American Express 2005 Annual Report Download - page 98

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(Millions, except where indicated)
U.S. Card
Services(a)
International
Card & Global
Commercial
Services(b)
Global
Network &
Merchant
Services(c) Corporate
& Other(d) Consolidated
2005
Revenues $ 11,949 $ 9,038 $ 2,842 $ 438 $ 24,267
Cardmember lending net finance charge revenue 1,792 684 67 37 2,580
Interest expense 548 332 (150) 190 920
Pretax income (loss) from continuing operations 2,599 1,149 870 (370) 4,248
Income tax provision (benefit) 765 215 306 (259) 1,027
Income (loss) from continuing operations $ 1,834 $ 934 $ 564 $ (111) $ 3,221
Total assets (billions) $ 70.3 $ 51.7 $ 4.5 $ (12.5) $ 114.0
Total equity (billions) $ 5.1 $ 4.1 $ 1.3 $ — $ 10.5
2004
Revenues $ 10,395 $ 8,429 $ 2,639 $ 501 $ 21,964
Cardmember lending net finance charge revenue 1,370 640 29 185 2,224
Interest expense 453 280 (108) 189 814
Pretax income (loss) from continuing operations 2,140 1,116 904 (329) 3,831
Income tax provision (benefit) 622 335 330 (142) 1,145
Income (loss) from continuing operations $ 1,518 $ 781 $ 574 $ (187) $ 2,686
Total assets (billions)
(e)
$ 58.3 $ 47.9 $ 3.9 $ 84.1 $ 194.2
Total equity (billions) $ 4.5 $ 3.8 $ 1.1 $ 6.6 $ 16.0
2003
Revenues $ 9,478 $ 7,405 $ 2,347 $ 319 $ 19,549
Cardmember lending net finance charge revenue 1,271 609 22 140 2,042
Interest expense 571 291 (103) 101 860
Pretax income (loss) from continuing operations 1,956 1,074 766 (381) 3,415
Income tax provision (benefit) 558 359 280 (117) 1,080
Income (loss) from continuing operations $ 1,398 $ 715 $ 486 $ (264) $ 2,335
Total assets (billions)
(e)
$ 53.0 $ 42.3 $ 4.2 $ 76.4 $ 175.9
Total equity (billions) $ 3.7 $ 3.4 $ 1.0 $ 7.2 $ 15.3
(a)U.S. Card Services’ 2005 results reflect reengineering charges of $10 million ($7 million after-tax), tax benefits of $29 million, a $123 million ($80 million
after-tax) provision for losses recorded in the fourth quarter 2005 reflecting substantially higher losses related to increased bankruptcy filings resulting
from the October 17, 2005 change in bankruptcy legislation, and a provision to reflect estimated costs related to Hurricane Katrina of $38 million. 2004
results reflect a reconciliation of securitization-related cardmember loans, which resulted in a charge of $115 million (net of $32 million of reserves pre-
viously provided) for balances accumulated over the five-year period as a result of a computational error. The amount of the error was immaterial to
any of the periods to which it occurred.
(b)International Card & Global Commercial Services’ 2005 results reflect reengineering charges of $168 million ($109 million after-tax), tax benefits of
$33 million and a provision to reflect estimated costs related to Hurricane Katrina of $9 million. 2004 results reflect restructuring charges of $90 million
($59 million after-tax).
(c)Global Network & Merchant Services’ 2005 results reflect reengineering charges of $3 million ($2 million after-tax), tax benefits of $21 million and
a provision to reflect estimated costs related to Hurricane Katrina of $2 million. 2004 results reflect a reduction in merchant-related reserves of approxi-
mately $60 million that reflect changes made to mitigate loss exposure and ongoing favorable credit experience with merchants.
(d)Corporate & Other 2005 results reflect reengineering charges of $105 million ($68 million after-tax), tax benefits of $159 million and a $73 million
($47 million after-tax) benefit related to the settlement of an insurance claim associated with September 11, 2001. 2004 results reflect 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 charges of $9 million ($5 million after-tax).
(e)Corporate & Other total assets for 2004 and 2003 include $87.1 billion and $80.2 billion of assets of discontinued operations, respectively.
Notes to Consolidated
Financial Statements
AXP / AR.2005
[96 ]