What caused the restatement of American Express's financial results?

The restatement was due to a calculation error impacting the amount of ineffectiveness recorded for American Express's fair value hedges. This error led to an overstatement of expenses and an understatement of net income in the initial report.

How did the restatement affect Net Income and Earnings Per Share for the year ended December 31, 2008?

The restatement resulted in a $68 million increase in Net Income for the full year 2008, bringing the total to $2.70 billion. Diluted Earnings Per Share for the full year also increased to $2.33 from the previously reported $2.27.

Which business segments were most impacted by these adjustments?

The U.S. Card Services and Global Commercial Services segments were impacted. For the fourth quarter of 2008, U.S. Card Services income increased from $4 million to $64 million, and Global Commercial Services income improved from a loss of $18 million to a loss of $7 million. For the full year 2008, U.S. Card Services income rose from $792 million to $852 million, and Global Commercial Services income increased from $494 million to $505 million.

Have these restated figures been incorporated into other filings?

Yes, the adjustments discussed in this 8-K have been reflected in American Express Company's Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on the same date as this 8-K.

AXP 8-K: Regulation FD — Feb 27, 2009

Summary

This 8-K filing from American Express (AXP) on February 27, 2009, addresses restated financial results for the quarter and year ended December 31, 2008. The company identified a calculation error related to the ineffectiveness of its fair value hedges, leading to adjustments in its previously reported earnings. These adjustments improved both net income and earnings per share for the affected periods. Specifically, the error resulted in a $108 million reduction in Other Expenses, net, and an increase of $68 million in Net Income. The filing provides updated figures for Net Income and Diluted Earnings Per Share for both the fourth quarter and the full year of 2008, reflecting these corrections. The report also details the impact of these adjustments on specific operating segments, namely U.S. Card Services and Global Commercial Services, as well as the Corporate segment.

Key Highlights

1Restatement of Q4 and Full Year 2008 financial results due to a calculation error in hedge ineffectiveness.
2Net income for Q4 2008 was revised upwards by $68 million to $240 million.
3Net income for the full year 2008 was revised upwards by $68 million to $2.70 billion.
4Diluted EPS for Q4 2008 increased to $0.21 from $0.15.
5Diluted EPS for the full year 2008 increased to $2.33 from $2.27.
6The adjustment resulted in a $108 million reduction in Other Expenses, net.
7Specific segment income (loss) for U.S. Card Services and Global Commercial Services have been updated for the affected periods.

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Feb 27, 2009)

Summary

Key Highlights

Frequently Asked Questions