10-KPeriod: FY2009

AMERICAN EXPRESS CO Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:AXP

Summary

In 2009, American Express (AXP) faced a challenging economic environment, reporting a 14% decrease in total revenues net of interest expense to $24.5 billion and a 26% decline in income from continuing operations to $2.1 billion. Diluted earnings per share also saw a significant drop. Despite these headwinds, AXP demonstrated resilience, with spending volumes turning positive in Q4 2009, indicating a potential recovery. The company continued to execute its "spend-centric" business model, leveraging its strong brand and closed-loop network as competitive advantages. Strategic organizational changes were implemented in late 2009 to focus on growth opportunities and streamline operations, including the creation of an Enterprise Growth Group and a Global Services Group aimed at cost savings and improved efficiency.

Financial Highlights

42 data points
Beta

Revenue

$24.52B

Net Income

$2.13B

8.7% Net Margin

EPS (Diluted)

$1.54

Total Assets

$125.14B

Cash & Equivalents

$4.06B

Free Cash Flow

$5.62B

Financial Statements
Beta
Revenue$24.52B
Operating Income$2.84B
Interest Expense$2.21B
Net Income$2.13B
EPS (Basic)$1.54
EPS (Diluted)$1.54
Shares Outstanding (Basic)1.17B
Shares Outstanding (Diluted)1.17B

Key Highlights

  • 1Total revenues net of interest expense decreased by 14% to $24.5 billion in 2009 compared to 2008.
  • 2Income from continuing operations decreased by 26% to $2.1 billion in 2009.
  • 3Diluted earnings per share (EPS) based on income from continuing operations fell to $1.54 in 2009, down from $2.47 in 2008.
  • 4Return on average equity decreased to 14.6% in 2009 from 22.3% in 2008.
  • 5Cardmember spending volumes turned positive in the fourth quarter of 2009, a positive sign after a challenging year.
  • 6AXP implemented organizational changes in October 2009, including the formation of an Enterprise Growth Group and a Global Services Group to drive new revenue streams and cost efficiencies.
  • 7The company emphasized its "spend-centric" business model and strong brand as key competitive advantages.

Frequently Asked Questions

In 2009, American Express experienced a decline in financial performance due to the challenging economic environment. Total revenues net of interest expense decreased by 14% to $24.5 billion, and income from continuing operations fell by 26% to $2.1 billion. Diluted earnings per share also decreased significantly.

The primary factors impacting AXP's performance were the weak global economy, frozen credit markets in the first half of the year, and high industry-wide credit losses. These conditions led to declines in cardmember spending and increased credit write-offs.

American Express remains focused on its "spend-centric" business model, leveraging its brand and closed-loop network. In late 2009, the company restructured by creating an Enterprise Growth Group to explore new revenue opportunities and a Global Services Group to streamline operations and achieve cost savings, aiming for $500 million in gross expense savings by 2012.

American Express operates through four reportable segments: U.S. Card Services, International Card Services, Global Commercial Services, and Global Network & Merchant Services.