American Express 2003 Annual Report Download - page 29

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Financial Review
INTRODUCTION
The financial section of American Express Company’s (the Company) Annual Report consists of this Financial Review, the
Consolidated Financial Statements and related notes that follow. This introduction is designed to provide perspective
regarding the information contained in the financial section.
Business Operations
American Express Company is a global travel, financial and network services provider. The Company has three operating
segments: Travel Related Services (TRS), American Express Financial Advisors (AEFA) and American Express Bank (AEB).
TRS includes the Company’s card, travel, merchant and network businesses, as well as the Travelers Cheque and other pre-
paid products and services. Through its TRS businesses, the Company offers consumers and small businesses a variety of
charge and credit cards, Travelers Cheques and other stored value products. The Company’s Corporate Card services help
companies and institutions manage their travel, entertainment and purchasing expenses. TRS’ global network services busi-
ness focuses on partnering with third-party financial institutions that issue American Express-branded cards accepted on
the Company’s merchant network.
As the world’s largest travel agency, the Company offers travel and related consulting services to individuals and corpora-
tions around the world.
AEFA is one of the leading financial planning companies in the United States. AEFA has over 12,000 financial advisors
nationwide and offers a wide array of products and services, including financial planning, brokerage services, mutual funds,
insurance and other investment products.
AEB provides banking and other financial services to wealthy individuals, financial institutions and retail customers out-
side the United States.
Financial Reporting
The Company follows accounting principles generally accepted in the United States (GAAP). In addition to information
provided on a GAAP basis, the Company discloses certain data on a “managed basis.” This information, which should be
read only as a supplement to GAAP information, assumes there have been no securitization transactions at TRS, i.e., as if all
securitized cardmember loans and related income effects are reflected in the Company’s balance sheet and income state-
ments. In addition, revenues are reported net of AEFA’s provision for losses and benefits for annuities, insurance and invest-
ment certificate products, which are essentially spread businesses. See the TRS and AEFA Results of Operations sections for
further discussion of this approach. Certain reclassifications of prior period amounts have been made to conform to the
current presentation.
Organization of Information
•This Financial Review section (pages 27 to 73) is designed to provide the reader of the financial statements with a narra-
tive on the Company’s financial results. It provides an Executive Overview of how the business makes money and certain
key performance indicators used by management. It also discusses and analyzes the results of operations and liquidity
and capital resources on a consolidated basis and for each operating segment of the Company.
•The Consolidated Financial Statements (pages 74 to 77) include the Company’s statements of income and cash flow and
its financial position.
•The Notes to the Consolidated Financial Statements (pages 78 to 108) contain the Company’s accounting policies (pages
78 through 85), detailed information on balances within the financial statements, certain contingencies and commit-
ments (pages 95 to 96), and the results of each of the Company’s segments and geographic operations (pages 104 to 106).
(p.27_axp_ financial review)