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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) April 20, 1995
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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Item 5. Other Events
On April 20, 1995, American Express Company issued the following
press release:
NEW YORK, April 20, 1995 -- American Express Company today reported
first quarter net income of $353 million, compared with last year's income
from continuing operations of $317 million. Including the net income of
Lehman Brothers, which is reported as a discontinued operation, last year's
first quarter net income was also $353 million.
On a per share basis, first quarter net income was $0.70, compared
with income from continuing operations of $0.62 a year ago, an increase of
13 percent.
Travel Related Services (TRS) reported record first quarter net income
of $263 million, a 12.5 percent increase over last year's net income of
$234 million.
Net revenues increased 16 percent reflecting an increase in worldwide
billed business and higher business travel sales resulting from
acquisitions and growth. The increase in billed business resulted from
higher spending per Cardmember and an increase in the average number of
Cards outstanding.
Operating expenses, which excludes interest and the provision for
losses, increased 13 percent, reflecting business travel acquisitions and
growth, as well as continuing investments in certain business initiatives.
The decline in the U. S. dollar relative to other currencies
increased to a limited extent both revenues and expenses, but with
essentially no effect on net income.
American Express Financial Advisors (AXP Advisors) reported record
first quarter net income of $107 million, an 18 percent increase over last
year's net income of $91 million.
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Revenue and earnings growth benefited primarily from an increase in
managed assets, as well as an increase in life insurance in force. These
increases were partially offset by the impact of narrowing investment
margins and lower distribution fees.
AXP Advisors reported higher sales of annuities, investment
certificates and life and other insurance products, while sales of mutual
funds decreased from last year.
American Express Bank (AEB) reported first quarter net income of $16
million, compared with last year's net income of $24 million.
Results reflect lower interest income due to lower spreads on the
investment portfolio. Operating expenses increased over the year ago
level, in part due to spending related to systems technology. The decline
in results was partially offset by a reduction in the provision for credit
losses and a lower effective tax rate.
Corporate and Other reported first quarter net expenses of $33
million, compared with net expenses of $32 million last year. The 1995
first quarter includes the Company's share of the Travelers Inc. (Travelers)
revenue participation in accordance with an agreement related to the 1993 sale
of the Shearson Lehman Brothers Division, which was offset by expenses related
to certain business building initiatives.
* * *
American Express Company is a diversified travel and financial
services company founded in 1850. It is a leader in charge and credit
cards, Travelers Cheques, travel, financial planning, investment products,
insurance and international banking.
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AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
Three Months Ended
March 31, Percentage
1995 1994 Inc/(Dec)
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Revenues by Industry Segment (A)
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Travel Related Services $2,741 $2,359 16.2%
American Express Financial Advisors 874 816 7.2
American Express Bank 160 168 (4.6)
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3,775 3,343 12.9
Corporate and Other,
including adjustments and
eliminations (4) 27 -
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CONSOLIDATED REVENUES (A) $3,771 $3,370 11.9
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Pretax Income (Loss) from continuing
operations by Industry Segment
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Travel Related Services $377 $326 15.4%
American Express Financial Advisors 164 136 20.8
American Express Bank 22 36 (38.2)
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563 498 13.0
Corporate and Other (65) (58) (11.8)
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PRETAX INCOME $498 $440 13.1
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Income (Loss) from continuing
operations by Industry Segment
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Travel Related Services $263 $234 12.5%
American Express Financial Advisors 107 91 18.4
American Express Bank 16 24 (36.0)
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386 349 10.7
Corporate and Other (33) (32) (3.3)
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Income from continuing operations 353 317 11.4
Discontinued operations (net of income
taxes) (B) - 36 -
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NET INCOME $353 $353 0.1
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Earnings per common share:
Continuing operations $0.70 $0.62 12.9
Discontinued operations - 0.07 -
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NET INCOME PER COMMON SHARE $0.70 $0.69 1.4
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Cash dividends declared per
common share (C) $0.225 $0.225
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Average shares outstanding (000's) 502,588 506,729
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(A) Revenues are reported net of interest expense, where applicable.
(B) 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 for the first quarter of 1994 are reported
as Discontinued Operations, which represents American Express'
share of LB's results after preferred dividends to Nippon Life
Insurance Company.
(C) 1994 cash dividends declared have been adjusted to reflect
the LB spin - off.
Note: Certain prior year amounts have been reclassified to conform to
the current year's presentation.
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(Preliminary)
Travel Related Services
Statement of Income
(Unaudited)
(Amounts in millions, except percentages)
Three Months Ended
March 31, Percentage
1995 1994 Inc/(Dec)
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Net Revenues:
Discount Revenue $1,018 $906 12.4%
Net Card Fees 436 431 1.3
Travel Commissions and Fees 295 183 61.4
Interest and Dividends 243 174 39.9
Other Revenues 513 437 17.1
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2,505 2,131 17.6
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Lending:
Finance Charge Revenue 354 292 21.3
Interest Expense 118 64 86.7
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Net Finance Charge Revenue 236 228 3.2
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Total Net Revenues 2,741 2,359 16.2
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Expenses:
Marketing and Promotion 229 229 0.2
Provision for Losses and Claims:
Charge Card 164 148 11.2
Lending 106 114 (6.9)
Other 122 103 17.2
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Total 392 365 7.3
Interest Expense:
Charge Card 208 159 31.4
Other Interest Expense 58 25 #
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Total 266 184 44.8
Net Discount Expense * 100 67 47.6
Human Resources 693 586 18.3
Other Operating Expenses 684 602 13.7
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Total Expenses 2,364 2,033 16.3
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Pretax Income 377 326 15.4
Income Tax Provision 114 92 22.6
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Net Income $263 $234 12.5
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# Denotes variance of more than 100%.
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* The impact of Net Discount Expense (related to TRS' securitized
receivables) was to:
Decrease the Provision for Losses
Claims - Charge Card $37 $27 35.8
Decrease Interest Expense -
Charge Card 41 24 71.0
Increase Other Revenues 22 16 33.4
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Total Net Discount Expense $100 $67 47.6
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(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
March 31, Percentage
1995 1994 Inc/(Dec)
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Total Cards in Force:
United States 25.1 24.7 1.8%
Outside the United States 11.2 10.7 4.2
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Total 36.3 35.4 2.5
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Basic Cards in Force:
United States 18.6 18.1 2.6
Outside the United States 8.6 7.9 8.2
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Total 27.2 26.0 4.3
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Card Billed Business (billions):
United States $26.0 $22.9 13.6
Outside the United States 10.8 8.9 21.4
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Total $36.8 $31.8 15.8
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U.S. Consumer Lending Loan
Balances (billions) $8.3 $7.2 16.1
Travelers Cheque Sales (billions) $5.4 $4.8 10.8
Average Travelers Cheques
Outstanding (billions) $5.4 $4.8 11.5
Travel Sales (billions) $3.4 $2.1 62.1
Return on Average Equity 24.2% 23.4% -
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(Preliminary)
American Express Financial Advisors
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
March 31, Percentage
1995 1994 Inc/(Dec)
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Revenues:
Investment Income $535 $503 6.4%
Management and Distribution Fees 206 205 0.4
Other Income 133 108 23.8
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Total Revenues 874 816 7.2
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Expenses:
Provision for Losses and Benefits:
Annuities 273 255 7.1
Insurance 94 88 7.0
Investment Certificates 49 22 #
Other 0 0 #
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Total 416 365 14.1
Human Resources 207 209 (0.7)
Other Operating Expenses 87 106 (18.3)
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Total Expenses 710 680 4.5
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Pretax Income 164 136 20.8
Income Tax Provision 57 45 25.6
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Net Income $107 $91 18.4
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Selected Statistical Information
Life Insurance in Force (billions) $54.4 $47.7 14.0
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Assets Owned and/or Managed (billions):
Assets managed for institutions $30.3 $24.3 24.6
Assets owned and managed for individuals
Owned Assets 42.3 38.4 10.2
Managed Assets 40.4 36.8 9.8
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Total $113.0 $99.5 13.6
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Sales of Selected Products:
Mutual Funds $2,288 $2,526 (9.4)
Annuities $1,096 $1,010 8.5
Investment Certificates $412 $155 #
Life and Other Insurance Sales $83 $75 10.5
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Fees From Financial Plans (thousands) $10,419 $10,174 2.4
Number of Financial Planners 8,015 7,719 3.8
Product Sales Generated from Financial
Plans as a Percentage of Total Sales 63.4% 59.7% -
Return on Average Equity 20.0% 17.9% -
# Denotes variance of more than 100%.
Note: Certain prior year amounts have been reclassified to conform
to the current year's presentation.
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(Preliminary)
American Express Bank
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
March 31, Percentage
1995 1994 Inc/(Dec)
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Net Revenues:
Interest Income $239 $233 2.8%
Interest Expense 157 142 10.9
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Net Interest Income 82 91 (9.7)
Commissions, Fees and Other Revenues 59 58 1.9
Foreign Exchange Income 19 19 (0.1)
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Total Net Revenues 160 168 (4.6)
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Provision for Credit Losses 3 7 (52.9)
Expenses:
Human Resources 64 61 4.4
Other Operating Expenses 71 64 10.8
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Total Expenses 135 125 7.6
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Pretax Income 22 36 (38.2)
Income Tax Provision 6 12 (43.0)
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Net Income $16 $24 (36.0)
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Selected Statistical Information
Return on Average Assets 0.46% 0.65% -
Return on Average Common Equity 8.37% 13.13% -
Total Loans $5,371 $5,658 (5.1)
Reserve for Credit Losses $112 $132 (15.2)
Total Nonperforming Loans $32 $34 (6.6)
Other Nonperforming Assets $55 $89 (38.3)
Risk-Based Capital Ratios:
Tier 1 7.7% 6.5% -
Total 14.9% 12.7% -
Leverage Ratio 4.9% 4.3% -
Note: Certain prior year amounts have been reclassified to conform
to the current year's presentation.
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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: April 20, 1995
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