose in the Pricing Supplement ("Replacement Agent"), subject to all applicable laws and the requirements of any stock exchange on which the Instruments are listed, upon payment by the claimant of all expenses incurred in connection with such replacement, including any tax or other governmental charge that may be imposed in relation thereto, and upon such terms as to evidence, security, indemnity and otherwise as the Issuer and the Replacement Agent may require. Mutilated or

35 defaced Instruments, Receipts and Coupons must be surrendered before replacements will be delivered therefor.

13. Meetings of Holders and Modification The Issue and Paying Agency Agreement contains provisions for convening meetings of Holders of Instruments to consider any matter affecting their interests. Other than in the case of an Extraordinary Resolution described below, a majority in aggregate principal amount of Instruments of a Series voted at a meeting duly called, by proxy or in person, may, with the written consent of the Issuer, modify, amend or supplement the terms of Instruments of such Series, or waive any breaches or proposed breaches of the terms of Instruments of such Series, and any resolution passed at a meeting of Holders of Instruments will be binding on all Holders of Instruments of such Series, whether or not they are present at the meeting, and on all Holders of Coupons appertaining thereto, and shall be binding on the Holders and all future Holders of any Instruments issued in exchange therefor, whether or not a notation is made on the Instruments. Modification by Extraordinary Resolution of certain terms and conditions of the Instruments or other provisions of the Issue and Paying Agreement (including terms of the payment of principal and interest on Instruments) requires special voting. In the case of any Series of Instruments, the quorum at any such meeting of Holders of Instruments for passing an Extraordinary Resolution will be any person or persons holding or representing not less than two-thirds, or at any adjourned such meeting not less than one-third, in principal amount of the Instruments of such Series for the time outstanding and entitled to be voted at such meeting and an Extraordinary Resolution may be passed by the affirmative vote of not less than 75 percent in aggregate principal amount of such Instruments voted in respect of such Extraordinary Resolution. The Fiscal Agent may agree, without the consent of the Holders of Instruments, Coupons or Talons, to any modification (except as aforesaid) of, or to any waiver or authorisation of any breach or proposed breach of, any of the Terms and Conditions of the Instruments or any other provisions of the Issue and Paying Agency Agreement which does not adversely affect the interest of any Holder of such Instruments in any material respect or to any modification which is of a minor or technical nature or to correct a manifest error as set forth in the Issue and Paying Agency Agreement.

14. Notices Notices to Holders of Instruments will, save where another means of effective communication has been specified herein or in the Pricing Supplement, be deemed to be validly given if (i) published in a leading daily newspaper having general circulation in London (which is expected to be the Financial Times) and (ii) in the case of Instruments which are listed on the Luxembourg Stock Exchange (so long as such Instruments are listed on the Luxembourg Stock Exchange and the rules of that exchange so require), in a leading newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) or, if such publication is not practicable, if published in a leading English language daily newspaper having general circulation in Europe (or, if permitted by the rules of the relevant stock exchange, in the case of Instruments represented by a Temporary Global Instrument or Permanent Global Instrument, if delivered to Euroclear and Clearstream, Luxembourg and/or any other relevant clearing system for communication by them to the persons shown in their respective records as having interests therein). The Issuer shall also ensure that notices are duly published in compliance with the requirements of each stock exchange on which the Instruments are listed. Any notice so given will be deemed to have been validly given on the date of first such publication (or, if required to be published in more than one newspaper, on the first date on which publication shall have been made in all the required newspapers) or, as the case may be, on the fourth weekday after the date of such delivery to Euroclear and Clearstream, Luxembourg and/or such other clearing system. Holders of Coupons will be deemed for all purposes to have notice of the contents of any notice given to Holders of Instruments in accordance with this Condition.

15. Further Issues The Issuer may from time to time, without the consent of the Holders of any Instruments or Coupons, create and issue further instruments, bonds or debentures having the same terms and conditions as such Instruments in all respects (or in all respects except for the first payment of interest, if any, on

36 them and/or the denomination thereof) so as to form a single Series with the Instruments of any particular Series.

16. Currency Indemnity The currency in which the Instruments are denominated or, if different, payable, as specified in the relevant Pricing Supplement (the "Contractual Currency"), is the sole currency of account and payment for all sums payable by the Issuer in respect of the Instruments, including damages. Any amount received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction or otherwise) by any Holder of an Instrument or Coupon in respect of any sum expressed to be due to it from the Issuer shall only constitute a discharge to the Issuer to the extent of the amount in the Contractual Currency which such Holder is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that amount is less than the amount in the Contractual Currency expressed to be due to any Holder of an Instrument or Coupon in respect of such Instrument or Coupon the Issuer shall indemnify such Holder against any loss sustained by such Holder as a result. In any event, the Issuer shall indemnify each such Holder against any cost of making such purchase which is reasonably incurred. These indemnities constitute a separate and independent obligation from the Issuer's other obligations, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder of an Instrument or Coupon and shall continue in full force and effect despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due in respect of the Instruments or any judgment or order. Any such loss aforesaid shall be deemed to constitute a loss suffered by the relevant Holder of an Instrument or Coupon and no proof or evidence of any actual loss will be required by the Issuer.

17. Waiver and Remedies No failure to exercise, and no delay in exercising, on the part of the Holder of any Instrument, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise thereof or the exercise of any other right. Rights hereunder shall be in addition to all other rights provided by law. No notice or demand given in any case shall constitute a waiver of rights to take other action in the same, similar or other instances without such notice or demand.

18. Law and Jurisdiction 18.01 The Instruments and the Issue and Paying Agency Agreement are governed by, and shall be construed in accordance with, the laws of the State of New York. 18.02 The Issuer irrevocably agrees for the benefit of the Holders of the Instruments that any New York State or United States federal court sitting in New York City, the Borough of Manhattan and the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes, which may arise out of or in connection with the Instruments (respectively, "Proceedings" and "Disputes") and, for such purposes, irrevocably submits to the jurisdiction of such courts. 18.03 The Issuer irrevocably waives any objection which it might now or hereafter have to any New York State or United States federal court sitting in New York City, the Borough of Manhattan and the courts of England being nominated as the forum to hear and determine any Proceedings and to settle any Disputes and agrees not to claim that any such court is not a convenient or appropriate forum. 18.04 The Issuer agrees that the documents which start any proceedings and any other documents required to be served in New York City in relation to those proceedings may be served on it by being delivered to the Issuer at TRS' headquarters in New York at World Financial Center, 200 Vesey Street, New York, NY 10285 and that the documents which start any proceedings and any other documents required to be served in England in relation to those proceedings may be served on it by being delivered to the Issuer c/o American Express Europe Ltd. at 60 Buckingham Palace Road, London, SW1W ORU, United Kingdom. If the appointment of the person mentioned in this Condition 18.04 ceases to be effective, the Issuer shall forthwith appoint a further person in New York City or in England, as the case

37 may be, to accept service of process on its behalf in New York City or in England, as the case may be, and notify the name and address of such person to the Fiscal Agent and, failing such appointment within fifteen days, any Holder of an Instrument shall be entitled to appoint such a person by written notice addressed to the Issuer and delivered to the Issuer or to the specified office of the Fiscal Agent. Nothing contained herein shall affect the right of any Holder of an Instrument to serve process in any other manner permitted by law. 18.05 The submission to the jurisdiction of the New York State or United States federal courts sitting in New York City or in the Borough of Manhattan and courts of England shall not (and shall not be construed so as to) limit the right of the Holders of the Instruments or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.

38 PRO FORMA PRICING SUPPLEMENT

Pricing Supplement Series No.: [ Tranche No.: [

AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. AMERICAN EXPRESS BANK LTD. AMERICAN EXPRESS CREDIT CORPORATION AMERICAN EXPRESS OVERSEAS CREDIT CORPORATION LIMITED AMERICAN EXPRESS CENTURION BANK

Program for the Issuance of Debt Instruments Issue of

[Aggregate Principal Amount of Tranche] [Title of Instruments]

The Instruments have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "'Securities Act"). The Instruments will be issued only in bearer form and are subject to United States tax law requirements. The Instruments may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in transactions exempt from the registration requirements of the Securities Act. This document constitutes the Pricing Supplement relating to the issue of Instruments described herein. Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Information Memorandum dated [ ]. This Pricing Supplement contains the trial terms of the Instruments and must be read in conjunction with such Information Memorandum. The following alternative language applies if the first tranche of an issue which is being increased was issued under an Information Memorandum with an earlier date. Terms used herein shall be deemed to be denned as such for the purposes of the Conditions (the "Conditions)" set forth in the Information Memorandum dated [original date]. This Pricing Supplement contains the final terms of the Instruments and must be read in conjunction with the Information Memorandum dated [current year] [and the supplemental Information Memorandum dated [ ], save in respect of the Conditions which are extracted from the Information Memorandum dated [original date] and are attached hereto.] [Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or sub- paragraphs. Italics denote directions for completing the Pricing Supplement.] 1. Issuer: [American Express Travel Related Services Company, Inc./American Express Bank Ltd./American Express Credit Corporation/American Express Overseas Credit Corporation Limited/American Express Centurion Bank] 2. [(i)] Series Number: [ ]

39 [(ii)] Tranche Number: (if fungible with an existing Series, details of that Series, including the date on which the Instruments become fungible).] 3. Specified Currency or Currencies: 4. Aggregate Principal Amount: [(i)] Series: [(ii) Tranche: 5. [(i)] Issue Price: [ ] percent of the Aggregate Principal Amount [plus accrued interest from [insert date] (in the case of fungible issues only, if applicable)} [(ii) Net Proceeds: [ ] (Required only for listed issues) 6. Specified Denominations:

7. [(i) Issue Date:

[(ii) Interest Commencement Date: [ 11 8. Maturity Date: [specify date or (for Floating Rate Instruments) Interest Payment Date falling in or nearest to the relevant months and year] [If the issue proceeds are received by the Issuer in the United Kingdom and the Maturity Date is less than one year from the Issue Date, the Instruments must have a minimum redemption value of £100,000 (or its equivalent in other currencies) and be sold only to "professional investors" (or another applicable exemption from section 19 of the FSMA must be available.)] 9. Interest Basis: [• percent Fixed Rate] [[specify reference rate]+/—• percent Floating Rate] [Zero Coupon] [Index-Linked Interest] [Other (specify)] (further particulars specified below) 10. Redemption/Payment Basis: [Redemption at par] [Index-Linked Redemption] [Dual Currency] [Partly Paid] [Installment] [Other (specify)] 11. Change of Interest or Redemption/ [Specify details of any provision for convertibility of Payment Basis: Instruments into another interest or redemption/ payment basis] 12. Put/Call Options: [Investor Put] [Issuer Call] [(further particulars specified below)] 13. Status of the Instruments: [Senior/[Dated/Perpetual]/Subordinated]

40 14. Listing: [London/Luxembourg/other (specify)fNone] 15. Method of distribution: [Syndicated/Non-syndicated]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 16. Fixed Rate Instrument Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Rate[(s)] of Interest: [ ] percent per annum [payable [annually/semi- annually/quarterly/monthly] in arrear] (ii) Interest Payment Date(s): [ ] in each year [adjusted in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]/not adjusted] (iii) Fixed Coupon Amount[(s)]: [ 1 (Per Instrument of ] Specified Denomination and per Instrument of [ Specified Denomination] (iv) Day Count Fraction: [30/360]/[Actual/Actual (ISMA)/[// neither of these options applies, give details] (v) Broken Amount(s): [Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Coupon Amount[(s)]] (vi) Other terms relating to the [Not Applicable/g/ve details] (Consider if day count method of calculating interest for fraction, particularly for euro denominated issues, Fixed Rate Instruments: should be on an Actual/Actual basis. Also consider what should happen to unmatured Coupons in the event of early redemption of the Notes.) 17. Floating Rate Instrument Provisions [Applicable/Not Applicable] (// not applicable, delete the remaining sub-paragraphs of this paragraph. (i) Interest Period(s): (ii) Interest Payment Dates: (iii) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Convention/ Preceding Business Day Convention/other (give details)] (iv) Relevant Financial Center(s): [Not Applicable/g/ve details] (v) Manner in which the Rate(s) of [Screen Rate Determination/ISDA Determination/ Interest is/are to be determined: other (give details)] (vi) Party responsible for calculating [[Name] shall be the Calculation Agent (no need to the Rate(s) of Interest and specify if the Issue and Paying Agent is to perform this Interest Amount(s) (if not the function)} Issuer and Paying Agent): (vii) Screen Rate Determination: — Reference Rate: [For example, LIBOR or EURIBOR] — Relevant Screen Page: [For example, Moneyline Telerate page 3750/248] — Interest Determination Date(s): — Relevant Time: [For example, 11.00 a.m. London time/Brussels time]

41 — Relevant Financial Center: [For example, London/euro-zone (where euro-zone means the region comprized of the countries whose lawful currency is the euro)] (viii) ISDA Determination: — Floating Rate Option: — Designated Maturity: — Reset Date: (ix) Margin(s) [+/—] [ ] percent per annum (x) Minimum Rate of Interest: [ ] percent per annum (xi) Maximum Rate of Interest: [ ] percent per annum (xii) Day Count Fraction: (xiii) Fall back provisions, rounding provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Instruments, if different from those set out in the Conditions: 18. Zero Coupon Instrument Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Amortization Yield: [ ] percent per annum (ii) Reference Price: (iii) Any other formula/basis of [Consider whether it is necessary to specify a Day Count determining amount payable: Fraction] 19. Index-Linked Interest Instrument [Applicable/Not Applicable] Provisions (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Index/Formula: [Give or annex details] (ii) Calculation Agent responsible for calculating the interest due: (iii) Provisions for determining Coupon where calculating by reference to Index and/or Formula is impossible or impracticable: (iv) Interest Period(s): (v) Interest Payment Dates: (vi) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Convention/ Preceding Business Day Convention/other (give details)] (vii) Additional Business Center(s): (viii) Minimum Rate of Interest: ] percent per annum (ix) Maximum Rate of Interest ] percent per annum (x) Day Count Fraction:

42 20. Dual Currency Instrument Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Rate of Exchange/method of [Give details] calculating Rate of Exchange: (ii) Calculation Agent, if any, responsible for calculating the principal and/or interest due: (iii) Provisions applicable where calculation by reference to Rate of Exchange impossible or impracticable: (iv) Person at whose option Specified Currency(ies) is/are payable:

PROVISIONS RELATING TO REDEMPTION 21. Call Option [Applicable/Not Applicable] (// not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Optional Redemption Date(s) (Call): (ii) Optional Redemption [ ] per Instrument of [ ] Specified Denomination Amount(s) of each Instrument (Call) and method, if any, of calculation of such amount(s): (iii) If redeemable in part: (a) Minimum Redemption Amount: (b) Maximum Redemption Amount: (iv) Notice period (if other than as set out in the Conditions): 22. Put Option [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Optional Redemption Date(s): (ii) Optional Redemption [ ] per Instrument of [ ] Specified Denomination Amount(s) of each Instrument and method, if any, of calculation of such amount(s): (iii) Notice period (if other than as set out in the Conditions): 23. Final Redemption Amount of each [per Instrument of Specified Denomination/other/ Instrument see Appendix]

43 24. Early Redemption Amount Early Redemption Amount(s) payable [Not Applicable (if both the Early Redemption Amount on redemption for taxation reasons or on (Tax) and the Early Termination Amount are the event of default and/or the method of principal amount of the Note/specify the Early calculating the same (if required or if Redemption Amount (Tax) and/or the Early different from that set out in the Termination Amount if different from the principal Conditions): amount of the Instruments)]

GENERAL PROVISIONS APPLICABLE TO THE INSTRUMENTS 25. Form of Notes: Bearer Instruments: [Temporary Global Instrument exchangeable for a Permanent Global Instrument which is exchangeable for Definitive Instrument on [ ] days' notice/at any time/in the limited circumstances specified in the Permanent Global Instrument.] [Temporary Global Instrument exchangeable for Definitive Instruments on [ ] days' notice.] [Permanent Global Instrument exchangeable for Definitive Instruments on [ ] days' notice/at any time/in the limited circumstances specified in the Permanent Global Instrument]. 26. Relevant Financial Center Day: [Not Applicable/give details. Note that this item relates to the date and place of payment, and not interest period end dates, to which items 16(ii), 17(iii) and 19(vi) relate] 27. Talons for future Coupons or Receipts to [Yes/No. If yes, give details] be attached to Definitive Instruments (and dates on which such Talons mature) 28. Details relating to Partly Paid [Not Applicable/give details] Instruments: amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Instruments and interest due on late payment: 29. Details relating to Installment [Not Applicable/g/ve details] Instruments: amount of each installment, date on which each payment is to be made: 30. Redemption, renominalisation and [Not Applicable/The provisions annexed to this Pricing reconventioning provisions: Supplement apply] 31. Consolidation provisions: [Not Applicable/The provisions annexed to this Pricing Supplement apply] 32. Other terms or special conditions: [Not Applicable/g/ve details] DISTRIBUTION 33. (i) If syndicated, names of Managers: [Not Applicable/give names] (ii) Stabilizing Institution (if any): [Not Applicable/g/ve name] 34. If non-syndicated, name of Dealer: [Not Applicable/gz've name] 35. TEFRA: [Not Applicable/The [C/D] Rules are applicable] 36. Additional selling restrictions1: [Not Applicable/g/ve details]

OPERATIONAL INFORMATION 37. ISIN Code: I 1 38. Common Code: 39. Any clearing system(s) other than [Not Applicable/give name(s) and number(s)] Euroclear Bank S.A./N.V. and Clearstream Banking, societe anonyme and the relevant identification number(s): 40. Delivery: Delivery [against/free of] payment 41. Additional Paying Agent(s) (if any): [ 1

[LISTING APPLICATION This Pricing Supplement comprises the final terms required to list the issue of Instruments described herein pursuant to the U.S.$6,000,000,000 Program for the Issuance of Debt Instruments of American Express Travel Related Services Company, Inc., American Express Bank Ltd., American Express Credit Corporation, American Express Overseas Credit Corporation Limited and American Express Centurion Bank.]

RESPONSIBILITY The Issuer accepts responsibility for the information contained in this Pricing Supplement. Signed on behalf of the Issuer

By:. Duly authorized

45 USE OF PROCEEDS

The net proceeds of the issue of each Tranche of Instruments will be applied by the relevant Issuer to meet part of its general financing requirements.

46 AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.

American Express Travel Related Services Company, Inc. (including its subsidiaries, unless the context indicates otherwise, "TRS") was incorporated on May 3, 1982, TRS' registered office and principal place of business is located at World Financial Center, 200 Vesey Street, New York, New York 10285. TRS is a wholly-owned subsidiary of American Express. American Express was founded in 1850 as a joint stock association and was incorporated under the laws of the State of New York in 1965. American Express and its subsidiaries are primarily engaged in the business of providing travel related services, financial advisory services and international banking services throughout the world. American Express common stock trades on The New York Stock Exchange and certain other stock exchanges in and outside the United States. As a publicly held company, American Express files periodic reports with the SEC, The information about TRS presented below is qualified in its entirety by reference to, and should be read in conjunction with, TRS' audited consolidated financial statements for each of the years ended December 31, 2002 and 2001, including the notes thereto. THE INSTRUMENTS ISSUED BY TRS ARE DIRECT, UNSECURED OBLIGATIONS OF TRS ONLY. THEY ARE NOT THE OBLIGATIONS OF OR GUARANTEED BY AMERICAN EXPRESS OR ANY OTHER AMERICAN EXPRESS SUBSIDIARY OR AFFILIATE. TRS, which includes the Card, travel, merchant and network businesses, as well as the Travelers Cheque and Prepaid Services group, provides a variety of products and services worldwide, including, among others, global card network, issuing and processing services, the American Express® Card, the American Express® Rewards Green and American Express® Rewards Gold Cards, Blue from American Express®, the Optima® Card, the American Express^ Cash Rebate Card, a number of co-brand Cards, other consumer and corporate lending and banking products, American Express^ Travelers Cheques, prepaid card products, business expense management products and services, corporate travel and travel management services, consumer travel services, tax, accounting and business consulting services, a network of automated teller machines ("ATMs"), magazine publishing, merchant transaction processing and point of sale and back-office products and services. In certain countries, partly owned affiliates and unaffiliated entities offer some of these products and services under licenses from TRS. TRS' business as a whole has not experienced significant seasonal fluctuation although Travelers Cheque Sales and Travelers Cheques outstanding tend to be greatest each year in the summer months, peaking in the third quarter, and Card-billed business tends to be moderately higher in the fourth quarter than in other quarters. TRS places significant importance on its trademarks and service marks and diligently protects its intellectual property rights around the world.

Global Network Services TRS operates a global general purpose card network. Network functions include operations, service delivery, systems, authorization, clearing, settlement and brand advertising and marketing; the development of new and innovative products for the network; and establishing and enhancing relationships with millions of merchants globally, both online and offline. One of the key assets of TRS' network is the American Express brand, which is one of the world's most highly recognized and respected brands. Cards bearing the American Express logo ("Cards") are issued directly by TRS and by qualified institutions, and are accepted at ATMs and at all merchant locations worldwide that accept the American Express Card. TRS issues the vast majority of Cards on the American Express global network. In 2002, TRS continued to expand its Global Network Services ("GNS") business in which it authorizes third-party financial institutions to issue American Express-branded cards that are accepted on the American Express merchant network. American Express currently has 77 arrangements in place with banks and other qualified institutions in 77 countries providing for Card issuance by those entities. While some GNS arrangements have been in place for more than 20 years, the vast majority have been

47 established since 1995. In 2002, American Express signed eight new GNS partners, including Toyota Finance Company in Japan and Samsung Card Company, Ltd. in Korea. Together, GNS partners launched 40 new products during 2002. These partnerships increase TRS' market presence, drive more transaction volume onto TRS1 merchant network and significantly increase the number of merchants accepting the American Express Card in selected markets. TRS may charge fees and royalties for other services to banks and other financial institutions. Conversely, TRS' partners benefit from association with the American Express brand and access to TRS' network services. GNS continued to show strong growth in billed business in 2002. Local restrictive regulations governing the issuance of charge and credit cards have not been a significant factor impacting TRS' arrangements with banks and qualifying financial institutions in any country in which such arrangements exist, because such banks and institutions generally are already licensed to issue cards (e.g., Visa and MasterCard cards) prior to their issuing cards on the American Express network. Accordingly, TRS' GNS partners have generally not had difficulty in obtaining appropriate government authorization in the markets in which TRS has chosen to enter into these partnership arrangements. In May 1996, American Express invited banks and other qualified institutions in the United States to begin issuing Cards on the American Express network. In contrast to the situation outside the United States, there are no major U.S. bank issuers on the American Express network in the United States. This situation is the result of rules and policies of VISA USA, Inc. and MasterCard International, Incorporated ("MasterCard") in the United States calling for expulsion of members who issue American Express-branded cards. No banks have been willing to forfeit membership in VISA USA, Inc. and/or MasterCard to issue cards on the American Express network. In a lawsuit filed in October 1998 against VISA USA, Inc. and VISA International Corp. (collectively, "VISA") and MasterCard, the U.S. Department of Justice alleged that these rules and policies violate the antitrust laws of the United States. In October 2001, the trial judge ruled in favor of the U.S. Department of Justice, holding that these rules and policies do violate such laws. TRS views this decision as a major victory for U.S. consumers because it will ultimately lead to more vigorous competition and more innovative card products and services. However, VISA and MasterCard have appealed this decision and have obtained a stay of the court's judgment while the appeal is pending. Assuming the appeals court affirms the trial court's decision, American Express expects to launch the GNS business in the U.S. after the appeals process has been completed. As a network, TRS encounters intense competition from other card networks. Global competition comes from VISA, MasterCard, Diners Club. Discover Financial Services, a business unit of Morgan Stanley & Co. (U.S. only), and JCB Co., Ltd. (primarily in Japan). The principal competitive factors that affect the network business are (i) the number of cards in force and amount of spending on these cards: (ii) the quantity and quality of establishments that accept the cards; (in) the economic attractiveness to card issuers and merchant acquirers of participating in the network; (iv) the success of targeted marketing and promotional campaigns; (v) reputation and brand recognition; (vi) the ability to develop and implement innovative systems and technologies cost effectively on a global basis; (vii) the ability to develop and implement innovative types of card products and support services for merchants, issuers and acquirers on the network; (viii) success in implementation of strategies to reduce suppression - when merchants that accept cards encourage a customer to use another card or cash; (ix) the availability of alternative payment systems; and (x) the quality of customer service.

Global Merchant Services During 2002, TRS continued its ongoing efforts to encourage consumers to use the American Express Card as their card of choice for everyday spending at establishments such as supermarkets, gas stations, drug stores and home improvement stores, as well as for their travel and entertainment spending. TRS also continued to increase the range of merchants in retail and everyday spending categories that accept the Card. Key signings in the United States included The Stop & Shop Supermarket Company, Dairy Queen, Time Warner Cable and H&R Block. As of the end of 2002, TRS estimates that the merchant network in the United Slates accommodated more than 95 percent of American Express Cardmcmbcrs' general purpose charge and credit card spending.

48 As a result of the expansion of the types of merchants accepting charge and credit cards and the utilization of a more discriminating approach to identify and cancel inactive merchant accounts, in 2002, TRS continued to refine its calculation of international merchant coverage. Based on this refinement, as of the end of 2QQ2, in markets in which TRS is the merchant acquirer, TRS' international merchant coverage accommodated approximately 84 percent of Cardmembers' general purpose charge and credit card spending, up from approximately 83 percent a year ago. TRS continued to make strong progress globally in signing key merchants and merchants in new industry categories, including quick-service restaurants, government, utilities and telecommunications. New signings in international markets included Mayne Group Limited-Pharmacy Services in Australia; Canadian Tire; Cora Hypermarkets in France; Arkio in Mexico; and NTT DoCoMo, a telecommunications provider in Japan. Along with expanding merchant coverage, TRS also launched new card products and promotions to build spending in retail and everyday locations. During 2002, TRS completed the implementation of its various agreements with JCB Co., Ltd., the largest card issuer and merchant acquirer in Japan, whereby TRS became the third-party merchant acquirer for JCB card transactions in Australia, Canada, India, Mexico, and New Zealand. As a result of these agreements, over 150,000 TRS Service Establishments in those countries began accepting the JCB card. During 2002, TRS also completed the second phase of implementing the agreement under which JCB became the third-party merchant acquirer for TRS in Japan. As a result of this implementation, over 500,000 additional merchants in Japan began accepting the Card, significantly expanding the extent of American Express merchant coverage in the country. TRS' objective is to achieve merchant coverage wherever and however Cardmembers want to use the Card. TRS signs up new merchants through a number of sales channels: a proprietary sales force, third-party sales agents, the Internet, telemarketing and inbound "Want to Honor" calls (i.e., merchants desiring to accept the Card contacting American Express directly). TRS earns "discount revenue" from fees charged to "service establishments" for accepting Cards where TRS is the "merchant acquirer." The discount, which is the fee charged by American Express to the service establishment for accepting Cards, is deducted from the amount of the payment that TRS pays to a service establishment for charges submitted. A service establishment is defined as a merchant that enters into an agreement to accept Cards as a method of payment for goods and services. A merchant acquirer is the entity that maintains the merchant Card acceptance relationship, receives all Card transactions from the merchant and pays the merchant for these transactions. When a Cardmember presents the Card for payment, the service establishment creates a record of charge for the transaction and submits it to the merchant acquirer for payment. The discount (i.e., value of charge times discount rate) is deducted from payment to the service establishment and is recorded as discount revenue at the time the transaction is captured. Where TRS acts as the merchant acquirer and the Card presented at a service establishment is issued by a third-party bank or financial institution, such as in the case of TRS' GNS partnership arrangements, TRS will make financial settlement with the Card issuer. Such amounts shared are recorded as a reduction of discount revenue. Where the merchant acquirer is a third-party bank or financial institution, TRS also receives a portion of the discount revenue charged to such service establishments. Such amounts shared with and paid to TRS are recorded as discount revenue. The discount rate, which is generally expressed as a percentage of the amount charged on a Card, is contractually agreed with the service establishment. The level of the discount rate charged is principally determined by the value that is delivered to the service establishment and generally includes a premium to other cards. Value is delivered to the service establishment through higher spending Cardmembers, the \olume of spending by all Cardmembers and the insistence of Cardmembers to use their Cards when enrolled in loyalty or other Card usage programs. The discount rate varies with the type of participating establishment, the charge volume, the timing and method of payment to the establishment, the method of submission of charges and, in certain instances, the average charge amount and the amount of information provided. TRS has generally been able to charge higher discount rates to participating establishments than its competitors as a result of TRS' attractive Cardmember base. While many establishments understand this pricing in relation to the value provided, TRS has encountered dissatisfaction from some establishments, as well as suppression of the Card's use. TRS continues to devote significant resources to respond to this issue, and has made

49 progress by concentrating on acquiring merchants where Cardmembers want to use the Card, providing better and earlier communication of the American Express value proposition and, when necessary, by canceling merchants who suppress usage of the American Express Card. Over time, American Express has experienced some erosion in its discount rate, primarily reflecting its business decision to expand its merchant coverage base to lower rate "everyday spend" merchant categories, and the stronger than average growth rates in those categories. TRS focuses on understanding and addressing key factors that influence merchant satisfaction, on executing programs that increase Card usage at merchants and on strengthening its relationships with merchants through an expanded roster of services that help them meet their business goals. In 2002, TRS continued to offer value added front-office solutions designed to support merchants' billing needs. These fee-based solutions include the Purchase Express product that enables merchants to authorize and settle transactions from their PCs and capture additional data required for Corporate Purchasing Card transactions. TRS also continues to support merchant implementations on the Automated Bill Payment Platform that allows merchants to bill Cardmembers on a regular basis for repeated charges such as insurance premiums and subscriptions. Wherever TRS manages both the acquiring relationship with merchants and the Card-issuing side of the business, there is a "closed loop," which distinguishes the American Express network from the bank card networks in that there is access to information at both ends of the Card transaction. This enables TRS to provide targeted marketing opportunities for merchants and special offers to Cardmembers through a variety of channels. During 2002, TRS continued to address credit quality issues on the merchant side of its business and the growing risk related to merchant bankruptcies in light of the difficult economy. To reduce this risk, particularly in the travel industry where merchants may be paid by American Express well before the time they actually render the services to Cardmembers, American Express holds payments to service establishments where appropriate. In some cases, American Express has lengthened the time between when the Card charges are submitted by the merchant and when American Express pays the merchant and has taken other appropriate steps to manage risk. At year-end 2002, TRS was the sixth-largest owner/operator of ATMs in the United States with more than 7,300 terminals, which are operated under the ATM Axis - brand. In recent years there has been considerable interest on the part of a number of government regulators around the world in the fees that merchants are charged to accept credit cards. Most significantly, regulators in the United Kingdom, European Union and Australia have conducted extensive investigations into the way that VISA and MasterCard members collectively set the "interchange," which is the fee paid to the card issuing bank and the fundamental element of merchant pricing, and are imposing regulations on this process. Regulators have also considered the industry practice of prohibiting merchants from passing these fees along to consumers through surcharges on credit card purchases. Although the regulatory focus has for the most part been specifically on VISA and MasterCard, government regulation of the card associations' pricing could ultimately affect all card service providers by increasing pressure on the levels of interchange and merchant discount. Downward movement of interchange and merchant discount may impact the relative economic attractiveness to card issuers and merchant acquirers of participating in a particular network, and may drive card service providers to look for other sources of revenue such as annual card fees. In addition, any legal or regulatory bar on the "no surcharging" rules may result in merchant surcharging to consumers who choose to pay with credit and charge cards. As a result of action taken by the Reserve Bank of Australia, merchants in Australia are permitted to surcharge credit card transactions, including American Express Card transactions, as of January 1,2003.

Consumer Card, Small Business and Consumer Travel Services As described above, TRS' Card business has a significant presence both in the U.S. and internationally. TRS and its licensees offer individual consumers charge cards such as the American ExpressK Card, the American ExpressK Gold Card, the Platinum Card *, and the ultra-premium Centurion" Card; revolving credit cards such as Blue from American Express", the Optima" Card and the recently launched American Express" Cash Rebate Card, among others; and a variety of cards

50 sponsored by and co-branded with other corporations and institutions, such as the Delta SkyMiles1- Credit Card from American Express, American Express® Platinum Cash Rebate Card exclusively for Costco Members, and the American Express® Costco Business Card from OPEN: The Small Business Network. Charge Cards, which are marketed in the U.S. and many other countries and carry no pre-set spending limits, are primarily designed as a method of payment and not as a means of financing purchases of goods or services. Charges are approved based on a variety of factors including a Cardmember's account history, credit record and personal resources. Charge Cards generally require payment by the Cardmember of the full amount billed each month, and no finance charges are assessed. Charge Card accounts that are past due are subject, in most cases, to a delinquency assessment and, if not brought to current status, may be canceled. TRS and its licensees also offer a variety of revolving credit cards in the United States and other countries. These cards have a range of different payment terms, grace periods and rate and fee structures. Since late 1994, when American Express began aggressively to expand its credit card business, its lending balance growth has been among the top tier of card issuers. Much of this growth has been due to the breadth of American Express' lending products, such as Blue from American Express and the Delta SkyMiles Credit Card from American Express, as well as the increased number of Charge Cardmembers who have taken advantage of American Express' "lending on charge" options (such as Sign & Travel). TRS continued to bolster its proprietary business through the introduction of more than 100 new proprietary card products in 17 countries during 2002. These are cards that American Express issues, either on its own or co-branded with partnering institutions. The wide array of new or enhanced international products included Blue from American Express in Mexico and Indonesia (bringing the total number of international ''Blue" markets to 18), the American Express Tiger Woods Credit Card in Canada, and co-branded cards with such high-value partners as Costco in Puerto Rico, Alitalia in Italy and Shinsei Bank in Japan. TRS also acquired a credit card portfolio from AMP Bank, one of Australia's leading financial services companies. American Express Centurion Bank ("Centurion Bank"), a wholly owned subsidiary of TRS, issues Blue from American Express, the Optima Card, and all other American Express-branded revolving credit cards in the United States and owns most of the receivables arising from the use of these Cards. In addition, Centurion Bank has outstanding lines of credit in association with certain Charge Cards and offers unsecured loans to Cardmembers in connection with its Sign & Travel and Extended Payment Option programs. The Sign & Travel® program gives qualified U.S. Cardmembers the option of extended payments for airline, cruise and certain travel charges that are purchased with the Charge Card. The Extended Payment Option offers qualified U.S. Cardmembers the option of extending payment for certain charges on the Charge Card in excess of a specified amount. Centurion Bank is also the issuer of certain Charge Cards in the U.S. Various flexible payment options are offered to Cardmembers in international markets as well. TRS issues Cards under co-brand agreements with selected commercial firms and affinity programs with certain marketing partners. Examples of TRS' co-brand arrangements include agreements with Aero Mexico, Air France, Loyalty Management Group Canada, Inc. (Air Miles), Alitalia, British Airways, Costco, Delta Airlines, Hilton Hotels, Madison Square Garden (New York Knicks/New York Rangers), Shop Rite supermarkets, Singapore Airlines, SOGO-UNY (Hong Kong), and Starwood Hotels & Resorts. The lengths of arrangements generally range from 5 to 10 years. Cardmembers earn rewards provided by the commercial firms' respective loyalty programs based upon their spending on the co-brand cards, such as frequent flyer miles, hotel loyalty points and rebates. TRS makes payments to the commercial firms with which it has co-brand card arrangements. Payments by TRS are primarily based on the amount of Cardmember spending and corresponding rewards earned on such spending, and, under certain arrangements, on the number of accounts acquired and retained. TRS expenses amounts due under co-brand arrangements in the month earned. Payment terms vary by arrangement, but are monthly or quarterly. Once TRS makes payment to the co-brand partner, as described above, the partner is solely liable with respect to providing rewards to the Cardmember under the co-brand partner's own loyalty program.

51 Affinity programs are generally designed as joint marketing arrangements whereby TRS and the affinity partner create a program with joint branding and offers designed to appeal to people with a relationship or affinity to a particular partner-entity or association. In general, in an affinity arrangement, TRS makes payments to the affinity partners that are primarily based on the number of accounts acquired and retained through the affinity arrangement and the amount of annual Cardmember spending on such cards. The lengths of such arrangements generally range from 5 to 7 years. American Express also issues Cards under arrangements with banks, primarily outside the United States. Such bank distribution agreements involve the offering of a standard Company product (issued by TRS or one of its subsidiaries) to customers of the bank, generally with the bank's logo on the card. In a bank distribution arrangement, American Express makes payments to the bank partners that are primarily based on the number of accounts acquired and retained through the arrangement and the amount of Cardmember spending on such cards. The length of such arrangements generally range from 5 to 7 years. New distribution agreements during 2002 were signed with Societe Generale in France, Ban Regio in Mexico, Erste Bank in Austria and Joseph Leopold Bank in the UK. In addition to the payments to co-brand, affinity and bank partners referred to above, the arrangements with such entities may contain other terms unique to the arrangement with the partner, including an obligation on the part of TRS to make payments under certain circumstances. Many TRS Cardmembers, particularly Charge Card holders, are charged an annual fee which varies based on the type of card, the number of cards for each account, the currency in which the card is denominated and the country of residence of the Cardmember. Many revolving credit cards are offered with no annual fee. Each Cardmember must meet standards and criteria for creditworthiness that are applied through a variety of means both at the time of initial solicitation or application and on an ongoing basis during the Card relationship. American Express uses sophisticated credit models and techniques in its risk management operations. Several products launched or renewed by TRS in the United States in the last few years continued to make significant contributions to its results in 2002. In one major move, TRS enhanced its classic charge card lineup by introducing the American Express Rewards Green and American Express Rewards Gold cards for U.S. consumers. These cards offer automatic enrollment in the Membership Rewards" program and double points for everyday purchases at supermarkets, gas stations, drugstores, home improvement stores and other locations. Rewards-based products not only drive higher spending, they also have very favorable economics in terms of Cardmember attrition, credit and payment performance. Following their launch, the new American Express Rewards Green and American Express Rewards Gold Charge Cards and the American Express Cash Rebate Card had good early performance, together attracting almost 500,000 new cards in 2002, with most coming in the fourth quarter. In addition to improving TRS' U.S. consumer Charge Card offerings, these new cards provide Cardmembers with enhanced opportunities to earn rewards and support TRS' efforts to drive spending at everyday locations. TRS also launched the American Express Cash Rebate Card for U.S. consumers. This card carries no annual fee and offers up to five percent cash back, based on a Cardmember's annual spending and payment activity. In addition to these new product launches, TRS continued to grow its existing rewards-based lending products in the U.S., such as its co-brand portfolios with Delta Air Lines and Costco. TRS also focused on expanding its Membership Rewards program - the largest program of its kind, with more than nine million Cardmembers enrolled worldwide. TRS continued to expand the array of choices in Membership Rewards in 2002, signing new partners in retail and entertainment categories including Banana Republic, Blockbuster, Broadway.com, Cingular Wireless, Staples, Ticketmaster, The Home Depot and Toys "R" Us. About 1,200 redemption partners now participate in the Membership Rewards program. TRS' Membership Rewards loyalty program continues to be a strong driver of Cardmember retention and profitability. TRS makes payments to merchants pursuant to contractual arrangements when Cardmembers redeem their Membership Rewards points and establishes reserves in connection with estimated future redemptions. Due to higher charge volumes and overall reward redemption costs, the expense of Membership Rewards has increased over the past several years and continues to grow. During 2002, TRS worked to reduce program-related costs. Cardmembers can now handle online many program-related activities, such as enrollment and point redemption. By offering a broader range of redemption choices, TRS has improved customer satisfaction of the Membership Rewards program and lowered the average cost per point that is redeemed. TRS will continue to seek ways to contain the overall cost of the program and make changes to enhance its value to Cardmembers. As in the United States, the Membership Rewards program is a powerful driver of Cardmember loyalty in the international consumer business. TRS now offers Membership Rewards in 30 countries. In 2002, TRS enhanced its rewards programs in several markets, offering richer and more flexible choices that enable Cardmembers to earn points more quickly. In addition to using the Internet to support Membership Rewards, TRS continued to deliver other online tools to help its customers effectively manage their relationships with American Express. Throughout the world, Cardmembers have access to a variety of free and fee-based special services and programs, depending on the type of Card they have and their country of residence. These include the Membership Rewards program, Global Assist/! Hotline, Buyer's Assurance Plan, Car Rental Loss and Damage Insurance, Travel Accident Insurance, Purchase Protection Plan, Best Value Guarantee, Emergency Card Replacement, Emergency Check Cashing Privileges, Automatic Flight Insurance. Premium Baggage Protection, Private Payments-, Assured Reservations and Online Fraud Protection Guarantee. Certain Cards provide Cardmembers with access to additional services, such as a Year-End Summary of Charges Report. The Platinum Card, offered to certain Cardmembers in the United States and in virtually all other countries in which TRS issues Cards, provides access to additional and enhanced travel, financial, insurance, personal assistance and other services. The Centurion Card, which is offered in the U.S. and six other countries, is an ultra-premium charge card providing highly personalized customer service and an array of travel, lifestyle and financial benefits. Personal, Gold, Platinum Card and Centurion Cardmembers receive the Customer Relationship Statement, which is used to communicate special offers for products and services of both merchants and American Express. It is now offered in the U.S. as well as in several international markets. Examples of additional services offered for a fee to Cardmembers include travel, accident and credit insurance products, a card registry and replacement service, credit bureau monitoring and telecommunication services. Additional services include a subscription service for magazines, a pre- paid legal service and various merchandise-related offerings. Over the past ten years, TRS has significantly expanded the roster of merchants who accept TRS1 card products as well as the kinds of businesses that accept the Card. As discussed above, in recent years, TRS has focused its efforts on increasing the use of its Cards for everyday spending at such places as supermarkets, gas stations and retailers, as well as for telecommunications services. Consumers increasingly want to use cards for everyday purchases and tend to maintain their level of spending in these areas, in contrast to spending for certain kinds of travel and entertainment, even during periods of economic weakness. In 1990, 65 percent of all of TRS' U.S. billings came from the travel and entertainment sectors and 35 percent came from retail and other sectors. By 2002, that proportion was essentially reversed, with everyday spending accounting for over 60 percent of the business billed on American Express Cards. This shift resulted from the growth, over time, in the types of merchants who began to accept charge and credit cards in response to consumers' increased desire to use these cards for more of their purchases, and TRS' focus on expanding Card acceptance to exploit these opportunities. In 2002, this shift was important because of a decrease in spending in travel and entertainment resulting from the overall economic and political environment. As part of American Express' effort in 2002 to further reduce certain risks to its balance sheet, TRS continued to maintain strong reserve coverage to address credit quality in its charge card and lending portfolio. In this regard TRS increased its reserve coverage of past due balances, which remained in excess of 100 percent. TRS is concerned about fraud throughout its Card operations. American Express continues to take measures to address fraud issues, including investing in new technologies and educating Cardmembers through fraud protection initiatives. American Express had success in reducing known fraud in 2002.

53 TRS continues to make significant investments, both in the U.S. and internationally, in its card processing system and infrastructure to allow faster introduction and greater customization of products. TRS also is using technology to develop and improve its service capabilities. For example, TRS maintains a service delivery platform that its employees use in the card business to support a variety of customer servicing and account management activities such as account maintenance, updating of Cardmember information, the addition of new cards to an account and customer satisfaction issues. In international markets, TRS is building flexibility and enhancing its global platforms and capabilities in revolving credit, its full service banking platform and consumer payment options. See "Corporate and Other" for a description of American Express' arrangement to outsource many of its technology operations to IBM. TRS is also a leading provider of financial and travel services to small businesses (i.e., generally less than 100 employees and/or sales of $10 million or less), a key growth area in the United States. In 2002, TRS took steps to strengthen its competitive position in this customer segment by introducing a new set of products, services, customer communications and partnerships, as well as increasing the use of the Internet to meet the servicing needs of small business owners in the United States. As part of this initiative, TRS' Small Business Services Group created a new sub-brand and adopted a new name, OPEN: The Small Business Network From American ExpressSM ("OSBN"). This network provides a robust new set of products, services, online account management tools and partnerships that offer everyday savings to small businesses. A nationwide advertising campaign supported this effort, reinforcing American Express' commitment to serving small business owners. New card products launched for small business owners in 2002 included the Business Purchase Account- (charge), the Business Management Account® (credit), and the Platinum Delta SkyMiles Business Credit Card. TRS also added several new merchants to the Everyday Savings program for small business cardmembers, including Cingular Wireless, Kinko's, Nextel and Staples. TRS encounters substantial and increasingly intense competition with respect to the Card issuing business. As a card issuer, TRS competes in the U.S. with financial institutions (such as Citibank, Bank One/First USA, MBNA, JP Morgan Chase and Capital One Financial) that are members of VISA and/or MasterCard and that issue general purpose cards, primarily under revolving credit plans, on one or both of those systems, and the Morgan Stanley affiliate that issues the Discover Card on the Discover Business Services network. TRS also encounters some very limited competition from businesses that issue their own cards or otherwise extend credit to their customers, such as retailers and airline associations, although these cards are not generally substitutes for TRS" Cards because of their limited acceptance. As a result of consolidations among banking and financial services companies and credit card portfolio acquisitions by major card issuers, there are now a smaller number of significant issuers and the largest issuers have continued to grow using their greater resources, economies of scale and brand recognition to compete. Competing card issuers offer a variety of products and services to attract cardholders including premium cards with enhanced services or lines of credit, airline frequent flyer program mileage credits and other reward or rebate programs, "teaser" promotional interest rates for both card acquisition and balance transfers, and co-branded arrangements with partners that offer benefits to cardholders. Target customers are segmented based on factors such as financial needs and preferences, brand loyalty, interest in rewards programs and creditworthiness, and specific products are tailored to specific customer segments. Most financial institutions that offer demand deposit accounts also issue debit cards to permit depositors to access their funds. Use of debit cards for point of sale purchases has grown as many financial institutions have replaced ATM cards with general purpose debit cards bearing either the VISA or MasterCard logo and accepted wherever those branded credit cards are accepted. As a result, the volume of transactions made with debit cards in the U.S. has continued to increase significantly. Debit cards are marketed as replacements for cash and checks, and transactions made with debit cards are typically for small dollar amounts. While debit cards may be used instead of credit and charge cards for certain kinds of transactions, they are not generally substitutes for credit or charge cards. TRS does not currently offer point-of-sale debit card products in any significant way. The principal competitive factors that affect the Card-issuing business are (i) the features and the quality of the services and products, including rewards programs provided to Cardmembers; (ii) the

54 number, spending characteristics and credit performance of Cardmembers; (iii) the quantity and quality of the establishments that accept a card; (iv) the cost of cards to Cardmembers; (v) the terms of payment available to Cardmembers; (vi) the number and quality of other payment instruments available to Cardmembers; (vii) the nature and quality of expense management data capture and reporting capability; (viii) the success of targeted marketing and promotional campaigns; (ix) reputation and brand recognition; (x) the ability of issuers to implement operational and cost efficiencies; and (xi) the quality of customer service. American Express Credit Corporation, a wholly owned subsidiary of TRS, along with its subsidiaries ("Credco"), purchases most Charge Card receivables arising from the use of cards issued in the United States and in designated currencies outside the United States. Credco finances the purchase of receivables principally through the issuance of commercial paper and the sale of medium- and long-term notes. Centurion Bank finances its revolving credit receivables through the sale of short- and medium- term notes and certificates of deposit. TRS and Centurion Bank also fund receivables through asset securitization programs, which comprises part of its financing strategy. American Express utilizes the income from its securitization activities to help fund certain marketing and promotion activities. The cost of funding Cardmember receivables and loans is a major expense of Card operations. For a further discussion of TRS' and Centurion Bank's securitization and other financing activities, see pages 32-33, pages 36-37 and pages 41-42 under the caption "Financial Review," and Note 4 on pages 66-67 of American Express' 2002 Annual Report to Shareholders, which portions of such report are incorporated herein by reference. Centurion Bank's deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") for up to $100,000 per depositor. Centurion Bank is a Utah-chartered industrial loan company regulated, supervised and regularly examined by the Utah Department of Financial Institutions and the FDIC. Among the activities of Centurion Bank that are regulated at the federal level are its anti-money laundering compliance activities. American Express has taken steps to maintain a compliance program consistent with applicable standards. For further discussion of the anti-money laundering initiatives affecting American Express, see page 62 under the heading "Corporate and Other." The Charge Card, ATM and consumer lending businesses are subject to extensive regulation in the United States under a number of federal laws and regulations, including the Equal Credit Opportunity Act (which generally prohibits discrimination in the granting and handling of credit); the Fair Credit Reporting Act (which, among other things, regulates use by creditors of consumer credit reports and credit prescreening practices and requires certain disclosures when an application for credit is rejected); the Truth in Lending Act (which, among other things, requires extensive disclosure of the terms upon which credit is granted); the Fair Credit Billing Act (which, among other things, regulates the manner that billing inquiries are handled and specifies certain billing requirements); the Fair Credit and Charge Card Disclosure Act (which mandates certain disclosures on credit and charge card applications); and the Electronic Funds Transfer Act (which regulates disclosures and settlement of transactions for electronic funds transfers including those at ATMs). Certain federal privacy-related laws and regulations govern the collection and use of customer information by financial institutions (see page 62). Federal legislation also regulates abusive debt collection practices. In addition, a number of states and foreign countries have similar consumer credit protection, disclosure and privacy-related laws. The application of federal and state bankruptcy and debtor relief laws affect American Express to the extent that such laws result in amounts owed being classified as delinquent and/or charged off as uncollectible. Card issuers and card networks are subject to anti-money laundering and anti-terrorism legislation, including the USA PATRIOT Act (see pages 62-63 for a discussion of this legislation and its effect on American Express' business). Centurion Bank is subject to a variety of state and federal laws and regulations applicable to FDlC-insured, state-chartered financial institutions. Changes in such laws and regulations or in the regulatory application or judicial interpretation thereof could impact the manner in which Centurion Bank conducts its business. American Express regularly reviews and, as appropriate, refines its business practices in light of existing and anticipated developments in laws, regulations and industry trends so that it can continue to manage its business prudently and consistent with regulatory requirements and expectations. In January 2003, the Federal Financial Institutions Examination Council (the "FFIEC"), an interagency body composed of the principal federal entities that regulate banks and other financial

55 institutions, issued in final form its guidance on Credit Card Account Management and Loss Allowance Practices (the "Guidance"). The Guidance covers five areas: (i) credit line management, (ii) over-limit practices, (iii) minimum payment and negative amortization practices, (iv) workout and forbearance practices, and (v) certain income (fee) recognition and loss allowance practices. The Guidance is generally applicable to all institutions under the supervision of the federal bank regulatory agencies that comprise the FFIEC, although it is primarily the result of the bank regulators' identifying in recent examinations of other credit card lenders practices deemed by them to be inappropriate, particularly, but not exclusively, with regard to subprime lending programs. American Express does not have any lending programs that target the subprime market. American Express does not believe that the Guidance will have any material impact on American Express' businesses or practices, nor will the Guidance mandate any changes to American Express' practices. The American Express Consumer Travel business provides travel services to consumers through: American Express-owned travel service offices; American Express Representatives, which are travel offices independently owned by third parties; and American Express Call Centers, which offer travel services to Platinum Card®, Centurion® Card and other Cardmembers. Through these facilities, Cardmembers are able to receive service in person, by phone or by fax, in addition to American Express' online servicing. The Consumer Travel business also operates a wholesale travel business selling travel packages to other retail travel agents. Since a large number of American Express' consumer and small business Cardmembers are also active leisure travelers, TRS seeks to use its consumer travel network to better serve its customers and grow the business despite extremely challenging competitive pressures. See pages 57-58 for a discussion of competition in the travel industry. TRS' travel network of more than 1,700 retail travel locations is important in supporting the American Express brand and providing customer service throughout the world. TRS continually evaluates this structure to determine the best way to leverage the strength of the travel network. At the same time, TRS is developing ways to better serve the travel consumer, including 1-800 type services and Internet-based products and services.

Global Corporate Services TRS' Global Corporate Services Group ("GCSG") provides Corporate Card, Corporate Travel, Corporate Purchasing Card ("CPC") and consulting services to businesses around the world. In addition to being a leading provider of such services to large-market businesses, GCSG has a strong presence among middle-market companies (those in the U.S. with annual revenues of $10 million to $1 billion and annual travel and entertainment expenditures between $100,000 and $10 million). The corporate middle market is a rapidly expanding segment that offers great opportunity for growth. In 2002, GCSG invested heavily in the middle market, expanding marketing efforts and adding sales staff in 13 countries. It also launched the Savings at WorkSM program, which provides U.S. mid-sized firms with significant discounts on everyday products and services such as office supplies and a range of business services, and it enhanced American Express' product offerings to mid-sized firms in other parts of the world. Companies are offered services through the American Express* Corporate Card, which is a charge card issued to individuals through a corporate account established by their employer for business purposes. The CPC assists large- and middle-market companies in managing indirect spending, including traditional purchasing administration expenses. The CPC is used by corporations to buy everyday goods and services, such as office supplies and industrial supplies and equipment, in 23 markets around the world. This type of spending by corporations is less susceptible to downturns in difficult economic times than is traditional travel and entertainment spending, and is thereby helping to diversify American Express' spending mix. During 2002, TRS added or expanded Corporate Card and Corporate Purchasing Card relationships around the world including those with Accenture, Halliburton, Hilton Hotels, PepsiCo, Procter & Gamble, Seagate Technology and Unisys Corporation. Competition in the commercial card (Corporate Card and CPC) business is increasingly intense at both the card network and card issuer levels. At the network level, Diners Club remains a significant global competitor. In addition, both VISA and MasterCard have stepped-up efforts to support card

56 issuers such as U.S. Bank, JP Morgan Chase, GE Financial Services and Citibank (in the U.S. and globally), who are willing to build and support data collection and reporting necessary to satisfy customer requirements. In the past few years, MasterCard has promoted enhanced web-based support for its corporate card issuing members, and VISA International supported the creation of a joint venture by a number of its member banks from around the world to compete against GCSG and Diners Club for the business of multinational companies. The key competitive factors in the commercial card business are (i) the ability to capture and deliver detailed transaction data and expense management reports; (ii) the number and types of businesses that accept the cards; (iii) pricing; (iv) the range and innovativeness of products and services to suit business needs; (v) quality of customer services; and (vi) global presence. For a discussion of competition relating to the Card issuing business, see pages 54-55. GCSG offers integrated commercial card and business travel services in the United States and certain foreign countries to compete for the business traveler and to provide client companies with a customized approach to managing their travel and entertainment budgets. Clients are provided an information package to plan, account for and control travel and entertainment expenses. CPC solutions can also be packaged as complimentary expense management and reporting tools. GCSG provides a wide variety of travel services to customers traveling for business and is one of the leading business travel providers worldwide. For corporate travel accounts, GCSG provides corporate travel policy consultation, management information systems and group and incentive travel services in 37 markets worldwide, of which 31 are proprietary operations and six are managed through joint ventures. GCSG faces vigorous competition in the United States and abroad from numerous other traditional and online travel management companies, as well as from direct sales by airlines and other travel suppliers. Competition among travel agencies is mainly based on price, service, convenience and proximity to the customer. In addition, competition comes from corporate customers themselves as many companies have become accredited as in-house corporate travel agents. In 2001, five of the largest U.S. carriers launched Orbitz, an online travel agency from which travelers are able to access information regarding a large selection of airfares from many airlines, including web-only fares, which may in some cases be lower than fares that can be obtained through traditional travel agencies. The website also provides offers on car rentals and other travel. In addition, Orbitz provides access to rates on hotel rooms in both independent hotels and hotels in certain major national chains, which may be lower than rates that could be obtained through traditional travel agencies. While Orbitz is targeted primarily toward the leisure traveler, business travelers are increasingly using Orbitz and other airline-owned websites to gain access to web-only fares. Other online agencies, formerly specializing in targeted sales to leisure travelers, such as Expedia and Travelocity, have begun to pursue corporate travel customers, initially in the small and mid-sized markets. In 2002, GCSG expanded its presence in Asia by opening joint venture operations through CITS (China International Travel Services) American Express Travel Services Limited, launching business travel centers in Beijing and Shanghai. This venture serves multinational, pan-regional and local corporations traveling to and from the People's Republic of China. The CITS American Express partnership is the first corporate travel joint venture fully licensed to sell both domestic and international airline tickets in China. Airlines have continued efforts to reduce their distribution expenses. For example, in March 2002, all of the major U.S. airlines and some international carriers announced that they would no longer pay any "base" commissions to travel agents for tickets sold in the U.S. and Canada for all domestic and international travel. In addition, in 2002, airlines continued efforts to move corporate customers to their own proprietary direct billing and payment products, such as UATP, and made attempts to limit the use of credit and charge cards for web-only corporate fares. In addition, airlines continue to maintain and expand alliances for marketing, code share and other service delivery purposes. Those actions and the impact of the economic slowdown have caused some independent travel agencies to go out of business and, as referenced above, forced others to seek consolidation opportunities. Consolidation of travel agencies is expected to continue as agencies seek to better serve national and multinational business travel clients and negotiate more effectively with the airlines. It is also expected that travel agencies will continue to look for expense reduction opportunities such as focusing on electronic ticketing and interactive travel fulfillment solutions.

57 GCSG has historically received commissions and fees for ticketing and reservations from airlines and other travel suppliers, and management and transaction fees from certain corporate travel accounts. The ongoing trend of airline alliances, airline websites permitting travelers to book business directly and airline commission rate reductions continues to result in decreased business travel revenue for travel companies and price increases for travelers, fewer opportunities for data aggregation for corporations and greater pressure on the GCSG travel business. Throughout 2002, GCSG, similar to other travel management companies, tested and utilized on behalf of its customers multiple technology tools to assure access to inventory and all airfares, formerly classified as "web-only" fares. Late in 2002, GCSG announced its TravelBahnSM Distribution Solution, a proprietary network alternative, which will provide access to all American Airlines inventory and fares for American Express Corporate Travel customers. GCSG continues to modify its business model and invest in new technologies to address these ongoing industry challenges. For example, GCSG has been successful in its efforts to rely less on commission revenues from suppliers, such as airlines or hotels, and now relies more on customers to pay transaction fees for its travel services. In 2002, only 28 percent of U.S. corporate travel revenues came from airlines, hotels, rental car companies and other suppliers, and 72 percent came from customers. A few years ago, the mix was approximately the reverse. These changes to GCSG's sources of revenue enabled Corporate Travel to successfully manage its business in one of the toughest years in recent history for the business travel industry. The travel industry continues to be impacted by world events and challenging economic conditions. Threat of war, terrorism and a general economic downturn have depressed both business and leisure travel and may continue to do so. In 2002, both United Airlines and USAir filed for Chapter 11 bankruptcy protection in the U.S., while both airlines continue to operate with reduced capacity in attempts to lower their cost base. 2002 also saw the significant rise in popularity and profitability for the low-cost carrier segment in the U.S., Europe and Asia. In the past, this segment had primarily focused on leisure travelers, while 2002 saw a dramatic rise in the number and percentage of business travelers using these low-cost airlines. GCSG took advantage of the downturn in travel to step up sales efforts. It was awarded the corporate travel business of companies including Monsanto Company; Nestle USA; Nokia, Inc.; Panasonic; and The Shell Company of Australia Limited. As in other areas of American Express, GCSG has moved many of its business processes and customer servicing online to reduce costs, improve processes and enhance the quality of customer service. By year-end 2002, 16 percent of all corporate travel transactions in the U.S. were conducted online. This online delivery optimizes savings for corporate customers and enhances GCSG profitability through lower-cost servicing. Expanding on the momentum from U.S. corporations migration to booking their company travel online, GCSG opened two new E-Fulfillment Centers in Europe - in Stockholm and Nice - to complement the North American E-Fulfillment Center in Miami Lakes, Florida, which has been operational since 2001. By shifting travel reservations from the telephone onto a website, GCSG is able to improve substantially employee productivity and drive down costs. Employees at online fulfillment centers process almost 7,000 transactions per year compared to approximately 1,400 for offline servicing. Similarly, GCSG's Internet application for the corporate card segment, Amex@Work, gives clients a faster, simpler way to work with American Express. During 2002, GCSG offered American Express@Work " Expense Reporting and Purchase Reconciliation, an online tool which helps companies and their employees track and file expense reports and reconcile everyday purchases. TRS also enhanced American Express@Work by adding a searchable database that corporate travel managers can access to keep track of employees' travel reservations. Over 11,000 corporate account administrators now go online to perform most of their account maintenance, rather than contacting American Express by phone, fax or mail. Since its launch in 1999, the percentage of corporate card maintenance transactions completed online through Amex@Work has grown significantly and this channel now handles 63 percent of such transactions. GCSG has also developed relationships with a number of e-commerce firms to provide a faster, more efficient way for customers to purchase office supplies and related products using the CPC. In March 2002, GCSG announced that it has entered into an agreement with IBM to jointly develop a web- based expense reporting and reconciliation tool designed to reduce the cost of managing everyday

58 business expenses. Under the Agreement, GCSG plans to market the application as part of its American Express@Work suite of online expense management tools. GCSG, through its Consumer Travel International and Foreign Exchange Services Group ("CTI & FES"), provides travel services, currency exchange and Cardmember services through a retail network of American Express-owned and franchised offices. CTI & FES expanded its global retail presence in Australia and Southeast Asia, and extended its partnerships in India, Thailand, Turkey and the United States. TRS further expanded its retail network through aggressive growth at international airport locations; Paris' Charles de Gaulle airport and London's Heathrow airport being notable recent additions to the network. CTI & FES also provides electronic funds transfers through an international payments service. Offered in the U.S., Australia and the UK, this service offers small businesses and banking customers an Internet-based source to make payments to foreign suppliers.

Global Travellers Cheque and Prepaid Services American Express, through its Global Travelers Cheque and Prepaid Services Group ("TCPS"), is a leading issuer of travelers checks. American Express also issues Money Order and Official Check products in the United States, and the TravelFunds Direct® product, which provides direct delivery of foreign bank notes and Travelers Cheques in selected markets. The American Express® Travelers Cheque ("Travelers Cheque" or "Cheque") is sold as a safe and convenient alternative to currency. The Travelers Cheque is a negotiable instrument, has no expiration date and is payable by the issuer in the currency of issuance when presented for the purchase of goods and services or for redemption. In 2002, TCPS launched enhanced services for Travelers Cheque customers, including passport and credit replacement assistance. Gift Cheques, a type of Travelers Cheque, are used for gift-giving purposes. Travelers Cheques are issued in eight currencies, including a Euro-denominated Travelers Cheque, both directly by American Express and through joint venture companies in which American Express generally holds an equity interest. Gift Cheques are issued in two currencies, U.S. dollars and Canadian dollars. As a result of the final conversion in early 2002 of certain European currencies to the Euro, American Express ceased selling the French franc, German mark and Dutch guilder Travelers Cheques as of the end of 2001. However, American Express will continue to honor, redeem, and refund Cheques in these currencies for Euros, since they do not expire. American Express Travelers Cheques are sold through a broad network of selling outlets worldwide, including travel offices of American Express, its affiliates and representatives; travel agents; commercial banks; savings banks; savings and loan associations; credit unions; and other financial, travel and commercial businesses. American Express sometimes compensates selling outlets for their sale of Travelers Cheques. In 2002, American Express' sale of Travelers Cheques and Gift Cheques over the Internet continued to grow strongly. During the year, overall Travelers Cheque sales decreased 6.2 percent globally, and consumer Gift Cheque sales increased approximately 14 percent. While Gift Cheque growth can be attributed to new advertising and marketing programs, it is believed that the lag in Travelers Cheque sales was driven by the continuing global economic slowdown and the reduction in both business and personal travel. Partnerships with sellers continue to be critical to the Travelers Cheque Group as TRS expands its sales distribution network. In 2002, TCPS lost the account of the American Automobile Association, a major seller in the United States, but gained a number of new sellers, including Abbey National in the UK; Saudi American Bank; STA Travel in Germany; and Tokyo Credit Service. The proceeds from sales of Travelers Cheques issued by American Express are invested predominantly in highly rated debt securities consisting primarily of intermediate- and long-term state and municipal obligations. Issuers of travelers checks and money orders are regulated under most states' "money transmitter" laws. These laws require travelers check issuers to obtain licenses, to meet certain safety and soundness criteria, to hold outstanding proceeds of sale in highly rated and secure investments, and to provide detailed reports. Many states audit Travelers Cheque and Money Order licensees annually. In addition, Travelers Cheque and Money Order issuers are required to comply with state and foreign unclaimed and

59 abandoned property laws. The state laws require issuers to pay to states the face amount of any Travelers Cheque or Money Order that is uncashed or unredeemed after a specified period of years. Outside the U.S., there are varying requirements, including some countries with requirements similar to those in the U.S. On December 31, 2001, new federal anti-money laundering regulations became effective. These regulations required, among other things, the registration of traveler check and money order issuers as "Money Service Businesses" and compliance with anti-money laundering recording and reporting requirements by issuers and selling outlets. For a discussion of other anti-money laundering legislative initiatives affecting the Travelers Cheque Group, see page 63 under the heading "Corporate and Other." Travelers Cheques compete with a wide variety of financial payment products. Consumers may choose to use their credit or charge cards when they travel instead of carrying Travelers Cheques, although a Travelers Cheque would not typically be an acceptable substitute for most transactions made with credit or charge cards. Other payment mechanisms that might substitute for Travelers Cheques include cash, checks, other brands of travelers checks, debit cards and cards accepted at national and international automated teller machine networks. The principal competitive factors affecting the travelers check industry are (i) the availability to the consumer of other forms of payment; (ii) the amount of the fee charged to the consumer; (iii) the availability and acceptability of travelers checks throughout the world; (iv) the compensation paid to, and frequency of settlement by, selling outlets; (v) the accessibility of travelers check sales and refunds; (vi) the success of marketing and promotional campaigns; and (vii) the ability to service the check purchaser satisfactorily if the checks are lost or stolen. TCPS has also grown its Prepaid Card business. In 2002, the Group launched a general retail gifting product, the American Express Gift Card, and continued to offer the Be My Guest®' Card, a Prepaid Card product used to give the gift of restaurant dining. TCPS is continually looking into additional prepaid products both individually and through partnerships with others.

Other Products and Services Interactive Services and New Businesses ("TS&NB") leverages interactive technologies to develop new businesses and enhance existing businesses. IS&NB leads and coordinates the deployment of American Express' enterprise-wide interactive strategy with a focus on providing Internet and interactive capabilities to meet customer needs. American Express continued to leverage the Internet to lower costs and improve service quality. During 2002, it expanded the number of services and capabilities available to customers online and increased their utilization. For example, within the U.S., approximately 80 percent of American Express' card servicing transactions are now available online. American Express now has more online interactions with customers than it does by telephone or in person. At year-end, approximately nine million Cards were enrolled in "Manage Your Card Account Service." This service enables Cardmembers to review and pay their American Express bills electronically, view their Membership Rewards n accounts and conduct various other functions quickly and securely online. American Express now has an online presence in over 50 markets. American Express Tax and Business Services Inc. ("TBS") is a tax, accounting, consulting and business advisory firm focused primarily on small and middle-market companies. TBS provides a wide range of services for a fee, including tax planning and accounting, litigation support, business reorganization, business advisory, business technology and other consulting services. In addition, TBS has expertise in a variety of industries, including health care, real estate, manufacturing and distribution, among others. TBS employs CPAs but is not a licensed CPA firm. Attestation services for its clients are available from licensed public accounting firms with whom TBS has continuing professional services relationships. TBS has more than 50 offices in 17 states with approximately 2,700 employees. TRS, through American Express Publishing, also publishes luxury lifestyle magazines such as Travel+Leisure1', T+L Family, a supplement to Travel+Leisure, T&L Golf", Food & Wine1' and Departures®; travel resources such as SkyGuide"; business resources such as the American Express Appointment Book and Fortune Small Business magazine; a variety of general interest, cooking, travel, wine, financial and time management books; branded membership services; as well as directly sold and licensed products. In 2002, American Express Publishing introduced a Spanish language version of

60 Travel+Leisure, the Blue from American Express Appointment Book and SkyGuide GO, a supplement to SkyGuide geared to business travelers. TRS also has a custom publishing group and is expanding service-driven websites such as: travelandleisure.com, foodandwine.com, departures.com, tlgolf.com, tlfamily.com and skyguide.net.

Foreign Operations American Express derives a significant portion of its revenues from the use of the Card, Travelers Cheques, travel and other financial products and services in countries outside the United States and continues to broaden the use of these products and services outside the United States. (For a discussion of American Express' revenue by geographic region, see Note 18 to American Express' Consolidated Financial Statement, which can be found on pages 80 through 82 of American Express' Annual Report to Shareholders.) Political and economic conditions in these countries (including the availability of foreign exchange for the payment by the local card issuer of obligations arising out of local Cardmembers' spending outside such country, for the payment of card bills by Cardmembers who are billed in other than their local currency, and for the remittance of the proceeds of Travelers Cheque sales) can have an effect on American Express' revenues. Substantial and sudden devaluation of local Cardmembers' currency can also affect their ability to make payments to the local issuer of the card in connection with spending outside the local country. The majority of AEB's revenues are derived from business conducted in countries outside the United States. Some of the risks attendant to those operations include currency fluctuations and changes in political, economic and legal environments in each such country. As a result of its foreign operations, American Express is exposed to the possibility that, because of foreign exchange rate fluctuations, assets and liabilities denominated in currencies other than the United States dollar may be realized in amounts greater or lesser than the United States dollar amounts at which they are currently recorded in American Express' Consolidated Financial Statements. Examples of transactions in which this may occur include the purchase by Cardmembers of goods and services in a currency other than the currency in which they are billed; the sale in one currency of a Travelers Cheque denominated in a second currency; foreign exchange positions held by AEB as a consequence of its client-related foreign exchange trading operations; and, in most instances, investments in foreign operations. These risks, unless properly monitored and managed, could have an adverse effect on American Express' operations. American Express' policy in this area is generally to monitor closely all foreign exchange positions and to minimize foreign exchange gains and losses, for example, by offsetting foreign currency assets with foreign currency liabilities, as in the case of foreign currency loans and receivables, which are financed in the same currency. An additional technique used to manage exposures is the spot and forward purchase or sale of foreign currencies as a hedge of net exposures in those currencies as, for example, in the case of the Cardmember and Travelers Cheque transactions described above. Additionally, Cardmembers may be charged in United States dollars for their spending outside their local country. American Express' investments in foreign operations are hedged by forward exchange contracts or by identifiable transactions, where appropriate.

Corporate and Other The American Express brand and its attributes - trust, security, integrity, quality and customer service - are key assets. American Express continues to focus on the brand by educating employees about its attributes and by further incorporating these attributes into its programs, products and services. During the year, American Express continued its strategy to obtain patents for its businesses. In 2002, American Express filed more than 100 U.S. and foreign patent applications. American Express has devoted substantial resources to its global technology platforms and undertaken significant efforts to protect and manage its proprietary systems and the data collected and stored on such systems. In this vein, American Express has continued to focus on ways to secure such systems from "hackers" and other unauthorized users. American Express uses information about its customers to develop products and services and to provide personalized services. Regulatory activity in the areas of privacy and data protection continues to grow worldwide and is generally being driven by the growth of technology and concomitant concerns

61 about the rapid and widespread dissemination and use of information. Federal regulations implementing the Gramm-Leach-Bliley Act ("GLBA") became effective on July 1, 2001. GLBA provides for disclosure of a financial institution's privacy policies and practices and affords customers the right to "opt out" of the institution's disclosure of their personal financial information to unaffiliated third parties (with limited exceptions). This legislation does not preempt state laws that afford greater privacy protections to consumers, and several states and municipalities have adopted such legislation. American Express will continue its efforts to safeguard the data entrusted to it in accordance with applicable law and its internal data protection policies, including taking steps to reduce the potential for identity theft, while seeking to properly collect and use data to achieve its business objectives. In addition, provisions of the Fair Credit Reporting Act that preempt states from enacting legislation regarding the sharing of customer information among affiliates and regarding certain uses of consumer report information expire on January 1, 2004. Without further Congressional action, states would be permitted to enact laws that place greater restrictions on how customer data may be shared among Company affiliates and greater restrictions on American Express' use of consumer report data. If such laws were enacted, complying with varying state requirements might adversely affect American Express' ability to provide effectively personalized services to its customers. Federal privacy rules promulgated under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") became effective on April 14, 2003. The rules address the privacy rights of health care customers and the obligation of American Express when obtaining and using protected health information. In addition, both HIPPA and GLBA regulations require the adoption of security standards to safeguard the integrity, confidentiality and access of health and financial customer data. In 2002, American Express outsourced most of its technology operations work to IBM. This arrangement, which has a seven-year term with options to extend, will enable American Express to benefit from IBM's expertise while lowering its information technology costs. IBM has taken on responsibility for managing most of American Express' day-to-day technology operations functions, including mainframe, midrange and desktop systems; web hosting; database administration; help desk services; and data center operations. American Express' Technologies organization continues to retain its core technology competencies, including information technology strategy, managing strategic relationships with technologies' partners, developing and maintaining applications and databases, and managing the technologies' portfolios of its businesses. In the U.S., the USA PATRIOT Act (the "Patriot Act") was enacted in October 2001 in the wake of the September llth terrorist attacks. The Patriot Act contains a wide variety of provisions aimed at fighting terrorism, including provisions aimed at attacking terrorists' ability to access and move funds used in support of terrorist activities. Among other things, the Patriot Act directs federal regulators, led by the Secretary of the Treasury, to promulgate regulations or take other steps to require financial institutions to establish anti-money laundering programs that meet certain standards, including expanded reporting and enhanced information gathering and record-keeping requirements. While American Express has long maintained money laundering prevention programs in its businesses, the Secretary of the Treasury has issued regulations under the Patriot Act applicable to certain of American Express' business activities conducted within AEB, TRS, AEFA and their subsidiaries, prescribing minimum standards for such anti-money laundering programs, and it is anticipated that further regulations applicable to these and to certain of American Express' other businesses will be issued in the future. For example, in April 2002, the U.S. Treasury issued draft regulations applicable to operators of credit card networks (such as Visa, MasterCard, Diners Club, Discover and American Express) that would require credit card networks to have risk-based programs to screen institutions that are licensed to issue cards or acquire transactions from merchants on their networks, in order to help prevent these networks from being used for money laundering and financing terrorist activities. American Express has initiated such a program for its Global Network Services business. Treasury will also be issuing regulations regarding customer identification requirements applicable to many of American Express' businesses. American Express intends to take steps to comply with any regulations that are ultimately promulgated. In addition, American Express will take steps to comply with anti-money laundering initiatives adopted in other jurisdictions in which it conducts business.

62 Subsidiaries TRS operates its business activities through numerous subsidiary corporations. The most significant of these subsidiaries reflected in TRS' Consolidated Financial Statements are the following: American Express Credit Corporation American Express International, Inc. Delaware Incorporation Delaware Incorporation 301 North Walnut Street Suite 1002 200 Vesey Street Wilmington, Delaware 19801-2919 New York, New York 10285 American Express Centurion Bank American Express Limited Utah Incorporation Delaware Incorporation 4315 South 2700 West 200 Vesey Street Salt Lake City, Utah 84184 New York, New York 10285

American Express Europe Limited Delaware Incorporation Amex House Edward Street Brighton, England BN2 2LP

TRS estimates that approximately 85 percent of its consolidated assets are represented by the consolidated assets of the above subsidiaries and their subsidiaries.

63 DIRECTORS AND OFFICERS OF TRS The Directors and Executive Officers of TRS and their principal occupations are as follows:

Name Principal Occupation within TRS Directors: Kenneth I. Chenault Chairman & Chief Executive Officer Jonathan S. Linen Vice Chairman Louise M. Parent General Counsel

Executive Officers who are not Directors: Alfred F. Kelly, Jr President - U.S. Consumer and Small Business Services Group Edward P. Gilligan President - Global Corporate Services Group David C. House President - Global Establishment Services and Travelers Cheque Group James M. Cracchiolo President - Global Financial Services Group David L. Yowan Treasurer John D. Koslow Assistant Treasurer Stephen P. Norman Secretary Michael Kuchs Assistant Secretary Anne C. Schepp Insurance Officer

The Directors of TRS have no interest or activities outside TRS which are significant with respect to TRS. Mr. Chenault also serves as Chairman of the Board & Chief Executive Officer of American Express; Mr. Linen also serves as Vice Chairman of American Express; and Ms. Parent also serves as Executive Vice President and General Counsel of American Express. The business address of each Director and each Executive Officer is World Financial Center, 200 Vesey Street, New York, New York 10285.

64 CAPITALIZATION OF TRS

The following table sets forth the consolidated capitalization of TRS as of September 30, 2003: September 30, 2003 (unaudited) (in millions) Long-term indebtedness: Total long-term indebtedness $ 17,487 Shareholder's equity: Common shares: authorized, 200 shares of no par value; issued and outstanding, 102 shares 1 Capital surplus 1,539 Retained earnings 6,505 Other comprehensive loss, net of tax: Net unrealized securities gains 316 Net unrealized derivatives losses (454) Foreign currency translation adjustments (167) Minimum pension liability (41) Accumulated other comprehensive loss (346) Total shareholder's equity 7,699 Total long-term indebtedness and shareholder's equity $ 25,186

There has been no material change in the capitalization of TRS since September 30, 2003. As of September 30, 2003, TRS has no cumulative warrants or convertible notes outstanding and has not issued any notes or incurred further indebtedness.

65 SELECTED FINANCIAL INFORMATION OF TRS

The following consolidated financial information of TRS for the nine months ended September 30, 2003 (derived from TRS' unaudited financial statements) and for each of the years ended December 31, 2002 and 2001 (derived from TRS' audited consolidated financial statements) should be read in conjunction with the respective financial statements and with the detailed information contained elsewhere herein. Nine months ended September 30, Years Ended December 31, 2003 2002 2001 Operating Data:* Revenues: Discount revenue 6,332 7,911 7,694 Other commissions and fees 1,377 1,860 1,828 Net card fees 1,359 1,719 1,666 Cardmember lending net finance charge revenue 1,411 1,689 1,600 Travel commissions and fees 1,053 1,401 1,528 Securitization income, net 968 1,207 974 Interest and dividends, net 438 748 864 Other 930 1,166 1,143 Total revenues 13,868 17,701 17,297 Expenses: Human resources 2,805 3,490 3,977 Marketing, promotion, rewards and cardmember services 2,654 3,005 2,638 Provision for credit losses and other, net of recoveries 1,603 2,533 2,649 Professional services 1,385 1,689 1,369 Interest 650 1,139 1,579 Occupancy and equipment 822 1,096 1,219 Communications 334 441 459 Restructuring charges (4) 414 Disaster recovery charge 79 Other 1,012 1,331 1,012 Total expenses 11,265 14,720 15,395 Pretax income 2,603 2,981 1,902 Income tax provision 842 927 508 Net income 1,761 $ 2,054 $ 1,394

See "TRS — Management's Discussion and Analysis of Financial Condition and Results of Operations."

66 September 30, December 31, 2003 2002 2007 Balance Sheet Data:* (in millions) Assets: Cash and cash equivalents 2,490 $ 2,768 3,532 Investments 9,974 11,783 9,554 Cardmember accounts receivable, accrued interest and other receivables, less credit reserves 29,277 28,726 29,089 Loans, less credit reserves 24,662 23,772 22,663 Land, buildings and equipment at cost, less accumulated depreciation 2,066 1,868 1,836 Other assets 4,838 5,061 4,719 Total assets 73,307 $ 73,978 $ 71,395 Liabilities and Shareholder's Equity: Customers' deposits 7,717 7,747 4,988 Travelers Cheques outstanding 6,778 6,623 6,190 Money orders and drafts outstanding 595 686 1,206 Accounts payable 7,067 6,034 5,847 Short-term debt 16,617 21,559 31,739 Long-term debt 17,487 15,775 7,013 Other liabilities 8,829 8,115 7,315 TotaJ liabilities 65,090 66,539 64,298 Redeemable preferred stock'1' 518 518 518 Shareholder's equity: Common shares: authorized, 200 shares of no par value; issued and outstanding, 102 shares(2) 1 1 1 Capital surplus 1,539 1,562 1,688 Retained earnings 6,505 5,707 5,080 Other comprehensive loss, net of tax: Net unrealized securities gains 316 319 186 Net unrealized derivatives losses (454) (526) (277) Foreign currency translation adjustments (167) (101) (11) Minimum pension liability (41) (41) (88)

Accumulated other comprehensive loss (346) (349) (190) Total shareholder's equity 7,699 6,921 6,579 Total liabilities and shareholder's equity 73,307 $ 73,978 $ 71,395

(1) The redeemable preferred stock reflected in the Liabilities and Shareholder's Equity section above is a 10 year mandatory redeemable non-voting security paying a fixed rate of interest and dividend. Since this security is redeemable and has a limited life, it is classified as a liability rather than equity.

(2) The 102 shares of outstanding common stock are the only shares representing TRS' capital stock.

* See "TRS — Management's Discussion and Analysis of Financial Condition and Results of Operations."

67 TRS — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Selected Statistical Information Years Ended December 31, 2002 and 2001 The following table presents selected statistical information of TRS for the nine months ended September 30, 2003 and the years ended December 31, 2002 and 2001: Nine months ended Years ended September 30, December 31, Percentage 2003 2002 2001 Inc/(Dec) (in billions, except percentages and where indicated) % Total Cards in Force11J (millions): United States 36.2 35.1 34.6 2 Outside the United States 23.4 22.2 20.6 8 Total 59.6 57.3 55.2

Basic Cards in Force<2) (millions): United States 27.3 26.9 26.8 Outside the United States 19.3 18.3 15.6 Total 46.6 45.2 42.4

Card Billed Business: United States $ 189.8 $ 234.1 $ 224.5 4 Outside the United States 63.9 77.3 73.5 5 Total S 253.7 $ 311.4 S 298.0

Travelers Cheque Sales $ 14.5 $ 22.1 $ 23.5 (6) Average Travelers Cheques Outstanding $ 6.6 $ 6.5 $ 6.4 2 Travel Sales $ 11.3 $ 15.5 $ 17.2 (10)

111 Total Cards in Force consists of all Cards, including Optima, supplemental, network and Corporate Cards. (2' Basic Cards in Force generally represents the number of Card relationships, which includes all Cards other than supplemental Cash and original Options Cards tied to basic Card products.

Results of Operations Years Ended December 31, 2002 and 2001 In 2002, TRS1 net revenues rose 2 percent as a result of greater net finance charge revenue, greater securitization income, higher cardmember spending and increased cards-in-force, partially offset by lower travel commissions and fees, Travelers Cheque investment income and other revenues. These increases reflect the benefits of higher net finance charge revenue from the cardmember lending portfolio due to improved spreads and growth in worldwide billed business. Discount revenue rose 3 percent during 2002 as a result of a 4 percent increase in billed business partially offset by a lower discount rate. The 4 percent increase in billed business in 2002 primarily resulted from a 4 percent growth in cards-in-force and higher spending per basic cardmember worldwide. U.S. cards-in-force rose 2 percent in 2002 reflecting the impact of more selective consumer card and small business acquisition activities during the past year in light of weak economic conditions. International cards-in-force increased 8 percent in 2002 due to growth in proprietary card products, as well as network card growth. Proprietary card growth was slower during 2002, reflecting attrition due to adverse business

68 conditions in Argentina, Brazil and Hong Kong. Cards-in-force growth accelerated worldwide in the second half of 2002, including the addition of over 900,000 cards in the fourth quarter. U.S. billed business rose 4 percent reflecting 8 percent growth within the consumer card business (on 10 percent higher transaction volume), 4 percent growth in small business services volume and a 3 percent decline within Corporate Services. U.S. non-T&E related volume categories (which represented approximately 63 percent of U.S. billed business during 2002) grew 9 percent versus last year while U.S. T&E volumes declined 2 percent. Worldwide airline related volume declined 6 percent on a single-digit decline in the average airline charge and flat transaction volumes. Net card fees increased slightly in 2002 reflecting the growth in cards-in-force. Average fee per card remained at $34 in both 2002 and 2001. Lending net finance charge revenue rose 4 percent in 2002. The net interest yield on the U.S. portfolio rose, as a decrease in the proportion of the portfolio on introductory rates and the benefit of declining funding costs were partially offset by the evolving mix of products toward more lower-rate offerings. Additionally, there was a higher level of securitizations in 2002 compared to the prior year. Travel commissions and fees declined 8 percent in 2002 as a result of a 10 percent contraction in travel sales reflecting the weaker corporate travel environment throughout the year. Securitization income increased 35 percent in 2002 as a result of a higher average balance of cardmember lending securitizations and improved spreads. Other revenue decreased 10 percent in 2002 as a result of lower interest income on investment and liquidity pools held within card funding vehicles. Marketing and promotion expense increased 18 percent in 2002 from the launch of the new brand advertising campaign, the introduction of the new charge cards with Membership Rewards built-in and the Cash Rebate card, more loyalty marketing, and an increase in selected card acquisition activities. The charge card provision on card products decreased 20 percent in 2002 on strong credit quality reflected in an improved past due rate and loss ratio. The net loss ratio decreased to 0.38% in 2002 from 0.42% in 2001. The worldwide lending provision rose in 2002 reflecting portfolio growth and increased reserve coverage levels. The net write-off rate was 5.4% in 2002 versus 5.2% in 2001. Charge card interest expense declined 31 percent in 2002 due to a lower effective cost of funds and lower average receivable balance. In 2002, human resources expense decreased 12 percent as a result of a lower average number of employees, reflecting ongoing reengineering efforts and the impact of a technology outsourcing agreement. Other operating expenses increased 14 percent in 2002 due to higher costs related to cardmember loyalty programs, losses primarily from strategic investments versus gains in the prior year, as well as the impact of the technology outsourcing agreement, which transferred costs from human resources expense, although at a lower level. These increases were partially offset by reengineering initiatives and other cost containment efforts.

Financing Activities TRS funds its charge card receivables and cardmember loans using various funding sources, such as long- and short-term debt, medium-term notes, commercial paper and asset securitizations. In 2002, the company shifted its funding strategy to reduce its reliance on short-term debt; at December 31, 2002, short-term debt was 56 percent of total debt versus 80 percent a year ago. Charge card receivables are predominantly funded by Credco and its subsidiaries while funding for cardmember loans is primarily through Centurion Bank.

Securitizations The American Express Credit Account Master Trust (the Trust) securitized $4.6 billion and $4.3 billion of loans in 2002 and 2001, respectively, through the public issuance of investor certificates. During 2002 and 2001, $2 billion and $1 billion, respectively, of investor certificates that were previously issued by the Trust matured. The securitized assets consist of loans arising in a portfolio of designated consumer American Express Credit Card, Optima Line of Credit and Sign & Travel/Extended Payment Option revolving credit accounts or features owned by Centurion Bank, a wholly-owned subsidiary of TRS, and,

69 in the future, may include other charge or credit accounts, features or products. At December 31, 2002 and 2001, TRS had a total of $16.9 billion and $14.3 billion, respectively, of Trust-related securitized loans which are not on the Consolidated Balance Sheets. In early 2003, the company securitized an additional $920 million of loans. Under the terms of the Trust pooling and servicing agreement, the occurrence of certain events could result in the Trust being required to pay down the inventor certificates before their expected payment dates over an early amortization period. Examples of these events include: the failure or the decline of the securitized assets to generate specified yields over a defined period of time, and the decline of the total of the securitized assets' principal balances below a specified percentage of total investor certificates outstanding after the failure to add additional securitized assets as required by the agreement. The company does not expect an early amortization event to occur. In the event of a pay down, $15.4 billion of assets would revert to the balance sheet and an alternate source of funding of a commensurate amount would have to be obtained. Had a total pay down hypothetically occurred at a single point in time at December 31, 2002, the one-time negative effect on results of operations would have been approximately $693 million pretax, to re-establish reserves and accelerate amortization of the interest- only strip related to the $16.9 billion of cardmember loans that would revert to the balance sheet. The American Express Master Trust (the Master Trust) securitizes charge card receivables generated under designated American Express Card, Gold Card and Platinum Card consumer accounts through the issuance of trust certificates. In 2002 and 2001, the Master Trust securitized $1.8 billion and $750 million, respectively, which remain on the Consolidated Balance Sheets. In 2001, $600 million of accounts receivable trust certificates that were previously issued by the Master Trust matured from the charge card securitization portfolio. The Master Trust specifies events, the occurrence of which would result in a pay down. The company does not expect a pay down to occur. While virtually no financial statement impact would result from a pay down, an alternate source of funding for $4.8 billion of receivables would have to be obtained. With respect to both the Trust and the Master Trust, a decline in the actual or implied short-term credit rating of TRS below A-l/P-1 will trigger a requirement that TRS, as servicer, transfer collections on the securitized assets to investors on daily, rather than a monthly, basis or make alternative arrangements with the rating agencies so as to allow TRS to continue to transfer collections on a monthly basis. Such alternative arrangements include obtaining appropriate guarantees for the performance of the payment and deposit obligations of TRS, as servicer. TRS also securitizes equipment lease receivables. At December 31, 2002 and 2001, the amount sold and outstanding to third party investors was $254 million and $675 million, respectively. These sales result in a reduction of interest expense and provisions for losses, as well as servicing revenue, all of which are insignificant to the company's results of operations. Other Financing Activities TRS, primarily through Credco, maintained commercial paper outstanding of approximately $11.2 billion at an average interest rate of 1.3 percent and approximately $18.0 billion at an average interest rare of 1.9 percent at December 31, 2002 and 2001, respectively. Additionally, during 2002, Credco issued an aggregate of $6.8 billion of medium-term notes at fixed and floating rates with maturities of one to three years. This reflects a shift in the funding strategy as the company is placing less reliance on short-term debt. In early 2003, Credco issued an additional $2 billion of floating rate medium- term notes, with maturities of one year that can be extended by the holders to up to five years. Bank notes issued and Fed Funds purchased by Centurion Bank totaled approximately $8 billion during 2002. Borrowings under bank lines of credit totaled $1.2 billion and $1.3 billion at December 31, 2002 and 2001, respectively. As of December 31, 2002, Credco had the ability to issue approximately $3.2 billion of debt securities under a shelf registration statement filed with the SEC, which amount was increased to approximately $18.2 billion in early 2003. In addition, approximately $10 billion of the company's unused lines of credit supporting TRS' commercial paper borrowings were allocated to Credco at December 31, 2002. These lines expire in increments from 2003 through 2007. Also, TRS had $2.6 billion in committed back-up lines of credit available at December 31, 2002 for other corporate purposes.

70 AMERICAN EXPRESS BANK LTD.

American Express Bank Ltd. ("AEB") is a wholly-owned indirect subsidiary of American Express and AEB was incorporated in Connecticut on February 19,1919. Its worldwide headquarters are located at World Financial Center, 200 Vesey Street, New York, New York 10285. American Express was founded in 1850 as a joint stock association and was incorporated under the laws of the State of New York in 1965. American Express and its subsidiaries are primarily engaged in the business of providing travel related services, financial advisory services and international banking services throughout the world. American Express common stock trades on The New York Stock Exchange and certain other stock exchanges in and outside the United States. As a publicly held company, American Express files periodic reports with the United States Securities and Exchange Commission. The information about AEB presented below is qualified in its entirety by reference to and should be read in conjunction with AEB's unaudited consolidated financial statements for the nine months ended September 30, 2003 and audited consolidated financial statements for each of the years ended December 31, 2002 and 2001, including the notes thereto. THE INSTRUMENTS ISSUED BY AEB ARE DIRECT, UNSECURED OBLIGATIONS OF AEB ONLY; THEY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS OF AEB OR ANY BANK OR NON-BANK SUBSIDIARY OF AEB; AND THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THEY ARE NOT THE OBLIGATION OF OR GUARANTEED BY AMERICAN EXPRESS OR ANY OTHER AMERICAN EXPRESS SUBSIDIARY OR AFFILIATE. FURTHER, INSTRUMENTS ISSUED BY AEB MAY BE SUBORDINATED AND/ OR MAY BE ISSUED AND PAYABLE BY A PARTICULAR BRANCH. AEB offers products that meet the financial service needs of three primary client groups: retail customers, wealthy individuals and financial institutions. AEB's operations are conducted principally through its global network of offices and subsidiaries. AEB does not directly or indirectly do business in the United States except as an incident to its activities outside the United States. Accordingly, the following discussion relating to AEB generally does not distinguish between United States and non- United States based activities. AEB's three primary business lines are Personal Financial Services ("PFS"), The Private Bank and the Financial Institutions Group ("FIG"). PFS provides consumer products in direct response to specific financial needs of retail customers and includes interest-bearing deposits, unsecured lines of credit, installment loans, money market funds, mortgage loans, auto loans and mutual funds. The Private Bank focuses on wealthy individuals by providing such customers with investment management, trust and estate planning and banking services, including secured lending. FIG provides financial institution clients with a wide range of correspondent banking products including international payments processing (wire transfers and checks), trade-related payments and financing, cash management, loans, extensions of credit and investment products, including third-party distribution of AEB offshore mutual funds. AEB also provides treasury and capital market products and services to its customers, including foreign exchange, foreign exchange options, derivatives and interest rate risk management products. In 2002, AEB continued to shift its business focus from corporate clients to individuals and financial institutions. This change aligns AEB's businesses more closely with the rest of American Express and positions it to play a more important role in the delivery of financial services on a global basis. Due in part to this change in emphasis, AEB reduced its corporate banking and other loans by $407 million at December 31, 2002 (as compared with $994 million at December 31, 2001), increased its consumer and private banking loans by $703 million, and increased its FIG loans by $231 million. Loans outstanding worldwide were approximately $5.3 billion at December 31, 2002 and $4.8 billion at December 31, 2001. In 2002, AEB acquired the Latin American private banking business of Schroder & Co. Trust Bank, Miami, to help AEB expand its Latin American private banking franchise. During 2002, The Private Bank client holdings rose 12 percent to a total of $13.9 billion, client volumes in PFS increased 15 percent and FIG-related non-credit fee revenue increased by 12 percent.

71 AEB continued to broaden its offering of offshore mutual funds, hedge funds and other managed products in 2002. AEB's fund products are sold by The Private Bank and PFS business lines to individual customers and by FIG through distributors in several foreign markets. AEB continued to expand the number of third-party relationships in Europe and Asia. During 2002, AEB signed more than 50 distribution agreements in Europe and Asia for the sale of its own American Express-branded products. AEB's assets under management in its fund products and related managed accounts totaled approximately $2.8 billion at year-end. AEB also added a number of investment portfolios in 2002 to its existing Luxembourg investment company umbrella fund and introduced new hedge fund investment portfolios. In addition, AEB created a new Luxembourg umbrella fund of funds, the American Express BestSelect Funds registered in Germany for sale to German investors. AEB's affiliate, American Express Financial Corporation ("AEFC"), provides investment management services to many of the Luxembourg umbrella fund portfolios and to the hedge funds. AEB also continued to work closely with other parts of American Express to cross-sell a range of payment, lending, insurance and financial service products and build deeper relationships with affluent and pre-affluent consumer and small business customers in key international markets. AEB markets its Private Bank services to a highly selective group of Cardmembers outside the United States. AEB offers credit products such as installment loans and revolving lines of credit to both Cardmembers and non- Cardmembers in Germany, Greece, Hong Kong, India, Singapore, Taiwan and the United Kingdom. AEB also markets a wide range of investment and savings products to TRS Cardmembers and select non- cardmembers in Germany, Greece, Hong Kong, India, Indonesia, Singapore and Taiwan. In addition, American Express Financial Advisors Inc. ("AEFAI") has contracted with AEB to act as subadvisor to most of AEB's American Express Funds and the American Express Offshore Alternative Investment Fund. As stated earlier, AEB has contracted with American Express Certificate Co. ("AECC") to market AECC's investment certificates, and operates a joint venture American Express International Deposit Company ("AEIDC") with AEFC in the Cayman Islands to accept deposits. AEB has a global network with offices in 42 countries. It maintains an international banking agency in New York City and facility offices in San Francisco, San Diego and Los Angeles, California. Its wholly owned Edge Act subsidiary, American Express Bank International ("AEBI"), is headquartered in Miami, Florida and has branches in New York City and Miami. AEB's business does not, as a whole, experience significant seasonal fluctuations.

Risks The global nature of AEB's business activities is such that concentrations of credit to particular industries and geographic regions are not unusual. At December 31, 2002, AEB had significant investments in certain on- and off-balance sheet financial instruments, which were primarily represented by deposits with banks, securities, loans, forward contracts, contractual amounts of letters of credit (standby and commercial) and guarantees. The counterparties to these financial instruments were primarily unrelated to AEB, and principally consisted of banks and other financial institutions and various commercial and industrial enterprises operating geographically within the Asia/Pacific region, Europe, North America, Latin America and the Indian Subcontinent. AEB continually monitors and actively manages its credit concentrations to reduce the associated risk. In December 2001 and January 2002, the Argentine government mandated the conversion of U.S. dollar denominated assets into Argentine pesos and simultaneously devalued the peso. AEB's credit exposures to Argentina at December 31, 2002 and 2001 were $28 million and $56 million, respectively, which include loans of $17 million and $25 million, respectively. In an ongoing effort to mitigate the effects of AEB's credit risks, as well as its decision to shift its business focus from corporations to individuals, AEB continued to reduce its wholesale credit exposure in 2002, particularly with respect to its Asia/Pacific commercial loan portfolio. AEB continues to carefully monitor its credit exposures. AEB's earnings are sensitive to fluctuations in interest rates, as it is not always possible to match precisely the maturities of interest-related assets and liabilities. However, strict earnings at risk limits are

72 established at both the country and overall bank level to limit AEB's exposure to interest rate fluctuations. On occasion, AEB may decide to mismatch in anticipation of a change in future interest rates in accordance with these guidelines. Term loans extended by AEB include both floating and fixed interest rate loans. Because AEB conducts significant business in emerging market countries and in countries that are less politically and economically stable than those in the United States or Western Europe, its Private Banking, PFS and correspondent banking activities may be subject to greater credit and compliance risks than are found in more well-developed jurisdictions. AEB continuously monitors its exposures in such jurisdictions, and regularly evaluates its client base to identify potential legal risks as a result of clients' use of AEB's banking services.

Competition The banking services of AEB are subject to vigorous competition everywhere AEB operates. Competitors include local and international banks whose assets often exceed those of AEB, other financial institutions (including certain other subsidiaries of American Express) and, in certain cases, governmental agencies.

Regulation AEB is a wholly-owned direct subsidiary of American Express Banking Corp. ("AEBC"). AEBC is a New York investment company organized under Article XII of the New York Banking Law and is a wholly owned direct subsidiary of American Express. AEBC, AEB and AEB's global network of offices and subsidiaries are subject to the continuous supervision and examination by the New York State Banking Department ("NYSBD") pursuant to the New York Banking Law. AEBC does not directly engage in banking activities. AEB's branches, representative offices and subsidiaries are licensed and regulated in the jurisdictions in which they do business and are subject to the same local requirements as other competitors that have the same license. Within the United States, AEB's New York agency is supervised and regularly examined by the NYSBD. In addition, the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") regulates, supervises and examines AEBI and the California Department of Financial Institutions supervises and examines AEB's San Francisco, Los Angeles and San Diego facility offices. Since AEB does not do business in the United States, except as an incident to its activities outside the United States, American Express' affiliation with AEB neither causes American Express to be subject to the provisions of the Bank Holding Company Act of 1956, as amended, nor requires it to register as a bank holding company under the Federal Reserve Board's Regulation Y. AEB is not a member of the Federal Reserve System, is not subject to supervision by the FDIC, and is not subject to any of the restrictions imposed by the Competitive Equality Banking Act of 1987 other than anti-tie-in rules with respect to transactions involving products and services of certain of its affiliates, AEB is not a financial holding company under the Gramm-Leach-Bliley Act. AEB is required to comply with the Federal Reserve Board's risk-based capital guidelines and complementary leverage constraint applicable to state-chartered banks that are members of the Federal Reserve System. Pursuant to the FDIC Improvement Act of 1991, the Federal Reserve Board, among other federal banking agencies, adopted regulations defining levels of capital adequacy. Under these regulations, a bank is deemed to be well capitalized if it maintains a Tier 1 risk-based capital ratio of at least six percent, a total risk-based capital ratio of at least 10.0 percent, and a leverage ratio of at least five percent. Based on AEB's risk-based capital and leverage ratios, which are set forth on page 79, AEB is considered to be well capitalized at December 31, 2002. In recent years U.S. and foreign regulatory authorities, together with international organizations, have raised increasing concerns over the ability of criminal organizations and corrupt persons to use global financial intermediaries to facilitate money laundering. In the U.S., the Secretary of the Treasury has issued regulations pursuant to the USA PATRIOT Act that specifically impact certain money laundering prevention activities of entities involved, as AEB is, in correspondent and private banking activities. AEB has taken steps as necessary to comply with these regulations, and increased its

73 compliance efforts to combat money laundering generally. AEB may increase these efforts to address further regulations expected under the USA PATRIOT Act as well as other evolving supervisory standards and requirements in jurisdictions in which AEB does business. In January 2002 the Basel Committee on Banking Supervision (the "Basel Committee") released a proposal for a new risk-based bank capital accord to replace a prior accord that has been in effect since 1988. The Basel Committee is comprised of representatives of central banks and certain bank supervisors from the "Group of Ten" countries and establishes guidelines and recommendations governing the prudential supervision of banking institutions. The proposal would refine the current capital requirements for credit risk and market risk and would add capital requirements for operational risk. Operational risk means the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events. Member countries are expected to implement the new accord by 2006, although the ultimate timing for a new accord and specific capital requirements are uncertain. AEB believes that implementation of and compliance efforts required by the new accord, to the extent applicable to AEB, could increase minimum risk-based capital requirements applicable to AEB and result in certain changes to certain of AEB's information systems, processes and employee training.

Subsidiaries AEB operates its business activities through its global network of offices and subsidiaries. The most significant AEB subsidiary is: Amex Holdings, Inc. Delaware Incorporation 301 North Walnut Street Suite 1002 Wilmington, Delaware 19801-2919

74 DIRECTORS AND OFFICERS OF AEB

The Directors and Executive Officers of AEB and their principal occupations are as follows: Name Principal Occupation Directors: John L. Adams Executive Vice President, Trinity Industries Charles A. Bowsher Former Comptroller General of the United States James M. Cracchiolo Chairman, AEB and Group President, Global Financial Services, American Express Company W. Richard Holmes President and Chief Executive Officer, AEB Bruce K. MacLaury President Emeritus, The Brookings Institution Aldo Papone Senior Advisor, American Express Company Vijay R. Parekh Vice Chairman, AEB and President International Consumer and Small Business Payments and Financial Services, TRS Francis X. Stankard International Banking Advisor Senior Management: W. Richard Holmes President and Chief Executive Officer Alan P. Gallo Executive Director, Chief Financial Officer Peter C. Sisti Executive Director and Treasurer P. Nicholas Kourides Managing Director and General Counsel Frederick D. Moore Comptroller Kathleen M. Kramer Executive Director and Chief Credit Officer Kathryn S. Reimann Executive Director and Chief Compliance Officer Edward C. Smith Executive Director and General Auditor Stephen P. Norman Secretary Gennaro Bruni Assistant Secretary

The business address of each Director and each Executive Officer is World Financial Center, 200 Vesey Street, New York, New York 10285.

75 CAPITALIZATION OF AEB

The following table sets forth the consolidated capitalization of AEB as of September 30, 2003: (in millions) (unaudited) Long-term Indebtedness: Floating Rate Subordinated Notes due 2004 $ 150 Floating Rate Notes, Egyptian Pounds 300 million due 2006 49 Total long-term indebtedness 199 Shareholder's Equity: Common stock: authorized, 2,000,000 shares of $100 par value; issued and outstanding, 460,000 shares 46 Class A preferred stock: authorized, 1,925,000 shares of $1 par value; none issued and outstanding Class B adjustable rate noncumulative preferred stock: authorized, 75,000 shares of $1 par value; issued and outstanding, 75,000 shares; redeemable at $1,001 per share 75 Additional paid-in capital 595 Retained earnings 267 Other comprehensive Joss, net of tax: Net unrealized gains on available-for-sale securities 92 Net unrealized derivatives gains 1 Foreign currency translation adjustments (113) Minimum pension liability (2) Accumulated other comprehensive loss (22) Total shareholder's equity 961 Total long-term indebtedness and shareholder's equity $ 1,160

There has been no material change in the capitalization of AEB since September 30, 2003. As of September 30, 2003, AEB has no cumulative warrants or convertible notes outstanding and has not issued any notes or incurred further indebtedness.

76 SELECTED FINANCIAL INFORMATION OF AEB

The following consolidated financial information of AEB for the nine months ended September 30, 2003 (derived from AEB's unaudited consolidated financial statements) and for each of the years ended December 31, 2002 and 2001 (derived from AEB's audited consolidated financial statements) should be read in conjunction with respective financial statements and with the detailed information contained elsewhere herein. Years Ended September 30, December 31, 2003 2002 2001 (in millions) (unaudited) Operating Data:* Revenues: Interest income $ 406 $ 530 $ 646 Interest expense 169 237 386 Net interest income 237 293 260 Provision for credit losses: Ongoing 58 50 50 Restructuring Related - - 26 Net interest income after provision for credit losses 179 243 184 Non-interest income: Commissions, fees and other revenues 285 347 351 Foreign exchange income 84 68 76 Total 369 415 427 Total net revenues 548 658 611 Expenses: Human resources 212 251 264 Other operating expenses 231 268 286 Restructuring charge (2) (3) 70 Total expenses 441 516 620 Pretax income (loss) 107 142 (9) Income tax provision 36 49 1 Net income (loss) $ 71 $ 93 $ (10)

"See "AEB — Management's Discussion and Analysis of Financial Condition and Results of Operations."

77 As of September 30, December 31, 2003 2002 2001 (in millions) (unaudited) Balance Sheet Data:* Assets: Cash and non-interest-earning deposits with banks $ 338 $ 254 $ 436 Interest-earning deposits with banks 1,443 1,454 1,583 Federal funds sold 672 728 206 Trading assets 750 486 223 Available-for-sale securities 3,204 3,169 3,044 Loans 6,032 5,298 4,771 Reserve for loan losses (85) (112) (119) Customers' acceptance liability 58 51 59 Due from American Express Company and subsidiaries .. 760 520 258 Accrued interest and other receivables 318 294 259 Land, buildings and equipment, net of accumulated depreciation and amortization 148 141 125 Other assets 871 773 718 Total assets $ 14,509 $ 13,056 $ 11,563 Liabilities and Shareholder's Equity: Customers' deposits $ 10,606 $ 9,505 $ 8,483 Short-term borrowings 165 339 486 Trading liabilities 435 274 115 Acceptances outstanding 58 51 59 Accounts payable 221 222 227 Long-term debt 199 215 215 Other liabilities 619 515 606 Due to American Express Company and subsidiaries 1,245 988 606 Total liabilities 13,548 12,109 10,797

Shareholder's equity: Common stock 46 46 46 Preferred stock 75 75 75 Additional paid-in capital 595 595 553 Retained earnings 267 231 170 Other comprehensive (loss) income, net of tax: Net unrealized gains on available-for-sale securities .. 92 103 36 Net unrealized derivatives gains 14- Foreign currency translation adjustments (113) (105) (98) Minimum pension liability (2) (2) (16) Accumulated other comprehensive (loss) income (22) - (78) Total shareholder's equity 961 947 766 Total liabilities and shareholder's equity $ 14,509 $ 13,056 $ 11,563

*See "AEB — Management's Discussion and Analysis of Financial Condition and Results of Operations."

78 AEB — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Selected Information September 30, Years Ended 2003 December 31, (unaudited) 2002 2001 (in millions, except percentages and where indicated) Total loans: $ 6,032 $ 5,298 $ 4,771 Reserve for credit losses* $ 93 $ 119 $ 139 Loan loss reserve as a percentage of total loans 1.4% 2.1% 2.5% Total nonperforming loans $ 84 $ 119 $ 123 Other nonperforming assets $ 15 $ 15 $ 22 Risk-based capital ratios: Tierl 10.5% 10.9% 11.1% Total 10.8% 11.4% 12.2% Leverage ratio 6.0% 5.3% 5.3% Return on average total assets - GAAP** 0.76% 0.78% (0.09)% Return on average total shareholders equity*** 10.5% 11.2% (1.3)%

*Allocation: Loans $ 85 $ 112 $ 119 Other assets, primarily foreign exchange derivatives 664 Unfunded contingents 2 1 16 Total Credit Loss Reserves $ 93 $ 119 $ 139

**Computed on a trailing 12-month basis using total shareholder's equity as reported in the Consolidated Financial Statements prepared in accordance with GAAP ***Computed on a trailing 12-month basis using total assets as reported in the Consolidated Financial Statements prepared in accordance with GAAP.

Results of Operations Years Ended December 31, 2002 and 2001 Net interest income in 2002 increased from a year ago due to the effects of lower funding costs. Commissions, fees and other revenues in 2002 decreased due to lower results in Corporate Banking, partially offset by greater non- credit transactions in the Financial Institutions Group and higher joint venture income, due to lower funding costs within the premium deposits joint venture with AEFC. Foreign exchange income decreased in 2002 substantially due to unfavorable foreign currency exchange rate impacts. Human resources and other operating expenses declined in 2002 reflecting the benefits of re-engineering activities and tighter controls. Financial Condition AEB's assets totaled $13 billion as of December 31, 2002, and $12 billion as of December 31, 2001. AEB had approximately $5.3 billion outstanding in worldwide loans at December 31,2002, up from $4.8 billion at December 31, 2001. The increase from prior year included a $400 million decrease in corporate banking and other loans, as AEB continued to focus on reducing exposure in this activity and emphasizing consumer and private banking loans, which rose by $700 million, excluding the effect of asset sales and securitization. In addition, financial institution loans rose by $200 million. Other banking activities, such as securities, unrealized gains on foreign exchange and derivative contracts, various contingencies and market placements, added approximately $8.0 billion and $7.3 billion to AEB's credit exposure at December 31, 2002 and December 31, 2001, respectively.

79 AMERICAN EXPRESS CREDIT CORPORATION

American Express Credit Corporation (including its subsidiaries, where appropriate, "Credco") was incorporated in Delaware in 1962 and was acquired by American Express in December 1965. On January ], 1983, Credco became a wholly-owned subsidiary of TRS which is a wholly-owned subsidiary of American Express. Credco's principal place of business is located at 301 North Walnut Street, Wilmington, Delaware 19801-2919. The information about Credco presented below is qualified in its entirety by reference to and should be read in conjunction with Credco's Annual Report on Form 10-K for the year ended December 31, 2002 which include Credco's audited consolidated financial statements for each of the years ended December 31,2002 and 2001, and the notes thereto and Credco's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, filed with the SEC. THE INSTRUMENTS ISSUED BY CREDCO ARE DIRECT, UNSECURED OBLIGATIONS OF CREDCO ONLY. THEY ARE NOT THE OBLIGATIONS OF OR GUARANTEED BY AMERICAN EXPRESS OR TRS OR ANY OTHER AMERICAN EXPRESS SUBSIDIARY OR AFFILIATE. Credco is primarily engaged in the business of financing most non-interest-bearing charge cardmember receivables arising from the use of the American Express'^ card, including the American Express^ Gold Card, Platinum card^ and Corporate card issued in the United States, and in designated currencies outside the United States. Credco also purchases certain interest-bearing and discounted revolving credit and extended payment plan receivables comprised principally of Optima^ card and other American Express credit cards, Sign & Travel" and Extended Payment Option receivables, lines of credit and loans to American Express Bank Ltd. customers and interest-bearing equipment financing installment loans and leases. The American Express card and American Express credit cards are collectively referred to herein as the "card."

American Express Card Business Please refer to the description of TRS beginning on page 47 of this document.

General Nature of Credco's Business Credco purchases certain cardmember receivables arising from the use of the card throughout the world pursuant to agreements (the Receivables Agreements) with TRS and certain of its subsidiaries that issue the card (Card Issuers). Net income primarily depends on the volume of receivables arising from the use of the card purchased by Credco, the discount rates applicable thereto, the relationship of total discount to Credco's interest expense and the collectibility of the receivables purchased. The average life and collectibility of accounts receivable generated by the use of the card are affected by factors such as general economic conditions, overall levels of consumer debt and the number of new cards issued. Credco purchases cardmember receivables without recourse. Amounts resulting from unauthorized charges (for example, those made with a lost or stolen card) are excluded from the definition of "receivables" under the Receivables Agreements and are not eligible for purchase by Credco. If the unauthorized nature of the charge is discovered after purchase by Credco, the Card Issuer repurchases the charge from Credco. Credco generally purchases non-interest-bearing charge cardmember receivables at face amount less a specified discount agreed upon from time to time, and interest-bearing revolving credit cardmember receivables at face amount. The Receivables Agreements generally require that non- interest-bearing receivables be purchased at a discount rate which yields to Credco earnings of at least 1.25 times its fixed charges on an annual basis. The Receivables Agreements also provide that consideration will be given from time to time to revising the discount rate applicable to purchases of new receivables to reflect changes in money market interest rates or significant changes in the collectibility of the receivables. New groups of cardmember receivables are generally purchased net of reserve balances applicable thereto.

80 Extended payment plan receivables and loans (lending receivables) are primarily funded by subsidiaries of TRS other than Credco, although certain lending receivables are purchased by Credco. At December 31, 2002 and 2001, lending receivables owned by Credco totaled $4.9 billion and $3.9 billion, representing approximately 22 percent and 17 percent, respectively, of all interests in receivables owned by Credco. These receivables consist of certain interest-bearing and discounted extended payment plan receivables comprised principally of American Express credit card, Sign & Travel and Extended Payment Option receivables, lines of credit and loans to American Express Bank customers and interest-bearing equipment financing installment loans and leases, Credco, through a wholly-owned subsidiary, Credco Receivables Corp. (CRC), purchases gross participation interests in the seller's interest in both non-interest-bearing and interest-bearing cardmember receivables owned by two master trusts formed by TRS as part of its asset securitization programs. The gross participation interests represent undivided interests in the receivables originated by TRS and by American Express Centurion Bank (Centurion Bank), a wholly-owned subsidiary of TRS. The Card Issuers, at their expense and as agents for Credco, perform accounting, clerical and other services necessary to bill and collect all cardmember receivables owned by Credco. The Receivables Agreements provide that, without the prior written consent of Credco, the credit standards used to determine whether a card is to be issued to an applicant may not be materially reduced and that the policy as to the cancellation of cards for credit reasons may not be materially liberalized. American Express, as the parent of TRS, has agreed with Credco that it will take all necessary steps to assure performance of certain TRS obligations under the Receivables Agreement between TRS and Credco. The Receivables Agreements may be terminated at any time by the parties thereto, generally upon little or no notice. Alternatively, such parties may agree to reduce the required 1.25 fixed charge coverage ratio, which could result in lower discount rates and, consequently, lower revenues and net income for Credco. The obligations of Credco are not guaranteed under the Receivables Agreements or otherwise by American Express or the Card Issuers.

Volume of Business The following table shows the volume of all charge cardmember and lending receivables purchased by Credco, excluding cardmember receivables sold to affiliates, during each of the years indicated, together with receivables owned by Credco at the end of such years (billions):

Volume of Gross Receivables Owned Receivables Purchased at December 31,

Year Domestic Foreign Total Domestic Foreign Total 2002 $137.2 $46.9 $184.1 $15.2 $6.8 $22.0 2001 $159.0 $45.1 $204.1 $17.4 $5.6 $23.0

The card business does not experience significant seasonal fluctuation, although card billed business tends to be moderately higher in the fourth quarter than in other quarters. TRS' asset securitization programs disclosed above have reduced the volume of domestic cardmember receivables purchased and the amount owned by Credco.

81 Charge Cardmember Receivables Nine Years ended December 31, months (Millions, except ended percentages and where September 30, indicated) 2003 2002 2001 Total charge cardmember receivables $ 19,059 $ 17,169 $ 19,121 90 days past due as a % of total 2.2% 2.6% 3.6% Loss reserves $ 547 $ 498 $ 683 as a % of receivables 2.9% 2.9% 3.5% Write-offs, net of recoveries $ 345 $ 568 $ 703 Net loss ratio(1) 0.24% 0.32% 0.35% Average life of charge cardmember receivables (in days)(2) 33 34 36

(1) Credco's write-offs, net of recoveries, expressed as a percentage of the volume of charge cardmember receivables purchased by Credco in each of the years indicated.

(2) Represents the average life of charge cardmember 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 years indicated, to the volume of charge cardmember receivables purchased by Credco. For charge cardmember receivables Credco generally writes off against its reserve for losses the total balance in an account for which any portion remains unpaid twelve months from the date of original billing. Accounts are written off earlier if deemed uncollectible.

Lending Receivables Nine months Years ended December 31, ended (Millions, except percentages September 30, and where indicated) 2003 2002 2001 Total lending receivables $ 5,195 $ 4,858 $ 3,927 Loss reserves $ 225 $ 243 $ 164 as a % of lending receivables 4.3% 5.0% 4.2% Write-offs, net of recoveries $ 242 $ 330 $ 165 Net write-off rate(1) 6.38% 7.37%(2) 5.31%

(1) Credco's write-offs, net of recoveries, expressed as a percentage of the average amount of lending receivables owned by Crcdco at the beginning of the year and at the end of each month in each of the years indicated.

(2) Excluding the impact of the American Express Bank Hong Kong lines of credit and loans, the net write-off rate for 2002 was 6.27%. For lending receivables, Credco generally writes off against its reserve for losses the total balance in an account for which any portion remains unpaid after six contractual payments are past due. Accounts are written off earlier if deemed uncollectible.

Sources of Funds Credco's business is financed by short-term borrowings consisting principally of commercial paper, borrowings under bank lines of credit and issuances of medium- and long-term debt, as well as through operations. The weighted average interest cost on an annual basis of all borrowings, after giving effect to commitment fees under lines of credit and the impact of interest rate swaps, during the following years were:

82 Weighted Average Interest Year Cost 2002 3.96% 2001 5.98

From time to time, American Express and certain of its subsidiaries purchase Credco's commercial paper at prevailing rates, enter into variable rate note agreements at interest rates generally above the 13-week treasury bill rate or at interest rates based on LIBOR, and provide lines of credit. The largest amount of borrowings from American Express or its subsidiaries at any month end during the five years ended December 31, 2002 was $6.4 billion. At December 31,2002, the amount borrowed was $4.7 billion.

Subsidiaries: The most significant of Credco's subsidiaries are: American Express Overseas Credit Corporation Limited 41/43 La Motte Street St. Helier Jersey JE2 4SZ Channel Islands

Credco Receivables Corp. 301 North Walnut Street, Suite 1002 Wilmington, Delaware 19801-2919

DIRECTORS AND OFFICERS OF CREDCO The Directors and Executive Officers of Credco and their principal occupations are as follows: Name Principal Occupation Directors: Walter S. Bermao Chairman of the Board and Director (Principal Financial Officer), Credco, Treasurer, American Express Walker C. Tompkins, Jr President, Chief Executive Officer and Director, Credco David L. Yowan Treasurer, TRS and Vice President and Director, Credco, Assistant Treasurer, American Express

Officers who are not Directors: Anthony Gillespie Vice President, Financial Marketing, Credco Erich Komdat Vice President and Chief Accounting Officer, Information Systems and Services Neil P. Burns Treasurer, Credco Stephen P. Norman Secretary, American Express, TRS and Credco John J. Nowak Assistant Secretary, Credco Kathryn Panning Assistant Treasurer, Credco

The business address of each Director and each Executive Officer is 301 North Walnut Street, Wilmington, Delaware 19801-2919.

83 CAPITALIZATION OF CREDCO

The following table sets forth the consolidated capitalization of Credco as of September 30,2003 September 30, 2003 (unaudited) (in millions) Long-term indebtedness: Senior notes due 2005 $ 100 Variable rate debt with American Express due 2004 910 Fixed rate debt with affiliate due 2004 - 2005 463 Medium-term fixed rate note due 2005 1,250 Medium-term variable rate notes due 2003 - 2004 9,451 Swiss franc note due 2003 Fair value adjustment 20 Total long-term indebtedness $ 12,194

Shareholder's equity: Common stock-authorized, 3,000,000 shares of $.10 par value; issued and outstanding, 1,504,938 shares $ 1 Capital surplus 161 Retained earnings 2,685 Other comprehensive income, net of tax: Net unrealized securities gains 1 Net unrealized derivatives losses (211) Accumulated other comprehensive loss (210) Total shareholder's equity 2,637 Total long-term indebtedness and shareholder's equity $ 14,831

There has been no material change in the capitalization of Credco since September 30, 2003. As of September 30, 2003 Credco has no cumulative warrants or convertible shares outstanding and has not issued any notes or incurred further indebtedness.

84 SELECTED FINANCIAL INFORMATION OF CREDCO

The following consolidated financial information of Credco for the six months ended September 30, 2003 (derived from Credco's unaudited consolidated financial statements) and for each of the years ended December 31,2002 and 2001 (derived from Credco's audited consolidated financial statements) should be read in conjunction with the respective financial statements and with the detailed information contained elsewhere herein. Years Ended September 30, December 31, 2003 2002 2001 (in millions) (unaudited) (audited) Operating Data:* Revenues: Revenue earned from purchased accounts receivable 1,389 2,019 2,616 Interest income from affiliates 24 45 82 Interest income from investments 54 83 Other income 10 6 Total revenues 1,477 2,153 2,842 Expenses: Interest expense—affiliates 46 98 160 Interest expense—other 593 818 1,298 Provision for doubtful accounts, net of recoveries 521 846 937 Other expenses 29 45 30 Total expenses 1,189 1,807 2,425 Income before taxes... 288 346 417 Income tax provision. 99 118 140 Net income 189 $ 228 $ 277

* See "Credco — Management's Discussion and Analysis of Financial Conditions and Results of Operations".

85 Years Ended September 30, December 31, 2003 2002 2001 (in millions, except share data) (unaudited) (audited) Balance Sheet Data* Assets: Cash and cash equivalents $ 710 $ 1,924 408 Investments 1,776 1,901 1,428 Charge cardmember and lending receivables 24,254 22,027 23,048 Less: reserve for doubtful accounts 772 741 847 23,482 21,286 22,201 Loans and deposits with affiliates 1,659 2,047 1,907 Deferred charges and other assets 425 507 598 Total assets $ 28,052 $ 27,665 $ 26,542 Liabilities and Shareholder's Equity Short-term debt - other 8,770 11,366 18,370 Short-term debt with affiliates 3,129 3,779 2,214 Current portion of long-term debt 2,920 5,751 800 Current portion of long term debt with affiliates 918 Long-term debt with affiliates 456 943 910 Long-term debt - other 7,900 1,174 120 Total debt 24,093 23,013 22,414 Due to affiliates 455 1,418 1,425 Accrued interest and other liabilities 867 919 503 Total liabilities 25,415 25,350 24,342 Shareholder's equity Common stock-authorized, 3,000,000 shares of $.10 par value, issued and outstanding, 1,504,938 shares 1 1 1 Capital surplus 161 161 161 Retained earnings 2,685 2,496 2,268 Other comprehensive loss, net of tax: Net unrealized securities gains/(losses) 1 (11) (4) Net unrealized derivatives losses (211) (332) (226) Total shareholder's equity 2,637 2,315 2,200 Total liabilities and shareholder's equity 28,052 $ 27,665 $ 26,542

*See "Credco — Management's Discussion and Analysis of Financial Condition and Results of Operations."

86 CREDCO — MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations Years Ended December 31, 2002 and 2001 The ratio of earnings to fixed charges was 1.38 and 1.29 in 2002 and 2001, respectively. The Receivables Agreements also provide that consideration will be given from time to time to revising the discount rate applicable to purchases of new receivables to reflect changes in money market interest rates or significant changes in the collectibility of the receivables. Pretax income depends primarily on the volume of charge cardmember and lending receivables purchased the discount rates applicable thereto, the relationship of total discount to Credco's interest expense and the collectibility of receivables purchased. The average life of charge cardmember receivables was 34 days and 36 days for the years ended December 31, 2002 and 2001, respectively. Credco's decrease in revenues during 2002 is attributable to lower discount rates and a decrease in the volume of receivables purchased. Interest income in 2002 decreased as a result of lower interest rates. Interest expense decreased in 2002 as a result of lower interest rates combined with a decrease in the volume of average debt outstanding. Provision for losses decreased in 2002 reflecting a decrease in the volume of receivables purchased, partially offset by an increase in provision rates.

Liquidity and Capital Resources Credco's portfolio consists principally of charge cardmember receivables and lending receivables purchased without recourse from Card Issuers throughout the world and participation interests purchased without recourse in the seller's interest in both non-interest-bearing and interest-bearing cardmember receivables. These participation interests are owned by two master trusts formed by TRS as part of its asset securitization programs. At December 31, 2002 and 2001, respectively, Credco owned $17.2 billion and $19.1 billion of charge cardmember receivables and participation in charge cardmember receivables, representing approximately 78 percent and 83 percent, respectively, of the total receivables owned. Lending receivables, representing approximately 22 percent and 17 percent of the total receivables owned, were $4.9 billion and $3.9 billion at December 31, 2002 and 2001, respectively. Credco's assets are financed through a combination of short-term debt, long-term senior notes, equity capital and retained earnings. Daily funding requirements are met primarily by the sale of commercial paper. Credco has readily sold the volume of commercial paper necessary to meet its funding needs as well as to cover the daily maturities of commercial paper issued. The average amount of commercial paper outstanding was $12,2 billion for 2002 and $18-6 billion for 2001. Credco issued an aggregate of $6.8 billion of medium-term notes at fixed and floating rates with maturities of one to three years during 2002. This reflects a shift in funding strategy as Credco is placing less reliance, on short-term debt. In early 2003, Credco issued an additional $2.0 billion of floating rate medium-term notes, with maturities of one year that can be extended by the holders up to an additional four years, and $750 million of floating rate medium-term notes with maturities of two years. During 2002, 2001 and 2000, Credco's average long-term debt outstanding was $5.8 billion, $2.2 billion and $2.7 billion, respectively. At December 31, 2002, Credco had approximately $3.2 billion of medium- and Long-term debt and warrants available for issuance under shelf registrations filed with the Securities and Exchange Commission (SEC). At March 31, 2003, Credco had $15.4 billion of debt securities and warrants available for issuance under such shelf registrations. At December 31, 2002, Credco had the ability to issue $5.5 billion of debt under a Euro Medium- Term Note program for the issuance of debt outside the United States to non-U.S. persons. This program was established by Credco, TRS, AEOCC, Centurion Bank and American Express Bank Ltd. (a wholly- owned indirect subsidiary of American Express). The maximum aggregate principal amount of debt instruments outstanding at any one time under the program will not exceed $6.0 billion. An alternate source of borrowing consists of committed credit line facilities. Committed credit line facilities at December 31,2002 and 2001 totaled $10.0 billion and $10.4 billion, respectively. In April 2002, Credco, American Express and Centurion Bank renegotiated their committed credit line facilities. As of

87 December 31, 2002 total available credit lines were $11.5 billion. As a result of an internal change in allocations during the third quarter, credit lines were reallocated to include $1.6 billion allocated to American Express and $9.4 billion allocated to Credco. In addition, Credco and American Express agreed to increase Credco's available committed credit lines by $600 million with a corresponding reduction in the committed credit lines available to American Express. This agreement will be in effect until April 2003. Credco has the right to borrow up to a maximum amount of $11.0 billion, with a commensurate reduction in the amount available to American Express. Based on this maximum amount of available borrowing, Credco's committed bank line coverage of its net short-term debt would have been 117 percent as of December 31, 2002. These facilities expire in increments from 2003 through 2007. In addition, Credco, through its wholly-owned subsidiary, American Express Overseas Credit Corporation Limited ("AEOCC"), had short-term borrowings under uncommitted lines of credit totaling $58 million and $68 million at December 31, 2002 and 2001, respectively. The availability of credit lines is subject to Credco's maintenance of a 1.25 ratio of combined earnings and fixed charges to fixed charges. For the year ended December 31, 2002, this ratio was 1.38. Additionally, Credco's credit ratings are critical to maintaining its short-term funding sources and determining related interest costs. Rating agencies review factors such as capital adequacy with a view towards maintaining certain levels of capital, liquidity, business volumes, asset quality and economic market trends, among others, in assessing American Express' and its subsidiaries' appropriate ratings. See "Qualitative and Quantitative Disclosures About Market Risk" below for a discussion of the potential effects of a ratings downgrade. Credco did not pay dividends to TRS in 2002 or 2001. In 2002, the American Express Credit Account Master Trust (the Master Trust) securitized $4.6 billion of lending receivables through the public issuance of two classes of investor certificates and privately placed collateral interests in the assets of the Master Trust. At the time of these issuances, CRC sold $10 million of gross seller's interest in lending receivables ($9 million, net of reserves) to American Express Receivables Financing Corporation Ii (RFCII), a wholly-owned subsidiary of TRS. In addition, at the time of these issuances, CRC purchased from the Master Trust, as an investment, $437 million of Class C Certificates issued by the Master Trust, collateralized by the revolving credit receivables held by the Master Trust. In February 2003, the Master Trust securitized an additional $920 million of lending receivables through the public issuance of two classes of investor certificates and privately placed collateral interests in the assets of the Master Trust. At the time of this issuance, CRC sold $33 million of gross seller's interest in lending receivables ($32 million, net of reserves) to RFCII. In addition, at the time of this issuance, CRC purchased from the Master Trust, as an investment, $87 million of Class C Certificates issued by the Master Trust, collateralized by the revolving credit receivables held by the Master Trust. Additionally, in 2002, $95 million of Class C Certificates owned by CRC matured. Throughout 2002, the American Express Master Trust (the Trust) securitized $1.8 billion of charge cardmember receivables through the public issuance of one class of investor certificates and privately placed collateral interests in the assets of the Trust. At the time of these issuances, CRC sold $1.9 billion of gross seller's interest in charge cardmember receivables ($1.9 billion, net of reserves) to American Express Receivables Financing Corporation (RFC), a wholly-owned subsidiary of TRS, which is a wholly- owned subsidiary of American Express. In addition, at the time of these issuances, CRC purchased from the Trust, as an investment, $142 million of Class B Certificates collateralized by the charge cardmember receivables held by the Trust. In 2002, Credco recorded $8 million pretax ($5 million after-tax) of foreign exchange losses related to its exposure to receivables denominated in Argentine pesos, which devalued by 117 percent during 2002. This exposure totaling approximately $17 million U.S. dollars at December 31, 2002, was a result of the action taken by the Argentine government at year end 2001 at which time the conversion of dollar denominated assets into pesos was mandated and the peso simultaneously devalued. Credco continues to evaluate economical ways to manage its Argentine exposure.

88 AMERICAN EXPRESS OVERSEAS CREDIT CORPORATION LIMITED

American Express Overseas Credit Corporation Limited ("AEOCC") was incorporated in the Island of Jersey and commenced operations in 1982. AEOCC is a wholly-owned subsidiary of Credco. AEOCC is the parent of AEOCC Management Company Limited, American Express Overseas Credit Corporation N.V., and AEOCC Finance Limited. AEOCC's principal place of business is located at 41/43 La Motte Street, St. Helier, Jersey, JE2 4SZ, Channel Islands. The information about AEOCC presented below is qualified in its entirety by reference to and should be read in conjunction with AEOCC's audited consolidated financial statements for each of the years ended December 31, 2002 and 2001, including the notes thereto. THE INSTRUMENTS ISSUED BY AEOCC ARE DIRECT, UNSECURED OBLIGATIONS OF AEOCC ONLY. THEY ARE NOT THE OBLIGATIONS OF OR GUARANTEED BY AMERICAN EXPRESS OR ANY OTHER AMERICAN EXPRESS SUBSIDIARY OR AFFILIATE, INCLUDING WITHOUT LIMITATION AMERICAN EXPRESS CREDIT CORPORATION OR AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. AEOCC is primarily engaged in the business of financing receivables arising from the use of American Express Cards issued by TRS and certain of its subsidiaries, including 50 percent-owned subsidiaries (each a "Card issuer") outside the United States and lines of credit and loans of American Express Bank Ltd. customers. In 1996, AEOCC started purchasing from Credco, without recourse, U.S. dollar denominated receivables arising from the use of Corporate Cards issued in the United States.

American Express Card Business Please refer to the description of TRS beginning on page 47 of this document.

General Nature of AEOCC's Business AEOCC purchases both interest and non-interest-bearing cardmember receivables pursuant to Receivables Agreements with each of the Card issuers. Net income primarily depends on the volume of receivables arising from the use of the Card purchased by AEOCC, the discount rates applicable thereto, the relationship of total discount to AEOCC's interest expense and the collectibility of the receivables purchased. Cardmember receivables are purchased at discount rates that are designed at present to yield to AEOCC a minimum ratio of consolidated earnings to fixed charges of no less than 1.25. For the year ended December 31, 2002, the ratio was 1.28 and 1.29 for the year ended December 31, 2001. In computing this ratio, "earnings" consist of net income of AEOCC plus income taxes and fixed charges. "Fixed charges" consist of interest on indebtedness for borrowed money, amortization of premiums and discounts on indebtedness for borrowed money and hedge premium or discount. The fixed charge coverage ratio of no less than 1.25 may be adjusted in the future by agreement between AEOCC and the Card issuers, AEOCC purchases cardmember receivables without recourse. Amounts resulting from unauthorized charges (for example, those made with a lost or stolen Card) are excluded from the definition of "receivables" under the Receivables Agreements and are not eligible for purchase by AEOCC. If the unauthorized nature of the charge is discovered after purchase by AEOCC, the Card issuer repurchases the charge from AEOCC. At December 31, 2002 and 2001, total assets of AEOCC were $8.6 billion and $7.9 billion, respectively. At December 31, 2002 and 2001, interest-bearing receivables represented 27.5 percent and 26.2 percent, respectively, of total cardmember receivables owned by AEOCC. AEOCC's reserve for credit loss represents management's estimate of the amount necessary to absorb future credit losses inherent in its outstanding portfolio of charge cardmember and lending receivables. Management's evaluation process requires numerous estimates and judgments. Reserves for these credit losses are primarily based upon models which analyze portfolio statistics and management's judgment. AEOCC generally writes off against its reserve for credit loss the total balance in an account

89 for which any portion remains unpaid twelve months from the date of original billing for non-interest- bearing cardmember receivables and after six contractual payments are past due for interest-bearing cardmember receivables. Accounts are written off earlier if deemed uncollectible. As of December 2002, AEOCC was purchasing cardmember receivables in the following currencies: U.S. dollars; Pounds sterling; Hong Kong dollars; Euros; Swedish kronor and Singapore dollars. The volume of receivables owned by AEOCC in any one currency and the proportion of receivables denominated in one currency to those denominated in other currencies will fluctuate from time to time. In the future, AEOCC may finance the purchase of receivables in other currencies in which the Card is issued. In cases where the purchase of receivables may not be feasible, AEOCC or a subsidiary may extend secured or unsecured loans to a Card issuer to finance such receivables. Each Card issuer acts as collection agent on behalf of AEOCC in connection with receivables sold by such Card issuer to AEOCC. Therefore, in the event of the bankruptcy or insolvency of a Card issuer, funds held by such Card issuer for the account of AEOCC may, under applicable local law, be subject to claims of the general creditors of such Card issuer. The sources of funds of AEOCC may at any time include (a) borrowings under lines of credit and overdraft facilities; (b) debt issues in the public or private markets; (c) borrowings from American Express or affiliates; (d) capital contributed by American Express or other wholly-owned direct or indirect subsidiaries of American Express; and (e) reserves and retained earnings. At December 31,2002, AEOCC had uncommitted lines of credit with ten institutions in various currencies in the aggregate equivalent amount of approximately $480 million, under which short-term loans in the aggregate equivalent amount of approximately $58 million were outstanding.

Subsidiaries The most significant of AEOCC's subsidiaries are: AEOCC Management Company Limited 41/43 La Motte Street St. Helier Jersey JE2 4SZ Channel Islands American Express Overseas Credit Corporation N.V. Kaya W.F.G. (Jombi) Mensing 36 Curacao Netherlands Antilles

90 DIRECTORS AND OFFICERS OF AEOCC The Directors and Executive Officers of AEOCC and their principal occupations are as follows:

Name Principal Occupation Directors: Brian J. Godden Managing Director, AEOCC Peter C. Sisti Vice President, Executive Director and Treasurer, AEB and TRS Walker C. Tompkins, Jr President, Chief Executive Officer and Director, Credco Officers: Brian J. Godden Managing Director, AEOCC Hugh H. Lawton Director Finance, AEOCC Management Company Limited AEOCC Management Company Limited Secretary, AEOCC

The business address of each Director and each Executive Officer is 41/43 La Motte Street, St. Helier, Jersey, JE2 4SZ, Channel Islands.

91 CAPITALIZATION OF AEOCC

The following table sets forth the consolidated capitalization of AEOCC as of September 30, 2003: September 30, 2003 (unaudited) (in millions) Long-term Indebtedness: Fixed rate debt with affiliate, due 2004 - 2006 $ 464 Total long-term indebtedness 464

Shareholders' Equity: Common shares: authorized share capital, 100,000 shares of $100 par value; issued and outstanding, 70,009 shares 7 Share premium 63 Retained earnings 1,174 Other comprehensive gain; Unrealized derivatives gains 1 Total shareholders' equity 1,251 Total long-term indebtedness and shareholders' equity $ 1,715

There has been no material change in the capitalization of AEOCC since September 30,2003. As at September 30, 2003, AEOCC has no cumulative warrants or convertible notes outstanding and has not issued any notes nor has it incurred any further material indebtedness.

92 SELECTED FINANCIAL INFORMATION OF AEOCC

The following consolidated financial information of AEOCC for the nine months ended September 30, 2003 and for each of the years ended December 31, 2002 and 2001 was derived from AEOCC's audited consolidated financial statements and should be read in conjunction with respective financial statement and with the detailed information contained elsewhere herein. September 30, Years Ended December 31, Operating Data:* 2003 2002 2001 (unaudited) (audited) (in millions) Revenues: Revenue earned from purchased accounts receivable $ 431 $ 716 $ 788 Service fee income from affiliates 356 Other income - 1 1 Total revenues 434 722 795 Expenses: Interest 184 293 435 Provision for credit loss, net of recoveries 180 343 232 Other 323 Total expenses 367 638 670 Pretax income 67 84 125 Income tax provision 122 Net income $ 66 $ 82 $ 123

*See "AEOCC — Management's Discussion and Analysis of Financial Condition and Results of Operations."

93 September 30 Years ended December 31, Balance Sheet Data: 2003 2002 2001 (unaudited) (audited) (in millions, except share data) Assets: Cash and cash equivalents 1 15 $ 4 Time deposits 22

Charge cardmembers receivables, less credit reserve of $107, $108 and $129 5,942 6,007 5,727 Lending receivables, less credit reserve of $100, $124 and $64 2,298 2,287 2,046 Deferred charges and other assets 12 286 90 Total assets 8,259 $ 8,595 $ 7,889 Liabilities and Shareholders' Equity: Short-term debt - other 127 58 68 Short-term debt - affiliates 5,810 6,900 6,464 Long-term debt - other 1 1 Long-term debt - affiliates 464 33 Total debt 6,401 6,992 6,553 Due to affiliates 409 241 199 Accrued interest and other liabilities 198 202 78 Total liabilities 7,008 7,435 6,810

Shareholders' equity: Common shares: authorized share capital, 100,000 shares of $100 par value; issued and outstanding, 70,009 shares 7 7 7 Share premium 63 63 63 Retained earnings 1,174 1,108 1,026 Other comprehensive gain/(loss): Unrealized derivative gains/(losses) 7 (18) (17) Total shareholders' equity 1,251 1,160 1,079 Total liabilities and shareholders' equity 8,259 $ 8,595 $ 7,f

*See "AEOCC — Management's Discussion and Analysis of Financial Condition and Results of Operations.

94 AEOCC — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations and Sources of Funds and Liquidity Years Ended December 31, 2002 and 2001 AEOCC's consolidated net income for the years ended December 31,2002 and 2001 was $82 million and $123 million, respectively. AEOCC purchases, without recourse, Cardmember receivables from certain Card issuers. These receivables are purchased at discount rates that are designed at present to yield a minimum ratio of consolidated earnings to fixed charges of no less than 1.25. For the year ended December 31, 2002 the ratio was 1.28 and 1.29 for the year ended December 31, 2001. At December 31, 2002, AEOCC had uncommitted lines of credit with ten institutions in various currencies in the aggregate equivalent amount of approximately $480 million, under which short-term loans in the aggregate equivalent amount of approximately $58 million were outstanding.

95 AMERICAN EXPRESS CENTURION BANK Business American Express Centurion Bank ("AECB") was incorporated under Utah law as an industrial loan company in 1987 and received FDIC insurance in 1989. Its principal office is located at 4315 South 2700 West, Salt Lake City, Utah 84184. AECB is the surviving company of a 1996 merger with an affiliated bank also named American Express Centurion Bank. AECB is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. ("TRS"). The information about AECB presented below is qualified in its entirety by reference to and should be read in conjunction with AECB's audited consolidated financial statements and Call Reports for the nine months ended September 30, 2003 and each of the years ended December 31, 2002 and 200L including the notes thereto. AECB issues the Optima Card, Blue from American Express and all other American Express branded revolving credit cards in the United States and owns most of the receivables arising from the use of these Cards. AECB is also the issuer of certain Charge Cards in the United States on substantially similar terms to those Charge Cards issued by TRS. AECB's credit and charge card activities are more fully described in the CONSUMER CARD, SMALL BUSINESS AND CONSUMER TRAVEL SERVICES Section on page 50 of this Information Memorandum. In addition, AECB has outstanding lines of credit in association with certain Charge Cards and offers unsecured loans to Cardmembers in connection with their Sign & Travel and Extended Payment Option. The Sign & Travel program gives qualified United States Cardmembers the option of extended payments for airline, cruise and certain travel charges that are purchased with the Charge Card. The Extended Payment Option offers qualified United States Cardmembers the option of extending payment for certain charges on the Charge Card in excess of a specified amount. AECB offers Membership B@nkingSM an online bank that provides consumers with high-value products, such as free ATM access with rebates on surcharges from other banks, high rates on deposits and the convenience of banking by the internet, telephone, ATM or mail. During 2002, Membership B@nking continued to grow, through Home Equity Lines of Credit. To help further expand its financial services businesses globally, American Express formed the Global Brokerage and Membership B@nking unit. This unit will work closely with American Express Financial Advisors and TRS' card business in both the United States and select international markets to better reach consumers through a number of distribution channels with a variety of products. In addition to earning finance charge revenues, AECB also receives revenue from Cardmember fees, and discount revenue from service establishments. The credit card account is offered in different versions with a variety of features and terms, including co-branded cards, cards with differing rates, fees and grace periods, and cards with additional features such as rebates. THE INSTRUMENTS ISSUED BY AECB ARE DIRECT, UNSECURED OBLIGATIONS OF AECB ONLY; THEY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS OF AECB OR ANY BANK OR NON-BANK SUBSIDIARY OF AECB; AND THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THEY ARE NOT THE OBLIGATION OF OR GUARANTEED BY AMERICAN EXPRESS OR ANY OTHER AMERICAN EXPRESS SUBSIDIARY OR AFFILIATE. FURTHER, INSTRUMENTS ISSUED BY AECB MAY BE SUBORDINATED. Support of most of AECB's activities is provided at its principal office and domestic branch in Utah and by facilities currently owned by an affiliate located in Phoenix, Arizona; Greensboro, North Carolina; and Fort Lauderdale, Florida. Total loans from lending activities were $16.8 billion and $16.7 billion as of December 31, 2002 and 2001, respectively. AECB's charge-offs, net of recoveries, as a percentage of average loans were 5.46 percent and 5.24 percent in 2002 and 2001, respectively. AECB finances its revolving credit receivables through the sale of short- and medium-term notes and certificates of deposit. AECB also funds receivables through asset securitization programs. As of

96 December 31, 2002, AECB had $7.5 billion of certificates of deposit and foreign deposits outstanding, $4.2 billion in bank notes outstanding and $4.1 billion in other borrowed funds and federal funds purchased. At December 31, 2002, AECB sold $17.3 billion of credit card receivables and $611 million of charge card receivables to the securitization trusts. For a further discussion of TRS' and AECB's Financing Activities, see pages 32 through 33 and pages 41 through 42 under the caption "Financial Review", and Note 6 on pages 68 through 69 of American Express Company's 2002 Annual Report to Shareholders, which portions of such report are incorporated herein by reference.

97 REGULATORY MATTERS OF AECB The following is a general discussion of the regulatory environment in which AECB operates and certain of the material laws, regulations and policies that apply to AECB and its subsidiary. Any discussion of statutory or regulatory provisions is qualified in its entirety by reference to those provisions.

General AECB is incorporated under Utah law as an industrial loan company and is subject to the supervision of, and to regulation by, the Utah Commissioner of Financial Institutions and the FDIC. AECB's business is influenced by prevailing economic conditions, as well as policies and actions of the Board of Governors of the Federal Reserve System (the "FRB"). FRB policies and regulations influence, both directly and indirectly, the rates of interest paid by commercial banks on their time and savings deposits and the costs of funding AECB's activities,

Industrial Loan Company and Bank Holding Company Restrictions The Competitive Equality Banking Act of 1987 ("CEBA"), among other things, prevented the formation of new "nonbank" banks after March 5, 1987 and restricts the activities of such banks that existed on that date. As an industrial loan company, AECB is not subject to these restrictions, except for one regarding affiliate overdrafts. AECB is not deemed to be a bank for purposes of the Bank Holding Company Act of 1956 (the "BHC Act"), and neither TRS nor American Express is treated as a bank holding company under the BHC Act. AECB's compliance with CEBA has not had a material effect on AECB's financial results.

Depositor Preference The claims of a receiver of an insured depository institution for administrative expenses and the claims of holders of deposit liabilities of that institution (including the FDIC, as the subrogee of such holders) have priority over the claims of general unsecured creditors of that institution, including the holders of obligations such as the AECB Notes, in the event of a liquidation or other resolution of that institution. Under a final FDIC rule, "administrative expenses" of a receiver are defined as those incurred by a receiver in liquidating or resolving the affairs of a failed insurance depository institution. In a liquidation or other resolution of AECB by the FDIC, holders of AECB Notes would be treated differently from, and could receive, if anything, significantly less than, holders of deposit obligations of AECB.

Powers of the FDIC in Connection with the Insolvency of an Insured Depository Institution A bank insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to a commonly controlled depository institution in danger of default. The term "default" is defined to mean the appointment of a conservator or receiver for such institution and "in danger of default" is defined generally as the existence of certain conditions indicating that a "default" is likely to occur in the absence of regulatory assistance. Thus, AECB could incur liability to the FDIC pursuant to this statutory provision in the event of the default of the other insured depository institutions owned or controlled by American Express. As of the date of this Offering Circular, the only other insured depository institution controlled by American Express, other than AECB, is American Express Personal Trust Services, FSB. Such liability to the FDIC is subordinate in right of payment to deposit liabilities, secured obligations, and any other general or senior liability and any obligation subordinated to depositors or other general creditors, other than obligations owed to any affiliate of the depository institution (with certain exceptions) and any obligations to shareholders in such capacity. In addition, if any insured depository institution becomes insolvent and the FDIC is appointed its conservator or receiver, the FDIC may disaffirm or repudiate any contract or lease to which such institution is a party, the performance of which is determined by the FDIC to be burdensome, and the disaffirmance or repudiation of which is determined by the FDIC to promote the orderly administration of the institution's affairs. Counsel for AECB believes that debt obligations of an insured depository institution (such as AECB Notes) might be deemed by the FDIC to be "contracts" within the meaning of

98 the foregoing. In such case, the FDIC in its capacity as a conservator or receiver of a failed insured depository institution could repudiate some debt obligations of such institution while leaving others unaffected. If the FDIC were to contend successfully that its power to repudiate "contracts" extends to obligations such as the AECB Notes, the effect of any such repudiation would be to accelerate the maturity of AECB Notes. Such repudiation would result in a claim of the holders of the AECB Notes against the receivership for principal and interest accrued through the date of the appointment of the conservator or receiver. The amount paid upon this claim would depend upon, among other factors, the amount of receivership assets available for the payment of unsecured claims and the priority of this claim relative to the priority of other unsecured creditors and depositors. See "Depositor Preference"' above. If the maturity of the AECB Notes were so accelerated, and a claim relating to AECB Notes paid by the receivership, the holders of the AECB Notes might not be able, depending upon economic conditions, to reinvest any amounts paid on the AECB Notes at a rate of interest comparable to that paid on the AECB Notes. The FDIC, as conservator or receiver, may also transfer to a new obligor any of AECB's assets and liabilities, including AECB Notes, without the approval of AECB's creditors, including holders of the AECB Notes. In its resolution of the problems of an insured depository institution in default or in danger of default, the FDIC is generally required to satisfy its obligations to insured depositors at the least possible cost to the deposit insurance fund. The FDIC may not take any action that would have the effect of increasing the losses to the deposit insurance fund by protecting depositors for more than the insured portion of deposits (generally, $100,000) or creditors other than depositors (such as holders of AECB Notes). The Federal Deposit Insurance Corporation Improvement Act of 1991 authorizes the FDIC to settle all uninsured and unsecured claims in the insolvency of an insured bank by making a final settlement payment after the declaration of insolvency. Such a payment would constitute full payment and disposition of the FDIC's obligations to claimants. The rate of such final settlement payments is to be a percentage rate determined by the FDIC reflecting an average of the FDIC's receivership recovery experience. As a result of provisions of law described above, including those described under "Depositor Preference," whether or not the FDIC seeks to repudiate the AECB Notes, in an insolvency of AECB, the AECB Notes would be treated differently from, and holders of the AECB Notes could receive, if anything, significantly less than, holders of deposit obligations, including deposit notes, of AECB.

Capital Requirements The FDJC has adopted risk-based capital guidelines to which AECB is subject. The guidelines establish a systematic analytical framework that makes regulatory capital requirements more sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures into explicit account in assessing capital adequacy and minimizes disincentives to holding liquid, low-risk assets. Under the guidelines and related policies, an insured bank must maintain capital sufficient to meet both a risk-based asset ratio test and leverage ratio test on a consolidated basis. A bank's total risk-based capital ratio (the ratio of total capital (as defined below) to total risk-weighted assets) is determined by allocating assets and specified off-balance sheet financial instruments into four weighted categories, with higher levels of capital being required for the categories perceived as representing greater risk. Under these guidelines, a bank's capital is divided into two tiers. The first tier (Tier I) includes common equity, non-cumulative perpetual preferred stock (excluding auction rate issues) and minority interests that are held by others in a bank's consolidated subsidiaries, less goodwill and any disallowed intangibles. The risk-based capital guidelines provide that the maximum allowable amount of mortgage servicing assets, purchased credit card relationships and nonmortgage servicing assets that may be included in (i.e., not deducted from) the calculation of a bank's Tier I capital, may in the aggregate, not exceed 100 percent of Tier I capital (calculated net of certain disallowable intangible assets) and no more than 25 percent of such Tier I capital can consist of purchased credit card relationships and nonmortgage servicing assets. In addition, no more than 25 percent of Tier I capital may consist of credit-enhancing interest-only strips. Supplementary (Tier II) capital includes, among other items, cumulative and limited life preferred stock, hybrid capital instruments, mandatory convertible securities, qualifying subordinated debt and the allowance for loan and lease losses, subject to certain limitations, less required deductions as provided by regulation. "Total capital" is the sum of Tier I and Tier II capital.

99 Banks are required to attain a minimum total risk-based capital ratio of 8 percent, of which half (4 percent) must be Tier I capital. The FDIC may, however, set higher risk-based capital ratio requirements when a bank's particular circumstances warrant. As of December 31, 2002, AECB's Tier I risk-based capital ratio was 9.42 percent, and AECB's total risk-based capital ratio was 10.76 percent. Under the leverage ratio test, the numerator is Tier I capital and the denominator is adjusted total assets (as specified in the guidelines). These guidelines provide for a minimum leverage ratio of 3 percent for banks that meet certain specified criteria, including excellent asset quality, high liquidity, low interest rate exposure and the highest regulatory rating. Banks not meeting these criteria or which are experiencing or anticipating significant growth are expected to maintain a minimum ratio which exceeds the 3 percent minimum by at least 100 to 200 basis points. The FDIC may, however, set higher leverage ratio requirements when a bank's particular circumstances warrant. As of December 31, 2002, AECB's leverage ratio was 12.28 percent. In November 2001, the four federal banking agencies, including the FDIC, adopted an amendment to the regulatory capital standards regarding the treatment of certain recourse obligations, direct credit substitutes (i.e., guarantees on third party assets), residual interests in asset securitizations, and other securitized transactions that expose institutions primarily to credit risk. Effective January 1, 2002, this rule amended the agencies' regulatory capital standards to create greater differentiation in the capital treatment of residual interests. The risk-based capital guidelines of the FDIC follow the Capital Accord of the Basel Committee on Banking Supervision. The Basel Committee, which consists of banking supervisors from the principal nations whose banking organizations are active internationally, issued its Capital Accord to achieve convergence in the capital regulations applicable to internationally active banking organizations. On January 16, 2001, the Basel Committee proposed a replacement of the Capital Accord. Under the new framework, risk weights for certain types of claims, including corporate credits, would be based on ratings assigned by rating agencies. Certain low-quality exposures would be assigned a risk rating greater than 100 percent. Short-term commitments to lend, which currently do not require capital, would be subject to a 20 percent conversion factor. In addition to this "standardized1' approach, banks with advanced risk management capabilities that met rigorous supervisory standards would be permitted to use an internal ratings-based approach. The Basel Committee also proposed capital charges for operational risk. The Basel Committee indicated that it intends to finalize the proposed framework by the end of 2003, with implementation in 2006. From time to time the FDIC issues statements and interpretations on how institutions subject to its authority must apply the capital requirements discussed above. Such statements and interpretations could have a significant impact on AECB's ability to satisfy its minimum capital requirements and should be consulted when evaluating the capital adequacy of AECB. As of December 31, 2002, AECB exceeded the FDIC "well capitalized" levels for Tier I, total capital and minimum leverage ratios.

Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") In addition to the provisions described above, the following is a brief summary of certain provisions of FDICIA. FDICIA provides the federal banking agencies with broad powers to take "prompt corrective action" to resolve problems of insured depository institutions. The extent of these powers depends upon whether the institutions in question are "well capitalized", "adequately capitalized", "undercapitalized", "significantly undercapitalized" or "critically undercapitalized." Under rules adopted by the FDIC, an insured bank will be considered (A) "well capitalized" if it has (i) a total risk-based capital ratio of 10 percent or greater, (ii) a Tier I risk-based capital ratio of 6 percent or greater, (iii) a leverage ratio of 5 percent or greater and (iv) is not subject to any order or written directive to meet and maintain a specific capital level; and (B) "adequately capitalized" if it has (i) a total risk-based capital ratio of 8 percent or greater, (ii) a Tier I risk-based capital ratio of 4 percent or greater and (iii) a leverage ratio of 4 percent or greater (or 3 percent or greater in the case of a bank with a composite regulatory CAMEL rating of 1). A bank will be considered (C) "undercapitalized" if it does not meet either of the above definitions; (D) "significantly undercapitalized" if it has (i) a total risk-based capital ratio of less than 6 percent, (ii) a Tier I risk-based capital ratio of less than 3 percent or (iii) a leverage ratio of less than

100 3 percent; and (E) "critically undercapitalized" if it has a ratio of tangible equity (as defined in the regulation) to total assets less than or equal to 2 percent. Under FDICIA's prompt corrective actions system, a bank in the undercapitalized category must submit a capital restoration plan guaranteed by its parent company. The liability of the parent company under any such guarantee is limited to the lesser of 5 percent of the bank's assets at the time it became undercapitalized, or the amount needed to comply with the plan. A bank in the undercapitalized category also is subject to limitations in numerous areas including, but not limited to, asset growth, acquisitions, branches, new business lines, acceptance of brokered deposits and borrowings from the Federal Reserve. Progressively more burdensome restrictions are applied to banks in the undercapitalized category that fail to submit or implement a capital plan and to banks that are in the significantly undercapitalized or critically undercapitalized categories. In addition, a bank's primary federal banking agency is authorized to downgrade the bank's capital category to the next lower category upon a determination that the bank is in an unsafe or unsound condition or is engaged in an unsafe or unsound practice. An unsafe or unsound practice can include receipt by the institution of a rating on its most recent examination of three or worse (on a scale for 1 (best) to 5 (worst)), with respect to its capital, asset quality, management, earning, liquidity or sensitivity. FDICIA and the regulations issued there under also have (i) limited the use of brokered deposits to well capitalized banks and adequately capitalized banks that have received waivers from the FDIC; (ii) established restrictions on the permissible investments and activities of FDIC-insured state chartered banks and their subsidiaries; (iii) implemented uniform real estate lending rules; (iv) prescribed standards to limit the risks posed by credit exposure between banks; (v) amended various consumer banking laws; (vi) increased restrictions on loans to a bank's insiders; (vii) established standards in a number of areas to assure bank safety and soundness; and (viii) implemented additional requirements for institutions that have $500 million or more in total assets with respect to annual independent audits, audit committees, and management reports related to financial statements, internal controls and compliance with designated laws and regulations.

Deposit Insurance Assessments The FDIC administers two separate deposit insurance funds, the Bank Insurance Fund ("BIF"), which insures the deposits of institutions which were insured by the FDIC prior to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), and the Savings Association Insurance Fund ("SAIF"), which insures the deposits of institutions which were insured by the Federal Savings and Loan Insurance Corporation prior to the enactment of FIRREA. AECB is a member of the BIF. Under the FDIC's risk-based assessment system, each insured depository institution is assigned into one of three capital groups - well capitalized, adequately capitalized or undercapitalized - and further assigned into one of three subgroups within a capital group, on the basis of supervisory evaluations by the institution's primary federal and, if applicable, state supervisors and other information relevant to the institution's financial condition and the risk posed to the applicable insurance fund. The assessment rate applicable to AECB in the future will depend in part upon the risk assessment classification assigned to AECB by the FDIC and in part on the BIF assessment schedule adopted by the FDIC. The Deposit Insurance Funds Act of 1996 ("DIFA") provides that premiums related to deposits assessed by the BIF are to be assessed at a rate of between 0 cents and 27 cents per $100 of deposits. All depository institutions must also pay an annual assessment so that the Financing Corporation ("FICO") may pay interest on bonds it issued in connection with the resolution of savings association insolvencies occurring prior to 1991. The FICO assessment for the fourth quarter of 2002 is 1.68 basis points of domestic deposits. The rate schedules are subject to future adjustments by the FDIC. In addition, the FDIC has authority to impose special assessments from time to time, subject to certain limitations specified in the Deposit Insurance Funds Act.

Consumer Protection Laws There are numerous federal and state laws that significantly influence AECB's primary lending and deposit activities, including consumer protection and usury laws. These laws can affect AECB's earnings and activities. Legislation may be enacted or regulation imposed to further regulate banking and financial services or to limit finance charges or other fees or charges earned in such activities. There can be no

101 assurance whether any such legislation or regulation will place additional limitations on AECB's operations or adversely affect its earnings.

Financial Services Modernization On November 12,1999, the Gramm-Leach-Bliley Act of 1999 ("GLBA") was signed into law. The GLBA increased the ability of banks, securities firms, insurance companies and other financial service providers to affiliate. As a result, there may be an increase in the number and type of companies that compete with AECB. In addition, the provisions of GLBA impact a wide range of laws that affect the activities of financial institutions, including insurance, securities and merchant banking. The GLBA may change the operating environment of AECB and its subsidiaries in substantial and unpredictable ways. We cannot accurately predict the ultimate effect that this legislation, or implementing regulations, will have upon the financial condition or results of operations of AECB or any of its subsidiaries.

Privacy The GLBA included extensive consumer privacy provisions and the federal banking regulators have adopted privacy regulations implementing the new law. These provisions, among other things, require full disclosure of AECB's privacy policy to consumers and mandate offering the consumer the ability to "opt out" of having non-public personal information disclosed to third parties. In addition, the states are permitted to adopt more extensive privacy protections through legislation or regulation. There can be no assurance whether any such legislation or regulation will place additional limitations on AECB's operations or adversely affect its earnings.

Future Developments In addition to the matters discussed above, there have been proposed a number of legislative and regulatory proposals designed to strengthen the federal deposit insurance system and to improve the overall financial stability of the United States banking system. It is impossible to predict whether or in what form these proposals may be adopted in the future, and, if adopted, what their effect will be on AECB.

102 DIRECTORS AND OFFICERS OF AECB

The Directors and Executive Officers of AECB and their principal occupations are as follows:

Name Principal Occupation Directors Ashwini Gupta Chairman David E. Poulsen President and Chief Executive Officer Jay B. Stevelman Retired Financial Executive Frank L. Skillern Retired Financial Executive Roslyn M. Watson President, Watson Ventures Inc. Maria J. Garciaz Executive Director and CEO, Salt Lake Neighborhood Housing Services Peter A. Lefferts Chairman of NHSA Community Development Financial Institution William M. Isaac Chairman of the Secura Group Roger O. Goldman Consultant

The following persons are Executive Officers who are not Directors of AECB:

Name Principal Occupation L. Craig Downs Secretary & Chief Credit Officer and VP Credit Julie M. Lindquist Chief Operating Officer & VP Operations Roy Nilsen Chief Technology Officer Daniel Follett Chief Financial Officer, Treasurer David Yowan Senior Vice President, Asset/Liability Management John D. Koslow Assistant Treasurer Maureen A. Ryan Assistant Treasurer Leslie Scharfstein Assistant Treasurer John B. Hobby Assistant Secretary Stephen P. Norman Assistant Secretary Timothy J. Heine Assistant Secretary Kevin J. Cooper Assistant Secretary Christopher A. Gibson General Auditor Jon C. Patton Vice President, New Accounts Carla J. Wells Building Security Officer Gillen Clements Senior Compliance Officer C. Jane Shock CRA Officer Clifford Pedersen Privacy Officer, BSA Officer Rhonda Halpern VP and Chair, Regulatory Compliance Committee

The business address of each Director and each Executive Officer is 4315 South 2700 West, Salt Lake City, Utah 84184.

103 AMERICAN EXPRESS CENTURION BANK - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations Years Ended December 32, 2002 and 2001 In 2002 and 2001, AECB reported earnings of $766 million and $606 million, respectively. These earning levels were supported by loans outstanding of $16.8 billion and $16.7 billion as of December 31, 2002 and 2001, respectively. In 2002 and 2001, average return on assets were 4.72 percent and 3.53 percent, respectively. At December 31, 2002, AECB reserves as a percent of delinquencies were 131 percent. Accounts are charged-off when six contractual payments become past due or earlier if the account is deemed uncollectible. The charge-off rates for the years ended December 31, 2002 and 2001 were 5.46 percent and 5.24 percent, respectively.

Sources of Funds and Liquidity December 31, 2002 and 2001 Total assets were $18.8 billion and $17.7 billion at year end 2002 and 2001, respectively. Loan Receivables were $16.8 billion and $16.7 billion at December 31, 2002 and 2001, respectively. Loan Reserves were $732 million and $567 million at December 31, 2002 and 2001, respectively. As of December 31, 2002 and 2001 AECB exceeded the FDIC 'well-capitalized' levels for tier 1, total capital and minimum leverage rates. The tier 1 rates in 2002 and 2001 were 9.42 percent and 10.97 percent, respectively. Total capital rates in 2002 and 2001 were 10.76 percent and 12.26 percent, respectively. The minimum leverage ratios in 2002 and 2001 were 12.28 percent and 11.69 percent, respectively.

104 CAPITALIZATION OF AMERICAN EXPRESS CENTURION BANK

The following table sets forth the unaudited consolidated capitalization of AECB as of September 30, 2003: September 30, 2003 (in millions) Deposits liabilities: Less than one year $ 7,212 Greater than one year 28 Total 7,240

Short-term indebtedness: Federal funds and term borrowings 3,410 Medium-term bank notes 2,925 Total 6,335

Long-term indebtedness: Medium-term bank notes due after one year Term borrowings due after one year Total

Shareholder's equity: Common stock Capital surplus 420 Undivided profits and capital reserves 1,802 Total shareholder's equity 2,222 Total capitalization $ 15,797

There has been no material change in the capitalization of AECB and its subsidiaries (taken as a whole) since September 30, 2003. As of September 30, 2003, AECB has no cumulative warrants and/or convertible shares outstanding and has not issued any notes or incurred further indebtedness.

105 SELECTED FINANCIAL INFORMATION OF AECB

September 30, December 31, 2003 2002 2001 (unaudited) (unaudited) (in millions) Balance Sheet Data: Assets: Cash and cash equivalents $ 528 $ 39 $ 51 Investments 45 52 41 Federal funds sold 0 420 520 Loans 16,084 16,796 16,696 Reserves (663) (732) (567) Loans, net 15,421 16,064 16,129 Other assets 1,232 2,184 928 Total assets $ 17,226 $ 18,759 $ 17,669

Liabilities and Shareholder's Equity: Deposit liabilities $ 7,240 $ 7,488 $ 4,804 Federal funds purchased 175 1,550 1,161 Other borrowings 6,160 6,707 9,149 Total debt 13,575 15,745 15,114 Other liabilities 1,429 1,138 635 Total liabilities 15,004 16,883 15,749 Total shareholder's equity 2,222 1,876 1,920 Total liabilities and shareholder's equity $ 17,226 $ 18,759 $ 17,669

September 30. December 31, 2003 2002 2001 (unaudited) (unaudited) Selected Ratios: Return on average assets 5.85% 4.72% 3.53% Return on average shareholder's equity . 47.48% 36.94% 32.00% Tier I capital ratio 12.77% 9.42% 10.97% Total capital ratio 14.13% 10.76% 12.26% Net charge-offs/average loans*-1* 4.93% 5.46% 5.24% Reserves/past due & non-accrual loans'2' 133% 131% 95%

(1) Net charge-offs/average loans are calculated by dividing gross charge-offs less recoveries by full year average loans.

(2) Past due and non-accrual loans are based on the Call Report definitions for alt balances that are 30 days past due and still accruing plus all non-accrual loans.

106 SELECTED FINANCIAL INFORMATION OF AECB

The following unaudited financial information of AECB for the nine months ended September 30, 2003 and for each of the years ended December 31, 2002 and 2001 was derived from AECB's Call Reports and should be read in conjunction therewith and with the detailed information contained elsewhere herein and incorporated by reference. September 30, December 31, 2003 2002 2001 (unaudited) (unaudited) (in millions) Operating Data: Interest income $ 1,695 $ 2,279 $ 2,526 Interest expense 218 279 709 Net interest income 1,477 2,000 1,817 Provision for loan losses 540 959 941 Income after provision for loan losses 937 1,041 876 Non-interest income 1,825 2,011 1,745 Non-interest expense 1,559 1,825 1,649 Net non-interest income (expense) 266 186 96 Pretax income 1,203 1,227 972 Income tax provision 440 461 366 Net income $ 763 $ 766 $ 606

107 IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

Various forward-looking statements have been made in this Information Memorandum. Forward- looking statements may also be made in the American Express Company's other reports filed with the United States Securities and Exchange Commission, in its press releases and in other documents. In addition, from time to time, the Company through its management may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties, including those identified below, which could cause actual results to differ materially from such statements. The words "believe," "expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "should," "could," "likely," and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these 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. The Company undertakes no obligation to update publicly or revise any forward-looking statements. Factors that could cause actual results to differ materially from the Company's forward-looking statements include but are not limited to the following: American Express' ability to: • successfully implement a business model that allows for significant earnings growth based on revenue growth that is lower than historical levels, including the ability to improve its operating expense to revenue ratio both in the short-term and over time, which will depend in part on the effectiveness of reengineering and other cost control initiatives, as well as factors impacting American Express' revenues; • grow its business and meet or exceed its return on equity target by reinvesting approximately 35% of annually generated capital and returning approximately 65% of such capital to shareholders, over time, which will depend, in part, on American Express' ability to manage its capital needs and the effect of business mix, acquisitions and rating agency requirements; • increase investment spending, which will depend in part on the equity markets, other factors affecting revenues and the success of reengineering programs, and capitalize on such investments to improve business metrics; • extend the value of the American Express brand, which historically has been associated with the card and travel businesses (e.g., perception of trust, security and quality service), to a broad range of financial products and services in the financial services industry; • manage credit risk related to consumer debt, business loans, merchant bankruptcies and other credit exposures, both in the United States and abroad, including unseasoned balances in TRS' lending portfolios; • accurately estimate the provision for credit losses in American Express' outstanding portfolio of loans and receivables; • accurately estimate the fair value of the assets in American Express' investment portfolio, and, in particular, those investments that are not readily marketable; • successfully achieve in a timely manner significant cost savings and other benefits from the reengineering efforts being implemented or considered by American Express, including cost management, structural and strategic measures such as vendor, process, facilities and operations consolidation, outsourcing functions (including, among others, technologies operations), relocating certain functions to lower cost overseas locations, moving internal and external functions to the Internet to save costs, the scale-back of corporate lending in certain regions, and planned staff reductions relating to certain of such reengineering actions; • successfully expand its online and offline distribution channels and cross-selling for financial, travel, card and other products and services to its customer base, both in the U.S. and internationally; • participate in payment and other systems material to its businesses on a fair and competitive basis;

108 • control and manage operating, infrastructure, advertising and promotion and other expenses as business expands or changes, including balancing the need for longer term investment spending; • accurately estimate the provision for the cost of American Express' Membership Rewards^ program; • invest successfully in, and compete at the leading edge of, technology developments across all businesses, e.g., transaction processing, data management, customer interactions and communications, travel reservations systems, prepaid products, multi-application smart cards and risk management systems; • recover under its insurance policies for losses resulting from the September llth terrorist attacks; • recognize evolutionary technology developments by competitors or others which could hasten business model obsolescence or, because of patent rights held by such competitors or others, limit or restrict American Express' use of desired business technology or processes; • develop and implement successfully enterprise-wide interactive strategies; • improve online customer satisfaction, website performance and online availability for its customers and clients; • effectively leverage its assets, such as its brand, customers and international presence in the Internet environment; and • attract and retain qualified employees in all its businesses. TRS' ability to: • increase consumer and business spending and borrowing on its credit and charge Cards and travel related services products, gain market share and develop and issue new or enhanced products that capture greater share of customers' total spending on Cards issued on its network both in the United States and in its international operations; • execute American Express' global corporate services strategy including greater penetration of middle market companies, increasing capture of non-T&E spending through greater use of American Express' corporate purchasing card and other means, and further globalizing business capabilities; • manage credit risk and exposure in a challenging economic environment; • cost effectively manage and expand Cardmember benefits, including Membership Rewards; • expand the Global Network Services business; • enhance significantly its international operations, which will depend in part on its ability to reduce expenses for reinvestment in the international business and expand the proprietary and third party-issued Card businesses; • retain Cardmembers in consumer lending products after low introductory rate periods have expired; and • sustain premium discount rates, increase merchant coverage and reduce suppression, all of which will depend in part on its ability to maintain a customer base that appeals to merchants and to develop deeper merchant relationships through creation of new products and services. AEFA's ability to: • sell certain high-yield investments at expected values and within anticipated timeframes and to maintain its high-yield portfolio at certain levels in the future; • improve investment performance in AEFA's businesses, including attracting and retaining high-quality personnel;

109 • develop and roll out new and attractive products to clients in a timely manner and effectively manage the economics in selling a growing volume of non-proprietary products to clients; • manage developments relating to AEFA's platform structure forfinancia ladvisors , including the ability to increase advisor productivity (including adding new clients), increase the growth of productive new advisors and create efficiencies in the infrastructure; • resolve the potential conflicts inherent in its growing multi-channel delivery systems; • obtain critical mass and operating efficiencies in the Global Brokerage and Membership B@nking Unit and diversify sources of revenue; • make accurate assumptions used to determine the amount of amortization of deferred acquisition costs ("DAC") with respect to sale of annuity, insurance and certain mutual fund products; • respond effectively to fluctuation in the equity and fixed income markets, a short-term financial market crash or a long-term financial market decline or stagnation, or a prolonged period of relatively low or high interest rates, any of which could affect the amount and types of investment products sold by AEFA, AEFA's ability to earn target spreads on fixed account liabilities, the level of management, distribution and other fees received based on the market value of managed assets, AEFA's ability to recover DAC as well as the timing of that DAC amortization, and the level of guaranteed minimum death benefits paid to clients; • respond effectively to changes to or elimination of federal tax benefits for AEFA's products and other changes in laws and regulations (including those relating to the federal estate tax and retirement savings laws) which could adversely affect sales of insurance and annuity products; • respond effectively if the independent directors of the mutual funds managed by AEFA reduce the compensation paid to AEFA or terminate the contracts to manage, distribute and/ or service those funds. Factors that could cause actual results to differ materially from Credco's forward-looking statements include, but are not limited to: • credit trends and the rate of bankruptcies, which can affect spending on card products and debt payments by individual and corporate customers; • Credco's ability to accurately estimate the provision for credit losses in Credco's outstanding portfolio of charge cardmember and lending receivables; • fluctuations in foreign currency exchange rates; • negative changes in Credco's credit ratings, which could result in decreased liquidity and higher borrowing costs; • the effect offluctuatin g interest rates, which could affect Credco's borrowing cost; and • the impact on American Express Company's business from the war in Iraq and its aftermath and other geopolitical uncertainty. In general: • the impact on American Express' businesses and uncertainty created by the September llth terrorist attacks, and the potential negative effect on American Express' businesses and infrastructure, including information technology systems, of terrorist attacks or disasters in the future; • the impact on American Express' businesses resulting from the war in Iraq and its aftermath and other geopolitical uncertainty; • relationships with third-party providers of various computer systems and other services integral to the operations of American Express' businesses;

110 the triggering of obligations to make payments to certain co-brand partners, merchants, vendors and customers under contractual arrangements with such parties under certain circumstances; potential deterioration in the high-yield sector and other investment areas, which could result in further losses in AEFA's investment portfolio; credit trends and the rate of bankruptcies, which can affect spending on card products, debt payments by individual and corporate customers and businesses that accept American Express' card products, and returns on American Express' investment portfolios; fluctuations in foreign currency exchange rates; a downturn in American Express' businesses and/or negative changes in American Express' and its subsidiaries' credit ratings, which could result in contingent payments under contracts, decreased liquidity and higher borrowing costs', the effect of fluctuating interest rates, which could affect AEFA's spreads in the investment and insurance businesses and benefits credited to clients' accounts, TRS' borrowing costs and TRS' and AEB's return on lending products; changes in laws or government regulations, including tax laws affecting American Express' businesses or that may impact the sales of the products and services that it offers, and regulatory activity in the areas of customer privacy, consumer protection, business continuity and data protection; political or economic instability in certain regions or countries, which could affect commercial or other lending activities, among other businesses, or restrictions on convertibility of certain currencies; the costs and integration of acquisitions; competitive pressures in all of American Express' major businesses; the adoption of recently issued accounting rules related to the consolidation of special-purpose entities, including those involving collateralized debt obligations, secured loan trusts, mutual funds, hedge funds and limited partnerships that the Company manages and/or invests in, which could affect both American Express' balance sheet and results of operations; and outcomes and costs associated with litigation and compliance and regulatory matters.

Ill UNITED STATES TAXATION

The following discussion addresses certain of the United States federal income and estate tax consequences applicable to the ownership of the Instruments by United States Aliens (defined below). The following discussion does not address the United States federal income tax consequences arising from the fact that a United States Alien is present in the United States or that such holder of an Instrument has a connection with the United States or the Company or has any special status. Persons considering the purchase, ownership or disposition of the Instruments should consult their own tax advisers concerning the United States federal tax consequences in light of their particular situations as well as any consequences arising under the laws of any state, locality or non-U.S. taxing jurisdiction. The discussion set forth below is based upon currently existing provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code") existing regulations of the U.S. Treasury thereunder ("Treasury Regulations") and current administrative rulings and court decisions all of which may be repealed, revoked or modified so as to make the ensuing analysis inapplicable.

General Purchasers of Instruments or Coupons should consult their own advisers as to the tax consequences in connection with the acquisition and sale of any Instrument or Coupon.

United States Taxation In the opinion of Linda Worrell, Tax Counsel, under present United States federal income and estate tax law, and subject to the discussion below concerning information reporting and backup withholding: (a) payments outside the United States on an Instrument or Coupon by the Issuers or any of their paying agents to any person who, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, or a foreign estate or trust (a "United States Alien"), generally will not be subject to withholding of United States federal income tax, provided, however, that in the case of interest (i) the Holder does not actually or constructively own 10 percent or more of the total combined voting power of all classes of stock of the relevant Issuer entitled to vote within the meaning of Section 871(h)(3) of the Code and the regulations thereunder, (ii) the Holder is not a controlled foreign corporation for United States federal income tax purposes that is related to the Issuer through stock ownership, (iii) the interest is not contingent interest described in section 871(h)(4) of the Code (in very general terms, interest based on or determined by reference to income, profits, cash flow or other comparable attributes of the obligor or a party related to the obligor), and (iv) the interest is not effectively connected with the conduct by the Holder of a trade or business within the United States (as determined under the Code); (b) a Holder of an Instrument or Coupon who is a United States Alien generally will not be subject to United States federal income tax on any gain realised on the sale, exchange or redemption of an Instrument or Coupon (other than such gain attributable to accrued interest, which is addressed in paragraph (a) above) if such gain is not effectively connected with the conduct by the Holder of a trade or business within the United States and not attributable to an office or other fixed place of business in the United States and, in the case of a non-resident alien individual, such Holder is not present in the United States for 183 days or more during the taxable year and does not have a tax home (as defined in the Code) in the United States; (c) an Instrument or Coupon held by an individual who at the time of death is not a citizen or resident of the United States will not be subject to United States federal estate tax as a result of such individual's death, if at the time of death (i) the individual did not actually or constructively own 10 percent or more of the total combined voting power of all classes of stock of the Issuer entitled to vote within the meaning of Section 871(h)(3) of the Code, and (ii) payments of interest on such Instrument held by such individual would not have been effectively connected with a United States trade or business; and

112 (d) If an entity or arrangement treated as a partnership for United States federal income tax purposes holds an Instrument or Coupon, the United States federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding an Instrument or Coupon should consult its own tax adviser regarding the United States federal income tax consequences to the partner of the acquisition, ownership and disposition of an Instrument or Coupon by the partnership. Certain payments to non-corporate persons of interest and principal on obligations are subject to information reporting and may be subject to a backup withholding tax at a current rate of 28 percent (subject to change in subsequent years). Under current United States federal income tax law and regulations, payment of interest on and principal of an Instrument or Coupon by the Issuers or any of their paying agents made outside the United States generally will not be subject to information reporting or backup withholding unless the Issuers or their paying agents have actual knowledge that the beneficial owner of the Instrument is a United States person (as defined below). However, if payments of interest on or principal of an Instrument or Coupon are collected outside the United States by the foreign office of a custodian, nominee or other agent acting on behalf of the beneficial owner of an Instrument, and, if such custodian, nominee or other agent is (i) a United States person, (ii) a controlled foreign corporation for United States tax purposes, (iii) a foreign person 50 percent or more of whose gross income for certain periods is from a United States trade or business, or (iv) a partnership if, at anytime during the taxable year, it is engaged in a U.S. trade or business or more than 50 percent of its income or capital interests are held by U.S. persons (as defined in the Code) (hereinafter a "U.S. Controlled Person"), payments of interest and principal in respect of the Instrument made by such custodian, nominee or agent to the beneficial owner may be subject to information reporting (but generally not backup withholding) unless such custodian, nominee or agent has sufficient documentary evidence in its records that the beneficial owner is not a United States person or the beneficial owner otherwise establishes an exemption. Payments of principal or interest on an Instrument or Coupon paid to the beneficial owner of an Instrument or Coupon by a United States office of a custodian, nominee or agent, or the payment by a broker of the proceeds of a sale of an Instrument, effected at a United States office of the broker generally will be subject to both backup withholding and information reporting unless the beneficial owner certifies to its non-U.S. status under penalties of perjury, and the payor does not have actual knowledge that the beneficial owner is a United States person, or the beneficial owner otherwise establishes an exemption. For the purposes of these rules, a sale of an Instrument will be deemed to be effected inside the United States if (i) the holder has a specified relationship with a U.S. office of the broker, (ii) the proceeds are transferred to an account maintained by the holder in the United States or are mailed to a United States address, (iii) the confirmation of the sale is mailed to a United States address, or (iv) the holder has transmitted instructions to the broker from within the United States other than in isolated and infrequent circumstances. Information reporting requirements and backup withholding requirements generally will not apply to any payment of the proceeds of the sale of an Instrument effected outside the United States by a foreign office of a "broker" (as denned in applicable United States Treasury regulations), provided that such broker is not a U.S. Controlled Person. Payment of the proceeds of the sale of an Instrument effected outside the United States by a foreign office of any broker that is a U.S. Controlled Person is subject to information reporting unless such broker has documentary evidence in its records that the beneficial owner is not a United States person and certain other conditions are met, or the beneficial owner otherwise establishes an exemption. If a payment is made to a foreign partnership (other than one that qualifies as a "withholding foreign partnership"), the partners of such partnership will be required to provide the certification discussed above in order to establish an exemption from information reporting and backup withholding. A payor may rely on a certification or documentary evidence only if the payor does not know or have reason to know that it is unreliable. Backup withholding tax is not an additional tax. Any amounts deducted and withheld under the backup withholding rules from a payment to a Holder generally may be claimed as a credit against such Holder's United States federal income tax liability provided that the required information is furnished to

113 the Internal Revenue Service. Holders should consult their tax advisers regarding the applicability and consequences of backup withholding and information reporting. As used in this section, "United States" means the United States of America (including the States and the District of Columbia), and where relevant, its territories, its possessions and other areas subject to its jurisdictions, "United States person" means any citizen or resident of the United States for United States federal income tax purposes, a corporation partnership (or other entity treated as a corporation partnership for U.S. federal income tax purposes organized in or under the laws of the United States or any political subdivision thereof including the District of Columbia), or an estate the income of which is subject to United States federal income tax regardless of its source, a trust if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions or if the trust made a valid election under United States Treasury Regulations to be treated as a domestic trust; and "restricted period" has the meaning given such term in the regulations promulgated under Section 163(f) of the Code. The above opinion of counsel and the foregoing discussion are based upon certain of the facts set forth in this Information Memorandum and other documents related to the issuance of Instruments and upon compliance with the provisions thereof and the representations and agreements therein. In rendering its opinion, counsel has, in particular, relied on representations to the Issuers by the Dealers that they have in effect procedures reasonably designed to ensure that their employees or agents who are directly engaged in selling the Instruments are aware that the Instruments and Coupons cannot be offered, sold or delivered during the restricted period to a person who is within the United States or who is a United States person, except as permitted by United States Treasury regulations. The Code, Treasury Regulations, rulings and decisions in effect on the date hereof, upon which this opinion is also based, are all subject to change. THE OPINIONS AND TAX DISCUSSION SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY, THEY DO NOT PURPORT TO BE A COMPLETE ANALYSIS OR LISTING OF ALL POTENTIAL TAX EFFECTS RELEVANT TO A DECISION TO PURCHASE THE INSTRUMENTS AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. SUCH OPINIONS AND DISCUSSION DO NOT ADDRESS TAX CONSEQUENCES THAT MAY BE RELEVANT TO INVESTORS THAT ARE NOT UNITED STATES ALIENS OR ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCALITY OR NON-U.S. JURISDICTION. HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR CONSEQUENCES TO THEM OF HOLDING AND DISPOSING OF INSTRUMENTS OR COUPONS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER LOCAL, STATE, FOREIGN AND OTHER TAX LAWS AND POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL INCOME OR OTHER TAX LAWS. ADDITIONALLY, AND WITHOUT PURPORTING TO BE COMPLETE, THE OPINIONS AND TAX DISCUSSIONS DO NOT ADDRESS THE TAX TREATMENT OF A PARTICULAR ISSUANCE. PURCHASERS SHOULD CONSULT THEIR OWN TAX ADVISERS CONCERNING THE TAX TREATMENT OF A PARTICULAR ISSUANCE INCLUDING BUT NOT LIMITED TO INSTRUMENTS ISSUED IN NON-U.S. DOLLARS OR AT A PREMIUM OR DISCOUNT.

114 UNITED KINGDOM TAXATION

The following is only a summary of the Issuers' understanding of current United Kingdom law and practice at the date hereof relevant to United Kingdom Holders, relating to withholding or deduction from interest on the Instruments for or on account of tax and does not deal with other United Kingdom tax aspects of acquiring, holding or disposing of the Instruments. This summary relates only to the position of persons who are the absolute beneficial owners of the Instruments. The following assumes that the issuers are not resident in the United Kingdom for United Kingdom tax purposes, are not issuing the Instruments for the purposes of a trade or other business carried on by them in the United Kingdom, that no security will be created, and that interest on the Instruments does not have a United Kingdom source. Prospective Holders should be aware that the particular terms of issue of any series of Instruments as specified in the relevant Pricing Supplement may affect the tax treatment of that and other series of Instruments. The following is a general guide and should be treated with appropriate caution. Persons who are unsure of their tax position are strongly advised to consult their own professional advisers. Holders who may be liable to taxation in jurisdictions other than the United Kingdom in respect of their acquisition, holding or disposal of the Instruments are particularly advised to consult their professional advisers as to whether they are so liable (and if so under the laws of which jurisdictions), since the following comments relate only to certain United Kingdom taxation aspects of payments in respect of the Instruments. In particular, Holders should be aware that they may be liable to taxation under the laws of other jurisdictions in relation to payments in respect of the Instruments even if such payments may be made without withholding or deduction for or on account of taxation under the laws of the United Kingdom.

1. UK Withholding Tax Interest on the Instruments may be paid without withholding or deduction for or on account of United Kingdom income tax if the interest does not have a United Kingdom source.

2. Provision of Information Holders should note that where any interest on Instruments is paid to them (or to any person acting on their behalf) by any person in the United Kingdom acting on behalf of the relevant Issuer (a "paying agent"), or is received by any person in the United Kingdom acting on behalf of the relevant Holder (other than solely by clearing or arranging the clearing of a cheque) (a "collecting agent"), then the paying agent or the collecting agent (as the case may be) may, in certain cases, be required to supply to the United Kingdom Inland Revenue details of the payment and certain details relating to the Holder (including the Holder's name and address). These provisions will apply whether or not the interest has been paid subject to withholding or deduction for or on account of United Kingdom income tax and whether or not the Holder is resident in the United Kingdom for United Kingdom taxation purposes. Where the Holder is not so resident, the details provided to the United Kingdom Inland Revenue may, in certain cases, be passed by the United Kingdom Inland Revenue to the tax authorities of the jurisdiction in which the Holder is resident for taxation purposes. The provisions referred to above may also apply, in certain circumstances, to payments made on redemption of any Instruments where the amount payable on redemption is greater than the issue price of the Instruments.

3. Other Rules Relating to United Kingdom Withholding Tax (a) The above description of the United Kingdom withholding tax position assumes that there will be no substitution of an Issuer pursuant to the Terms and Conditions of the Instruments and does not consider the tax consequences of any such substitution. (b) The references to "interest" in this summary mean "interest" as understood in United Kingdom tax law. The statements in this summary do not take any account of any different

115 definitions of "interest" or "principal" which may prevail under any other law or which may be created by the Terms and Conditions of the Instruments or any related documentation. (c) Instruments may be issued at an issue price of less than 100 percent of their principal amount. Any discount element on any such Instruments will not be subject to any United Kingdom withholding tax, but may be subject to reporting requirements as outlined above. (d) Where Instruments are to be, or may fall to be, redeemed at a premium, as opposed to being issued at a discount, then any such element of premium may constitute a payment of interest. Payments of interest are subject to United Kingdom withholding tax and reporting requirements as outlined above.

4. EU Savings Directive On June 3, 2003 the EU Council of Economic and Finance Ministers adopted a new directive regarding the taxation of savings income. The directive is scheduled to be applied by Member States from January 1,2005, provided that certain non-EU countries adopt similar measures from the same date. Under the directive each Member State will be required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to an individual resident in that other Member State; however, Austria, Belgium and Luxembourg may instead apply a withholding system for a transitional period in relation to such payments, deducting tax at rates rising over time to 35 percent. The transitional period is to commence on the date from which the directive is to be applied by Member States and to terminate at the end of the first fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.

116 SUBSCRIPTION AND SALE

Instruments may be sold from time to time by each Issuer to any one or more of ABN AMRO Bank N.V., Barclays Bank PLC, BNP Paribas, Credit Suisse First Boston (Europe) Limited, Dresdner Bank Aktiengesellschaft, Goldman Sachs International, Morgan Stanley & Co. International Limited, Tokyo- Mitsubishi International pic and Westpac Banking Corporation (the "Dealers"). Instruments may also be sold by the Issuers directly to institutions who are not Dealers. The arrangements under which Instruments may from time to time be agreed to be sold by the relevant Issuer to, and purchased by, Dealers are set out in an amended and restated dealership agreement dated December 22, 2003 (the "Dealership Agreement") and made between the Issuers and the Dealers. Any such agreement will, inter alia, make provision for the form and terms and conditions of the relevant Instruments, the price at which such Instruments will be purchased by the Dealers and the commissions or other agreed deductibles (if any) payable or allowable by the relevant Issuer in respect of such purchase. The Dealership Agreement makes provision for the resignation or termination of appointment of existing Dealers and for the appointment of additional or other Dealers either generally in respect of the Program or in relation to a particular Tranche of Instruments.

United States of America: Regulation S Category 2/3, TEFRA D; Not Rule 144A Eligible Instruments have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act. The Instruments are subject to United States tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by U.S. tax regulations. Terms used in the preceding sentence have the meanings given to them by the United States Internal Revenue Code and regulations thereunder. Each Dealer has agreed that, except as permitted by the Dealership Agreement, it, its affiliates (if any) or any person acting on its behalf will not offer, sell or deliver Instruments, (i) as part of their distribution at any time or (ii) otherwise until forty days after the later of the commencement of the offering and the completion of the distribution of the Instruments comprising the relevant Tranche, as determined and certified to the Fiscal Agent or the relevant Issuer by such Dealer (or, in the case of a sale of a Tranche of Instruments to or through more than one Dealer, by each of such Dealers as to Instruments of such Tranche purchased by or through it, in which case the Fiscal Agent or the relevant Issuer shall notify each such Dealer when all such Dealers have so certified) within the United States or to, or for the account or benefit of, U.S. persons, and such Dealer will send to each dealer to which it sells Instruments during the distribution compliance period relating thereto a confirmation or other notice setting forth the restrictions on offers and sales of the Instruments within the United States or to, or for the account or benefit of, U.S. persons. Terms used in the preceding sentence have the meanings given to them by Regulation S under the Securities Act. In addition, until forty days after the later of the commencement of the offering and the completion of the distribution of the Instruments comprising the relevant Tranche, any offer or sale of Instruments within the United States by a dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

United Kingdom In relation to each Tranche of Instruments, each Dealer subscribing for or purchasing such Instruments has represented to, warranted and agreed with, or will represent to, warrant and agree with, the Issuer and each other such Dealer (if any) that: (i) No offer to public: in relation to Instruments which have a maturity of one year or more, it has not offered or sold and, prior to the expiry of a period of six months from the Issue Date of such Instruments, will not offer or sell any such Instruments to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or

117 disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) No deposit-taking: in relation to any Instruments which have a maturity of less than one year from the date of their issue; (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business; and (b) it has not offered or sold and will not offer or sell any Instruments other than to persons; (A) whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses; or (B) who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their business, where the issue of the Instruments would otherwise constitute a contravention of section 19 of the FSMA by the Issuer; (iii) Financial promotion: it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Instruments in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and (iv) General compliance: it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Instruments in, from or otherwise involving the United Kingdom.

Japan The Instruments have not been and will not be registered under the Securities and Exchange Law of Japan and, accordingly, each Dealer has undertaken that it will not offer or sell any Instruments directly or indirectly, in Japan or to, or for the benefit of, any Japanese Person, or to others for reoffering or resale, directly or indirectly in Japan or to any Japanese Person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For the purposes of this paragraph, "Japanese Person" shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

The Netherlands Each Dealer has represented and agreed that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell in The Netherlands, as part of their initial distribution or as part of any re-offering, any Instruments other than to individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities firms, insurance companies, pension funds, investment institutions, central governments, large international and supranational organisations, other institutional investors and other parties, including treasury departments of commercial enterprises, which are regularly active in the financial markets in a professional manner) in which case: (a) it must be made clear both upon making the offer and in any documents or advertisements in which a forthcoming offering of such Instruments is publicly announced in The Netherlands (whether electronically or otherwise) that such offer is exclusively made to the said individuals or legal entities in The Netherlands; and (b) a copy of this Information Memorandum and the applicable Pricing Supplement must be submitted to the Netherlands Authority for the Financial Markets (Autoriteit Financiele Markten) before the issue date.

118 This selling restriction shall not apply in the event that (a) all Instruments offered in The Netherlands have a denomination of Eur 50,000 or more (or the equivalent in any other currency) or (b) one of the other exemptions from or exceptions to the prohibition contained in article 3 of the Dutch Securities Transactions Supervision Act 1995 ("Wet toezicht effectenverkeer 1995") is applicable and the conditions attached to such exemption or exception are complied with.

Switzerland Each Dealer has agreed that any issue of Instruments denominated in Swiss Francs will be in compliance with the guidelines of the Swiss National Bank regarding issues of Swiss Franc denominated debt securities.

General Other than with respect to the listing of the Instruments on the relevant stock exchange, no action has been or will be taken in any country or jurisdiction by the Issuers or the Dealers that would permit a public offering of Instruments, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required. Persons into whose hands the Information Memorandum or any Pricing Supplement comes are required by the Issuer and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction hi or from which they purchase, offer, sell or deliver Instruments or have in their possession or distribute such offering material, in all cases at their own expense and the Dealers have represented that all offers, sales and deliveries by them will be made on these terms. The Dealership Agreement provides that the Dealers shall not be bound by any of the restrictions relating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or change(s) in official interpretation, after the date hereof, in applicable laws and regulations, no longer be applicable but without prejudice to the obligations of the Dealers described in the paragraph headed "General" above. Selling restrictions may be supplemented or modified with the agreement of the Issuer. Any such supplement or modification will be set out in the relevant Pricing Supplement (in the case of a supplement or modification relevant only to a particular Tranche of Instruments) or (in any other case) in a supplement to this document. Purchasers of Instruments may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the offering price set forth on the cover page hereof.

119 GENERAL INFORMATION

1. Application has been made to list Instruments issued under the Program on the Luxembourg Stock Exchange. Prior to the listing of any Instruments, the constitutional documents of the Issuers and the legal notice relating to the issue will be deposited at the Register of Companies and Commerce (Registre du Commerce et des societes a Luxembourg), where copies of these documents may be obtained upon request. The Luxembourg Stock Exchange has allocated to the program the number 11903 for listing purposes. However, Instruments may be issued pursuant to the Program which will not be listed on the Luxembourg Stock Exchange or any other stock exchange or which will be listed on such stock exchange as the relevant Issuer and the relevant Dealer(s) may agree. 2. The establishment and updates of the Program were authorized by TRS by Unanimous Written Consent of its Board of Directors dated October 24, 1996; by Credco by Unanimous Written Consent of its Board of Directors dated October 29,1996; by AEOCC at meetings of its Board of Directors held on November 1,1996 and December 19,2003; and by AEB by a meeting of its Board of Directors held on November 26, 1996. The entering into and updating of the Program was authorised by AECB by a meeting of its Board of Directors dated April 27, 2000. The Issuers have obtained or will obtain from time to time all necessary consents, approvals and authorizations in connection with the issue and performance of the Instruments. 3. For so long as the Program remains in effect or any Instruments shall be outstanding, copies of the following documents will be available for inspection and copies may be obtained during normal business hours at the specified office of the Paying Agent in Luxembourg namely: (a) the constitutional documents of the Issuers; (b) the Information Memorandum and any document incorporated by reference therein; (c) the Issue and Paying Agency Agreement; (d) the Dealership Agreement; (e) the most recent and all future publicly available audited consolidated financial statements of the Issuers together with the most recent and all future summary unaudited consolidated quarterly balance sheets and profit and loss accounts of TRS, AEB and AEOCC, the quarterly Call Reports of AECB and the Annual Report on Form 10-K, Quarterly Reports on Form 10- Q and Current Reports on Form 8-K of Credco (filed with the SEC); and (f) any Pricing Supplement relating to Instruments which are listed on any stock exchange. (In the case of any Instruments which are not listed on any stock exchange, copies of the relevant Pricing Supplement will only be available for inspection by a Holder of such Instruments). The Issuers do not make publicly available any non-consolidated financial statements. 4. There has been no material adverse change in the consolidated financial position of the Issuers and their consolidated subsidiaries taken as a whole since December 31, 2002, except as disclosed herein. 5. No Issuer nor any of its subsidiaries is a party to any litigation that, in the judgment of such Issuer, is material in the context of the issue of the Instruments, except as disclosed herein. 6. The financial statements of all of the Issuers have been audited for the three financial years preceding the date of this document by Ernst & Young, LLP, independent public auditors of the Issuers for that period, and unqualified opinions have been reported thereon. 7. The Instruments have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The appropriate common code and the International Securities Identification Number in relation to the Instruments of each Series will be specified in the Pricing Supplement relating thereto. The relevant Pricing Supplement shall specify any other clearing system as shall have accepted the relevant Instruments for clearance together with any further appropriate information.

120 8. Instruments with a maturity of more than 183 days and any related Coupons and Talons will bear the following legend on their face: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in the legend provide that a United States person will not, with certain exceptions, be permitted to deduct any loss, and will not be eligible for capital gain treatment with respect to any gain, realised on any sale or other disposition of the Instruments or the Coupons. Instruments with a maturity of 183 days or less and any related Coupons and Talons will bear the following legend on their face: "By accepting this obligation, the holder represents and warrants that it is not a United States person (other than an exempt recipient described in section 6049(b)(4) of the Internal Revenue Code and regulations thereunder) and that it is not acting for or on behalf of a United States person (other than an exempt recipient described in section 6049(b)(4) of the Internal Revenue Code and regulations thereunder)." The term "United States person," as used in this paragraph, has the meaning set forth in the Code and the U.S. Treasury regulations thereunder. 9. Settlement arrangements will be agreed between the relevant Issuer, the relevant Dealer and the Fiscal Agent in relation to each Tranche of Instruments. 10. None of the Issuers have outstanding any convertible debt securities exchangeable debt securities or debt securities with attached warrants. 11. No person asserts any claim of proprietary ownership or exclusive right with respect to any feature of the U.S. tax structure or the U.S. tax aspects of the transactions described herein, and the Issuers and their affiliates authorize each recipient of this Information Memorandum (and each employee, representative, or other agent of the recipient) to disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transactions and all materials of any kind (including opinions and other tax analyses) that are provided to the recipient relating to such U.S. tax treatment and U.S. tax structure. This authorization is effective from the commencement of discussions and is intended to comply with the presumption set forth in Treasury Regulation Section

121 PRINCIPAL OFFICES OF THE ISSUERS

American Express Travel Related American Express Bank Ltd. Services Company, Inc. World Financial Center World Financial Center 200 Vesey Street 200 Vesey Street New York, NY 10285 New York, NY 10285

American Express Credit Corporation American Express Overseas Credit One Christina Centre Corporation Limited 301 North Walnut Street, Suite 1002 41/43 La Motte Street Wilmington, DE 19801-2919 St. Helier Jersey JE2 4SZ Channel Islands

American Express Centurion Bank 4315 South 2700 West Salt Lake City, Utah 84184

DEALERS

ABN AMRO Bank N.V. Barclays Bank PLC 250 Bishopsgate 5 The North Colonnade London EC2M 4AA Canary Wharf London E14 4BB

BNP Paribas Credit Suisse First Boston (Europe) Limited 10 Harewood Avenue One Cabot Square London NW1 6AA London E14 4QJ

Dresdner Bank Aktiengesellschaft Goldman Sachs International Jurgen-Ponto-Platz 1 Peterborough Court D-60301 Frankfurt am Main 133 Fleet Street London EC4A 2BB

Lehman Brothers International (Europe) Morgan Stanley & Co. International Limited 25 Bank Street 25 Cabot Square Canary Wharf Canary Wharf London E14 5LE London E14 4QA

Tokyo-Mitsubishi International pic Westpac Banking Corporation 6 Broadgate 63 St. Mary Axe London EC2M 2AA London EC3A 8LE

AUDITORS OF THE ISSUERS

Ernst & Young LLP 5 Times Square New York, NY 10036

122 FISCAL AGENT AND PAYING AGENT

Deutsche Bank AG London Winchester House 1 Great Winchester Street London EC2N 2DB

PAYING AGENT

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer L-1115 Luxembourg

LEGAL ADVISERS

To the Dealers as to New York law To the Issuers as to United States law Clifford Chance US LLP General Counsel's Office 200 Park Avenue American Express Company New York, New York 10166 World Financial Center 200 Vesey Street New York, NY 10285

To the Issuers as to certain matters of To AEOCC as to Jersey law United States taxation law Voisin & Co. Linda Worrell, Esq. Templar House Vice President — Taxes Don Road American Express Travel Related Services St. Helier: Company, Inc. Jersey JE4 8NU World Financial Center Channel Islands 200 Vesey Street New York, NY 10285

To AECB as to Utah law Van Cott, Bagley, Cornwall & McCarthy 50 South Main Street Suite 1600 Salt Lake City, Utah 84144

LISTING AGENT

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer L-1115 Luxembourg

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