AMX: American Exp.Co: American Express Third Quarter EPS up 15% to $1.25; Revenues, Card Member Spending and Loans Continue to

  AMX: American Exp.Co: American Express Third Quarter EPS up 15% to $1.25;
  Revenues, Card Member Spending and Loans Continue to Grow

UK Regulatory Announcement

NEW YORK

American Express Company (NYSE:AXP) today reported third-quarter net income of
$1.4 billion, up 9 percent from a year ago. Diluted earnings per share was
$1.25, up 15 percent from $1.09 a year ago.

(Millions, except percentages and per share amounts)
                                                                           
                 Quarters Ended          Percentage   Nine Months Ended         Percentage
                 September 30,           Inc/(Dec)    September 30,             Inc/(Dec)
                 2013       2012                     2013        2012
Total Revenues
Net of           $ 8,301     $ 7,862     6     %      $ 24,427     $ 23,414     4     %
Interest
Expense
Net Income       $ 1,366     $ 1,250     9     %      $ 4,051      $ 3,845      5     %
Earnings Per
Common Share –
Diluted:
Net Income
Attributable     $ 1.25      $ 1.09      15    %      $ 3.67       $ 3.31       11    %
to Common
Shareholders^1
Average
Diluted Common     1,081       1,132     (5    )%       1,094        1,149      (5    )%
Shares
Outstanding
Return on          24.3  %     26.3  %                  24.3   %     26.3   %
Average Equity


Consolidated total revenues net of interest expense rose 6 percent to $8.3
billion in the third quarter, from $7.9 billion a year ago. The increase was
driven by a rise in Card Member spending and higher net interest income that
reflected lower funding costs and growth in Card Member loans.

Adjusted for foreign currency translations, consolidated total revenues net of
interest expense rose 7 percent from a year ago.^2

Consolidated provisions for losses totaled $492 million, up 3 percent from
$479 million a year ago. This increase reflects lower reserve releases from a
year ago, partially offset by the benefit of lower net write-offs in the
current quarter. Credit indicators continued to be at historically strong
levels.

Consolidated expenses totaled $5.8 billion, up 5 percent from $5.5 billion
last year. The increase primarily reflects a rise in rewards and marketing
costs, as well as higher operating expenses.^3

Adjusted for foreign currency translations, consolidated total expenses were
up 6 percent from a year ago.^2

The effective tax rate was 32 percent, down from 33 percent from a year ago.

The company's return on average equity (ROE) was 24.3 percent, down from 26.3
percent a year ago.

“Despite an uncertain environment, we generated a healthy increase in revenues
and stronger Card Member spending across all regions this quarter,” said
Kenneth I. Chenault, chairman and chief executive officer. “Spending on our
global network rose 7 percent (9 percent adjusted for currency translations)
and Card Member loans continued the modest growth rates we have been seeing
for the past several quarters.

“Credit quality indicators remained at historically strong levels,” said Mr.
Chenault. “And, year to date, we are delivering on the annual targets we set
to contain operating costs.

“The combination of top-line growth, credit quality, a strong capital position
and continued vigilance on expenses produced a 15 percent increase in earnings
per share. It also gave us the flexibility to make substantial investments
this quarter in marketing and other initiatives to position our business for
the years ahead.”

Segment Results

U.S. Card Services reported third-quarter net income of $782 million, up 12
percent from $699 million a year ago.

Total revenues net of interest expense increased 6 percent to $4.3 billion,
from $4.1 billion a year ago. The increase reflects an 8 percent increase in
Card Member spending and a rise in net interest income, driven primarily by 4
percent growth in average Card Member loans.

Provisions for losses totaled $331 million, down 2 percent from $339 million a
year ago.

Total expenses increased 4 percent to $2.7 billion from a year ago, primarily
reflecting higher rewards and marketing expenses, partially offset by lower
operating expenses.

The effective tax rate remained unchanged from the year-ago period at 38
percent.

International Card Services reported third-quarter net income of $142 million,
down 13 percent from $164 million a year ago.

Total revenues net of interest expense increased 3 percent to $1.4 billion.
The increase primarily reflects an increase in commissions and fees and net
card fees. Adjusted for foreign currency translations, revenues rose 8 percent
from a year ago.^2

Provisions for losses totaled $113 million, up 36 percent from $83 million a
year ago. The increase reflects higher net write-offs and a reserve build in
the current quarter.

Total expenses increased 3 percent to $1.1 billion primarily reflecting higher
rewards and marketing expenses. Adjusted for foreign currency translations,
expenses increased 7 percent from a year ago.^2

The effective tax rate was 24 percent compared to 21 percent a year ago.

Global Commercial Services reported third-quarter net income of $261 million,
up 43 percent from $183 million a year ago.

Total revenues net of interest expense increased 6 percent to $1.2 billion,
reflecting higher Card Member spending and a rise in travel commissions and
fees.

Total expenses decreased 1 percent to $844 million, reflecting lower operating
expenses, partially offset by higher rewards costs.

The effective tax rate was 23 percent compared to 33 percent from a year ago.
The current quarter benefited from a reserve release in the global business
travel organization.

Global Network & Merchant Services reported third-quarter net income of $391
million, up 9 percent from $360 million a year ago.

Total revenues net of interest expense increased 5 percent to $1.4 billion
from $1.3 billion a year ago, reflecting higher merchant-related revenues
driven by an increase in global Card Member spending, as well as an increase
in revenues from Global Network Services’ bank partners. Adjusted for foreign
currency translations, revenues rose 7 percent from a year ago.^2

Total expenses increased 4 percent to $758 million from $731 million a year
ago, reflecting an increase in operating and marketing expenses. Adjusted for
foreign currency translations, expenses rose 6 percent from a year ago.^2

The effective tax rate remained unchanged from a year ago at 36 percent.

Corporate and Other reported third-quarter net loss of $210 million compared
with net loss of $156 million in the year-ago period. The current period
reflected, in part, higher investments in Enterprise Growth Group initiatives.

About American Express

American Express is a global services company, providing customers with access
to products, insights and experiences that enrich lives and build business
success. Learn more at americanexpress.com and connect with us on
facebook.com/americanexpress, foursquare.com/americanexpress,
linkedin.com/companies/american-express, twitter.com/americanexpress, and
youtube.com/americanexpress.

Key links to products and services: charge and credit cards, business credit
cards, travel services, gift cards, prepaid cards, merchant services, business
travel, and corporate card

The 2013 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. (ET) 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 the same web site.
A replay of the conference call will be available later today at the same web
site address.

This release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based
on the company’s expected business and financial performance and are subject
to risks and uncertainties. Actual results may differ from those set forth in
the forward-looking statements due to a variety of factors, including those
contained in the company's Annual Report on Form 10-K for the year ended
December 31, 2012, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2013 and June 30, 2013 and the company’s other filings with the
Securities and Exchange Commission. 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.

^1 Represents net income less earnings allocated to participating share awards
of $12 million and $14 million for the three months ended September 30, 2013
and 2012, respectively, and $36 million and $42 million for the nine months
ended September 30, 2013 and 2012, respectively.

^2 As reported in this release, FX adjusted information, which constitute
non-GAAP financial measures, assumes a constant exchange rate between the
periods being compared for purposes of currency translation into U.S. dollars
(i.e., assumes the foreign exchange rates used to determine results for the
three months ended September 30, 2013 apply to the period(s) against which
such results are being compared). The company believes the presentation of
information on an FX adjusted basis is helpful to investors by making it
easier to compare the company's performance in one period to that of another
period without the variability caused by fluctuations in currency exchange
rates.

^3 Operating expenses include salaries and employee benefits, professional
services, occupancy and equipment, communications and other, net.

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. Certain reclassifications of prior period amounts have
been made to conform to the current period presentation.

(Preliminary)
American Express Company
Consolidated Statements of Income
                                                                         
(Millions)
                 Quarters Ended                       Nine Months Ended
                 September 30,           Percentage   September 30,             Percentage
                 2013        2012        Inc/(Dec)    2013         2012         Inc/(Dec)
                                                                                
Revenues
Non-interest
revenues
Discount         $ 4,659     $ 4,425     5      %    $ 13,826     $ 13,164     5      %
revenue
Net card fees      658         633       4              1,958        1,858      5
Travel
commissions        490         465       5              1,422        1,437      (1     )
and fees
Other
commissions        610         581       5              1,788        1,739      3
and fees
Other             601       577      4             1,705      1,781     (4     )
Total
non-interest      7,018     6,681    5             20,699     19,979    4
revenues
Interest
income
Interest on        1,698       1,658     2              5,003        4,851      3
loans
Interest and
dividends on       48          60        (20    )       153          193        (21    )
investment
securities
Deposits with
banks and         21        21       -             67         73        (8     )
other
Total interest    1,767     1,739    2             5,223      5,117     2
income
Interest
expense
Deposits           111         118       (6     )       332          362        (8     )
Long-term debt    373       440      (15    )      1,163      1,320     (12    )
and other
Total interest    484       558      (13    )      1,495      1,682     (11    )
expense
Net interest      1,283     1,181    9             3,728      3,435     9
income
Total revenues
net of            8,301     7,862    6             24,427     23,414    4
interest
expense
Provisions for
losses
Charge card        194         190       2              590          531        11
Card Member        282         264       7              921          753        22
loans
Other             16        25       (36    )      71         68        4
Total
provisions for    492       479      3             1,582      1,352     17
losses
Total revenues
net of
interest          7,809     7,383    6             22,845     22,062    4
expense after
provisions for
losses
                                                                                
Expenses
Marketing and      827         764       8              2,234        2,168      3
promotion
Card Member        1,619       1,496     8              4,740        4,425      7
rewards
Card Member        197         201       (2     )       579          575        1
services
Salaries and
employee           1,544       1,516     2              4,702        4,687      -
benefits
Professional       793         690       15             2,272        2,092      9
services
Occupancy and      462         453       2              1,394        1,337      4
equipment
Communications     94          93        1              282          284        (1     )
Other, net        269       300      (10    )      734        972       (24    )
Total             5,805     5,513    5             16,937     16,540    2
Pretax income      2,004       1,870     7              5,908        5,522      7
Income tax        638       620      3             1,857      1,677     11
provision
Net income       $ 1,366    $ 1,250    9            $ 4,051     $ 3,845     5
Net income
attributable
to common        $ 1,354    $ 1,236    10           $ 4,015     $ 3,803     6
shareholders
(A)
Effective tax      31.8  %     33.2  %                  31.4   %     30.4   %
rate


(A) Represents net income, less earnings allocated to participating share
awards of $12 million and $14 million for the three months ended September 30,
2013 and 2012, respectively, and $36 million and $42 million for the nine
months ended September 30, 2013 and 2012, respectively.


(Preliminary)                                             
American Express Company
Condensed Consolidated Balance Sheets
                                                             
(Billions)
                                                             
                                             September 30,   December 31,
                                             2013            2012
                                                             
Assets
Cash & cash equivalents                      $     22        $     22
Accounts receivable                                46              46
Investment securities                              5               6
Loans                                              62              64
Other assets                                      15             15
Total assets                                 $     150       $     153
                                                             
Liabilities and Shareholders' Equity
Customer deposits                            $     42        $     40
Short-term borrowings                              3               3
Long-term debt                                     53              59
Other liabilities                                 33             32
Total liabilities                                 131            134
                                                             
Shareholders' Equity                              19             19
Total liabilities and shareholders' equity   $     150       $     153


(Preliminary)                                                           
American Express Company
Financial Summary
                                                                               
(Millions)
                Quarters Ended                       Nine Months Ended
                September 30,           Percentage   September 30,             Percentage
                2013        2012        Inc/(Dec)    2013         2012         Inc/(Dec)
                                                                               
Total
revenues net
of interest
expense
U.S. Card       $ 4,286     $ 4,055     6      %    $ 12,607     $ 11,976     5     %
Services
International     1,356       1,313     3              3,972        3,909      2
Card Services
Global
Commercial        1,221       1,156     6              3,615        3,534      2
Services
Global
Network &        1,379     1,310    5             4,066      3,881     5
Merchant
Services
                  8,242       7,834     5              24,260       23,300     4
Corporate &      59        28       #             167        114       46
Other
                                                                               
CONSOLIDATED
TOTAL
REVENUES NET    $ 8,301    $ 7,862    6            $ 24,427    $ 23,414    4
OF INTEREST
EXPENSE
                                                                               
Pretax income
(loss)
U.S. Card       $ 1,257     $ 1,128     11           $ 3,702      $ 3,457      7
Services
International     186         207       (10    )       535          549        (3    )
Card Services
Global
Commercial        341         275       24             957          818        17
Services
Global
Network &        608       561      8             1,837      1,662     11
Merchant
Services
                  2,392       2,171     10             7,031        6,486      8
Corporate &      (388  )    (301  )   29            (1,123 )    (964   )   16
Other
                                                                               
PRETAX INCOME   $ 2,004    $ 1,870    7            $ 5,908     $ 5,522     7
                                                                               
Net income
(loss)
U.S. Card       $ 782       $ 699       12           $ 2,329      $ 2,169      7
Services
International     142         164       (13    )       528          539        (2    )
Card Services
Global
Commercial        261         183       43             678          579        17
Services
Global
Network &        391       360      9             1,176      1,089     8
Merchant
Services
                  1,576       1,406     12             4,711        4,376      8
Corporate &      (210  )    (156  )   35            (660   )    (531   )   24
Other
                                                                               
NET INCOME      $ 1,366    $ 1,250    9            $ 4,051     $ 3,845     5
                                                                               
# - Denotes a variance of more than 100 percent.


(Preliminary)                                                         
American Express Company
Financial Summary (continued)
                                                                             
                                                                             
                Quarters Ended                       Nine Months Ended
                September 30,           Percentage   September 30,           Percentage
                2013        2012        Inc/(Dec)    2013        2012        Inc/(Dec)
EARNINGS PER
COMMON SHARE
                                                                             
BASIC
Net income
attributable    $ 1.26     $ 1.10     15    %     $ 3.69     $ 3.33     11    %
to common
shareholders
                                                                             
Average
common shares    1,074     1,126    (5    )%      1,087     1,143    (5    )%
outstanding
(millions)
                                                                             
DILUTED
Net income
attributable    $ 1.25     $ 1.09     15    %     $ 3.67     $ 3.31     11    %
to common
shareholders
                                                                             
Average
common shares    1,081     1,132    (5    )%      1,094     1,149    (5    )%
outstanding
(millions)
                                                                             
Cash
dividends       $ 0.23     $ 0.20     15    %     $ 0.66     $ 0.60     10    %
declared per
common share
                                                                             
                                                                             
Selected Statistical Information
                                                                             
                Quarters Ended                       Nine Months Ended
                September 30,           Percentage   September 30,           Percentage
                 2013      2012     Inc/(Dec)     2013      2012     Inc/(Dec)
                                                                             
Return on
average           24.3  %     26.3  %                  24.3  %     26.3  %
equity (A)
Return on
average           24.1  %     26.0  %                  24.1  %     26.0  %
common equity
(A)
Return on
average
tangible          30.6  %     33.5  %                  30.6  %     33.5  %
common equity
(A)
Common shares
outstanding       1,071       1,122     (5    )%       1,071       1,122     (5    )%
(millions)
Book value
per common      $ 17.94     $ 17.37     3     %     $ 17.94     $ 17.37     3     %
share
Shareholders'
equity          $ 19.2      $ 19.5      (1    )%     $ 19.2      $ 19.5      (1    )%
(billions)


(A) Refer to Appendix I for components of return on average equity, return on
average common equity and return on average tangible common equity, a non-GAAP
measure.


(Preliminary)                                                  
American Express Company
Components of Return on Average Equity (ROE), Return on Average Common Equity
(ROCE),
and Return on Average Tangible Common Equity (ROTCE)
Appendix I
                                                                     
(Millions)
                 For the Twelve Months Ended
                 September    June 30,     March 31,    December     September
                 30,                                    31,          30,
                 2013         2013         2013         2012         2012
                                                                     
ROE
                                                                     
Net income       $ 4,688      $ 4,572      $ 4,506      $ 4,482      $ 5,037
Average
shareholders'    $ 19,289     $ 19,372     $ 19,426     $ 19,425     $ 19,145
equity
Return on
average equity     24.3   %     23.6   %     23.2   %     23.1   %     26.3   %
(A)
                                                                     
Reconciliation
of ROCE and
ROTCE
                                                                     
Net income       $ 4,688      $ 4,572      $ 4,506      $ 4,482      $ 5,037
Earnings
allocated to
participating     43         45         46         49         56     
share awards
and other
Net income
attributable     $ 4,645     $ 4,527     $ 4,460     $ 4,433     $ 4,981  
to common
shareholders
                                                                     
Average
shareholders'    $ 19,289    $ 19,372    $ 19,426    $ 19,425    $ 19,145 
equity
Average common
shareholders'    $ 19,289    $ 19,372    $ 19,426    $ 19,425    $ 19,145 
equity
Average
goodwill and      4,091      4,128      4,181      4,232      4,272  
other
intangibles
Average
tangible
common           $ 15,198    $ 15,244    $ 15,245    $ 15,193    $ 14,873 
shareholders'
equity
Return on
average common     24.1   %     23.4   %     23.0   %     22.8   %     26.0   %
equity (A)
Return on
average
tangible           30.6   %     29.7   %     29.3   %     29.2   %     33.5   %
common equity
(B)


(A) Return on average equity and return on average common equity are
calculated by dividing one year period net income/net income attributable to
common shareholders by one year average total shareholders’ equity/average
common shareholders' equity, respectively.

(B) Return on average tangible common equity, a non-GAAP measure, is computed
in the same manner as return on average common equity except the computation
of average tangible common shareholders' equity, a non-GAAP measure, excludes
from average total shareholders' equity, average goodwill and other
intangibles. The Company believes that return on average tangible common
equity is a useful measure of the profitability of its business.

Media Contacts:
Marina Norville, +1.212.640.2832
marina.h.norville@aexp.com
or
Mike O'Neill, +1.212.640.5951
mike.o'neill@aexp.com
or
Investors/Analysts Contacts:
Ken Paukowits, +1.212.640.6348
ken.f.paukowits@aexp.com
or
Rick Petrino, +1.212.640.5574
richard.petrino@aexp.com

Contact:

American Exp.Co
 
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