Attached files
EXHIBIT 99.2
All information in the following tables is presented on a basis prepared in
accordance with U.S. generally accepted accounting principles (GAAP), unless
otherwise indicated.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
Quarters Ended Nine Months Ended
September 30, September 30,
----------------------- Percentage ----------------------- Percentage
2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec)
---------- ---------- ---------- ---------- ---------- ----------
Revenues
Non-interest revenues
Discount revenue $ 3,373 $ 3,848 (12)% $ 9,744 $ 11,557 (16)%
Net card fees 538 541 (1) 1,602 1,614 (1)
Travel commissions and fees 383 499 (23) 1,155 1,566 (26)
Other commissions and fees 448 573 (22) 1,340 1,785 (25)
Securitization income, net 71 200 (65) 210 871 (76)
Other 449 553 (19) 1,569 1,591 (1)
---------- ---------- ---------- ----------
Total non-interest revenues 5,262 6,214 (15) 15,620 18,984 (18)
---------- ---------- ---------- ----------
Interest income
Interest and fees on loans 1,059 1,560 (32) 3,432 4,795 (28)
Interest and dividends on investment securities 229 200 15 579 603 (4)
Deposits with banks and other 9 74 (88) 48 235 (80)
---------- ---------- ---------- ----------
Total interest income 1,297 1,834 (29) 4,059 5,633 (28)
---------- ---------- ---------- ----------
Interest expense
Deposits 109 109 - 299 381 (22)
Short-term borrowings 2 114 (98) 36 411 (91)
Long-term debt and other 432 661 (35) 1,310 1,966 (33)
---------- ---------- ---------- ----------
Total interest expense 543 884 (39) 1,645 2,758 (40)
---------- ---------- ---------- ----------
Net interest income 754 950 (21) 2,414 2,875 (16)
---------- ---------- ---------- ----------
Total revenues net of interest expense 6,016 7,164 (16) 18,034 21,859 (17)
---------- ---------- ---------- ----------
Provisions for losses
Charge card 143 351 (59) 716 937 (24)
Cardmember lending 989 958 3 3,706 3,304 12
Other 46 50 (8) 143 153 (7)
---------- ---------- ---------- ----------
Total provisions for losses 1,178 1,359 (13) 4,565 4,394 4
---------- ---------- ---------- ----------
Total revenues net of interest expense after
provisions for losses 4,838 5,805 (17) 13,469 17,465 (23)
---------- ---------- ---------- ----------
Expenses
Marketing and promotion 504 649 (22) 1,201 1,906 (37)
Cardmember rewards 983 1,132 (13) 2,858 3,301 (13)
Cardmember services 132 148 (11) 374 402 (7)
Salaries and employee benefits 1,261 1,465 (14) 3,884 4,430 (12)
Professional services 575 608 (5) 1,693 1,764 (4)
Occupancy and equipment 374 398 (6) 1,124 1,185 (5)
Communications 105 118 (11) 315 348 (9)
Other, net (14) 209 # 140 816 (83)
---------- ---------- ---------- ----------
Total 3,920 4,727 (17) 11,589 14,152 (18)
---------- ---------- ---------- ----------
Pretax income from continuing operations 918 1,078 (15) 1,880 3,313 (43)
Income tax provision 276 217 27 453 748 (39)
---------- ---------- ---------- ----------
Income from continuing operations 642 861 (25) 1,427 2,565 (44)
Loss from discontinued operations, net of tax (2) (46) (96) (13) (106) (88)
---------- ---------- ---------- ----------
Net income $ 640 $ 815 (21) $ 1,414 $ 2,459 (42)
========== ========== ========== ==========
Income from continuing operations attributable to
common shareholders (A) $ 634 $ 856 (26) $ 1,108 $ 2,551 (57)
========== ========== ========== ==========
Net income attributable to common shareholders (A) $ 632 $ 810 (22) $ 1,095 $ 2,445 (55)
========== ========== ========== ==========
# - Denotes a variance of more than 100%.
(A) Represents income from continuing operations or net income, as applicable,
less (i) accelerated preferred dividend accretion of $212 million for the nine
months ended September 30, 2009 due to the repurchase of $3.39 billion of
preferred shares issued as part of the Capital Purchase Program (CPP), (ii)
preferred shares dividends and related accretion of $94 million for the nine
months ended September 30, 2009, and (iii) earnings allocated to participating
share awards and other items of $8 million and $5 million for the three months
ended September 30, 2009 and 2008, respectively, and $13 million and $14
million for the nine months ended September 30, 2009 and 2008, respectively.
-1-
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
September 30, December 31,
2009 2008
------------- -------------
Assets
Cash $ 19 $ 21
Accounts receivable 35 37
Investment securities 24 13
Loans 29 41
Other assets 13 14
------------- -------------
Total assets $ 120 $ 126
============= =============
Liabilities and Shareholders' Equity
Customer deposits $ 24 $ 15
Short-term borrowings 2 9
Long-term debt 53 60
Other liabilities 27 30
------------- -------------
Total liabilities 106 114
------------- -------------
Shareholders' equity 14 12
------------- -------------
Total liabilities and shareholders' equity $ 120 $ 126
============= =============
-2-
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
Quarters Ended Nine Months Ended
September 30, September 30,
----------------------- Percentage ----------------------- Percentage
2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $ 2,903 $ 3,459 (16)% $ 8,782 $ 10,774 (18)%
International Card Services 1,148 1,232 (7) 3,262 3,683 (11)
Global Commercial Services 997 1,200 (17) 2,944 3,652 (19)
Global Network & Merchant Services 963 1,071 (10) 2,709 3,157 (14)
---------- ---------- ---------- ----------
6,011 6,962 (14) 17,697 21,266 (17)
Corporate & Other,
including adjustments and eliminations 5 202 (98) 337 593 (43)
---------- ---------- ---------- ----------
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE $ 6,016 $ 7,164 (16) $ 18,034 $ 21,859 (17)
========== ========== ========== ==========
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 139 $ 364 (62) $ (243) $ 1,092 #
International Card Services 127 1 # 184 191 (4)
Global Commercial Services 170 191 (11) 397 735 (46)
Global Network & Merchant Services 358 397 (10) 1,083 1,187 (9)
---------- ---------- ---------- ----------
794 953 (17) 1,421 3,205 (56)
Corporate & Other 124 125 (1) 459 108 #
---------- ---------- ---------- ----------
PRETAX INCOME FROM CONTINUING OPERATIONS $ 918 $ 1,078 (15) $ 1,880 $ 3,313 (43)
========== ========== ========== ==========
NET INCOME (LOSS)
U.S. Card Services $ 109 $ 244 (55) $ (116) $ 788 #
International Card Services 127 67 90 230 315 (27)
Global Commercial Services 116 134 (13) 273 512 (47)
Global Network & Merchant Services 240 258 (7) 713 780 (9)
---------- ---------- ---------- ----------
592 703 (16) 1,100 2,395 (54)
Corporate & Other 50 158 (68) 327 170 92
---------- ---------- ---------- ----------
Income from continuing operations 642 861 (25) 1,427 2,565 (44)
Loss from discontinued operations, net of tax (2) (46) (96) (13) (106) (88)
---------- ---------- ---------- ----------
NET INCOME $ 640 $ 815 (21) $ 1,414 $ 2,459 (42)
========== ========== ========== ==========
# - Denotes a variance of more than 100%.
-3-
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
Quarters Ended Nine Months Ended
September 30, September 30,
----------------------- Percentage ----------------------- Percentage
2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec)
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations attributable to
common shareholders $ 0.54 $ 0.74 (27)% $ 0.95 $ 2.21 (57)%
Loss from discontinued operations - (0.04) # (0.01) (0.09) (89)
---------- ---------- ---------- ----------
Net income attributable to common shareholders $ 0.54 $ 0.70 (23)% $ 0.94 $ 2.12 (56)%
========== ========== ========== ==========
Average common shares outstanding (millions) 1,178 1,154 2% 1,164 1,154 1%
========== ========== ========== ==========
DILUTED
Income from continuing operations attributable to
common shareholders $ 0.54 $ 0.74 (27)% $ 0.95 $ 2.20 (57)%
Loss from discontinued operations (0.01) (0.04) (75) (0.01) (0.10) (90)
---------- ---------- ---------- ----------
Net income attributable to common shareholders $ 0.53 $ 0.70 (24)% $ 0.94 $ 2.10 (55)%
========== ========== ========== ==========
Average common shares outstanding (millions) 1,181 1,158 2% 1,166 1,161 -%
========== ========== ========== ==========
Cash dividends declared per common share $ 0.18 $ 0.18 -% $ 0.54 $ 0.54 -%
========== ========== ========== ==========
SELECTED STATISTICAL INFORMATION
Quarters Ended Nine Months Ended
September 30, September 30,
----------------------- Percentage ----------------------- Percentage
2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec)
---------- ---------- ---------- ---------- ---------- ----------
Return on average equity (A) 11.7% 27.8% 11.7% 27.8%
Return on average common equity (A) 10.4% 27.6% 10.4% 27.6%
Return on average tangible common equity (A) 13.5% 34.2% 13.5% 34.2%
Common shares outstanding (millions) 1,189 1,160 3% 1,189 1,160 3%
Book value per common share $ 11.72 $ 10.79 9% $ 11.72 $ 10.79 9%
Shareholders' equity (billions) $ 13.9 $ 12.5 11% $ 13.9 $ 12.5 11%
# - Denotes a variance of more than 100%.
(A) Refer to Appendix I for components of return on average equity, return on
average common equity and return on average tangible common equity.
-4-
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Card billed business (A):
United States $ 106.5 $ 120.3 (11)%
Outside the United States 50.1 55.2 (9)
---------- ----------
Total $ 156.6 $ 175.5 (11)
========== ==========
Total cards-in-force (millions) (B):
United States 49.4 54.3 (9)%
Outside the United States 39.0 37.8 3
---------- ----------
Total 88.4 92.1 (4)
========== ==========
Basic cards-in-force (millions) (B):
United States 38.6 42.3 (9)%
Outside the United States 34.3 32.8 5
---------- ----------
Total 72.9 75.1 (3)
========== ==========
Average discount rate (C) 2.54% 2.56%
Average basic cardmember spending (dollars) (D) $ 2,898 $ 3,049 (5)%
Average fee per card (dollars) (D) $ 37 $ 34 9%
Average fee per card adjusted (dollars) (D) $ 41 $ 39 5%
(A) Card billed business includes activities (including cash advances) related
to proprietary cards, cards issued under network partnership agreements, and
certain insurance fees charged on proprietary cards. Card billed business is
reflected in the United States or outside the United States based on where the
cardmember is domiciled.
(B) Total cards-in-force represents the number of cards that are issued and
outstanding. Proprietary basic consumer cards-in-force includes basic cards
issued to the primary account owner and does not include additional
supplemental cards issued on that account. Proprietary basic small business
and corporate cards-in-force include basic and supplemental cards issued to
employee cardmembers. Non-proprietary basic cards-in-force includes all cards
that are issued and outstanding under network partnership agreements.
(C) This calculation is designed to approximate merchant pricing. It
represents the percentage of billed business (both proprietary and Global
Network Services) retained by the Company from merchants it acquires, prior to
payments to third parties unrelated to merchant acceptance.
(D) Average basic cardmember spending and average fee per card are computed
from proprietary card activities only. Average fee per card is computed based
on net card fees, including the amortization of deferred direct acquisition
costs, plus card fees included in interest and fees on loans (including
related amortization of deferred direct acquisition costs), divided by average
worldwide proprietary cards-in-force. The card fees related to cardmember
loans included in interest and fees on loans were $47 million and $35 million
for the quarters ended September 30, 2009 and 2008, respectively. The adjusted
average fee per card is computed in the same manner, but excludes amortization
of deferred direct acquisition costs (a portion of which is charge card
related and included in net card fees and a portion of which is lending
related and included in interest and fees on loans). The amount of
amortization excluded was $57 million and $84 million for the quarters ended
September 30, 2009 and 2008, respectively. The Company presents adjusted
average fee per card because management believes that this metric presents a
useful indicator of card fee pricing across a range of its proprietary card
products.
-5-
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION (CONTINUED)
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Worldwide cardmember receivables:
Total receivables $ 32.1 $ 37.6 (15)%
Loss reserves (millions):
Beginning balance $ 714 $ 1,146 (38)%
Provision 143 351 (59)
Net write-offs (265) (333) (20)
Other 7 (30) #
---------- ----------
Ending balance $ 599 $ 1,134 (47)
========== ==========
% of receivables 1.9% 3.0%
Net write-off rate - USCS 3.2% 3.4%
30 days past due as a % of total - USCS 2.2% 3.3%
Net loss ratio as a % of charge volume - ICS 0.37% 0.25%
90 days past due as a % of total - ICS 2.5% 2.7%
Net loss ratio as a % of charge volume - GCS 0.23% 0.15%
90 days past due as a % of total - GCS 1.5% 1.8%
Worldwide cardmember lending - owned basis (A):
Total loans $ 31.5 $ 45.7 (31)%
30 days past due loans as a % of total 4.0% 3.7%
Loss reserves (millions):
Beginning balance $ 3,219 $ 2,594 24%
Provision 973 927 5
Net write-offs - principal (731) (697) 5
Write-offs - interest and fees (90) (161) (44)
Other (B) (12) (23) (48)
---------- ----------
Ending balance $ 3,359 $ 2,640 27
========== ==========
Ending Reserves - principal $ 3,246 $ 2,426 34
Ending Reserves - interest and fees $ 113 $ 214 (47)
% of loans 10.7% 5.8%
% of past due 264% 154%
Average loans $ 32.3 $ 47.7 (32)%
Net write-off rate 9.1% 5.8%
Net interest yield on cardmember loans (C) 9.7% 8.9%
Worldwide cardmember lending - managed basis (D):
Total loans $ 60.7 $ 75.5 (20)%
30 days past due loans as a % of total 4.0% 3.8%
Net write-offs - principal (millions) $ 1,327 $ 1,090 22
Average loans $ 61.8 $ 76.1 (19)%
Net write-off rate 8.6% 5.7%
Net interest yield on cardmember loans (C) 10.0% 9.2%
# - Denotes a variance of more than 100%.
(A) "Owned," a GAAP basis measurement, reflects only cardmember loans included
in the Company's Consolidated Balance Sheets.
(B) For the quarter ended September 30, 2009, this amount primarily includes
$25 million of reserves that were removed in connection with securitizations
during the period. The offset is in the allocated cost of the associated
retained subordinated securities. This amount also includes foreign currency
translation adjustments. The prior period primarily included foreign currency
translation adjustments.
(C) See Appendix III for discussion of net interest yield on cardmember loans.
(D) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. The difference between the "owned basis" (GAAP)
information and "managed basis" information is attributable to the effects of
securitization activities. Refer to the information set forth under U.S. Card
Services Selected Financial Information for further discussion of the managed
basis presentation.
-6-
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Revenues
Non-interest revenues
Discount revenue 3,373 $ 3,305 $ 3,066 $ 3,468 $ 3,848
Net card fees 538 532 532 536 541
Travel commissions and fees 383 407 365 444 499
Other commissions and fees 448 439 453 522 573
Securitization income, net 71 (2) 141 199 200
Other 449 670 450 566 553
------------- ------------- ------------- ------------- -------------
Total non-interest revenues 5,262 5,351 5,007 5,735 6,214
------------- ------------- ------------- ------------- -------------
Interest income
Interest and fees on loans 1,059 1,081 1,292 1,364 1,560
Interest and dividends on investment securities 229 196 154 168 200
Deposits with banks and other 9 11 28 36 74
------------- ------------- ------------- ------------- -------------
Total interest income 1,297 1,288 1,474 1,568 1,834
------------- ------------- ------------- ------------- -------------
Interest expense
Deposits 109 105 85 73 109
Short-term borrowings 2 7 27 72 114
Long-term debt and other 432 435 443 652 661
------------- ------------- ------------- ------------- -------------
Total interest expense 543 547 555 797 884
------------- ------------- ------------- ------------- -------------
Net interest income 754 741 919 771 950
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense 6,016 6,092 5,926 6,506 7,164
------------- ------------- ------------- ------------- -------------
Provisions for losses
Charge card 143 237 336 426 351
Cardmember lending 989 1,303 1,414 927 958
Other 46 44 53 51 50
------------- ------------- ------------- ------------- -------------
Total provisions for losses 1,178 1,584 1,803 1,404 1,359
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense after
provision for losses 4,838 4,508 4,123 5,102 5,805
------------- ------------- ------------- ------------- -------------
Expenses
Marketing and promotion 504 352 345 524 649
Cardmember rewards 983 1,029 846 1,088 1,132
Cardmember services 132 131 111 140 148
Salaries and employee benefits 1,261 1,370 1,253 1,660 1,465
Professional services 575 599 519 649 608
Occupancy and equipment 374 392 358 456 398
Communications 105 106 104 118 118
Other, net (14) 111 43 199 209
------------- ------------- ------------- ------------- -------------
Total 3,920 4,090 3,579 4,834 4,727
------------- ------------- ------------- ------------- -------------
Pretax income from continuing operations 918 418 544 268 1,078
Income tax provision (benefit) 276 76 101 (38) 217
------------- ------------- ------------- ------------- -------------
Income from continuing operations 642 342 443 306 861
Loss from discontinued operations, net of tax (2) (5) (6) (66) (46)
------------- ------------- ------------- ------------- -------------
Net income $ 640 $ 337 $ 437 $ 240 $ 815
============= ============= ============= ============= =============
Income from continuing operations attributable to
common shareholders (A) $ 634 $ 107 $ 367 $ 305 $ 856
============= ============= ============= ============= =============
Net income attributable to common shareholders (A) $ 632 $ 102 $ 361 $ 239 $ 810
============= ============= ============= ============= =============
(A) Represents income from continuing operations or net income, as applicable,
less (i) accelerated preferred dividend accretion of $212 million for the
quarter ended June 30, 2009 due to the repurchase of $3.39 billion of
preferred shares issued as part of the Capital Purchase Program (CPP), (ii)
preferred shares dividends and related accretion of $22 million for the
quarter ended June 30, 2009 and $72 million for the quarter ended March 31,
2009, respectively, and (iii) earnings allocated to participating share awards
of $8 million for the quarter ended September 30, 2009, $1 million for the
quarter ended June 30, 2009, $4 million for the quarter ended March 31, 2009,
$1 million for the quarter ended December 31, 2008, and $5 million for the
quarter ended September 30, 2008, respectively.
-7-
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
TOTAL REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $ 2,903 $ 2,805 $ 3,074 $ 3,223 $ 3,459
International Card Services 1,148 1,091 1,023 1,098 1,232
Global Commercial Services 997 1,003 944 1,044 1,200
Global Network & Merchant Services 963 910 836 945 1,071
------------- ------------- ------------- ------------- -------------
6,011 5,809 5,877 6,310 6,962
Corporate & Other,
including adjustments and eliminations 5 283 49 196 202
------------- ------------- ------------- ------------- -------------
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE $ 6,016 $ 6,092 $ 5,926 $ 6,506 $ 7,164
============= ============= ============= ============= =============
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 139 $ (332) $ (50) $ 49 $ 364
International Card Services 127 49 8 (38) 1
Global Commercial Services 170 99 128 (42) 191
Global Network & Merchant Services 358 360 365 303 397
------------- ------------- ------------- ------------- -------------
794 176 451 272 953
Corporate & Other 124 242 93 (4) 125
------------- ------------- ------------- ------------- -------------
PRETAX INCOME FROM CONTINUING OPERATIONS $ 918 $ 418 $ 544 $ 268 $ 1,078
============= ============= ============= ============= =============
NET INCOME (LOSS)
U.S. Card Services $ 109 $ (200) $ (25) $ 64 $ 244
International Card Services 127 64 39 36 67
Global Commercial Services 116 71 86 (7) 134
Global Network & Merchant Services 240 236 237 215 258
------------- ------------- ------------- ------------- -------------
592 171 337 308 703
Corporate & Other 50 171 106 (2) 158
------------- ------------- ------------- ------------- -------------
Income from continuing operations 642 342 443 306 861
Loss from discontinued operations, net of tax (2) (5) (6) (66) (46)
------------- ------------- ------------- ------------- -------------
NET INCOME $ 640 $ 337 $ 437 $ 240 $ 815
============= ============= ============= ============= =============
-8-
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations attributable
to common shareholders $ 0.54 $ 0.09 $ 0.32 $ 0.26 $ 0.74
Loss from discontinued operations - - (0.01) (0.05) (0.04)
------------- ------------- ------------- ------------- -------------
Net income attributable to common shareholders $ 0.54 $ 0.09 $ 0.31 $ 0.21 $ 0.70
============= ============= ============= ============= =============
Average common shares outstanding (millions) 1,178 1,162 1,156 1,155 1,154
============= ============= ============= ============= =============
DILUTED
Income from continuing operations attributable
to common shareholders $ 0.54 $ 0.09 $ 0.32 $ 0.26 $ 0.74
Loss from discontinued operations (0.01) - (0.01) (0.05) (0.04)
------------- ------------- ------------- ------------- -------------
Net income attributable to common shareholders $ 0.53 $ 0.09 $ 0.31 $ 0.21 $ 0.70
============= ============= ============= ============= =============
Average common shares outstanding (millions) 1,181 1,165 1,156 1,155 1,158
============= ============= ============= ============= =============
Cash dividends declared per common share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18
============= ============= ============= ============= =============
SELECTED STATISTICAL INFORMATION
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Return on average equity (A) 11.7% 13.2% 16.3% 22.3% 27.8%
Return on average common equity (A) 10.4% 12.0% 16.7% 22.1% 27.6%
Return on average tangible common equity (A) 13.5% 15.6% 21.6% 28.0% 34.2%
Common shares outstanding (millions) 1,189 1,189 1,168 1,160 1,160
Book value per common share $ 11.72 $ 11.28 $ 10.61 $ 10.21 $ 10.79
Shareholders' equity (billions) $ 13.9 $ 13.4 $ 15.8 $ 11.8 $ 12.5
(A) Refer to Appendix I for components of return on average equity, return on
average common equity and return on average tangible common equity.
-9-
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Card billed business (A):
United States $ 106.5 $ 104.8 $ 97.4 $ 112.7 $ 120.3
Outside the United States 50.1 46.6 41.8 47.8 55.2
------------- ------------- ------------- ------------- -------------
Total $ 156.6 $ 151.4 $ 139.2 $ 160.5 $ 175.5
============= ============= ============= ============= =============
Total cards-in-force (millions) (B):
United States 49.4 49.8 53.4 54.0 54.3
Outside the United States 39.0 38.7 38.2 38.4 37.8
------------- ------------- ------------- ------------- -------------
Total 88.4 88.5 91.6 92.4 92.1
============= ============= ============= ============= =============
Basic cards-in-force (millions) (B):
United States 38.6 38.7 41.6 42.0 42.3
Outside the United States 34.3 33.9 33.3 33.4 32.8
------------- ------------- ------------- ------------- -------------
Total 72.9 72.6 74.9 75.4 75.1
============= ============= ============= ============= =============
Average discount rate (C) 2.54% 2.55% 2.56% 2.53% 2.56%
Average basic cardmember spending (dollars) (D) $ 2,898 $ 2,712 $ 2,443 $ 2,792 $ 3,049
Average fee per card (dollars) (D) $ 37 $ 35 $ 34 $ 34 $ 34
Average fee per card adjusted (dollars) (D) $ 41 $ 39 $ 38 $ 38 $ 39
(A) Card billed business includes activities (including cash advances) related
to proprietary cards, cards issued under network partnership agreements, and
certain insurance fees charged on proprietary cards. Card billed business is
reflected in the United States or outside the United States based on where the
cardmember is domiciled.
(B) Total cards-in-force represents the number of cards that are issued and
outstanding. Proprietary basic consumer cards-in-force includes basic cards
issued to the primary account owner and does not include additional
supplemental cards issued on that account. Proprietary basic small business
and corporate cards-in-force include basic and supplemental cards issued to
employee cardmembers. Non-proprietary basic cards-in-force includes all cards
that are issued and outstanding under network partnership agreements.
(C) This calculation is designed to approximate merchant pricing. It
represents the percentage of billed business (both proprietary and Global
Network Services) retained by the Company from merchants it acquires, prior to
payments to third parties unrelated to merchant acceptance.
(D) Average basic cardmember spending and average fee per card are computed
from proprietary card activities only. Average fee per card is computed based
on net card fees, including the amortization of deferred direct acquisition
costs, plus card fees included in interest and fees on loans (including
related amortization of deferred direct acquisition costs), divided by average
worldwide proprietary cards-in-force. The card fees related to cardmember
loans included in interest and fees on loans were $47 million for the quarter
ended September 30, 2009, $45 million for the quarter ended June 30, 2009, $40
million for the quarter ended March 31, 2009, $41 million for the quarter
ended December 31, 2008, and $35 million for the quarter ended September 30,
2008, respectively. The adjusted average fee per card is computed in the same
manner, but excludes amortization of deferred direct acquisition costs (a
portion of which is charge card related and included in net card fees and a
portion of which is lending related and included in interest and fees on
loans). The amount of amortization excluded for these periods was $57 million
for the quarter ended September 30, 2009, $62 million for the quarter ended
June 30, 2009, $70 million for the quarter ended March 31, 2009, $76 million
for the quarter ended December 31, 2008, and $84 million for the quarter ended
September 30, 2008, respectively. The Company presents adjusted average fee
per card because management believes that this metric presents a useful
indicator of card fee pricing across a range of its proprietary card products.
-10-
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION (CONTINUED)
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Worldwide cardmember receivables:
Total receivables $ 32.1 $ 31.4 $ 30.3 $ 33.0 $ 37.6
Loss reserves (millions):
Beginning balance $ 714 $ 810 $ 810 $ 1,134 $ 1,146
Provision 143 237 336 426 351
Net write-offs (A) (265) (340) (332) (669) (333)
Other 7 7 (4) (81) (30)
------------- ------------- ------------- ------------- -------------
Ending balance $ 599 $ 714 $ 810 $ 810 $ 1,134
============= ============= ============= ============= =============
% of receivables 1.9% 2.3% 2.7% 2.5% 3.0%
Net write-off rate - USCS (A) 3.2% 5.2% 4.9% 3.5% 3.4%
30 days past due as a % of total - USCS 2.2% 2.6% 3.7% 3.7% 3.3%
Net loss ratio as a % of charge volume - ICS 0.37% 0.36% 0.35% 0.30% 0.25%
90 days past due as a % of total - ICS 2.5% 3.0% 3.3% 3.1% 2.7%
Net loss ratio as a % of charge volume - GCS 0.23% 0.22% 0.17% 0.14% 0.15%
90 days past due as a % of total - GCS 1.5% 1.9% 2.4% 2.7% 1.8%
Worldwide cardmember lending - owned basis (B):
Total loans $ 31.5 $ 32.5 $ 36.7 $ 42.2 $ 45.7
30 days past due loans as a % of total 4.0% 4.3% 4.9% 4.4% 3.7%
Loss reserves (millions):
Beginning balance $ 3,219 $ 3,013 $ 2,570 $ 2,640 $ 2,594
Provision 973 1,291 1,401 897 927
Net write-offs - principal (731) (847) (782) (702) (697)
Write-offs - interest and fees (90) (131) (155) (143) (161)
Other (C) (12) (107) (21) (122) (23)
------------- ------------- ------------- ------------- -------------
Ending balance $ 3,359 $ 3,219 $ 3,013 $ 2,570 $ 2,640
============= ============= ============= ============= =============
Ending Reserves - principal $ 3,246 $ 3,035 $ 2,806 $ 2,379 $ 2,426
Ending Reserves - interest and fees $ 113 $ 184 $ 207 $ 191 $ 214
% of loans 10.7% 9.9% 8.2% 6.1% 5.8%
% of past due 264% 230% 168% 137% 154%
Average loans $ 32.3 $ 35.2 $ 39.0 $ 43.0 $ 47.7
Net write-off rate 9.1% 9.6% 8.0% 6.5% 5.8%
Net interest yield on cardmember loans (D) 9.7% 9.2% 10.5% 8.6% 8.9%
Worldwide cardmember lending - managed basis (E):
Total loans $ 60.7 $ 62.9 $ 65.0 $ 72.0 $ 75.5
30 days past due loans as a % of total 4.0% 4.3% 5.0% 4.6% 3.8%
Net write-offs - principal (millions) $ 1,327 $ 1,541 $ 1,392 $ 1,181 $ 1,090
Average loans $ 61.8 $ 63.9 $ 67.9 $ 72.8 $ 76.1
Net write-off rate 8.6% 9.7% 8.2% 6.5% 5.7%
Net interest yield on cardmember loans (D) 10.0% 9.9% 10.9% 8.9% 9.2%
(A) In the fourth quarter of 2008, the Company revised the time period in
which past due cardmember receivables in U.S. Card Services are written off to
180 days past due, consistent with applicable regulatory guidance. Previously,
receivables were written off when 360 days past due. The net write-offs for
the fourth quarter of 2008 include write-offs of $341 million resulting from
this write-off methodology change, which is not reflected in the net write-off
rate for U.S. Card Services. Including the $341 million in write-offs, the net
write-off rate was 11.0 percent for the fourth quarter of 2008.
(B) "Owned," a GAAP basis measurement, reflects only cardmember loans included
in the Company's Consolidated Balance Sheets.
(C) This amount primarily includes reserves of $25 million for the quarter
ended September 30, 2009 and $144 million for the quarter ended June 30, 2009
that were removed in connection with securitizations during the period. The
offset is in the allocated cost of the associated retained subordinated
securities. This amount also includes foreign currency translation
adjustments. Prior periods included foreign currency translation and other
adjustments primarily related to the reclassification of waived fee reserves
to a contra-cardmember receivable.
(D) See Appendix III for discussion of net interest yield on cardmember loans.
(E) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. The difference between the "owned basis" (GAAP)
information and "managed basis" information is attributable to the effects of
securitization activities. Refer to the information set forth under U.S. Card
Services Selected Financial Information for further discussion of the managed
basis presentation.
-11-
(Preliminary)
U.S. CARD SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Revenues
Discount revenue, net card fees and other $ 2,267 $ 2,597 (13)%
Securitization income, net 71 200 (65)
Interest income 772 1,190 (35)
Interest expense 207 528 (61)
---------- ----------
Net interest income 565 662 (15)
---------- ----------
Total revenues net of interest expense 2,903 3,459 (16)
---------- ----------
Provisions for losses 850 941 (10)
---------- ----------
Total revenues net of interest expense after provisions for losses 2,053 2,518 (18)
---------- ----------
Expenses
Marketing, promotion, rewards and cardmember services 1,050 1,245 (16)
Salaries and employee benefits and other operating expenses 864 909 (5)
---------- ----------
Total 1,914 2,154 (11)
---------- ----------
Pretax segment income 139 364 (62)
Income tax provision 30 120 (75)
---------- ----------
Segment income $ 109 $ 244 (55)
========== ==========
# - Denotes a variance of more than 100%.
-12-
(Preliminary)
U.S. CARD SERVICES
SELECTED FINANCIAL INFORMATION
MANAGED BASIS PRESENTATION
(Millions)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
INCOME STATEMENT DATA
Discount revenue, net card fees and other:
Reported for the period (GAAP) $ 2,267 $ 2,597 (13)%
Securitization adjustments 82 122 (33)
---------- ----------
Managed discount revenue, net card fees and other $ 2,349 $ 2,719 (14)
---------- ----------
Interest income:
Reported for the period (GAAP) $ 772 $ 1,190 (35)
Securitization adjustments 714 883 (19)
---------- ----------
Managed interest income $ 1,486 $ 2,073 (28)
---------- ----------
Securitization income, net:
Reported for the period (GAAP) $ 71 $ 200 (65)
Securitization adjustments (71) (200) (65)
---------- ----------
Managed securitization income, net $ - $ - -
---------- ----------
Interest expense:
Reported for the period (GAAP) $ 207 $ 528 (61)
Securitization adjustments 58 196 (70)
---------- ----------
Managed interest expense $ 265 $ 724 (63)
---------- ----------
Provisions for losses:
Reported for the period (GAAP) $ 850 $ 941 (10)
Securitization adjustments 529 629 (16)
---------- ----------
Managed provisions for losses $ 1,379 $ 1,570 (12)
---------- ----------
# - Denotes a variance of more than 100%.
For U.S. Card Services, the managed basis presentation assumes that there have
been no off-balance sheet securitization transactions, i.e., all securitized
cardmember loans and related income effects are reflected as if they were in
the Company's balance sheets and income statements, respectively. For the
managed basis presentation, revenue and expenses related to securitized
cardmember loans are reflected in other commissions and fees (included above
in discount revenue, net card fees and other), interest income, interest
expense, and provisions for losses. On a managed basis, there is no
securitization income, net as the managed basis presentation assumes no
securitization transactions have occurred.
The Company presents U.S. Card Services information on a managed basis because
that is the way the Company's management views and manages the business.
Management believes that a full picture of trends in the Company's cardmember
lending business can only be derived by evaluating the performance of both
securitized and non-securitized cardmember loans. Management also believes
that use of a managed basis presentation presents a more comprehensive
portrayal of the key dynamics of the cardmember lending business. Irrespective
of the on and off-balance sheet funding mix, it is important for management
and investors to see metrics for the entire cardmember lending portfolio
because they are more representative of the economics of the aggregate
cardmember relationships and ongoing business performance and trends over
time. It is also important for investors to see the overall growth of
cardmember loans and related revenue in order to evaluate market share. These
metrics are significant in evaluating the Company's performance and can only
be properly assessed when all non-securitized and securitized cardmember loans
are viewed together on a managed basis. The Company does not currently
securitize international loans.
-13-
(Preliminary)
U.S. CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Card billed business $ 85.2 $ 97.9 (13)%
Total cards-in-force (millions) 39.8 44.7 (11)%
Basic cards-in-force (millions) 29.7 33.4 (11)%
Average basic cardmember spending (dollars) $ 2,851 $ 2,950 (3)%
U.S. Consumer Travel:
Travel sales (millions) $ 629 $ 771 (18)%
Travel commissions and fees/sales 8.4% 8.2%
Total segment assets $ 53.2 $ 80.5 (34)%
Segment capital (millions) (A) $ 5,837 $ 5,069 15%
Return on average segment capital (B) -1.0% 17.0%
Return on average tangible segment capital (B) -1.1% 17.7%
Cardmember receivables:
Total receivables $ 15.9 $ 18.8 (15)%
30 days past due receivables as a % of total 2.2% 3.3%
Average receivables $ 15.8 $ 19.3 (18)%
Net write-off rate 3.2% 3.4%
Cardmember lending - owned basis (C):
Total loans $ 22.7 $ 34.6 (34)%
30 days past due loans as a % of total (F) 4.2% 3.9%
Average loans $ 23.4 $ 36.3 (36)%
Net write-off rate 9.8% 6.1%
Net interest yield on cardmember loans (D) 8.8% 8.6%
Cardmember lending - managed basis (E):
Total loans $ 51.9 $ 64.3 (19)%
30 days past due loans as a % of total 4.1% 3.9%
Average loans $ 52.9 $ 64.6 (18)%
Net write-off rate 8.9% 5.9%
Net interest yield on cardmember loans (D) 9.6% 9.1%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
(C) "Owned," a GAAP basis measurement, reflects only cardmember loans included
in the Company's Consolidated Balance Sheets.
(D) See Appendix IV for discussion of net interest yield on cardmember loans.
(E) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. The difference between the "owned basis" (GAAP)
information and "managed basis" information is attributable to the effects of
securitization activities. Refer to the information set forth under U.S. Card
Services Selected Financial Information for further discussion of the managed
basis presentation.
(F) The ratio shown for 30 days past due loans as a % of total loans as of
September 30, 2009 was revised from the ratio of 4.0 percent previously
reported in the Company's Form 8-K filed on October 15, 2009.
-14-
(Preliminary)
U.S. CARD SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Revenues
Discount revenue, net card fees and other $ 2,267 $ 2,273 $ 2,205 $ 2,465 $ 2,597
Securitization income, net 71 (2) 141 199 200
Interest income 772 748 946 1,049 1,190
Interest expense 207 214 218 490 528
------------- ------------- ------------- ------------- -------------
Net interest income 565 534 728 559 662
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense 2,903 2,805 3,074 3,223 3,459
------------- ------------- ------------- ------------- -------------
Provisions for losses 850 1,190 1,383 1,051 941
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense after
provisions for losses 2,053 1,615 1,691 2,172 2,518
------------- ------------- ------------- ------------- -------------
Expenses
Marketing, promotion, rewards and
cardmember services 1,050 1,021 889 1,208 1,245
Salaries and employee benefits and other
operating expenses 864 926 852 915 909
------------- ------------- ------------- ------------- -------------
Total 1,914 1,947 1,741 2,123 2,154
------------- ------------- ------------- ------------- -------------
Pretax segment income (loss) 139 (332) (50) 49 364
Income tax provision (benefit) 30 (132) (25) (15) 120
------------- ------------- ------------- ------------- -------------
Segment income (loss) $ 109 $ (200) $ (25) $ 64 $ 244
============= ============= ============= ============= =============
-15-
(Preliminary)
U.S. CARD SERVICES
SELECTED FINANCIAL INFORMATION
MANAGED BASIS PRESENTATION
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
INCOME STATEMENT DATA
Discount revenue, net card fees and other:
Reported for the period (GAAP) $ 2,267 $ 2,273 $ 2,205 $ 2,465 $ 2,597
Securitization adjustments 82 79 99 110 122
------------- ------------- ------------- ------------- -------------
Managed discount revenue, net card fees and other $ 2,349 $ 2,352 $ 2,304 $ 2,575 $ 2,719
------------- ------------- ------------- ------------- -------------
Interest income:
Reported for the period (GAAP) $ 772 $ 748 $ 946 $ 1,049 $ 1,190
Securitization adjustments 714 771 886 902 883
------------- ------------- ------------- ------------- -------------
Managed interest income $ 1,486 $ 1,519 $ 1,832 $ 1,951 $ 2,073
------------- ------------- ------------- ------------- -------------
Securitization income, net:
Reported for the period (GAAP) $ 71 $ (2) $ 141 $ 199 $ 200
Securitization adjustments (71) 2 (141) (199) (200)
------------- ------------- ------------- ------------- -------------
Managed securitization income, net $ - $ - $ - $ - $ -
------------- ------------- ------------- ------------- -------------
Interest expense:
Reported for the period (GAAP) $ 207 $ 214 $ 218 $ 490 $ 528
Securitization adjustments 58 48 83 230 196
------------- ------------- ------------- ------------- -------------
Managed interest expense $ 265 $ 262 $ 301 $ 720 $ 724
------------- ------------- ------------- ------------- -------------
Provisions for losses:
Reported for the period (GAAP) $ 850 $ 1,190 $ 1,383 $ 1,051 $ 941
Securitization adjustments 529 836 636 577 629
------------- ------------- ------------- ------------- -------------
Managed provisions for losses $ 1,379 $ 2,026 $ 2,019 $ 1,628 $ 1,570
------------- ------------- ------------- ------------- -------------
See page 21 for discussion of managed basis presentation.
-16-
(Preliminary)
U.S. CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Card billed business $ 85.2 $ 84.1 $ 78.0 $ 92.0 $ 97.9
Total cards-in-force (millions) 39.8 40.2 43.4 44.2 44.7
Basic cards-in-force (millions) 29.7 29.8 32.3 32.9 33.4
Average basic cardmember spending (dollars) $ 2,851 $ 2,667 $ 2,391 $ 2,758 $ 2,950
U.S. Consumer Travel:
Travel sales $ 0.6 $ 0.7 $ 0.6 $ 0.7 $ 0.8
Travel commissions and fees/sales 8.4% 8.5% 8.1% 7.8% 8.2%
Total segment assets $ 53.2 $ 54.1 $ 55.6 $ 77.8 $ 80.5
Segment capital (A) $ 5.8 $ 5.9 $ 4.8 $ 4.8 $ 5.1
Return on average segment capital (B) -1.0% 1.6% 6.3% 18.0% 17.0%
Return on average tangible segment capital (B) -1.1% 1.7% 6.7% 19.0% 17.7%
Cardmember receivables:
Total receivables $ 15.9 $ 15.9 $ 15.6 $ 17.8 $ 18.8
30 days past due receivables as a % of total 2.2% 2.6% 3.7% 3.7% 3.3%
Average receivables $ 15.8 $ 15.7 $ 16.1 $ 18.1 $ 19.3
Net write-off rate (C) 3.2% 5.2% 4.9% 3.5% 3.4%
Cardmember lending - owned basis (D):
Total loans $ 22.7 $ 23.6 $ 28.2 $ 32.7 $ 34.6
30 days past due loans as a % of total (G) 4.2% 4.4% 5.1% 4.7% 3.9%
Average loans $ 23.4 $ 26.5 $ 30.2 $ 33.2 $ 36.3
Net write-off rate 9.8% 10.3% 8.5% 7.0% 6.1%
Net interest yield on cardmember loans (E) 8.8% 8.3% 10.2% 8.2% 8.6%
Cardmember lending - managed basis (F):
Total loans $ 51.9 $ 54.0 $ 56.5 $ 62.4 $ 64.3
30 days past due loans as a % of total 4.1% 4.4% 5.1% 4.7% 3.9%
Average loans $ 52.9 $ 55.1 $ 59.1 $ 63.0 $ 64.6
Net write-off rate 8.9% 10.0% 8.5% 6.7% 5.9%
Net interest yield on cardmember loans (E) 9.6% 9.5% 10.8% 8.7% 9.1%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
(C) In the fourth quarter of 2008, the Company revised the time period in
which past due cardmember receivables in U.S. Card Services are written off to
180 days past due, consistent with applicable regulatory guidance. Previously,
receivables were written off when 360 days past due. The net write-offs for
the fourth quarter of 2008 include write-offs of $341 million resulting from
this write-off methodology change, which is not reflected in the net write-off
rate for U.S. Card Services. Including the $341 million in write-offs, the net
write-off rate was 11.0 percent for the fourth quarter of 2008.
(D) "Owned," a GAAP basis measurement, reflects only cardmember loans included
in the Company's Consolidated Balance Sheets.
(E) See Appendix IV for discussion of net interest yield on cardmember loans.
(F) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. The difference between the "owned basis" (GAAP)
information and "managed basis" information is attributable to the effects of
securitization activities. Refer to the information set forth under U.S. Card
Services Selected Financial Information for further discussion of the managed
basis presentation.
(G) The ratio shown for 30 days past due loans as a % of total loans as of
September 30, 2009 was revised from the ratio of 4.0 percent previously
reported in the Company's Form 8-K filed on October 15, 2009.
-17-
(Preliminary)
INTERNATIONAL CARD SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Revenues
Discount revenue, net card fees and other $ 866 $ 965 (10)%
---------- ----------
Interest income 392 523 (25)
Interest expense 110 256 (57)
---------- ----------
Net interest income 282 267 6
---------- ----------
Total revenues net of interest expense 1,148 1,232 (7)
---------- ----------
Provisions for losses 250 316 (21)
---------- ----------
Total revenues net of interest expense after provisions for losses 898 916 (2)
---------- ----------
Expenses
Marketing, promotion, rewards and cardmember services 302 388 (22)
Salaries and employee benefits and other operating expenses 469 527 (11)
---------- ----------
Total 771 915 (16)
---------- ----------
Pretax segment income 127 1 #
Income tax benefit - (66) #
---------- ----------
Segment income $ 127 $ 67 90
========== ==========
# - Denotes variance of more than 100%.
-18-
(Preliminary)
INTERNATIONAL CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Card billed business $ 24.2 $ 27.5 (12)%
Total cards-in-force (millions) 15.2 16.4 (7)%
Basic cards-in-force (millions) 10.6 11.5 (8)%
Average basic cardmember spending (dollars) $ 2,273 $ 2,393 (5)%
International Consumer Travel:
Travel sales (millions) $ 258 $ 334 (23)%
Travel commissions and fees/sales 8.5% 8.4%
Total segment assets $ 19.3 $ 22.6 (15)%
Segment capital (millions) (A) $ 2,265 $ 2,257 0%
Return on average segment capital (B) 12.4% 11.8%
Return on average tangible segment capital (B) 16.7% 15.9%
Cardmember receivables:
Total receivables $ 5.6 $ 6.1 (8)%
90 days past due as a % of total 2.5% 2.7%
Net loss ratio as a % of charge volume 0.37% 0.25%
Cardmember lending:
Total loans $ 8.8 $ 11.1 (21)%
30 days past due loans as a % of total 3.7% 3.3%
Average loans $ 8.9 $ 11.4 (22)%
Net write-off rate 7.1% 5.1%
Net interest yield on cardmember loans (C) 12.3% 9.7%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
(C) See Appendix IV for discussion of net interest yield on cardmember loans.
-19-
(Preliminary)
INTERNATIONAL CARD SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Revenues
Discount revenue, net card fees and other $ 866 $ 823 $ 772 $ 864 $ 965
------------- ------------- ------------- ------------- -------------
Interest income 392 399 400 427 523
Interest expense 110 131 149 193 256
------------- ------------- ------------- ------------- -------------
Net interest income 282 268 251 234 267
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense 1,148 1,091 1,023 1,098 1,232
------------- ------------- ------------- ------------- -------------
Provisions for losses 250 302 335 243 316
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense after
provisions for losses 898 789 688 855 916
------------- ------------- ------------- ------------- -------------
Expenses
Marketing, promotion, rewards
and cardmember services 302 287 258 303 388
Salaries and employee benefits
and other operating expenses 469 453 422 590 527
------------- ------------- ------------- ------------- -------------
Total 771 740 680 893 915
------------- ------------- ------------- ------------- -------------
Pretax segment income (loss) 127 49 8 (38) 1
Income tax benefit - (15) (31) (74) (66)
------------- ------------- ------------- ------------- -------------
Segment income $ 127 $ 64 $ 39 $ 36 $ 67
============= ============= ============= ============= =============
-20-
(Preliminary)
INTERNATIONAL CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Card billed business $ 24.2 $ 22.7 $ 20.5 $ 24.2 $ 27.5
Total cards-in-force (millions) 15.2 15.5 15.8 16.3 16.4
Basic cards-in-force (millions) 10.6 10.8 11.0 11.4 11.5
Average basic cardmember spending (dollars) $ 2,273 $ 2,083 $ 1,823 $ 2,109 $ 2,393
International Consumer Travel:
Travel sales $ 0.3 $ 0.2 $ 0.2 $ 0.3 $ 0.3
Travel commissions and fees/sales 8.5% 8.7% 8.3% 7.5% 8.4%
Total segment assets $ 19.3 $ 19.3 $ 17.7 $ 20.4 $ 22.6
Segment capital (A) $ 2.3 $ 2.2 $ 2.0 $ 2.0 $ 2.3
Return on average segment capital (B) 12.4% 9.7% 12.3% 16.7% 11.8%
Return on average tangible segment capital (B) 16.7% 13.1% 16.6% 22.5% 15.9%
Cardmember receivables:
Total receivables $ 5.6 $ 5.4 $ 5.0 $ 5.6 $ 6.1
90 days past due as a % of total 2.5% 3.0% 3.3% 3.1% 2.7%
Net loss ratio as a % of charge volume 0.37% 0.36% 0.35% 0.30% 0.25%
Cardmember lending:
Total loans $ 8.8 $ 8.9 $ 8.5 $ 9.5 $ 11.1
30 days past due loans as a % of total 3.7% 4.0% 4.2% 3.6% 3.3%
Average loans $ 8.9 $ 8.7 $ 8.8 $ 9.8 $ 11.4
Net write-off rate 7.1% 7.5% 6.4% 5.1% 5.1%
Net interest yield on cardmember loans (C) 12.3% 12.2% 11.7% 9.8% 9.7%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
(C) See Appendix IV for discussion of net interest yield on cardmember loans.
-21-
(Preliminary)
GLOBAL COMMERCIAL SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Revenues
Discount revenue, net card fees and other $ 1,017 $ 1,291 (21)%
---------- ----------
Interest income 8 43 (81)
Interest expense 28 134 (79)
---------- ----------
Net interest income (20) (91) (78)
---------- ----------
Total revenues net of interest expense 997 1,200 (17)
---------- ----------
Provisions for losses 40 60 (33)
---------- ----------
Total revenues net of interest expense after provisions for losses 957 1,140 (16)
---------- ----------
Expenses
Marketing, promotion, rewards and cardmember services 81 113 (28)
Salaries and employee benefits and other operating expenses 706 836 (16)
---------- ----------
Total 787 949 (17)
---------- ----------
Pretax segment income 170 191 (11)
Income tax provision 54 57 (5)
---------- ----------
Segment income $ 116 $ 134 (13)
========== ==========
# - Denotes variance of more than 100%.
-22-
(Preliminary)
GLOBAL COMMERCIAL SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Card billed business $ 27.9 $ 32.3 (14)%
Total cards-in-force (millions) 7.1 7.0 1%
Basic cards-in-force (millions) 7.1 7.0 1%
Average basic cardmember spending (dollars) $ 3,907 $ 4,611 (15)%
Global Corporate Travel:
Travel sales $ 3.5 $ 5.1 (31)%
Travel commissions and fees/sales 8.8% 8.0%
Total segment assets $ 22.7 $ 23.6 (4)%
Segment capital (millions) (A) $ 3,424 $ 3,564 (4)%
Return on average segment capital (B) 7.7% 21.2%
Return on average tangible segment capital (B) 17.4% 43.9%
Cardmember receivables:
Total receivables $ 10.4 $ 12.5 (17)%
90 days past due as a % of total 1.5% 1.8%
Net loss ratio as a % of charge volume 0.23% 0.15%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
-23-
(Preliminary)
GLOBAL COMMERCIAL SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Revenues
Discount revenue, net card fees and other $ 1,017 $ 1,035 $ 981 $ 1,150 $ 1,291
------------- ------------- ------------- ------------- -------------
Interest income 8 21 21 30 43
Interest expense 28 53 58 136 134
------------- ------------- ------------- ------------- -------------
Net interest income (20) (32) (37) (106) (91)
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense 997 1,003 944 1,044 1,200
------------- ------------- ------------- ------------- -------------
Provisions for losses 40 53 47 69 60
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense after
provisions for losses 957 950 897 975 1,140
------------- ------------- ------------- ------------- -------------
Expenses
Marketing, promotion, rewards
and cardmember services 81 74 79 79 113
Salaries and employee benefits
and other operating expenses 706 777 690 938 836
------------- ------------- ------------- ------------- -------------
Total 787 851 769 1,017 949
------------- ------------- ------------- ------------- -------------
Pretax segment income (loss) 170 99 128 (42) 191
Income tax provision (benefit) 54 28 42 (35) 57
------------- ------------- ------------- ------------- -------------
Segment income (loss) $ 116 $ 71 $ 86 $ (7) $ 134
============= ============= ============= ============= =============
-24-
(Preliminary)
GLOBAL COMMERCIAL SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Card billed business $ 27.9 $ 27.2 $ 25.1 $ 28.7 $ 32.3
Total cards-in-force (millions) 7.1 7.2 7.3 7.1 7.0
Basic cards-in-force (millions) 7.1 7.2 7.3 7.1 7.0
Average basic cardmember spending (dollars) $ 3,907 $ 3,746 $ 3,517 $ 4,070 $ 4,611
Global Corporate Travel:
Travel sales $ 3.5 $ 3.6 $ 3.4 $ 4.3 $ 5.1
Travel commissions and fees/sales 8.8% 9.1% 8.6% 8.4% 8.0%
Total segment assets $ 22.7 $ 21.1 $ 19.0 $ 25.1 $ 23.6
Segment capital (A) $ 3.4 $ 3.3 $ 3.4 $ 3.6 $ 3.6
Return on average segment capital (B) 7.7% 8.3% 12.8% 15.8% 21.2%
Return on average tangible segment capital (B) 17.4% 18.9% 29.2% 34.3% 43.9%
Cardmember receivables:
Total receivables $ 10.4 $ 9.9 $ 9.6 $ 9.4 $ 12.5
90 days past due as a % of total 1.5% 1.9% 2.4% 2.7% 1.8%
Net loss ratio as a % of charge volume 0.23% 0.22% 0.17% 0.14% 0.15%
(A) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(B) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
-25-
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Revenues
Discount revenue, fees and other $ 945 $ 1,015 (7)%
---------- ----------
Interest income 1 2 (50)
Interest expense (17) (54) (69)
---------- ----------
Net interest income 18 56 (68)
---------- ----------
Total revenues net of interest expense 963 1,071 (10)
---------- ----------
Provisions for losses 33 34 (3)
---------- ----------
Total revenues net of interest expense after provision for losses 930 1,037 (10)
---------- ----------
Expenses
Marketing and promotion 157 150 5
Salaries and employee benefits and other operating expenses 415 490 (15)
---------- ----------
Total 572 640 (11)
---------- ----------
Pretax segment income 358 397 (10)
Income tax provision 118 139 (15)
---------- ----------
Segment income $ 240 $ 258 (7)
========== ==========
-26-
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
September 30,
----------------------- Percentage
2009 2008 Inc/(Dec)
---------- ---------- ----------
Global Card billed business (A) $ 156.6 $ 175.5 (11)%
Global Network & Merchant Services:
Total segment assets $ 7.7 $ 8.0 (4)%
Segment capital (millions) (B) $ 1,803 $ 1,437 25%
Return on average segment capital (C) 56.9% 82.4%
Return on average tangible segment capital (C) 58.1% 84.7%
Global Network Services:
Card billed business $ 18.6 $ 18.2 2%
Total cards-in-force (millions) 26.3 24.0 10%
(A) Global Card billed business includes activities (including cash advances)
related to proprietary cards, cards issued under network partnership
agreements, and certain insurance fees charged on proprietary cards.
(B) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(C) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
-27-
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED INCOME STATEMENT DATA
(Millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Revenues
Discount revenue, fees and other $ 945 $ 888 $ 813 $ 893 $ 1,015
------------- ------------- ------------- ------------- -------------
Interest income 1 1 1 1 2
Interest expense (17) (21) (22) (51) (54)
------------- ------------- ------------- ------------- -------------
Net interest income 18 22 23 52 56
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense 963 910 836 945 1,071
------------- ------------- ------------- ------------- -------------
Provisions for losses 33 33 35 36 34
------------- ------------- ------------- ------------- -------------
Total revenues net of interest expense after
provisions for losses 930 877 801 909 1,037
------------- ------------- ------------- ------------- -------------
Expenses
Marketing and promotion 157 94 64 118 150
Salaries and employee benefits
and other operating expenses 415 423 372 488 490
------------- ------------- ------------- ------------- -------------
Total 572 517 436 606 640
------------- ------------- ------------- ------------- -------------
Pretax segment income 358 360 365 303 397
Income tax provision 118 124 128 88 139
------------- ------------- ------------- ------------- -------------
Segment income $ 240 $ 236 $ 237 $ 215 $ 258
============= ============= ============= ============= =============
-28-
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Global Card billed business (A) $ 156.6 $ 151.4 $ 139.2 $ 160.5 $ 175.5
Global Network & Merchant Services:
Total segment assets $ 7.7 $ 8.1 $ 6.6 $ 7.0 $ 8.0
Segment capital (B) $ 1.8 $ 1.8 $ 1.7 $ 1.5 $ 1.4
Return on average segment capital (C) 56.9% 61.2% 70.6% 75.4% 82.4%
Return on average tangible segment capital (C) 58.1% 62.6% 72.4% 77.4% 84.7%
Global Network Services:
Card billed business $ 18.6 $ 17.0 $ 14.8 $ 16.0 $ 18.2
Total cards-in-force (millions) 26.3 25.6 25.1 24.8 24.0
(A) Global Card billed business includes activities (including cash advances)
related to proprietary cards, cards issued under network partnership
agreements, and certain insurance fees charged on proprietary cards.
(B) Segment capital represents capital allocated to a segment based upon
specific business operational needs, risk measures, and regulatory capital
requirements.
(C) Refer to Appendix II for components of return on average segment capital
and return on average tangible segment capital.
-29-
(Preliminary)
AMERICAN EXPRESS COMPANY
COMPONENTS OF RETURN ON AVERAGE EQUITY (ROE), RETURN ON AVERAGE COMMON EQUITY
(ROCE), AND RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROTCE)
APPENDIX I
(Millions)
For the Twelve Months Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
ROE
Net income $ 1,654 $ 1,829 $ 2,145 $ 2,699 $ 3,290
Average shareholders' equity $ 14,151 $ 13,892 $ 13,147 $ 12,127 $ 11,833
Return on average equity (A) 11.7% 13.2% 16.3% 22.3% 27.8%
RECONCILIATION OF ROCE AND ROTCE
Net income $ 1,654 $ 1,829 $ 2,145 $ 2,699 $ 3,290
Preferred shares dividends and
related accretion $ 306 $ 306 $ 72 $ - $ -
Earnings allocated to participating share
awards and other $ 14 $ 11 $ 13 $ 16 $ 19
------------- ------------- ------------- ------------- -------------
Net income attributable to common
shareholders $ 1,334 $ 1,512 $ 2,060 $ 2,683 $ 3,271
------------- ------------- ------------- ------------- -------------
Average shareholders' equity $ 14,151 $ 13,892 $ 13,147 $ 12,127 $ 11,833
Average preferred shares $ 1,303 $ 1,303 $ 782
------------- ------------- ------------- ------------- -------------
Average common shareholders' equity $ 12,848 $ 12,589 $ 12,365 $ 12,127 $ 11,833
------------- ------------- ------------- ------------- -------------
Average goodwill and other intangibles 2,944 2,886 2,830 2,533 2,264
------------- ------------- ------------- ------------- -------------
Average tangible common shareholders' equity $ 9,904 $ 9,703 $ 9,535 $ 9,594 $ 9,569
------------- ------------- ------------- ------------- -------------
Return on average common equity (A) 10.4% 12.0% 16.7% 22.1% 27.6%
Return on average tangible common equity (A) 13.5% 15.6% 21.6% 28.0% 34.2%
(A) Return on average equity and return on average common equity are
calculated by dividing one year period net income/net income attributable to
common shareholders by one year average total shareholders' equity/average
common shareholders' equity, respectively. Return on average tangible common
equity is computed in the same manner as return on average common equity
except the computation of average tangible common shareholders' equity
excludes average goodwill and other intangibles. The Company believes that
return on average tangible common equity is a useful measure of the
profitability of its business growth.
-30-
(Preliminary)
AMERICAN EXPRESS COMPANY
COMPONENTS OF RETURN ON AVERAGE SEGMENT CAPITAL (ROSC) AND RETURN ON AVERAGE
TANGIBLE SEGMENT CAPITAL (ROTSC)
APPENDIX II
(Millions)
For the Twelve Months Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
U.S. CARD SERVICES
Segment (loss) income $ (52) $ 83 $ 304 $ 852 $ 795
Average segment capital 5,280 5,083 4,814 4,736 4,672
Average goodwill and other intangibles 383 338 294 243 188
------------- ------------- ------------- ------------- -------------
Average tangible segment capital $ 4,897 $ 4,745 $ 4,520 $ 4,493 $ 4,484
------------- ------------- ------------- ------------- -------------
Return on average segment capital (A) -1.0% 1.6% 6.3% 18.0% 17.0%
Return on average tangible segment capital (A) -1.1% 1.7% 6.7% 19.0% 17.7%
INTERNATIONAL CARD SERVICES
Segment income $ 266 $ 206 $ 257 $ 351 $ 247
Average segment capital 2,141 2,123 2,096 2,107 2,102
Average goodwill and other intangibles 551 546 544 544 544
------------- ------------- ------------- ------------- -------------
Average tangible segment capital $ 1,590 $ 1,577 $ 1,552 $ 1,563 $ 1,558
------------- ------------- ------------- ------------- -------------
Return on average segment capital (A) 12.4% 9.7% 12.3% 16.7% 11.8%
Return on average tangible segment capital (A) 16.7% 13.1% 16.6% 22.5% 15.9%
GLOBAL COMMERCIAL SERVICES
Segment income $ 266 $ 284 $ 440 $ 505 $ 622
Average segment capital 3,464 3,435 3,437 3,197 2,933
Average goodwill and other intangibles 1,938 1,933 1,930 1,724 1,515
------------- ------------- ------------- ------------- -------------
Average tangible segment capital $ 1,526 $ 1,502 $ 1,507 $ 1,473 $ 1,418
------------- ------------- ------------- ------------- -------------
Return on average segment capital (A) 7.7% 8.3% 12.8% 15.8% 21.2%
Return on average tangible segment capital (A) 17.4% 18.9% 29.2% 34.3% 43.9%
GLOBAL NETWORK & MERCHANT SERVICES
Segment income $ 928 $ 946 $ 1,009 $ 995 $ 1,034
Average segment capital 1,632 1,547 1,430 1,320 1,255
Average goodwill and other intangibles 35 35 36 35 34
------------- ------------- ------------- ------------- -------------
Average tangible segment capital $ 1,597 $ 1,512 $ 1,394 $ 1,285 $ 1,221
------------- ------------- ------------- ------------- -------------
Return on average segment capital (A) 56.9% 61.2% 70.6% 75.4% 82.4%
Return on average tangible segment capital (A) 58.1% 62.6% 72.4% 77.4% 84.7%
(A) Return on average segment capital is calculated by dividing one year
period segment income by one year average segment capital. Return on average
tangible segment capital is computed in the same manner as return on average
segment capital except the computation of average tangible segment capital
excludes average goodwill and other intangibles. The Company believes that
return on average tangible segment capital is a useful measure of the
profitability of its business growth.
-31-
(Preliminary)
AMERICAN EXPRESS COMPANY
NET INTEREST YIELD ON CARDMEMBER LOANS
APPENDIX III
(millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
Owned Basis:
Net interest income $ 754 $ 741 $ 919 $ 771 $ 950
Average loans (billions) $ 32.3 $ 35.2 $ 39.0 $ 43.0 $ 47.7
Adjusted net interest income (A) $ 797 $ 814 $ 1,017 $ 929 $ 1,068
Adjusted average loans (billions) (B) $ 32.4 $ 35.4 $ 39.1 $ 43.1 $ 47.8
Net interest yield on cardmember loans (C) 9.7% 9.2% 10.5% 8.6% 8.9%
Managed Basis (D):
Net interest income (E) $ 1,410 $ 1,464 $ 1,722 $ 1,443 $ 1,637
Average loans (billions) $ 61.8 $ 63.9 $ 67.9 $ 72.8 $ 76.1
Adjusted net interest income (F) $ 1,554 $ 1,576 $ 1,835 $ 1,622 $ 1,756
Adjusted average loans (billions) (G) $ 62.0 $ 64.0 $ 68.0 $ 72.9 $ 76.2
Net interest yield on cardmember loans (C) 10.0% 9.9% 10.9% 8.9% 9.2%
(A) Represents net interest income allocable to the Company's cardmember
lending portfolio, which excludes the impact of card fees on loans and balance
transfer fees attributable to the Company's cardmember lending portfolio.
(B) Represents average loans excluding the impact of deferred card fees net of
deferred direct acquisition costs for cardmember loans.
(C) Net interest yield on cardmember loans represents the net spread earned on
cardmember loans. Net interest yield on cardmember loans (both on an owned and
managed basis) is computed by dividing adjusted net interest income by
adjusted average loans, computed on an annualized basis. The calculation of
net interest yield on cardmember loans (both on an owned and managed basis)
includes interest and fees that are deemed uncollectible. For the owned basis
presentation, reserves and net write-offs related to uncollectible interest
and fees are recorded through provisions for losses - cardmember lending, and
for the managed basis presentation, reserves and net write-offs related to
uncollectible interest and fees are included as a reduction to securitization
income, net; therefore, such reserves and net write-offs are not included in
the net interest yield calculation. The Company believes net interest yield on
cardmember loans (on both an owned and managed basis) is useful to investors
because it provides a measure of profitability of the Company's cardmember
lending portfolio. Owned net interest yield for the quarters ended June 30,
2009, March 31, 2009, and December 31, 2008 has been revised for a correction
in the calculation methodology.
(D) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. Refer to the information set forth under U.S.
Card Services Selected Financial Information for further discussion of the
managed basis presentation.
(E) Includes the GAAP to managed basis securitization adjustments to interest
income and interest expense as set forth under U.S. Card Services Selected
Financial Information managed basis presentation.
(F) Represents net interest income allocable to the Company's managed
cardmember lending portfolio, which excludes the impact of card fees on
managed loans and balance transfer fees attributable to the Company's managed
cardmember lending portfolio.
(G) Represents average managed loans excluding the impact of deferred card
fees net of deferred direct acquisition costs for managed cardmember loans.
-32-
(Preliminary)
U. S. CARD SERVICES AND INTERNATIONAL CARD SERVICES
NET INTEREST YIELD ON CARDMEMBER LOANS
APPENDIX IV
(millions)
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
------------- ------------- ------------- ------------- -------------
USCS Owned Basis:
Net interest income $ 565 $ 534 $ 728 $ 559 $ 662
Average loans (billions) $ 23.4 $ 26.5 $ 30.2 $ 33.2 $ 36.3
Adjusted net interest income (A) $ 521 $ 548 $ 763 $ 687 $ 787
Adjusted average loans (billions) (B) $ 23.5 $ 26.6 $ 30.3 $ 33.3 $ 36.3
Net interest yield on cardmember loans (C) 8.8% 8.3% 10.2% 8.2% 8.6%
USCS Managed Basis (D):
Net interest income (E) $ 1,221 $ 1,257 $ 1,531 $ 1,231 $ 1,349
Average loans (billions) $ 52.9 $ 55.1 $ 59.1 $ 63.0 $ 64.6
Adjusted net interest income (F) $ 1,278 $ 1,311 $ 1,581 $ 1,380 $ 1,475
Adjusted average loans (billions) (G) $ 53.0 $ 55.2 $ 59.2 $ 63.1 $ 64.7
Net interest yield on cardmember loans (C) 9.6% 9.5% 10.8% 8.7% 9.1%
ICS:
Net interest income $ 282 $ 268 $ 251 $ 234 $ 267
Average loans (billions) $ 8.9 $ 8.7 $ 8.8 $ 9.8 $ 11.4
Adjusted net interest income (A) $ 276 $ 265 $ 254 $ 242 $ 281
Adjusted average loans (billions) (B) $ 8.9 $ 8.8 $ 8.8 $ 9.8 $ 11.5
Net interest yield on cardmember loans (C) 12.3% 12.2% 11.7% 9.8% 9.7%
(A) Represents net interest income allocable to the Company's cardmember
lending portfolio, which excludes the impact of card fees on loans and balance
transfer fees attributable to the Company's cardmember lending portfolio.
(B) Represents average loans excluding the impact of deferred card fees net of
deferred direct acquisition costs for cardmember loans.
(C) Net interest yield on cardmember loans represents the net spread earned on
cardmember loans. Net interest yield on cardmember loans (both on an owned and
managed basis) is computed by dividing adjusted net interest income by
adjusted average loans, computed on an annualized basis. The calculation of
net interest yield on cardmember loans (both on an owned and managed basis)
includes interest and fees that are deemed uncollectible. For the owned basis
presentation, reserves and net write-offs related to uncollectible interest
and fees are recorded through provisions for losses - cardmember lending, and
for the managed basis presentation, reserves and net write-offs related to
uncollectible interest and fees are included as a reduction to securitization
income, net; therefore, such reserves and net write-offs are not included in
the net interest yield calculation. The Company believes net interest yield on
cardmember loans (on both an owned and managed basis) is useful to investors
because it provides a measure of profitability of the Company's cardmember
lending portfolio. Owned net interest yield for U.S. Card Services for the
quarters ended June 30, 2009, March 31, 2009, and December 31, 2008 has been
revised for a correction in the calculation methodology.
(D) Includes on-balance sheet cardmember loans and off-balance sheet
securitized cardmember loans. Refer to the information set forth under U.S.
Card Services Selected Financial Information for further discussion of the
managed basis presentation.
(E) Includes the GAAP to managed basis securitization adjustments to interest
income and interest expense as set forth under U.S. Card Services Selected
Financial Information managed basis presentation.
(F) Represents net interest income allocable to the Company's managed
cardmember lending portfolio, which excludes the impact of card fees on
managed loans and balance transfer fees attributable to the Company's managed
cardmember lending portfolio.
(G) Represents average managed loans excluding the impact of deferred card
fees net of deferred direct acquisition costs for managed cardmember loans.
-33
