American Express Company (NYSE:AXP) today reported third-quarter net income of $1.5 billion, up 8 percent from $1.4 billion a year ago. Diluted earnings per share was $1.40, up 12 percent from $1.25 a year ago.
(Millions, except percentages and per share amounts) | ||||||||||||||||||||||
| Quarters Ended | Percentage | Nine Months Ended | Percentage | |||||||||||||||||||
September 30, | Inc/(Dec) | September 30, | Inc/(Dec) | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Total Revenues Net of Interest Expense | $ | 8,329 | $ | 8,301 | - | % | $ | 25,185 | $ | 24,427 | 3 | % | ||||||||||
Adjusted Revenues Net of Interest Expense Excluding Business Travel Revenues in Q3 20131 | $ | 7,905 | 5 | % | $ | 24,031 | 5 | % | ||||||||||||||
| Net Income | $ | 1,477 | $ | 1,366 | 8 | % | $ | 4,438 | $ | 4,051 | 10 | % | ||||||||||
| Earnings Per Common Share – Diluted: | ||||||||||||||||||||||
Net Income Attributable to Common Shareholders2 | $ | 1.40 | $ | 1.25 | 12 | % | $ | 4.17 | $ | 3.67 | 14 | % | ||||||||||
| Average Diluted Common Shares Outstanding | 1,047 | 1,081 | (3 | )% | 1,057 | 1,094 | (3 | )% | ||||||||||||||
| Return on Average Equity | 28.8 | % | 24.3 | % | 28.8 | % | 24.3 | % | ||||||||||||||
Consolidated total revenues net of interest expense was $8.3 billion, in line with a year ago. Last year’s third quarter included revenue from the company’s business travel operations, which were deconsolidated as a result of the previously announced joint venture transaction that closed on June 30, 2014. Excluding business travel revenues from the year-ago period, adjusted revenue rose 5 percent1 (6 percent when further adjusted for foreign currency translations3). The increase primarily reflected higher Card Member spending and higher net interest income.
Consolidated provisions for losses totaled $488 million, up 16 percent from $419 million, reflecting a larger credit reserve release in the year-ago period. Credit indicators continued to be at historically strong levels.
Consolidated expenses totaled $5.6 billion, down 5 percent from $5.9 billion last year. The decrease primarily reflected expenses related to business travel operations in the prior year. Excluding those expenses from the year-ago period, adjusted expenses rose 1 percent for the third quarter of 2014.1
The effective tax rate was 34 percent, up from 32 percent from a year ago.
The company's return on average equity (ROE) was 28.8 percent, up from 24.3 percent a year ago.
“We delivered another solid quarter of financial results,” said Kenneth I. Chenault, chairman and chief executive officer. “Card Member spending was up 9 percent, a modest acceleration from last quarter, and loan balances grew 5 percent. Revenues continued to rise at a steady pace, but the growth rate is still below our long-term target.
“On the cost side of the ledger, operating expense growth remained on track to come in well below our target for the full year and that’s one of the factors that provided the flexibility to invest in both the core business as well as some newer initiatives.
“We developed new partnerships and services with Uber, Apple Pay and McDonald’s that are helping us to capitalize on the convergence of online and offline commerce. At the same time, initiatives like the Amex EveryDay Credit Card and OptBlue are helping to make our brand more welcoming and inclusive as we expand into markets not traditionally served by American Express.
“Over the last couple of years we have delivered solid earnings through a combination of disciplined expense control, a strong balance sheet and targeted investments in growth initiatives. While the economy is stronger, it is not growing as fast or as steadily as most people would like, and those same levers will continue to be an important part of our strategy.
“Our focus will be on delivering earnings growth in an environment that is characterized by rapidly changing technologies, intense competition, regulation and an economy that may continue to grow at only a modest pace.”
Segment Results
U.S. Card Services reported third-quarter net income of $889 million, up 14 percent from $782 million a year ago.
Total revenues net of interest expense increased 6 percent to $4.5 billion, from $4.3 billion a year ago. The increase reflected a 9 percent increase in Card Member spending and a rise in net interest income, driven primarily by 6 percent growth in average Card Member loans.
Provisions for losses totaled $316 million, up 11 percent from $285 million a year ago. The increase reflected a larger reserve release in the prior year.
Total expenses increased 2 percent to $2.8 billion, primarily reflecting higher rewards expenses.
The effective tax rate was 37 percent, down from 38 percent from a year ago.
International Card Services reported third-quarter net income of $142 million, unchanged from a year ago.
Total revenues net of interest expense were $1.4 billion, up 3 percent (5 percent FX adjusted3). The increase primarily reflected higher revenues from the Loyalty Partner business and an increase in Card Member spending, partially offset by a decrease in net interest income.
Provisions for losses increased 2 percent to $98 million from $96 million a year ago.
Total expenses were $1.1 billion, up 4 percent (6 percent FX adjusted3) from a year ago. The increase primarily reflected higher rewards, marketing and operating expenses.4
The effective tax rate was 19 percent compared to 24 percent a year ago.
Global Commercial Services reported net income of $204 million, down 22 percent from $261 million a year ago. The segment previously included results from the company’s business travel operations, which were deconsolidated as a result of the joint venture transaction referred to above. The company’s proportional share of the joint venture’s net income is now reported within Other Revenues. This change impacts growth rates for Global Commercial Services’ net income, revenues and expenses.
Total revenues net of interest expense were $900 million, down 26 percent from $1.2 billion a year ago. Excluding business travel revenue from the year-ago period, adjusted revenues rose 9 percent (10 percent FX adjusted3) primarily reflecting higher Card Member spending.1
Provisions for losses totaled $49 million, up 69 percent from $29 million a year ago. The increase primarily reflected higher net write-offs in the current quarter.
Total expenses were $542 million, down 36 percent from $851 million. Excluding business travel expenses, third quarter adjusted expenses rose 5 percent.1 The increase reflected joint venture transaction-related costs and higher rewards expenses.
The effective tax rate was 34 percent compared to 23 percent from a year ago. The year-ago quarter benefited from the release of a valuation allowance in business travel.
Global Network & Merchant Services reported third-quarter net income of $427 million, up 9 percent from $391 million a year ago.
Total revenues net of interest expense were $1.5 billion, up 5 percent (6 percent FX adjusted3) from $1.4 billion a year ago. The increase reflected higher merchant-related revenues driven by an increase in global Card Member spending.
Total expenses of $756 million were in line with a year ago.
The effective tax rate was unchanged from 36 percent a year ago.
Corporate and Other reported third-quarter net loss of $185 million compared with net loss of $210 million in the year-ago period.
About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/companies/american-express, twitter.com/americanexpress and youtube.com/americanexpress.
Key links to products and services: charge and credit cards, business credit cards, travel services, gift cards, prepaid cards, merchant services, corporate card and business travel.
The 2014 Third 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. (ET) today to discuss third-quarter earnings results. Live audio and presentation slides for the investor conference call will be available to the general public at the same web site. A replay of the conference call will be available later today at the same web site address.
This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the company’s expected business and financial performance and are subject to risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements due to a variety of factors, including those contained in the company's Annual Report on Form 10-K for the year ended December 31, 2013, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014 and the company’s other filings with the Securities and Exchange Commission. 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.
_______________ |
| 1 Adjusted revenue growth and adjusted expense growth are non-GAAP measures. Management believes these metrics are useful in evaluating the ongoing operating performance of the company. See Appendix V in the selected statistical tables for reconciliations to total revenues net of interest expense and total expenses on a GAAP basis. |
| 2 Represents net income less earnings allocated to participating share awards of $11 million and $12 million for the three months ended September 30, 2014 and 2013, respectively, and $35 million and $36 million for the nine months ended September 30, 2014 and 2013, respectively. |
| 3 As reported in this release, FX adjusted information, which constitute non-GAAP financial measures, 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 the three months ended September 30, 2014 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. |
| 4 Operating expenses represent salaries and employee benefits, professional services, occupancy and equipment, communications and other, net. |
| American Express Company | (Preliminary) | ||||||||||||||||||||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||||||||||||||||||||
| (Millions, except percentages and per share amounts) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Non-interest revenues | |||||||||||||||||||||||||||||||||||
| Discount revenue | $ | 4,915 | $ | 4,945 | $ | 4,646 | $ | 4,869 | $ | 4,659 | 5 | $ | 14,506 | $ | 13,826 | 5 | |||||||||||||||||||
| Net card fees | 680 | 687 | 674 | 673 | 658 | 3 | 2,041 | 1,958 | 4 | ||||||||||||||||||||||||||
| Travel commissions and fees | 104 | 500 | 423 | 491 | 490 | (79 | ) | 1,027 | 1,422 | (28 | ) | ||||||||||||||||||||||||
| Other commissions and fees | 642 | 624 | 618 | 626 | 610 | 5 | 1,884 | 1,788 | 5 | ||||||||||||||||||||||||||
| Other | 593 | 585 | 501 | 569 | 601 | (1 | ) | 1,679 | 1,705 | (2 | ) | ||||||||||||||||||||||||
| Total non-interest revenues | 6,934 | 7,341 | 6,862 | 7,228 | 7,018 | (1 | ) | 21,137 | 20,699 | 2 | |||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||||||||
| Interest on loans | 1,753 | 1,696 | 1,711 | 1,715 | 1,698 | 3 | 5,160 | 5,003 | 3 | ||||||||||||||||||||||||||
| Interest and dividends on investment securities | 45 | 45 | 46 | 48 | 48 | (6 | ) | 136 | 153 | (11 | ) | ||||||||||||||||||||||||
| Deposits with banks and other | 17 | 18 | 19 | 19 | 21 | (19 | ) | 54 | 67 | (19 | ) | ||||||||||||||||||||||||
| Total interest income | 1,815 | 1,759 | 1,776 | 1,782 | 1,767 | 3 | 5,350 | 5,223 | 2 | ||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||
| Deposits | 91 | 91 | 94 | 110 | 111 | (18 | ) | 276 | 332 | (17 | ) | ||||||||||||||||||||||||
| Long-term debt and other | 329 | 352 | 345 | 353 | 373 | (12 | ) | 1,026 | 1,163 | (12 | ) | ||||||||||||||||||||||||
| Total interest expense | 420 | 443 | 439 | 463 | 484 | (13 | ) | 1,302 | 1,495 | (13 | ) | ||||||||||||||||||||||||
| Net interest income | 1,395 | 1,316 | 1,337 | 1,319 | 1,283 | 9 | 4,048 | 3,728 | 9 | ||||||||||||||||||||||||||
| Total revenues net of interest expense | 8,329 | 8,657 | 8,199 | 8,547 | 8,301 | - | 25,185 | 24,427 | 3 | ||||||||||||||||||||||||||
| Provisions for losses | |||||||||||||||||||||||||||||||||||
| Charge card | 196 | 183 | 215 | 174 | 159 | 23 | 594 | 474 | 25 | ||||||||||||||||||||||||||
| Card Member loans | 265 | 282 | 250 | 290 | 248 | 7 | 797 | 825 | (3 | ) | |||||||||||||||||||||||||
| Other | 27 | 24 | 20 | 15 | 12 | # | 71 | 54 | 31 | ||||||||||||||||||||||||||
| Total provisions for losses | 488 | 489 | 485 | 479 | 419 | 16 | 1,462 | 1,353 | 8 | ||||||||||||||||||||||||||
| Total revenues net of interest expense after provisions for losses | 7,841 | 8,168 | 7,714 | 8,068 | 7,882 | (1 | ) | 23,723 | 23,074 | 3 | |||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Marketing and promotion | 809 | 985 | 613 | 809 | 827 | (2 | ) | 2,407 | 2,234 | 8 | |||||||||||||||||||||||||
| Card Member rewards | 1,695 | 1,773 | 1,582 | 1,717 | 1,619 | 5 | 5,050 | 4,740 | 7 | ||||||||||||||||||||||||||
| Card Member services and other | 205 | 192 | 222 | 188 | 197 | 4 | 619 | 579 | 7 | ||||||||||||||||||||||||||
| Salaries and employee benefits | 1,290 | 1,658 | 1,540 | 1,489 | 1,544 | (16 | ) | 4,488 | 4,702 | (5 | ) | ||||||||||||||||||||||||
| Professional services | 731 | 817 | 692 | 830 | 793 | (8 | ) | 2,240 | 2,272 | (1 | ) | ||||||||||||||||||||||||
| Occupancy and equipment | 432 | 467 | 462 | 510 | 462 | (6 | ) | 1,361 | 1,394 | (2 | ) | ||||||||||||||||||||||||
| Communications | 91 | 101 | 93 | 97 | 94 | (3 | ) | 285 | 282 | 1 | |||||||||||||||||||||||||
| Other, net | 342 | (137 | ) | 302 | 448 | 342 | - | 507 | 963 | (47 | ) | ||||||||||||||||||||||||
| Total | 5,595 | 5,856 | 5,506 | 6,088 | 5,878 | (5 | ) | 16,957 | 17,166 | (1 | ) | ||||||||||||||||||||||||
| Pretax income | 2,246 | 2,312 | 2,208 | 1,980 | 2,004 | 12 | 6,766 | 5,908 | 15 | ||||||||||||||||||||||||||
| Income tax provision | 769 | 783 | 776 | 672 | 638 | 21 | 2,328 | 1,857 | 25 | ||||||||||||||||||||||||||
| Net income | $ | 1,477 | $ | 1,529 | $ | 1,432 | $ | 1,308 | $ | 1,366 | 8 | $ | 4,438 | $ | 4,051 | 10 | |||||||||||||||||||
| Net income attributable to common shareholders (A) | $ | 1,466 | $ | 1,517 | $ | 1,420 | $ | 1,297 | $ | 1,354 | 8 | $ | 4,403 | $ | 4,015 | 10 | |||||||||||||||||||
| Effective tax rate | 34.2 | % | 33.9 | % | 35.1 | % | 33.9 | % | 31.8 | % | 34.4 | % | 31.4 | % | |||||||||||||||||||||
Earnings Per Common Share | |||||||||||||||||||||||||||||||||||
| BASIC | |||||||||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 1.41 | $ | 1.44 | $ | 1.34 | $ | 1.22 | $ | 1.26 | 12 | $ | 4.19 | $ | 3.69 | 14 | |||||||||||||||||||
| Average common shares outstanding | 1,041 | 1,052 | 1,060 | 1,067 | 1,074 | (3 | ) | 1,051 | 1,087 | (3 | ) | ||||||||||||||||||||||||
| DILUTED | |||||||||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 1.40 | $ | 1.43 | $ | 1.33 | $ | 1.21 | $ | 1.25 | 12 | $ | 4.17 | $ | 3.67 | 14 | |||||||||||||||||||
| Average common shares outstanding | 1,047 | 1,058 | 1,067 | 1,073 | 1,081 | (3 | ) | 1,057 | 1,094 | (3 | ) | ||||||||||||||||||||||||
| Cash dividends declared per common share | $ | 0.26 | $ | 0.26 | $ | 0.23 | $ | 0.23 | $ | 0.23 | 13 | $ | 0.75 | $ | 0.66 | 14 | |||||||||||||||||||
# - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| American Express Company | ||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||
| (Billions, except percentages, per share amounts and where indicated) | ||||||||||||||||||||||||
| Quarters Ended | % Change | |||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | |||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Cash & cash equivalents | $ | 21 | $ | 18 | $ | 21 | $ | 19 | $ | 22 | (5 | ) | ||||||||||||
| Accounts receivable | 47 | 49 | 47 | 47 | 46 | 2 | ||||||||||||||||||
| Investment securities | 5 | 5 | 5 | 5 | 5 | - | ||||||||||||||||||
| Loans | 66 | 66 | 63 | 67 | 62 | 6 | ||||||||||||||||||
| Other assets | 15 | 14 | 15 | 15 | 15 | - | ||||||||||||||||||
| Total assets | $ | 154 | $ | 152 | $ | 151 | $ | 153 | $ | 150 | 3 | |||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||
| Customer deposits | $ | 43 | $ | 42 | $ | 43 | $ | 42 | $ | 42 | 2 | |||||||||||||
| Short-term borrowings | 3 | 3 | 3 | 5 | 3 | - | ||||||||||||||||||
| Long-term debt | 56 | 55 | 54 | 55 | 53 | 6 | ||||||||||||||||||
| Other liabilities | 32 | 32 | 31 | 32 | 33 | (3 | ) | |||||||||||||||||
| Total liabilities | 134 | 132 | 131 | 134 | 131 | 2 | ||||||||||||||||||
| Shareholders' Equity | 20 | 20 | 20 | 19 | 19 | 5 | ||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 154 | $ | 152 | $ | 151 | $ | 153 | $ | 150 | 3 | |||||||||||||
Selected Statistical Information | ||||||||||||||||||||||||
| Quarters Ended | % Change | |||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | |||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | |||||||||||||||||||
| Return on average equity (B) | 28.8 | % | 28.8 | % | 28.3 | % | 27.8 | % | 24.3 | % | ||||||||||||||
| Return on average common equity (B) | 28.6 | % | 28.5 | % | 28.1 | % | 27.6 | % | 24.1 | % | ||||||||||||||
| Return on average tangible common equity (B) | 35.6 | % | 35.8 | % | 35.4 | % | 34.9 | % | 30.6 | % | ||||||||||||||
| Common shares outstanding (millions) | 1,035 | 1,046 | 1,059 | 1,064 | 1,071 | (3 | ) | |||||||||||||||||
| Book value per common share (dollars) | $ | 19.54 | $ | 19.32 | $ | 18.87 | $ | 18.32 | $ | 17.94 | 9 | |||||||||||||
| Shareholders' equity | $ | 20.2 | $ | 20.2 | $ | 20.0 | $ | 19.5 | $ | 19.2 | 5 | |||||||||||||
| # - Denotes a variance of more than 100 percent. | ||||||||||||||||||||||||
See Appendix VI for footnote references | ||||||||||||||||||||||||
| American Express Company | |||||||||||||||||||||||||||||||||||
Financial Summary | |||||||||||||||||||||||||||||||||||
| (Millions) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
Total revenues net of interest expense | |||||||||||||||||||||||||||||||||||
| U.S. Card Services | $ | 4,527 | $ | 4,477 | $ | 4,290 | $ | 4,388 | $ | 4,286 | 6 | $ | 13,294 | $ | 12,607 | 5 | |||||||||||||||||||
| International Card Services | 1,394 | 1,391 | 1,352 | 1,429 | 1,356 | 3 | 4,137 | 3,972 | 4 | ||||||||||||||||||||||||||
| Global Commercial Services | 900 | 1,269 | 1,194 | 1,238 | 1,221 | (26 | ) | 3,363 | 3,615 | (7 | ) | ||||||||||||||||||||||||
| Global Network & Merchant Services | 1,450 | 1,455 | 1,365 | 1,447 | 1,379 | 5 | 4,270 | 4,066 | 5 | ||||||||||||||||||||||||||
| 8,271 | 8,592 | 8,201 | 8,502 | 8,242 | - | 25,064 | 24,260 | 3 | |||||||||||||||||||||||||||
| Corporate & Other | 58 | 65 | (2 | ) | 45 | 59 | (2 | ) | 121 | 167 | (28 | ) | |||||||||||||||||||||||
| CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE | $ | 8,329 | $ | 8,657 | $ | 8,199 | $ | 8,547 | $ | 8,301 | - | $ | 25,185 | $ | 24,427 | 3 | |||||||||||||||||||
Pretax income (loss) | |||||||||||||||||||||||||||||||||||
| U.S. Card Services | $ | 1,411 | $ | 1,200 | $ | 1,406 | $ | 1,292 | $ | 1,257 | 12 | $ | 4,017 | $ | 3,702 | 9 | |||||||||||||||||||
| International Card Services | 176 | 69 | 203 | 108 | 186 | (5 | ) | 448 | 535 | (16 | ) | ||||||||||||||||||||||||
| Global Commercial Services | 309 | 865 | 285 | 287 | 341 | (9 | ) | 1,459 | 957 | 52 | |||||||||||||||||||||||||
| Global Network & Merchant Services | 670 | 578 | 702 | 632 | 608 | 10 | 1,950 | 1,837 | 6 | ||||||||||||||||||||||||||
| 2,566 | 2,712 | 2,596 | 2,319 | 2,392 | 7 | 7,874 | 7,031 | 12 | |||||||||||||||||||||||||||
| Corporate & Other | (320 | ) | (400 | ) | (388 | ) | (339 | ) | (388 | ) | (18 | ) | (1,108 | ) | (1,123 | ) | (1 | ) | |||||||||||||||||
| PRETAX INCOME | $ | 2,246 | $ | 2,312 | $ | 2,208 | $ | 1,980 | $ | 2,004 | 12 | $ | 6,766 | $ | 5,908 | 15 | |||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||||||||||
| U.S. Card Services | $ | 889 | $ | 770 | $ | 876 | $ | 864 | $ | 782 | 14 | $ | 2,535 | $ | 2,329 | 9 | |||||||||||||||||||
| International Card Services | 142 | 77 | 159 | 103 | 142 | - | 378 | 528 | (28 | ) | |||||||||||||||||||||||||
| Global Commercial Services | 204 | 561 | 184 | 182 | 261 | (22 | ) | 949 | 678 | 40 | |||||||||||||||||||||||||
| Global Network & Merchant Services | 427 | 373 | 443 | 399 | 391 | 9 | 1,243 | 1,176 | 6 | ||||||||||||||||||||||||||
| 1,662 | 1,781 | 1,662 | 1,548 | 1,576 | 5 | 5,105 | 4,711 | 8 | |||||||||||||||||||||||||||
| Corporate & Other | (185 | ) | (252 | ) | (230 | ) | (240 | ) | (210 | ) | (12 | ) | (667 | ) | (660 | ) | 1 | ||||||||||||||||||
| NET INCOME | $ | 1,477 | $ | 1,529 | $ | 1,432 | $ | 1,308 | $ | 1,366 | 8 | $ | 4,438 | $ | 4,051 | 10 | |||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| American Express Company | (Preliminary) | ||||||||||||||||||||||||||||||||||
Selected Statistical Information (continued) | |||||||||||||||||||||||||||||||||||
| (Billions, except percentages and where indicated) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Card billed business (C): | |||||||||||||||||||||||||||||||||||
| United States | $ | 173.0 | $ | 173.4 | $ | 159.2 | $ | 169.1 | $ | 158.2 | 9 | $ | 505.6 | $ | 467.9 | 8 | |||||||||||||||||||
| Outside the United States | 85.1 | 84.7 | 78.9 | 84.9 | 78.0 | 9 | 248.7 | 230.5 | 8 | ||||||||||||||||||||||||||
| Total | $ | 258.1 | $ | 258.1 | $ | 238.1 | $ | 254.0 | $ | 236.2 | 9 | $ | 754.3 | $ | 698.4 | 8 | |||||||||||||||||||
| Total cards-in-force (D) (millions): | |||||||||||||||||||||||||||||||||||
| United States | 54.5 | 54.1 | 53.5 | 53.1 | 52.8 | 3 | 54.5 | 52.8 | 3 | ||||||||||||||||||||||||||
| Outside the United States | 56.6 | 55.8 | 54.7 | 54.1 | 52.6 | 8 | 56.6 | 52.6 | 8 | ||||||||||||||||||||||||||
| Total | 111.1 | 109.9 | 108.2 | 107.2 | 105.4 | 5 | 111.1 | 105.4 | 5 | ||||||||||||||||||||||||||
| Basic cards-in-force (D) (millions): | |||||||||||||||||||||||||||||||||||
| United States | 42.2 | 42.0 | 41.5 | 41.1 | 40.9 | 3 | 42.2 | 40.9 | 3 | ||||||||||||||||||||||||||
| Outside the United States | 46.3 | 45.6 | 44.6 | 44.0 | 42.6 | 9 | 46.3 | 42.6 | 9 | ||||||||||||||||||||||||||
| Total | 88.5 | 87.6 | 86.1 | 85.1 | 83.5 | 6 | 88.5 | 83.5 | 6 | ||||||||||||||||||||||||||
| Average discount rate (E) | 2.49 | % | 2.48 | % | 2.52 | % | 2.48 | % | 2.52 | % | 2.49 | % | 2.52 | % | |||||||||||||||||||||
| Average basic Card Member spending (dollars) (F) | $ | 4,223 | $ | 4,288 | $ | 3,991 | $ | 4,292 | $ | 4,037 | 5 | $ | 12,504 | $ | 12,040 | 4 | |||||||||||||||||||
| Average fee per card (dollars) (F) | $ | 40 | $ | 41 | $ | 40 | $ | 41 | $ | 40 | - | $ | 41 | $ | 40 | 3 | |||||||||||||||||||
| Average fee per card adjusted (dollars) (F) | $ | 45 | $ | 45 | $ | 45 | $ | 44 | $ | 44 | 2 | $ | 45 | $ | 44 | 2 | |||||||||||||||||||
| Worldwide Card Member receivables: | |||||||||||||||||||||||||||||||||||
| Total receivables | $ | 45.1 | $ | 45.3 | $ | 44.7 | $ | 44.2 | $ | 43.5 | 4 | $ | 45.1 | $ | 43.5 | 4 | |||||||||||||||||||
| Loss reserves (millions): | |||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 413 | $ | 414 | $ | 386 | $ | 396 | $ | 386 | 7 | $ | 386 | $ | 428 | (10 | ) | ||||||||||||||||||
| Provisions (G) | 196 | 183 | 215 | 174 | 159 | 23 | 594 | 474 | 25 | ||||||||||||||||||||||||||
| Net write-offs (H) | (168 | ) | (182 | ) | (177 | ) | (162 | ) | (149 | ) | 13 | (527 | ) | (507 | ) | 4 | |||||||||||||||||||
| Other (I) | (9 | ) | (2 | ) | (10 | ) | (22 | ) | - | - | (21 | ) | 1 | # | |||||||||||||||||||||
| Ending balance | $ | 432 | $ | 413 | $ | 414 | $ | 386 | $ | 396 | 9 | $ | 432 | $ | 396 | 9 | |||||||||||||||||||
| % of receivables | 1.0 | % | 0.9 | % | 0.9 | % | 0.9 | % | 0.9 | % | 1.0 | % | 0.9 | % | |||||||||||||||||||||
| Net write-off rate (principal only) - USCS/ICS (J) | 1.6 | % | 1.8 | % | 1.9 | % | (L) | (L) | 1.8 | % | (L) | ||||||||||||||||||||||||
| Net write-off rate (principal and fees) - USCS/ICS (J) | 1.8 | % | 2.0 | % | 2.1 | % | (L) | (L) | 2.0 | % | (L) | ||||||||||||||||||||||||
| 30 days past due as a % of total - USCS/ICS | 1.6 | % | 1.5 | % | 1.7 | % | (L) | (L) | 1.6 | % | (L) | ||||||||||||||||||||||||
| Net loss ratio (as a % of charge volume) - GCS | 0.09 | % | 0.09 | % | 0.09 | % | 0.08 | % | 0.06 | % | 0.09 | % | 0.07 | % | |||||||||||||||||||||
| 90 days past billing as a % of total - GCS | 0.8 | % | 0.7 | % | 0.7 | % | 0.9 | % | 0.8 | % | 0.8 | % | 0.8 | % | |||||||||||||||||||||
| Worldwide Card Member loans: | |||||||||||||||||||||||||||||||||||
| Total loans | $ | 66.1 | $ | 66.3 | $ | 64.0 | $ | 67.2 | $ | 63.0 | 5 | $ | 66.1 | $ | 63.0 | 5 | |||||||||||||||||||
| Loss reserves (millions): | |||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 1,170 | $ | 1,191 | $ | 1,261 | $ | 1,281 | $ | 1,342 | (13 | ) | $ | 1,261 | $ | 1,471 | (14 | ) | |||||||||||||||||
| Provisions (G) | 265 | 282 | 250 | 290 | 248 | 7 | 797 | 825 | (3 | ) | |||||||||||||||||||||||||
| Net write-offs - principal (H) | (245 | ) | (267 | ) | (274 | ) | (253 | ) | (275 | ) | (11 | ) | (786 | ) | (888 | ) | (11 | ) | |||||||||||||||||
| Net write-offs - interest and fees (H) | (40 | ) | (42 | ) | (42 | ) | (37 | ) | (36 | ) | 11 | (124 | ) | (113 | ) | 10 | |||||||||||||||||||
| Other (I) | (4 | ) | 6 | (4 | ) | (20 | ) | 2 | # | (2 | ) | (14 | ) | (86 | ) | ||||||||||||||||||||
| Ending balance | $ | 1,146 | $ | 1,170 | $ | 1,191 | $ | 1,261 | $ | 1,281 | (11 | ) | $ | 1,146 | $ | 1,281 | (11 | ) | |||||||||||||||||
| Ending reserves - principal | $ | 1,093 | $ | 1,114 | $ | 1,135 | $ | 1,212 | $ | 1,234 | (11 | ) | $ | 1,093 | $ | 1,234 | (11 | ) | |||||||||||||||||
| Ending reserves - interest and fees | $ | 53 | $ | 56 | $ | 56 | $ | 49 | $ | 47 | 13 | $ | 53 | $ | 47 | 13 | |||||||||||||||||||
| % of loans | 1.7 | % | 1.8 | % | 1.9 | % | 1.9 | % | 2.0 | % | 1.7 | % | 2.0 | % | |||||||||||||||||||||
| % of past due | 165 | % | 171 | % | 159 | % | 169 | % | 179 | % | 165 | % | 179 | % | |||||||||||||||||||||
| Average loans | $ | 66.4 | $ | 65.2 | $ | 64.5 | $ | 64.4 | $ | 63.0 | 5 | $ | 65.4 | $ | 62.8 | 4 | |||||||||||||||||||
| Net write-off rate (principal only) (J) | 1.5 | % | 1.6 | % | 1.7 | % | 1.6 | % | 1.7 | % | 1.6 | % | 1.9 | % | |||||||||||||||||||||
| Net write-off rate (principal, interest and fees) (J) | 1.7 | % | 1.9 | % | 2.0 | % | 1.8 | % | 2.0 | % | 1.9 | % | 2.1 | % | |||||||||||||||||||||
| 30 days past due loans as a % of total | 1.1 | % | 1.0 | % | 1.2 | % | 1.1 | % | 1.1 | % | 1.1 | % | 1.1 | % | |||||||||||||||||||||
| Net interest income divided by average loans (K) | 8.5 | % | 8.1 | % | 8.4 | % | 8.1 | % | 8.1 | % | 8.1 | % | 7.9 | % | |||||||||||||||||||||
| Net interest yield on Card Member loans (K) | 9.3 | % | 9.2 | % | 9.5 | % | 9.3 | % | 9.4 | % | 9.3 | % | 9.3 | % | |||||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| U.S. Card Services | (Preliminary) | ||||||||||||||||||||||||||||||||||
Selected Income Statement Data | |||||||||||||||||||||||||||||||||||
| (Millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Discount revenue, net card fees and other | $ | 3,214 | $ | 3,222 | $ | 3,017 | $ | 3,132 | $ | 3,050 | 5 | $ | 9,453 | $ | 8,991 | 5 | |||||||||||||||||||
| Interest income | 1,465 | 1,408 | 1,423 | 1,417 | 1,408 | 4 | 4,296 | 4,148 | 4 | ||||||||||||||||||||||||||
| Interest expense | 152 | 153 | 150 | 161 | 172 | (12 | ) | 455 | 532 | (14 | ) | ||||||||||||||||||||||||
| Net interest income | 1,313 | 1,255 | 1,273 | 1,256 | 1,236 | 6 | 3,841 | 3,616 | 6 | ||||||||||||||||||||||||||
| Total revenues net of interest expense | 4,527 | 4,477 | 4,290 | 4,388 | 4,286 | 6 | 13,294 | 12,607 | 5 | ||||||||||||||||||||||||||
| Provisions for losses | 316 | 339 | 342 | 319 | 285 | 11 | 997 | 931 | 7 | ||||||||||||||||||||||||||
| Total revenues net of interest expense after provisions for losses | 4,211 | 4,138 | 3,948 | 4,069 | 4,001 | 5 | 12,297 | 11,676 | 5 | ||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Marketing, promotion, rewards, | |||||||||||||||||||||||||||||||||||
| Card Member services and other | 1,790 | 1,865 | 1,582 | 1,789 | 1,756 | 2 | 5,237 | 5,036 | 4 | ||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| and other operating expenses | 1,010 | 1,073 | 960 | 988 | 988 | 2 | 3,043 | 2,938 | 4 | ||||||||||||||||||||||||||
| Total | 2,800 | 2,938 | 2,542 | 2,777 | 2,744 | 2 | 8,280 | 7,974 | 4 | ||||||||||||||||||||||||||
| Pretax segment income | 1,411 | 1,200 | 1,406 | 1,292 | 1,257 | 12 | 4,017 | 3,702 | 9 | ||||||||||||||||||||||||||
| Income tax provision | 522 | 430 | 530 | 428 | 475 | 10 | 1,482 | 1,373 | 8 | ||||||||||||||||||||||||||
| Segment income | $ | 889 | $ | 770 | $ | 876 | $ | 864 | $ | 782 | 14 | $ | 2,535 | $ | 2,329 | 9 | |||||||||||||||||||
| Effective tax rate | 37.0 | % | 35.8 | % | 37.7 | % | 33.1 | % | 37.8 | % | 36.9 | % | 37.1 | % | |||||||||||||||||||||
Selected Statistical Information | |||||||||||||||||||||||||||||||||||
| (Billions, except percentages and where indicated) | |||||||||||||||||||||||||||||||||||
| Card billed business | $ | 136.2 | $ | 136.5 | $ | 124.3 | $ | 134.1 | $ | 124.6 | 9 | $ | 397.0 | $ | 366.9 | 8 | |||||||||||||||||||
| Total cards-in-force (millions) | 45.2 | 44.7 | 44.1 | 43.7 | 43.4 | 4 | 45.2 | 43.4 | 4 | ||||||||||||||||||||||||||
| Basic cards-in-force (millions) | 33.7 | 33.3 | 32.8 | 32.5 | 32.2 | 5 | 33.7 | 32.2 | 5 | ||||||||||||||||||||||||||
| Average basic Card Member spending (dollars) | $ | 4,069 | $ | 4,133 | $ | 3,805 | $ | 4,138 | $ | 3,882 | 5 | $ | 12,008 | $ | 11,547 | 4 | |||||||||||||||||||
| U.S. Consumer Travel: | |||||||||||||||||||||||||||||||||||
| Travel sales (millions) | $ | 956 | $ | 1,027 | $ | 974 | $ | 865 | $ | 900 | 6 | $ | 2,957 | $ | 3,102 | (5 | ) | ||||||||||||||||||
| Travel commissions and fees/sales | 7.4 | % | 7.4 | % | 6.5 | % | 7.4 | % | 7.9 | % | 7.1 | % | 7.0 | % | |||||||||||||||||||||
| Total segment assets | $ | 103.3 | $ | 101.1 | $ | 98.9 | $ | 103.5 | $ | 95.2 | 9 | $ | 103.3 | $ | 95.2 | 9 | |||||||||||||||||||
| Segment capital (M) | $ | 9.9 | $ | 9.9 | $ | 9.7 | $ | 9.3 | $ | 9.1 | 9 | $ | 9.9 | $ | 9.1 | 9 | |||||||||||||||||||
| Return on average segment capital (N) | 35.5 | % | 35.3 | % | 35.6 | % | 35.6 | % | 30.8 | % | 35.5 | % | 30.8 | % | |||||||||||||||||||||
| Return on average tangible segment capital (N) | 36.6 | % | 36.5 | % | 36.9 | % | 37.0 | % | 32.0 | % | 36.6 | % | 32.0 | % | |||||||||||||||||||||
| Card Member receivables: | |||||||||||||||||||||||||||||||||||
| Total receivables | $ | 21.3 | $ | 21.2 | $ | 20.7 | $ | 21.8 | $ | 20.3 | 5 | $ | 21.3 | $ | 20.3 | 5 | |||||||||||||||||||
| 30 days past due as a % of total | 1.6 | % | 1.5 | % | 1.8 | % | 1.6 | % | 1.7 | % | 1.6 | % | 1.7 | % | |||||||||||||||||||||
| Average receivables | $ | 21.4 | $ | 21.3 | $ | 20.6 | $ | 21.2 | $ | 20.5 | 4 | $ | 21.1 | $ | 20.3 | 4 | |||||||||||||||||||
| Net write-off rate (principal only) (J) | 1.5 | % | 1.8 | % | 1.8 | % | 1.5 | % | 1.4 | % | 1.7 | % | 1.8 | % | |||||||||||||||||||||
| Net write-off rate (principal and fees) (J) | 1.7 | % | 2.0 | % | 2.0 | % | 1.7 | % | 1.6 | % | 1.9 | % | 1.9 | % | |||||||||||||||||||||
| Card Member loans: | |||||||||||||||||||||||||||||||||||
| Total loans | $ | 58.0 | $ | 57.7 | $ | 55.8 | $ | 58.4 | $ | 54.5 | 6 | $ | 58.0 | $ | 54.5 | 6 | |||||||||||||||||||
| 30 days past due loans as a % of total | 1.0 | % | 0.9 | % | 1.1 | % | 1.1 | % | 1.1 | % | 1.0 | % | 1.1 | % | |||||||||||||||||||||
| Average loans | $ | 58.0 | $ | 56.8 | $ | 56.1 | $ | 55.8 | $ | 54.7 | 6 | $ | 57.0 | $ | 54.2 | 5 | |||||||||||||||||||
| Net write-off rate (principal only) (J) | 1.4 | % | 1.6 | % | 1.7 | % | 1.5 | % | 1.7 | % | 1.6 | % | 1.9 | % | |||||||||||||||||||||
| Net write-off rate (principal, interest and fees) (J) | 1.6 | % | 1.8 | % | 1.9 | % | 1.7 | % | 1.9 | % | 1.8 | % | 2.1 | % | |||||||||||||||||||||
| Net interest income divided by average loans (O) | 9.1 | % | 8.9 | % | 9.2 | % | 8.9 | % | 9.0 | % | 9.0 | % | 8.9 | % | |||||||||||||||||||||
| Net interest yield on Card Member loans (O) | 9.2 | % | 9.1 | % | 9.4 | % | 9.2 | % | 9.3 | % | 9.3 | % | 9.2 | % | |||||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| International Card Services | (Preliminary) | ||||||||||||||||||||||||||||||||||
Selected Income Statement Data | |||||||||||||||||||||||||||||||||||
| (Millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Discount revenue, net card fees and other | $ | 1,206 | $ | 1,208 | $ | 1,157 | $ | 1,229 | $ | 1,161 | 4 | $ | 3,571 | $ | 3,415 | 5 | |||||||||||||||||||
| Interest income | 273 | 275 | 277 | 288 | 281 | (3 | ) | 825 | 830 | (1 | ) | ||||||||||||||||||||||||
| Interest expense | 85 | 92 | 82 | 88 | 86 | (1 | ) | 259 | 273 | (5 | ) | ||||||||||||||||||||||||
| Net interest income | 188 | 183 | 195 | 200 | 195 | (4 | ) | 566 | 557 | 2 | |||||||||||||||||||||||||
| Total revenues net of interest expense | 1,394 | 1,391 | 1,352 | 1,429 | 1,356 | 3 | 4,137 | 3,972 | 4 | ||||||||||||||||||||||||||
| Provisions for losses | 98 | 90 | 87 | 110 | 96 | 2 | 275 | 278 | (1 | ) | |||||||||||||||||||||||||
| Total revenues net of interest expense after provisions for losses | 1,296 | 1,301 | 1,265 | 1,319 | 1,260 | 3 | 3,862 | 3,694 | 5 | ||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Marketing, promotion, rewards, | |||||||||||||||||||||||||||||||||||
| Card Member services and other | 532 | 577 | 496 | 585 | 498 | 7 | 1,605 | 1,428 | 12 | ||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| and other operating expenses | 588 | 655 | 566 | 626 | 576 | 2 | 1,809 | 1,731 | 5 | ||||||||||||||||||||||||||
| Total | 1,120 | 1,232 | 1,062 | 1,211 | 1,074 | 4 | 3,414 | 3,159 | 8 | ||||||||||||||||||||||||||
| Pretax segment income | 176 | 69 | 203 | 108 | 186 | (5 | ) | 448 | 535 | (16 | ) | ||||||||||||||||||||||||
| Income tax provision/(benefit) | 34 | (8 | ) | 44 | 5 | 44 | (23 | ) | 70 | 7 | # | ||||||||||||||||||||||||
| Segment income | $ | 142 | $ | 77 | $ | 159 | $ | 103 | $ | 142 | - | $ | 378 | $ | 528 | (28 | ) | ||||||||||||||||||
| Effective tax rate | 19.3 | % | (11.6 | )% | 21.7 | % | 4.6 | % | 23.7 | % | 15.6 | % | 1.3 | % | |||||||||||||||||||||
Selected Statistical Information | |||||||||||||||||||||||||||||||||||
| (Billions, except percentages and where indicated) | |||||||||||||||||||||||||||||||||||
| Card billed business | $ | 33.9 | $ | 34.1 | $ | 31.9 | $ | 35.5 | $ | 32.5 | 4 | $ | 99.9 | $ | 96.2 | 4 | |||||||||||||||||||
| Total cards-in-force (millions) | 15.8 | 15.7 | 15.7 | 15.7 | 15.5 | 2 | 15.8 | 15.5 | 2 | ||||||||||||||||||||||||||
| Basic cards-in-force (millions) | 10.9 | 10.9 | 10.9 | 10.7 | 10.6 | 3 | 10.9 | 10.6 | 3 | ||||||||||||||||||||||||||
| Average basic Card Member spending (dollars) | $ | 3,100 | $ | 3,137 | $ | 2,942 | $ | 3,336 | $ | 3,076 | 1 | $ | 9,185 | $ | 9,094 | 1 | |||||||||||||||||||
| International Consumer Travel: | |||||||||||||||||||||||||||||||||||
| Travel sales (millions) | $ | 362 | $ | 354 | $ | 353 | $ | 367 | $ | 359 | 1 | $ | 1,069 | $ | 1,053 | 2 | |||||||||||||||||||
| Travel commissions and fees/sales | 6.9 | % | 6.8 | % | 6.2 | % | 7.1 | % | 7.0 | % | 6.6 | % | 6.8 | % | |||||||||||||||||||||
| Total segment assets | $ | 31.1 | $ | 31.6 | $ | 30.4 | $ | 31.1 | $ | 30.4 | 2 | $ | 31.1 | $ | 30.4 | 2 | |||||||||||||||||||
| Segment capital (M) | $ | 3.0 | $ | 3.0 | $ | 3.0 | $ | 3.1 | $ | 3.1 | (3 | ) | $ | 3.0 | $ | 3.1 | (3 | ) | |||||||||||||||||
| Return on average segment capital (N) | 15.8 | % | 15.7 | % | 20.0 | % | 20.9 | % | 20.8 | % | 15.8 | % | 20.8 | % | |||||||||||||||||||||
| Return on average tangible segment capital (N) | 28.9 | % | 28.8 | % | 36.8 | % | 38.8 | % | 39.1 | % | 28.9 | % | 39.1 | % | |||||||||||||||||||||
| Card Member receivables: | |||||||||||||||||||||||||||||||||||
| Total receivables | $ | 7.3 | $ | 7.5 | $ | 7.2 | $ | 7.8 | $ | 7.2 | 1 | $ | 7.3 | $ | 7.2 | 1 | |||||||||||||||||||
| 30 days past billing as a % of total | 1.4 | % | 1.3 | % | 1.4 | % | (L) | (L) | 1.4 | % | (L) | ||||||||||||||||||||||||
| Net write-off rate (principal only) (J) | 1.9 | % | 1.9 | % | 2.2 | % | (L) | (L) | 2.0 | % | (L) | ||||||||||||||||||||||||
| Net write-off rate (principal and fees) (J) | 2.1 | % | 2.0 | % | 2.3 | % | (L) | (L) | 2.1 | % | (L) | ||||||||||||||||||||||||
| 90 days past billing as a % of total | (L) | (L) | (L) | 1.1 | % | 1.1 | % | (L) | 1.1 | % | |||||||||||||||||||||||||
| Net loss ratio (as a % of charge volume) | (L) | (L) | (L) | 0.19 | % | 0.21 | % | (L) | 0.20 | % | |||||||||||||||||||||||||
| Card Member loans: | |||||||||||||||||||||||||||||||||||
| Total loans | $ | 8.0 | $ | 8.6 | $ | 8.2 | $ | 8.8 | $ | 8.4 | (5 | ) | $ | 8.0 | $ | 8.4 | (5 | ) | |||||||||||||||||
| 30 days past due loans as a % of total | 1.6 | % | 1.6 | % | 1.7 | % | 1.4 | % | 1.5 | % | 1.6 | % | 1.5 | % | |||||||||||||||||||||
| Average loans | $ | 8.3 | $ | 8.3 | $ | 8.3 | $ | 8.5 | $ | 8.3 | - | $ | 8.3 | $ | 8.5 | (2 | ) | ||||||||||||||||||
| Net write-off rate (principal only) (J) | 1.9 | % | 2.0 | % | 2.0 | % | 1.8 | % | 1.9 | % | 2.0 | % | 1.9 | % | |||||||||||||||||||||
| Net write-off rate (principal, interest and fees) (J) | 2.4 | % | 2.4 | % | 2.4 | % | 2.2 | % | 2.4 | % | 2.4 | % | 2.3 | % | |||||||||||||||||||||
| Net interest income divided by average loans (O) | 9.1 | % | 8.8 | % | 9.5 | % | 9.3 | % | 9.3 | % | 9.1 | % | 8.7 | % | |||||||||||||||||||||
| Net interest yield on Card Member loans (O) | 9.9 | % | 9.6 | % | 10.1 | % | 10.0 | % | 10.4 | % | 9.9 | % | 9.8 | % | |||||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| Global Commercial Services | (Preliminary) | ||||||||||||||||||||||||||||||||||
Selected Income Statement Data | |||||||||||||||||||||||||||||||||||
| (Millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Discount revenue, net card fees and other | $ | 957 | $ | 1,332 | $ | 1,249 | $ | 1,298 | $ | 1,277 | (25 | ) | $ | 3,538 | $ | 3,787 | (7 | ) | |||||||||||||||||
| Interest income | 4 | 3 | 4 | 4 | 3 | 33 | 11 | 9 | 22 | ||||||||||||||||||||||||||
| Interest expense | 61 | 66 | 59 | 64 | 59 | 3 | 186 | 181 | 3 | ||||||||||||||||||||||||||
| Net interest expense | (57 | ) | (63 | ) | (55 | ) | (60 | ) | (56 | ) | 2 | (175 | ) | (172 | ) | 2 | |||||||||||||||||||
| Total revenues net of interest expense | 900 | 1,269 | 1,194 | 1,238 | 1,221 | (26 | ) | 3,363 | 3,615 | (7 | ) | ||||||||||||||||||||||||
| Provisions for losses | 49 | 43 | 38 | 36 | 29 | 69 | 130 | 93 | 40 | ||||||||||||||||||||||||||
| Total revenues net of interest expense after provisions for losses | 851 | 1,226 | 1,156 | 1,202 | 1,192 | (29 | ) | 3,233 | 3,522 | (8 | ) | ||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Marketing, promotion, rewards, | |||||||||||||||||||||||||||||||||||
| Card Member services and other | 161 | 177 | 166 | 162 | 148 | 9 | 504 | 442 | 14 | ||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| and other operating expenses | 381 | 184 | 705 | 753 | 703 | (46 | ) | 1,270 | 2,123 | (40 | ) | ||||||||||||||||||||||||
| Total | 542 | 361 | 871 | 915 | 851 | (36 | ) | 1,774 | 2,565 | (31 | ) | ||||||||||||||||||||||||
| Pretax segment income | 309 | 865 | 285 | 287 | 341 | (9 | ) | 1,459 | 957 | 52 | |||||||||||||||||||||||||
| Income tax provision | 105 | 304 | 101 | 105 | 80 | 31 | 510 | 279 | 83 | ||||||||||||||||||||||||||
| Segment income | $ | 204 | $ | 561 | $ | 184 | $ | 182 | $ | 261 | (22 | ) | $ | 949 | $ | 678 | 40 | ||||||||||||||||||
| Effective tax rate | 34.0 | % | 35.1 | % | 35.4 | % | 36.6 | % | 23.5 | % | 35.0 | % | 29.2 | % | |||||||||||||||||||||
Selected Statistical Information | |||||||||||||||||||||||||||||||||||
| (Billions, except percentages and where indicated) | |||||||||||||||||||||||||||||||||||
| Card billed business | $ | 46.5 | $ | 47.6 | $ | 45.5 | $ | 45.0 | $ | 43.2 | 8 | $ | 139.6 | $ | 130.4 | 7 | |||||||||||||||||||
| Total cards-in-force (millions) | 6.9 | 7.0 | 7.1 | 7.1 | 7.1 | (3 | ) | 6.9 | 7.1 | (3 | ) | ||||||||||||||||||||||||
| Basic cards-in-force (millions) | 6.9 | 7.0 | 7.1 | 7.1 | 7.1 | (3 | ) | 6.9 | 7.1 | (3 | ) | ||||||||||||||||||||||||
| Average basic Card Member spending (dollars) | $ | 6,691 | $ | 6,781 | $ | 6,429 | $ | 6,361 | $ | 6,139 | 9 | $ | 19,905 | $ | 18,564 | 7 | |||||||||||||||||||
| Global Corporate Travel: | |||||||||||||||||||||||||||||||||||
| Travel sales (millions) | $ | 80 | $ | 4,882 | $ | 4,698 | $ | 4,793 | $ | 4,469 | (98 | ) | $ | 9,660 | $ | 14,076 | (31 | ) | |||||||||||||||||
| Travel commissions and fees/sales | 10.0 | % | 8.2 | % | 7.2 | % | 8.3 | % | 8.8 | % | 7.7 | % | 8.0 | % | |||||||||||||||||||||
| Total segment assets | $ | 20.6 | $ | 20.8 | $ | 21.6 | $ | 19.2 | $ | 20.5 | - | $ | 20.6 | $ | 20.5 | - | |||||||||||||||||||
| Segment capital (M) | $ | 3.8 | $ | 3.8 | $ | 3.8 | $ | 3.7 | $ | 3.6 | 6 | $ | 3.8 | $ | 3.6 | 6 | |||||||||||||||||||
| Return on average segment capital (N) | 30.3 | % | 32.0 | % | 23.2 | % | 23.6 | % | 20.4 | % | 30.3 | % | 20.4 | % | |||||||||||||||||||||
| Return on average tangible segment capital (N) | 56.0 | % | 60.3 | % | 44.4 | % | 45.8 | % | 39.9 | % | 56.0 | % | 39.9 | % | |||||||||||||||||||||
| Card Member receivables: | |||||||||||||||||||||||||||||||||||
| Total receivables | $ | 16.4 | $ | 16.5 | $ | 16.6 | $ | 14.4 | $ | 15.9 | 3 | $ | 16.4 | $ | 15.9 | 3 | |||||||||||||||||||
| 90 days past billing as a % of total | 0.8 | % | 0.7 | % | 0.7 | % | 0.9 | % | 0.8 | % | 0.8 | % | 0.8 | % | |||||||||||||||||||||
| Net loss ratio (as a % of charge volume) | 0.09 | % | 0.09 | % | 0.09 | % | 0.08 | % | 0.06 | % | 0.09 | % | 0.07 | % | |||||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| Global Network & Merchant Services | (Preliminary) | ||||||||||||||||||||||||||||||||||
Selected Income Statement Data | |||||||||||||||||||||||||||||||||||
| (Millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Discount revenue, fees and other | $ | 1,368 | $ | 1,366 | $ | 1,293 | $ | 1,373 | $ | 1,309 | 5 | $ | 4,027 | $ | 3,856 | 4 | |||||||||||||||||||
| Interest income | 14 | 11 | 10 | 9 | 8 | 75 | 35 | 23 | 52 | ||||||||||||||||||||||||||
| Interest expense | (68 | ) | (78 | ) | (62 | ) | (65 | ) | (62 | ) | 10 | (208 | ) | (187 | ) | 11 | |||||||||||||||||||
| Net interest income | 82 | 89 | 72 | 74 | 70 | 17 | 243 | 210 | 16 | ||||||||||||||||||||||||||
| Total revenues net of interest expense | 1,450 | 1,455 | 1,365 | 1,447 | 1,379 | 5 | 4,270 | 4,066 | 5 | ||||||||||||||||||||||||||
| Provisions for losses | 24 | 18 | 16 | 14 | 13 | 85 | 58 | 53 | 9 | ||||||||||||||||||||||||||
| Total revenues net of interest expense after provisions for losses | 1,426 | 1,437 | 1,349 | 1,433 | 1,366 | 4 | 4,212 | 4,013 | 5 | ||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Marketing, promotion, rewards, Card Member services and other | 201 | 277 | 156 | 158 | 200 | 1 | 634 | 546 | 16 | ||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| and other operating expenses | 555 | 582 | 491 | 643 | 558 | (1 | ) | 1,628 | 1,630 | - | |||||||||||||||||||||||||
| Total | 756 | 859 | 647 | 801 | 758 | - | 2,262 | 2,176 | 4 | ||||||||||||||||||||||||||
| Pretax segment income | 670 | 578 | 702 | 632 | 608 | 10 | 1,950 | 1,837 | 6 | ||||||||||||||||||||||||||
| Income tax provision | 243 | 205 | 259 | 233 | 217 | 12 | 707 | 661 | 7 | ||||||||||||||||||||||||||
| Segment income | $ | 427 | $ | 373 | $ | 443 | $ | 399 | $ | 391 | 9 | $ | 1,243 | $ | 1,176 | 6 | |||||||||||||||||||
| Effective tax rate | 36.3 | % | 35.5 | % | 36.9 | % | 36.9 | % | 35.7 | % | 36.3 | % | 36.0 | % | |||||||||||||||||||||
Selected Statistical Information | |||||||||||||||||||||||||||||||||||
| (Billions, except percentages and where indicated) | |||||||||||||||||||||||||||||||||||
| Global Card billed business (P) | $ | 258.1 | $ | 258.1 | $ | 238.1 | $ | 254.0 | $ | 236.2 | 9 | $ | 754.3 | $ | 698.4 | 8 | |||||||||||||||||||
| Global Network & Merchant Services: | |||||||||||||||||||||||||||||||||||
| Total segment assets | $ | 18.2 | $ | 18.7 | $ | 18.3 | $ | 17.1 | $ | 17.8 | 2 | $ | 18.2 | $ | 17.8 | 2 | |||||||||||||||||||
| Segment capital (M) | $ | 2.0 | $ | 2.0 | $ | 1.9 | $ | 2.0 | $ | 2.0 | (3 | ) | $ | 2.0 | $ | 2.0 | (3 | ) | |||||||||||||||||
| Return on average segment capital (N) | 82.6 | % | 79.4 | % | 81.2 | % | 76.8 | % | 73.4 | % | 82.6 | % | 73.4 | % | |||||||||||||||||||||
| Return on average tangible segment capital (N) | 91.3 | % | 87.8 | % | 89.7 | % | 84.9 | % | 81.1 | % | 91.3 | % | 81.1 | % | |||||||||||||||||||||
| Global Network Services: | |||||||||||||||||||||||||||||||||||
| Card billed business | $ | 41.6 | $ | 40.1 | $ | 36.6 | $ | 39.3 | $ | 35.9 | 16 | $ | 118.2 | $ | 104.9 | 13 | |||||||||||||||||||
| Total cards-in-force (millions) | 43.2 | 42.5 | 41.3 | 40.7 | 39.4 | 10 | 43.2 | 39.4 | 10 | ||||||||||||||||||||||||||
| # - Denotes a variance of more than 100 percent. | |||||||||||||||||||||||||||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||||||||||||||||
| American Express Company | (Preliminary) | ||||||||||||||||||||
Components of Return on Average Equity (ROE), Return on Average Common Equity (ROCE), and Return on Average Tangible Common Equity (ROTCE) | |||||||||||||||||||||
Appendix I | |||||||||||||||||||||
| (Millions, except percentages) | |||||||||||||||||||||
| For the Twelve Months Ended | |||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||
ROE | |||||||||||||||||||||
| Net income | $ | 5,746 | $ | 5,635 | $ | 5,511 | $ | 5,359 | $ | 4,688 | |||||||||||
| Average shareholders' equity | $ | 19,948 | $ | 19,591 | $ | 19,442 | $ | 19,254 | $ | 19,289 | |||||||||||
| Return on average equity (Q) | 28.8 | % | 28.8 | % | 28.3 | % | 27.8 | % | 24.3 | % | |||||||||||
Reconciliation of ROCE and ROTCE | |||||||||||||||||||||
| Net income | $ | 5,746 | $ | 5,635 | $ | 5,511 | $ | 5,359 | $ | 4,688 | |||||||||||
| Earnings allocated to participating share awards and other | 46 | 47 | 48 | 47 | 43 | ||||||||||||||||
| Net income attributable to common shareholders | $ | 5,700 | $ | 5,588 | $ | 5,463 | $ | 5,312 | $ | 4,645 | |||||||||||
| Average shareholders' equity | $ | 19,948 | $ | 19,591 | $ | 19,442 | $ | 19,254 | $ | 19,289 | |||||||||||
| Average common shareholders' equity | $ | 19,948 | $ | 19,591 | $ | 19,442 | $ | 19,254 | $ | 19,289 | |||||||||||
| Average goodwill and other intangibles | 3,941 | 3,994 | 4,012 | 4,055 | 4,091 | ||||||||||||||||
| Average tangible common shareholders' equity | $ | 16,007 | $ | 15,597 | $ | 15,430 | $ | 15,199 | $ | 15,198 | |||||||||||
| Return on average common equity (Q) | 28.6 | % | 28.5 | % | 28.1 | % | 27.6 | % | 24.1 | % | |||||||||||
| Return on average tangible common equity (R) | 35.6 | % | 35.8 | % | 35.4 | % | 34.9 | % | 30.6 | % | |||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||
| American Express Company | (Preliminary) | |||||||||||||||||||
Components of Return on Average Segment Capital (ROSC) and Return on Average Tangible Segment Capital (ROTSC) | ||||||||||||||||||||
Appendix II | ||||||||||||||||||||
| (Millions, except percentages) | ||||||||||||||||||||
| For the Twelve Months Ended | ||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | ||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||
U.S. Card Services | ||||||||||||||||||||
| Segment income | $ | 3,399 | $ | 3,292 | $ | 3,265 | $ | 3,193 | $ | 2,752 | ||||||||||
| Average segment capital | $ | 9,580 | $ | 9,337 | $ | 9,180 | $ | 8,974 | $ | 8,940 | ||||||||||
| Average goodwill and other intangibles | 299 | 311 | 323 | 334 | 345 | |||||||||||||||
| Average tangible segment capital | $ | 9,281 | $ | 9,026 | $ | 8,857 | $ | 8,640 | $ | 8,595 | ||||||||||
| Return on average segment capital (S) | 35.5 | % | 35.3 | % | 35.6 | % | 35.6 | % | 30.8 | % | ||||||||||
| Return on average tangible segment capital (S) | 36.6 | % | 36.5 | % | 36.9 | % | 37.0 | % | 32.0 | % | ||||||||||
International Card Services | ||||||||||||||||||||
| Segment income | $ | 481 | $ | 481 | $ | 612 | $ | 631 | $ | 623 | ||||||||||
| Average segment capital | $ | 3,043 | $ | 3,063 | $ | 3,053 | $ | 3,024 | $ | 2,990 | ||||||||||
| Average goodwill and other intangibles | 1,376 | 1,394 | 1,389 | 1,396 | 1,398 | |||||||||||||||
| Average tangible segment capital | $ | 1,667 | $ | 1,669 | $ | 1,664 | $ | 1,628 | $ | 1,592 | ||||||||||
| Return on average segment capital (S) | 15.8 | % | 15.7 | % | 20.0 | % | 20.9 | % | 20.8 | % | ||||||||||
| Return on average tangible segment capital (S) | 28.9 | % | 28.8 | % | 36.8 | % | 38.8 | % | 39.1 | % | ||||||||||
Global Commercial Services | ||||||||||||||||||||
| Segment income | $ | 1,131 | $ | 1,188 | $ | 853 | $ | 860 | $ | 743 | ||||||||||
| Average segment capital | $ | 3,736 | $ | 3,707 | $ | 3,679 | $ | 3,647 | $ | 3,637 | ||||||||||
| Average goodwill and other intangibles | 1,715 | 1,736 | 1,759 | 1,768 | 1,775 | |||||||||||||||
| Average tangible segment capital | $ | 2,021 | $ | 1,971 | $ | 1,920 | $ | 1,879 | $ | 1,862 | ||||||||||
| Return on average segment capital (S) | 30.3 | % | 32.0 | % | 23.2 | % | 23.6 | % | 20.4 | % | ||||||||||
| Return on average tangible segment capital (S) | 56.0 | % | 60.3 | % | 44.4 | % | 45.8 | % | 39.9 | % | ||||||||||
Global Network & Merchant Services | ||||||||||||||||||||
| Segment income | $ | 1,642 | $ | 1,606 | $ | 1,645 | $ | 1,575 | $ | 1,530 | ||||||||||
| Average segment capital | $ | 1,989 | $ | 2,022 | $ | 2,026 | $ | 2,050 | $ | 2,084 | ||||||||||
| Average goodwill and other intangibles | 190 | 192 | 193 | 195 | 197 | |||||||||||||||
| Average tangible segment capital | $ | 1,799 | $ | 1,830 | $ | 1,833 | $ | 1,855 | $ | 1,887 | ||||||||||
| Return on average segment capital (S) | 82.6 | % | 79.4 | % | 81.2 | % | 76.8 | % | 73.4 | % | ||||||||||
| Return on average tangible segment capital (S) | 91.3 | % | 87.8 | % | 89.7 | % | 84.9 | % | 81.1 | % | ||||||||||
See Appendix VI for footnote references | ||||||||||||||||||||
| American Express Company | (Preliminary) | ||||||||||||||||||||
Net Interest Yield on Card Member Loans | |||||||||||||||||||||
Appendix III | |||||||||||||||||||||
| (Millions, except percentages and where indicated) | |||||||||||||||||||||
| Quarters Ended | |||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||
| Net interest income | $ | 1,395 | $ | 1,316 | $ | 1,337 | $ | 1,319 | $ | 1,283 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Interest expense not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | 247 | $ | 259 | $ | 263 | $ | 279 | $ | 296 | |||||||||||
| Interest income not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | (90 | ) | $ | (89 | ) | $ | (88 | ) | $ | (91 | ) | $ | (87 | ) | ||||||
| Adjusted net interest income (T) | $ | 1,552 | $ | 1,486 | $ | 1,512 | $ | 1,507 | $ | 1,492 | |||||||||||
| Average loans (billions) | $ | 66.4 | $ | 65.2 | $ | 64.5 | $ | 64.4 | $ | 63.0 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Unamortized deferred card fees, net of direct | |||||||||||||||||||||
| acquisition costs of Card Member loans, and other (billions) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | ||||||
| Adjusted average loans (billions) (U) | $ | 66.2 | $ | 65.0 | $ | 64.3 | $ | 64.2 | $ | 62.8 | |||||||||||
| Net interest income divided by average loans (V) | 8.5 | % | 8.1 | % | 8.4 | % | 8.1 | % | 8.1 | % | |||||||||||
| Net interest yield on Card Member loans (W) | 9.3 | % | 9.2 | % | 9.5 | % | 9.3 | % | 9.4 | % | |||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||
| U.S. Card Services and International Card Services | (Preliminary) | ||||||||||||||||||||
Net Interest Yield on Card Member Loans | |||||||||||||||||||||
Appendix IV | |||||||||||||||||||||
(Millions, except percentages and where indicated) | |||||||||||||||||||||
| Quarters Ended | |||||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |||||||||||||||||
| 2014 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||
USCS: | |||||||||||||||||||||
| Net interest income | $ | 1,313 | $ | 1,255 | $ | 1,273 | $ | 1,256 | $ | 1,236 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Interest expense not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | 39 | $ | 40 | $ | 39 | $ | 43 | $ | 45 | |||||||||||
| Interest income not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | (3 | ) | $ | (3 | ) | $ | (3 | ) | $ | (2 | ) | $ | (3 | ) | ||||||
| Adjusted net interest income (T) | $ | 1,349 | $ | 1,292 | $ | 1,309 | $ | 1,297 | $ | 1,278 | |||||||||||
| Average loans (billions) | $ | 58.0 | $ | 56.8 | $ | 56.1 | $ | 55.8 | $ | 54.7 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Unamortized deferred card fees, net of direct | |||||||||||||||||||||
| acquisition costs of Card Member loans (billions) | $ | - | $ | - | $ | 0.1 | $ | - | $ | - | |||||||||||
| Adjusted average loans (billions) (U) | $ | 58.0 | $ | 56.8 | $ | 56.2 | $ | 55.8 | $ | 54.7 | |||||||||||
| Net interest income divided by average loans (V) | 9.1 | % | 8.9 | % | 9.2 | % | 8.9 | % | 9.0 | % | |||||||||||
| Net interest yield on Card Member loans (W) | 9.2 | % | 9.1 | % | 9.4 | % | 9.2 | % | 9.3 | % | |||||||||||
ICS: | |||||||||||||||||||||
| Net interest income | $ | 188 | $ | 183 | $ | 195 | $ | 200 | $ | 195 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Interest expense not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | 24 | $ | 21 | $ | 18 | $ | 21 | $ | 23 | |||||||||||
| Interest income not attributable to the Company's | |||||||||||||||||||||
| Card Member loan portfolio | $ | (10 | ) | $ | (10 | ) | $ | (10 | ) | $ | (11 | ) | $ | (6 | ) | ||||||
| Adjusted net interest income (T) | $ | 202 | $ | 194 | $ | 203 | $ | 210 | $ | 212 | |||||||||||
| Average loans (billions) | $ | 8.3 | $ | 8.3 | $ | 8.3 | $ | 8.5 | $ | 8.3 | |||||||||||
| Exclude: | |||||||||||||||||||||
| Unamortized deferred card fees, net of direct | |||||||||||||||||||||
| acquisition costs of Card Member loans, and other (billions) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | ||||||
| Adjusted average loans (billions) (U) | $ | 8.1 | $ | 8.1 | $ | 8.1 | $ | 8.3 | $ | 8.1 | |||||||||||
| Net interest income divided by average loans (V) | 9.1 | % | 8.8 | % | 9.5 | % | 9.3 | % | 9.3 | % | |||||||||||
| Net interest yield on Card Member loans (W) | 9.9 | % | 9.6 | % | 10.1 | % | 10.0 | % | 10.4 | % | |||||||||||
See Appendix VI for footnote references | |||||||||||||||||||||
| American Express Company | (Preliminary) | ||||||||||||||||||
Revenue and Expense Reconciliation | |||||||||||||||||||
Appendix V | |||||||||||||||||||
| (Millions) | |||||||||||||||||||
| Quarters Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||
| Sep 30, | Sep 30, | Sep 30, 2014 vs. | Sep 30, | Sep 30, | Sep 30, 2014 vs. | ||||||||||||||
| 2014 | 2013 | Sep 30, 2013 | 2014 | 2013 | Sep 30, 2013 | ||||||||||||||
Consolidated: | |||||||||||||||||||
| Reported total revenues net of interest expense | $ | 8,329 | $ | 8,301 | - | $ | 25,185 | $ | 24,427 | 3 | |||||||||
| Global Business Travel ("GBT") revenues net of interest expense | 396 | 396 | |||||||||||||||||
| Adjusted total revenues net of interest expense | 8,329 | 7,905 | 5 | 25,185 | 24,031 | 5 | |||||||||||||
| FX and GBT adjusted total revenues net of interest expense (X) | 7,857 | 6 | 23,871 | 6 | |||||||||||||||
| Reported total expenses | 5,595 | 5,878 | (5 | ) | 16,957 | 17,166 | (1 | ) | |||||||||||
| GBT expenses | 336 | 336 | |||||||||||||||||
| Adjusted total expenses | 5,595 | 5,542 | 1 | 16,957 | 16,830 | 1 | |||||||||||||
| FX and GBT adjusted total expenses (X) | 5,525 | 1 | 16,763 | 1 | |||||||||||||||
Global Commercial Services: | |||||||||||||||||||
| Reported total revenues net of interest expense | 900 | 1,221 | (26 | ) | 3,363 | 3,615 | (7 | ) | |||||||||||
| GBT revenues net of interest expense | 396 | 396 | |||||||||||||||||
| Adjusted total revenues net of interest expense | 900 | 825 | 9 | 3,363 | 3,219 | 4 | |||||||||||||
| FX and GBT adjusted total revenues net of interest expense (X) | 818 | 10 | 3,205 | 5 | |||||||||||||||
| Reported total expenses | 542 | 851 | (36 | ) | 1,774 | 2,565 | (31 | ) | |||||||||||
| GBT expenses | 336 | 336 | |||||||||||||||||
| Adjusted total expenses | $ | 542 | $ | 515 | 5 | $ | 1,774 | $ | 2,229 | (20 | ) | ||||||||
| FX and GBT adjusted total expenses (X) | 514 | 5 | 2,225 | (20 | ) | ||||||||||||||
Note: Represents operating performance of Global Business Travel as reported in Q3’13. Does not include other Global Business Travel-related items, including equity earnings from the joint venture and impacts related to a transition services agreement that will phase out over time. |
See Appendix VI for footnote references |
| Appendix VI | (Preliminary) | ||||||||||||||
| All Information in the preceding tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. Certain reclassifications of prior period amounts have been made to conform to the current period presentation. | |||||||||||||||
| (A) | Represents net income, less earnings allocated to participating share awards of $11 million for the quarter ended September 30, 2014, $12 million for the quarter ended June 30, 2014, $12 million for the quarter ended March 31, 2014, $11 million for the quarter ended December 31, 2013, and $12 million for the quarter ended September 30, 2013. | ||||||||||||||
| (B) | Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity, a non-GAAP measure. | ||||||||||||||
| (C) | Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. Card billed business is reflected in the United States or outside the United States based on where the issuer is located. | ||||||||||||||
| (D) | Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee Card Members. Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand Card Member accounts that have no out-of-store spend activity during the prior 12 month period. | ||||||||||||||
| (E) | This calculation is designed to reflect pricing at merchants accepting general purpose American Express cards. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance. | ||||||||||||||
| (F) | Average basic Card Member spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs divided by average worldwide proprietary cards-in-force. The adjusted average fee per card, which is a non-GAAP measure, is computed in the same manner, but excludes amortization of deferred direct acquisition costs. The amount of amortization excluded for these periods was $77 million for the quarter ended September 30, 2014, $77 million for the quarter ended June 30, 2014, $73 million for the quarter ended March 31, 2014, $64 million for the quarter ended December 31, 2013, and $67 million for the quarter ended September 30, 2013. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fee pricing across a range of its proprietary card products. | ||||||||||||||
| (G) | Provisions for principal (resulting from authorized transactions) and fee reserve components. | ||||||||||||||
| (H) | Consists of principal (resulting from authorized transactions), interest and/or fees, less recoveries. | ||||||||||||||
| (I) | Beginning in first quarter 2014, reserves related for card-related fraud losses are reflected in Other liabilities. All periods include foreign currency translation adjustments and other items. | ||||||||||||||
| (J) | 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. | ||||||||||||||
| (K) | 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. | ||||||||||||||
| (L) | Historically, net loss ratio as a % of charge volume and 90 days past billings as a % of receivables were presented for ICS and GCS. As a result of system enhancements, beginning in first quarter 2014, 30 days past due as a % of total, net write-off rate (principal only) and net write-off rate (principal and fees) will be presented for ICS. | ||||||||||||||
| (M) | Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements. | ||||||||||||||
| (N) | Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure. | ||||||||||||||
| (O) | See Appendix IV 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. | ||||||||||||||
| (P) | Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. | ||||||||||||||
| (Q) | 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. | ||||||||||||||
| (R) | Return on average tangible common equity, a non-GAAP measure, is computed in the same manner as return on average common equity except the computation of average tangible common shareholders' equity, a non-GAAP measure, excludes from average total shareholders' equity, average goodwill and other intangibles. The Company believes that return on average tangible common equity is a useful measure of the profitability of its business. | ||||||||||||||
| (S) | Return on average segment capital is calculated by dividing one year period segment income by one year average segment capital. Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes average goodwill and other intangibles. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business. | ||||||||||||||
| (T) | Adjusted net interest income, a non-GAAP measure, represents net interest income allocated to the Company's Card Member loan portfolio excluding the impact of interest expense and interest income not attributable to the Company's Card Member loan portfolio. The Company believes adjusted net interest income is useful to investors because it is a component of net interest yield on Card Member loans. | ||||||||||||||
| (U) | Adjusted average loans, a non-GAAP measure, represents average Card Member loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of Card Member loans, and other. The Company believes adjusted average loans is useful to investors because it is a component of net interest yield on Card Member loans. | ||||||||||||||
| (V) | 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. | ||||||||||||||
| (W) | Net interest yield on Card Member loans, a non-GAAP measure, is computed by dividing adjusted net interest income by adjusted average loans, computed on an annualized basis. The calculation of net interest yield on Card Member loans includes interest that is deemed uncollectible. For all presentations of net interest yield on Card Member loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - Card Member loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation. 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. | ||||||||||||||
| (X) | Revenue net of interest expense and total expenses on an FX adjusted basis are a non-GAAP measures. 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 Q3’14 foreign exchange rates apply to Q3'13 results). The Company’s calculations of non-GAAP measures may differ from the calculations of similarly titled measures of other companies. | ||||||||||||||
Contacts:
Caitlin Stefanik, +1-212-640-2921
caitlin.stefanik@aexp.com
or
Mike
O’Neill, +1-212-640-5951
mike.o'neill@aexp.com
or
Investors/Analysts
Contacts:
Ken Paukowits, +1-212-640-6348
ken.f.paukowits@aexp.com
or
Rick
Petrino, +1-212-640-5574
richard.petrino@aexp.com
