American Express 2015 Annual Report Download - page 2
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1AMERICAN EXPRESS COMPANY | ANNUAL REPORT 2015
TO OUR
SHAREHOLDERS
Our company has a long track record of success. That’s not to say the path has
always been easy. We’ve often faced challenges, yet each time we’ve adapted and
emerged stronger. Today, as our industry undergoes fundamental change, we’re
taking steps to accelerate revenue growth and adjust our cost structure. We’re
doing so with both a realistic view of our challenges and confidence in our many
strengths. I think we have a strong foundation and abundant opportunities to create
a very successful future.
However, I’d also be among the first to tell you that we need to raise our performance
coming out of 2015. All in all, it was a tough year. Our earnings were not what we,
or you, are used to seeing from American Express. Our stock trailed the broader
market. And, on a personal note, we suered the tragic loss of our dear friend and
president, Ed Gilligan, who passed away in May.
We made progress on many fronts in 2015, including strong loan growth, industry-
leading credit quality, higher transaction volumes, and encouraging results from
investments to expand our Card Member and merchant bases. However, we also
had several factors working against us, such as worsening cobrand economics and
the stronger U.S. dollar, which suppressed earnings and revenue.
For the year, we earned $5.2 billion in net income, down 12 percent from 2014.
Revenues decreased by 4 percent to $32.8 billion. Expenses were down 1 percent
overall as a result of strong operating expense controls. At the same time, we
continued to invest heavily in initiatives designed to fuel our future growth.
A number of factors made year-over-year comparisons somewhat complex. But a
look at our underlying business shows continued growth. Adjusted revenues rose
4 percent, excluding foreign exchange, a 2014 gain on the sale of our investment in
Concur Technologies and revenues from business travel, which now operates as
a joint venture.1
Spending on American Express cards rose 6 percent, adjusted for foreign exchange
translations.2 This came despite lower volumes in Canada, where our relationship
with Costco ended, as well as a slowdown in Costco volumes in the U.S. in anticipa-
tion of the end of our contract in mid-2016.