EXHIBIT 99.1
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RE
[LOGO OF AMERICAN EXPRESS COMPANY]
CONTACTS: Media: Joanna Lambert Michael O'Neill
212-640-9668 212-640-5951
joanna.g.lambert@aexp.com mike.o'neill@aexp.com
Investors/Analysts: Alex Hopwood Ron Stovall
212-640-5495 212-640-5574
alex.w.hopwood@aexp.com ronald.stovall@aexp.com
FOR IMMEDIATE RELEASE
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN EXPRESS REPORTS STRONG RESULTS
ON HIGHER REVENUES AND RECORD CARDMEMBER SPENDING.
2.5 MILLION CARDS-IN-FORCE ADDED IN THE QUARTER.
(Millions, except per share amounts)
Quarters Ended Percentage Nine Months Ended Percentage
September 30, Inc/(Dec) September 30, Inc/(Dec)
------------- --------- ------------- ---------
2007 2006 2007 2006
---- ---- ---- ----
Revenues net of interest expense $ 6,945 $ 6,265 11% $ 20,367 $ 18,479 10%
Income From Continuing Operations $ 1,074 $ 934 15% $ 3,209 $ 2,716 18%
(Loss) Income From Discontinued Operations $ (7) $ 33 # $ (28) $ 69 #
Net Income $ 1,067 $ 967 10% $ 3,181 $ 2,785 14%
Earnings Per Common Share - Basic:
Income From Continuing Operations $ 0.92 $ 0.78 18% $ 2.72 $ 2.23 22%
(Loss) Income From Discontinued Operations $ (0.01) $ 0.02 # $ (0.02) $ 0.06 #
Net Income $ 0.91 $ 0.80 14% $ 2.70 $ 2.29 18%
Earnings Per Common Share - Diluted:
Income From Continuing Operations $ 0.90 $ 0.76 18% $ 2.67 $ 2.19 22%
(Loss) Income From Discontinued Operations - $ 0.03 # $ (0.02) $ 0.05 #
Net Income $ 0.90 $ 0.79 14% $ 2.65 $ 2.24 18%
Average Common Shares Outstanding
Basic 1,170 1,202 (3%) 1,179 1,217 (3%)
Diluted 1,192 1,227 (3%) 1,202 1,242 (3%)
Return on Average Equity* 38.2% 33.6% 38.2% 33.6%
- ------------------------------------------------------------------------------------------------------------------------------------
* 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%.
-1-
New York - October 22, 2007 - AMERICAN EXPRESS COMPANY (NYSE: AXP) today
reported third quarter income from continuing operations of $1.1 billion, up
15 percent from $934 million a year ago. Diluted earnings per share were
$0.90, up 18 percent from $0.76.
As previously disclosed, the Company entered into an agreement to sell
its international banking subsidiary, American Express Bank Ltd.(AEB). Net
income, which includes AEB within discontinued operations, totaled $1.1
billion for the quarter, up 10 percent from $967 million a year ago. On a per
share basis, net income was $0.90, up 14 percent from $0.79.
Consolidated revenues net of interest expense rose 11 percent to $6.9
billion, up from $6.3 billion a year ago.
Consolidated expenses totaled $4.5 billion, up 9 percent from $4.2
billion a year ago.
The Company's return on equity (ROE) was 38.2 percent.
"Our strong earnings growth this quarter reflected a 16 percent rise in
combined spending by consumers, small businesses and corporate Cardmembers,"
said Kenneth I. Chenault, chairman and chief executive.
"Investments that expanded our service, rewards and loyalty programs
helped to add 2.5 million cards during the quarter while also generating
excellent spending increases from existing Cardmembers.
"While we continue to be cautious about the overall economy, our ongoing
focus on the premium sector and careful management of loan and investment
portfolios allowed us to maintain strong credit quality that compares
favorably to the industry.
"We continued to build on the momentum of recent periods, generating
excellent revenue growth and ending the quarter in a strong competitive
position."
-2-
The third quarter results included a $75 million tax benefit primarily
related to the resolution of prior years' tax items. Also included in results
was $81 million ($41 million after-tax) of previously disclosed charges
primarily related to the contracted sale of American Express International
Deposit Company (AEIDC), a wholly-owned subsidiary of the Company which issues
investment certificates to AEB's customers.
The year-ago quarter results included a $33 million ($24 million
after-tax) gain related to the sale of the Company's card operations in
Malaysia and Indonesia.
DISCONTINUED OPERATIONS
Discontinued operations included a loss of $7 million primarily
reflecting the results of AEB. In the year-ago period, discontinued operations
included income of $33 million.
SEGMENT RESULTS
As previously announced, the Company reorganized its businesses into two
customer-focused groups - the Global Consumer Group and the Global
Business-to-Business Group. The Company will continue to report the U.S. Card
Services segment and Global Network & Merchant Services segments consistent
with previous reporting. The previously reported International Card & Global
Commercial Services segment will now be reported as two separate segments: the
International Card Services segment and the Global Commercial Services
segment. The Company's U.S. Card Services and International Card Services
segments are aligned with the Global Consumer Group and the Company's Global
Network & Merchant Services and Global Commercial Services segments are
aligned with the Global Business-to-Business Group.
In addition, beginning with the third quarter of 2007, and for all prior
periods, AEB results have been removed from the Corporate & Other segment and
reported within the discontinued operations line on the Company's Consolidated
Statements of Income. In addition to the agreement to sell AEB to Standard
Chartered PLC, AEIDC was also contracted to be sold to Standard Chartered 18
months after the close of the AEB sale through a put/call agreement. AEIDC
will continue to be reflected in continuing operations within the Corporate &
Other segment until one year before the anticipated close of this portion of
the transaction. Based on the assumed completion of the AEB sale in the first
quarter of 2008, we expect to begin reporting AEIDC's results in the
discontinued operations line in the third quarter of 2008. The following
segment discussion, as well as the selected financial data for all periods
presented, reflect the changes noted above.
-3-
U.S. CARD SERVICES reported third quarter net income of $592 million, up
6 percent from $558 million a year ago.
Revenues net of interest expense for the third 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.
Total expenses increased 6 percent. Marketing, promotion, rewards and
cardmember services expenses increased 7 percent from the year-ago period
primarily due to higher rewards costs partially offset by a targeted decrease
in marketing and promotion expenses. Human resources and other operating
expenses increased 5 percent.
Strong growth in loans outstanding, along with write-off and delinquency
rates returning to levels more consistent with historical rates from the
unusually low levels of a year ago, resulted in a 44 percent increase in
provisions for losses. Results for the third quarter included $18 million of
the previously mentioned tax benefit.
INTERNATIONAL CARD SERVICES reported third quarter net income of $140
million, up 32 percent from $106 million a year ago.
Revenues net of interest expense increased 17 percent to $1.1 billion,
reflecting higher Cardmember spending, as well as higher loan balances.
Total expenses increased 27 percent. Human resources and other operating
expenses increased 17 percent from a year ago when these expenses included a
gain related to the sale of the Company's card operations in Malaysia and
Indonesia. Marketing, promotion, rewards and cardmember services expenses
increased 43 percent due to an increase in rewards and higher marketing
promotion costs.
Provisions for losses were unchanged from a year ago as growth in the
loan portfolio was offset by a lower level of write off and delinquency rates.
Results for the third quarter included $17 million of the previously
mentioned tax benefit and certain consolidated tax benefits arising from this
segment's ongoing non-U.S. funding activities.
GLOBAL COMMERCIAL SERVICES reported third quarter net income of $135
million, up 29 percent from $105 million a year ago. Revenues net of interest
expense increased 12 percent to $1.1 billion, reflecting higher spending by
corporate Cardmembers.
Total expenses increased 10 percent. Human resources and other operating
expenses increased 10 percent reflecting continued growth in the business.
Marketing, promotion, rewards and cardmember services expenses increased 8
percent.
Provisions for losses increased 24 percent from year-ago levels,
primarily reflecting higher volumes.
Results for the third quarter included $9 million of the previously
mentioned tax benefit.
-4-
GLOBAL NETWORK & MERCHANT SERVICES reported third quarter net income of
$266 million, up 25 percent from $212 million a year ago.
Revenues net of interest expense for the third quarter increased 17
percent to $980 million. The increase reflected continued strong growth in
merchant-related revenue primarily from higher company-wide billed business.
Spending on Global Network Services cards increased 45 percent from
year-ago levels reflecting continued growth in spending on cards issued by
bank partners. Cards-in-force issued by bank partners increased 32 percent.
Total expenses increased 12 percent, reflecting higher human resources
costs and expanded marketing and promotion activities.
Results for the third quarter included $22 million of the previously
mentioned tax benefit.
CORPORATE AND OTHER reported third quarter net expenses of $59 million,
compared with net expenses of $47 million a year ago. The increase was
primarily due to the previously mentioned charges at AEIDC.
***
-5-
American Express Company (www.americanexpress.com) is a leading global
payments, network and travel company founded in 1850.
Note: The 2007 Third Quarter Earnings Supplement will be available today
on the American Express web site at HTTP://IR.AMERICANEXPRESS.COM. An investor
conference call will be held with Chief Financial Officer, Daniel T. Henry, at
5:00 p.m. (EDT) today to discuss third quarter earnings results, operating
performance and other topics that may be raised during the discussion. Live
audio of the investor 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 will be available later today at the same web site
address.
***
THIS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO
RISKS AND UNCERTAINTIES. THE 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 ACTUAL AMOUNT SPENT BY THE COMPANY IN THE FOURTH
QUARTER OF 2007 ON MARKETING, PROMOTION, REWARDS AND CARDMEMBER SERVICES BASED
ON MANAGEMENT'S ASSESSMENT OF COMPETITIVE OPPORTUNITIES AND OTHER FACTORS
AFFECTING ITS JUDGMENT; 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,
-6-
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,
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 (INCLUDING FLUCTUATIONS IN BENCHMARKS, SUCH AS
LIBOR AND OTHER BENCHMARK RATES, USED TO PRICE LOANS AND OTHER INDEBTEDNESS,
AS WELL AS CREDIT SPREADS IN THE PRICING OF LOANS AND OTHER INDEBTEDNESS),
WHICH IMPACT THE COMPANY'S BORROWING COSTS, RETURN ON LENDING PRODUCTS AND THE
VALUE OF THE COMPANY'S INVESTMENTS; 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
UNDERLYING ASSUMPTIONS AND EXPECTATIONS RELATED TO THE SALE OF THE AMERICAN
EXPRESS BANK LTD. BUSINESSES PROVING TO BE INACCURATE OR UNREALIZED,
INCLUDING, AMONG OTHER THINGS, THE LIKELIHOOD OF AND EXPECTED TIMING FOR
COMPLETION OF THE TRANSACTION, THE PROCEEDS TO BE RECEIVED BY THE COMPANY IN
THE TRANSACTION AND THE TRANSACTION'S IMPACT ON THE COMPANY'S EARNINGS; 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; ACCOUNTING
CHANGES; OUTCOMES AND COSTS ASSOCIATED WITH LITIGATION AND COMPLIANCE AND
REGULATORY MATTERS; AND COMPETITIVE PRESSURES IN ALL OF THE COMPANY'S MAJOR
BUSINESSES. A FURTHER DESCRIPTION OF THESE AND OTHER RISKS AND UNCERTAINTIES
CAN BE FOUND IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2006, AND ITS OTHER REPORTS FILED WITH THE SEC.
-7-
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). Amounts have also been revised to reflect American
Express Bank Ltd. (AEB) activities as discontinued operations. 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. Segment disclosures have also been revised to
reflect the Company's organizational changes that became effective July 1,
2007 and to remove AEB from the Corporate & Other segment. See also pages 2-3
of the 2007 Third Quarter Earnings Supplement for a description of such
adjustments.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
Revenues
Discount revenue $ 3,659 $ 3,259 12% $ 10,684 $ 9,520 12%
Net card fees 522 462 13 1,506 1,515 (1)
Travel commissions and fees 484 427 13 1,412 1,328 6
Other commissions and fees 644 539 19 1,767 1,660 6
Securitization income, net 392 384 2 1,181 1,142 3
Other 362 417 (13) 1,175 1,161 1
-------- -------- -------- --------
Total 6,063 5,488 10 17,725 16,326 9
-------- -------- -------- --------
Interest income
Cardmember lending finance revenue 1,581 1,213 30 4,463 3,260 37
Other (including investment certificates) 309 291 6 969 860 13
-------- -------- -------- --------
Total 1,890 1,504 26 5,432 4,120 32
-------- -------- -------- --------
Total revenues 7,953 6,992 14 23,157 20,446 13
-------- -------- -------- --------
Interest expense
Cardmember lending 444 318 40 1,260 841 50
Charge card and other 564 409 38 1,530 1,126 36
-------- -------- -------- --------
Total 1,008 727 39 2,790 1,967 42
-------- -------- -------- --------
Revenues net of interest expense 6,945 6,265 11 20,367 18,479 10
-------- -------- -------- --------
Expenses
Marketing, promotion, rewards and cardmember services 1,810 1,586 14 5,098 4,772 7
Human resources 1,366 1,227 11 4,001 3,679 9
Professional services 539 562 (4) 1,637 1,621 1
Occupancy and equipment 374 346 8 1,054 1,012 4
Communications 118 104 13 342 322 6
Other 339 342 (1) 980 993 (1)
-------- -------- -------- --------
Total 4,546 4,167 9 13,112 12,399 6
-------- -------- -------- --------
Provisions for losses and benefits
Charge card 279 257 9 721 658 10
Cardmember lending 579 412 41 1,791 1,139 57
Other (including investment certificates) 124 118 5 306 331 (8)
-------- -------- -------- --------
Total 982 787 25 2,818 2,128 32
-------- -------- -------- --------
Pretax income from continuing operations 1,417 1,311 8 4,437 3,952 12
Income tax provision 343 377 (9) 1,228 1,236 (1)
-------- -------- -------- --------
Income from continuing operations 1,074 934 15 3,209 2,716 18
(Loss) Income from discontinued operations, net of tax (7) 33 # (28) 69 #
-------- -------- -------- --------
Net income $ 1,067 $ 967 10 $ 3,181 $ 2,785 14
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
-8-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
<Table>
<Caption>
September 30, December 31,
2007 2006
--------------- ---------------
Assets
Cash and cash equivalents $ 8 $ 5
Accounts receivable 40 39
Investments 16 18
Loans 50 43
Other assets 10 9
Assets of discontinued operations 17 14
--------------- ---------------
Total assets $ 141 $ 128
=============== ===============
Liabilities and Shareholders' Equity
Short-term debt $ 15 $ 15
Long-term debt 54 43
Other liabilities 45 45
Liabilities of discontinued operations 16 14
--------------- ---------------
Total liabilities 130 117
--------------- ---------------
Shareholders' equity 11 11
--------------- ---------------
Total liabilities and shareholders' equity $ 141 $ 128
=============== ===============
</Table>
-9-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ----------- -------- -------- ----------
REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $ 3,589 $ 3,203 12% $ 10,513 $ 9,271 13%
International Card Services 1,114 952 17 3,142 2,939 7
Global Commercial Services 1,064 949 12 3,141 2,918 8
Global Network & Merchant Services 980 841 17 2,823 2,428 16
-------- -------- -------- --------
6,747 5,945 13 19,619 17,556 12
Corporate & Other, including adjustments and
eliminations 198 320 (38) 748 923 (19)
-------- -------- -------- --------
CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $ 6,945 $ 6,265 11 $ 20,367 $ 18,479 10
======== ======== ======== ========
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 912 $ 839 9 $ 2,770 $ 2,600 7
International Card Services 110 121 (9) 298 236 26
Global Commercial Services 187 157 19 600 549 9
Global Network & Merchant Services 389 314 24 1,181 891 33
-------- -------- -------- --------
1,598 1,431 12 4,849 4,276 13
Corporate & Other (181) (120) 51 (412) (324) 27
-------- -------- -------- --------
PRETAX INCOME FROM CONTINUING OPERATIONS $ 1,417 $ 1,311 8 $ 4,437 $ 3,952 12
======== ======== ======== ========
NET INCOME (LOSS)
U.S. Card Services $ 592 $ 558 6 $ 1,816 $ 1,679 8
International Card Services 140 106 32 359 244 47
Global Commercial Services 135 105 29 426 360 18
Global Network & Merchant Services 266 212 25 768 578 33
-------- -------- -------- --------
1,133 981 15 3,369 2,861 18
Corporate & Other (59) (47) 26 (160) (145) 10
-------- -------- -------- --------
Income from continuing operations 1,074 934 15 3,209 2,716 18
(Loss) Income from discontinued operations, net
of tax (7) 33 # (28) 69 #
-------- -------- -------- --------
NET INCOME $ 1,067 $ 967 10 $ 3,181 $ 2,785 14
======== ======== ======== ========
</Table>
# - Denotes a variance of more than 100%.
-10-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.92 $ 0.78 18% $ 2.72 $ 2.23 22%
(Loss) Income from discontinued operations (0.01) 0.02 # $ (0.02) 0.06 #
-------- -------- -------- --------
Net income $ 0.91 $ 0.80 14% $ 2.70 $ 2.29 18%
======== ======== ======== ========
Average common shares outstanding (millions) 1,170 1,202 (3)% 1,179 1,217 (3)%
======== ======== ======== ========
DILUTED
Income from continuing operations $ 0.90 $ 0.76 18% $ 2.67 $ 2.19 22%
(Loss) Income from discontinued operations - 0.03 # (0.02) 0.05 #
-------- -------- -------- --------
Net income $ 0.90 $ 0.79 14% $ 2.65 $ 2.24 18%
======== ======== ======== ========
Average common shares outstanding (millions) 1,192 1,227 (3)% 1,202 1,242 (3)%
======== ======== ======== ========
Cash dividends declared per common share $ 0.15 $ 0.15 -% $ 0.45 $ 0.42 7%
======== ======== ======== ========
</Table>
SELECTED STATISTICAL INFORMATION
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
-------------------- Percentage -------------------- Percentage
2007 2006 Inc/(Dec) 2007 2006 Inc/(Dec)
-------- -------- ---------- -------- -------- ----------
Return on average equity (A) 38.2% 33.6% 38.2% 33.6%
Common shares outstanding (millions) 1,169 1,204 (3)% 1,169 1,204 (3)%
Book value per common share $ 9.32 $ 8.93 4% $ 9.32 $ 8.93 4%
Shareholders' equity (billions) $ 10.9 $ 10.8 1% $ 10.9 $ 10.8 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.
-11-