Performance Reflects
Expense Controls, Higher Loans and Card Member Spending, Which
Helped to Mitigate the Impact of Stronger U.S. Dollar and Year-Ago
Business Travel Benefits
American Express Company (NYSE:AXP) today reported
second-quarter net income of $1.47 billion, down from $1.53 billion
a year ago. Diluted earnings per share decreased 1 percent to
$1.42, from $1.43 a year ago.
(Millions, except percentages and per
share amounts)
Quarters Ended
June 30,
Percentage
Inc/(Dec)
Six Months Ended
June 30,
Percentage
Inc/(Dec)
2015 2014
2015 2014
Total Revenues Net of Interest Expense
$ 8,284 $ 8,631 (4)%
$ 16,234 $ 16,804 (3)% Net
Income $ 1,473 $ 1,529
(4)% $ 2,998 $ 2,961
1% Earnings Per Common Share – Diluted:
Net Income Attributable to Common
Shareholders1
$ 1.42 $ 1.43
(1)% $ 2.90 $ 2.77
5% Average Diluted Common Shares Outstanding
1,013 1,058 (4)%
1,018 1,062 (4)% Return on Average
Equity 28.1% 28.8 %
28.1 % 28.8 %
Results for the quarter were negatively affected by the
significant impact of a stronger U.S. dollar on international
operations. The year-ago quarter included business travel
operations and a gain related to the business travel joint venture
transaction.
Consolidated total revenues net of interest expense totaled $8.3
billion for the second quarter, down 4 percent from $8.6 billion a
year ago. Excluding the impact of foreign exchange rates2 and
business travel results in the year-ago period, adjusted revenues
rose 5 percent.3 The increase primarily reflected higher Card
Member spending and growth in the loan portfolio.
Consolidated provisions for losses totaled $467 million, down 4
percent from $489 million a year ago. The decrease reflected lower
net write-offs in the current quarter, offset, in part, by the
effect of a larger reserve release a year ago.
Consolidated expenses totaled $5.6 billion, down 4 percent (flat
FX-adjusted2) from $5.8 billion a year ago. The year-ago quarter
included business travel operations and the previously mentioned
joint venture transaction gain (which was reported as an expense
reduction). The gain was partially offset by several other year-ago
items, including incremental investments, a restructuring charge
and transaction-related costs.
The effective tax rate for the quarter remained unchanged from a
year ago at 34 percent.
The company’s return on average equity (ROE) was 28.1 percent,
down from 28.8 percent a year ago.
“We delivered solid underlying earnings performance this
quarter,” said Kenneth I. Chenault, chairman and chief executive
officer. “Disciplined expense control and a substantial return of
capital to shareholders through share repurchases together with
higher Card Member spending and loan volumes helped to mitigate the
negative impact of a strong U.S. dollar and the year-ago benefits
from Global Business Travel, which now operates as a joint
venture.
“Against the backdrop of an uneven global economy, Card Member
spending grew 6 percent, adjusted for FX, with strong performance
in most international regions. Our credit metrics remained at, or
near, historically low levels.
“Lower operating expenses this quarter largely offset the higher
costs related to previously renewed co-brand partnerships.
“We continue to see opportunities across the company and this
quarter marked the initial stage of a ramp up in investment
spending on growth initiatives. As planned, we expect to increase
our investments substantially in the second half of the year. Our
focus will be on: acquiring new Card Members; gaining additional
business from consumer, small business and middle market customers;
expanding our presence internationally; growing our merchant
network; building our loyalty coalition business; and introducing
new digital capabilities.”
Segment Results
U.S. Card Services reported second-quarter net income of
$886 million, up 15 percent from $770 million a year ago.
Total revenues net of interest expense increased 6 percent to
$4.7 billion from $4.5 billion a year ago. The rise largely
reflected an increase in Card Member spending and higher net
interest income from the growth in the loan portfolio.
Provisions for losses totaled $327 million, down 4 percent from
$339 million a year ago. The decrease reflected lower net
write-offs in the current quarter, offset, in part, by a larger
reserve release a year ago.
Total expenses increased 4 percent to $3.0 billion from $2.9
billion a year ago. The rise primarily reflected higher rewards and
Card Member services expenses driven by increased Card Member
spending volumes and increased costs related to certain previously
renewed co-brand partnerships.
The effective tax rate was 35 percent compared to 36 percent a
year ago.
International Card Services reported second-quarter net
income of $125 million, up 62 percent from $77 million a year
ago.
Total revenues net of interest expense were $1.3 billion, down
10 percent from $1.4 billion a year ago. Revenues rose 5 percent on
an FX-adjusted basis,2 primarily reflecting higher FX-adjusted net
interest income and net card fees.
Total expenses were $1.0 billion, down 16 percent (down 8
percent FX-adjusted2) from $1.2 billion a year ago. The year-ago
period included a portion of the incremental investments and
restructuring charge mentioned earlier.
The effective tax rate was 13 percent compared to (12) percent a
year ago, reflecting the impact of recurring permanent tax benefits
on varying levels of pretax income.
Global Commercial Services reported second-quarter net
income of $203 million, down 64 percent from $561 million a year
ago, which included the joint venture transaction gain.
Total revenues net of interest expense were $881 million, down
31 percent (down 27 percent FX-adjusted2) from $1.3 billion a year
ago. Year-ago revenues included the company’s business travel
operations.
Total expenses increased 45 percent (up 67 percent FX-adjusted2)
to $525 million from $361 million a year ago. The increase
primarily reflected the joint venture transaction gain in the prior
year (which was reported as an expense reduction).
Global Network & Merchant Services reported
second-quarter net income of $448 million, up 20 percent from $373
million a year ago.
Total revenues net of interest expense decreased 4 percent to
$1.4 billion from $1.5 billion a year ago. Revenues increased 2
percent on an FX-adjusted basis,2 reflecting higher global Card
Member spending.
Total expenses decreased 20 percent to $688 million from $859
million a year ago. The year-ago period included a portion of the
incremental investments mentioned earlier.
Corporate and Other reported second-quarter net loss of
$189 million compared with net loss of $252 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/company/american-express,
twitter.com/americanexpress,
and youtube.com/americanexpress.
Key links to products and services: charge and credit cards,
business credit cards, Plenti rewards program, travel services,
gift cards, prepaid cards, merchant services, corporate card and
business travel.
The 2015 Second Quarter Earnings Supplement will be available
today on the American Express website at
http://ir.americanexpress.com. An investor conference call will be
held at 5:00 p.m. (ET) 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 the same
website. A replay of the conference call will be available later
today at the same website 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 described in the 2015 Second Quarter Earnings Supplement of
American Express Company furnished today as an exhibit to a Current
Report on Form 8-K, the company's Annual Report on Form 10-K for
the year ended December 31, 2014 and the company’s other reports on
file 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 Represents net income less earnings allocated to participating
share awards of $11 million and $12 million for the three months
ended June 30, 2015 and 2014, respectively, and $22 million and $24
million for the six months ended June 30, 2015 and 2014,
respectively. In addition, net income is further reduced by
dividends on preferred shares of $20 million for both the three and
six months ended June 30, 2015. No preferred dividends were paid in
2014.
2 As reported in this release, FX adjusted information assumes a
constant exchange rate between the periods being compared for
purposes of currency translations into U.S. dollars (i.e., assumes
the foreign exchange rates used to determine results for the three
months ended June 30, 2015 apply to the period(s) against which
such results are being compared). Certain amounts included in the
calculations of FX-adjusted revenues and expenses, which constitute
non-GAAP measures, are subject to management allocations. 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.
3 Adjusted revenue growth is a non-GAAP measure and excludes the
impact of changes in foreign exchange rates and the company’s
business travel operations in Q2’14 from total revenues net of
interest expense. Management believes this metric is useful in
evaluating the ongoing operating performance of the company. See
Appendix V in the selected statistical tables for a reconciliation
to total revenues net of interest expense on a GAAP basis.
American Express Company
(Preliminary)
Consolidated
Statements of Income
(Millions, except percentages and per share amounts)
Quarters Ended % Change Six
Months Ended % Change Jun 30,
Mar 31, Dec 31,
Sep 30, Jun 30,
Jun 30, 2015 vs. Jun 30, Jun 30, 2015 vs.
2015 2015 2014 2014 2014 Jun
30, 2014 2015 2014 Jun
30, 2014 Revenues Non-interest revenues
Discount revenue (A) $ 4,946 $
4,660 $ 4,961 $ 4,889 $
4,919 1 $ 9,606 $ 9,539
1 Net card fees 667 667 671
680 687 (3 ) 1,334 1,361
(2 ) Travel commissions and fees 95
89 91 104 500 (81 )
184 923 (80 ) Other commissions and
fees 632 619 624 642 624
1 1,251 1,242 1 Other
521 468 1,310
593 585 (11
) 989 1,086
(9 ) Total non-interest revenues
6,861 6,503 7,657
6,908 7,315
(6 ) 13,364 14,151
(6 ) Interest income Interest on
loans 1,776 1,795 1,769 1,753
1,696 5 3,571 3,407 5
Interest and dividends on investment securities 41
41 43 45 45 (9 )
82 91 (10 ) Deposits with banks and
other 20 21
17 17 18
11 41 37 11
Total interest income 1,837
1,857 1,829 1,815
1,759 4 3,694
3,535 4 Interest expense
Deposits 109 103 97 91 91
20 212 185 15 Long-term debt and
other 305 307
308 329 352
(13 ) 612 697
(12 ) Total interest expense
414 410 405
420 443 (7
) 824 882
(7 ) Net interest income 1,423
1,447 1,424
1,395 1,316 8
2,870 2,653 8 Total
revenues net of interest expense 8,284
7,950 9,081
8,303 8,631 (4 )
16,234 16,804 (3
) Provisions for losses Charge card 165
174 198 196 183 (10 )
339 398 (15 ) Card Member loans
285 235 341 265 282 1
520 532 (2 ) Other
17 11 43
27 24 (29 )
28 44 (36 )
Total provisions for losses 467
420 582 488
489 (4 ) 887
974 (9 ) Total
revenues net of interest expense after provisions for losses
7,817 7,530
8,499 7,815 8,142
(4 ) 15,347
15,830 (3 ) Expenses
Marketing and promotion (A) 761 609 887
783 959 (21 ) 1,370 1,546
(11 ) Card Member rewards 1,799
1,640 1,881 1,695 1,773 1
3,439 3,355 3 Card Member services and
other 242 261 203 205 192
26 503 414 21 Salaries and employee
benefits 1,250 1,305 1,607 1,290
1,658 (25 ) 2,555 3,198
(20 ) Professional services 655
624 768 731 817 (20 )
1,279 1,509 (15 ) Occupancy and
equipment 415 434 446 432
467 (11 ) 849 929 (9
) Communications 85 88 98
91 101 (16 ) 173 194
(11 ) Other, net 380
253 384 342
(137 ) # 633
165 # Total
5,587 5,214 6,274
5,569 5,830
(4 ) 10,801 11,310
(5 ) Pretax income 2,230
2,316 2,225 2,246 2,312 (4
) 4,546 4,520 1 Income tax
provision 757 791
778 769 783
(3 ) 1,548
1,559 (1 ) Net income $
1,473 $ 1,525 $
1,447 $ 1,477 $
1,529 (4 ) $ 2,998
$ 2,961 1 Net income attributable to
common shareholders (B) $ 1,442 $
1,514 $ 1,436 $
1,466 $ 1,517 (5 )
$ 2,956 $ 2,937 1
Effective tax rate 33.9 % 34.2 %
35.0 % 34.2 % 33.9 %
34.0 % 34.5 %
Earnings Per
Common Share
BASIC Net income attributable to common
shareholders $ 1.43 $ 1.49
$ 1.40 $ 1.41
$ 1.44 (1 ) $ 2.92
$ 2.78 5 Average common
shares outstanding 1,009
1,019 1,028 1,041
1,052 (4 )
1,013 1,056 (4 )
DILUTED Net income attributable to common
shareholders $ 1.42 $ 1.48
$ 1.39 $ 1.40
$ 1.43 (1 ) $ 2.90
$ 2.77 5 Average common
shares outstanding 1,013
1,023 1,033 1,047
1,058 (4 )
1,018 1,062 (4 )
Cash dividends declared per common share $
0.29 $ 0.26 $ 0.26
$ 0.26 $ 0.26
12 $ 0.55 $ 0.49
12 # - Denotes a variance of more than 100
percent. American Express Company
Condensed
Consolidated Balance Sheets
(Billions, except percentages, per share amounts and where
indicated) Quarters Ended
% Change Jun 30,
Mar 31, Dec 31, Sep
30, Jun 30, Jun 30, 2015 vs.
2015 2015 2014 2014 2014 Jun
30, 2014 Assets Cash & cash equivalents
$ 21 $ 24 $ 22 $
21 $ 18 17 Accounts receivable
47 46 47 47 49 (4
) Investment securities 5 4 4
5 5 - Loans 69 67
70 66 66 5 Other assets
15 14 16
15 14 7 Total
assets $ 157 $ 155
$ 159 $ 154 $
152 3 Liabilities and Shareholders'
Equity Customer deposits $ 47 $
45 $ 44 $ 43 $ 42
12 Short-term borrowings 4 2 3
3 3 33 Long-term debt 53
55 58 56 55 (4 ) Other
liabilities 31 31
33 32 32
(3 ) Total liabilities
135 133 138
134 132 2
Shareholders' Equity 22
22 21 20
20 10 Total liabilities and
shareholders' equity $ 157 $
155 $ 159 $ 154
$ 152 3
Selected
Statistical Information
Return on average equity (C) 28.1 %
29.0 % 29.1 % 28.8 %
28.8 % Return on average common equity (C)
28.8 % 29.3 % 29.0 %
28.6 % 28.5 % Return on average
tangible common equity (C) 35.4 % 36.2
% 35.9 % 35.6 % 35.8
% Common shares outstanding (millions) 1,002
1,016 1,023 1,035 1,046 (4
) Book value per common share (dollars) $
21.85 $ 21.49 $ 20.21 $
19.54 $ 19.32 13 Shareholders'
equity $ 21.9 $ 21.8 $
20.7 $ 20.2 $ 20.2 8
# - Denotes a variance of more than 100 percent.
American Express Company
Financial
Summary
(Millions) Quarters Ended
% Change Six Months
Ended % Change Jun 30,
Mar 31, Dec 31, Sep 30,
Jun 30, Jun 30, 2015 vs. Jun 30, Jun
30, 2015 vs. 2015 2015 2014 2014
2014 Jun 30, 2014 2015
2014 Jun 30, 2014
Total revenues
net of interest expense
U.S. Card Services $ 4,726 $
4,525 $ 4,594 $ 4,501 $
4,451 6 $ 9,251 $ 8,715
6 International Card Services 1,258
1,241 1,355 1,394 1,391 (10
) 2,499 2,743 (9 ) Global
Commercial Services 881 827 1,585
900 1,269 (31 ) 1,708
2,463 (31 ) Global Network & Merchant
Services 1,396 1,344
1,477 1,450
1,455 (4 ) 2,740
2,820 (3 ) 8,261
7,937 9,011 8,245 8,566 (4
) 16,198 16,741 (3 )
Corporate & Other 23
13 70 58
65 (65 ) 36
63 (43 ) CONSOLIDATED
TOTAL REVENUES NET OF INTEREST EXPENSE $ 8,284
$ 7,950 $ 9,081
$ 8,303 $ 8,631 (4
) $ 16,234 $ 16,804
(3 )
Pretax income
(loss)
U.S. Card Services $ 1,366 $
1,480 $ 1,083 $ 1,411 $
1,200 14 $ 2,846 $ 2,606
9 International Card Services 144 184
1 176 69 # 328 272
21 Global Commercial Services 314 284
949 309 865 (64 ) 598
1,150 (48 ) Global Network & Merchant
Services 695 698
670 670 578
20 1,393 1,280
9 2,519 2,646 2,703 2,566
2,712 (7 ) 5,165 5,308 (3
) Corporate & Other (289 )
(330 ) (478 )
(320 ) (400 ) (28
) (619 ) (788 )
(21 ) PRETAX INCOME $
2,230 $ 2,316 $
2,225 $ 2,246 $
2,312 (4 ) $ 4,546
$ 4,520 1
Net income
(loss)
U.S. Card Services $ 886 $ 934
$ 665 $ 889 $ 770
15 $ 1,820 $ 1,646 11
International Card Services 125 134 33
142 77 62 259 236 10
Global Commercial Services 203 180 594
204 561 (64 ) 383 745
(49 ) Global Network & Merchant Services
448 444 417
427 373 20
892 816 9
1,662 1,692 1,709 1,662 1,781
(7 ) 3,354 3,443 (3 )
Corporate & Other (189 )
(167 ) (262 ) (185
) (252 ) (25 )
(356 ) (482 ) (26
) NET INCOME $ 1,473
$ 1,525 $ 1,447 $
1,477 $ 1,529 (4 )
$ 2,998 $ 2,961 1
# - Denotes a variance of more than 100 percent.
American Express Company
(Preliminary)
Selected
Statistical Information (continued)
(Billions, except percentages and where indicated)
Quarters Ended % Change Six Months Ended
% Change Jun 30, Mar
31, Dec 31, Sep 30,
Jun 30, Jun 30, 2015 vs. Jun 30,
Jun 30, 2015 vs. 2015 2015 2014
2014 2014 Jun 30, 2014 2015
2014 Jun 30, 2014 Card billed business
(D): United States $ 181.6 $
169.2 $ 182.5 $ 173.0 $
173.4 5 $ 350.8 $ 332.6
5 Outside the United States 80.4
76.4 86.0
85.1 84.7 (5 )
156.8 163.6 (4
) Total $ 262.0 $
245.6 $ 268.5 $
258.1 $ 258.1 2 $
507.6 $ 496.2 2 Total
cards-in-force (E) (millions): United States 55.3
54.8 54.9 54.5 54.1 2
55.3 54.1 2 Outside the United States
58.5 57.4
57.3 56.6 55.8
5 58.5 55.8
5 Total 113.8
112.2 112.2 111.1
109.9 4 113.8
109.9 4 Basic cards-in-force
(E) (millions): United States 42.8 42.4
42.6 42.2 42.0 2 42.8
42.0 2 Outside the United States
48.2 47.3 47.0
46.3 45.6 6
48.2 45.6 6
Total 91.0 89.7
89.6 88.5
87.6 4 91.0
87.6 4 Average discount rate (A)
(F) 2.49 % 2.49 % 2.44
% 2.48 % 2.48 % 2.49
% 2.49 % Average basic Card Member spending
(dollars) (G) $ 4,272 $ 4,008
$ 4,377 $ 4,223 $ 4,288
(0 ) $ 8,277 $ 8,281
(0 ) Average fee per card (dollars) (G)
$ 39 $ 39 $ 39 $
40 $ 41 (5 ) $ 39
$ 41 (5 ) Average fee per card
adjusted (dollars) (G) $ 43 $ 44
$ 44 $ 45 $ 45 (4
) $ 44 $ 45 (2 )
Worldwide Card Member receivables: Total
receivables $ 44.9 $ 43.7 $
44.9 $ 45.1 $ 45.3 (1
) $ 44.9 $ 45.3 (1
) Loss reserves (millions): Beginning balance
$ 429 $ 465 $ 432
$ 413 $ 414 4 $
465 $ 386 20 Provisions (H)
165 174 198 196 183 (10
) 339 398 (15 ) Net
write-offs (I) (171 ) (199 )
(156 ) (168 ) (182 )
(6 ) (370 ) (359 )
3 Other (J) (3 )
(11 ) (9 ) (9
) (2 ) 50 (14
) (12 ) 17 Ending balance
$ 420 $ 429 $
465 $ 432 $ 413
2 $ 420 $ 413
2 % of receivables 0.9 %
1.0 % 1.0 % 1.0 %
0.9 % 0.9 % 0.9 % Net
write-off rate (principal only) - USCS/ICS (K) 1.7
% 2.1 % 1.5 % 1.6
% 1.8 % 1.9 % 1.9
% Net write-off rate (principal and fees) - USCS/ICS
(K) 1.9 % 2.3 % 1.7 %
1.8 % 2.0 % 2.1 %
2.0 % 30 days past due as a % of total -
USCS/ICS 1.5 % 1.6 % 1.6
% 1.6 % 1.5 % 1.5
% 1.5 % Net loss ratio (as a % of charge
volume) - GCS 0.09 % 0.10 %
0.08 % 0.09 % 0.09 %
0.10 % 0.09 % 90 days past billing
as a % of total - GCS 0.7 % 0.7 %
0.8 % 0.8 % 0.7 %
0.7 % 0.7 % Worldwide Card
Member loans: Total loans $ 69.0 $
66.8 $ 70.4 $ 66.1 $
66.3 4 $ 69.0 $ 66.3
4 Loss reserves (millions): Beginning balance
$ 1,130 $ 1,201 $ 1,146
$ 1,170 $ 1,191 (5 )
$ 1,201 $ 1,261 (5 )
Provisions (H) 285 235 341 265
282 1 520 532 (2 ) Net
write-offs - principal (I) (243 ) (259
) (237 ) (245 ) (267
) (9 ) (502 ) (541
) (7 ) Net write-offs - interest and fees
(I) (42 ) (43 ) (40 )
(40 ) (42 ) - (85
) (84 ) 1 Other (J)
2 (4 ) (9 )
(4 ) 6 (67
) (2 ) 2 #
Ending balance $ 1,132 $
1,130 $ 1,201 $
1,146 $ 1,170 (3 )
$ 1,132 $ 1,170 (3
) Ending reserves - principal $ 1,076
$ 1,074 $ 1,149 $ 1,093
$ 1,114 (3 ) $ 1,076
$ 1,114 (3 ) Ending reserves -
interest and fees $ 56 $ 56
$ 52 $ 53 $ 56 -
$ 56 $ 56 - % of loans
1.6 % 1.7 % 1.7 %
1.7 % 1.8 % 1.6 %
1.8 % % of past due 171 %
163 % 167 % 165 %
171 % 171 % 171 %
Average loans $ 68.0 $ 67.6
$ 67.7 $ 66.4 $ 65.2
4 $ 68.0 $ 65.0 5 Net
write-off rate (principal only) (K) 1.4 %
1.5 % 1.4 % 1.5 %
1.6 % 1.5 % 1.7 % Net
write-off rate (principal, interest and fees) (K) 1.7
% 1.8 % 1.6 % 1.7
% 1.9 % 1.7 % 1.9
% 30 days past due loans as a % of total 1.0
% 1.0 % 1.0 % 1.1
% 1.0 % 1.0 % 1.0
% Net interest income divided by average loans (L)
8.4 % 8.6 % 8.4 %
8.5 % 8.1 % 8.4 %
8.2 % Net interest yield on Card Member loans
(L) 9.3 % 9.6 % 9.3 %
9.3 % 9.2 % 9.4 %
9.3 % # - Denotes a variance of more than
100 percent. U.S. Card Services
(Preliminary)
Selected Income
Statement Data
(Millions, except percentages) Quarters Ended %
Change Six Months Ended % Change
Jun 30, Mar 31,
Dec 31, Sep 30,
Jun 30, Jun 30, 2015 vs. Jun 30,
Jun 30, 2015 vs. 2015 2015 2014
2014 2014 Jun 30, 2014 2015
2014 Jun 30, 2014 Revenues
Non-interest revenues (A) $ 3,372 $
3,148 $ 3,253 $ 3,188 $
3,196 6 $ 6,520 $ 6,187
5 Interest income 1,517 1,529
1,490 1,465 1,408 8 3,046
2,831 8 Interest expense 163
152 149
152 153 7
315 303 4 Net interest
income 1,354 1,377
1,341 1,313
1,255 8 2,731
2,528 8 Total revenues net of interest
expense 4,726 4,525
4,594 4,501
4,451 6 9,251
8,715 6 Provisions for losses
327 296 399
316 339 (4
) 623 681
(9 ) Total revenues net of interest expense after
provisions for losses 4,399
4,229 4,195 4,185
4,112 7 8,628
8,034 7 Expenses
Marketing, promotion, rewards, (A) Card Member services
and other 1,996 1,733 2,038 1,764
1,839 9 3,729 3,395 10
Salaries and employee benefits and other operating
expenses 1,037 1,016
1,074 1,010
1,073 (3 ) 2,053
2,033 1 Total
3,033 2,749 3,112
2,774 2,912
4 5,782 5,428
7 Pretax segment income 1,366 1,480
1,083 1,411 1,200 14 2,846
2,606 9 Income tax provision 480
546 418
522 430 12
1,026 960 7 Segment
income $ 886 $ 934
$ 665 $ 889 $
770 15 $ 1,820 $
1,646 11 Effective tax rate 35.1
% 36.9 % 38.6 % 37.0
% 35.8 % 36.1 % 36.8
%
Selected
Statistical Information
(Billions, except percentages and where indicated)
Card billed business $ 144.1 $
132.5 $ 145.0 $ 136.2 $
136.5 6 $ 276.7 $ 260.8
6 Total cards-in-force (millions) 46.3
45.9 45.6 45.2 44.7 4
46.3 44.7 4 Basic cards-in-force
(millions) 34.6 34.2 34.0 33.7
33.3 4 34.6 33.3 4 Average
basic Card Member spending (dollars) $ 4,210
$ 3,875 $ 4,281 $ 4,069
$ 4,133 2 $ 8,073 $
7,938 2 U.S. Consumer Travel: Travel
sales (millions) $ 1,020 $ 988
$ 817 $ 956 $ 1,027
(1 ) $ 2,008 $ 2,001
0 Travel commissions and fees/sales 7.1
% 6.6 % 7.5 % 7.4
% 7.4 % 6.8 % 6.9
% Total segment assets $ 108.2
$ 107.7 $ 113.2 $ 103.3
$ 101.1 7 $ 108.2 $
101.1 7 Segment capital (M) $
10.8 $ 10.8 $ 10.4 $
9.9 $ 9.9 9 $ 10.8
$ 9.9 9 Return on average segment capital
(N) 32.6 % 32.1 % 32.5
% 35.5 % 35.3 % 32.6
% 35.3 % Return on average tangible segment
capital (N) 33.8 % 33.2 %
33.6 % 36.6 % 36.5 %
33.8 % 36.5 % Card Member
receivables: Total receivables $ 22.1
$ 21.5 $ 22.5 $ 21.3
$ 21.2 4 $ 22.1 $
21.2 4 30 days past due as a % of total
1.5 % 1.7 % 1.7 %
1.6 % 1.5 % 1.5 %
1.5 % Average receivables $ 22.0
$ 21.3 $ 21.8 $ 21.4
$ 21.3 3 $ 21.7 $
21.0 3 Net write-off rate (principal only) (K)
1.6 % 2.2 % 1.4 %
1.5 % 1.8 % 1.9 %
1.8 % Net write-off rate (principal and fees)
(K) 1.8 % 2.4 % 1.6 %
1.7 % 2.0 % 2.1 %
2.0 % Card Member loans: Total
loans $ 61.7 $ 59.9 $
62.6 $ 58.0 $ 57.7 7
$ 61.7 $ 57.7 7 30 days past
due loans as a % of total 0.9 % 1.0
% 1.0 % 1.0 % 0.9
% 0.9 % 0.9 % Average
loans $ 60.9 $ 60.4 $
59.7 $ 58.0 $ 56.8 7
$ 60.8 $ 56.6 7 Net write-off
rate (principal only) (K) 1.4 % 1.5
% 1.3 % 1.4 % 1.6
% 1.4 % 1.6 % Net write-off
rate (principal, interest and fees) (K) 1.6 %
1.7 % 1.5 % 1.6 %
1.8 % 1.6 % 1.9 % Net
interest income divided by average loans (L) 8.9
% 9.1 % 9.0 % 9.1
% 8.9 % 9.0 % 8.9
% Net interest yield on Card Member loans (L)
9.2 % 9.5 % 9.1 %
9.2 % 9.1 % 9.3 %
9.3 % # - Denotes a variance of more than
100 percent. International Card Services
(Preliminary)
Selected Income
Statement Data
(Millions, except percentages) Quarters Ended %
Change Six Months Ended % Change
Jun 30, Mar 31, Dec
31, Sep 30, Jun 30,
Jun 30, 2015 vs. Jun 30, Jun 30, 2015 vs.
2015 2015 2014 2014 2014 Jun
30, 2014 2015 2014 Jun 30,
2014 Revenues Non-interest revenues
$ 1,082 $ 1,061 $ 1,166
$ 1,206 $ 1,208 (10 )
$ 2,143 $ 2,365 (9 )
Interest income 236 244 260 273
275 (14 ) 480 552 (13
) Interest expense 60
64 71 85
92 (35 ) 124
174 (29 ) Net interest
income 176 180
189 188 183
(4 ) 356 378
(6 ) Total revenues net of interest
expense 1,258 1,241
1,355 1,394
1,391 (10 ) 2,499
2,743 (9 ) Provisions for
losses 83 76
95 98 90
(8 ) 159 177
(10 ) Total revenues net of interest
expense after provisions for losses 1,175
1,165 1,260
1,296 1,301 (10 )
2,340 2,566 (9
) Expenses Marketing, promotion, rewards,
Card Member services and other 472 437
555 532 577 (18 ) 909
1,073 (15 ) Salaries and employee
benefits and other operating expenses 559
544 704
588 655 (15 )
1,103 1,221 (10
) Total 1,031 981
1,259 1,120
1,232 (16 ) 2,012
2,294 (12 ) Pretax segment
income 144 184 1 176 69
# 328 272 21 Income tax
provision/(benefit) 19 50
(32 ) 34
(8 ) # 69
36 92 Segment income $
125 $ 134 $ 33
$ 142 $ 77
62 $ 259 $ 236
10 Effective tax rate 13.2 %
27.2 % # 19.3 % -11.6
% 21.0 % 13.2 %
Selected
Statistical Information
(Billions, except percentages and where indicated)
Card billed business $ 30.0 $
28.7 $ 34.0 $ 33.9 $
34.1 (12 ) $ 58.7 $
66.0 (11 ) Total cards-in-force
(millions) 15.0 14.9 15.7 15.8
15.7 (4 ) 15.0 15.7 (4
) Basic cards-in-force (millions) 10.4
10.4 11.0 10.9 10.9 (5 )
10.4 10.9 (5 ) Average basic Card
Member spending (dollars) $ 2,888 $
2,729 $ 3,109 $ 3,100 $
3,137 (8 ) $ 5,609 $
6,084 (8 ) International Consumer
Travel: Travel sales (millions) $ 333
$ 334 $ 353 $ 362
$ 354 (6 ) $ 667 $
707 (6 ) Travel commissions and
fees/sales 6.9 % 7.2 % 7.4
% 6.9 % 6.8 % 7.0
% 6.5 % Total segment assets
$ 29.2 $ 29.0 $ 30.7
$ 31.1 $ 31.6 (8 )
$ 29.2 $ 31.6 (8 )
Segment capital (M) $ 3.5 $ 3.2
$ 3.0 $ 3.0 $ 3.0
15 $ 3.5 $ 3.0 15
Return on average segment capital (N) 13.9 %
12.7 % 13.6 % 15.8 %
15.7 % 13.9 % 15.7 %
Return on average tangible segment capital (N) 23.3
% 22.3 % 24.6 % 28.9
% 28.8 % 23.3 % 28.8
% Card Member receivables: Total
receivables $ 6.8 $ 6.4 $
7.7 $ 7.3 $ 7.5 (9
) $ 6.8 $ 7.5 (9 )
30 days past billing as a % of total 1.4 %
1.6 % 1.3 % 1.4 %
1.3 % 1.4 % 1.3 % Net
write-off rate (principal only) (K) 2.1 %
1.9 % 1.8 % 1.9 %
1.9 % 2.0 % 2.0 % Net
write-off rate (principal and fees) (K) 2.3 %
2.0 % 1.9 % 2.1 %
2.0 % 2.1 % 2.2 %
Card Member loans: Total loans $ 7.2
$ 6.8 $ 7.7 $ 8.0
$ 8.6 (16 ) $ 7.2
$ 8.6 (16 ) 30 days past due loans
as a % of total 1.6 % 1.8 %
1.6 % 1.6 % 1.6 %
1.6 % 1.6 % Average loans
$ 7.0 $ 7.2 $ 7.9
$ 8.3 $ 8.3 (16 )
$ 7.1 $ 8.3 (14 ) Net
write-off rate (principal only) (K) 2.0 %
2.0 % 1.9 % 1.9 %
2.0 % 2.0 % 2.0 % Net
write-off rate (principal, interest and fees) (K) 2.5
% 2.5 % 2.4 % 2.4
% 2.4 % 2.5 % 2.4
% Net interest income divided by average loans (O)
10.1 % 10.0 % 9.6 %
9.1 % 8.8 % 10.0 %
9.1 % Net interest yield on Card Member loans
(O) 10.7 % 10.9 % 10.5
% 9.9 % 9.6 % 10.7
% 9.8 % # - Denotes a variance of
more than 100 percent. Global Commercial
Services
(Preliminary)
Selected Income
Statement Data
(Millions, except percentages) Quarters Ended %
Change Six Months Ended % Change
Jun 30, Mar 31, Dec
31, Sep 30, Jun 30,
Jun 30, 2015 vs. Jun 30, Jun 30, 2015 vs.
2015 2015 2014 2014 2014 Jun
30, 2014 2015 2014 Jun 30,
2014 Revenues Non-interest revenues
$ 924 $ 871 $ 1,635
$ 957 $ 1,332 (31 )
$ 1,795 $ 2,581 (30 )
Interest income 3 4 4 4 3
- 7 7 - Interest expense
46 48 54
61 66 (30 )
94 125 (25
) Net interest expense (43 )
(44 ) (50 )
(57 ) (63 ) (32 )
(87 ) (118 ) (26
) Total revenues net of interest expense
881 827 1,585
900 1,269
(31 ) 1,708 2,463
(31 ) Provisions for losses
42 35 50
49 43 (2 )
77 81 (5 )
Total revenues net of interest expense after provisions for
losses 839 792
1,535 851 1,226
(32 ) 1,631
2,382 (32 ) Expenses
Marketing, promotion, rewards, Card Member services and
other 156 164 178 161 177
(12 ) 320 343 (7 )
Salaries and employee benefits and other operating
expenses 369 344
408 381 184
# 713 889
(20 ) Total 525
508 586 542
361 45 1,033
1,232 (16 ) Pretax segment
income 314 284 949 309 865
(64 ) 598 1,150 (48 )
Income tax provision 111
104 355 105
304 (63 ) 215
405 (47 ) Segment
income $ 203 $ 180
$ 594 $ 204 $
561 (64 ) $ 383
$ 745 (49 ) Effective tax
rate 35.4 % 36.6 % 37.4
% 34.0 % 35.1 % 36.0
% 35.2 %
Selected
Statistical Information
(Billions, except percentages and where indicated)
Card billed business $ 46.4 $
45.3 $ 47.1 $ 46.5 $
47.6 (3 ) $ 91.6 $
93.1 (2 ) Total cards-in-force
(millions) 6.9 6.9 6.9 6.9
7.0 (1 ) 6.9 7.0 (1
) Basic cards-in-force (millions) 6.9
6.9 6.9 6.9 7.0 (1 )
6.9 7.0 (1 ) Average basic Card
Member spending (dollars) $ 6,739 $
6,567 $ 6,817 $ 6,691 $
6,781 (1 ) $ 13,313 $
13,216 1 Total segment assets $
19.7 $ 19.6 $ 18.5 $
20.6 $ 20.8 (5 ) $
19.7 $ 20.8 (5 ) Segment
capital (M) $ 4.0 $ 4.1 $
3.8 $ 3.8 $ 3.8 5
$ 4.0 $ 3.8 5 Return on
average segment capital (N) 30.3 % 39.9
% 40.9 % 30.3 % 32.0
% 30.3 % 32.0 % Return on
average tangible segment capital (N) 52.8 %
70.6 % 74.4 % 56.0 %
60.3 % 52.8 % 60.3 %
Card Member receivables: Total receivables
$ 15.9 $ 15.7 $ 14.6
$ 16.4 $ 16.5 (4 )
$ 15.9 $ 16.5 (4 ) 90
days past billing as a % of total 0.7 %
0.7 % 0.8 % 0.8 %
0.7 % 0.7 % 0.7 % Net
loss ratio (as a % of charge volume) 0.09 %
0.10 % 0.08 % 0.09 %
0.09 % 0.10 % 0.09 %
# - Denotes a variance of more than 100 percent.
Global Network & Merchant Services
(Preliminary)
Selected Income
Statement Data
(Millions, except percentages) Quarters Ended %
Change Six Months Ended % Change
Jun 30, Mar 31, Dec
31, Sep 30, Jun 30,
Jun 30, 2015 vs. Jun 30, Jun 30, 2015 vs.
2015 2015 2014 2014 2014 Jun
30, 2014 2015 2014 Jun 30,
2014 Revenues Non-interest revenues $
1,326 $ 1,270 $ 1,399 $
1,368 $ 1,366 (3 ) $
2,596 $ 2,659 (2 ) Interest
income 23 20 17 14 11
# 43 21 # Interest expense
(47 ) (54 )
(61 ) (68 ) (78
) (40 ) (101 )
(140 ) (28 ) Net interest income
70 74 78
82 89 (21
) 144 161
(11 ) Total revenues net of interest expense
1,396 1,344
1,477 1,450 1,455
(4 ) 2,740
2,820 (3 ) Provisions for losses
13 11 35
24 18 (28
) 24 34 (29
) Total revenues net of interest expense after provisions
for losses 1,383 1,333
1,442 1,426
1,437 (4 ) 2,716
2,786 (3 ) Expenses
Marketing, promotion, rewards, Card Member services and
other 164 147 185 201 277
(41 ) 311 433 (28 )
Salaries and employee benefits and other operating
expenses 524 488
587 555 582
(10 ) 1,012
1,073 (6 ) Total
688 635 772
756 859 (20
) 1,323 1,506
(12 ) Pretax segment income 695
698 670 670 578 20 1,393
1,280 9 Income tax provision 247
254 253
243 205 20
501 464 8 Segment
income $ 448 $ 444
$ 417 $ 427 $
373 20 $ 892 $
816 9 Effective tax rate 35.5
% 36.4 % 37.8 % 36.3
% 35.5 % 36.0 % 36.3
%
Selected
Statistical Information
(Billions, except percentages and where indicated)
Global Card billed business (P) $ 262.0
$ 245.6 $ 268.5 $ 258.1
$ 258.1 2 $ 507.6 $
496.2 2 Global Network & Merchant
Services: Total segment assets $ 17.6
$ 17.8 $ 18.1 $ 18.2
$ 18.7 (6 ) $ 17.6
$ 18.7 (6 ) Segment capital (M)
$ 2.2 $ 2.2 $ 2.0
$ 2.0 $ 2.0 8 $
2.2 $ 2.0 8 Return on average
segment capital (N) 83.5 % 82.1 %
84.0 % 82.6 % 79.4 %
83.5 % 79.4 % Return on average
tangible segment capital (N) 92.0 % 90.6
% 92.9 % 91.3 % 87.8
% 92.0 % 87.8 % Global
Network Services: Card billed business $
41.9 $ 39.1 $ 42.5 $
41.6 $ 40.1 4 $ 81.0
$ 76.7 6 Total cards-in-force
(millions) 45.6 44.5 44.0 43.2
42.5 7 45.6 42.5 7 # -
Denotes a variance of more than 100 percent. 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 Jun 30,
Mar 31, Dec 31,
Sep 30, Jun 30, 2015 2015
2014 2014 2014
ROE
Net income $ 5,922 $ 5,978
$ 5,885 $ 5,746 $ 5,635
Average shareholders' equity $ 21,050 $
20,606 $ 20,254 $ 19,948
$ 19,591 Return on average equity (Q)
28.1 % 29.0 % 29.1 %
28.8 % 28.8 %
Reconciliation of
ROCE and ROTCE
Net income $ 5,922 $ 5,978
$ 5,885 $ 5,746 $ 5,635
Preferred shares dividends and related accretion 20
- - - - Earnings allocated to
participating share awards and other 44
45 46 46
47 Net income attributable to common
shareholders $ 5,858 $ 5,933
$ 5,839 $ 5,700
$ 5,588 Average shareholders'
equity $ 21,050 $ 20,606 $
20,254 $ 19,948 $ 19,591
Average preferred shares 716
350 114 -
- Average common shareholders' equity
$ 20,334 $ 20,256
$ 20,140 $ 19,948
$ 19,591 Average goodwill and other
intangibles 3,802 3,845
3,888 3,941
3,994 Average tangible common shareholders'
equity $ 16,532 $ 16,411
$ 16,252 $ 16,007
$ 15,597 Return on average common equity
(Q) 28.8 % 29.3 % 29.0
% 28.6 % 28.5 % Return on
average tangible common equity (R) 35.4 %
36.2 % 35.9 % 35.6 %
35.8 % 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 Jun 30,
Mar 31, Dec 31,
Sep 30, Jun 30,
2015 2015 2014 2014 2014
U.S. Card
Services
Segment income $ 3,374 $ 3,258
$ 3,200 $ 3,399 $ 3,292
Average segment capital $ 10,352 $
10,148 $ 9,843 $ 9,580 $
9,337 Average goodwill and other intangibles
358 339 319
299 311 Average
tangible segment capital $ 9,994 $
9,809 $ 9,524 $
9,281 $ 9,026 Return on
average segment capital (S) 32.6 % 32.1
% 32.5 % 35.5 % 35.3
% Return on average tangible segment capital (S)
33.8 % 33.2 % 33.6 %
36.6 % 36.5 %
International
Card Services
Segment income $ 434 $ 386
$ 411 $ 481 $ 481
Average segment capital $ 3,133 $
3,043 $ 3,020 $ 3,043 $
3,063 Average goodwill and other intangibles
1,273 1,311 1,350
1,376 1,394
Average tangible segment capital $ 1,860
$ 1,732 $ 1,670
$ 1,667 $ 1,669 Return
on average segment capital (S) 13.9 % 12.7
% 13.6 % 15.8 % 15.7
% Return on average tangible segment capital (S)
23.3 % 22.3 % 24.6 %
28.9 % 28.8 %
Global Commercial
Services
Segment income $ 1,181 $ 1,539
$ 1,543 $ 1,131 $ 1,188
Average segment capital $ 3,897 $
3,859 $ 3,771 $ 3,736 $
3,707 Average goodwill and other intangibles
1,661 1,678 1,696
1,715 1,736
Average tangible segment capital $ 2,236
$ 2,181 $ 2,075
$ 2,021 $ 1,971 Return
on average segment capital (S) 30.3 % 39.9
% 40.9 % 30.3 % 32.0
% Return on average tangible segment capital (S)
52.8 % 70.6 % 74.4 %
56.0 % 60.3 %
Global Network
& Merchant Services
Segment income $ 1,736 $ 1,661
$ 1,660 $ 1,642 $ 1,606
Average segment capital $ 2,080 $
2,024 $ 1,976 $ 1,989 $
2,022 Average goodwill and other intangibles
194 190 189
190 192 Average
tangible segment capital $ 1,886 $
1,834 $ 1,787 $
1,799 $ 1,830 Return on
average segment capital (S) 83.5 % 82.1
% 84.0 % 82.6 % 79.4
% Return on average tangible segment capital (S)
92.0 % 90.6 % 92.9 %
91.3 % 87.8 % American
Express Company
(Preliminary)
Net Interest
Yield on Card Member Loans
Appendix
III
(Millions, except percentages and where indicated)
Quarters Ended Jun 30, Mar 31,
Dec 31, Sep 30, Jun
30, 2015 2015 2014 2014 2014
Net interest income $ 1,423 $
1,447 $ 1,424 $ 1,395 $
1,316 Exclude: Interest expense not attributable
to the Company's Card Member loan portfolio $
249 $ 249 $ 250 $
247 $ 259 Interest income not attributable
to the Company's Card Member loan portfolio $
(97 ) $ (95 ) $
(92 ) $ (90 ) $
(89 ) Adjusted net interest income
(T) $ 1,575 $ 1,601 $
1,582 $ 1,552 $ 1,486
Average loans (billions) $ 68.0 $
67.6 $ 67.7 $ 66.4 $
65.2 Exclude: Certain non-traditional Card Member
loans and other fees (billions) $ (0.2
) $ (0.2 ) $ (0.2
) $ (0.2 ) $ (0.2
) Adjusted average loans (billions) (U)
$ 67.8 $ 67.4 $ 67.5
$ 66.2 $ 65.0 Net interest
income divided by average loans (V) 8.4 %
8.6 % 8.4 % 8.5 %
8.1 % Net interest yield on Card Member loans
(W) 9.3 % 9.6 % 9.3 %
9.3 % 9.2 % 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 Jun 30, Mar
31, Dec 31,
Sep 30, Jun 30, 2015 2015 2014
2014 2014
USCS:
Net interest income $ 1,354 $
1,377 $ 1,341 $ 1,313 $
1,255 Exclude: Interest expense not attributable
to the Company's Card Member loan portfolio $
41 $ 38 $ 39 $ 39
$ 40 Interest income not attributable to the
Company's Card Member loan portfolio $ (4
) $ (3 ) $ (3 )
$ (3 ) $ (3 ) Adjusted
net interest income (T) $ 1,391 $
1,412 $ 1,377 $ 1,349 $
1,292 Average loans (billions) $ 60.9
$ 60.4 $ 59.7 $ 58.0
$ 56.8 Exclude:
Certain non-traditional Card Member
loans
and other fees (billions)
$ - $ - $ -
$ - $ -
Adjusted average loans (billions) (U) $ 60.9
$ 60.4 $ 59.7 $ 58.0
$ 56.8 Net interest income divided by average
loans (V) 8.9 % 9.1 % 9.0
% 9.1 % 8.9 % Net interest
yield on Card Member loans (W) 9.2 % 9.5
% 9.1 % 9.2 % 9.1
%
ICS:
Net interest income $ 176 $ 180
$ 189 $ 188 $ 183
Exclude: Interest expense not attributable to the
Company's Card Member loan portfolio $ 16
$ 18 $ 26 $ 24 $
21 Interest income not attributable to the Company's
Card Member loan portfolio $ (8 )
$ (8 ) $ (9 ) $
(10 ) $ (10 ) Adjusted net
interest income (T) $ 184 $ 190
$ 206 $ 202 $ 194
Average loans (billions) $ 7.0 $
7.2 $ 7.9 $ 8.3 $
8.3 Exclude:
Certain non-traditional Card Member
loans
and other fees (billions)
$ (0.1 ) $ (0.1 )
$ (0.2 ) $ (0.2 )
$ (0.2 ) Adjusted average loans (billions)
(U) $ 6.9 $ 7.1 $ 7.7
$ 8.1 $ 8.1 Net interest income
divided by average loans (V) 10.1 % 10.0
% 9.6 % 9.1 % 8.8
% Net interest yield on Card Member loans (W)
10.7 % 10.9 % 10.5 %
9.9 % 9.6 % American
Express Company
(Preliminary)
Revenues
Reconciliation for GBT Operations.
Appendix
V
(Millions, except percentages) Quarters Ended
Jun 30, Jun 30, % Change
2015 2014
Consolidated:
Reported total revenues net of interest expense
$ 8,284 $ 8,631 (4 )
Global Business Travel ("GBT") revenues
net of interest expense
- 402 Adjusted total revenues net of
interest expense 8,284 8,229
1 FX and GBT adjusted total revenues net of interest
expense (X) 7,909 5 Note: GBT
revenues represent operating performance as reported in Q2'14.
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.
(A) In Q1’15, the Company changed the classification related to
certain payments to co-brand partners reducing both marketing and
promotion and discount revenue. The misclassification in prior
periods has been conformed to the current period presentation. The
discount rate for prior periods has also been revised accordingly,
resulting in a reduction of between zero and one basis point in any
period from what was originally reported. (B) Represents net
income, less (i) earnings allocated to participating share awards
of $11 million for the quarter ended June 30, 2015, $11 million for
the quarter ended March 31, 2015, $11 million for the quarter ended
December 31, 2014, $11 million for the quarter ended September 30,
2014 and $12 million for the quarter ended June 30, 2014; and (ii)
dividends on preferred shares of $20 million for the quarter ended
June 30, 2015, and nil for all other comparative periods.
(C) 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. (D) 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. (E) 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. (F) 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. (G) 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 $62 million for the quarter ended June 30, 2015,
$83 million for the quarter ended March 31, 2015, $79 million for
the quarter ended December 31, 2014, $77 million for the quarter
ended September 30, 2014 and $77 million for the quarter ended June
30, 2014. 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. (H) Provisions for principal (resulting from
authorized transactions) and fee reserve components. (I)
Consists of principal (resulting from authorized transactions),
interest and/or fees, less recoveries. (J) 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. (K) 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. Beginning in January 2015,
timing of charge-offs for loans in certain modification programs
changed from 180 days past due to 120 days past due. Excluding the
impact of the change, which was fully recognized in the first
quarter, the Q1'15 USCS/ICS Charge net write-off rate – principal
only was 1.9% and the USCS Lending net write-off rate - principal
only was 1.4%. (L) See Appendix III for quarterly
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. For calculations for the twelve months
ended December 31, 2014 and 2013, please refer to Annex 3 of the
Company’s 2014 Fourth Quarter/ Full Year Earnings Supplement on
file with the Securities and Exchange Commission. (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 common
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 on an FX
adjusted basis and excluding the Company's business travel
operations in Q2'14 is a non-GAAP measure. 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 Q2’15 foreign exchange rates apply to Q2'14 results).
Country results used to calculate FX adjusted revenues, are subject
to management allocations. Management believes this metric is
useful in evaluating the ongoing operating performance of the
Company. The Company’s calculations of non-GAAP measures may differ
from the calculations of similarly titled measures of other
companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150722006381/en/
Media:Marina H. Norville,
+1-212-640-2832marina.h.norville@aexp.comorInvestors/Analysts:Ken
Paukowits, +1-212-640-6348ken.f.paukowits@aexp.comorToby Willard,
+1-212-640-5574sherwood.s.willardjr@aexp.com
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