EXHIBIT 12
AMERICAN EXPRESS COMPANY
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Nine Months Years Ended December 31,
Ended Sept 30,----------------------------------------
1998
(Unaudited) 1997 1996 1995 1994 1993
--------- ---- ---- ---- ---- ----
Earnings:
Pretax income from
continuing operations $2,212 $2,750 $2,664 $2,183 $1,891 $2,326
Interest expense 1,655 2,122 2,160 2,343 1,925 1,776
Other adjustments 91 127 139 95 103 88
----- ----- ----- ----- ----- -----
Total earnings (a) $3,958 $4,999 $4,963 $4,621 $3,919 $4,190
----- ----- ----- ----- ----- -----
Fixed charges:
Interest expense $1,655 $2,122 $2,160 $2,343 $1,925 $1,776
Other adjustments 89 129 130 135 142 130
----- ----- ----- ----- ----- -----
Total fixed charges(b) $1,744 $2,251 $2,290 $2,478 $2,067 $1,906
----- ----- ----- ----- ----- -----
Ratio of earnings to
fixed charges (a/b) 2.27 2.22 2.17 1.86 1.90 2.20
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
Statements of Income.
For purposes of the "earnings" computation, other adjustments include
adding the amortization of capitalized interest, the net loss of
affiliates accounted for at equity 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 at equity.
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 (FDC) 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.