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Previous: AMERICAN ELECTRIC POWER COMPANY INC, 35-CERT, 1998-04-17 |
Next: AMERICAN PRECISION INDUSTRIES INC, DEFA14A, 1998-04-17 |
<PAGE>
===============================================================================
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 16, 1998
--------------------------
AMERICAN EXPRESS COMPANY
(Exact name of registrant as specified in its charter)
--------------------------
New York 1-7657 13-4922250
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or Identification No.)
organization)
200 Vesey Street, World Financial Center
New York, New York 10285
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 640-2000
---------------------------------------------------
(Former name or former address, if changed since last report)
===============================================================================
<PAGE>
Item 5. Other Events
In the third quarter of 1997, the Travelers Cheque (TC) unit of
American Express Company (the "Company") began reporting to the Chief
Executive Officer of American Express Bank (AEB). Prior thereto it had been
part of the Stored Value Group of American Express Travel Related Services
Company, Inc. (TRS). This change was designed to better align the Company's
TC business with AEB's strengths in overseas markets, and improve its ability
to take advantage of synergies that can be realized by closer cooperation
between the TC unit and AEB. As previously reported, in accordance with
Statement of Financial Accounting Standards No. 131, which redefines how
operating segments are determined and is effective for fiscal years beginning
after December 15, 1997, the Company's TC operation, which historically has
been included in the TRS segment, will be reported in a new segment with AEB
commencing in the first quarter of 1998.
Filed herewith as Exhibit 99.1 is financial information relating to the years
1995, 1996 and 1997, reflecting a) the reported TRS segment, and the restated
TRS segment excluding the TC business, b) the new reporting segment which
includes AEB and TC, and c) the old AEB segment, as originally reported.
An item which affects the 1997 versus 1996 comparisons for each segment
is the increased recognition in 1997 of recoveries on abandoned property
related to the TC business. As previously reported, these recoveries were
largely offset by higher investment spending on business building
initiatives. The full year 1997 increased recoveries amounted to $96 million
($60 million after-tax), or $24 million ($15 million after-tax) in each of the
1997 quarters. In the 1997 financial information filed with this 8-K, the
"Other Revenue" for the new AEB/TC segment includes the increased recognition
of the recoveries, while the remaining TRS segment reflects the higher
investment spending on business building initiatives. In addition, the 1996
AEB/TC segment includes approximately $60 million ($39 million after-tax) of
capital gains realized throughout the year within the TC investment portfolio.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 TRS Restated Statement of Income (Owned Asset Basis) - 1997-1995
TRS Restated Statement of Income (Managed Asset Basis) - 1997-1995
TRS Restated Statement of Income (Owned Asset Basis) - 1997 Quarters
TRS Restated Statement of Income (Managed Asset Basis) - 1997 Quarters
TRS Restated Statement of Income (Owned Asset Basis) - 1996 Quarters
TRS Restated Statement of Income (Managed Asset Basis) - 1996 Quarters
TRS Restated Condensed Balance Sheet - 1997-1995
AEB/TC New Segment Statement of Income - 1997-1995
AEB/TC New Segment Selected Statistical Information - 1997-1995
AEB/TC New Segment Statement of Income - 1997 Quarters
AEB/TC New Segment Selected Statistical Information - 1997 Quarters
AEB/TC New Segment Statement of Income - 1996 Quarters
AEB/TC New Segment Selected Statistical Information - 1996 Quarters
Old AEB Segment Statement of Income - 1997-1995
Old AEB Segment Selected Statistical Information - 1997-1995
Old AEB Segment Statement of Income - 1997 Quarters
Old AEB Segment Selected Statistical Information - 1997 Quarters
Old AEB Segment Statement of Income - 1996 Quarters
Old AEB Segment Selected Statistical Information - 1996 Quarters
Segment Information
<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 hereunto duly authorized.
AMERICAN EXPRESS COMPANY
(REGISTRANT)
By /s/ Stephen P. Norman
---------------------
Name: Stephen P. Norman
Title: Secretary
DATE: April 16, 1998
<PAGE>
EXHIBIT INDEX
Item No. Description
- -------- -----------
99.1 TRS Restated Statement of Income (Owned Asset Basis) - 1997-1995
TRS Restated Statement of Income (Managed Asset Basis) - 1997-1995
TRS Restated Statement of Income (Owned Asset Basis) - 1997 Quarters
TRS Restated Statement of Income (Managed Asset Basis) - 1997 Quarters
TRS Restated Statement of Income (Owned Asset Basis) - 1996 Quarters
TRS Restated Statement of Income (Managed Asset Basis) - 1996 Quarters
TRS Restated Condensed Balance Sheet - 1997-1995
AEB/TC New Segment Statement of Income - 1997-1995
AEB/TC New Segment Selected Statistical Information - 1997-1995
AEB/TC New Segment Statement of Income - 1997 Quarters
AEB/TC New Segment Selected Statistical Information - 1997 Quarters
AEB/TC New Segment Statement of Income - 1996 Quarters
AEB/TC New Segment Selected Statistical Information - 1996 Quarters
Old AEB Segment Statement of Income - 1997-1995
Old AEB Segment Selected Statistical Information - 1997-1995
Old AEB Segment Statement of Income - 1997 Quarters
Old AEB Segment Selected Statistical Information - 1997 Quarters
Old AEB Segment Statement of Income - 1996 Quarters
Old AEB Segment Selected Statistical Information - 1996 Quarters
Segment Information
<PAGE>
Exhibit 99.1
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Owned Asset Basis)
(Dollars in millions)
Year Ended December 31,
----------------------------------------------------------------
1997 1996 1995
------------------- ------------------- -------------------
Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 5,666 $ 5,666 $ 5,024 $ 5,024 $ 4,457 $ 4,457
Net Card Fees 1,604 1,604 1,668 1,668 1,742 1,742
Travel Commissions and Fees 1,489 1,489 1,422 1,422 1,368 1,368
Interest and Dividends 561 295 724 438 969 629
Other Revenues 2,103 1,916 1,867 1,737 2,054 2,004
Lending:
Finance Charge Revenue 1,848 1,848 1,575 1,575 1,529 1,529
Interest Expense 604 604 507 507 497 497
-------- -------- -------- -------- -------- --------
Net Finance Charge Revenue 1,244 1,244 1,068 1,068 1,032 1,032
-------- -------- -------- -------- -------- --------
Total Net Revenues 12,667 12,214 11,773 11,357 11,622 11,232
-------- -------- -------- -------- -------- --------
Expenses:
Marketing and Promotion 1,062 1,027 998 957 950 916
Provision for Losses and Claims:
Charge Card 858 858 743 743 835 835
Lending 817 817 635 635 522 522
Other 88 57 101 73 416 379
-------- -------- -------- -------- -------- --------
Total 1,763 1,732 1,479 1,451 1,773 1,736
-------- -------- -------- -------- -------- --------
Interest Expense:
Charge Card 743 743 688 688 673 673
Other 177 178 347 349 453 453
-------- -------- -------- -------- -------- --------
Total 920 921 1,035 1,037 1,126 1,126
Net Discount Expense 597 597 554 554 414 414
Human Resources 3,154 3,076 2,984 2,907 2,829 2,764
Other Operating Expenses 3,266 3,076 3,004 2,841 2,951 2,745
-------- -------- -------- -------- -------- --------
Total Expenses 10,762 10,429 10,054 9,747 10,043 9,701
-------- -------- -------- -------- -------- --------
Pretax Income 1,905 1,785 1,719 1,610 1,579 1,531
Income Tax Provision 551 621 489 559 454 550
-------- -------- -------- -------- -------- --------
Operating Income $ 1,354 $ 1,164 $ 1,230* $ 1,051* $ 1,125 $ 981
======== ======== ======== ======== ======== =========
</TABLE>
*Excludes restructuring charge of $125 million after-tax ($196 million pretax).
1<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Managed Asset Basis)
(Dollars in millions)
Year Ended December 31,
----------------------------------------------------------------
1997 1996 1995
------------------- ------------------- -------------------
Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 5,666 $ 5,666 $ 5,024 $ 5,024 $ 4,457 $ 4,457
Net Card Fees 1,609 1,609 1,664 1,664 1,742 1,742
Travel Commissions and Fees 1,489 1,489 1,422 1,422 1,368 1,368
Interest and Dividends 552 286 724 438 969 629
Other Revenues 1,903 1,716 1,714 1,584 1,970 1,920
Lending:
Finance Charge Revenue 2,105 2,105 1,691 1,691 1,529 1,529
Interest Expense 694 694 548 548 497 497
-------- -------- -------- -------- -------- --------
Net Finance Charge Revenue 1,411 1,411 1,143 1,143 1,032 1,032
-------- -------- -------- -------- -------- --------
Total Net Revenues 12,630 12,177 11,691 11,275 11,538 11,148
-------- -------- -------- -------- -------- --------
Expenses:
Marketing and Promotion 1,025 990 998 957 950 916
Provision for Losses and Claims:
Charge Card 1,105 1,105 989 989 1,002 1,002
Lending 937 937 678 678 522 522
Other 88 57 101 73 416 379
-------- -------- -------- -------- -------- --------
Total 2,130 2,099 1,768 1,740 1,940 1,903
-------- -------- -------- -------- -------- --------
Interest Expense:
Charge Card 973 973 871 871 836 836
Other 177 178 347 349 453 453
-------- -------- -------- -------- -------- --------
Total 1,150 1,151 1,218 1,220 1,289 1,289
Human Resources 3,154 3,076 2,984 2,907 2,829 2,764
Other Operating Expenses 3,266 3,076 3,004 2,841 2,951 2,745
-------- -------- -------- -------- -------- --------
Total Expenses 10,725 10,392 9,972 9,665 9,959 9,617
-------- -------- -------- -------- -------- --------
Pretax Income 1,905 1,785 1,719 1,610 1,579 1,531
Income Tax Provision 551 621 489 559 454 550
-------- -------- -------- -------- -------- --------
Operating Income $ 1,354 $ 1,164 $ 1,230* $ 1,051* $ 1,125 $ 981
======== ======== ======== ======== ======== =========
</TABLE>
*Excludes restructuring charge of $125 million after-tax ($196 million pretax).
This Statement of Income is provided on a Managed Asset Basis for analytical
purposes only. It presents the income statement of TRS as if there had been
no securitization transactions.
Under Statement of Financial Accounting Standards No. 125 (SFAS 125), which
prescribes the accounting for securitized loans and receivables, TRS recognized
a pretax gain of $37 million in the third quarter of 1997 ($24 million
after-tax) related to securitization of U.S. lending receivables. This gain
was invested in additional Marketing and Promotion expenses and had no material
impact on net income or total expenses in 1997. For purposes of this
presentation such gain and a corresponding $37 million increase in Marketing
and Promotion expenses have been eliminated in the Year Ended December 31, 1997.
2<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Owned Asset Basis)
(Dollars in millions) Quarter Ended
------------------------------------------------------------------------------
December 31, 1997 September 30, 1997 June 30, 1997 March 31, 1997
------------------ ------------------- ------------------ ------------------
Reported Restated Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $1,530 $1,530 $1,422 $1,422 $1,407 $1,407 $1,306 $1,306
Net Card Fees 397 397 399 399 403 403 405 405
Travel Commissions and Fees 402 402 370 370 381 381 336 336
Interest and Dividends 136 72 150 81 143 76 132 66
Other Revenues 552 501 540 493 509 460 503 463
Lending:
Finance Charge Revenue 487 487 472 472 458 458 431 431
Interest Expense 153 153 154 154 154 154 143 143
------ ------ ------ ------ ------ ------ ------ ------
Net Finance Charge Revenue 334 334 318 318 304 304 288 288
------ ------ ------ ------ ------ ------ ------ ------
Total Net Revenues 3,351 3,236 3,199 3,083 3,147 3,031 2,970 2,864
------ ------ ------ ------ ------ ------ ------ ------
Expenses:
Marketing and Promotion 315 309 301 290 244 233 202 195
Provision for Losses and Claims:
Charge Card 201 201 228 228 239 239 190 190
Lending 239 239 179 179 187 187 211 211
Other 22 14 22 14 21 15 24 16
------ ------ ------ ------ ------ ------ ------ ------
Total 462 454 429 421 447 441 425 417
------ ------ ------ ------ ------ ------ ------ ------
Interest Expense:
Charge Card 213 213 186 186 174 174 169 169
Other 41 41 50 50 52 52 35 35
------ ------ ------ ------ ------ ------ ------ ------
Total 254 254 236 236 226 226 204 204
Net Discount Expense 139 139 142 142 165 165 151 151
Human Resources 826 805 796 776 783 764 749 731
Other Operating Expenses 887 836 801 749 789 742 790 749
------ ------ ------ ------ ------ ------ ------ ------
Total Expenses 2,883 2,797 2,705 2,614 2,654 2,571 2,521 2,447
------ ------ ------ ------ ------ ------ ------ ------
Pretax Income 468 439 494 469 493 460 449 417
Income Tax Provision 140 158 138 159 138 155 134 150
------ ------ ------ ------ ------ ------ ------ ------
Net Income $ 328 $ 281 $ 356 $ 310 $ 355 $ 305 $ 315 $ 267
====== ====== ====== ====== ====== ====== ====== ======
Return on Average Equity (A) 27.9% 25.1% 27.4% 24.8% 27.0% 24.2% 26.3% 23.6%
Return on Average Assets (A) 3.0% 3.0% 3.0% 3.1% 3.0% 3.0% 2.9% 2.9%
</TABLE>
(A) Excludes the effect of SFAS No. 115 for all periods presented.
3<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Managed Asset Basis)
(Dollars in millions) Quarter Ended
------------------------------------------------------------------------------
December 31, 1997 September 30, 1997 June 30, 1997 March 31, 1997
------------------ ------------------ ------------------ ------------------
Reported Restated Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $1,530 $1,530 $1,422 $1,422 $1,407 $1,407 $1,306 $1,306
Net Card Fees 398 398 403 403 404 404 405 405
Travel Commissions and Fees 402 402 370 370 381 381 336 336
Interest and Dividends 132 68 145 76 143 76 132 66
Other Revenues 499 448 485 438 466 417 453 413
Lending:
Finance Charge Revenue 574 574 548 548 505 505 478 478
Interest Expense 186 186 177 177 171 171 160 160
------ ------ ------ ------ ------ ------ ------ ------
Net Finance Charge Revenue 388 388 371 371 334 334 318 318
------ ------ ------ ------ ------ ------ ------ ------
Total Net Revenues 3,349 3,234 3,196 3,080 3,135 3,019 2,950 2,844
------ ------ ------ ------ ------ ------ ------ ------
Expenses:
Marketing and Promotion 315 309 264 253 244 233 202 195
Provision for Losses and Claims:
Charge Card 255 255 284 284 313 313 252 252
Lending 269 269 243 243 203 203 222 222
Other 22 14 22 14 21 15 24 16
------ ------ ------ ------ ------ ------ ------ ------
Total 546 538 549 541 537 531 498 490
------ ------ ------ ------ ------ ------ ------ ------
Interest Expense:
Charge Card 266 266 242 242 237 237 227 227
Other 41 41 50 50 52 52 35 35
------ ------ ------ ------ ------ ------ ------ ------
Total 307 307 292 292 289 289 262 262
Human Resources 826 805 796 776 783 764 749 731
Other Operating Expenses 887 836 801 749 789 742 790 749
------ ------ ------ ------ ------ ------ ------ ------
Total Expenses 2,881 2,795 2,702 2,611 2,642 2,559 2,501 2,427
------ ------ ------ ------ ------ ------ ------ ------
Pretax Income 468 439 494 469 493 460 449 417
Income Tax Provision 140 158 138 159 138 155 134 150
------ ------ ------ ------ ------ ------ ------ ------
Net Income $ 328 $ 281 $ 356 $ 310 $ 355 $ 305 $ 315 $ 267
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
This Statement of Income is provided on a Managed Asset Basis for analytical
purposes only. It presents the income statement of TRS as if there had been no
securitization transactions.
Under Statement of Financial Accounting Standards No. 125 (SFAS 125), which
prescribes the accounting for securitized loans and receivables, TRS recognized
a pretax gain of $37 million in the third quarter of 1997 ($24 million
after-tax) related to securitization of U.S. lending receivables. This gain was
invested in additional Marketing and Promotion expenses and had no material
impact on net income or total expenses in 1997. For purposes of this
presentation such gain and a corresponding $37 million increase in Marketing
and Promotion expenses have been eliminated in the third quarter of 1997.
4<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Owned Asset Basis)
(Dollars in millions) Quarter Ended
-------------------------------------------------------------------------------
December 31, 1996 September 30, 1996 June 30, 1996 March 31, 1996
------------------ ------------------ ------------------ ------------------
Reported Restated Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $1,380 $1,380 $1,256 $1,256 $1,247 $1,247 $1,141 $1,141
Net Card Fees 415 415 418 418 414 414 421 421
Travel Commissions and Fees 380 380 354 354 362 362 325 325
Interest and Dividends 156 88 167 92 211 138 191 120
Other Revenues 483 464 508 454 451 417 424 402
Lending:
Finance Charge Revenue 423 423 377 377 371 371 404 404
Interest Expense 134 134 122 122 122 122 129 129
------ ------ ------ ------ ------ ------ ------ ------
Net Finance Charge Revenue 289 289 255 255 249 249 275 275
------ ------ ------ ------ ------ ------ ------ ------
Total Net Revenues 3,103 3,016 2,958 2,829 2,934 2,827 2,777 2,684
------ ------ ------ ------ ------ ------ ------ ------
Expenses:
Marketing and Promotion 268 255 278 263 252 245 200 194
Provision for Losses and Claims:
Charge Card 113 113 172 172 248 248 210 210
Lending 214 214 107 107 126 126 188 188
Other 22 19 28 17 26 19 24 18
------ ------ ------ ------ ------ ------ ------ ------
Total 349 346 307 296 400 393 422 416
------ ------ ------ ------ ------ ------ ------ ------
Interest Expense:
Charge Card 176 176 175 175 171 171 167 167
Other 65 65 72 73 114 114 95 96
------ ------ ------ ------ ------ ------ ------ ------
Total 241 241 247 248 285 285 262 263
Net Discount Expense 174 174 128 128 125 125 126 126
Human Resources 794 774 764 745 721 702 704 686
Other Operating Expenses 874 836 793 744 692 650 647 610
------ ------ ------ ------ ------ ------ ------ ------
Total Expenses 2,700 2,626 2,517 2,424 2,475 2,400 2,361 2,295
------ ------ ------ ------ ------ ------ ------ ------
Pretax Income 403 390 441 405 459 427 416 389
Income Tax Provision 104 129 118 132 137 153 130 146
------ ------ ------ ------ ------ ------ ------ ------
Operating Income $ 299* $ 261* $ 323 $ 273 $ 322 $ 274 $ 286 $ 243
====== ====== ====== ====== ====== ====== ====== ======
Return on Average Equity (A) 25.6% 22.9% 25.1% 22.4% 24.8% 22.2% 24.7% 22.5%
Return on Average Assets (A) 2.8% 2.8% 2.7% 2.7% 2.6% 2.6% 2.5% 2.6%
</TABLE>
* Excludes restructuring charge of $125 million after-tax ($196 million pretax).
(A) Excludes the effect of SFAS No. 115 for all periods presented.
5<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Statement of Income
-------------------
(Managed Asset Basis)
(Dollars in millions) Quarter Ended
----------------------------------------------------------------------------------
December 31, 1996 September 30, 1996 June 30, 1996 March 31, 1996
------------------- ------------------ ------------------ ------------------
Reported Restated Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $1,380 $1,380 $1,256 $1,256 $1,247 $1,247 $1,141 $1,141
Net Card Fees 415 415 414 414 414 414 421 421
Travel Commissions and Fees 380 380 354 354 362 362 325 325
Interest and Dividends 156 88 167 92 211 138 191 120
Other Revenues 450 431 463 409 409 375 393 371
Lending:
Finance Charge Revenue 463 463 420 420 403 403 404 404
Interest Expense 150 150 139 139 130 130 129 129
------ ------ ------ ------ ------ ------ ------ ------
Net Finance Charge Revenue 313 313 281 281 273 273 275 275
------ ------ ------ ------ ------ ------ ------ ------
Total Net Revenues 3,094 3,007 2,935 2,806 2,916 2,809 2,746 2,653
------ ------ ------ ------ ------ ------ ------ ------
Expenses:
Marketing and Promotion 268 255 278 263 252 245 200 194
Provision for Losses and Claims:
Charge Card 199 199 223 223 302 302 264 264
Lending 235 235 118 118 138 138 188 188
Other 22 19 28 17 26 19 24 18
------ ------ ------ ------ ------ ------ ------ ------
Total 456 453 369 358 466 459 476 470
------ ------ ------ ------ ------ ------ ------ ------
Interest Expense:
Charge Card 234 234 218 218 212 212 208 208
Other 65 65 72 73 114 114 95 96
------ ------ ------ ------ ------ ------ ------ ------
Total 299 299 290 291 326 326 303 304
Human Resources 794 774 764 745 721 702 704 686
Other Operating Expenses 874 836 793 744 692 650 647 610
------ ------ ------ ------ ------ ------ ------ ------
Total Expenses 2,691 2,617 2,494 2,401 2,457 2,382 2,330 2,264
------ ------ ------ ------ ------ ------ ------ ------
Pretax Income 403 390 441 405 459 427 416 389
Income Tax Provision 104 129 118 132 137 153 130 146
------ ------ ------ ------ ------ ------ ------ ------
Operating Income $ 299* $ 261* $ 323 $ 273 $ 322 $ 274 $ 286 $ 243
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
* Excludes restructuring charge of $125 million after-tax ($196 million pretax).
This Statement of Income is provided on a Managed Asset Basis for analytical
purposes only. It presents the income statement of TRS as if there had been no
securitization transactions.
6<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
-----------------------
Condensed Balance Sheet
-----------------------
(Dollars in millions) December 31,
---------------------------------------------------------------------------------
1997 1996 1995
---------------------- ----------------------- -----------------------
Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash & Investment Securities $ 8,925 $ 3,097 $ 7,638 $ 1,915 $11,641 $ 5,994
Cardmember & Other Receivables-net 20,888 20,476 19,503 19,152 18,877 18,700
Loans-net 13,373 13,635 12,220 12,220 10,293 10,284
Land, Buildings, & Equipment-net 990 953 1,080 1,044 1,048 1,010
Other Assets 3,011 2,539 2,612 2,083 3,329 2,803
-------- -------- -------- -------- -------- --------
Total Assets $47,187 $40,700 $43,053 $36,414 $45,188 $38,791
======== ======== ======== ======== ======== ========
LIABILITIES & EQUITY
Customers' Deposits $ 841 $ 841 $ 897 $ 897 $ 1,441 $ 1,441
Travelers Cheques Outstanding 5,634 0 5,838 0 5,697 0
Accounts Payable 3,983 3,878 3,905 3,689 4,412 4,345
Insurance Reserves 104 104 104 104 143 143
Debt 26,936 26,945 23,431 23,439 22,311 22,310
Deferred Card Fees 733 733 745 745 775 775
Other Liabilities 3,906 3,567 3,459 3,204 5,504 5,275
-------- -------- -------- -------- -------- --------
Total Liabilities 42,137 36,068 38,379 32,078 40,283 34,289
Equity 5,050 4,632 4,674 4,336 4,905 4,502
-------- -------- -------- -------- -------- --------
Total Liabilities & Equity $47,187 $40,700 $43,053 $36,414 $45,188 $38,791
======== ======== ======== ======== ======== ========
Return on Average Equity (A) 27.9% 25.1% 25.6%* 22.9%* 24.6% 22.6%
Return on Average Assets (A) 3.0% 3.0% 2.8%* 2.8%* 2.5% 2.6%
</TABLE>
* Excludes restructuring charge of $125 million after-tax ($196 million pretax).
(A) Excludes the effect of SFAS No. 115 for all periods presented.
7
<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Statement of Income
-------------------
(Dollars in millions)
Year Ended December 31,
-------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net Revenues:
Interest Income $ 897 $ 845 $ 925
Interest Expense 579 537 604
-------- -------- -------
Net Interest Income 318 308 321
T/C Investment Income 331 349 361
Foreign Exchange Income 101 72 79
Commissions, Fees and Other Revenue 374 337 307
-------- -------- -------
Total Net Revenues 1,124 1,066 1,068
-------- -------- -------
Expenses:
Human Resources 306 289 313
Other Operating Expenses 517 511 549
Provision for Losses 52 52 44
-------- -------- -------
Total Expenses 875 852 906
-------- -------- -------
Pretax Income 249 214 162
Income Tax Benefit (23) (33) (58)
-------- -------- -------
Net Income $ 272 $ 247 $ 220
======== ======== ========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Selected Statistical Information
--------------------------------
(Dollars in billions, except where indicated)
Year Ended December 31,
------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Selected Statistical Information
- --------------------------------
Total Shareholder's Equity (millions) $ 1,248 $ 1,163 $ 1,141
Return on Average Common Equity * 28.7% 26.6% 22.8%
Return on Average Assets * 1.40% 1.33% 1.11%
American Express Bank:
Total Loans $ 6.2 $ 5.9 $ 5.4
Deposits $ 8.5 $ 8.7 $ 8.5
Reserve for Credit Losses (millions) $ 131 $ 117 $ 111
Reserves as a % of Total Loans 2.1% 2.0% 2.0%
Total Nonperforming Loans (millions) $ 47 $ 35 $ 34
Other Real Estate Owned (millions) $ 4 $ 36 $ 44
Assets Managed / Administered ** $ 5.0 $ 4.8 $ 4.4
Assets of Non-Consolidated Joint
Ventures $ 2.4 $ 1.3 $ 1.2
Risk-Based Capital Ratios:
Tier 1 8.8% 8.8% 8.9%
Total 12.3% 12.5% 13.0%
Leverage Ratio 5.3% 5.6% 5.8%
Travelers Cheque:
Sales $ 25.0 $ 26.0 $ 25.6
Average Outstanding $ 5.9 $ 6.0 $ 6.0
Average Investments $ 5.6 $ 5.6 $ 5.6
Tax equivalent yield 9.2% 9.4% 9.7%
</TABLE>
* Excludes the effect of SFAS No. 115 for all periods presented.
** Includes assets managed by American Express Financial Advisors.
9
<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Statement of Income
-------------------
(Dollars in millions)
Quarter Ended
-------------------------------------------------
December 31, September 30, June 30, March 31,
1997 1997 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 223 $ 230 $ 226 $ 218
Interest Expense 148 148 148 136
-------- -------- ------- -------
Net Interest Income 75 82 78 82
T/C Investment Income 80 87 83 81
Foreign Exchange Income 38 23 21 19
Commissions, Fees and Other Revenue 90 98 100 87
-------- -------- ------- -------
Total Net Revenues 283 290 282 269
-------- -------- ------- -------
Expenses:
Human Resources 82 76 75 73
Other Operating Expenses 123 139 133 121
Provision for Losses 19 16 8 10
-------- -------- ------- -------
Total Expenses 224 231 216 204
-------- -------- ------- -------
Pretax Income 59 59 66 65
Income Tax Benefit (7) (8) (4) (4)
-------- -------- ------- -------
Net Income $ 66 $ 67 $ 70 $ 69
======== ======== ======= =======
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Selected Statistical Information
--------------------------------
(Dollars in billions, except where indicated)
Quarter Ended
---------------------------------------------------
December 31, September 30, June 30, March 31,
1997 1997 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Selected Statistical Information
- --------------------------------
Total Shareholder's Equity (millions) $ 1,248 $ 1,203 $ 1,157 $ 1,085
Return on Average Common Equity * 28.7% 27.5% 27.8% 27.3%
Return on Average Assets * 1.40% 1.35% 1.38% 1.36%
American Express Bank:
Total Loans $ 6.2 $ 6.5 $ 6.4 $ 6.1
Deposits $ 8.5 $ 9.0 $ 9.0 $ 9.1
Reserve for Credit Losses (millions) $ 131 $ 127 $ 130 $ 131
Reserves as a % of Total Loans 2.1% 1.9% 2.0% 2.2%
Total Nonperforming Loans (millions) $ 47 $ 60 $ 80 $ 46
Other Real Estate Owned (millions) $ 4 $ 5 $ 4 $ 35
Assets Managed / Administered ** $ 5.0 $ 5.1 $ 5.0 $ 4.8
Assets of Non-Consolidated Joint
Ventures $ 2.4 $ 1.6 $ 1.4 $ 1.3
Risk-Based Capital Ratios:
Tier 1 8.8% 8.6% 8.4% 8.7%
Total 12.3% 11.6% 11.3% 11.8%
Leverage Ratio 5.3% 5.4% 5.5% 5.6%
Travelers Cheque:
Sales $ 5.2 $ 8.1 $ 6.6 $ 5.1
Average Outstanding $ 5.7 $ 6.4 $ 6.0 $ 5.8
Average Investments $ 5.4 $ 6.0 $ 5.7 $ 5.4
Tax equivalent yield 9.2% 9.0% 9.3% 9.3%
</TABLE>
* Excludes the effect of SFAS No. 115 for all periods presented.
** Includes assets managed by American Express Financial Advisors.
11
<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Statement of Income
-------------------
(Dollars in millions)
Quarter Ended
------------------------------------------------
December 31, September 30, June 30, March 31,
1996 1996 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 223 $ 206 $ 204 $ 211
Interest Expense 140 128 134 134
-------- -------- ------- -------
Net Interest Income 83 78 70 77
T/C Investment Income 84 92 88 85
Foreign Exchange Income 16 16 20 20
Commissions, Fees and Other Revenue 75 110 82 69
-------- -------- ------- -------
Total Net Revenues 258 296 260 251
-------- -------- ------- -------
Expenses:
Human Resources 72 75 70 72
Other Operating Expenses 132 141 124 113
Provision for Losses 14 16 12 10
-------- -------- ------- -------
Total Expenses 218 232 206 195
-------- -------- ------- -------
Pretax Income 40 64 54 56
Income Tax Benefit (14) (4) (8) (6)
-------- -------- ------- -------
Net Income $ 54 $ 68 $ 62 $ 62
======== ======== ======= =======
</TABLE>
12<PAGE>
<TABLE>
<CAPTION>
American Express Bank / Travelers Cheque New Segment
----------------------------------------------------
Selected Statistical Information
--------------------------------
(Dollars in billions, except where indicated)
Quarter Ended
--------------------------------------------------
December 31, September 30, June 30, March 31,
1996 1996 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Selected Statistical Information
- --------------------------------
Total Shareholder's Equity (millions) $ 1,163 $ 1,113 $ 1,084 $ 1,117
Return on Average Common Equity * 26.6% 26.7% 25.5% 24.3%
Return on Average Assets * 1.33% 1.33% 1.26% 1.20%
American Express Bank:
Total Loans $ 5.9 $ 5.6 $ 5.5 $ 5.3
Deposits $ 8.7 $ 8.4 $ 7.8 $ 8.1
Reserve for Credit Losses (millions) $ 117 $ 116 $ 113 $ 110
Reserves as a % of Total Loans 2.0% 2.0% 2.1% 2.1%
Total Nonperforming Loans (millions) $ 35 $ 31 $ 38 $ 35
Other Real Estate Owned (millions) $ 36 $ 34 $ 48 $ 43
Assets Managed / Administered ** $ 4.8 $ 4.7 $ 4.4 $ 4.7
Assets of Non-Consolidated Joint
Ventures $ 1.3 $ 1.3 $ 1.3 $ 1.3
Risk-Based Capital Ratios:
Tier 1 8.8% 9.0% 9.1% 9.0%
Total 12.5% 12.8% 12.9% 12.9%
Leverage Ratio 5.6% 6.0% 5.8% 5.5%
Travelers Cheque:
Sales $ 5.5 $ 8.6 $ 6.7 $ 5.3
Average Outstanding $ 6.0 $ 6.6 $ 6.1 $ 5.7
Average Investments $ 5.5 $ 6.0 $ 5.6 $ 5.3
Tax equivalent yield 9.5% 9.0% 9.6% 9.6%
</TABLE>
* Excludes the effect of SFAS No. 115 for all periods presented.
** Includes assets managed by American Express Financial Advisors.
13
<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Statement of Income
-------------------
(Dollars in millions)
For the Year Ended December 31,
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net Revenues:
Interest Income $897 $842 $925
Interest Expense 579 536 604
---- ---- ----
Net Interest Income 318 306 321
Commissions, Fees and Other Revenues 218 213 243
Foreign Exchange Income 101 72 79
---- ---- ----
Total Net Revenues 637 591 643
---- ---- ----
Provision for Credit Losses 20 23 7
---- ---- ----
Expenses:
Human Resources 242 224 248
Other Operating Expenses 245 239 273
---- ---- ----
Total Expenses 487 463 521
---- ---- ----
Pretax Income 130 105 115
Income Tax Provision 48 37 38
---- ---- ----
Net Income $ 82 $ 68 $ 77
==== ==== ====
</TABLE>
14<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Selected Statistical Information
--------------------------------
(Dollars in millions, except where indicated)
For the Year Ended December 31,
---------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investments (billions) $ 2.3 $ 2.8 $ 2.5
Total Loans (billions) $ 6.2 $ 5.9 $ 5.4
Reserve for Credit Losses $ 131 $ 117 $ 111
Total Nonperforming Loans $ 47 $ 35 $ 34
Other Real Estate Owned $ 4 $ 36 $ 44
Deposits (billions) $ 8.5 $ 8.7 $ 8.5
Shareholder's Equity $ 830 $ 799 $ 837
Return on Average Assets* 0.64% 0.57% 0.59%
Return on Average Common Equity* 10.83% 9.22% 9.99%
Risk-Based Capital Ratios:
Tier 1 8.8% 8.8% 8.9%
Total 12.3% 12.5% 13.0%
Leverage Ratio 5.3% 5.6% 5.8%
* Excluding the effect of SFAS #115.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Statement of Income
-------------------
(Dollars in millions)
Quarter Ended
-------------------------------------------------
December 31, September 30, June 30, March 31,
1997 1997 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $223 $230 $226 $218
Interest Expense 148 148 148 136
---- ---- ---- ----
Net Interest Income 75 82 78 82
Commissions, Fees and Other Revenues 54 57 54 52
Foreign Exchange Income 38 23 21 19
---- ---- ---- ----
Total Net Revenues 167 162 153 153
---- ---- ---- ----
Provision for Credit Losses 10 7 1 2
---- ---- ---- ----
Expenses:
Human Resources 64 60 58 58
Other Operating Expenses 63 61 61 61
---- ---- ---- ----
Total Expenses 127 121 119 119
---- ---- ---- ----
Pretax Income 30 34 33 32
Income Tax Provision 11 13 12 12
---- ---- ---- ----
Net Income $ 19 $ 21 $ 21 $ 20
==== ==== ==== ====
</TABLE>
16<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Selected Statistical Information
--------------------------------
(Dollars in millions, except where indicated)
Quarter Ended
------------------------------------------------
December 31, September 30, June 30, March 31,
1997 1997 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments (billions) $2.3 $2.6 $2.9 $2.8
Total Loans (billions) $6.2 $6.5 $6.4 $6.1
Reserve for Credit Losses $131 $127 $130 $131
Total Nonperforming Loans $47 $60 $80 $46
Other Real Estate Owned $4 $5 $4 $35
Deposits (billions) $8.5 $9.0 $9.0 $9.1
Shareholder's Equity $830 $819 $814 $787
Return on Average Assets* 0.58% 0.65% 0.65% 0.69%
Return on Average Common Equity* 9.98% 11.16% 11.05% 11.14%
Risk-Based Capital Ratios:
Tier 1 8.8% 8.6% 8.4% 8.7%
Total 12.3% 11.6% 11.3% 11.8%
Leverage Ratio 5.3% 5.4% 5.5% 5.6%
* Excluding the effect of SFAS #115.
</TABLE>
17<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Statement of Income
-------------------
(Dollars in millions)
Quarter Ended
---------------------------------------------
December 31, September 30, June 30, March 31,
1996 1996 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $223 $206 $204 $211
Interest Expense 140 128 134 134
---- ---- ---- ----
Net Interest Income 83 78 70 77
Commissions, Fees and Other Revenues 57 57 49 49
Foreign Exchange Income 16 16 20 20
---- ---- ---- ----
Total Net Revenues 156 151 139 146
---- ---- ---- ----
Provision for Credit Losses 10 5 4 4
---- ---- ---- ----
Expenses:
Human Resources 56 59 54 56
Other Operating Expenses 64 59 59 57
---- ---- ---- ----
Total Expenses 120 118 113 113
---- ---- ---- ----
Pretax Income 26 28 22 29
Income Tax Provision 9 10 8 10
---- ---- ---- ----
Net Income $ 17 $ 18 $ 14 $ 19
==== ==== ==== ====
</TABLE>
18<PAGE>
<TABLE>
<CAPTION>
American Express Bank
---------------------
Selected Statistical Information
--------------------------------
(Dollars in millions, except where indicated)
Quarter Ended
-----------------------------------------------
December 31, September 30, June 30, March 31,
1996 1996 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments (billions) $ 2.8 $ 2.5 $ 2.1 $ 2.4
Total Loans (billions) $ 5.9 $ 5.6 $ 5.5 $ 5.3
Reserve for Credit Losses $ 117 $ 116 $ 113 $ 110
Total Nonperforming Loans $ 35 $ 31 $ 38 $ 35
Other Real Estate Owned $ 36 $ 34 $ 48 $ 43
Deposits (billions) $ 8.7 $ 8.4 $ 7.8 $ 8.1
Shareholder's Equity $ 799 $ 777 $ 755 $ 746
Return on Average Assets* 0.55% 0.62% 0.49% 0.64%
Return on Average Common Equity* 8.89% 9.61% 7.83% 10.57%
Risk-Based Capital Ratios:
Tier 1 8.8% 9.0% 9.1% 9.0%
Total 12.5% 12.8% 12.9% 12.9%
Leverage Ratio 5.6% 6.0% 5.8% 5.5%
* Excluding the effect of SFAS #115.
</TABLE>
19<PAGE>
<TABLE>
<CAPTION>
SEGMENT INFORMATION
-------------------
American Express
(millions) Travel Related American Express Bank/Travelers Corporate Adjustments
Services Financial Advisors Cheque Group and Other and Eliminations Consolidated
---------------- ------------------ ---------------- --------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
1997
- ----
Net revenues $ 12,214 $ 4,599 $ 1,124 $ 123 $ (300) $ 17,760
Pretax income before
general corporate expenses $ 1,785 $ 1,022 $ 249 -- -- $ 3,056
General corporate expenses -- -- -- $ (306) -- (306)
--------- --------- --------- --------- --------- ---------
Pretax income (loss) $ 1,785 $ 1,022 $ 249 $ (306) -- $ 2,750
Net income (loss) $ 1,164 $ 707 $ 272 $ (152) -- $ 1,991
Assets $ 40,700 $ 59,828 $ 19,573 $ 3,374 $ (3,472) $ 120,003
- -----------------------------------------------------------------------------------------------------------------------------------
1996
- ----
Net revenues $ 11,357 $ 4,110 $ 1,066 $ 129 $ (282) $ 16,380
Pretax income before
general corporate expenses $ 1,414 $ 885 $ 214 -- -- $ 2,513
General corporate expenses -- -- -- $ 151 -- 151
--------- -------- --------- --------- --------- --------
Pretax income $ 1,414 $ 885 $ 214 $ 151 -- $ 2,664
Net income $ 926 $ 594 $ 247 $ 134 -- $ 1,901
Assets $ 36,414 $ 52,670 $ 18,870 $ 3,158 $ (2,600) $ 108,512
- -----------------------------------------------------------------------------------------------------------------------------------
1995
- ----
Net revenues $ 11,232 $ 3,691 $ 1,068 $ 139 $ (209) $ 15,921
Pretax income before
general corporate expenses $ 1,531 $ 755 $ 162 -- -- $ 2,448
General corporate expenses -- -- -- $ (265) -- (265)
--------- --------- --------- --------- --------- ---------
Pretax income (loss) $ 1,531 $ 755 $ 162 $ (265) -- $ 2,183
Net income (loss) $ 981 $ 503 $ 220 $ (140) -- $ 1,564
Assets $ 38,791 $ 48,250 $ 18,705 $ 4,358 $ (2,699) $ 107,405
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
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