EXHIBIT 12
AMERICAN EXPRESS COMPANY
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Nine Months
Ended September 30, Years Ended December 31,
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1996 1995 1994 1993 1992 1991
(Unaudited) ---- ---- ---- ---- ----
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Earnings:
Pretax income from
continuing operations $1,821 $2,183 $1,891 $2,326 $ 896 $ 622
Interest expense 1,639 2,343 1,925 1,776 2,171 2,761
Other adjustments 108 95 103 88 196 142
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Total earnings (a) $3,568 $4,621 $3,919 $4,190 $3,263 $3,525
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Fixed charges:
Interest expense $1,639 $2,343 $1,925 $1,776 $2,171 $2,761
Other adjustments 100 135 142 130 154 147
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Total fixed charges(b) $1,739 $2,478 $2,067 $1,906 $2,325 $2,908
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Ratio of earnings to
fixed charges (a/b) 2.05 1.86 1.90 2.20 1.40 1.21
Included in interest expense in the above computation is interest expense
related to the international banking operations of American Express
Company (the "Company") and Travel Related Services' Cardmember lending
activities, which is netted against interest and dividends and Cardmember
lending net finance charge revenue, respectively, in the Consolidated
Statement of Income.
For purposes of the "earnings" computation, other adjustments include
adding the amortization of capitalized interest, the net loss of
affiliates accounted for under the equity method whose debt is not
guaranteed by the Company, the minority interest in the earnings of
majority-owned subsidiaries with fixed charges, and the interest component
of rental expense and subtracting undistributed net income of affiliates
accounted for under the equity method.
For purposes of the "fixed charges" computation, other adjustments include
capitalized interest costs and the interest component of rental expense.
On May 31, 1994, the Company completed the spin-off of Lehman Brothers
through a dividend to American Express common shareholders. Accordingly,
Lehman Brothers' results are reported as a discontinued operation and are
excluded from the above computation for all periods presented. In March
1993, the Company reduced its ownership in First Data Corporation to
approximately 22 percent through a public offering. As a result,
beginning in 1993, FDC was reported as an equity investment in the above
computation. In the fourth quarter of 1995, the Company's ownership was
further reduced to approximately 10 percent as a result of shares issued
by FDC in connection with a merger transaction. Accordingly, as of
December 31, 1995, the Company's investment in FDC is accounted for as
Investments - Available for Sale.