AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - EXHIBIT 99.2 FINANCIALS

Attached files

file	filename
8-K - 2011 THIRD QUARTER EARNINGS RELEASE - AMERICAN EXPRESS CO	form8k.htm
EX-99.1 - EXHIBIT 99.1 PRESS RELEASE - AMERICAN EXPRESS CO	ex99_1.htm
EX-99.3 - EXHIBIT 99.3 EARNINGS SUPPLEMENT - AMERICAN EXPRESS CO	ex99_3.htm

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. Prior period amounts were revised in the first quarter of 2011 to reflect various changes associated with the Company's reclassification of certain contractual lump sum payments to partners, previously recognized in Other, net, expenses, as either contra Discount revenue or Marketing and promotion expense. Additionally, the tables reflect changes to the Company's segment allocation methodology due to reorganization of certain businesses, such as Enterprise Growth, across its reportable operating segments.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)

	Quarters Ended							Nine Months Ended
	September 30,				Percentage			September 30,				Percentage
	2011		2010		Inc/(Dec)			2011		2010		Inc/(Dec)

Revenues
Non-interest revenues
Discount revenue	$	4,218	$	3,761		12	%	$	12,398	$	10,863		14	%
Net card fees		556		527		6			1,638		1,568		4
Travel commissions and fees		480		483		(1	)		1,457		1,302		12
Other commissions and fees		604		515		17			1,717		1,512		14
Other		534		503		6			1,546		1,414		9
Total non-interest revenues		6,392		5,789		10			18,756		16,659		13
Interest income
Interest and fees on loans		1,653		1,675		(1	)		4,883		5,107		(4	)
Interest and dividends on investment securities		68		103		(34	)		255		345		(26	)
Deposits with banks and other		33		16		#			71		45		58
Total interest income		1,754		1,794		(2	)		5,209		5,497		(5	)
Interest expense
Deposits		127		141		(10	)		395		406		(3	)
Short-term borrowings		5		-		#			6		2		#
Long-term debt and other		443		469		(6	)		1,344		1,410		(5	)
Total interest expense		575		610		(6	)		1,745		1,818		(4	)
Net interest income		1,179		1,184		-			3,464		3,679		(6	)
Total revenues net of interest expense		7,571		6,973		9			22,220		20,338		9
Provisions for losses
Charge card		174		89		96			533		412		29
Cardmember loans		48		262		(82	)		104		1,490		(93	)
Other		27		22		23			66		66		-
Total provisions for losses		249		373		(33	)		703		1,968		(64	)
Total revenues net of interest expense after provisions for losses		7,322		6,600		11			21,517		18,370		17

Expenses
Marketing and promotion		757		871		(13	)		2,261		2,314		(2	)
Cardmember rewards		1,565		1,263		24			4,755		3,666		30
Cardmember services		189		141		34			526		425		24
Salaries and employee benefits		1,598		1,354		18			4,715		3,996		18
Professional services		690		701		(2	)		2,098		1,898		11
Occupancy and equipment		433		371		17			1,218		1,134		7
Communications		93		92		1			280		284		(1	)
Other, net		286		167		71			456		166		#
Total		5,611		4,960		13			16,309		13,883		17
Pretax income from continuing operations		1,711		1,640		4			5,208		4,487		16
Income tax provision		476		547		(13	)		1,501		1,492		1
Income from continuing operations		1,235		1,093		13			3,707		2,995		24
Income from discontinued operations, net of tax		-		-		-			36		-		#
Net income	$	1,235	$	1,093		13		$	3,743	$	2,995		25
Income from continuing operations attributable to common shareholders (A)	$	1,220	$	1,080		13		$	3,663	$	2,957		24
Net income attributable to common shareholders (A)	$	1,220	$	1,080		13		$	3,699	$	2,957		25

# - Denotes a variance of more than 100%.

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards and other items of $15 million and $13 million for the three months ended September 30, 2011 and 2010, and $44 million and $38 million for the nine months ended September 30, 2011 and 2010, respectively.

(Preliminary)

American Express Company

Condensed Consolidated Balance Sheets

(Billions)

	September 30,		December 31,
	2011		2010

Assets
Cash	$	25	$	16
Accounts receivable		43		40
Investment securities		9		14
Loans		56		58
Other assets		16		19
Total assets	$	149	$	147

Liabilities and Shareholders' Equity
Customer deposits	$	33	$	30
Short-term borrowings		4		3
Long-term debt		62		66
Other liabilities		32		32
Total liabilities		131		131

Shareholders' Equity		18		16
Total liabilities and shareholders' equity	$	149	$	147

(Preliminary)

American Express Company

Financial Summary

(Millions)

	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2011			2010			Inc/(Dec)			2011			2010			Inc/(Dec)

Total revenues net of interest expense
U.S. Card Services	$	3,838		$	3,625			6	%	$	11,174		$	10,734			4	%
International Card Services		1,347			1,163			16			3,906			3,405			15
Global Commercial Services		1,130			1,072			5			3,442			3,060			12
Global Network & Merchant Services		1,250			1,100			14			3,626			3,133			16
		7,565			6,960			9			22,148			20,332			9
Corporate & Other, including adjustments and eliminations		6			13			(54	)		72			6			#

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,571		$	6,973			9		$	22,220		$	20,338			9

Pretax income (loss) from continuing operations
U.S. Card Services	$	1,151		$	971			19		$	2,961		$	2,445			21
International Card Services		189			131			44			625			487			28
Global Commercial Services		269			226			19			799			583			37
Global Network & Merchant Services		514			410			25			1,477			1,208			22
		2,123			1,738			22			5,862			4,723			24
Corporate & Other		(412	)		(98	)		#			(654	)		(236	)		#

PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,711		$	1,640			4		$	5,208		$	4,487			16

Net income (loss)
U.S. Card Services	$	733		$	595			23		$	1,953		$	1,525			28
International Card Services		221			144			53			571			438			30
Global Commercial Services		197			150			31			558			347			61
Global Network & Merchant Services		332			252			32			969			766			27
		1,483			1,141			30			4,051			3,076			32
Corporate & Other		(248	)		(48	)		#			(344	)		(81	)		#
Income from continuing operations		1,235			1,093			13			3,707			2,995			24
Income from discontinued operations, net of tax		-			-			-			36			-			#


NET INCOME	$	1,235		$	1,093			13		$	3,743		$	2,995			25

# - Denotes a variance of more than 100%.

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended							Nine Months Ended
	September 30,				Percentage			September 30,				Percentage
	2011		2010		Inc/(Dec)			2011		2010		Inc/(Dec)
EARNINGS PER COMMON SHARE

BASIC
Income from continuing operations attributable to common shareholders	$	1.04	$	0.91		14	%	$	3.09	$	2.49		24	%
Income from discontinued operations		-		-		-			0.03		-		#
Net income attributable to common shareholders	$	1.04	$	0.91		14	%	$	3.12	$	2.49		25	%

Average common shares outstanding (millions)		1,175		1,193		(2	)%		1,184		1,189		-	%

DILUTED
Income from continuing operations attributable to common shareholders	$	1.03	$	0.90		14	%	$	3.08	$	2.47		25	%
Income from discontinued operations		-		-		-			0.03		-		#
Net income attributable to common shareholders	$	1.03	$	0.90		14	%	$	3.11	$	2.47		26	%

Average common shares outstanding (millions)		1,181		1,199		(2	)%		1,191		1,195		-	%

Cash dividends declared per common share	$	0.18	$	0.18		-	%	$	0.54	$	0.54		-	%

Selected Statistical Information

	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
		2011			2010		Inc/(Dec)				2011			2010		Inc/(Dec)

Return on average equity (A)		27.8	%		25.9	%					27.8	%		25.9	%
Return on average common equity (A)		27.5	%		25.6	%					27.5	%		25.6	%
Return on average tangible common equity (A)		35.7	%		33.1	%					35.7	%		33.1	%
Common shares outstanding (millions)		1,169			1,204			(3	)%		1,169			1,204			(3	)%
Book value per common share	$	15.49		$	13.22			17	%	$	15.49		$	13.22			17	%
Shareholders' equity (billions)	$	18.1		$	15.9			14	%	$	18.1		$	15.9			14	%

# - 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, a non-GAAP measure.

(Preliminary)

American Express Company

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)
Card billed business (A):
United States	$	136.4		$	120.5			13	%
Outside the United States		71.3			58.8			21
Total	$	207.7		$	179.3			16

Total cards-in-force (millions) (B):
United States		50.2			48.1			4	%
Outside the United States		45.6			40.9			11
Total		95.8			89.0			8

Basic cards-in-force (millions) (B) (C):
United States		38.9			37.2			5	%
Outside the United States		36.4			32.6			12
Total		75.3			69.8			8

Average discount rate (D)		2.54	%		2.56	%
Average basic cardmember spending (dollars) (E)	$	3,739		$	3,330			12	%
Average fee per card (dollars) (E)	$	40		$	38			5	%
Average fee per card adjusted (dollars) (E)	$	43		$	41			5	%

(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. 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 cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand cardmember accounts which have no out-of-store spend activity during the prior 12 month period.

(C) Prior to and including the fourth quarter of 2010, the Company did not have the data necessary to separately report Basic and Supplementary cards-in-force (CIF) for Global Network Services; therefore, all cards-in-force for Global Network Services was reported as Basic CIF. Starting in the first quarter of 2011, as the necessary data became available, the Company began to separately report Basic and Supplementary CIF for Global Network Services. The Company has accordingly revised prior periods to conform with the current period presentation.

(D) This calculation is designed to reflect pricing at merchants accepting general purpose American Express cards. 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.

(E) 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 $66 million and $58 million for the quarters ended September 30, 2011 and 2010, respectively. The adjusted average fee per card, which is a non-GAAP measure, 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 $52 million and $49 million for the quarters ended September 30, 2011 and 2010, respectively. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fee pricing across a range of its proprietary card products.

(Preliminary)

American Express Company

Selected Statistical Information (continued)

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)
Worldwide cardmember receivables:
Total receivables	$	39.8		$	35.1			13	%
Loss reserves (millions):
Beginning balance	$	415		$	440			(6	)%
Provisions for losses on authorized transactions (A)		125			53			#
Net write-offs		(146	)		(116	)		26
Other		(6	)		(13	)		(54	)
Ending balance	$	388		$	364			7
% of receivables		1.0	%		1.0	%
Net write-off rate (principal only) - USCS (B)		1.8	%		1.6	%
Net write-off rate (principal and fees) - USCS (B)		1.9	%		1.8	%
30 days past due as a % of total - USCS		2.0	%		1.7	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.09	%
90 days past billing as a % of total - ICS/GCS		0.8	%		0.8	%

Worldwide cardmember loans:
Total loans	$	58.2		$	57.2			2	%
30 days past due loans as a % of total		1.5	%		2.5	%
Loss reserves (millions):
Beginning balance	$	2,560		$	4,866			(47	)%
Provisions for losses on authorized transactions		16			239			(93	)
Net write-offs - principal		(383	)		(728	)		(47	)
Net write-offs - interest and fees		(44	)		(81	)		(46	)
Other		(10	)		22			#
Ending balance	$	2,139		$	4,318			(50	)
Ending Reserves - principal	$	2,080		$	4,210			(51	)
Ending Reserves - interest and fees	$	59		$	108			(45	)
% of loans		3.7	%		7.5	%
% of past due		238	%		302	%
Average loans	$	58.9		$	57.4			3	%
Net write-off rate (principal only) (B)		2.6	%		5.1	%
Net write-off rate (principal, interest and fees) (B)		2.9	%		5.6	%
Net interest income divided by average loans (C) (D)		7.9	%		8.2	%
Net interest yield on cardmember loans (C)		9.1	%		9.5	%

# - Denotes a variance of more than 100%.

(A) Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.

(B) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest and/or fees is also presented.

(C) See Appendix III for calculations of net interest yield on cardmember loans, a non-GAAP measure, and net interest income divided by average loans, a GAAP measure. The Company believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.

(D) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)

	Quarters Ended
	September 30,		June 30,		March 31,			December 31,		September 30,
	2011		2011		2011			2010		2010

Revenues
Non-interest revenues
Discount revenue	$	4,218	$	4,278	$	3,902		$	4,017	$	3,761
Net card fees		556		545		537			534		527
Travel commissions and fees		480		523		454			471		483
Other commissions and fees		604		584		529			519		515
Other		534		537		475			513		503
Total non-interest revenues		6,392		6,467		5,897			6,054		5,789
Interest income
Interest and fees on loans		1,653		1,611		1,619			1,676		1,675
Interest and dividends on investment securities		68		99		88			98		103
Deposits with banks and other		33		18		20			21		16
Total interest income		1,754		1,728		1,727			1,795		1,794
Interest expense
Deposits		127		131		137			140		141
Short-term borrowings		5		1		-			1		-
Long-term debt and other		443		445		456			464		469
Total interest expense		575		577		593			605		610
Net interest income		1,179		1,151		1,134			1,190		1,184
Total revenues net of interest expense		7,571		7,618		7,031			7,244		6,973
Provisions for losses
Charge card		174		161		198			183		89
Cardmember loans		48		176		(120	)		37		262
Other		27		20		19			19		22
Total provisions for losses		249		357		97			239		373
Total revenues net of interest expense after provisions for losses		7,322		7,261		6,934			7,005		6,600

Expenses
Marketing and promotion		757		795		709			833		871
Cardmember rewards		1,565		1,613		1,577			1,334		1,263
Cardmember services		189		173		164			166		141
Salaries and employee benefits		1,598		1,595		1,522			1,570		1,354
Professional services		690		745		663			908		701
Occupancy and equipment		433		391		394			428		371
Communications		93		92		95			99		92
Other, net		286		92		78			190		167
Total		5,611		5,496		5,202			5,528		4,960
Pretax income from continuing operations		1,711		1,765		1,732			1,477		1,640
Income tax provision		476		470		555			415		547
Income from continuing operations		1,235		1,295		1,177			1,062		1,093
Income from discontinued operations, net of tax		-		36		-			-		-
Net income	$	1,235	$	1,331	$	1,177		$	1,062	$	1,093
Income from continuing operations attributable to common shareholders (A)	$	1,220	$	1,280	$	1,163		$	1,050	$	1,080
Net income attributable to common shareholders (A)	$	1,220	$	1,316	$	1,163		$	1,050	$	1,080

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards and other items of $15 million for the quarter ended September 30, 2011, $15 million for the quarter ended June 31, 2011, $14 million for the quarter ended March 31, 2011, $12 million for the quarter ended December 30, 2010, $13 million for the quarter ended September 30, 2010.

(Preliminary)

American Express Company

Financial Summary

(Millions)

	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2011			2011			2011			2010			2010

Total revenues net of interest expense
U.S. Card Services	$	3,838		$	3,759		$	3,577		$	3,728		$	3,625
International Card Services		1,347			1,351			1,208			1,238			1,163
Global Commercial Services		1,130			1,191			1,121			1,067			1,072
Global Network & Merchant Services		1,250			1,239			1,137			1,172			1,100
		7,565			7,540			7,043			7,205			6,960
Corporate & Other, including adjustments and eliminations		6			78			(12	)		39			13

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,571		$	7,618		$	7,031		$	7,244		$	6,973

Pretax income (loss) from continuing operations
U.S. Card Services	$	1,151		$	900		$	910		$	1,059		$	971
International Card Services		189			196			240			102			131
Global Commercial Services		269			265			265			140			226
Global Network & Merchant Services		514			487			476			381			410
		2,123			1,848			1,891			1,682			1,738
Corporate & Other		(412	)		(83	)		(159	)		(205	)		(98	)

PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,711		$	1,765		$	1,732		$	1,477		$	1,640

Net income (loss)
U.S. Card Services	$	733		$	665		$	555		$	700		$	595
International Card Services		221			161			189			99			144
Global Commercial Services		197			177			184			103			150
Global Network & Merchant Services		332			324			313			259			252
		1,483			1,327			1,241			1,161			1,141
Corporate & Other		(248	)		(32	)		(64	)		(99	)		(48	)
Income from continuing operations		1,235			1,295			1,177			1,062			1,093
Income from discontinued operations, net of tax		-			36			-			-			-

NET INCOME	$	1,235		$	1,331		$	1,177		$	1,062		$	1,093

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
	2011		2011		2011		2010		2010
EARNINGS PER COMMON SHARE

BASIC
Income from continuing operations attributable to common shareholders	$	1.04	$	1.08	$	0.98	$	0.88	$	0.91
Income from discontinued operations		-		0.03		-		-		-
Net income attributable to common shareholders	$	1.04	$	1.11	$	0.98	$	0.88	$	0.91

Average common shares outstanding (millions)		1,175		1,190		1,192		1,188		1,193

DILUTED
Income from continuing operations attributable to common shareholders	$	1.03	$	1.07	$	0.97	$	0.88	$	0.90
Income from discontinued operations		-		0.03		-		-		-
Net income attributable to common shareholders	$	1.03	$	1.10	$	0.97	$	0.88	$	0.90

Average common shares outstanding (millions)		1,181		1,197		1,198		1,194		1,199

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,
	2011			2011			2011			2010			2010

Return on average equity (A)		27.8	%		28.2	%		27.9	%		27.5	%		25.9	%
Return on average common equity (A)		27.5	%		27.9	%		27.6	%		27.2	%		25.6	%
Return on average tangible common equity (A)		35.7	%		36.1	%		35.6	%		35.1	%		33.1	%
Common shares outstanding (millions)		1,169			1,193			1,202			1,197			1,204
Book value per common share	$	15.49		$	15.26		$	14.54		$	13.56		$	13.22
Shareholders' equity (billions)	$	18.1		$	18.2		$	17.5		$	16.2		$	15.9

(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity, a non-GAAP measure.

(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,
	2011			2011			2011			2010			2010
Card billed business (A):
United States	$	136.4		$	136.8		$	124.1		$	131.1		$	120.5
Outside the United States		71.3			70.8			63.8			66.6			58.8
Total	$	207.7		$	207.6		$	187.9		$	197.7		$	179.3

Total cards-in-force (millions) (B):
United States		50.2			49.8			49.4			48.9			48.1
Outside the United States		45.6			44.2			43.0			42.1			40.9
Total		95.8			94.0			92.4			91.0			89.0

Basic cards-in-force (millions) (B) (C):
United States		38.9			38.7			38.3			37.9			37.2
Outside the United States		36.4			35.3			34.4			33.7			32.6
Total		75.3			74.0			72.7			71.6			69.8

Average discount rate (D)		2.54	%		2.54	%		2.55	%		2.52	%		2.56	%
Average basic cardmember spending (dollars) (E)	$	3,739		$	3,767		$	3,438		$	3,629		$	3,330
Average fee per card (dollars) (E)	$	40		$	39		$	39		$	38		$	38
Average fee per card adjusted (dollars) (E)	$	43		$	43		$	42		$	42		$	41

(E) 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 $66 million for the quarter ended September 30, 2011, $68 million for the quarter ended June 30, 2011, $64 million for the quarter ended March 31, 2011, $63 million for the quarter ended December 31, 2010 and $58 million for the quarter ended September 30, 2010. The adjusted average fee per card, a non-GAAP measure, 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 were $52 million for the quarter ended September 30, 2011, $56 million for the quarter ended June 30, 2011, $54 million for the quarter ended March 31, 2011, $51 million for the quarter ended December 31, 2010 and $49 million for the quarter ended September 30, 2010. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fee pricing across a range of its proprietary card products.

(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,
	2011			2011			2011			2010			2010

Worldwide cardmember receivables:
Total receivables	$	39.8		$	40.1		$	37.7		$	37.3		$	35.1
Loss reserves (millions):
Beginning balance	$	415		$	421		$	386		$	364		$	440
Provisions for losses on authorized transactions (A)		125			119			160			147			53
Net write-offs		(146	)		(128	)		(132	)		(117	)		(116	)
Other		(6	)		3			7			(8	)		(13	)
Ending balance	$	388		$	415		$	421		$	386		$	364
% of receivables		1.0	%		1.0	%		1.1	%		1.0	%		1.0	%
Net write-off rate (principal only) - USCS (B)		1.8	%		1.5	%		1.7	%		1.4	%		1.6	%
Net write-off rate (principal and fees) - USCS (B)		1.9	%		1.7	%		1.8	%		1.6	%		1.8	%
30 days past due as a % of total - USCS		2.0	%		1.7	%		1.8	%		1.5	%		1.7	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.09	%		0.09	%		0.09	%		0.09	%
90 days past billing as a % of total - ICS/GCS		0.8	%		0.8	%		0.8	%		0.9	%		0.8	%

Worldwide cardmember loans:
Total loans	$	58.2		$	58.7		$	57.8		$	60.9		$	57.2
30 days past due loans as a % of total		1.5	%		1.6	%		1.9	%		2.1	%		2.5	%
Loss reserves (millions):
Beginning balance	$	2,560		$	2,921		$	3,646		$	4,318		$	4,866
Provisions for losses on authorized transactions		16			146			(139	)		16			239
Net write-offs - principal		(383	)		(457	)		(535	)		(630	)		(728	)
Net write-offs - interest and fees		(44	)		(54	)		(61	)		(72	)		(81	)
Other		(10	)		4			10			14			22
Ending balance	$	2,139		$	2,560		$	2,921		$	3,646		$	4,318
Ending Reserves - principal	$	2,080		$	2,488		$	2,839		$	3,551		$	4,210
Ending Reserves - interest and fees	$	59		$	72		$	82		$	95		$	108
% of loans		3.7	%		4.4	%		5.1	%		6.0	%		7.5	%
% of past due		238	%		273	%		263	%		287	%		302	%
Average loans	$	58.9		$	58.5		$	58.5		$	58.5		$	57.4
Net write-off rate (principal only) (B)		2.6	%		3.1	%		3.7	%		4.3	%		5.1	%
Net write-off rate (principal, interest and fees) (B)		2.9	%		3.5	%		4.1	%		4.8	%		5.6	%
Net interest income divided by average loans (C) (D)		7.9	%		7.9	%		7.9	%		8.1	%		8.2	%
Net interest yield on cardmember loans (C)		9.1	%		9.0	%		9.2	%		9.3	%		9.5	%

(A) Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,				Percentage
	2011		2010		Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	2,710	$	2,501		8	%
Interest income		1,329		1,334		-
Interest expense		201		210		(4	)
Net interest income		1,128		1,124		-
Total revenues net of interest expense		3,838		3,625		6
Provisions for losses		143		274		(48	)
Total revenues net of interest expense after provisions for losses		3,695		3,351		10
Expenses
Marketing, promotion, rewards and cardmember services		1,646		1,477		11
Salaries and employee benefits and other operating expenses		898		903		(1	)
Total		2,544		2,380		7
Pretax segment income		1,151		971		19
Income tax provision		418		376		11
Segment income	$	733	$	595		23

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Card billed business	$	106.8		$	95.2			12	%
Total cards-in-force (millions)		40.7			39.9			2	%
Basic cards-in-force (millions)		30.2			29.7			2	%
Average basic cardmember spending (dollars)	$	3,542		$	3,219			10	%

U.S. Consumer Travel:
Travel sales (millions)	$	920		$	828			11	%
Travel commissions and fees/sales		8.5	%		8.6	%

Total segment assets	$	87.9		$	81.1			8	%
Segment capital (millions) (A)	$	8,233		$	7,011			17	%
Return on average segment capital (B)		34.2	%		32.5	%
Return on average tangible segment capital (B)		36.2	%		35.1	%

Cardmember receivables:
Total receivables	$	19.0		$	16.5			15	%
30 days past due as a % of total		2.0	%		1.7	%
Average receivables	$	19.1		$	16.9			13	%
Net write-off rate (principal only) (C)		1.8	%		1.6	%
Net write-off rate (principal and fees) (C)		1.9	%		1.8	%

Cardmember loans:
Total loans	$	49.9		$	48.7			2	%
30 days past due loans as a % of total		1.5	%		2.5	%
Average loans	$	50.2		$	49.1			2	%
Net write-off rate (principal only) (C)		2.6	%		5.2	%
Net write-off rate (principal, interest and fees) (C)		2.9	%		5.7	%
Net interest income divided by average loans (D) (E)		8.9	%		9.1	%
Net interest yield on cardmember loans (D)		9.0	%		9.3	%

(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, a non-GAAP measure.

(C) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest and/or fees is also presented.

(D) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure, and net interest income divided by average loans, a GAAP measure. The Company believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company’s cardmember loan portfolio.

(E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
	2011		2011		2011		2010		2010

Revenues
Discount revenue, net card fees and other	$	2,710	$	2,696	$	2,486	$	2,606	$	2,501
Interest income		1,329		1,263		1,294		1,330		1,334
Interest expense		201		200		203		208		210
Net interest income		1,128		1,063		1,091		1,122		1,124
Total revenues net of interest expense		3,838		3,759		3,577		3,728		3,625
Provisions for losses		143		228		47		111		274
Total revenues net of interest expense after provisions for losses		3,695		3,531		3,530		3,617		3,351
Expenses
Marketing, promotion, rewards and cardmember services		1,646		1,689		1,718		1,533		1,477
Salaries and employee benefits and other operating expenses		898		942		902		1,025		903
Total		2,544		2,631		2,620		2,558		2,380
Pretax segment income		1,151		900		910		1,059		971
Income tax provision		418		235		355		359		376
Segment income	$	733	$	665	$	555	$	700	$	595

(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,
	2011			2011			2011			2010			2010

Card billed business	$	106.8		$	106.8		$	96.1		$	103.4		$	95.2
Total cards-in-force (millions)		40.7			40.4			40.1			39.9			39.9
Basic cards-in-force (millions)		30.2			30.1			29.8			29.7			29.7
Average basic cardmember spending (dollars)	$	3,542		$	3,567		$	3,231		$	3,480		$	3,219

U.S. Consumer Travel:
Travel sales	$	0.9		$	1.0		$	0.8		$	0.7		$	0.8
Travel commissions and fees/sales		8.5	%		8.4	%		7.9	%		8.8	%		8.6	%

Total segment assets	$	87.9		$	85.8		$	81.2		$	91.3		$	81.1
Segment capital (A)	$	8.2		$	8.2		$	8.0		$	7.4		$	7.0
Return on average segment capital (B)		34.2	%		34.4	%		35.1	%		35.0	%		32.5	%
Return on average tangible segment capital (B)		36.2	%		36.6	%		37.6	%		37.8	%		35.1	%

Cardmember receivables:
Total receivables	$	19.0		$	19.2		$	17.6		$	19.2		$	16.5
30 days past due as a % of total		2.0	%		1.7	%		1.8	%		1.5	%		1.7	%
Average receivables	$	19.1		$	18.4		$	17.9		$	17.5		$	16.9
Net write-off rate (principal only) (C)		1.8	%		1.5	%		1.7	%		1.4	%		1.6	%
Net write-off rate (principal and fees) (C)		1.9	%		1.7	%		1.8	%		1.6	%		1.8	%

Cardmember loans:
Total loans	$	49.9		$	49.9		$	49.2		$	51.6		$	48.7
30 days past due loans as a % of total		1.5	%		1.5	%		1.8	%		2.1	%		2.5	%
Average loans	$	50.2		$	49.7		$	49.6		$	49.8		$	49.1
Net write-off rate (principal only) (C)		2.6	%		3.2	%		3.7	%		4.4	%		5.2	%
Net write-off rate (principal, interest and fees) (C)		2.9	%		3.5	%		4.1	%		4.8	%		5.7	%
Net interest income divided by average loans (D) (E)		8.9	%		8.6	%		8.9	%		8.9	%		9.1	%
Net interest yield on cardmember loans (D)		9.0	%		8.7	%		9.1	%		9.1	%		9.3	%

(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, a non-GAAP measure.

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,132		$	926			22	%
Interest income		323			342			(6	)
Interest expense		108			105			3
Net interest income		215			237			(9	)
Total revenues net of interest expense		1,347			1,163			16
Provisions for losses		101			64			58
Total revenues net of interest expense after provisions for losses		1,246			1,099			13
Expenses
Marketing, promotion, rewards and cardmember services		460			428			7
Salaries and employee benefits and other operating expenses		597			540			11
Total		1,057			968			9
Pretax segment income		189			131			44
Income tax benefit		(32	)		(13	)		#
Segment income	$	221		$	144			53

# - Denotes a variance of more than 100%.

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Card billed business	$	31.6		$	27.1			17	%
Total cards-in-force (millions)		15.2			15.0			1	%
Basic cards-in-force (millions)		10.4			10.4			-	%
Average basic cardmember spending (dollars)	$	3,032		$	2,609			16	%

International Consumer Travel:
Travel sales (millions)	$	346		$	291			19	%
Travel commissions and fees/sales		7.5	%		7.9	%

Total segment assets	$	27.8		$	21.9			27	%
Segment capital (millions) (A)	$	2,927		$	2,077			41	%
Return on average segment capital (B)		25.3	%		23.6	%
Return on average tangible segment capital (B)		45.5	%		32.1	%

Cardmember receivables:
Total receivables	$	6.7		$	6.2			8	%
90 days past billing as a % of total		0.9	%		1.0	%
Net loss ratio (as a % of charge volume)		0.16	%		0.14	%

Cardmember loans:
Total loans	$	8.3		$	8.5			(2	)%
30 days past due loans as a % of total		1.9	%		2.8	%
Average loans	$	8.7		$	8.3			5	%
Net write-off rate (principal only) (C)		2.5	%		4.3	%
Net write-off rate (principal, interest and fees) (C)		3.1	%		5.1	%
Net interest income divided by average loans (D) (E)		9.8	%		11.3	%
Net interest yield on cardmember loans (D)		9.9	%		11.1	%

(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, a non-GAAP measure.

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,			June 30,		March 31,		December 31,		September 30,
	2011			2011		2011		2010		2010

Revenues
Discount revenue, net card fees and other	$	1,132		$	1,112	$	989	$	1,010	$	926
Interest income		323			347		325		346		342
Interest expense		108			108		106		118		105
Net interest income		215			239		219		228		237
Total revenues net of interest expense		1,347			1,351		1,208		1,238		1,163
Provisions for losses		101			78		5		80		64
Total revenues net of interest expense after provisions for losses		1,246			1,273		1,203		1,158		1,099
Expenses
Marketing, promotion, rewards and cardmember services		460			493		407		458		428
Salaries and employee benefits and other operating expenses		597			584		556		598		540
Total		1,057			1,077		963		1,056		968
Pretax segment income		189			196		240		102		131
Income tax (benefit) provision		(32	)		35		51		3		(13	)
Segment income	$	221		$	161	$	189	$	99	$	144

(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,
	2011			2011			2011			2010			2010

Card billed business	$	31.6		$	31.5		$	28.4		$	30.9		$	27.1
Total cards-in-force (millions)		15.2			15.1			15.0			15.0			15.0
Basic cards-in-force (millions)		10.4			10.4			10.4			10.4			10.4
Average basic cardmember spending (dollars)	$	3,032		$	3,032		$	2,735		$	2,971		$	2,609

International Consumer Travel:
Travel sales	$	0.3		$	0.3		$	0.3		$	0.3		$	0.3
Travel commissions and fees/sales		7.5	%		7.6	%		7.6	%		8.7	%		7.9	%

Total segment assets	$	27.8		$	28.2		$	26.7		$	25.3		$	21.9
Segment capital (A)	$	2.9		$	3.0		$	3.0		$	2.2		$	2.1
Return on average segment capital (B)		25.3	%		24.1	%		25.8	%		25.1	%		23.6	%
Return on average tangible segment capital (B)		45.5	%		40.1	%		39.4	%		34.8	%		32.1	%

Cardmember receivables:
Total receivables	$	6.7		$	6.9		$	6.5		$	6.7		$	6.2
90 days past billing as a % of total		0.9	%		1.0	%		1.0	%		1.0	%		1.0	%
Net loss ratio (as a % of charge volume)		0.16	%		0.15	%		0.15	%		0.15	%		0.14	%

Cardmember loans:
Total loans	$	8.3		$	8.8		$	8.5		$	9.3		$	8.5
30 days past due loans as a % of total		1.9	%		2.1	%		2.4	%		2.3	%		2.8	%
Average loans	$	8.7		$	8.8		$	8.8		$	8.7		$	8.3
Net write-off rate (principal only) (C)		2.5	%		2.9	%		3.2	%		4.0	%		4.3	%
Net write-off rate (principal, interest and fees) (C)		3.1	%		3.6	%		3.9	%		4.7	%		5.1	%
Net interest income divided by average loans (D) (E)		9.8	%		10.9	%		10.1	%		10.4	%		11.3	%
Net interest yield on cardmember loans (D)		9.9	%		10.7	%		10.0	%		10.6	%		11.1	%

(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, a non-GAAP measure.

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,195		$	1,128			6	%
Interest income		3			2			50
Interest expense		68			58			17
Net interest expense		(65	)		(56	)		16
Total revenues net of interest expense		1,130			1,072			5
Provisions for losses		(17	)		21			#
Total revenues net of interest expense after provisions for losses		1,147			1,051			9
Expenses
Marketing, promotion, rewards and cardmember services		157			109			44
Salaries and employee benefits and other operating expenses		721			716			1
Total		878			825			6
Pretax segment income		269			226			19
Income tax provision		72			76			(5	)
Segment income	$	197		$	150			31

# - Denotes a variance of more than 100%.

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Card billed business	$	38.7		$	33.2			17	%
Total cards-in-force (millions)		7.0			7.0			-	%
Basic cards-in-force (millions)		7.0			7.0			-	%
Average basic cardmember spending (dollars)	$	5,520		$	4,734			17	%

Global Corporate Travel:
Travel sales	$	4.8		$	4.2			14	%
Travel commissions and fees/sales		7.8	%		9.3	%

Total segment assets	$	20.3		$	18.4			10	%
Segment capital (millions) (A)	$	3,529		$	3,633			(3	)%
Return on average segment capital (B)		18.2	%		12.3	%
Return on average tangible segment capital (B)		37.7	%		26.6	%

Cardmember receivables:
Total receivables	$	13.9		$	12.2			14	%
90 days past billing as a % of total		0.7	%		0.8	%
Net loss ratio (as a % of charge volume)		0.06	%		0.06	%

(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, a non-GAAP measure.

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2011			2011			2011			2010			2010

Revenues
Discount revenue, net card fees and other	$	1,195		$	1,259		$	1,177		$	1,130		$	1,128
Interest income		3			2			2			2			2
Interest expense		68			70			58			65			58
Net interest expense		(65	)		(68	)		(56	)		(63	)		(56	)
Total revenues net of interest expense		1,130			1,191			1,121			1,067			1,072
Provisions for losses		(17	)		35			23			30			21
Total revenues net of interest expense after provisions for losses		1,147			1,156			1,098			1,037			1,051
Expenses
Marketing, promotion, rewards and cardmember services		157			138			125			112			109
Salaries and employee benefits and other operating expenses		721			753			708			785			716
Total		878			891			833			897			825
Pretax segment income		269			265			265			140			226
Income tax provision		72			88			81			37			76
Segment income	$	197		$	177		$	184		$	103		$	150

(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,
	2011			2011			2011			2010			2010

Card billed business	$	38.7		$	39.3		$	36.6		$	35.9		$	33.2
Total cards-in-force (millions)		7.0			7.1			7.1			7.1			7.0
Basic cards-in-force (millions)		7.0			7.1			7.1			7.1			7.0
Average basic cardmember spending (dollars)	$	5,520		$	5,533		$	5,175		$	5,083		$	4,734

Global Corporate Travel:
Travel sales	$	4.8		$	5.3		$	4.9		$	4.6		$	4.2
Travel commissions and fees/sales		7.8	%		7.8	%		7.4	%		8.3	%		9.3	%

Total segment assets	$	20.3		$	20.3		$	20.5		$	18.1		$	18.4
Segment capital (A)	$	3.5		$	3.8		$	3.6		$	3.7		$	3.6
Return on average segment capital (B)		18.2	%		16.9	%		15.5	%		12.6	%		12.3	%
Return on average tangible segment capital (B)		37.7	%		35.4	%		33.5	%		27.1	%		26.6	%

Cardmember receivables:
Total receivables	$	13.9		$	13.8		$	13.3		$	11.3		$	12.2
90 days past billing as a % of total		0.7	%		0.7	%		0.7	%		0.8	%		0.8	%
Net loss ratio (as a % of charge volume)		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%

(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, a non-GAAP measure.

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)
Revenues
Discount revenue, fees and other	$	1,188		$	1,048			13	%
Interest income		2			1			#
Interest expense		(60	)		(51	)		18
Net interest income		62			52			19
Total revenues net of interest expense		1,250			1,100			14
Provisions for losses		21			13			62
Total revenues net of interest expense after provisions for losses		1,229			1,087			13
Expenses
Marketing, promotion, rewards and cardmember services		196			208			(6	)
Salaries and employee benefits and other operating expenses		519			469			11
Total		715			677			6
Pretax segment income		514			410			25
Income tax provision		182			158			15
Segment income	$	332		$	252			32

# - Denotes a variance of more than 100%.

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	September 30,						Percentage
	2011			2010			Inc/(Dec)

Global Card billed business (A)	$	207.7		$	179.3			16	%

Global Network & Merchant Services:
Total segment assets	$	16.0		$	12.3			30	%
Segment capital (millions) (B)	$	1,979		$	1,831			8	%
Return on average segment capital (C)		64.4	%		61.2	%
Return on average tangible segment capital (C)		70.8	%		62.7	%

Global Network Services (D):
Card billed business	$	30.1		$	23.1			30	%
Total cards-in-force (millions)		32.9			27.1			21	%

(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business.

(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, a non-GAAP measure.

(D) Since third quarter of 2010, for non-proprietary retail co-brand partners, Global Network Services metrics exclude cardmember accounts which have no out-of-store spend activity during the prior 12 month period.

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2011			2011			2011			2010			2010
Revenues
Discount revenue, fees and other	$	1,188		$	1,183		$	1,088		$	1,115		$	1,048
Interest income		2			1			1			1			1
Interest expense		(60	)		(55	)		(48	)		(56	)		(51	)
Net interest income		62			56			49			57			52
Total revenues net of interest expense		1,250			1,239			1,137			1,172			1,100
Provisions for losses		21			13			21			15			13
Total revenues net of interest expense after provisions for losses		1,229			1,226			1,116			1,157			1,087
Expenses
Marketing, promotion, rewards and cardmember services		196			213			166			172			208
Salaries and employee benefits and other operating expenses		519			526			474			604			469
Total		715			739			640			776			677
Pretax segment income		514			487			476			381			410
Income tax provision		182			163			163			122			158
Segment income	$	332		$	324		$	313		$	259		$	252

(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,
	2011			2011			2011			2010			2010

Global Card billed business (A)	$	207.7		$	207.6		$	187.9		$	197.7		$	179.3

Global Network & Merchant Services:
Total segment assets	$	16.0		$	16.7		$	14.2		$	13.6		$	12.3
Segment capital (B)	$	2.0		$	2.0		$	1.9		$	1.9		$	1.8
Return on average segment capital (C)		64.4	%		61.5	%		62.1	%		61.6	%		61.2	%
Return on average tangible segment capital (C)		70.8	%		66.5	%		66.1	%		64.3	%		62.7	%

Global Network Services (D):
Card billed business	$	30.1		$	29.3		$	26.0		$	26.9		$	23.1
Total cards-in-force (millions)		32.9			31.4			30.2			29.0			27.1

(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, a non-GAAP measure.

(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,
	2011			2011			2011			2010			2010

ROE

Net income	$	4,805		$	4,663		$	4,349		$	4,057		$	3,711
Average shareholders' equity	$	17,277		$	16,508		$	15,564		$	14,755		$	14,307
Return on average equity (A)		27.8	%		28.2	%		27.9	%		27.5	%		25.9	%

Reconciliation of ROCE and ROTCE

Net income	$	4,805		$	4,663		$	4,349		$	4,057		$	3,711
Preferred shares dividends and related accretion		-			-			-			-			-
Earnings allocated to participating share awards and other		56			55			52			51			47
Net income attributable to common shareholders	$	4,749		$	4,608		$	4,297		$	4,006		$	3,664

Average shareholders' equity	$	17,277		$	16,508		$	15,564		$	14,755		$	14,307
Average preferred shares		-			-			-			-			-
Average common shareholders' equity	$	17,277		$	16,508		$	15,564		$	14,755		$	14,307
Average goodwill and other intangibles		3,992			3,744			3,487			3,334			3,234
Average tangible common shareholders' equity	$	13,285		$	12,764		$	12,077		$	11,421		$	11,073
Return on average common equity (A)		27.5	%		27.9	%		27.6	%		27.2	%		25.6	%
Return on average tangible common equity (B)		35.7	%		36.1	%		35.6	%		35.1	%		33.1	%

(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.

(B) 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, a non-GAAP measure, excludes from average total shareholders' equity, average goodwill and other intangibles of $4.0 billion for the quarter ended September 30, 2011, $3.7 billion for the quarter ended June 30, 2011, $3.5 billion for the quarter ended March 31, 2011, $3.3 billion for the quarter ended December 31, 2010 and $3.2 billion for the quarter ended September 30, 2010. The Company believes that return on average tangible common equity is a useful measure of the profitability of its business.

(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,
	2011			2011			2011			2010			2010

U.S. Card Services
Segment income	$	2,653		$	2,515		$	2,366		$	2,225		$	1,936
Average segment capital	$	7,762		$	7,315		$	6,746		$	6,350		$	5,966
Average goodwill and other intangibles		436			446			457			459			454
Average tangible segment capital	$	7,326		$	6,869		$	6,289		$	5,891		$	5,512
Return on average segment capital (A)		34.2	%		34.4	%		35.1	%		35.0	%		32.5	%
Return on average tangible segment capital (A)		36.2	%		36.6	%		37.6	%		37.8	%		35.1	%

International Card Services
Segment income	$	670		$	593		$	587		$	537		$	507
Average segment capital	$	2,644		$	2,464		$	2,279		$	2,136		$	2,146
Average goodwill and other intangibles		1,170			987			788			592			567
Average tangible segment capital	$	1,474		$	1,477		$	1,491		$	1,544		$	1,579
Return on average segment capital (A)		25.3	%		24.1	%		25.8	%		25.1	%		23.6	%
Return on average tangible segment capital (A)		45.5	%		40.1	%		39.4	%		34.8	%		32.1	%

Global Commercial Services
Segment income	$	661		$	614		$	549		$	450		$	442
Average segment capital	$	3,632		$	3,628		$	3,548		$	3,581		$	3,587
Average goodwill and other intangibles		1,881			1,895			1,908			1,923			1,924
Average tangible segment capital	$	1,751		$	1,733		$	1,640		$	1,658		$	1,663
Return on average segment capital (A)		18.2	%		16.9	%		15.5	%		12.6	%		12.3	%
Return on average tangible segment capital (A)		37.7	%		35.4	%		33.5	%		27.1	%		26.6	%

Global Network & Merchant Services
Segment income	$	1,228		$	1,148		$	1,085		$	1,025		$	966
Average segment capital	$	1,908		$	1,866		$	1,746		$	1,664		$	1,578
Average goodwill and other intangibles		174			140			105			70			37
Average tangible segment capital	$	1,734		$	1,726		$	1,641		$	1,594		$	1,541
Return on average segment capital (A)		64.4	%		61.5	%		62.1	%		61.6	%		61.2	%
Return on average tangible segment capital (A)		70.8	%		66.5	%		66.1	%		64.3	%		62.7	%

(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, a non-GAAP measure, 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.

(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,
	2011			2011			2011			2010			2010

Net interest income	$	1,179		$	1,151		$	1,134		$	1,190		$	1,184
Average loans (billions)	$	58.9		$	58.5		$	58.5		$	58.5		$	57.4
Adjusted net interest income (A)	$	1,356		$	1,313		$	1,326		$	1,371		$	1,381
Adjusted average loans (billions) (B)	$	58.8		$	58.2		$	58.3		$	58.4		$	57.4
Net interest income divided by average loans (C)		7.9	%		7.9	%		7.9	%		8.1	%		8.2	%
Net interest yield on cardmember loans (D)		9.1	%		9.0	%		9.2	%		9.3	%		9.5	%

(A) Represents net interest income allocated to the Company's cardmember loan portfolio excluding the impact of card fees on loans and balance transfer fees attributable to the Company's cardmember loans.

(B) Represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans.

(C) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.

(D) Net interest yield on cardmember loans, a non-GAAP measure, 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 includes interest that is deemed uncollectible. For all presentations of net interest yield on cardmember loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - cardmember loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation.

(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,
	2011			2011			2011			2010			2010
USCS:
Net interest income	$	1,128		$	1,063		$	1,091		$	1,122		$	1,124
Average loans (billions)	$	50.2		$	49.7		$	49.6		$	49.8		$	49.1
Adjusted net interest income (A)	$	1,142		$	1,080		$	1,112		$	1,143		$	1,150
Adjusted average loans (billions) (B)	$	50.2		$	49.5		$	49.6		$	49.8		$	49.2
Net interest income divided by average loans (C)		8.9	%		8.6	%		8.9	%		8.9	%		9.1	%
Net interest yield on cardmember loans (D)		9.0	%		8.7	%		9.1	%		9.1	%		9.3	%

ICS:
Net interest income	$	215		$	239		$	219		$	228		$	237
Average loans (billions)	$	8.7		$	8.8		$	8.8		$	8.7		$	8.3
Adjusted net interest income (A)	$	214		$	233		$	214		$	228		$	231
Adjusted average loans (billions) (B)	$	8.6		$	8.7		$	8.7		$	8.5		$	8.2
Net interest income divided by average loans (C)		9.8	%		10.9	%		10.1	%		10.4	%		11.3	%
Net interest yield on cardmember loans (D)		9.9	%		10.7	%		10.0	%		10.6	%		11.1	%

(B) Represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans.

AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - EXHIBIT 99.2 FINANCIALS - October 19, 2011

Attached files

AMERICAN EXPRESS CO Reports