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notes to consolidated financial statements
american express company
78
For all periods presented, all of the operating results, assets
and liabilities, and cash flows of discontinued operations, except
as described above, have been removed from the Corporate &
Other segment and are presented separately in the Company’s
Consolidated Financial Statements. Summary operating results
of the discontinued operations included AEB (except for certain
components of AEB that are not being sold), AEIDC, and the
Brazilian banking activities, as well as businesses disposed of
in previous years. The Notes to the Consolidated Financial
Statements have been adjusted to exclude discontinued
operations unless otherwise noted.
Results from discontinued operations for the years ended
December 31, were as follows:
(Millions) 2008 2007 2006
Total revenues net of interest expense $ (43) $ 925 $1,097
Pretax (loss) income from
discontinued operations(a) $(160) $(163) $ 108
Income tax provision (benefit) 12 (49) 26
(Loss) Income from discontinued
operations, net of tax $(172) $(114) $ 82
(a) Included in the results from discontinued operations for 2008, 2007 and
2006 are pretax losses of $275 million ($179 million after-tax), $105 million
($69 million after-tax), and $0, respectively, for mark-to-market adjustments
and sales associated with the AEIDC investment portfolio.
Assets and liabilities of the discontinued operations at
December 31, were as follows:
(Millions) 2008 2007
Assets:
Cash and cash equivalents $ 3 $ 6,390
Investments 213 5,730
Loans, net of reserves —8,283
Other assets —1,875
Total assets 216 22,278
Liabilities:
Customer deposits —15,079
Investment certificate reserves 22 5,299
Other liabilities(a) 238 1,149
Total liabilities 260 21,527
Net (deficit) assets $ (44) $ 751
(a) The balance at December 31, 2008, represents a loan to AEIDC from AEIDC’s
parent; this loan is expected to be settled concurrent with, or following the
transfer of AEIDC to Standard Chartered in the third quarter of 2009.
Accumulated other comprehensive loss, net of tax, associated
with discontinued operations at December 31, was as follows:
(Millions) 2008(a) 2007
Accumulated other comprehensive loss,
net of tax:
Net unrealized securities losses $— $(15)
Foreign currency translation adjustments —(28)
Net unrealized pension and other
postretirement benefit costs —2
Total accumulated other comprehensive loss $— $(41)
(a) As noted above, all of AEIDC’s investment portfolio was reclassified from
available-for-sale to Trading in the third quarter of 2007. As a result, no
further balances remain in accumulated other comprehensive loss related to
this portfolio.
Goodwill of approximately $27 million was included in AEB’s
assets as of December 31, 2007.