EXHIBIT 99.1
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE
[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 THIRD QUARTER REVENUES RISE
EARNINGS DECLINE ON INCREASED CREDIT PROVISIONS
(Millions, except per share amounts)
Quarters Ended Percentage Nine Months Ended Percentage
September 30, Inc/(Dec) September 30, Inc/(Dec)
------------- --------- ------------- ---------
2008 2007 2008 2007
---- ---- ---- ----
Revenues net of interest expense $ 7,164 $ 6,956 3% $ 21,859 $ 20,235 8%
Income From Continuing Operations $ 861 $ 1,122 (23)% $ 2,565 $ 3,268 (22)%
Loss From Discontinued Operations $ (46) $ (55) (16)% $ (106) $ (87) 22%
Net Income $ 815 $ 1,067 (24)% $ 2,459 $ 3,181 (23)%
Earnings Per Common Share - Basic:
Income From Continuing Operations $ 0.75 $ 0.96 (22)% $ 2.22 $ 2.77 (20)%
Loss From Discontinued Operations $ (0.04) $ (0.05) (20)% $ (0.09) $ (0.07) 29%
Net Income $ 0.71 $ 0.91 (22)% $ 2.13 $ 2.70 (21)%
Earnings Per Common Share - Diluted:
Income From Continuing Operations $ 0.74 $ 0.94 (21)% $ 2.21 $ 2.72 (19)%
Loss From Discontinued Operations $ (0.04) $ (0.04) -% $ (0.09) $ (0.07) 29%
Net Income $ 0.70 $ 0.90 (22)% $ 2.12 $ 2.65 (20)%
Average Common Shares Outstanding
Basic 1,154 1,170 (1)% 1,154 1,179 (2)%
Diluted 1,158 1,192 (3)% 1,161 1,202 (3)%
Return on Average Equity* 27.8% 38.2% 27.8% 38.2%
- -----------------------------------------------------------------------------------------------------------------------------
* Refer to Appendix I for the components of return on average equity.
# Denotes a variance of more than 100%.
New York - October 20, 2008 - American Express Company (NYSE: AXP) today
reported third-quarter income from continuing operations of $861 million, down
23 percent from $1.1 billion a year ago. Diluted earnings per share from
continuing operations were $0.74, down 21 percent from $0.94 a year ago.
Net income totaled $815 million for the quarter, down 24 percent from a year
ago. On a per-share basis, net income was $0.70, down 22 percent from $0.90 a
year ago.
Consolidated revenues net of interest expense rose 3 percent to $7.2 billion,
up from $7.0 billion a year ago.
Consolidated expenses totaled $4.7 billion, up 4 percent from $4.5 billion a
year ago.
Consolidated provisions for losses totaled $1.4 billion, up 51 percent from
$905 million a year ago.
The Company's return on average equity (ROE) was 27.8 percent, down from 38.2
percent a year ago.
"While we continued to generate a substantial level of earnings this quarter,
bottom line results were down from a year ago as growth in Cardmember spending
slowed, lending volumes moderated, and we set aside significant additions to
our loan loss reserves," said Kenneth I. Chenault, chairman and chief
executive officer.
"We saw clear signs earlier this year of a weakening environment and the
recent volatility in the financial markets has reinforced our view that
consumer and business sentiment is likely to deteriorate further, translating
into weaker economies around the globe well into 2009. Cardmember spending is
likely to remain soft. Loan growth will be restrained, in part because of the
steps we are taking to reduce credit risks, and credit indicators are likely
to reflect the continued downturn in the economy and throughout the housing
sector.
"Against this backdrop, we are moving ahead with reengineering plans that will
free up resources by reducing operating costs and staffing levels. We expect
to complete aspects of this work shortly and, as indicated earlier, to
recognize a restructuring-related charge in the fourth quarter to cover the
costs of these actions.
"Our business model is well positioned to generate earnings and excess capital
even in an economic environment that is likely to be among the weakest in many
years. We believe we have the capital strength, funding resources and
comprehensive liquidity plans to manage successfully through difficult market
conditions.
-2-
"We remain confident in our ability to emerge from the downturn in a stronger
competitive position and continue to see growth opportunities in the payments
sector. For now, though, we plan to be very selective with our investment
dollars, balancing near term performance with longer term profitability."
DISCONTINUED OPERATIONS
Discontinued operations for the third quarter generated a loss of $46 million
compared with a loss of $55 million during the year-ago period, which
primarily reflected the results of American Express International Deposit
Company, an affiliate of the former American Express Bank anticipated to be
sold in the third quarter 2009.
SEGMENT RESULTS
U.S. CARD SERVICES reported third-quarter net income of $244 million, down
from $592 million a year ago.
Revenues net of interest expense for the third quarter decreased 4 percent to
$3.5 billion, driven by lower securitization income, net. This decrease was
partially offset by higher net interest income and higher Cardmember spending.
Total expenses increased 6 percent. Marketing, promotion, rewards and
Cardmember services expenses increased 5 percent from the year-ago period
reflecting increased rewards and costs of Cardmember services, which were
partially offset by lower investments in marketing and promotion. Human
resources and other operating expenses increased 7 percent from the year-ago
period primarily driven by investments in technology and increased credit and
collection costs.
Provisions for losses increased to $941 million, up from $638 million a year
ago, reflecting increased write-off and past due rates driven by the impact of
the economic slowdown. On a managed basis* the net loan write-off rate was
5.9%, up from 5.3% in the second quarter and 3.0% a year ago. Owned net
write-offs were 6.1% in the quarter, up from 5.8% in the second quarter and
3.0% a year ago.
- ----------------------------------------------------
* The "managed basis" presentation includes on-balance sheet Cardmember
loans and off-balance sheet securitized Cardmember loans. The difference
between the "owned basis" (GAAP) information and "managed basis" information
is attributable to the effects of securitization activities. Please refer to
the information set forth on Exhibit I for further discussion of the owned and
managed basis presentation.
-3-
INTERNATIONAL CARD SERVICES reported third-quarter net income of $67 million,
down 52 percent from $140 million a year ago.
Revenues net of interest expense increased 11 percent to $1.2 billion,
reflecting higher Cardmember spending and borrowing.
Total expenses increased 13 percent reflecting higher volumes and
business-building investments. Human resources and other operating expenses
increased 16 percent from year-ago levels due to higher human resources
expense, greater professional services expense and increased other operating
expenses. Marketing, promotion, rewards and Cardmember services expenses
increased 10 percent reflecting greater marketing and promotion expenses and
higher volume related rewards costs.
Provisions for losses rose to $316 million, from $197 million a year ago
reflecting higher past due and write-off rates as well as loan and business
volume growth.
GLOBAL COMMERCIAL SERVICES reported third-quarter net income of $134 million
compared to $135 million a year ago.
Revenues net of interest expense increased 13 percent to $1.2 billion,
reflecting higher spending by corporate Cardmembers as well as increased
travel commissions and fees.
Total expenses increased 14 percent. Human resources and other operating
expenses increased 12 percent from the year-ago period. Marketing, promotion,
rewards and Cardmember services expenses increased 31 percent from the
year-ago period primarily reflecting a reallocation of rewards costs from U.S.
Card Services.
Both the revenue and expense growth rates were affected by the acquisition of
a commercial card and corporate purchasing unit in March 2008.
Provision for losses totaled $60 million up from $42 million in the year ago
period due to higher write-offs and past due rates.
GLOBAL NETWORK & MERCHANT SERVICES reported third-quarter net income of $258
million, down 3 percent from $266 million a year ago.
Revenues net of interest expense for the third quarter increased 9 percent to
$1.1 billion. The increase reflected continued growth in merchant-related
revenue, primarily from higher company-wide billed business and higher
revenues from Global Network Services' bank partners.
-4-
Spending on Global Network Services cards increased 29 percent from year-ago
levels, reflecting growth in spending on cards issued by bank partners.
Cards-in-force issued by bank partners increased 25 percent.
Total expenses increased 11 percent, reflecting higher human resources costs
driven in part by an expansion of the merchant sales force.
Provision for losses increased to $43 million from $23 million in the prior
year reflecting greater merchant-related provisions in the third quarter of
2008 compared to a year ago.
CORPORATE AND OTHER reported a third-quarter net gain of $158 million,
compared with a net loss of $11 million from a year ago. The net gain reflects
the recognition of $220 million ($136 million after-tax) for the previously
announced MasterCard and Visa settlements and tax benefits due to the revision
of the Company's estimated annual effective tax rate.
American Express Company is a leading global payments and travel company
founded in 1850. For more information, visit www.americanexpress.com.
***
Note: The 2008 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 at 5:00 p.m. (EDT) today to discuss third-quarter
earnings results. Live audio and presentation slides for the investor
conference call will be available to the general public at
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,
-6-
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, including, among things, the housing market, 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 during the remainder of 2008 and in 2009, and the volumes of the
Company's loan balances in 2008 and 2009; the write-off and delinquency rates
in the medium- to long-term of Cardmembers added by the Company during the
past few years, which could impact their profitability to the Company; the
Company's ability to effectively implement changes in the pricing of certain
of its products and services; fluctuations in interest rates (including
fluctuations in benchmarks, such as LIBOR and other benchmark rates, and
credit spreads), 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 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,
generate excess capital and, over time, 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 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
-7-
additional higher spending customers; the ability of the Global Network
Services business to meet the performance requirements called for by the
Company's recent settlements with MasterCard and VISA; trends in travel and
entertainment spending and the overall level of consumer confidence; the
uncertainties associated with business 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 February 2008 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 (including during 2009) 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 Airlines/Northwest Airlines 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; the ability of the Company to satisfy its
liquidity needs and execute on its funding plans, which will depend on, among
other things, the Company's future business growth, its credit ratings, market
capacity and demand for securities offered by the Company, performance by the
Company's counterparties under its bank credit facilities and other lending
facilities, regulatory changes, including changes to the policies, rules and
regulations of the Board of Governors of the Federal Reserve System and the
Federal Reserve Bank of San Francisco, the Company's ability to securitize and
sell receivables and the performance of receivables previously sold in
securitization transactions and the Company's ability to meet the criteria for
participation in certain liquidity facilities and other funding programs,
including the Commercial Paper Funding Facility and the Temporary Liquidity
Guarantee Program, being made available through the Federal Reserve Bank of
New York, the Federal Deposit Insurance Corporation and other federal
departments and agencies; 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; the potential
impact of regulations proposed by federal bank regulators relating to certain
credit and charge card practices, including, among others, the imposition by
card issuers of interest rate increases on outstanding balances and the
allocation of payments in respect of outstanding balances with different
interest rates, which could have an adverse impact on the Company's net
income; 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.
-8-
EXHIBIT I
AMERICAN EXPRESS COMPANY
U.S. Card Services
(Billions, except percentages)
Quarter Ended Quarter Ended Quarter Ended
September 30, 2008 June 30, 2008 September 30, 2007
------------------ ------------------ ------------------
Cardmember lending - owned basis (A):
Average Loans $ 36.3 $ 38.0 $ 38.6
Net write-off rate (B) 6.1% 5.8% 3.0%
Cardmember lending - managed basis (C):
Average Loans $ 64.7 $ 64.2 $ 60.0
Net write-off rate (B) 5.9% 5.3% 3.0%
(A) "Owned," a GAAP basis measurement, reflects only Cardmember loans included
in the Company's Consolidated Balance Sheets.
(B) In the third quarter 2008, the Company revised its method of reporting the
Cardmember lending net write-off rate. Historically, the net write-off rate
has been presented using net write-off amounts for principal, interest and
fees. However, industry convention is generally to include only the net
write-offs related to principal in write-off rate disclosures. Accordingly,
the Company is presenting the net write-off rate to reflect the net write-off
amounts for principal only.
(C) The managed basis presentation assumes that there have been no off-balance
sheet securitization transactions, i.e., all securitized Cardmember loans and
related income effects are reflected as if they were in the Company's balance
sheets and income statements, respectively. The difference between the "owned
basis" (GAAP) information and "managed basis" information is attributable to
the effects of securitization activities. The Company presents U.S. Card
Services information on a managed basis because that is the way the Company's
management views and manages the business. Management believes that a full
picture of trends in the Company's Cardmember lending business can only be
derived by evaluating the performance of both securitized and non-securitized
Cardmember loans. Management also believes that use of a managed basis
presentation presents a more accurate picture of the key dynamics of the
Cardmember lending business. Irrespective of the on and off-balance sheet
funding mix, it is important for management and investors to see metrics for
the entire Cardmember lending portfolio because they are more representative
of the economics of the aggregate Cardmember relationships and ongoing
business performance and trends over time. It is also important for investors
to see the overall growth of Cardmember loans and related revenue in order to
evaluate market share. These metrics are significant in evaluating the
Company's performance and can only be properly assessed when all
non-securitized and securitized Cardmember loans are viewed together on a
managed basis. The Company does not currently securitize international loans.
-9-
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 have been revised to reflect American Express
International Deposit Company (AEIDC) activities as discontinued operations
and to remove AEIDC from the Corporate & Other segment.
(Preliminary)
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
--------------- Percentage ----------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------ ------ ---------- ------- ------- ----------
Revenues
Discount revenue $3,848 $3,659 5% $11,557 $10,684 8%
Net card fees 577 522 11 1,720 1,506 14
Travel commissions and fees 499 484 3 1,566 1,412 11
Other commissions and fees 573 644 (11) 1,785 1,767 1
Securitization income, net 200 392 (49) 871 1,181 (26)
Other 551 443 24 1,588 1,256 26
------ ------ ------- -------
Total 6,248 6,144 2 19,087 17,806 7
------ ------ ------- -------
Interest income
Cardmember lending finance revenue 1,521 1,581 (4) 4,667 4,463 5
Other 238 239 - 723 756 (4)
------ ------ ------- -------
Total 1,759 1,820 (3) 5,390 5,219 3
------ ------ ------- -------
Total revenues 8,007 7,964 1 24,477 23,025 6
------ ------ ------- -------
Interest expense
Cardmember lending 346 444 (22) 1,127 1,260 (11)
Charge card and other 497 564 (12) 1,491 1,530 (3)
------ ------ ------- -------
Total 843 1,008 (16) 2,618 2,790 (6)
------ ------ ------- -------
Revenues net of interest expense 7,164 6,956 3 21,859 20,235 8
------ ------ ------- -------
Expenses
Marketing, promotion, rewards
and cardmember services 1,929 1,810 7 5,609 5,098 10
Human resources 1,465 1,366 7 4,430 4,001 11
Professional services 608 539 13 1,764 1,634 8
Occupancy and equipment 398 374 6 1,185 1,054 12
Communications 118 118 - 348 342 2
Other, net 200 339 (41) 770 979 (21)
------ ------ ------- -------
Total 4,718 4,546 4 14,106 13,108 8
------ ------ ------- -------
Provisions for losses
Charge card 351 279 26 937 721 30
Cardmember lending 958 579 65 3,304 1,791 84
Other 59 47 26 199 79 #
------ ------ ------- -------
Total 1,368 905 51 4,440 2,591 71
------ ------ ------- -------
Pretax income from continuing operations 1,078 1,505 (28) 3,313 4,536 (27)
Income tax provision 217 383 (43) 748 1,268 (41)
------ ------ ------- -------
Income from continuing operations 861 1,122 (23) 2,565 3,268 (22)
Loss from discontinued operations, net of tax (46) (55) (16) (106) (87) 22
------ ------ ------- -------
Net income $ 815 $1,067 (24) $ 2,459 $ 3,181 (23)
====== ====== ======= =======
</Table>
# - Denotes a variance of more than 100%.
-10-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Billions)
<Table>
<Caption>
September 30, December 31,
2008 2007
------------- ------------
Assets
Cash and cash equivalents $ 16 $ 9
Accounts receivable 41 42
Investments 13 13
Loans 44 53
Other assets 12 11
Assets of discontinued operations 1 22
---- ----
Total assets $127 $150
==== ====
Liabilities and Shareholders' Equity
Short-term debt $ 14 $ 18
Long-term debt 58 55
Other liabilities 41 44
Liabilities of discontinued operations 1 22
---- ----
Total liabilities 114 139
---- ----
Shareholders' equity 13 11
---- ----
Total liabilities and shareholders' equity $127 $150
==== ====
</Table>
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<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY
(Millions)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
--------------- Percentage ----------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------ ------ ---------- ------- ------- ----------
REVENUES NET OF INTEREST EXPENSE
U.S. Card Services $3,459 $3,589 (4)% $10,774 $10,513 2%
International Card Services 1,232 1,114 11 $ 3,683 3,142 17
Global Commercial Services 1,200 1,064 13 $ 3,652 3,141 16
Global Network & Merchant Services 1,071 980 9 $ 3,157 2,823 12
------ ------ ------- -------
6,962 6,747 3 21,266 19,619 8
Corporate & Other,
including adjustments and eliminations 202 209 (3) 593 616 (4)
------ ------ ------- -------
CONSOLIDATED REVENUES NET OF INTEREST EXPENSE $7,164 $6,956 3 $21,859 $20,235 8
====== ====== ======= =======
PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS
U.S. Card Services $ 364 $ 912 (60) $ 1,092 $ 2,770 (61)
International Card Services 1 110 (99) $ 191 298 (36)
Global Commercial Services 191 187 2 $ 735 600 23
Global Network & Merchant Services 397 389 2 $ 1,187 1,181 1
------ ------ ------- -------
953 1,598 (40) 3,205 4,849 (34)
Corporate & Other 125 (93) # 108 (313) #
------ ------ ------- -------
PRETAX INCOME FROM CONTINUING OPERATIONS $1,078 $1,505 (28) $ 3,313 $ 4,536 (27)
====== ====== ======= =======
NET INCOME (LOSS)
U.S. Card Services $ 244 $ 592 (59) $ 788 $ 1,816 (57)
International Card Services 67 140 (52) $ 315 359 (12)
Global Commercial Services 134 135 (1) $ 512 426 20
Global Network & Merchant Services 258 266 (3) $ 780 768 2
------ ------ ------- -------
703 1,133 (38) 2,395 3,369 (29)
Corporate & Other 158 (11) # 170 (101) #
------ ------ ------- -------
Income from continuing operations 861 1,122 (23) 2,565 3,268 (22)
Loss from discontinued operations, net of tax (46) (55) (16) (106) (87) 22
------ ------ ------- -------
NET INCOME $ 815 $1,067 (24) $ 2,459 $ 3,181 (23)
====== ====== ======= =======
</Table>
# - Denotes a variance of more than 100%.
-12-
<Page>
(Preliminary)
AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED)
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
--------------- Percentage ----------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------ ------- ---------- ------- ------- ----------
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations $ 0.75 $ 0.96 (22)% $ 2.22 $ 2.77 (20)%
Loss from discontinued operations (0.04) (0.05) (20) (0.09) (0.07) 29
------ ------ ------ ------
Net income $ 0.71 $ 0.91 (22)% $ 2.13 $ 2.70 (21)%
====== ====== ====== ======
Average common shares outstanding (millions) 1,154 1,170 (1)% 1,154 1,179 (2)%
====== ====== ====== ======
DILUTED
Income from continuing operations $ 0.74 $ 0.94 (21)% $ 2.21 $ 2.72 (19)%
Loss from discontinued operations (0.04) (0.04) - (0.09) (0.07) 29
------ ------ ------ ------
Net income $ 0.70 $ 0.90 (22)% $ 2.12 $ 2.65 (20)%
====== ====== ====== ======
Average common shares outstanding (millions) 1,158 1,192 (3)% 1,161 1,202 (3)%
====== ====== ====== ======
Cash dividends declared per common share $ 0.18 $ 0.15 20% $ 0.54 $ 0.45 20%
====== ====== ====== ======
</Table>
SELECTED STATISTICAL INFORMATION
<Table>
<Caption>
Quarters Ended Nine Months Ended
September 30, September 30,
---------------- Percentage ----------------- Percentage
2008 2007 Inc/(Dec) 2008 2007 Inc/(Dec)
------- ------ ---------- ------- ------- ----------
Return on average equity (A) 27.8% 38.2% 27.8% 38.2%
Return on average tangible equity (A) 34.4% 44.9% 34.4% 44.9%
Common shares outstanding (millions) 1,160 1,169 (1)% 1,160 1,169 (1)%
Book value per common share $10.79 $ 9.32 16% $10.79 $ 9.32 16%
Shareholders' equity (billions) $ 12.5 $ 10.9 15% $ 12.5 $ 10.9 15%
</Table>
# - Denotes a variance of more than 100%.
(A) Refer to Appendix I for components of return on average equity and return
on average tangible equity.
-13-