Exhibit 99.2
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 information presented herein reflects discontinued
operations presentation for the spin-off of Ameriprise effective as of
September 30, 2005 and certain dispositions, and is revised from previously
reported results.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
------------------ Percentage ------------------ Percentage
2005 2004 Inc/(Dec) 2005 2004 Inc/(Dec)
-------- -------- ----------- -------- -------- -----------
Revenues
Discount revenue $ 2,945 $ 2,535 16.2% $ 8,558 $ 7,432 15.1%
Cardmember lending net finance charge revenue 648 562 15.6 1,877 1,664 12.9
Net card fees 511 474 7.9 1,515 1,418 6.9
Travel commissions and fees 421 426 (1.0) 1,345 1,311 2.7
Other commissions and fees 628 574 7.7 1,816 1,668 8.4
Securitization income, net 353 295 19.7 965 807 19.6
Other investment and interest income 246 248 (1.0) 776 736 5.5
Other 316 362 (10.9) 978 1,025 (4.2)
-------- -------- -------- --------
Total 6,068 5,476 10.8 17,830 16,061 11.0
-------- -------- -------- --------
Expenses
Human resources 1,197 1,098 8.9 3,652 3,306 10.4
Marketing, promotion, rewards
and cardmember services 1,492 1,286 16.0 4,260 3,545 20.2
Provision for losses and benefits
Charge card 299 206 45.3 748 593 26.1
Cardmember lending 364 233 56.0 934 834 12.0
Investment certificates and other 76 117 (35.0) 278 230 20.4
-------- -------- -------- --------
Total 739 556 32.9 1,960 1,657 18.2
Professional services 563 534 5.5 1,594 1,494 6.8
Occupancy and equipment 346 328 5.6 1,038 974 6.6
Interest 238 201 18.3 671 592 13.3
Communications 112 114 (1.9) 342 354 (3.2)
Other 301 345 (12.7) 1,024 1,228 (16.7)
-------- -------- -------- --------
Total 4,988 4,462 11.8 14,541 13,150 10.6
-------- -------- -------- --------
Pretax income from continuing operations before
accounting change 1,080 1,014 6.5 3,289 2,911 13.0
Income tax provision 215 312 (30.9) 819 894 (8.4)
-------- -------- -------- --------
Income from continuing operations before
accounting change 865 702 23.2 2,470 2,017 22.5
Income from discontinued operations, net of tax 165 177 (6.8) 519 603 (13.9)
-------- -------- -------- --------
Income before cumulative effect of accounting change 1,030 879 17.1 2,989 2,620 14.1
Cumulative effect of accounting change - - - - (71)(A) #
-------- -------- -------- --------
Net income $ 1,030 $ 879 17.1 $ 2,989 $ 2,549 17.3
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
(A) Reflects a $109 million non-cash pretax charge ($71 million after-tax)
associated with discontinued operations related to the January 1, 2004
adoption of SOP 03-1.
-1-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
<Table>
<Caption>
September 30, December 31,
2005 2004
---------------- ----------------
Assets
Cash and cash equivalents $ 8 $ 8
Accounts receivable 33 32
Investments 22 22
Loans 37 34
Other assets 9 11
Assets of discontinued operations - 87
---------------- ----------------
Total assets $ 109 $ 194
================ ================
Liabilities and Shareholders' Equity
Short-term debt $ 15 $ 14
Long-term debt 29 33
Other liabilities 55 50
Liabilities of discontinued operations - 81
---------------- ----------------
Total liabilities 99 178
---------------- ----------------
Shareholders' Equity* 10 16
---------------- ----------------
Total liabilities and shareholders' equity $ 109 $ 194
================ ================
</Table>
* Total Shareholders' Equity at December 31, 2004 includes discontinued
operations reflected in the Company's historical Consolidated Financial
Statements.
-2-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
------------------ Percentage ------------------ Percentage
2005 2004 Inc/(Dec) 2005 2004 Inc/(Dec)
-------- -------- ----------- -------- -------- -----------
REVENUES
U.S. Card Services $ 3,035 $ 2,618 15.9% $ 8,772 $ 7,584 15.7%
International Card & Global Commercial Services 2,238 2,059 8.6 6,698 6,164 8.7
Global Network & Merchant Services 716 659 8.9 2,097 1,936 8.4
-------- -------- -------- --------
5,989 5,336 12.3 17,567 15,684 12.0
Corporate & Other,
including adjustments and eliminations 79 140 (43.6) 263 377 (31.4)
-------- -------- -------- --------
CONSOLIDATED REVENUES $ 6,068 $ 5,476 10.8 $ 17,830 $ 16,061 11.0
======== ======== ======== ========
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 638 $ 502 27.5 $ 2,066 $ 1,641 25.9
International Card & Global Commercial Services 325 314 3.2 846 880 (3.6)
Global Network & Merchant Services 214 272 (20.8) 628 693 (9.4)
-------- -------- -------- --------
1,177 1,088 8.2 3,540 3,214 10.2
Corporate & Other (97) (74) 32.2 (251) (303) (16.6)
-------- -------- -------- --------
PRETAX INCOME FROM CONTINUING OPERATIONS
BEFORE ACCOUNTING CHANGE $ 1,080 $ 1,014 6.5 $ 3,289 $ 2,911 13.0
======== ======== ======== ========
NET INCOME (LOSS)
U.S. Card Services $ 446 $ 356 25.1 $ 1,423 $ 1,155 23.2
International Card & Global Commercial Services 254 224 13.7 693 597 16.3
Global Network & Merchant Services 141 173 (18.6) 405 440 (8.1)
-------- -------- -------- --------
841 753 11.7 2,521 2,192 15.0
Corporate & Other 24 (51) # (51) (175) (71.2)
-------- -------- -------- --------
Income from continuing operations before
accounting change 865 702 23.2 2,470 2,017 22.5
Income from discontinued operations, net of tax 165 177 (6.8) 519 603 (13.9)
Cumulative effect of accounting change - - - - (71)(A) #
-------- -------- -------- --------
NET INCOME $ 1,030 $ 879 17.1 $ 2,989 $ 2,549 17.3
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
(A) Reflects a $109 million non-cash pretax charge ($71 million after-tax)
associated with discontinued operations related to the January 1, 2004
adoption of SOP 03-1.
-3-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
------------------ Percentage ------------------ Percentage
2005 2004 Inc/(Dec) 2005 2004 Inc/(Dec)
-------- -------- ----------- -------- -------- -----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.70 $ 0.56 25.0% $ 2.00 $ 1.60 25.0%
Income from discontinued operations 0.14 0.14 -% 0.42 0.47 (10.6)%
Cumulative effect of accounting change - - - - (0.05)(A) #
-------- -------- -------- --------
Net income $ 0.84 $ 0.70 20.0% $ 2.42 $ 2.02 19.8%
======== ======== ======== ========
Average common shares outstanding (millions) 1,229 1,251 (1.8)% 1,233 1,264 (2.4)%
======== ======== ======== ========
DILUTED
Income from continuing operations $ 0.69 $ 0.55 25.5% $ 1.96 $ 1.56 25.6%
Income from discontinued operations 0.13 0.14 (7.1)% 0.42 0.47 (10.6)%
Cumulative effect of accounting change - - - - (0.05)(A) #
-------- -------- -------- --------
Net income $ 0.82 $ 0.69 18.8% $ 2.38 $ 1.98 20.2%
======== ======== ======== ========
Average common shares outstanding (millions) 1,254 1,275 (1.7)% 1,257 1,289 (2.5)%
======== ======== ======== ========
Cash dividends declared per common share $ 0.12 $ 0.12 -% $ 0.36 $ 0.32 12.5%
======== ======== ======== ========
</Table>
SELECTED STATISTICAL INFORMATION
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
------------------ Percentage ------------------ Percentage
2005 2004 Inc/(Dec) 2005 2004 Inc/(Dec)
-------- -------- ----------- -------- -------- -----------
Return on average total shareholders' equity (B) 24.2% 21.5% 24.2% 21.5%
Common shares outstanding (millions) 1,239 1,255 (1.3)% 1,239 1,255 (1.3)%
Book value per common share* $ 7.99 $ 12.62 (36.7)% $ 7.99 $ 12.62 (36.7)%
Shareholders' equity (billions)* $ 9.9 $ 15.8 (37.3)% $ 9.9 $ 15.8 (37.3)%
</Table>
# - Denotes a variance of more than 100%.
(A) Reflects a $109 million non-cash pretax charge ($71 million after-tax), or
$0.05 on a basic and diluted per share basis, associated with discontinued
operations related to the January 1, 2004 adoption of SOP 03-1.
(B) Computed on a trailing 12-month basis using net income and total
shareholders' equity (including discontinued operations) as included in the
historical Consolidated Financial Statements prepared in accordance with GAAP.
* Total shareholders' equity and book value per common share amounts prior to
September 30, 2005 include discontinued operations reflected in the Company's
historical Consolidated Financial Statements.
-4-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
September 30,
--------------------- Percentage
2005 2004 Inc/(Dec)
--------- --------- ------------
Card billed business (A):
United States $ 89 $ 76 18.7%
Outside the United States 33 27 17.7
--------- ---------
Total $ 122 $ 103 18.4
========= =========
Total cards-in-force (millions):
United States 42.0 38.0 10.4%
Outside the United States 27.0 25.3 7.1
--------- ---------
Total 69.0 63.3 9.1
========= =========
Basic cards-in-force (millions):
United States 31.9 28.9 10.6%
Outside the United States 22.4 20.8 7.8
--------- ---------
Total 54.3 49.7 9.4
========= =========
Average discount rate (B) 2.57% 2.60%
Average quarterly basic cardmember spending (dollars) (A) $ 2,610 $ 2,330 12.0%
Average fee per card - managed (dollars) (A) $ 35 $ 34 2.9%
Travel sales $ 4.8 $ 4.6 4.9%
Travel commissions and fees/sales (C) 8.7% 9.2%
Worldwide Travelers Cheque and prepaid products:
Sales $ 5.8 $ 5.8 (0.5)%
Average outstanding $ 7.3 $ 7.1 2.8%
Average investments $ 7.9 $ 7.6 3.9%
Investment yield 5.1% 5.4%
Tax equivalent yield 7.8% 8.3%
</Table>
(A) Card billed business and cards-in-force include activities related to
proprietary cards, cards issued under network partnership agreements, cash
advances on proprietary cards and certain insurance fees charged on
proprietary cards. Average basic cardmember spending and average fee per card
are computed from proprietary card activities only.
(B) Computed as follows: Discount Revenue from all card spending (proprietary
and Global Network Services) at merchants divided by all billed business
(proprietary and Global Network Services) generating discount revenue at such
merchants. Only merchants acquired by the Company are included in the
computation. Discount rates have been restated on a historical basis from
those previously disclosed, primarily to retain in the computation the Global
Network Services partner portion of discount revenue, as well as the Company's
portion of discount revenue.
(C) Computed from information provided herein.
-5-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION (CONTINUED)
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
September 30,
--------------------- Percentage
2005 2004 Inc/(Dec)
--------- --------- ------------
Worldwide cardmember receivables:
Total receivables $ 31.9 $ 28.6 11.5%
90 days past due as a % of total 1.7% 1.8%
Loss reserves (millions): $ 909 $ 847 7.4%
% of receivables 2.9% 3.0%
% of 90 days past due 173% 160%
Net loss ratio as a % of charge volume 0.27% 0.26%
Worldwide cardmember lending - owned basis:
Total loans $ 29.9 $ 25.2 18.4%
30 days past due loans as a % of total 2.5% 2.5%
Loss reserves (millions):
Beginning balance $ 888 $ 1,030 (13.9)%
Provision 325 205 59.1
Net write-offs (280) (255) 9.6
Other 19 28 (35.0)
--------- ---------
Ending balance $ 952 $ 1,008 (5.6)
========= =========
% of loans 3.2% 4.0%
% of past due 128% 159%
Average loans $ 28.3 $ 26.2 8.0%
Net write-off rate 4.0% 3.9%
Net finance charge revenue*/average loans 9.2% 8.6%
Worldwide cardmember lending - managed basis:
Total loans $ 50.6 $ 45.6 11.0%
30 days past due loans as a % of total 2.4% 2.5%
Loss reserves (millions):
Beginning balance $ 1,367 $ 1,535 (11.0)%
Provision 510 437 16.7
Net write-offs (494) (463) (6.7)
Other 18 28 (35.0)
--------- ---------
Ending balance $ 1,401 $ 1,537 (8.9)
========= =========
% of loans 2.8% 3.4%
% of past due 114% 132%
Average loans $ 49.6 $ 45.3 9.4%
Net write-off rate 4.0% 4.1%
Net finance charge revenue*/average loans 9.4% 9.1%
</Table>
# - Denotes a variance of more than 100%.
* - Computed on an annualized basis.
-6-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
-------------- -------------- -------------- -------------- --------------
Revenues
Discount revenue $ 2,945 $ 2,941 $ 2,672 $ 2,817 $ 2,535
Cardmember lending net finance charge revenue 648 637 592 560 562
Net card fees 511 506 498 491 474
Travel commissions and fees 421 502 422 484 426
Other commissions and fees 628 611 577 616 574
Securitization income, net 353 296 316 325 295
Other investment and interest income 246 269 261 261 248
Other 316 328 334 349 362
-------------- -------------- -------------- -------------- --------------
Total 6,068 6,090 5,672 5,903 5,476
-------------- -------------- -------------- -------------- --------------
Expenses
Human resources 1,197 1,268 1,187 1,232 1,098
Marketing, promotion, rewards
and cardmember services 1,492 1,445 1,323 1,420 1,286
Provision for losses and benefits
Charge card 299 234 215 240 206
Cardmember lending 364 275 295 296 233
Investment certificates and other 76 123 79 71 117
-------------- -------------- -------------- -------------- --------------
Total 739 632 589 607 556
Professional services 563 544 487 647 534
Occupancy and equipment 346 356 336 379 328
Interest 238 232 201 222 201
Communications 112 113 117 120 114
Other 301 379 344 356 345
-------------- -------------- -------------- -------------- --------------
Total 4,988 4,969 4,584 4,983 4,462
-------------- -------------- -------------- -------------- --------------
Pretax income from continuing operations 1,080 1,121 1,088 920 1,014
Income tax provision 215 261 343 251 312
-------------- -------------- -------------- -------------- --------------
Income from continuing operations 865 860 745 669 702
Income from discontinued operations, net of tax 165 153 201 227 177
-------------- -------------- -------------- -------------- --------------
Net income $ 1,030 $ 1,013 $ 946 $ 896 $ 879
============== ============== ============== ============== ==============
</Table>
-7-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
-------------- -------------- -------------- -------------- --------------
REVENUES
U.S. Card Services $ 3,035 $ 2,968 $ 2,769 $ 2,811 $ 2,618
International Card & Global Commercial Services 2,238 2,299 2,161 2,265 2,059
Global Network & Merchant Services 716 718 663 703 659
-------------- -------------- -------------- -------------- --------------
5,989 5,985 5,593 5,779 5,336
Corporate & Other,
including adjustments and eliminations 79 105 79 124 140
-------------- -------------- -------------- -------------- --------------
CONSOLIDATED REVENUES $ 6,068 $ 6,090 $ 5,672 $ 5,903 $ 5,476
============== ============== ============== ============== ==============
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 638 $ 710 $ 718 $ 499 $ 502
International Card & Global Commercial Services 325 263 258 236 314
Global Network & Merchant Services 214 244 170 211 272
-------------- -------------- -------------- -------------- --------------
1,177 1,217 1,146 946 1,088
Corporate & Other (97) (96) (58) (26) (74)
-------------- -------------- -------------- -------------- --------------
PRETAX INCOME FROM CONTINUING OPERATIONS $ 1,080 $ 1,121 $ 1,088 $ 920 $ 1,014
============== ============== ============== ============== ==============
NET INCOME (LOSS)
U.S. Card Services $ 446 $ 485 $ 492 $ 363 $ 356
International Card & Global Commercial Services 254 237 202 184 224
Global Network & Merchant Services 141 154 110 134 173
-------------- -------------- -------------- -------------- --------------
841 876 804 681 753
Corporate & Other 24 (16) (59) (12) (51)
-------------- -------------- -------------- -------------- --------------
Income from continuing operations 865 860 745 669 702
Income from discontinued operations, net of tax 165 153 201 227 177
-------------- -------------- -------------- -------------- --------------
NET INCOME $ 1,030 $ 1,013 $ 946 $ 896 $ 879
============== ============== ============== ============== ==============
</Table>
-8-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
<Table>
<Caption>
Quarters Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
-------------- -------------- -------------- -------------- --------------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.70 $ 0.70 $ 0.60 $ 0.54 $ 0.56
Income from discontinued operations 0.14 0.12 0.16 0.18 0.14
-------------- -------------- -------------- -------------- --------------
Net income $ 0.84 $ 0.82 $ 0.76 $ 0.72 $ 0.70
============== ============== ============== ============== ==============
Average common shares outstanding (millions) 1,229 1,231 1,239 1,242 1,251
============== ============== ============== ============== ==============
DILUTED
Income from continuing operations $ 0.69 $ 0.69 $ 0.59 $ 0.53 $ 0.55
Income from discontinued operations 0.13 0.12 0.16 0.18 0.14
-------------- -------------- -------------- -------------- --------------
Net income $ 0.82 $ 0.81 $ 0.75 $ 0.71 $ 0.69
============== ============== ============== ============== ==============
Average common shares outstanding (millions) 1,254 1,254 1,264 1,270 1,275
============== ============== ============== ============== ==============
Cash dividends declared per common share $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.12
============== ============== ============== ============== ==============
</Table>
SELECTED STATISTICAL INFORMATION
<Table>
<Caption>
Quarters Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
-------------- -------------- -------------- -------------- --------------
Return on average total shareholders' equity (A) 24.2% 23.1% 22.8% 22.0% 21.5%
Common shares outstanding (millions) 1,239 1,240 1,245 1,249 1,255
Book value per common share* $ 7.99 $ 13.84 $ 12.95 $ 12.83 $ 12.62
Shareholders' equity (billions)* $ 9.9 $ 17.2 $ 16.1 $ 16.0 $ 15.8
</Table>
(A) Computed on a trailing 12-month basis using net income and total
shareholders' equity (including discontinued operations) as included in the
Consolidated Financial Statements prepared in accordance with GAAP.
* Total shareholders' equity and book value per common share amounts prior to
September 30, 2005 include discontinued operations reflected in the Company's
historical Consolidated Financial Statements.
-9-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
-------------- -------------- -------------- -------------- --------------
Card billed business (A):
United States $ 89 $ 89 $ 79 $ 84 $ 76
Outside the United States 33 32 30 32 27
-------------- -------------- -------------- -------------- --------------
Total $ 122 $ 121 $ 109 $ 116 $ 103
============== ============== ============== ============== ==============
Total cards-in-force (millions):
United States 42.0 41.0 40.3 39.9 38.0
Outside the United States 27.0 26.3 25.8 25.5 25.3
-------------- -------------- -------------- -------------- --------------
Total 69.0 67.3 66.1 65.4 63.3
============== ============== ============== ============== ==============
Basic cards-in-force (millions):
United States 31.9 31.1 30.6 30.3 28.9
Outside the United States 22.4 21.8 21.3 21.0 20.8
-------------- -------------- -------------- -------------- --------------
Total 54.3 52.9 51.9 51.3 49.7
============== ============== ============== ============== ==============
Average discount rate (B) 2.57% 2.58% 2.60% 2.58% 2.60%
Average quarterly basic cardmember spending
(dollars) (A) $ 2,610 $ 2,640 $ 2,412 $ 2,589 $ 2,330
Average fee per card - managed (dollars) (A) $ 35 $ 35 $ 35 $ 35 $ 34
Travel sales $ 4.8 $ 5.6 $ 5.0 $ 5.3 $ 4.6
Travel commissions and fees/sales (C) 8.7% 8.9% 8.4% 9.1% 9.2%
Worldwide Travelers Cheque and prepaid products:
Sales $ 5.8 $ 4.9 $ 4.2 $ 4.9 $ 5.8
Average outstanding $ 7.3 $ 7.1 $ 7.1 $ 7.0 $ 7.1
Average investments $ 7.9 $ 7.7 $ 7.8 $ 7.6 $ 7.6
Investment yield 5.1% 5.2% 5.2% 5.4% 5.4%
Tax equivalent yield 7.8% 8.0% 8.0% 8.3% 8.3%
</Table>
(A) Card billed business and cards-in-force include activities related to
proprietary cards, cards issued under network partnership agreements, cash
advances on proprietary cards and certain insurance fees charged on
proprietary cards. Average basic cardmember spending and average fee per card
are computed from proprietary card activities only.
(B) Computed as follows: Discount Revenue from all card spending (proprietary
and Global Network Services) at merchants divided by all billed business
(proprietary and Global Network Services) generating discount revenue at such
merchants. Only merchants acquired by the Company are included in the
computation. Discount rates have been restated on a historical basis from
those previously disclosed, primarily to retain in the computation the Global
Network Services partner portion of discount revenue, as well as the Company's
portion of discount revenue.
(C) Computed from information provided herein.
-10-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
SELECTED STATISTICAL INFORMATION (CONTINUED)
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
-------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- --------- --------- ------------- -------------
Worldwide cardmember receivables:
Total receivables $ 31.9 $ 31.5 $ 30.0 $ 31.1 $ 28.6
90 days past due as a % of total 1.7% 1.7% 1.9% 1.8% 1.8%
Loss reserves (millions): $ 909 $ 848 $ 831 $ 806 $ 847
% of receivables 2.9% 2.7% 2.8% 2.6% 3.0%
% of 90 days past due 173% 160% 147% 146% 160%
Net loss ratio as a % of charge volume 0.27% 0.25% 0.23% 0.25% 0.26%
Worldwide cardmember lending - owned basis:
Total loans $ 29.9 $ 28.1 $ 25.9 $ 26.9 $ 25.2
30 days past due loans as a % of total 2.5% 2.4% 2.7% 2.4% 2.5%
Loss reserves (millions):
Beginning balance $ 888 $ 918 $ 972 $ 1,008 $ 1,030
Provision 325 262 266 272 205
Net write-offs (280) (285) (267) (254) (255)
Other 19 (7) (53) (54) 28
------------- --------- --------- ------------- -------------
Ending balance $ 952 $ 888 $ 918 $ 972 $ 1,008
============= ========= ========= ============= =============
% of loans 3.2% 3.2% 3.6% 3.6% 4.0%
% of past due 128% 133% 134% 151% 159%
Average loans $ 28.3 $ 27.5 $ 26.3 $ 26.2 $ 26.2
Net write-off rate 4.0% 4.1% 4.1% 3.9% 3.9%
Net finance charge revenue*/average loans 9.2% 9.3% 9.0% 8.6% 8.6%
Worldwide cardmember lending - managed basis:
Total loans $ 50.6 $ 48.8 $ 46.3 $ 47.2 $ 45.6
30 days past due loans as a % of total 2.4% 2.3% 2.6% 2.4% 2.5%
Loss reserves (millions):
Beginning balance $ 1,367 $ 1,419 $ 1,475 $ 1,537 $ 1,535
Provision 510 445 471 463 437
Net write-offs (494) (490) (474) (471) (463)
Other 18 (7) (53) (54) 28
------------- --------- --------- ------------- -------------
Ending balance $ 1,401 $ 1,367 $ 1,419 $ 1,475 $ 1,537
============= ========= ========= ============= =============
% of loans 2.8% 2.8% 3.1% 3.1% 3.4%
% of past due 114% 121% 120% 129% 132%
Average loans $ 49.6 $ 47.5 $ 46.4 $ 46.5 $ 45.3
Net write-off rate 4.0% 4.1% 4.1% 4.1% 4.1%
Net finance charge revenue*/average loans 9.4% 9.2% 9.1% 9.0% 9.1%
</Table>
* - Computed on an annualized basis.
-11-
<Page>
(Preliminary)
U.S. CARD SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
September 30,
------------------- Percentage
2005 2004 Inc/(Dec)
-------- -------- ----------
Revenues:
Discount revenue, net card fees and other $ 2,224 $ 1,982 12.2%
Cardmember lending:
Finance charge revenue 614 445 38.1
Interest expense 156 104 50.9
-------- --------
Net finance charge revenue 458 341 34.2
Securitization income, net 353 295 19.8
-------- --------
Total 3,035 2,618 15.9
-------- --------
Expenses:
Marketing, promotion, rewards
and cardmember services 1,003 854 17.5
Provision for losses 458 438 4.4
Human resources and other operating expenses 936 824 13.5
-------- --------
Total 2,397 2,116 13.2
-------- --------
Pretax segment income 638 502 27.5
Income tax provision 192 146 33.3
-------- --------
Segment income $ 446 $ 356 25.1
======== ========
</Table>
-12-
<Page>
(Preliminary)
U.S. CARD SERVICES
SELECTED FINANCIAL INFORMATION
Quarters Ended September 30,
(Millions)
<Table>
<Caption>
GAAP Basis Securitization Effect
--------------------- Percentage ---------------------
2005 2004 Inc/(Dec) 2005 2004
-------- -------- ---------- -------- --------
Revenues:
Discount revenue, net card fees
and other $ 2,224 $ 1,982 12.2% $ 53 $ 53
Cardmember lending:
Finance charge revenue 614 445 38.1 721 573
Interest expense 156 104 50.9 209 108
-------- -------- -------- --------
Net finance charge revenue 458 341 34.2 512 465
Securitization income, net 353 295 19.8 (353) (295)
-------- -------- -------- --------
Total 3,035 2,618 15.9 212 223
-------- -------- -------- --------
Expenses:
Marketing, promotion, rewards
and cardmember services 1,003 854 17.5 (2) (6)
Provision for losses 458 438 4.4 215 232
Human resources and other
operating expenses 936 824 13.5 (1) (3)
-------- -------- -------- --------
Total 2,397 2,116 13.2 $ 212 $ 223
-------- -------- -------- --------
Pretax segment income 638 502 27.5
Income tax provision 192 146 33.3
-------- --------
Segment income $ 446 $ 356 25.1
======== ========
<Caption>
Tax Equivalent Effect Managed Basis
--------------------- --------------------- Percentage
2005 2004 2005 2004 Inc/(Dec)
-------- -------- -------- -------- ----------
Revenues:
Discount revenue, net card fees
and other $ 56 $ 57 $ 2,333 $ 2,092 11.6%
Cardmember lending:
Finance charge revenue 1,335 1,018 31.1
Interest expense 365 212 71.9
-------- --------
Net finance charge revenue 970 806 20.4
Securitization income, net - - -
-------- -------- -------- --------
Total 56 57 3,303 2,898 14.0
-------- -------- -------- --------
Expenses:
Marketing, promotion, rewards
and cardmember services 1,001 848 18.1
Provision for losses 673 670 0.4
Human resources and other
operating expenses 935 821 13.8
-------- --------
Total 2,609 2,339 11.5
-------- -------- -------- --------
Pretax segment income 56 57 694 559 24.6
Income tax provision $ 56 $ 57 $ 248 $ 203 23.5
-------- -------- -------- --------
Segment income
</Table>
The tables above reconcile the GAAP basis for certain income statement line
items to the managed basis information, where different. Securitization
income, net represents the non-credit provision components of the net gains
and charges from securitization activities, the amortization and related
impairment charges, if any, of the related interest-only strip, excess spread
related to securitized loans, net finance charge revenue on retained interests
in securitized loans and servicing income, net of related discounts or fees.
Management views any net gains from securitizations as discretionary benefits
to be used for card acquisition expenses, which are reflected in both
marketing, promotion, rewards and cardmember services expenses and other
operating expenses. Consequently, the managed Selected Financial Information
above for the quarters ended September 30, 2005 and 2004 assumes that gains
from new issuances and charges from the amortization and maturities of
outstanding lending securitization transactions of $3 million and $9 million,
respectively, are offset by higher marketing, promotion, rewards and
cardmember services expenses of $2 million and $6 million, respectively, and
other operating expenses of $1 million and $3 million, respectively.
Accordingly, the incremental expenses, as well as the impact of this net
activity, have been eliminated.
The tax equivalent effect represents an increase to interest income recorded
to enable management to evaluate tax exempt investments on a basis consistent
with taxable investment securities. On a GAAP basis, interest income
associated with tax exempt investments is recorded based on amounts earned.
Accordingly, the managed Selected Financial Information above for the quarters
ended September 30, 2005 and 2004 assumes that tax exempt securities earned
income at rates as if the securities produced taxable income with a
corresponding increase in the provision for income taxes.
-13-
<Page>
(Preliminary)
U.S. CARD SERVICES
SELECTED FINANCIAL INFORMATION
Quarters Ended
(Millions)
<Table>
<Caption>
GAAP Basis Securitization Effect
--------------------------- ---------------------------
June 30, March 31, June 30, March 31,
2005 2005 2005 2005
------------ ------------ ------------ ------------
Revenues:
Discount revenue, net card fees and other $ 2,225 $ 2,051 $ 51 $ 53
Cardmember lending:
Finance charge revenue 587 522 618 609
Interest expense 140 120 164 140
------------ ------------ ------------ ------------
Net finance charge revenue 447 402 454 469
Securitization income, net 296 316 (296) (316)
------------ ------------ ------------ ------------
Total 2,968 2,769 209 206
------------ ------------ ------------ ------------
Expenses:
Marketing, promotion, rewards and cardmember
services 974 837 (1) (4)
Provision for losses 367 342 210 212
Human resources and other operating expenses 917 872 - (2)
------------ ------------ ------------ ------------
Total 2,258 2,051 $ 209 $ 206
------------ ------------ ------------ ------------
Pretax segment income 710 718
Income tax provision 225 226
------------ ------------
Segment income $ 485 $ 492
============ ============
<Caption>
Tax Equivalent Effect Managed Basis
--------------------------- ---------------------------
June 30, March 31, June 30, March 31,
2005 2005 2005 2005
------------ ------------ ------------ ------------
Revenues:
Discount revenue, net card fees and other $ 57 $ 57 $ 2,333 $ 2,161
Cardmember lending:
Finance charge revenue 1,205 1,131
Interest expense 304 260
------------ ------------
Net finance charge revenue 901 871
Securitization income, net - -
------------ ------------ ------------ ------------
Total 57 57 3,234 3,032
------------ ------------ ------------ ------------
Expenses:
Marketing, promotion, rewards and cardmember
services 973 833
Provision for losses 577 554
Human resources and other operating expenses 917 870
------------ ------------
Total 2,467 2,257
------------ ------------ ------------ ------------
Pretax segment income 57 57 767 775
Income tax provision $ 57 $ 57 $ 282 $ 283
------------ ------------ ------------ ------------
Segment income
</Table>
The tables above reconcile the GAAP basis for certain income statement line
items to the managed basis information, where different. Securitization
income, net represents the non-credit provision components of the net gains
and charges from securitization activities, the amortization and related
impairment charges, if any, of the related interest-only strip, excess spread
related to securitized loans, net finance charge revenue on retained interests
in securitized loans and servicing income, net of related discounts or fees.
Management views any net gains from securitizations as discretionary benefits
to be used for card acquisition expenses, which are reflected in both
marketing, promotion, rewards and cardmember services expenses and other
operating expenses. Consequently, the managed Selected Financial Information
above for the quarters ended June 30, 2005 and March 30, 2005 assumes that
gains from new issuances and charges from the amortization and maturities of
outstanding lending securitization transactions of $1 million and $6 million,
respectively, are offset by higher marketing, promotion, rewards and
cardmember services expenses of $1 million and $4 million, respectively, and
other operating expenses of nil and $2 million, respectively. Accordingly, the
incremental expenses, as well as the impact of this net activity, have been
eliminated.
The tax equivalent effect represents an increase to interest income recorded
to enable management to evaluate tax exempt investments on a basis consistent
with taxable investment securities. On a GAAP basis, interest income
associated with tax exempt investments is recorded based on amounts earned.
Accordingly, the managed Selected Financial Information above for the quarters
ended June 30, 2005 and March 31, 2005 assumes that tax exempt securities
earned income at rates as if the securities produced taxable income with a
corresponding increase in the provision for income taxes.
-14-
<Page>
(Preliminary)
U.S. CARD SERVICES
SELECTED FINANCIAL INFORMATION
Quarter Ended
(Millions)
<Table>
<Caption>
GAAP Basis Securitization Effect
--------------------------- ---------------------------
December 31, September 30, December 31, September 30,
2004 2004 2004 2004
------------ ------------- ------------ -------------
Revenues:
Discount revenue, net card fees and other $ 2,127 $ 1,982 $ 54 $ 53
Cardmember lending:
Finance charge revenue 455 445 621 573
Interest expense 96 104 132 108
------------ ------------- ------------ -------------
Net finance charge revenue 359 341 489 465
Securitization income, net 325 295 (325) (295)
------------ ------------- ------------ -------------
Total 2,811 2,618 218 223
------------ ------------- ------------ -------------
Expenses:
Marketing, promotion, rewards and cardmember
services 976 854 - (6)
Provision for losses 386 438 218 232
Human resources and other operating expenses 950 824 - (3)
------------ ------------- ------------ -------------
Total 2,312 2,116 $ 218 $ 223
------------ ------------- ------------ -------------
Pretax segment income 499 502
Income tax provision 136 146
------------ -------------
Segment income $ 363 $ 356
============ =============
<Caption>
Tax Equivalent Effect Managed Basis
--------------------------- ---------------------------
December 31, September 30, December 31, September 30,
2004 2004 2004 2004
------------ ------------- ------------ -------------
Revenues:
Discount revenue, net card fees and other $ 57 $ 57 $ 2,238 $ 2,092
Cardmember lending:
Finance charge revenue 1,076 1,018
Interest expense 228 212
------------ -------------
Net finance charge revenue 848 806
Securitization income, net - -
------------ ------------- ------------ -------------
Total 57 57 3,086 2,898
------------ ------------- ------------ -------------
Expenses:
Marketing, promotion, rewards and cardmember
services 976 848
Provision for losses 604 670
Human resources and other operating expenses 950 821
------------ -------------
Total 2,530 2,339
------------ ------------- ------------ -------------
Pretax segment income 57 57 556 559
Income tax provision $ 57 $ 57 $ 193 $ 203
------------ ------------- ------------ -------------
Segment income
</Table>
The tables above reconcile the GAAP basis for certain income statement line
items to the managed basis information, where different. Securitization
income, net represents the non-credit provision components of the net gains
and charges from securitization activities, the amortization and related
impairment charges, if any, of the related interest-only strip, excess spread
related to securitized loans, net finance charge revenue on retained interests
in securitized loans and servicing income, net of related discounts or fees.
Management views any net gains from securitizations as discretionary benefits
to be used for card acquisition expenses, which are reflected in both
marketing, promotion, rewards and cardmember services expenses and other
operating expenses. Consequently, the managed Selected Financial Information
above for the quarter ended September 30, 2004 assumes that gains from new
issuances and charges from the amortization and maturities of outstanding
lending securitization transactions of $9 million are offset by higher
marketing, promotion, rewards and cardmember services expenses of $6 million
and other operating expenses of $3 million. Accordingly, the incremental
expenses, as well as the impact of this net activity, have been eliminated.
The tax equivalent effect represents an increase to interest income recorded
to enable management to evaluate tax exempt investments on a basis consistent
with taxable investment securities. On a GAAP basis, interest income
associated with tax exempt investments is recorded based on amounts earned.
Accordingly, the managed Selected Financial Information above for the quarters
ended December 31, 2004 and September 30, 2004 assumes that tax exempt
securities earned income at rates as if the securities produced taxable income
with a corresponding increase in the provision for income taxes.
-15-
<Page>
(Preliminary)
U.S. CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
September 30,
---------------------------- Percentage
2005 2004 Inc/(Dec)
------------ ------------ ------------
Card billed business: $ 74 $ 63 18.5%
Total cards-in-force (millions): 36.9 34.4 7.1
Basic cards-in-force (millions): 27.2 25.3 7.4
Average quarterly basic cardmember spending (dollars) $ 2,765 $ 2,498 10.7%
U.S. Consumer Travel
Travel sales $ 0.5 $ 0.4 16.1%
Travel commissions and fees/sales 8.6% 8.5%
Worldwide Travelers Cheque and prepaid products:
Sales $ 5.8 $ 5.8 (0.5)%
Average outstanding $ 7.3 $ 7.1 2.8%
Average investments $ 7.9 $ 7.6 4.0%
Investment yield 5.1% 5.4%
Tax equivalent yield 7.8% 8.3%
Total segment assets $ 65.2 $ 54.3 20.0%
Segment capital $ 4.9 $ 4.1 18.5%
Return on segment capital (A) 40.0% 39.3%
Cardmember receivables:
Total receivables $ 16.8 $ 15.3 9.0%
90 days past due as a % of total 2.0% 2.2%
Net loss ratio as a % of charge volume 0.30% 0.32%
Cardmember lending - owned basis:
Total loans $ 22.4 $ 17.2 29.7%
30 days past due loans as a % of total 2.4% 2.4%
Average loans $ 20.9 $ 18.2 14.6%
Net write-off rate 3.6% 3.7%
Net finance charge revenue*/average loans 8.7% 7.5%
Cardmember lending - managed basis:
Total loans $ 43.0 $ 37.5 14.7%
30 days past due loans as a % of total 2.4% 2.5%
Average loans $ 42.3 $ 37.4 13.1%
Net write-off rate 3.8% 4.0%
Net finance charge revenue*/average loans 9.2% 8.6%
</Table>
(A) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
* Computed on an annualized basis.
-16-
<Page>
(Preliminary)
U.S. CARD SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------- -------------
Revenues:
Discount revenue, net card fees and other $ 2,224 $ 2,225 $ 2,051 $ 2,127 $ 1,982
Cardmember lending:
Finance charge revenue 614 587 522 455 445
Interest expense 156 140 120 96 104
------------- ------------- ------------- ------------- -------------
Net finance charge revenue 458 447 402 359 341
Securitization income, net 353 296 316 325 295
------------- ------------- ------------- ------------- -------------
Total 3,035 2,968 2,769 2,811 2,618
------------- ------------- ------------- ------------- -------------
Expenses:
Marketing, promotion, rewards and cardmember
services 1,003 974 837 976 854
Provision for losses 458 367 342 386 438
Human resources and other operating expenses 936 917 872 950 824
------------- ------------- ------------- ------------- -------------
Total 2,397 2,258 2,051 2,312 2,116
------------- ------------- ------------- ------------- -------------
Pretax segment income 638 710 718 499 502
Income tax provision 192 225 226 136 146
------------- ------------- ------------- ------------- -------------
Segment income $ 446 $ 485 $ 492 $ 363 $ 356
============= ============= ============= ============= =============
</Table>
-17-
<Page>
(Preliminary)
U.S. CARD SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------- -------------
Card billed business: $ 74 $ 73 $ 65 $ 70 $ 63
Total cards-in-force (millions): 36.9 36.1 35.5 35.0 34.4
Basic cards-in-force (millions): 27.2 26.5 26.1 25.7 25.3
Average quarterly basic cardmember spending
(dollars) $ 2,765 $ 2,769 $ 2,506 $ 2,734 $ 2,498
U.S. Consumer Travel
Travel sales $ 0.5 $ 0.5 $ 0.4 $ 0.3 $ 0.4
Travel commissions and fees/sales 8.6% 8.8% 9.0% 10.3% 8.5%
Worldwide Travelers Cheque and prepaid products:
Sales $ 5.8 $ 4.9 $ 4.2 $ 4.9 $ 5.8
Average outstanding $ 7.3 $ 7.1 $ 7.1 $ 7.0 $ 7.1
Average investments $ 7.9 $ 7.7 $ 7.8 $ 7.6 $ 7.6
Investment yield 5.1% 5.2% 5.2% 5.4% 5.4%
Tax equivalent yield 7.8% 8.0% 8.0% 8.3% 8.3%
Total segment assets $ 65.2 $ 60.9 $ 57.7 $ 58.3 $ 54.3
Segment capital $ 4.9 $ 4.5 $ 4.4 $ 4.5 $ 4.1
Return on segment capital (A) 40.0% 39.4% 39.5% 38.2% 39.3%
Cardmember receivables:
Total receivables $ 16.8 $ 16.8 $ 15.7 $ 17.4 $ 15.3
90 days past due as a % of total 2.0% 2.0% 2.3% 2.0% 2.2%
Net loss ratio as a % of charge volume 0.30% 0.29% 0.25% 0.29% 0.32%
Cardmember lending - owned basis:
Total loans $ 22.4 $ 20.9 $ 18.7 $ 19.6 $ 17.2
30 days past due loans as a % of total 2.4% 2.3% 2.6% 2.4% 2.4%
Average loans $ 20.9 $ 20.3 $ 19.2 $ 18.1 $ 18.2
Net write-off rate 3.6% 3.9% 3.9% 3.7% 3.7%
Net finance charge revenue*/average loans 8.7% 8.8% 8.4% 7.9% 7.5%
Cardmember lending - managed basis:
Total loans $ 43.0 $ 41.6 $ 39.2 $ 39.9 $ 37.5
30 days past due loans as a % of total 2.4% 2.2% 2.5% 2.5% 2.5%
Average loans $ 42.3 $ 40.3 $ 39.3 $ 38.3 $ 37.4
Net write-off rate 3.8% 4.0% 4.1% 4.0% 4.0%
Net finance charge revenue*/average loans 9.2% 8.9% 8.9% 8.8% 8.6%
</Table>
(A) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
* Computed on an annualized basis.
-18-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
September 30,
----------------------- Percentage
2005 2004 Inc/(Dec)
---------- ---------- ----------
Revenues:
Discount revenue, net card fees and other $ 2,067 $ 1,902 8.6%
Cardmember lending:
Finance charge revenue 259 222 16.3
Interest expense 88 65 34.9
---------- ----------
Net finance charge revenue 171 157 8.6
---------- ----------
Total 2,238 2,059 8.6
---------- ----------
Expenses:
Marketing, promotion, rewards
and cardmember services 310 285 8.6
Provision for losses and benefits 270 174 54.5
Human resources and other operating expenses 1,333 1,286 3.8
---------- ----------
Total 1,913 1,745 9.7
---------- ----------
Pretax segment income 325 314 3.2
Income tax provision 71 90 (22.7)
---------- ----------
Segment income $ 254 $ 224 13.7
========== ==========
</Table>
-19-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
SELECTED FINANCIAL INFORMATION
Quarters Ended September 30,
(Millions)
<Table>
<Caption>
Foreign Exchange
GAAP Basis Services Reclassification Managed Basis
---------------- Percentage ------------------------- ---------------- Percentage
2005 2004 Inc/(Dec) 2005 2004 2005 2004 Inc/(Dec)
------- ------- ---------- ------------- ---------- ------- ------- ----------
Revenues:
Discount revenue, net card fees and other $ 2,067 $ 1,902 8.6% $ 36 $ 47 $ 2,103 $ 1,949 7.9%
Cardmember lending:
Finance charge revenue 259 222 16.3
Interest expense 88 65 34.9
------- -------
Net finance charge revenue 171 157 8.6
------- ------- ------------- ---------- ------- -------
Total 2,238 2,059 8.6 36 47 2,274 2,106 7.9
------- ------- ------------- ---------- ------- -------
Expenses:
Marketing, promotion, rewards
and cardmember services 310 285 8.6
Provision for losses and benefits 270 174 54.5
Human resources and other operating
expenses 1,333 1,286 3.8 36 47 1,369 1,333 2.8
------- ------- ------------- ---------- ------- -------
Total 1,913 1,745 9.7 $ 36 $ 47 $ 1,949 $ 1,792 8.7
------- ------- ------------- ---------- ------- -------
Pretax segment income 325 314 3.2
Income tax provision 71 90 (22.7)
------- -------
Segment income $ 254 $ 224 13.7
======= =======
</Table>
The tables above reconcile the GAAP basis for certain income statement line
items to the managed basis information, where different. The foreign exchange
services reclassification reflects revenues earned related to the sale and
purchase of foreign currencies for customers as part of the foreign exchange
business. On a GAAP basis, these revenues are included with other foreign
exchange items that are reflected in other operating expenses. Management
views foreign exchange services as a revenue generating activity and makes
operating decisions based upon that information. Accordingly, the managed
Selected Financial Information above for the quarters ended September 30, 2005
and 2004 assumes that the amounts earned are included in other revenue with a
corresponding increase in other operating expenses.
-20-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
SELECTED FINANCIAL INFORMATION
Quarters Ended
(Millions)
<Table>
<Caption>
Foreign Exchange
GAAP Basis Services Reclassification
---------------------------------------- ----------------------------------------
June 30, March 31, December 31, June 30, March 31, December 31,
2005 2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------ ------------
Revenues:
Discount revenue, net card fees and other $ 2,134 $ 1,997 $ 2,103 $ 36 $ 31 $ 42
Cardmember lending:
Finance charge revenue 251 247 240
Interest expense 86 83 78
------------ ------------ ------------
Net finance charge revenue 165 164 162
------------ ------------ ------------ ------------ ------------ ------------
Total 2,299 2,161 2,265 36 31 42
------------ ------------ ------------ ------------ ------------ ------------
Expenses:
Marketing, promotion, rewards
and cardmember services 328 310 312
Provision for losses and benefits 239 228 199
Human resources and other operating expenses 1,469 1,365 1,518 36 31 42
------------ ------------ ------------ ------------ ------------ ------------
Total 2,036 1,903 2,029 $ 36 $ 31 $ 42
------------ ------------ ------------ ------------ ------------ ------------
Pretax segment income 263 258 236
Income tax provision 26 56 52
------------ ------------ ------------
Segment income $ 237 $ 202 $ 184
============ ============ ============
<Caption>
Managed Basis
----------------------------------------
June 30, March 31, December 31,
2005 2005 2004
------------ ------------ ------------
Revenues:
Discount revenue, net card fees and other $ 2,170 $ 2,028 $ 2,145
Cardmember lending:
Finance charge revenue
Interest expense
Net finance charge revenue
------------ ------------ ------------
Total 2,335 2,192 2,307
------------ ------------ ------------
Expenses:
Marketing, promotion, rewards
and cardmember services
Provision for losses and benefits
Human resources and other operating expenses 1,505 1,396 1,560
------------ ------------ ------------
Total $ 2,072 $ 1,934 $ 2,071
------------ ------------ ------------
Pretax segment income
Income tax provision
Segment income
</Table>
The tables above reconcile the GAAP basis for certain income statement line
items to the managed basis information, where different. The foreign exchange
services reclassification reflects revenues earned related to the sale and
purchase of foreign currencies for customers as part of the foreign exchange
business. On a GAAP basis, these revenues are included with other foreign
exchange items that are reflected in other operating expenses. Management
views foreign exchange services as a revenue generating activity and makes
operating decisions based upon that information. Accordingly, the managed
Selected Financial Information above for the quarters ended June 30, 2005,
March 31, 2005 and December 31, 2004 assumes that the amounts earned are
included in other revenue with a corresponding increase in other operating
expenses.
-21-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
September 30,
---------------------------- Percentage
2005 2004 Inc/(Dec)
------------ ------------ ------------
Card billed business: $ 42 $ 36 15.2%
Total cards-in-force (millions): 22.2 21.5 3.1
Basic cards-in-force (millions): 17.6 17.1 2.9
Average quarterly basic cardmember spending (dollars) $ 2,384 $ 2,107 13.1%
Global Corporate & International Consumer Travel
Travel sales $ 4.4 $ 4.2 3.0%
Travel commissions and fees/sales 8.6% 9.4%
International banking
Total loans $ 6.9 $ 6.4 8.3%
Private banking holdings $ 20.2 $ 17.1 18.3%
Total segment assets $ 51.0 $ 44.4 14.9%
Segment capital $ 3.8 $ 3.6 6.2%
Return on segment capital (A) 23.3% 23.1%
Cardmember receivables:
Total receivables $ 15.2 $ 13.3 14.2%
90 days past due as a % of total 1.2% 1.5%
Net loss ratio as a % of charge volume 0.24% 0.18%
Cardmember lending - owned basis:
Total loans $ 7.5 $ 6.5 15.4%
30 days past due loans as a % of total 2.8% 2.5%
Average loans $ 7.3 $ 6.5 13.5%
Net write-off rate 5.0% 5.1%
Net finance charge revenue*/average loans 9.3% 9.8%
</Table>
(A) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
* - Computed on an annualized basis.
-22-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------- -------------
Revenues:
Discount revenue, net card fees and other $ 2,067 $ 2,134 $ 1,997 $ 2,103 $ 1,902
Cardmember lending:
Finance charge revenue 259 251 247 240 222
Interest expense 88 86 83 78 65
------------- ------------- ------------- ------------- -------------
Net finance charge revenue 171 165 164 162 157
------------- ------------- ------------- ------------- -------------
Total 2,238 2,299 2,161 2,265 2,059
------------- ------------- ------------- ------------- -------------
Expenses:
Marketing, promotion, rewards
and cardmember services 310 328 310 312 285
Provision for losses and benefits 270 239 228 199 174
Human resources and other operating expenses 1,333 1,469 1,365 1,518 1,286
------------- ------------- ------------- ------------- -------------
Total 1,913 2,036 1,903 2,029 1,745
------------- ------------- ------------- ------------- -------------
Pretax segment income 325 263 258 236 314
Income tax provision 71 26 56 52 90
------------- ------------- ------------- ------------- -------------
Segment income $ 254 $ 237 $ 202 $ 184 $ 224
============= ============= ============= ============= =============
</Table>
-23-
<Page>
(Preliminary)
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------ -------------
Card billed business: $ 42 $ 42 $ 39 $ 41 $ 36
Total cards-in-force (millions): 22.2 22.0 21.7 21.6 21.5
Basic cards-in-force (millions): 17.6 17.5 17.2 17.2 17.1
Average quarterly basic cardmember spending (dollars) $ 2,384 $ 2,449 $ 2,275 $ 2,387 $ 2,107
Global Corporate & International Consumer Travel
Travel sales $ 4.4 $ 5.1 $ 4.6 $ 5.0 $ 4.2
Travel commissions and fees/sales 8.6% 8.8% 8.4% 9.1% 9.4%
International banking
Total loans $ 6.9 $ 7.0 $ 7.0 $ 6.9 $ 6.4
Private banking holdings $ 20.2 $ 19.8 $ 18.9 $ 18.6 $ 17.1
Total segment assets $ 51.0 $ 49.7 $ 48.5 $ 47.9 $ 44.4
Segment capital $ 3.8 $ 3.9 $ 3.8 $ 3.8 $ 3.6
Return on segment capital (A) 23.3% 22.9% 22.3% 22.0% 23.1%
Cardmember receivables:
Total receivables $ 15.2 $ 14.7 $ 14.4 $ 13.7 $ 13.3
90 days past due as a % of total 1.2% 1.3% 1.4% 1.5% 1.5%
Net loss ratio as a % of charge volume 0.24% 0.20% 0.22% 0.21% 0.18%
Cardmember lending - owned basis:
Total loans $ 7.5 $ 7.2 $ 7.1 $ 7.3 $ 6.5
30 days past due loans as a % of total 2.8% 2.7% 2.8% 2.3% 2.5%
Average loans $ 7.3 $ 7.1 $ 7.2 $ 7.0 $ 6.5
Net write-off rate 5.0% 4.8% 4.3% 4.5% 5.1%
Net finance charge revenue*/average loans 9.3% 9.3% 9.2% 9.4% 9.8%
</Table>
(A) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
* - Computed on an annualized basis.
-24-
<Page>
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
September 30,
---------------------------- Percentage
2005 2004 Inc/(Dec)
------------ ------------ ------------
Revenues:
Discount revenue, fees and other $ 716 $ 659 8.9%
------------ ------------
Expenses:
Marketing and promotion 167 108 54.5
Provision for losses 19 (43) #
Human resources and other operating expenses 316 322 (1.8)
------------ ------------
Total 502 387 29.8
------------ ------------
Pretax segment income 214 272 (20.8)
Income tax provision 73 99 (24.6)
------------ ------------
Segment income $ 141 $ 173 (18.6)
============ ============
</Table>
# - Denotes a variance of more than 100%.
-25-
<Page>
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
September 30,
---------------------------- Percentage
2005 2004 Inc/(Dec)
------------ ------------ ------------
Global Card billed business (A) $ 122 $ 103 18.4%
Global Network & Merchant Services:
Total segment assets $ 4.5 $ 3.5 32.4%
Segment capital $ 1.2 $ 1.0 20.8%
Return on segment capital (B) 48.7% 56.4%
Global Network Services:
Card billed business: $ 6 $ 4 35.2%
Total cards-in-force (millions): 9.9 7.4 36.1%
</Table>
(A) Global Card billed business includes activities related to proprietary
cards, cards issued under Network partnership agreements, cash advances on
proprietary cards and certain insurance fees charged on proprietary cards.
(B) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
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<Page>
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------- -------------
Revenues:
Discount revenue, fees and other $ 716 $ 718 $ 663 $ 703 $ 659
------------- ------------- ------------- ------------- -------------
Expenses:
Marketing and promotion 167 131 165 105 108
Provision for losses 19 17 17 14 (43)
Human resources and other operating expenses 316 326 311 373 322
------------- ------------- ------------- ------------- -------------
Total 502 474 493 492 387
------------- ------------- ------------- ------------- -------------
Pretax segment income 214 244 170 211 272
Income tax provision 73 90 60 77 99
------------- ------------- ------------- ------------- -------------
Segment income $ 141 $ 154 $ 110 $ 134 $ 173
============= ============= ============= ============= =============
</Table>
-27-
<Page>
(Preliminary)
GLOBAL NETWORK & MERCHANT SERVICES
SELECTED STATISTICAL INFORMATION
(Billions, except percentages and where indicated)
<Table>
<Caption>
Quarters Ended
-----------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30,
2005 2005 2005 2004 2004
------------- ------------- ------------- ------------- -------------
Global Card billed business (A) $ 122 $ 121 $ 109 $ 116 $ 103
Global Network & Merchant Services:
Total segment assets $ 4.5 $ 4.7 $ 4.6 $ 3.9 $ 3.5
Segment capital $ 1.2 $ 1.1 $ 1.1 $ 1.1 $ 1.0
Return on segment capital (B) 48.7% 53.5% 53.2% 55.8% 56.4%
Global Network Services:
Card billed business: $ 6 $ 6 $ 5 $ 5 $ 4
Total cards-in-force (millions): 9.9 9.2 8.9 8.8 7.4
</Table>
(A) Global Card billed business includes activities related to proprietary
cards, cards issued under Network partnership agreements, cash advances on
proprietary cards and certain insurance fees charged on proprietary cards.
(B) Computed on a trailing 12-month basis using equity capital allocated to
segments based upon specific business operational needs, risk measures and
regulatory capital requirements.
-28-