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notes to consolidated financial statements
american express company
113
The following table presents certain selected financial information at December 31, 2008, 2007, and 2006 and for each of the years
then ended.
(Millions, except where indicated) USCS ICS GCS GNMS
Corporate
& Other(a) Consolidated
2008
Non-interest revenues $11,427 $3,758 $5,081 $3,875 $ 578 $24,719
Interest income 4,736 1,984 168 5 308 7,201
Interest expense 2,166 961 553 (222) 97 3,555
Total revenues net of interest expense 13,997 4,781 4,696 4,102 789 28,365
Total provision 4,389 1,030 231 127 21 5,798
Pretax income from continuing operations 1,141 153 693 1,490 104 3,581
Income tax provision (benefit) 289 (198) 188 495 (64) 710
Income from continuing operations $ 852 $ 351 $ 505 $ 995 $ 168 $ 2,871
Total equity (billions) $ 4.8 $ 2.0 $ 3.5 $ 1.4 $ 0.1 $ 11.8
2007(b)
Non-interest revenues $11,750 $3,499 $4,697 $3,549 $ 621 $24,116
Interest income 5,125 1,741 187 3 368 7,424
Interest expense 2,653 909 615 (312) 116 3,981
Total revenues net of interest expense 14,222 4,331 4,269 3,864 873 27,559
Total provision 2,998 812 163 103 27 4,103
Pretax income from continuing operations 2,730 117 744 1,560 543 5,694
Income tax provision (benefit) 907 (174) 208 538 89 1,568
Income from continuing operations $ 1,823 $ 291 $ 536 $1,022 $ 454 $ 4,126
Total equity (billions) $ 4.5 $ 2.1 $ 2.2 $ 1.2 $ 1.0 $ 11.0
2006(b)
Non-interest revenues $10,775 $3,243 $4,254 $3,059 $ 660 $21,991
Interest income 3,688 1,440 120 5 448 5,701
Interest expense 1,843 718 474 (280) 111 2,866
Total revenues net of interest expense 12,620 3,965 3,900 3,344 997 24,826
Total provision 1,625 852 113 63 13 2,666
Pretax income (loss) from continuing operations 3,323 312 716 1,188 (387) 5,152
Income tax provision (benefit) 1,171 (31) 239 409 (261) 1,527
Income (loss) from continuing operations $ 2,152 $ 343 $ 477 $ 779 $(126) $ 3,625
Total equity (billions) $ 4.7 $ 1.7 $ 1.9 $ 1.3 $ 0.9 $ 10.5
(a) Corporate & Other includes adjustments and eliminations for the items included in total revenues net of interest expense above.
(b) Amounts for 2007 and 2006 include certain revenue and expense reclassifications related to the Company’s conversion to a bank holding company discussed in
Note 1, as well as changes to the Company’s reportable operating segments in 2007. Additionally, certain reclassifications of prior year amounts have been made to
conform to the current presentation related to discontinued operations as discussed in Note 2. Except for discontinued operations, these items had no impact on
the Company’s consolidated pretax income from continuing operations, income tax provision, and income from continuing operations. None of these items had an
impact on the Company’s net income.
Expenses
Marketing, promotion, rewards and cardmember services
expenses are reflected in each segment based on actual expenses
incurred, with the exception of brand advertising, which is
reflected in the GNMS segment. Rewards and cardmember
services expenses are reflected in each segment based on actual
expenses incurred within each segment.
Salaries and employee benefits and other operating expenses
reflect expenses, such as professional services, occupancy and
equipment, and communications, incurred directly within each
segment. In addition, expenses related to the Company’s support
services, such as technology costs, are allocated to each segment
based on support service activities directly attributable to the
segment. Other overhead expenses, such as staff group support
functions, are allocated to segments based on each segment’s
Total Revenues Net of Interest Expense
The Company allocates discount revenue and certain other
revenues among segments using a transfer pricing methodology.
Segments earn discount revenue based on the volume of
merchant business generated by cardmembers. Within the
USCS, ICS and GCS segments, discount revenue reflects
the issuer component of the overall discount rate; within the
GNMS segment, discount revenue reflects the network and
merchant component of the overall discount rate. Total interest
income and net card fees are directly attributable to the segment
in which they are reported.
Provisions for Losses
The provisions for losses are directly attributable to the segment
in which they are reported.