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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 25, 1994
AMERICAN EXPRESS COMPANY
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(Exact name of registrant as specified in its charter)
New York 1-7657 13-4922250
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification)
American Express Tower, World Financial Center
New York, New York 10285
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (212) 640-2000
including area code --------------
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(Former name or former address, if changed since last report.)
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<PAGE>
Item 5. Other Events
On July 25, 1994, American Express Company issued the following
press release:
NEW YORK, July 25, 1994 - American Express Company today reported
second quarter income from continuing operations of $359 million, or $0.70 per
share, compared with $301 million, or $0.60 per share, a year ago. The
Company completed the spin-off of Lehman Brothers (Lehman) on May 31, 1994.
Including Lehman as a discontinued operation through the spin-off date,
American Express' net income totaled $357 million, or $0.69 per share,
compared with $416 million, or $0.83 per share a year ago.
Travel Related Services (TRS) reported record second quarter net income
of $263 million, a 13 percent increase over last year's net income of $233
million.
Net revenues increased 7 percent reflecting an increase in worldwide
billed business and growth in Business Travel sales. The increase in billed
business resulted from higher spending per Cardmember and an increase in the
number of Cards outstanding. The increase in net revenues was partially
offset by discount rate reductions.
The provision for losses declined, reflecting improved credit quality.
Excluding the provision and interest, total expenses increased 9 percent, in
part reflecting Business Travel growth and investments in certain business
initiatives.
IDS Financial Services (IDS) reported record second quarter net income of
$109 million, a 21 percent increase over last year's net income of $90
million.
Revenue and earnings growth benefited primarily from an increase in
management fees and net investment income that resulted from higher asset
levels. Results also benefited from wider investment margins compared to
year-ago levels.
IDS reported increased sales of annuities, mutual funds and investment
certificates, while sales of life and related insurance products decreased
slightly from last year.
<PAGE>
American Express Bank (AEB) reported second quarter net income of $19
million, compared with last year's net income of $21 million.
Results for the second quarter reflect a decline in net interest income,
primarily due to higher short-term funding costs and lower investment income,
as well as higher operating expenses. Partially offsetting this decline was a
lower provision for credit losses and a lower effective tax rate. Increased
expenses primarily reflected spending related to systems technology.
Total nonperforming loans and other nonperforming assets of $93 million
reflect a decrease of $39 million from December 31, 1993 due to the sale of a
foreclosed property and write-offs.
Corporate and Other reported second quarter net expenses of $32 million,
compared with net expenses of $43 million last year.
* * *
American Express Company is a diversified travel and financial services
company founded in 1850. It is a world leader in charge cards, Travelers
Cheques, travel, financial planning, investment products, insurance and
international banking.
<PAGE>
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
<S> <C> <C> <C>
Revenues by Industry Segment (A)
Travel Related Services (B) $2,503 $2,339 7.0%
IDS Financial Services 815 791 3.0
American Express Bank (B) 162 171 (5.4)
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3,480 3,301 5.4
Corporate and Other,
including adjustments and
eliminations 28 (4) -
----- -----
CONSOLIDATED REVENUES (A) $3,508 $3,297 6.4
====== ======
Pretax Income from continuing operations
by Industry Segment
Travel Related Services (B) $365 $319 14.2%
IDS Financial Services 161 132 21.7
American Express Bank (B) 28 35 (20.8)
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554 486 13.7
Corporate and Other :
Corporate expenses (76) (69) (7.2)
FDC Gain - - -
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(76) (69) (7.2)
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PRETAX INCOME $478 $417 14.8
===== =====
Income from continuing operations
by Industry Segment
Travel Related Services (B) $263 $233 13.2%
IDS Financial Services 109 90 21.0
American Express Bank (B) 19 21 (8.8)
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391 344 13.9
Corporate and Other :
Corporate expenses (32) (43) 24.6
FDC Gain - - -
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(32) (43) 24.6
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Income from continuing operations 359 301 19.4
Discontinued operations (net of
income taxes) (C) (2) 115 -
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NET INCOME $357 $416 (14.2)
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Earnings per common share:
Continuing operations $0.70 $0.60 16.7
Discontinued operations (0.01) 0.23 -
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NET INCOME PER COMMON SHARE $0.69 $0.83 (16.9)
===== =====
Cash dividends declared per common
share $0.225 $0.25
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Average shares outstanding (000's) 511,283 498,640
======= =======
</TABLE/
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
<S> <C> <C> <C>
Revenues by Industry Segment (A)
Travel Related Services (B) $4,862 $4,570 6.4%
IDS Financial Services 1,633 1,533 6.5
American Express Bank (B) 330 327 1.0
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6,825 6,430 6.1
Corporate and Other,
including adjustments and
eliminations 56 (23) -
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CONSOLIDATED REVENUES (A) $6,881 $6,407 7.4
====== ======
Pretax Income from continuing operations
by Industry Segment
Travel Related Services (B) $691 $580 19.2%
IDS Financial Services 297 239 24.2
American Express Bank (B) 64 62 2.9
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1,052 881 19.4
Corporate and Other :
Corporate expenses (134) (142) 6.0
FDC Gain - 779 -
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(134) 637 -
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PRETAX INCOME $918 $1,518 (39.5)
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Income from continuing operations
by Industry Segment
Travel Related Services (B) $498 $442 12.7%
IDS Financial Services 200 165 21.4
American Express Bank (B) 44 39 12.8
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742 646 14.9
Corporate and Other :
Corporate expenses (65) (78) 15.0
FDC Gain - 433 -
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(65) 355 -
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Income from continuing operations 677 1,001 (32.5)
Discontinued operations (net of
income taxes) (C) 33 (342) -
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NET INCOME $710 $659 7.7
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Earnings per common share:
Continuing operations $1.31 $2.01 (34.8)
Discontinued operations 0.07 (0.70) -
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NET INCOME PER COMMON SHARE $1.38 $1.31 5.3
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Cash dividends declared per common
share $0.475 $0.50
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Average shares outstanding (000's) 509,284 496,744
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</TABLE>
(A) Revenues are reported net of interest expense, where applicable.
(B) Prior year's amounts for Travel Related Services (TRS) and
American Express Bank (AEB) have been restated to reflect the
transfer of certain consumer financial services businesses from
TRS to AEB.
(C) On May 31, 1994, the Company completed a tax free spin - off of
Lehman Brothers (LB) through a special dividend to shareholders.
Accordingly, LB results are reported as Discontinued Operations for all
periods presented. The Discontinued Operations amounts in the table
above represent American Express' share of LB's results after preferred
dividends to Nippon Life Insurance Company.
Note: Certain prior year amounts have been reclassified to
conform to the current year's presentation.
<PAGE>
(Preliminary)
Travel Related Services
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Revenues:
Discount Revenue $983 $899 9.4%
Net Card Fees 431 433 (0.5)
Interest and Dividends 187 177 5.6
Other Revenues 667 592 12.5
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2,268 2,101 7.9
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Lending:
Finance Charge Revenue 304 302 0.6
Interest Expense 69 64 7.8
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Net Finance Charge Revenue 235 238 (1.3)
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Total Net Revenues 2,503 2,339 7.0
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Expenses:
Marketing and Promotion 273 264 3.5
Provision for Losses and Claims:
Charge Card 177 192 (7.8)
Lending 63 97 (35.1)
Other 120 101 19.9
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Total 360 390 (7.5)
Interest Expense:
Charge Card 168 171 (2.2)
Other Interest Expense 41 27 51.5
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Total 209 198 5.1
Net Discount Expense 68 50 35.9
Human Resources 625 537 16.4
Other Operating Expenses 603 581 3.9
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Total Expenses 2,138 2,020 5.9
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Pretax Income 365 319 14.2
Income Tax Provision 102 86 16.9
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Net Income $263 $233 13.2
===== =====
Selected Statistical Information
Total Cards in Force:
United States 24.8 23.8 4.2
Outside the United States 10.8 10.2 5.3
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Total 35.6 34.0 4.5
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Basic Cards in Force:
U.S. Charge Card 11.3 11.8 (3.8)
U.S. Corporate Card 6.8 5.4 26.4
International Charge Card 8.0 7.9 0.8
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Total 26.1 25.1 4.1
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Card Billed Business (billions):
United States $25.3 $22.5 12.7
Outside the United States 9.3 8.5 8.9
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Total $34.6 $31.0 11.7
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Note: Prior year's results are stated on a consistent basis
with the current year's presentation and include the
impact of the transfer of certain consumer financial
services businesses to American Express Bank.
<PAGE>
(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
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Number of Service Establishments 3.7 3.5 6.6%
Travelers Cheque Sales (billions) $6.5 $6.2 5.0
Average Travelers Cheques
Outstanding (billions) $5.3 $5.0 5.1
Travel Sales (billions) $2.5 $2.0 29.3
Return on Average Equity 23.8% 12.2% -
<PAGE>
(Preliminary)
IDS Financial Services
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Revenues:
Investment Income $497 $516 (3.6%)
Fee Income 201 177 14.0
Other Income 117 98 17.9
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Total Revenues 815 791 3.0
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Expenses:
Provision for Losses and Benefits:
Annuities 252 266 (5.5)
Insurance 85 78 9.3
Investment Certificates 25 32 (21.9)
Other 0 2 (87.2)
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Total 362 378 (4.2)
Human Resources 201 183 9.8
Other Operating Expenses 91 98 (7.0)
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Total Expenses 654 659 (0.7)
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Pretax Income 161 132 21.7
Income Tax Provision 52 42 23.3
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Net Income $109 $90 21.0
===== =====
Selected Statistical Information
Life Insurance in Force (billions) $49.3 $43.5 13.3
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Assets Owned and/or Managed (billions):
Assets managed for institutions $25.6 $22.7 12.7
Assets owned and managed
for individuals
Owned Assets 37.8 34.6 9.1
Managed Assets 37.2 33.6 10.8
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Total $100.6 $90.9 10.6
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Sales of Selected Products (millions):
Mutual Funds $2,324 $2,077 11.9
Annuities $1,158 $1,025 13.0
Investment Certificates $215 $157 37.2
Life and Other Insurance Sales $77 $79 (2.6)
Fees From Financial Plans $9,624 $8,941 7.6
Number of Financial Planners 7,780 7,439 4.6
Product Sales Generated from Financial
Plans as a Percentage of Total Sales 61.5% 57.3% -
Return on Average Equity 18.3% 17.4% -<PAGE>
(Preliminary)
American Express Bank
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
June 30, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Net Revenues:
Interest Income $237 $236 0.8%
Interest Expense 153 142 8.2
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Net Interest Income 84 94 (10.2)
Commissions, Fees and Other
Revenues 58 58 (2.1)
Foreign Exchange Income 20 19 8.1
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Total Net Revenues 162 171 (5.4)
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Provision for Credit Losses 2 13 (88.9)
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Expenses:
Human Resources 62 58 6.0
Other Operating Expenses 70 65 10.2
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Total Expenses 132 123 8.2
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Pretax Income 28 35 (20.8)
Income Tax Provision 9 14 (38.9)
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Net Income $19 $21 (8.8)
===== =====
Selected Statistical Information
Return on Average Assets 0.51% 0.61% -
Return on Average Equity 10.03% 11.97% -
Total Loans $5,625 $5,261 6.9
Reserve for Credit Losses $115 $144 (20.3)
Total Nonperforming Loans $34 $104 (67.0)
Other Nonperforming Assets $59 $103 (42.2)
Risk-Based Capital Ratios:
Tier 1 6.6% 6.0% -
Total 13.0% 9.6% -
Leverage Ratio 4.2% 4.5% -
Note: Prior year's results are stated on a consistent basis
with the current year's presentation and include the
impact of the transfer of certain consumer financial
services businesses from Travel Related Services.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
AMERICAN EXPRESS COMPANY
By: /s/ Stephen P. Norman
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Name: Stephen P. Norman
Title: Secretary
Dated: July 26, 1994
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