American Express 2011 Annual Report Download - page 42

AMERICAN EXPRESS COMPANY
2011 FINANCIAL REVIEW
U.S. CARD SERVICES
SELECTED INCOME STATEMENT DATA
Years Ended December 31,
(Millions) 2011 2010 2009
Revenues
Discount revenue, net card fees and other $ 10,648 $ 9,884 $ 9,043
Securitization income, net(a) –– 400
Interest income 5,230 5,390 3,216
Interest expense 807 812 568
Net interest income 4,423 4,578 2,648
Total revenues net of interest expense 15,071 14,462 12,091
Provisions for losses 687 1,591 3,769
Total revenues net of interest expense after
provisions for losses 14,384 12,871 8,322
Expenses
Marketing, promotion, rewards and
cardmember services 6,593 5,744 4,362
Salaries and employee benefits and other
operating expenses 3,662 3,623 3,385
Total 10,255 9,367 7,747
Pretax segment income 4,129 3,504 575
Income tax provision 1,449 1,279 171
Segment income $ 2,680 $ 2,225 $ 404
(a) In accordance with new GAAP governing consolidations and VIEs, the
Company no longer reports securitization income, net in its income
statement beginning January 1, 2010.
SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31,
(Billions, except percentages
and where indicated) 2011 2010 2009
Card billed business $ 424.3 $ 378.1 $ 339.4
Total cards-in-force (millions) 40.9 39.9 39.5
Basic cards-in-force (millions) 30.4 29.7 29.5
Average basic cardmember spending (dollars)*$ 14,124 $ 12,795 $ 10,957
U.S. Consumer Travel:
Travel sales (millions) $ 3,603 $ 3,116 $ 2,561
Travel commissions and fees/sales 8.3% 8.2% 8.4%
Total segment assets $ 97.8 $ 91.3 $ 57.6
Segment capital (millions) $ 8,804 $ 7,411 $ 6,021
Return on average segment capital(a) 33.0% 35.0% 7.9%
Return on average tangible segment capital(a) 34.8% 37.8% 8.6%
Cardmember receivables:
Total receivables $ 20.6 $ 19.2 $ 17.8
30 days past due as a % of total 1.9% 1.5% 1.8%
Average receivables $ 18.8 $ 17.1 $ 16.1
Net write-off rate – principal only(b) 1.7% 1.6% 3.8%
Net write-off rate – principal and fees(b) 1.9% 1.8% 4.2%
Cardmember loans – GAAP basis
portfolio:
Total loans $ 53.7 $ 51.6 $ 23.5
30 days past due loans as a % of total 1.4% 2.1% 3.7%
Average loans $ 50.3 $ 49.8 $ 25.9
Net write-off rate – principal only(b) 2.9% 5.8% 9.1%
Net write-off rate – principal, interest
and fees(b) 3.2% 6.3% 10.4%
Net interest income divided by average
loans(c)(d) 8.8% 9.2% 10.2%
Net interest yield on cardmember loans(c) 8.9% 9.4% 9.4%
Cardmember loans – Managed basis
portfolio:
Total loans $ 53.7 $ 51.6 $ 52.6
30 days past due loans as a % of total 1.4% 2.1% 3.7%
Average loans $ 50.3 $ 49.8 $ 54.9
Net write-off rate – principal only(b) 2.9% 5.8% 8.7%
Net write-off rate – principal, interest and
fees(b) 3.2% 6.3% 9.9%
Net interest yield on cardmember loans(c) 8.9% 9.4% 10.1%
* Proprietary cards only.
(a) Return on average segment capital is calculated by dividing (i) one-year
period segment income ($2.7 billion, $2.2 billion and $404 million for 2011,
2010 and 2009, respectively) by (ii) one-year average segment capital ($8.1
billion, $6.4 billion and $5.1 billion for 2011, 2010 and 2009, respectively).
Return on average tangible segment capital is computed in the same manner
as return on average segment capital except the computation of average
tangible segment capital, a non-GAAP measure, excludes from average
segment capital average goodwill and other intangibles of $425 million, $459
million and $432 million as of December 31, 2011, 2010 and 2009
respectively. The Company believes return on average tangible segment
capital is a useful measure of the profitability of its business.
(b) Refer to “Consolidated Results of Operations — Selected Statistical
Information”, footnote (b) on page 20.
(c) See table on the following page for the calculation of net interest yield on
cardmember loans, a non-GAAP measure, and net interest income divided
by average loans, a GAAP measure.
(d) Refer to “Consolidated Results of Operations — Selected Statistical
Information”, footnote (g) on page 20.
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