REG-American Exp.Co American Express Reports Fourth-Quarter EPS of $0.56, Down from $1.01 a Year Ago; Cardmember Spending, Revenues and Credit Remain Strong; Results Consistent with Pre-Announcement

Fri Jan 18, 2013 2:00am EST

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NEW YORK--(Business Wire)--


American Express Company (NYSE: AXP) today reported fourth-quarter net income of
$637 million, down 47 percent from $1.2 billion a year ago. Net income from the
quarter included the restructuring charge, rewards expense and cardmember
reimbursements that were announced last week. Diluted earnings per share was
$0.56, down 45 percent from $1.01 a year ago.

                                                                                                                                                                                                                         
 (Millions, except percentages and per share amounts)                                                                                                                                                                    
                                                                                                                                                                                                                         
                                                                                   Quarters Ended                                        Percentage          Years Ended                                 Percentage      
                                                                                   
December 31,                                         Inc/(Dec)           
December 31,                               Inc/(Dec)       
                                                                                        2012                       2011                                          2012                    2011                            
 Total Revenues Net of Interest Expense                                            $    8,141                 $    7,742                 5       %           $   31,582              $   29,962          5       %       
 Income From Continuing Operations                                                 $    637                   $    1,192                 (47     )%          $   4,482               $   4,899           (9      )%      
 Income From Discontinued Operations, net of tax1                                  $    -                     $    -                     -                   $   -                   $   36              #               
 Net Income                                                                        $    637                   $    1,192                 (47     )%          $   4,482               $   4,935           (9      )%      
                                                                                                                                                                                                                         
 Earnings Per Common Share - Diluted:                                                                                                                                                                                    
 Income From Continuing Operations Attributable to Common Shareholders2            $    0.56                  $    1.01                  (45     )%          $   3.89                $   4.09            (5      )%      
 Income from Discontinued Operations1                                              $    -                     $    -                     -                   $   -                   $   0.03            #               
 Net Income Attributable to Common Shareholders2                                   $    0.56                  $    1.01                  (45     )%          $   3.89                $   4.12            (6      )%      
 Average Diluted Common Shares Outstanding                                              1,116                      1,163                 (4      )%              1,141                   1,184           (4      )%      
 Return on Average Equity                                                               23.1   %                   27.7   %                                      23.1    %               27.7    %                       
 # Denotes a variance of more than 100 %                                                                                                                                                                                 
                                                                                                                                                                                                                         


Excluding these items, fourth-quarter adjusted net income was $1.2 billion, or
$1.09 per share.3

Consolidated total revenues net of interest expense were $8.1 billion, up 5
percent from $7.7 billion a year ago. The increase was driven by an 8 percent
rise in cardmember spending and higher net interest income that reflected growth
in the cardmember loan portfolio. 

Adjusted for foreign currency translations, consolidated total revenues net of
interest expense rose 5 percent from a year ago.4

Consolidated provisions for losses totaled $638 million, up 56 percent from $409
million a year ago. The provision increase reflected higher reserve releases a
year ago, partially offset by lower net write-offs in the current quarter.
Credit indicators continued to be at historically low levels. 

Consolidated expenses totaled $6.6 billion, up 18 percent from $5.6 billion a
year ago. The increase primarily reflected the previously announced
restructuring charge and Membership Rewards estimation process enhancements. 

Adjusted for foreign currency translations, consolidated total expenses were up
17 percent from a year ago.4

Net income for the quarter reflected costs associated with the three previously
announced items:

* A $400 million restructuring charge ($287 million after-tax) designed to
contain future operating expenses, adapt parts of the business as more customers
transact online or through mobile channels, and provide the resources for
additional growth initiatives in the U.S. and internationally. 
* A $342 million expense ($212 million after-tax) reflecting enhancements to the
process that estimates future redemptions of Membership Rewards points by U.S.
cardmembers. 
* Approximately $153 million ($95 million after-tax) of cardmember
reimbursements for various types of transactions dating back several years. This
amount dealt with fees, interest and bonus rewards as well as an incremental
expense related to the consent orders entered into with regulators last
October.

The effective tax rate was 31 percent, down from 32 percent a year ago. 

The company's return on average equity (ROE) was 23.1 percent, down from 27.7
percent a year ago. 

"With higher fourth quarter revenues and cardmember spending, we ended 2012 in
strong shape," said Kenneth I. Chenault, chairman and chief executive officer.
"Against the backdrop of an uneven economy, we capitalized on opportunities and
continued to stay ahead of the trends that are reshaping our industry. 

"Since rebounding from the recession, we have gained share in a very competitive
U.S. industry and enhanced the many benefits we provide cardmembers. We have
improved our risk management capabilities, begun to tap additional revenue
streams and deployed new technologies that let us serve a growing number of
customers online and through their mobile phones. At the same time, we`ve
expanded into new markets internationally and extended our presence well beyond
the traditional American Express footprint. The investments we`ve made in the
business are substantial, but we have also been able to contain the growth in
overall operating expenses. 

"We`ve made great progress in recent years, and we want to make sure we stay
ahead of trends that present both enormous promise and complex challenges. New
technologies are changing the way businesses operate, both online and in the
physical world. While this evolution is still in the early stages for our
industry, it continues to open up opportunities that play to our strengths. The
restructuring program we announced last week is designed to help take advantage
of them, while also playing an important role in our aim of holding annual
operating expense increases to less than 3 percent for the next two years.5 A
lean operating structure is a critical advantage for any business. That, along
with the flexibility to allocate resources toward growth initiatives, should put
us in an even better position as we seek to deliver strong results for
shareholders." 

Segment Results

U.S. Card Services reported fourth-quarter net income of $423 million, down 42
percent from $727 million a year ago. 

Total revenues net of interest expense increased 4 percent to $4.1 billion from
$3.9 billion a year ago. The increase was driven by higher cardmember spending
and higher net interest income, partially offset by the impact of cardmember
reimbursements mentioned above. 

Provisions for losses totaled $477 million, up 77 percent from $269 million a
year ago, primarily reflecting higher reserve releases a year ago, partially
offset by lower net write-offs in the current quarter. Credit indicators
continued to be at historically low levels. 

Total expenses increased 21 percent to $3.0 billion from $2.5 billion a year
ago, primarily reflecting the Membership Rewards estimation process enhancements
and cardmember reimbursements mentioned earlier. 

The effective tax rate was 31 percent compared to 38 percent a year ago. 

International Card Services reported fourth-quarter net income of $95 million,
down 38 percent from $152 million a year ago. 

Total revenues net of interest expense increased 5 percent to $1.4 billion from
$1.3 billion a year ago, reflecting higher cardmember spending and fee revenues
related to Loyalty Partner. 

Provisions for losses totaled $99 million, up 18 percent from $84 million a year
ago, primarily reflecting higher reserve releases in the prior year. 

Total expenses increased 7 percent to $1.2 billion from $1.1 billion a year ago,
primarily reflecting the restructuring charge mentioned earlier. Marketing,
promotion, rewards and cardmember services costs increased 6 percent. 

The effective tax rate was 14 percent compared to (11) percent a year ago. The
year ago tax rate reflected the benefit from the resolution of certain prior
years` tax items. 

Global Commercial Services reported fourth-quarter net income of $65 million,
down 64 percent from $180 million a year ago. 

Total revenues net of interest expense increased 3 percent to $1.2 billion from
a year ago, reflecting increased spending by corporate cardmembers, partially
offset by lower travel commissions and fees. 

Provisions for losses totaled $33 million, down 6 percent from $35 million a
year ago. 

Total expenses increased 19 percent to $1.0 billion from $872 million a year
ago, primarily reflecting the restructuring charge and Membership Rewards
estimation process enhancements mentioned earlier. 

The effective tax rate was 54 percent compared to 35 percent a year ago. This
quarter`s tax rate reflected lower tax benefits from the restructuring charges
in international markets. 

Global Network & Merchant Services reported fourth-quarter net income of $354
million, up 9 percent from $324 million a year ago. 

Total revenues net of interest expense increased 6 percent to $1.4 billion from
$1.3 billion a year ago, reflecting higher merchant-related revenues driven by
an increase in global cardmember spending. 

Total expenses increased 2 percent to $812 million from $794 million a year ago,
primarily reflecting the restructuring charge mentioned earlier. 

The effective tax rate for the quarter was 36 percent, unchanged from a year
ago. 

Corporate and Other reported fourth quarter net loss of $300 million compared
with a net loss of $191 million a year ago. The result for the current period
reflected the restructuring charge mentioned earlier and the prior year included
income of $70 million ($43 million after-tax) for the previously announced
settlement of Visa litigation. 

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, business
travel, and corporate card

The 2012 Fourth Quarter/ Full Year 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 fourth-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
contained in the company's Annual Report on Form 10-K for the year ended
December 31, 2011, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 2012 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 Income from discontinued operations primarily reflects benefits from the
resolution of certain prior years` tax items related to American Express Bank
Ltd., which was sold to Standard Chartered PLC during Q1`08. 

2 Represents income from continuing operations or net income, as applicable,
less earnings allocated to participating share awards of $7 million and $14
million for the three months ended December 31, 2012 and 2011, respectively, and
$49 million and $58 million for the twelve months ended December 31, 2012 and
2011, respectively. 

3 Management believes adjusted net income and adjusted earnings per share, which
are non-GAAP measures, provide useful metrics to evaluate the ongoing operating
performance of the company. See Appendix V in the selected statistical tables
for a reconciliation of adjusted net income and adjusted earnings per share. 

4 As reported in this release, F/X adjusted information, which constitute
non-GAAP financial measures, assumes a constant exchange rate between the
periods being compared for purposes of currency translation to U.S. dollars
(i.e., assumes the foreign exchange rates used to determine results for the
three months ended December 31, 2012 apply to the period(s) against which such
results are being compared). The company believes the presentation of
information on an F/X 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. 

5 Operating expenses represent salaries and employee benefits, professional
services, occupancy and equipment, communications and other expenses. 

All information in the following tables is presented on a basis prepared in
accordance with U.S. generally accepted accounting principles (GAAP), unless
otherwise indicated. The Company revised the income statement reporting of card
fees on lending products in the first quarter of 2012, increasing Net card fees
and reducing Interest on loans. Corresponding amounts in prior periods have been
reclassified to conform to the current period presentation. This change does not
impact Total revenues net of interest expense in the income statement, or the
Net interest yield on cardmember loans, a non-GAAP measure.

                                                                                                                                                                                                              
 (Preliminary)                                                                                                                                                                                                
 American Express Company                                                                                                                                                                                     
 Consolidated Statements of Income                                                                                                                                                                            
                                                                                                                                                                                                              
 (Millions)                                                                                                                                                                                                   
                                                                                Quarters Ended                                                  Years Ended                                                   
                                                                                December 31,                              Percentage            December 31,                                Percentage        
                                                                                    2012                   2011           Inc/(Dec)                 2012                    2011            Inc/(Dec)         
                                                                                                                                                                                                              
 Revenues                                                                                                                                                                                                     
 Non-interest revenues                                                                                                                                                                                        
 Discount revenue                                                               $   4,575              $   4,336          6           %         $   17,739              $   16,734          6           %     
 Net card fees                                                                      648                    612            6                         2,506                   2,448           2                 
 Travel commissions and fees                                                        503                    514            (2    )                   1,940                   1,971           (2    )           
 Other commissions and fees                                                         578                    552            5                         2,317                   2,269           2                 
 Other                                                                              644                    618            4                         2,452                   2,164           13                
 Total non-interest revenues                                                        6,948                  6,632          5                         26,954                  25,586          5                 
 Interest income                                                                                                                                                                                              
 Interest on loans                                                                  1,660                  1,587          5                         6,511                   6,272           4                 
 Interest and dividends on investment securities                                    53                     72             (26   )                   246                     327             (25   )           
 Deposits with banks and other                                                      24                     26             (8    )                   97                      97              -                 
 Total interest income                                                              1,737                  1,685          3                         6,854                   6,696           2                 
 Interest expense                                                                                                                                                                                             
 Deposits                                                                           118                    133            (11   )                   480                     528             (9    )           
 Long-term debt and other                                                           426                    442            (4    )                   1,746                   1,792           (3    )           
 Total interest expense                                                             544                    575            (5    )                   2,226                   2,320           (4    )           
 Net interest income                                                                1,193                  1,110          7                         4,628                   4,376           6                 
 Total revenues net of interest expense                                             8,141                  7,742          5                         31,582                  29,962          5                 
 Provisions for losses                                                                                                                                                                                        
 Charge card                                                                        211                    237            (11   )                   742                     770             (4    )           
 Cardmember loans                                                                   396                    149            #                         1,149                   253             #                 
 Other                                                                              31                     23             35                        99                      89              11                
 Total provisions for losses                                                        638                    409            56                        1,990                   1,112           79                
 Total revenues net of interest expense after provisions for losses                 7,503                  7,333          2                         29,592                  28,850          3                 
                                                                                                                                                                                                              
 Expenses                                                                                                                                                                                                     
 Marketing and promotion                                                            722                    735            (2    )                   2,890                   2,996           (4    )           
 Cardmember rewards                                                                 1,857                  1,463          27                        6,282                   6,218           1                 
 Cardmember services                                                                197                    190            4                         799                     716             12                
 Salaries and employee benefits                                                     1,910                  1,537          24                        6,597                   6,252           6                 
 Professional services                                                              871                    853            2                         2,963                   2,951           -                 
 Occupancy and equipment                                                            486                    467            4                         1,823                   1,685           8                 
 Communications                                                                     99                     98             1                         383                     378             1                 
 Other, net                                                                         432                    242            79                        1,404                   698             #                 
 Total                                                                              6,574                  5,585          18                        23,141                  21,894          6                 
 Pretax income from continuing operations                                           929                    1,748          (47   )                   6,451                   6,956           (7    )           
 Income tax provision                                                               292                    556            (47   )                   1,969                   2,057           (4    )           
 Income from continuing operations                                                  637                    1,192          (47   )                   4,482                   4,899           (9    )           
 Income from discontinued operations, net of tax                                    -                      -              -                         -                       36              #                 
 Net income                                                                     $   637                $   1,192          (47   )               $   4,482               $   4,935           (9    )           
 Income from continuing operations attributable to common shareholders (A)      $   630                $   1,178          (47   )               $   4,433               $   4,841           (8    )           
 Net income attributable to common shareholders (A)                             $   630                $   1,178          (47   )               $   4,433               $   4,877           (9    )           
 Effective tax rate                                                                 31.4   %               31.8   %                                 30.5    %               29.6    %                         
                                                                                                                                                                                                              
 # - Denotes a variance of more than 100%.                                                                                                                                                                    
                                                                                                                                                                                                              


(A) Represents income from continuing operations or net income, as applicable,
less earnings allocated to participating share awards of $7 million and $14
million for the three months ended December 31, 2012 and 2011, respectively, and
$49 million and $58 million for the twelve months ended December 31, 2012 and
2011, respectively.

                                                                                         
 (Preliminary)                                                                           
 American Express Company                                                                
 Condensed Consolidated Balance Sheets                                                   
                                                                                         
 (Billions)                                                                              
                                                                                         
                                                 December 31,          December 31,      
                                                 2012                  2011              
                                                                                         
 Assets                                                                                  
 Cash & cash equivalents                         $        22           $        25       
 Accounts receivable                                      46                    44       
 Investment securities                                    6                     7        
 Loans                                                    64                    61       
 Other assets                                             15                    16       
 Total assets                                    $        153          $        153      
                                                                                         
 Liabilities and Shareholders' Equity                                                    
 Customer deposits                               $        40           $        38       
 Short-term borrowings                                    3                     4        
 Long-term debt                                           59                    60       
 Other liabilities                                        32                    32       
 Total liabilities                                        134                   134      
                                                                                         
 Shareholders' Equity                                     19                    19       
 Total liabilities and shareholders' equity      $        153          $        153      
                                                                                         


                                                                                                                                                                                        
 (Preliminary)                                                                                                                                                                          
 American Express Company                                                                                                                                                               
 Financial Summary                                                                                                                                                                      
                                                                                                                                                                                        
 (Millions)                                                                                                                                                                             
                                                          Quarters Ended                                                  Years Ended                                                   
                                                          December 31,                              Percentage            December 31,                                Percentage        
                                                              2012                   2011           Inc/(Dec)                 2012                    2011            Inc/(Dec)         
                                                                                                                                                                                        
 Total revenues net of interest expense                                                                                                                                                 
 U.S. Card Services                                       $   4,070              $   3,897          4           %         $   16,046              $   15,071          6           %     
 International Card Services                                  1,397                  1,333          5                         5,306                   5,239           1                 
 Global Commercial Services                                   1,215                  1,183          3                         4,749                   4,625           3                 
 Global Network & Merchant Services                           1,390                  1,316          6                         5,271                   4,942           7                 
                                                              8,072                  7,729          4                         31,372                  29,877          5                 
 Corporate & Other                                            69                     13             #                         210                     85              #                 
                                                                                                                                                                                        
 CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE      $   8,141              $   7,742          5                     $   31,582              $   29,962          5                 
                                                                                                                                                                                        
 Pretax income (loss) from continuing operations                                                                                                                                        
 U.S. Card Services                                       $   612                $   1,168          (48   )               $   4,069               $   4,129           (1    )           
 International Card Services                                  110                    137            (20   )                   659                     762             (14   )           
 Global Commercial Services                                   142                    276            (49   )                   960                     1,075           (11   )           
 Global Network & Merchant Services                           557                    502            11                        2,219                   1,979           12                
                                                              1,421                  2,083          (32   )                   7,907                   7,945           -                 
 Corporate & Other                                            (492   )               (335   )       47                        (1,456  )               (989    )       47                
                                                                                                                                                                                        
 PRETAX INCOME FROM CONTINUING OPERATIONS                 $   929                $   1,748          (47   )               $   6,451               $   6,956           (7    )           
                                                                                                                                                                                        
 Net income (loss)                                                                                                                                                                      
 U.S. Card Services                                       $   423                $   727            (42   )               $   2,592               $   2,680           (3    )           
 International Card Services                                  95                     152            (38   )                   634                     723             (12   )           
 Global Commercial Services                                   65                     180            (64   )                   644                     738             (13   )           
 Global Network & Merchant Services                           354                    324            9                         1,443                   1,293           12                
                                                              937                    1,383          (32   )                   5,313                   5,434           (2    )           
 Corporate & Other                                            (300   )               (191   )       57                        (831    )               (535    )       55                
 Income from continuing operations                            637                    1,192          (47   )                   4,482                   4,899           (9    )           
 Income from discontinued operations, net of tax              -                      -              -                         -                       36              #                 
 NET INCOME                                               $   637                $   1,192          (47   )               $   4,482               $   4,935           (9    )           
                                                                                                                                                                                        
 # - Denotes a variance of more than 100%.                                                                                                                                              
                                                                                                                                                                                        


 (Preliminary)                                                                                                                                                                                           
 American Express Company                                                                                                                                                                                
 Financial Summary (continued)                                                                                                                                                                           
                                                                                                                                                                                                         
                                                                                                                                                                                                         
                                                                            Quarters Ended                                                   Years Ended                                                 
                                                                            December 31,                               Percentage            December 31,                              Percentage        
                                                                                 2012                  2011            Inc/(Dec)                 2012                   2011           Inc/(Dec)         
 EARNINGS PER COMMON SHARE                                                                                                                                                                               
                                                                                                                                                                                                         
 BASIC                                                                                                                                                                                                   
 Income from continuing operations attributable to common shareholders      $    0.57             $    1.02            (44   )     %         $   3.91               $   4.11           (5    )     %     
 Income from discontinued operations                                             -                     -               -                         -                      0.03           #                 
 Net income attributable to common shareholders                             $    0.57             $    1.02            (44   )     %         $   3.91               $   4.14           (6    )     %     
                                                                                                                                                                                                         
 Average common shares outstanding (millions)                                    1,110                 1,157           (4    )     %             1,135                  1,178          (4    )     %     
                                                                                                                                                                                                         
 DILUTED                                                                                                                                                                                                 
 Income from continuing operations attributable to common shareholders      $    0.56             $    1.01            (45   )     %         $   3.89               $   4.09           (5    )     %     
 Income from discontinued operations                                             -                     -               -                         -                      0.03           #                 
 Net income attributable to common shareholders                             $    0.56             $    1.01            (45   )     %         $   3.89               $   4.12           (6    )     %     
                                                                                                                                                                                                         
 Average common shares outstanding (millions)                                    1,116                 1,163           (4    )     %             1,141                  1,184          (4    )     %     
                                                                                                                                                                                                         
 Cash dividends declared per common share                                   $    0.20             $    0.18            11          %         $   0.80               $   0.72           11          %     
                                                                                                                                                                                                         
                                                                                                                                                                                                         
 Selected Statistical Information                                                                                                                                                                        
                                                                                                                                                                                                         
                                                                            Quarters Ended                                                   Years Ended                                                 
                                                                            December 31,                               Percentage            December 31,                              Percentage        
                                                                                 2012                  2011            Inc/(Dec)                 2012                   2011           Inc/(Dec)         
                                                                                                                                                                                                         
 Return on average equity (A)                                                    23.1   %              27.7   %                                  23.1   %               27.7   %                         
 Return on average common equity (A)                                             22.8   %              27.3   %                                  22.8   %               27.3   %                         
 Return on average tangible common equity (A)                                    29.2   %              35.8   %                                  29.2   %               35.8   %                         
 Common shares outstanding (millions)                                            1,105                 1,164           (5    )     %             1,105                  1,164          (5    )     %     
 Book value per common share                                                $    17.09            $    16.15           6           %         $   17.09              $   16.15          6           %     
 Shareholders' equity (billions)                                            $    18.9             $    18.8            1           %         $   18.9               $   18.8           1           %     
                                                                                                                                                                                                         
 # - Denotes a variance of more than 100%.                                                                                                                                                               
                                                                                                                                                                                                         


(A) Refer to Appendix I for components of return on average equity, return on
average common equity and return on average tangible common equity, a non-GAAP
measure.

                                                                                                                                                                                                         
 (Preliminary)                                                                                                                                                                                           
 American Express Company                                                                                                                                                                                
 Components of Return on Average Equity (ROE), Return on Average Common Equity (ROCE),                                                                                                                   
 and Return on Average Tangible Common Equity (ROTCE)                                                                                                                                                    
 Appendix I                                                                                                                                                                                              
                                                                                                                                                                                                         
 (Millions)                                                                                                                                                                                              
                                                                 For the Twelve Months Ended                                                                                                             
                                                                 December 31,                  September 30,                 June 30,                  March 31,                   December 31,          
                                                                        2012                          2012                        2012                       2012                         2011           
                                                                                                                                                                                                         
 ROE                                                                                                                                                                                                     
                                                                                                                                                                                                         
 Net income                                                      $      4,482                  $      5,037                  $    5,022                $     5,014                 $      4,935          
 Average shareholders' equity                                    $      19,425                 $      19,145                 $    18,887               $     18,525                $      17,842         
 Return on average equity (A)                                           23.1    %                     26.3    %                   26.6    %                  27.1    %                    27.7    %      
                                                                                                                                                                                                         
 Reconciliation of ROCE and ROTCE                                                                                                                                                                        
                                                                                                                                                                                                         
 Net income                                                      $      4,482                  $      5,037                  $    5,022                $     5,014                 $      4,935          
 Earnings allocated to participating share awards and other             49                            56                          57                         58                           58             
 Net income attributable to common shareholders                  $      4,433                  $      4,981                  $    4,965                $     4,956                 $      4,877          
                                                                                                                                                                                                         
 Average shareholders' equity                                    $      19,425                 $      19,145                 $    18,887               $     18,525                $      17,842         
 Average common shareholders' equity                             $      19,425                 $      19,145                 $    18,887               $     18,525                $      17,842         
 Average goodwill and other intangibles                                 4,232                         4,272                       4,330                      4,380                        4,215          
 Average tangible common shareholders' equity                    $      15,193                 $      14,873                 $    14,557               $     14,145                $      13,627         
 Return on average common equity (A)                                    22.8    %                     26.0    %                   26.3    %                  26.8    %                    27.3    %      
 Return on average tangible common equity (B)                           29.2    %                     33.5    %                   34.1    %                  35.0    %                    35.8    %      
                                                                                                                                                                                                         


(A) Return on average equity and return on average common equity are calculated
by dividing one year period net income/net income attributable to common
shareholders by one year average total shareholders` equity/average common
shareholders' equity, respectively.

(B) Return on average tangible common equity, a non-GAAP measure, is computed in
the same manner as return on average common equity except the computation of
average tangible common shareholders' equity, a non-GAAP measure, excludes from
average total shareholders' equity, average goodwill and other intangibles. The
Company believes that return on average tangible common equity is a useful
measure of the profitability of its business.

                                                                                                                      
 (Preliminary)                                                                                                        
 American Express Company                                                                                             
 Net Income and EPS Reconciliation                                                                                    
 Appendix V                                                                                                           
                                                                                                                      
 (Millions, except per share amounts)                                 Quarter Ended             Year Ended            
                                                                      December 31, 2012         December 31, 2012     
                                                                                                                      
 Net income:                                                                                                          
                                                                                                                      
 Reported Net income                                                  $          637            $          4,482      
                                                                                                                      
 Q4'12 Restructuring Charges                                          $          287            $          287        
                                                                                                                      
 Q4'12 Membership Rewards Estimation Process Enhancement Expense      $          212            $          212        
                                                                                                                      
 Q4'12 Cardmember Reimbursements                                      $          95             $          95         
                                                                                                                      
 Adjusted Net income (A)                                              $          1,231          $          5,076      
                                                                                                                      
 Diluted EPS:                                                                                                         
                                                                                                                      
 Reported Net income attributable to common shareholders              $          0.56           $          3.89       
                                                                                                                      
 Q4'12 Restructuring Charges                                          $          0.26           $          0.25       
                                                                                                                      
 Q4'12 Membership Rewards Estimation Process Enhancement Expense      $          0.19           $          0.19       
                                                                                                                      
 Q4'12 Cardmember Reimbursements                                      $          0.08           $          0.07       
                                                                                                                      
 Adjusted Net income attributable to common shareholders (A)          $          1.09           $          4.40       
                                                                                                                      


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

American Express
Media:
Marina H. Norville, +1-212-640-2832
marina.h.norville@aexp.com
Mike O`Neill, +1-212-640-5951
mike.o`neill@aexp.com
or
Investors/Analysts:
Ken Paukowits, +1-212-640-6348
ken.f.paukowits@aexp.com
Rick Petrino, +1-212-640-5574
richard.petrino@aexp.com

American Express Company 

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