American Express reported fourth-quarter consolidated total revenues net of interest expense rose to $9.1 billion from $8.5 billion a year ago, up 7% (9% when adjusted for foreign currency translations). The revenue increase primarily reflected the previously reported gain of $719 million ($453 million after-tax) on the sale of the company’s investment in Concur Technologies. The increase also reflected a rise in cardholder spending and higher net interest income.
U.S. Card Services (USCS) reported fourth-quarter net income of $665 million, down 23 percent from $864 million a year ago.
International Card Services (ICS) reported fourth-quarter net income of $33 million, down 68 percent from $103 million a year ago.
Global Commercial Services (GCS) reported fourth-quarter net income of $594 million, up from $182 million a year ago.
Global Network & Merchant Services (GNS) reported fourth-quarter net income of $417 million, up 5 percent from $399 million a year ago.
During the fourth quarter, American Express continued to invest in growth opportunities through expanded products and services.
In Its proprietary issuing and merchant businesses, the Company:
Announced a multiyear renewal of its exclusive cobrand Credit Card with Delta Airlines. The deal includes continuation of Delta as a Card-accepting merchant and as a participant in the Membership Rewards® program. In addition, Platinum Card® Members from American Express and Delta Reserve Card Members can continue to utilize the Delta Sky Club, Delta’s network of proprietary airport lounges.
Continued its support for the Small Business Saturday movement for the fifth straight year by helping ensure that small businesses across the country and around the world got their holiday season off to a strong start as millions of consumers “shopped small” and made a big impact on local communities. Having originated in the United States, Small Business Saturday has now spread to the U.K., Australia, Israel, Canada, and South Africa.
Launched American Express Token Service, a suite of solutions designed to enable card-issuing partners, processors, acquirers and merchants to create a safer online and mobile payments environment for consumers.
Added a new Membership Rewards® program relationship with Airbnb. U.S. Card Members enrolled in the Membership Rewards® program can now use Membership Rewards® points for Airbnb eGift cards.
Expanded CenturionSM Lounge access to San Francisco International Airport. The Centurion Lounge at SFO is the fourth in a network of lounges across the United States, with locations currently open in McCarran International Airport (LAS) in Las Vegas, Dallas/Fort Worth International Airport (DFW) and New York’s LaGuardia Airport (LGA). The Centurion Lounge in Miami International Airport is also under construction.
Continued to sign new merchants around the world to the American Express network. In the United States, In-N-Out Burger, a fast food restaurant with 300 locations across California, Arizona, Texas, Nevada and Utah, now accepts the American Express Card. The Company signed Caminos y Puentes Federales (CAPUFE), Mexico’s government toll road service provider. Fusion Retail Brands, Australia’s largest footwear retailer with over 200 locations nationally, now accepts American Express. In Europe, we signed Sibeg – Coca-Cola, the producer and marketer of The Coca-Cola Company drinks in the region of Sicily.
In the Global Network Services (“GNS”) business, the Company:
Announced a new merchant acquiring partnership with Bank of Central Asia in Indonesia.
Supported GNS partners in launching a wide range of new products, including: the U.S. Bank FlexPerks® Rewards credit cards with U.S. Bank in the U.S.; the Equity Bank American Express® Green Card and the Equity Bank American Express® Gold Card with Equity Bank in Kenya; the Nedbank Greenbacks Shop Card with Nedbank in South Africa; the All World Premier American Express® Card and the All World Optimum American Express® Card with URALSIB Bank in Russia; the American Express® Design Card with Russian Standard Bank in Russia; the Shell easiGO American Express Prepaid Card with Maybank in Malaysia; HanaSK American Express Virtual Pay with HanaSK Card in South Korea; the SPDB E-Go American Express Account with Shanghai Pudong Development Bank in China; and the ICICI Bank Coral American Express® Credit Card with ICICI Bank in India.
In the Enterprise Growth Group, the Company:
Partnered with the Brooklyn Nets and Barclays Center to launch a pilot program of the Brooklyn eWallet, a digital payment solution that is directly integrated into the Brooklyn Nets mobile application. The Brooklyn eWallet is built on the American Express Serve platform and allows guests of the Barclays Center to purchase food and drinks directly from their smartphone.
Announced a research pilot to study consumer savings behaviors using the American Express Serve software platform. The research pilot can help identify new ways to promote saving and whether certain behavioral interventions are effective in increasing consumer savings. The program will also help inform research at the Consumer Financial Protection Bureau (CFPB).
Additionally, n December 11, 2014, the Company announced a multi-year renewal of its exclusive cobrand credit card partnership with Delta, as well as other partnership arrangements, including Membership Rewards, merchant acceptance and travel. In connection with this announcement, the Company recorded a charge of $109MM ($68MM after-tax) in Q4’14. This primarily reflects an increase in the Company’s Membership Rewards balance sheet liability to reflect the estimated impact of an increase in the cost per point that the Company will pay to Delta for previously-earned MR points that are expected to be transferred to Delta SkyMiles in the future. This charge was reflected on the Card Member Rewards expense line within the USCS and GCS segments.
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