American Express 2015 Annual Report Download - page 77

INTERNATIONAL CARD SERVICES
TABLE 11: ICS SELECTED INCOME STATEMENT DATA
Years Ended December 31,
(Millions, except percentages) 2015 2014 2013 Change 2015 vs. 2014 Change 2014 vs. 2013
Revenues
Non-interest revenues ............................ $ 4,321 $4,737 $4,644 $ (416) (9)% $ 93 2%
Interest income .................................. 939 1,085 1,118 (146) (13) (33) (3)
Interest expense ................................. 242 330 361 (88) (27) (31) (9)
Net interest income ............................ 697 755 757 (58) (8) (2) —
Total revenues net of interest expense ................ 5,018 5,492 5,401 (474) (9) 91 2
Provisions for losses ............................... 329 370 388 (41) (11) (18) (5)
Total revenues net of interest expense after provisions
for losses ....................................... 4,689 5,122 5,013 (433) (8) 109 2
Expenses
Marketing, promotion, rewards, Card Member
services and other ............................. 1,943 2,160 2,013 (217) (10) 147 7
Salaries and employee benefits and other operating
expenses ..................................... 2,238 2,513 2,357 (275) (11) 156 7
Total expenses ................................ 4,181 4,673 4,370 (492) (11) 303 7
Pretax segment income ............................ 508 449 643 59 13 (194) (30)
Income tax provision ............................... 87 38 12 49 # 26 #
Segment income .................................. $ 421 $ 411 $ 631 $ 10 2% $(220) (35)%
Effective tax rate .................................. 17.1% 8.5% 1.9%
# Denotes a variance greater than 100 percent
ICS offers a wide range of card products and services to consumers and small businesses outside the United
States, provides travel services to Card Members and other consumers, and operates a coalition loyalty business in
various countries.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues decreased $416 million or 9 percent in 2015 compared to 2014, and FX-adjusted non-interest
revenues increased 5 percent, primarily driven by net foreign exchange fees and spread revenue on cross-border Card
Member spending, higher net card fees and revenue from our Loyalty Partner business.
3
Billed business decreased 10 percent
in 2015 compared to 2014, while FX-adjusted billed business increased 3 percent, primarily due to higher average Card
Member spending per card, partially offset by lower cards-in-force in Canada driven by the termination of our relationship with
Costco in that country.
3
Refer to Tables 5 and 6 for additional information on billed business by region.
Interest income decreased $146 million or 13 percent (and remained flat on an FX-adjusted basis), in 2015 compared to
2014, primarily driven by lower average loans as a result of the termination of our relationship with Costco in Canada, offset by
a higher net interest yield.
3
Interest expense decreased $88 million or 27 percent in 2015 compared to 2014, primarily driven by lower funding costs,
as a result of lower average loans.
Total revenues net of interest expense increased $91 million or 2 percent in 2014 compared to 2013, primarily driven by
higher Loyalty Partner-related fees, higher discount revenue and an increase in net card fees.
PROVISIONS FOR LOSSES
Provisions for losses decreased $41 million or 11 percent (4 percent increase on an FX-adjusted basis) in 2015, compared
to 2014, and decreased $18 million or 5 percent (1 percent on an FX-adjusted basis) in 2014 compared to 2013.
3
Refer to Table
12 for Card Member receivables and loans write-off rates for 2015, 2014 and 2013.
EXPENSES
Marketing, promotion, rewards, Card Member services and other expenses decreased $217 million or 10 percent in 2015
compared to 2014, but increased 3 percent on an FX-adjusted basis, reflecting elevated levels of spending on growth
initiatives, primarily in marketing.
3
3Refer to footnote 1 on page 55 for details regarding foreign currency adjusted information.
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