American Express 2007 Annual Report Download - page 31

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[ 29 ]
2007 FINANCIAL REVIEW
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
A summary of the Company’s recent financial performance
follows:
Years Ended December 31,
(Millions, except per share
amounts and ratio data) 2007 2006
Percent
Increase
(Decrease)
Revenues net of interest expense $27,731 $25,154 10%
Expenses $17,824 $16,989 5
Provisions for losses and benefits $ 4,341 $ 3,026 43
Income from continuing operations $ 4,048 $ 3,611 12
Net income $ 4,012 $ 3,707 8
Earnings per common share from
continuing operations — diluted $ 3.39 $ 2.92 16
Earnings per common share —
diluted $ 3.36 $ 2.99 12
Return on average equity(a) 37.3% 34.7%
(a) Calculated based on $4.0 billion and $3.7 billion of net income for 2007
and 2006, respectively, and $10.8 billion and $10.7 billion of average
shareholders’ equity for the trailing 12 months ending December 31, 2007
and 2006, respectively.
See Consolidated Results of Operations, beginning on page 34,
for discussion of the Company’s results.
The Company follows U.S. generally accepted accounting
principles (GAAP). In addition to information provided
on a GAAP basis, the Company discloses certain data on a
“managed basis.” This information, which should be read
only as a supplement to GAAP information, assumes, in the
Consolidated Selected Statistical Information and U.S. Card
Services segment, there have been no cardmember lending
securitization transactions. These managed basis adjustments,
and management’s rationale for such presentation, are discussed
further in the U.S. Card Services section below under “Differences
between GAAP and Managed Basis Presentation.”
Certain reclassifications of prior period amounts have been
made to conform to the current presentation throughout this
Annual Report.
Certain of the statements in this Annual Report are forward-
looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. See Forward-Looking Statements
at the end of this discussion.
29