RNS Number:6327X
American Express Co
22 January 2001
PART 1
CONTACT: Michael J O'Neill
212/640-5951
mike.o'neill@aexp.com
Molly Faust
212/640-7453
molly.faust@aexp.com
AMERICAN EXPRESS COMPANY REPORTS RECORD
NET INCOME OF $2.81 BILLION FOR 2000
(millions, except per share amounts)
Quarters Ended Percentage Years Ended Percentage
December 31 Inc/(Dec) December 31 Inc/(Dec)
2000 1999 2000 1999
Net Income $ 677 $ 606 12% $ 2,810 $ 2,475 14%
Net Revenues* $5,714 $5,227 9% $22,085 $19,483 13%
Per Share
Net Income
Basic $ 0.51 $ 0.45 13% $ 2.12 $ 1.85 15%
Diluted $ 0.50 $ 0.44 14% $ 2.07 $ 1.81 14%
Average Common
Shares
Outstanding
Basic 1,322 1,335 (1%) 1,327 1,340 (1%)
Diluted 1,355 1,369 (1%) 1,360 1,369 (1%)
Return on
Average
Equity 25.3% 25.3% - 15.3% 25.3% -
*Net revenues are presented on a managed basis.
NEW YORK, January 22, 2001 -- American Express Company today reported record net
income for 2000 of $2.81 billion, up 14 percent from $2.48 billion a year ago.
Diluted earnings per share rose 14 percent to $2.07 from $1.81. Net revenues on
a managed basis totaled $22.1 billion, up 13 percent from $19.5 billion. The
Company's return on equity was 25.3 percent.
For the fourth quarter of 2000, American Express reported net income of $677
million, up 12 percent from $606 million a year ago. On a diluted per share
basis, net income increased 14 percent to $0.50 from $0.44 a year ago.
The full year and fourth quarter results 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 - on average and over time. Separately,
the Company said that it expects the weak financial markets and economic
slowdown of the last few months to continue into this year, and as a result,
that full year 2001 earnings per share growth is expected to be at the low end
of its target range.
Travel Related Services (TRS) reported record net income for 2000 of $1.93
billion, up 14 percent from $1.69 billion a year ago.
TRS net revenues increased 14 percent, reflecting higher billed business as well
as strong growth in average Cardmember loans. These improvements resulted from
an increase of 5.7 million cards in force, up 12 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 the prior year, reflecting
a higher percentage of loan balances on lower- and fixed-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, primarily as a result of higher volume. Charge Card interest expense
grew as a result of higher volumes and an increased cost of funds. Other
operating expenses increased, reflecting in part the cost of Cardmember loyalty
programs, business growth and investment spending.
TRS reported 2000 fourth quarter net income of $470 million, a 16 percent
increase over $406 million reported a year ago.
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 2000 included securitization gains of $142
million ($92 million after-tax realized in first, second and third quarters),
compared with similar gains of $154 million ($100 million after-tax) in 1999.
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 record net income for 2000
of $1.03 billion, up 10 percent from $935 million a year ago.
Net revenues and earnings growth benefited from higher fee revenues due to
increases in average managed assets and product sales, which were partially
offset by narrower spreads on the investment portfolio. The narrower spreads
reflected losses on high-yield securities, as well as the impact of higher
interest rates. 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. Other operating expenses grew primarily
due to higher business volumes and ongoing investments to build the business.
AEFA reported 2000 fourth quarter net income of $242 million, a 2 percent
increase over $238 million a year ago. The modest growth in earnings and net
revenues for the quarter reflected narrower spreads on the investment portfolio
and the effect of a decline in equity markets during the quarter. The narrower
spreads resulted from losses of $49 million on high-yield securities and the
continued impact of higher interest rates. Management fees for the quarter
included a net year-over-year benefit of $58 million from a fee hedge that
minimized the effect of the equity market decline on management fees.
American Express Bank (AEB) reported 2000 net income of $29 million compared
with $22 million a year ago.
Current year results reflect greater commission and fee revenues in the
Correspondent Banking, Private Banking and Personal Financial Services
businesses, 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, as well as lower securities gains and joint
venture income.
AEB reported fourth quarter 2000 net income of $6 million compared with $4
million a year ago.
Corporate and Other reported 2000 net expenses of $180 million, compared with
$174 million a year ago. The results for both years include a preferred stock
dividend based on earnings from Lehman Brothers, which was offset by expenses
related to business building initiatives in both years and by Y2K expenses a
year ago.
Corporate and Other reported fourth quarter 2000 net expenses of $41 million,
compared with $42 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 Fourth 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 fourth quarter and full year 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 at that same Web address.
The statements in this press release relating to the company's expected 2001
financial performance are forward-looking statements, which are subject to risks
and uncertainties. Factors that could cause actual results to differ materially
from these forward-looking statements include, but are not limited to, the
following:
Fluctuation in the equity markets in 2001, which can affect the amount and types
of investment products sold by AEFA, the market value of its managed assets, and
management and distribution fees received based on those assets; potential
deterioration in the high yield sector, which could result in further losses in
AEFA's investment portfolio; developments relating to AEFA's new platform
structure for financial advisors, including the ability to increase advisor
productivity, moderate the growth of new advisors and create efficiencies in the
infrastructure; AEFA's ability to effectively manage the economics in selling a
growing volume of non-proprietary products to clients; investment performance in
AEFA's mutual fund business; the success and financial impact of reengineering
initiatives being implemented at the Company, including cost management,
structural and strategic measures such as vendor and process consolidation,
outsourcing and using lower cost internal distribution channels; the ability to
control and manage operating, infrastructure, advertising and promotion and
other expenses as business expands or changes, including balancing the need for
longer term investment spending; consumer and business spending on the Company's
travel related services products, particularly credit and charge cards and
growth in card lending balances, which depend in part on the ability to issue
new and enhanced card products and increase revenues from such products, attract
new cardholders, capture a greater share of existing cardholders' spending,
sustain premium discount rates, increase merchant coverage, retain Cardmembers
after low introductory lending rates have expired, and expand the global network
services business; successfully expanding the Company's on-line and off-line
distribution channels and cross-selling financial, travel, card and other
products and services to its customer base, both in the U.S. and abroad;
effectively leveraging the Company's assets, such as its brand, customers and
international presence, in the Internet environment; investing in and competing
at the leading edge of technology across all businesses; increasing competition
in all of the Company's major businesses; fluctuations in interest rates, which
impacts the Company's borrowing costs, return on lending products and spreads in
the investment and insurance businesses; credit trends and the rate of
bankruptcies, which can affect spending on card products, debt payments by
individual and corporate customers and returns on the Company's investment
portfolios; foreign currency exchange rates; political or economic instability
in certain regions or countries, which could affect commercial lending
activities, among other businesses; legal and regulatory developments, such as
in the areas of consumer privacy and data protection; acquisitions; and outcomes
in litigation. A further description of these and other risks and uncertainties
can be found in the Company's 10-K Annual Report for the fiscal year ending
December 31, 1999 and other reports filed with the SEC.
(Preliminary)
American Express Company
Financial Summary
(Unaudited)
(Dollars in millions)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues (Managed
Basis) (A)
Travel Related Services $ 4,543 $ 4,109 11%
American Express Financial
Advisors 1,066 999 7
American Express Bank 144 147 (2)
5,753 5,255 9
Corporate and Other,
including adjustments and
eliminations (39) (28) (41)
CONSOLIDATED NET REVENUES
(MANAGED BASIS) (A) $ 5,714 $ 5,227 9
Pretax Income
Travel Related Services $ 614 $ 567 13
American Express Financial
Advisors 344 347 (1)
American Express Bank 8 6 21
993 920 8
Corporate and Other (80) (76) (5)
PRETAX INCOME $ 913 $ 844 8
Net Income
Travel Related Services $ 470 $ 406 16
American Express Financial
Advisors 242 238 2
American Express Bank 6 4 50
718 648 11
Corporate and Other (41) (42) 1
NET INCOME $ 677 $ 606 12
(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.
(Dollars in millions)
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues (Managed
Basis) (A)
Travel Related Services $ 17,441 $ 15,234 14%
American Express Financial
Advisors 4,219 3,737 13%
American Express Bank 591 621 (5)
22,251 19,592 14
Corporate and Other,
including adjustments and
eliminations (166) (109) (53)
CONSOLIDATED NET REVENUES
(MANAGED BASIS) (A) $ 22,085 $ 19,483 13
Pretax Income
Travel Related Services $ 2,713 $ 2,383 14
American Express Financial
Advisors 1,483 1,363 9
American Express Bank 33 27 23
4,229 3,773 12
Corporate and Other (321) (335) 4
PRETAX INCOME $ 3,908 $ 3,438 14
Net Income
Travel Related Services $ 1,929 $ 1,692 14
American Express Financial
Advisors 1,032 935 10
American Express Bank 29 22 29
2,990 2,649 13
Corporate and Other (180) (174) (4)
NET INCOME $ 2,810 $ 2,475 14
(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
American Express Company
Financial Summary (continued)
(Unaudited)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 0.51 $ 0.45 13%
Average common shares
outstanding (millions) 1,322 1,335 (1)
Diluted
Earnings Per Common Share $ 0.50 $ 0.44 14
Average common shares
outstanding (millions) 1,355 1,369 (1)
Cash dividends declared
per common share $ 0.08 $ 0.075 7
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 2.12 $ 1.85 15%
Average common shares
outstanding (millions) 1,327 1,340 (1)
Diluted
Earnings Per Common Share $ 2.07 $ 1.81 14
Average common shares 1,360 1,369 (1)
outstanding (millions)
Cash dividends declared
per common share $ 0.32 $ 0.30 7
Selected Statistical Information
(Unaudited)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Return on Average Equity* 25.3% 25.3% -
Common Shares Outstanding
(millions) 1,326 1,341 (1)%
Book Value per Common Share
Actual $ 8.80 $ 7.52 17%
Pro Forma* $ 8.92 $ 7.74 15%
Shareholders' Equity $ 11.7 $ 10.1 16%
(billions)
* Excludes the effect of SFAS No. 115.
Selected Statistical Information
(Unaudited)
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Return on Average Equity* 25.3% 25.3% -
Common Shares Outstanding
(millions) 1,326 1,341 (1)%
Book Value per Common Share
Actual $ 8.80 $ 7.52 17%
Pro Forma* $ 8.92 $ 7.74 15%
Shareholders' Equity
(billions) $ 11.7 $ 10.1 16%
* Excludes the effect of SFAS No. 115.
(Preliminary)
American Express Company
Financial Summary
(Unaudited)
(Dollars in millions)
Quarters Ended
December 31, September 30, June 30,
2000 2000 2000
Net Revenues (Managed
Basis) (A)
Travel Related Services $ 4,543 $ 4,400 $ 4,372
American Express Financial
Advisors 1,066 1,052 1,081
American Express Bank 144 146 151
5,753 5,598 5,604
Corporate and Other,
including adjustments
and eliminations (39) (44) (46)
CONSOLIDATED NET REVENUES
(MANAGED BASIS) (A) $ 5,714 $ 5,554 $ 5,558
Pretax Income
Travel Related Services $ 641 $ 721 $ 721
American Express Financial
Advisors 344 387 397
American Express Bank 8 8 10
993 1,116 1,128
Corporate and Other (80) (87) (82)
PRETAX INCOME $ 913 $ 1,029 $ 1,046
Net Income
Travel Related Services $ 470 $ 507 $ 505
American Express Financial
Advisors 242 269 275
American Express Bank 6 7 7
718 783 787
Corporate and Other (41) (46) (47)
NET INCOME $ 677 $ 737 $ 740
(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.
(Dollars in millions)
Quarters Ended
March 31, December 31,
2000 1999
Net Revenues (Managed
Basis) (A)
Travel Related Services $ 4,127 $ 4,109
American Express Financial
Advisors 1,019 999
American Express Bank 150 147
5,296 5,255
Corporate and Other,
including adjustments
and eliminations (37) (28)
CONSOLIDATED NET REVENUES
(MANAGED BASIS) (A) $ 5,259 $ 5,227
Pretax Income
Travel Related Services $ 631 $ 567
American Express Financial
Advisors 355 347
American Express Bank 8 6
994 920
Corporate and Other (74) (76)
PRETAX INCOME $ 920 $ 844
Net Income
Travel Related Services $ 448 $ 406
American Express Financial
Advisors 245 238
American Express Bank 7 4
700 648
Corporate and Other (44) (42)
NET INCOME $ 656 $ 606
(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)
American Express Company
Financial Summary (continued)
(Unaudited)
Quarters Ended
December 31, September 30, June 30,
2000 2000 2000
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 0.51 $ 0.56 $ 0.56
Average common shares
outstanding (millions) 1,322 1,326 1,328
Diluted
Earnings Per Common Share
Average common shares $ 0.50 $ 0.54 $ 0.54
outstanding (millions) 1,355 1,361 1,361
Cash dividends declared
per common share $ 0.08 $ 0.08 $ 0.08
Quarters Ended
March 31, December 31,
2000 1999
EARNINGS PER SHARE
Basic
Earnings Per Common Share $ 0.49 $ 0.45
Average common shares
outstanding (millions) 1,331 1,335
Diluted
Earnings Per Common Share $ 0.48 $ 0.44
Average common shares
outstanding (millions) 1,362 1,369
Cash dividends declared
per common share $ 0.08 $ 0.075
Selected Statistical Information
(Unaudited)
Quarters Ended
December 31, September 30, June 30,
2000 2000 2000
Return on Average Equity* 25.3% 25.5% 25.5%
Common Shares Outstanding
(millions) 1,326 1,329 1,333
Book Value per Common Share:
Actual $ 8.80 $ 8.44 $ 7.88
Pro Forma* $ 8.92 $ 8.68 $ 8.26
Shareholders' Equity
(billions) $ 11.7 $ 11.2 $ 10.5
* Excludes the effect of
SFAS No. 115.
Quarters Ended
March 31, December 31,
2000 1999
Return on Average Equity* 25.4% 25.3%
Common Shares Outstanding
(millions) 1,334 1,341
Book Value per Common Share:
Actual $ 7.69 $ 7.52
Pro Forma* $ 7.96 $ 7.74
Shareholders' Equity
(billions) $ 10.3 $ 10.1
* Excludes the effect of
SFAS No. 115.
(Preliminary)
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues:
Discount Revenue $ 2,062 $ 1,865 10.6%
Net Card Fees 417 408 2.1
Lending:
Finance Charge Revenue 1,090 802 35.9
Interest Expense 448 302 48.2
Net Finance Charge Revenue 642 500 28.4
Travel Commissions and Fees 442 459 (3.7)
TC Investment Income 95 88 8.2
Other Revenues 885 789 12.2
Total Net Revenues 4,543 4,109 10.6
Expenses:
Marketing and Promotion 314 344 (8.6)
Provision for Losses and
Claims:
Charge Card 262 227 15.1
Lending 432 332 30.2
Other 19 24 (22.5)
Total 713 583 22.1
Charge Card Interest
Expense 383 300 27.8
Human Resources 1,046 1,033 1.3
Other Operating Expenses 1,446 1,282 12.7
Total Expenses 3,902 3,542 10.1
Pretax Income 641 567 13.1
Income Tax Provision 171 161 6.5
Net Income $ 470 $ 406 15.7
These Statements of Income are provided on a Managed Basis for analytical
purposes only. The 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 $142 million ($92 million after-tax)
and $154 million ($100 million after-tax) in 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 2000 or 1999. For purposes of this presentation such gains
and corresponding increases in Marketing and Promotion and Other Operating
Expenses have been eliminated in 2000 and 1999.
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues:
Discount Revenue $ 7,779 $ 6,741 15.4%
Net Card Fees 1,653 1,604 3.1
Lending:
Finance Charge Revenue 3,977 2,884 37.9
Interest Expense 1,594 955 66.9
Net Finance Charge Revenue 2,383 1,929 23.5
Travel Commissions and Fees 1,821 1,802 1.1
TC Investment Income 387 345 12.3
Other Revenues 3,418 2,813 21.5
Total Net Revenues 17,441 15,234 14.5
Expenses:
Marketing and Promotion 1,348 1,247 8.2
Provision for Losses and
Claims:
Charge Card 1,157 995 16.3
Lending 1,486 1,186 25.3
Other 105 85 24.4
Total 2,748 2,266 21.3
Charge Card Interest
Expense 1,408 1,055 33.3
Human Resources 4,126 3,931 5.0
Other Operating Expenses 5,098 4,352 17.1
Total Expenses 14,728 12,851 14.6
Pretax Income 2,713 2,383 13.9
Income Tax Provision 784 691 13.5
Net Income $ 1,929 $ 1,692 14.1
These Statements of Income are provided on a Managed Basis for analytical
purposes only. The 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 $142 million ($92 million after-tax)
and $154 million ($100 million after-tax) in 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 2000 or 1999. For purposes of this presentation such gains
and corresponding increases in Marketing and Promotion and Other Operating
Expenses have been eliminated in 2000 and 1999.
(Preliminary)
Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues:
Discount Revenue $ 2,062 $ 1,865 10.6%
Net Card Fees 417 408 2.1
Lending:
Finance Charge Revenue 498 526 (5.3)
Interest Expense 277 197 40.8
Net Finance Charge Revenue 221 329 (32.9)
Travel Commissions and Fees 442 459 (3.7)
TC Investment Income 95 88 8.2
Other Revenues 1,184 902 31.3
Total Net Revenues 4,421 4,051 9.1
Expenses:
Marketing and Promotion 314 344 (8.6)
Provision for Losses and
Claims:
Charge Card 228 213 7.2
Lending 277 241 15.3
Other 19 24 (22.5)
Total 524 478 9.7
Charge Card Interest
Expense 336 246 36.0
Net Discount Expense 114 101 12.8
Human Resources 1,046 1,033 1.3
Other Operating Expenses 1,446 1,282 12.7
Total Expenses 3,780 3,484 8.5
Pretax Income 641 567 13.1
Income Tax Provision 171 161 6.5
Net Income $ 470 $ 406 15.7
(Dollars in millions)
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Net Revenues:
Discount Revenue $ 7,779 $ 6,741 15.4%
Net Card Fees 1,651 1,599 3.2
Lending:
Finance Charge Revenue 2,026 2,007 0.9
Interest Expense 1,039 674 54.1
Net Finance Charge Revenue 987 1,333 (25.9)
Travel Commissions and Fees 1,821 1,802 1.1
TC Investment Income 387 345 12.3
Other Revenues 4,495 3,310 35.8
Total Net Revenues 17,120 15,130 13.2
Expenses:
Marketing and Promotion 1,434 1,338 7.2
Provision for Losses and
Claims:
Charge Card 1,006 865 16.3
Lending 891 799 11.4
Other 105 85 24.4
Total 2,002 1,749 14.5
Charge Card Interest
Expense 1,202 835 44.0
Net Discount Expense 489 479 2.2
Human Resources 4,126 3,931 5.0
Other Operating Expenses 5,154 4,415 16.7
Total Expenses 14,407 12,747 13.0
Pretax Income 2,713 2,383 13.9
Income Tax Provision 784 691 13.5
Net Income $ 1,929 $ 1,692 14.1
(Preliminary)
Travel Related Services
Selected Statistical Information
(Unaudited)
(Amounts in billions, except percentages and where indicated)
Quarters Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Total Cards in Force
(millions):
United States 33.3 29.9 11.5%
Outside the United States 18.4 16.1 13.6
Total 51.7 46.0 12.2
Basic Cards in Force
(millions):
United States 26.3 23.4 12.2
Outside the United States 13.9 12.3 12.7
Total 40.2 35.7 12.4
Card Billed Business:
United States $ 59.0 $ 51.7 14.1
Outside the United States 20.0 19.1 5.0
Total $ 79.0 $ 70.8 11.6
Average Discount Rate (A) 2.69% 2.71% -
Average Basic Cardmember
Spending (dollars) (A) $ 2,113 $ 2,102 0.5
Average Fee per Card -
Managed (dollars) (A) $ 35 $ 38 (7.9)
Non-Amex Brand (B):
Cards in Force (millions) 0.6 0.3 #
Billed Business $ 1.1 $ 0.2 #
Travel Sales $ 5.5 $ 5.6 (2.3)
Travel Commissions and
Fees/Sales (C) 8.0% 8.2% -
Travelers Cheque:
Sales $ 5.1 $ 5.4 (4.8)
Average Outstanding $ 6.2 $ 6.1 0.4
Average Investments $ 6.2 $ 5.9 4.5
Tax Equivalent Yield 9.1% 8.8% -
Total Debt $ 40.0 $ 35.7 12.0
Shareholder's Equity $ 6.6 $ 5.5 18.2
Return on Average
Equity (D) 33.0% 31.2% -
Return on Average 3.0% 3.1% -
Assets (D)
(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%.
(Amounts in billions, except percentages and where indicated)
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Total Cards in Force
(millions):
United States 33.3 29.9 11.5%
Outside the United States 18.4 16.1 13.6
Total 51.7 46.0 12.2
Basic Cards in Force
(millions):
United States 26.3 23.4 12.2
Outside the United States 13.9 12.3 12.7
Total 40.2 35.7 12.4
Card Billed Business:
United States $ 221.7 $ 186.4 18.9
Outside the United States 75.0 67.7 10.8
Total $ 296.7 $ 254.1 16.8
Average Discount Rate (A) 2.70% 2.72% -
Average Basic Cardmember
Spending (dollars) (A) $ 8,229 $ 7,758 6.1
Average Fee per Card -
Managed (dollars) (A) $ 36 $ 39 (7.7)
Non-Amex Brand (B):
Cards in Force (millions) 0.6 0.3 #
Billed Business $ 3.2 $ 0.7 #
Travel Sales $ 22.6 $ 22.5 0.6
Travel Commissions and
Fees/Sales (C) 8.1% 8.0% -
Travelers Cheque:
Sales $ 24.6 $ 23.3 5.3
Average Outstanding $ 6.4 $ 6.2 4.7
Average Investments $ 6.2 $ 5.9 6.1
Tax Equivalent Yield 8.9% 8.8% -
Total Debt $ 40.0 $ 35.7 12.0
Shareholder's Equity $ 6.6 $ 5.5 18.2
Return on Average
Equity (D) 33.0% 31.2% -
Return on Average 3.0% 3.1% -
Assets (D)
(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
December 31, Percentage
2000 1999 (Inc/(Dec)
Charge Card Receivables:
Total Receivables $ 29.0 $ 27.0 7.4%
90 Days Past Due as a %
of Total 2.3% 2.5% -
Loss Reserves (millions) $ 964 $ 857 12.5
% of Receivables 3.3% 3.2% -
% of 90 Days Past Due 142% 126% -
Net Loss Ratio 0.36% 0.40% -
U.S. Cardmember Lending:
Total Loans $ 28.7 $ 23.4 22.6
Past Due Loans as a %
of Total:
30-89 Days 1.9% 1.8% -
90+ Days 0.9% 0.8% -
Loss Reserves (millions):
Beginning Balance $ 731 $ 636 15.0
Provision 377 277 36.0
Net Charge-Offs/Other (288) (241) 19.5
Ending Balance $ 820 $ 672 22.0
% of Loans 2.9% 2.9% -
% of Past Due 104% 110% -
Average Loans $ 27.6 $ 21.7 27.5
Net Write-Off Rate 4.4% 4.5% -
Net Interest Yield 7.7% 7.7% -
(Amounts in billions, except percentages and where indicated)
Years Ended
December 31, Percentage
2000 1999 (Inc/(Dec)
Charge Card Receivables:
Total Receivables $ 29.0 $ 27.0 7.4%
90 Days Past Due as a %
of Total 2.3% 2.5% -
Loss Reserves (millions) $ 964 $ 857 12.5
% of Receivables 3.3% 3.2% -
% of 90 Days Past Due 142% 126% -
Net Loss Ratio 0.36% 0.41% -
U.S. Cardmember Lending:
Total Loans $ 28.7 $ 23.4 22.6
Past Due Loans as a %
of Total:
30-89 Days 1.9% 1.8% -
90+ Days 0.9% 0.8% -
Loss Reserves (millions):
Beginning Balance $ 672 $ 619 8.4
Provision 1,258 994 26.6
Net Charge-Offs/Other (1,110) (941) 17.9
Ending Balance $ 820 $ 672 22.0
% of Loans 2.9% 2.9% -
% of Past Due 104% 110% -
Average Loans $ 25.8 $ 18.9 36.6
Net Write-Off Rate 4.4% 5.0% -
Net Interest Yield 7.6% 8.6% -
(Preliminary)
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions)
Quarters Ended
December 31, September 30, June 30,
2000 2000 2000
Net Revenues:
Discount Revenue $ 2,062 $ 1,963 $ 1,949
Net Card Fees 417 420 411
Lending:
Finance Charge Revenue 1,090 1,052 948
Interest Expense 448 429 385
Net Finance Charge Revenue 642 623 563
Travel Commissions and Fees 442 433 507
TC Investment Income 95 103 98
Other Revenues 885 858 844
Total Net Revenues 4,543 4,400 4,372
Expenses:
Marketing and Promotion 314 358 345
Provision for Losses and
Claims:
Charge Card 262 273 344
Lending 432 386 332
Other 19 29 28
Total 713 688 704
Charge Card Interest
Expense 383 362 350
Human Resources 1,046 1,017 1,048
Other Operating Expenses 1,446 1,254 1,204
Total Expenses 3,902 3,679 3,651
Pretax Income 641 721 721
Income Tax Provision 171 214 216
Net Income $ 470 $ 507 $ 505
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 and $36 million ($23 million after-tax) in the first
quarter of 2000, 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.
(Dollars in millions)
Quarters Ended
March 31, December 31,
2000 1999
Net Revenues:
Discount Revenue $ 1,805 $ 1,865
Net Card Fees 405 408
Lending:
Finance Charge Revenue 887 802
Interest Expense 332 302
Net Finance Charge Revenue 555 500
Travel Commissions and Fees 438 459
TC Investment Income 91 88
Other Revenues 833 789
Total Net Revenues 4,127 4,109
Expenses:
Marketing and Promotion 331 344
Provision for Losses and
Claims:
Charge Card 278 227
Lending 335 332
Other 29 24
Total 642 583
Charge Card Interest
Expense 314 300
Human Resources 1,016 1,033
Other Operating Expenses 1,193 1,282
Total Expenses 3,496 3,542
Pretax Income 631 567
Income Tax Provision 183 161
Net Income $ 448 $ 406
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 and $36 million ($23 million after-tax) in the first
quarter of 2000, 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
December September June March December
31, 30, 30, 31, 31,
2000 2000 2000 2000 1999
Net Revenues:
Discount Revenue $2,062 $1,963 $1,949 $1,805 $1,865
Net Card Fees 417 418 411 405 408
Lending:
Finance Charge Revenue 498 504 500 524 526
Interest Expense 277 272 258 231 197
Net Finance Charge Revenue 221 232 242 293 329
Travel Commissions and Fee 442 433 507 438 459
TC Investment Income 95 103 98 91 88
Other Revenues 1,184 1,190 1,117 1,006 902
Total Net Revenues 4,421 4,339 4,324 4,038 4,051
Expenses:
Marketing and Promotion 341 373 393 352 344
Provision for Losses
and Claims:
Charge Card 228 236 302 241 213
Lending 277 267 170 175 241
Other 19 29 28 29 24
Total 524 532 500 445 478
Charge Card Interest Expense 336 312 295 260 246
Net Discount Expense 114 119 131 126 101
Human Resources 1,046 1,017 1,048 1,016 1,033
Other Operating Expenses 1,446 1,265 1,236 1,208 1,282
Total Expenses 3,780 3,618 3,603 3,407 3,484
Pretax Income 641 721 721 631 567
Income Tax Provision 171 241 216 183 161
Net Income $ 470 $ 507 $ 505 $ 448 $ 406
(Preliminary) Travel Related Services
Selected Statistical Information
(Unaudited)
(Amounts in billions,except percentages and where indicated)
Quarters Ended
December 31, September 30, June 30, March 31, December 31,
2000 2000 2000 2000 1999
Total Cards in Force
(millions):
United States 33.3 32.9 32.5 31.4 29.9
Outside the United 18.4 17.5 16.9 16.5 16.1
States
Total 51.7 50.4 49.4 47.9 46.0
Basic Cards in Force
(millions):
United States 26.3 25.8 25.3 24.5 23.4
Outside the United 13.9 13.4 12.9 12.6 12.3
States
Total 40.2 39.2 38.2 37.1 35.7
Card Billed Business:
United States $ 59.0 $ 56.2 $ 55.8 $ 50.6 $ 51.7
Outside the United 20.0 18.6 18.7 17.7 19.1
States
Total $ 79.0 $ 74.8 $ 74.5 $ 68.3 $ 70.8
Average Discount Rate(A) 2.69% 2.70% 2.69% 2.72% 2.71%
Average Basic Cardmember $2,113 $ 2,041 $ 2,085 $1,980 $2,102
Spending (dollars)(A)
Average Fee per Card - $ 35 $ 36 $ 36 $ 37 $ 38
Managed (dollars)(A)
Non-Amex Brand (B):
Cards in Force (millions) 0.6 0.6 0.6 0.6 0.3
Billed Business $ 1.1 $ 0.8 $ 0.7 $ 0.5 $ 0.2
Travel Sales $ 5.5 $ 5.4 $ 6.2 $ 5.5 $ 5.6
Travel Commissions and 8.0% 8.0% 8.2% 8.0% 8.2%
Fees/Sales (C)
Travelers Cheque:
Sales $ 5.1 $ 7.7 $ 6.7 $ 5.1 $ 5.4
Average Outstanding $ 6.2 $ 6.9 $ 6.5 $ 6.1 $ 6.1
Average Investments $ 6.2 $ 6.7 $ 6.2 $ 6.0 $ 5.9
Tax Equivalent Yield 9.1% 8.8% 8.9% 8.9% 8.8%
Total Debt $ 40.0 $ 35.2 $ 31.1 $ 33.9 $ 35.7
Shareholder's Equity $ 6.6 $ 6.3 $ 6.0 $ 5.8 $ 5.5
Return on Average Equity(D)33.0% 32.6% 32.2% 31.6% 31.2%
Return on Average Assets(D) 3.0% 3.0% 3.0% 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.
MORE TO FOLLOW
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