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) October 23, 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 October 23, 1995, American Express Company issued the following
press release:
NEW YORK, October 23, 1995 -- American Express Company today reported
third quarter net income of $416 million, up 13 percent from a year
ago.
On a per share basis, third quarter net income was $0.83, compared
with $0.71 a year ago, an increase of 17 percent.
Travel Related Services (TRS) reported record third quarter net income
of $297 million, a 13 percent increase over net income of $264
million a year ago.
Net revenues increased 14 percent reflecting an increase in worldwide
billed business and higher business travel sales. The increase in billed
business resulted from higher spending per Cardmember, due in part to
increased merchant coverage and the benefits of rewards programs, as well
as an increase in the number of Cards outstanding. Higher business travel
sales resulted from acquisitions and growth.
Operating expenses, which excludes interest and the provision for
losses, increased 8 percent, reflecting business travel acquisitions and
growth, as well as continuing investments in certain business initiatives.
The charge card provision for losses increased, primarily related to
higher loss rates in Latin America. The lending provision for losses was
higher in part due to portfolio growth, since the company reserves for
losses at the time receivables are recorded. Charge card interest expense
increased, reflecting higher rates and increased volume.
American Express Financial Advisors (AXP Advisors) reported record
quarterly net income of $134 million, a 17 percent increase over net
income of $114 million a year ago.
Revenue and earnings growth benefited primarily from higher fee
revenues due to an increase in managed assets, as well as an increase in
life insurance in force. These increases were partially offset by the
impact of lower investment margins.
AXP Advisors reported higher sales of mutual funds, life and other
insurance products, and investment certificates, while sales of annuities
decreased from last year.
American Express Bank (AEB) reported third quarter net income of
$22 million, a 9 percent increase over net income of $20 million a
year ago.
Results reflect growth in foreign exchange revenue, as well as in
commissions, fees and other revenues. These increases were offset
primarily by lower net interest income due to lower spreads on the
investment portfolio. Operating expenses decreased compared with a year
ago.
Corporate and Other reported third quarter net expenses of $37
million, compared with net expenses of $29 million a year ago.
* * *
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
September 30,
-------------------- Percentage
1995 1994 Inc/(Dec)
--------- --------- ----------
Revenues by Industry Segment (A)
--------------------------------
Travel Related Services $2,972 $2,601 14.3%
American Express Financial Advisors 934 822 13.5
American Express Bank 161 163 (1.0)
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4,067 3,586 13.4
Corporate and Other,
including adjustments and
eliminations (13) 18 -
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CONSOLIDATED REVENUES (A) $4,054 $3,604 12.5
========= =========
Pretax Income from continuing operations
by Industry Segment
----------------------------------------
Travel Related Services $408 $364 12.1%
American Express Financial Advisors 197 168 17.1
American Express Bank 33 31 8.8
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638 563 13.4
Corporate and Other (67) (65) (2.8)
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PRETAX INCOME $571 $498 14.8
========= =========
Income from continuing operations
by Industry Segment
---------------------------------
Travel Related Services $297 $264 12.5%
American Express Financial Advisors 134 114 17.0
American Express Bank 22 20 9.5
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453 398 13.6
Corporate and Other (37) (29) (21.5)
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Income from continuing operations 416 369 13.0
Discontinued operations
(net of income taxes) (B) - - -
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NET INCOME $416 $369 13.0
========= =========
Earnings per common share:
Continuing operations $0.83 $0.71 16.9
Discontinued operations - - -
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NET INCOME PER COMMON SHARE $0.83 $0.71 16.9
========= =========
Cash dividends declared per common
share (C) $0.225 $0.225
========= =========
Average shares outstanding (000's) 496,516 512,579
========= =========
(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 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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AMERICAN EXPRESS COMPANY (Continued)
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
Nine Months Ended
September 30,
-------------------- Percentage
1995 1994 Inc/(Dec)
--------- --------- ----------
Revenues by Industry Segment (A)
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Travel Related Services $8,615 $7,463 15.4%
American Express Financial Advisors 2,718 2,450 10.9
American Express Bank 484 493 (1.7)
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11,817 10,406 13.6
Corporate and Other,
including adjustments and
eliminations (25) 74 -
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CONSOLIDATED REVENUES (A) $11,792 $10,480 12.5
========= =========
Pretax Income from continuing operations
by Industry Segment
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Travel Related Services $1,208 $1,055 14.5%
American Express Financial Advisors 553 465 18.8
American Express Bank 83 94 (12.0)
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1,844 1,614 14.2
Corporate and Other (203) (198) (1.9)
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PRETAX INCOME $1,641 $1,416 15.9
========= =========
Income from continuing operations
by Industry Segment
---------------------------------
Travel Related Services $859 $762 12.7%
American Express Financial Advisors 370 314 17.7
American Express Bank 57 64 (11.3)
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1,286 1,140 12.8
Corporate and Other (107) (95) (11.7)
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Income from continuing operations 1,179 1,045 12.9
Discontinued operations
(net of income taxes) (B) - 33 -
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NET INCOME $1,179 $1,078 9.4
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Earnings per common share:
Continuing operations $2.34 $2.02 15.8
Discontinued operations - 0.07 -
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NET INCOME PER COMMON SHARE $2.34 $2.09 12.0
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Cash dividends declared per common
share (C) $0.675 $0.675
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Average shares outstanding (000's) 499,430 510,672
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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 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
September 30,
----------------------- Percentage
1995 1994 Inc/(Dec)
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Net Revenues:
Discount Revenue $1,116 $996 12.0%
Net Card Fees 439 435 0.8
Travel Commissions and Fees 316 233 35.4
Interest and Dividends 261 206 26.9
Other Revenues 570 494 15.5
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2,702 2,364 14.3
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Lending:
Finance Charge Revenue 396 317 25.1
Interest Expense 126 80 57.6
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Net Finance Charge Revenue 270 237 14.2
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Total Net Revenues 2,972 2,601 14.3
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Expenses:
Marketing and Promotion 252 274 (7.9)
Provision for Losses and Claims:
Charge Card 207 153 35.6
Lending 132 81 62.8
Other 137 131 3.9
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Total 476 365 30.3
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Interest Expense:
Charge Card 169 132 28.5
Other Interest Expense 114 76 49.0
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Total 283 208 36.0
Net Discount Expense * 101 93 9.3
Human Resources 700 651 7.5
Other Operating Expenses 752 646 16.3
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Total Expenses 2,564 2,237 14.6
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Pretax Income 408 364 12.1
Income Tax Provision 111 100 11.1
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Net Income $297 $264 12.5
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* The impact of Net Discount Expense (related to TRS' securitized
receivables) was to:
Increase Net Card Fees - $9 -
Decrease the Provision for Losses
and Claims - Charge Card $40 30 34.2
Decrease Interest Expense -
Charge Card 41 29 42.7
Increase Other Revenues 20 25 (19.4)
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Total Net Discount Expense $101 $93 9.3
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Note: Certain prior year amounts have been reclassified to conform to
the current year's presentation.<PAGE>
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(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
September 30,
----------------------- Percentage
1995 1994 Inc/(Dec)
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Total Cards in Force:
United States 25.9 24.7 5.0%
Outside the United States 11.1 10.9 1.9
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Total 37.0 35.6 4.0
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Basic Cards in Force:
United States 19.4 18.1 7.4
Outside the United States 8.6 8.0 7.1
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Total 28.0 26.1 7.3
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Card Billed Business (billions):
United States $29.2 $25.2 15.9
Outside the United States 11.6 10.3 12.8
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Total $40.8 $35.5 15.0
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U.S. Consumer Lending Loan
Balances (billions) $9.0 $7.6 17.9
Travelers Cheque Sales (billions) $8.3 $8.4 (1.6)
Average Travelers Cheques
Outstanding (billions) $6.7 $5.9 13.0
Travel Sales (billions) $3.7 $2.5 44.2
Return on Average Equity 24.6% 23.9% -
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(Preliminary)
American Express Financial Advisors
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Three Months Ended
September 30,
----------------------- Percentage
1995 1994 Inc/(Dec)
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Revenues:
Investment Income $555 $498 11.5%
Management and Distribution Fees 241 200 20.4
Other Income 138 124 10.3
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Total Revenues 934 822 13.5
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Expenses:
Provision for Losses and Benefits:
Annuities 293 256 14.4
Insurance 99 95 4.6
Investment Certificates 55 30 84.6
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Total 447 381 17.4
Human Resources 226 213 6.2
Other Operating Expenses 64 60 4.9
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Total Expenses 737 654 12.6
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Pretax Income 197 168 17.1
Income Tax Provision 63 54 17.2
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Net Income $134 $114 17.0
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Selected Statistical Information
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Life Insurance in Force (billions) $57.6 $50.9 13.1
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Assets Owned and/or Managed (billions):
Assets managed for institutions $32.3 $26.7 21.0
Assets owned and managed for individuals
Owned Assets 46.2 39.2 17.8
Managed Assets 46.3 38.5 20.3
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Total $124.8 $104.4 19.5
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Sales of Selected Products:
Mutual Funds $2,584 $2,021 27.8
Annuities $699 $1,088 (35.8)
Investment Certificates $363 $324 11.8
Life and Other Insurance Sales $94 $78 19.8
Fees From Financial Plans (thousands) $9,798 $9,559 2.5
Number of Financial Advisors 7,930 7,847 1.1
Product Sales Generated from Financial
Plans as a Percentage of Total Sales 65.3% 63.5% -
Return on Average Equity 19.8% 18.7% -
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
September 30,
----------------------- Percentage
1995 1994 Inc/(Dec)
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Net Revenues:
Interest Income $221 $249 (11.2%)
Interest Expense 140 160 (12.3)
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Net Interest Income 81 89 (9.2)
Commissions, Fees and Other
Revenues 59 57 4.0
Foreign Exchange Income 21 17 25.9
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Total Net Revenues 161 163 (1.0)
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Provision for Credit Losses 1 0 -
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Expenses:
Human Resources 62 62 (1.7)
Other Operating Expenses 65 70 (6.2)
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Total Expenses 127 132 (4.1)
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Pretax Income 33 31 8.8
Income Tax Provision 11 11 7.6
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Net Income $22 $20 9.5
========== ==========
Selected Statistical Information
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Return on Average Assets 0.68% 0.54% -
Return on Average Common Equity 11.35% 10.68% -
Total Loans $5,383 $5,383 -
Reserve for Credit Losses $115 $118 (2.5)
Total Nonperforming Loans $32 $33 (3.8)
Other Nonperforming Assets $43 $57 (24.8)
Risk-Based Capital Ratios:
Tier 1 8.7% 6.7% -
Total 13.9% 13.0% -
Leverage Ratio 5.6% 4.2% -
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: October 24, 1995
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