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

Attached files

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8-K - AXP FORM 8-K DATED JANUARY 17 2013 - AMERICAN EXPRESS CO	form8k17jan.htm
EX-99.3 - AXP EARNINGS SUPPLEMENT - AMERICAN EXPRESS CO	ex99_3earningsupp17jan.htm
EX-99.1 - AXP PRESS RELEASE DATED JANUARY 17 2013 - AMERICAN EXPRESS CO	ex99_1pressrelease17jan.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. The Company revised the income statement reporting of card fees on lending products in the first quarter of 2012, increasing Net card fees and reducing Interest on loans. Corresponding amounts in prior periods have been reclassified to conform to the current period presentation. This change does not impact Total revenues net of interest expense in the income statement, or the Net interest yield on cardmember loans, a non-GAAP measure.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Revenues
Non-interest revenues
Discount revenue	$	4,575		$	4,336			6	%	$	17,739		$	16,734			6	%
Net card fees		648			612			6			2,506			2,448			2
Travel commissions and fees		503			514			(2	)		1,940			1,971			(2	)
Other commissions and fees		578			552			5			2,317			2,269			2
Other		644			618			4			2,452			2,164			13
Total non-interest revenues		6,948			6,632			5			26,954			25,586			5
Interest income
Interest on loans		1,660			1,587			5			6,511			6,272			4
Interest and dividends on investment securities		53			72			(26	)		246			327			(25	)
Deposits with banks and other		24			26			(8	)		97			97			-
Total interest income		1,737			1,685			3			6,854			6,696			2
Interest expense
Deposits		118			133			(11	)		480			528			(9	)
Long-term debt and other		426			442			(4	)		1,746			1,792			(3	)
Total interest expense		544			575			(5	)		2,226			2,320			(4	)
Net interest income		1,193			1,110			7			4,628			4,376			6
Total revenues net of interest expense		8,141			7,742			5			31,582			29,962			5
Provisions for losses
Charge card		211			237			(11	)		742			770			(4	)
Cardmember loans		396			149			#			1,149			253			#
Other		31			23			35			99			89			11
Total provisions for losses		638			409			56			1,990			1,112			79
Total revenues net of interest expense after provisions for losses		7,503			7,333			2			29,592			28,850			3

Expenses
Marketing and promotion		722			735			(2	)		2,890			2,996			(4	)
Cardmember rewards		1,857			1,463			27			6,282			6,218			1
Cardmember services		197			190			4			799			716			12
Salaries and employee benefits		1,910			1,537			24			6,597			6,252			6
Professional services		871			853			2			2,963			2,951			-
Occupancy and equipment		486			467			4			1,823			1,685			8
Communications		99			98			1			383			378			1
Other, net		432			242			79			1,404			698			#
Total		6,574			5,585			18			23,141			21,894			6
Pretax income from continuing operations		929			1,748			(47	)		6,451			6,956			(7	)
Income tax provision		292			556			(47	)		1,969			2,057			(4	)
Income from continuing operations		637			1,192			(47	)		4,482			4,899			(9	)
Income from discontinued operations, net of tax		-			-			-			-			36			#
Net income	$	637		$	1,192			(47	)	$	4,482		$	4,935			(9	)
Income from continuing operations attributable to common shareholders (A)	$	630		$	1,178			(47	)	$	4,433		$	4,841			(8	)
Net income attributable to common shareholders (A)	$	630		$	1,178			(47	)	$	4,433		$	4,877			(9	)
Effective tax rate		31.4	%		31.8	%					30.5	%		29.6	%

# - 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 of $7 million and $14 million for the three months ended December 31, 2012 and 2011, respectively, and $49 million and $58 million for the twelve months ended December 31, 2012 and 2011, respectively.

(Preliminary)

American Express Company

Condensed Consolidated Balance Sheets

(Billions)

	December 31,		December 31,
	2012		2011

Assets
Cash & cash equivalents	$	22	$	25
Accounts receivable		46		44
Investment securities		6		7
Loans		64		61
Other assets		15		16
Total assets	$	153	$	153

Liabilities and Shareholders' Equity
Customer deposits	$	40	$	38
Short-term borrowings		3		4
Long-term debt		59		60
Other liabilities		32		32
Total liabilities		134		134

Shareholders' Equity		19		19
Total liabilities and shareholders' equity	$	153	$	153

(Preliminary)

American Express Company

Financial Summary

(Millions)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Total revenues net of interest expense
U.S. Card Services	$	4,070		$	3,897			4	%	$	16,046		$	15,071			6	%
International Card Services		1,397			1,333			5			5,306			5,239			1
Global Commercial Services		1,215			1,183			3			4,749			4,625			3
Global Network & Merchant Services		1,390			1,316			6			5,271			4,942			7
		8,072			7,729			4			31,372			29,877			5
Corporate & Other		69			13			#			210			85			#

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	8,141		$	7,742			5		$	31,582		$	29,962			5

Pretax income (loss) from continuing operations
U.S. Card Services	$	612		$	1,168			(48	)	$	4,069		$	4,129			(1	)
International Card Services		110			137			(20	)		659			762			(14	)
Global Commercial Services		142			276			(49	)		960			1,075			(11	)
Global Network & Merchant Services		557			502			11			2,219			1,979			12
		1,421			2,083			(32	)		7,907			7,945			-
Corporate & Other		(492	)		(335	)		47			(1,456	)		(989	)		47

PRETAX INCOME FROM CONTINUING OPERATIONS	$	929		$	1,748			(47	)	$	6,451		$	6,956			(7	)

Net income (loss)
U.S. Card Services	$	423		$	727			(42	)	$	2,592		$	2,680			(3	)
International Card Services		95			152			(38	)		634			723			(12	)
Global Commercial Services		65			180			(64	)		644			738			(13	)
Global Network & Merchant Services		354			324			9			1,443			1,293			12
		937			1,383			(32	)		5,313			5,434			(2	)
Corporate & Other		(300	)		(191	)		57			(831	)		(535	)		55
Income from continuing operations		637			1,192			(47	)		4,482			4,899			(9	)
Income from discontinued operations, net of tax		-			-			-			-			36			#
NET INCOME	$	637		$	1,192			(47	)	$	4,482		$	4,935			(9	)

# - Denotes a variance of more than 100%.

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended							Years Ended
	December 31,				Percentage			December 31,				Percentage
	2012		2011		Inc/(Dec)			2012		2011		Inc/(Dec)
EARNINGS PER COMMON SHARE

BASIC
Income from continuing operations attributable to common shareholders	$	0.57	$	1.02		(44	)%	$	3.91	$	4.11		(5	)%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	0.57	$	1.02		(44	)%	$	3.91	$	4.14		(6	)%

Average common shares outstanding (millions)		1,110		1,157		(4	)%		1,135		1,178		(4	)%

DILUTED
Income from continuing operations attributable to common shareholders	$	0.56	$	1.01		(45	)%	$	3.89	$	4.09		(5	)%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	0.56	$	1.01		(45	)%	$	3.89	$	4.12		(6	)%

Average common shares outstanding (millions)		1,116		1,163		(4	)%		1,141		1,184		(4	)%

Cash dividends declared per common share	$	0.20	$	0.18		11	%	$	0.80	$	0.72		11	%

Selected Statistical Information

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Return on average equity (A)		23.1	%		27.7	%					23.1	%		27.7	%
Return on average common equity (A)		22.8	%		27.3	%					22.8	%		27.3	%
Return on average tangible common equity (A)		29.2	%		35.8	%					29.2	%		35.8	%
Common shares outstanding (millions)		1,105			1,164			(5	)%		1,105			1,164			(5	)%
Book value per common share	$	17.09		$	16.15			6	%	$	17.09		$	16.15			6	%
Shareholders' equity (billions)	$	18.9		$	18.8			1	%	$	18.9		$	18.8			1	%

# - 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

(Millions, except percentages and where indicated)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Card billed business (billions) (A):
United States	$	155.5		$	145.5			7	%	$	590.7		$	542.8			9	%
Outside the United States		80.0			73.5			9			297.7			279.4			7
Total	$	235.5		$	219.0			8		$	888.4		$	822.2			8
Total cards-in-force (B):
United States		52.0			50.6			3	%		52.0			50.6			3	%
Outside the United States		50.4			46.8			8			50.4			46.8			8
Total		102.4			97.4			5			102.4			97.4			5
Basic cards-in-force (B):
United States		40.3			39.3			3	%		40.3			39.3			3	%
Outside the United States		40.5			37.4			8			40.5			37.4			8
Total		80.8			76.7			5			80.8			76.7			5

Average discount rate (C)		2.49	%		2.51	%					2.52	%		2.54	%
Average basic cardmember spending (dollars) (D)	$	4,113		$	3,933			5	%	$	15,720		$	14,881			6	%
Average fee per card (dollars) (D)	$	40		$	39			3	%	$	39		$	39			-
Average fee per card adjusted (dollars) (D)	$	44		$	42			5	%	$	43		$	43			-

(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 that have no out-of-store spend activity during the prior 12 month period.

(C) 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.

(D) Average basic card member 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 divided by average worldwide proprietary cards-in-force. 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. The amount of amortization excluded was $63 million and $57 million for the quarters ended December 31, 2012 and 2011, respectively, and $257 million and $219 million for the years ended December 31, 2012 and 2011, respectively. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fees 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									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Worldwide cardmember receivables:
Total receivables	$	42.8		$	40.9			5	%	$	42.8		$	40.9			5	%
Loss reserves (millions):
Beginning balance	$	409		$	388			5	%	$	438		$	386			13	%
Provisions (A)		167			199			(16	)		601			603			-
Other additions (B)		44			38			16			141			167			(16	)
Net write-offs (C)		(153	)		(154	)		(1	)		(640	)		(560	)		14
Other deductions (D)		(39	)		(33	)		18			(112	)		(158	)		(29	)
Ending balance	$	428		$	438			(2	)	$	428		$	438			(2	)
% of receivables		1.0	%		1.1	%					1.0	%		1.1	%
Net write-off rate (principal only) - USCS (E)		1.8	%		1.9	%					1.9	%		1.7	%
Net write-off rate (principal and fees) - USCS (E)		1.9	%		2.0	%					2.1	%		1.9	%
30 days past due as a % of total - USCS		1.8	%		1.9	%					1.8	%		1.9	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.09	%		0.10	%					0.10	%		0.09	%
90 days past billing as a % of total - ICS/GCS		0.9	%		0.9	%					0.9	%		0.9	%

Worldwide cardmember loans:
Total loans	$	65.2		$	62.6			4	%	$	65.2		$	62.6			4	%
Loss reserves (millions):
Beginning balance	$	1,459		$	2,139			(32	)%	$	1,874		$	3,646			(49	)%
Provisions (A)		362			122			#			1,031			145			#
Other additions (B)		34			27			26			118			108			9
Net write-offs - principal (C)		(310	)		(345	)		(10	)		(1,280	)		(1,720	)		(26	)
Net write-offs - interest and fees (C)		(36	)		(42	)		(14	)		(157	)		(201	)		(22	)
Other deductions (D)		(38	)		(27	)		41			(115	)		(104	)		11
Ending balance	$	1,471		$	1,874			(22	)	$	1,471		$	1,874			(22	)
Ending reserves - principal	$	1,423		$	1,818			(22	)	$	1,423		$	1,818			(22	)
Ending reserves - interest and fees	$	48		$	56			(14	)	$	48		$	56			(14	)
% of loans		2.3	%		3.0	%					2.3	%		3.0	%
% of past due		182	%		206	%					182	%		206	%
Average loans	$	62.9		$	59.9			5	%	$	61.5		$	59.1			4	%
Net write-off rate (principal only) (E)		2.0	%		2.3	%					2.1	%		2.9	%
Net write-off rate (principal, interest and fees) (E)		2.2	%		2.6	%					2.3	%		3.3	%
30 days past due loans as a % of total		1.2	%		1.5	%					1.2	%		1.5	%
Net interest income divided by average loans (F)		7.5	%		7.4	%					7.5	%		7.4	%
Net interest yield on cardmember loans (F)		9.1	%		8.9	%					9.1	%		9.1	%

# - Denotes a variance of more than 100%.

(A) Provisions for principal (resulting from authorized transactions) and fee reserve components.

(B) Provisions for unauthorized transactions.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(41) million and $(38) million for the three months ended December 31, 2012 and 2011, respectively and $(141) million and $(161) million for the years ended December 31, 2012 and 2011, respectively; foreign currency translation adjustments of $(2) million and $(3) million for the three months ended December 31, 2012 and 2011, respectively and $2 million and $(2) million for the years ended December 31, 2012 and 2011, respectively; reclassified cardmember bankruptcy reserves were nil for both the three months ended December 31, 2012 and 2011, and $18 million and nil for the years ended December 31, 2012 and 2011, respectively (cardmember bankruptcy reserves were classified as other liabilities in periods prior to March 31, 2012); and other adjustments of $4 million and $8 million for the three months ended December 31, 2012 and 2011, respectively and $9 million and $5 million for the years ended December 31, 2012 and 2011, respectively. For cardmember loans, includes net write-offs for unauthorized transactions of $(32) million and $(27) million for the three months ended December 31, 2012 and 2011, respectively and $(116) million and $(103) million for the years ended December 31, 2012 and 2011, respectively; foreign currency translation adjustments of $(2) million and $(1) million for the three months ended December 31, 2012 and 2011, respectively and $7 million and $(2) million for the years ended December 31, 2012 and 2011, respectively; reclassified cardmember bankruptcy reserves were nil for both the three months ended December 31, 2012 and 2011, and $4 million and nil for the years ended December 31, 2012 and 2011, respectively (cardmember bankruptcy reserves were classified as other liabilities in periods prior to March 31, 2012); and other adjustments of $(4) million and $1 million for the three months ended December 31, 2012 and 2011, respectively and $(10) million and $1 million for the years ended December 31, 2012 and 2011, respectively.

(E) 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.

(F) 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, and the Company's rationale for presenting net interest yield on cardmember loans.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Revenues
Non-interest revenues
Discount revenue	$	4,575		$	4,425		$	4,482		$	4,257		$	4,336
Net card fees		648			633			615			610			612
Travel commissions and fees		503			465			521			451			514
Other commissions and fees		578			581			575			583			552
Other		644			577			651			580			618
Total non-interest revenues		6,948			6,681			6,844			6,481			6,632
Interest income
Interest on loans		1,660			1,658			1,582			1,611			1,587
Interest and dividends on investment securities		53			60			67			66			72
Deposits with banks and other		24			21			22			30			26
Total interest income		1,737			1,739			1,671			1,707			1,685
Interest expense
Deposits		118			118			115			129			133
Long-term debt and other		426			440			435			445			442
Total interest expense		544			558			550			574			575
Net interest income		1,193			1,181			1,121			1,133			1,110
Total revenues net of interest expense		8,141			7,862			7,965			7,614			7,742
Provisions for losses
Charge card		211			190			163			178			237
Cardmember loans		396			264			277			212			149
Other		31			25			21			22			23
Total provisions for losses		638			479			461			412			409
Total revenues net of interest expense after provisions for losses		7,503			7,383			7,504			7,202			7,333

Expenses
Marketing and promotion		722			764			773			631			735
Cardmember rewards		1,857			1,496			1,462			1,467			1,463
Cardmember services		197			201			180			221			190
Salaries and employee benefits		1,910			1,516			1,536			1,635			1,537
Professional services		871			690			711			691			853
Occupancy and equipment		486			453			446			438			467
Communications		99			93			95			96			98
Other, net		432			300			422			250			242
Total		6,574			5,513			5,625			5,429			5,585
Pretax income		929			1,870			1,879			1,773			1,748
Income tax provision		292			620			540			517			556
Net income	$	637		$	1,250		$	1,339		$	1,256		$	1,192
Net income attributable to common shareholders (A)	$	630		$	1,236		$	1,325		$	1,242		$	1,178
Effective tax rate		31.4	%		33.2	%		28.7	%		29.2	%		31.8	%

(A) Represents net income, less earnings allocated to participating share awards of $7 million for the quarter ended December 31, 2012, $14 million for the quarter ended September 30, 2012, $14 million for the quarter ended June 30, 2012, $14 million for the quarter ended March 31, 2012 and $14 million for the quarter ended December 31, 2011.

(Preliminary)

American Express Company

Financial Summary

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Total revenues net of interest expense
U.S. Card Services	$	4,070		$	4,055		$	4,037		$	3,884		$	3,897
International Card Services		1,397			1,313			1,297			1,299			1,333
Global Commercial Services		1,215			1,156			1,221			1,157			1,183
Global Network & Merchant Services		1,390			1,310			1,323			1,248			1,316
		8,072			7,834			7,878			7,588			7,729
Corporate & Other		69			28			87			26			13

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	8,141		$	7,862		$	7,965		$	7,614		$	7,742

Pretax income (loss)
U.S. Card Services	$	612		$	1,128		$	1,149		$	1,180		$	1,168
International Card Services		110			207			146			196			137
Global Commercial Services		142			275			299			244			276
Global Network & Merchant Services		557			561			562			539			502
		1,421			2,171			2,156			2,159			2,083
Corporate & Other		(492	)		(301	)		(277	)		(386	)		(335	)

PRETAX INCOME	$	929		$	1,870		$	1,879		$	1,773		$	1,748

Net income (loss)
U.S. Card Services	$	423		$	699		$	718		$	752		$	727
International Card Services		95			164			178			197			152
Global Commercial Services		65			183			219			177			180
Global Network & Merchant Services		354			360			372			357			324
		937			1,406			1,487			1,483			1,383
Corporate & Other		(300	)		(156	)		(148	)		(227	)		(191	)

NET INCOME	$	637		$	1,250		$	1,339		$	1,256		$	1,192

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
	2012		2012		2012		2012		2011
EARNINGS PER COMMON SHARE

BASIC
Net income attributable to common shareholders	$	0.57	$	1.10	$	1.16	$	1.07	$	1.02

Average common shares outstanding (millions)		1,110		1,126		1,145		1,160		1,157

DILUTED
Net income attributable to common shareholders	$	0.56	$	1.09	$	1.15	$	1.07	$	1.01

Average common shares outstanding (millions)		1,116		1,132		1,152		1,166		1,163

Cash dividends declared per common share	$	0.20	$	0.20	$	0.20	$	0.20	$	0.18

Selected Statistical Information

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Return on average equity (A)		23.1	%		26.3	%		26.6	%		27.1	%		27.7	%
Return on average common equity (A)		22.8	%		26.0	%		26.3	%		26.8	%		27.3	%
Return on average tangible common equity (A)		29.2	%		33.5	%		34.1	%		35.0	%		35.8	%
Common shares outstanding (millions)		1,105			1,122			1,139			1,166			1,164
Book value per common share	$	17.09		$	17.37		$	16.92		$	17.08		$	16.15
Shareholders' equity (billions)	$	18.9		$	19.5		$	19.3		$	19.9		$	18.8

(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

(Millions, except percentages and where indicated)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011
Card billed business (billions) (A):
United States	$	155.5		$	146.9		$	148.7		$	139.6		$	145.5
Outside the United States		80.0			73.2			72.9			71.6			73.5
Total	$	235.5		$	220.1		$	221.6		$	211.2		$	219.0
Total cards-in-force (B):
United States		52.0			51.8			51.2			50.9			50.6
Outside the United States		50.4			49.6			48.9			47.8			46.8
Total		102.4			101.4			100.1			98.7			97.4
Basic cards-in-force (B):
United States		40.3			40.2			39.8			39.6			39.3
Outside the United States		40.5			39.8			39.2			38.2			37.4
Total		80.8			80.0			79.0			77.8			76.7

Average discount rate (C)		2.49	%		2.53	%		2.54	%		2.53	%		2.51	%
Average basic cardmember spending (dollars) (D)	$	4,113		$	3,885		$	3,948		$	3,772		$	3,933
Average fee per card (dollars) (D)	$	40		$	39		$	39		$	38		$	39
Average fee per card adjusted (dollars) (D)	$	44		$	44		$	43		$	42		$	42

(D) Average basic card member 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 divided by average worldwide proprietary cards-in-force. 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. The amount of amortization excluded for these periods was $63 million for the quarter ended December 31, 2012, $65 million for the quarter ended September 30, 2012, $64 million for the quarter ended June 30, 2012, $65 million for the quarter ended March 31, 2012 and $57 million for the quarter ended December 31, 2011. 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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Worldwide cardmember receivables:
Total receivables	$	42.8		$	42.3		$	41.5		$	41.5		$	40.9
Loss reserves (millions):
Beginning balance	$	409		$	392		$	424		$	438		$	388
Provisions (A)		167			151			134			149			199
Other additions (B)		44			39			29			29			38
Net write-offs (C)		(153	)		(141	)		(164	)		(182	)		(154	)
Other deductions (D)		(39	)		(32	)		(31	)		(10	)		(33	)
Ending balance	$	428		$	409		$	392		$	424		$	438
% of receivables		1.0	%		1.0	%		0.9	%		1.0	%		1.1	%
Net write-off rate (principal only) - USCS (E)		1.8	%		1.6	%		2.0	%		2.3	%		1.9	%
Net write-off rate (principal and fees) - USCS (E)		1.9	%		1.7	%		2.2	%		2.5	%		2.0	%
30 days past due as a % of total - USCS		1.8	%		1.8	%		1.7	%		1.9	%		1.9	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.09	%		0.10	%		0.10	%		0.11	%		0.10	%
90 days past billing as a % of total - ICS/GCS		0.9	%		0.7	%		0.7	%		0.7	%		0.9	%

Worldwide cardmember loans:
Total loans	$	65.2		$	61.8		$	61.0		$	60.1		$	62.6
Loss reserves (millions):
Beginning balance	$	1,459		$	1,547		$	1,680		$	1,874		$	2,139
Provisions (A)		362			231			253			185			122
Other additions (B)		34			33			24			27			27
Net write-offs - principal (C)		(310	)		(292	)		(329	)		(349	)		(345	)
Net write-offs - interest and fees (C)		(36	)		(36	)		(41	)		(44	)		(42	)
Other deductions (D)		(38	)		(24	)		(40	)		(13	)		(27	)
Ending balance	$	1,471		$	1,459		$	1,547		$	1,680		$	1,874
Ending reserves - principal	$	1,423		$	1,411		$	1,492		$	1,622		$	1,818
Ending reserves - interest and fees	$	48		$	48		$	55		$	58		$	56
% of loans		2.3	%		2.4	%		2.5	%		2.8	%		3.0	%
% of past due		182	%		182	%		202	%		201	%		206	%
Average loans	$	62.9		$	61.4		$	60.6		$	60.7		$	59.9
Net write-off rate (principal only) (E)		2.0	%		1.9	%		2.2	%		2.3	%		2.3	%
Net write-off rate (principal, interest and fees) (E)		2.2	%		2.1	%		2.4	%		2.6	%		2.6	%
30 days past due loans as a % of total		1.2	%		1.3	%		1.3	%		1.4	%		1.5	%
Net interest income divided by average loans (F)		7.5	%		7.7	%		7.4	%		7.5	%		7.4	%
Net interest yield on cardmember loans (F)		9.1	%		9.3	%		9.0	%		9.2	%		8.9	%

(A) Provisions for principal (resulting from authorized transactions) and fee reserve components.

(B) Provisions for unauthorized transactions.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(41) million for the three months ended December 31, 2012, $(37) million for the three months ended September 30, 2012, $(30) million for the three months ended June 30, 2012, $(33) million for the three months ended March 31, 2012 and $(38) million for the three months ended December 31, 2011; foreign currency translation adjustments of $(2) million for the three months ended December 31, 2012, $6 million for the three months ended September 30, 2012, $(5) million for the three months ended June 30, 2012, $3 million for the three months ended March 31, 2012 and $(3) million for the three months ended December 31, 2011; reclassified cardmember bankruptcy reserves of $18 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $4 million for the three months ended December 31, 2012, $(1) million for the three months ended September 30, 2012, $4 million for the three months ended June 30, 2012, $2 million for the three months ended March 31, 2012 and $8 million for the three months ended December 31, 2011. For cardmember loans, includes net write-offs for unauthorized transactions of $(32) million for the three months ended December 31, 2012, $(31) million for the three months ended September 30, 2012, $(25) million for the three months ended June 30, 2012, $(28) million for the three months ended March 31, 2012 and $(27) million for the three months ended December 31, 2011; foreign currency translation adjustments of $(2) million for the three months ended December 31, 2012, $10 million for the three months ended September 30, 2012, $(11) million for the three months ended June 30, 2012, $10 million for the three months ended March 31, 2012 and $(1) million for the three months ended December 31, 2011; reclassified cardmember bankruptcy reserves of $4 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $(4) million for the three months ended December 31, 2012, $(3) million for the three months ended September 30, 2012, $(4) million for the three months ended June 30, 2012, $1 million for the three months ended March 31, 2012 and $1 million for the three months ended December 31, 2011.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	2,903		$	2,796			4	%	$	11,469		$	10,804			6	%
Interest income		1,364			1,304			5			5,342			5,074			5
Interest expense		197			203			(3	)		765			807			(5	)
Net interest income		1,167			1,101			6			4,577			4,267			7
Total revenues net of interest expense		4,070			3,897			4			16,046			15,071			6
Provisions for losses		477			269			77			1,429			687			#
Total revenues net of interest expense after provisions for losses		3,593			3,628			(1	)		14,617			14,384			2
Expenses
Marketing, promotion, rewards and cardmember services		1,888			1,540			23			6,552			6,593			(1	)
Salaries and employee benefits and other operating expenses		1,093			920			19			3,996			3,662			9
Total		2,981			2,460			21			10,548			10,255			3
Pretax segment income		612			1,168			(48	)		4,069			4,129			(1	)
Income tax provision		189			441			(57	)		1,477			1,449			2
Segment income	$	423		$	727			(42	)	$	2,592		$	2,680			(3	)
Effective tax rate		30.9	%		37.8	%					36.3	%		35.1	%

# - Denotes a variance of more than 100%.

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Card billed business	$	123.3		$	114.6			8	%	$	462.3		$	424.3			9	%
Total cards-in-force (millions)		42.2			40.9			3	%		42.2			40.9			3	%
Basic cards-in-force (millions)		31.3			30.4			3	%		31.3			30.4			3	%
Average basic cardmember spending (dollars)	$	3,952		$	3,779			5	%	$	14,986		$	14,124			6	%

U.S. Consumer Travel:
Travel sales (millions)	$	907		$	834			9	%	$	4,042		$	3,603			12	%
Travel commissions and fees/sales		7.8	%		8.3	%					7.6	%		8.3	%

Total segment assets	$	98.3		$	97.8			1	%	$	98.3		$	97.8			1	%
Segment capital (millions) (A)	$	8,714		$	8,804			(1	)%	$	8,714		$	8,804			(1	)%
Return on average segment capital (B)		28.8	%		33.0	%					28.8	%		33.0	%
Return on average tangible segment capital (B)		30.1	%		34.8	%					30.1	%		34.8	%

Cardmember receivables:
Total receivables	$	21.1		$	20.6			2	%	$	21.1		$	20.6			2	%
30 days past due as a % of total		1.8	%		1.9	%					1.8	%		1.9	%
Average receivables	$	20.1		$	19.7			2	%	$	19.8		$	18.8			5	%
Net write-off rate (principal only) (C)		1.8	%		1.9	%					1.9	%		1.7	%
Net write-off rate (principal and fees) (C)		1.9	%		2.0	%					2.1	%		1.9	%

Cardmember loans:
Total loans	$	56.0		$	53.7			4	%	$	56.0		$	53.7			4	%
30 days past due loans as a % of total		1.2	%		1.4	%					1.2	%		1.4	%
Average loans	$	53.9		$	51.4			5	%	$	52.8		$	50.3			5	%
Net write-off rate (principal only) (C)		2.0	%		2.3	%					2.1	%		2.9	%
Net write-off rate (principal, interest and fees) (C)		2.2	%		2.5	%					2.3	%		3.2	%
Net interest income divided by average loans (D)		8.6	%		8.5	%					8.7	%		8.5	%
Net interest yield on cardmember loans (D)		9.0	%		8.9	%					9.0	%		8.9	%

(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, and the Company's rationale for presenting net interest yield on cardmember loans.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Revenues
Discount revenue, net card fees and other	$	2,903		$	2,887		$	2,925		$	2,754		$	2,796
Interest income		1,364			1,362			1,302			1,314			1,304
Interest expense		197			194			190			184			203
Net interest income		1,167			1,168			1,112			1,130			1,101
Total revenues net of interest expense		4,070			4,055			4,037			3,884			3,897
Provisions for losses		477			339			312			301			269
Total revenues net of interest expense after provisions for losses		3,593			3,716			3,725			3,583			3,628
Expenses
Marketing, promotion, rewards and cardmember services		1,888			1,626			1,566			1,472			1,540
Salaries and employee benefits and other operating expenses		1,093			962			1,010			931			920
Total		2,981			2,588			2,576			2,403			2,460
Pretax segment income		612			1,128			1,149			1,180			1,168
Income tax provision		189			429			431			428			441
Segment income	$	423		$	699		$	718		$	752		$	727
Effective tax rate		30.9	%		38.0	%		37.5	%		36.3	%		37.8	%

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Card billed business	$	123.3		$	115.3		$	116.0		$	107.7		$	114.6
Total cards-in-force (millions)		42.2			41.8			41.5			41.2			40.9
Basic cards-in-force (millions)		31.3			31.1			30.8			30.6			30.4
Average basic cardmember spending (dollars)	$	3,952		$	3,725		$	3,776		$	3,529		$	3,779

U.S. Consumer Travel:
Travel sales	$	0.9		$	1.0		$	1.1		$	1.0		$	0.8
Travel commissions and fees/sales		7.8	%		7.6	%		7.7	%		7.4	%		8.3	%

Total segment assets	$	98.3		$	96.3		$	95.5		$	90.7		$	97.8
Segment capital (A)	$	8.7		$	9.1		$	9.0		$	9.3		$	8.8
Return on average segment capital (B)		28.8	%		32.5	%		33.6	%		33.8	%		33.0	%
Return on average tangible segment capital (B)		30.1	%		34.0	%		35.3	%		35.5	%		34.8	%

Cardmember receivables:
Total receivables	$	21.1		$	19.5		$	19.6		$	19.3		$	20.6
30 days past due as a % of total		1.8	%		1.8	%		1.7	%		1.9	%		1.9	%
Average receivables	$	20.1		$	19.4		$	19.8		$	19.6		$	19.7
Net write-off rate (principal only) (C)		1.8	%		1.6	%		2.0	%		2.3	%		1.9	%
Net write-off rate (principal and fees) (C)		1.9	%		1.7	%		2.2	%		2.5	%		2.0	%

Cardmember loans:
Total loans	$	56.0		$	52.9		$	52.5		$	51.4		$	53.7
30 days past due loans as a % of total		1.2	%		1.3	%		1.2	%		1.3	%		1.4	%
Average loans	$	53.9		$	52.8		$	52.1		$	51.9		$	51.4
Net write-off rate (principal only) (C)		2.0	%		1.9	%		2.2	%		2.3	%		2.3	%
Net write-off rate (principal, interest and fees) (C)		2.2	%		2.1	%		2.4	%		2.6	%		2.5	%
Net interest income divided by average loans (D)		8.6	%		8.8	%		8.6	%		8.8	%		8.5	%
Net interest yield on cardmember loans (D)		9.0	%		9.2	%		9.0	%		9.1	%		8.9	%

(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									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,210		$	1,155			5	%	$	4,561		$	4,470			2	%
Interest income		289			282			2			1,147			1,195			(4	)
Interest expense		102			104			(2	)		402			426			(6	)
Net interest income		187			178			5			745			769			(3	)
Total revenues net of interest expense		1,397			1,333			5			5,306			5,239			1
Provisions for losses		99			84			18			330			268			23
Total revenues net of interest expense after provisions for losses		1,298			1,249			4			4,976			4,971			-
Expenses
Marketing, promotion, rewards and cardmember services		525			497			6			1,927			1,857			4
Salaries and employee benefits and other operating expenses		663			615			8			2,390			2,352			2
Total		1,188			1,112			7			4,317			4,209			3
Pretax segment income		110			137			(20	)		659			762			(14	)
Income tax provision/(benefit)		15			(15	)		#			25			39			(36	)
Segment income	$	95		$	152			(38	)	$	634		$	723			(12	)
Effective tax rate		13.6	%		-10.9	%					3.8	%		5.1	%

# - Denotes a variance of more than 100%.

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Card billed business	$	34.7		$	32.8			6	%	$	128.9		$	124.2			4	%
Total cards-in-force (millions)		15.6			15.3			2	%		15.6			15.3			2	%
Basic cards-in-force (millions)		10.6			10.5			1	%		10.6			10.5			1	%
Average basic cardmember spending (dollars)	$	3,280		$	3,137			5	%	$	12,221		$	11,935			2	%

International Consumer Travel:
Travel sales (millions)	$	367		$	335			10	%	$	1,372		$	1,324			4	%
Travel commissions and fees/sales		7.4	%		8.4	%					7.2	%		7.8	%

Total segment assets	$	31.8		$	29.1			9	%	$	31.8		$	29.1			9	%
Segment capital (millions) (A)	$	2,875		$	2,840			1	%	$	2,875		$	2,840			1	%
Return on average segment capital (B)		21.8	%		25.8	%					21.8	%		25.8	%
Return on average tangible segment capital (B)		43.0	%		49.8	%					43.0	%		49.8	%

Cardmember receivables:
Total receivables	$	7.8		$	7.2			8	%	$	7.8		$	7.2			8	%
90 days past billing as a % of total		0.9	%		0.9	%					0.9	%		0.9	%
Net loss ratio (as a % of charge volume)		0.16	%		0.15	%					0.16	%		0.15	%

Cardmember loans:
Total loans	$	9.2		$	8.9			3	%	$	9.2		$	8.9			3	%
30 days past due loans as a % of total		1.5	%		1.7	%					1.5	%		1.7	%
Average loans	$	8.9		$	8.5			5	%	$	8.7		$	8.8			(1	)%
Net write-off rate (principal only) (C)		1.8	%		2.2	%					1.9	%		2.7	%
Net write-off rate (principal, interest and fees) (C)		2.3	%		2.8	%					2.4	%		3.3	%
Net interest income divided by average loans (D)		8.3	%		8.3	%					8.5	%		8.8	%
Net interest yield on cardmember loans (D)		9.6	%		9.2	%					9.6	%		9.9	%

(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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Revenues
Discount revenue, net card fees and other	$	1,210		$	1,126		$	1,119		$	1,106		$	1,155
Interest income		289			289			276			293			282
Interest expense		102			102			98			100			104
Net interest income		187			187			178			193			178
Total revenues net of interest expense		1,397			1,313			1,297			1,299			1,333
Provisions for losses		99			83			94			54			84
Total revenues net of interest expense after provisions for losses		1,298			1,230			1,203			1,245			1,249
Expenses
Marketing, promotion, rewards and cardmember services		525			466			475			461			497
Salaries and employee benefits and other operating expenses		663			557			582			588			615
Total		1,188			1,023			1,057			1,049			1,112
Pretax segment income		110			207			146			196			137
Income tax provision/(benefit)		15			43			(32	)		(1	)		(15	)
Segment income	$	95		$	164		$	178		$	197		$	152
Effective tax rate		13.6	%		20.8	%		-21.9	%		-0.5	%		-10.9	%

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Card billed business	$	34.7		$	31.9		$	31.5		$	30.7		$	32.8
Total cards-in-force (millions)		15.6			15.5			15.5			15.4			15.3
Basic cards-in-force (millions)		10.6			10.6			10.6			10.5			10.5
Average basic cardmember spending (dollars)	$	3,280		$	3,026		$	2,985		$	2,927		$	3,137

International Consumer Travel:
Travel sales	$	0.4		$	0.3		$	0.3		$	0.3		$	0.3
Travel commissions and fees/sales		7.4	%		7.1	%		7.1	%		7.2	%		8.4	%

Total segment assets	$	31.8		$	30.6		$	29.3		$	30.9		$	29.1
Segment capital (A)	$	2.9		$	3.0		$	2.8		$	3.0		$	2.8
Return on average segment capital (B)		21.8	%		23.7	%		25.5	%		24.7	%		25.8	%
Return on average tangible segment capital (B)		43.0	%		46.9	%		51.1	%		50.0	%		49.8	%

Cardmember receivables:
Total receivables	$	7.8		$	7.2		$	6.8		$	6.7		$	7.2
90 days past billing as a % of total		0.9	%		0.9	%		1.0	%		1.0	%		0.9	%
Net loss ratio (as a % of charge volume)		0.16	%		0.17	%		0.16	%		0.15	%		0.15	%

Cardmember loans:
Total loans	$	9.2		$	8.9		$	8.4		$	8.6		$	8.9
30 days past due loans as a % of total		1.5	%		1.6	%		1.7	%		1.8	%		1.7	%
Average loans	$	8.9		$	8.6		$	8.5		$	8.8		$	8.5
Net write-off rate (principal only) (C)		1.8	%		1.6	%		2.0	%		2.1	%		2.2	%
Net write-off rate (principal, interest and fees) (C)		2.3	%		2.2	%		2.6	%		2.7	%		2.8	%
Net interest income divided by average loans (D)		8.3	%		8.7	%		8.4	%		8.8	%		8.3	%
Net interest yield on cardmember loans (D)		9.6	%		9.8	%		9.5	%		9.8	%		9.2	%

(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									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,277		$	1,249			2	%	$	4,995		$	4,880			2	%
Interest income		3			2			50			11			9			22
Interest expense		65			68			(4	)		257			264			(3	)
Net interest expense		(62	)		(66	)		(6	)		(246	)		(255	)		(4	)
Total revenues net of interest expense		1,215			1,183			3			4,749			4,625			3
Provisions for losses		33			35			(6	)		136			76			79
Total revenues net of interest expense after provisions for losses		1,182			1,148			3			4,613			4,549			1
Expenses
Marketing, promotion, rewards and cardmember services		148			127			17			579			547			6
Salaries and employee benefits and other operating expenses		892			745			20			3,074			2,927			5
Total		1,040			872			19			3,653			3,474			5
Pretax segment income		142			276			(49	)		960			1,075			(11	)
Income tax provision		77			96			(20	)		316			337			(6	)
Segment income	$	65		$	180			(64	)	$	644		$	738			(13	)
Effective tax rate		54.2	%		34.8	%					32.9	%		31.3	%

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Card billed business	$	41.9		$	39.6			6	%	$	166.4		$	154.2			8	%
Total cards-in-force (millions)		7.0			7.0			-			7.0			7.0			-
Basic cards-in-force (millions)		7.0			7.0			-			7.0			7.0			-
Average basic cardmember spending (dollars)	$	5,978		$	5,661			6	%	$	23,737		$	21,898			8	%

Global Corporate Travel:
Travel sales (millions)	$	4,625		$	4,693			(1	)%	$	18,894		$	19,618			(4	)%
Travel commissions and fees/sales		8.7	%		8.8	%					8.1	%		8.0	%

Total segment assets	$	18.9		$	18.8			1	%	$	18.9		$	18.8			1	%
Segment capital (millions) (A)	$	3,625		$	3,564			2	%	$	3,625		$	3,564			2	%
Return on average segment capital (B)		17.6	%		20.4	%					17.6	%		20.4	%
Return on average tangible segment capital (B)		35.1	%		42.1	%					35.1	%		42.1	%

Cardmember receivables:
Total receivables	$	13.7		$	12.8			7	%	$	13.7		$	12.8			7	%
90 days past billing as a % of total		0.8	%		0.8	%					0.8	%		0.8	%
Net loss ratio (as a % of charge volume)		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 Commercial Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Revenues
Discount revenue, net card fees and other	$	1,277		$	1,218		$	1,284		$	1,216		$	1,249
Interest income		3			3			2			3			2
Interest expense		65			65			65			62			68
Net interest expense		(62	)		(62	)		(63	)		(59	)		(66	)
Total revenues net of interest expense		1,215			1,156			1,221			1,157			1,183
Provisions for losses		33			32			36			35			35
Total revenues net of interest expense after provisions for losses		1,182			1,124			1,185			1,122			1,148
Expenses
Marketing, promotion, rewards and cardmember services		148			139			138			154			127
Salaries and employee benefits and other operating expenses		892			710			748			724			745
Total		1,040			849			886			878			872
Pretax segment income		142			275			299			244			276
Income tax provision		77			92			80			67			96
Segment income	$	65		$	183		$	219		$	177		$	180
Effective tax rate		54.2	%		33.5	%		26.8	%		27.5	%		34.8	%

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Card billed business	$	41.9		$	40.6		$	42.3		$	41.4		$	39.6
Total cards-in-force (millions)		7.0			7.0			7.0			7.0			7.0
Basic cards-in-force (millions)		7.0			7.0			7.0			7.0			7.0
Average basic cardmember spending (dollars)	$	5,978		$	5,798		$	6,042		$	5,920		$	5,661

Global Corporate Travel:
Travel sales	$	4.6		$	4.4		$	5.1		$	4.8		$	4.7
Travel commissions and fees/sales		8.7	%		8.4	%		8.1	%		7.2	%		8.8	%

Total segment assets	$	18.9		$	20.4		$	20.0		$	21.9		$	18.8
Segment capital (A)	$	3.6		$	3.6		$	3.6		$	3.8		$	3.6
Return on average segment capital (B)		17.6	%		20.9	%		21.1	%		20.0	%		20.4	%
Return on average tangible segment capital (B)		35.1	%		41.9	%		42.3	%		40.6	%		42.1	%

Cardmember receivables:
Total receivables	$	13.7		$	15.4		$	15.0		$	15.3		$	12.8
90 days past billing as a % of total		0.8	%		0.7	%		0.6	%		0.6	%		0.8	%
Net loss ratio (as a % of charge volume)		0.06	%		0.05	%		0.06	%		0.08	%		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									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Revenues
Discount revenue, fees and other	$	1,322		$	1,254			5	%	$	5,005		$	4,713			6	%
Interest income		7			1			#			23			5			#
Interest expense		(61	)		(61	)		-			(243	)		(224	)		8
Net interest income		68			62			10			266			229			16
Total revenues net of interest expense		1,390			1,316			6			5,271			4,942			7
Provisions for losses		21			20			5			74			75			(1	)
Total revenues net of interest expense after provisions for losses		1,369			1,296			6			5,197			4,867			7
Expenses
Marketing, promotion, rewards and cardmember services		180			180			-			744			755			(1	)
Salaries and employee benefits and other operating expenses		632			614			3			2,234			2,133			5
Total		812			794			2			2,978			2,888			3
Pretax segment income		557			502			11			2,219			1,979			12
Income tax provision		203			178			14			776			686			13
Segment income	$	354		$	324			9		$	1,443		$	1,293			12
Effective tax rate		36.4	%		35.5	%					35.0	%		34.7	%

# - Denotes a variance of more than 100%.

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended									Years Ended
	December 31,						Percentage			December 31,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)

Global Card billed business (A)	$	235.5		$	219.0			8	%	$	888.4		$	822.2			8	%

Global Network & Merchant Services:
Total segment assets	$	16.5		$	17.8			(7	)%	$	16.5		$	17.8			(7	)%
Segment capital (millions) (B)	$	2,048		$	2,037			1	%	$	2,048		$	2,037			1	%
Return on average segment capital (C)		68.6	%		66.3	%					68.6	%		66.3	%
Return on average tangible segment capital (C)		75.9	%		74.3	%					75.9	%		74.3	%

Global Network Services:
Card billed business	$	35.1		$	31.4			12	%	$	128.8		$	116.8			10	%
Total cards-in-force (millions)		37.6			34.2			10	%		37.6			34.2			10	%

(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.

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011
Revenues
Discount revenue, fees and other	$	1,322		$	1,238		$	1,259		$	1,186		$	1,254
Interest income		7			7			5			4			1
Interest expense		(61	)		(65	)		(59	)		(58	)		(61	)
Net interest income		68			72			64			62			62
Total revenues net of interest expense		1,390			1,310			1,323			1,248			1,316
Provisions for losses		21			18			17			18			20
Total revenues net of interest expense after provisions for losses		1,369			1,292			1,306			1,230			1,296
Expenses
Marketing, promotion, rewards and cardmember services		180			192			200			172			180
Salaries and employee benefits and other operating expenses		632			539			544			519			614
Total		812			731			744			691			794
Pretax segment income		557			561			562			539			502
Income tax provision		203			201			190			182			178
Segment income	$	354		$	360		$	372		$	357		$	324
Effective tax rate		36.4	%		35.8	%		33.8	%		33.8	%		35.5	%

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Global Card billed business (A)	$	235.5		$	220.1		$	221.6		$	211.2		$	219.0

Global Network & Merchant Services:
Total segment assets	$	16.5		$	21.4		$	19.8		$	20.1		$	17.8
Segment capital (B)	$	2.0		$	2.1		$	2.2		$	2.1		$	2.0
Return on average segment capital (C)		68.6	%		67.6	%		67.4	%		67.1	%		66.3	%
Return on average tangible segment capital (C)		75.9	%		75.0	%		74.9	%		74.9	%		74.3	%

Global Network Services:
Card billed business	$	35.1		$	32.0		$	31.3		$	30.4		$	31.4
Total cards-in-force (millions)		37.6			37.1			36.1			35.1			34.2

(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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

ROE

Net income	$	4,482		$	5,037		$	5,022		$	5,014		$	4,935
Average shareholders' equity	$	19,425		$	19,145		$	18,887		$	18,525		$	17,842
Return on average equity (A)		23.1	%		26.3	%		26.6	%		27.1	%		27.7	%

Reconciliation of ROCE and ROTCE

Net income	$	4,482		$	5,037		$	5,022		$	5,014		$	4,935
Earnings allocated to participating share awards and other		49			56			57			58			58
Net income attributable to common shareholders	$	4,433		$	4,981		$	4,965		$	4,956		$	4,877

Average shareholders' equity	$	19,425		$	19,145		$	18,887		$	18,525		$	17,842
Average common shareholders' equity	$	19,425		$	19,145		$	18,887		$	18,525		$	17,842
Average goodwill and other intangibles		4,232			4,272			4,330			4,380			4,215
Average tangible common shareholders' equity	$	15,193		$	14,873		$	14,557		$	14,145		$	13,627
Return on average common equity (A)		22.8	%		26.0	%		26.3	%		26.8	%		27.3	%
Return on average tangible common equity (B)		29.2	%		33.5	%		34.1	%		35.0	%		35.8	%

(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, a non-GAAP measure, 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. 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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

U.S. Card Services
Segment income	$	2,592		$	2,896		$	2,930		$	2,877		$	2,680
Average segment capital	$	8,999		$	8,903		$	8,714		$	8,508		$	8,121
Average goodwill and other intangibles		379			391			403			414			425
Average tangible segment capital	$	8,620		$	8,512		$	8,311		$	8,094		$	7,696
Return on average segment capital (A)		28.8	%		32.5	%		33.6	%		33.8	%		33.0	%
Return on average tangible segment capital (A)		30.1	%		34.0	%		35.3	%		35.5	%		34.8	%

International Card Services
Segment income	$	634		$	691		$	748		$	731		$	723
Average segment capital	$	2,909		$	2,919		$	2,936		$	2,962		$	2,797
Average goodwill and other intangibles		1,433			1,446			1,472			1,500			1,346
Average tangible segment capital	$	1,476		$	1,473		$	1,464		$	1,462		$	1,451
Return on average segment capital (A)		21.8	%		23.7	%		25.5	%		24.7	%		25.8	%
Return on average tangible segment capital (A)		43.0	%		46.9	%		51.1	%		50.0	%		49.8	%

Global Commercial Services
Segment income	$	644		$	759		$	773		$	731		$	738
Average segment capital	$	3,649		$	3,629		$	3,661		$	3,649		$	3,619
Average goodwill and other intangibles		1,812			1,819			1,833			1,847			1,867
Average tangible segment capital	$	1,837		$	1,810		$	1,828		$	1,802		$	1,752
Return on average segment capital (A)		17.6	%		20.9	%		21.1	%		20.0	%		20.4	%
Return on average tangible segment capital (A)		35.1	%		41.9	%		42.3	%		40.6	%		42.1	%

Global Network & Merchant Services
Segment income	$	1,443		$	1,413		$	1,385		$	1,337		$	1,293
Average segment capital	$	2,104		$	2,090		$	2,056		$	1,993		$	1,949
Average goodwill and other intangibles		203			205			207			209			209
Average tangible segment capital	$	1,901		$	1,885		$	1,849		$	1,784		$	1,740
Return on average segment capital (A)		68.6	%		67.6	%		67.4	%		67.1	%		66.3	%
Return on average tangible segment capital (A)		75.9	%		75.0	%		74.9	%		74.9	%		74.3	%

(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, a non-GAAP measure, 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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011

Net interest income	$	1,193		$	1,181		$	1,121		$	1,133		$	1,110

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	324		$	338		$	341		$	364		$	353

Interest income not attributable to the Company's cardmember loan portfolio	$	(91	)	$	(97	)	$	(104	)	$	(109	)	$	(113	)


Adjusted net interest income (A)	$	1,426		$	1,422		$	1,358		$	1,388		$	1,350

Average loans (billions)	$	62.9		$	61.4		$	60.6		$	60.7		$	59.9

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other (billions)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	-

Adjusted average loans (billions) (B)	$	62.7		$	61.2		$	60.4		$	60.5		$	59.9

Net interest income divided by average loans (C)		7.5	%		7.7	%		7.4	%		7.5	%		7.4	%
Net interest yield on cardmember loans (D)		9.1	%		9.3	%		9.0	%		9.2	%		8.9	%

(A) Adjusted net interest income, a non-GAAP measure, represents net interest income allocated to the Company's cardmember loan portfolio excluding the impact of interest expense and interest income not attributable to the Company's cardmember loan portfolio. The Company believes adjusted net interest income is useful to investors because it is a component of net interest yield on cardmember loans.

(B) Adjusted average loans, a non-GAAP measure, represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans, and other. The Company believes adjusted average loans is useful to investors because it is a component of net interest yield on 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. 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.

(Preliminary)

U. S. Card Services and International Card Services

Net Interest Yield on Cardmember Loans

Appendix IV

(Millions)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011
USCS:
Net interest income	$	1,167		$	1,168		$	1,112		$	1,130		$	1,101

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	51		$	51		$	51		$	51		$	58

Interest income not attributable to the Company's cardmember loan portfolio	$	(2	)	$	(3	)	$	(2	)	$	(2	)	$	(3	)

Adjusted net interest income (A)	$	1,216		$	1,216		$	1,161		$	1,179		$	1,156

Average loans (billions)	$	53.9		$	52.8		$	52.1		$	51.9		$	51.4

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans (billions)	$	-		$	-		$	-		$	-		$	0.1

Adjusted average loans (billions) (B)	$	53.9		$	52.8		$	52.1		$	51.9		$	51.5

Net interest income divided by average loans (C)		8.6	%		8.8	%		8.6	%		8.8	%		8.5	%
Net interest yield on cardmember loans (D)		9.0	%		9.2	%		9.0	%		9.1	%		8.9	%

ICS:
Net interest income	$	187		$	187		$	178		$	193		$	178

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	27		$	26		$	26		$	25		$	27

Interest income not attributable to the Company's cardmember loan portfolio	$	(3	)	$	(7	)	$	(7	)	$	(9	)	$	(11	)

Adjusted net interest income (A)	$	211		$	206		$	197		$	209		$	194

Average loans (billions)	$	8.9		$	8.6		$	8.5		$	8.8		$	8.5

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other (billions)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.1	)

Adjusted average loans (billions) (B)	$	8.7		$	8.4		$	8.3		$	8.6		$	8.4

Net interest income divided by average loans (C)		8.3	%		8.7	%		8.4	%		8.8	%		8.3	%
Net interest yield on cardmember loans (D)		9.6	%		9.8	%		9.5	%		9.8	%		9.2	%

(Preliminary)

American Express Company

Net Income and EPS Reconciliation

Appendix V

(Millions, except per share amounts)	Quarter Ended		Year Ended
	December 31, 2012		December 31, 2012

Net income:

Reported Net income	$	637	$	4,482

Q4'12 Restructuring Charges	$	287	$	287

Q4'12 Membership Rewards Estimation Process Enhancement Expense	$	212	$	212

Q4'12 Cardmember Reimbursements	$	95	$	95

Adjusted Net income (A)	$	1,231	$	5,076

Diluted EPS:

Reported Net income attributable to common shareholders	$	0.56	$	3.89

Q4'12 Restructuring Charges	$	0.26	$	0.25

Q4'12 Membership Rewards Estimation Process Enhancement Expense	$	0.19	$	0.19

Q4'12 Cardmember Reimbursements	$	0.08	$	0.07

Adjusted Net income attributable to common shareholders (A)	$	1.09	$	4.40

(A) Adjusted net income and adjusted net income attributable to common shareholders, which are non-GAAP measures, represent net income excluding the impact of the restructuring charges, membership rewards estimation process enhancement expense and cardmember reimbursements recognized in Q4’12. The Company believes adjusted net income and adjusted net income attributable to common shareholders provide useful metrics to evaluate the ongoing operating performance of the Company.

AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - AXP FINANCIALS - January 17, 2013

Attached files

AMERICAN EXPRESS CO Reports