American Express 2003 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 2003 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 116

  • 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
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

Strong growth in our card business, outstanding credit quality, the success of our ongoing reengineering efforts,
and progress at American Express Financial Advisors all played a role in our 2003 performance. For the year,
we delivered:
•Net income of $2.99 billion, up 12 percent from $2.67 billion in 2002.
•Diluted earnings per share of $2.30, up 14 percent from $2.01 last year.
•Return on equity of 20.6 percent, compared with 20.2 percent a year ago.
•Revenues of $25.9 billion, up 9 percent from $23.8 billion last year.
These results were at the high end of our long-term target of 12 to 15 percent earnings per share growth and
surpassed our long-term targets of 8 percent revenue growth and 18 to 20 percent return on equity. We were
particularly pleased with our revenue performance. Although we fell short of our revenue target in the first half
of the year, we grew revenues at a much faster pace in the second half as the economy and stock market envi-
ronment improved. This enabled us to exceed our revenue target for the full year and gave us strong momentum
going into 2004.
As our 2003 results clearly show, we are capitalizing on the changes we initiated three years ago to build a more
flexible and adaptable business. These changes focused on improving our economics, diversifying our card
business, lowering our risk profile and investing in growth. They were designed to help us meet our financial
targets in an environment of slower economic growth and market appreciation, and to help us capitalize quickly
on improving market conditions. And that is exactly what happened in 2003.
We entered the year with a cautious view of the environment. For the first part of the year that view was well
justified. Continued weakness in corporate spending and the equity markets, the war in Iraq and the outbreak
of SARS all made for a highly uncertain environment. Despite these challenges, we were able to deliver strong
earnings growth even without a robust economy. Then, as the economy strengthened in the second half of the
year, we were ready to take full advantage of the improving conditions.
The investments we had been making in the business enabled us to quickly move to the offense while others
were still retrenching. We launched many new products, stepped up marketing efforts and made strategic acqui-
sitions. As a result, we generated substantially higher growth in cardmember spending and loans and posted
higher results at AEFA.
(p.4_axp)
TOTAL RETURN TO SHAREHOLDERS — American Express stock outperformed the major market indices for the second year in a row.
Total shareholder return was 38 percent, compared with 29 percent for the S&P 500 and 31 percent for the S&P Financials.
American Express S&P Financial Index S&P 500 Index