American Express 2001 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2001 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

axp_35
FINANCIAL REVIEW
Asset/liability and market risk management at AEB are supervised by the Asset and Liability Committee, which comprises senior
business managers of AEB. It meets monthly and monitors: (i) liquidity, (ii) capital exposure, (iii) capital adequacy, (iv) market risk
and (v) investment portfolios. The committee evaluates current market conditions and determines AEB’s tactics within risk limits
approved by AEB’s Board of Directors. AEB’s treasury and risk management issue policies and control procedures and delegate risk
limits throughout AEB’s regional trading centers.
TRAVEL RELATED SERVICES
RESULTS OF OPERATIONS
Statements of Income
(Managed Basis)
Years Ended December 31, (Millions) 2001 2000 1999
Net revenues:
Discount revenue $ 7,714 $ 7,779 $ 6,741
Net card fees 1,691 1,653 1,604
Lending:
Finance charge revenue 4,622 3,977 2,884
Interest expense 1,484 1,594 955
Net finance charge revenue 3,138 2,383 1,929
Travel commissions and fees 1,537 1,821 1,802
Travelers Cheque investment income 394 387 345
Other revenues 3,628 3,418 2,813
Total net revenues 18,102 17,441 15,234
Expenses:
Marketing and promotion 1,145 1,348 1,247
Provision for losses and claims:
Charge card 1,231 1,157 995
Lending 2,243 1,486 1,186
Other 164 105 85
Total 3,638 2,748 2,266
Charge card interest expense 1,476 1,408 1,055
Human resources 3,992 4,126 3,931
Other operating expenses 5,379 5,098 4,352
Restructuring charges 414
——
Disaster recovery charge* 79
——
Total expenses 16,123 14,728 12,851
Pretax income 1,979 2,713 2,383
Income tax provision 520 784 691
Net income $ 1,459 $ 1,929 $ 1,692
* Excludes approximately $8 million of waived finance charges and late fees recognized in the third quarter of 2001.
Travel Related Services reported net income of $1.46 billion in 2001, a 24 percent decrease from $1.93 billion in 2000. Excluding
restructuring charges of $414 million ($267 million after-tax) and one-time costs and waived fees directly related to the September
11th terrorist attacks of $87 million ($57 million after-tax), earnings were $1.78 billion, down 8 percent from last year.
In 2001, TRS’net revenues rose 4 percent as increased cards in force, growth in Cardmember loans outstanding and higher fee rev-
enue were partially offset by relatively flat worldwide billed business and lower travel commissions and fees. The 2001 perfor-
mance reflects overall weakness in the economy, especially within the travel and entertainment sectors. In 2000, TRS’ net revenues
benefited from growth in worldwide billed business and Cardmember loans outstanding. Billed business rose less than 1 percent