Attached files
| file | filename |
|---|---|
| 8-K - 2011 FIRST QUARTER EARNINGS RELEASE - AMERICAN EXPRESS CO | form8k.htm |
| EX-99.3 - EXHIBIT 99.3 EARNINGS SUPPLEMENT - AMERICAN EXPRESS CO | exhibit99_3.htm |
| EX-99.1 - EXHIBIT 99.1 PRESS RELEASE - AMERICAN EXPRESS CO | exhibit99_1.htm |
Exhibit 99.2
All information in the following tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. Prior period amounts have been revised to reflect various changes associated with the Company's reclassification of certain contractual lump sum payments to partners, previously recognized in Other, net, expenses, as either contra Discount revenue or Marketing and promotion expense. Additionally, the tables reflect changes to the Company's segment allocation methodology due to reorganization of certain businesses, such as Enterprise Growth, across its reportable operating segments.
(Preliminary)
American Express Company
Consolidated Statements of Income
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Revenues
|
||||||||||||
|
Non-interest revenues
|
||||||||||||
|
Discount revenue
|
$ | 3,902 | $ | 3,422 | 14 | % | ||||||
|
Net card fees
|
537 | 521 | 3 | |||||||||
|
Travel commissions and fees
|
454 | 385 | 18 | |||||||||
|
Other commissions and fees
|
529 | 500 | 6 | |||||||||
|
Other
|
475 | 425 | 12 | |||||||||
|
Total non-interest revenues
|
5,897 | 5,253 | 12 | |||||||||
|
Interest income
|
||||||||||||
|
Interest and fees on loans
|
1,619 | 1,775 | (9 | ) | ||||||||
|
Interest and dividends on investment securities
|
88 | 117 | (25 | ) | ||||||||
|
Deposits with banks and other
|
20 | 13 | 54 | |||||||||
|
Total interest income
|
1,727 | 1,905 | (9 | ) | ||||||||
|
Interest expense
|
||||||||||||
|
Deposits
|
137 | 128 | 7 | |||||||||
|
Short-term borrowings
|
- | 1 | # | |||||||||
|
Long-term debt and other
|
456 | 469 | (3 | ) | ||||||||
|
Total interest expense
|
593 | 598 | (1 | ) | ||||||||
|
Net interest income
|
1,134 | 1,307 | (13 | ) | ||||||||
|
Total revenues net of interest expense
|
7,031 | 6,560 | 7 | |||||||||
|
Provisions for losses
|
||||||||||||
|
Charge card
|
198 | 227 | (13 | ) | ||||||||
|
Cardmember loans
|
(120 | ) | 688 | # | ||||||||
|
Other
|
19 | 28 | (32 | ) | ||||||||
|
Total provisions for losses
|
97 | 943 | (90 | ) | ||||||||
|
Total revenues net of interest expense after provisions for losses
|
6,934 | 5,617 | 23 | |||||||||
|
Expenses
|
||||||||||||
|
Marketing and promotion
|
709 | 619 | 15 | |||||||||
|
Cardmember rewards
|
1,577 | 1,211 | 30 | |||||||||
|
Cardmember services
|
164 | 157 | 4 | |||||||||
|
Salaries and employee benefits
|
1,522 | 1,327 | 15 | |||||||||
|
Professional services
|
663 | 561 | 18 | |||||||||
|
Occupancy and equipment
|
394 | 384 | 3 | |||||||||
|
Communications
|
95 | 95 | - | |||||||||
|
Other, net
|
78 | 11 | # | |||||||||
|
Total
|
5,202 | 4,365 | 19 | |||||||||
|
Pretax income
|
1,732 | 1,252 | 38 | |||||||||
|
Income tax provision
|
555 | 367 | 51 | |||||||||
|
Net income
|
$ | 1,177 | $ | 885 | 33 | |||||||
|
Net income attributable to common shareholders (A)
|
$ | 1,163 | $ | 873 | 33 | |||||||
# - Denotes a variance of more than 100%.
(A) Represents net income less earnings allocated to participating share awards and other items of $14 million and $12 million for the three months ended March 31, 2011 and 2010, respectively.
-1-
(Preliminary)
American Express Company
Condensed Consolidated Balance Sheets
(Billions)
|
March 31,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
Assets
|
||||||||
|
Cash
|
$ | 22 | $ | 17 | ||||
|
Accounts receivable
|
41 | 40 | ||||||
|
Investment securities
|
11 | 14 | ||||||
|
Loans
|
55 | 58 | ||||||
|
Other assets
|
15 | 18 | ||||||
|
Total assets
|
$ | 144 | $ | 147 | ||||
|
Liabilities and Shareholders' Equity
|
||||||||
|
Customer deposits
|
$ | 32 | $ | 30 | ||||
|
Short-term borrowings
|
3 | 3 | ||||||
|
Long-term debt
|
61 | 66 | ||||||
|
Other liabilities
|
31 | 32 | ||||||
|
Total liabilities
|
127 | 131 | ||||||
|
Shareholders' Equity
|
17 | 16 | ||||||
|
Total liabilities and shareholders' equity
|
$ | 144 | $ | 147 | ||||
-2-
(Preliminary)
American Express Company
Financial Summary
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Total revenues net of interest expense
|
||||||||||||
|
U.S. Card Services
|
$ | 3,577 | $ | 3,502 | 2 | % | ||||||
|
International Card Services
|
1,208 | 1,135 | 6 | |||||||||
|
Global Commercial Services
|
1,121 | 965 | 16 | |||||||||
|
Global Network & Merchant Services
|
1,137 | 982 | 16 | |||||||||
| 7,043 | 6,584 | 7 | ||||||||||
|
Corporate & Other, including adjustments and eliminations
|
(12 | ) | (24 | ) | (51 | ) | ||||||
|
|
||||||||||||
|
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE
|
$ | 7,031 | $ | 6,560 | 7 | |||||||
|
Pretax income (loss)
|
||||||||||||
|
U.S. Card Services
|
$ | 910 | $ | 653 | 39 | |||||||
|
International Card Services
|
240 | 165 | 45 | |||||||||
|
Global Commercial Services
|
265 | 124 | # | |||||||||
|
Global Network & Merchant Services
|
476 | 393 | 21 | |||||||||
| 1,891 | 1,335 | 42 | ||||||||||
|
Corporate & Other
|
(159 | ) | (83 | ) | 91 | |||||||
|
PRETAX INCOME
|
$ | 1,732 | $ | 1,252 | 38 | |||||||
|
Net income (loss)
|
||||||||||||
|
U.S. Card Services
|
$ | 555 | $ | 414 | 34 | |||||||
|
International Card Services
|
189 | 139 | 36 | |||||||||
|
Global Commercial Services
|
184 | 85 | # | |||||||||
|
Global Network & Merchant Services
|
313 | 253 | 24 | |||||||||
| 1,241 | 891 | 39 | ||||||||||
|
Corporate & Other
|
(64 | ) | (6 | ) | # | |||||||
|
NET INCOME
|
$ | 1,177 | $ | 885 | 33 | |||||||
# - Denotes a variance of more than 100%.
-3-
(Preliminary)
American Express Company
Financial Summary (continued)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
EARNINGS PER COMMON SHARE
|
||||||||||||
|
BASIC
|
||||||||||||
|
Net income attributable to common shareholders
|
$ | 0.98 | $ | 0.74 | 32 | % | ||||||
|
Average common shares outstanding (millions)
|
1,192 | 1,185 | 1 | % | ||||||||
|
DILUTED
|
||||||||||||
|
Net income attributable to common shareholders
|
$ | 0.97 | $ | 0.73 | 33 | % | ||||||
|
Average common shares outstanding (millions)
|
1,198 | 1,191 | 1 | % | ||||||||
|
Cash dividends declared per common share
|
$ | 0.18 | $ | 0.18 | - | % | ||||||
Selected Statistical Information
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Return on average equity (A)
|
27.9 | % | 18.0 | % | ||||||||
|
Return on average common equity (A)
|
27.6 | % | 17.1 | % | ||||||||
|
Return on average tangible common equity (A)
|
35.6 | % | 22.2 | % | ||||||||
|
Common shares outstanding (millions)
|
1,202 | 1,198 | - | % | ||||||||
|
Book value per common share
|
$ | 14.54 | $ | 11.21 | 30 | % | ||||||
|
Shareholders' equity (billions)
|
$ | 17.5 | $ | 13.4 | 31 | % | ||||||
# - Denotes a variance of more than 100%.
(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity.
-4-
American Express Company
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Card billed business (A):
|
||||||||||||
|
United States
|
$ | 124.1 | $ | 108.0 | 15 | % | ||||||
|
Outside the United States
|
63.8 | 53.0 | 20 | |||||||||
|
Total
|
$ | 187.9 | $ | 161.0 | 17 | |||||||
|
Total cards-in-force (millions) (B):
|
||||||||||||
|
United States
|
49.4 | 48.8 | 1 | % | ||||||||
|
Outside the United States
|
43.0 | 39.2 | 10 | |||||||||
|
Total
|
92.4 | 88.0 | 5 | |||||||||
|
Basic cards-in-force (millions) (B) (C):
|
||||||||||||
|
United States
|
38.3 | 37.8 | 1 | % | ||||||||
|
Outside the United States
|
34.4 | 31.2 | 10 | |||||||||
|
Total
|
72.7 | 69.0 | 5 | |||||||||
|
Average discount rate (D)
|
2.55 | % | 2.55 | % | ||||||||
|
Average basic cardmember spending (dollars) (E)
|
$ | 3,438 | $ | 3,012 | 14 | % | ||||||
|
Average fee per card (dollars) (E)
|
$ | 39 | $ | 37 | 5 | % | ||||||
|
Average fee per card adjusted (dollars) (E)
|
$ | 42 | $ | 40 | 5 | % | ||||||
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. Card billed business is reflected in the United States or outside the United States based on where the cardmember is domiciled.
(B) Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand cardmember accounts which have no out-of-store spend activity during the prior 12 month period.
(C) Prior to and including the fourth quarter of 2010, the Company did not have the data necessary to separately report Basic and Supplementary cards-in-force (CIF) for Global Network Services; therefore, all cards-in-force for Global Network Services was reported as Basic CIF. Starting in the first quarter of 2011, as the necessary data became available, the Company began to separately report Basic and Supplementary CIF for Global Network Services. The Company has accordingly revised prior periods to conform with the current period presentation.
(D) This calculation is designed to reflect pricing at merchants accepting general purpose American Express cards. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance.
(E) Average basic cardmember spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs, plus card fees included in interest and fees on loans (including related amortization of deferred direct acquisition costs), divided by average worldwide proprietary cards-in-force. The card fees related to cardmember loans included in interest and fees on loans were $64 million and $51 million for the quarters ended March 31, 2011 and 2010, respectively. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs (a portion of which is charge card related and included in net card fees and a portion of which is lending related and included in interest and fees on loans). The amount of amortization excluded was $54 million and $51 million for the quarters ended March 31, 2011 and 2010, respectively. The Company presents adjusted average fee per card because management believes that this metric presents a useful indicator of card fee pricing across a range of its proprietary card products.
-5-
(Preliminary)
American Express Company
Selected Statistical Information (continued)
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Worldwide cardmember receivables:
|
||||||||||||
|
Total receivables
|
$ | 37.7 | $ | 33.7 | 12 | % | ||||||
|
Loss reserves (millions):
|
||||||||||||
|
Beginning balance
|
$ | 386 | $ | 546 | (29 | )% | ||||||
|
Provisions for losses on authorized transactions (A)
|
160 | 184 | (13 | ) | ||||||||
|
Net write-offs
|
(132 | ) | (244 | ) | (46 | ) | ||||||
|
Other
|
7 | 12 | (42 | ) | ||||||||
|
Ending balance
|
$ | 421 | $ | 498 | (15 | ) | ||||||
|
% of receivables
|
1.1 | % | 1.5 | % | ||||||||
|
Net write-off rate - USCS
|
1.7 | % | 1.7 | % | ||||||||
|
30 days past due as a % of total - USCS
|
1.8 | % | 1.9 | % | ||||||||
|
Net loss ratio (as a % of charge volume) - ICS/GCS (B)
|
0.09 | % | 0.38 | % | ||||||||
|
90 days past billing as a % of total - ICS/GCS (B)
|
0.8 | % | 0.9 | % | ||||||||
|
Worldwide cardmember loans:
|
||||||||||||
|
Total loans
|
$ | 57.8 | $ | 57.6 | - | % | ||||||
|
30 days past due loans as a % of total
|
1.9 | % | 3.3 | % | ||||||||
|
Loss reserves (millions):
|
||||||||||||
|
Beginning balance
|
$ | 3,646 | $ | 3,268 | 12 | % | ||||||
|
Adoption of GAAP consolidation standard (C)
|
N/A | $ | 2,531 | - | ||||||||
|
Provisions for losses on authorized transactions
|
(139 | ) | 670 | # | ||||||||
|
Net write-offs - principal
|
(535 | ) | (1,035 | ) | (48 | ) | ||||||
|
Net write-offs - interest and fees
|
(61 | ) | (114 | ) | (46 | ) | ||||||
|
Other
|
10 | (6 | ) | # | ||||||||
|
Ending balance
|
$ | 2,921 | $ | 5,314 | (45 | ) | ||||||
|
Ending Reserves - principal
|
$ | 2,839 | $ | 5,161 | (45 | ) | ||||||
|
Ending Reserves - interest and fees
|
$ | 82 | $ | 153 | (46 | ) | ||||||
|
% of loans
|
5.1 | % | 9.2 | % | ||||||||
|
% of past due
|
263 | % | 277 | % | ||||||||
|
Average loans
|
$ | 58.5 | $ | 59.3 | (1 | )% | ||||||
|
Net write-off rate
|
3.7 | % | 7.0 | % | ||||||||
|
Net interest income divided by average loans (D) (E)
|
7.9 | % | 8.9 | % | ||||||||
|
Net interest yield on cardmember loans (D)
|
9.2 | % | 10.3 | % | ||||||||
# - Denotes a variance of more than 100%.
(A) Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.
(B) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in International Card Services and Global Commercial Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $60 million for International Card Services and approximately $48 million for Global Commercial Services resulting from this write-off methodology change, which increased the net loss ratios and decreased the 90 days past billing metrics for these segments, but did not have a substantial impact on provisions for losses. If these amounts had been excluded from net write-offs, the combined net loss ratio for International Card Services/Global Commercial Services for the first quarter of 2010 would have been 0.13%.
(C) In accordance with GAAP effective January 1, 2010, which resulted in the consolidation of the American Express Credit Account Master Trust (the Lending Trust), reflecting $29.0 billion of additional cardmember loans along with a $2.5 billion loan loss reserve on the Company's balance sheets.
(D) See Appendix III for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-6-
(Preliminary)
American Express Company
Consolidated Statements of Income
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Non-interest revenues
|
||||||||||||||||||||
|
Discount revenue
|
$ | 3,902 | $ | 4,017 | $ | 3,761 | $ | 3,680 | $ | 3,422 | ||||||||||
|
Net card fees
|
537 | 534 | 527 | 520 | 521 | |||||||||||||||
|
Travel commissions and fees
|
454 | 471 | 483 | 434 | 385 | |||||||||||||||
|
Other commissions and fees
|
529 | 519 | 515 | 497 | 500 | |||||||||||||||
|
Other
|
475 | 513 | 503 | 486 | 425 | |||||||||||||||
|
Total non-interest revenues
|
5,897 | 6,054 | 5,789 | 5,617 | 5,253 | |||||||||||||||
|
Interest income
|
||||||||||||||||||||
|
Interest and fees on loans
|
1,619 | 1,676 | 1,675 | 1,657 | 1,775 | |||||||||||||||
|
Interest and dividends on investment securities
|
88 | 98 | 103 | 125 | 117 | |||||||||||||||
|
Deposits with banks and other
|
20 | 21 | 16 | 16 | 13 | |||||||||||||||
|
Total interest income
|
1,727 | 1,795 | 1,794 | 1,798 | 1,905 | |||||||||||||||
|
Interest expense
|
||||||||||||||||||||
|
Deposits
|
137 | 140 | 141 | 137 | 128 | |||||||||||||||
|
Short-term borrowings
|
- | 1 | - | 1 | 1 | |||||||||||||||
|
Long-term debt and other
|
456 | 464 | 469 | 472 | 469 | |||||||||||||||
|
Total interest expense
|
593 | 605 | 610 | 610 | 598 | |||||||||||||||
|
Net interest income
|
1,134 | 1,190 | 1,184 | 1,188 | 1,307 | |||||||||||||||
|
Total revenues net of interest expense
|
7,031 | 7,244 | 6,973 | 6,805 | 6,560 | |||||||||||||||
|
Provisions for losses
|
||||||||||||||||||||
|
Charge card
|
198 | 183 | 89 | 96 | 227 | |||||||||||||||
|
Cardmember loans
|
(120 | ) | 37 | 262 | 540 | 688 | ||||||||||||||
|
Other
|
19 | 19 | 22 | 16 | 28 | |||||||||||||||
|
Total provisions for losses
|
97 | 239 | 373 | 652 | 943 | |||||||||||||||
|
Total revenues net of interest expense after provision for losses
|
6,934 | 7,005 | 6,600 | 6,153 | 5,617 | |||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
Marketing and promotion
|
709 | 833 | 871 | 824 | 619 | |||||||||||||||
|
Cardmember rewards
|
1,577 | 1,334 | 1,263 | 1,192 | 1,211 | |||||||||||||||
|
Cardmember services
|
164 | 166 | 141 | 127 | 157 | |||||||||||||||
|
Salaries and employee benefits
|
1,522 | 1,570 | 1,354 | 1,315 | 1,327 | |||||||||||||||
|
Professional services
|
663 | 908 | 701 | 636 | 561 | |||||||||||||||
|
Occupancy and equipment
|
394 | 428 | 371 | 379 | 384 | |||||||||||||||
|
Communications
|
95 | 99 | 92 | 97 | 95 | |||||||||||||||
|
Other, net
|
78 | 190 | 167 | (12 | ) | 11 | ||||||||||||||
|
Total
|
5,202 | 5,528 | 4,960 | 4,558 | 4,365 | |||||||||||||||
|
Pretax income
|
1,732 | 1,477 | 1,640 | 1,595 | 1,252 | |||||||||||||||
|
Income tax provision
|
555 | 415 | 547 | 578 | 367 | |||||||||||||||
|
Net income
|
$ | 1,177 | $ | 1,062 | $ | 1,093 | $ | 1,017 | $ | 885 | ||||||||||
|
Net income attributable to common shareholders (A)
|
$ | 1,163 | $ | 1,050 | $ | 1,080 | $ | 1,004 | $ | 873 | ||||||||||
(A) Represents net income less earnings allocated to participating share awards and other items of $14 million for the quarter ended March 31, 2011, $12 million for the quarter ended December 31, 2010, $13 million for the quarter ended September 30, 2010, $13 million for the quarter ended June 30, 2010 and $12 million for the quarter ended March 31, 2010.
-7-
(Preliminary)
American Express Company
Financial Summary
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Total revenues net of interest expense
|
||||||||||||||||||||
|
U.S. Card Services
|
$ | 3,577 | $ | 3,728 | $ | 3,625 | $ | 3,607 | $ | 3,502 | ||||||||||
|
International Card Services
|
1,208 | 1,238 | 1,163 | 1,107 | 1,135 | |||||||||||||||
|
Global Commercial Services
|
1,121 | 1,067 | 1,072 | 1,023 | 965 | |||||||||||||||
|
Global Network & Merchant Services
|
1,137 | 1,172 | 1,100 | 1,051 | 982 | |||||||||||||||
| 7,043 | 7,205 | 6,960 | 6,788 | 6,584 | ||||||||||||||||
|
Corporate & Other, including adjustments and eliminations
|
(12 | ) | 39 | 13 | 17 | (24 | ) | |||||||||||||
|
|
||||||||||||||||||||
|
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE
|
$ | 7,031 | $ | 7,244 | $ | 6,973 | $ | 6,805 | $ | 6,560 | ||||||||||
|
Pretax income (loss)
|
||||||||||||||||||||
|
U.S. Card Services
|
$ | 910 | $ | 1,059 | $ | 971 | $ | 821 | $ | 653 | ||||||||||
|
International Card Services
|
240 | 102 | 131 | 191 | 165 | |||||||||||||||
|
Global Commercial Services
|
265 | 140 | 226 | 233 | 124 | |||||||||||||||
|
Global Network & Merchant Services
|
476 | 381 | 410 | 405 | 393 | |||||||||||||||
| 1,891 | 1,682 | 1,738 | 1,650 | 1,335 | ||||||||||||||||
|
Corporate & Other
|
(159 | ) | (205 | ) | (98 | ) | (55 | ) | (83 | ) | ||||||||||
|
PRETAX INCOME
|
$ | 1,732 | $ | 1,477 | $ | 1,640 | $ | 1,595 | $ | 1,252 | ||||||||||
|
Net income (loss)
|
||||||||||||||||||||
|
U.S. Card Services
|
$ | 555 | $ | 700 | $ | 595 | $ | 516 | $ | 414 | ||||||||||
|
International Card Services
|
189 | 99 | 144 | 155 | 139 | |||||||||||||||
|
Global Commercial Services
|
184 | 103 | 150 | 112 | 85 | |||||||||||||||
|
Global Network & Merchant Services
|
313 | 259 | 252 | 261 | 253 | |||||||||||||||
| 1,241 | 1,161 | 1,141 | 1,044 | 891 | ||||||||||||||||
|
Corporate & Other
|
(64 | ) | (99 | ) | (48 | ) | (27 | ) | (6 | ) | ||||||||||
|
NET INCOME
|
$ | 1,177 | $ | 1,062 | $ | 1,093 | $ | 1,017 | $ | 885 | ||||||||||
-8-
(Preliminary)
American Express Company
Financial Summary (continued)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
EARNINGS PER COMMON SHARE
|
||||||||||||||||||||
|
BASIC
|
||||||||||||||||||||
|
Net income attributable to common shareholders
|
$ | 0.98 | $ | 0.88 | $ | 0.91 | $ | 0.84 | $ | 0.74 | ||||||||||
|
Average common shares outstanding (millions)
|
1,192 | 1,188 | 1,193 | 1,190 | 1,185 | |||||||||||||||
|
DILUTED
|
||||||||||||||||||||
|
Net income attributable to common shareholders
|
$ | 0.97 | $ | 0.88 | $ | 0.90 | $ | 0.84 | $ | 0.73 | ||||||||||
|
Average common shares outstanding (millions)
|
1,198 | 1,194 | 1,199 | 1,197 | 1,191 | |||||||||||||||
|
Cash dividends declared per common share
|
$ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | ||||||||||
|
Selected Statistical Information
|
||||||||||||||||||||
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Return on average equity (A)
|
27.9 | % | 27.5 | % | 25.9 | % | 23.5 | % | 18.0 | % | ||||||||||
|
Return on average common equity (A)
|
27.6 | % | 27.2 | % | 25.6 | % | 23.2 | % | 17.1 | % | ||||||||||
|
Return on average tangible common equity (A)
|
35.6 | % | 35.1 | % | 33.1 | % | 30.0 | % | 22.2 | % | ||||||||||
|
Common shares outstanding (millions)
|
1,202 | 1,197 | 1,204 | 1,202 | 1,198 | |||||||||||||||
|
Book value per common share
|
$ | 14.54 | $ | 13.56 | $ | 13.22 | $ | 12.08 | $ | 11.21 | ||||||||||
|
Shareholders' equity (billions)
|
$ | 17.5 | $ | 16.2 | $ | 15.9 | $ | 14.5 | $ | 13.4 | ||||||||||
(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity.
-9-
(Preliminary)
American Express Company
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Card billed business (A):
|
||||||||||||||||||||
|
United States
|
$ | 124.1 | $ | 131.1 | $ | 120.5 | $ | 119.7 | $ | 108.0 | ||||||||||
|
Outside the United States
|
63.8 | 66.6 | 58.8 | 55.6 | 53.0 | |||||||||||||||
|
Total
|
$ | 187.9 | $ | 197.7 | $ | 179.3 | $ | 175.3 | $ | 161.0 | ||||||||||
|
Total cards-in-force (millions) (B):
|
||||||||||||||||||||
|
United States
|
49.4 | 48.9 | 48.1 | 49.0 | 48.8 | |||||||||||||||
|
Outside the United States
|
43.0 | 42.1 | 40.9 | 39.9 | 39.2 | |||||||||||||||
|
Total
|
92.4 | 91.0 | 89.0 | 88.9 | 88.0 | |||||||||||||||
|
Basic cards-in-force (millions) (B) (C):
|
||||||||||||||||||||
|
United States
|
38.3 | 37.9 | 37.2 | 37.9 | 37.8 | |||||||||||||||
|
Outside the United States
|
34.4 | 33.7 | 32.6 | 31.8 | 31.2 | |||||||||||||||
|
Total
|
72.7 | 71.6 | 69.8 | 69.7 | 69.0 | |||||||||||||||
|
Average discount rate (D)
|
2.55 | % | 2.52 | % | 2.56 | % | 2.56 | % | 2.55 | % | ||||||||||
|
Average basic cardmember spending (dollars) (E)
|
$ | 3,438 | $ | 3,629 | $ | 3,330 | $ | 3,288 | $ | 3,012 | ||||||||||
|
Average fee per card (dollars) (E)
|
$ | 39 | $ | 38 | $ | 38 | $ | 37 | $ | 37 | ||||||||||
|
Average fee per card adjusted (dollars) (E)
|
$ | 42 | $ | 42 | $ | 41 | $ | 41 | $ | 40 | ||||||||||
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. Card billed business is reflected in the United States or outside the United States based on where the cardmember is domiciled.
(B) Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand cardmember accounts which have no out-of-store spend activity during the prior 12 month period.
(C) Prior to and including the fourth quarter of 2010, the Company did not have the data necessary to separately report Basic and Supplementary cards-in-force (CIF) for Global Network Services; therefore, all cards-in-force for Global Network Services was reported as Basic CIF. Starting in the first quarter of 2011, as the necessary data became available, the Company began to separately report Basic and Supplementary CIF for Global Network Services. The Company has accordingly revised prior periods to conform with the current period presentation.
(D) This calculation is designed to reflect pricing at merchants accepting general purpose American Express cards. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance.
(E) Average basic cardmember spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs, plus card fees included in interest and fees on loans (including related amortization of deferred direct acquisition costs), divided by average worldwide proprietary cards-in-force. The card fees related to cardmember loans included in interest and fees on loans were $64 million for the quarter ended March 31, 2011, $63 million for the quarter ended December 31, 2010, $58 million for the quarter ended September 30, 2010, $48 million for the quarter ended June 30, 2010 and $51 million for the quarter ended March 31, 2010. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs (a portion of which is charge card related and included in net card fees and a portion of which is lending related and included in interest and fees on loans). The amount of amortization excluded for these periods were $54 million for the quarter ended March 31, 2011, $51 million for the quarter ended December 31, 2010, $49 million for the quarter ended September 30, 2010, $56 million for the quarter ended June 30, 2010 and $51 million for the quarter ended March 31, 2010. The Company presents adjusted average fee per card because management believes that this metric presents a useful indicator of card fee pricing across a range of its proprietary card products.
-10-
American Express Company
Selected Statistical Information (continued)
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Worldwide cardmember receivables:
|
||||||||||||||||||||
|
Total receivables
|
$ | 37.7 | $ | 37.3 | $ | 35.1 | $ | 34.6 | $ | 33.7 | ||||||||||
|
Loss reserves (millions):
|
||||||||||||||||||||
|
Beginning balance
|
$ | 386 | $ | 364 | $ | 440 | $ | 498 | $ | 546 | ||||||||||
|
Provisions for losses on authorized transactions (A)
|
160 | 147 | 53 | 55 | 184 | |||||||||||||||
|
Net write-offs
|
(132 | ) | (117 | ) | (116 | ) | (121 | ) | (244 | ) | ||||||||||
|
Other
|
7 | (8 | ) | (13 | ) | 8 | 12 | |||||||||||||
|
Ending balance
|
$ | 421 | $ | 386 | $ | 364 | $ | 440 | $ | 498 | ||||||||||
|
% of receivables
|
1.1 | % | 1.0 | % | 1.0 | % | 1.3 | % | 1.5 | % | ||||||||||
|
Net write-off rate - USCS
|
1.7 | % | 1.4 | % | 1.6 | % | 1.6 | % | 1.7 | % | ||||||||||
|
30 days past due as a % of total - USCS
|
1.8 | % | 1.5 | % | 1.7 | % | 1.5 | % | 1.9 | % | ||||||||||
|
Net loss ratio (as a % of charge volume) - ICS/GCS (B)
|
0.09 | % | 0.09 | % | 0.09 | % | 0.10 | % | 0.38 | % | ||||||||||
|
90 days past billing as a % of total - ICS/GCS (B)
|
0.8 | % | 0.9 | % | 0.8 | % | 1.0 | % | 0.9 | % | ||||||||||
|
Worldwide cardmember loans:
|
||||||||||||||||||||
|
Total loans
|
$ | 57.8 | $ | 60.9 | $ | 57.2 | $ | 57.3 | $ | 57.6 | ||||||||||
|
30 days past due loans as a % of total
|
1.9 | % | 2.1 | % | 2.5 | % | 2.8 | % | 3.3 | % | ||||||||||
|
Loss reserves (millions):
|
||||||||||||||||||||
|
Beginning balance
|
$ | 3,646 | $ | 4,318 | $ | 4,866 | $ | 5,314 | $ | 3,268 | ||||||||||
|
Adoption of GAAP consolidation standard (C)
|
N/A | N/A | N/A | N/A | $ | 2,531 | ||||||||||||||
|
Provisions for losses on authorized transactions
|
(139 | ) | 16 | 239 | 520 | 670 | ||||||||||||||
|
Net write-offs - principal
|
(535 | ) | (630 | ) | (728 | ) | (867 | ) | (1,035 | ) | ||||||||||
|
Net write-offs - interest and fees
|
(61 | ) | (72 | ) | (81 | ) | (92 | ) | (114 | ) | ||||||||||
|
Other
|
10 | 14 | 22 | (9 | ) | (6 | ) | |||||||||||||
|
Ending balance
|
$ | 2,921 | $ | 3,646 | $ | 4,318 | $ | 4,866 | $ | 5,314 | ||||||||||
|
Ending Reserves - principal
|
$ | 2,839 | $ | 3,551 | $ | 4,210 | $ | 4,743 | $ | 5,161 | ||||||||||
|
Ending Reserves - interest and fees
|
$ | 82 | $ | 95 | $ | 108 | $ | 123 | $ | 153 | ||||||||||
|
% of loans
|
5.1 | % | 6.0 | % | 7.5 | % | 8.5 | % | 9.2 | % | ||||||||||
|
% of past due
|
263 | % | 287 | % | 302 | % | 307 | % | 277 | % | ||||||||||
|
Average loans
|
$ | 58.5 | $ | 58.5 | $ | 57.4 | $ | 57.5 | $ | 59.3 | ||||||||||
|
Net write-off rate
|
3.7 | % | 4.3 | % | 5.1 | % | 6.0 | % | 7.0 | % | ||||||||||
|
Net interest income divided by average loans (D) (E)
|
7.9 | % | 8.1 | % | 8.2 | % | 8.3 | % | 8.9 | % | ||||||||||
|
Net interest yield on cardmember loans (D)
|
9.2 | % | 9.3 | % | 9.5 | % | 9.6 | % | 10.3 | % | ||||||||||
(A) Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.
(B) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in International Card Services and Global Commercial Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $60 million for International Card Services and approximately $48 million for Global Commercial Services resulting from this write-off methodology change, which increased the net loss ratios and decreased the 90 days past billing metrics for these segments, but did not have a substantial impact on provisions for losses. If these amounts had been excluded from net write-offs, the combined net loss ratio for International Card Services/Global Commercial Services for the first quarter of 2010 would have been 0.13%.
(C) In accordance with GAAP effective January 1, 2010, which resulted in the consolidation of the American Express Credit Account Master Trust (the Lending Trust), reflecting $29.0 billion of additional cardmember loans along with a $2.5 billion loan loss reserve on the Company's balance sheets.
(D) See Appendix III for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-11-
(Preliminary)
U.S. Card Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Revenues
|
||||||||||||
|
Discount revenue, net card fees and other
|
$ | 2,486 | $ | 2,281 | 9 | % | ||||||
|
Interest income
|
1,294 | 1,411 | (8 | ) | ||||||||
|
Interest expense
|
203 | 190 | 7 | |||||||||
|
Net interest income
|
1,091 | 1,221 | (11 | ) | ||||||||
|
Total revenues net of interest expense
|
3,577 | 3,502 | 2 | |||||||||
|
Provisions for losses
|
47 | 687 | (93 | ) | ||||||||
|
Total revenues net of interest expense after provisions for losses
|
3,530 | 2,815 | 25 | |||||||||
|
Expenses
|
||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
1,718 | 1,324 | 30 | |||||||||
|
Salaries and employee benefits and other operating expenses
|
902 | 838 | 8 | |||||||||
|
Total
|
2,620 | 2,162 | 21 | |||||||||
|
Pretax segment income
|
910 | 653 | 39 | |||||||||
|
Income tax provision
|
355 | 239 | 49 | |||||||||
|
Segment income
|
$ | 555 | $ | 414 | 34 | |||||||
# - Denotes a variance of more than 100%.
-12-
(Preliminary)
U.S. Card Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Card billed business
|
$ | 96.1 | $ | 84.9 | 13 | % | ||||||
|
Total cards-in-force (millions)
|
40.1 | 39.5 | 2 | % | ||||||||
|
Basic cards-in-force (millions)
|
29.8 | 29.4 | 1 | % | ||||||||
|
Average basic cardmember spending (dollars)
|
$ | 3,231 | $ | 2,884 | 12 | % | ||||||
|
U.S. Consumer Travel:
|
||||||||||||
|
Travel sales (millions)
|
$ | 849 | $ | 735 | 16 | % | ||||||
|
Travel commissions and fees/sales
|
7.9 | % | 7.8 | % | ||||||||
|
Total segment assets
|
$ | 81.2 | $ | 74.9 | 8 | % | ||||||
|
Segment capital (millions) (A)
|
$ | 8,000 | $ | 5,311 | 51 | % | ||||||
|
Return on average segment capital (B)
|
35.1 | % | 15.4 | % | ||||||||
|
Return on average tangible segment capital (B)
|
37.6 | % | 16.8 | % | ||||||||
|
Cardmember receivables:
|
||||||||||||
|
Total receivables
|
$ | 17.6 | $ | 16.6 | 6 | % | ||||||
|
30 days past due as a % of total
|
1.8 | % | 1.9 | % | ||||||||
|
Average receivables
|
$ | 17.9 | $ | 16.7 | 7 | % | ||||||
|
Net write-off rate
|
1.7 | % | 1.7 | % | ||||||||
|
Cardmember loans:
|
||||||||||||
|
Total loans
|
$ | 49.2 | $ | 49.2 | - | % | ||||||
|
30 days past due loans as a % of total
|
1.8 | % | 3.3 | % | ||||||||
|
Average loans
|
$ | 49.6 | $ | 50.5 | (2 | )% | ||||||
|
Net write-off rate
|
3.7 | % | 7.2 | % | ||||||||
|
Net interest income divided by average loans (C) (D)
|
8.9 | % | 9.8 | % | ||||||||
|
Net interest yield on cardmember loans (C)
|
9.1 | % | 10.0 | % | ||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(D) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-13-
(Preliminary)
U.S. Card Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Discount revenue, net card fees and other
|
$ | 2,486 | $ | 2,606 | $ | 2,501 | $ | 2,496 | $ | 2,281 | ||||||||||
|
Interest income
|
1,294 | 1,330 | 1,334 | 1,315 | 1,411 | |||||||||||||||
|
Interest expense
|
203 | 208 | 210 | 204 | 190 | |||||||||||||||
|
Net interest income
|
1,091 | 1,122 | 1,124 | 1,111 | 1,221 | |||||||||||||||
|
Total revenues net of interest expense
|
3,577 | 3,728 | 3,625 | 3,607 | 3,502 | |||||||||||||||
|
Provisions for losses
|
47 | 111 | 274 | 519 | 687 | |||||||||||||||
|
Total revenues net of interest expense after provisions for losses
|
3,530 | 3,617 | 3,351 | 3,088 | 2,815 | |||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
1,718 | 1,533 | 1,477 | 1,410 | 1,324 | |||||||||||||||
|
Salaries and employee benefits and other operating expenses
|
902 | 1,025 | 903 | 857 | 838 | |||||||||||||||
|
Total
|
2,620 | 2,558 | 2,380 | 2,267 | 2,162 | |||||||||||||||
|
Pretax segment income
|
910 | 1,059 | 971 | 821 | 653 | |||||||||||||||
|
Income tax provision
|
355 | 359 | 376 | 305 | 239 | |||||||||||||||
|
Segment income
|
$ | 555 | $ | 700 | $ | 595 | $ | 516 | $ | 414 | ||||||||||
-14-
(Preliminary)
U.S. Card Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Card billed business
|
$ | 96.1 | $ | 103.4 | $ | 95.2 | $ | 94.6 | $ | 84.9 | ||||||||||
|
Total cards-in-force (millions)
|
40.1 | 39.9 | 39.9 | 39.6 | 39.5 | |||||||||||||||
|
Basic cards-in-force (millions)
|
29.8 | 29.7 | 29.7 | 29.5 | 29.4 | |||||||||||||||
|
Average basic cardmember spending (dollars)
|
$ | 3,231 | $ | 3,480 | $ | 3,219 | $ | 3,212 | $ | 2,884 | ||||||||||
|
U.S. Consumer Travel:
|
||||||||||||||||||||
|
Travel sales
|
$ | 0.8 | $ | 0.7 | $ | 0.8 | $ | 0.8 | $ | 0.7 | ||||||||||
|
Travel commissions and fees/sales
|
7.9 | % | 8.8 | % | 8.6 | % | 7.9 | % | 7.8 | % | ||||||||||
|
Total segment assets
|
$ | 81.2 | $ | 91.3 | $ | 81.1 | $ | 80.8 | $ | 74.9 | ||||||||||
|
Segment capital (A)
|
$ | 8.0 | $ | 7.4 | $ | 7.0 | $ | 6.0 | $ | 5.3 | ||||||||||
|
Return on average segment capital (B)
|
35.1 | % | 35.0 | % | 32.5 | % | 26.4 | % | 15.4 | % | ||||||||||
|
Return on average tangible segment capital (B)
|
37.6 | % | 37.8 | % | 35.1 | % | 28.7 | % | 16.8 | % | ||||||||||
|
Cardmember receivables:
|
||||||||||||||||||||
|
Total receivables
|
$ | 17.6 | $ | 19.2 | $ | 16.5 | $ | 17.3 | $ | 16.6 | ||||||||||
|
30 days past due as a % of total
|
1.8 | % | 1.5 | % | 1.7 | % | 1.5 | % | 1.9 | % | ||||||||||
|
Average receivables
|
$ | 17.9 | $ | 17.5 | $ | 16.9 | $ | 17.1 | $ | 16.7 | ||||||||||
|
Net write-off rate
|
1.7 | % | 1.4 | % | 1.6 | % | 1.6 | % | 1.7 | % | ||||||||||
|
Cardmember loans:
|
||||||||||||||||||||
|
Total loans
|
$ | 49.2 | $ | 51.6 | $ | 48.7 | $ | 49.0 | $ | 49.2 | ||||||||||
|
30 days past due loans as a % of total
|
1.8 | % | 2.1 | % | 2.5 | % | 2.7 | % | 3.3 | % | ||||||||||
|
Average loans
|
$ | 49.6 | $ | 49.8 | $ | 49.1 | $ | 49.1 | $ | 50.5 | ||||||||||
|
Net write-off rate
|
3.7 | % | 4.4 | % | 5.2 | % | 6.2 | % | 7.2 | % | ||||||||||
|
Net interest income divided by average loans (C) (D)
|
8.9 | % | 8.9 | % | 9.1 | % | 9.1 | % | 9.8 | % | ||||||||||
|
Net interest yield on cardmember loans (C)
|
9.1 | % | 9.1 | % | 9.3 | % | 9.3 | % | 10.0 | % | ||||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loan is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(D) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-15-
(Preliminary)
International Card Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Revenues
|
||||||||||||
|
Discount revenue, net card fees and other
|
$ | 989 | $ | 878 | 13 | % | ||||||
|
Interest income
|
325 | 363 | (10 | ) | ||||||||
|
Interest expense
|
106 | 106 | - | |||||||||
|
Net interest income
|
219 | 257 | (15 | ) | ||||||||
|
Total revenues net of interest expense
|
1,208 | 1,135 | 6 | |||||||||
|
Provisions for losses
|
5 | 158 | (97 | ) | ||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,203 | 977 | 23 | |||||||||
|
Expenses
|
||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
407 | 350 | 16 | |||||||||
|
Salaries and employee benefits and other operating expenses
|
556 | 462 | 20 | |||||||||
|
Total
|
963 | 812 | 19 | |||||||||
|
Pretax segment income
|
240 | 165 | 45 | |||||||||
|
Income tax provision
|
51 | 26 | 96 | |||||||||
|
Segment income
|
$ | 189 | $ | 139 | 36 | |||||||
# - Denotes variance of more than 100%.
-16-
(Preliminary)
International Card Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Card billed business
|
$ | 28.4 | $ | 24.4 | 16 | % | ||||||
|
Total cards-in-force (millions)
|
15.0 | 15.0 | - | % | ||||||||
|
Basic cards-in-force (millions)
|
10.4 | 10.4 | - | % | ||||||||
|
Average basic cardmember spending (dollars)
|
$ | 2,735 | $ | 2,340 | 17 | % | ||||||
|
International Consumer Travel:
|
||||||||||||
|
Travel sales (millions)
|
$ | 315 | $ | 261 | 21 | % | ||||||
|
Travel commissions and fees/sales
|
7.6 | % | 7.3 | % | ||||||||
|
Total segment assets
|
$ | 26.7 | $ | 21.1 | 27 | % | ||||||
|
Segment capital (millions) (A)
|
$ | 2,978 | $ | 2,117 | 41 | % | ||||||
|
Return on average segment capital (B)
|
25.8 | % | 19.1 | % | ||||||||
|
Return on average tangible segment capital (B)
|
39.4 | % | 25.6 | % | ||||||||
|
Cardmember receivables:
|
||||||||||||
|
Total receivables
|
$ | 6.5 | $ | 5.5 | 18 | % | ||||||
|
90 days past billing as a % of total (C)
|
1.0 | % | 1.0 | % | ||||||||
|
Net loss ratio (as a % of charge volume) (C)
|
0.15 | % | 0.53 | % | ||||||||
|
Cardmember loans:
|
||||||||||||
|
Total loans
|
$ | 8.5 | $ | 8.4 | 1 | % | ||||||
|
30 days past due loans as a % of total
|
2.4 | % | 3.3 | % | ||||||||
|
Average loans
|
$ | 8.8 | $ | 8.8 | - | % | ||||||
|
Net write-off rate
|
3.2 | % | 5.5 | % | ||||||||
|
Net interest income divided by average loans (D) (E)
|
10.1 | % | 11.8 | % | ||||||||
|
Net interest yield on cardmember loans (D)
|
10.0 | % | 11.7 | % | ||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in International Card Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $60 million for International Card Services resulting from this write-off methodology change, which increased the net loss ratio and decreased the 90 days past billing metric for this segment, but did not have a substantial impact on provisions for losses. If this amount had been excluded from net write-offs, the net loss ratio for International Card Services would have been 0.17%.
(D) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-17-
(Preliminary)
International Card Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Discount revenue, net card fees and other
|
$ | 989 | $ | 1,010 | $ | 926 | $ | 864 | $ | 878 | ||||||||||
|
Interest income
|
325 | 346 | 342 | 342 | 363 | |||||||||||||||
|
Interest expense
|
106 | 118 | 105 | 99 | 106 | |||||||||||||||
|
Net interest income
|
219 | 228 | 237 | 243 | 257 | |||||||||||||||
|
Total revenues net of interest expense
|
1,208 | 1,238 | 1,163 | 1,107 | 1,135 | |||||||||||||||
|
Provisions for losses
|
5 | 80 | 64 | 90 | 158 | |||||||||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,203 | 1,158 | 1,099 | 1,017 | 977 | |||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
407 | 458 | 428 | 376 | 350 | |||||||||||||||
|
Salaries and employee benefits and other operating expenses
|
556 | 598 | 540 | 450 | 462 | |||||||||||||||
|
Total
|
963 | 1,056 | 968 | 826 | 812 | |||||||||||||||
|
Pretax segment income
|
240 | 102 | 131 | 191 | 165 | |||||||||||||||
|
Income tax provision (benefit)
|
51 | 3 | (13 | ) | 36 | 26 | ||||||||||||||
|
Segment income
|
$ | 189 | $ | 99 | $ | 144 | $ | 155 | $ | 139 | ||||||||||
-18-
International Card Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Card billed business
|
$ | 28.4 | $ | 30.9 | $ | 27.1 | $ | 25.5 | $ | 24.4 | ||||||||||
|
Total cards-in-force (millions)
|
15.0 | 15.0 | 15.0 | 15.0 | 15.0 | |||||||||||||||
|
Basic cards-in-force (millions)
|
10.4 | 10.4 | 10.4 | 10.4 | 10.4 | |||||||||||||||
|
Average basic cardmember spending (dollars)
|
$ | 2,735 | $ | 2,971 | $ | 2,609 | $ | 2,449 | $ | 2,340 | ||||||||||
|
International Consumer Travel:
|
||||||||||||||||||||
|
Travel sales
|
$ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||||||
|
Travel commissions and fees/sales
|
7.6 | % | 8.7 | % | 7.9 | % | 8.0 | % | 7.3 | % | ||||||||||
|
Total segment assets
|
$ | 26.7 | $ | 25.3 | $ | 21.9 | $ | 20.6 | $ | 21.1 | ||||||||||
|
Segment capital (A)
|
$ | 3.0 | $ | 2.2 | $ | 2.1 | $ | 2.0 | $ | 2.1 | ||||||||||
|
Return on average segment capital (B)
|
25.8 | % | 25.1 | % | 23.6 | % | 22.8 | % | 19.1 | % | ||||||||||
|
Return on average tangible segment capital (B)
|
39.4 | % | 34.8 | % | 32.1 | % | 30.7 | % | 25.6 | % | ||||||||||
|
Cardmember receivables:
|
||||||||||||||||||||
|
Total receivables
|
$ | 6.5 | $ | 6.7 | $ | 6.2 | $ | 5.6 | $ | 5.5 | ||||||||||
|
90 days past billing as a % of total (C)
|
1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | ||||||||||
|
Net loss ratio (as a % of charge volume) (C)
|
0.15 | % | 0.15 | % | 0.14 | % | 0.15 | % | 0.53 | % | ||||||||||
|
Cardmember loans:
|
||||||||||||||||||||
|
Total loans
|
$ | 8.5 | $ | 9.3 | $ | 8.5 | $ | 8.3 | $ | 8.4 | ||||||||||
|
30 days past due loans as a % of total
|
2.4 | % | 2.3 | % | 2.8 | % | 3.0 | % | 3.3 | % | ||||||||||
|
Average loans
|
$ | 8.8 | $ | 8.7 | $ | 8.3 | $ | 8.3 | $ | 8.8 | ||||||||||
|
Net write-off rate
|
3.2 | % | 4.0 | % | 4.3 | % | 4.9 | % | 5.5 | % | ||||||||||
|
Net interest income divided by average loans (D) (E)
|
10.1 | % | 10.4 | % | 11.3 | % | 11.7 | % | 11.8 | % | ||||||||||
|
Net interest yield on cardmember loans (D)
|
10.0 | % | 10.6 | % | 11.1 | % | 11.4 | % | 11.7 | % | ||||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in International Card Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $60 million for International Card Services resulting from this write-off methodology change, which increased the net loss ratio and decreased the 90 days past billing metric for this segment, but did not have a substantial impact on provisions for losses. If this amount had been excluded from net write-offs, the net loss ratio for International Card Services would have been 0.17%.
(D) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure and net interest income divided by average loans, a GAAP measure. Management believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.
(E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
-19-
(Preliminary)
Global Commercial Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Revenues
|
||||||||||||
|
Discount revenue, net card fees and other
|
$ | 1,177 | $ | 1,013 | 16 | % | ||||||
|
Interest income
|
2 | 1 | 100 | |||||||||
|
Interest expense
|
58 | 49 | 18 | |||||||||
|
Net interest expense
|
(56 | ) | (48 | ) | 17 | |||||||
|
Total revenues net of interest expense
|
1,121 | 965 | 16 | |||||||||
|
Provisions for losses
|
23 | 78 | (71 | ) | ||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,098 | 887 | 24 | |||||||||
|
Expenses
|
||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
125 | 114 | 10 | |||||||||
|
Salaries and employee benefits and other operating expenses
|
708 | 649 | 9 | |||||||||
|
Total
|
833 | 763 | 9 | |||||||||
|
Pretax segment income
|
265 | 124 | # | |||||||||
|
Income tax provision
|
81 | 39 | # | |||||||||
|
Segment income
|
$ | 184 | $ | 85 | # | |||||||
# - Denotes variance of more than 100%.
-20-
(Preliminary)
Global Commercial Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Card billed business
|
$ | 36.6 | $ | 30.8 | 19 | % | ||||||
|
Total cards-in-force (millions)
|
7.1 | 7.0 | 1 | % | ||||||||
|
Basic cards-in-force (millions)
|
7.1 | 7.0 | 1 | % | ||||||||
|
Average basic cardmember spending (dollars)
|
$ | 5,175 | $ | 4,400 | 18 | % | ||||||
|
Global Corporate Travel:
|
||||||||||||
|
Travel sales
|
$ | 4.9 | $ | 4.1 | 20 | % | ||||||
|
Travel commissions and fees/sales
|
7.4 | % | 7.4 | % | ||||||||
|
Total segment assets
|
$ | 20.5 | $ | 17.1 | 20 | % | ||||||
|
Segment capital (millions) (A)
|
$ | 3,556 | $ | 3,394 | 5 | % | ||||||
|
Return on average segment capital (B)
|
15.5 | % | 9.4 | % | ||||||||
|
Return on average tangible segment capital (B)
|
33.5 | % | 20.4 | % | ||||||||
|
Cardmember receivables:
|
||||||||||||
|
Total receivables
|
$ | 13.3 | $ | 11.4 | 17 | % | ||||||
|
90 days past billing as a % of total (C)
|
0.7 | % | 0.8 | % | ||||||||
|
Net loss ratio (as a % of charge volume) (C)
|
0.06 | % | 0.28 | % | ||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in Global Commercial Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $48 million for Global Commercial Services resulting from this write-off methodology change, which increased the net loss ratio and decreased the 90 days past billing metric for this segment, but did not have a substantial impact on provisions for losses. If this amount had been excluded from net write-offs, the net loss ratio for Global Commercial Services would have been 0.11%.
-21-
Global Commercial Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Discount revenue, net card fees and other
|
$ | 1,177 | $ | 1,130 | $ | 1,128 | $ | 1,076 | $ | 1,013 | ||||||||||
|
Interest income
|
2 | 2 | 2 | 2 | 1 | |||||||||||||||
|
Interest expense
|
58 | 65 | 58 | 55 | 49 | |||||||||||||||
|
Net interest expense
|
(56 | ) | (63 | ) | (56 | ) | (53 | ) | (48 | ) | ||||||||||
|
Total revenues net of interest expense
|
1,121 | 1,067 | 1,072 | 1,023 | 965 | |||||||||||||||
|
Provisions for losses
|
23 | 30 | 21 | 28 | 78 | |||||||||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,098 | 1,037 | 1,051 | 995 | 887 | |||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
125 | 112 | 109 | 104 | 114 | |||||||||||||||
|
Salaries and employee benefits and other operating expenses
|
708 | 785 | 716 | 658 | 649 | |||||||||||||||
|
Total
|
833 | 897 | 825 | 762 | 763 | |||||||||||||||
|
Pretax segment income
|
265 | 140 | 226 | 233 | 124 | |||||||||||||||
|
Income tax provision
|
81 | 37 | 76 | 121 | 39 | |||||||||||||||
|
Segment income
|
$ | 184 | $ | 103 | $ | 150 | $ | 112 | $ | 85 | ||||||||||
-22-
Global Commercial Services
Selected Statistical Information
(Billions, except percentages and where indicated)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Card billed business
|
$ | 36.6 | $ | 35.9 | $ | 33.2 | $ | 32.9 | $ | 30.8 | ||||||||||
|
Total cards-in-force (millions)
|
7.1 | 7.1 | 7.0 | 7.0 | 7.0 | |||||||||||||||
|
Basic cards-in-force (millions)
|
7.1 | 7.1 | 7.0 | 7.0 | 7.0 | |||||||||||||||
|
Average basic cardmember spending (dollars)
|
$ | 5,175 | $ | 5,083 | $ | 4,734 | $ | 4,712 | $ | 4,400 | ||||||||||
|
Global Corporate Travel:
|
||||||||||||||||||||
|
Travel sales
|
$ | 4.9 | $ | 4.6 | $ | 4.2 | $ | 4.6 | $ | 4.1 | ||||||||||
|
Travel commissions and fees/sales
|
7.4 | % | 8.3 | % | 9.3 | % | 7.6 | % | 7.4 | % | ||||||||||
|
Total segment assets
|
$ | 20.5 | $ | 18.1 | $ | 18.4 | $ | 17.4 | $ | 17.1 | ||||||||||
|
Segment capital (A)
|
$ | 3.6 | $ | 3.7 | $ | 3.6 | $ | 3.5 | $ | 3.4 | ||||||||||
|
Return on average segment capital (B)
|
15.5 | % | 12.6 | % | 12.3 | % | 10.9 | % | 9.4 | % | ||||||||||
|
Return on average tangible segment capital (B)
|
33.5 | % | 27.1 | % | 26.6 | % | 23.6 | % | 20.4 | % | ||||||||||
|
Cardmember receivables:
|
||||||||||||||||||||
|
Total receivables
|
$ | 13.3 | $ | 11.3 | $ | 12.2 | $ | 11.5 | $ | 11.4 | ||||||||||
|
90 days past billing as a % of total (C)
|
0.7 | % | 0.8 | % | 0.8 | % | 1.0 | % | 0.8 | % | ||||||||||
|
Net loss ratio (as a % of charge volume) (C)
|
0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | 0.28 | % | ||||||||||
(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(C) Effective January 1, 2010, the Company revised the time period in which past due cardmember receivables in Global Commercial Services are written off to when they are 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Card Services in the fourth quarter of 2008. Previously, receivables were written off when they were 360 days past billing or earlier. Therefore, the net write-offs for the first quarter of 2010 include net write-offs of approximately $48 million for Global Commercial Services resulting from this write-off methodology change, which increased the net loss ratio and decreased the 90 days past billing metric for this segment, but did not have a substantial impact on provisions for losses. If this amount had been excluded from net write-offs, the net loss ratio for Global Commercial Services would have been 0.11%.
-23-
Global Network & Merchant Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Revenues
|
||||||||||||
|
Discount revenue, fees and other
|
$ | 1,088 | $ | 934 | 16 | % | ||||||
|
Interest income
|
1 | 1 | - | |||||||||
|
Interest expense
|
(48 | ) | (47 | ) | 2 | |||||||
|
Net interest income
|
49 | 48 | 2 | |||||||||
|
Total revenues net of interest expense
|
1,137 | 982 | 16 | |||||||||
|
Provisions for losses
|
21 | 21 | - | |||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,116 | 961 | 16 | |||||||||
|
Expenses
|
||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
166 | 166 | - | |||||||||
|
Salaries and employee benefits and other operating expenses
|
474 | 402 | 18 | |||||||||
|
Total
|
640 | 568 | 13 | |||||||||
|
Pretax segment income
|
476 | 393 | 21 | |||||||||
|
Income tax provision
|
163 | 140 | 16 | |||||||||
|
Segment income
|
$ | 313 | $ | 253 | 24 | |||||||
# - Denotes variance of more than 100%.
-24-
(Preliminary)
Global Network & Merchant Services
Selected Statistical Information
|
(Billions, except percentages and where indicated)
|
Quarters Ended
|
|||||||||||
|
March 31,
|
Percentage
|
|||||||||||
|
2011
|
2010
|
Inc/(Dec)
|
||||||||||
|
Global Card billed business (A)
|
$ | 187.9 | $ | 161.0 | 17 | % | ||||||
|
Global Network & Merchant Services:
|
||||||||||||
|
Total segment assets
|
$ | 14.2 | $ | 11.1 | 28 | % | ||||||
|
Segment capital (millions) (B)
|
$ | 1,855 | $ | 1,361 | 36 | % | ||||||
|
Return on average segment capital (C)
|
62.1 | % | 64.9 | % | ||||||||
|
Return on average tangible segment capital (C)
|
66.1 | % | 66.5 | % | ||||||||
|
Global Network Services (D):
|
||||||||||||
|
Card billed business
|
$ | 26.0 | $ | 20.1 | 29 | % | ||||||
|
Total cards-in-force (millions)
|
30.2 | 26.5 | 14 | % | ||||||||
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business.
(B) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(C) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(D) Since third quarter of 2010, for non-proprietary retail co-brand partners, Global Network Services metrics exclude cardmember accounts which have no out-of-store spend activity during the prior 12 month period.
-25-
(Preliminary)
Global Network & Merchant Services
Selected Income Statement Data
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Discount revenue, fees and other
|
$ | 1,088 | $ | 1,115 | $ | 1,048 | $ | 1,004 | $ | 934 | ||||||||||
|
Interest income
|
1 | 1 | 1 | 1 | 1 | |||||||||||||||
|
Interest expense
|
(48 | ) | (56 | ) | (51 | ) | (46 | ) | (47 | ) | ||||||||||
|
Net interest income
|
49 | 57 | 52 | 47 | 48 | |||||||||||||||
|
Total revenues net of interest expense
|
1,137 | 1,172 | 1,100 | 1,051 | 982 | |||||||||||||||
|
Provisions for losses
|
21 | 15 | 13 | 12 | 21 | |||||||||||||||
|
Total revenues net of interest expense after provisions for losses
|
1,116 | 1,157 | 1,087 | 1,039 | 961 | |||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
Marketing, promotion, rewards and cardmember services
|
166 | 172 | 208 | 209 | 166 | |||||||||||||||
|
Salaries and employee benefits and other operating expenses
|
474 | 604 | 469 | 425 | 402 | |||||||||||||||
|
Total
|
640 | 776 | 677 | 634 | 568 | |||||||||||||||
|
Pretax segment income
|
476 | 381 | 410 | 405 | 393 | |||||||||||||||
|
Income tax provision
|
163 | 122 | 158 | 144 | 140 | |||||||||||||||
|
Segment income
|
$ | 313 | $ | 259 | $ | 252 | $ | 261 | $ | 253 | ||||||||||
-26-
(Preliminary)
Global Network & Merchant Services
Selected Statistical Information
|
(Billions, except percentages and where indicated)
|
Quarters Ended
|
|||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Global Card billed business (A)
|
$ | 187.9 | $ | 197.7 | $ | 179.3 | $ | 175.3 | $ | 161.0 | ||||||||||
|
Global Network & Merchant Services:
|
||||||||||||||||||||
|
Total segment assets
|
$ | 14.2 | $ | 13.6 | $ | 12.3 | $ | 11.3 | $ | 11.1 | ||||||||||
|
Segment capital (B)
|
$ | 1.9 | $ | 1.9 | $ | 1.8 | $ | 1.8 | $ | 1.4 | ||||||||||
|
Return on average segment capital (C)
|
62.1 | % | 61.6 | % | 61.2 | % | 63.8 | % | 64.9 | % | ||||||||||
|
Return on average tangible segment capital (C)
|
66.1 | % | 64.3 | % | 62.7 | % | 65.3 | % | 66.5 | % | ||||||||||
|
Global Network Services (D):
|
||||||||||||||||||||
|
Card billed business
|
$ | 26.0 | $ | 26.9 | $ | 23.1 | $ | 21.6 | $ | 20.1 | ||||||||||
|
Total cards-in-force (millions)
|
30.2 | 29.0 | 27.1 | 27.3 | 26.5 | |||||||||||||||
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business.
(B) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(C) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital.
(D) Since third quarter of 2010, for non-proprietary retail co-brand partners, Global Network Services metrics exclude cardmember accounts which have no out-of-store spend activity during the prior 12 month period.
-27-
(Preliminary)
American Express Company
Components of Return on Average Equity (ROE), Return on Average Common Equity (ROCE),
and Return on Average Tangible Common Equity (ROTCE)
Appendix I
(Millions)
|
For the Twelve Months Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
ROE
|
||||||||||||||||||||
|
Net income
|
$ | 4,349 | $ | 4,057 | $ | 3,711 | $ | 3,258 | $ | 2,578 | ||||||||||
|
Average shareholders' equity
|
$ | 15,564 | $ | 14,755 | $ | 14,307 | $ | 13,863 | $ | 14,290 | ||||||||||
|
Return on average equity (A)
|
27.9 | % | 27.5 | % | 25.9 | % | 23.5 | % | 18.0 | % | ||||||||||
|
Reconciliation of ROCE and ROTCE
|
||||||||||||||||||||
|
Net income
|
$ | 4,349 | $ | 4,057 | $ | 3,711 | $ | 3,258 | $ | 2,578 | ||||||||||
|
Preferred shares dividends and related accretion
|
- | - | - | - | 234 | |||||||||||||||
|
Earnings allocated to participating share awards and other
|
52 | 51 | 47 | 42 | 30 | |||||||||||||||
|
Net income attributable to common shareholders
|
$ | 4,297 | $ | 4,006 | $ | 3,664 | $ | 3,216 | $ | 2,314 | ||||||||||
|
Average shareholders' equity
|
$ | 15,564 | $ | 14,755 | $ | 14,307 | $ | 13,863 | $ | 14,290 | ||||||||||
|
Average preferred shares
|
- | - | - | - | 782 | |||||||||||||||
|
Average common shareholders' equity
|
$ | 15,564 | $ | 14,755 | $ | 14,307 | $ | 13,863 | $ | 13,508 | ||||||||||
|
Average goodwill and other intangibles
|
3,487 | 3,334 | 3,234 | 3,157 | 3,081 | |||||||||||||||
|
Average tangible common shareholders' equity
|
$ | 12,077 | $ | 11,421 | $ | 11,073 | $ | 10,706 | $ | 10,427 | ||||||||||
|
Return on average common equity (A)
|
27.6 | % | 27.2 | % | 25.6 | % | 23.2 | % | 17.1 | % | ||||||||||
|
Return on average tangible common equity (B)
|
35.6 | % | 35.1 | % | 33.1 | % | 30.0 | % | 22.2 | % | ||||||||||
(A) Return on average equity and return on average common equity are calculated by dividing one year period net income/net income attributable to common shareholders by one year average total shareholders’ equity/average common shareholders' equity, respectively.
(B) Return on average tangible common equity is computed in the same manner as return on average common equity except the computation of average tangible common shareholders' equity excludes average goodwill and other intangibles. Management believes that return on average tangible common equity is a useful measure of the profitability of its business.
-28-
(Preliminary)
American Express Company
Components of Return on Average Segment Capital (ROSC) and Return on Average Tangible Segment Capital (ROTSC)
Appendix II
(Millions)
|
For the Twelve Months Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
U.S. Card Services
|
||||||||||||||||||||
|
Segment income
|
$ | 2,366 | $ | 2,225 | $ | 1,936 | $ | 1,498 | $ | 827 | ||||||||||
|
Average segment capital
|
$ | 6,746 | $ | 6,350 | $ | 5,966 | $ | 5,664 | $ | 5,367 | ||||||||||
|
Average goodwill and other intangibles
|
457 | 459 | 454 | 447 | 440 | |||||||||||||||
|
Average tangible segment capital
|
$ | 6,289 | $ | 5,891 | $ | 5,512 | $ | 5,217 | $ | 4,927 | ||||||||||
|
Return on average segment capital (A)
|
35.1 | % | 35.0 | % | 32.5 | % | 26.4 | % | 15.4 | % | ||||||||||
|
Return on average tangible segment capital (A)
|
37.6 | % | 37.8 | % | 35.1 | % | 28.7 | % | 16.8 | % | ||||||||||
|
International Card Services
|
||||||||||||||||||||
|
Segment income
|
$ | 587 | $ | 537 | $ | 507 | $ | 495 | $ | 417 | ||||||||||
|
Average segment capital
|
$ | 2,279 | $ | 2,136 | $ | 2,146 | $ | 2,174 | $ | 2,183 | ||||||||||
|
Average goodwill and other intangibles
|
788 | 592 | 567 | 561 | 554 | |||||||||||||||
|
Average tangible segment capital
|
$ | 1,491 | $ | 1,544 | $ | 1,579 | $ | 1,613 | $ | 1,629 | ||||||||||
|
Return on average segment capital (A)
|
25.8 | % | 25.1 | % | 23.6 | % | 22.8 | % | 19.1 | % | ||||||||||
|
Return on average tangible segment capital (A)
|
39.4 | % | 34.8 | % | 32.1 | % | 30.7 | % | 25.6 | % | ||||||||||
|
Global Commercial Services
|
||||||||||||||||||||
|
Segment income
|
$ | 549 | $ | 450 | $ | 442 | $ | 388 | $ | 336 | ||||||||||
|
Average segment capital
|
$ | 3,548 | $ | 3,581 | $ | 3,587 | $ | 3,571 | $ | 3,581 | ||||||||||
|
Average goodwill and other intangibles
|
1,908 | 1,923 | 1,924 | 1,930 | 1,936 | |||||||||||||||
|
Average tangible segment capital
|
$ | 1,640 | $ | 1,658 | $ | 1,663 | $ | 1,641 | $ | 1,645 | ||||||||||
|
Return on average segment capital (A)
|
15.5 | % | 12.6 | % | 12.3 | % | 10.9 | % | 9.4 | % | ||||||||||
|
Return on average tangible segment capital (A)
|
33.5 | % | 27.1 | % | 26.6 | % | 23.6 | % | 20.4 | % | ||||||||||
|
Global Network & Merchant Services
|
||||||||||||||||||||
|
Segment income
|
$ | 1,085 | $ | 1,025 | $ | 966 | $ | 963 | $ | 941 | ||||||||||
|
Average segment capital
|
$ | 1,746 | $ | 1,664 | $ | 1,578 | $ | 1,510 | $ | 1,449 | ||||||||||
|
Average goodwill and other intangibles
|
105 | 70 | 37 | 36 | 34 | |||||||||||||||
|
Average tangible segment capital
|
$ | 1,641 | $ | 1,594 | $ | 1,541 | $ | 1,474 | $ | 1,415 | ||||||||||
|
Return on average segment capital (A)
|
62.1 | % | 61.6 | % | 61.2 | % | 63.8 | % | 64.9 | % | ||||||||||
|
Return on average tangible segment capital (A)
|
66.1 | % | 64.3 | % | 62.7 | % | 65.3 | % | 66.5 | % | ||||||||||
(A) Return on average segment capital is calculated by dividing one year period segment income by one year average segment capital. Return on average tangible segment capital is computed in the same manner as return on average segment capital except the computation of average tangible segment capital excludes average goodwill and other intangibles. Management believes that return on average tangible segment capital is a useful measure of the profitability of its business.
-29-
(Preliminary)
American Express Company
Net Interest Yield on Cardmember Loans
Appendix III
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
Net interest income
|
$ | 1,134 | $ | 1,190 | $ | 1,184 | $ | 1,188 | $ | 1,307 | ||||||||||
|
Average loans (billions)
|
$ | 58.5 | $ | 58.5 | $ | 57.4 | $ | 57.5 | $ | 59.3 | ||||||||||
|
Adjusted net interest income (A)
|
$ | 1,326 | $ | 1,371 | $ | 1,381 | $ | 1,379 | $ | 1,498 | ||||||||||
|
Adjusted average loans (billions) (B)
|
$ | 58.3 | $ | 58.4 | $ | 57.4 | $ | 57.4 | $ | 59.2 | ||||||||||
|
Net interest income divided by average loans (C)
|
7.9 | % | 8.1 | % | 8.2 | % | 8.3 | % | 8.9 | % | ||||||||||
|
Net interest yield on cardmember loans (D)
|
9.2 | % | 9.3 | % | 9.5 | % | 9.6 | % | 10.3 | % | ||||||||||
(A) Represents net interest income allocated to the Company's cardmember loan portfolio excluding the impact of card fees on loans and balance transfer fees attributable to the Company's cardmember loans.
(B) Represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans.
(C) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
(D) Net interest yield on cardmember loans is computed by dividing adjusted net interest income by adjusted average loans, computed on an annualized basis. The calculation of net interest yield on cardmember loans includes interest that is deemed uncollectible. For all presentations of net interest yield on cardmember loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - cardmember loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation.
-30-
(Preliminary)
U. S. Card Services and International Card Services
Net Interest Yield on Cardmember Loans
Appendix IV
(Millions)
|
Quarters Ended
|
||||||||||||||||||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
USCS:
|
||||||||||||||||||||
|
Net interest income
|
$ | 1,091 | $ | 1,122 | $ | 1,124 | $ | 1,111 | $ | 1,221 | ||||||||||
|
Average loans (billions)
|
$ | 49.6 | $ | 49.8 | $ | 49.1 | $ | 49.1 | $ | 50.5 | ||||||||||
|
Adjusted net interest income (A)
|
$ | 1,112 | $ | 1,143 | $ | 1,150 | $ | 1,145 | $ | 1,246 | ||||||||||
|
Adjusted average loans (billions) (B)
|
$ | 49.6 | $ | 49.8 | $ | 49.2 | $ | 49.2 | $ | 50.5 | ||||||||||
|
Net interest income divided by average loans (C)
|
8.9 | % | 8.9 | % | 9.1 | % | 9.1 | % | 9.8 | % | ||||||||||
|
Net interest yield on cardmember loans (D)
|
9.1 | % | 9.1 | % | 9.3 | % | 9.3 | % | 10.0 | % | ||||||||||
|
ICS:
|
||||||||||||||||||||
|
Net interest income
|
$ | 219 | $ | 228 | $ | 237 | $ | 243 | $ | 257 | ||||||||||
|
Average loans (billions)
|
$ | 8.8 | $ | 8.7 | $ | 8.3 | $ | 8.3 | $ | 8.8 | ||||||||||
|
Adjusted net interest income (A)
|
$ | 214 | $ | 228 | $ | 231 | $ | 234 | $ | 253 | ||||||||||
|
Adjusted average loans (billions) (B)
|
$ | 8.7 | $ | 8.5 | $ | 8.2 | $ | 8.2 | $ | 8.8 | ||||||||||
|
Net interest income divided by average loans (C)
|
10.1 | % | 10.4 | % | 11.3 | % | 11.7 | % | 11.8 | % | ||||||||||
|
Net interest yield on cardmember loans (D)
|
10.0 | % | 10.6 | % | 11.1 | % | 11.4 | % | 11.7 | % | ||||||||||
(A) Represents net interest income allocated to the Company's cardmember loan portfolio excluding the impact of card fees on loans and balance transfer fees attributable to the Company's cardmember loans.
(B) Represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans.
(C) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.
(D) Net interest yield on cardmember loans is computed by dividing adjusted net interest income by adjusted average loans, computed on an annualized basis. The calculation of net interest yield on cardmember loans includes interest that is deemed uncollectible. For all presentations of net interest yield on cardmember loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - cardmember loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation.
-31-