Revenues Rise on Higher Cardmember Spending
Earnings Decline as Company Adds to Lending Credit Reserves
American Express Company
American Express Company (NYSE: AXP) today reported second-quarter income from
continuing operations of $655 million, down 37 percent from $1.0 billion a year
ago. Diluted earnings per share from continuing operations were $0.56, down 35
percent from $0.86 a year ago.
(Millions, except per share amounts)
Quarters Ended Percentage Six Months Ended Percentage
June 30, Inc/(Dec) June 30, Inc/(Dec)
-----------------------------------------------------
2008 2007 2008 2007
------- ------- -------- --------
Revenues net of
interest expense$7,484 $6,938 8% $14,670 $13,422 9%
Income From
Continuing
Operations $ 655 $1,040 (37)% $ 1,629 $ 2,135 (24)%
(Loss) Income
From
Discontinued
Operations $ (2) $ 17 # $ 15 $ (21) #
Net Income $ 653 $1,057 (38)% $ 1,644 $ 2,114 (22)%
Earnings Per
Common Share -
Basic:
Income From
Continuing
Operations $ 0.57 $ 0.88 (35)% $ 1.41 $ 1.80 (22)%
Income (Loss)
From
Discontinued
Operations $ - $ 0.02 # $ 0.02 $ (0.01) #
Net Income $ 0.57 $ 0.90 (37)% $ 1.43 $ 1.79 (20)%
Earnings Per
Common Share -
Diluted:
Income From
Continuing
Operations $ 0.56 $ 0.86 (35)% $ 1.40 $ 1.77 (21)%
Income (Loss)
From
Discontinued
Operations $ - $ 0.02 # $ 0.01 $ (0.02) #
Net Income $ 0.56 $ 0.88 (36)% $ 1.41 $ 1.75 (19)%
Average Common
Shares
Outstanding
Basic 1,154 1,179 (2)% 1,153 1,183 (3)%
Diluted 1,163 1,203 (3)% 1,163 1,207 (4)%
Return on Average
Equity* 31.1% 37.5% 31.1% 37.5%
----------------------------------------------------------------------
* Computed on a trailing 12-month basis using net income over average total
shareholders' equity (including discontinued operations) as included in the
Consolidated Financial Statements prepared in accordance with U.S. generally
accepted accounting principles (GAAP).
# Denotes a variance of more than 100%.
New York - July 21, 2008 - American Express Company (NYSE: AXP) today reported
second-quarter income from continuing operations of $655 million, down 37
percent from $1.0 billion a year ago. Diluted earnings per share from continuing
operations were $0.56, down 35 percent from $0.86 a year ago.
Net income totaled $653 million for the quarter, down 38 percent from a year
ago. On a per-share basis, net income was $0.56, down 36 percent from $0.88 a
year ago.
Consolidated revenues net of interest expense rose 8 percent to $7.5 billion, up
from $6.9 billion a year ago.
Consolidated expenses totaled $4.8 billion, up 6 percent from $4.6 billion a
year ago.
The Company's return on equity (ROE) was 31.1 percent, down from 37.5 percent a
year ago.
The second quarter results included a $600 million ($374 million after-tax)
addition to U.S. lending credit reserves that reflects a deterioration of credit
indicators beyond our prior expectation, and a $136 million ($85 million
after-tax) charge to the fair market value of the Company's retained interest in
securitized Cardmember loans. The second quarter also included a tax benefit of
$101 million primarily related to resolution of certain prior years' tax items.
Year-ago results included a $65 million tax benefit from the IRS related to the
treatment of certain prior years' card fee income.
"Fallout from a weaker U.S. economy accelerated during June with consumer
confidence dropping, unemployment rates moving sharply higher and home prices
declining at the fastest rate in decades," said Kenneth I. Chenault, chairman
and chief executive officer. "Consumer spending slowed during the latter part of
the quarter and credit indicators deteriorated beyond our expectations.
"In light of the weakening economy, we are no longer tracking to our prior
forecast of 4-6 percent earnings per share growth. That outlook was based on
business and economic conditions in line with, or moderately worse than, January
2008. The environment has weakened significantly since then, particularly during
the month of June.
"The scope of the economic fallout was evident even among our longer term,
superprime Cardmembers," Mr. Chenault said. "Newer Cardmembers -- whose
write-off levels are typically higher than the total portfolio -- are also
feeling the impact, but we are confident that the relationships we've built
during the last several years will generate attractive economics over their life
cycle.
"Despite the weakness in our bottom line, revenue grew a strong 8 percent and
many of our key business metrics performed very well as we benefited from the
strength of our international consumer and Global Business-to-Business
operations.
"While we are obviously disappointed in the impact that the higher reserves had
on earnings, our coverage levels are now substantially higher than at any point
during the last three years. The current reserves reflect our expectation that
write-offs will continue to rise in the remainder of 2008.
"We remain focused on gaining profitable share but, as you would expect in this
environment, we will be very selective with our investment dollars. While we
continue to scale back some card acquisition efforts and reduce credit lines
selectively, we also plan to take advantage of growth opportunities in the
marketplace.
"Our reengineering efforts over the past decade have resulted in a well
controlled expense base, but in order to give us greater flexibility to invest
in the business, we are accelerating those efforts. Our aim is to free-up
resources by reducing overall costs and staffing levels. While we have not yet
quantified the impact of these activities, we expect them to result in
restructuring-related charges during the second half.
"While we have been able to generate substantial earnings and returns relative
to many in the financial sector, we do not expect to meet or exceed our
long-term financial targets until we see improvements in the economy.
"We do not know the extent of the current downturn, but the position of our
company today is financially sound and competitively strong. We've lowered our
risk profile by divesting some businesses and we are well-positioned to execute
against growth opportunities in a manner that continues to appropriately balance
our short, medium and long-term objectives."
Discontinued operations
Discontinued operations for the second quarter reflected a loss of $2 million
compared with income of $17 million during the year-ago period, which included
results of American Express Bank Ltd.
Segment Results
U.S. Card Services reported second-quarter net income of $21 million, down from
$580 million a year ago.
Revenues net of interest expense for the second quarter increased 1 percent to
$3.6 billion, reflecting higher Cardmember spending and borrowing. This benefit
was partially offset by lower securitization income, net, which reflected the
$136 million charge noted above, and lower net interest income.
Total expenses increased 2 percent. Marketing, promotion, rewards and Cardmember
services expenses decreased 2 percent from the year-ago period reflecting lower
investments in marketing and promotion, which were partially offset by increased
rewards costs. Human resources and other operating expenses increased 9 percent
from the year-ago period driven by volume-related operating expenses, including
increased credit and collection costs.
The net loan write-off rate on a managed basis(1) and adjusted to conform to the
industry standard of excluding fees and interest was 5.3 percent, up from 4.3
percent in the first quarter and 2.9 percent a year ago. Including fees and
interest, the managed net write-off rate was 6.5 percent, up from 5.3 percent in
the first quarter and 3.7 percent a year ago.
Provisions for losses increased significantly to $1.5 billion, up from $640
million a year ago. This reflected the previously-mentioned $600 million ($374
million after-tax) addition, increased write-off and delinquency rates and also
the higher level of loans and business volumes compared to the year-ago period.
The 2008 and 2007 results reflect a tax benefit due to the resolution of certain
tax items from previous years, as mentioned above.
International Card Services reported second-quarter net income of $115 million,
down 2 percent from $117 million, reflecting substantially higher investment
levels compared to the year ago period.
Revenues net of interest expense increased 20 percent to $1.3 billion,
reflecting higher Cardmember spending and borrowing.
Total expenses increased 26 percent. Marketing, promotion, rewards and
Cardmember services expenses increased 38 percent reflecting significantly
increased marketing and promotion expenses and higher volume related rewards
costs. Human resources and other operating expenses increased 19 percent from
year-ago levels due to increased employee levels and higher professional
services costs.
Provisions for losses rose to $242 million, from $211 million a year ago
reflecting growth in the loan portfolio and business volumes.
Global Commercial Services reported second-quarter net income of $227 million,
up 40 percent from $162 million a year ago.
Revenues net of interest expense increased 21 percent to $1.3 billion,
reflecting higher spending by corporate Cardmembers and increased travel
commissions.
Total expenses increased 14 percent. Marketing, promotion, rewards and
Cardmember services expenses increased 19 percent from the year-ago period
reflecting higher volume-related rewards costs. Human resources and other
operating expenses increased 13 percent from the year-ago period.
Both the revenue and expense growth rates were affected by the acquisition of
Corporate Payment Services, General Electric Company's commercial card and
corporate purchasing unit, in March 2008.
Global Network & Merchant Services reported second-quarter net income of $299
million, up 12 percent from $266 million a year ago.
Revenues net of interest expense for the second quarter increased 12 percent to
$1.1 billion. The increase reflected continued strong growth in merchant-related
revenue, primarily from higher company-wide billed business.
Spending on Global Network Services cards increased 42 percent from year-ago
levels, reflecting continued growth in spending on cards issued by bank
partners. Cards-in-force issued by bank partners increased 28 percent.
Total expenses increased 6 percent, reflecting higher human resources costs
driven in part by an expansion of the merchant sales force and gains related to
the sale of merchant-related operations in Russia in the year-ago period,
partially offset by lower litigation-related expenses in the current period.
Provision for losses increased $48 million due to greater merchant-related
provisions in the second quarter of 2008 compared to a year ago.
Corporate and Other reported a second-quarter net loss of $7 million, compared
with a net loss of $85 million from a year ago reflecting the recognition of $70
million ($43 million after-tax) for the previously announced Visa settlement.
American Express Company is a leading global payments and travel company founded
in 1850. For more information, visit www.americanexpress.com.
Note: The 2008 Second Quarter Earnings Supplement will be available today on the
American Express web site at http://ir.americanexpress.com. An investor
conference call will be held at 5:00 p.m. (EDT) today to discuss second-quarter
earnings results. Live audio and presentation slides for the investor conference
call will be available to the general public at http://ir.americanexpress.com. A
replay of the conference call will be available later today at the same web site
address.
This release includes forward-looking statements, which are subject to risks and
uncertainties. The forward-looking statements, which address the Company's
expected business and financial performance, among other matters, contain words
such as "believe," "expect," "anticipate," "optimistic," "intend," "plan,"
"aim," "will," "may," "should," "could," "would," "likely," and similar
expressions. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made. The Company undertakes no obligation to update or revise any
forward-looking statements. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to, the following: consumer and business spending on the Company's credit and
charge card products and Travelers Cheques and other prepaid products and growth
in card lending balances, which depend in part on the economic environment, and
the ability to issue new and enhanced card and prepaid products, services and
rewards programs, and increase revenues from such products, attract new
Cardmembers, reduce Cardmember attrition, capture a greater share of existing
Cardmembers' spending, and sustain premium discount rates on its card products
in light of regulatory and market pressures, increase merchant coverage, retain
Cardmembers after low introductory lending rates have expired, and expand the
Global Network Services business; the Company's ability to manage credit risk
related to consumer debt, business loans, merchants and other credit trends,
which will depend in part on the economic environment, including, among things,
the housing market, the rates of bankruptcies and unemployment, which can affect
spending on card products, debt payments by individual and corporate customers
and businesses that accept the Company's card products, and on the effectiveness
of the Company's credit models; the impact of the Company's efforts to deal with
delinquent Cardmembers in the current challenging economic environment, which
may affect payment patterns of Cardmembers, the Company's near-term write-off
rates, including during the remainder of 2008, and the volumes of the Company's
loan balances in 2008; the level of future write-offs and delinquencies of
Cardmembers added by the Company during the past several years, which will
impact the profitability of such Cardmembers to the Company; fluctuations in
interest rates (including fluctuations in benchmarks, such as LIBOR and other
benchmark rates, and credit spreads), which impact the Company's borrowing
costs, return on lending products and the value of the Company's investments;
the Company's ability to meet its ROE target range of 33 to 36 percent on
average and over time, which will depend in part on factors such as the
Company's ability to generate sufficient revenue growth and achieve sufficient
margins, fluctuations in the capital required to support its businesses, the mix
of the Company's financings, and fluctuations in the level of the Company's
shareholders' equity due to share repurchases, dividends, changes in accumulated
other comprehensive income and accounting changes, among other things; the
actual amount to be spent by the Company on marketing, promotion, rewards and
Cardmember services based on management's assessment of competitive
opportunities and other factors affecting its judgment; the ability to control
and manage operating, infrastructure, advertising and promotion expenses as
business expands or changes, including the ability to accurately estimate the
provision for the cost of the Membership Rewards program; fluctuations in
foreign currency exchange rates; the Company's ability to grow its business and
meet or exceed its return on shareholders' equity target by reinvesting
approximately 35 percent of annually-generated capital, and returning
approximately 65 percent of such capital to shareholders, over time, which will
depend on the Company's ability to manage its capital needs and the effect of
business mix, acquisitions and rating agency requirements; the success of the
Global Network Services business in partnering with banks in the United States,
which will depend in part on the extent to which such business further enhances
the Company's brand, allows the Company to leverage its significant processing
scale, expands merchant coverage of the network, provides Global Network
Services' bank partners in the United States the benefits of greater Cardmember
loyalty and higher spend per customer, and merchant benefits such as greater
transaction volume and additional higher spending customers; the ability of the
Global Network Services business to meet the performance requirements called for
by the Company's recent settlements with MasterCard and VISA; trends in travel
and entertainment spending and the overall level of consumer confidence; the
uncertainties associated with business acquisitions, including, among others,
the failure to realize anticipated business retention, growth and cost savings,
as well as the ability to effectively integrate the acquired business into the
Company's existing operations; the underlying assumptions and expectations
related to the February 2008 sale of the American Express Bank Ltd. businesses
and the transaction's impact on the Company's earnings proving to be inaccurate
or unrealized; the success, timeliness and financial impact (including costs,
cost savings and other benefits including increased revenues), and beneficial
effect on the Company's operating expense to revenue ratio, both in the
short-term and over time, of reengineering initiatives being implemented or
considered by the Company, including cost management, structural and strategic
measures such as vendor, process, facilities and operations consolidation,
outsourcing (including, among others, technologies operations), relocating
certain functions to lower-cost overseas locations, moving internal and external
functions to the internet to save costs, and planned staff reductions relating
to certain of such reengineering actions; the Company's ability to reinvest the
benefits arising from such reengineering actions in its businesses;
bankruptcies, restructurings, consolidations or similar events (including, among
others, the proposed Delta Airlines / Northwest Airlines merger) affecting the
airline or any other industry representing a significant portion of the
Company's billed business, including any potential negative effect on particular
card products and services and billed business generally that could result from
the actual or perceived weakness of key business partners in such industries;
the triggering of obligations to make payments to certain co-brand partners,
merchants, vendors and customers under contractual arrangements with such
parties under certain circumstances; a downturn in the Company's businesses
and/or negative changes in the Company's and its subsidiaries' credit ratings,
which could result in contingent payments under contracts, decreased liquidity
and higher borrowing costs; accuracy of estimates for the fair value of the
assets in the Company's investment portfolio and, in particular, those
investments that are not readily marketable, including the valuation of the
interest-only strip relating to the Company's lending securitizations; the
Company's ability to invest in technology advances across all areas of its
business to stay on the leading edge of technologies applicable to the payments
industry; the Company's ability to protect its intellectual property rights (IP)
and avoid infringing the IP of other parties; the potential negative effect on
the Company's businesses and infrastructure, including information technology,
of terrorist attacks, natural disasters or other catastrophic events in the
future; political or economic instability in certain regions or countries, which
could affect lending and other commercial activities, among other businesses, or
restrictions on convertibility of certain currencies; changes in laws or
government regulations; the potential impact of regulations to be proposed by
federal bank regulators relating to certain credit and charge card practices,
including, among others, the imposition by card issuers of interest rate
increases on outstanding balances and the allocation of payments in respect of
outstanding balances with different interest rates, which could have an adverse
impact on the Company's net income; the potential failure of the U.S. Congress
to extend the active financing exception to Subpart F of the Internal Revenue
Code, which is scheduled to expire at the end of 2008 and could increase the
Company's effective tax rate and have an adverse impact on net income;
accounting changes; outcomes and costs associated with litigation and compliance
and regulatory matters; and competitive pressures in all of the Company's major
businesses. A further description of these and other risks and uncertainties can
be found in the Company's Annual Report on Form 10-K for the year ended
December 31, 2007, and its other reports filed with the SEC.
(1) The "managed basis" presentation includes on-balance sheet Cardmember loans
and off-balance sheet securitized Cardmember loans. The difference between the
"owned basis" (i.e., GAAP) information and "managed basis" information is
attributable to the effects of the Company's securitization activities. Owned
net write-offs, including write-offs of accrued interest and fees, were 7.1
percent in the quarter, up from 5.5 percent in the first quarter and 3.7 percent
a year ago.
All information in the following tables is presented on a basis
prepared in accordance with U.S. generally accepted accounting
principles (GAAP), unless otherwise indicated.
(Preliminary)
American Express Company
----------------------------------------------------------------------
Consolidated Statements of Income
----------------------------------------------------------------------
(Millions)
Quarters Six Months
Ended Ended
June 30, June 30,
------------- Percentage ------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------ ------ ---------- ------ ------ ----------
Revenues
Discount revenue $3,991 $3,670 9% $7,709 $7,025 10%
Net card fees 576 500 15 1,143 984 16
Travel commissions
and fees 573 491 17 1,067 928 15
Other commissions
and fees 590 587 1 1,212 1,123 8
Securitization
income, net 227 332 (32) 671 789 (15)
Other 573 426 35 929 813 14
------ ------ ------ ------
Total 6,530 6,006 9 12,731 11,662 9
------ ------ ------ ------
Interest income
Cardmember lending
finance revenue 1,521 1,514 - 3,146 2,882 9
Other 289 357 (19) 568 660 (14)
------ ------ ------ ------
Total 1,810 1,871 (3) 3,714 3,542 5
------ ------ ------ ------
Total
revenues 8,340 7,877 6 16,445 15,204 8
------ ------ ------ ------
Interest expense
Cardmember lending 364 431 (16) 781 816 (4)
Charge card and
other 492 508 (3) 994 966 3
------ ------ ------ ------
Total 856 939 (9) 1,775 1,782 -
------ ------ ------ ------
Revenues net of
interest expense 7,484 6,938 8 14,670 13,422 9
------ ------ ------ ------
Expenses
Marketing,
promotion,
rewards and
cardmember
services 1,924 1,826 5 3,680 3,288 12
Human resources 1,495 1,334 12 2,965 2,635 13
Professional
services 607 580 5 1,158 1,098 5
Occupancy and
equipment 412 352 17 787 680 16
Communications 115 112 3 230 224 3
Other, net 276 348 (21) 572 641 (11)
------ ------ ------ ------
Total 4,829 4,552 6 9,392 8,566 10
------ ------ ------ ------
Provisions for
losses and benefits
Charge card 241 233 3 586 442 33
Cardmember lending 1,537 638 # 2,346 1,212 94
Other (including
investment
certificates) 111 106 5 226 182 24
------ ------ ------ ------
Total 1,889 977 93 3,158 1,836 72
------ ------ ------ ------
Pretax income from
continuing
operations 766 1,409 (46) 2,120 3,020 (30)
Income tax provision 111 369 (70) 491 885 (45)
------ ------ ------ ------
Income from
continuing
operations 655 1,040 (37) 1,629 2,135 (24)
(Loss) Income from
discontinued
operations, net of
tax (2) 17 # 15 (21) #
------ ------ ------ ------
Net income $653 $1,057 (38) $1,644 $2,114 (22)
====== ====== ====== ======
# - Denotes a variance of more than 100%.
(Preliminary)
American Express Company
----------------------------------------------------------------------
Condensed Consolidated Balance Sheets
----------------------------------------------------------------------
(Billions)
June 30, December 31,
2008 2007
--------- ------------
Assets
Cash and cash equivalents $ 20 $ 12
Accounts receivable 43 42
Investments 15 16
Loans 48 53
Other assets 11 10
Assets of discontinued operations - 17
--------- ------------
Total assets $ 137 $ 150
========= ============
Liabilities and Shareholders' Equity
Short-term debt $ 18 $ 18
Long-term debt 57 55
Other liabilities 50 50
Liabilities of discontinued operations - 16
--------- ------------
Total liabilities 125 139
--------- ------------
Shareholders' equity 12 11
--------- ------------
Total liabilities and shareholders' equity $ 137 $ 150
========= ============
(Preliminary)
American Express Company
----------------------------------------------------------------------
Financial Summary
----------------------------------------------------------------------
(Millions)
Quarters Six Months
Ended Ended
June 30, June 30,
------------- Percentage --------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------ ------ ---------- ------- ------- ----------
Revenues net of
interest expense
------------------
U.S. Card
Services $3,593 $3,560 1% $ 7,315 $ 6,924 6%
International
Card Services 1,256 1,049 20 2,451 2,028 21
Global
Commercial
Services 1,308 1,083 21 2,452 2,077 18
Global Network &
Merchant
Services 1,083 966 12 2,086 1,843 13
------ ------ ------- -------
7,240 6,658 9 14,304 12,872 11
Corporate &
Other,
including
adjustments
and
eliminations 244 280 (13) 366 550 (33)
------ ------ ------- -------
CONSOLIDATED
REVENUES NET OF
INTEREST EXPENSE $7,484 $6,938 8 $14,670 $13,422 9
====== ====== ======= =======
Pretax income
(loss) from
continuing
operations
------------------
U.S. Card
Services $ (63) $ 827 # $ 728 $ 1,858 (61)
International
Card Services 73 92 (21) 190 188 1
Global
Commercial
Services 326 218 50 544 413 32
Global Network &
Merchant
Services 455 418 9 790 792 -
------ ------ ------- -------
791 1,555 (49) 2,252 3,251 (31)
Corporate &
Other (25) (146) (83) (132) (231) (43)
------ ------ ------- -------
PRETAX INCOME FROM
CONTINUING
OPERATIONS $ 766 $1,409 (46) $ 2,120 $ 3,020 (30)
====== ====== ======= =======
Net income (loss)
------------------
U.S. Card
Services $ 21 $ 580 (96) $ 544 $ 1,224 (56)
International
Card Services 115 117 (2) 248 219 13
Global
Commercial
Services 227 162 40 378 291 30
Global Network &
Merchant
Services 299 266 12 522 502 4
------ ------ ------- -------
662 1,125 (41) 1,692 2,236 (24)
Corporate &
Other (7) (85) (92) (63) (101) (38)
------ ------ ------- -------
Income from
continuing
operations 655 1,040 (37) 1,629 2,135 (24)
(Loss) Income
from
discontinued
operations, net
of tax (2) 17 # 15 (21) #
------ ------ ------- -------
NET INCOME $ 653 $1,057 (38) $ 1,644 $ 2,114 (22)
====== ====== ======= =======
# - Denotes a variance of more than 100%.
(Preliminary)
American Express Company
----------------------------------------------------------------------
Financial Summary (continued)
----------------------------------------------------------------------
Quarters Six Months
Ended Ended
June 30, June 30,
------------- Percentage ------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------- ----- ---------- ------ ------ -----------
EARNINGS PER COMMON
SHARE
BASIC
Income from
continuing
operations $0.57 $0.88 (35)% $1.41 $1.80 (22)%
Income (Loss) from
discontinued
operations - 0.02 # 0.02 (0.01) #
------- ----- ------ ------
Net income $0.57 $0.90 (37)% $1.43 $1.79 (20)%
======= ===== ====== ======
Average common
shares outstanding
(millions) 1,154 1,179 (2)% 1,153 1,183 (3)%
======= ===== ====== ======
DILUTED
Income from
continuing
operations $0.56 $0.86 (35)% $1.40 $1.77 (21)%
Income (Loss) from
discontinued
operations - 0.02 # 0.01 (0.02) #
------- ----- ------ ------
Net income $0.56 $0.88 (36)% $1.41 $1.75 (19)%
======= ===== ====== ======
Average common
shares outstanding
(millions) 1,163 1,203 (3)% 1,163 1,207 (4)%
======= ===== ====== ======
Cash dividends
declared per common
share $0.18 $0.15 20% $0.36 $0.30 20%
======= ===== ====== ======
Selected Statistical Information
----------------------------------------------------------------------
Quarters Six Months
Ended Ended
June 30, June 30,
------------- Percentage ------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------- ----- ---------- ------ ------ -----------
Return on average
equity (A) 31.1% 37.5% 31.1% 37.5%
Return on average
tangible equity (A) 37.7% 44.0% 37.7% 44.0%
Common shares
outstanding
(millions) 1,159 1,182 (2)% 1,159 1,182 (2)%
Book value per
common share $10.58 $9.00 18% $10.58 $9.00 18%
Shareholders' equity
(billions) $12.3 $10.6 16% $12.3 $10.6 16%
# - Denotes a variance of more than 100%.
(A) Computed on a trailing 12-month basis using net income over
average total shareholders' equity (including discontinued
operations) as included in the Consolidated Financial Statements
prepared in accordance with GAAP. Return on average tangible equity
excludes goodwill and other intangibles. The Company believes average
tangible shareholders' equity is a more meaningful measure because it
reflects the tangible equity deployed in the Company. Refer to page
37 for a reconciliation of shareholders' equity to tangible
shareholders' equity.
To view additional business segment financials go to:
http:/ir.americanexpress.com
American Express Company
Media:
Joanna Lambert, 212-640-9668
joanna.g.lambert@aexp.com
or
Michael O'Neill, 212-640-5951
mike.o'neill@aexp.com
or
Investors/Analysts:
Alex Hopwood, 212-640-5495
alex.w.hopwood@aexp.com
or
Ron Stovall, 212-640-5574
ronald.stovall@aexp.com
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