American Express 2010 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2010 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 127

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127

Total Revenues Net of Interest Expense
Consolidated total revenues net of interest expense for 2010 of
$27.8 billion were up $3.3 billion or 13 percent from 2009. The
increase in total revenues net of interest expense primarily
reflects new GAAP effective January 1, 2010, which caused
the reporting of write-offs related to securitized loans to
move from securitization income, net in 2009 to provisions
for cardmember loan losses in 2010. In addition, total
revenues net of interest expense reflects higher discount
revenues, increased other commissions and fees, greater
travel commissions and fees, and higher net interest income,
partially offset by lower other revenue, and reduced net card
fees. Consolidated total revenues net of interest expense for
2009 of $24.5 billion were down $3.8 billion or 14 percent from
2008, due to lower discount revenue, lower total interest
income, reduced securitization income, net, lower other
commissions and fees, reduced travel commissions and fees,
and decreased other revenues, partially offset by lower total
interest expense.
Discount revenue for 2010 increased $1.7 billion or 13 percent
as compared to 2009 to $15.1 billion as a result of a 15 percent
increase in worldwide billed business and a slightly higher
discount rate. The lower revenue growth versus total billed
business growth reflects the relatively faster billed business
growth rate of 28 percent related to GNS, where discount
revenue is shared with card issuing partners, and higher
contra-revenues, including cash-back rewards costs and
corporate incentive payments. The 15 percent increase in
worldwide billed business in 2010 reflected an increase in
proprietary billed business of 13 percent. The average
discount rate was 2.55 percent and 2.54 percent for 2010 and
2009, respectively. Over time, certain repricing initiatives,
changes in the mix of business and volume-related pricing
discounts and investments will likely result in some erosion
of the average discount rate.
U.S. billed business and billed business outside the United
States were up 13 percent and 19 percent, respectively, in 2010.
The increase in billed business within the United States
reflected an increase in average spending per proprietary
basic card, partially offset by a slight decrease in basic
cards-in-force. The increase in billed business outside the
United States reflected an increase in average spending per
proprietary basic card and basic cards-in-force.
The table below summarizes selected statistics for billed business and average spend:
Percentage Increase
(Decrease)
Percentage Increase
(Decrease) Assuming
No Changes in
Foreign Exchange
Rates
(a)
Percentage Increase
(Decrease)
Percentage Increase
(Decrease) Assuming
No Changes in
Foreign Exchange
Rates
(a)
2010 2009
Worldwide
(b)
Billed business 15% 14% (9)% (7)%
Proprietary billed business 13 13 (11) (9)
GNS billed business
(c)
28 24 711
Average spending per proprietary basic card 18 17 (7) (5)
Basic cards-in-force 4(4)
United States
(b)
Billed business 13 (10)
Average spending per proprietary basic card 18 (6)
Basic cards-in-force (1) (9)
Proprietary consumer card billed business
(d)
12 (10)
Proprietary small business billed business
(d)
11 (13)
Proprietary Corporate Services billed business
(e)
19 (11)
Outside the United States
(b)
Billed business 19 15 (8) (1)
Average spending per proprietary basic card 20 16 (9) (3)
Basic cards-in-force 93
Proprietary consumer and small business billed business
(f)
14 9 (10) (4)
Proprietary Corporate Services billed business
(e)
20 18 (19) (12)
(a) Refer to footnote 1 on page 33 relating to changes in foreign exchange rates.
(b) Captions in the table above not designated as “proprietary” or “GNS” include both proprietary and GNS data.
(c) Included in the Global Network segment.
(d) Included in the USCS segment.
(e) Included in the GCS segment.
(f) Included in the ICS segment.
34
AMERICAN EXPRESS COMPANY
2010 FINANCIAL REVIEW