-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H5MptpPFkSlli594GgygfKVo3ArkTVQyDn/IDdj/DJ1xJRnmgrAo5ub1k4lje5m9 pOEPu1MoNbePRRxM/j+7Sw== 0000004962-97-000003.txt : 19970130 0000004962-97-000003.hdr.sgml : 19970130 ACCESSION NUMBER: 0000004962-97-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970127 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19970129 SROS: BSE SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EXPRESS CO CENTRAL INDEX KEY: 0000004962 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 134922250 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07657 FILM NUMBER: 97512656 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR, WORLD FINANCIAL CN STREET 2: 200 VESEY ST 49TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2126402000 MAIL ADDRESS: STREET 1: AMERICAN EXPRESS TOWER STREET 2: 200 VESEY ST 49TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 8-K 1 8-K REPORT AMERICAN EXPRESS COMPANY SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 27, 1997 AMERICAN EXPRESS COMPANY - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 1-7657 13-4922250 - -------------------------------- -------------- ------------ (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification) 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.) Item 5. Other Events On January 27, 1997, American Express Company issued the following press release: NEW YORK, January 27, 1997 -- American Express Company today reported 1996 operating income of $1.74 billion, excluding two fourth quarter items: a $300 million gain (after-tax) on the exchange of DECS for shares of common stock of First Data Corporation and a $138 million restructuring charge (after-tax), primarily at Travel Related Services. The 1996 results are 11 percent higher than 1995 net income of $1.56 billion. On a per share basis, earnings were $3.57, compared with $3.11 a year ago, an increase of 15 percent. Including the gain and restructuring charge in 1996, net income was $1.90 billion, up 22 percent from a year ago. On a per share basis, net income increased 25 percent to $3.90. For the fourth quarter, American Express reported operating income of $433 million, or $0.90 per share, excluding the gain and the restructuring charge, compared with net income of $384 million, or $0.77 per share a year ago, an increase of 17 percent. Including the gain and the restructuring charge, fourth quarter 1996 net income was $595 million, or $1.23 per share. Travel Related Services (TRS) reported 1996 operating income of $1.23 billion, up 13 percent from $1.09 billion a year ago. The 1996 results exclude a fourth-quarter restructuring charge of $125 million ($196 million pre-tax). The 1995 amount excludes the income of AMEX Life, a subsidiary sold in October 1995. Including the restructuring charge in 1996 and AMEX Life's results in 1995, TRS' net income was $1.11 billion compared with $1.12 billion a year ago. The fourth quarter restructuring charge reflects TRS' costs of continuing to reengineer its Card and Travel businesses, approximately two-thirds of which relate to international markets. The charge includes $70 million in severance related to a reduction in force of approximately 3,300 employees and $55 million related to the closing of certain leased facilities, the consolidation of other operations and the write-down of certain assets or the termination of contractual obligations. It is expected that these initiatives will be implemented in 1997 and that the savings will be reinvested into the business with no material immediate impact on future earnings. Excluding the revenues for AMEX Life, TRS' revenues increased approximately 5 percent compared with a year ago. Excluding the 1996 restructuring charge and the AMEX Life expenses in 1995, TRS' expenses were up approximately 4 percent compared with last year. Net revenues reflect higher worldwide billed business on American Express Cards and growth in Cardmember loans outstanding. Billed business rose due to higher spending per Cardmember, attributable in part to the benefits of rewards programs and expanded merchant coverage, as well as a greater number of cards outstanding. These were partially offset by a decrease in net card fees, in line with the company's strategy of building its lending portfolio through the issuance of low- and no-fee credit cards. The charge card provision for losses declined slightly with improving credit quality, particularly in Latin America. The lending provision for losses rose primarily reflecting growth in outstanding loans. The increase in operating expenses resulted from the cost of Cardmember loyalty programs, business growth and investment spending. Excluding the restructuring charge, TRS reported fourth quarter operating income of $299 million, compared with $266 million in the 1995 fourth quarter. Including the charge, TRS' fourth quarter 1996 net income was $174 million. American Express Financial Advisors (AEFA) reported record net income in 1996 of $594 million, 18 percent above the $503 million reported in 1995. Revenue and earnings growth benefited primarily from higher fee revenues due to an increase in managed assets and growth in distribution fees primarily from sales of mutual funds. Record sales were reported for mutual funds and life and other insurance products. Sales of annuities increased over last year, while sales of investment certificates decreased. AEFA reported record fourth quarter net income of $155 million, compared with $133 million in the 1995 fourth quarter. American Express Bank (AEB) reported 1996 net income of $68 million, a 12 percent decrease from $77 million in 1995. The decline in earnings reflects lower revenues and a higher provision for loan losses, partly offset by reduced expenses. The decrease in revenues and expenses reflects, in part, the effect of the Bank's continued efforts to focus on strategic markets and eliminate low return activities. The increase in the provision for credit losses was due to loan growth and write-offs. AEB reported fourth quarter net income of $17 million, compared with $21 million in the 1995 fourth quarter. Corporate and Other reported 1996 net expenses of $153 million, excluding the $300 million after-tax gain on the exchange of DECS ($480 million pre-tax) and a charge primarily related to the early retirement of debt. This compares with net expenses of $141 million a year ago. Including these items, Corporate and Other reported 1996 net income of $134 million. Both years include the Company's share of the Travelers Inc. revenue and net income participations in accordance with an agreement related to the 1993 sale of the Shearson Lehman Brothers Division, which was offset by expenses related to certain business building initiatives. For the fourth quarter, net expenses were $38 million, excluding the above gain and charge, compared with net expenses of $36 million a year ago. Including these items, Corporate and Other fourth quarter 1996 net income was $249 million. American Express Company, a global travel, financial and network services provider founded in 1850, provides customers with a variety of products and services consistent with its brand. The Company provides individuals with charge and credit cards, travelers cheques and other stored value products. It also offers financial planning, brokerage services, mutual funds, insurance and other investment products. Through its family of Corporate Card services, American Express helps companies and institutions manage their travel, entertainment and purchasing expenses. It provides investment management services and administers pension and other employee benefit plans. The Company also offers accounting and tax preparation to small businesses, and financial education services to employees at their places of work. As the world's largest travel agency, American Express offers travel and related consulting services to individuals and corporations around the globe. The Company also provides banking services to corporations, wealthy entrepreneurs, financial institutions and retail customers outside the United States. American Express Company ------------------------ Financial Summary ----------------- (Unaudited) (Dollars in millions, except per share amounts) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) -------------- ---------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $3,059 $2,927 4.5% American Express Financial Advisors 1,069 973 9.8 American Express Bank 156 158 (1.0) ------- ------ 4,284 4,058 5.6 Corporate and Other, including adjustments and eliminations (27) (10) # ------- ------ CONSOLIDATED REVENUES (A) $4,257 $4,048 5.1 ======= ====== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $403 $371 8.5% American Express Financial Advisors 228 203 12.3 American Express Bank 26 32 (16.8) ------- ----- 657 606 8.5 Corporate and Other (C) (78) (65) (21.5) ------- ----- PRETAX OPERATING INCOME $579 $541 6.9 ======= ===== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $299 $266 12.3% American Express Financial Advisors 155 133 16.5 American Express Bank 17 21 (18.4) ------- ----- 471 420 12.1 Corporate and Other(C) (38) (36) (7.3) ------- ----- OPERATING INCOME $433 $384 12.6 FDC Gain/(Restructuring) 162 0 - ------ ----- NET INCOME $595 $384 54.7 ====== ===== OPERATING INCOME PER COMMON SHARE $0.90 $0.77 16.9 FDC Gain/(Restructuring) $0.33 $0.00 - ------- ------ NET INCOME PER COMMON SHARE $1.23 $0.77 59.7 ======= ====== Cash dividends declared per common share $0.225 $0.225 ====== ======= Average common shares outstanding (000's) 482,065 493,326 ======= ======= Year Ended December 31, Percentage 1996 1995 Inc/(Dec) -------------- ---------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $11,630 $11,542 0.8% American Express Financial Advisors 4,110 3,691 11.3 American Express Bank 591 643 (7.9) -------- ------- 16,331 15,876 2.9 Corporate and Other, including adjustments and eliminations (94) (35) # -------- -------- CONSOLIDATED REVENUES (A) $16,237 $15,841 2.5 ======= ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $1,719 $1,579 8.8% American Express Financial Advisors 885 755 17.2 American Express Bank 105 115 (8.2) ------- ------- 2,709 2,449 10.6 Corporate and Other (C) (309) (266) (16.0) ------- ------- PRETAX OPERATING INCOME $2,400 $2,183 10.0 ======= ======= Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $1,230 $1,125 9.4% American Express Financial Advisors 594 503 18.0 American Express Bank 68 77 (12.1) -------- ------- 1,892 1,705 11.0 Corporate and Other(C) (153) (141) (7.8) -------- ------- OPERATING INCOME $1,739 $1,564 11.2 FDC Gain/(Restructuring) 162 0 - -------- ------- NET INCOME $1,901 $1,564 21.6 ======= ======= OPERATING INCOME PER COMMON SHARE $3.57 $3.11 14.8 FDC Gain/(Restructuring) $0.33 $0.00 - ------- ------- NET INCOME PER COMMON SHARE $3.90 $3.11 25.4 ======= ======= Cash dividends declared per common share $0.90 $0.90 ======= ======= Average common shares outstanding (000's) 485,595 497,953 ======= ======= (A) Revenues are reported net of interest expense, where applicable. (B) TRS' results for the quarter and year ended December 31, 1996 exclude a pretax restructuring charge of $196 million ($125 million after-tax). (C) Corporate and Other for the quarter and year ended December 31, 1996 exclude a pretax gain of $480 million ($300 million after-tax) on the exchange of the Company's DECS (Debt Exchangeable for Common Stock) for shares of common stock of First Data Corporation and a $20 million pretax charge ($13 million after-tax) related to the early retirement of debt and certain restructuring costs. # Denotes variance of more than 100%. American Express Company ------------------------ Selected Statistical Information -------------------------------- (Unaudited) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) -------------- ---------- Return on Average Equity* 22.8% 22.0% - Common Shares Outstanding (millions) 472.9 483.1 (2.1%) Book Value per Common Share: Actual $18.04 $16.60 8.7 Pro Forma** $17.22 $14.79 16.4 Shareholders' Equity (billions) $8.5 $8.2 3.7 Year Ended December 31, Percentage 1996 1995 Inc/(Dec) -------------- ---------- Return on Average Equity* 22.8% 22.0% - Common Shares Outstanding (millions) 472.9 483.1 (2.1%) Book Value per Common Share: Actual $18.04 $16.60 8.7 Pro Forma** $17.22 $14.79 16.4 Shareholders' Equity (billions) $8.5 $8.2 3.7 * Excluding the effect of SFAS #115 and, for the quarter and year ended December 31, 1996, the $300 million gain on the exchange of the Company's DECS and a $138 million restructuring charge. ** Excluding the effect of SFAS #115. American Express Company ------------------------ Financial Summary ----------------- (Unaudited) (Dollars in millions, except per share amounts) Quarter Ended December 31, 1996 ----------------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $3,059 American Express Financial Advisors 1,069 American Express Bank 156 ------- 4,284 Corporate and Other, including adjustments and eliminations (27) -------- CONSOLIDATED REVENUES (A) $4,257 ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $403 American Express Financial Advisors 228 American Express Bank 26 -------- 657 Corporate and Other (C) (78) -------- PRETAX OPERATING INCOME $579 ======== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $299 American Express Financial Advisors 155 American Express Bank 17 -------- 471 Corporate and Other(C) (38) -------- OPERATING INCOME $433 FDC Gain/(Restructuring) 162 ------- NET INCOME $595 ======== OPERATING INCOME PER COMMON SHARE $0.90 FDC Gain/(Restructuring) $0.33 -------- NET INCOME PER COMMON SHARE $1.23 ======== Cash dividends declared per common share $0.225 ======== Average common shares outstanding (000's) 482,065 ======== Quarter Ended September 30, 1996 ------------------ Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $2,920 American Express Financial Advisors 1,021 American Express Bank 151 -------- 4,092 Corporate and Other, including adjustments and eliminations (36) -------- CONSOLIDATED REVENUES (A) $4,056 ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $441 American Express Financial Advisors 230 American Express Bank 28 -------- 699 Corporate and Other (C) (78) -------- PRETAX OPERATING INCOME $621 ======== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $323 American Express Financial Advisors 156 American Express Bank 18 -------- 497 Corporate and Other(C) (39) -------- OPERATING INCOME $458 FDC Gain/(Restructuring) 0 -------- NET INCOME $458 ======== OPERATING INCOME PER COMMON SHARE $0.95 FDC Gain/(Restructuring) $0.00 ------- NET INCOME PER COMMON SHARE $0.95 ======== Cash dividends declared per common share $0.225 ======== Average common shares outstanding (000's) 481,865 ======== Quarter Ended June 30, 1996 ------------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $2,901 American Express Financial Advisors 1,017 American Express Bank 140 -------- 4,058 Corporate and Other, including adjustments and eliminations (14) -------- CONSOLIDATED REVENUES (A) $4,044 ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $459 American Express Financial Advisors 231 American Express Bank 22 -------- 712 Corporate and Other (C) (76) -------- PRETAX OPERATING INCOME $636 ======== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $322 American Express Financial Advisors 153 American Express Bank 14 -------- 489 Corporate and Other(C) (37) -------- OPERATING INCOME $452 FDC Gain/(Restructuring) 0 -------- NET INCOME $452 ======== OPERATING INCOME PER COMMON SHARE $0.93 FDC Gain/(Restructuring) $0.00 -------- NET INCOME PER COMMON SHARE $0.93 ======== Cash dividends declared per common share $0.225 ======== Average common shares outstanding (000's) 487,048 ======== Quarter Ended March 31, 1996 -------------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $2,750 American Express Financial Advisors 1,003 American Express Bank 146 -------- 3,899 Corporate and Other, including adjustments and eliminations (17) -------- CONSOLIDATED REVENUES (A) $3,882 ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $416 American Express Financial Advisors 196 American Express Bank 29 -------- 641 Corporate and Other (C) (76) -------- PRETAX OPERATING INCOME $565 ======== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $286 American Express Financial Advisors 130 American Express Bank 19 -------- 435 Corporate and Other(C) (39) -------- OPERATING INCOME $396 FDC Gain/(Restructuring) 0 -------- NET INCOME $396 ======== OPERATING INCOME PER COMMON SHARE $0.80 FDC Gain/(Restructuring) $0.00 -------- NET INCOME PER COMMON SHARE $0.80 ======== Cash dividends declared per common share $0.225 ======== Average common shares outstanding (000's) 490,610 ======== Quarter Ended December 31, 1995 ----------------- Revenues by Industry Segment (A) - -------------------------------- Travel Related Services $2,927 American Express Financial Advisors 973 American Express Bank 158 -------- 4,058 Corporate and Other, including adjustments and eliminations (10) -------- CONSOLIDATED REVENUES (A) $4,048 ======== Pretax Operating Income by Industry Segment - ------------------------------------------- Travel Related Services (B) $371 American Express Financial Advisors 203 American Express Bank 32 -------- 606 Corporate and Other (C) (65) -------- PRETAX OPERATING INCOME $541 ======== Operating Income by Industry Segment - ------------------------------------ Travel Related Services (B) $266 American Express Financial Advisors 133 American Express Bank 21 -------- 420 Corporate and Other(C) (36) -------- OPERATING INCOME $384 FDC Gain/(Restructuring) 0 ------- NET INCOME $384 ======== OPERATING INCOME PER COMMON SHARE $0.77 FDC Gain/(Restructuring) $0.00 ------- NET INCOME PER COMMON SHARE $0.77 ======== Cash dividends declared per common share $0.225 ======== Average common shares outstanding (000's) 493,326 ======== (A) Revenues are reported net of interest expense, where applicable. (B) TRS' results for the quarter and year ended December 31, 1996 exclude a pretax restructuring charge of $196 million ($125 million after-tax). (C) Corporate and Other results for the quarter and year ended December 31, 1996 exclude a pretax gain of $480 million ($300 million after-tax) on the exchange of the Company's DECS (Debt Exchangeable for Common Stock) for shares of common stock of First Data Corporation and a $20 million pretax charge ($13 million after-tax) related to the early retirement of debt and certain restructuring costs. American Express Company ------------------------ Selected Statistical Information -------------------------------- (Unaudited) Quarter Ended December 31, 1996 ----------------- Return on Average Equity* 22.8% Common Shares Outstanding (millions) 472.9 Book Value per Common Share: Actual $18.04 Pro Forma** $17.22 Shareholders' Equity (billions) $8.5 Quarter Ended September 30, 1996 ------------------ Return on Average Equity* 22.8% Common Shares Outstanding (millions) 473.5 Book Value per Common Share: Actual $17.41 Pro Forma** $16.19 Shareholders' Equity (billions) $8.2 Quarter Ended June 30, 1996 ------------- Return on Average Equity* 22.6% Common Shares Outstanding (millions) 476.6 Book Value per Common Share: Actual $16.69 Pro Forma** $15.57 Shareholders' Equity (billions) $8.0 Quarter Ended March 31, 1996 -------------- Return on Average Equity* 22.3% Common Shares Outstanding (millions) 479.1 Book Value per Common Share: Actual $16.26 Pro Forma** $14.93 Shareholders' Equity (billions) $8.0 Quarter Ended December 31, 1995 ----------------- Return on Average Equity* 22.0% Common Shares Outstanding (millions) 483.1 Book Value per Common Share: Actual $16.60 Pro Forma** $14.79 Shareholders' Equity (billions) $8.2 * Excluding the effect of SFAS #115 and, for the quarter ended December 31, 1996, the $300 million gain on the exchange of the Company's DECS and a $138 million restructuring charge. ** Excluding the effect of SFAS# 115. (Preliminary) Travel Related Services ----------------------- Statement of Income ---------------------- (Unaudited) (Dollars in millions) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------- ---------- Net Revenues: Discount Revenue $1,380 $1,212 13.9% Net Card Fees 415 431 (3.8) Travel Commissions and Fees 336 357 (5.8) Interest and Dividends 156 209 (25.3) Other Revenues 483 444 8.6 -------- -------- 2,770 2,653 4.4 -------- -------- Lending: Finance Charge Revenue 423 403 5.0 Interest Expense 134 129 3.6 -------- -------- Net Finance Charge Revenue 289 274 5.7 -------- -------- Total Net Revenues 3,059 2,927 4.5 -------- -------- Expenses: Marketing and Promotion 268 218 23.0 Provision for Losses and Claims: Charge Card 113 264 (57.3) Lending 214 158 35.2 Other 22 35 (34.6) -------- -------- Total 349 457 (23.6) -------- -------- Interest Expense: Charge Card 176 178 (1.2) Other 65 115 (43.7) -------- -------- Total 241 293 (17.9) Net Discount Expense 174 106 65.3 Human Resources 794 731 8.6 Other Operating Expenses 830 751 10.5 -------- -------- Total Expenses 2,656 2,556 3.9 -------- -------- Pretax Income 403 371 8.5 Income Tax Provision 104 105 (1.0) -------- -------- Operating Income $299* $266 12.3 ======== ======== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ------------------------- Statement of Income ---------------------- (Unaudited) (Dollars in millions) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ --------- Net Revenues: Discount Revenue $5,024 $4,457 12.7% Net Card Fees 1,668 1,742 (4.3) Travel Commissions and Fees 1,279 1,288 (0.7) Interest and Dividends 724 969 (25.3) Other Revenues 1,867 2,054 (9.1) -------- -------- 10,562 10,510 0.5 -------- -------- Lending: Finance Charge Revenue 1,575 1,529 3.1 Interest Expense 507 497 2.0 -------- -------- Net Finance Charge Revenue 1,068 1,032 3.5 -------- -------- Total Net Revenues 11,630 11,542 0.8 -------- -------- Expenses: Marketing and Promotion 998 950 5.1 Provision for Losses and Claims: Charge Card 743 835 (11.0) Lending 635 522 21.7 Other 101 416 (75.9) -------- -------- Total 1,479 1,773 (16.6) -------- -------- Interest Expense: Charge Card 688 673 2.3 Other 347 453 (23.3) -------- -------- Total 1,035 1,126 (8.0) Net Discount Expense 554 414 33.7 Human Resources 2,984 2,829 5.5 Other Operating Expenses 2,861 2,871 (0.3) -------- -------- Total Expenses 9,911 9,963 (0.5) -------- -------- Pretax Income 1,719 1,579 8.8 Income Tax Provision 489 454 7.5 -------- -------- Operating Income $1,230* $1,125 9.4 ======== ======== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ----------------------- Statement of Income ----------------------- (Unaudited, Managed Asset Basis) (Dollars in millions) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Net Revenues: Discount Revenue $1,380 $1,212 13.9% Net Card Fees 415 431 (3.8) Travel Commissions and Fees 336 357 (5.8) Interest and Dividends 156 209 (25.3) Other Revenues 450 423 6.1 -------- -------- 2,737 2,632 4.0 -------- -------- Lending: Finance Charge Revenue 463 403 15.0 Interest Expense 150 129 16.0 -------- -------- Net Finance Charge Revenue 313 274 14.5 -------- -------- Total Net Revenues 3,050 2,906 5.0 -------- -------- Expenses: Marketing and Promotion 268 218 23.0 Provision for Losses and Claims: Charge Card 199 308 (35.4) Lending 235 158 48.3 Other 22 35 (34.6) -------- -------- Total 456 501 (8.9) -------- -------- Interest Expense: Charge Card 234 219 7.1 Other 65 115 (43.7) -------- -------- Total 299 334 (10.4) Human Resources 794 731 8.6 Other Operating Expenses 830 751 10.5 -------- -------- Total Expenses 2,647 2,535 4.4 -------- -------- Pretax Income 403 371 8.5 Income Tax Provision 104 105 (1.0) -------- -------- Operating Income $299* $266 12.3 ======== ======== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ----------------------- Statement of Income --------------------- (Unaudited, Managed Asset Basis) (Dollars in millions) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Net Revenues: Discount Revenue $5,024 $4,457 12.7% Net Card Fees 1,664 1,742 (4.5) Travel Commissions and Fees 1,279 1,288 (0.7) Interest and Dividends 724 969 (25.3) Other Revenues 1,714 1,970 (13.0) -------- -------- 10,405 10,426 (0.2) -------- -------- Lending: Finance Charge Revenue 1,691 1,529 10.6 Interest Expense 548 497 10.4 -------- -------- Net Finance Charge Revenue 1,143 1,032 10.7 -------- -------- Total Net Revenues 11,548 11,458 0.8 -------- -------- Expenses: Marketing and Promotion 998 950 5.1 Provision for Losses and Claims: Charge Card 989 1,002 (1.4) Lending 678 522 30.0 Other 101 416 (75.9) -------- -------- Total 1,768 1,940 (8.9) -------- -------- Interest Expense: Charge Card 871 836 4.2 Other 347 453 (23.3) -------- -------- Total 1,218 1,289 (5.5) Human Resources 2,984 2,829 5.5 Other Operating Expenses 2,861 2,871 (0.3) -------- -------- Total Expenses 9,829 9,879 (0.5) -------- -------- Pretax Income 1,719 1,579 8.8 Income Tax Provision 489 454 7.5 -------- -------- Operating Income $1,230* $1,125 9.4 ======== ======== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ---------------------- Selected Statistical Information -------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Total Cards in Force (millions): United States 29.2 26.7 9.5% Outside the United States 12.3 11.6 5.4 -------- -------- Total 41.5 38.3 8.2 ======== ======== Basic Cards in Force (millions): United States 22.5 20.0 12.3 Outside the United States 9.6 9.2 4.2 -------- -------- Total 32.1 29.2 9.8 ======== ======== Card Billed Business: United States $36.2 $31.3 15.5 Outside the United States 14.9 12.7 17.8 -------- -------- Total $51.1 $44.0 16.2 ======== ======== Average Discount Rate* 2.70% 2.75% - Average Basic Cardmember Spending (dollars)* $1,617 $1,528 5.8 Average Fee per Card (dollars)* $41 $46 (10.9) Travel Sales $4.3 $4.1 4.7 Travel Commissions and Fees/Sales* 7.8% 8.7% - Travelers Cheque Sales $5.5 $5.1 8.2 Average Travelers Cheques Outstanding $6.0 $6.0 (0.3) Investments $6.5 $9.2 (29.7) Travelers Cheques Outstanding $5.8 $5.7 2.5 Total Debt $23.4 $22.3 5.0 Shareholder's Equity $4.7 $4.9 (4.7) Return on Average Equity** 25.6% 24.6% - Return on Average Assets** 2.8% 2.5% - * Computed from information provided herein. ** Excluding the effect of SFAS #115 and the fourth quarter 1996 restructuring charge of $125 million after-tax. (Preliminary) Travel Related Services ----------------------- Selected Statistical Information -------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ --------- Total Cards in Force (millions): United States 29.2 26.7 9.5% Outside the United States 12.3 11.6 5.4 -------- -------- Total 41.5 38.3 8.2 ======== ======== Basic Cards in Force (millions): United States 22.5 20.0 12.3 Outside the United States 9.6 9.2 4.2 -------- -------- Total 32.1 29.2 9.8 ======== ======== Card Billed Business: United States $131.0 $115.2 13.7 Outside the United States 53.3 47.3 12.7 -------- -------- Total $184.3 $162.5 13.4 ======== ======== Average Discount Rate* 2.73% 2.74% - Average Basic Cardmember Spending (dollars)* $6,013 $5,814 3.4 Average Fee per Card (dollars)* $42 $47 (10.6) Travel Sales $15.8 $15.1 4.2 Travel Commissions and Fees/Sale* 8.1% 8.5% - Travelers Cheque Sales $26.0 $25.6 1.7 Average Travelers Cheques Outstanding $6.0 $6.0 1.2 Investments $6.5 $9.2 (29.7) Travelers Cheques Outstanding $5.8 $5.7 2.5 Total Debt $23.4 $22.3 5.0 Shareholder's Equity $4.7 $4.9 (4.7) Return on Average Equity** 25.6% 24.6% - Return on Average Assets** 2.8% 2.5% - * Computed from information provided herein. ** Excluding the effect of SFAS #115 and the fourth quarter 1996 restructuring charge of $125 million after-tax. (Preliminary) Travel Related Services ----------------------- Selected Statistical Information (continued) ------------------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Owned and Managed Charge Card Receivables: Total Receivables $22.5 $20.5 9.7% 90 Days Past Due as a % of Total 3.2% 3.5% - Loss Reserves (millions) $923 $952 (3.0) % of Receivables 4.1% 4.6% - % of 90 Days Past Due 128% 131% - Net Loss Ratio 0.51% 0.57% - Owned and Managed U.S. Cardmember Lending: Total Loans $12.7 $10.0 27.9 Past Due Loans as a % of Total: 30-89 Days 2.4% 2.8% - 90+ Days 0.9% 1.0% - Loss Reserves (millions): Beginning Balance $427 $389 9.8 Provision 220 162 35.5 Net Charge-Offs/Other (159) (108) 47.3 -------- -------- Ending Balance $488 $443 10.0 ======== ======== % of Loans 3.8% 4.5% - % of Past Due 117% 116% - Average Loans $12.1 $9.5 28.2 Net Write-Off Rate 5.2% 4.5% - Net Interest Yield 8.6% 9.9% - (Preliminary) Travel Related Services ----------------------- Selected Statistical Information (continued) -------------------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Owned and Managed Charge Card Receivables: Total Receivables $22.5 $20.5 9.7% 90 Days Past Due as a % of Total 3.2% 3.5% - Loss Reserves (millions) $923 $952 (3.0) % of Receivables 4.1% 4.6% - % of 90 Days Past Due 128% 131% - Net Loss Ratio 0.51% 0.51% - Owned and Managed U.S. Cardmember Lending: Total Loans $12.7 $10.0 27.9 Past Due Loans as a % of Total: 30-89 Days 2.4% 2.8% - 90+ Days 0.9% 1.0% - Loss Reserves (millions): Beginning Balance $443 $329 34.8 Provision 607 505 20.3 Net Charge-Offs/Other (562) (391) 44.2 -------- -------- Ending Balance $488 $443 10.0 ======== ======== % of Loans 3.8% 4.5% - % of Past Due 117% 116% - Average Loans $10.8 $8.8 22.7 Net Write-Off Rate 5.2% 4.4% - Net Interest Yield 8.8% 9.9% - (Preliminary) Travel Related Services ----------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Quarter Ended December 31, 1996 ----------------- Net Revenues: Discount Revenue $1,380 Net Card Fees 415 Travel Commissions and Fees 336 Interest and Dividends 156 Other Revenues 483 --------- 2,770 --------- Lending: Finance Charge Revenue 423 Interest Expense 134 --------- Net Finance Charge Revenue 289 --------- Total Net Revenues 3,059 --------- Expenses: Marketing and Promotion 268 Provision for Losses and Claims: Charge Card 113 Lending 214 Other 22 --------- Total 349 --------- Interest Expense: Charge Card 176 Other 65 --------- Total 241 Net Discount Expense 174 Human Resources 794 Other Operating Expenses 830 --------- Total Expenses 2,656 --------- Pretax Income 403 Income Tax Provision 104 --------- Operating Income $299 * ========= Quarter Ended September 30, 1996 ------------------ Net Revenues: Discount Revenue $1,256 Net Card Fees 418 Travel Commissions and Fees 316 Interest and Dividends 167 Other Revenues 508 ---------- 2,665 ---------- Lending: Finance Charge Revenue 377 Interest Expense 122 ---------- Net Finance Charge Revenue 255 ---------- Total Net Revenues 2,920 ---------- Expenses: Marketing and Promotion 278 Provision for Losses and Claims: Charge Card 172 Lending 107 Other 28 ---------- Total 307 ---------- Interest Expense: Charge Card 175 Other 72 ---------- Total 247 Net Discount Expense 128 Human Resources 764 Other Operating Expenses 755 ---------- Total Expenses 2,479 ---------- Pretax Income 441 Income Tax Provision 118 ---------- Operating Income $323 ========== Quarter Ended June 30, 1996 ------------- Net Revenues: Discount Revenue $1,247 Net Card Fees 414 Travel Commissions and Fees 329 Interest and Dividends 211 Other Revenues 451 ---------- 2,652 ---------- Lending: Finance Charge Revenue 371 Interest Expense 122 ---------- Net Finance Charge Revenue 249 ---------- Total Net Revenues 2,901 ---------- Expenses: Marketing and Promotion 252 Provision for Losses and Claims: Charge Card 248 Lending 126 Other 26 ---------- Total 400 ---------- Interest Expense: Charge Card 171 Other 114 ---------- Total 285 Net Discount Expense 125 Human Resources 721 Other Operating Expenses 659 ---------- Total Expenses 2,442 ---------- Pretax Income 459 Income Tax Provision 137 ---------- Operating Income $322 ========== Quarter Ended March 31, 1996 -------------- Net Revenues: Discount Revenue $1,141 Net Card Fees 421 Travel Commissions and Fees 298 Interest and Dividends 191 Other Revenues 424 ---------- 2,475 ---------- Lending: Finance Charge Revenue 404 Interest Expense 129 ---------- Net Finance Charge Revenue 275 ---------- Total Net Revenues 2,750 ---------- Expenses: Marketing and Promotion 200 Provision for Losses and Claims: Charge Card 210 Lending 188 Other 24 ---------- Total 422 ---------- Interest Expense: Charge Card 167 Other 95 ---------- Total 262 Net Discount Expense 126 Human Resources 704 Other Operating Expenses 620 ---------- Total Expenses 2,334 ---------- Pretax Income 416 Income Tax Provision 130 ---------- Operating Income $286 ========== Quarter Ended December 31, 1995 ----------------- Net Revenues: Discount Revenue $1,212 Net Card Fees 431 Travel Commissions and Fees 357 Interest and Dividends 209 Other Revenues 444 ---------- 2,653 ---------- Lending: Finance Charge Revenue 403 Interest Expense 129 ---------- Net Finance Charge Revenue 274 ---------- Total Net Revenues 2,927 ---------- Expenses: Marketing and Promotion 218 Provision for Losses and Claims: Charge Card 264 Lending 158 Other 35 ---------- Total 457 ---------- Interest Expense: Charge Card 178 Other 115 ---------- Total 293 Net Discount Expense 106 Human Resources 731 Other Operating Expenses 751 ---------- Total Expenses 2,556 ---------- Pretax Income 371 Income Tax Provision 105 ---------- Operating Income $266 ========== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ----------------------- Statement of Income ------------------- (Unaudited, Managed Asset Basis) (Dollars in millions) Quarter Ended December 31, 1996 ----------------- Net Revenues: Discount Revenue $1,380 Net Card Fees 415 Travel Commissions and Fees 336 Interest and Dividends 156 Other Revenues 450 ---------- 2,737 ---------- Lending: Finance Charge Revenue 463 Interest Expense 150 ---------- Net Finance Charge Revenue 313 ---------- Total Net Revenues 3,050 ---------- Expenses: Marketing and Promotion 268 Provision for Losses and Claims: Charge Card 199 Lending 235 Other 22 ---------- Total 456 ---------- Interest Expense: Charge Card 234 Other 65 ---------- Total 299 Human Resources 794 Other Operating Expenses 830 ---------- Total Expenses 2,647 ---------- Pretax Income 403 Income Tax Provision 104 ---------- Operating Income $299 * ========== Quarter Ended September 30, 1996 ------------------ Net Revenues: Discount Revenue $1,256 Net Card Fees 414 Travel Commissions and Fees 316 Interest and Dividends 167 Other Revenues 463 ---------- 2,616 ---------- Lending: Finance Charge Revenue 420 Interest Expense 139 ---------- Net Finance Charge Revenue 281 ---------- Total Net Revenues 2,897 ---------- Expenses: Marketing and Promotion 278 Provision for Losses and Claims: Charge Card 223 Lending 118 Other 28 ---------- Total 369 ---------- Interest Expense: Charge Card 218 Other 72 ---------- Total 290 Human Resources 764 Other Operating Expenses 755 ---------- Total Expenses 2,456 ---------- Pretax Income 441 Income Tax Provision 118 ---------- Operating Income $323 ========== Quarter Ended June 30, 1996 ------------- Net Revenues: Discount Revenue $1,247 Net Card Fees 414 Travel Commissions and Fees 329 Interest and Dividends 211 Other Revenues 409 ---------- 2,610 ---------- Lending: Finance Charge Revenue 403 Interest Expense 130 ---------- Net Finance Charge Revenue 273 ---------- Total Net Revenues 2,883 ---------- Expenses: Marketing and Promotion 252 Provision for Losses and Claims: Charge Card 302 Lending 138 Other 26 ---------- Total 466 ---------- Interest Expense: Charge Card 212 Other 114 ---------- Total 326 Human Resources 721 Other Operating Expenses 659 ---------- Total Expenses 2,424 ---------- Pretax Income 459 Income Tax Provision 137 ---------- Operating Income $322 ========== Quarter Ended March 31, 1996 -------------- Net Revenues: Discount Revenue $1,141 Net Card Fees 421 Travel Commissions and Fees 298 Interest and Dividends 191 Other Revenues 393 ---------- 2,444 ---------- Lending: Finance Charge Revenue 404 Interest Expense 129 ---------- Net Finance Charge Revenue 275 ---------- Total Net Revenues 2,719 ---------- Expenses: Marketing and Promotion 200 Provision for Losses and Claims: Charge Card 264 Lending 188 Other 24 ---------- Total 476 ---------- Interest Expense: Charge Card 208 Other 95 ---------- Total 303 Human Resources 704 Other Operating Expenses 620 ---------- Total Expenses 2,303 ---------- Pretax Income 416 Income Tax Provision 130 ---------- Operating Income $286 ========== Quarter Ended December 31, 1995 ----------------- Net Revenues: Discount Revenue $1,212 Net Card Fees 431 Travel Commissions and Fees 357 Interest and Dividends 209 Other Revenues 423 ---------- 2,632 ---------- Lending: Finance Charge Revenue 403 Interest Expense 129 ---------- Net Finance Charge Revenue 274 ---------- Total Net Revenues 2,906 ---------- Expenses: Marketing and Promotion 218 Provision for Losses and Claims: Charge Card 308 Lending 158 Other 35 ---------- Total 501 ---------- Interest Expense: Charge Card 219 Other 115 ---------- Total 334 Human Resources 731 Other Operating Expenses 751 ---------- Total Expenses 2,535 ---------- Pretax Income 371 Income Tax Provision 105 ---------- Operating Income $266 ========== * Excludes restructuring charge of $125 million after-tax ($196 million pretax). (Preliminary) Travel Related Services ----------------------- Selected Statistical Information -------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Quarter Ended December 31, 1996 ----------------- Total Cards in Force (millions): United States 29.2 Outside the United States 12.3 ------- Total 41.5 ======= Basic Cards in Force (millions): United States 22.5 Outside the United States 9.6 ------- Total 32.1 ======= Card Billed Business: United States $36.2 Outside the United States 14.9 ------- Total $51.1 ======= Average Discount Rate* 2.70% Average Basic Cardmember Spending (dollars)* $1,617 Average Fee per Card (dollars)* $41 Travel Sales $4.3 Travel Commissions and Fees/Sales* 7.8% Travelers Cheque Sales $5.5 Average Travelers Cheques Outstanding $6.0 Investments $6.5 Travelers Cheques Outstanding $5.8 Total Debt $23.4 Shareholder's Equity $4.7 Return on Average Equity** 25.6% Return on Average Assets** 2.8% Owned and Managed Charge Card Receivables: Total Receivables $22.5 90 Days Past Due as a % of Total 3.2% Loss Reserves (millions) $923 % of Receivables 4.1% % of 90 Days Past Due 128% Net Loss Ratio 0.51% Owned and Managed U.S. Cardmember Lending: Total Loans $12.7 Past Due Loans as a % of Total: 30-89 Days 2.4% 90+ Days 0.9% Loss Reserves (millions): Beginning Balance $427 Provision 220 Net Charge-Offs/Other (159) ------- Ending Balance $488 ======= % of Loans 3.8% % of Past Due 117% Average Loans $12.1 Net Write-Off Rate 5.2% Net Interest Yield 8.6% Quarter Ended September 30, 1996 ------------------ Total Cards in Force (millions): United States 28.4 Outside the United States 11.9 ------- Total 40.3 ======= Basic Cards in Force (millions): United States 21.7 Outside the United States 9.4 ------- Total 31.1 ======= Card Billed Business: United States $32.7 Outside the United States 13.2 ------- Total $45.9 ======= Average Discount Rate* 2.74% Average Basic Cardmember Spending (dollars)* $1,498 Average Fee per Card (dollars)* $42 Travel Sales $3.8 Travel Commissions and Fees/Sales* 8.3% Travelers Cheque Sales $8.6 Average Travelers Cheques Outstanding $6.6 Investments $6.5 Travelers Cheques Outstanding $6.3 Total Debt $21.8 Shareholder's Equity $5.0 Return on Average Equity** 25.1% Return on Average Assets** 2.7% Owned and Managed Charge Card Receivables: Total Receivables $20.7 90 Days Past Due as a % of Total 3.6% Loss Reserves (millions) $996 % of Receivables 4.8% % of 90 Days Past Due 134% Net Loss Ratio 0.54% Owned and Managed U.S. Cardmember Lending: Total Loans $11.2 Past Due Loans as a % of Total: 30-89 Days 2.3% 90+ Days 0.9% Loss Reserves (millions): Beginning Balance $468 Provision 98 Net Charge-Offs/Other (139) ------- Ending Balance $427 ======= % of Loans 3.8% % of Past Due 119% Average Loans $11.0 Net Write-Off Rate 5.1% Net Interest Yield 8.4% Quarter Ended June 30, 1996 ------------- Total Cards in Force (millions): United States 27.5 Outside the United States 11.8 ------ Total 39.3 ====== Basic Cards in Force (millions): United States 20.9 Outside the United States 9.3 ------ Total 30.2 ====== Card Billed Business: United States $32.6 Outside the United States 13.2 ------ Total $45.8 ====== Average Discount Rate* 2.72% Average Basic Cardmember Spending (dollars)* $1,529 Average Fee per Card (dollars)* $42 Travel Sales $4.0 Travel Commissions and Fees/Sales* 8.2% Travelers Cheque Sales $6.7 Average Travelers Cheques Outstanding $6.1 Investments $9.0 Travelers Cheques Outstanding $6.6 Total Debt $21.9 Shareholder's Equity $4.9 Return on Average Equity** 24.8% Return on Average Assets** 2.6% Owned and Managed Charge Card Receivables: Total Receivables $20.6 90 Days Past Due as a % of Total 3.7% Loss Reserves (millions) $1,054 % of Receivables 5.1% % of 90 Days Past Due 138% Net Loss Ratio 0.51% Owned and Managed U.S. Cardmember Lending: Total Loans $10.5 Past Due Loans as a % of Total: 30-89 Days 2.3% 90+ Days 0.9% Loss Reserves (millions): Beginning Balance $483 Provision 119 Net Charge-Offs/Other (134) ------ Ending Balance $468 ====== % of Loans 4.5% % of Past Due 135% Average Loans $10.5 Net Write-Off Rate 5.2% Net Interest Yield 8.9% Quarter Ended March 31, 1996 -------------- Total Cards in Force (millions): United States 27.1 Outside the United States 11.6 ------ Total 38.7 ====== Basic Cards in Force (millions): United States 20.5 Outside the United States 9.2 ------ Total 29.7 ====== Card Billed Business: United States $29.8 Outside the United States 11.8 ------ Total $41.6 ====== Average Discount Rate* 2.74% Average Basic Cardmember Spending (dollars)* $1,413 Average Fee per Card (dollars)* $44 Travel Sales $3.6 Travel Commissions and Fees/Sales* 8.3% Travelers Cheque Sales $5.3 Average Travelers Cheques Outstanding $5.7 Investments $9.0 Travelers Cheques Outstanding $5.9 Total Debt $23.1 Shareholder's Equity $4.9 Return on Average Equity** 24.7% Return on Average Assets** 2.5% Owned and Managed Charge Card Receivables: Total Receivables $18.8 90 Days Past Due as a % of Total 4.1% Loss Reserves (millions) $991 % of Receivables 5.3% % of 90 Days Past Due 129% Net Loss Ratio 0.51% Owned and Managed U.S. Cardmember Lending: Total Loans $10.2 Past Due Loans as a % of Total: 30-89 Days 2.5% 90+ Days 1.0% Loss Reserves (millions): Beginning Balance $443 Provision 170 Net Charge-Offs/Other (130) ------ Ending Balance $483 ====== % of Loans 4.7% % of Past Due 136% Average Loans $10.2 Net Write-Off Rate 5.2% Net Interest Yield 9.4% Quarter Ended December 31, 1995 ----------------- Total Cards in Force (millions): United States 26.7 Outside the United States 11.6 ------ Total 38.3 ====== Basic Cards in Force (millions): United States 20.0 Outside the United States 9.2 ------ Total 29.2 ====== Card Billed Business: United States $31.3 Outside the United States 12.7 ------ Total $44.0 ====== Average Discount Rate* 2.75% Average Basic Cardmember Spending (dollars)* $1,528 Average Fee per Card (dollars)* $46 Travel Sales $4.1 Travel Commissions and Fees/Sales* 8.7% Travelers Cheque Sales $5.1 Average Travelers Cheques Outstanding $6.0 Investments $9.2 Travelers Cheques Outstanding $5.7 Total Debt $22.3 Shareholder's Equity $4.9 Return on Average Equity** 24.6% Return on Average Assets** 2.5% Owned and Managed Charge Card Receivables: Total Receivables $20.5 90 Days Past Due as a % of Total 3.5% Loss Reserves (millions) $952 % of Receivables 4.6% % of 90 Days Past Due 131% Net Loss Ratio 0.57% Owned and Managed U.S. Cardmember Lending: Total Loans $10.0 Past Due Loans as a % of Total: 30-89 Days 2.8% 90+ Days 1.0% Loss Reserves (millions): Beginning Balance $389 Provision 162 Net Charge-Offs/Other (108) ------ Ending Balance $443 ====== % of Loans 4.5% % of Past Due 116% Average Loans $9.5 Net Write-Off Rate 4.5% Net Interest Yield 9.9% * Computed from information provided herein. ** Excluding the effect of SFAS #115 and the fourth quarter 1996 restructuring charge of $125 million after-tax. (Preliminary) American Express Financial Advisors ----------------------------------- Statement of Income --------------------- (Unaudited) (Dollars in millions) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ----------- Revenues: Investment Income $576 $570 1.0% Management and Distribution Fees 327 261 25.1 Other Revenues 166 142 17.0 -------- -------- Total Revenues 1,069 973 9.8 -------- -------- Expenses: Provision for Losses and Benefits: Annuities 309 301 2.7 Insurance 108 105 2.9 Investment Certificates 51 54 (7.0) -------- -------- Total 468 460 1.6 Human Resources 277 227 22.1 Other Operating Expenses 96 83 16.1 -------- -------- Total Expenses 841 770 9.2 -------- -------- Pretax Income 228 203 12.3 Income Tax Provision 73 70 4.2 -------- -------- Net Income $155 $133 16.5 ======== ======== (Preliminary) American Express Financial Advisors ----------------------------------- Statement of Income --------------------- (Unaudited) (Dollars in millions) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Revenues: Investment Income $2,267 $2,209 2.6% Management and Distribution Fees 1,205 935 28.9 Other Revenues 638 547 16.5 -------- -------- Total Revenues 4,110 3,691 11.3 -------- -------- Expenses: Provision for Losses and Benefits: Annuities 1,208 1,156 4.4 Insurance 420 401 4.7 Investment Certificates 197 205 (3.6) -------- -------- Total 1,825 1,762 3.6 Human Resources 1,034 877 17.9 Other Operating Expenses 366 297 23.1 -------- -------- Total Expenses 3,225 2,936 9.8 -------- -------- Pretax Income 885 755 17.2 Income Tax Provision 291 252 15.5 -------- -------- Net Income $594 $503 18.0 ======== ======== (Preliminary) American Express Financial Advisors ----------------------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Revenues, Net of Provisions $601 $513 17.3% Investments (billions) $28.6 $28.8 (0.4) Client Contract Reserves (billions) $28.9 $28.6 1.0 Shareholder's Equity (billions) $3.2 $3.1 4.5 Return on Average Equity* 20.4% 19.4% - Life Insurance in Force (billions) $67.3 $59.4 13.2 Assets Owned and/or Managed (billions): Assets managed for institutions $37.3 $32.0 16.5 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 18.5 15.0 23.8 Other Owned Assets 34.2 33.3 2.6 -------- -------- Total Owned Assets 52.7 48.3 9.2 Managed Assets 59.4 49.2 20.6 -------- -------- Total $149.4 $129.5 15.3 ======== ======== Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $735 $556 32.2 Other Owned Assets $126 $211 (40.3) Total Managed Assets $3,264 $2,918 11.9 Sales of Selected Products: Mutual Funds $3,686 $2,967 24.3 Annuities $1,085 $763 42.2 Investment Certificates $233 $88 # Life and Other Insurance Sales $131 $110 18.9 Number of Financial Advisors 8,340 7,945 5.0 Fees From Financial Plans (thousands) $13,205 $10,986 20.2 Product Sales Generated from Financial Plans as a Percentage of Total Sales 64.9% 63.5% - * Excluding the effect of SFAS #115. (Preliminary) American Express Financial Advisors ----------------------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Year Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Revenues, Net of Provisions $2,285 $1,929 18.5% Investments (billions) $28.6 $28.8 (0.4) Client Contract Reserves (billions) $28.9 $28.6 1.0 Shareholder's Equity (billions) $3.2 $3.1 4.5 Return on Average Equity* 20.4% 19.4% - Life Insurance in Force (billions) $67.3 $59.4 13.2 Assets Owned and/or Managed (billions): Assets managed for institutions $37.3 $32.0 16.5 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 18.5 15.0 23.8 Other Owned Assets 34.2 33.3 2.6 -------- -------- Total Owned Assets 52.7 48.3 9.2 Managed Assets 59.4 49.2 20.6 -------- -------- Total $149.4 $129.5 15.3 ======== ======== Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $1,937 $2,839 (31.8) Other Owned Assets ($232) $927 # Total Managed Assets $9,063 $12,246 (26.0) Sales of Selected Products: Mutual Funds $14,331 $10,202 40.5 Annuities $4,311 $3,520 22.5 Investment Certificates $736 $1,467 (49.8) Life and Other Insurance Sales $449 $383 17.1 Number of Financial Advisors 8,340 7,945 5.0 Fees From Financial Plans (thousands) $48,072 $40,828 17.7 Product Sales Generated from Financial Plans as a Percentage of Total Sales 64.0% 64.1% - * Excluding the effect of SFAS #115. # Denotes variance of more than 100% (Preliminary) American Express Financial Advisors ----------------------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions Quarter Ended December 31, 1996 ----------------- Revenues: Investment Income $576 Management and Distribution Fees 327 Other Revenues 166 ------- Total Revenues 1,069 ------- Expenses: Provision for Losses and Benefits: Annuities 309 Insurance 108 Investment Certificates 51 ------- Total 468 Human Resources 277 Other Operating Expenses 96 ------- Total Expenses 841 ------- Pretax Income 228 Income Tax Provision 73 ------- Net Income $155 ======= Quarter Ended September 30, 1996 ------------------ Revenues: Investment Income $560 Management and Distribution Fees 302 Other Revenues 159 ------- Total Revenues 1,021 ------- Expenses: Provision for Losses and Benefits: Annuities 303 Insurance 102 Investment Certificates 45 ------- Total 450 Human Resources 259 Other Operating Expenses 82 ------- Total Expenses 791 ------- Pretax Income 230 Income Tax Provision 74 ------- Net Income $156 ======= Quarter Ended June 30, 1996 ------------- Revenues: Investment Income $562 Management and Distribution Fees 296 Other Revenues 159 ------- Total Revenues 1,017 ------- Expenses: Provision for Losses and Benefits: Annuities 298 Insurance 102 Investment Certificates 48 ------- Total 448 Human Resources 252 Other Operating Expenses 86 ------- Total Expenses 786 ------- Pretax Income 231 Income Tax Provision 78 ------- Net Income $153 ======= Quarter Ended March 31, 1996 -------------- Revenues: Investment Income $569 Management and Distribution Fees 279 Other Revenues 155 ------- Total Revenues 1,003 ------- Expenses: Provision for Losses and Benefits: Annuities 298 Insurance 109 Investment Certificates 53 ------- Total 460 Human Resources 246 Other Operating Expenses 101 ------- Total Expenses 807 ------- Pretax Income 196 Income Tax Provision 66 ------- Net Income $130 ======= Quarter Ended December 31, 1995 ----------------- Revenues: Investment Income $570 Management and Distribution Fees 261 Other Revenues 142 ------- Total Revenues 973 ------- Expenses: Provision for Losses and Benefits: Annuities 301 Insurance 105 Investment Certificates 54 ------- Total 460 Human Resources 227 Other Operating Expenses 83 ------- Total Expenses 770 ------- Pretax Income 203 Income Tax Provision 70 ------- Net Income $133 ======= (Preliminary) American Express Financial Advisors ----------------------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Quarter Ended December 31, 1996 ----------------- Revenues, Net of Provisions $601 Investments (billions) $28.6 Client Contract Reserves (billions) $28.9 Shareholder's Equity (billions) $3.2 Return on Average Equity* 20.4% Life Insurance in Force (billions) $67.3 Assets Owned and/or Managed (billions): Assets managed for institutions $37.3 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 18.5 Other Owned Assets 34.2 ------- Total Owned Assets 52.7 Managed Assets 59.4 ------- Total $149.4 ======= Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $735 Other Owned Assets $126 Total Managed Assets $3,264 Sales of Selected Products: Mutual Funds $3,686 Annuities $1,085 Investment Certificates $233 Life and Other Insurance Sales $131 Number of Financial Advisors 8,340 Fees From Financial Plans (thousands) $13,205 Product Sales Generated from Financial Plans as a Percentage of Total Sales 64.9% Quarter Ended September 30, 1996 ------------------ Revenues, Net of Provisions $570 Investments (billions) $28.2 Client Contract Reserves (billions) $28.6 Shareholder's Equity (billions) $3.0 Return on Average Equity* 20.2% Life Insurance in Force (billions) $65.2 Assets Owned and/or Managed (billions): Assets managed for institutions $35.8 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 17.5 Other Owned Assets 33.3 ------- Total Owned Assets 50.8 Managed Assets 56.3 ------- Total $142.9 ======= Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $354 Other Owned Assets $56 Total Managed Assets $2,380 Sales of Selected Products: Mutual Funds $3,313 Annuities $946 Investment Certificates $182 Life and Other Insurance Sales $109 Number of Financial Advisors 8,092 Fees From Financial Plans (thousands) $11,660 Product Sales Generated from Financial Plans as a Percentage of Total Sales 64.7% Quarter Ended June 30, 1996 ------------- Revenues, Net of Provisions $570 Investments (billions) $27.9 Client Contract Reserves (billions) $28.3 Shareholder's Equity (billions) $2.9 Return on Average Equity* 19.9% Life Insurance in Force (billions) $63.0 Assets Owned and/or Managed (billions): Assets managed for institutions $34.8 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 16.7 Other Owned Assets 33.0 ------- Total Owned Assets 49.7 Managed Assets 54.0 ------- Total $138.5 ======= Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $390 Other Owned Assets ($131) Total Managed Assets $2,254 Sales of Selected Products: Mutual Funds $3,762 Annuities $1,125 Investment Certificates $186 Life and Other Insurance Sales $113 Number of Financial Advisors 7,997 Fees From Financial Plans (thousands) $11,584 Product Sales Generated from Financial Plans as a Percentage of Total Sales 62.9% Quarter Ended March 31, 1996 -------------- Revenues, Net of Provisions $544 Investments (billions) $28.2 Client Contract Reserves (billions) $28.6 Shareholder's Equity (billions) $2.9 Return on Average Equity* 19.6% Life Insurance in Force (billions) $61.2 Assets Owned and/or Managed (billions): Assets managed for institutions $32.7 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 15.8 Other Owned Assets 33.2 ------- Total Owned Assets 49.0 Managed Assets 51.4 ------- Total $133.1 ======= Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $458 Other Owned Assets (283) Total Managed Assets $1,165 Sales of Selected Products: Mutual Funds $3,569 Annuities $1,155 Investment Certificates $136 Life and Other Insurance Sales $95 Number of Financial Advisors 7,954 Fees From Financial Plans (thousands) $11,623 Product Sales Generated from Financial Plans as a Percentage of Total Sales 63.3% Quarter Ended December 31, 1995 ----------------- Revenues, Net of Provisions $513 Investments (billions) $28.8 Client Contract Reserves (billions) $28.6 Shareholder's Equity (billions) $3.1 Return on Average Equity* 19.4% Life Insurance in Force (billions) $59.4 Assets Owned and/or Managed (billions): Assets managed for institutions $32.0 Assets owned and managed for individuals: Owned Assets: Separate Account Assets 15.0 Other Owned Assets 33.3 ------- Total Owned Assets 48.3 Managed Assets 49.2 ------- Total $129.5 ======= Market Appreciation (Depreciation) During the Period: Owned Assets: Separate Account Assets $556 Other Owned Assets $211 Total Managed Assets $2,918 Sales of Selected Products: Mutual Funds $2,967 Annuities $763 Investment Certificates $88 Life and Other Insurance Sales $110 Number of Financial Advisors 7,945 Fees From Financial Plans (thousands) $10,986 Product Sales Generated from Financial Plans as a Percentage of Total Sales 63.5% * Excluding the effect of SFAS #115. (Preliminary) American Express Bank --------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Quarter Ended December 31, Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Net Revenues: Interest Income $223 $232 (3.9%) Interest Expense 140 155 (9.5) -------- -------- Net Interest Income 83 77 7.4 Commissions, Fees and Other Revenues 57 62 (7.8) Foreign Exchange Income 16 19 (13.2) -------- -------- Total Net Revenues 156 158 (1.0) -------- -------- Provision for Credit Losses 10 2 # -------- -------- Expenses: Human Resources 56 57 (2.1) Other Operating Expenses 64 67 (5.5) -------- -------- Total Expenses 120 124 (4.0) -------- -------- Pretax Income 26 32 (16.8) Income Tax Provision 9 11 (13.7) -------- -------- Net Income $17 $21 (18.4) ======== ======== # Denotes variance of more than 100%. American Express Bank --------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Year Ended December 31, ----------------- Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Net Revenues: Interest Income $842 $925 (9.0%) Interest Expense 536 604 (11.3) -------- -------- Net Interest Income 306 321 (4.6) Commissions, Fees and Other Revenues 213 243 (12.1) Foreign Exchange Income 72 79 (8.8) -------- -------- Total Net Revenues 591 643 (7.9) -------- -------- Provision for Credit Losses 23 7 # -------- -------- Expenses: Human Resources 224 248 (9.5) Other Operating Expenses 239 273 (12.6) -------- -------- Total Expenses 463 521 (11.1) -------- -------- Pretax Income 105 115 (8.2) Income Tax Provision 37 38 (0.3) -------- -------- Net Income $68 $77 (12.1) ======== ======== # Denotes variance of more than 100%. (Preliminary) American Express Bank --------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Quarter Ended December 31, ----------------- Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Investments (billions) $2.8 $2.5 11.8% Total Loans (billions) $5.9 $5.4 8.3 Reserve for Credit Losses $117 $111 5.6 Total Nonperforming Loans $35 $34 3.5 Other Real Estate Owned $36 $44 (18.5) Deposits (billions) $8.7 $8.5 2.0 Shareholder's Equity $799 $837 (4.6) Return on Average Assets* 0.55% 0.66% - Return on Average Common Equity* 8.89% 10.54% - Risk-Based Capital Ratios: Tier 1 8.8% 8.9% - Total 12.5% 13.0% - Leverage Ratio 5.6% 5.8% - * Excluding the effect of SFAS #115. (Preliminary) American Express Bank --------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Year Ended December 31, ----------------- Percentage 1996 1995 Inc/(Dec) ------ ------ ---------- Investments (billions) $2.8 $2.5 11.8% Total Loans (billions) $5.9 $5.4 8.3 Reserve for Credit Losses $117 $111 5.6 Total Nonperforming Loans $35 $34 3.5 Other Real Estate Owned $36 $44 (18.5) Deposits (billions) $8.7 $8.5 2.0 Shareholder's Equity $799 $837 (4.6) Return on Average Assets* 0.57% 0.59% - Return on Average Common Equity* 9.22% 9.99% - Risk-Based Capital Ratios: Tier 1 8.8% 8.9% - Total 12.5% 13.0% - Leverage Ratio 5.6% 5.8% - * Excluding the effect of SFAS #115. (Preliminary) American Express Bank --------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Quarter Ended December 31, 1996 ----------------- Net Revenues: Interest Income $223 Interest Expense 140 ------- Net Interest Income 83 Commissions, Fees and Other Revenues 57 Foreign Exchange Income 16 ------- Total Net Revenues 156 ------- Provision for Credit Losses 10 ------- Expenses: Human Resources 56 Other Operating Expenses 64 ------- Total Expenses 120 ------- Pretax Income 26 Income Tax Provision 9 ------- Net Income $17 ====== Quarter Ended September 30, 1996 ------------------ Net Revenues: Interest Income $206 Interest Expense 128 ------- Net Interest Income 78 Commissions, Fees and Other Revenues 57 Foreign Exchange Income 16 ------- Total Net Revenues 151 ------- Provision for Credit Losses 5 ------- Expenses: Human Resources 59 Other Operating Expenses 59 ------- Total Expenses 118 ------- Pretax Income 28 Income Tax Provision 10 ------- Net Income $18 ======= Quarter Ended June 30, 1996 ------------- Net Revenues: Interest Income $207 Interest Expense 135 ------- Net Interest Income 72 Commissions, Fees and Other Revenues 48 Foreign Exchange Income 20 ------- Total Net Revenues 140 ------- Provision for Credit Losses 4 ------- Expenses: Human Resources 54 Other Operating Expenses 60 ------- Total Expenses 114 ------- Pretax Income 22 Income Tax Provision 8 ------- Net Income $14 ======= Quarter Ended March 31, 1996 -------------- Net Revenues: Interest Income $211 Interest Expense 134 ------- Net Interest Income 77 Commissions, Fees and Other Revenues 49 Foreign Exchange Income 20 ------- Total Net Revenues 146 ------- Provision for Credit Losses 4 ------- Expenses: Human Resources 56 Other Operating Expenses 57 ------- Total Expenses 113 ------- Pretax Income 29 Income Tax Provision 10 ------- Net Income $19 ======= Quarter Ended December 31, 1995 ----------------- Net Revenues: Interest Income $232 Interest Expense 155 ------- Net Interest Income 77 Commissions, Fees and Other Revenues 62 Foreign Exchange Income 19 ------- Total Net Revenues 158 ------- Provision for Credit Losses 2 ------- Expenses: Human Resources 57 Other Operating Expenses 67 ------- Total Expenses 124 ------- Pretax Income 32 Income Tax Provision 11 ------- Net Income $21 ======= (Preliminary) American Express Bank --------------------- Selected Statistical Information -------------------------------- (Unaudited) (Dollars in millions, except where indicated) Quarter Ended December 31, 1996 ----------------- Investments (billions) $2.8 Total Loans (billions) $5.9 Reserve for Credit Losses $117 Total Nonperforming Loans $35 Other Real Estate Owned $36 Deposits (billions) $8.7 Shareholder's Equity $799 Return on Average Assets* 0.55% Return on Average Common Equity* 8.89% Risk-Based Capital Ratios: Tier 1 8.8% Total 12.5% Leverage Ratio 5.6% Quarter Ended September 30, 1996 ------------------ Investments (billions) $2.5 Total Loans (billions) $5.6 Reserve for Credit Losses $116 Total Nonperforming Loans $31 Other Real Estate Owned $34 Deposits (billions) $8.4 Shareholder's Equity $777 Return on Average Assets* 0.62% Return on Average Common Equity* 9.61% Risk-Based Capital Ratios: Tier 1 9.0% Total 12.8% Leverage Ratio 6.0% Quarter Ended June 30, 1996 ------------- Investments (billions) $2.1 Total Loans (billions) $5.5 Reserve for Credit Losses $113 Total Nonperforming Loans $38 Other Real Estate Owned $48 Deposits (billions) $7.8 Shareholder's Equity $755 Return on Average Assets* 0.49% Return on Average Common Equity* 7.83% Risk-Based Capital Ratios: Tier 1 9.1% Total 12.9% Leverage Ratio 5.8% Quarter Ended March 31, 1996 -------------- Investments (billions) $2.4 Total Loans (billions) $5.3 Reserve for Credit Losses $110 Total Nonperforming Loans $35 Other Real Estate Owned $43 Deposits (billions) $8.1 Shareholder's Equity $746 Return on Average Assets* 0.64% Return on Average Common Equity* 10.57% Risk-Based Capital Ratios: Tier 1 9.0% Total 12.9% Leverage Ratio 5.5% Quarter Ended December 31, 1995 ----------------- Investments (billions) $2.5 Total Loans (billions) $5.4 Reserve for Credit Losses $111 Total Nonperforming Loans $34 Other Real Estate Owned $44 Deposits (billions) $8.5 Shareholder's Equity $837 Return on Average Assets* 0.66% Return on Average Common Equity* 10.54% Risk-Based Capital Ratios: Tier 1 8.9% Total 13.0% Leverage Ratio 5.8% * Excluding the effect of SFAS #115. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN EXPRESS COMPANY By: /s/ Stephen P. Norman ---------------------------- Name: Stephen P. Norman Title: Secretary Dated: January 28, 1997 -----END PRIVACY-ENHANCED MESSAGE-----