American Express Reports Record Third Quarter
Earnings of $770 Million
Results Reflect Record Cardmember Billings,
Strong Growth in Lending Balances,
Improved Credit Quality and Higher Client Assets
(Dollars in millions, except per share amounts)
Quarters Ended Percentage Nine Months Ended Percentage
September 30 Inc/(Dec) September 30 Inc/(Dec)
2003 2002
Net Income $770 $687 12% $2,224 $1,988 12%
Revenues $6,419 $5,907 9% $18,798 $17,611 7%
Per Share Net
Income:
Basic $0.60 $0.52 15% $1.73 $1.50 15%
Diluted $0.59 $0.52 13% $1.71 $1.49 15%
Average Common
Shares
Outstanding
Basic 1,278 1,323 (3%) 1,287 1,324 (3%)
Diluted 1,297 1,330 (2%) 1,298 1,334 (3%)
Return on Average
Total
Shareholders' 20.4% 17.8% - 20.4% 17.8% -
Equity*
*Computed on a trailing 12-month basis using total Shareholders' Equity as
reported in the Consolidated Financial Statements prepared in accordance with
accounting principles generally accepted in the United States (GAAP). Certain
prior period amounts have been restated to conform to current year
presentation.
NEW YORK, Oct. 27 -- American Express Company today reported record net
income of $770 million for the third quarter, up 12 percent from $687 million a
year ago. Diluted earnings per share (EPS) rose to $0.59, up 13 percent from
$0.52.
The company's return on equity was 20.4 percent.
Revenues on a GAAP basis totaled $6.4 billion, up nine percent from $5.9
billion a year ago. This growth reflects a rise in cards-in-force, average
cardmember spending and lending balances. It also reflects increased revenue
from higher asset levels at American Express Financial Advisors (AEFA).
Consolidated expenses on a GAAP basis totaled $5.4 billion, up eight
percent from $4.9 billion a year ago. This increase primarily reflects higher
marketing, promotion, rewards and cardmember services expenses, as well as
higher human resources expense.
Kenneth I. Chenault, Chairman and CEO said: "The results this quarter
benefited from an acceleration of revenue growth, outstanding credit quality,
a winning set of products and reengineering initiatives that helped to fund a
significantly higher level of business-building investments.
"The changes we've made to our business model over the last few years are
delivering results now. They are also putting us in an excellent position to
capitalize on competitive opportunities -- particularly in the card business.
"During the quarter, we met all three of our long-term financial targets:
12 to 15 percent earnings per share growth, eight percent revenue growth and a
return on equity of 18 to 20 percent. And, we did this while substantially
increasing the level of investment spending designed to generate both
short- and longer-term growth.
"We see excellent competitive opportunities and we plan to continue a
higher level of investment spending through the remainder of the year.
Because of the momentum we're generating, we now believe that our 2003
earnings per share before accounting changes will be at the high end of our
previous guidance of $2.26 to $2.29."
Third Quarter Results/GAAP Basis
The third quarter revenue growth from year-ago levels reflected increases
of eight percent at Travel Related Services (TRS) and 10 percent at AEFA.
Revenue at American Express Bank (AEB) was essentially unchanged. More
specifically,
* Discount revenue increased 13 percent, reflecting a 15 percent rise in
cardmember spending.
* Net finance charge revenue increased 18 percent, reflecting continued
strong growth in the cardmember lending portfolio.
* Net securitization income rose 10 percent, primarily reflecting a
higher level of securitized lending balances in this portfolio.
* Management and distribution fees rose 10 percent, reflecting in part
higher asset levels at AEFA.
* Insurance and annuity-related revenues rose 14 percent.
The rise in third quarter expenses from a year ago reflected increases of
seven percent at TRS and 10 percent at AEFA, slightly offset by a one percent
decrease at AEB. More specifically, the overall increase reflected:
* A 26 percent increase in marketing, promotion, rewards and cardmember
services expenses, driven by a 25 percent increase at TRS.
* A five percent increase in other operating expenses, including an eight
percent increase at TRS.
* A 10 percent increase in human resources expense, reflecting merit
increases, employee benefits and management incentives. Total staffing
levels were essentially unchanged from the year-ago period.
These items were slightly offset by a 10 percent decline in interest
expense, reflecting a 25 percent decline in charge card interest expense at
TRS.
Travel Related Services (TRS) reported net income of $606 million for the
third quarter, up 10 percent from $553 million a year ago.
The following discussion of third quarter results presents TRS segment
results on a "managed basis," as if there had been no cardmember lending
securitization transactions. This is the basis used by management to evaluate
operations and is consistent with industry practice. For further information
about managed basis and reconciliation of GAAP and managed TRS information,
see the "Managed Basis" section below. The AEFA, AEB and Corporate and Other
sections below are presented on a GAAP basis.
Total net revenues increased seven percent from the year-ago period,
reflecting continued strong growth in spending and borrowing on American
Express cards. This strength in the card business was partially offset by
continued weakness in the travel and Travelers Cheque businesses.
Record cardmember spending contributed to a 13 percent rise in discount
revenue. The spending increase reflected growth in the number of American
Express Cards, higher average cardmember spending and the continued benefit of
rewards programs. The higher cardmember spending was driven by strong growth
in retail and everyday spending, and by a notable improvement in the
traditional travel and entertainment category.
Net finance charge revenue increased eight percent, reflecting 14 percent
growth in loan balances offset in part by a lower net interest yield. Net
card fees increased primarily as a result of a higher number of
cards-in-force.
Total expenses increased six percent. In line with the plans announced at
mid-year, marketing, promotion, rewards and cardmember services expenses rose
26 percent from year-ago levels, primarily reflecting the continued expansion
of card-acquisition programs, as well as increased cardmember loyalty program
participation.
Human resources expense increased eight percent largely due to higher
costs related to merit increases, employee benefits and management incentives.
Other operating expenses increased nine percent.
Credit quality remained very strong in both the charge and credit card
portfolios. The total provision for losses declined seven percent, reflecting
a decline of 12 percent in the lending provision, partially offset by an 11
percent increase in the charge card provision. The increase in the charge
card provision is primarily a result of higher receivable balances, which rose
nine percent from last year. Reserve coverage ratios remained at historically
strong levels.
Charge card interest expense decreased 24 percent largely due to lower
funding costs. This decrease was partially offset by higher average
receivable balances.
American Express Financial Advisors (AEFA) reported third quarter net
income of $197 million, up 30 percent from $152 million a year ago. Total
revenues increased 10 percent.
Investment income rose seven percent, reflecting the benefit of a higher
level of owned investments that was partially offset by lower yields.
Invested assets increased due to strong sales over the past year of annuities,
insurance and certificate products.
Management and distribution fees and assets under management -- excluding
the acquisition of Threadneedle -- increased from year-ago levels. This
increase reflected higher average equity values for the quarter, partially
offset by net outflows.
Human resources and other operating expenses rose a combined 10 percent
from year-ago levels, reflecting merit increases, higher employee benefits and
management incentive costs.
These increases were partially offset by a slight net benefit resulting
from AEFA's Deferred Acquisition Cost (DAC) review. As discussed in prior
reports, AEFA annually reviews its DAC assumptions and related practices in
the third quarter. On a gross basis, this year's review resulted in both
significant favorable and unfavorable changes to DAC amortization, which net
to a $2 million benefit.
The after-tax results reflect a tax benefit, which was partially offset by
net investment losses and higher legal and acquisition-related costs.
American Express Bank (AEB) reported net income for the third quarter of
$27 million, up five percent from $25 million a year ago.
AEB's results reflect lower provisions for losses primarily due to the
continued stabilization of write-offs in the consumer lending portfolio. The
results also reflected higher fee-related, foreign exchange and other revenues
in Private Banking and the Financial Institutions Group. These benefits were
partially offset by lower net interest income due to lower volumes in the
Personal Financial Services and corporate loan portfolios and higher human
resources and technology expenses.
Corporate and Other reported third quarter net expenses of $60 million in
2003 compared with $43 million in 2002.
Other Items
In October 2003, the Financial Accounting Standards Board (FASB) issued a
statement delaying the effective date of its accounting rule, FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46).
FIN 46 requires the consolidation for reporting purposes of assets within
certain structured investments that AEFA both owns and manages for third
parties.
Detailed interpretations of FIN 46 continue to emerge and the FASB will
likely issue further interpretations of the rule over the next few months.
Accordingly, the company has decided to delay its plans to adopt FIN 46 in the
third quarter 2003 until the revised effective date of December 31, 2003.
In July 2003, the company preliminarily estimated the impact of FIN 46 to
be a below-the-line charge of approximately $150 million after tax. Based on
current interpretations of the rules and market factors as of September 30,
2003, the charge is now expected to be lower than originally estimated.
However, the charge upon adoption of FIN 46 is dependent upon further
interpretations of the rules and market factors as of December 31, 2003. The
charge will have no effect on cash flow, and the company expects that it will
be reversed at a later date as the structured investments mature.
Managed Basis - TRS
Managed basis means the presentation assumes there have been no
securitization transactions, i.e. all securitized cardmember loans and related
income effects are reflected as if they were in the company's balance sheet
and income statements, respectively. The company presents TRS information on
a managed basis because that is the way the company's management views and
manages the business. Management believes that a full picture of trends in
the company's cardmember lending business can only be derived by evaluating
the performance of both securitized and non-securitized cardmember loans.
Asset securitization is just one of several ways for the company to fund
cardmember loans. Use of a managed basis presentation, including non-
securitized and securitized cardmember loans, presents a more accurate picture
of the key dynamics of the cardmember lending business, avoiding distortions
due to the mix of funding sources at any particular point in time.
For example, irrespective of the funding mix, it is important for
management and investors to see metrics, such as changes in delinquencies and
write-off rates, for the entire cardmember lending portfolio because they are
more representative of the economics of the aggregate cardmember relationships
and ongoing business performance and trends over time. It is also important
for investors to see the overall growth of cardmember loans and related
revenue and changes in market share, which are all significant metrics in
evaluating the company's performance and which can only be properly assessed
when all non-securitized and securitized cardmember loans are viewed together
on a managed basis.
The Consolidated Section of this press release and attachments provide the
GAAP presentation for items described on a managed basis.
The following table reconciles the GAAP-basis TRS income statements to the
managed-basis information.
Travel Related Services
Selected Financial Information
(Unaudited)
Quarters Ended September 30,
(millions)
Preliminary
GAAP Basis
-------------------------------
Percentage
2003 2002 Inc/(Dec)
-------------------------------
Net revenues:
Discount revenue $2,221 $1,967 13.0%
Net card fees 462 439 5.4
Lending:
Finance charge revenue 566 504 12.0
Interest expense 116 124 (7.3)
-------- --------
Net finance charge revenue 450 380 18.3
Travel commissions and fees 349 342 1.9
Other commissions and fees 465 467 (0.4)
Travelers Cheque investment
income 90 96 (7.0)
Securitization income, net 327 298 9.6
Other revenues 394 406 (3.0)
-------- --------
Total net revenues 4,758 4,395 8.2
-------- --------
Expenses:
Marketing, promotion, rewards
and cardmember services 994 796 24.8
Provision for losses and
claims:
Charge card 213 191 11.1
Lending 279 319 (12.6)
Other 31 38 (17.8)
-------- --------
Total 523 548 (4.7)
Charge card interest expense 186 249 (25.3)
Human resources 938 871 7.6
Other operating expenses 1,225 1,133 8.3
-------- --------
Total expenses 3,866 3,597 7.5
-------- --------
Pretax income 892 798 11.7
Income tax provision 286 245 16.3
-------- --------
Net income $606 $553 9.7
======== ========
Note: Certain prior period amounts have been reclassified to
conform to current year presentation.
Travel Related Services
Selected Financial Information
(Unaudited)
Quarters Ended September 30,
(millions)
Preliminary
Securitization
Effect Managed Basis
---------------- ----------------------------
Percentage
2003 2002 2003 2002 Inc/(Dec)
---------------- ----------------------------
Net revenues:
Discount revenue
Net card fees
Lending:
Finance charge revenue $611 $630 $1,177 $1,134 3.7%
Interest expense 74 98 190 222 (15.1)
------- ------- -------- --------
Net finance charge
revenue 537 532 987 912 8.2
Travel commissions and
fees
Other commissions and
fees 45 48 510 515 (0.9)
Travelers Cheque investment
income
Securitization income,
net (327) (298) - - -
Other revenues - (4) 394 402 (2.1)
----- ---- ------ ------
Total net revenues 255 278 5,013 4,673 7.3
----- ---- ------ ------
Expenses:
Marketing, promotion,
rewards and cardmember
services - (5) 994 791 25.6
Provision for losses and
claims:
Charge card
Lending 255 291 534 610 (12.3)
Other
------- ------- -------- --------
Total 255 291 778 839 (7.2)
Charge card interest
expense - (4) 186 245 (24.2)
Human resources
Other operating expenses - (4) 1,225 1,129 8.6
------- ------- -------- --------
Total expenses $255 $278 $4,121 $3,875 6.4
------- ------- -------- --------
Note: Certain prior period amounts have been reclassified to
conform to current year presentation.
American Express Company (www.americanexpress.com), founded in 1850, is a
global travel, financial and network services provider.
Note: The 2003 Third Quarter Earnings Supplement, as well as CFO Gary
Crittenden's presentation from the investor conference call referred to below,
will be available today on the American Express web site at
http://ir.americanexpress.com. An investor conference call to discuss third
quarter earnings results, operating performance and other topics that may be
raised during the discussion will be held at 5:00 p.m. (ET) today. Live audio
of the conference call will be accessible to the general public on the
American Express web site athttp://ir.americanexpress.com. A replay of the
conference call also will be available today at the same web site address.
This release includes forward-looking statements, which are subject to
risks and uncertainties. The words "believe," "expect," "anticipate,"
"optimistic," "intend," "plan," "aim," "will," "may," "should," "could,"
"would," "likely," and similar expressions are intended to identify
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 or revise any
forward-looking statements. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to: the company's 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 re-engineering and other cost-control
initiatives, as well as factors impacting the company's revenues; the
company's ability to grow its business and meet or exceed its return on
shareholders' equity target by reinvesting approximately 35% of annually-
generated capital, and returning approximately 65% of such capital to
shareholders, over time, which will depend on the company's ability to manage
its capital needs and the effect of business mix, acquisitions and rating
agency requirements; the ability of the company to generate sufficient
revenues for expanded investment spending and to actually spend such funds
over the remainder of the year to the extent available, particularly if funds
for discretionary spending are higher than anticipated, and the ability to
capitalize on such investments to improve business metrics; credit risk
related to consumer debt, business loans, merchant bankruptcies and other
credit exposures both in the U.S. and internationally; fluctuation in the
equity and fixed income markets, which can affect the amount and types of
investment products sold by AEFA, the market value of its managed assets, and
management, distribution and other fees received based on the value of those
assets; AEFA's ability to recover Deferred Acquisition Costs (DAC), as well as
the timing of such DAC amortization, in connection with the sale of annuity,
insurance and certain mutual fund products; changes in assumptions relating to
DAC, which could impact the amount of DAC amortization; the ability to improve
investment performance in AEFA's businesses, including attracting and
retaining high-quality personnel; the success, timeliness and financial
impact, including costs, cost savings and other benefits, including increased
revenues, of re-engineering initiatives being implemented or considered by the
company, including cost management, structural and strategic measures such as
vendor, process, facilities and operations consolidation, outsourcing
(including, among others, technologies operations), relocating certain
functions to lower cost overseas locations, moving internal and external
functions to the Internet to save costs, and planned staff reductions relating
to certain of such re-engineering actions; the ability to 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; the potential negative effect on the company's businesses
and infrastructure, including information technology systems, of terrorist
attacks, disasters or other catastrophic events in the future; the impact on
the company's businesses resulting from continuing geopolitical uncertainty;
the overall level of consumer confidence; consumer and business spending on
the company's travel related services products, particularly credit and charge
cards and growth in card lending balances, which depend in part on the ability
to issue new and enhanced card products and increase revenues from such
products, attract new cardholders, capture a greater share of existing
cardholders' spending, sustain premium discount rates, increase merchant
coverage, retain cardmembers after low introductory lending rates have
expired, and expand the global network services business; the ability to
manage and expand cardmember benefits, including Membership Rewards(R), in a
cost-effective manner and to accurately estimate the provision for the cost of
the Membership Rewards program; 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;
successfully cross-selling financial, travel, card and other products and
services to the company's customer base, both in the U.S. and internationally;
a downturn in the company's businesses and/or negative changes in the
company's and its subsidiaries' credit ratings, which could result in
contingent payments under contracts, decreased liquidity and higher borrowing
costs; fluctuations in interest rates, which impact the company's borrowing
costs, return on lending products and spreads in the investment and insurance
businesses; 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 the company's card products and returns on the
company's investment portfolios; fluctuations in foreign currency exchange
rates; political or economic instability in certain regions or countries,
which could affect lending and other commercial activities, among other
businesses, or restrictions on convertibility of certain currencies; changes
in laws or government regulations; the costs and integration of acquisitions;
the ability to accurately interpret the recently issued accounting rules
related to the consolidation of variable interest entities, including those
involving collateralized debt obligations and secured loan trusts and limited
partnerships that the company manages and/or invests in, the impact of which
on both the company's balance sheet and results of operations could be greater
or less than that estimated by management to the extent that after additional
experience with and interpretation of such rules the company would need to
revise estimates of the consolidation impact with respect to such investments
and re-evaluate the impact of the rules on certain types of structures; and
outcomes and costs associated with litigation and compliance and regulatory
matters. A further description of these and other risks and uncertainties can
be found in the company's Annual Report on Form 10-K for the year ended
December 31, 2002, and its other reports filed with the SEC.
All information in the following tables is presented on a basis
prepared in accordance with accounting principles generally
accepted in the United States (GAAP), unless otherwise indicated.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Millions)
Quarters Ended
September 30,
------------------ Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
Revenues
Discount revenue $2,221 $1,967 13.0%
Interest and dividends, net 730 759 (3.8)
Management and distribution fees 603 551 9.5
Cardmember lending net
finance charge revenue 450 380 18.3
Net card fees 462 439 5.4
Travel commissions and fees 349 342 1.9
Other commissions and fees 514 490 5.1
Insurance and annuity revenues 345 303 13.9
Securitization income, net 327 298 9.6
Other 418 378 10.4
------ ------
Total revenues 6,419 5,907 8.7
Expenses
Human resources 1,559 1,414 10.3
Provision for losses and benefits 1,080 1,073 0.6
Marketing, promotion, rewards
and cardmember services 1,016 805 26.2
Interest 239 264 (9.7)
Other operating expenses 1,463 1,394 5.0
Restructuring charges (2) (2) 32.3
Disaster recovery charge - - -
------ ------
Total expenses 5,355 4,948 8.2
------ ------
Pretax income 1,064 959 11.0
Income tax provision 294 272 8.0
------ ------
Net income $770 $687 12.1%
====== ======
Note: Certain prior period amounts have been reclassified to conform
to current year presentation.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Millions)
Nine Months Ended
September 30,
------------------ Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
Revenues
Discount revenue $6,349 $5,809 9.3%
Interest and dividends, net 2,277 2,175 4.7
Management and distribution fees 1,692 1,757 (3.7)
Cardmember lending net
finance charge revenue 1,400 1,240 12.9
Net card fees 1,368 1,291 6.0
Travel commissions and fees 1,062 1,039 2.1
Other commissions and fees 1,490 1,423 4.8
Insurance and annuity revenues 1,000 901 11.0
Securitization income, net 968 883 9.7
Other 1,192 1,093 8.9
------ ------
Total revenues 18,798 17,611 6.7
Expenses
Human resources 4,625 4,346 6.4
Provision for losses and
benefits 3,265 3,336 (2.2)
Marketing, promotion, rewards
and cardmember services 2,735 2,297 19.1
Interest 700 812 (13.8)
Other operating expenses 4,318 4,070 6.1
Restructuring charges (2) (21) 91.6
Disaster recovery charge - (7) -
------ ------
Total expenses 15,641 14,833 5.4
------ ------
Pretax income 3,157 2,778 13.7
Income tax provision 933 790 18.2
------ ------
Net income $2,224 $ 1,988 11.9%
====== ======
Note: Certain prior period amounts have been reclassified to conform
to current year presentation.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Billions)
September 30, December 31,
2003 2002
------------ ------------
Assets
Cash and cash equivalents $ 6 $ 10
Accounts receivable 30 29
Investments 56 54
Loans 28 28
Separate account assets 28 22
Other assets 16 14
------------ ------------
Total assets $ 164 $ 157
============ ============
Liabilities and Shareholders'
Equity
Separate account liabilities $ 28 $ 22
Short-term debt 16 21
Long-term debt 19 16
Other liabilities 86 84
------------ ------------
Total liabilities 149 143
------------ ------------
Shareholders' Equity 15 14
------------ ------------
Total liabilities and
shareholders' equity $ 164 $ 157
============ ============
Note: Certain prior period amounts have been reclassified to conform
to current year presentation.
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(Millions)
Quarters Ended
September 30,
------------------ Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
REVENUES (A)
Travel Related Services $4,758 $4,395 8%
American Express Financial
Advisors 1,525 1,388 10
American Express Bank 199 199 -
------ ------
6,482 5,982 8
Corporate and other,
including adjustments
and eliminations (63) (75) 16
------ ------
CONSOLIDATED REVENUES $6,419 $5,907 9%
====== ======
PRETAX INCOME (LOSS)
Travel Related Services $892 $798 12%
American Express Financial Advisors 224 205 9
American Express Bank 41 38 5
------ ------
1,157 1,041 11
Corporate and other (93) (82) (12)
------ ------
PRETAX INCOME $1,064 $959 11%
====== ======
NET INCOME (LOSS)
Travel Related Services $606 $553 10%
American Express Financial Advisors 197 152 30
American Express Bank 27 25 5
------ ------
830 730 14
Corporate and other (60) (43) (39)
------ ------
NET INCOME $770 $687 12%
====== ======
(A) Managed net revenues are reported net of American Express Financial
Advisors' provision for losses and benefits and exclude the effect
of TRS' securitization activities. The following table reconciles
consolidated GAAP revenues to Managed Basis net revenues:
GAAP revenues $ 6,419 $ 5,907 9%
Effect of TRS securitizations 255 278
Effect of AEFA provisions (535) (487)
------ ------
Managed net revenues $ 6,139 $ 5,698 8%
====== ======
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(Millions)
Nine Months Ended
September 30,
------------------ Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
REVENUES (A)
Travel Related Services $13,978 $13,056 7%
American Express Financial
Advisors 4,432 4,173 6
American Express Bank 596 557 7
------ ------
19,006 17,786 7
Corporate and other,
including adjustments
and eliminations (208) (175) (19)
------ ------
CONSOLIDATED REVENUES $18,798 $17,611 7%
====== ======
PRETAX INCOME (LOSS)
Travel Related Services $2,687 $2,286 18%
American Express Financial
Advisors 611 659 (7)
American Express Bank 109 85 28
------ ------
3,407 3,030 12
Corporate and other (250) (252) 1
------ ------
PRETAX INCOME $3,157 $2,778 14%
====== ======
NET INCOME (LOSS)
Travel Related Services $1,824 $1,585 15%
American Express Financial
Advisors 487 479 2
American Express Bank 73 56 29
------ ------
2,384 2,120 12
Corporate and other (160) (132) (21)
------ ------
NET INCOME $2,224 $1,988 12%
====== ======
(A) Managed net revenues are reported net of American Express Financial
Advisors' provision for losses and benefits and exclude the
effect of TRS' securitization activities. The following table
reconciles consolidated GAAP revenues to Managed Basis net revenues:
GAAP revenues $18,798 $17,611 7%
Effect of TRS securitizations 735 724
Effect of AEFA provisions (1,567) (1,415)
------ ------
Managed net revenues $17,966 $16,920 6%
====== ======
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
(UNAUDITED)
Quarters Ended
September 30,
---------------- Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
EARNINGS PER SHARE
Per share net income:
Basic $ 0.60 $ 0.52 15%
====== ======
Diluted $ 0.59 $ 0.52 13%
====== ======
Average common shares outstanding
for earnings per common share
(millions):
Basic 1,278 1,323 (3)%
====== ======
Diluted 1,297 1,330 (2)%
====== ======
Cash dividends declared
per common share $0.10 $0.08 25%
====== ======
SELECTED STATISTICAL INFORMATION
(Unaudited)
Quarters Ended
September 30,
---------------- Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
Return on average total
shareholders' equity (A) 20.4% 17.8% -
Common shares outstanding
(millions) 1,285 1,325 (3)%
Book value per common share $11.54 $10.55 9%
Shareholders' equity (billions) $14.8 $14.0 6%
(A) Computed on a trailing 12-month basis using total shareholders'
equity as reported in the Consolidated Financial Statements
prepared in accordance with GAAP. All return on average total
shareholders' equity and return on average total asset
calculations in this and following tables are revised from
amounts previously reported.
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
(UNAUDITED)
Nine Months Ended
September 30,
----------------- Percentage
2003 2002 Inc/(Dec)
------ ------ ----------
EARNINGS PER SHARE
Per share net income:
Basic $1.73 $1.50 15%
====== ======
Diluted $1.71 $1.49 15%
====== ======
Average common shares outstanding
for earnings per common share
(millions):
Basic 1,287 1,324 (3)%
====== ======
Diluted 1,298 1,334 (3)%
====== ======
Cash dividends declared
per common share $0.28 $0.24 17%
====== ======
SELECTED STATISTICAL INFORMATION
(Unaudited)
Nine Months Ended
September 30,
----------------- Percentage
2003 2002 Inc/(Dec)
------ ------ -----------
Return on average total shareholders'
equity (A) 20.4% 17.8% -
Common shares outstanding
(millions) 1,285 1,325 (3)%
Book value per common share $11.54 $10.55 9%
Shareholders' equity (billions) $14.8 $14.0 6%
(A) Computed on a trailing 12-month basis using total shareholders'
equity as reported in the Consolidated Financial Statements
prepared in accordance with GAAP. All return on average total
shareholders' equity and return on average total asset
calculations in this and following tables are revised from
amounts previously reported.
To view additional business segment financials go to:
http://ir.americanexpress.com
SOURCE American Express Company
-0- 10/27/2003
/CONTACT: Molly Faust of the American Express Company, +1-212-640-0624,
molly.faust@aexp.com /
/Web site: http://www.americanexpress.com /
(AXP)
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