American Express 2007 Annual Report Download - page 16

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2007 FINANCIAL RESULTS
Those who follow our company know we measure our performance against specific long-term
financial targets: earnings per share growth of 12 to 15 percent, revenue growth of at least 8 percent
and return on equity of 33 to 36 percent, on average and over time. In 2007, we exceeded each of
these goals:
• Diluted earnings per share from continuing operations rose 16 percent to $3.39
• Revenues net of interest expense increased 10 percent to $27.7 billion
• Return on equity reached 37 percent
Growth across our global payments and network businesses drove our performance, as we continued to
capitalize on the shift away from cash and checks in all sectors—consumer, small business and corporate.
Worldwide spending by American Express cardmembers increased 15 percent to a record $647 billion.
This rate of growth placed us ahead of all major card issuers, most of whom reported only single-digit
increases. Cardmember loans rose 22 percent on a managed basis and 26 percent on a GAAP basis, also
well above industry averages. During the year, we added nearly 8.5 million new American Express cards,
which brought total cards-in-force to 86.4 million. Consumer and business travel, which complement our
payments business and serve our customers around the world, had strong years as well.
We achieved these results while also investing substantially in activities to build future business. Expenses
for marketing, promotion, rewards and cardmember services increased 20 percent from a year ago. This
commitment of resources shows the priority we place on funding initiatives that will drive revenue growth
over the moderate to long term. Throughout the year, we worked hard to bring new and innovative
rewards to our customers, provide services that simplify and enrich their lives, and anticipate their
evolving needs.
LETTER TO SHAREHOLDERS
GROWTH IN CARDMEMBER SPENDING
AND CARDS-IN-FORCE
BILLED BUSINESS
(in billions)
CARDS-IN-FORCE
(in millions)
14
Worldwide cardmember spending rose 15 percent to $647 billion as we continued to increase average spending
per cardmember and expand our customer base. For the year, cards-in-force grew by more than 8 million to
reach 86.4 million.
$352
$416
$484
$561
$647
03 04 05 06 07
60.5
65.4
71.0
78.0
86.4
03 04 05 06 07