American Express 2005 Annual Report Download - page 32

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Consolidated Results of Operations
Summary of the Company’s Financial Performance
Years Ended December 31,
(Millions, except per share
amounts and ratio data) 2005 2004 2003
Revenues $ 24,267 $ 21,964 $ 19,549
Expenses $ 20,019 $ 18,133 $ 16,134
Income from
continuing
operations $ 3,221 $ 2,686 $ 2,335
Net income $ 3,734 $ 3,445 $ 2,987
Earnings per common
share from
continuing
operations —
diluted $ 2.56 $ 2.09 $ 1.80
Earnings per common
share — diluted $ 2.97 $ 2.68 $ 2.30
Return on average
shareholders’
equity
(a)
25.4% 22.0% 20.6%
(a)Calculated based on $3.7 billion of net income and $14.7 billion of
average shareholders’ equity for the trailing twelve months ending
December 31, 2005. Pro forma return on average shareholders’ equity
was 31.5 percent for 2005 and was calculated based on $3.2 billion of
income from continuing operations and $10.2 billion of average month-
end shareholders’ equity for the quarter ending December 31, 2005.
Selected Statistical Information
Years Ended December 31,
(Billions, except percentages
and where indicated) 2005 2004 2003
Card billed business
(a)
:
United States $ 354.6 $ 304.8 $ 262.1
Outside the United
States 129.8 111.3 90.1
Total $ 484.4 $ 416.1 $ 352.2
Total cards-in-force
(millions)
(a)
:
United States 43.0 39.9 36.4
Outside the United
States 28.0 25.5 24.1
Total 71.0 65.4 60.5
Basic cards-in-force
(millions)
(a)
:
United States 32.8 30.3 27.7
Outside the United
States 23.2 21.0 19.9
Total 56.0 51.3 47.6
Average discount rate
(b)
2.57% 2.60% 2.62%
Average basic cardmember
spending (dollars)
(a)
$ 10,445 $ 9,460 $ 8,367
Average fee per card
(dollars)
(a)
$35$34$35
Travel sales $ 20.6 $ 19.9 $ 16.0
Travel commissions and
fees/sales 8.6% 9.0% 9.4%
Worldwide Travelers
Cheque and prepaid
products:
Sales $ 19.7 $ 19.9 $ 19.2
Average outstanding $ 7.1 $ 7.0 $ 6.6
Average investments $ 7.8 $ 7.5 $ 7.1
Investment yield
(c)
5.1% 5.4% 5.4%
Tax equivalent yield —
managed
(c)
7.9% 8.4% 8.4%
International banking
Total loans $ 7.1 $ 6.9 $ 6.5
Private banking
holdings $ 20.3 $ 18.6 $ 16.2
(a)Card billed business includes activities related to proprietary cards, cards
issued under network partnership agreements, cash advances on propri-
etary cards and certain insurance fees charged on proprietary cards.
Cards-in-force include proprietary cards and cards issued under network
partnership agreements. Average basic cardmember spending and aver-
age 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) generating discount revenue at
such merchants. Only merchants acquired by the Company are included in
the computation. Discount rates have been retrospectively adjusted on a his-
torical basis from those previously disclosed, primarily to retain in the com-
putation the Global Network Services partner portion of discount revenue,
as well as the Company’s portion of discount revenue.
(c)Investment yield represents earnings on certain tax-exempt securities.
The tax equivalent yield — managed represents earnings on such tax-
exempt securities as if it had been earned on a taxable basis and assumes
an income tax-rate of 35 percent. See the U.S. Card Services segment
for additional information on managed basis presentation.
Financial Review
AXP / AR.2005
[30 ]