American Express 2001 Annual Report Download - page 10

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related charges, the unit’s net income for the full year would have been $1.78
billion, down 8 percent from last year.
TRS’ net revenues rose 4 percent in 2001, as growth in loans and fee revenues
were partly offset by a 16 percent decline in travel commissions and fees. Billed
business, or the total amount spent on American Express® Cards, was up slightly
in 2001 as higher consumer card spending in the retail and “everyday” cate-
gories was largely offset by lower Corporate Card spending in the travel and
entertainment sector, particularly after September 11. Net finance charge rev-
enues rose 32 percent, due to growth in loan balances and wider net interest
yields. This increase reflected a smaller percentage of loan balances on intro-
ductory rates and the benefit of declining interest rates during the year. Travel
sales declined 24 percent due to the effects of the September 11 terrorist attacks
and the weaker corporate travel environment.
TRS’ provision for losses grew faster than its receivables largely as a result of
an increase in U.S. lending write-off rates and delinquencies, reflecting higher
unemployment and the overall economic environment.
AMERICAN EXPRESS FINANCIAL ADVISORS
AEFA reported net income for 2001 of $52 million, down from $1.03 billion a
year ago. Excluding its portion of the restructuring charges and the one-time
September 11 charges, AEFA’s net income would have been $130 million, down
87 percent from last year. Reflected in these results were the previously men-
tioned charges to write down high-yield securities and rebalance the risk profile
of AEFA’s investment portfolio.
AEFA’s net revenues for 2001 decreased 33 percent to $2.8 billion, reflecting
weakness in equity markets and narrower spreads in the investment portfolio.
The weakened equity markets led to lower asset levels and lower sales of
investment products. As a result, assets owned, managed and administered
declined 8 percent to $253.3 billion. Management and distribution fees fell 13
percent. Mutual fund sales, including proprietary and non-proprietary funds,
axp_8
$253.3
01009998
$300
$275
$250
$225
$200
AMERICAN EXPRESS FINANCIAL
ADVISORS ASSETS OWNED,
MANAGED OR ADMINISTERED
(in billions)
Throughout 2001, weak equity
markets led to lower asset levels
and lower sales of investment
products. As a result, assets
owned, managed or administered
by American Express Financial
Advisors declined 8 percent.