RNS Number:9494S
American Express Co
23 October 2000
Contact: Michael J. O'Neill
212/640-5951
mike.o'neil@aexp.com
AMERICAN EXPRESS COMPANY REPORTS
QUARTERLY NET INCOME OF $737 MILLION
(millions, except per share amounts)
Quarter Ended Percentage Nine Months Percentage
September 30 Inc/(Dec) Ended Inc/(Dec)
September 30
2000 1999 2000 1999
Net Income $737 $ 648 14 % $ 2,133 $ 1,869 14%
Net Revenues* $5,554 $4,920 13 % $16,371 $14,256 15%
Per Share
Net Income
Basic $0.56 $0.48 17 % $ 1.61 $ 1.39 16%
Diluted $0.54 $0.47 15 % $ 1.57 $ 1.36 15%
Average Common
Shares
Outstanding
Basic 1,326 1,338 (1%) 1,328 1,341 (1%)
Diluted 1,361 1,369 (1%) 1,361 1,369 (1%)
Return on
Average
Equity 25.5% 25.3% - 25.5% 25.3% -
*Net revenues are presented on a managed basis.
NEW YORK, October 23, 2000 -- American Express Company today reported quarterly
net income of $737 million, up from $648 million in the same period a year ago.
Diluted earnings per share rose 15 percent to $0.54 compared with $0.47. Net
revenues on a managed basis totaled $5.6 billion, up 13 percent from $4.9
billion. The company's return on equity was 25.5 percent. These results
reflected strong earnings growth in all business segments, and met the company's
long-term targets of 12-15 percent earnings per share growth, at least 8 percent
growth in revenues and a return on equity of 18-20 percent.
Travel Related Services (TRS) reported record quarterly net income of $507
million, up 14 percent from $446 million in the third quarter a year ago.
The TRS segment now includes earnings from Travelers Cheque (TC) operations,
which were unchanged from year-ago levels. Excluding TC, net income for the
remaining TRS business rose 15 percent from last year's third quarter. TC
results had previously been included in the American Express Bank/TC segment.
TRS net revenues increased 14 percent, reflecting higher billed business as well
as strong growth in Cardmember loans. These improvements resulted from an
increase of 5.6 million cards in force, up 13 percent from a year ago, and
higher average spending per Cardmember. The higher spending was driven by
several factors, including rewards programs and expanded merchant coverage. The
net interest yield on Cardmember loans decreased from a year ago, but increased
from second quarter levels. The year-to-year decline mainly reflects a higher
percentage of loan balances on lower-rate products. Other revenues increased,
primarily reflecting higher fee income.
The provision for losses on the charge card and lending portfolios rose from the
prior year as a result of higher volume, partly offset by improvement in credit
quality in the lending portfolio. Charge Card interest expense grew as a result
of higher volumes and an increased cost of funds. Other operating expenses rose,
reflecting in part the cost of Cardmember loyalty programs, business growth and
investment spending.
The above discussion presents TRS results "on a managed basis" as if there had
been no securitization transactions, which conforms to industry practice. The
attached financials present TRS results on both a managed and reported basis.
Net income is the same in both formats.
On a reported basis, TRS results for the third quarter of 2000 included a
securitization gain of $26 million ($17 million after-tax), compared with a
similar gain of $55 million ($36 million after-tax) a year ago. These gains were
offset by higher expenses related to card acquisition activities and therefore
had no material impact on net income or total expenses.
American Express Financial Advisors (AEFA) reported quarterly net income of $269
million, up 12 percent from $240 million a year ago.
Net revenues and earnings growth benefited from higher fee revenues due to an
increase in managed assets, which was partially offset by narrower spreads on
the investment portfolio. This increase reflected positive net sales and market
appreciation over the past 12 months. AEFA reported increases in sales of mutual
funds, annuities, and life and other insurance products. Human resources
expenses rose primarily as a result of an increase in financial advisors'
compensation, which reflected growth in sales and asset levels, the new advisor
platforms, and an increase in the total number of financial advisors.
American Express Bank (AEB) reported quarterly net income of $7 million compared
with $5 million a year ago.
Results for the current quarter reflect greater commission and fee revenues and
lower operating expenses, reflecting savings from reengineering initiatives.
These were partially offset by a decline in net interest income, mainly due to
higher funding costs.
Corporate and Other reported net expenses of $46 million, compared with $43
million a year ago.
American Express Company (http://www.americanexpress.com), founded in 1850, is a
global travel, financial and network services provider.
Note: The 2000 Third Quarter Earnings Supplement will be available on the
American Express Web site at http://ir.americanexpress.com. In addition, 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 p.m. ET today. A live webcast of the conference call will be
accessible at the American Express Web site at http://ir.americanexpress.com. A
replay of the conference call will be available from October 23 through October
30 at the same Web address.
(Preliminary)
American Express Company
Financial Summary
(Unaudited)
(Dollars in millions)
Quarters Ended
September 30 Percentage
2000 1999 Inc/(Dec)
Net Revenues (Managed Basis)(A)
Travel Related Services $ 4,400 $ 3,864 14 %
American Express Financial
Advisors 1,052 936 12
American Express Bank 146 157 (7)
5,598 4,957 13
Corporate and Other,
including adjustments and
eliminations (44) (37) (21)
CONSOLIDATED NET REVENUES
(MANAGED BASIS)(A) $ 5,554 $ 4,920 13
Pretax Income
Travel Related Services $ 721 $ 630 14
American Express Financial
Advisors 387 350 10
American Express Bank 8 6 33
1,116 986 13
Corporate and Other (87) (79) (8)
PRETAX INCOME $ 1,029 $ 907 14
Net Income
Travel Related Services $ 507 $ 446 14
American Express Financial
Advisors 269 240 12
American Express Bank 7 5 60
783 691 13
Corporate and Other (46) (43) (7)
NET INCOME $ 737 $ 648 14
Nine Months Ended
September 30 Percentage
2000 1999 Inc/(Dec)
Net Revenues (Managed Basis)(A)
Travel Related Services $ 12,898 $ 11,125 16 %
American Express Financial
Advisors 3,153 2,738 15
American Express Bank 447 474 (6)
16,498 14,337 15
Corporate and Other,
including adjustments and
eliminations (127) (81) (57)
CONSOLIDATED NET REVENUES
(MANAGED BASIS)(A) $ 16,371 $ 14,256 15
Pretax Income
Travel Related Services $ 2,073 $ 1,815 14
American Express Financial
Advisors 1,138 1,015 12
American Express Bank 26 21 23
3,237 2,851 14
Corporate and Other (242) (258) 7
PRETAX INCOME $ 2,995 $ 2,593 16
Net Income
Travel Related Services $ 1,460 $ 1,286 14
American Express Financial
Advisors 790 696 13
American Express Bank 22 18 24
2,272 2,000 14
Corporate and Other (139) (131) (6)
NET INCOME $ 2,133 $ 1,869 14
(A) Managed net reserves are reported net of interest expense, where applicable,
and American Express Financial Advisors' provision for losses and benefits, and
exclude the effect of TRS' securitization activities.
(Preliminary)
Quarters Ended
September 30 Percentage
2000 1999 Inc/(Dec)
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 0.56 $ 0.48 17 %
Average common shares
outstanding (millions) 1,326 1,338 (1)
Diluted
Earnings Per Common Share $ 0.54 $ 0.47 15
Average common shares
outstanding (millions) 1,361 1,369 (1)
Cash dividends declared
per common share $ 0.08 $ 0.075 7
Nine Months Ended
September 30 Percentage
2000 1999 Inc/(Dec)
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 1.61 $ 1.39 16 %
Average common shares
outstanding (millions) 1,328 1,341 (1)
Diluted
Earnings Per Common Share $ 1.57 $ 1.36 15
Average common shares
outstanding (millions) 1,361 1,369 (1)
Cash dividends declared
per common share $ 0.24 $ 0.225 7
Selected Statistical Information
(Unaudited)
Quarters Ended
September 30 Percentage
2000 1999 Inc/(Dec)
Return on Average Equity* 25.5% 25.3% -
Common Shares Outstanding(millions) 1,329 1,343 (1) %
Book Value per Common Share:
Actual $ 8.44 $ 7.26 16 %
Pro Forma* $ 8.68 $ 7.47 16 %
Shareholders' Equity (billions) $ 11.2 $ 9.7 15 %
Nine Months Ended
September 30 Percentage
2000 1999 Inc/(Dec)
Return on Average Equity* 25.5% 25.3% -
Common Shares Outstanding(millions) 1,329 1,343 (1) %
Book Value per Common Share:
Actual $ 8.44 $ 7.26 16 %
Pro Forma* $ 8.68 $ 7.47 16 %
Shareholders' Equity (billions) $ 11.2 $ 9.7 15 %
* Excludes the effect of SFAS No. 115
(Preliminary)
Financial Summary
(Unaudited)
(Dollars in millions)
Quarters Ended
Sept 30 June 30 March 31 Dec 31 Sept 30
2000 2000 2000 1999 1999
Net Revenues(Managed
Basis)(A)
Travel Related
Services $ 4,400 $ 4,372 $ 4,127 $ 4,109 $ 3,864
American Express
Financial Advisors 1,052 1,081 1,019 999 936
American Express
Bank 146 151 150 147 157
5,598 5,604 5,296 5,255 4,957
Corporate and Other,
including adjustments
and eliminations (44) (46) (37) (28) (37)
CONSOLIDATED NET
REVENUES (MANAGED
BASIS)(A) $ 5,554 $ 5,558 $ 5,259 $ 5,227 $ 4,920
Pretax Income
Travel Related
Services $ 721 $ 721 $ 631 $ 567 $ 630
American Express
Financial Advisors 387 397 355 347 350
American Express
Bank 8 10 8 6 6
1,116 1,128 994 920 986
Corporate and Other (87) (82) (74) (76) (79)
PRETAX INCOME $ 1,029 $ 1,046 $ 920 $ 844 $ 907
Net Income
Travel Related
Services $ 507 $ 505 $ 448 $ 406 $ 446
American Express
Financial Advisors 269 275 245 238 240
American Express Bank 7 7 7 4 5
783 787 700 648 691
Corporate and Other (46) (47) (44) (42) (43)
NET INCOME $ 737 $ 740 $ 656 $ 606 $ 648
(A) Managed net revenues are reported net of interest expense, where applicable,
and American Express Financial Advisors' provision for losses and benefits, and
exclude the effect of TRS' securitization activities.
(Preliminary) Financial Summary
(Unaudited)
Quarters Ended
Sept 30 June 30 March 31 Dec 31 Sept 30
2000 2000 2000 1999 1999
EARNINGS PER SHARE
Basic
Earnings Per Common $ 0.56 $ 0.56 $ 0.49 $ 0.45 $ 0.48
Share
Average common shares
outstanding (millions) 1,326 1,328 1,331 1,335 1,338
Diluted
Earnings Per Common
Share $ 0.54 $ 0.54 $ 0.48 $ 0.44 $ 0.47
Average common shares
outstanding(millions) 1,361 1,361 1,362 1,369 1,369
Cash dividends declared $ 0.08 $ 0.08 $ 0.08 $ 0.075 $ 0.075
per common share
Selected Statistical Information
(Unaudited)
Quarters Ended
September, 30 June 30, March 31, December 31, September 30,
2000 2000 2000 1999 1999
Return on Average
Equity* 25.5% 25.5% 25.4% 25.3% 25.3%
Common Shares
Outstanding
(millions) 1,329 1,333 1,334 1,341 1,343
Book Value per
Common Share:
Actual $ 8.44 $ 7.88 $ 7.69 $ 7.52 $ 7.26
Pro Forma* $ 8.68 $ 8.26 $ 7.96 $ 7.74 $ 7.47
Shareholders'
Equity
(billions) $ 11.2 $ 10.5 $ 10.3 $ 10.1 $ 9.7
* Excludes the effect of SFAS No. 115.
(Preliminary) Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Net Revenues:
Discount Revenue $ 1,963 $ 1,700 15.5%
Net Card Fees 420 399 5.3
Lending:
Finance Charge Revenue 1,052 747 40.8
Interest Expense 429 246 74.8
Net Finance Charge Revenue 623 501 24.2
Travel Commissions and Fees 433 448 (3.2)
TC Investment Income 103 91 12.5
Other Revenues 858 725 18.5
Total Net Revenues 4,400 3,864 13.9
Expenses:
Marketing and Promotion 358 349 2.5
Provision for Losses and Claims:
Charge Card 273 247 10.6
Lending 386 312 23.8
Other 29 17 63.9
Total 688 576 19.4
Charge Card Interest Expense 362 259 40.2
Human Resources 1,017 985 3.2
Other Operating Expenses 1,254 1,065 17.8
Total Expenses 3,679 3,234 13.8
Pretax Income 721 630 14.4
Income Tax Provision 214 184 16.7
Net Income $ 507 $ 446 13.5
These Statements of Income are provided on a Managed Basis for analytical
purposes only.
They present the income statement of TRS as if there had been no securitization
transactions.
Under Statement of Financial Accounting Standards No. 125 (SFAS No. 125), which
prescribes the accounting for securitized receivables, TRS recognized pretax
gains of $26 million ($17 million after-tax) and $55 million ($36 million
after-tax) in the third quarters of 2000 and 1999, respectively, related to the
securitization of U.S. receivables. These gains were invested in additional card
acquisition activities and had no material impact on Net Income or Total
Expenses in either quarter. For purposes of this presentation such gains and
corresponding increases in Marketing and Promotion and Other Operating Expenses
have been eliminated in each quarter.
(Preliminary) Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Net Revenues:
Discount Revenue $ 1,963 $ 1,700 15.5%
Net Card Fees 418 395 5.8
Lending:
Finance Charge Revenue 504 513 (1.9)
Interest Expense 272 165 64.4
Net Finance Charge
Revenue 232 348 (33.3)
Travel Commissions and Fees 433 448 (3.2)
TC Investment Income 103 91 12.5
Other Revenues 1,190 841 41.5
Total Net Revenues 4,339 3,823 13.5
Expenses:
Marketing and Promotion 373 382 (2.3)
Provision for Losses and
Claims:
Charge Card 236 222 6.5
Lending 267 187 43.1
Other 29 17 63.9
Total 532 426 24.9
Charge Card Interest Expense 312 208 50.5
Net Discount Expense 119 105 13.3
Human Resources 1,017 985 3.2
Other Operating Expenses 1,265 1,087 16.3
Total Expenses 3,618 3,193 13.3
Pretax Income 721 630 14.4
Income Tax Provision 214 184 16.7
Net Income $ 507 $ 446 13.5
(Preliminary) Travel Related Services
Selected Statistical Information
(Unaudited)
(Amounts in billions, except percentages and where indicated)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Total Cards in Force (millions):
United States 32.9 29.2 12.7%
Outside the United States 17.5 15.6 12.6
Total 50.4 44.8 12.6
Basic Cards in Force (millions):
United States 25.8 22.9 12.7
Outside the United States 13.4 12.0 11.6
Total 39.2 34.9 12.3
Card Billed Business:
United States $ 56.2 $ 47.1 19.4
Outside the United States 18.6 17.0 9.7
Total $ 74.8 $ 64.1 16.8
Average Discount Rate (A) 2.70% 2.73% -
Average Basic Cardmember
Spending (dollars) (A) $ 2,041 $ 1,935 5.5
Average Fee per Card-Managed
(dollars) (A) $ 36 $ 38 (5.3)
Non-Amex Brand (B):
Cards in Force (millions) 0.6 0.2 +
Billed Business $ 0.8 $ 0.2 +
Travel Sales $ 5.4 $ 5.5 (1.6)
Travel Commissions and Fees/
Sales (C) 8.0% 8.1% -
Travelers Cheque:
Sales $ 7.7 $ 7.3 5.0
Average Outstanding $ 6.9 $ 6.5 6.3
Average Investments $ 6.7 $ 6.2 6.5
Tax Equivalent Yield 8.8% 8.8% -
Total Debt $ 35.2 $ 30.8 14.2
Shareholder's Equity $ 6.3 $ 5.7 10.5
Return on Average Equity (D) 32.6% 30.5% -
Return on Average Assets (D) 3.0% 3.1% -
(A) Computed from proprietary card activities only.
(B) This data relates to Visa and Eurocards issued in connection with joint
venture activities.
(C) Computed from information provided herein.
(D) Excluding the effect of SFAS NO. 115.
+ Denotes variance of more than 100%.
(Preliminary) Travel Related Services
Selected Statistical Information (continued)
(Unaudited, Managed Basis)
(Amounts in billions, except percentages and where indicated)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Charge Card Receivables:
Total Receivables $ 28.1 $ 25.3 11.0%
90 Days Past Due as a % of Total 2.3% 2.5% -
Loss Reserves (millions) $ 987 $ 907 8.8
% of Receivables 3.5% 3.6% -
% of 90 Days Past Due 152% 144% -
Net Loss Ratio 0.37% 0.41% -
U.S. Cardmember Lending:
Total Loans $ 27.1 $ 20.6% 31.7
Past Due Loans as a % of Total:
30-89 Days 1.8% 2.0% -
90+ Days 0.8% 0.8% -
Loss Reserves (millions):
Beginning Balance $ 686 $ 602 13.9
Provision 328 264 24.2
Net Charge-Offs/Other (283) (230) 22.8
Ending Balance $ 731 $ 636 15.0
% of Loans 2.7% 3.1% -
% of Past Due 103% 111% -
Average Loans $ 26.6 $ 19.8 34.8
Net Write-Off Rate 4.3% 4.7% -
Net Interest Yield 7.8% 8.5% -
(Preliminary) Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions)
Quarters Ended
September June March December September
30, 2000 30, 2000 31, 2000 31, 1999 30, 1999
Net Revenues:
Discount Revenue $ 1,963 $ 1,949 $ 1,805 $ 1,865 $ 1,700
Net Card Fees 420 411 405 408 399
Lending:
Finance Charge
Revenue 1,052 948 887 802 747
Interest Expense 429 385 332 302 246
Net Finance Charge
Revenue 623 563 555 500 501
Travel Commissions
and Fees 433 507 438 459 448
TC Investment Income 103 98 91 88 91
Other Revenues 858 844 833 789 725
Total Net Revenues 4,400 4,372 4,127 4,109 3,864
Expenses:
Marketing and Promotion 358 345 331 344 349
Provision for Losses
and Claims:
Charge Card 273 344 278 227 247
Lending 386 332 335 332 312
Other 29 28 29 24 17
Total 688 704 642 583 576
Charge Card Interest
Expense 362 350 314 300 259
Human Resources 1,017 1,048 1,016 1,033 985
Other Operating
Expenses 1,254 1,204 1,193 1,282 1,065
Total Expenses 3,679 3,651 3,496 3,542 3,234
Pretax Income 721 721 631 567 630
Income Tax Provision 214 216 183 161 184
Net Income $ 507 $ 505 $ 448 $ 406 $ 446
These Statements of Income are provided on a Managed Basis for analytical
purposes only. They present the income statements of TRS as if there had been no
securitization transactions. Under Statement of Financial Accounting Standards
No. 125 (SFAS No. 125), which prescribes the accounting for securitized
receivables, TRS recognized pretax gains of $26 million ($17 million after-tax)
in the third quarter of 2000, $80 million ($52 million after-tax) in the second
quarter of 2000, $36 million ($23 million after-tax) in the first quarter of
2000 and $55 million ($36 million after-tax) in the third quarter of 1999,
related to the securitization of U.S. receivables. These gains were invested in
additional card acquisition activities and had no material impact on Net Income
or Total Expenses in any quarter. For purposes of this presentation such gains
and corresponding increases in Marketing and Promotion and Other Operating
Expenses have been eliminated in each quarter.
(Preliminary) Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions)
Quarters Ended
September June March December September
30, 2000 30, 2000 31, 2000 31, 1999 30, 1999
Net Revenues:
Discount Revenue $ 1,963 $ 1,949 $ 1,805 $ 1,865 $ 1,700
Net Card Fees 418 411 405 408 395
Lending:
Finance Charge
Revenue 504 500 524 526 513
Interest Expense 272 258 231 197 165
Net Finance
Charge Revenue 232 242 293 329 348
Travel Commissions
and Fees 433 507 438 459 448
TC Investment Income 103 98 91 88 91
Other Revenues 1,190 1,117 1,006 902 841
Total Net Revenues 4,339 4,324 4,038 4,051 3,823
Expenses:
Marketing and
Promotion 373 393 352 344 382
Provision for Losses
and Claims:
Charge Card 236 302 241 213 222
Lending 267 170 175 241 187
Other 29 28 29 24 17
Total 532 500 445 478 426
Charge Card Interest
Expense 312 295 260 246 208
Net Discount Expense 119 131 126 101 105
Human Resources 1,017 1,048 1,016 1,033 985
Other Operating
Expenses 1,265 1,236 1,208 1,282 1,087
Total Expenses 3,618 3,603 3,407 3,484 3,193
Pretax Income 721 721 631 567 630
Income Tax Provision 214 216 183 161 184
Net Income $ 507 $ 505 $ 448 $ 406 $ 446
(Preliminary) Travel Related Services
Selected Statistical Information
(Unaudited)
(Amounts in billions, except percentages and where indicated)
Quarters Ended
September June March December September
30, 2000 30, 2000 31, 2000 31, 1999 30, 1999
Total Cards in
Force (millions):
United States 32.9 32.5 31.4 29.9 29.2
Outside the
United States 17.5 16.9 16.5 16.1 15.6
Total 50.4 49.4 47.9 46.0 44.8
Basic Cards in
Force (millions):
United States 25.8 25.3 24.5 23.4 22.9
Outside the
United States 13.4 12.9 12.6 12.3 12.0
Total 39.2 38.2 37.1 35.7 34.9
Card Billed Business:
United States $ 56.2 $ 55.8 $ 50.6 $ 51.7 $ 47.1
Outside the
United States 18.6 18.7 17.7 19.1 17.0
Total $ 74.8 $ 74.5 $ 68.3 $ 70.8 $ 64.1
Average Discount
Rate (A) 2.70% 2.69% 2.72% 2.71% 2.73%
Average Basic
Cardmember
Spending
(dollars) (A) $ 2,041 $ 2,085 $ 1,980 $ 2,102 $ 1,935
Average Fee per
Card - Managed
(dollars) (A) $ 36 $ 36 $ 37 $ 38 $ 38
Non-Amex Brand (B):
Cards in Force
(millions) 0.6 0.6 0.6 0.3 0.2
Billed Business $ 0.8 $ 0.7 $ 0.5 $ 0.2 $ 0.2
Travel Sales $ 5.4 $ 6.2 $ 5.5 $ 5.6 $ 5.5
Travel Commissions
and Fees/Sales (C) 8.0% 8.2% 8.0% 8.2% 8.1%
Travelers Cheque:
Sales $ 7.7 $ 6.7 $ 5.1 $ 5.4 $ 7.3
Average Outstanding $ 6.9 $ 6.5 $ 6.1 $ 6.1 $ 6.5
Average Investments $ 6.7 $ 6.2 $ 6.0 $ 5.9 $ 6.2
Tax Equivalent Yield 8.8% 8.9% 8.9% 8.8% 8.8%
Total Debt $ 35.2 $ 31.1 $ 33.9 $ 35.7 $ 30.8
Shareholder's Equity $ 6.3 $ 6.0 $ 5.8 $ 5.5 $ 5.7
Return on Average
Equity (D) 32.6% 32.2% 31.6% 31.2% 30.5%
Return on Average
Assets (D) 3.0% 3.0% 3.0% 3.1% 3.1%
(A) Computed from proprietary card activities only.
(B) This data relates to Visa and Eurocards issued in connection with joint
venture activities.
(C) Computed from information provided herein.
(D) Excluding the effect of SFAS No. 115.
(Preliminary) Travel Related Services
Selected Statistical Information (continued)
(Unaudited, Managed Basis)
(Amounts in billions, except percentages and where indicated)
Quarters Ended
September June March December September
30, 2000 30, 2000 31, 2000 31, 1999 30, 1999
Charge Card
Receivables:
Total
Receivables: $ 28.1 $ 27.4 $ 26.8 $ 27.0 $ 25.3
90 Days Past
Due as a %
of Total 2.3% 2.4% 2.6% 2.5% 2.5%
Loss Reserves
(millions) $ 987 $ 986 $ 894 $ 857 $ 907
% of Receivables 3.5% 3.6% 3.3% 3.2% 3.6%
% of 90 Days
Past Due 152% 153% 129% 126% 144%
Net Loss Ratio 0.37% 0.36% 0.34% 0.40% 0.41%
U.S. Cardmember
Lending:
Total Loans $ 27.1 $ 25.9 $ 24.2 $ 23.4 $ 20.6
Past Due Loans
as a % of Total:
30-89 Days 1.8% 1.6% 1.8% 1.8% 2.0%
90+ Days 0.8% 0.8% 0.8% 0.8% 0.8%
Loss Reserves
(millions):
Beginning
Balance $ 686 $ 689 $ 672 $ 636 $ 602
Provision 328 268 285 277 264
Net Charge-
Offs/Other (283) (271) (268) (241) (230)
Ending Balance $ 731 $ 686 $ 689 $ 672 $ 636
% of Loans 2.7% 2.6% 2.8% 2.9% 3.1%
% of Past Due 103% 109% 109% 110% 111%
Average Loans $ 26.6 $ 25.2 $ 23.6 $ 21.7 $ 19.8
Net Write-Off Rate 4.3% 4.4% 4.6% 4.5% 4.7%
Net Interest Yield 7.8% 7.4% 7.8% 7.7% 8.5%
(Preliminary) American Express Financial Advisors
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Net Revenues:
Investment Income $ 582 $ 566 2.8%
Management and Distribution
Fees 700 578 21.0
Other Revenues 259 224 15.6
Total Revenues 1,541 1,368 12.6
Provisions for Losses and
Benefits:
Annuities 254 251 1.0
Insurance 146 135 8.2
Investment Certificates 89 46 94.4
Total 489 432 13.1
Net Revenues 1,052 936 12.4
Expenses:
Human Resources 527 456 15.5
Other Operating Expenses 138 130 6.8
Total Expenses 665 586 13.6
Pretax Income 387 350 10.3
Income Tax Provision 118 110 6.8
Net Income $ 269 $ 240 12.0
(Preliminary American Express Financial Advisors
Selected Statistical Information
(Unaudited)
(Dollars in millions, except where indicated)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Investments (billions) $ 30.0 $ 30.7 (2.5)%
Client Contract Reserves
(billions) $ 31.0 $ 31.0 0.1
Shareholder's Equity
(billions) $ 4.2 $ 3.9 8.1
Return on Average Equity* 23.1% 22.8% -
Life Insurance in Force
(billions) $ 95.8 $ 86.3 11.0
Assets Owned, Managed or
Administered(billions):
Assets Managed for
Institutions $ 55.9 $ 48.2 15.9
Assets Owned,Managed or
Administered for Individuals:
Owned Assets:
Separate Account Assets 36.6 28.9 26.8
Other Owned Assets 40.6 38.1 6.4
Total Owned Assets 77.2 67.0 15.2
Managed Assets 122.0 99.5 22.7
Administered Assets 38.0 21.1 80.3
Total $ 293.1 $ 235.8 24.3
Market Appreciation
(Depreciation) During
the period:
Owned Assets:
Separate Account Assets $ (203) $ (986) 79.4
Other Owned Assets $ 163 $ (273) -
Total Managed Assets $ (76) $ (5,318) 98.6
Cash Sales:
Mutual Funds $ 11,698 $ 8,304 40.9
Annuities 1,465 1,190 23.2
Investment Certificates 868 1,061 (18.2)
Life and Other Insurance
Products 220 196 12.1
Institutional 1,169 909 28.6
Other 815 953 (14.6)
Total Cash Sales $ 16,235 $ 12,613 28.7
Number of Financial Advisors 12,137 10,631 14.2
Fees from Financial Plans &
Advice Services $ 26.1 $ 22.3 16.9
Percentage of Total Sales
from Financial Plans and
Advice Services 69.2% 67.7% -
*Excluding the effect of SFAS No. 115.
Note: In the first quarter of 2000, reporting of data related to cash sales
and assets owned, managed and administered was revised to better reflect
AEFA's multiple sales channel strategy and broadening of its product
portfolio through additional non-proprietary offerings.
(Preliminary) American Express Financial Advisors
Statements of Income
(Dollars in millions) (Unaudited)
Quarters Ended
September June March December September
30, 30, 31, 31, 30,
2000 2000 2000 1999 1999
Net Revenues:
Investment Income $ 582 $ 592 $ 572 $ 668 $ 566
Management&
Distribution Fees 700 701 688 616 578
Other Revenues 259 248 246 245 224
Total Revenues 1,541 1,541 1,506 1,529 1,368
Provision for Losses
& Benefits:
Annuities 254 254 259 276 251
Insurance 146 138 139 130 135
Investment Certificates 89 68 89 124 46
Total 489 460 487 530 432
Net Revenues 1,052 1,081 1,019 999 936
Expenses:
Human Resources 527 528 498 443 456
Other Operating Expenses 138 156 166 209 130
Total Expenses 665 684 664 652 586
Pretax Income 387 397 355 347 350
Income Tax Provision 118 122 110 109 110
Net Income $ 269 $ 275 $ 245 $ 238 $ 240
(Preliminary) American Express Financial Advisors
Selected Statistical Information
(Unaudited)
(Dollars in millions, except where indicated)
Quarters Ended
September June March December September
30, 30, 31 31, 30,
2000 2000 2000 1999 1999
Investments (billions) $ 30.0 $ 30.0 $ 30.3 $ 30.3 $ 30.7
Client Contract Reserves
(billions) $ 31.0 $ 31.0 $ 31.0 $ 31.0 $ 31.0
Shareholder's Equity
(billions) $ 4.2 $ 4.0 $ 3.9 $ 3.9 $ 3.9
Return on Average
Equity* 23.1% 23.1% 23.0% 22.9% 22.8%
Life Insurance in
Force (billions) $ 95.8 $ 93.8 $ 91.7 $ 89.2 $ 86.3
Assets Owned, Managed or
Administered(billions):
Assets Managed for
Institutions $ 55.9 $ 56.1 $ 57.4 $ 55.5 $ 48.2
Assets Owned,Managed or
Administered for Individuals:
Owned Assets:
Separate Account Assets 36.6 36.5 38.4 35.9 28.9
Other Owned Assets 40.6 39.9 39.8 38.7 38.1
Total Owned Assets 77.2 76.4 78.2 74.6 67.0
Managed Assets 122.0 119.6 122.7 115.1 99.5
Administered Assets 38.0 34.1 31.2 24.8 21.1
Total $ 293.1 $ 286.2 $ 289.5 $ 270.0 $ 235.8
Market Appreciation
(Depreciation) During
the period:
Owned Assets:
Separate Account
Assets $ (203) $ (2,301) $ 2,332 $ 6,726 $ (986)
Other Owned Assets $ 163 $ (90) $ (120) $ (254) $ (273)
Total Managed Assets $ (76) $ (6,488) $ 7,020 $ 20,745 $ (5,318)
Cash Sales:
Mutual Funds $ 11,698 $ 10,376 $ 12,104 $ 8,611 $ 8,304
Annuities 1,465 1,566 1,362 939 1,190
Investment
Certificates 868 871 835 993 1,061
Life and Other Insurance
Products 220 219 237 224 196
Institutional 1,169 1,557 1,551 1,928 909
Other 815 661 573 870 953
Total Cash Sales $ 16,235 $ 15,250 $ 16,662 $ 13,565 $ 12,613
Number of Financial
Advisors 12,137 11,486 11,094 11,366 10,631
Fees from Financial Plans
& Advice Services $ 26.1 $ 23.9 $ 26.3 $ 22.1 $ 22.3
Percentage of Total Sales
from Financial Plans and
Advice Services 69.2% 66.1% 66.9% 67.4% 67.7%
*Excluding the effect of SFAS No. 115.
Note: In the first quarter of 2000, reporting of data related to cash sales
and assets owned, managed and administered was revised to better reflect
AEFA's multiple sales channel strategy and broadening of its product
portfolio through additional non-proprietary offerings.
(Preliminary) American Express Bank
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Net Revenues:
Interest Income $ 188 $ 181 3.9%
Interest Expense 125 106 17.3
Net Interest Income 63 75 (15.2)
Commissions & Fees 54 46 17.7
Foreign Exchange Income
& Other Revenue 29 36 (20.8)
Total Net Revenues 146 157 (7.0)
Expenses:
Human Resources 65 68 (4.2)
Other Operating Expenses 67 78 (14.7)
Provision for Losses 6 5 26.9
Total Expenses 138 151 (8.7)
Pretax Income 8 6 33.5
Income Tax Provision 1 1 (40.2)
Net Income $ 7 $ 5 60.0
(Preliminary) American Express Bank
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
September 30, Percentage
2000 1999 Inc/(Dec)
Total Shareholder's
Equity (millions) $ 729 $ 702 3.8%
Return on Average
Common Equity (A) 4.1% 3.7% -
Return on Average
Assets (A) 0.24% 0.20% -
Total Loans $ 5.1 $ 5.1 0.8
Total Non-performing
Loans(millions) $ 156 $ 181 (14.2)
Other Non-performing
Assets (millions) $ 37 $ 40 (6.6)
Reserve for Credit
Losses(millions)(B) $ 179 $ 204 (12.1)
Loan Loss Reserves as
a % of Total Loans 3.1% 3.5% -
Deposits $ 8.0 $ 8.1 (1.7)
Assets Managed (C)/
Administered $ 10.2 $ 7.7 33.5
Assets of Non-
Consolidated Joint
Ventures $ 2.3 $ 2.4 (1.6)
Risk-Based Capital Ratios:
Tier 1 10.4% 9.9% -
Total 11.9% 12.1% -
Leverage Ratio 5.8% 5.5% -
(A) Excludes the effect of SFAS No.115 for all periods presented.
(B) Allocation:
Loans $ 158 $ 179
Other Assets,
primarily derivatives 16 23
Other Liabilities 5 2
Total Credit Loss
Reserves = $ 179 $ 204
(C) Includes assets managed by American Express Financial Advisors.
(Preliminary) American Express Bank
Statements of Income
(Unaudited)
(Dollars in millions) Quarters Ended
September June March December September
30, 30, 31, 31, 30,
2000 2000 2000 1999 1999
Net Revenues:
Interest Income $ 188 $ 183 $ 183 $ 180 $ 181
Interest Expense 125 120 118 112 106
Net Interest Income 63 63 65 68 75
Commissions & Fees 54 56 52 48 46
Foreign Exchange Income
& Other Revenue 29 32 33 31 36
Total Net Revenues 146 151 150 147 157
Expenses:
Human Resources 65 65 66 69 68
Other Operating Expenses 67 69 68 68 78
Provision for Losses 6 7 8 4 5
Total Expenses 138 141 142 141 151
Pretax Income 8 10 8 6 6
Income Tax Provision 1 3 1 2 1
Net Income $ 7 $ 7 $ 7 $ 4 $ 5
(Preliminary) American Express Bank
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
September June March December September
30, 30, 31, 31, 30,
2000 2000 2000 1999 1999
Total Shareholder's
Equity (millions) $ 729 $ 707 $ 697 $ 691 $ 702
Return on Average
Common Equity (A) 4.1% 3.7% 3.5% 3.5% 3.7%
Return on Average
Assets (A) 0.24% 0.21% 0.19% 0.20% 0.20%
Total Loans $ 5.1 $ 5.1 $ 5.0 $ 5.1 $ 5.1
Total Non-performing
Loans(millions) $ 156 $ 174 $ 174 $ 168 $ 181
Other Non-performing
Assets (millions) $ 37 $ 36 $ 31 $ 37 $ 40
Reserve for Credit
Losses(millions)(B) $ 179 $ 187 $ 189 $ 189 $ 204
Loan Loss Reserves as
a % of Total Loans 3.1% 3.3% 3.4% 3.3% 3.5%
Deposits $ 8.0 $ 8.2 $ 8.4 $ 8.3 $ 8.1
Assets Managed (C)/
Administered $10.2 $ 9.8(D) $ 9.4 $ 8.6 $ 7.7
Assets of Non-
Consolidated Joint
Ventures $ 2.3 $ 2.3 $ 2.4 $ 2.2 $ 2.4
Risk-Based Capital Ratios:
Tier 1 10.4% 10.3% 10.1% 9.9% 9.9%
Total 11.9% 11.9% 11.6% 12.0% 12.1%
Leverage Ratio 5.8% 5.8% 5.6% 5.6% 5.5%
(A) Excludes the effect of SFAS No.115 for all periods presented.
(B) Allocation:
Loans $ 158 $ 166 $ 170 $ 169 $ 179
Other Assets,
primarily derivatives 16 16 15 16 23
Other Liabilities 5 5 4 4 2
Total Credit Loss
Reserves $ 179 $ 187 $ 189 $ 189 204
(C) Includes assets managed by American Express Financial Advisors.
(D) Revised from previous disclosure
(Preliminary) American Express Bank
Exposures by Country and Region
(Unaudited)
($ in billions) Net
Guarantees 9/30/00 6/30/00
FX & and Total Total
Country Loans Deriv- Contin- Other* Exposure** Exposure**
atives gents
Hong Kong $ 0.5 - $ 0.1 $ 0.1 $ 0.7 $ 0.6
Indonesia 0.2 - - 0.1 0.3 0.3
Singapore 0.5 - 0.1 0.1 0.7 0.6
Korea 0.2 - - 0.2 0.5 0.5
Taiwan 0.2 - - 0.1 0.4 0.4
China - - - - - -
Japan - - - - 0.1 0.1
Thailand - - - - - -
Other 0.1 - - 0.1 0.2 0.2
Total Asia/Pacific
Region** 1.7 - 0.4 0.7 2.8 2.7
Chile 0.2 - - 0.1 0.3 0.4
Brazil 0.2 - - 0.1 0.3 0.3
Mexico - - - - 0.1 0.1
Peru - - - - - -
Argentina 0.1 - - - 0.1 0.1
Other 0.2 0.2 0.1 0.5 0.5
Total Latin
America** 0.8 - 0.2 0.3 1.3 1.4
India 0.3 - 0.1 0.3 0.7 0.7
Pakistan 0.1 - - 0.2 0.3 0.3
Other 0.1 - 0.1 0.1 0.2 0.2
Total
Subcontinent** 0.4 - 0.2 0.6 1.2 1.2
Egypt 0.3 - - 0.2 0.6 0.5
Other 0.1 - - - 0.2 0.2
Total Middle East
& Africa** 0.4 - 0.1 0.2 0.7 0.7
Total Europe*** 1.4 $ 0.1 0.5 2.3 4.4 4.4
Total
North America** 0.3 0.1 0.2 1.3 1.9 1.8
Total
Worldwide** = $ 5.1 $ 0.3 $ 1.6 $ 5.3 $ 12.3 $ 12.3
* Includes cash, placements and securities
** Individual items may not add to totals due to rounding
*** Total exposures at 9/30/00 and 6/30/00 include $4 million and $5 million of
exposures to Russia, respectively.
Note: Includes cross-border and local exposure and does not net local funding
or liabilities against any local exposure.
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