and lending net finance charge revenue from greater spending and borrowing on American Express cards, higher interest and dividends primarily from the investment portfolio of AEFA, higher income from securitization activities at TRS, as well as higher card fee revenue. These increases were partially offset by lower management fees, weaker travel revenues and reduced other revenues. 2001 consolidated revenues declined due to lower interest and dividends on AEFA’s investment portfolio, which reflect the investment losses mentioned earlier, weaker travel revenues and lower management and distribution fees. 

Discount revenue rose 3 percent during 2002 as a result of a 4 percent increase in billed business partially offset by a lower discount rate. Discount revenue fell 1 percent in 2001 as a slight increase in billed business was more than offset by a lower discount rate. 

Interest and dividends increased 40 percent over 2001, which was 35 percent lower than 2000. The increase in 2002 and the decrease in 2001 are both primarily due to AEFA’s $1.01 billion of investment losses during 2001 mentioned previously. 

Management and distribution fees declined 7 percent in 2002 due to lower average assets under management, partially offset by higher distribution fees. The distribution fee increase is the result of lower mutual fund sales being more than offset by other product related sales increases. In 2001, management and distribution fees declined 13 percent due to lower average assets under management and weaker sales, particularly in mutual fund products, reflecting the negative impact of weak equity market conditions throughout the year. 

Income from securitizations at TRS rose 35 percent in 2002 and 42 percent in 2001 primarily driven by a higher average balance of cardmember lending securitizations as well as higher portfolio yields. 

Net card fees increased slightly in 2002 and 2001, reflecting the growth in cards-in-force in both years. The average fee per card remained at $34 in both 2002 and 2001, down from $36 in 2000, reflecting the mix shift toward lower and no fee products. 

Cardmember lending net finance charge revenue at TRS grew 4 percent during 2002 primarily due to improved spreads reflect- ing the benefits of improved funding costs coupled with an overall decrease in the proportion of the portfolio on introductory rates. In 2001, cardmember lending net finance charge revenue at TRS rose 14 percent from higher worldwide lending balances and wider net interest margins. 

Travel commissions and fees declined 8 percent in 2002 as a result of a 10 percent contraction in travel sales reflecting the weaker corporate travel environment throughout the year. Travel commissions and fees declined 16 percent in 2001 as a result of a 24 percent contraction in travel sales due to the effects of the September 11th terrorist attacks and the weaker corporate travel environment. 

All other revenues decreased 4 percent in 2002, including a 10 percent decrease at TRS, versus a 4 percent increase in 2001, including a 1 percent decrease at TRS. The decrease in 2002 included significantly lower interest income on investments held within card funding vehicles partially offset by higher insurance related revenues. The 2001 increase was primarily driven by higher insurance related revenues. 

Consolidated expenses decreased 4 percent in 2002 reflecting a 5 percent decrease at TRS, a 1 percent decrease at AEFA and a 6 percent decrease at AEB. These declines were due to lower funding costs, a decline in human resources expense, reduced pro- visions for losses and benefits and the benefits of reengineering activities and expense control initiatives. Consolidated expenses increased 6 percent in 2001 primarily due to larger provisions for losses and benefits and the impact of the restructuring charges and one-time costs and waived customer fees noted previously. 

Human resources expense declined in both 2002 and 2001 primarily as a result of a 15 percent reduction in the number of employees since the beginning of 2001 and the benefit of reengineering activities over the past two years, including the impact of a technology outsourcing agreement which had the effect of moving certain technology related costs from human resources expense to professional services expense. 

Total provisions for losses and benefits declined 3 percent in 2002, resulting from a 20 percent reduction in the charge card provision at TRS due to strong credit quality, reflected in an improved past due rate and net loss ratio, and an 8 percent reduction in provision for losses and benefits on annuities and investment certificates, primarily due to lower crediting rates on the investment certificate product. These decreases were partially offset by a 14 percent increase in life insurance, 

