American Express 2008 Annual Report Download - page 116
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notes to consolidated financial statements
american express company
114
relative level of pretax income, with the exception of certain
fourth quarter 2008 severance and other related charges of
$133 million from the Company’s fourth quarter restructuring
initiative. This presentation is consistent with how such charges
were reported internally. See further discussion in Note 25
regarding this corporate initiative. Financing requirements are
managed on a consolidated basis. Funding costs are allocated
based on segment funding requirements.
Capital
Each business segment is allocated capital based on established
business model operating requirements, risk measures, and
regulatory capital requirements. Business model operating
requirements include capital needed to support operations
and specific balance sheet items. The risk measures include
considerations for credit, market, and operational risk.
Income Taxes
Income tax provision (benefit) is allocated to each business
segment based on the actual effective tax rates applicable to
various businesses that make up the segment.
geographic operations
The following table presents the Company’s total revenues net of interest expense and pretax income in different geographic
regions:
(Millions) United States Europe Asia/Pacific All Other Consolidated
2008
Total revenues net of interest expense $19,365 $3,755 $2,544 $2,701 $28,365
Pretax income from continuing operations $ 3,110 $ 196 $ 99 $ 176 $ 3,581
2007
Total revenues net of interest expense $19,456 $3,515 $2,231 $2,357 $27,559
Pretax income from continuing operations $ 4,984 $ 301 $ 124 $ 285 $ 5,694
2006
Total revenues net of interest expense $17,393 $3,168 $1,992 $2,273 $24,826
Pretax income from continuing operations $ 4,312 $ 292 $ 131 $ 417 $ 5,152
The data in the above table is, in part, based upon internal allocations, which necessarily involve management’s judgment.