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AMERICAN EXPRESS COMPANY ANNUAL REPORT
2001 2002 2003 2004 Our Next Chapter Begins 2005

Table of contents

  • Page 1
    2001 2002 2003 2004 Our Next Chapter Begins 2005 AMERICAN EXPRESS COMPANY ANNUAL REPORT

  • Page 2
    ... Cash dividends declared per common share Book value per common share Average common shares outstanding for diluted earnings per common share Total assets Shareholders' equity Common share cash dividends declared Common share repurchases Return on average shareholders' equity Number of employees...

  • Page 3
    Reinvention has been a theme of American Express' success for 155 years. In 2005, we opened our next chapter with industryleading growth and changes designed to shape a stronger future for the company.

  • Page 4
    CARD BILLED BUSINESS (in billions) $500 $484 $416 $400 $352 $311 $300 $298 $200 01 02 03 04 05 Worldwide spending on American Express cards reached a record $484 billion this year, up 16 percent from 2004. At year end, we had 71 million cards-in-force worldwide, reflecting our global ...

  • Page 5
    American Express is the world's largest issuer of charge and credit cards as measured by purchase volume. With leadership positions in the consumer, small business, middle market and large corporate sectors, we offer cardmembers a choice of products designed to meet their spending needs. We also ...

  • Page 6
    By delivering high-spending cardmembers to our merchants, we help to grow their businesses. Strong growth across our card and network services businesses drove a 10 percent increase in revenues in 2005. REVENUES (in billions) $25 $24.3 $22.0 $20 $17.7 $18.1 $19.5 $15 01 02 03 04 05

  • Page 7
    ... to everyday purchases for gas or groceries, to emerging categories like rent and quick-service restaurants, we continue to expand the places where customers can use their American Express cards. In 1990, retail and everyday purchases accounted for only 36 percent of total cardmember spending in the...

  • Page 8
    ... credit, charge and debit cards. The rest is primarily on cash and checks. The continuing shift from cash to card presents a significant opportunity for us. The expansion of our bank relationships around the world provides additional opportunities for growth. Last year we launched new card products...

  • Page 9
    A relationship with American Express creates unique opportunities - from access to some of the best seats in the house at entertainment events, to discounts and special online offers, to targeted marketing programs that bring value to our customers and build business for our partners. CREATING ...

  • Page 10
    Kenneth I. Chenault, Chairman and Chief Executive Officer

  • Page 11
    .... American Express proved this in 2005. We delivered record earnings while reshaping the company for a stronger future. Key developments such as the spin-off of our financial planning unit, the industry-leading performance of our payments businesses, and the promising start of our network business...

  • Page 12
    ... share growth, 8 percent revenue growth, and return on equity of 28-to-30 percent, on average and over time. During the year, we raised our return on equity target from 18-to-20 percent to the current level to reflect the company's higher return potential following the spin-off. Net income for 2005...

  • Page 13
    ..., the results from our card business in 2005 showed the competitive advantages of our spend-centric model, the benefits of our business-building investments over the past few years, and our emphasis on providing superior value to our cardmembers and merchant partners. A STRONGER, MORE FOCUSED...

  • Page 14
    ...into business-building activities when market conditions make it advantageous to do so, as well as high payout ratios to shareholders through share repurchases and dividends. A unique closed-loop network and marketing capabilities that directly link cardmembers with merchants through targeted offers...

  • Page 15
    ... capital return target of 65 percent, on average and over time, and we remain committed to this long-term objective. A DEEPER LOOK AT RESULTS Across our lines of business in 2005, American Express moved aggressively to develop and market new products, rewards and services to deliver more value to...

  • Page 16
    ... choices for redeeming their points - including the booking of trips arranged through our newly redesigned travel Web site. We also signed new partners in the hotel, express delivery and restaurant industries for OPEN Savings, which gives small-business cardmembers access to special negotiated rates...

  • Page 17
    ... - avenue for growth. Spending on cards issued by our bank partners rose 36 percent globally, network cards-in-force rose 23 percent, and we signed a number of key issuers in the United States and in several international markets. As 2005 drew to a close, we marked our first full year of operating...

  • Page 18
    ... partners, we deliver customized cardmember offers to help merchants grow their businesses. On average, during 2005 we added a new merchant location to our network every 16 seconds, expanding card acceptance globally and giving our cardmembers more places and more ways to use their American Express...

  • Page 19
    ...its branch network, in call centers and on its Web site. Travel American Express is the world's premier travel management company. Our travel business supports our brand, our global presence and our ability to serve our cardmembers' needs around the world. In 2005, we grew worldwide travel sales by...

  • Page 20
    ... American Express is well positioned to navigate through these challenges and to execute our growth strategy. DISCOUNT RATE PRESSURE Two factors have combined to focus attention on the fees that card networks charge merchants: regulatory actions in several countries and private merchant litigation...

  • Page 21
    ... fees, we have lowered our merchant discount rates to reflect competitive trends, but not as much as the associations. At the same time, we have increased billed business and locations-in-force in these countries, further illustrating the advantages of our spend-centric model and the clear value...

  • Page 22
    HELPING MIDSIZE BUSINESSES Helping midsize companies manage employee spending is an excellent growth opportunity for American Express. In 2005, we launched corporate cards in partnership with British Airways, Aeroplan and Alitalia that deliver travel discounts and rebates to midsize businesses that ...

  • Page 23
    ... market - This continues to be an excellent growth opportunity for American Express, as we focus on leveraging our strengths in the corporate sector to bring expense management and other services to midsize businesses around the world. These companies spend more than $900 billion annually on travel...

  • Page 24
    .... We are proud that American Express was included on 28 best places to work lists in major media worldwide in 2005, and that we retained the number one ranking in the consumer credit category in Fortune's annual America's Most Admired Companies list. In 2006, we will roll out new programs to further...

  • Page 25
    ... of Independent Registered Public Accounting Firms Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Shareholders' Equity Notes to Consolidated Financial Statements Consolidated Five-Year Summary of Selected Financial...

  • Page 26
    ... direct mail, on-line applications, targeted sales-forces and direct response advertising. The Company generates revenue from a variety of sources including global payments, such as charge and credit cards, travel services and stored value products, including Travelers Cheques. Charge and credit...

  • Page 27
    ... a variety of travel-related products and services; and Corporate Purchasing Solutions, an account established by a company to pay for everyday business expenses such as office and computer supplies. International Card & Global Commercial Services also includes American Express Bank Ltd., which...

  • Page 28
    ... per share, revenue and return on equity targets, illustrating the benefits of the strong business momentum achieved through the business-building investments made over the past few years. After the completion of the Ameriprise spin-off in 2005, the Company raised its return on equity target from...

  • Page 29
    ... reserve for Membership Rewards costs and asset securitizations. Reserves for cardmember losses Critical Accounting Policies Assumptions/Approach Used Effect if Actual Results Differ from Assumptions Reserves for losses relating to cardmember loans and receivables represent management's estimate of...

  • Page 30
    ... American Express Cards. Many cards offer the ability to earn double points for certain types of purchases. Membership Rewards points are redeemable in a wide selection of reward categories, including travel, merchandise and gift certificates. Points have no expiration date, and there is no limit...

  • Page 31
    ... time of sale when the Company securitizes cardmember loans. Estimates and assumptions are generally based on projections of finance charges and fees paid related to the securitized assets, net credit losses, average loan life, the contractual fee to service the securitized assets and a discount...

  • Page 32
    ... basic cardmember spending and average fee per card are computed from proprietary card activities only. (b)Computed as follows: Discount Revenue from all card spending (proprietary and Global Network Services) at merchants divided by all billed business (proprietary and Global Network Services...

  • Page 33
    ... 03-1 related to discontinued operations. Both the Company's revenues and expenses are affected by changes in the relative values of non-U.S. currencies to the U.S. dollar. The currency rate changes increased both revenue and expense growth by less than 1 percentage point in 2005 and approximately...

  • Page 34
    ... discount revenues as well as increased travel and other commissions and fees. Corporate Services volumes. Billed business related to Global Network Services increased 36 percent during 2005. The increase in overall cards-in-force reï¬,ected both proprietary and Global Network Services activities...

  • Page 35
    ... Company's ongoing global brand advertising campaign and continued focus on business-building initiatives. The growth in rewards costs is attributed to volume growth, a higher redemption rate and strong cardmember loyalty program participation. Marketing, promotion, rewards and cardmember services...

  • Page 36
    ... from the Company-sponsored Incentive Savings Program (ISP) to facilitate the ISP's required disposal of shares when employee-directed activity results in an excess common share position. Such purchases are made at market price without commissions or other fees. During 2005, the Company purchased 34...

  • Page 37
    ... American Express Bank, FSB (FSB) principally fund cardmember loans originated from the Company's U.S. lending activities. Two trusts are used by the Company in connection with the securitization and sale of U.S. receivables and loans generated in the ordinary course of the Company's card businesses...

  • Page 38
    ...customer deposits. Centurion Bank and FSB each maintain $400 million of committed bank credit lines as a backup to short-term funding programs. Long-term funding needs are met principally through the sale of cardmember loans in securitization transactions. The Asset/Liability Committees of Centurion...

  • Page 39
    ... borrowing costs. At December 31, 2005, its debt ratings were as follows: Moody's Standard & Poor's Fitch Ratings American Express Credit Corporation: Fixed and Floating Rate Medium-Term Notes American Express Centurion Bank: Floating Rate Medium-Term Notes American Express Bank, FSB: Floating Rate...

  • Page 40
    ... a requirement that TRS, as servicer, transfer collections on the securitized assets to investors on a daily, rather than a monthly, basis or make alternative arrangements with the rating agencies Securitization of cardmember receivables generated under designated consumer charge card accounts is...

  • Page 41
    ... change in the Company's credit rating. In addition, TRS, Centurion Bank, Credco, American Express Overseas Credit Corporation Limited, a whollyowned subsidiary of Credco, and American Express Bank Ltd. have established a program for the issuance, outside the United States, of debt instruments to be...

  • Page 42
    ..., to reduce or retire other contingent funding sources such as bank credit lines, or a combination of the two. However, other factors affect the Company's ability to securitize loans and receivables, such as credit quality of the assets and the legal, accounting, regulatory and tax environment for...

  • Page 43
    ... are associated with cardmember services provided to enhance the value of owning an American Express card. At December 31, 2005, the Company had guarantees totaling approximately $97 billion related to cardmember protection plans, as well as other guarantees in the ordinary course of business that...

  • Page 44
    ...-return tradeoffs on a daily basis. The ERMC leads the Company's overall risk management activities by measuring and monitoring enterprise-wide risk, and establishing enterprise-wide risk management policies and practices. Daily risk management occurs at the business unit level where the processes...

  • Page 45
    ... prospect targeting, new accounts, line assignment, line management, balance transfer, cross sell and account management. Each decision has benefited from sophisticated modeling capability that uses the most up-to-date information on customers, including extensive payment history, purchase data...

  • Page 46
    ... asset liability management strategy and processes. Use of derivative financial instruments is incorporated into the discussion below as well as Note 10 to the Consolidated Financial Statements. Market exposure is a byproduct of the delivery of products and services to cardmembers. Interest rate...

  • Page 47
    ...related foreign exchange forward contracts outstanding, a 10 percent change in the U.S. dollar would result in a $12 million reduction in equity as of December 31, 2005. In conjunction with its international banking operations, the Company also uses derivative financial instruments to manage market...

  • Page 48
    ...Global Network & Merchant Services segment, discount revenue reï¬,ects the network component of the overall discount rate. Net finance charge revenue and net card fees are directly attributable to the segment in which they are reported. Expenses Marketing, promotion, rewards and cardmember services...

  • Page 49
    ... benefits to be used for card acquisition expenses, which are reï¬,ected in both marketing, promotion, rewards and cardmember services and other operating expenses. Consequently, the managed basis presentation for 2005, 2004 and 2003 assumes that the impact of this net activity was offset by higher...

  • Page 50
    ... statement line items to the managed basis information, where different. Tax Equivalent Effect Years Ended December 31, (Millions) GAAP Basis Securitization Effect Managed Basis 2005 2004 2003 2005 2004 2003 2005 2004 2003 2005 2004 2003 Revenues: Discount revenue, net card fees and...

  • Page 51
    ... 2003 Card billed business $ 292.8 $ 251.7 Total cards-in-force (millions) 37.5 35.0 Basic cards-in-force (millions) 27.7 25.7 Average basic cardmember spending (dollars) $ 10,996 $ 10,118 U.S. Consumer Travel Travel sales $ 1.9 $ 1.5 Travel commissions and fees/sales 8.7% 8.9% Worldwide Travelers...

  • Page 52
    ... data of International Card & Global Commercial Services for 2005, 2004 and 2003 on a GAAP basis. On a GAAP basis, amounts earned related to the sale and purchase of foreign currencies for customers as part of the foreign exchange business are included with other foreign exchange items that are...

  • Page 53
    ... billed business Total cards-in-force (millions) Basic cards-in-force (millions) Average basic cardmember spending (dollars) Global Corporate & International Consumer Travel Travel sales Travel commissions and fees/sales International banking Total loans Private banking holdings Total segment assets...

  • Page 54
    ... 2003. Global Network & Merchant Services Selected Income Statement Data Years Ended December 31, (Millions) 2005 2004 2003 Revenues: Discount revenue, fees and other Expenses: Marketing and promotion Provision/(benefit) for losses Human resources and other operating expenses Total expenses...

  • Page 55
    ... the Bankruptcy Code. At December 31, 2005 the remaining principal balance was $300 million. This post-petition facility continues to be structured as an advance against the Company's obligations to purchase Delta SkyMiles rewards points under the Company's co-brand and Membership Rewards agreements...

  • Page 56
    ... accounts. Billed business - Represents the dollar amount of charges on all American Express cards; also referred to as spend or charge volume. Proprietary billed business includes charges made on the Company's proprietary cards-in-force, cash advances on proprietary cards and certain insurance fees...

  • Page 57
    ... and services. Travel sales - Represents the total dollar amount of travel transaction volume for airline, hotel, car rental and other travel arrangements made for consumers and corporate clients. The Company earns revenue on these transactions by charging a transaction or management fee. Forward...

  • Page 58
    ... cost of the Membership Rewards program; the Company's ability to manage credit risk related to consumer debt, business loans, merchant bankruptcies and other credit trends and the rate of bankruptcies, which can affect spending on card products, debt payments by individual and corporate customers...

  • Page 59
    ... are being made only in accordance with authorizations of management and directors of the Company; and Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial...

  • Page 60
    ..., the accompanying consolidated balance sheet and the related consolidated statements of income, of shareholders' equity and of cash ï¬,ows present fairly, in all material respects, the financial position of American Express Company and its subsidiaries (the "Company") at December 31, 2005, and the...

  • Page 61
    ...acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations... policies or procedures may deteriorate. New York, New York February 27, 2006 Report of Independent Registered Public Accounting Firm AXP / AR...

  • Page 62
    ... PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders of American Express Company We have audited the accompanying consolidated balance sheet of American Express Company as of December 31, 2004, and the consolidated statements of income, shareholders' equity, and cash ï¬,ows for the years...

  • Page 63
    THIS PAGE INTENTIONALLY LEFT BLANK AXP / AR.2005 [ 61 ]

  • Page 64
    CONSOLIDATED STATEMENTS OF INCOME American Express Company Years Ended December 31, (Millions, except per share amounts) 2005 2004 2003 Revenues Discount revenue Cardmember lending net finance charge revenue Net card fees Travel commissions and fees Other commissions and fees Securitization ...

  • Page 65
    CONSOLIDATED BALANCE SHEETS American Express Company December 31, (Millions, except share data) 2005 2004 Assets Cash and cash equivalents (Note 1) Accounts receivable and accrued interest: Cardmember receivables, less reserves: 2005, $942; 2004, $806 Other receivables, less reserves: 2005, $66; ...

  • Page 66
    ... of three months or less Issuance of debt Principal payments on debt Redemption of preferred beneficial interests securities Issuance of American Express common shares and other Repurchase of American Express common shares Dividends paid Net cash provided by financing activities attributable to...

  • Page 67
    ...Foreign currency translation adjustments Minimum pension liability adjustment Total comprehensive income Spin-off of Ameriprise Repurchase of common shares Other changes, primarily employee plans Cash dividends declared: Common, $0.48 per share Balances at December 31, 2005 See Notes to Consolidated...

  • Page 68
    ... Accounting Policies The Company American Express Company (the Company) is a leading global payments, network and travel company. The Company offers a broad range of products including charge and credit cards; stored value products such as Travelers Cheques and gift cards; travel agency services...

  • Page 69
    ...cards, travel services and investments funded by the sale of stored value products, including Travelers Cheques. Discount revenue The Company earns discount revenue from fees charged to service establishments with whom the Company has entered into card acceptance agreements for processing cardmember...

  • Page 70
    ... July 1, 2005, the Company adopted SFAS No. 123 (revised 2004), "Share-Based Payment (SFAS No. 123(R))," using the modified prospective application. SFAS No. 123(R) requires entities to measure and recognize the cost of employee services received in exchange for an award of equity instruments based...

  • Page 71
    ...cash cannot be utilized for operations. Accounts receivable Cardmember receivables Cardmember receivables represent amounts due from charge card customers and are recorded at the time that a cardmember enters into a point-of-sale transaction at a service establishment. Cardmember receivable balances...

  • Page 72
    ... private banking loans include unsecured lines of credit, installment loans, mortgage loans and auto loans to retail customers as well as secured lending to high net worth individuals. Loans to banks and other institutions represent trade-related financing and other extensions of credit. Corporate...

  • Page 73
    ... by cardmembers and the current weighted-average cost per point of redemption. The estimated points to be redeemed by cardmembers are based on many factors including past redemption behavior of cardmembers, card product type, year of program enrollment and card spend level. Past behavior is used to...

  • Page 74
    ...as hedges are highly effective in offsetting the fair value or cash ï¬,ows of hedged items. Such assessments are usually made through the application of statistical measures. The Company only applies the "short cut" method of hedge accounting in very limited cases when such requirements are strictly...

  • Page 75
    ... TBS) for cash proceeds of approximately $190 million. These dispositions resulted in a net after-tax gain of approximately $63 million during the third quarter of 2005. The operating results and assets and liabilities of discontinued operations are presented separately in the Company's Consolidated...

  • Page 76
    ...is a summary of investments at December 31: (Millions) 2004 2005 2004 Assets: Investments Separate account assets Deferred acquisition costs Other assets Total assets Liabilities: Insurance and annuity reserves Investment certificate reserves Separate account liabilities Other liabilities Total...

  • Page 77
    ... 31, 2005. The securities which have fair value to cost ratio of less than 90âˆ'95 percent are comprised primarily of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation issued mortgage-backed securities, as well as foreign government and specific corporate issued bonds...

  • Page 78
    ... the years ended December 31: (Millions) 2005 2004 2003 Gross investment gains from sales and prepayments: U.S. Card Services International Card & Global Commercial Services Corporate & Other Total Gross investment losses from sales and prepayments: U.S. Card Services International Card & Global...

  • Page 79
    ... on the Company's Consolidated Balance Sheets. The Company retains servicing responsibilities for the transferred cardmember loans, through its subsidiary, American Express Travel Related Services Company, Inc. (TRS), and earns a related fee. Notes to Consolidated Financial Statements AXP / AR.2005...

  • Page 80
    ... 30 Days or More Past Due Net Credit Losses During the Year (Billions) Total Principal Amount of Loans 2005 Cardmember loans managed Less: Securitized cardmember loans sold Cardmember loans on balance sheet 2004 Cardmember loans managed Less: Securitized cardmember loans sold Cardmember loans on...

  • Page 81
    ...partnerships is represented by the carrying value. The following table presents the consolidated assets, which are restricted from use by the Company, and other balances related to AAC at December 31: (Millions) 2005 Assets: Investments Other assets Total assets Total liabilities Net assets $ 83...

  • Page 82
    ...Commercial Services Global Network & Merchant Services (Millions) U.S. Card Services Total Balance at January 1, 2004 Acquisitions Dispositions(a) Other, including foreign currency translation Balance at December 31, 2004 Other, including foreign currency translation Balance at December 31, 2005...

  • Page 83
    ... in the American Express Centurion Bank and the American Express Bank, FSB captions in prior periods. (e)American Express Travel Related Services Company Inc. fixed rate senior notes were issued by the Travel Related Services Parent Company. Notes to Consolidated Financial Statements AXP / AR.2005...

  • Page 84
    ...2010 Thereafter Total American Express Company (Parent Company only) American Express Travel Related Services Company, Inc. American Express Credit Corporation American Express Centurion Bank American Express Receivables Financing Corporation V LLC American Express Bank, FSB Other Total $ 1,000...

  • Page 85
    .... Cash Flow Hedges The Company uses interest rate products, primarily interest rate swaps, to manage interest rate risk related to the Company's charge card business. The interest rate swaps are used primarily to achieve a targeted mix of fixed and ï¬,oating rate funding as well as to protect the...

  • Page 86
    ... purchase and sale of a designated currency at an agreed upon rate for settlement on a specified date. Such foreign currency forward contracts entered into by the Company generally mature within one year. The total fair value, excluding accruals, of these derivative product assets and liabilities...

  • Page 87
    ... price available on covered items purchased entirely with an eligible American Express card; and (iii) provide account protection in the event that a cardmember is unable to make payments on the account due to unforeseen hardship. (d)Represents the Company's contingent liability arising from billing...

  • Page 88
    ...from the Company's Consolidated Balance Sheet was $91 million. The pretax gain of approximately $94 million, net of $2 million in closing costs, has been deferred and will be amortized over the ten year term of the operating leasebacks as a reduction to rental expense. One of the 2004 sale-leaseback...

  • Page 89
    ... one year, fair value approximates carrying value. For other long-term debt, fair value is estimated using either quoted market prices or discounted cash ï¬,ows based on the Company's current borrowing rates for similar types of borrowing. Notes to Consolidated Financial Statements AXP / AR.2005...

  • Page 90
    ... companies and savings and loan associations. (b)Charge card products have no preset spending limit; therefore, the quantified credit amount includes the total credit line available to cardmembers. The unused lines aggregating $213 billion and $176 billion in 2005 and 2004, respectively, represent...

  • Page 91
    ... stock award (RSA) activity as of December 31, 2005, and changes during the year are presented below: (Shares in thousands) Shares Stock Options Weighted Average Exercise Price Shares RSAs Weighted Average Grant Price Outstanding at beginning of year Granted Exercised/vested Forfeited/expired...

  • Page 92
    ...awards were accounted for as stock-based compensation although paid in cash. NOTE 16 Retirement Plans Defined Benefit Pension Plans The Company sponsors the American Express Retirement Plan (the Plan), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement...

  • Page 93
    ... with the minimum funding requirements in all countries. The following table reconciles the plans' funded status (benefit obligation less fair value of plan assets) to the amounts recognized on the Consolidated Balance Sheets: Funded Status (Millions) 2005 2004 The prior service costs are...

  • Page 94
    ... plan expense discussed below. The ISP held 17 million and 22 million shares of American Express Common Stock at December 31, 2005 and 2004, respectively, beneficially for employees. The weighted average assumptions used to determine net periodic benefit cost were: 2005 2004 2003 Discount rates...

  • Page 95
    ...: 2005 2004 Discount rates Health care cost increase rate: Following year Decreasing to the year 2016 5.4% 10.0% 5% 5.75% 10.5% 5% Combined tax at U.S. statutory rate Changes in taxes resulting from: Tax-preferred investments State and local income taxes Foreign earnings IRS tax settlement All...

  • Page 96
    ... tax payments and cash settlements relating to prior tax years. The actual tax benefit realized for tax deductions from stock option exercises which are recorded in additional paid-in capital totaled $234 million, $158 million and $60 million, respectively, for the years ended December 31, 2005...

  • Page 97
    ... of value-added point-of-sale and back office services. In addition, in particular emerging markets, issuance of certain proprietary cards is managed within the Global Network Services business. Global Network & Merchant Services works with merchant and bank partners to develop and market product...

  • Page 98
    ... to the settlement of an insurance claim associated with September 11, 2001. 2004 results reï¬,ect a gain of $117 million ($76 million after-tax) on the sale of the leasing product line of the Company's small business financing unit, American Express Business Finance Corporation, and restructuring...

  • Page 99
    ...Global Network & Merchant Services segment, discount revenue reï¬,ects the network component of the overall discount rate. Net finance charge revenue and net card fees are directly attributable to the segment in which they are reported. Expenses Marketing, promotion, rewards and cardmember services...

  • Page 100
    ...Card Services International Card & Global Commercial Services Global Network & Merchant Services Corporate & Other Consolidated 2005 Managed Basis Revenues Cardmember lending net finance charge revenue Pretax income (loss) from continuing operations Income tax provision (benefit) 2004 Managed...

  • Page 101
    ... ($76 million after-tax) net gain on the sale of the leasing product line of the Company's small business financing unit, American Express Business Finance Corporation. (f)Third quarter 2004 results reï¬,ect a reconciliation of securitization-related cardmember loans, which resulted in a charge...

  • Page 102
    ... Other Total Cash paid during 2005 Severance Other Total Liability balance at December 31, 2005 Severance Other Total (Millions) Severance Other Total U.S. Card Services International Card & Global Commercial Services Global Network & Merchant Services Corporate & Other Total $- $- $- $ 10...

  • Page 103
    ...Cash and cash equivalents $ 7,126 Accounts receivable and accrued interest, net 35,497 Investments 21,334 Loans, net 40,801 Assets of discontinued operations - Total assets 113,960 Customers' deposits 24,579 Travelers Cheques outstanding 7,175 Short-term debt 15,633 Long-term debt 30,781 Liabilities...

  • Page 104
    ... Managing Director The Carlyle Group Gary L. Crittenden Executive Vice President and Chief Financial Officer Head, Global Network Services Charlene Barshefsky Senior International Partner Wilmer Cutler Pickering Hale and Dorr LLP Edward P. Gilligan Group President American Express International...

  • Page 105
    ... American Express World Service & Design® Blue Cash® Blue from American Express® Centurion® Card Gladiator Head Design® IN:NYC Membership Rewards® My life. My card. OPEN from American Express OPEN Savings Platinum Card® TrueEarnings SM SM SM SM SM SM Stock Exchange Listing New York Stock...

  • Page 106
    AMERICAN EXPRESS COMPANY 200 VESEY STREET NEW YORK, NY 10285 212.640.2000 www.americanexpress.com