AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - EXHIBIT 99.2 OF AMERICAN EXPRESS COMPANY - October 18, 2017

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8-K - FORM 8-K OF AMERICAN EXPRESS COMPANY - AMERICAN EXPRESS COearningsq317.htm
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EXHIBIT 99.2

 
American Express Company
 (Preliminary)
Consolidated Statements of Income
 
(Millions, except percentages and per share amounts)
 
 
 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Non-interest revenues
                                                      
Discount revenue
  
$
4,772
    
$
4,815
    
$
4,519
    
$
4,697
    
$
4,516
      
6
    
$
14,106
    
$
13,983
      
1
  
Net card fees
    
786
      
771
      
748
      
725
      
747
      
5
      
2,305
      
2,161
      
7
  
Other fees and commissions
    
767
      
752
      
713
      
677
      
694
      
11
      
2,232
      
2,076
      
8
  
Other
    
436
      
439
      
409
      
515
      
483
      
(10
)
    
1,284
      
1,514
      
(15
)
Total non-interest revenues
    
6,761
      
6,777
      
6,389
      
6,614
      
6,440
      
5
      
19,927
      
19,734
      
1
  
Interest income
                                                                        
Interest on loans
    
2,129
      
1,947
      
1,860
      
1,759
      
1,690
      
26
      
5,936
      
5,446
      
9
  
Interest and dividends on investment securities
    
22
      
23
      
23
      
27
      
34
      
(35
)
    
68
      
104
      
(35
)
Deposits with banks and other
    
91
      
82
      
60
      
35
      
40
      
#
      
233
      
104
      
#
  
Total interest income
    
2,242
      
2,052
      
1,943
      
1,821
      
1,764
      
27
      
6,237
      
5,654
      
10
  
Interest expense
                                                                        
Deposits
    
213
      
176
      
149
      
148
      
150
      
42
      
538
      
450
      
20
  
Long-term debt and other
    
354
      
346
      
294
      
265
      
280
      
26
      
994
      
841
      
18
  
Total interest expense
    
567
      
522
      
443
      
413
      
430
      
32
      
1,532
      
1,291
      
19
  
Net interest income
    
1,675
      
1,530
      
1,500
      
1,408
      
1,334
      
26
      
4,705
      
4,363
      
8
  
Total revenues net of interest expense
    
8,436
      
8,307
      
7,889
      
8,022
      
7,774
      
9
      
24,632
      
24,097
      
2
  
Provisions for losses
                                                                        
Charge card
    
214
      
163
      
213
      
200
      
174
      
23
      
590
      
496
      
19
  
Card Member loans
    
531
      
404
      
337
      
404
      
319
      
66
      
1,272
      
831
      
53
  
Other
    
24
      
17
      
23
      
21
      
11
      
#
      
64
      
74
      
(14
)
Total provisions for losses
    
769
      
584
      
573
      
625
      
504
      
53
      
1,926
      
1,401
      
37
  
Total revenues net of interest expense after provisions for losses
    
7,667
      
7,723
      
7,316
      
7,397
      
7,270
      
5
      
22,706
      
22,696
      
-
  
   
Expenses
                                                                        
Marketing and promotion
    
814
      
830
      
700
      
1,205
      
930
      
(12
)
    
2,344
      
2,445
      
(4
)
Card Member rewards
    
1,900
      
1,926
      
1,807
      
1,758
      
1,566
      
21
      
5,633
      
5,035
      
12
  
Card Member services and other
    
363
      
349
      
321
      
292
      
278
      
31
      
1,033
      
841
      
23
  
Salaries and employee benefits
    
1,265
      
1,293
      
1,264
      
1,207
      
1,263
      
-
      
3,822
      
4,052
      
(6
)
Professional services
    
501
      
521
      
512
      
721
      
630
      
(20
)
    
1,534
      
1,862
      
(18
)
Occupancy and equipment
    
568
      
484
      
475
      
506
      
429
      
32
      
1,527
      
1,332
      
15
  
Other, net
    
429
      
371
      
420
      
547
      
439
      
(2
)
    
1,220
      
194
      
#
  
Total expenses
    
5,840
      
5,774
      
5,499
      
6,236
      
5,535
      
6
      
17,113
      
15,761
      
9
  
Pretax income
    
1,827
      
1,949
      
1,817
      
1,161
      
1,735
      
5
      
5,593
      
6,935
      
(19
)
Income tax provision
    
471
      
609
      
580
      
336
      
593
      
(21
)
    
1,660
      
2,352
      
(29
)
Net income
  
$
1,356
    
$
1,340
    
$
1,237
    
$
825
    
$
1,142
      
19
    
$
3,933
    
$
4,583
      
(14
)
Net income attributable to common shareholders (A)
  
$
1,324
    
$
1,310
    
$
1,206
    
$
800
    
$
1,112
      
19
    
$
3,840
    
$
4,485
      
(14
)
Effective tax rate
    
25.8
%
    
31.2
%
    
31.9
%
    
28.9
%
    
34.2
%
            
29.7
%
    
33.9
%
        
 
                                                                        
Earnings Per Common Share
                                                                        
Basic
                                                                        
Net income attributable to common shareholders
  
$
1.51
    
$
1.47
    
$
1.34
    
$
0.88
    
$
1.21
      
25
    
$
4.32
    
$
4.77
      
(9
)
Average common shares outstanding
    
878
      
890
      
899
      
910
      
920
      
(5
)
    
889
      
940
      
(5
)
Diluted
                                                                        
Net income attributable to common shareholders
  
$
1.50
    
$
1.47
    
$
1.34
    
$
0.88
    
$
1.20
      
25
    
$
4.30
    
$
4.76
      
(10
)
Average common shares outstanding
    
881
      
893
      
903
      
913
      
923
      
(5
)
    
892
      
943
      
(5
)
Cash dividends declared per common share
  
$
0.35
    
$
0.32
    
$
0.32
    
$
0.32
    
$
0.32
      
9
    
$
0.99
    
$
0.90
      
10
  
 
# - Denotes a variance of more than 100 percent.
 
 
 
 
 
 
 
 
 
See Appendix V for footnote references
-1-
 
 
 
 
American Express Company
(Preliminary)
Consolidated Balance Sheets and Related Statistical Information
 
(Billions, except percentages, per share amounts and where indicated)
 
 
 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
  
Assets
                                    
Cash & cash equivalents
  
$
26
    
$
30
    
$
29
    
$
25
    
$
27
      
(4
)
Card Member receivables, less reserves
    
51
      
49
      
47
      
47
      
45
      
13
  
Card Member Loans, less reserves
    
66
      
65
      
62
      
64
      
60
      
10
  
Investment securities
    
3
      
3
      
4
      
3
      
4
      
(25
)
Other (B)
    
23
      
20
      
19
      
20
      
17
      
35
  
Total assets
  
$
169
    
$
167
    
$
161
    
$
159
    
$
153
      
10
  
   
Liabilities and Shareholders' Equity
                                                
Customer deposits
  
$
61
    
$
58
    
$
54
    
$
53
    
$
54
      
13
  
Short-term borrowings
    
2
      
3
      
4
      
6
      
3
      
(33
)
Long-term debt
    
49
      
52
      
52
      
47
      
45
      
9
  
Other (B)
    
36
      
33
      
30
      
32
      
30
      
20
  
Total liabilities
    
148
      
146
      
140
      
138
      
132
      
12
  
   
Shareholders' Equity
    
21
      
21
      
21
      
21
      
21
      
-
  
Total liabilities and shareholders' equity
  
$
169
    
$
167
    
$
161
    
$
159
    
$
153
      
10
  
   
Return on average equity (C)
    
22.7
%
    
21.7
%
    
25.1
%
    
26.0
%
    
26.1
%
        
Return on average common equity (C)
    
23.9
%
    
22.9
%
    
26.5
%
    
27.5
%
    
27.6
%
        
Book value per common share (dollars)
  
$
22.39
    
$
22.14
    
$
21.62
    
$
20.93
    
$
21.20
      
6
  
 
 
 
See Appendix V for footnote references
-2-
 
 
 
American Express Company
(Preliminary)
Consolidated Capital

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
  
Shares Outstanding (in millions)
      
Beginning of period
    
885
      
895
      
904
      
917
      
925
  
Repurchase of common shares
    
(15
)
    
(10
)
    
(11
)
    
(15
)
    
(8
)
Net impact of employee benefit plans and others
    
1
      
-
      
2
      
2
      
-
  
End of period
    
871
      
885
      
895
      
904
      
917
  
   
Risk-Based Capital Ratios - Transitional Basel III ($ in billions) (D)
      
Common Equity Tier 1/Risk Weighted Assets (RWA)
    
11.9
%
    
12.3
%
    
12.7
%
    
12.3
%
    
13.6
%
Tier 1
    
13.0
%
    
13.5
%
    
13.9
%
    
13.5
%
    
14.9
%
Total
    
14.7
%
    
15.2
%
    
15.6
%
    
15.2
%
    
16.6
%
   
Common Equity Tier 1
  
$
16.4
    
$
16.4
    
$
16.3
    
$
16.1
    
$
16.8
  
Tier 1 Capital
  
$
17.9
    
$
18.0
    
$
17.8
    
$
17.7
    
$
18.4
  
Tier 2 Capital
  
$
2.3
    
$
2.3
    
$
2.2
    
$
2.2
    
$
2.1
  
Total Capital
  
$
20.2
    
$
20.3
    
$
20.0
    
$
19.9
    
$
20.5
  
RWA
  
$
138.0
    
$
133.5
    
$
128.6
    
$
131.0
    
$
123.6
  
Tier 1 Leverage
    
10.9
%
    
11.0
%
    
11.5
%
    
11.6
%
    
11.9
%
Supplementary Leverage Ratio (SLR) (E)
    
9.3
%
    
9.4
%
    
9.9
%
    
10.0
%
    
10.3
%
Average Total Assets to calculate the Tier 1 Leverage Ratio (F)
  
$
164.6
    
$
164.2
    
$
155.0
    
$
152.7
    
$
154.2
  
Total Leverage Exposure to calculate SLR
  
$
191.7
    
$
190.4
    
$
180.5
    
$
177.5
    
$
178.7
  
   
Risk-Based Capital Ratios - Estimated fully phased-in Basel III ($ in billions) (D) (G)
                                        
RWA
  
$
139.2
    
$
135.0
    
$
130.3
    
$
131.9
    
$
124.7
  
Risk-Based Capital (Common Equity Tier 1)
  
$
16.1
    
$
16.1
    
$
16.0
    
$
15.6
    
$
16.3
  
Risk-Based Capital (Tier 1)
  
$
17.6
    
$
17.7
    
$
17.5
    
$
17.2
    
$
17.9
  
Common Equity Tier 1 ratio (H)
    
11.5
%
    
12.0
%
    
12.3
%
    
11.8
%
    
13.1
%
Tier 1 Risk-Based Capital Ratio (I)
    
12.7
%
    
13.1
%
    
13.5
%
    
13.0
%
    
14.3
%
Supplementary Leverage Ratio (J)
    
9.2
%
    
9.3
%
    
9.7
%
    
9.7
%
    
10.0
%
 
 
 
See Appendix V for footnote references
-3-
 

American Express Company
 
(Preliminary)
Selected Card Related Statistical Information
 
 
(Billions, except percentages and where indicated)
 
 

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Card billed business (K)
                                                      
United States
  
$
176.4
    
$
177.6
    
$
165.4
    
$
174.4
    
$
164.6
      
7
    
$
519.4
    
$
526.0
      
(1
)
Outside the United States
    
95.5
      
92.0
      
86.9
      
88.8
      
86.6
      
10
      
274.4
      
248.3
      
11
  
Worldwide
  
$
271.9
    
$
269.6
    
$
252.3
    
$
263.2
    
$
251.2
      
8
    
$
793.8
    
$
774.3
      
3
  
Proprietary
  
$
225.3
    
$
223.8
    
$
208.9
    
$
218.6
    
$
206.4
      
9
    
$
658.0
    
$
645.2
      
2
  
Global Network Services (GNS)
    
46.6
      
45.8
      
43.4
      
44.6
      
44.8
      
4
      
135.8
      
129.1
      
5
  
Worldwide
  
$
271.9
    
$
269.6
    
$
252.3
    
$
263.2
    
$
251.2
      
8
    
$
793.8
    
$
774.3
      
3
  
Total cards-in-force (millions) (L)
                                                                        
United States
    
49.5
      
48.9
      
48.2
      
47.5
      
47.1
      
5
      
49.5
      
47.1
      
5
  
Outside the United States
    
63.4
      
63.3
      
63.0
      
62.4
      
61.7
      
3
      
63.4
      
61.7
      
3
  
Worldwide
    
112.9
      
112.2
      
111.2
      
109.9
      
108.8
      
4
      
112.9
      
108.8
      
4
  
Proprietary
    
63.9
      
63.0
      
62.2
      
61.3
      
60.7
      
5
      
63.9
      
60.7
      
5
  
GNS
    
49.0
      
49.2
      
49.0
      
48.6
      
48.1
      
2
      
49.0
      
48.1
      
2
  
Worldwide
    
112.9
      
112.2
      
111.2
      
109.9
      
108.8
      
4
      
112.9
      
108.8
      
4
  
Basic cards-in-force (millions) (L)
                                                                        
United States
    
39.0
      
38.6
      
38.1
      
37.4
      
37.0
      
5
      
39.0
      
37.0
      
5
  
Outside the United States
    
52.7
      
52.6
      
52.2
      
51.7
      
51.1
      
3
      
52.7
      
51.1
      
3
  
Worldwide
    
91.7
      
91.2
      
90.3
      
89.1
      
88.1
      
4
      
91.7
      
88.1
      
4
  
Average basic Card Member spending (dollars) (M)
                                                                        
United States
  
$
5,018
    
$
5,128
    
$
4,859
    
$
5,181
    
$
4,937
      
2
    
$
15,009
    
$
13,732
      
9
  
Outside the United States
  
$
3,598
    
$
3,468
    
$
3,283
    
$
3,401
    
$
3,264
      
10
    
$
10,351
    
$
9,667
      
7
  
Worldwide
  
$
4,596
    
$
4,633
    
$
4,387
    
$
4,647
    
$
4,433
      
4
    
$
13,620
    
$
12,628
      
8
  
Card Member loans
                                                                        
United States
  
$
59.9
    
$
58.5
    
$
56.6
    
$
58.3
    
$
53.9
      
11
    
$
59.9
    
$
53.9
      
11
  
Outside the United States
    
8.0
      
7.5
      
7.0
      
7.0
      
6.7
      
19
      
8.0
      
6.7
      
19
  
Worldwide
  
$
67.9
    
$
66.0
    
$
63.6
    
$
65.3
    
$
60.6
      
12
    
$
67.9
    
$
60.6
      
12
  
 
                                                                        
Average discount rate (N)
    
2.42
%
    
2.44
%
    
2.45
%
    
2.44
%
    
2.47
%
            
2.44
%
    
2.45
%
        
Average fee per card (dollars) (M)
  
$
49
    
$
49
    
$
48
    
$
47
    
$
49
      
-
    
$
49
    
$
43
      
14
  

# - Denotes a variance of 100 percent or more.



See Appendix V for footnote references
-4-

American Express Company
(Preliminary)
Selected Credit Related Statistical Information
 
 
 
 
 
 
 
(Billions, except percentages and where indicated)
 
 
 
 
 
 
 

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Worldwide Card Member receivables (O)
                                                      
Total receivables
  
$
51.5
    
$
49.4
    
$
47.6
    
$
47.3
    
$
45.3
      
14
    
$
51.5
    
$
45.3
      
14
  
Loss reserves (millions):
                                                                        
Beginning balance
  
$
475
    
$
491
    
$
467
    
$
437
    
$
423
      
12
    
$
467
    
$
462
      
1
  
Provisions (P)
    
214
      
163
      
213
      
200
      
174
      
23
      
590
      
496
      
19
  
Net write-offs (Q)
    
(175
)
    
(179
)
    
(194
)
    
(156
)
    
(159
)
    
10
      
(548
)
    
(518
)
    
6
  
Other (R)
    
(2
)
    
-
      
5
      
(14
)
    
(1
)
    
#
      
3
      
(3
)
    
#
  
Ending balance
  
$
512
    
$
475
    
$
491
    
$
467
    
$
437
      
17
    
$
512
    
$
437
      
17
  
% of receivables
    
1.0
%
    
1.0
%
    
1.0
%
    
1.0
%
    
1.0
%
            
1.0
%
    
1.0
%
        
Net write-off rate, excluding Global Corporate Payments (GCP) (principal only) (S)
    
1.5
%
    
1.5
%
    
1.7
%
    
1.3
%
    
1.4
%
            
1.6
%
    
1.6
%
        
Net write-off rate, excluding GCP (principal and fees) (S)
    
1.7
%
    
1.7
%
    
2.0
%
    
1.5
%
    
1.6
%
            
1.8
%
    
1.8
%
        
30+ days past due as a % of total, excluding GCP
    
1.3
%
    
1.3
%
    
1.5
%
    
1.4
%
    
1.4
%
            
1.3
%
    
1.4
%
        
GCP Net loss ratio (as a % of charge volume) (T)
    
0.09
%
    
0.10
%
    
0.11
%
    
0.10
%
    
0.11
%
            
0.10
%
    
0.09
%
        
GCP 90+ days past billing as a % of total (T)
    
0.9
%
    
0.8
%
    
0.7
%
    
0.9
%
    
0.8
%
            
0.9
%
    
0.8
%
        
   
Worldwide Card Member loans (O)
                                                                        
Total loans
  
$
67.9
    
$
66.0
    
$
63.6
    
$
65.3
    
$
60.6
      
12
    
$
67.9
    
$
60.6
      
12
  
Loss reserves (millions):
                                                                        
Beginning balance
  
$
1,320
    
$
1,248
    
$
1,223
    
$
1,114
    
$
1,091
      
21
    
$
1,223
    
$
1,028
      
19
  
Provisions (P)
    
531
      
404
      
337
      
404
      
319
      
66
      
1,272
      
831
      
53
  
Net write-offs - principal (Q)
    
(299
)
    
(285
)
    
(272
)
    
(243
)
    
(250
)
    
20
      
(856
)
    
(687
)
    
25
  
Net write-offs - interest and fees (Q)
    
(57
)
    
(55
)
    
(51
)
    
(47
)
    
(48
)
    
19
      
(163
)
    
(128
)
    
27
  
Other (R)
    
7
      
8
      
11
      
(5
)
    
2
      
#
      
26
      
70
      
(63
)
Ending balance
  
$
1,502
    
$
1,320
    
$
1,248
    
$
1,223
    
$
1,114
      
35
    
$
1,502
    
$
1,114
      
35
  
Ending reserves - principal
  
$
1,427
    
$
1,247
    
$
1,179
    
$
1,160
    
$
1,050
      
36
    
$
1,427
    
$
1,050
      
36
  
Ending reserves - interest and fees
  
$
75
    
$
73
    
$
69
    
$
63
    
$
64
      
17
    
$
75
    
$
64
      
17
  
% of loans
    
2.2
%
    
2.0
%
    
2.0
%
    
1.9
%
    
1.8
%
            
2.2
%
    
1.8
%
        
% of past due
    
174
%
    
167
%
    
158
%
    
161
%
    
160
%
            
174
%
    
160
%
        
Average loans
  
$
67.1
    
$
65.1
    
$
63.9
    
$
62.6
    
$
60.3
      
11
    
$
65.4
    
$
58.9
      
11
  
Net write-off rate (principal only) (S)
    
1.8
%
    
1.8
%
    
1.7
%
    
1.6
%
    
1.7
%
            
1.7
%
    
1.6
%
        
Net write-off rate (principal, interest and fees) (S)
    
2.1
%
    
2.1
%
    
2.0
%
    
1.9
%
    
2.0
%
            
2.1
%
    
1.8
%
        
30+ days past due loans as a % of total
    
1.3
%
    
1.2
%
    
1.2
%
    
1.2
%
    
1.1
%
            
1.3
%
    
1.1
%
        
   
Net interest income divided by average loans (U)
    
10.0
%
    
9.4
%
    
9.4
%
    
9.0
%
    
8.8
%
            
9.6
%
    
8.7
%
        
Net interest yield on Card Member loans (U)
    
10.7
%
    
10.3
%
    
10.3
%
    
9.9
%
    
9.8
%
            
10.5
%
    
9.6
%
        

# - Denotes a variance of 100 percent or more.


See Appendix V for footnote references
-5-

 

American Express Company
 (Preliminary)
Selected Income Statement Information by Segment
 
(Millions)
 
 
 

 
  
U.S. Consumer Services
    
International Consumer and Network Services
    
Global Commercial Services
    
Global Merchant Services
    
Corporate and Other
    
Consolidated
  
 
  
(USCS)
    
(ICNS)
    
(GCS)
    
(GMS)
              
Q3'17
                                    
Non-interest revenues
  
$
1,976
    
$
1,277
    
$
2,360
    
$
1,088
    
$
60
    
$
6,761
  
Interest income
    
1,509
      
271
      
351
      
-
      
111
      
2,242
  
Interest expense
    
202
      
65
      
144
      
(65
)
    
221
      
567
  
Total revenues net of interest expense
    
3,283
      
1,483
      
2,567
      
1,153
      
(50
)
    
8,436
  
Total provision
    
459
      
106
      
194
      
8
      
2
      
769
  
Pretax income (loss)
    
700
      
307
      
772
      
517
      
(469
)
    
1,827
  
Income tax provision (benefit)
    
225
      
21
      
243
      
149
      
(167
)
    
471
  
Net income (loss)
    
475
      
286
      
529
      
368
      
(302
)
    
1,356
  
Q3'16
                                                
Non-interest revenues
  
$
1,849
    
$
1,205
    
$
2,240
    
$
1,044
    
$
102
    
$
6,440
  
Interest income
    
1,178
      
231
      
282
      
-
      
73
      
1,764
  
Interest expense
    
125
      
55
      
98
      
(60
)
    
212
      
430
  
Total revenues net of interest expense
    
2,902
      
1,381
      
2,424
      
1,104
      
(37
)
    
7,774
  
Total provision
    
275
      
84
      
134
      
8
      
3
      
504
  
Pretax income (loss)
    
615
      
208
      
729
      
571
      
(388
)
    
1,735
  
Income tax provision (benefit)
    
214
      
53
      
263
      
212
      
(149
)
    
593
  
Net income (loss)
    
401
      
155
      
466
      
359
      
(239
)
    
1,142
  
YOY % change
                                                
Non-interest revenues
    
7
      
6
      
5
      
4
      
(41
)
    
5
  
Interest income
    
28
      
17
      
24
      
-
      
52
      
27
  
Interest expense
    
62
      
18
      
47
      
8
      
4
      
32
  
Total revenues net of interest expense
    
13
      
7
      
6
      
4
      
35
      
9
  
Total provision
    
67
      
26
      
45
      
-
      
(33
)
    
53
  
Pretax income (loss)
    
14
      
48
      
6
      
(9
)
    
21
      
5
  
Income tax provision (benefit)
    
5
      
(60
)
    
(8
)
    
(30
)
    
12
      
(21
)
Net income (loss)
    
18
      
85
      
14
      
3
      
26
      
19
  

 
# - Denotes a variance of 100 percent or more.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
See Appendix V for footnote references
-6-
 

American Express Company
(Preliminary)
Billed Business Growth Trend
    
 
 
 
 

 
  
YOY % change
  
 
  
Reported
    
FX-Adjusted (V)
    
Reported
    
FX-Adjusted (V)
  
 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
FY'17
    
FY'17
  
Worldwide (W)
                                                                        
Total Billed Business
    
8
%
    
-
      
(1
%)
    
(4
%)
    
(3
%)
    
8
%
    
1
%
    
-
      
(3
%)
    
(3
%)
    
3
%
    
3
%
Proprietary billed business
    
9
      
(1
)
    
(2
)
    
(5
)
    
(5
)
    
9
      
-
      
(2
)
    
(4
)
    
(5
)
    
2
      
2
  
GNS billed business (X)
    
4
      
5
      
7
      
3
      
10
      
4
      
5
      
6
      
4
      
10
      
5
      
5
  
Airline-related volume (8% of Q3'17 worldwide billed business)
    
5
      
1
      
1
      
(3
)
    
(6
)
    
3
      
1
      
2
      
(1
)
    
(5
)
    
2
      
2
  
 
                                                                                                
United States (W)
                                                                                                
Billed Business
    
7
      
(4
)
    
(6
)
    
(8
)
    
(9
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
(1
)
    
n/a
  
Proprietary consumer card billed business (Y)
    
7
      
(9
)
    
(13
)
    
(14
)
    
(15
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
(6
)
    
n/a
  
Proprietary small business and corporate services billed business (Z)
    
9
      
4
      
2
      
1
      
(1
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
5
      
n/a
  
T&E-related volume (25% of Q3'17 U.S. billed business)
    
3
      
(3
)
    
(5
)
    
(6
)
    
(7
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
(2
)
    
n/a
  
Non-T&E-related volume (75% of Q3'17 U.S. billed business)
    
8
      
(4
)
    
(7
)
    
(9
)
    
(9
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
(1
)
    
n/a
  
Airline-related volume (7% of Q3'17 U.S. billed business)
    
2
      
(1
)
    
(4
)
    
(6
)
    
(11
)
    
n/a
      
n/a
      
n/a
      
n/a
      
n/a
      
(1
)
    
n/a
  
 
                                                                                                
Outside the United States (W)
                                                                                                
Billed Business
    
10
      
9
      
12
      
7
      
10
      
9
      
11
      
13
      
11
      
11
      
11
      
11
  
Japan, Asia Pacific & Australia ("JAPA") billed business
    
8
      
12
      
16
      
14
      
22
      
9
      
13
      
14
      
13
      
16
      
12
      
12
  
Latin America & Canada ("LACC") billed business
    
10
      
8
      
10
      
1
      
-
      
8
      
9
      
9
      
7
      
7
      
10
      
9
  
Europe, Middle East & Africa ("EMEA") billed business
    
13
      
7
      
7
      
1
      
2
      
10
      
10
      
12
      
9
      
7
      
9
      
11
  
Proprietary consumer card billed business (X)
    
15
      
9
      
8
      
4
      
6
      
13
      
12
      
11
      
10
      
8
      
11
      
12
  
Proprietary small business and corporate services billed business (Z)
    
14
      
8
      
13
      
7
      
6
      
11
      
10
      
14
      
11
      
6
      
12
      
12
  



See Appendix V for footnote references
-7-

 

U.S. Consumer Services
 
 (Preliminary)
Selected Income Statement and Statistical Information
(Millions, except percentages)

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Non-interest revenues
  
$
1,976
    
$
1,999
    
$
1,857
    
$
1,927
    
$
1,849
      
7
    
$
5,832
    
$
5,947
      
(2
)
Interest income
    
1,509
      
1,369
      
1,308
      
1,235
      
1,178
      
28
      
4,186
      
3,847
      
9
  
Interest expense
    
202
      
171
      
146
      
132
      
125
      
62
      
519
      
404
      
28
  
Net interest income
    
1,307
      
1,198
      
1,162
      
1,103
      
1,053
      
24
      
3,667
      
3,443
      
7
  
Total revenues net of interest expense
    
3,283
      
3,197
      
3,019
      
3,030
      
2,902
      
13
      
9,499
      
9,390
      
1
  
Provisions for losses
    
459
      
345
      
294
      
363
      
275
      
67
      
1,098
      
702
      
56
  
Total revenues net of interest expense after provisions for losses
    
2,824
      
2,852
      
2,725
      
2,667
      
2,627
      
7
      
8,401
      
8,688
      
(3
)
Expenses
                                                                        
Marketing, promotion, rewards, Card Member services and other
    
1,440
      
1,469
      
1,297
      
1,425
      
1,274
      
13
      
4,206
      
3,991
      
5
  
Salaries and employee benefits and other operating expenses
    
684
      
714
      
728
      
761
      
738
      
(7
)
    
2,126
      
1,297
      
64
  
Total expenses
    
2,124
      
2,183
      
2,025
      
2,186
      
2,012
      
6
      
6,332
      
5,288
      
20
  
Pretax segment income
    
700
      
669
      
700
      
481
      
615
      
14
      
2,069
      
3,400
      
(39
)
Income tax provision
    
225
      
229
      
231
      
130
      
214
      
5
      
685
      
1,238
      
(45
)
Segment income
  
$
475
    
$
440
    
$
469
    
$
351
    
$
401
      
18
    
$
1,384
    
$
2,162
      
(36
)
Effective tax rate
    
32.1
%
    
34.2
%
    
33.0
%
    
27.0
%
    
34.8
%
            
33.1
%
    
36.4
%
        
   
(Billions, except percentages and where indicated)
                                                                        
Card billed business
  
$
83.7
    
$
84.8
    
$
77.5
    
$
84.3
    
$
78.6
      
6
    
$
246.0
    
$
261.0
      
(6
)
Total cards-in-force (millions)
    
34.4
      
33.8
      
33.2
      
32.7
      
32.3
      
7
      
34.4
      
32.3
      
7
  
Basic cards-in-force (millions)
    
24.6
      
24.2
      
23.7
      
23.3
      
22.9
      
7
      
24.6
      
22.9
      
7
  
Average basic Card Member spending (dollars) (M)
  
$
3,433
    
$
3,538
    
$
3,297
    
$
3,643
    
$
3,452
      
(1
)
  
$
10,271
    
$
9,878
      
4
  
   
Total segment assets
  
$
87.7
    
$
86.8
    
$
81.2
    
$
87.4
    
$
79.4
      
10
    
$
87.7
    
$
79.4
      
10
  
Segment capital (AA)
  
$
7.1
    
$
7.1
    
$
7.1
    
$
7.2
    
$
7.5
      
(5
)
  
$
7.1
    
$
7.5
      
(5
)
Return on average segment capital (AA)
    
24.2
%
    
23.3
%
    
31.9
%
    
34.9
%
    
37.4
%
            
24.2
%
    
37.4
%
        
   
Card Member receivables
                                                                        
Total receivables
  
$
11.2
    
$
11.3
    
$
10.9
    
$
12.3
    
$
10.1
      
11
    
$
11.2
    
$
10.1
      
11
  
30+ days past due as a % of total
    
1.2
%
    
1.1
%
    
1.3
%
    
1.2
%
    
1.4
%
            
1.2
%
    
1.4
%
        
Net write-off rate (principal only) (S)
    
1.2
%
    
1.2
%
    
1.5
%
    
1.3
%
    
1.1
%
            
1.3
%
    
1.4
%
        
Net write-off rate (principal and fees) (S)
    
1.3
%
    
1.4
%
    
1.7
%
    
1.5
%
    
1.3
%
            
1.5
%
    
1.6
%
        
Card Member loans
                                                                        
Total loans
  
$
49.3
    
$
48.3
    
$
46.7
    
$
48.8
    
$
44.9
      
10
    
$
49.3
    
$
44.9
      
10
  
30+ days past due loans as a % of total
    
1.3
%
    
1.1
%
    
1.2
%
    
1.1
%
    
1.1
%
            
1.3
%
    
1.1
%
        
Average loans
  
$
49.0
    
$
47.7
    
$
47.2
    
$
46.5
    
$
44.8
      
9
    
$
48.1
    
$
43.7
      
10
  
Net write-off rate (principal only) (S)
    
1.8
%
    
1.8
%
    
1.7
%
    
1.5
%
    
1.6
%
            
1.7
%
    
1.5
%
        
Net write-off rate (principal, interest and fees) (S)
    
2.1
%
    
2.1
%
    
2.0
%
    
1.8
%
    
1.9
%
            
2.0
%
    
1.8
%
        
   
Net interest income divided by average loans (U)
    
10.7
%
    
10.0
%
    
9.8
%
    
9.5
%
    
9.4
%
            
10.2
%
    
9.2
%
        
Net interest yield on Card Member loans (U)
    
10.6
%
    
10.1
%
    
10.0
%
    
9.6
%
    
9.5
%
            
10.2
%
    
9.3
%
        

# - Denotes a variance of 100 percent or more.
 
 
 
 

 
See Appendix V for footnote references

-8-

 

International Consumer and Network Services
 
(Preliminary)
Selected Income Statement and Statistical Information
(Millions, except percentages)

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Non-interest revenues
  
$
1,277
    
$
1,247
    
$
1,195
    
$
1,198
    
$
1,205
      
6
    
$
3,719
    
$
3,587
      
4
  
Interest income
    
271
      
246
      
235
      
230
      
231
      
17
      
752
      
692
      
9
  
Interest expense
    
65
      
60
      
53
      
52
      
55
      
18
      
178
      
167
      
7
  
Net interest income
    
206
      
186
      
182
      
178
      
176
      
17
      
574
      
525
      
9
  
Total revenues net of interest expense
    
1,483
      
1,433
      
1,377
      
1,376
      
1,381
      
7
      
4,293
      
4,112
      
4
  
Provisions for losses
    
106
      
84
      
66
      
92
      
84
      
26
      
256
      
233
      
10
  
Total revenues net of interest expense after provisions for losses
    
1,377
      
1,349
      
1,311
      
1,284
      
1,297
      
6
      
4,037
      
3,879
      
4
  
Expenses
                                                                        
Marketing, promotion, rewards, Card Member services and other
    
587
      
561
      
505
      
642
      
554
      
6
      
1,653
      
1,535
      
8
  
Salaries and employee benefits and other operating expenses
    
483
      
513
      
514
      
560
      
535
      
(10
)
    
1,510
      
1,608
      
(6
)
Total expenses
    
1,070
      
1,074
      
1,019
      
1,202
      
1,089
      
(2
)
    
3,163
      
3,143
      
1
  
Pretax segment income
    
307
      
275
      
292
      
82
      
208
      
48
      
874
      
736
      
19
  
Income tax provision/(benefit)
    
21
      
66
      
74
      
(2
)
    
53
      
(60
)
    
161
      
165
      
(2
)
Segment income
  
$
286
    
$
209
    
$
218
    
$
84
    
$
155
      
85
    
$
713
    
$
571
      
25
  
Effective tax rate
    
6.8
%
    
24.0
%
    
25.3
%
    
(2.4
%)
    
25.5
%
            
18.4
%
    
22.4
%
        
   
(Billions, except percentages and where indicated)
                                                                        
Card billed business
                                                                        
    Proprietary
  
$
30.5
    
$
28.9
    
$
26.6
    
$
28.1
    
$
26.6
      
15
    
$
86.0
    
$
77.8
      
11
  
    Global Network Services (GNS)
    
46.6
      
45.8
      
43.4
      
44.6
      
44.8
      
4
      
135.8
      
129.1
      
5
  
Total
  
$
77.1
    
$
74.7
    
$
70.0
    
$
72.7
    
$
71.4
      
8
    
$
221.8
    
$
206.9
      
7
  
   
Total cards-in-force (millions)
                                                                        
    Proprietary
    
15.6
      
15.4
      
15.3
      
15.0
      
14.8
      
5
      
15.6
      
14.8
      
5
  
    GNS
    
49.0
      
49.2
      
49.0
      
48.6
      
48.1
      
2
      
49.0
      
48.1
      
2
  
Total
    
64.6
      
64.6
      
64.3
      
63.6
      
62.9
      
3
      
64.6
      
62.9
      
3
  
   
Proprietary basic cards-in-force (millions)
    
10.8
      
10.6
      
10.5
      
10.3
      
10.3
      
5
      
10.8
      
10.3
      
5
  
Average basic Card Member spending (dollars) (M)
  
$
2,840
    
$
2,726
    
$
2,542
    
$
2,720
    
$
2,596
      
9
    
$
8,111
    
$
7,665
      
6
  
   
Total segment assets
  
$
38.9
    
$
37.6
    
$
36.1
    
$
35.7
    
$
34.4
      
13
    
$
38.9
    
$
34.4
      
13
  
Segment capital (AA)
  
$
2.9
    
$
2.8
    
$
2.7
    
$
2.5
    
$
2.7
      
7
    
$
2.9
    
$
2.7
      
7
  
Return on average segment capital (AA)
    
29.5
%
    
25.2
%
    
26.4
%
    
25.4
%
    
26.4
%
            
29.5
%
    
26.4
%
        
   
Card Member receivables
                                                                        
Total receivables
  
$
6.5
    
$
6.0
    
$
5.5
    
$
6.0
    
$
5.6
      
16
    
$
6.5
    
$
5.6
      
16
  
30+ days past due as a % of total
    
1.4
%
    
1.4
%
    
1.5
%
    
1.3
%
    
1.5
%
            
1.4
%
    
1.5
%
        
Net write-off rate (principal only) (S)
    
2.2
%
    
1.9
%
    
2.1
%
    
1.8
%
    
2.0
%
            
2.1
%
    
2.1
%
        
Net write-off rate (principal and fees) (S)
    
2.4
%
    
2.0
%
    
2.3
%
    
1.9
%
    
2.2
%
            
2.2
%
    
2.3
%
        
Card Member loans
                                                                        
Total loans
  
$
7.8
    
$
7.2
    
$
6.8
    
$
7.0
    
$
6.7
      
16
    
$
7.8
    
$
6.7
      
16
  
30+ days past due loans as a % of total
    
1.6
%
    
1.7
%
    
1.7
%
    
1.6
%
    
1.7
%
            
1.6
%
    
1.7
%
        
Average loans
  
$
7.5
    
$
7.1
    
$
6.9
    
$
6.8
    
$
6.7
      
12
    
$
7.2
    
$
6.8
      
6
  
Net write-off rate (principal only) (S)
    
2.2
%
    
2.0
%
    
2.0
%
    
2.0
%
    
2.1
%
            
2.1
%
    
2.0
%
        
Net write-off rate (principal, interest and fees) (S)
    
2.7
%
    
2.5
%
    
2.5
%
    
2.5
%
    
2.6
%
            
2.6
%
    
2.5
%
        
   
Net interest income divided by average loans (U)
    
11.0
%
    
10.5
%
    
10.6
%
    
10.5
%
    
10.5
%
            
10.6
%
    
10.4
%
        
Net interest yield on Card Member loans (U)
    
11.6
%
    
11.2
%
    
11.1
%
    
11.0
%
    
11.2
%
            
11.2
%
    
10.9
%
        
 

 
# - Denotes a variance of 100 percent or more.
 
 


See Appendix V for footnote references
-9-
 
 

Global Commercial Services
 
(Preliminary)
Selected Income Statement and Statistical Information
(Millions, except percentages)

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Non-interest revenues
  
$
2,360
    
$
2,368
    
$
2,271
    
$
2,297
    
$
2,240
      
5
    
$
6,999
    
$
6,710
      
4
  
Interest income
    
351
      
334
      
319
      
296
      
282
      
24
      
1,004
      
913
      
10
  
Interest expense
    
144
      
129
      
109
      
104
      
98
      
47
      
382
      
297
      
29
  
Net interest income
    
207
      
205
      
210
      
192
      
184
      
13
      
622
      
616
      
1
  
Total revenues net of interest expense
    
2,567
      
2,573
      
2,481
      
2,489
      
2,424
      
6
      
7,621
      
7,326
      
4
  
Provisions for losses
    
194
      
154
      
208
      
171
      
134
      
45
      
556
      
433
      
28
  
Total revenues net of interest expense after provisions for losses
    
2,373
      
2,419
      
2,273
      
2,318
      
2,290
      
4
      
7,065
      
6,893
      
2
  
Expenses
                                                                        
Marketing, promotion, rewards, Card Member services and other
    
905
      
949
      
938
      
983
      
808
      
12
      
2,792
      
2,415
      
16
  
Salaries and employee benefits and other operating expenses
    
696
      
697
      
705
      
790
      
753
      
(8
)
    
2,098
      
2,078
      
1
  
Total expenses
    
1,601
      
1,646
      
1,643
      
1,773
      
1,561
      
3
      
4,890
      
4,493
      
9
  
Pretax segment income
    
772
      
773
      
630
      
545
      
729
      
6
      
2,175
      
2,400
      
(9
)
Income tax provision
    
243
      
273
      
212
      
163
      
263
      
(8
)
    
728
      
873
      
(17
)
Segment income
  
$
529
    
$
500
    
$
418
    
$
382
    
$
466
      
14
    
$
1,447
    
$
1,527
      
(5
)
Effective tax rate
    
31.5
%
    
35.3
%
    
33.7
%
    
29.9
%
    
36.1
%
            
33.5
%
    
36.4
%
        
   
(Billions, except percentages and where indicated)
                                                                        
Card billed business
  
$
109.7
    
$
109.0
    
$
102.8
    
$
105.1
    
$
100.1
      
10
    
$
321.5
    
$
302.8
      
6
  
Total cards-in-force (millions)
    
13.9
      
13.8
      
13.7
      
13.6
      
13.6
      
2
      
13.9
      
13.6
      
2
  
Basic cards-in-force (millions)
    
13.9
      
13.8
      
13.7
      
13.6
      
13.6
      
2
      
13.9
      
13.6
      
2
  
Average basic Card Member spending (dollars) (M)
  
$
7,907
    
$
7,920
    
$
7,533
    
$
7,729
    
$
7,386
      
7
    
$
23,364
    
$
20,857
      
12
  
 
                                                                        
Total segment assets
  
$
52.7
    
$
51.0
    
$
48.3
    
$
46.5
    
$
46.8
      
13
    
$
52.7
    
$
46.8
      
13
  
Segment capital (AA)
  
$
7.3
    
$
7.4
    
$
7.2
    
$
7.0
    
$
7.3
      
-
    
$
7.3
    
$
7.3
      
-
  
Return on average segment capital (AA)
    
25.3
%
    
24.2
%
    
25.4
%
    
26.4
%
    
28.0
%
            
25.3
%
    
28.0
%
        
 
                                                                        
Card Member receivables
  
$
33.8
    
$
32.1
    
$
31.2
    
$
29.0
    
$
29.6
      
14
    
$
33.8
    
$
29.6
      
14
  
Card Member loans
  
$
10.7
    
$
10.4
    
$
10.0
    
$
9.5
    
$
9.1
      
18
    
$
10.7
    
$
9.1
      
18
  
   
Card Member receivables
                                                                        
Total receivables - GCP  (T)
  
$
17.9
    
$
16.9
    
$
16.6
    
$
14.8
    
$
15.8
      
13
    
$
17.9
    
$
15.8
      
13
  
90+ days past billing as a % of total - GCP (T)
    
0.9
%
    
0.8
%
    
0.7
%
    
0.9
%
    
0.8
%
            
0.9
%
    
0.8
%
        
Net loss ratio (as a % of charge volume) - GCP (T)
    
0.09
%
    
0.10
%
    
0.11
%
    
0.10
%
    
0.11
%
            
0.10
%
    
0.09
%
        
Total receivables - Global Small Business Services (GSBS) (AB)
  
$
15.9
    
$
15.2
    
$
14.6
    
$
14.3
    
$
13.8
      
15
    
$
15.9
    
$
13.8
      
15
  
30+ days past due as a % of total - GSBS
    
1.4
%
    
1.4
%
    
1.6
%
    
1.6
%
    
1.5
%
            
1.4
%
    
1.5
%
        
Net write-off rate (principal only) - GSBS (S)
    
1.5
%
    
1.6
%
    
1.8
%
    
1.2
%
    
1.3
%
            
1.6
%
    
1.6
%
        
Net write-off rate (principal and fees) - GSBS (S)
    
1.7
%
    
1.8
%
    
2.0
%
    
1.4
%
    
1.5
%
            
1.8
%
    
1.8
%
        
Card Member loans (AC)
                                                                        
Total loans - GSBS
  
$
10.7
    
$
10.3
    
$
10.0
    
$
9.5
    
$
9.0
      
19
    
$
10.7
    
$
9.0
      
19
  
30+ days past due as a % of total - GSBS
    
1.1
%
    
1.1
%
    
1.2
%
    
1.1
%
    
1.1
%
            
1.1
%
    
1.1
%
        
Average loans - GSBS
  
$
10.5
    
$
10.1
    
$
9.6
    
$
9.3
    
$
8.8
      
19
    
$
10.1
    
$
8.4
      
20
  
Net write-off rate (principal only) - GSBS (S)
    
1.6
%
    
1.5
%
    
1.6
%
    
1.4
%
    
1.5
%
            
1.6
%
    
1.4
%
        
Net write-off rate (principal, interest and fees) - GSBS (S)
    
1.9
%
    
1.8
%
    
1.8
%
    
1.7
%
    
1.8
%
            
1.9
%
    
1.7
%
        
   
Net interest income divided by average loans (U)
    
7.9
%
    
8.0
%
    
8.7
%
    
8.3
%
    
8.3
%
            
8.2
%
    
8.4
%
        
Net interest yield on Card Member loans (U)
    
10.8
%
    
10.9
%
    
11.1
%
    
10.6
%
    
10.6
%
            
10.9
%
    
10.4
%
        
 

 
# - Denotes a variance of 100 percent or more.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

See Appendix V for footnote references

-10-


Global Merchant Services
 
(Preliminary)
Selected Income Statement and Statistical Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Millions, except percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
YOY % change
    
FY'17
    
FY'16
    
YOY % change
  
Non-interest revenues
  
$
1,088
    
$
1,086
    
$
1,017
    
$
1,063
    
$
1,044
      
4
    
$
3,191
    
$
3,172
      
1
  
Interest income
    
-
      
1
      
-
      
-
      
-
      
-
      
1
      
1
      
-
  
Interest expense
    
(65
)
    
(65
)
    
(58
)
    
(57
)
    
(60
)
    
8
      
(188
)
    
(180
)
    
4
  
Net interest income
    
65
      
66
      
58
      
57
      
60
      
8
      
189
      
181
      
4
  
Total revenues net of interest expense
    
1,153
      
1,152
      
1,075
      
1,120
      
1,104
      
4
      
3,380
      
3,353
      
1
  
Provisions for losses
    
8
      
-
      
3
      
4
      
8
      
-
      
11
      
21
      
(48
)
Total revenues net of interest expense after provisions for losses
    
1,145
      
1,152
      
1,072
      
1,116
      
1,096
      
4
      
3,369
      
3,332
      
1
  
Expenses
                                                                        
Marketing, promotion, rewards, Card Member services and other
    
48
      
37
      
32
      
61
      
55
      
(13
)
    
117
      
171
      
(32
)
Salaries and employee benefits and other operating expenses
    
580
      
435
      
473
      
499
      
470
      
23
      
1,488
      
1,422
      
5
  
Total expenses
    
628
      
472
      
505
      
560
      
525
      
20
      
1,605
      
1,593
      
1
  
Pretax segment income
    
517
      
680
      
567
      
556
      
571
      
(9
)
    
1,764
      
1,739
      
1
  
Income tax provision
    
149
      
250
      
204
      
187
      
212
      
(30
)
    
603
      
650
      
(7
)
Segment income
  
$
368
    
$
430
    
$
363
    
$
369
    
$
359
      
3
    
$
1,161
    
$
1,089
      
7
  
Effective tax rate
    
28.8
%
    
36.8
%
    
36.0
%
    
33.6
%
    
37.1
%
            
34.2
%
    
37.4
%
        
   
Loyalty Coalition revenue
  
$
116
    
$
114
    
$
102
    
$
106
    
$
106
      
9
    
$
332
    
$
304
      
9
  
   
(Billions, except percentages and where indicated)
                                                                        
Average discount rate (N)
    
2.42
%
    
2.44
%
    
2.45
%
    
2.44
%
    
2.47
%
            
2.44
%
    
2.45
%
        
Total segment assets
  
$
26.7
    
$
25.5
    
$
24.5
    
$
24.3
    
$
23.2
      
15
    
$
26.7
    
$
23.2
      
15
  
Segment capital (AA)
  
$
2.6
    
$
2.7
    
$
2.7
    
$
2.5
    
$
2.3
      
13
    
$
2.6
    
$
2.3
      
13
  
Return on average segment capital (AA)
    
59.3
%
    
59.8
%
    
59.1
%
    
60.2
%
    
59.9
%
            
59.3
%
    
59.9
%
        
 
                                                                        

# - Denotes a variance of 100 percent or more.
 
 
 

 
 
See Appendix V for footnote references
-11-


American Express Company
(Preliminary)
 
 
Components of Return on Average Equity (ROE) and Return on Average Common Equity (ROCE)
(Millions, except percentages)
 

 
  
For the Twelve Months Ended
  
 
  
Sep 30,
    
Jun 30,
    
Mar 31,
    
Dec 31,
    
Sep 30,
  
 
  
2017
    
2017
    
2017
    
2016
    
2016
  
ROE
                              
Net income
  
$
4,758
    
$
4,544
    
$
5,219
    
$
5,408
    
$
5,482
  
Average shareholders' equity
  
$
21,000
    
$
20,909
    
$
20,786
    
$
20,805
    
$
20,969
  
Return on average equity (C)
    
22.7
%
    
21.7
%
    
25.1
%
    
26.0
%
    
26.1
%
   
Reconciliation of ROCE
                                        
Net income
  
$
4,758
    
$
4,544
    
$
5,219
    
$
5,408
    
$
5,482
  
Preferred shares dividends and related accretion
    
80
      
80
      
80
      
80
      
81
  
Earnings allocated to participating share awards and other
    
38
      
36
      
42
      
43
      
43
  
Net income attributable to common shareholders
  
$
4,640
    
$
4,428
    
$
5,097
    
$
5,285
    
$
5,358
  
   
Average shareholders' equity
  
$
21,000
    
$
20,909
    
$
20,786
    
$
20,805
    
$
20,969
  
Average preferred shares
    
1,584
      
1,584
      
1,584
      
1,584
      
1,584
  
Average common shareholders' equity
  
$
19,416
    
$
19,325
    
$
19,202
    
$
19,221
    
$
19,385
  
Return on average common equity (C)
    
23.9
%
    
22.9
%
    
26.5
%
    
27.5
%
    
27.6
%

 

 
See Appendix V for footnote references
-12-

 

American Express Company
 
(Preliminary)
Appendix II
  
 
Components of Return on Average Segment Capital (ROSC)
(Millions, except percentages)
 
 

 
  
For the Twelve Months Ended
  
 
  
Sep 30,
    
Jun 30,
    
Mar 31,
    
Dec 31,
    
Sep 30,
  
 
  
2017
    
2017
    
2017
    
2016
    
2016
  
U.S. Consumer Services
                              
Segment income
  
$
1,735
    
$
1,661
    
$
2,288
    
$
2,513
    
$
2,703
  
Average segment capital (AA)
  
$
7,181
    
$
7,133
    
$
7,184
    
$
7,204
    
$
7,235
  
Return on average segment capital (AA)
    
24.2
%
    
23.3
%
    
31.9
%
    
34.9
%
    
37.4
%
   
International Consumer and Network Services
                                        
Segment income
  
$
797
    
$
666
    
$
685
    
$
655
    
$
711
  
Average segment capital (AA)
  
$
2,703
    
$
2,646
    
$
2,592
    
$
2,577
    
$
2,695
  
Return on average segment capital (AA)
    
29.5
%
    
25.2
%
    
26.4
%
    
25.4
%
    
26.4
%
   
Global Commercial Services
                                        
Segment income
  
$
1,829
    
$
1,766
    
$
1,842
    
$
1,909
    
$
2,014
  
Average segment capital (AA)
  
$
7,227
    
$
7,290
    
$
7,262
    
$
7,237
    
$
7,202
  
Return on average segment capital (AA)
    
25.3
%
    
24.2
%
    
25.4
%
    
26.4
%
    
28.0
%
   
Global Merchant Services
                                        
Segment income
  
$
1,530
    
$
1,521
    
$
1,464
    
$
1,458
    
$
1,453
  
Average segment capital (AA)
  
$
2,582
    
$
2,546
    
$
2,478
    
$
2,420
    
$
2,425
  
Return on average segment capital (AA)
    
59.3
%
    
59.8
%
    
59.1
%
    
60.2
%
    
59.9
%

 

 
See Appendix V for footnote references
-13-

American Express Company
 
(Preliminary)
Appendix III
  
 
  
 
 
 
Net Interest Yield on Card Member Loans
  
 
 
 
 
 
(Millions, except percentages and where indicated)
 
 
 
 
 
 
 
 
 
 
  
 
 
 

 
  
Q3'17
    
Q2'17
    
Q1'17
    
Q4'16
    
Q3'16
    
FY'17
    
FY'16
  
Consolidated
                                          
Net interest income
  
$
1,675
    
$
1,530
    
$
1,500
    
$
1,408
    
$
1,334
    
$
4,705
    
$
4,363
  
Exclude:
                                                        
Interest expense not attributable to the Company's Card Member loan portfolio
    
315
      
302
      
252
      
238
      
261
      
869
      
746
  
Interest income not attributable to the Company's Card Member loan portfolio
    
(174
)
    
(155
)
    
(130
)
    
(94
)
    
(104
)
    
(459
)
    
(309
)
Adjusted net interest income (AD)
  
$
1,816
    
$
1,677
    
$
1,622
    
$
1,552
    
$
1,491
    
$
5,115
    
$
4,800
  
Average loans including Held for Sale (billions)
  
$
67.1
    
$
65.1
    
$
63.9
    
$
62.6
    
$
60.3
    
$
65.4
    
$
66.6
  
Net interest income divided by average loans (AE)
    
10.0
%
    
9.4
%
    
9.4
%
    
9.0
%
    
8.8
%
    
9.6
%
    
8.7
%
Net interest yield on Card Member loans (AF)
    
10.7
%
    
10.3
%
    
10.3
%
    
9.9
%
    
9.8
%
    
10.5
%
    
9.6
%
   
U.S. Consumer Services
                                                        
Net interest income
  
$
1,307
    
$
1,198
    
$
1,162
    
$
1,103
    
$
1,053
    
$
3,667
    
$
3,443
  
Exclude:
                                                        
Interest expense not attributable to the Company's Card Member loan portfolio
    
33
      
28
      
23
      
21
      
20
      
84
      
59
  
Interest income not attributable to the Company's Card Member loan portfolio
    
(29
)
    
(23
)
    
(18
)
    
(8
)
    
(6
)
    
(70
)
    
(16
)
Adjusted net interest income (AD)
  
$
1,311
    
$
1,203
    
$
1,167
    
$
1,116
    
$
1,067
    
$
3,681
    
$
3,486
  
Average loans including Held for Sale (billions)
  
$
49.0
    
$
47.7
    
$
47.2
    
$
46.5
    
$
44.8
    
$
48.1
    
$
50.1
  
Net interest income divided by average loans (AE)
    
10.7
%
    
10.0
%
    
9.8
%
    
9.5
%
    
9.4
%
    
10.2
%
    
9.2
%
Net interest yield on Card Member loans (AF)
    
10.6
%
    
10.1
%
    
10.0
%
    
9.6
%
    
9.5
%
    
10.2
%
    
9.3
%
   
International Consumer and Network Services
                                                        
Net interest income
  
$
206
    
$
186
    
$
182
    
$
178
    
$
176
    
$
574
    
$
525
  
Exclude:
                                                        
Interest expense not attributable to the Company's Card Member loan portfolio
    
17
      
14
      
10
      
11
      
12
      
41
      
33
  
Interest income not attributable to the Company's Card Member loan portfolio
    
(4
)
    
(3
)
    
(3
)
    
-
      
-
      
(10
)
    
(7
)
Adjusted net interest income (AD)
  
$
219
    
$
197
    
$
189
    
$
189
    
$
188
    
$
605
    
$
551
  
Average loans (billions)
  
$
7.5
    
$
7.1
    
$
6.9
    
$
6.8
    
$
6.7
    
$
7.2
    
$
6.8
  
Net interest income divided by average loans (AE)
    
11.0
%
    
10.5
%
    
10.6
%
    
10.5
%
    
10.5
%
    
10.6
%
    
10.4
%
Net interest yield on Card Member loans (AF)
    
11.6
%
    
11.2
%
    
11.1
%
    
11.0
%
    
11.2
%
    
11.2
%
    
10.9
%
   
Global Commercial Services
                                                        
Net interest income
  
$
207
    
$
205
    
$
210
    
$
193
    
$
184
    
$
622
    
$
616
  
Exclude:
                                                        
Interest expense not attributable to the Company's Card Member loan portfolio
    
108
      
99
      
83
      
81
      
79
      
290
      
231
  
Interest income not attributable to the Company's Card Member loan portfolio
    
(29
)
    
(27
)
    
(27
)
    
(26
)
    
(28
)
    
(83
)
    
(85
)
Adjusted net interest income (AD)
  
$
286
    
$
277
    
$
266
    
$
248
    
$
235
    
$
829
    
$
762
  
Average loans including Held for Sale (billions)
  
$
10.5
    
$
10.2
    
$
9.7
    
$
9.3
    
$
8.8
    
$
10.1
    
$
9.8
  
Net interest income divided by average loans (AE)
    
7.9
%
    
8.0
%
    
8.7
%
    
8.3
%
    
8.3
%
    
8.2
%
    
8.4
%
Net interest yield on Card Member loans (AF)
    
10.8
%
    
10.9
%
    
11.1
%
    
10.6
%
    
10.6
%
    
10.9
%
    
10.4
%


 
See Appendix V for footnote references
-14-

 

American Express Company
 
(Preliminary)
Appendix IV
 
 
 
 
 
 
Reconciliations of Adjustments
 
 
 
 
 
 
(Millions, except percentages and where indicated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 

                   
   
Q3'17
    
Q3'16
    
YOY % Change
  
Adjusted Operating Expenses
                  
Operating expenses (AG)
  
$
2,763
    
$
2,761
      
-
  
U.S. Loyalty Coalition and Prepaid charges (pre-tax) (AH)
  
 
(155
)
                
Q3'16 Restructuring charge (pre-tax)
            
(44
)
        
Adjusted Operating Expenses
  
$
2,608
    
$
2,717
      
(4
)


 
See Appendix V for footnote references

-15-


Appendix V
(Preliminary)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

All Information in the preceding tables is presented on a basis prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), unless otherwise indicated.  Certain reclassifications of prior period amounts have been made to conform to the current period presentation.  None of the prior period financial information was materially misstated.

(A)
 
Represents net income, less (i) earnings allocated to participating share awards of $11 million, $11 million, $10 million, $6 million and $9 million in Q3'17, Q2'17, Q1'17, Q4'16 and Q3'16, respectively, and (ii) dividends on preferred shares of $21 million, $19 million, $21 million, $19 million, $21 million in Q3'17, Q2'17, Q1'17, Q4'16 and Q3'16, respectively.
(B)
 
Within assets, "other" includes the following items as presented in the Company's Consolidated Balance Sheets: Other receivables, Other loans (including merchant financing loans), Premises and equipment and Other assets; and within liabilities, "other" includes the following items: Travelers Cheques and other prepaid products, Accounts payable and Other liabilities.
(C)
 
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.  Refer to Appendix I for components of return on average equity and return on average common equity.
(D)
 
These ratios represent preliminary estimates for the current period as of the date of Third Quarter 2017 Earnings Release and may be revised in the Company's 2017 Form 10-Q for period ended September 30, 2017.
(E)
 
The Company is required to calculate a Supplementary Leverage Ratio, which is defined as Tier 1 Capital divided by Total Leverage Exposure. The Total Leverage Exposure reflects average total consolidated assets with adjustments for Tier 1 Capital deductions and includes off-balance sheet derivatives exposures, repo-style transactions and credit equivalents of undrawn commitments that are both conditionally and unconditionally cancellable.
(F)
 
Presented for the purpose of calculating the Tier 1 Leverage Ratio.
(G)
 
Estimated Common Equity Tier 1 Capital, Tier 1 Capital, Risk-Weighted Assets and Average Total Assets for Supplementary Leverage Capital purposes under the fully phased-in Basel III rules reflect the Company's current interpretation of the fully phased-in Basel III rules using the standardized approach. The estimated fully phased-in Basel III amounts could change in the future if the Company's business changes.
(H)
 
The Common Equity Tier 1 Capital ratio under the fully phased-in Basel III rules is calculated as Common Equity Tier 1 Capital under fully phased-in Basel III rules divided by estimated Risk-Weighted Assets under fully phased-in Basel III rules.
(I)
 
The Tier 1 Risk-Based Capital ratio under the fully phased-in Basel III rules is calculated as Tier 1 Risk-Based Capital under the fully phased-in Basel III rules divided by estimated Risk-Weighted Assets under the fully phased-in Basel III rules.
(J)
 
The fully phased-in Basel III Supplementary Leverage Ratio is calculated by dividing fully phased-in Basel III Tier 1 Capital by Total Leverage Exposure (refer to Footnote E for a definition of Total Leverage Exposure).
(K)
 
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 cobrand portfolios in GNS, from which the Company earns no revenue, is not included.  Card billed business is reflected in the United States or outside the United States based on where the issuer is located.
(L)
 
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 supplemental cards issued on that account.  Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee Card Members.  Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail cobrand Card Member accounts that have no out-of-store spend activity during the prior 12-month period.
(M)
 
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 divided by average worldwide proprietary cards-in-force.
(N)
 
This calculation is generally designed to reflect pricing at merchants accepting general-purpose American Express cards.  It represents the percentage of billed business (generated from both proprietary and GNS Card Member spending) retained by the Company from merchants it acquires, or for merchants acquired by a third party on its behalf, net of amounts retained by such third party.
(O)
 
Effective December 1, 2015, the Company reclassified the Card Member loans and receivables related to its cobrand partnerships with Costco in the U.S. and JetBlue, to reflect them as Held for Sale (HFS) on the Consolidated Balance Sheets.  The loans were reclassified at their net carrying amount, inclusive of the related reserves for losses.  Accordingly, Card Member loans and receivables and the related credit metrics are presented excluding the HFS loans and receivables for periods subsequent to the reclassification through the sale completion dates.
(P)
 
Provisions for principal, interest and/or fee reserve components.
(Q)
 
Consists of principal, interest and/or fees, less recoveries.
(R)
 
Card Member loans includes a reserve of $60 million related to loan balances of $245 million in Q2'16, reclassified from HFS to held for investment.  In addition, Other includes foreign currency translation adjustments and other items for all periods.
(S)
 
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.
(T)
 
GCP includes global, large and middle markets corporate accounts.
(U)
 
See Appendix III for calculations of net interest yield on Card Member 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 Card Member loans.
(V)
 
FX-adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e. assumes the foreign exchange rates used to determine results for Q3'17 apply to the period(s) against which such results are being compared).  The Company believes the presentation of information on an FX-adjusted basis is helpful to investors by making it easier to compare the Company's performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.
(W)
 
Captions not designated as "proprietary" or "GNS" include both proprietary and GNS data.
(X)
 
Included in ICNS.
(Y)
 
Included in USCS.
(Z)
 
Included in GCS.
(AA)
 
Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.  Return on average segment capital is calculated by dividing one year period segment income by one year average segment capital.  Refer to Appendix II for components of return on average segment capital.
(AB)
 
GSBS includes small business in the U.S. and international small business services.
(AC)
 
Effective Q3'17, GSBS loans and associated metrics include small business in the U.S. and international small business services.  Prior to Q3'17, due to certain system limitations, international small business services loans and associated credit metrics were reported within the international consumer business, in the ICNS segment, which were insignificant to both ICNS and GCS.
(AD)
 
Adjusted net interest income, a non-GAAP measure that represents net interest income attributable to our Card Member loans and loans HFS (which includes, on a GAAP basis, interest that is deemed uncollectible), excluding the impact of interest expense and interest income not attributable to our Card Member loans. The Company believes adjusted net interest income is useful to investors because it is a component of net interest yield on Card Member loans.
(AE)
 
This calculation includes elements of total interest income and total interest expense that are not attributable to the Card Member loan portfolio, and thus is not representative of net interest yield on Card Member loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to Card Member loans, and interest expense attributable to other activities, including Card Member receivables.
(AF)
 
Net interest yield on Card Member loans, a non-GAAP measure that is computed by dividing adjusted net interest income by average loans, computed on an annualized basis.  Reserves and net write-offs related to uncollectible interest are recorded through provisions for losses and are thus not included in the net interest yield calculation. Effective January 1, 2016, net interest yield also includes an insignificant amount of net interest income and loans related to certain non-traditional Card Member loans.  The prior periods have been revised to conform with this presentation.  The Company believes net interest yield on Card Member loans is useful to investors because it provides a measure of profitability of the Company's Card Member loan portfolio.
(AG)
 
Operating expenses represent salaries and employee benefits, professional services, occupancy and equipment, communications, and other, net.
(AH)
 
Includes asset impairments and restructuring and other charges.


 
-16-

AMERICAN EXPRESS CO Reports