EX-99.2 3 exhibit99_2finan.txt EXHIBIT 99.2 FINANCIALS EXHIBIT 99.2 All information in the following tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. For additional information related to the impact of changes to the Company's financial reporting, including the Company's organizational changes that became effective July 1, 2007, refer to the Company's Form 8-Ks filed with the Securities and Exchange Commission, dated November 1, 2007 and March 30, 2007. (Preliminary) AMERICAN EXPRESS COMPANY CONSOLIDATED STATEMENTS OF INCOME (Millions)
Quarters Ended Years Ended December 31, December 31, ---------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------- ------ ---------- ------- ------- ---------- Revenues Discount revenue $ 3,912 $3,458 13% $14,596 $12,978 12% Net card fees 544 479 14 2,050 1,994 3 Travel commissions and fees 514 450 14 1,926 1,778 8 Other commissions and fees 650 573 13 2,417 2,233 8 Securitization income, net 326 347 (6) 1,507 1,489 1 Other 470 528 (11) 1,645 1,689 (3) ------- ------ ------- ------- Total 6,416 5,835 10 24,141 22,161 9 ------- ------ ------- ------- Interest income Cardmember lending finance revenue 1,682 1,326 27 6,145 4,586 34 Other 302 287 5 1,271 1,147 11 ------- ------ ------- ------- Total 1,984 1,613 23 7,416 5,733 29 ------- ------ ------- ------- Total revenues 8,400 7,448 13 31,557 27,894 13 ------- ------ ------- ------- Interest expense Cardmember lending 474 351 35 1,734 1,192 45 Charge card and other 562 422 33 2,092 1,548 35 ------- ------ ------- ------- Total 1,036 773 34 3,826 2,740 40 ------- ------ ------- ------- Revenues net of interest expense 7,364 6,675 10 27,731 25,154 10 ------- ------ ------- ------- Expenses Marketing, promotion, rewards and cardmember services 2,719 1,732 57 7,817 6,504 20 Human resources 1,437 1,361 6 5,438 5,040 8 Professional services 646 648 -- 2,283 2,269 1 Occupancy and equipment 382 372 3 1,436 1,384 4 Communications 119 112 6 461 434 6 Other, net (591) 365 # 389 1,358 (71) ------- ------ ------- ------- Total 4,712 4,590 3 17,824 16,989 5 ------- ------ ------- ------- Provisions for losses and benefits Charge card 419 277 51 1,140 935 22 Cardmember lending 970 484 # 2,761 1,623 70 Other (including investment certificates) 134 137 (2) 440 468 (6) ------- ------ ------- ------- Total 1,523 898 70 4,341 3,026 43 ------- ------ ------- ------- Pretax income from continuing operations 1,129 1,187 (5) 5,566 5,139 8 Income tax provision 290 292 (1) 1,518 1,528 (1) ------- ------ ------- ------- Income from continuing operations 839 895 (6) 4,048 3,611 12 (Loss) Income from discontinued operations, net of tax (8) 27 # (36) 96 # ------- ------ ------- ------- Net income $ 831 $ 922 (10) $ 4,012 $ 3,707 8 ======= ====== ======= =======
# - Denotes a variance of more than 100%. -1- (Preliminary) AMERICAN EXPRESS COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Billions) December 31, December 31, 2007 2006 ------------ ------------ Assets Cash and cash equivalents $ 12 $ 5 Accounts receivable 42 39 Investments 16 18 Loans 53 43 Other assets 10 9 Assets of discontinued operations 17 14 ---- ---- Total assets $150 $128 ==== ==== Liabilities and Shareholders' Equity Short-term debt $ 18 $ 15 Long-term debt 55 43 Other liabilities 50 45 Liabilities of discontinued operations 16 14 ---- ---- Total liabilities 139 117 ---- ---- Shareholders' equity 11 11 ---- ---- Total liabilities and shareholders' equity $150 $128 ==== ==== -2- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (Millions)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- REVENUES NET OF INTEREST EXPENSE U.S. Card Services $3,709 $3,349 11% $14,222 $12,620 13% International Card Services 1,189 1,026 16 4,331 3,965 9 Global Commercial Services 1,128 982 15 4,269 3,900 9 Global Network & Merchant Services 1,041 916 14 3,864 3,344 16 ------ ------ ------- ------- 7,067 6,273 13 26,686 23,829 12 Corporate & Other, including adjustments and eliminations 297 402 (26) 1,045 1,325 (21) ------ ------ ------- ------- CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $7,364 $6,675 10 $27,731 $25,154 10 ====== ====== ======= ======= PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS U.S. Card Services $ (40) $ 723 # $ 2,730 $ 3,323 (18) International Card Services (181) 76 # 117 312 (63) Global Commercial Services 144 167 (14) 744 716 4 Global Network & Merchant Services 379 297 28 1,560 1,188 31 ------ ------ ------- ------- 302 1,263 (76) 5,151 5,539 (7) Corporate & Other 827 (76) # 415 (400) # ------ ------ ------- ------- PRETAX INCOME FROM CONTINUING OPERATIONS $1,129 $1,187 (5) $ 5,566 $ 5,139 8 ====== ====== ======= ======= NET INCOME (LOSS) U.S. Card Services $ 7 $ 473 (99) $ 1,823 $ 2,152 (15) International Card Services (68) 99 # 291 343 (15) Global Commercial Services 110 117 (6) 536 477 12 Global Network & Merchant Services 254 201 26 1,022 779 31 ------ ------ ------- ------- 303 890 (66) 3,672 3,751 (2) Corporate & Other 536 5 # 376 (140) # ------ ------ ------- ------- Income from continuing operations 839 895 (6) 4,048 3,611 12 (Loss) Income from discontinued operations, net of tax (8) 27 # (36) 96 # ------ ------ ------- ------- NET INCOME $ 831 $ 922 (10) $ 4,012 $ 3,707 8 ====== ====== ======= =======
# - Denotes a variance of more than 100%. -3- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (CONTINUED)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- EARNINGS PER COMMON SHARE BASIC Income from continuing operations $ 0.72 $ 0.75 (4)% $ 3.45 $ 2.98 16% (Loss) Income from discontinued operations -- 0.02 # (0.03) 0.08 # ------ ------ ------ ------ Net income $ 0.72 $ 0.77 (6)% $ 3.42 $ 3.06 12% ====== ====== ====== ====== Average common shares outstanding (millions) 1,157 1,196 (3)% 1,173 1,212 (3)% ====== ====== ====== ====== DILUTED Income from continuing operations $ 0.71 $ 0.73 (3)% $ 3.39 $ 2.92 16% (Loss) Income from discontinued operations -- 0.02 # (0.03) 0.07 # ------ ------ ------ ------ Net income $ 0.71 $ 0.75 (5)% $ 3.36 $ 2.99 12% ====== ====== ====== ====== Average common shares outstanding (millions) 1,178 1,224 (4)% 1,196 1,238 (3)% ====== ====== ====== ====== Cash dividends declared per common share $ 0.18 $ 0.15 20% $ 0.63 $ 0.57 11% ====== ====== ====== ======
SELECTED STATISTICAL INFORMATION
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/Dec) 2007 2006 Inc/Dec) ------ ------ ---------- ------ ------ ---------- Return on average equity (A) 37.3% 34.7% 37.3% 34.7% Common shares outstanding (millions) 1,158 1,199 (3)% 1,158 1,199 (3)% Book value per common share $ 9.53 $ 8.76 9% $ 9.53 $ 8.76 9% Shareholders' equity (billions) $ 11.0 $ 10.5 5% $ 11.0 $ 10.5 5%
# - Denotes a variance of more than 100%. (A) Computed on a trailing 12-month basis using net income over average total shareholders' equity (including discontinued operations) as included in the Consolidated Financial Statements prepared in accordance with GAAP. -4- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- Card billed business (A): United States $123.0 $109.7 12% $ 459.3 $ 406.8 13% Outside the United States 54.5 43.8 24 188.0 154.7 22 ------ ------ ------- ------- Total $177.5 $153.5 16 $ 647.3 $ 561.5 15 ====== ====== ======= ======= Total cards-in-force (millions) (B): United States 52.3 48.1 9% 52.3 48.1 9% Outside the United States 34.1 29.9 14 34.1 29.9 14 ------ ------ ------- ------- Total 86.4 78.0 11 86.4 78.0 11 ====== ====== ======= ======= Basic cards-in-force (millions) (B): United States 40.9 37.1 10% 40.9 37.1 10% Outside the United States 29.2 25.4 15 29.2 25.4 15 ------ ------ ------- ------- Total 70.1 62.5 12 70.1 62.5 12 ====== ====== ======= ======= Average discount rate (C) 2.54% 2.55% 2.56% 2.57% Average basic cardmember spending (dollars) (D) $3,228 $2,985 8% $12,106 $11,201 8% Average fee per card (dollars) (D) $ 33 $ 31 6% $ 32 $ 32 -%
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (B) Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary basic cards-in-force includes all cards that are issued and outstanding under network partnership agreements. (C) This calculation is designed to approximate merchant pricing. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance. (D) Average basic cardmember spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs (which beginning prospectively as of July 1, 2006, was reclassified from other expense to a reduction in net card fees), divided by average worldwide proprietary cards-in-force. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs. The adjusted average fee per card was $37 for the quarter and $36 for the year ended December 31, 2007, and $35 for the quarter and year ended December 31, 2006, and the amount of amortization excluded for these periods was $74 million for the quarter and $288 million for the year ended December 31, 2007, and $75 million for the quarter and $147 million for the year ended December 31, 2006. The Company presents adjusted average fee per card because management believes that this metric presents a better picture of card fee pricing across a range of its proprietary card products. -5- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (CONTINUED) (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- ----------------- Percentage Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- Worldwide cardmember receivables: Total receivables $ 40.1 $ 37.4 7% $ 40.1 $ 37.4 7% 90 days past due as a % of total 3.0% 2.8% 3.0% 2.8% Loss reserves (millions): $1,149 $ 981 17% $ 1,149 $ 981 17% % of receivables 2.9% 2.6% 2.9% 2.6% % of 90 days past due 95% 95% 95% 95% Net loss ratio as a % of charge volume 0.25% 0.26% 0.24% 0.24% Worldwide cardmember lending - owned basis (A): Total loans $ 54.5 $ 43.3 26% $ 54.5 $ 43.3 26% 30 days past due loans as a % of total 3.4% 2.7% 3.4% 2.7% Loss reserves (millions): Beginning balance $1,469 $1,126 30% $ 1,171 $ 996 18% Provision 924 451 # 2,615 1,507 74 Net write offs (579) (405) 43 (1,990) (1,359) 46 Other 17 (1) # 35 27 30 ------ ------ ------- ------- Ending balance $1,831 $1,171 56 $ 1,831 $ 1,171 56 ====== ====== ======= ======= % of loans 3.4% 2.7% 3.4% 2.7% % of past due 100% 98% 100% 98% Average loans $ 51.7 $ 40.2 29% $ 47.2 $ 36.5 29% Net write-off rate 4.5% 4.0% 4.2% 3.7% Net finance revenue(B)/average loans 9.3% 9.6% 9.4% 9.3% Worldwide cardmember lending - managed basis (C): Total loans $ 77.2 $ 63.5 22% $ 77.2 $ 63.5 22% 30 days past due loans as a % of total 3.2% 2.6% 3.2% 2.6% Loss reserves (millions): Beginning balance $1,991 $1,571 27% $ 1,622 $ 1,469 10% Provision 1,387 608 # 3,726 1,991 87 Net write offs (813) (557) 46 (2,799) (1,933) 45 Other 16 -- # 32 95 (66) ------ ------ ------- ------- Ending balance $2,581 $1,622 59 $ 2,581 $ 1,622 59 ====== ====== ======= ======= % of loans 3.3% 2.6% 3.3% 2.6% % of past due 106% 97% 106% 97% Average loans $ 74.1 $ 60.4 23% $ 68.3 $ 56.9 20% Net write-off rate 4.4% 3.7% 4.1% 3.4% Net finance revenue(B)/average loans 9.4% 9.4% 9.4% 9.3%
# - Denotes a variance of more than 100%. (A) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (B) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. (C) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information on page 20 for further discussion of the managed basis presentation. -6- (Preliminary) AMERICAN EXPRESS COMPANY CONSOLIDATED STATEMENTS OF INCOME (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Revenues Discount revenue $3,912 $3,659 $3,670 $3,355 $3,458 Net card fees 544 522 500 484 479 Travel commissions and fees 514 484 491 437 450 Other commissions and fees 650 644 587 536 573 Securitization income, net 326 392 332 457 347 Other 470 362 426 387 528 ------ ------ ------ ------ ------ Total 6,416 6,063 6,006 5,656 5,835 ------ ------ ------ ------ ------ Interest income Cardmember lending finance revenue 1,682 1,581 1,514 1,368 1,326 Other 302 309 357 303 287 ------ ------ ------ ------ ------ Total 1,984 1,890 1,871 1,671 1,613 ------ ------ ------ ------ ------ Total revenues 8,400 7,953 7,877 7,327 7,448 ------ ------ ------ ------ ------ Interest expense Cardmember lending 474 444 431 385 351 Charge card and other 562 564 508 458 422 ------ ------ ------ ------ ------ Total 1,036 1,008 939 843 773 ------ ------ ------ ------ ------ Revenues net of interest expense 7,364 6,945 6,938 6,484 6,675 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 2,719 1,810 1,826 1,462 1,732 Human resources 1,437 1,366 1,334 1,301 1,361 Professional services 646 539 580 518 648 Occupancy and equipment 382 374 352 328 372 Communications 119 118 112 112 112 Other, net (591) 339 348 293 365 ------ ------ ------ ------ ------ Total 4,712 4,546 4,552 4,014 4,590 ------ ------ ------ ------ ------ Provisions for losses and benefits Charge card 419 279 233 209 277 Cardmember lending 970 579 638 574 484 Other (including investment certificates) 134 124 106 76 137 ------ ------ ------ ------ ------ Total 1,523 982 977 859 898 ------ ------ ------ ------ ------ Pretax income from continuing operations 1,129 1,417 1,409 1,611 1,187 Income tax provision 290 343 369 516 292 ------ ------ ------ ------ ------ Income from continuing operations 839 1,074 1,040 1,095 895 (Loss) Income from discontinued operations, net of tax (8) (7) 17 (38) 27 ------ ------ ------ ------ ------ Net income $ 831 $1,067 $1,057 $1,057 $ 922 ====== ====== ====== ====== ======
-7- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ REVENUES NET OF INTEREST EXPENSE U.S. Card Services $3,709 $3,589 $3,560 $ 3,364 $3,349 International Card Services 1,189 1,114 1,049 979 1,026 Global Commercial Services 1,128 1,064 1,083 994 982 Global Network & Merchant Services 1,041 980 966 877 916 ------ ------ ------ ------- ------ 7,067 6,747 6,658 6,214 6,273 Corporate & Other, including adjustments and eliminations 297 198 280 270 402 ------ ------ ------ ------- ------ CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $7,364 $6,945 $6,938 $ 6,484 $6,675 ====== ====== ====== ======= ====== PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS U.S. Card Services $ (40) $ 912 $ 827 $ 1,031 $ 723 International Card Services (181) 110 92 96 76 Global Commercial Services 144 187 218 195 167 Global Network & Merchant Services 379 389 418 374 297 ------ ------ ------ ------- ------ 302 1,598 1,555 1,696 1,263 Corporate & Other 827 (181) (146) (85) (76) ------ ------ ------ ------- ------ PRETAX INCOME FROM CONTINUING OPERATIONS $1,129 $1,417 $1,409 $ 1,611 $1,187 ====== ====== ====== ======= ====== NET INCOME (LOSS) U.S. Card Services $ 7 $ 592 $ 580 $ 644 $ 473 International Card Services (68) 140 117 102 99 Global Commercial Services 110 135 162 129 117 Global Network & Merchant Services 254 266 266 236 201 ------ ------ ------ ------- ------ 303 1,133 1,125 1,111 890 Corporate & Other 536 (59) (85) (16) 5 ------ ------ ------ ------- ------ Income from continuing operations 839 1,074 1,040 1,095 895 (Loss) Income from discontinued operations, net of tax (8) (7) 17 (38) 27 ------ ------ ------ ------- ------ NET INCOME $ 831 $1,067 $1,057 $ 1,057 $ 922 ====== ====== ====== ======= ======
-8- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (CONTINUED)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ EARNINGS PER COMMON SHARE BASIC Income from continuing operations $ 0.72 $ 0.92 $ 0.88 $ 0.92 $ 0.75 (Loss) Income from discontinued operations -- (0.01) 0.02 (0.03) 0.02 ------ ------ ------ ------ ------ Net income $ 0.72 $ 0.91 $ 0.90 $ 0.89 $ 0.77 ====== ====== ====== ====== ====== Average common shares outstanding (millions) 1,157 1,170 1,179 1,187 1,196 ====== ====== ====== ====== ====== DILUTED Income from continuing operations $ 0.71 $ 0.90 $ 0.86 $ 0.90 $ 0.73 (Loss) Income from discontinued operations -- -- 0.02 (0.03) 0.02 ------ ------ ------ ------ ------ Net income $ 0.71 $ 0.90 $ 0.88 $ 0.87 $ 0.75 ====== ====== ====== ====== ====== Average common shares outstanding (millions) 1,178 1,192 1,203 1,210 1,224 ====== ====== ====== ====== ====== Cash dividends declared per common share $ 0.18 $ 0.15 $ 0.15 $ 0.15 $ 0.15 ====== ====== ====== ====== ======
SELECTED STATISTICAL INFORMATION
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Return on average equity (A) 37.3% 38.2% 37.5% 36.6% 34.7% Common shares outstanding (millions) 1,158 1,169 1,182 1,188 1,199 Book value per common share $ 9.53 $ 9.32 $ 9.00 $ 8.83 $ 8.76 Shareholders' equity (billions) $ 11.0 $ 10.9 $ 10.6 $ 10.5 $ 10.5
(A) Computed on a trailing 12-month basis using net income over average total shareholders' equity (including discontinued operations) as included in the Consolidated Financial Statements prepared in accordance with GAAP. -9- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Card billed business (A): United States $123.0 $115.2 $115.7 $105.4 $109.7 Outside the United States 54.5 47.3 45.4 40.8 43.8 ------ ------ ------ ------ ------ Total $177.5 $162.5 $161.1 $146.2 $153.5 ====== ====== ====== ====== ====== Total cards-in-force (millions) (B): United States 52.3 51.7 50.5 49.3 48.1 Outside the United States 34.1 33.0 31.7 30.6 29.9 ------ ------ ------ ------ ------ Total 86.4 84.7 82.2 79.9 78.0 ====== ====== ====== ====== ====== Basic cards-in-force (millions) (B): United States 40.9 40.1 39.2 38.1 37.1 Outside the United States 29.2 28.3 27.0 26.0 25.4 ------ ------ ------ ------ ------ Total 70.1 68.4 66.2 64.1 62.5 ====== ====== ====== ====== ====== Average discount rate (C) 2.54% 2.57% 2.57% 2.58% 2.55% Average basic cardmember spending (dollars) (D) $3,228 $3,006 $3,049 $2,817 $2,985 Average fee per card (dollars) (D) $ 33 $ 32 $ 31 $ 30 $ 31
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (B) Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary basic cards-in-force includes all cards that are issued and outstanding under network partnership agreements. (C) This calculation is designed to approximate merchant pricing. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance. (D) Average basic cardmember spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs (which beginning prospectively as of July 1, 2006, was reclassified from other expense to a reduction in net card fees), divided by average worldwide proprietary cards-in-force. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs. The adjusted average fee per card was $37 for the quarter ended December 31, 2007, $36 for the quarters ended September 30, 2007 and June 30, 2007 and $35 for the quarters ended March 31, 2007 and December 31, 2006. The amount of amortization excluded for these periods was $74 million for the quarter ended December 31, 2007, $71 million for the quarters ended September 30, 2007 and June 30, 2007, $72 million for the quarter ended March 31, 2007, and $75 million for the quarter ended December 31, 2006. The Company presents adjusted average fee per card because management believes that this metric presents a better picture of card fee pricing across a range of its proprietary card products. -10- AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (CONTINUED) (Preliminary) (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Worldwide cardmember receivables: Total receivables $ 40.1 $ 38.5 $ 38.4 $ 36.5 $ 37.4 90 days past due as a % of total 3.0% 2.8% 2.7% 2.9% 2.8% Loss reserves (millions): $1,149 $ 998 $ 981 $ 979 $ 981 % of receivables 2.9% 2.6% 2.6% 2.7% 2.6% % of 90 days past due 95% 91% 95% 93% 95% Net loss ratio as a % of charge volume 0.25% 0.26% 0.24% 0.23% 0.26% Worldwide cardmember lending - owned basis (A): Total loans $ 54.5 $ 50.5 $ 48.3 $ 42.3 $ 43.3 30 days past due loans as a % of total 3.4% 3.0% 2.8% 3.0% 2.7% Loss reserves (millions): Beginning balance $1,469 $1,417 $1,271 $1,171 $1,126 Provision 924 543 606 542 451 Net write offs (579) (499) (473) (439) (405) Other 17 8 13 (3) (1) ------ ------ ------ ------ ------ Ending balance $1,831 $1,469 $1,417 $1,271 $1,171 ====== ====== ====== ====== ====== % of loans 3.4% 2.9% 2.9% 3.0% 2.7% % of past due 100% 97% 106% 100% 98% Average loans $ 51.7 $ 48.8 $ 45.6 $ 42.4 $ 40.2 Net write-off rate 4.5% 4.1% 4.1% 4.1% 4.0% Net finance revenue(B)/average loans 9.3% 9.3% 9.5% 9.4% 9.6% Worldwide cardmember lending - managed basis (C): Total loans $ 77.2 $ 72.0 $ 68.6 $ 63.2 $ 63.5 30 days past due loans as a % of total 3.2% 2.8% 2.6% 2.8% 2.6% Loss reserves (millions): Beginning balance $1,991 $1,917 $1,787 $1,622 $1,571 Provision 1,387 762 780 797 608 Net write offs (813) (696) (662) (628) (557) Other 16 8 12 (4) -- ------ ------ ------ ------ ------ Ending balance $2,581 $1,991 $1,917 $1,787 $1,622 ====== ====== ====== ====== ====== % of loans 3.3% 2.8% 2.8% 2.8% 2.6% % of past due 106% 97% 106% 100% 97% Average loans $ 74.1 $ 70.1 $ 65.9 $ 62.8 $ 60.4 Net write-off rate 4.4% 4.0% 4.0% 4.0% 3.7% Net finance revenue(B)/average loans 9.4% 9.4% 9.3% 9.5% 9.4%
(A) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (B) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. (C) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information on page 20 for further discussion of the managed basis presentation. -11- (Preliminary) U.S. CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended Years Ended December 31, December 31, ---------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------- ------ ---------- ------- ------- ---------- Revenues Discount revenue, net card fees and other $ 2,747 $2,481 11% $10,435 $ 9,421 11% Cardmember lending finance revenue 1,304 1,018 28 4,762 3,434 39 Securitization income, net 326 347 (6) 1,507 1,489 1 ------- ------ ------- ------- Total revenues 4,377 3,846 14 16,704 14,344 16 ------- ------ ------- ------- Interest expense Cardmember lending 440 288 53 1,518 957 59 Charge card and other 228 209 9 964 767 26 ------- ------ ------- ------- Revenues net of interest expense 3,709 3,349 11 14,222 12,620 13 ------- ------ ------- ------- Expenses Marketing, promotion, rewards and cardmember services 1,739 1,220 43 5,140 4,445 16 Human resources and other operating expenses 871 876 (1) 3,354 3,227 4 ------- ------ ------- ------- Total 2,610 2,096 25 8,494 7,672 11 ------- ------ ------- ------- Provisions for losses 1,139 530 # 2,998 1,625 84 ------- ------ ------- ------- Pretax segment (loss) income (40) 723 # 2,730 3,323 (18) Income tax (benefit) provision (47) 250 # 907 1,171 (23) ------- ------ ------- ------- Segment income $ 7 $ 473 (99) $ 1,823 $ 2,152 (15) ======= ====== ======= =======
# - Denotes a variance of more than 100%. -12- (Preliminary) U.S. CARD SERVICES SELECTED FINANCIAL INFORMATION MANAGED BASIS PRESENTATION (Millions)
Quarters Ended Years Ended December 31, December 31, ---------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------- ------ ---------- ------- ------- ---------- INCOME STATEMENT DATA Discount revenue, net card fees and other: Reported for the period (GAAP) $2,747 $2,481 11% $10,435 $ 9,421 11% Securitization adjustments 76 56 36 310 199 56 ------ ------ ------- ------- Managed discount revenue, net card fees and other $2,823 $2,537 11 $10,745 $ 9,620 12 ------ ------ ------- ------- Cardmember lending finance revenue: Reported for the period (GAAP) $1,304 $1,018 28 $ 4,762 $ 3,434 39 Securitization adjustments 828 729 14 3,130 2,937 7 ------ ------ ------- ------- Managed finance revenue $2,132 $1,747 22 $ 7,892 $ 6,371 24 ------ ------ ------- ------- Securitization income, net: Reported for the period (GAAP) $ 326 $ 347 (6) $ 1,507 $ 1,489 1 Securitization adjustments (326) (347) (6) (1,507) (1,489) 1 ------ ------ ------- ------- Managed securitization income, net $ -- $ -- -- $ -- $ -- -- ------ ------ ------- ------- Cardmember lending interest expense: Reported for the period (GAAP) $ 440 $ 288 53 $ 1,518 $ 957 59 Securitization adjustments 287 279 3 1,136 1,057 7 ------ ------ ------- ------- Managed cardmember lending interest expense $ 727 $ 567 28 $ 2,654 $ 2,014 32 ------ ------ ------- ------- Provisions for losses: Reported for the period (GAAP) $1,139 $ 530 # $ 2,998 $ 1,625 84 Securitization adjustments 263 153 72 871 550 58 ------ ------ ------- ------- Managed provisions for losses $1,402 $ 683 # $ 3,869 $ 2,175 78 ------ ------ ------- -------
# - Denotes a variance of more than 100%. For U.S. Card Services, the managed basis presentation assumes that there have been no off-balance sheet securitization transactions, i.e., all securitized cardmember loans and related income effects are reflected as if they were in the Company's balance sheets and income statements, respectively. For the managed basis presentation, revenue and expenses related to securitized cardmember loans are reflected in other commissions and fees (included above in discount revenue, net card fees and other), cardmember lending finance revenue, cardmember lending interest expense, and provisions for losses. On a managed basis, there is no securitization income, net, as the managed basis presentation assumes no securitization transactions have occurred. The Company presents U.S. Card Services information on a managed basis because that is the way the Company's management views and manages the business. Management believes that a full picture of trends in the Company's cardmember lending business can only be derived by evaluating the performance of both securitized and non-securitized cardmember loans. Management also believes that use of a managed basis presentation presents a more accurate picture of the key dynamics of the cardmember lending business. Irrespective of the on and off-balance sheet funding mix, it is important for management and investors to see metrics for the entire cardmember lending portfolio because they are more representative of the economics of the aggregate cardmember relationships and ongoing business performance and trends over time. It is also important for investors to see the overall growth of cardmember loans and related revenue in order to evaluate market share. These metrics are significant in evaluating the Company's performance and can only be properly assessed when all non-securitized and securitized cardmember loans are viewed together on a managed basis. The Company does not currently securitize international loans. -13- (Preliminary) U.S. CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- Card billed business $101.2 $ 90.8 11% $ 375.2 $ 333.4 13% Total cards-in-force (millions) 43.3 40.7 6% 43.3 40.7 6% Basic cards-in-force (millions) 32.3 30.1 7% 32.3 30.1 7% Average basic cardmember spending (dollars) $3,161 $3,044 4% $12,011 $11,521 4% U.S. Consumer Travel: Travel sales (millions) $ 707 $ 597 18% $ 2,975 $ 2,357 26% Travel commissions and fees/sales 8.2% 8.2% 8.0% 8.4% Total segment assets $ 82.3 $ 71.0 16% $ 82.3 $ 71.0 16% Segment capital (A) $ 4.5 $ 4.7 (4)% $ 4.5 $ 4.7 (4)% Return on segment capital (B) 40.2% 47.4% 40.2% 47.4% Cardmember receivables: Total receivables $ 21.4 $ 20.6 4% $ 21.4 $ 20.6 4% 90 days past due as a % of total 3.9% 3.3% 3.9% 3.3% Net loss ratio as a % of charge volume 0.35% 0.32% 0.31% 0.28% Cardmember lending - owned basis (C): Total loans $ 43.3 $ 33.6 29% $ 43.3 $ 33.6 29% 30 days past due loans as a % of total 3.5% 2.7% 3.5% 2.7% Average loans $ 40.9 $ 30.9 32% $ 37.1 $ 27.6 34% Net write-off rate 4.3% 3.5% 3.9% 3.0% Net finance revenue(D)/average loans 8.4% 9.4% 8.7% 9.0% Cardmember lending - managed basis (E): Total loans $ 66.0 $ 53.8 23% $ 66.0 $ 53.8 23% 30 days past due loans as a % of total 3.2% 2.6% 3.2% 2.6% Average loans $ 63.2 $ 51.1 24% $ 58.3 $ 48.0 21% Net write-off rate 4.3% 3.3% 3.8% 2.9% Net finance revenue(D)/average loans 8.8% 9.2% 9.0% 9.1%
(A) Segment capital includes an allocation attributable to goodwill of $175 million and $168 million as of the quarters and years ended December 31, 2007 and 2006, respectively. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (C) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (D) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. (E) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information on page 20 for further discussion of the managed basis presentation. -14- (Preliminary) U.S. CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Revenues Discount revenue, net card fees and other $2,747 $2,632 $2,642 $2,414 $2,481 Cardmember lending finance revenue 1,304 1,224 1,179 1,055 1,018 Securitization income, net 326 392 332 457 347 ------ ------ ------ ------ ------ Total revenues 4,377 4,248 4,153 3,926 3,846 ------ ------ ------ ------ ------ Interest expense Cardmember lending 440 402 363 313 288 Charge card and other 228 257 230 249 209 ------ ------ ------ ------ ------ Revenues net of interest expense 3,709 3,589 3,560 3,364 3,349 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 1,739 1,191 1,266 944 1,220 Human resources and other operating expenses 871 848 827 808 876 ------ ------ ------ ------ ------ Total 2,610 2,039 2,093 1,752 2,096 ------ ------ ------ ------ ------ Provisions for losses 1,139 638 640 581 530 ------ ------ ------ ------ ------ Pretax segment (loss) income (40) 912 827 1,031 723 Income tax (benefit) provision (47) 320 247 387 250 ------ ------ ------ ------ ------ Segment income $ 7 $ 592 $ 580 $ 644 $ 473 ====== ====== ====== ====== ======
-15- (Preliminary) U.S. CARD SERVICES SELECTED FINANCIAL INFORMATION MANAGED BASIS PRESENTATION (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ INCOME STATEMENT DATA Discount revenue, net card fees and other: Reported for the period (GAAP) $2,747 $2,632 $2,642 $2,414 $2,481 Securitization adjustments 76 67 80 87 56 ------ ------ ------ ------ ------ Managed discount revenue, net card fees and other $2,823 $2,699 $2,722 $2,501 $2,537 ------ ------ ------ ------ ------ Cardmember lending finance revenue: Reported for the period (GAAP) $1,304 $1,224 $1,179 $1,055 $1,018 Securitization adjustments 828 821 724 757 729 ------ ------ ------ ------ ------ Managed finance revenue $2,132 $2,045 $1,903 $1,812 $1,747 ------ ------ ------ ------ ------ Securitization income, net: Reported for the period (GAAP) $ 326 $ 392 $ 332 $ 457 $ 347 Securitization adjustments (326) (392) (332) (457) (347) ------ ------ ------ ------ ------ Managed securitization income, net $ -- $ -- $ -- $ -- $ -- ------ ------ ------ ------ ------ Cardmember lending interest expense: Reported for the period (GAAP) $ 440 $ 402 $ 363 $ 313 $ 288 Securitization adjustments 287 302 274 273 279 ------ ------ ------ ------ ------ Managed cardmember lending interest expense $ 727 $ 704 $ 637 $ 586 $ 567 ------ ------ ------ ------ ------ Provisions for losses: Reported for the period (GAAP) $1,139 $ 638 $ 640 $ 581 $ 530 Securitization adjustments 263 226 177 205 153 ------ ------ ------ ------ ------ Managed provisions for losses $1,402 $ 864 $ 817 $ 786 $ 683 ------ ------ ------ ------ ------
See page 20 for discussion of managed basis presentation. -16- (Preliminary) U.S. CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Card billed business $101.2 $ 94.2 $ 94.6 $ 85.2 $ 90.8 Total cards-in-force (millions) 43.3 42.9 42.1 41.5 40.7 Basic cards-in-force (millions) 32.3 31.8 31.2 30.7 30.1 Average basic cardmember spending (dollars) $3,161 $2,986 $3,054 $2,801 $3,044 U.S. Consumer Travel: Travel sales $ 0.7 $ 0.7 $ 0.8 $ 0.7 $ 0.6 Travel commissions and fees/sales 8.2% 8.5% 8.0% 7.5% 8.2% Total segment assets $ 82.3 $ 79.0 $ 76.1 $ 68.4 $ 71.0 Segment capital (A) $ 4.5 $ 4.5 $ 4.5 $ 4.5 $ 4.7 Return on segment capital (B) 40.2% 50.5% 49.9% 50.2% 47.4% Cardmember receivables: Total receivables $ 21.4 $ 19.4 $ 19.8 $ 19.0 $ 20.6 90 days past due as a % of total 3.9% 3.9% 3.6% 3.8% 3.3% Net loss ratio as a % of charge volume 0.35% 0.34% 0.30% 0.25% 0.32% Cardmember lending - owned basis (C): Total loans $ 43.3 $ 40.0 $ 38.3 $ 33.0 $ 33.6 30 days past due loans as a % of total 3.5% 3.1% 2.7% 2.9% 2.7% Average loans $ 40.9 $ 38.6 $ 35.9 $ 33.1 $ 30.9 Net write-off rate 4.3% 3.7% 3.7% 3.7% 3.5% Net finance revenue(D)/average loans 8.4% 8.5% 9.1% 9.1% 9.4% Cardmember lending - managed basis (E): Total loans $ 66.0 $ 61.5 $ 58.6 $ 53.9 $ 53.8 30 days past due loans as a % of total 3.2% 2.9% 2.6% 2.8% 2.6% Average loans $ 63.2 $ 60.0 $ 56.3 $ 53.4 $ 51.1 Net write-off rate 4.3% 3.7% 3.7% 3.7% 3.3% Net finance revenue(D)/average loans 8.8% 8.9% 9.0% 9.3% 9.2%
(A) Segment capital includes an allocation attributable to goodwill of $175 million as of December 31, 2007 and $168 million as of September 30, 2007, June 30, 2007, March 31, 2007 and December 31, 2006, respectively. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (C) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (D) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. (E) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information on page 20 for further discussion of the managed basis presentation. -17- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- Revenues Discount revenue, net card fees and other $1,022 $ 884 16% $3,703 $3,405 9% Cardmember lending finance revenue 376 304 24 1,372 1,146 20 ------ ------ ------ ------ Total revenues 1,398 1,188 18 5,075 4,551 12 ------ ------ ------ ------ Interest expense Cardmember lending 138 105 31 493 393 25 Charge card and other 71 57 25 251 193 30 ------ ------ ------ ------ Revenues net of interest expense 1,189 1,026 16 4,331 3,965 9 ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 638 280 # 1,566 1,109 41 Human resources and other operating expenses 512 460 11 1,836 1,692 9 ------ ------ ------ ------ Total 1,150 740 55 3,402 2,801 21 ------ ------ ------ ------ Provisions for losses 220 210 5 812 852 (5) ------ ------ ------ ------ Pretax segment (loss) income (181) 76 # 117 312 (63) Income tax benefit (113) (23) # (174) (31) # ------ ------ ------ ------ Segment (loss) income $ (68) $ 99 # $ 291 $ 343 (15) ====== ====== ====== ======
# - Denotes variance of more than 100%. -18- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- Card billed business $ 28.2 $ 23.6 19% $ 98.0 $ 86.3 14% Total cards-in-force (millions) 16.0 15.6 3% 16.0 15.6 3% Basic cards-in-force (millions) 11.3 11.2 1% 11.3 11.2 1% Average basic cardmember spending (dollars) $2,515 $2,106 19% $8,772 $7,491 17% International Consumer Travel: Travel sales (millions) $ 310 $ 251 24% $1,113 $ 922 21% Travel commissions and fees/sales 8.7% 8.6% 8.6% 8.7% Total segment assets $ 21.4 $ 18.9 13% $ 21.4 $ 18.9 13% Segment capital (millions) (A) $2,062 $1,724 20% $2,062 $1,724 20% Return on segment capital (B) 15.3% 17.9% 15.3% 17.9% Cardmember receivables: Total receivables $ 6.6 $ 6.0 10% $ 6.6 $ 6.0 10% 90 days past due as a % of total 1.8% 2.3% 1.8% 2.3% Net loss ratio as a % of charge volume 0.21% 0.30% 0.26% 0.26% Cardmember lending: Total loans $ 11.2 $ 9.7 15% $ 11.2 $ 9.7 15% 30 days past due loans as a % of total 2.8% 2.9% 2.8% 2.9% Average loans $ 10.8 $ 9.3 16% $ 10.0 $ 8.9 12% Net write-off rate 5.1% 5.7% 5.6% 5.9% Net finance revenue(C)/average loans 8.7% 8.5% 8.8% 8.5%
(A) Segment capital includes an allocation attributable to goodwill of $519 million and $518 million as of the quarters and years ended December 31, 2007 and 2006, respectively. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (C) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. -19- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Revenues Discount revenue, net card fees and other $1,022 $ 953 $ 900 $ 828 $ 884 Cardmember lending finance revenue 376 353 333 310 304 ------ ------ ------ ------ ------ Total revenues 1,398 1,306 1,233 1,138 1,188 ------ ------ ------ ------ ------ Interest expense Cardmember lending 138 126 120 109 105 Charge card and other 71 66 64 50 57 ------ ------ ------ ------ ------ Revenues net of interest expense 1,189 1,114 1,049 979 1,026 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 638 354 293 281 280 Human resources and other operating expenses 512 453 453 418 460 ------ ------ ------ ------ ------ Total 1,150 807 746 699 740 ------ ------ ------ ------ ------ Provisions for losses 220 197 211 184 210 ------ ------ ------ ------ ------ Pretax segment (loss) income (181) 110 92 96 76 Income tax benefit (113) (30) (25) (6) (23) ------ ------ ------ ------ ------ Segment (loss) income $ (68) $ 140 $ 117 $ 102 $ 99 ====== ====== ====== ====== ======
-20- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Card billed business $ 28.2 $ 24.7 $ 23.6 $ 21.5 $ 23.6 Total cards-in-force (millions) 16.0 15.8 15.7 15.7 15.6 Basic cards-in-force (millions) 11.3 11.2 11.2 11.2 11.2 Average basic cardmember spending (dollars) $2,515 $2,209 $2,123 $1,926 $2,106 International Consumer Travel: Travel sales $ 0.3 $ 0.3 $ 0.3 $ 0.2 $ 0.3 Travel commissions and fees/sales 8.7% 8.8% 8.6% 8.4% 8.6% Total segment assets $ 21.4 $ 20.8 $ 19.7 $ 18.5 $ 18.9 Segment capital (A) $ 2.1 $ 2.0 $ 1.9 $ 1.8 $ 1.7 Return on segment capital (B) 15.3% 24.4% 22.8% 20.9% 17.9% Cardmember receivables: Total receivables $ 6.6 $ 6.1 $ 5.9 $ 5.4 $ 6.0 90 days past due as a % of total 1.8% 1.8% 2.0% 2.4% 2.3% Net loss ratio as a % of charge volume 0.21% 0.26% 0.28% 0.29% 0.30% Cardmember lending: Total loans $ 11.2 $ 10.5 $ 10.0 $ 9.3 $ 9.7 30 days past due loans as a % of total 2.8% 2.7% 2.9% 3.1% 2.9% Average loans $ 10.8 $ 10.2 $ 9.7 $ 9.4 $ 9.3 Net write-off rate 5.1% 5.5% 6.0% 5.7% 5.7% Net finance revenue(C)/average loans 8.7% 8.9% 8.9% 8.7% 8.5%
(A) Segment capital includes an allocation attributable to goodwill of $519 million as of December 31, 2007, $520 million as of September 30, 2007, $519 million as of June 30, 2007 and March 31, 2007, and $518 million as of December 31, 2006, respectively. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (C) Net finance revenue, which represents cardmember lending finance revenue less cardmember lending interest expense, is computed on an annualized basis. -21- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- Revenues Discount revenue, net card fees and other $1,259 $1,089 16% $4,747 $4,269 11% ------ ------ ------ ------ Interest expense Charge card and other 131 107 22 478 369 30 ------ ------ ------ ------ Revenues net of interest expense 1,128 982 15 4,269 3,900 9 ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 135 63 # 387 307 26 Human resources and other operating expenses 794 721 10 2,975 2,764 8 ------ ------ ------ ------ Total 929 784 18 3,362 3,071 9 ------ ------ ------ ------ Provisions for losses 55 31 77 163 113 44 ------ ------ ------ ------ Pretax segment income 144 167 (14) 744 716 4 Income tax provision 34 50 (32) 208 239 (13) ------ ------ ------ ------ Segment income $ 110 $ 117 (6) $ 536 $ 477 12 ====== ====== ====== ======
# - Denotes variance of more than 100%. -22- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage ----------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- Card billed business $ 32.2 $ 27.6 17% $ 122.1 $ 106.9 14% Total cards-in-force (millions) 6.8 6.7 1% 6.8 6.7 1% Basic cards-in-force (millions) 6.8 6.7 1% 6.8 6.7 1% Average basic cardmember spending (dollars) $4,695 $4,170 13% $18,017 $16,264 11% Global Corporate Travel: Travel sales $ 5.5 $ 4.6 20% $ 20.5 $ 18.5 11% Travel commissions and fees/sales 7.8% 8.1% 7.7% 8.1% Total segment assets $ 21.1 $ 18.9 12% $ 21.1 $ 18.9 12% Segment capital (millions) (A) $2,239 $1,907 17% $ 2,239 $ 1,907 17% Return on segment capital (B) 25.3% 25.7% 25.3% 25.7% Cardmember receivables: Total receivables $ 11.4 $ 10.3 11% $ 11.4 $ 10.3 11% 90 days past due as a % of total 2.1% 1.9% 2.1% 1.9% Net loss ratio as a % of charge volume 0.12% 0.09% 0.10% 0.09%
(A) Segment capital includes an allocation attributable to goodwill of $771 million and $740 million as of the quarters and years ended December 31, 2007 and 2006. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. -23- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Revenues Discount revenue, net card fees and other $1,259 $1,180 $1,210 $1,098 $1,089 ------ ------ ------ ------ ------ Interest expense Charge card and other 131 116 127 104 107 ------ ------ ------ ------ ------ Revenues net of interest expense 1,128 1,064 1,083 994 982 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 135 86 83 83 63 Human resources and other operating expenses 794 749 746 686 721 ------ ------ ------ ------ ------ Total 929 835 829 769 784 ------ ------ ------ ------ ------ Provisions for losses 55 42 36 30 31 ------ ------ ------ ------ ------ Pretax segment income 144 187 218 195 167 Income tax provision 34 52 56 66 50 ------ ------ ------ ------ ------ Segment income $ 110 $ 135 $ 162 $ 129 $ 117 ====== ====== ====== ====== ======
-24- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Card billed business $ 32.2 $ 29.9 $ 31.0 $ 29.0 $ 27.6 Total cards-in-force (millions) 6.8 6.8 6.8 6.7 6.7 Basic cards-in-force (millions) 6.8 6.8 6.8 6.7 6.7 Average basic cardmember spending (dollars) $4,695 $4,389 $4,583 $4,343 $4,170 Global Corporate Travel: Travel sales $ 5.5 $ 4.9 $ 5.3 $ 4.8 $ 4.6 Travel commissions and fees/sales 7.8% 8.0% 7.5% 7.6% 8.1% Total segment assets $ 21.1 $ 21.8 $ 21.7 $ 20.5 $ 18.9 Segment capital (A) $ 2.2 $ 2.2 $ 2.1 $ 2.1 $ 1.9 Return on segment capital (B) 25.3% 26.2% 25.3% 25.7% 25.7% Cardmember receivables: Total receivables $ 11.4 $ 12.5 $ 12.2 $ 11.7 $ 10.3 90 days past due as a % of total 2.1% 1.6% 1.6% 1.6% 1.9% Net loss ratio as a % of charge volume 0.12% 0.11% 0.10% 0.10% 0.09%
(A) Segment capital includes an allocation attributable to goodwill of $771 million as of December 31, 2007, $767 million as of September 30, 2007, $745 million as of June 30, 2007, $742 million as of March 31, 2007 and $740 million as of December 31, 2006, respectively. (B) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. -25- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended Years Ended December 31, December 31, -------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ---- ---------- ------ ------ ---------- Revenues Discount revenue, fees and other $ 961 $840 14% $3,550 $3,063 16% ------ ---- ------ ------ Interest expense Cardmember lending (34) (29) 17 (126) (98) 29 Other (46) (47) (2) (188) (183) 3 ------ ---- ------ ------ Revenues net of interest expense 1,041 916 14 3,864 3,344 16 ------ ---- ------ ------ Expenses Marketing and promotion 165 125 32 595 518 15 Human resources and other operating expenses 466 448 4 1,665 1,549 7 ------ ---- ------ ------ Total 631 573 10 2,260 2,067 9 ------ ---- ------ ------ Provisions for losses 31 46 (33) 44 89 (51) ------ ---- ------ ------ Pretax segment income 379 297 28 1,560 1,188 31 Income tax provision 125 96 30 538 409 32 ------ ---- ------ ------ Segment income $ 254 $201 26 $1,022 $ 779 31 ====== ==== ====== ======
-26- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended Years Ended December 31, December 31, --------------- Percentage --------------- Percentage 2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- Global Card billed business (A) $177.5 $153.5 16% $647.3 $561.5 15% Global Network & Merchant Services: Total segment assets $ 6.5 $ 4.4 48% $ 6.5 $ 4.4 48% Segment capital (millions) (B) $1,170 $1,272 (8)% $1,170 $1,272 (8)% Return on segment capital (C) 90.7% 60.3% 90.7% 60.3% Global Network Services (D): Card billed business $ 16.0 $ 11.5 39% $ 52.9 $ 35.4 49% Total cards-in-force (millions) (E) 20.3 15.0 35% 20.3 15.0 35%
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (B) Segment capital includes an allocation attributable to goodwill of $27 million as of the quarters and years ended December 31, 2007 and 2006. (C) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (D) Billed business and cards-in-force reflect the transfer, effective January 1, 2006, to Global Commercial Services' segment of corporate card accounts in certain emerging markets that had been managed within Global Network Services. (E) Cards-in-force for 2006 reflect the transfer of 1.3 million proprietary cards in Brazil, and approximately 200,000 proprietary cards-in-force in Malaysia and Indonesia from the International Card Services and Global Commercial Services segments during the second quarter of 2006 and the third quarter of 2006, respectively. -27- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Revenues Discount revenue, fees and other $ 961 $902 $887 $800 $840 ------ ---- ---- ---- ---- Interest expense Cardmember lending (34) (33) (31) (28) (29) Other (46) (45) (48) (49) (47) ------ ---- ---- ---- ---- Revenues net of interest expense 1,041 980 966 877 916 ------ ---- ---- ---- ---- Expenses Marketing and promotion 165 151 150 129 125 Human resources and other operating expenses 466 417 389 393 448 ------ ---- ---- ---- ---- Total 631 568 539 522 573 ------ ---- ---- ---- ---- Provisions for losses 31 23 9 (19) 46 ------ ---- ---- ---- ---- Pretax segment income 379 389 418 374 297 Income tax provision 125 123 152 138 96 ------ ---- ---- ---- ---- Segment income $ 254 $266 $266 $236 $201 ====== ==== ==== ==== ====
-28- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ------------------------------------------------------------------ December 31, September 30, June 30, March 31, December 31, 2007 2007 2007 2007 2006 ------------ ------------- -------- --------- ------------ Global Card billed business (A) $177.5 $162.5 $161.1 $146.2 $153.5 Global Network & Merchant Services: Total segment assets $ 6.5 $ 4.6 $ 4.3 $ 4.5 $ 4.4 Segment capital (B) $ 1.2 $ 1.1 $ 1.1 $ 1.0 $ 1.3 Return on segment capital (C) 90.7% 84.7% 78.0% 69.2% 60.3% Global Network Services (D): Card billed business $ 16.0 $ 14.1 $ 12.3 $ 10.5 $ 11.5 Total cards-in-force (millions) 20.3 19.2 17.6 16.0 15.0
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (B) Segment capital includes an allocation attributable to goodwill of $27 million as of the quarters ended December 31, 2007, September 30, 2007, June 30, 2007, March 31, 2007 and December 31, 2006, respectively. (C) Computed on a trailing 12-month basis using segment income and equity capital allocated to segments based upon specific business operational needs, risk measures, and regulatory capital requirements. (D) Billed business and cards-in-force reflect the transfer, effective January 1, 2006, to Global Commercial Services' segment of corporate card accounts in certain emerging markets that had been managed within Global Network Services. -29-