EXHIBIT 99.1
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS
[LOGO OF AMERICAN EXPRESS COMPANY]
CONTACTS: Media: Robert Glick Michael O'Neill
212-640-1041 212-640-5951
robert.a.glick@aexp.com mike.o'neill@aexp.com
Investors/Analysts: Malkah Buchweitz Ron Stovall
212-640-6657 212-640-5574
malkah.y.buchweitz@aexp.com ronald.stovall@aexp.com
- --------------------------------------------------------------------------------
AMERICAN EXPRESS REPORTS STRONG RESULTS
ON RECORD CARDMEMBER SPENDING.
MORE THAN 2 MILLION CARDS-IN-FORCE ADDED IN THE QUARTER.
(Millions, except per share amounts)
Quarters Ended Percentage Six Months Ended Percentage
June 30, Inc/(Dec) June 30, Inc/(Dec)
------------------ ---------- ------------------- -----------
2007 2006 2007 2006
---- ---- ---- ----
Revenues net of interest expense $ 7,130 $ 6,542 9% $ 13,798 $ 12,595 10%
Income From Continuing Operations $ 1,062 $ 972 9% $ 2,127 $ 1,848 15%
Loss From Discontinued Operations $ (5) $ (27) (81%) $ (13) $ (30) (57%)
Net Income $ 1,057 $ 945 12% $ 2,114 $ 1,818 16%
Earnings Per Common Share - Basic:
Income From Continuing Operations $ 0.90 $ 0.80 13% $ 1.80 $ 1.51 19%
Loss From Discontinued Operations $ - $ (0.02) # $ (0.01) $ (0.02) (50%)
Net Income $ 0.90 $ 0.78 15% $ 1.79 $ 1.49 20%
Earnings Per Common Share - Diluted:
Income From Continuing Operations $ 0.88 $ 0.78 13% $ 1.76 $ 1.48 19%
Loss From Discontinued Operations $ - $ (0.02) # $ (0.01) $ (0.03) (67%)
Net Income $ 0.88 $ 0.76 16% $ 1.75 $ 1.45 21%
Average Common Shares Outstanding
Basic 1,179 1,217 (3%) 1,183 1,224 (3%)
Diluted 1,203 1,242 (3%) 1,207 1,250 (3%)
Return on Average Equity* 37.5% 29.8% 37.5% 29.8%
- ------------------------------------------------------------------------------------------------------------------------------------
* Computed on a trailing 12-month basis using net income over average total
shareholders' equity (including discontinued operations) as included in
the Consolidated Financial Statements prepared in accordance with U.S.
generally accepted accounting principles (GAAP).
# Denotes a variance of more than 100%.
New York - July 23, 2007 - AMERICAN EXPRESS COMPANY (NYSE: AXP) today
reported second quarter income from continuing operations of $1.1 billion, up
9 percent from $972 million a year ago. Diluted earnings per share from
continuing operations were $0.88, up 13 percent from $0.78.
Net income for the quarter also totaled $1.1 billion, up 12 percent
from $945 million a year ago, and $0.88 per share, up 16 percent from $0.76.
Consolidated revenues net of interest expense rose 9 percent to $7.1
billion, up from $6.5 billion a year ago.
Consolidated expenses totaled $4.7 billion, up 7 percent from $4.4
billion a year ago.
The Company's return on equity (ROE) was 37.5 percent.
"Continued growth in Cardmember spending and excellent credit quality
generated strong earnings for the quarter," said Kenneth I. Chenault, chairman
and chief executive.
"Spending on American Express cards rose 15 percent and we added more
than 2 million cards during the last three months.
"As expected, interest costs increased and provisions rebounded from
the exceptionally low levels of last year. We dealt with this short-term
challenge by controlling discretionary expenses and carefully targeting our
marketing investments.
"The result was strong performance in the second quarter and excellent
momentum as we head into the latter half of 2007.
"Given that momentum, we will be looking to capitalize on
opportunities to further strengthen our lead in the payments industry at a time
when some key competitors may be cutting back or dealing with weakness in parts
of their business."
The second quarter results included a $65 million tax benefit from the
IRS related to the treatment of certain prior years' card fee income. In light
of this benefit, the Company increased its investment in marketing and
promotion programs this quarter by $68 million ($42 million after-tax).
-2-
Significant items in the year-ago quarter included:
o A $144 million ($131 million after-tax) gain related to the sale of
the Company's card and merchant-related operations in Brazil to
Banco Bradesco S.A.; and
o A $62 million ($40 million after-tax) charge associated with
certain adjustments made to the Membership Rewards reserve model
outside the U.S.
Also included in the quarters ended June 30, 2007 and 2006, were $8
million ($5 million after-tax) and $53 million ($34 million after-tax) of
reengineering costs, respectively.
DISCONTINUED OPERATIONS
Discontinued operations (businesses sold in previous years) included
a loss of $5 million this quarter compared to a $27 million loss a year ago,
which primarily reflected losses related to last year's sale of the Company's
international banking operations in Brazil.
SEGMENT RESULTS
U.S. CARD SERVICES reported second quarter net income of $580 million,
down 2 percent from $594 million a year ago.
Revenues net of interest expense for the second quarter increased 12
percent to $3.6 billion, reflecting higher spending and borrowing by consumers
and small businesses, which were partially offset by higher interest expense.
Securitization income, net decreased 11 percent primarily due to increased
write offs.
Total expenses increased 11 percent. Marketing, promotion, rewards
and cardmember services expenses increased 16 percent from the year-ago period
primarily due to higher rewards costs and the previously mentioned increase in
marketing and promotion programs. Human resources and other operating expenses
increased 4 percent.
Provisions for losses increased 85 percent, reflecting higher loan
volumes and an increase in write-off and delinquency rates from the unusually
low levels of a year ago.
-3-
Results for the second quarter included $56 million of the previously
mentioned tax benefit.
INTERNATIONAL CARD & GLOBAL COMMERCIAL SERVICES reported second
quarter net income of $277 million, up 22 percent from $227 million a year
ago.
Revenues net of interest expense increased 4 percent to $2.2 billion,
reflecting higher spending by corporate and international consumer
Cardmembers, as well as higher loan balances. These increases were suppressed
by last year's sale of card-related operations in Brazil, Malaysia, and
Indonesia.
Total expenses increased 5 percent. Human resources and other
operating expenses increased 10 percent. Marketing, promotion, rewards and
cardmember services expenses decreased 8 percent from the year-ago period,
which included the previously mentioned $62 million charge for certain
adjustments to the Membership Rewards reserve model outside the U.S. Operating
expenses for the year-ago period were reduced by the gain on the sale of the
card and merchant-related operations in Brazil.
Provisions for losses decreased 7 percent from year-ago levels, which
had reflected industry-wide credit issues in Taiwan.
Results for the second quarter included certain tax benefits, $9
million of which was related to the previously mentioned item.
GLOBAL NETWORK & MERCHANT SERVICES reported second quarter net income
of $266 million, up 33 percent from $200 million a year ago.
Revenues net of interest expense for the second quarter increased 15
percent to $966 million. The increase reflects continued strong growth in
merchant-related revenue primarily resulting from higher company-wide billed
business. The increase also reflects higher network partner-related fees.
Spending on Global Network Services cards increased 62 percent from
year-ago levels. These increases reflect, in part, the completion in 2006 of
independent operator agreements in Brazil, Malaysia, and Indonesia.
Cards-in-force issued by bank partners increased 34 percent.
-4-
Total expenses increased 6 percent, reflecting higher human resources
costs and expanded marketing and promotion activities.
CORPORATE & OTHER reported second quarter net expenses of $61
million, compared with net expenses of $49 million a year ago.
***
American Express Company (www.americanexpress.com) is a leading
global payments, network and travel company founded in 1850.
Note: The 2007 Second Quarter Earnings Supplement, as well as
Executive Vice President and acting CFO Dan Henry's presentation from the
investor conference call referred to below, will be available today on the
American Express web site at http://ir.americanexpress.com. An investor
conference call to discuss second quarter earnings results, operating
performance and other topics that may be raised during the discussion will be
held at 5:00 p.m. (EST) today. Live audio of the conference call will be
accessible to the general public on the American Express web site at
http://ir.americanexpress.com. A replay of the conference call also will be
available today at the same web site address.
***
THIS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO RISKS
AND UNCERTAINTIES. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "OPTIMISTIC,"
"INTEND," "PLAN," "AIM," "WILL," "MAY," "SHOULD," "COULD," "WOULD," "LIKELY,"
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
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 MEET ITS ROE TARGET RANGE OF 33 TO 36
PERCENT ON AVERAGE AND OVER TIME, WHICH WILL DEPEND IN PART ON FACTORS SUCH AS
THE COMPANY'S ABILITY TO GENERATE SUFFICIENT REVENUE GROWTH AND ACHIEVE
SUFFICIENT MARGINS, FLUCTUATIONS IN THE CAPITAL REQUIRED TO SUPPORT ITS
BUSINESSES, THE MIX OF THE COMPANY'S FINANCINGS, AND FLUCTUATIONS IN THE LEVEL
OF THE COMPANY'S SHAREHOLDERS' EQUITY DUE TO SHARE REPURCHASES, DIVIDENDS,
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME AND ACCOUNTING CHANGES,
AMONG OTHER THINGS; THE COMPANY'S ABILITY TO GROW ITS BUSINESS AND MEET OR
EXCEED ITS RETURN ON SHAREHOLDERS' EQUITY TARGET BY REINVESTING APPROXIMATELY
35 PERCENT OF ANNUALLY-GENERATED CAPITAL, AND RETURNING APPROXIMATELY 65
PERCENT OF SUCH CAPITAL TO SHAREHOLDERS, OVER TIME, WHICH WILL DEPEND ON THE
COMPANY'S ABILITY TO MANAGE ITS CAPITAL NEEDS AND THE EFFECT OF BUSINESS MIX,
ACQUISITIONS AND RATING AGENCY REQUIREMENTS; CONSUMER AND BUSINESS SPENDING ON
THE COMPANY'S CREDIT AND CHARGE CARD PRODUCTS AND TRAVELERS CHEQUES AND OTHER
PREPAID PRODUCTS AND GROWTH IN CARD LENDING BALANCES, WHICH DEPEND IN PART ON
THE ABILITY TO ISSUE NEW AND ENHANCED CARD AND PREPAID PRODUCTS, SERVICES AND
REWARDS PROGRAMS, AND INCREASE REVENUES FROM SUCH PRODUCTS, ATTRACT NEW
CARDMEMBERS, REDUCE CARDMEMBER ATTRITION, CAPTURE A GREATER SHARE OF EXISTING
CARDMEMBERS' SPENDING, AND SUSTAIN PREMIUM DISCOUNT RATES ON ITS CARD PRODUCTS
IN LIGHT OF REGULATORY AND MARKET PRESSURES, INCREASE MERCHANT COVERAGE,
-5-
RETAIN CARDMEMBERS AFTER LOW INTRODUCTORY LENDING RATES HAVE EXPIRED, AND
EXPAND THE GLOBAL NETWORK SERVICES BUSINESS; THE SUCCESS OF THE GLOBAL NETWORK
SERVICES BUSINESS IN PARTNERING WITH BANKS IN THE UNITED STATES, WHICH WILL
DEPEND IN PART ON THE EXTENT TO WHICH SUCH BUSINESS FURTHER ENHANCES THE
COMPANY'S BRAND, ALLOWS THE COMPANY TO LEVERAGE ITS SIGNIFICANT PROCESSING
SCALE, EXPANDS MERCHANT COVERAGE OF THE NETWORK, PROVIDES GLOBAL NETWORK
SERVICES' BANK PARTNERS IN THE UNITED STATES THE BENEFITS OF GREATER
CARDMEMBER LOYALTY AND HIGHER SPEND PER CUSTOMER, AND MERCHANT BENEFITS SUCH
AS GREATER TRANSACTION VOLUME AND ADDITIONAL HIGHER SPENDING CUSTOMERS;
FLUCTUATIONS IN INTEREST RATES, WHICH IMPACT THE COMPANY'S BORROWING COSTS AND
RETURN ON LENDING PRODUCTS; THE CONTINUATION OF FAVORABLE TRENDS, INCLUDING
INCREASED TRAVEL AND ENTERTAINMENT SPENDING, AND THE OVERALL LEVEL OF CONSUMER
CONFIDENCE; THE COSTS AND INTEGRATION OF ACQUISITIONS; THE SUCCESS, TIMELINESS
AND FINANCIAL IMPACT (INCLUDING COSTS, COST SAVINGS AND OTHER BENEFITS
INCLUDING INCREASED REVENUES), AND BENEFICIAL EFFECT ON THE COMPANY'S
OPERATING EXPENSE TO REVENUE RATIO, BOTH IN THE SHORT-TERM AND OVER TIME, OF
REENGINEERING INITIATIVES BEING IMPLEMENTED OR CONSIDERED BY THE COMPANY,
INCLUDING COST MANAGEMENT, STRUCTURAL AND STRATEGIC MEASURES SUCH AS VENDOR,
PROCESS, FACILITIES AND OPERATIONS CONSOLIDATION, OUTSOURCING (INCLUDING,
AMONG OTHERS, TECHNOLOGIES OPERATIONS), RELOCATING CERTAIN FUNCTIONS TO
LOWER-COST OVERSEAS LOCATIONS, MOVING INTERNAL AND EXTERNAL FUNCTIONS TO THE
INTERNET TO SAVE COSTS, AND PLANNED STAFF REDUCTIONS RELATING TO CERTAIN OF
SUCH REENGINEERING ACTIONS; THE COMPANY'S ABILITY TO REINVEST THE BENEFITS
ARISING FROM SUCH REENGINEERING ACTIONS IN ITS BUSINESSES; THE ABILITY TO
CONTROL AND MANAGE OPERATING, INFRASTRUCTURE, ADVERTISING AND PROMOTION
EXPENSES AS BUSINESS EXPANDS OR CHANGES, INCLUDING THE ABILITY TO ACCURATELY
ESTIMATE THE PROVISION FOR THE COST OF THE MEMBERSHIP REWARDS PROGRAM; THE
COMPANY'S ABILITY TO MANAGE CREDIT RISK RELATED TO CONSUMER DEBT, BUSINESS
LOANS, MERCHANT BANKRUPTCIES AND OTHER CREDIT TRENDS AND THE RATE OF
BANKRUPTCIES, WHICH CAN AFFECT SPENDING ON CARD PRODUCTS, DEBT PAYMENTS BY
INDIVIDUAL AND CORPORATE CUSTOMERS AND BUSINESSES THAT ACCEPT THE COMPANY'S
CARD PRODUCTS AND RETURNS ON THE COMPANY'S INVESTMENT PORTFOLIOS;
BANKRUPTCIES, RESTRUCTURINGS, CONSOLIDATIONS OR SIMILAR EVENTS AFFECTING THE
AIRLINE OR ANY OTHER INDUSTRY REPRESENTING A SIGNIFICANT PORTION OF THE
COMPANY'S BILLED BUSINESS, INCLUDING ANY POTENTIAL NEGATIVE EFFECT ON
PARTICULAR CARD PRODUCTS AND SERVICES AND BILLED BUSINESS GENERALLY THAT COULD
RESULT FROM THE ACTUAL OR PERCEIVED WEAKNESS OF KEY BUSINESS PARTNERS IN SUCH
INDUSTRIES; THE TRIGGERING OF OBLIGATIONS TO MAKE PAYMENTS TO CERTAIN CO-BRAND
PARTNERS, MERCHANTS, VENDORS AND CUSTOMERS UNDER CONTRACTUAL ARRANGEMENTS WITH
SUCH PARTIES UNDER CERTAIN CIRCUMSTANCES; A DOWNTURN IN THE COMPANY'S
BUSINESSES AND/OR NEGATIVE CHANGES IN THE COMPANY'S AND ITS SUBSIDIARIES'
CREDIT RATINGS, WHICH COULD RESULT IN CONTINGENT PAYMENTS UNDER CONTRACTS,
DECREASED LIQUIDITY AND HIGHER BORROWING COSTS; FLUCTUATIONS IN FOREIGN
CURRENCY EXCHANGE RATES; ACCURACY OF ESTIMATES FOR THE FAIR VALUE OF THE
ASSETS IN THE COMPANY'S INVESTMENT PORTFOLIO AND, IN PARTICULAR, THOSE
INVESTMENTS THAT ARE NOT READILY MARKETABLE, INCLUDING THE VALUATION OF THE
INTEREST-ONLY STRIP RELATING TO THE COMPANY'S LENDING SECURITIZATIONS; THE
COMPANY'S ABILITY TO INVEST IN TECHNOLOGY ADVANCES ACROSS ALL AREAS OF ITS
BUSINESS TO STAY ON THE LEADING EDGE OF TECHNOLOGIES APPLICABLE TO THE
PAYMENTS INDUSTRY; THE COMPANY'S ABILITY TO PROTECT ITS INTELLECTUAL PROPERTY
RIGHTS (IP) AND AVOID INFRINGING THE IP OF OTHER PARTIES; THE POTENTIAL
NEGATIVE EFFECT ON THE COMPANY'S BUSINESSES AND INFRASTRUCTURE, INCLUDING
INFORMATION TECHNOLOGY, OF TERRORIST ATTACKS, NATURAL DISASTERS OR OTHER
CATASTROPHIC EVENTS IN THE FUTURE; POLITICAL OR ECONOMIC INSTABILITY IN
CERTAIN REGIONS OR COUNTRIES, WHICH COULD AFFECT LENDING AND OTHER COMMERCIAL
ACTIVITIES, AMONG OTHER BUSINESSES, OR RESTRICTIONS ON CONVERTIBILITY OF
CERTAIN CURRENCIES; CHANGES IN LAWS OR GOVERNMENT REGULATIONS; OUTCOMES AND
COSTS ASSOCIATED WITH LITIGATION AND COMPLIANCE AND REGULATORY MATTERS; AND
COMPETITIVE PRESSURES IN ALL OF THE COMPANY'S MAJOR BUSINESSES. A FURTHER
DESCRIPTION OF THESE AND OTHER RISKS AND UNCERTAINTIES CAN BE FOUND IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2006, AND
ITS OTHER REPORTS FILED WITH THE SEC.
-6-
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. Amounts herein reflect certain adjustments as noted in
the Company's Form 8-K dated March 30, 2007 filed with the U.S. Securities and
Exchange Commission (SEC). See also pages 2 - 3 of the 2007 Second Quarter
Earnings Supplement for a description of such adjustments. In addition,
amounts herein reflect certain modifications made to the Company's reportable
operating segment disclosures as noted in the Company's Form 8-K dated April
19, 2007 filed with the SEC.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended Six Months Ended
June 30, June 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
Revenues
Discount revenue $ 3,670 $ 3,292 11% $ 7,025 $ 6,261 12%
Net card fees 500 533 (6) 984 1,053 (7)
Travel commissions and fees 491 483 2 928 901 3
Other commissions and fees 681 642 6 1,303 1,281 2
Securitization income, net 332 372 (11) 789 758 4
Other 453 415 9 868 811 7
-------- -------- -------- --------
Total 6,127 5,737 7 11,897 11,065 8
-------- -------- -------- --------
Interest income:
Cardmember lending finance revenue 1,514 1,100 38 2,882 2,047 41
International banking 282 252 12 546 509 7
Other 276 196 41 505 384 32
-------- -------- -------- --------
Total 2,072 1,548 34 3,933 2,940 34
-------- -------- -------- --------
Total revenues 8,199 7,285 13 15,830 14,005 13
-------- -------- -------- --------
Interest expense:
Cardmember lending 431 277 56 816 523 56
International banking 135 93 45 261 181 44
Charge card and other 503 373 35 955 706 35
-------- -------- -------- --------
Total 1,069 743 44 2,032 1,410 44
-------- -------- -------- --------
Revenues net of interest expense 7,130 6,542 9 13,798 12,595 10
-------- -------- -------- --------
Expenses
Marketing, promotion, rewards and cardmember services 1,828 1,671 9 3,292 3,193 3
Human resources 1,331 1,276 4 2,611 2,516 4
Professional services 698 658 6 1,327 1,219 9
Occupancy and equipment 379 365 4 749 711 5
Communications 116 113 3 232 226 3
Other 345 287 20 694 565 23
-------- -------- -------- --------
Total 4,697 4,370 7 8,905 8,430 6
-------- -------- -------- --------
Provisions for losses and benefits:
Charge card 233 192 21 442 401 10
Cardmember lending 638 406 57 1,212 727 67
International banking and other (including
investment certificates) 122 132 (8) 205 270 (24)
-------- -------- -------- --------
Total 993 730 36 1,859 1,398 33
-------- -------- -------- --------
Pretax income from continuing operations 1,440 1,442 - 3,034 2,767 10
Income tax provision 378 470 (20) 907 919 (1)
-------- -------- -------- --------
Income from continuing operations 1,062 972 9 2,127 1,848 15
Loss from discontinued operations, net of tax (5) (27) (81) (13) (30) (57)
-------- -------- -------- --------
Net income $ 1,057 $ 945 12 $ 2,114 $ 1,818 16
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
-7-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
<Table>
<Caption>
June 30, December 31,
2007 2006
-------- ------------
Assets
Cash and cash equivalents $ 7 $ 8
Accounts receivable 40 39
Investments 21 21
Loans 55 50
Other assets 11 10
-------- ------------
Total assets $ 134 $ 128
======== ============
Liabilities and Shareholders' Equity
Short-term debt $ 16 $ 15
Long-term debt 50 43
Other liabilities 57 59
-------- ------------
Total liabilities 123 117
-------- ------------
Shareholders' equity 11 11
-------- ------------
Total liabilities and shareholders' equity $ 134 $ 128
======== ============
</Table>
-8-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended Six Months Ended
June 30, June 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $ 3,560 $ 3,170 12% $ 6,924 $ 6,068 14%
International Card & Global Commercial Services 2,159 2,083 4 4,155 4,017 3
Global Network & Merchant Services 966 839 15 1,843 1,587 16
-------- -------- -------- --------
6,685 6,092 10 12,922 11,672 11
Corporate & Other, including adjustments and
eliminations 445 450 (1) 876 923 (5)
-------- -------- -------- --------
CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $ 7,130 $ 6,542 9 $ 13,798 $ 12,595 10
======== ======== ======== ========
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 827 $ 939 (12) $ 1,858 $ 1,761 6
International Card & Global Commercial Services 308 289 7 603 471 28
Global Network & Merchant Services 418 315 33 792 577 37
-------- -------- -------- --------
1,553 1,543 1 3,253 2,809 16
Corporate & Other (113) (101) 12 (219) (42) #
-------- -------- -------- --------
PRETAX INCOME FROM CONTINUING OPERATIONS $ 1,440 $ 1,442 - $ 3,034 $ 2,767 10
======== ======== ======== ========
NET INCOME (LOSS)
U.S. Card Services $ 580 $ 594 (2) $ 1,224 $ 1,121 9
International Card & Global Commercial Services 277 227 22 512 370 38
Global Network & Merchant Services 266 200 33 502 366 37
-------- -------- -------- --------
1,123 1,021 10 2,238 1,857 21
Corporate & Other (61) (49) 24 (111) (9) #
-------- -------- -------- --------
Income from continuing operations 1,062 972 9 2,127 1,848 15
Loss from discontinued operations, net of tax (5) (27) (81) (13) (30) (57)
-------- -------- -------- --------
NET INCOME $ 1,057 $ 945 12 $ 2,114 $ 1,818 16
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
-9-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
<Table>
<Caption>
Quarters Ended Six Months Ended
June 30, June 30,
-------------------- Percentage --------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.90 $ 0.80 13% $ 1.80 $ 1.51 19%
Loss from discontinued operations - (0.02) # (0.01) (0.02) (50)
-------- -------- -------- --------
Net income $ 0.90 $ 0.78 15% $ 1.79 $ 1.49 20%
======== ======== ======== ========
Average common shares outstanding (millions) 1,179 1,217 (3)% 1,183 1,224 (3)%
======== ======== ======== ========
DILUTED
Income from continuing operations $ 0.88 $ 0.78 13% $ 1.76 $ 1.48 19%
Loss from discontinued operations - (0.02) # (0.01) (0.03) (67)
======== ======== ======== ========
Net income $ 0.88 $ 0.76 16% $ 1.75 $ 1.45 21%
======== ======== ======== ========
Average common shares outstanding (millions) 1,203 1,242 (3)% 1,207 1,250 (3)%
======== ======== ======== ========
Cash dividends declared per common share $ 0.15 $ 0.15 -% $ 0.30 $ 0.27 11%
======== ======== ======== ========
</Table>
SELECTED STATISTICAL INFORMATION
<Table>
<Caption>
Quarters Ended Six Months Ended
June 30, June 30,
-------------------- Percentage --------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
Return on average equity (A) 37.5% 29.8% 37.5% 29.8%
Common shares outstanding (millions) 1,182 1,216 (3)% 1,182 1,216 (3)%
Book value per common share $ 9.00 $ 8.62 4% $ 9.00 $ 8.62 4%
Shareholders' equity (billions) $ 10.6 $ 10.5 1% $ 10.6 $ 10.5 1%
</Table>
# - Denotes a variance of more than 100%.
(A) Computed on a trailing 12-month basis using net income over average total
shareholders' equity (including discontinued operations) as included in the
Consolidated Financial Statements prepared in accordance with GAAP.
-10-