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