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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): August 5, 1998
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AMERICAN EXPRESS COMPANY
(Exact name of registrant as specified in its charter)
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New York 1-7657 13-4922250
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 640-2000
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On August 5, 1998, Harvey Golub, Chairman and Chief Executive Officer of
the Registrant, and Steve Alesio, President of American Express Small Business
Services, presented speeches to the financial community. Certain information
contained in such speeches is filed herein on Exhibit 99.1.
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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 hereunto duly authorized.
AMERICAN EXPRESS COMPANY
(REGISTRANT)
By /s/ Stephen P. Norman
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Name: Stephen P. Norman
Title: Secretary
DATE: August 5, 1998
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EXHIBIT INDEX
Item No. Description
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99.1 Certain information from speeches presented by Harvey Golub and Steve
Alesio on August 5, 1998.
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Exhibit 99.1
Second financial community meeting of 1998.
Financial Community Meeting - August 5, 1998
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Network Alliances
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While the base for Global Network Services is small relative to our propriety
business, cards-in-force are up over 50% from a year ago, and the billed
business generated from these cards is up over 40% on an FX adjusted basis.
Travel
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Consolidation and expense initiatives within the airline industry have caused us
to work hard on the structural economics of our travel businesses. Among other
things, we continued the shift to being paid by customers, rather than
suppliers, by passing back commissions on 81% of our corporate business, and
being paid instead on a fee or cost plus basis -- up from 66% about 18 months
ago.
Small Business Services
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To put Small Business Services "SBS" into the context of the United States
business of American Express Travel Related Services Company, Inc. ("TRS"), TRS
is generally reported according to Charge Card, Lending and Merchant or
Establishment Coverage. The major business segment drivers of those areas are:
- our Consumer Business
- our Corporate Services business -- focused on selling to larger
companies, and
- SBS, our small business unit
For purposes of definition, small businesses refers to businesses that have 100
employees or less and/or sales of $10 million or less.
In 1997, SBS accounted for 18% of TRS Card billings in the U.S., 16% of TRS Card
revenues in the U.S. and 18% of TRS Card profits in the U.S.
In 1997, SBS had a high growth rate, exceeding the net income and revenue growth
rates of each of American Express Bank, American Express Financial Advisors and
TRS as a whole.
From 1994 through 1997, SBS grew billings nearly 80% over the course of three
years, and did so at a rate which was approximately 1.5 times total TRS
worldwide billings. Over the same period, SBS charge card spending per card has
grown at a compound growth rate of 14% annually. During this period, SBS charge
cardholders spent at approximately 1.7 times the rate of TRS consumer charge
customers.
SBS billings have grown from 1994 to 1997 in T&E and non-T&E categories, but
non-T&E has grown faster.
Approximately 50% of current SBS spending is linked to some type of "reward",
and approximately a third of all SBS spending comes on premium-priced products.
SBS growth in cards in force was 9%, 14% and 9% in 1995, 1996 and 1997
respectively.
We started to build the Lending business in 1996, and as of July of this year we
had $1.3 billion of accounts receivable on our books in three different product
areas -- credit cards, lines of credit and leasing.
Revenue yields on SBS lending product lines [1998 -- June year-to-date] were
14.2% for credit cards, 15.6% for leasing and 16.5% for lines of credit. The
line of credit yield includes an average annual fee of $95 per line.
SBS credit card loss rates were similar to TRS consumer card loss rates, when
comparing 30-day delinquency rates and lagged write-off rates on our 1997 small
business vintage to 1997 vintages in the TRS consumer card business. Since 1995,
delinquencies in the charge card portfolio for SBS cardholders has been
relatively consistent and has trended downward.
Measured in revenue, SBS has grown at an annual rate of 22% from 1994 to 1997.
