EXHIBIT 99.1
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS
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 REVENUES RISE ON HIGHER CARDMEMBER SPENDING
CREDIT INDICATORS IN LINE WITH EXPECTATIONS
(Millions, except per share amounts)
Quarters Ended Percentage
March 31, Inc/(Dec)
2008 2007
--------- ---------
Revenues net of interest expense $ 7,186 $ 6,484 11%
Income From Continuing Operations $ 974 $ 1,095 (11%)
Income (loss) From Discontinued Operations $ 17 $ (38) #
Net Income $ 991 $ 1,057 (6%)
Earnings Per Common Share - Basic:
Income From Continuing Operations $ 0.84 $ 0.92 (9%)
Income (loss) From Discontinued Operations $ 0.02 $ (0.03) #
Net Income $ 0.86 $ 0.89 (3%)
Earnings Per Common Share - Diluted:
Income From Continuing Operations $ 0.84 $ 0.90 (7%)
Income (loss) From Discontinued Operations $ 0.01 $ (0.03) #
Net Income $ 0.85 $ 0.87 (2%)
Average Common Shares Outstanding
Basic 1,153 1,187 (3%)
Diluted 1,163 1,210 (4%)
Return on Average Equity* 35.9% 36.6%
- -----------------------------------------------------------------------------------------------
* 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%.
New York - April 24, 2008 - AMERICAN EXPRESS COMPANY (NYSE: AXP) today
reported first-quarter income from continuing operations of $974 million, down
11 percent from $1.1 billion a year ago. Diluted earnings per share from
continuing operations were $0.84, down 7 percent from $0.90 a year ago.
Net income totaled $991 million for the quarter, down 6 percent from a year
ago. On a per-share basis, net income was $0.85, down 2 percent from $0.87 a
year ago.
Consolidated revenues net of interest expense rose 11 percent to $7.2 billion,
up from $6.5 billion a year ago.
Consolidated expenses totaled $4.6 billion, up 14 percent from $4.0 billion a
year ago.
The Company's return on equity (ROE) was 35.9 percent, down from 36.6 percent
a year ago.
In the year-ago quarter, results from continuing operations included an $80
million ($50 million after-tax) gain related to a new accounting standard for
retained interest in securitized loans and a $63 million ($39 million
after-tax) gain from amendments to the Company's U.S. pension plans. The
year-ago quarter also included $32 million ($21 million after-tax) of
reengineering costs compared to $10 million ($7 million after-tax) in the
current period.
"We delivered stronger than expected revenue growth this quarter, despite a
weak and uncertain U.S. economy," said Kenneth I. Chenault, chairman and chief
executive. "Business volume growth was in the top tier of the industry, as we
realized continuing returns on our multi-year investments and benefited from a
diverse consumer and business-to-business portfolio. Cardmember spending rose
14 percent, driven by strength in the international markets, among bank
partners and in the corporate sector.
"We continued to invest in longer-term opportunities at a time when some
traditional competitors have been constrained by problems elsewhere in their
operations. Marketing and related spending was up 20 percent, with a focus on
affluent U.S. consumers and the international markets. Investments in the
business-to-business sector included the recently completed acquisition of
General Electric's corporate card unit.
"Loan growth slowed from the rate of recent quarters, reflecting in part
credit-related actions such as targeted line reductions. Similarly, loan loss
reserves rose in light of the increase in delinquencies and write-offs,
particularly in those areas hit hardest by the U.S. housing market. In
managing our risk profile, we are aiming to balance the challenges of what
continues to be a difficult environment against longer-term growth
opportunities in the payments sector.
-2-
"While we continue to be cautious about the U.S. economy, we are encouraged by
our performance internationally. And, based on the breadth and flexibility of
our business model, we remain on track for the 4-6 percent EPS growth that we
indicated at the start of the year, barring significant deterioration in the
economic environment."
DISCONTINUED OPERATIONS
Discontinued operations for the first quarter reflected income of $17 million,
including an $11 million after-tax gain related to the sale of American
Express Bank Ltd. (AEB). The year-ago period reflected a loss of $38 million
which included a $60 million (pretax and after-tax) reserve established for
regulatory and legal exposure at American Express Bank International (a
subsidiary of AEB).
SEGMENT RESULTS
U.S. CARD SERVICES reported first-quarter net income of $523 million, down 19
percent from $644 million a year ago.
Revenues net of interest expense for the first quarter increased 11 percent to
$3.7 billion, reflecting higher spending and borrowing by consumers and small
businesses. This was partially offset by last year's gain related to the
adoption of a new accounting standard, which resulted in higher securitization
income, net, in 2007.
Total expenses increased 17 percent. Marketing, promotion, rewards and
Cardmember services expenses increased 21 percent from the year-ago period
reflecting increased investments in advertising and promotion, as well as
higher rewards costs. Human resources and other operating expenses increased
12 percent from the year-ago period when these expenses included a benefit
related to the U.S. pension plan curtailment of $36 million ($22 million
after-tax), partially offset by reengineering charges of $14 million ($9
million after-tax) in the prior year.
Provisions for losses increased 52 percent to $881 million, up from $581
million a year ago, reflecting higher write-off and delinquency rates as well
as growth in loans outstanding and business volumes.
The 2008 results reflect a lower tax rate that benefited from the resolution
of certain tax items from previous years.
-3-
INTERNATIONAL CARD SERVICES reported first-quarter net income of $133 million,
up 30 percent from $102 million a year ago.
Revenues net of interest expense increased 22 percent to $1.2 billion,
reflecting higher Cardmember spending and borrowing.
Total expenses increased 21 percent. Marketing, promotion, rewards and
Cardmember services expenses increased 27 percent. Human resources and other
operating expenses increased 17 percent from year-ago levels due in part to
increased employee levels.
Provisions for losses increased 24 percent to $229 million, up from $184
million a year ago, reflecting growth in the loan portfolio and business
volumes.
GLOBAL COMMERCIAL SERVICES reported first-quarter net income of $151 million,
up 17 percent from $129 million a year ago.
Revenues net of interest expense increased 15 percent to $1.1 billion,
reflecting higher spending by corporate Cardmembers and increased travel
commissions.
Total expenses increased 12 percent. Human resources and other operating
expenses increased 13 percent from the year-ago period when these expenses
included a benefit related to the U.S. pension plan curtailment of $19 million
($12 million after-tax) partially offset by reengineering charges of $4
million ($3 million after-tax).
Provisions for losses increased to $62 million, up from $30 million a year
ago, reflecting higher write-offs and increased business volumes.
GLOBAL NETWORK & MERCHANT SERVICES reported first-quarter net income of $223
million, down 6 percent from $236 million a year ago.
Revenues net of interest expense for the first quarter increased 14 percent to
$1.0 billion. The increase reflected continued strong growth in
merchant-related revenue, primarily from higher company-wide billed business.
Spending on Global Network Services cards increased 50 percent from year-ago
levels, reflecting continued growth in spending on cards issued by bank
partners. Cards-in-force issued by bank partners increased 33 percent.
Total expenses increased 21 percent, reflecting higher human resources costs
driven in part by an expansion of the merchant sales force and higher
litigation related expenses. Year-ago results included a benefit related to
the pension plan curtailment of $5 million ($3 million after-tax).
Provision for losses increased $56 million due to greater merchant-related
provisions in the first quarter of 2008 compared to a year ago, which
reflected a Delta Air Lines-related provision benefit as it had then recently
emerged from bankruptcy.
-4-
CORPORATE AND OTHER reported first-quarter net loss of $56 million, compared
with net loss of $16 million a year ago. The net loss reflects in part the
impact of the following items:
o a charge of $104 million($68 million after-tax) related to losses within
the trading securities portfolio of American Express International
Deposit Company,
o a charge of $29 million ($19 million after-tax) related to AEB operations
that were not sold, which included $7 million ($5 million after-tax) of
the previously mentioned reengineering costs, partially offset by
o the recognition of $70 million ($43 million after-tax) for the previously
announced Visa settlement.
***
American Express Company is a leading global payments and travel company
founded in 1850. For more information, visit www.americanexpress.com
Note: The 2008 First 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 first-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 FORWARD-LOOKING STATEMENTS, WHICH ADDRESS THE
COMPANY'S EXPECTED BUSINESS AND FINANCIAL PERFORMANCE, AMONG OTHER MATTERS,
CONTAIN WORDS SUCH AS "BELIEVE," "EXPECT," "ANTICIPATE," "OPTIMISTIC,"
"INTEND," "PLAN," "AIM," "WILL," "MAY," "SHOULD," "COULD," "WOULD," "LIKELY,"
AND SIMILAR EXPRESSIONS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH
THEY ARE MADE. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED
TO, THE FOLLOWING: CONSUMER AND BUSINESS SPENDING ON THE COMPANY'S CREDIT AND
CHARGE CARD PRODUCTS AND TRAVELERS CHEQUES AND OTHER PREPAID PRODUCTS AND
GROWTH IN CARD LENDING BALANCES, WHICH DEPEND IN PART ON THE ECONOMIC
ENVIRONMENT, AND THE ABILITY TO ISSUE NEW AND ENHANCED CARD AND PREPAID
PRODUCTS, SERVICES AND REWARDS PROGRAMS, AND INCREASE REVENUES FROM SUCH
PRODUCTS, ATTRACT NEW CARDMEMBERS, REDUCE CARDMEMBER ATTRITION, CAPTURE A
GREATER SHARE OF EXISTING CARDMEMBERS' SPENDING, AND SUSTAIN PREMIUM DISCOUNT
RATES ON ITS CARD PRODUCTS IN LIGHT OF REGULATORY AND MARKET PRESSURES,
INCREASE MERCHANT COVERAGE, RETAIN CARDMEMBERS AFTER LOW INTRODUCTORY LENDING
RATES HAVE EXPIRED, AND EXPAND THE GLOBAL NETWORK SERVICES BUSINESS; THE
COMPANY'S ABILITY TO MANAGE CREDIT RISK RELATED TO CONSUMER DEBT, BUSINESS
LOANS, MERCHANTS AND OTHER CREDIT TRENDS, WHICH WILL DEPEND IN PART ON THE
ECONOMIC ENVIRONMENT, THE RATES OF BANKRUPTCIES AND UNEMPLOYMENT, WHICH CAN
AFFECT SPENDING ON CARD PRODUCTS, DEBT PAYMENTS BY INDIVIDUAL AND CORPORATE
CUSTOMERS AND BUSINESSES THAT ACCEPT THE COMPANY'S CARD PRODUCTS, AND ON THE
EFFECTIVENESS OF THE COMPANY'S CREDIT MODELS; THE IMPACT OF THE COMPANY'S
EFFORTS TO DEAL WITH DELINQUENT CARDMEMBERS IN THE CURRENT CHALLENGING
ECONOMIC ENVIRONMENT, WHICH MAY AFFECT PAYMENT PATTERNS OF CARDMEMBERS, THE
COMPANY'S NEAR-TERM WRITE-OFF RATES, INCLUDING IN THE SECOND QUARTER OF 2008,
AND THE VOLUMES OF THE COMPANY'S LOAN BALANCES IN 2008; 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 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
-5-
CHANGES, AMONG OTHER THINGS; THE ACTUAL AMOUNT TO BE SPENT BY THE COMPANY ON
MARKETING, PROMOTION, REWARDS AND CARDMEMBER SERVICES BASED ON MANAGEMENT'S
ASSESSMENT OF COMPETITIVE OPPORTUNITIES AND OTHER FACTORS AFFECTING ITS
JUDGMENT; THE ABILITY TO CONTROL AND MANAGE OPERATING, INFRASTRUCTURE,
ADVERTISING AND PROMOTION EXPENSES AS BUSINESS EXPANDS OR CHANGES, INCLUDING
THE ABILITY TO ACCURATELY ESTIMATE THE PROVISION FOR THE COST OF THE
MEMBERSHIP REWARDS PROGRAM; FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES;
THE COMPANY'S ABILITY TO GROW ITS BUSINESS AND MEET OR EXCEED ITS RETURN ON
SHAREHOLDERS' EQUITY TARGET BY REINVESTING APPROXIMATELY 35 PERCENT OF
ANNUALLY-GENERATED CAPITAL, AND RETURNING APPROXIMATELY 65 PERCENT OF SUCH
CAPITAL TO SHAREHOLDERS, OVER TIME, WHICH WILL DEPEND ON THE COMPANY'S ABILITY
TO MANAGE ITS CAPITAL NEEDS AND THE EFFECT OF BUSINESS MIX, ACQUISITIONS AND
RATING AGENCY REQUIREMENTS; THE SUCCESS OF THE GLOBAL NETWORK SERVICES
BUSINESS IN PARTNERING WITH BANKS IN THE UNITED STATES, WHICH WILL DEPEND IN
PART ON THE EXTENT TO WHICH SUCH BUSINESS FURTHER ENHANCES THE COMPANY'S
BRAND, ALLOWS THE COMPANY TO LEVERAGE ITS SIGNIFICANT PROCESSING SCALE,
EXPANDS MERCHANT COVERAGE OF THE NETWORK, PROVIDES GLOBAL NETWORK SERVICES'
BANK PARTNERS IN THE UNITED STATES THE BENEFITS OF GREATER CARDMEMBER LOYALTY
AND HIGHER SPEND PER CUSTOMER, AND MERCHANT BENEFITS SUCH AS GREATER
TRANSACTION VOLUME AND ADDITIONAL HIGHER SPENDING CUSTOMERS; TRENDS IN TRAVEL
AND ENTERTAINMENT SPENDING AND THE OVERALL LEVEL OF CONSUMER CONFIDENCE; THE
UNCERTAINTIES ASSOCIATED WITH ACQUISITIONS, INCLUDING, AMONG OTHERS, THE
FAILURE TO REALIZE ANTICIPATED BUSINESS RETENTION, GROWTH AND COST SAVINGS, AS
WELL AS THE ABILITY TO EFFECTIVELY INTEGRATE THE ACQUIRED BUSINESS INTO THE
COMPANY'S EXISTING OPERATIONS; THE UNDERLYING ASSUMPTIONS AND EXPECTATIONS
RELATED TO THE SALE OF THE AMERICAN EXPRESS BANK LTD. BUSINESSES AND THE
TRANSACTION'S IMPACT ON THE COMPANY'S EARNINGS PROVING TO BE INACCURATE OR
UNREALIZED; THE SUCCESS, TIMELINESS AND FINANCIAL IMPACT (INCLUDING COSTS,
COST SAVINGS AND OTHER BENEFITS INCLUDING INCREASED REVENUES), AND BENEFICIAL
EFFECT ON THE COMPANY'S OPERATING EXPENSE TO REVENUE RATIO, BOTH IN THE
SHORT-TERM AND OVER TIME, OF REENGINEERING INITIATIVES BEING IMPLEMENTED OR
CONSIDERED BY THE COMPANY, INCLUDING COST MANAGEMENT, STRUCTURAL AND STRATEGIC
MEASURES SUCH AS VENDOR, PROCESS, FACILITIES AND OPERATIONS CONSOLIDATION,
OUTSOURCING (INCLUDING, AMONG OTHERS, TECHNOLOGIES OPERATIONS), RELOCATING
CERTAIN FUNCTIONS TO LOWER-COST OVERSEAS LOCATIONS, MOVING INTERNAL AND
EXTERNAL FUNCTIONS TO THE INTERNET TO SAVE COSTS, AND PLANNED STAFF REDUCTIONS
RELATING TO CERTAIN OF SUCH REENGINEERING ACTIONS; THE COMPANY'S ABILITY TO
REINVEST THE BENEFITS ARISING FROM SUCH REENGINEERING ACTIONS IN ITS
BUSINESSES; BANKRUPTCIES, RESTRUCTURINGS, CONSOLIDATIONS OR SIMILAR EVENTS
(INCLUDING, AMONG OTHERS, THE PROPOSED DELTA NORTHWEST MERGER) AFFECTING THE
AIRLINE OR ANY OTHER INDUSTRY REPRESENTING A SIGNIFICANT PORTION OF THE
COMPANY'S BILLED BUSINESS, INCLUDING ANY POTENTIAL NEGATIVE EFFECT ON
PARTICULAR CARD PRODUCTS AND SERVICES AND BILLED BUSINESS GENERALLY THAT COULD
RESULT FROM THE ACTUAL OR PERCEIVED WEAKNESS OF KEY BUSINESS PARTNERS IN SUCH
INDUSTRIES; THE TRIGGERING OF OBLIGATIONS TO MAKE PAYMENTS TO CERTAIN CO-BRAND
PARTNERS, MERCHANTS, VENDORS AND CUSTOMERS UNDER CONTRACTUAL ARRANGEMENTS WITH
SUCH PARTIES UNDER CERTAIN CIRCUMSTANCES; A DOWNTURN IN THE COMPANY'S
BUSINESSES AND/OR NEGATIVE CHANGES IN THE COMPANY'S AND ITS SUBSIDIARIES'
CREDIT RATINGS, WHICH COULD RESULT IN CONTINGENT PAYMENTS UNDER CONTRACTS,
DECREASED LIQUIDITY AND HIGHER BORROWING COSTS; ACCURACY OF ESTIMATES FOR THE
FAIR VALUE OF THE ASSETS IN THE COMPANY'S INVESTMENT PORTFOLIO AND, IN
PARTICULAR, THOSE INVESTMENTS THAT ARE NOT READILY MARKETABLE, INCLUDING THE
VALUATION OF THE INTEREST-ONLY STRIP RELATING TO THE COMPANY'S LENDING
SECURITIZATIONS; THE COMPANY'S ABILITY TO INVEST IN TECHNOLOGY ADVANCES ACROSS
ALL AREAS OF ITS BUSINESS TO STAY ON THE LEADING EDGE OF TECHNOLOGIES
APPLICABLE TO THE PAYMENTS INDUSTRY; THE COMPANY'S ABILITY TO PROTECT ITS
INTELLECTUAL PROPERTY RIGHTS (IP) AND AVOID INFRINGING THE IP OF OTHER
PARTIES; THE POTENTIAL NEGATIVE EFFECT ON THE COMPANY'S BUSINESSES AND
INFRASTRUCTURE, INCLUDING INFORMATION TECHNOLOGY, OF TERRORIST ATTACKS,
NATURAL DISASTERS OR OTHER CATASTROPHIC EVENTS IN THE FUTURE; POLITICAL OR
ECONOMIC INSTABILITY IN CERTAIN REGIONS OR COUNTRIES, WHICH COULD AFFECT
LENDING AND OTHER COMMERCIAL ACTIVITIES, AMONG OTHER BUSINESSES, OR
RESTRICTIONS ON CONVERTIBILITY OF CERTAIN CURRENCIES; CHANGES IN LAWS OR
GOVERNMENT REGULATIONS; ACCOUNTING CHANGES; OUTCOMES AND COSTS ASSOCIATED WITH
LITIGATION AND COMPLIANCE AND REGULATORY MATTERS; AND COMPETITIVE PRESSURES IN
ALL OF THE COMPANY'S MAJOR BUSINESSES. A FURTHER DESCRIPTION OF THESE AND
OTHER RISKS AND UNCERTAINTIES CAN BE FOUND IN THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007, AND ITS OTHER REPORTS FILED
WITH THE SEC.
-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.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended
March 31,
--------------- Percentage
2008 2007 Inc/(Dec)
------ ------ ----------
Revenues
Discount revenue $3,718 $3,355 11%
Net card fees 567 484 17
Travel commissions and fees 494 437 13
Other commissions and fees 622 536 16
Securitization income, net 444 457 (3)
Other 356 387 (8)
------ ------
Total 6,201 5,656 10
------ ------
Interest income
Cardmember lending finance revenue 1,625 1,368 19
Other 279 303 (8)
------ ------
Total 1,904 1,671 14
------ ------
Total revenues 8,105 7,327 11
------ ------
Interest expense
Cardmember lending 417 385 8
Charge card and other 502 458 10
------ ------
Total 919 843 9
------ ------
Revenues net of interest expense 7,186 6,484 11
------ ------
Expenses
Marketing, promotion, rewards and cardmember services 1,756 1,462 20
Human resources 1,470 1,301 13
Professional services 551 518 6
Occupancy and equipment 375 328 14
Communications 115 112 3
Other, net 296 293 1
------ ------
Total 4,563 4,014 14
------ ------
Provisions for losses and benefits
Charge card 345 209 65
Cardmember lending 809 574 41
Other (including investment certificates) 115 76 51
------ ------
Total 1,269 859 48
------ ------
Pretax income from continuing operations 1,354 1,611 (16)
Income tax provision 380 516 (26)
------ ------
Income from continuing operations 974 1,095 (11)
Income (Loss) from discontinued operations, net of tax 17 (38) #
------ ------
Net income $ 991 $1,057 (6)
====== ======
</Table>
# - Denotes a variance of more than 100%.
-7-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
March 31, December 31,
2008 2007
--------- ------------
Assets
Cash and cash equivalents $ 19 $ 12
Accounts receivable 41 42
Investments 14 16
Loans 48 53
Other assets 13 10
Assets of discontinued operations -- 17
---- ----
Total assets $135 $150
==== ====
Liabilities and Shareholders' Equity
Short-term debt $ 19 $ 18
Long-term debt 56 55
Other liabilities 48 50
Liabilities of discontinued operations -- 16
---- ----
Total liabilities 123 139
---- ----
Shareholders' equity 12 11
---- ----
Total liabilities and shareholders' equity $135 $150
==== ====
-8-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended
March 31,
--------------- Percentage
2008 2007 Inc/(Dec)
------ ------ ----------
REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $3,722 $3,364 11%
International Card Services 1,195 979 22
Global Commercial Services 1,144 994 15
Global Network & Merchant Services 1,003 877 14
------ ------
7,064 6,214 14
Corporate & Other,
including adjustments and eliminations 122 270 (55)
------ ------
CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $7,186 $6,484 11
====== ======
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 791 $1,031 (23)
International Card Services 117 96 22
Global Commercial Services 218 195 12
Global Network & Merchant Services 335 374 (10)
------ ------
1,461 1,696 (14)
Corporate & Other (107) (85) 26
------ ------
PRETAX INCOME FROM CONTINUING OPERATIONS $1,354 $1,611 (16)
====== ======
NET INCOME (LOSS)
U.S. Card Services $ 523 $ 644 (19)
International Card Services 133 102 30
Global Commercial Services 151 129 17
Global Network & Merchant Services 223 236 (6)
------ ------
1,030 1,111 (7)
Corporate & Other (56) (16) #
------ ------
Income from continuing operations 974 1,095 (11)
Income (Loss) from discontinued operations, net of tax 17 (38) #
------ ------
NET INCOME $ 991 $1,057 (6)
====== ======
</Table>
# - Denotes a variance of more than 100%.
-9-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
Quarters Ended
March 31,
--------------- Percentage
2008 2007 Inc/(Dec)
------ ------ ----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.84 $ 0.92 (9)%
Income (Loss) from discontinued operations 0.02 (0.03) #
------ ------
Net income $ 0.86 $ 0.89 (3)%
====== ======
Average common shares outstanding (millions) 1,153 1,187 (3)%
====== ======
DILUTED
Income from continuing operations $ 0.84 $ 0.90 (7)%
Income (Loss) from discontinued operations 0.01 (0.03) #
------ ------
Net income $ 0.85 $ 0.87 (2)%
====== ======
Average common shares outstanding (millions) 1,163 1,210 (4)%
====== ======
Cash dividends declared per common share $ 0.18 $ 0.15 20%
====== ======
SELECTED STATISTICAL INFORMATION
Quarters Ended
March 31,
--------------- Percentage
2008 2007 Inc/(Dec)
------ ------ ----------
Return on average equity (A) 35.9% 36.6%
Common shares outstanding (millions) 1,158 1,188 (3)%
Book value per common share $ 9.94 $ 8.83 13%
Shareholders' equity (billions) $ 11.5 $ 10.5 10%
# - 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-