American Express 2001 Annual Report Download - page 74

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axp_72
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 17 ❚EARNINGS PER COMMON SHARE
Basic earnings per share (EPS) is computed using the average actual shares outstanding during the period. Diluted EPS is basic EPS
adjusted for the dilutive effect of stock options, RSAs and other financial instruments that may be converted into common shares.
The basic and diluted EPS computations are as follows:
(Millions, except per share amounts) 2001 2000 1999
Numerator:
Net income $ 1,311 $ 2,810 $ 2,475
Denominator:
Denominator for basic EPS
—
weighted-average shares 1,324 1,327 1,340
Effect of dilutive securities:
Stock options, RSAs and other 12 33 29
Denominator for diluted EPS 1,336 1,360 1,369
Basic EPS $ 0.99 $ 2.12 $ 1.85
Diluted EPS $ 0.98 $ 2.07 $ 1.81
Note 18 ❚OPERATING SEGMENTS AND GEOGRAPHIC OPERATIONS
OPERATING SEGMENTS
The company is principally engaged in providing travel related, financial advisory and international banking services throughout
the world. TRS’products and services include, among others,Charge Cards,Cardmember lending products,Travelers Cheques,and
corporate and consumer travel services. AEFA’s services and products include financial planning and advice, investment advisory
services and a variety of products, including insurance and annuities, investment certificates and mutual funds. AEB’s products
and services include providing private, financial institution and corporate banking, personal financial services and global trading.
The company operates on a global basis, although the principal market for financial advisory services is the United States.
The following table presents certain information regarding these operating segments at December 31, 2001, 2000 and 1999 and
for each of the years then ended. The segment results have been affected by charges discussed in Notes 2 and 3. For certain income
statement items that are affected by asset securitizations at TRS, data is provided on both a managed basis, which excludes the
effect of securitizations, as well as on a GAAP basis. See Note 6 to the Consolidated Financial Statements and the TRS Results of
Operations section of the Financial Review for further information regarding the effect of securitizations on the financial state-
ments. In addition, net revenues (managed basis) are presented net of provisions for losses and benefits for annuities, insurance
and investment certificate products of AEFA.