American Express 2015 Annual Report Download - page 80

GLOBAL COMMERCIAL SERVICES
TABLE 13: GCS 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 ........................ $ 3,513 $ 5,173 $5,085 $(1,660) (32)%$ 88 2%
Interest income ............................. 14 15 13 (1) (7) 2 15
Interest expense ............................. 185 240 245 (55) (23) (5) (2)
Net interest expense ....................... (171) (225) (232) (54) (24) (7) (3)
Total revenues net of interest expense ............ 3,342 4,948 4,853 (1,606) (32) 95 2
Provisions for losses ........................... 148 180 129 (32) (18) 51 40
Total revenues net of interest expense after
provisions for losses ......................... 3,194 4,768 4,724 (1,574) (33) 44 1
Expenses
Marketing, promotion, rewards, Card Member
services and other ......................... 632 682 604 (50) (7) 78 13
Salaries and employee benefits and other
operating expenses ........................ 1,489 1,678 2,876 (189) (11) (1,198) (42)
Total expenses ............................ 2,121 2,360 3,480 (239) (10) (1,120) (32)
Pretax segment income ........................ 1,073 2,408 1,244 (1,335) (55) 1,164 94
Income tax provision ........................... 407 865 384 (458) (53) 481 #
Segment income .............................. $ 666 $ 1,543 $ 860 $ (877) (57)%$ 683 79%
Effective tax rate .............................. 37.9% 35.9% 30.9%
# Denotes a variance greater than 100 percent
GCS offers global corporate payment services to large and mid-sized companies. Our business travel operations,
which had been included in GCS, were deconsolidated effective June 30, 2014 in connection with the formation of the
GBT JV, discussed previously. Therefore, there is a lack of comparability against periods prior to the deconsolidation.
Our proportional share of the GBT JV net income or loss is reported within Other revenues.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues decreased $1.7 billion or 32 percent in 2015 compared to 2014. The decrease was primarily
due to the gain on the sale of our investment in Concur in 2014 and the impact of the business travel joint venture
transaction (resulting in a lack of comparability between periods). Billed business decreased 2 percent in 2015
compared to 2014 and increased 2 percent on an FX-adjusted basis.4Billed business volume increased 2 percent
within the United States and decreased 10 percent outside the United States. FX-adjusted billed business outside the
United States increased 3 percent.4
Net interest expense decreased $54 million or 24 percent in 2015 compared to 2014, primarily driven by lower
funding costs due to lower Card Member receivables.
Total revenues net of interest expense increased $95 million or 2 percent in 2014 compared to 2013, primarily due
to the gain on the sale of our investment in Concur in 2014 and higher discount revenue from an increased level of
Card Member spending, partially offset by the impact of the business travel joint venture transaction (resulting in a
lack of comparability between periods).
PROVISIONS FOR LOSSES
Provisions for losses decreased $32 million or 18 percent in 2015 compared to 2014, primarily driven by a lower
charge card provision, resulting from a lower reserve build due to lower average Card Member receivables and lower
net write-offs.
Provisions for losses increased $51 million or 40 percent in 2014 compared to 2013, primarily driven by higher
average Card Member receivables resulting in higher net write-offs. Refer to Table 14 for the charge card net loss ratio
as a percentage of charge volume.
4Refer to footnote 1 on page 55 for details regarding foreign currency adjusted information.
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