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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) January 23, 1995
AMERICAN EXPRESS COMPANY
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(Exact name of registrant as specified in its charter)
New York 1-7657 13-4922250
------------------------------- -------------- ------------
(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 January 23, 1995, American Express Company issued the following
press release:
NEW YORK, January 23, 1995 - American Express Company today reported record
1994 income from continuing operations of $1.4 billion, or $2.68 per share,
compared with $1.2 billion, or $2.30 per share a year ago before a gain of
$433 million from the sale of First Data Corporation (FDC) stock in 1993.
Including Lehman Brothers as a discontinued operation through May 31, 1994,
when it was spun-off, and the FDC gain in 1993, American Express' net
income totaled $1.4 billion, or $2.75 per share, compared with $1.5
billion, or $2.92 per share last year.
For the fourth quarter, American Express reported consolidated income
from continuing operations of $335 million, or $0.65 per share, compared
with $291 million, or $0.57 per share a year ago. Including discontinued
operations, fourth quarter net income in 1993 was $399 million, or $0.78
per share.
Travel Related Services (TRS) reported record 1994 net income of $998
million, a 13 percent increase over last year's net income of $884 million.
Net revenues increased 9 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 average number of Cards outstanding.
Total expenses, excluding interest and the provision for losses,
increased 9 percent, reflecting business travel acquisitions and growth,
and investments in certain business initiatives. The provision for losses
declined, reflecting improved credit experience, particularly in the first
half of the year. Marketing and promotion expenses for the year were less
than expected.
For the fourth quarter, TRS net income was $237 million, compared with
<PAGE>
$208 million a year ago.
American Express Financial Advisors, formerly IDS Financial Services,
reported record 1994 net income of $428 million, a 20 percent increase over
last year's net income of $358 million.
Revenue and earnings growth benefited from an increase in management
fees, as well as an increase in life insurance in force.
American Express Financial Advisors reported record sales of annuities,
mutual funds and life and other insurance products. Sales of investment
certificates increased significantly from last year.
For the fourth quarter, American Express Financial Advisors' net income
was $114 million, compared with $98 million a year ago, despite narrowing
investment margins during the quarter.
American Express Bank (AEB) reported 1994 net income of $80 million,
compared with last year's net income of $92 million.
Results reflect lower net revenues and higher operating expenses, 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.
For the fourth quarter, AEB net income was $16 million, compared with
$25 million a year ago, reflecting lower net revenues.
Corporate and Other reported 1994 net expenses of $126 million,
compared with net expenses of $162 million last year, before a $433 million
after-tax gain from the sale of FDC stock in 1993. For the fourth quarter,
Corporate and Other reported net expenses of $32 million, compared with net
expenses of $40 million last year.
* * *
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.
<PAGE>
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
Three Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Revenues by Industry Segment (A)
--------------------------------
Travel Related Services (B) $2,793 $2,474 12.9%
American Express Financial Advisors 820 807 1.6
American Express Bank (B) 159 179 (11.3)
----- -----
3,772 3,460 9.0
Corporate and Other,
including adjustments and
eliminations 30 18 66.7
----- -----
CONSOLIDATED REVENUES (A) $3,802 $3,478 9.3
====== ======
Pretax Income from continuing operations
by Industry Segment
----------------------------------------
Travel Related Services (B) $341 $282 20.7%
American Express Financial Advisors 166 139 19.5
American Express Bank (B) 25 35 (30.2)
----- -----
532 456 16.7
Corporate and Other:
Corporate expenses (57) (64) 13.1
FDC Gain - - -
----- -----
(57) (64) 13.1
----- -----
PRETAX INCOME $475 $392 21.3
===== =====
Income from continuing operations
by Industry Segment
---------------------------------
Travel Related Services (B) $237 $208 13.6%
American Express Financial Advisors 114 98 16.6
American Express Bank (B) 16 25 (34.0)
----- -----
367 331 10.9
Corporate and Other :
Corporate expenses (32) (40) 20.4
FDC Gain - - -
----- -----
<PAGE>
(32) (40) 20.4
----- -----
Income from continuing operations 335 291 15.2
Discontinued operations (net of
income taxes) (C) - 108 -
----- -----
NET INCOME $335 $399 (16.0)
===== =====
Earnings per common share:
Continuing operations $0.65 $0.57 14.0
Discontinued operations - 0.21 -
----- -----
NET INCOME PER COMMON SHARE $0.65 $0.78 (16.7)
===== =====
Cash dividends declared per
common share $0.225 $0.25
===== =====
Average shares outstanding (000's) 507,417 505,044
======= =======
Twelve Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Revenues by Industry Segment (A)
--------------------------------
Travel Related Services (B) $10,256 $9,432 8.8%
American Express Financial Advisors 3,270 3,156 3.6
American Express Bank (B) 652 677 (3.8)
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14,178 13,265 6.9
Corporate and Other,
including adjustments and
eliminations 104 (11) -
------ ------
CONSOLIDATED REVENUES (A) $14,282 $13,254 7.8
======= =======
Pretax Income from continuing operations
by Industry Segment
----------------------------------------
Travel Related Services (B) $1,396 $1,173 19.0%
American Express Financial Advisors 631 518 21.9
American Express Bank (B) 119 134 (11.3)
------ ------
2,146 1,825 17.6
Corporate and Other:
Corporate expenses (255) (278) 8.3
FDC Gain - 779 -
------ ------
(255) 501 -
------ ------
PRETAX INCOME $1,891 $2,326 (18.7)
====== ======
<PAGE>
Income from continuing operations
by Industry Segment
---------------------------------
Travel Related Services (B) $998 $884 12.9%
American Express Financial Advisors 428 358 19.6
American Express Bank (B) 80 92 (13.4)
------ ------
1,506 1,334 12.9
Corporate and Other:
Corporate expenses (126) (162) 22.0
FDC Gain - 433 -
------ ------
(126) 271 -
------ ------
Income from continuing operations 1,380 1,605 (14.0)
Discontinued operations (net of
income taxes) (C) 33 (127) -
------ ------
NET INCOME $1,413 $1,478 (4.4)
====== ======
Earnings per common share:
Continuing operations $2.68 $3.17 (15.5)
Discontinued operations 0.07 (0.25) -
------ ------
NET INCOME PER COMMON SHARE $2.75 $2.92 (5.8)
====== ======
Cash dividends declared per
common share $0.925 $1.00
====== ======
Average shares outstanding (000's) 508,815 500,138
======= =======
(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
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Net Revenues:
Discount Revenue $1,098 $980 12.0%
Net Card Fees 430 426 0.9
Interest and Dividends 209 176 18.3
Other Revenues 809 660 22.9
----- -----
2,546 2,242 13.6
----- -----
Lending:
Finance Charge Revenue 345 294 17.5
Interest Expense 98 62 59.2
----- -----
Net Finance Charge Revenue 247 232 6.4
----- -----
Total Net Revenues 2,793 2,474 12.9
----- -----
Expenses:
Marketing and Promotion 260 283 (7.8)
Provision for Losses and Claims:
Charge Card 155 174 (11.0)
Lending 121 106 14.2
Other 115 112 2.6
----- -----
Total 391 392 (0.3)
Interest Expense:
Charge Card 191 142 34.4
Other Interest Expense 40 49 (17.9)
----- -----
Total 231 191 21.1
Net Discount Expense 98 65 50.4
Human Resources 720 605 19.1
Other Operating Expenses 752 656 14.7
----- -----
Total Expenses 2,452 2,192 11.9
----- -----
Pretax Income 341 282 20.7
Income Tax Provision 104 74 40.6
----- -----
Net Income $237 $208 13.6
===== =====
Selected Statistical Information
Total Cards in Force:
United States - - -
Outside the United States - - -
Total - - -
<PAGE>
Basic Cards in Force:
U.S. Consumer Card - - -
U.S. Corporate Card - - -
International Charge Card - - -
Total - - -
Card Billed Business (billions):
United States $27.7 $24.5 13.2
Outside the United States 11.3 9.6 17.8
----- -----
Total $39.0 $34.1 14.5
===== =====
Twelve Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Net Revenues:
Discount Revenue $3,984 $3,621 10.0%
Net Card Fees 1,727 1,727 0.0
Interest and Dividends 776 724 7.2
Other Revenues 2,821 2,432 16.2
----- -----
9,308 8,504 9.5
----- -----
Lending:
Finance Charge Revenue 1,258 1,185 6.2
Interest Expense 310 257 21.2
----- -----
Net Finance Charge Revenue 948 928 2.0
------ -----
Total Net Revenues 10,256 9,432 8.8
------ -----
Expenses:
Marketing and Promotion 1,036 1,068 (2.9)
Provision for Losses and Claims:
Charge Card 633 702 (9.9)
Lending 378 417 (9.2)
Other 471 429 9.7
----- -----
Total 1,482 1,548 (4.3)
Interest Expense:
Charge Card 681 662 2.8
Other Interest Expense 150 137 9.6
----- -----
Total 831 799 4.0
Net Discount Expense 326 219 49.0
Human Resources 2,583 2,227 16.0
Other Operating Expenses 2,602 2,398 8.6
----- -----
Total Expenses 8,860 8,259 7.3
----- -----
<PAGE>
Pretax Income 1,396 1,173 19.0
Income Tax Provision 398 289 37.6
----- -----
Net Income $998 $884 12.9
===== =====
Selected Statistical Information
Total Cards in Force:
United States 25.3 24.7 2.3
Outside the United States 11.0 10.7 2.9
----- -----
Total 36.3 35.4 2.5
===== =====
Basic Cards in Force:
U.S. Consumer Card 11.5 11.5 0.4
U.S. Corporate Card 7.1 6.5 8.7
International Charge Card 8.1 8.0 2.0
----- -----
Total 26.7 26.0 3.0
===== =====
Card Billed Business (billions):
United States $101.2 $89.8 12.6
Outside the United States 39.7 34.3 16.0
----- -----
Total $140.9 $124.1 13.6
===== =====
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.
(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Number of Service Establishments - - -
Travelers Cheque Sales (billions) $5.1 $4.8 5.5
Average Travelers Cheques
Outstanding (billions) $5.4 $4.9 9.4
Travel Sales (billions) $3.6 $2.2 62.4
Return on Average Equity - - -
<PAGE>
Twelve Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Number of Service Establishments 3.9 3.6 9.6%
Travelers Cheque Sales (billions) $24.9 $23.6 5.1
Average Travelers Cheques
Outstanding (billions) $5.3 $5.0 6.4
Travel Sales (billions) $10.7 $8.0 34.5
Return on Average Equity 24.0% 24.1% -
(Preliminary)
American Express Financial Advisors
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
Revenues: ---- ---- ----------
Investment Income $496 $515 (3.7%)
Fee Income 202 198 2.4
Other Income 122 94 29.3
----- -----
Total Revenues 820 807 1.6
----- -----
Expenses:
Provision for Losses and Benefits:
Annuities 265 264 0.6
Insurance 102 84 21.7
Investment Certificates 30 27 12.9
Other 0 0 -
----- -----
Total 397 375 6.0
Human Resources 204 197 3.4
Other Operating Expenses 53 96 (45.1)
----- -----
Total Expenses 654 668 (2.1)
----- -----
Pretax Income 166 139 19.5
Income Tax Provision 52 41 26.2
----- -----
Net Income $114 $98 16.6
===== =====
Selected Statistical Information
Life Insurance in Force (billions) - - -
Assets Owned and/or Managed (billions):
Assets managed for institutions - - -
Assets owned and managed for individuals
<PAGE>
Owned Assets - - -
Managed Assets - - -
Total - - -
Sales of Selected Products:
Mutual Funds $2,069 $2,335 (11.4)
Annuities $1,104 $1,053 4.8
Investment Certificates $373 $123 #
Life and Other Insurance Sales $94 $89 5.2
Fees From Financial Plans (thousands) $10,294 $10,027 2.7
Number of Financial Planners - - -
Product Sales Generated from Financial
Plans as a Percentage of Total Sales 62.2% 59.3% -
Return on Average Equity - - -
Twelve Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Revenues:
Investment Income $1,994 $2,049 (2.7%)
Fee Income 806 727 10.9
Other Income 470 380 23.9
----- -----
Total Revenues 3,270 3,156 3.6
----- -----
Expenses:
Provision for Losses and Benefits:
Annuities 1,028 1,065 (3.5)
Insurance 370 321 15.3
Investment Certificates 107 124 (13.6)
Other 0 5 -
----- -----
Total 1,505 1,515 (0.6)
Human Resources 823 757 8.8
Other Operating Expenses 311 366 (15.2)
----- -----
Total Expenses 2,639 2,638 0.0
----- -----
Pretax Income 631 518 21.9
Income Tax Provision 203 160 27.1
----- -----
Net Income $428 $358 19.6
===== =====
Selected Statistical Information
Life Insurance in Force (billions) $52.7 $46.1 14.2
===== =====
Assets Owned and/or Managed (billions):
Assets managed for institutions $27.4 $25.0 9.7
Assets owned and managed for individuals
Owned Assets 40.2 37.4 7.5
<PAGE>
Managed Assets 37.9 37.3 1.6
----- -----
Total $105.5 $99.7 5.8
===== =====
Sales of Selected Products:
Mutual Funds $8,940 $8,583 4.2
Annuities $4,360 $4,105 6.2
Investment Certificates $1,068 $575 85.5
Life and Other Insurance Sales $324 $309 5.0
Fees From Financial Plans (thousands) $39,651 $37,382 6.1
Number of Financial Planners 8,054 7,655 5.2
Product Sales Generated from Financial
Plans as a Percentage of Total Sales 61.7% 57.5% -
Return on Average Equity 19.3% 17.9% -
# Denotes variance of more than 100%.
(Preliminary)
American Express Bank
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Net Revenues:
Interest Income $233 $238 (2.2%)
Interest Expense 149 147 1.3
----- -----
Net Interest Income 84 91 (8.0)
Commissions, Fees and Other Revenues 59 69 (15.5)
Foreign Exchange Income 16 19 (12.0)
----- -----
Total Net Revenues 159 179 (11.3)
----- -----
Provision for Credit Losses 0 9 -
----- -----
Expenses:
Human Resources 63 60 5.3
Other Operating Expenses 71 75 (5.9)
----- -----
Total Expenses 134 135 (1.0)
----- -----
Pretax Income 25 35 (30.2)
Income Tax Provision 9 10 (21.5)
----- -----
Net Income $16 $25 (34.0)
===== =====
<PAGE>
Selected Statistical Information
Return on Average Assets - - -
Return on Average Common Equity - - -
Total Loans - - -
Reserve for Credit Losses - - -
Total Nonperforming Loans - - -
Other Nonperforming Assets - - -
Risk-Based Capital Ratios:
Tier 1 - - -
Total - - -
Leverage Ratio - - -
Twelve Months Ended
December 31, Percentage
1994 1993 Inc/(Dec)
---- ---- ----------
Net Revenues:
Interest Income $952 $960 (0.9%)
Interest Expense 604 595 1.4
----- -----
Net Interest Income 348 365 (4.6)
Commissions, Fees and Other Revenues 232 236 (2.2)
Foreign Exchange Income 72 76 (4.6)
----- -----
Total Net Revenues 652 677 (3.8)
----- -----
Provision for Credit Losses 8 44 (81.0)
----- -----
Expenses:
Human Resources 250 236 6.0
Other Operating Expenses 275 263 4.2
----- -----
Total Expenses 525 499 5.1
----- -----
Pretax Income 119 134 (11.3)
Income Tax Provision 39 42 (6.9)
----- -----
Net Income $80 $92 (13.4)
===== =====
Selected Statistical Information
Return on Average Assets 0.54% 0.65% -
Return on Average Common Equity 10.78% 13.67% -
Total Loans $4,990 $5,614 (11.1)
Reserve for Credit Losses $109 $126 (13.0)
Total Nonperforming Loans $20 $43 (54.8)
Other Nonperforming Assets $56 $89 (37.2)
Risk-Based Capital Ratios:
Tier 1 7.5% 6.3% -
Total 14.7% 10.2% -
Leverage Ratio 4.8% 4.4% -
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
-------------------------
Name: Stephen P. Norman
Title: Secretary
Dated: January 24, 1995
<PAGE>
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