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Previous: AMERICAN EXPRESS CO, 8-K, 2000-10-10 |
Next: ANACOMP INC, 4, 2000-10-10 |
EXHIBIT 99.1
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions) Years Ended December 31,
--------------------------------------------------------------------------------------
1999 1998 1997
--------------------------- ---------------------------- ---------------------------
Reported Restated Reported Restated Reported Restated
------------ ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 6,741 $ 6,741 $ 6,115 $ 6,115 $ 5,666 $ 5,666
Net Card Fees 1,604 1,604 1,584 1,584 1,609 1,609
Lending:
Finance Charge Revenue 2,884 2,884 2,470 2,470 2,105 2,105
Interest Expense 955 955 810 810 694 694
------------ ------------- ------------- ------------- ------------ -------------
Net Finance Charge Revenue 1,929 1,929 1,660 1,660 1,411 1,411
Travel Commissions and Fees 1,802 1,802 1,647 1,647 1,489 1,489
TC Investment Income - 345 - 330 - 331
Other Revenues 2,827 2,813 2,225 2,188 2,002 2,124
------------ ------------- ------------- ------------- ------------ -------------
Total Net Revenues 14,903 15,234 13,231 13,524 12,177 12,630
------------ ------------- ------------- ------------- ------------ -------------
Expenses:
Marketing and Promotion 1,215 1,247 1,094 1,130 990 1,025
Provision for Losses and Claims:
Charge Card 995 995 994 994 1,105 1,105
Lending 1,186 1,186 1,093 1,093 937 937
Other 56 85 56 90 57 88
------------ ------------- ------------- ------------- ------------ -------------
Total 2,237 2,266 2,143 2,177 2,099 2,130
Charge Card Interest Expense 1,055 1,055 1,040 1,040 973 973
Human Resources 3,860 3,931 3,544 3,610 3,076 3,154
Other Operating Expenses 4,149 4,352 3,346 3,497 3,254 3,443
------------ ------------- ------------- ------------- ------------ -------------
Total Expenses 12,516 12,851 11,167 11,454 10,392 10,725
------------ ------------- ------------- ------------- ------------ -------------
Pretax Income 2,387 2,383 2,064 2,070 1,785 1,905
Income Tax Provision 825 691 700 579 621 551
------------ ------------- ------------- ------------- ------------ -------------
Net Income $ 1,562 $ 1,692 $ 1,364 $ 1,491 $ 1,164 $ 1,354
============ ============= ============= ============= ============ =============
</TABLE>
These Statements of Income are provided on a Managed Basis for analytical
purposes only. They present the income statements of TRS as if there had been no
securitization transactions. Under Statement of Financial Accounting Standards
No. 125 (SFAS No. 125), which prescribes the accounting for securitized
receivables, TRS recognized pretax gains of $154 million ($100 million
after-tax), $36 million ($23 million after-tax) and $37 million ($24 million
after-tax) in 1999, 1998 and 1997, respectively, related to the securitization
of U.S. receivables. These gains were invested in additional card acquisition
activities and had no material effect on Net Income or Total Expenses in any
year. For purposes of this presentation such gains and corresponding increases
in Marketing and Promotion and Other Operating Expenses have been eliminated in
each period.
1
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions) Years Ended December 31,
--------------------------------------------------------------------------------------
1999 1998 1997
--------------------------- ---------------------------- ---------------------------
Reported Restated Reported Restated Reported Restated
------------ ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 6,741 $ 6,741 $ 6,115 $ 6,115 $ 5,666 $ 5,666
Net Card Fees 1,599 1,599 1,587 1,587 1,604 1,604
Lending:
Finance Charge Revenue 2,007 2,007 2,007 2,007 1,848 1,848
Interest Expense 674 674 653 653 604 604
------------ ------------- ------------- ------------- ------------ -------------
Net Finance Charge Revenue 1,333 1,333 1,354 1,354 1,244 1,244
Travel Commissions and Fees 1,802 1,802 1,647 1,647 1,489 1,489
TC Investment Income - 345 - 330 - 331
Other Revenues 3,324 3,310 2,534 2,497 2,211 2,333
------------ ------------- ------------- ------------- ------------ -------------
Total Net Revenues 14,799 15,130 13,237 13,530 12,214 12,667
------------ ------------- ------------- ------------- ------------ -------------
Expenses:
Marketing and Promotion 1,306 1,338 1,130 1,166 1,027 1,062
Provision for Losses and Claims:
Charge Card 865 865 701 701 858 858
Lending 799 799 922 922 817 817
Other 56 85 56 90 57 88
------------ ------------- ------------- ------------- ------------ -------------
Total 1,720 1,749 1,679 1,713 1,732 1,763
Charge Card Interest Expense 835 835 809 809 743 743
Net Discount Expense 479 479 665 665 597 597
Human Resources 3,860 3,931 3,544 3,610 3,076 3,154
Other Operating Expenses 4,212 4,415 3,346 3,497 3,254 3,443
------------ ------------- ------------- ------------- ------------ -------------
Total Expenses 12,412 12,747 11,173 11,460 10,429 10,762
------------ ------------- ------------- ------------- ------------ -------------
Pretax Income 2,387 2,383 2,064 2,070 1,785 1,905
Income Tax Provision 825 691 700 579 621 551
------------ ------------- ------------- ------------- ------------ -------------
Net Income $ 1,562 $ 1,692 $ 1,364 $ 1,491 $ 1,164 $ 1,354
============ ============= ============= ============= ============ =============
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------
June 30, 2000 March 31, 2000
--------------------------- ----------------------------
Reported Restated Reported Restated
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,949 $ 1,949 $ 1,805 $ 1,805
Net Card Fees 411 411 405 405
Lending:
Finance Charge Revenue 948 948 887 887
Interest Expense 385 385 332 332
------------ ------------- ------------- -------------
Net Finance Charge Revenue 563 563 555 555
Travel Commissions and Fees 507 507 438 438
TC Investment Income - 98 - 91
Other Revenues 848 844 841 833
------------ ------------- ------------- -------------
Total Net Revenues 4,278 4,372 4,044 4,127
------------ ------------- ------------- -------------
Expenses:
Marketing and Promotion 330 345 318 331
Provision for Losses and Claims:
Charge Card 344 344 278 278
Lending 332 332 335 335
Other 20 28 21 29
------------ ------------- ------------- -------------
Total 696 704 634 642
Charge Card Interest Expense 350 350 314 314
Human Resources 1,028 1,048 998 1,016
Other Operating Expenses 1,147 1,204 1,144 1,193
------------ ------------- ------------- -------------
Total Expenses 3,551 3,651 3,408 3,496
------------ ------------- ------------- -------------
Pretax Income 727 721 636 631
Income Tax Provision 255 216 220 183
------------ ------------- ------------- -------------
Net Income $ 472 $ 505 $ 416 $ 448
============ ============= ============= =============
</TABLE>
These Statements of Income are provided on a Managed Basis for analytical
purposes only. They present the income statements of TRS as if there had been no
securitization transactions. Under Statement of Financial Accounting Standards
No. 125 (SFAS No. 125), which prescribes the accounting for securitized
receivables, TRS recognized pretax gains of $80 million ($52 million after-tax)
and $36 million ($23 million after-tax) in the second and first quarter of 2000,
respectively, related to the securitization of U.S. receivables. These gains
were invested in additional card acquisition activities and had no material
impact on Net Income or Total Expenses in either quarter. For purposes of this
presentation such gains and corresponding increases in Marketing and Promotion
and Other Operating Expenses have been eliminated in each quarter.
3
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------
June 30, 2000 March 31, 2000
--------------------------- ----------------------------
Reported Restated Reported Restated
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,949 $ 1,949 $ 1,805 $ 1,805
Net Card Fees 411 411 405 405
Lending:
Finance Charge Revenue 500 500 524 524
Interest Expense 258 258 231 231
------------ ------------- ------------- -------------
Net Finance Charge Revenue 242 242 293 293
Travel Commissions and Fees 507 507 438 438
TC Investment Income - 98 - 91
Other Revenues 1,121 1,117 1,014 1,006
------------ ------------- ------------- -------------
Total Net Revenues 4,230 4,324 3,955 4,038
------------ ------------- ------------- -------------
Expenses:
Marketing and Promotion 378 393 339 352
Provision for Losses and Claims:
Charge Card 302 302 241 241
Lending 170 170 175 175
Other 20 28 21 29
------------ ------------- ------------- -------------
Total 492 500 437 445
Charge Card Interest Expense 295 295 260 260
Net Discount Expense 131 131 126 126
Human Resources 1,028 1,048 998 1,016
Other Operating Expenses 1,179 1,236 1,159 1,208
------------ ------------- ------------- -------------
Total Expenses 3,503 3,603 3,319 3,407
------------ ------------- ------------- -------------
Pretax Income 727 721 636 631
Income Tax Provision 255 216 220 183
------------ ------------- ------------- -------------
Net Income $ 472 $ 505 $ 416 $ 448
============ ============= ============= =============
Return on Average Equity (A) 31.2% 32.2% 30.5% 31.6%
Return on Average Assets (A) 3.2% 3.0% 3.2% 3.0%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------------------------
December 31, 1999 September 30, 1999 June 30, 1999
------------------------ ------------------------ ------------------------
Reported Restated Reported Restated Reported Restated
------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,865 $ 1,865 $ 1,700 $ 1,700 $ 1,662 $ 1,662
Net Card Fees 408 408 399 399 393 393
Lending:
Finance Charge Revenue 802 802 747 747 684 684
Interest Expense 302 302 246 246 208 208
------------ ----------- ------------ ----------- ------------ -------------
Net Finance Charge Revenue 500 500 501 501 476 476
Travel Commissions and Fees 459 459 448 448 469 469
TC Investment Income - 88 - 91 - 86
Other Revenues 789 789 730 725 669 665
------------ ----------- ------------ ----------- ------------ -------------
Total Net Revenues 4,021 4,109 3,778 3,864 3,669 3,751
------------ ----------- ------------ ----------- ------------ -------------
Expenses:
Marketing and Promotion 338 344 340 349 267 276
Provision for Losses and Claims:
Charge Card 227 227 247 247 288 288
Lending 332 332 312 312 260 260
Other 17 24 10 17 14 21
------------ ----------- ------------ ----------- ------------ -------------
Total 576 583 569 576 562 569
Charge Card Interest Expense 300 300 259 259 257 257
Human Resources 1,012 1,033 968 985 968 985
Other Operating Expenses 1,222 1,282 1,010 1,065 987 1,036
------------ ----------- ------------ ----------- ------------ -------------
Total Expenses 3,448 3,542 3,146 3,234 3,041 3,123
------------ ----------- ------------ ----------- ------------ -------------
Pretax Income 573 567 632 630 628 628
Income Tax Provision 198 161 219 184 217 185
------------ ----------- ------------ ----------- ------------ -------------
Net Income $ 375 $ 406 $ 413 $ 446 $ 411 $ 443
============ =========== ============ =========== ============ =============
</TABLE>
<TABLE>
<CAPTION>
(Dollars in millions) Quarters Ended
-------------------------
March 31, 1999
------------------------
Reported Restated
------------ -----------
<S> <C> <C>
Net Revenues:
Discount Revenue $ 1,514 $ 1,514
Net Card Fees 403 403
Lending:
Finance Charge Revenue 652 652
Interest Expense 200 200
------------- -----------
Net Finance Charge Revenue 452 452
Travel Commissions and Fees 426 426
TC Investment Income - 79
Other Revenues 639 636
------------- -----------
Total Net Revenues 3,434 3,510
------------- -----------
Expenses:
Marketing and Promotion 270 277
Provision for Losses and Claims:
Charge Card 233 233
Lending 282 282
Other 14 20
------------- -----------
Total 529 535
Charge Card Interest Expense 241 241
Human Resources 912 928
Other Operating Expenses 928 971
------------- -----------
Total Expenses 2,880 2,952
------------- -----------
Pretax Income 554 558
Income Tax Provision 191 162
------------- -----------
Net Income $ 363 $ 396
============= ===========
</TABLE>
These Statements of Income are provided on a Managed Basis for analytical
purposes only. They present the income statements of TRS as if there had been no
securitization transactions. Under Statement of Financial Accounting Standards
No. 125 (SFAS No. 125), which prescribes the accounting for securitized
receivables, TRS recognized pretax gains of $55 million ($36 million after-tax)
and $99 million ($64 million after-tax) in the third and second quarter of 1999,
respectively, related to the securitization of U.S. receivables. These gains
were invested in additional card acquisition activities and had no material
impact on Net Income or Total Expenses in either quarter. For purposes of this
presentation such gains and corresponding increases in Marketing and Promotion
and Other Operating Expenses have been eliminated in each quarter.
5
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------------------------
December 31, 1999 September 30, 1999 June 30, 1999
------------------------ ------------------------ ------------------------
Reported Restated Reported Restated Reported Restated
------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,865 $ 1,865 $ 1,700 $ 1,700 $ 1,662 $ 1,662
Net Card Fees 408 408 395 395 393 393
Lending:
Finance Charge Revenue 526 526 513 513 465 465
Interest Expense 197 197 165 165 156 156
------------ ----------- ------------ ----------- ------------ ------------
Net Finance Charge Revenue 329 329 348 348 309 309
Travel Commissions and Fees 459 459 448 448 469 469
TC Investment Income - 88 - 91 - 86
Other Revenues 902 902 846 841 845 841
------------ ----------- ------------ ----------- ------------ ------------
Total Net Revenues 3,963 4,051 3,737 3,823 3,678 3,760
------------ ----------- ------------ ----------- ------------ ------------
Expenses:
Marketing and Promotion 338 344 373 382 325 334
Provision for Losses and Claims:
Charge Card 213 213 222 222 249 249
Lending 241 241 187 187 137 137
Other 17 24 10 17 14 21
------------ ----------- ------------ ----------- ------------ -----------
Total 471 478 419 426 400 407
Charge Card Interest Expense 246 246 208 208 198 198
Net Discount Expense 101 101 105 105 131 131
Human Resources 1,012 1,033 968 985 968 985
Other Operating Expenses 1,222 1,282 1,032 1,087 1,028 1,077
------------ ----------- ------------ ----------- ------------ ------------
Total Expenses 3,390 3,484 3,105 3,193 3,050 3,132
------------ ----------- ------------ ----------- ------------ ------------
Pretax Income 573 567 632 630 628 628
Income Tax Provision 198 161 219 184 217 185
------------ ----------- ------------ ----------- ------------ ------------
Net Income $ 375 $ 406 $ 413 $ 446 $ 411 $ 443
============ =========== ============ =========== ============ ============
Return on Average Equity (A) 30.1% 31.2% 29.3% 30.5% 28.8% 30.0%
Return on Average Assets (A) 3.2% 3.1% 3.3% 3.1% 3.3% 3.1%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
<TABLE>
<CAPTION>
(Dollars in millions) Quarters Ended
------------------------
March 31, 1999
------------------------
Reported Restated
------------ -----------
<S> <C> <C>
Net Revenues:
Discount Revenue $ 1,514 $ 1,514
Net Card Fees 403 403
Lending:
Finance Charge Revenue 503 503
Interest Expense 156 156
------------ -----------
Net Finance Charge Revenue 347 347
Travel Commissions and Fees 426 426
TC Investment Income - 79
Other Revenues 731 728
------------ -----------
Total Net Revenues 3,421 3,497
------------ -----------
Expenses:
Marketing and Promotion 270 277
Provision for Losses and Claims:
Charge Card 182 182
Lending 235 235
Other 14 20
------------ -----------
Total 431 437
Charge Card Interest Expense 183 183
Net Discount Expense 143 143
Human Resources 912 928
Other Operating Expenses 928 971
------------ -----------
Total Expenses 2,867 2,939
------------ -----------
Pretax Income 554 558
Income Tax Provision 191 162
------------ -----------
Net Income $ 363 $ 396
============ ===========
Return on Average Equity (A) 28.4% 29.6%
Return on Average Assets (A) 3.3% 3.1%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
<TABLE>
<CAPTION>
6
<PAGE>
Travel Related Services
Statements of Income
(Unaudited, Managed Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------------------------
December 31, 1998 September 30, 1998 June 30, 1998
------------------------ ------------------------ ------------------------
Reported Restated Reported Restated Reported Restated
------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,639 $ 1,639 $ 1,522 $ 1,522 $ 1,525 $ 1,525
Net Card Fees 398 398 395 395 393 393
Lending:
Finance Charge Revenue 655 655 636 636 595 595
Interest Expense 211 211 209 209 197 197
------------ ----------- ------------ ----------- ------------ ------------
Net Finance Charge Revenue 444 444 427 427 398 398
Travel Commissions and Fees 452 452 441 441 403 403
TC Investment Income - 82 - 88 - 80
Other Revenues 617 610 562 552 536 524
------------ ----------- ------------ ----------- ------------ ------------
Total Net Revenues 3,550 3,625 3,347 3,425 3,255 3,323
------------ ----------- ------------ ----------- ------------ ------------
Expenses:
Marketing and Promotion 301 309 310 322 239 248
Provision for Losses and Claims:
Charge Card 192 192 224 224 307 307
Lending 331 331 263 263 251 251
Other 14 24 17 24 11 21
------------ ----------- ------------ ----------- ------------ -----------
Total 537 547 504 511 569 579
Charge Card Interest Expense 271 271 262 262 259 259
Human Resources 990 1,008 924 941 843 858
Other Operating Expenses 968 1,011 793 832 799 831
------------ ----------- ------------ ----------- ------------ ------------
Total Expenses 3,067 3,146 2,793 2,868 2,709 2,775
------------ ----------- ------------ ----------- ------------ ------------
Pretax Income 483 479 554 557 546 548
Income Tax Provision 157 123 192 163 186 155
------------ ----------- ------------ ----------- ------------ ------------
Net Income $ 326 $ 356 $ 362 $ 394 $ 360 $ 393
============ =========== ============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
(Dollars in millions) Quarters Ended
-------------------------
March 31, 1998
------------------------
Reported Restated
------------ -----------
<S> <C> <C>
Net Revenues:
Discount Revenue $ 1,429 $ 1,429
Net Card Fees 398 398
Lending:
Finance Charge Revenue 584 584
Interest Expense 194 194
------------- -----------
Net Finance Charge Revenue 390 390
Travel Commissions and Fees 351 351
TC Investment Income - 80
Other Revenues 511 503
------------- -----------
Total Net Revenues 3,079 3,151
------------- -----------
Expenses:
Marketing and Promotion 244 251
Provision for Losses and Claims:
Charge Card 273 273
Lending 248 248
Other 13 20
------------ -----------
Total 534 541
Charge Card Interest Expense 248 248
Human Resources 787 802
Other Operating Expenses 784 821
------------- -----------
Total Expenses 2,597 2,663
------------- -----------
Pretax Income 482 488
Income Tax Provision 167 140
------------- -----------
Net Income $ 315 $ 348
============= ===========
</TABLE>
These Statements of Income are provided on a Managed Basis for analytical
purposes only. They present the income statements of TRS as if there had been no
securitization transactions. Under Statement of Financial Accounting Standards
No. 125 (SFAS No. 125), which prescribes the accounting for securitized
receivables, TRS recognized a pretax gain of $36 million ($23 million after-tax)
in the second quarter of 1998 related to the securitization of U.S. receivables.
This gain was invested in additional card acquisition activities and had no
material impact on Net Income or Total Expenses in the second quarter of 1998.
For purposes of this presentation such gain and a corresponding $36 million
increase in Marketing and Promotion expenses have been eliminated in the second
quarter of 1998.
7
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Statements of Income
(Unaudited, GAAP Reporting Basis)
(Dollars in millions) Quarters Ended
---------------------------------------------------------------------------
December 31, 1998 September 30, 1998 June 30, 1998
------------------------ ------------------------ ------------------------
Reported Restated Reported Restated Reported Restated
------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $ 1,639 $ 1,639 $ 1,522 $ 1,522 $ 1,525 $ 1,525
Net Card Fees 398 398 393 393 398 398
Lending:
Finance Charge Revenue 535 535 502 502 493 493
Interest Expense 166 166 164 164 163 163
------------ ----------- ------------ ----------- ------------ ------------
Net Finance Charge Revenue 369 369 338 338 330 330
Travel Commissions and Fees 452 452 441 441 403 403
TC Investment Income - 82 - 88 - 80
Other Revenues 687 680 645 635 614 602
------------ ----------- ------------ ----------- ------------ ------------
Total Net Revenues 3,545 3,620 3,339 3,417 3,270 3,338
------------ ----------- ------------ ----------- ------------ ------------
Expenses:
Marketing and Promotion 301 309 310 322 275 284
Provision for Losses and Claims:
Charge Card 100 100 148 148 236 236
Lending 293 293 224 224 187 187
Other 14 24 17 24 11 21
------------ ----------- ------------ ----------- ------------ -----------
Total 407 417 389 396 434 444
Charge Card Interest Expense 211 211 199 199 203 203
Net Discount Expense 185 185 170 170 170 170
Human Resources 990 1,008 924 941 843 858
Other Operating Expenses 968 1,011 793 832 799 831
------------ ----------- ------------ ----------- ------------ ------------
Total Expenses 3,062 3,141 2,785 2,860 2,724 2,790
------------ ----------- ------------ ----------- ------------ ------------
Pretax Income 483 479 554 557 546 548
Income Tax Provision 157 123 192 163 186 155
------------ ----------- ------------ ----------- ------------ ------------
Net Income $ 326 $ 356 $ 362 $ 394 $ 360 $ 393
============ =========== ============ =========== ============ ============
Return on Average Equity (A) 27.8% 29.1% 27.1% 28.8% 26.5% 28.5%
Return on Average Assets (A) 3.3% 3.1% 3.3% 3.1% 3.2% 3.1%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
<TABLE>
<CAPTION>
(Dollars in millions) Quarters Ended
-------------------------
March 31, 1998
------------------------
Reported Restated
------------ -----------
<S> <C> <C>
Net Revenues:
Discount Revenue $ 1,429 $ 1,429
Net Card Fees 398 398
Lending:
Finance Charge Revenue 478 478
Interest Expense 161 161
------------- -----------
Net Finance Charge Revenue 317 317
Travel Commissions and Fees 351 351
TC Investment Income - 80
Other Revenues 588 580
------------- -----------
Total Net Revenues 3,083 3,155
------------- -----------
Expenses:
Marketing and Promotion 244 251
Provision for Losses and Claims:
Charge Card 218 218
Lending 218 218
Other 13 20
------------ -----------
Total 449 456
Charge Card Interest Expense 197 197
Net Discount Expense 140 140
Human Resources 787 802
Other Operating Expenses 784 821
------------- -----------
Total Expenses 2,601 2,667
------------- -----------
Pretax Income 482 488
Income Tax Provision 167 140
------------- -----------
Net Income $ 315 $ 348
============= ===========
Return on Average Equity (A) 25.7% 28.1%
Return on Average Assets (A) 3.1% 3.0%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Travel Related Services
Condensed Balance Sheets
(Unaudited)
(Dollars in millions) June 30, December 31,
------------------------ --------------------------------------------------
2000 1999 1998
------------------------ ------------------------ ------------------------
Reported Restated Reported Restated Reported Restated
------------ ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash & Investment Securities $ 5,908 $14,094 $ 8,451 $14,908 $ 4,366 $10,284
Cardmember & Other
Receivables, net 25,858 26,235 25,316 25,622 21,314 21,542
Loans, net 17,802 17,557 18,159 17,910 15,201 14,947
Land, Buildings, & Equipment, net 1,408 1,439 1,325 1,356 1,066 1,097
Other Assets 3,114 3,448 3,010 3,437 2,735 3,294
------------ ----------- ----------- ------------ ----------- -----------
Total Assets $54,090 $62,773 $56,261 $63,233 $44,682 $51,164
============ =========== =========== ============ =========== ===========
LIABILITIES & EQUITY
Travelers Cheques Outstanding - $ 6,900 - $ 6,213 - $ 5,823
Customers' Deposits $ 5,141 5,301 $ 3,668 3,797 $ 2,037 2,056
Accounts Payable 7,090 7,053 5,991 5,971 4,811 5,025
Insurance Reserves 159 159 149 149 141 141
Debt 31,113 31,077 35,773 35,686 28,023 27,770
Deferred Card Fees 795 795 786 786 770 770
Other Liabilities 4,049 5,506 4,524 5,087 3,984 4,225
------------ ----------- ----------- ------------ ----------- -----------
Total Liabilities 48,347 56,791 50,891 57,689 39,766 45,810
Equity 5,743 5,982 5,370 5,544 4,916 5,354
------------ ----------- ----------- ------------ ----------- -----------
Total Liabilities & Equity $54,090 $62,773 $56,261 $63,233 $44,682 $51,164
============ =========== =========== ============ =========== ===========
Return on Average Equity (A) 31.2% 32.2% 30.1% 31.2% 27.8% 29.1%
Return on Average Assets (A) 3.2% 3.0% 3.2% 3.1% 3.3% 3.1%
(A) Excluding the effect of SFAS No. 115.
</TABLE>
<TABLE>
<CAPTION>
(Dollars in millions) December 31,
------------------------
1997
------------------------
Reported Restated
------------ -----------
<S> <C> <C>
ASSETS
Cash & Investment Securities $ 3,097 $ 8,925
Cardmember & Other
Receivables, net 20,476 20,888
Loans, net 13,635 13,373
Land, Buildings, & Equipment, net 953 990
Other Assets 2,539 3,011
------------ -----------
Total Assets $40,700 $47,187
============ ===========
LIABILITIES & EQUITY
Travelers Cheques Oustanding - $ 5,634
Customers' Deposits $ 841 841
Accounts Payable 3,878 3,983
Insurance Reserves 104 104
Debt 26,945 26,936
Deferred Card Fees 733 733
Other Liabilities 3,567 3,906
------------ -----------
Total Liabilities 36,068 42,137
Equity 4,632 5,050
------------ -----------
Total Liabilities & Equity $40,700 $47,187
============ ===========
Return on Average Equity (A) 25.1% 27.9%
Return on Average Assets (A) 3.0% 3.0%
</TABLE>
(A) Excluding the effect of SFAS No. 115.
9
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Statements of Income
(Unaudited)
(Dollars in millions) Years Ended December 31,
----------------------------------------------------
1999 1998 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net Revenues:
Interest Income $ 737 $ 854 $ 898
Interest Expense 446 564 580
---------------- ---------------- ----------------
Net Interest Income 291 290 318
Commissions and Fees 179 167 173
Foreign Exchange Income & Other Revenue 151 163 146
---------------- ---------------- ----------------
Total Net Revenues 621 620 637
---------------- ---------------- ----------------
Expenses:
Human Resources 271 256 242
Other Operating Expenses 294 261 245
Provision for Losses 29 238 20
---------------- ---------------- ----------------
Total Expenses 594 755 507
---------------- ---------------- ----------------
Pretax Income/(Loss) 27 (135) 130
Income Tax Provision/(Benefit) 5 (51) 48
---------------- ---------------- ----------------
Net Income/(Loss) $ 22 $ (84) 82
================ ================ ================
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997
----------------- ---------------- -----------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C>
Total Shareholder's Equity (millions) $ 691 $ 743 $ 830
Return on Average Common Equity * 3.5% (13.3)% 10.8%
Return on Average Assets * 0.20% (0.70)% 0.64%
Total Loans $ 5.1 $ 5.6 $ 6.2
Total Non-performing Loans (millions) $ 168 $ 180 $ 47
Other Non-performing Assets (millions) $ 37 $ 63 $ 11
Reserve for Credit Losses (millions)** $ 189 $ 259 $ 137
Loan Loss Reserves as a % of Total Loans 3.3% 3.8% 2.1%
Deposits $ 8.3 $ 8.3 $ 8.5
Assets Managed*** / Administered $ 8.6 $ 6.2 $ 5.0
Assets of Non-Consolidated Joint
Ventures $ 2.2 $ 2.6 $ 2.4
Risk-Based Capital Ratios:
Tier 1 9.9% 9.8% 8.8%
Total 12.0% 12.6% 12.3%
Leverage Ratio 5.6% 5.5% 5.3%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 169 $ 214 $ 131
Other Assets, primarily derivatives 16 43 6
Other Liabilities 4 2 -
----------------- ---------------- -----------------
Total Credit Loss Reserves $ 189 $ 259 $ 137
================= ================ =================
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
----------------------------------------
June 30, March 31,
2000 2000
------------------ --------------------
<S> <C> <C>
Net Revenues:
Interest Income $ 183 $ 183
Interest Expense 120 118
------------------ --------------------
Net Interest Income 63 65
Commissions and Fees 56 52
Foreign Exchange Income & Other Revenue 32 33
------------------ --------------------
Total Net Revenues 151 150
------------------ --------------------
Expenses:
Human Resources 65 66
Other Operating Expenses 69 68
Provision for Losses 7 8
------------------ --------------------
Total Expenses 141 142
------------------ --------------------
Pretax Income 10 8
Income Tax Provision 3 1
------------------ --------------------
Net Income $ 7 $ 7
================== ====================
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
------------------------------------------
June 30, March 31,
2000 2000
-------------------- -------------------
Selected Statistical Information
--------------------------------
<S> <C> <C>
Total Shareholder's Equity (millions) $ 707 $ 697
Return on Average Common Equity * 3.7% 3.5%
Return on Average Assets * 0.21% 0.19%
Total Loans $ 5.1 $ 5.0
Total Non-performing Loans (millions) $ 174 $ 174
Other Non-performing Assets (millions) $ 36 $ 31
Reserve for Credit Losses (millions)** $ 187 $ 189
Loan Loss Reserves as a % of Total Loans 3.3% 3.4%
Deposits $ 8.2 $ 8.4
Assets Managed*** / Administered $ 10.3 $ 9.4
Assets of Non-Consolidated Joint
Ventures $ 2.3 $ 2.4
Risk-Based Capital Ratios:
Tier 1 10.3% 10.1%
Total 11.9% 11.6%
Leverage Ratio 5.8% 5.6%
* Excludes the effect of SFAS No. 115 for all periods presented.
**Allocation:
Loans $ 166 $ 170
Other Assets, primarily derivatives 16 15
Other Liabilities 5 4
-------------------- -------------------
Total Credit Loss Reserves $ 187 $ 189
==================== ===================
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
-------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1999 1999 1999 1999
------------------ ---------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 180 $ 181 $ 183 $ 193
Interest Expense 112 106 108 119
------------------ ---------------- ------------------ ---------------
Net Interest Income 68 75 75 74
Commissions and Fees 48 46 45 42
Foreign Exchange Income & Other Revenue 31 36 41 41
------------------ ---------------- ------------------ ---------------
Total Net Revenues 147 157 161 157
------------------ ---------------- ------------------ ---------------
Expenses:
Human Resources 69 68 68 66
Other Operating Expenses 68 78 77 72
Provision for Losses 4 5 10 10
------------------ ---------------- ------------------ ---------------
Total Expenses 141 151 155 148
------------------ ---------------- ------------------ ---------------
Pretax Income 6 6 6 9
Income Tax Provision 2 1 - 1
------------------ ---------------- ------------------ ---------------
Net Income $ 4 $ 5 $ 6 $ 8
================== ================ ================== ===============
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
---------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1999 1999 1999 1999
----------------- ----------------- ---------------- -----------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C> <C>
Total Shareholder's Equity (millions) $ 691 $ 702 $ 714 $ 733
Return on Average Common Equity* 3.5% 3.7% 4.9% 6.4%
Return on Average Assets* 0.20% 0.20% 0.26% 0.33%
Total Loans $ 5.1 $ 5.1 $ 5.2 $ 5.3
Total Non-performing Loans (millions) $ 168 $ 181 $ 210 $ 209
Other Non-performing Assets (millions) $ 37 $ 40 $ 55 $ 64
Reserve for Credit Losses (millions)** $ 189 $ 204 $ 249 $ 261
Loan Loss Reserves as a % of Total Loans 3.3% 3.5% 4.1% 4.1%
Deposits $ 8.3 $ 8.1 $ 8.0 $ 7.9
Assets Managed*** / Administered $ 8.6 $ 7.7 $ 7.0 $ 6.3
Assets of Non-Consolidated Joint
Ventures $ 2.2 $ 2.4 $ 2.2 $ 2.6
Risk-Based Capital Ratios:
Tier 1 9.9% 9.9% 9.8% 9.8%
Total 12.0% 12.1% 12.1% 12.1%
Leverage Ratio 5.6% 5.5% 5.7% 5.4%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 169 $ 179 $ 216 $ 218
Other Assets, primarily derivatives 16 23 32 41
Other Liabilities 4 2 1 2
----------------- ----------------- --------------- ------------------
Total Credit Loss Reserves $ 189 $ 204 $ 249 $ 261
================= ================= =============== ==================
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
----------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1998 1998 1998 1998
------------------ -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 210 $ 217 $ 218 $ 210
Interest Expense 136 143 147 139
------------------ -------------------- ---------------- ----------------
Net Interest Income 74 74 71 71
Commissions and Fees 41 43 42 41
Foreign Exchange Income & Other Revenue 30 34 43 56
------------------ -------------------- ---------------- ----------------
Total Net Revenues 145 151 156 168
------------------ -------------------- ---------------- ----------------
Expenses:
Human Resources 67 66 63 59
Other Operating Expenses 67 65 68 64
Provision for Losses 5 3 4 225
------------------ -------------------- ---------------- ----------------
Total Expenses 139 134 135 348
------------------ -------------------- ---------------- ----------------
Pretax Income/(Loss) 6 17 21 (180)
Income Tax Provision/(Benefit) - 5 7 (64)
------------------ -------------------- ---------------- ----------------
Net Income/(Loss) $ 6 $ 12 $ 14 $ (116)
================== ==================== ================ ================
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
American Express Bank (New Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
--------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1998 1998 1998 1998
----------------- ----------------- ---------------- ----------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C> <C>
Total Shareholder's Equity (millions) $ 743 $ 752 $ 719 $ 708
Return on Average Common Equity* (13.3)% (11.0)% (9.3)% (8.2)%
Return on Average Assets* (0.70)% (0.57)% (0.48)% (0.42)%
Total Loans $ 5.6 $ 6.1 $ 6.1 $ 6.0
Total Non-performing Loans (millions) $ 180 $ 239 $ 205 $ 149
Other Non-performing Assets (millions) $ 63 $ 92 $ 73 $ 102
Reserve for Credit Losses (millions)** $ 259 $ 348 $ 350 $ 359
Loan Loss Reserves as a % of Total Loans 3.8% 4.6% 4.3% 4.9%
Deposits $ 8.3 $ 8.7 $ 8.1 $ 8.3
Assets Managed*** / Administered $ 6.2 $ 5.7 $ 5.6 $ 5.1
Assets of Non-Consolidated Joint
Ventures $ 2.6 $ 2.4 $ 2.7 $ 2.6
Risk-Based Capital Ratios:
Tier 1 9.8% 9.4% 9.2% 9.0%
Total 12.6% 12.2% 12.2% 12.2%
Leverage Ratio 5.5% 5.6% 5.6% 5.1%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 214 $ 279 $ 265 $ 294
Other Assets, primarily derivatives 43 66 84 59
Other Liabilities 2 3 1 6
----------------- ----------------- ---------------- -----------------
Total Credit Loss Reserves $ 259 $ 348 $ 350 $ 359
================= ================= ================ =================
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Years Ended December 31,
------------------------------------------------
1999 1998 1997
--------------- --------------- --------------
<S> <C> <C> <C>
Net Revenues:
Interest Income $ 737 $ 854 $ 897
Interest Expense 446 564 579
--------------- --------------- --------------
Net Interest Income 291 290 318
TC Investment Income 345 330 331
Commissions and Fees 188 175 181
Foreign Exchange Income & Other Revenue 195 207 294
--------------- --------------- --------------
Total Net Revenues 1,019 1,002 1,124
--------------- --------------- --------------
Expenses:
Human Resources 342 322 306
Other Operating Expenses 596 537 517
Provision for Losses 58 272 52
--------------- --------------- --------------
Total Expenses 996 1,131 875
--------------- --------------- --------------
Pretax Income/(Loss) 23 (129) 249
Income Tax Benefit (129) (172) (23)
--------------- --------------- --------------
Net Income $ 152 $ 43 $ 272
=============== =============== ==============
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Years Ended December 31,
---------------------------------------------------------
1999 1998 1997
---------------- --------------- ----------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C>
Total Shareholder's Equity (millions) $ 875 $ 1,197 $ 1,248
Return on Average Common Equity* 17.5% 4.9% 28.7%
Return on Average Assets* 0.82% 0.23% 1.40%
American Express Bank:
Shareholder's Equity (millions) $ 691 $ 743 $ 830
Total Loans $ 5.1 $ 5.6 $ 6.2
Total Non-performing Loans (millions) $ 168 $ 180 $ 47
Other Non-performing Assets (millions) $ 37 $ 63 $ 11
Reserve for Credit Losses (millions)** $ 189 $ 259 $ 137
Loan Loss Reserves as a % of Total Loans 3.3% 3.8% 2.1%
Deposits $ 8.3 $ 8.3 $ 8.5
Assets Managed***/ Administered $ 8.6 $ 6.2 $ 5.0
Assets of Non-Consolidated Joint
Ventures $ 2.2 $ 2.6 $ 2.4
Risk-Based Capital Ratios:
Tier 1 9.9% 9.8% 8.8%
Total 12.0% 12.6% 12.3%
Leverage Ratio 5.6% 5.5% 5.3%
Travelers Cheque:
Sales $ 23.3 $ 23.6 $ 25.0
Average Outstanding $ 6.2 $ 6.0 $ 5.9
Average Investments $ 5.9 $ 5.8 $ 5.6
Tax Equivalent Yield 8.8% 9.0% 9.2%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 169 $ 214 $ 131
Other Assets, primarily derivatives 16 43 6
Other Liabilities 4 2 -
---------------- --------------- ----------------
Total Credit Loss Reserves $ 189 $ 259 $ 137
================ =============== ================
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
-------------------------------------
June 30, March 31,
2000 2000
---------------- ----------------
<S> <C> <C>
Net Revenues:
Interest Income $ 183 $ 183
Interest Expense 120 118
---------------- ----------------
Net Interest Income 63 65
TC Investment Income 98 91
Commissions and Fees 59 54
Foreign Exchange Income & Other Revenue 42 41
---------------- ----------------
Total Net Revenues 262 251
---------------- ----------------
Expenses:
Human Resources 84 84
Other Operating Expenses 159 148
Provision for Losses 15 16
---------------- ----------------
Total Expenses 258 248
---------------- ----------------
Pretax Income 4 3
Income Tax Benefit (36) (37)
---------------- ----------------
Net Income $ 40 $ 40
================ ================
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
------------------------------------
June 30, March 31,
2000 2000
---------------- ---------------
Selected Statistical Information
--------------------------------
<S> <C> <C>
Total Shareholder's Equity (millions) $ 956 $ 943
Return on Average Common Equity* 17.6% 17.3%
Return on Average Assets* 0.80% 0.81%
American Express Bank:
Shareholder's Equity (millions) $ 707 $ 697
Total Loans $ 5.1 $ 5.0
Total Non-performing Loans (millions) $ 174 $ 174
Other Non-performing Assets (millions) $ 36 $ 31
Reserve for Credit Losses (millions)** $ 187 $ 189
Loan Loss Reserves as a % of Total Loans 3.3% 3.4%
Deposits $ 8.2 $ 8.4
Assets Managed***/ Administered $ 10.3 $ 9.4
Assets of Non-Consolidated Joint
Ventures $ 2.3 $ 2.4
Risk-Based Capital Ratios:
Tier 1 10.3% 10.1%
Total 11.9% 11.6%
Leverage Ratio 5.8% 5.6%
Travelers Cheque:
Sales $ 6.7 $ 5.1
Average Outstanding $ 6.5 $ 6.1
Average Investments $ 6.2 $ 6.0
Tax Equivalent Yield 8.9% 8.9%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 166 $ 170
Other Assets, primarily derivatives 16 15
Other Liabilities 5 4
---------------- ---------------
Total Credit Loss Reserves $ 187 $ 189
================ ===============
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
----------------------------------------------------------------
December 31, September 30, June 30, March 31,
1999 1999 1999 1999
--------------- --------------- -------------- ------------
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 180 $ 181 $ 183 $ 193
Interest Expense 112 106 108 119
--------------- --------------- -------------- ------------
Net Interest Income 68 75 75 74
TC Investment Income 88 91 86 79
Commissions and Fees 51 49 47 43
Foreign Exchange Income & Other Revenue 45 46 51 51
--------------- --------------- -------------- ------------
Total Net Revenues 252 261 259 247
--------------- --------------- -------------- ------------
Expenses:
Human Resources 90 86 85 82
Other Operating Expenses 151 159 150 136
Provision for Losses 11 12 18 17
--------------- --------------- -------------- ------------
Total Expenses 252 257 253 235
--------------- --------------- -------------- ------------
Pretax Income - 4 6 12
Income Tax Benefit (35) (34) (32) (29)
--------------- --------------- -------------- ------------
Net Income $ 35 $ 38 $ 38 $ 41
=============== =============== ============== ============
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
------------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1999 1999 1999 1999
---------------- ---------------- ---------------- ---------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C> <C>
Total Shareholder's Equity (millions) $ 875 $ 956 $ 1,048 $ 1,148
Return on Average Common Equity* 17.5% 17.7% 18.5% 19.7%
Return on Average Assets* 0.82% 0.83% 0.86% 0.90%
American Express Bank:
Shareholder's Equity (millions) $ 691 $ 702 $ 714 $ 733
Total Loans $ 5.1 $ 5.1 $ 5.2 $ 5.3
Total Non-performing Loans (millions) $ 168 $ 181 $ 210 $ 209
Other Non-performing Assets (millions) $ 37 $ 40 $ 55 $ 64
Reserve for Credit Losses (millions)** $ 189 $ 204 $ 249 $ 261
Loan Loss Reserves as a % of Total Loans 3.3% 3.5% 4.1% 4.1%
Deposits $ 8.3 $ 8.1 $ 8.0 $ 7.9
Assets Managed***/ Administered $ 8.6 $ 7.7 $ 7.0 $ 6.3
Assets of Non-Consolidated Joint
Ventures $ 2.2 $ 2.4 $ 2.2 $ 2.6
Risk-Based Capital Ratios:
Tier 1 9.9% 9.9% 9.8% 9.8%
Total 12.0% 12.1% 12.1% 12.1%
Leverage Ratio 5.6% 5.5% 5.7% 5.4%
Travelers Cheque:
Sales $ 5.4 $ 7.3 $ 6.1 $ 4.6
Average Outstanding $ 6.1 $ 6.5 $ 6.1 $ 5.8
Average Investments $ 5.9 $ 6.2 $ 5.7 $ 5.6
Tax Equivalent Yield 8.8% 8.8% 8.8% 8.9%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 169 $ 179 $ 216 $ 218
Other Assets, primarily derivatives 16 23 32 41
Other Liabilities 4 2 1 2
---------------- ---------------- ---------------- ---------------
Total Credit Loss Reserves $ 189 $ 204 $ 249 $ 261
================ ================ ================ ===============
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Statements of Income
(Unaudited)
(Dollars in millions)
Quarters Ended
-------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1998 1998 1998 1998
--------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Revenues:
Interest Income $ 210 $ 217 $ 218 $ 210
Interest Expense 136 143 147 139
--------------- ---------------- -------------- --------------
Net Interest Income 74 74 71 71
TC Investment Income 82 88 80 80
Commissions and Fees 43 45 44 43
Foreign Exchange Income & Other Revenue 40 48 56 63
--------------- ---------------- -------------- --------------
Total Net Revenues 239 255 251 257
--------------- ---------------- -------------- --------------
Expenses:
Human Resources 86 83 79 74
Other Operating Expenses 136 140 136 124
Provision for Losses 15 12 13 233
--------------- ---------------- -------------- --------------
Total Expenses 237 235 228 431
--------------- ---------------- -------------- --------------
Pretax Income/(Loss) 2 20 23 (174)
Income Tax Benefit (34) (23) (24) (91)
--------------- ---------------- -------------- --------------
Net Income/(Loss) $ 36 $ 43 $ 47 $ (83)
=============== ================ ============== ==============
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
American Express Bank/Travelers Cheque (Old Segment)
Selected Statistical Information
(Unaudited)
(Dollars in billions, except where indicated)
Quarters Ended
------------------------------------------------------------------------------
December 31, September 30, June 30, March 31,
1998 1998 1998 1998
---------------- ---------------- ---------------- ---------------
Selected Statistical Information
--------------------------------
<S> <C> <C> <C> <C>
Total Shareholder's Equity (millions) $ 1,197 $ 1,210 $ 1,135 $ 1,119
Return on Average Common Equity* 4.9% 8.1% 10.4% 12.5%
Return on Average Assets* 0.23% 0.39% 0.50% 0.61%
American Express Bank:
Shareholder's Equity (millions) $ 743 $ 752 $ 719 $ 708
Total Loans $ 5.6 $ 6.1 $ 6.1 $ 6.0
Total Non-performing Loans (millions) $ 180 $ 239 $ 205 $ 149
Other Non-performing Assets (millions) $ 63 $ 92 $ 73 $ 102
Reserve for Credit Losses (millions)** $ 259 $ 348 $ 350 $ 359
Loan Loss Reserves as a % of Total Loans 3.8% 4.6% 4.3% 4.9%
Deposits $ 8.3 $ 8.7 $ 8.1 $ 8.3
Assets Managed***/ Administered $ 6.2 $ 5.7 $ 5.6 $ 5.1
Assets of Non-Consolidated Joint
Ventures $ 2.6 $ 2.4 $ 2.7 $ 2.6
Risk-Based Capital Ratios:
Tier 1 9.8% 9.4% 9.2% 9.0%
Total 12.6% 12.2% 12.2% 12.2%
Leverage Ratio 5.5% 5.6% 5.6% 5.1%
Travelers Cheque:
Sales $ 5.0 $ 7.5 $ 6.4 $ 4.8
Average Outstanding $ 5.9 $ 6.4 $ 6.0 $ 5.7
Average Investments $ 5.8 $ 6.1 $ 5.7 $ 5.4
Tax Equivalent Yield 8.8% 8.8% 9.0% 9.2%
* Excludes the effect of SFAS No. 115 for all periods presented.
** Allocation:
Loans $ 214 $ 279 $ 265 $ 294
Other Assets, primarily derivatives 43 66 84 59
Other Liabilities 2 3 1 6
---------------- ---------------- ---------------- ---------------
Total Credit Loss Reserves $ 259 $ 348 $ 350 $ 359
================ ================ ================ ===============
*** Includes assets managed by American Express Financial Advisors.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Restatement of Certain Financial Information by Segment
(Unaudited)
American
Travel Express American Corporate Adjustments
Related Financial Express and and
Services Advisors Bank Other Eliminations Consolidated
(Millions) -------------- --------------- --------------- -------------- --------------- -------------
1999
----
<S> <C> <C> <C> <C> <C> <C>
Net revenues (managed basis) $ 15,234 $ 3,737 $ 621 $ 109 $ (218) $ 19,483
Revenues (GAAP basis) 15,130 5,636 621 109 (218) 21,278
Interest and dividends, net 643 2,443 291 105 (136) 3,346
Cardmember lending net finance charge
revenue:
Managed basis 1,929 - - - - 1,929
GAAP basis 1,333 - - - - 1,333
Interest expense:
Managed basis 1,204 32 - 164 (129) 1,271
GAAP basis 984 32 - 164 (129) 1,051
Pretax income (loss) 2,383 1,363 27 (335) - 3,438
Income tax provision (benefit) 691 428 5 (161) - 963
-------------- -------------- -------------- -------------- -------------- ---------------
Net income (loss) 1,692 935 22 (174) - 2,475
-------------- -------------- -------------- -------------- -------------- ---------------
Assets $ 63,233 $ 74,644 $ 11,354 $ 14,449 $ (15,163) $ 148,517
------------------------------------------------------------------------------------------------------------------------------------
1998
----
Net revenues (managed basis) $ 13,524 $ 3,181 $ 620 $ 112 $ (225) $ 17,212
Revenues (GAAP basis) 13,530 5,095 620 112 (225) 19,132
Interest and dividends, net 581 2,437 290 103 (134) 3,277
Cardmember lending net finance charge
revenue:
Managed basis 1,660 - - - - 1,660
GAAP basis 1,354 - - - - 1,354
Interest expense:
Managed basis 1,191 21 - 149 (131) 1,230
GAAP basis 960 21 - 149 (131) 999
Pretax income (loss) 2,070 1,192 (135) (202) - 2,925
Income tax provision (benefit) 579 374 (51) (118) - 784
-------------- -------------- -------------- -------------- -------------- ---------------
Net income (loss) 1,491 818 (84) (84) - 2,141
-------------- -------------- -------------- -------------- -------------- ---------------
Assets $ 51,164 $ 64,637 $ 11,576 $ 3,606 $ (4,050) $ 126,933
------------------------------------------------------------------------------------------------------------------------------------
1997
----
Net revenues (managed basis) $ 12,630 $ 2,733 $ 637 $ 123 $ (266) $ 15,857
Revenues (GAAP basis) 12,667 4,599 637 123 (266) 17,760
Interest and dividends, net 561 2,339 318 101 (144) 3,175
Cardmember lending net finance charge
revenue:
Managed basis 1,411 - - - - 1,411
GAAP basis 1,244 - - - - 1,244
Interest expense:
Managed basis 1,150 18 - 129 (143) 1,154
GAAP basis 920 18 - 129 (143) 924
Pretax income (loss) 1,905 1,022 130 (307) - 2,750
Income tax provision (benefit) 551 315 48 (155) - 759
-------------- -------------- -------------- -------------- -------------- ---------------
Net income (loss) 1,354 707 82 (152) - 1,991
-------------- -------------- -------------- -------------- -------------- ---------------
Assets $ 47,187 $ 59,828 $ 12,868 $ 3,374 $ (3,254) $ 120,003
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
26
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