TIDMAMX
American Express Company (NYSE:AXP) today reported third-quarter
net income of $1.3 billion, down 14 percent from $1.5 billion a
year ago. Diluted earnings per share was $1.24, down 11 percent
from $1.40 a year ago.
(Millions, except percentages and per share amounts)
Quarters Ended Percentage Nine Months Ended Percentage
September 30, Inc/(Dec) September 30, Inc/(Dec)
2015 2014 2015 2014
Total $ 8,193 $ 8,303 (1%) $ 24,427 $ 25,107 (3%)
Revenues
Net of
Interest
Expense
Net $ 1,266 $ 1,477 (14%) $ 4,264 $ 4,438 (4%)
Income
Earnings
Per
Common
Share
-
Diluted:
Net $ 1.24 $ 1.40 (11%) $ 4.15 $ 4.17 (0%)
Income
Attributable
to
Common
Shareholders1
Average 997 1,047 (5%) 1,011 1,057 (4%)
Diluted
Common
Shares
Outstanding
Return 26.8 % 28.8 % 26.8 % 28.8 %
on
Average
Equity
Results for the quarter were significantly affected by higher
spending on growth initiatives, earlier changes to certain renewed
co-brand partnerships, and the stronger U.S. dollar.
Consolidated total revenues net of interest expense was $8.2
billion, down 1 percent from $8.3 billion a year ago. Excluding the
impact of foreign exchange rates, adjusted revenues rose 3
percent.2 The increase primarily reflected continued growth in the
loan portfolio and modestly higher Card Member spending.
Consolidated provisions for losses totaled $529 million, up 8
percent from $488 million a year ago, reflecting an addition to
reserves in the current year compared to a reserve release a year
ago.
Consolidated expenses totaled $5.7 billion, up 3 percent from
$5.6 billion a year ago. On an FX-adjusted basis, consolidated
expenses rose 7 percent, reflecting higher spending on growth
initiatives, primarily for marketing and technology development.2
The increase was also driven by higher rewards and Card Member
services costs due to higher Card Member spending volumes and the
impact of certain previously renewed co-brand partnerships.
The effective tax rate was 35 percent, compared to 34 percent a
year ago.
The company's return on average equity (ROE) was 26.8 percent,
down from 28.8 percent a year ago.
"While overall results were in line with our 2015 financial
outlook, the quarter reflected the headwinds and challenges that we
have been dealing with throughout this year," said Kenneth I.
Chenault, chairman and chief executive officer. "Reported revenue
and billed business levels were suppressed by a stronger U.S.
dollar. In addition, the renewals and changes that we made earlier
this year to some co-brand relationships also entailed some
significant incremental expenses this quarter.
"Against the backdrop of a challenging environment and an uneven
global economy, we continued to move forward with initiatives to
build our business for the years ahead. With our Costco
relationship set to end in the U.S. next year, we're investing
substantially more in marketing, incentives and technology to
attract a range of new Card Members and additional spending across
our network. We're expanding card acceptance at an accelerated pace
among smaller merchants and also added Sam's Club, the eighth
largest retailer in the U.S., to our network earlier this month.
We're broadening our relationships with Card Members to accommodate
more of their borrowing needs, and our loan portfolio continued its
steady growth this quarter.
"The flexibility to invest in these and other growth initiatives
comes in part from our ongoing progress in containing operating
expenses throughout the company. We also continue to benefit from a
strong balance sheet that allows us to return a substantial portion
of our earnings to shareholders through share repurchases and
dividends.
"We continue to expect quarterly earnings performance to be more
uneven than it has been historically as we move forward on
initiatives to help ensure our organization is in position to
return to growth and deliver on the multi-year financial outlook
that we first shared in February of this year. Throughout this
year, we have said that our full year 2015 outlook was for EPS to
be flat to modestly down versus the prior year. Barring any
contingencies, we now expect our full year 2015 EPS to be between
$5.20 and $5.35. We believe our outlook to return to positive
earnings per share growth in 2016 and within our target range of 12
to 15 percent in 2017 remains appropriate."
Segment Results
U.S. Card Services reported third-quarter net income of $794
million, down 11 percent from $889 million a year ago.
Total revenues net of interest expense increased 5 percent to
$4.7 billion, from $4.5 billion a year ago. The rise reflected
higher net interest income from growth in the loan portfolio and an
increase in Card Member spending.
Provisions for losses totaled $390 million, up 23 percent from
$316 million a year ago. The increase reflected an addition to
reserves in the current year compared to a reserve release a year
ago.
Total expenses increased 11 percent to $3.1 billion from $2.8
billion a year ago. The rise reflected in part higher spending on
growth initiatives, primarily within marketing and promotion and
technology development. The increase was also driven by higher
rewards and services costs due to higher Card Member spending
volumes and the impact of certain previously renewed co-brand
partnerships.
The effective tax rate for the quarter remained unchanged from a
year ago at 37 percent.
International Card Services reported third-quarter net income of
$89 million, down 37 percent from $142 million a year ago. The
decline largely reflected a significant impact from a stronger U.S.
dollar.
Total revenues net of interest expense were $1.2 billion, down
11 percent from $1.4 billion a year ago. On an FX-adjusted basis,
revenues rose 4 percent, reflecting in part higher net card fees
and an increase in revenues from the Loyalty Partner business.2
Total expenses were $1.0 billion, down 6 percent from $1.1
billion a year ago. On an FX-adjusted basis, expenses were up 4
percent, reflecting increased spending on growth initiatives,
primarily within marketing.2
The effective tax rate was 15 percent compared to 19 percent a
year ago.
Global Commercial Services reported third-quarter net income of
$151 million, down 26 percent from $204 million a year ago.
Total revenues net of interest expense were $817 million, down 9
percent from $900 million a year ago. On an FX-adjusted basis,
revenues declined 5 percent, primarily reflecting a year-ago gain
on the sale of investment securities and lower discount
revenue.2
Total expenses were $541 million, compared to $542 million a
year ago. The quarter reflected expenses associated with technology
development to support growth initiatives.
The effective tax rate was 37 percent, up from 34 percent a year
ago.
Global Network & Merchant Services reported third-quarter
net income of $462 million, up 8 percent from $427 million a year
ago.
Total revenues net of interest expense were $1.4 billion, down 6
percent from $1.5 billion a year ago. On an FX-adjusted basis,
revenues increased 1 percent, reflecting in part increased revenue
from bank partners.2
Total expenses decreased 16 percent to $633 million, from $756
million a year ago, primarily reflecting a litigation reserve
release associated with a recently rejected merchant class
settlement.
The effective tax rate was 36 percent, unchanged from a year
ago.
Corporate and Other reported third-quarter net loss of $230
million compared with net loss of $185 million a year ago.
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 Third 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 third-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.
Cautionary Note Regarding Forward-looking Statements
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which are subject to risks and uncertainties. The forward-looking
statements, which address the Company's expected business and
financial performance and which include management's outlook for
2015-2017, among other matters, contain words such as "believe,"
"expect," "estimate," "anticipate," "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:
-- the Company's ability to achieve earnings per common share ("EPS")
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October 22, 2015 02:00 ET (06:00 GMT)
growth for the full year 2015 between $5.20 and $5.35, which
will
depend in part on the following: billed business and revenue
growth
rates in the fourth quarter, which could be impacted by, among
other
things, a decline in consumer confidence impacting the
willingness and
ability of Card Members to sustain spending, deterioration in
the
corporate and small business spending levels, weakening
economic
conditions in the U.S. or internationally, concerns regarding
U.S.
debt and budget matters, and an increase in the erosion of the
average
discount rate due to mix, competition, timing of merchant
re-signings
or other factors; the impact of any potential restructuring
charges or
other contingencies, including, but not limited to,
unanticipated
litigation-related expenses, impairments to goodwill or
other
intangible assets, regulatory fines, an increase in Card
Member
reimbursements and changes in reserves; credit performance
worsening
beyond current expectations; a decline in the Card Member
loan
portfolio; the Company's tax rate remaining in line with
recent
performance, which could be impacted by, among other things,
the
potential failure of the U.S. Congress to renew legislation
regarding
the active financing exception to Subpart F of the Internal
Revenue
Code, the Company's geographic mix of income being weighted more
to
higher tax jurisdictions than expected and unfavorable tax
audits and
other unanticipated tax items; the ability to continue to
realize
benefits from the Company's 2014 restructuring actions and
operating
leverage at levels consistent with recent quarters; the U.S.
dollar
strengthening beyond current expectations; the amount the
Company
spends in the fourth quarter on growth initiatives;
significant
changes in interest rates; the impact of accounting changes
and
reclassifications; and the Company's ability to continue
executing its
share repurchase program;
-- the Company's ability to achieve earnings per share growth in 2016 and
return to the Company's on-average and over-time EPS growth
target in
2017, which will depend on factors such as: the Company's
success in
implementing its strategies and business initiatives,
including
growing profitable spending through proprietary, co-brand and
network
products, increasing penetration among corporate clients,
expanding
its international footprint, growing loyalty coalitions and
marketing
services, increasing merchant acceptance, controlling expenses
and
addressing the end of the Costco U.S. relationship; the terms
and
outcome of the Costco U.S. Card Member loan portfolio sale
discussions; the behavior of Card Members and their actual
spending
patterns; the impact of new regulations in the European Union,
the
court's order in the U.S. Department of Justice case in the
marketplace and regulatory and competitive pressures generally;
the
effectiveness of the Company's marketing and loyalty programs;
credit
trends; changes in foreign currency exchange and interest
rates;
changes in general economic conditions, such as GDP growth,
consumer
confidence, unemployment and the housing market; and on other
factors
outside management's control;
-- the actual amount to be spent by the Company on growth initiatives,
including on marketing and promotion, technology development
and
contra-discount revenue items, as well as the timing of any
such
spending, which will be based in part on management's assessment
of
competitive opportunities, overall business performance, the
amount of
any potential gain arising from a sale of the Costco U.S. Card
Member
loan portfolio the Company decides to spend on growth
initiatives,
contractual obligations with business partners, management's
ability
to identify attractive investment opportunities and make
such
investments, which could be impacted by business, regulatory or
legal
complexities and the Company's performance, and the Company's
ability
to realize efficiencies and control expenses to fund such
spending;
-- uncertainty related to the Company's ability to drive growth and
achieve attractive returns from spending on growth initiatives,
which
will depend in part on the Company's ability to develop and
market
value propositions that appeal to Card Members and new customers
and
on the Company's ability to offer attractive services and
rewards
programs, as well as increasing competition, brand perceptions
and
reputation, the behavior of the Company's Card Members and
their
actual spending patterns, and ineffective or insufficient levels
of
investments, including on marketing and promotion expenses,
new
product development, acquisition efforts, including through
digital
channels, and attractive Card Member services and rewards
programs;
-- the ability to hold annual operating expense growth to less than 3
percent for 2015, which could be impacted by unanticipated
increases
in significant categories of operating expenses, such as
consulting or
professional fees, compliance or regulatory-related costs
and
technology costs, any potential restructuring charges, the
payment of
civil money penalties, disgorgement and restitution, the
Company's
decision to increase or decrease spending in such areas as
technology
development depending on overall business performance, the
Company's
ability to achieve the expected benefits of the Company's
reengineering plans, the Company's ability to balance expense
control
and investments in the business, the impact of changes in
foreign
currency exchange rates on costs, the impact of accounting
changes and
reclassifications, and the level of acquisition activity and
related
expenses;
-- the Company's lending write-off rates increasing more quickly than
current expectations and reserves building more than modestly,
and the
concomitant impact on the Company's provision expense being
higher
than current expectations, which will depend in part on changes
in the
level of the Company's loan balances, delinquency rates of
Card
Members, unemployment rates, the volume of bankruptcies and
recoveries
of previously written-off loans;
-- uncertainty relating to the ultimate outcome of the lawsuit filed
against the Company by the U.S. Department of Justice and
certain
state attorneys general, including the success or failure of
our
appeal and the impact of the court's order in the
marketplace,
including significantly increased merchant steering or other
actions
impairing the Card Member experience, as well as on existing
private
merchant cases, and potentially additional litigation and/or
arbitrations;
-- the Company's ability to execute against its lending strategy, which
may be affected by increasing competition, brand perceptions
and
reputation, the Company's ability to manage risk in a growing
Card
Member loan portfolio, and the behavior of the Company's Card
Members
and their actual spending patterns, which in turn may be driven
by the
Company's ability to issue new and enhanced card products,
offer
attractive services and rewards programs, attract new Card
Members,
reduce Card Member attrition and capture a greater share of
existing
Card Members' spending and borrowing;
-- the ability of the Company to grow in international markets, which
could be impacted by business practices that favor local
competitors
or prohibit or limit foreign ownership of certain
businesses;
continued regulation in the payments space; the Company's
ability to
partner with additional GNS issuers and the success of GNS
partners in
acquiring Card Members and/or merchants; political or
economic
instability, which could affect lending and other commercial
activities, among other businesses; the Company's ability to
tailor
products and services to make them attractive to local
customers; and
competitors with more scale and experience and more
established
relationships with relevant customers, regulators and
industry
participants;
-- uncertainties associated with the impact of any potential sale of the
Costco Card Member loan portfolio, including the result of
discussions
with Costco and its new cobrand issuer, the ability and
willingness of
the new issuer to purchase the portfolio and the timing and
magnitude
of the recognition of any gain by the Company as a result of a
sale,
which will be impacted by the credit quality and performance of
the
portfolio;
-- the possibility that the Company will not fully execute on its plans
for OptBlue, including bringing incremental volumes onto the
American
Express network over the next several years, which will depend
in part
on the success of OptBlue merchant acquirers in signing
merchants to
accept American Express, which could be impacted by the pricing
set by
the merchant acquirers and the value proposition offered to
small
merchants and the priority given to the Company by OptBlue
merchant
acquirers, as well as the willingness of Card Members to use
American
Express cards at small merchants;
-- the ability of the Company to add new benefits and introduce new
products and services, which will depend in part on the
Company's
ongoing investment in product innovation, the ability of the
Company
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October 22, 2015 02:00 ET (06:00 GMT)
to update its systems and platforms to support new products,
services
and benefits, the degree of interest of Card Members in the
value
proposition offered by the Company and the Company's ability to
tailor
new products and services to make them attractive to Card
Members; and
-- factors beyond the Company's control such as changes in global
economic and business conditions, including consumer and
business
spending, the availability and cost of capital, unemployment
and
political conditions, foreign currency rates, fire, power
loss,
disruptions in telecommunications, severe weather conditions,
natural
disasters, health pandemics, terrorism, cyber attacks or fraud,
which
could significantly affect spending on American Express
cards,
delinquency rates, loan balances and travel-related spending
or
disrupt the Company's global network systems and ability to
process
transactions.
A further description of these uncertainties and other risks can
be found in the Company's Annual Report on Form 10-K for the year
ended December 31, 2014, the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31 and June 30, 2015 and the
Company's other reports filed with the Securities and Exchange
Commission.
1Represents net income less earnings allocated to participating share
awards of $10 million and $11 million for the three months
ended September 30, 2015 and 2014, respectively, and $32 million
and $35 million for the nine months ended September 30,
2015 and 2014, respectively. In addition, net income is further
reduced by dividends on preferred shares of $22 million and $42
million for the three and nine months ended September 30, 2015,
respectively. No preferred dividends were paid in 2014.
2 As reported in this release, FX-adjusted information,
which constitute non-GAAP financial measures, assumes
a constant exchange rate between the periods being compared
for purposes of currency translation into U.S.
dollars (i.e., assumes the foreign exchange rates used to
determine results for the three months ended September
30, 2015 apply to the period(s) against which such
results are being compared). Certain amounts
included in the calculation 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.
American (Preliminary)
Express
Company
Consolidated
Statements
of Income
(Millions,
except
percentages
and per
share
amounts)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Revenues
Non-interest
revenues
Discount $ 4,778 $ 4,946 $ 4,660 $ 4,961 $ 4,889 (2 ) $ 14,384 $ 14,428 (0 )
revenue
(A)
Net card 679 667 667 671 680 (0 ) 2,013 2,041 (1 )
fees
Other fees 727 727 708 715 746 (3 ) 2,162 2,911 (26 )
and
commissions
(B)
Other 504 521 468 1,310 593 (15 ) 1,493 1,679 (11 )
Total 6,688 6,861 6,503 7,657 6,908 (3 ) 20,052 21,059 (5 )
non-interest
revenues
Interest
income
Interest 1,847 1,776 1,795 1,769 1,753 5 5,418 5,160 5
on loans
Interest 38 41 41 43 45 (16 ) 120 136 (12 )
and
dividends
on
investment
securities
Deposits 19 20 21 17 17 12 60 54 11
with
banks
and other
Total 1,904 1,837 1,857 1,829 1,815 5 5,598 5,350 5
interest
income
Interest
expense
Deposits 125 109 103 97 91 37 337 276 22
Long-term 274 305 307 308 329 (17 ) 886 1,026 (14 )
debt
and other
Total 399 414 410 405 420 (5 ) 1,223 1,302 (6 )
interest
expense
Net 1,505 1,423 1,447 1,424 1,395 8 4,375 4,048 8
interest
income
Total 8,193 8,284 7,950 9,081 8,303 (1 ) 24,427 25,107 (3 )
revenues
net of
interest
expense
Provisions
for
losses
Charge 203 165 174 198 196 4 542 594 (9 )
card
Card 309 285 235 341 265 17 829 797 4
Member
loans
Other 17 17 11 43 27 (37 ) 45 71 (37 )
Total 529 467 420 582 488 8 1,416 1,462 (3 )
provisions
for
losses
Total 7,664 7,817 7,530 8,499 7,815 (2 ) 23,011 23,645 (3 )
revenues
net of
interest
expense
after
provisions
for
losses
Expenses
Marketing 847 761 609 887 783 8 2,217 2,329 (5 )
and
promotion
(A)
Card 1,763 1,799 1,640 1,881 1,695 4 5,202 5,050 3
Member
rewards
Card 269 242 261 203 205 31 772 619 25
Member
services
and other
Salaries 1,212 1,250 1,305 1,607 1,290 (6 ) 3,767 4,488 (16 )
and
employee
benefits
Professional 687 655 624 768 731 (6 ) 1,966 2,240 (12 )
services
Occupancy 523 415 434 446 432 21 1,372 1,361 1
and
equipment
Communications 84 85 88 98 91 (8 ) 257 285 (10 )
Other, 341 380 253 384 342 (0 ) 974 507 92
net
Total 5,726 5,587 5,214 6,274 5,569 3 16,527 16,879 (2 )
Pretax 1,938 2,230 2,316 2,225 2,246 (14 ) 6,484 6,766 (4 )
income
Income 672 757 791 778 769 (13 ) 2,220 2,328 (5 )
tax
provision
Net $ 1,266 $ 1,473 $ 1,525 $ 1,447 $ 1,477 (14 ) $ 4,264 $ 4,438 (4 )
income
Net $ 1,234 $ 1,442 $ 1,514 $ 1,436 $ 1,466 (16 ) $ 4,190 $ 4,403 (5 )
income
attributable
to
common
shareholders
(C)
Effective 34.7 % 33.9 % 34.2 % 35.0 % 34.2 % 34.2 % 34.4 %
tax rate
Earnings
Per
Common
Share
BASIC
Net $ 1.24 $ 1.43 $ 1.49 $ 1.40 $ 1.41 (12 ) $ 4.16 $ 4.19 (1 )
income
attributable
to
common
shareholders
Average 994 1,009 1,019 1,028 1,041 (5 ) 1,007 1,051 (4 )
common
shares
outstanding
DILUTED
Net $ 1.24 $ 1.42 $ 1.48 $ 1.39 $ 1.40 (11 ) $ 4.15 $ 4.17 (0 )
income
attributable
to
common
shareholders
Average 997 1,013 1,023 1,033 1,047 (5 ) 1,011 1,057 (4 )
common
shares
outstanding
Cash $ 0.29 $ 0.29 $ 0.26 $ 0.26 $ 0.26 12 $ 0.84 $ 0.75 12
dividends
declared
per
common
share
# - 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
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014
Assets
Cash $ 20 $ 21 $ 24 $ 22 $ 21 (5 )
&
cash
equivalents
Accounts 46 47 46 47 47 (2 )
receivable
Investment 4 5 4 4 5 (20 )
securities
Loans 69 69 67 70 66 5
Other 15 15 14 16 15 -
assets
Total $ 154 $ 157 $ 155 $ 159 $ 154 -
assets
Liabilities
and
Shareholders'
Equity
Customer $ 49 $ 47 $ 45 $ 44 $ 43 14
deposits
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Short-term 3 4 2 3 3 -
borrowings
Long-term 49 53 55 58 56 (13 )
debt
Other 32 31 31 33 32 -
liabilities
Total 133 135 133 138 134 (1 )
liabilities
Shareholders' 21 22 22 21 20 5
Equity
Total $ 154 $ 157 $ 155 $ 159 $ 154 -
liabilities
and
shareholders'
equity
Selected
Statistical
Information
Return 26.8 % 28.1 % 29.0 % 29.1 % 28.8 %
on
average
equity
(D)
Return 27.8 % 28.8 % 29.3 % 29.0 % 28.6 %
on
average
common
equity
(D)
Return 34.2 % 35.4 % 36.2 % 35.9 % 35.6 %
on
average
tangible
common
equity
(D)
Common 985 1,002 1,016 1,023 1,035 (5 )
shares
outstanding
(millions)
Book $ 20.06 $ 20.27 $ 19.93 $ 19.49 $ 19.54 3
value
per
common
share
(dollars)
Shareholders' $ 21.3 $ 21.9 $ 21.8 $ 20.7 $ 20.2 6
equity
# - Denotes a variance of more than 100 percent.
American
Express
Company
Financial
Summary
(Millions)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Total
revenues
net of
interest
expense
U.S. $ 4,729 $ 4,726 $ 4,525 $ 4,594 $ 4,501 5 $ 13,980 $ 13,216 6
Card
Services
International 1,238 1,258 1,241 1,355 1,394 (11 ) 3,737 4,137 (10 )
Card
Services
Global 817 881 827 1,585 900 (9 ) 2,525 3,363 (25 )
Commercial
Services
Global 1,370 1,396 1,344 1,477 1,450 (6 ) 4,110 4,270 (4 )
Network
&
Merchant
Services
8,154 8,261 7,937 9,011 8,245 (1 ) 24,352 24,986 (3 )
Corporate 39 23 13 70 58 (33 ) 75 121 (38 )
& Other
CONSOLIDATED $ 8,193 $ 8,284 $ 7,950 $ 9,081 $ 8,303 (1 ) $ 24,427 $ 25,107 (3 )
TOTAL
REVENUES
NET
OF
INTEREST
EXPENSE
Pretax
income
(loss)
U.S. $ 1,262 $ 1,366 $ 1,480 $ 1,083 $ 1,411 (11 ) $ 4,108 $ 4,017 2
Card
Services
International 105 144 184 1 176 (40 ) 433 448 (3 )
Card
Services
Global 238 314 284 949 309 (23 ) 836 1,459 (43 )
Commercial
Services
Global 723 695 698 670 670 8 2,116 1,950 9
Network
&
Merchant
Services
2,328 2,519 2,646 2,703 2,566 (9 ) 7,493 7,874 (5 )
Corporate (390 ) (289 ) (330 ) (478 ) (320 ) 22 (1,009 ) (1,108 ) (9 )
& Other
PRETAX $ 1,938 $ 2,230 $ 2,316 $ 2,225 $ 2,246 (14 ) $ 6,484 $ 6,766 (4 )
INCOME
Net
income
(loss)
U.S. $ 794 $ 886 $ 934 $ 665 $ 889 (11 ) $ 2,614 $ 2,535 3
Card
Services
International 89 125 134 33 142 (37 ) 348 378 (8 )
Card
Services
Global 151 203 180 594 204 (26 ) 534 949 (44 )
Commercial
Services
Global 462 448 444 417 427 8 1,354 1,243 9
Network
&
Merchant
Services
1,496 1,662 1,692 1,709 1,662 (10 ) 4,850 5,105 (5 )
Corporate (230 ) (189 ) (167 ) (262 ) (185 ) 24 (586 ) (667 ) (12 )
& Other
NET $ 1,266 $ 1,473 $ 1,525 $ 1,447 $ 1,477 (14 ) $ 4,264 $ 4,438 (4 )
INCOME
# - Denotes a variance of more than 100 percent.
American (Preliminary)
Express
Company
Selected
Statistical
Information
(Billions,
except
percentages
and
where
indicated)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Card
billed
business
(E):
United $ 180.3 $ 181.6 $ 169.2 $ 182.5 $ 173.0 4 $ 531.1 $ 505.6 5
States
Outside 78.6 80.4 76.4 86.0 85.1 (8 ) 235.4 248.7 (5 )
the
United
States
Total $ 258.9 $ 262.0 $ 245.6 $ 268.5 $ 258.1 0 $ 766.5 $ 754.3 2
Total
cards-in-force
(F)
(millions):
United 56.4 55.3 54.8 54.9 54.5 3 56.4 54.5 3
States
Outside 59.4 58.5 57.4 57.3 56.6 5 59.4 56.6 5
the
United
States
Total 115.8 113.8 112.2 112.2 111.1 4 115.8 111.1 4
Basic
cards-in-force
(F)
(millions):
United 43.6 42.8 42.4 42.6 42.2 3 43.6 42.2 3
States
Outside 49.0 48.2 47.3 47.0 46.3 6 49 46.3 6
the
United
States
Total 92.6 91.0 89.7 89.6 88.5 5 92.6 88.5 5
Average 2.46 % 2.49 % 2.49 % 2.44 % 2.48 % 2.48 % 2.49 %
discount
rate (A)
(G)
Average $ 4,165 $ 4,272 $ 4,008 $ 4,377 $ 4,223 (1 ) $ 12,437 $ 12,504 (1 )
basic
Card
Member
spending
(dollars)
(H)
Average $ 39 $ 39 $ 39 $ 39 $ 40 (3 ) $ 39 $ 41 (5 )
fee
per card
(dollars)
(H)
Average $ 44 $ 43 $ 44 $ 44 $ 45 (2 ) $ 44 $ 45 (2 )
fee
per
card
adjusted
(dollars)
(H)
Worldwide
Card
Member
receivables:
Total $ 44.3 $ 44.9 $ 43.7 $ 44.9 $ 45.1 (2 ) $ 44.3 $ 45.1 (2 )
receivables
Loss
reserves
(millions):
Beginning $ 420 $ 429 $ 465 $ 432 $ 413 2 $ 465 $ 386 20
balance
Provisions 203 165 174 198 196 4 542 594 (9 )
(I)
Net (174 ) (171 ) (199 ) (156 ) (168 ) 4 (544 ) (527 ) 3
write-offs
(J)
Other (K) (8 ) (3 ) (11 ) (9 ) (9 ) (11 ) (22 ) (21 ) 5
Ending $ 441 $ 420 $ 429 $ 465 $ 432 2 $ 441 $ 432 2
balance
% 1.0 % 0.9 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 %
of
receivables
Net 1.8 % 1.7 % 2.1 % 1.5 % 1.6 % 1.8 % 1.8 %
write-off
rate
(principal
only)
-
USCS/ICS
(L)
Net 2.0 % 1.9 % 2.3 % 1.7 % 1.8 % 2.1 % 2.0 %
write-off
rate
(principal
and fees)
-
USCS/ICS
(L)
30 days 1.6 % 1.5 % 1.6 % 1.6 % 1.6 % 1.6 % 1.6 %
past
due as
a %
of total
-
USCS/ICS
Net loss 0.08 % 0.09 % 0.10 % 0.08 % 0.09 % 0.09 % 0.09 %
ratio
(as a
% of
charge
volume)
- GCS
90 days 0.7 % 0.7 % 0.7 % 0.8 % 0.8 % 0.7 % 0.8 %
past
billing
as
a % of
total
- GCS
Worldwide
Card
Member
loans:
Total $ 68.9 $ 69.0 $ 66.8 $ 70.4 $ 66.1 4 $ 68.9 $ 66.1 4
loans
Loss
reserves
(millions):
Beginning $ 1,132 $ 1,130 $ 1,201 $ 1,146 $ 1,170 (3 ) $ 1,201 $ 1,261 (5 )
balance
Provisions 309 285 235 341 265 17 829 797 4
(I)
Net (231 ) (243 ) (259 ) (237 ) (245 ) (6 ) (733 ) (786 ) (7 )
write-offs
-
principal
(J)
Net (37 ) (42 ) (43 ) (40 ) (40 ) (8 ) (122 ) (124 ) (2 )
write-offs
-
interest
and fees
(J)
Other (K) (9 ) 2 (4 ) (9 ) (4 ) # (11 ) (2 ) #
(MORE TO FOLLOW) Dow Jones Newswires
October 22, 2015 02:00 ET (06:00 GMT)
Ending $ 1,164 $ 1,132 $ 1,130 $ 1,201 $ 1,146 2 $ 1,164 $ 1,146 2
balance
Ending $ 1,114 $ 1,076 $ 1,074 $ 1,149 $ 1,093 2 $ 1,114 $ 1,093 2
reserves
-
principal
Ending $ 50 $ 56 $ 56 $ 52 $ 53 (6 ) $ 50 $ 53 (6 )
reserves
-
interest
and fees
% 1.7 % 1.6 % 1.7 % 1.7 % 1.7 % 1.7 % 1.7 %
of loans
% of past 164 % 171 % 163 % 167 % 165 % 164 % 165 %
due
Average $ 69.0 $ 68.0 $ 67.6 $ 67.7 $ 66.4 4 $ 68.3 $ 65.4 4
loans
Net 1.3 % 1.4 % 1.5 % 1.4 % 1.5 % 1.4 % 1.6 %
write-off
rate
(principal
only) (L)
Net 1.6 % 1.7 % 1.8 % 1.6 % 1.7 % 1.7 % 1.9 %
write-off
rate
(principal,
interest
and
fees) (L)
30 days 1.0 % 1.0 % 1.0 % 1.0 % 1.1 % 1.0 % 1.1 %
past
due loans
as a % of
total
Net 8.7 % 8.4 % 8.6 % 8.4 % 8.5 % 8.5 % 8.1 %
interest
income
divided
by
average
loans (M)
Net 9.5 % 9.3 % 9.6 % 9.3 % 9.3 % 9.5 % 9.3 %
interest
yield
on Card
Member
loans
(M)
# - Denotes a variance of more than 100 percent.
U.S. Card (Preliminary)
Services
Selected
Income
Statement
Data
(Millions,
except
percentages)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Revenues
Non-interest $ 3,302 $ 3,372 $ 3,148 $ 3,253 $ 3,188 4 $ 9,822 $ 9,375 5
revenues
(A)
Interest 1,593 1,517 1,529 1,490 1,465 9 4,639 4,296 8
income
Interest 166 163 152 149 152 9 481 455 6
expense
Net 1,427 1,354 1,377 1,341 1,313 9 4,158 3,841 8
interest
income
Total 4,729 4,726 4,525 4,594 4,501 5 13,980 13,216 6
revenues
net of
interest
expense
Provisions 390 327 296 399 316 23 1,013 997 2
for
losses
Total 4,339 4,399 4,229 4,195 4,185 4 12,967 12,219 6
revenues
net of
interest
expense
after
provisions
for
losses
Expenses
Marketing, 2,029 1,996 1,733 2,038 1,764 15 5,758 5,159 12
promotion,
rewards,
Card
Member
services
and other
(A)
Salaries 1,048 1,037 1,016 1,074 1,010 4 3,101 3,043 2
and
employee
benefits
and
other
operating
expenses
Total 3,077 3,033 2,749 3,112 2,774 11 8,859 8,202 8
Pretax 1,262 1,366 1,480 1,083 1,411 (11 ) 4,108 4,017 2
segment
income
Income 468 480 546 418 522 (10 ) 1,494 1,482 1
tax
provision
Segment $ 794 $ 886 $ 934 $ 665 $ 889 (11 ) $ 2,614 $ 2,535 3
income
Effective 37.1 % 35.1 % 36.9 % 38.6 % 37.0 % 36.4 % 36.9 %
tax rate
Selected
Statistical
Information
(Billions,
except
percentages
and
where
indicated)
Card $ 143.4 $ 144.1 $ 132.5 $ 145.0 $ 136.2 5 $ 420.0 $ 397.0 6
billed
business
Total 47.4 46.3 45.9 45.6 45.2 5 47.4 45.2 5
cards-in-force
(millions)
Basic 35.4 34.6 34.2 34.0 33.7 5 35.4 33.7 5
cards-in-force
(millions)
Average $ 4,098 $ 4,210 $ 3,875 $ 4,281 $ 4,069 1 $ 12,166 $ 12,008 1
basic
Card
Member
spending
(dollars)
U.S.
Consumer
Travel:
Travel $ 943 $ 1,020 $ 988 $ 817 $ 956 (1 ) $ 2,951 $ 2,957 (0 )
sales
(millions)
Travel 7.1 % 7.1 % 6.6 % 7.5 % 7.4 % 6.9 % 7.1 %
commissions
and
fees/sales
Total $ 107.7 $ 108.2 $ 107.7 $ 113.2 $ 103.3 4 $ 107.7 $ 103.3 4
segment
assets
(P)
Segment $ 10.3 $ 10.8 $ 10.8 $ 10.4 $ 9.9 4 $ 10.3 $ 9.9 4
capital
(N)
Return on 31.4 % 32.6 % 32.1 % 32.5 % 35.5 % 31.4 % 35.5 %
average
segment
capital
(O)
Return on 32.6 % 33.8 % 33.2 % 33.6 % 36.6 % 32.6 % 36.6 %
average
tangible
segment
capital
(O)
Card
Member
receivables:
Total $ 22.0 $ 22.1 $ 21.5 $ 22.5 $ 21.3 3 $ 22.0 $ 21.3 3
receivables
30 days 1.6 % 1.5 % 1.7 % 1.7 % 1.6 % 1.6 % 1.6 %
past
due
as a % of
total
Average $ 22.0 $ 22.0 $ 21.3 $ 21.8 $ 21.4 3 $ 21.8 $ 21.1 3
receivables
Net 1.6 % 1.6 % 2.2 % 1.4 % 1.5 % 1.8 % 1.7 %
write-off
rate
(principal
only) (L)
Net 1.9 % 1.8 % 2.4 % 1.6 % 1.7 % 2.0 % 1.9 %
write-off
rate
(principal
and fees)
(L)
Card
Member
loans:
Total $ 62.1 $ 61.7 $ 59.9 $ 62.6 $ 58.0 7 $ 62.1 $ 58.0 7
loans
30 days 1.0 % 0.9 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 %
past
due loans
as a % of
total
Average $ 62.1 $ 60.9 $ 60.4 $ 59.7 $ 58.0 7 $ 61.2 $ 57.0 7
loans
Net 1.3 % 1.4 % 1.5 % 1.3 % 1.4 % 1.4 % 1.6 %
write-off
rate
(principal
only) (L)
Net 1.5 % 1.6 % 1.7 % 1.5 % 1.6 % 1.6 % 1.8 %
write-off
rate
(principal,
interest
and
fees) (L)
Net 9.2 % 8.9 % 9.1 % 9.0 % 9.1 % 9.1 % 9.0 %
interest
income
divided
by
average
loans (M)
Net 9.4 % 9.2 % 9.5 % 9.1 % 9.2 % 9.3 % 9.3 %
interest
yield
on Card
Member
loans
(M)
# - Denotes a variance of more than 100 percent.
International (Preliminary)
Card
Services
Selected
Income
Statement Data
(Millions,
except
percentages)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Revenues
Non-interest $ 1,071 $ 1,082 $ 1,061 $ 1,166 $ 1,206 (11 ) $ 3,214 $ 3,571 (10 )
revenues
Interest 226 236 244 260 273 (17 ) 706 825 (14 )
income
Interest 59 60 64 71 85 (31 ) 183 259 (29 )
expense
Net interest 167 176 180 189 188 (11 ) 523 566 (8 )
income
Total revenues 1,238 1,258 1,241 1,355 1,394 (11 ) 3,737 4,137 (10 )
net of
interest
expense
Provisions 85 83 76 95 98 (13 ) 244 275 (11 )
for losses
Total revenues 1,153 1,175 1,165 1,260 1,296 (11 ) 3,493 3,862 (10 )
net of
interest
expense
after
provisions
for losses
Expenses
Marketing, 500 472 437 555 532 (6 ) 1,409 1,605 (12 )
promotion,
rewards,
Card Member
services
and other
Salaries and 548 559 544 704 588 (7 ) 1,651 1,809 (9 )
employee
benefits
and
other
operating
expenses
Total 1,048 1,031 981 1,259 1,120 (6 ) 3,060 3,414 (10 )
(MORE TO FOLLOW) Dow Jones Newswires
October 22, 2015 02:00 ET (06:00 GMT)
Pretax segment 105 144 184 1 176 (40 ) 433 448 (3 )
income
Income 16 19 50 (32 ) 34 (53 ) 85 70 21
tax
provision/(benefit)
Segment income $ 89 $ 125 $ 134 $ 33 $ 142 (37 ) $ 348 $ 378 (8 )
Effective 15.2 % 13.2 % 27.2 % # 19.3 % 19.6 % 15.6 %
tax rate
Selected
Statistical
Information
(Billions,
except
percentages
and
where
indicated)
Card billed $ 29.6 $ 30.0 $ 28.7 $ 34.0 $ 33.9 (13 ) $ 88.3 $ 99.9 (12 )
business
Total 15.2 15.0 14.9 15.7 15.8 (4 ) 15.2 15.8 (4 )
cards-in-force
(millions)
Basic 10.6 10.4 10.4 11.0 10.9 (3 ) 10.6 10.9 (3 )
cards-in-force
(millions)
Average basic $ 2,827 $ 2,888 $ 2,729 $ 3,109 $ 3,100 (9 ) $ 8,432 $ 9,185 (8 )
Card Member
spending
(dollars)
International
Consumer
Travel:
Travel sales $ 325 $ 333 $ 334 $ 353 $ 362 (10 ) $ 992 $ 1,069 (7 )
(millions)
Travel 5.8 % 6.9 % 7.2 % 7.4 % 6.9 % 6.7 % 6.6 %
commissions
and fees/sales
Total segment $ 34.9 $ 29.2 $ 29.0 $ 30.7 $ 31.1 12 $ 34.9 $ 31.1 12
assets (P)
Segment $ 3.3 $ 3.5 $ 3.2 $ 3.0 $ 3.0 12 $ 3.3 $ 3.0 12
capital
(N)
Return on 11.9 % 13.9 % 12.7 % 13.6 % 15.8 % 11.9 % 15.8 %
average
segment
capital (O)
Return on 19.4 % 23.3 % 22.3 % 24.6 % 28.9 % 19.4 % 28.9 %
average
tangible
segment
capital
(O)
Card
Member
receivables:
Total $ 6.5 $ 6.8 $ 6.4 $ 7.7 $ 7.3 (11 ) $ 6.5 $ 7.3 (11 )
receivables
30 days past 1.5 % 1.4 % 1.6 % 1.3 % 1.4 % 1.5 % 1.4 %
billing
as a % of
total
Net write-off 2.2 % 2.1 % 1.9 % 1.8 % 1.9 % 2.1 % 2.0 %
rate
(principal
only) (L)
Net write-off 2.4 % 2.3 % 2.0 % 1.9 % 2.1 % 2.2 % 2.1 %
rate
(principal
and fees) (L)
Card Member
loans:
Total loans $ 6.7 $ 7.2 $ 6.8 $ 7.7 $ 8.0 (16 ) $ 6.7 $ 8.0 (16 )
30 days past 1.6 % 1.6 % 1.8 % 1.6 % 1.6 % 1.6 % 1.6 %
due loans
as a % of
total
Average loans $ 6.9 $ 7.0 $ 7.2 $ 7.9 $ 8.3 (17 ) $ 7.0 $ 8.3 (16 )
Net write-off 1.8 % 2.0 % 2.0 % 1.9 % 1.9 % 2.0 % 2.0 %
rate
(principal
only) (L)
Net write-off 2.3 % 2.5 % 2.5 % 2.4 % 2.4 % 2.4 % 2.4 %
rate
(principal,
interest and
fees) (L)
Net interest 9.7 % 10.1 % 10.0 % 9.6 % 9.1 % 10.0 % 9.1 %
income
divided
by average
loans (Q)
Net interest 10.5 % 10.7 % 10.9 % 10.5 % 9.9 % 10.7 % 9.9 %
yield
on Card
Member loans
(Q)
# - Denotes a variance of more than 100 percent.
Global (Preliminary)
Commercial
Services
Selected
Income
Statement
Data
(Millions,
except
percentages)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Revenues
Non-interest $ 858 $ 924 $ 871 $ 1,635 $ 957 (10 ) $ 2,653 $ 3,538 (25 )
revenues
Interest 3 3 4 4 4 (25 ) 10 11 (9 )
income
Interest 44 46 48 54 61 (28 ) 138 186 (26 )
expense
Net (41 ) (43 ) (44 ) (50 ) (57 ) (28 ) (128 ) (175 ) (27 )
interest
expense
Total 817 881 827 1,585 900 (9 ) 2,525 3,363 (25 )
revenues
net of
interest
expense
Provisions 38 42 35 50 49 (22 ) 115 130 (12 )
for
losses
Total 779 839 792 1,535 851 (8 ) 2,410 3,233 (25 )
revenues
net of
interest
expense
after
provisions
for
losses
Expenses
Marketing, 160 156 164 178 161 (1 ) 480 504 (5 )
promotion,
rewards,
Card
Member
services
and other
Salaries 381 369 344 408 381 - 1,094 1,270 (14 )
and
employee
benefits
and
other
operating
expenses
Total 541 525 508 586 542 (0 ) 1,574 1,774 (11 )
Pretax 238 314 284 949 309 (23 ) 836 1,459 (43 )
segment
income
Income 87 111 104 355 105 (17 ) 302 510 (41 )
tax
provision
Segment $ 151 $ 203 $ 180 $ 594 $ 204 (26 ) $ 534 $ 949 (44 )
income
Effective 36.6 % 35.4 % 36.6 % 37.4 % 34.0 % 36.1 % 35.0 %
tax rate
Selected
Statistical
Information
(Billions,
except
percentages
and
where
indicated)
Card $ 45.0 $ 46.4 $ 45.3 $ 47.1 $ 46.5 (3 ) $ 136.6 $ 139.6 (2 )
billed
business
Total 6.9 6.9 6.9 6.9 6.9 - 6.9 6.9 -
cards-in-force
(millions)
Basic 6.9 6.9 6.9 6.9 6.9 - 6.9 6.9 -
cards-in-force
(millions)
Average $ 6,529 $ 6,739 $ 6,567 $ 6,817 $ 6,691 (2 ) $ 19,838 $ 19,905 (0 )
basic
Card
Member
spending
(dollars)
Total $ 19.6 $ 19.7 $ 19.6 $ 18.5 $ 20.6 (5 ) $ 19.6 $ 20.6 (5 )
segment
assets
(P)
Segment $ 3.6 $ 4.0 $ 4.1 $ 3.8 $ 3.8 (6 ) $ 3.6 $ 3.8 (6 )
capital
(N)
Return on 29.2 % 30.3 % 39.9 % 40.9 % 30.3 % 29.2 % 30.3 %
average
segment
capital
(O)
Return on 51.4 % 52.8 % 70.6 % 74.4 % 56.0 % 51.4 % 56.0 %
average
tangible
segment
capital
(O)
Card
Member
receivables:
Total $ 15.7 $ 15.9 $ 15.7 $ 14.6 $ 16.4 (4 ) $ 15.7 $ 16.4 (4 )
receivables
90 days 0.7 % 0.7 % 0.7 % 0.8 % 0.8 % 0.7 % 0.8 %
past
billing
as a % of
total
Net loss 0.08 % 0.09 % 0.10 % 0.08 % 0.09 % 0.09 % 0.09 %
ratio
(as a
%
of charge
volume)
# - Denotes a variance of more than 100 percent.
Global (Preliminary)
Network
&
Merchant
Services
Selected
Income
Statement
Data
(Millions,
except
percentages)
Quarters Ended % Change Nine Months Ended % Change
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, 2015 vs. Sep 30, Sep 30, 2015 vs.
2015 2015 2015 2014 2014 Sep 30, 2014 2015 2014 Sep 30, 2014
Revenues
Non-interest $ 1,302 $ 1,326 $ 1,270 $ 1,399 $ 1,368 (5 ) $ 3,898 $ 4,027 (3 )
revenues
Interest 26 23 20 17 14 86 69 35 97
income
Interest (42 ) (47 ) (54 ) (61 ) (68 ) (38 ) (143 ) (208 ) (31 )
expense
Net 68 70 74 78 82 (17 ) 212 243 (13 )
interest
income
Total 1,370 1,396 1,344 1,477 1,450 (6 ) 4,110 4,270 (4 )
revenues
net of
interest
expense
Provisions 14 13 11 35 24 (42 ) 38 58 (34 )
for
losses
Total 1,356 1,383 1,333 1,442 1,426 (5 ) 4,072 4,212 (3 )
revenues
net of
interest
expense
after
provisions
for
losses
Expenses
(MORE TO FOLLOW) Dow Jones Newswires
October 22, 2015 02:00 ET (06:00 GMT)
Marketing, 172 164 147 185 201 (14 ) 483 634 (24 )
promotion,
rewards,
Card
Member
services
and other
Salaries 461 524 488 587 555 (17 ) 1,473 1,628 (10 )
and
employee
benefits
and
other
operating
expenses
Total 633 688 635 772 756 (16 ) 1,956 2,262 (14 )
Pretax 723 695 698 670 670 8 2,116 1,950 9
segment
income
Income 261 247 254 253 243 7 762 707 8
tax
provision
Segment $ 462 $ 448 $ 444 $ 417 $ 427 8 $ 1,354 $ 1,243 9
income
Effective 36.1 % 35.5 % 36.4 % 37.8 % 36.3 % 36.0 % 36.3 %
tax rate
Selected
Statistical
Information
(Billions,
except
percentages
and
where
indicated)
Global $ 258.9 $ 262.0 $ 245.6 $ 268.5 $ 258.1 0 $ 766.5 $ 754.3 2
Card
billed
business
(R)
Global
Network
&
Merchant
Services:
Total $ 23.7 $ 17.6 $ 17.8 $ 18.1 $ 18.2 30 $ 23.7 $ 18.2 30
segment
assets
(P)
Segment $ 2.5 $ 2.2 $ 2.2 $ 2.0 $ 2.0 28 $ 2.5 $ 2.0 28
capital
(N)
Return on 81.4 % 83.5 % 82.1 % 84.0 % 82.6 % 81.4 % 82.6 %
average
segment
capital
(O)
Return on 89.5 % 92.0 % 90.6 % 92.9 % 91.3 % 89.5 % 91.3 %
average
tangible
segment
capital
(O)
Global
Network
Services:
Card $ 41.1 $ 41.9 $ 39.1 $ 42.5 $ 41.6 (1 ) $ 122.1 $ 118.2 3
billed
business
Total 46.3 45.6 44.5 44.0 43.2 7 46.3 43.2 7
cards-in-force
(millions)
# - Denotes a variance of more than 100 percent.
American (Preliminary)
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,
except
percentages)
For the Twelve Months Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2015 2015 2015 2014 2014
ROE
Net $ 5,711 $ 5,922 $ 5,978 $ 5,885 $ 5,746
income
Average $ 21,349 $ 21,050 $ 20,606 $ 20,254 $ 19,948
shareholders'
equity
Return on 26.8 % 28.1 % 29.0 % 29.1 % 28.8 %
average
equity
(S)
Reconciliation
of
ROCE and
ROTCE
Net $ 5,711 $ 5,922 $ 5,978 $ 5,885 $ 5,746
income
Preferred 42 20 - - -
shares
dividends
and
related
accretion
Earnings 43 44 45 46 46
allocated
to
participating
share
awards
and other
Net $ 5,626 $ 5,858 $ 5,933 $ 5,839 $ 5,700
income
attributable
to
common
shareholders
Average $ 21,349 $ 21,050 $ 20,606 $ 20,254 $ 19,948
shareholders'
equity
Average 1,081 716 350 114 -
preferred
shares
Average $ 20,268 $ 20,334 $ 20,256 $ 20,140 $ 19,948
common
shareholders'
equity
Average 3,796 3,802 3,845 3,888 3,941
goodwill
and
other
intangibles
Average $ 16,472 $ 16,532 $ 16,411 $ 16,252 $ 16,007
tangible
common
shareholders'
equity
Return on 27.8 % 28.8 % 29.3 % 29.0 % 28.6 %
average
common
equity
(S)
Return on 34.2 % 35.4 % 36.2 % 35.9 % 35.6 %
average
tangible
common
equity
(T)
American (Preliminary)
Express
Company
Components
of
Return
on
Average
Segment
Capital
(ROSC)
and
Return
on
Average
Tangible
Segment
Capital
(ROTSC)
Appendix
II
(Millions,
except
percentages)
For the Twelve Months Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2015 2015 2015 2014 2014
U.S.
Card
Services
Segment $ 3,279 $ 3,374 $ 3,258 $ 3,200 $ 3,399
income
Average $ 10,437 $ 10,352 $ 10,148 $ 9,843 $ 9,580
segment
capital
Average 377 358 339 319 299
goodwill
and
other
intangibles
Average $ 10,060 $ 9,994 $ 9,809 $ 9,524 $ 9,281
tangible
segment
capital
Return 31.4 % 32.6 % 32.1 % 32.5 % 35.5 %
on
average
segment
capital
(U)
Return 32.6 % 33.8 % 33.2 % 33.6 % 36.6 %
on
average
tangible
segment
capital
(U)
International
Card
Services
Segment $ 381 $ 434 $ 386 $ 411 $ 481
income
Average $ 3,195 $ 3,133 $ 3,043 $ 3,020 $ 3,043
segment
capital
Average 1,236 1,273 1,311 1,350 1,376
goodwill
and
other
intangibles
Average $ 1,959 $ 1,860 $ 1,732 $ 1,670 $ 1,667
tangible
segment
capital
Return 11.9 % 13.9 % 12.7 % 13.6 % 15.8 %
on
average
segment
capital
(U)
Return 19.4 % 23.3 % 22.3 % 24.6 % 28.9 %
on
average
tangible
segment
capital
(U)
Global
Commercial
Services
Segment $ 1,128 $ 1,181 $ 1,539 $ 1,543 $ 1,131
income
Average $ 3,861 $ 3,897 $ 3,859 $ 3,771 $ 3,736
segment
capital
Average 1,666 1,661 1,678 1,696 1,715
goodwill
and
other
intangibles
Average $ 2,195 $ 2,236 $ 2,181 $ 2,075 $ 2,021
tangible
segment
capital
Return 29.2 % 30.3 % 39.9 % 40.9 % 30.3 %
on
average
segment
capital
(U)
Return 51.4 % 52.8 % 70.6 % 74.4 % 56.0 %
on
average
tangible
segment
capital
(U)
Global
Network
&
Merchant
Services
Segment $ 1,771 $ 1,736 $ 1,661 $ 1,660 $ 1,642
income
Average $ 2,177 $ 2,080 $ 2,024 $ 1,976 $ 1,989
segment
capital
Average 199 194 190 189 190
goodwill
and
other
intangibles
Average $ 1,978 $ 1,886 $ 1,834 $ 1,787 $ 1,799
tangible
segment
capital
Return 81.4 % 83.5 % 82.1 % 84.0 % 82.6 %
on
average
segment
capital
(U)
Return 89.5 % 92.0 % 90.6 % 92.9 % 91.3 %
on
average
tangible
segment
capital
(U)
American (Preliminary)
Express
Company
Net
Interest
Yield on
Card
Member
Loans
Appendix
III
(Millions,
except
percentages
and
where
indicated)
Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2015 2015 2015 2014 2014
Net $ 1,505 $ 1,423 $ 1,447 $ 1,424 $ 1,395
interest
income
Exclude:
Interest $ 234 $ 249 $ 249 $ 250 $ 247
expense
not
attributable
to the
Company's
Card
Member
loan
portfolio
Interest $ (96 ) $ (97 ) $ (95 ) $ (92 ) $ (90 )
income
not
attributable
to the
Company's
Card
Member
loan
portfolio
Adjusted $ 1,643 $ 1,575 $ 1,601 $ 1,582 $ 1,552
net
interest
income (V)
Average $ 69.0 $ 68.0 $ 67.6 $ 67.7 $ 66.4
loans
(billions)
Exclude:
Certain $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.2 )
non-traditional
Card
Member
loans and
other
fees
(billions)
Adjusted $ 68.8 $ 67.8 $ 67.4 $ 67.5 $ 66.2
average
loans
(billions)
(W)
Net 8.7 % 8.4 % 8.6 % 8.4 % 8.5 %
interest
income
divided
by average
loans (X)
Net 9.5 % 9.3 % 9.6 % 9.3 % 9.3 %
interest
yield
on Card
Member
loans
(Y)
U.S. Card (Preliminary)
Services
and
International
Card
Services
Net
Interest
Yield on
Card
Member
Loans
Appendix
IV
(Millions,
except
percentages
and
where
indicated)
Quarters Ended Nine Months Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30,
2015 2015 2015 2014 2014 2015 2014
USCS:
Net $ 1,427 $ 1,354 $ 1,377 $ 1,341 $ 1,313 $ 4,158 $ 3,841
interest
income
Exclude:
Interest $ 42 $ 41 $ 38 $ 39 $ 39 $ 121 $ 118
expense
not
attributable
to the
Company's
Card
Member
loan
portfolio
Interest $ (4 ) $ (4 ) $ (3 ) $ (3 ) $ (3 ) $ (11 ) $ (8 )
income
not
attributable
to the
Company's
Card
Member
loan
portfolio
Adjusted $ 1,465 $ 1,391 $ 1,412 $ 1,377 $ 1,349 $ 4,268 $ 3,951
net
interest
income (V)
Average $ 62.1 $ 60.9 $ 60.4 $ 59.7 $ 58.0 $ 61.2 $ 57.0
loans
(billions)
Exclude:
(MORE TO FOLLOW) Dow Jones Newswires
October 22, 2015 02:00 ET (06:00 GMT)
Certain $ - $ - $ - $ - $ - $ - $ -
non-traditional
Card
Member
loans and
other
fees
(billions)
Adjusted $ 62.1 $ 60.9 $ 60.4 $ 59.7 $ 58.0 $ 61.2 $ 57.0
average
loans
(billions)
(W)
Net 9.2 % 8.9 % 9.1 % 9.0 % 9.1 % 9.1 % 9.0 %
interest
income
divided
by average
loans (X)
Net 9.4 % 9.2 % 9.5 % 9.1 % 9.2 % 9.3 % 9.3 %
interest
yield
on Card
Member
loans
(Y)
ICS:
Net $ 167 $ 176 $ 180 $ 189 $ 188 $ 523 $ 566
interest
income
Exclude:
Interest $ 18 $ 16 $ 18 $ 26 $ 24 $ 51 $ 63
expense
not
attributable
to the
Company's
Card
Member
loan
portfolio
Interest $ (7 ) $ (8 ) $ (8 ) $ (9 ) $ (10 ) $ (24 ) $ (30 )
income
not
attributable
to the
Company's
Card
Member
loan
portfolio
Adjusted $ 178 $ 184 $ 190 $ 206 $ 202 $ 550 $ 599
net
interest
income (V)
Average $ 6.9 $ 7.0 $ 7.2 $ 7.9 $ 8.3 $ 7.0 $ 8.3
loans
(billions)
Exclude:
Certain $ (0.1 ) $ (0.1 ) $ (0.1 ) $ (0.2 ) $ (0.2 ) $ (0.1 ) $ (0.2 )
non-traditional
Card
Member
loans and
other
fees
(billions)
Adjusted $ 6.8 $ 6.9 $ 7.1 $ 7.7 $ 8.1 $ 6.9 $ 8.1
average
loans
(billions)
(W)
Net 9.7 % 10.1 % 10.0 % 9.6 % 9.1 % 10.0 % 9.1 %
interest
income
divided
by average
loans (X)
Net 10.5 % 10.7 % 10.9 % 10.5 % 9.9 % 10.7 % 9.9 %
interest
yield
on Card
Member
loans
(Y)
Appendix (Preliminary)
V
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) Beginning in Q3'15, Travel Commissions & Fees and Other Commissions & Fees are consolidated into Other Fees & Commissions.
(C) Represents net income, less (i) earnings allocated to participating share awards of $10 million for the quarter ended September 30, 2015, $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 and $11 million for the quarter ended September 30, 2014; and (ii) dividends on preferred shares of $22 million for the quarter ended September 30, 2015, $20 million for the quarter ended June 30, 2015 and nil for all other comparative periods.
(D) 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.
(E) 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.
(F) 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.
(G) 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.
(H) 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 $72 million for the quarter ended September 30, 2015, $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, and $77 million for the quarter ended September 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.
(I) Provisions for principal (resulting from authorized transactions) and fee reserve components.
(J) Consists of principal (resulting from authorized transactions), interest and/or fees, less recoveries.
(K) 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.
(L) 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%.
(M) 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.
(N) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(O) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.
(P) Revised prospectively, as a result of systems enhancements, to reclassify certain intercompany accounts.
(Q) 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.
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