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Previous: AEL INDUSTRIES INC, DEFR14A, 1996-01-23 |
Next: AMERICAN GREETINGS CORP, SC 13G/A, 1996-01-23 |
==============================================================================
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 22, 1996
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.)
==============================================================================
<PAGE>
Item 5. Other Events
On January 22, 1996, American Express Company issued the following
press release:
NEW YORK, January 22, 1996 - American Express Company today reported
1995 income from continuing operations of $1.56 billion, up 13 percent
from $1.38 billion a year ago.
On a per share basis, 1995 income from continuing operations was
$3.11, compared with $2.68 a year ago, an increase of 16 percent.
Net income in 1995 was a record $1.56 billion. This compared with
$1.41 billion, or $2.75 per share, a year ago. Last year's net income
included the discontinued operations of Lehman Brothers.
For the fourth quarter, American Express reported record net income
of $384 million, or $0.77 per share, compared with $335 million, or
$0.65 per share a year ago.
Travel Related Services (TRS) reported record net income in 1995 of
$1.1 billion, up 13 percent from $998 million a year ago.
Net revenues also rose 13 percent reflecting an increase in
worldwide business billed on American Express Cards and higher business
travel sales. The rise in billed business resulted from higher spending
per Cardmember, due in part to increased merchant coverage and the
benefits of rewards programs. The rise also reflected an increase in
the number of Cards outstanding. Higher business travel sales resulted
from acquisitions and growth.
Excluding interest and the provision for losses, operating expenses
increased 7 percent. This increase reflects a number of factors,
including: business travel acquisitions and growth; ongoing spending
for new business initiatives; funding new card products and loyalty
initiatives; and up-front costs related to reengineering activities.
The charge card provision for losses increased, reflecting volume
growth as well as higher loss rates particularly in Latin America, and
<PAGE>
more recently, in the small business Corporate Card portfolio. The
lending provision for losses increased due to higher loss rates, as well
as portfolio growth since the company establishes reserves for future
losses at the time loans are recorded. Charge card interest expense
increased, reflecting higher rates and increased volume.
For the fourth quarter, TRS reported record net income of $266
million, compared with $237 million a year ago. As previously reported,
completion of the sale of AMEX Life in October did not materially impact
net income. Without the sale, TRS revenues and expenses would have
increased approximately 10 percent compared with the year-ago quarter.
American Express Financial Advisors (AXP Advisors) reported record
net income in 1995 of $503 million, an 18 percent increase over $428
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 record sales of mutual funds and life and
other insurance products, and higher sales of investment certificates,
while sales of annuities decreased from last year.
For the fourth quarter, AXP Advisors reported record net income of
$133 million, compared with $114 million a year ago.
American Express Bank (AEB) reported net income in 1995 of $77
million, a 4 percent decrease from $80 million a year ago.
Results reflect lower net interest income due to narrower spreads
on the investment portfolio. This was partially offset by growth in
foreign exchange and correspondent banking revenues. Operating expenses
decreased slightly compared with a year ago as a result of cost
containment measures.
<PAGE>
For the fourth quarter, AEB's net income was $21 million, compared
with $16 million a year ago. This increase was primarily due to lower
operating expenses.
Corporate and Other reported net expenses in 1995 of $141 million,
compared with net expenses of $126 million a year ago. For the fourth
quarter, Corporate and Other reported net expenses of $36 million,
compared with net expenses of $32 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.
<PAGE>
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
Year Ended
December 31, Percentage
1995 1994 Inc/(Dec)
------- ------- ---------
Revenues by Industry Segment (A)
Travel Related Services $11,542 $10,256 12.5%
American Express Financial Advisors 3,691 3,270 12.9
American Express Bank 643 652 (1.4)
------- -------
15,876 14,178 12.0
Corporate and Other,
including adjustments and
eliminations (35) 104 -
------- -------
CONSOLIDATED REVENUES (A) $15,841 $14,282 10.9
======= =======
Pretax Income from continuing operations
by Industry Segment
Travel Related Services $1,579 $1,396 13.1%
American Express Financial Advisors 755 631 19.6
American Express Bank 115 119 (3.7)
------- -------
2,449 2,146 14.1
Corporate and Other (266) (255) (4.5)
------- -------
PRETAX INCOME $2,183 $1,891 15.4
======= =======
Income from continuing operations
by Industry Segment
Travel Related Services $1,125 $998 12.7%
American Express Financial Advisors 503 428 17.5
American Express Bank 77 80 (3.6)
------- -------
1,705 1,506 13.2
Corporate and Other (141) (126) (11.4)
------- -------
Income from continuing operations 1,564 1,380 13.3
Discontinued operations (net of
income taxes) (B) - 33 -
------- -------
NET INCOME $1,564 $1,413 10.7
======= =======
Earnings per common share:
Continuing operations $3.11 $2.68 16.0
Discontinued operations - 0.07 -
------- -------
NET INCOME PER COMMON SHARE $3.11 $2.75 13.1
======= =======
<PAGE>
Cash dividends declared per
common share (C) $0.90 $0.90
======= =======
Average shares outstanding (000's) 497,953 508,815
======= =======
(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.
<PAGE>
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Unaudited)
(dollars in millions, except per share amounts)
Quarter Ended
December 31, Percentage
1995 1994 Inc/(Dec)
------- ------- ---------
Revenues by Industry Segment (A)
Travel Related Services $2,927 $2,793 4.8%
American Express Financial Advisors 973 820 18.7
American Express Bank 158 159 (0.3)
------- -------
4,058 3,772 7.6
Corporate and Other,
including adjustments and
eliminations (10) 30 -
------- -------
CONSOLIDATED REVENUES (A) $4,048 $3,802 6.5
======= =======
Pretax Income by Industry Segment
Travel Related Services $371 $341 8.9%
American Express Financial Advisors 203 166 21.9
American Express Bank 32 25 27.8
------- -------
606 532 13.9
Corporate and Other (65) (57) (13.6)
------- -------
PRETAX INCOME $541 $475 13.9
======= =======
Net Income by Industry Segment
Travel Related Services $266 $237 12.4%
American Express Financial Advisors 133 114 16.9
American Express Bank 21 16 26.2
------- -------
420 367 14.4
Corporate and Other (36) (32) (10.5)
------- -------
NET INCOME $384 $335 14.8
======= =======
NET INCOME PER COMMON SHARE $0.77 $0.65 18.5
======= =======
Cash dividends declared per
common share $0.225 $0.225
======= =======
Average shares outstanding (000's) 493,326 507,417
======= =======
(A) Revenues are reported net of interest expense, where applicable.
<PAGE>
(Preliminary)
Travel Related Services
Statement of Income
(Unaudited)
(Amounts in millions, except percentages)
Year Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Net Revenues: ------- ------- ---------
Discount Revenue $4,457 $3,984 11.9%
Net Card Fees 1,742 1,727 0.9
Travel Commissions and Fees 1,288 948 35.8
Interest and Dividends 969 776 25.0
Other Revenues 2,054 1,873 9.6
------- -------
10,510 9,308 12.9
------- -------
Lending:
Finance Charge Revenue 1,529 1,258 21.5
Interest Expense 497 310 60.1
------- -------
Net Finance Charge Revenue 1,032 948 8.9
------- -------
Total Net Revenues 11,542 10,256 12.5
------- -------
Expenses:
Marketing and Promotion 950 1,036 (8.3)
Provision for Losses and Claims:
Charge Card 835 633 32.0
Lending 522 378 37.9
Other 416 471 (11.4)
------- -------
Total 1,773 1,482 19.7
------- -------
Interest Expense:
Charge Card 673 535 25.7
Other Interest Expense 453 296 53.3
------- -------
Total 1,126 831 35.5
Net Discount Expense * 414 326 27.1
Human Resources 2,829 2,583 9.5
Other Operating Expenses 2,871 2,602 10.3
------- -------
Total Expenses 9,963 8,860 12.4
------- -------
Pretax Income 1,579 1,396 13.1
Income Tax Provision 454 398 14.4
------- -------
Net Income $1,125 $998 12.7
======= =======
<PAGE>
* The impact of Net Discount Expense (related to TRS'
securitized receivables) was to:
Increase Net Card Fees - $7 -
Decrease the Provision for Losses
and Claims - Charge Card $167 127 31.7
Decrease Interest Expense -
Charge Card 163 119 36.8
Increase Other Revenues 84 73 14.0
------- -------
Total Net Discount Expense $414 $326 27.1
======= =======
Note: Certain prior year amounts have been reclassified to
conform to the current year's presentation.
<PAGE>
(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Year Ended
December 31, Percentage
1995 1994 Inc/(Dec)
------- ------- ---------
Total Cards in Force:
United States 26.7 25.3 5.5%
Outside the United States 11.1 11.0 1.2
------- -------
Total 37.8 36.3 4.2
======= =======
Basic Cards in Force:
United States 20.0 18.6 7.8
Outside the United States 8.7 8.1 6.9
------- -------
Total 28.7 26.7 7.6
======= =======
Card Billed Business (billions):
United States $115.2 $101.2 13.9
Outside the United States 46.4 39.7 16.8
------- -------
Total $161.6 $140.9 14.7
======= =======
U.S. Consumer Lending Loan
Balances (billions) $10.0 $8.1 23.3
Travelers Cheque Sales (billions) $25.6 $24.9 3.0
Average Travelers Cheques
Outstanding (billions) $6.0 $5.3 12.4
Travel Sales (billions) $15.1 $10.7 40.9
Return on Average Equity * 24.6% 23.9% -
* ROE is calculated excluding the effect of SFAS #115.
<PAGE>
(Preliminary)
Travel Related Services
Statement of Income
(Unaudited)
(Amounts in millions, except percentages)
Quarter Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Net Revenues: ------- ------- ---------
Discount Revenue $1,212 $1,098 10.3%
Net Card Fees 431 430 0.3
Travel Commissions and Fees 357 310 15.3
Interest and Dividends 209 209 (0.1)
Other Revenues 444 499 (11.0)
------- -------
2,653 2,546 4.2
------- -------
Lending:
Finance Charge Revenue 403 345 16.6
Interest Expense 129 98 31.0
------- -------
Net Finance Charge Revenue 274 247 10.9
------- -------
Total Net Revenues 2,927 2,793 4.8
------- -------
Expenses:
Marketing and Promotion 218 260 (16.2)
Provision for Losses and Claims:
Charge Card 264 155 70.7
Lending 158 121 30.9
Other 35 115 (70.1)
------- -------
Total 457 391 16.9
------- -------
Interest Expense:
Charge Card 178 143 24.5
Other Interest Expense 115 88 31.5
------- -------
Total 293 231 27.1
Net Discount Expense * 106 98 8.1
Human Resources 731 720 1.5
Other Operating Expenses 751 752 (0.2)
------- -------
Total Expenses 2,556 2,452 4.2
------- -------
Pretax Income 371 341 8.9
Income Tax Provision 105 104 1.1
------- -------
Net Income $266 $237 12.4
======= =======
<PAGE>
* The impact of Net Discount Expense (related to TRS'
securitized receivables) was to:
Decrease Net Card Fees - ($2) -
Decrease the Provision for Losses
and Claims - Charge Card $44 41 6.7
Decrease Interest Expense -
Charge Card 41 43 (5.0)
Increase Other Revenues 21 16 29.7
------- -------
Total Net Discount Expense $106 $98 8.1
======= =======
Note: Certain prior year amounts have been reclassified to
conform to the current year's presentation.
<PAGE>
(Preliminary)
Travel Related Services (continued)
Selected Statistical Information
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Quarter Ended
December 31, Percentage
1995 1994 Inc/(Dec)
------- ------- ---------
Total Cards in Force:
United States 26.7 25.3 5.5%
Outside the United States 11.1 11.0 1.2
------- -------
Total 37.8 36.3 4.2
======= =======
Basic Cards in Force:
United States 20.0 18.6 7.8
Outside the United States 8.7 8.1 6.9
------- -------
Total 28.7 26.7 7.6
======= =======
Card Billed Business (billions):
United States $31.3 $27.7 13.0
Outside the United States 12.4 11.3 9.0
------- -------
Total $43.7 $39.0 11.9
======= =======
U.S. Consumer Lending Loan
Balances (billions) $10.0 $8.1 23.3
Travelers Cheque Sales (billions) $5.1 $5.1 0.2
Average Travelers Cheques
Outstanding (billions) $6.0 $5.4 11.0
Travel Sales (billions) $4.1 $3.6 15.7
Return on Average Equity * 24.6% 23.9% -
* ROE is calculated excluding the effect of SFAS #115.
<PAGE>
(Preliminary)
American Express Financial Advisors
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Year Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Revenues: ------- ------- ---------
Investment Income $2,209 $1,994 10.8%
Management and Distribution Fees 935 806 16.0
Other Income 547 470 16.4
------- -------
Total Revenues 3,691 3,270 12.9
------- -------
Expenses:
Provision for Losses and Benefits:
Annuities 1,156 1,028 12.5
Insurance 401 370 8.4
Investment Certificates 205 107 91.7
------- -------
Total 1,762 1,505 17.1
Human Resources 877 823 6.5
Other Operating Expenses 297 311 (4.2)
------- -------
Total Expenses 2,936 2,639 11.3
------- -------
Pretax Income 755 631 19.6
Income Tax Provision 252 203 24.1
------- -------
Net Income $503 $428 17.5
======= =======
Selected Statistical Information
Life Insurance in Force (billions) $59.4 $52.7 12.8
======= =======
Assets Owned and/or Managed (billions):
Assets managed for institutions $32.0 $27.4 17.0
Assets owned and managed
for individuals
Owned Assets 48.3 40.2 20.2
Managed Assets 49.2 37.9 29.5
------- -------
Total $129.5 $105.5 22.7
======= =======
Sales of Selected Products:
Mutual Funds $10,202 $8,940 14.1
Annuities $3,520 $4,360 (19.3)
Investment Certificates $1,467 $1,068 37.4
Life and Other Insurance Sales $383 $324 18.1
<PAGE>
Fees From Financial Plans
(thousands) $40,828 $39,651 3.0
Number of Financial Advisors 7,945 8,054 (1.4)
Product Sales Generated from
Financial Plans as a Percentage
of Total Sales 64.1% 61.7% -
Return on Average Equity* 19.4% 18.6% -
* ROE is calculated excluding the effect of SFAS #115.
<PAGE>
(Preliminary)
American Express Financial Advisors
Statement of Income
(Unaudited)
(Amounts in millions, except percentages and where indicated)
Quarter Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Revenues: ------- ------- ---------
Investment Income $570 $496 14.9%
Management and Distribution Fees 261 202 29.3
Other Income 142 122 16.4
------- -------
Total Revenues 973 820 18.7
------- -------
Expenses:
Provision for Losses and Benefits:
Annuities 301 265 13.3
Insurance 105 102 2.8
Investment Certificates 54 30 80.5
------- -------
Total 460 397 13.6
Human Resources 227 204 11.3
Other Operating Expenses 83 53 59.3
------- -------
Total Expenses 770 654 17.8
------- -------
Pretax Income 203 166 21.9
Income Tax Provision 70 52 32.7
------- -------
Net Income $133 $114 16.9
======= =======
Selected Statistical Information
Life Insurance in Force (billions) $59.4 $52.7 12.8
======= =======
Assets Owned and/or Managed (billions):
Assets managed for institutions $32.0 $27.4 17.0
Assets owned and managed
for individuals
Owned Assets 48.3 40.2 20.2
Managed Assets 49.2 37.9 29.5
------- -------
Total $129.5 $105.5 22.7
======= =======
Sales of Selected Products:
Mutual Funds $2,967 $2,069 43.4
Annuities $763 $1,104 (30.9)
Investment Certificates $88 $373 (76.5)
Life and Other Insurance Sales $110 $94 17.6
<PAGE>
Fees From Financial Plans
(thousands) $10,986 $10,294 6.7
Number of Financial Advisors 7,945 8,054 (1.4)
Product Sales Generated from
Financial Plans as a Percentage
of Total Sales 63.5% 62.2% -
Return on Average Equity* 19.4% 18.6% -
* ROE is calculated excluding the effect of SFAS #115.
<PAGE>
(Preliminary)
American Express Bank
Statement of Income
(Unaudited)
(Amounts in millions, except percentages)
Year Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Net Revenues: ------- ------- ---------
Interest Income $925 $952 (2.8%)
Interest Expense 604 604 0.1
------- -------
Net Interest Income 321 348 (7.7)
Commissions, Fees and Other Revenues 243 232 4.8
Foreign Exchange Income 79 72 9.7
------- -------
Total Net Revenues 643 652 (1.4)
------- -------
Provision for Credit Losses 7 8 (16.9)
------- -------
Expenses:
Human Resources 248 250 (0.8)
Other Operating Expenses 273 275 (0.4)
------- -------
Total Expenses 521 525 (0.6)
------- -------
Pretax Income 115 119 (3.7)
Income Tax Provision 38 39 (3.8)
------- -------
Net Income $77 $80 (3.6)
======= =======
Selected Statistical Information
Return on Average Assets 0.59% 0.54% -
Return on Average Common Equity* 9.99% 10.89% -
Total Loans $5,428 $4,990 8.8
Reserve for Credit Losses $111 $109 1.3
Total Nonperforming Loans $34 $20 71.9
Other Real Estate Owned $44 $56 (21.7)
Risk-Based Capital Ratios:
Tier 1 8.9% 7.5% -
Total 13.0% 14.7% -
Leverage Ratio 5.8% 4.8% -
* ROE is calculated excluding the effect of SFAS #115.
<PAGE>
(Preliminary)
American Express Bank
Statement of Income
(Unaudited)
(Amounts in millions, except percentages)
Quarter Ended
December 31, Percentage
1995 1994 Inc/(Dec)
Net Revenues: ------- ------- ---------
Interest Income $232 $233 (0.3%)
Interest Expense 155 149 3.7
------- -------
Net Interest Income 77 84 (7.4)
Commissions, Fees and Other
Revenues 62 59 5.7
Foreign Exchange Income 19 16 15.1
------- -------
Total Net Revenues 158 159 (0.3)
------- -------
Provision for Credit Losses 2 0 -
------- -------
Expenses:
Human Resources 57 63 (8.5)
Other Operating Expenses 67 71 (4.9)
------- -------
Total Expenses 124 134 (6.6)
------- -------
Pretax Income 32 25 27.8
Income Tax Provision 11 9 31.0
------- -------
Net Income $21 $16 26.2
======= =======
Selected Statistical Information
Return on Average Assets 0.59% 0.54% -
Return on Average Common Equity* 9.99% 10.89% -
Total Loans $5,428 $4,990 8.8
Reserve for Credit Losses $111 $109 1.3
Total Nonperforming Loans $34 $20 71.9
Other Real Estate Owned $44 $56 (21.7)
Risk-Based Capital Ratios:
Tier 1 8.9% 7.5% -
Total 13.0% 14.7% -
Leverage Ratio 5.8% 4.8% -
* ROE is calculated excluding the effect of SFAS #115.
<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 23, 1996
<PAGE>
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