AMX: American Exp.Co: American Express Fourth Quarter EPS Rises to $1.21 from $0.56 Last Year; Revenues and Loans Increase as

  AMX: American Exp.Co: American Express Fourth Quarter EPS Rises to $1.21
  from $0.56 Last Year; Revenues and Loans Increase as Card Member Spending
  Ends Year on Strong Note; Credit Indicators Remain at Historical Lows;
  Operating Expenses Well Contained in the Quarter

UK Regulatory Announcement

NEW YORK

American Express Company (NYSE:AXP) today reported fourth-quarter net income
of $1.3 billion, up from $637 million a year ago. Diluted earnings per share
rose to $1.21, from $0.56 a year ago. Excluding expenses associated with the
merchant litigation settlement agreement announced in late December,
fourth-quarter adjusted net income was $1.3 billion, or $1.25 per share.^2



(Millions, except percentages and per share amounts)
                                                                                     
                       Quarters Ended              Percentage     Years Ended                   Percentage
                       December 31,                Inc/(Dec)      December 31,                  Inc/(Dec)
                                                                            
                       2013          2012                         2013           2012
Total Revenues
Net of                 $ 8,547       $ 8,141       5     %        $ 32,974       $ 31,555       4     %
Interest
Expense
Net Income             $ 1,308       $ 637         #              $ 5,359        $ 4,482        20    %
Earnings Per
Common Share –
Diluted:
Net Income
Attributable           $ 1.21        $ 0.56        #              $ 4.88         $ 3.89         25    %
to Common
Shareholders^1
Average
Diluted Common           1,073         1,116       (4    )%         1,089          1,141        (5    )%
Shares
Outstanding
Return on                27.8  %       23.1  %                     27.8   %       23.1   %
Average Equity
# Denotes a variance of more than 100%
                                                                                                
                                                                                                

The year-ago quarter included three significant items: a restructuring charge;
an expense associated with higher estimated redemptions of Membership Rewards
points; and the impact of Card Member reimbursements.

Consolidated total revenues net of interest expense rose to $8.5 billion in
the fourth quarter, from $8.1 billion a year ago, representing a 5 percent
increase (6 percent when adjusted for foreign currency translations^3). The
increase reflected higher Card Member spending and higher net interest income.

Consolidated provisions for losses totaled $528 million, down 17 percent from
$638 million a year ago. This decrease reflected lower net write offs and a
modest reserve release this quarter, compared with a modest increase in
reserves last year. Credit indicators improved further from historically
strong levels reported in prior quarters.

Consolidated expenses totaled $6.0 billion, down 8 percent from $6.6 billion a
year ago. The decrease reflected the three year-ago items mentioned above.
Adjusted for foreign currency translations, consolidated total expenses were
down 7 percent from a year ago.^3

The effective tax rate for the quarter was 34 percent, up from 31 percent from
a year ago.

The company's return on average equity (ROE) was 27.8 percent, up from 23.1
percent a year ago.

“Fourth quarter results reflected a healthy increase in billed business in the
U.S. and internationally," said Kenneth I. Chenault, chairman and chief
executive officer. “We ended the year on a strong note, with Card Member
spending up 8 percent despite mixed reports during the holiday shopping
season.

“Credit quality indicators are at historically strong levels and, while many
consumers are still cautious about taking on additional debt, we again saw a
modest increase in Card Member loans this quarter.

“The settlement agreement we reached last month addresses merchant concerns
while helping to ensure that American Express Card Members are treated fairly
at the point of sale. The agreement, which is subject to court approval, would
limit our exposure to future legal claims and allow us to stay focused on
helping merchants build their business and strengthen relationships with their
customers.”

Mr. Chenault said, “Serving Card Members and merchants through a diversified,
spend-centric business has allowed us to generate consistent revenue increases
at a time when top line growth is still under pressure in parts of the
financial services industry.

“Controlling operating expenses,^4” he added, “remains a top priority, and the
restructuring we began a year ago allowed us to more than meet the goal we set
for 2013.

“We enter 2014 with good momentum and the flexibility to make investments
aimed at building on the strength of our performance during the past several
years.”

For the full year, the company reported net income of $5.4 billion, up 20
percent from $4.5 billion a year ago. Diluted earnings per share rose to
$4.88, up 25 percent from $3.89 a year ago.

Revenues net of interest expense for the full year increased 4 percent (5
percent FX adjusted^3) to $33.0 billion from $31.6 billion a year ago.
Consolidated expenses totaled $23.0 billion, down 1 percent from a year ago.
Adjusted for foreign currency translations, expenses were unchanged from a
year ago.^3

Segment Results

U.S. Card Services reported fourth-quarter net income of $864 million, up from
$423 million a year ago.

Total revenues net of interest expense increased 8 percent to $4.4 billion
from $4.1 billion a year ago. The rise reflected a 9 percent increase in Card
Member spending and higher net interest income. Revenues in the year-ago
period reflected the impact of Card Member reimbursements mentioned above.

Provisions for losses totaled $346 million, down 27 percent from $477 million
a year ago. The decrease reflected the benefit of lower net write-offs and a
reserve release in the current quarter.

Total expenses decreased 8 percent to $2.8 billion from $3.0 billion a year
ago, which included the rewards charges and a portion of the restructuring
charge mentioned above.

The effective tax rate was 33 percent compared to 31 percent a year ago.

International Card Services reported fourth-quarter net income of $103
million, up 8 percent from $95 million a year ago.

Total revenues net of interest expense increased 2 percent (7 percent FX
adjusted^3) to $1.4 billion. The increase primarily reflected higher Card
Member spending and higher net card fees.

Provisions for losses totaled $120 million, up 21 percent from $99 million a
year ago. The increase reflected higher net write offs and a reserve build in
the current quarter.

Total expenses increased 1 percent (5 percent FX adjusted^3) to $1.2 billion.
The increase primarily reflected higher rewards costs, partially offset by a
decline in operating expenses from year-ago levels which included a portion of
the restructuring charge mentioned above.

The effective tax rate was 5 percent compared to 14 percent a year ago.

Global Commercial Services reported fourth-quarter net income of $182 million,
up from $65 million a year ago.

Total revenues net of interest expense increased 2 percent to $1.2 billion.
The increase primarily reflected higher Card Member spending.

Total expenses decreased 13 percent (12 percent FX adjusted^3) to $910 million
from $1.0 billion a year ago. The decline primarily reflected lower operating
expenses related to the restructuring charge in the year-ago period mentioned
above.

The effective tax rate was 37 percent compared to 54 percent from a year ago.
The year-ago quarter’s higher tax rate reflected lower tax benefits from the
restructuring charge in certain international markets.

Global Network & Merchant Services reported fourth-quarter net income of $399
million, up 13 percent from $354 million a year ago.

Total revenues net of interest expense increased 4 percent (6 percent FX
adjusted^3) to $1.4 billion. The increase primarily reflected higher
merchant-related revenues driven by an increase in global Card Member
spending.

Total expenses decreased 1 percent to $801 million from $812 million a year
ago. The year-ago period included a portion of the previously mentioned
restructuring charge, and the current quarter reflected higher operating
expenses driven by the merchant litigation settlement. Adjusted for foreign
currency translations, expenses were unchanged from a year ago.^3

The effective tax rate was 37 percent compared to 36 percent a year ago.

Corporate and Other reported fourth-quarter net loss of $240 million compared
with net loss of $300 million in the year-ago period. The year-ago quarter
included a portion of the restructuring charge mentioned above.

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 Fourth Quarter/Full Year 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 fourth-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, June 30, 2013 and September 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 $11 million and $7 million for the three months ended December 31, 2013 and
2012, respectively, and $47 million and $49 million for the twelve months
ended December 31, 2013 and 2012, respectively.

^2 Management believes adjusted net income and adjusted earnings per share,
which are non-GAAP measures, provide useful metrics to evaluate the ongoing
operating performance of the company. See Appendix V in the selected
statistical tables for a reconciliation of adjusted net income and adjusted
earnings per share.

^3 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 translations into U.S. dollars
(i.e., assumes the foreign exchange rates used to determine results for the
three months ended December 31, 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.

^4 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                                   Years Ended
                         December 31,                Percentage           December 31,                  Percentage
                         2013          2012          Inc/(Dec)            2013           2012           Inc/(Dec)
                                                                                                                
Revenues
Non-interest
revenues
Discount                 $ 4,869       $ 4,575       6       %            $ 18,695       $ 17,739       5       %
revenue
Net card fees              673           648         4                      2,631          2,506        5
Travel
commissions                491           503         (2   )                 1,913          1,940        (1   )
and fees
Other
commissions                626           578         8                      2,414          2,317        4
and fees
Other                     569         644        (12  )                2,274        2,425       (6   )
Total
non-interest              7,228       6,948      4                     27,927       26,927      4
revenues
Interest
income
Interest on                1,715         1,660       3                      6,718          6,511        3
loans
Interest and
dividends on               48            53          (9   )                 201            246          (18  )
investment
securities
Deposits with
banks and                 19          24         (21  )                86           97          (11  )
other
Total interest            1,782       1,737      3                     7,005        6,854       2
income
Interest
expense
Deposits                   110           118         (7   )                 442            480          (8   )
Long-term debt            353         426        (17  )                1,516        1,746       (13  )
and other
Total interest            463         544        (15  )                1,958        2,226       (12  )
expense
Net interest              1,319       1,193      11                    5,047        4,628       9
income
Total revenues
net of                    8,547       8,141      5                     32,974       31,555      4
interest
expense
Provisions for
losses
Charge card                199           211         (6   )                 789            742          6
Card Member                308           396         (22  )                 1,229          1,149        7
loans
Other                     21          31         (32  )                92           99          (7   )
Total
provisions for            528         638        (17  )                2,110        1,990       6
losses
Total revenues
net of
interest                  8,019       7,503      7                     30,864       29,565      4
expense after
provisions for
losses
                                                                                                                
Expenses
Marketing and              809           722         12                     3,043          2,890        5
promotion
Card Member                1,717         1,857       (8   )                 6,457          6,282        3
rewards
Card Member                188           197         (5   )                 767            772          (1   )
services
Salaries and
employee                   1,489         1,910       (22  )                 6,191          6,597        (6   )
benefits
Professional               830           871         (5   )                 3,102          2,963        5
services
Occupancy and              510           486         5                      1,904          1,823        4
equipment
Communications             97            99          (2   )                 379            383          (1   )
Other, net                399         432        (8   )                1,133        1,404       (19  )
Total                     6,039       6,574      (8   )                22,976       23,114      (1   )
Pretax income              1,980         929         #                      7,888          6,451        22
Income tax                672         292        #                     2,529        1,969       28
provision
Net income               $ 1,308      $ 637        #                    $ 5,359       $ 4,482       20
Net income
attributable
to common                $ 1,297      $ 630        #                    $ 5,312       $ 4,433       20
shareholders
(A)
Effective tax              33.9  %       31.4  %                            32.1   %       30.5   %
rate
                                                                                                                
# - Denotes a variance of more than 100 percent.
                                                                                                                
(A) Represents net income, less earnings allocated to participating share awards of $11 million and $7 million for
the three months ended December 31, 2013 and 2012, respectively, and $47 million and $49 million for the twelve
months ended December 31, 2013 and 2012, respectively.
                                                                                                                
                                                                                                                
(Preliminary)
American Express Company
Condensed Consolidated Balance Sheets
                                                                                                                
(Billions)
                                                                                                                
                         December      December
                         31,           31,
                         2013          2012
                                                                                                                
Assets
Cash & cash              $ 19          $ 22
equivalents
Accounts                   47            46
receivable
Investment                 5             6
securities
Loans                      67            64
Other assets              15          15    
Total assets             $ 153        $ 153   
                                                                                                                
Liabilities
and
Shareholders'
Equity
Customer                 $ 42          $ 40
deposits
Short-term                 5             3
borrowings
Long-term debt             55            59
Other                     32          32    
liabilities
Total                     134         134   
liabilities
                                                                                                                
Shareholders'             19          19    
Equity
Total
liabilities
and                      $ 153        $ 153   
shareholders'
equity
                                                                                                                
                                                                                                                
(Preliminary)
American Express Company
Financial Summary
                                                                                                                
(Millions)
                         Quarters Ended                                   Years Ended
                         December 31,                Percentage           December 31,                  Percentage
                         2013          2012          Inc/(Dec)            2013           2012           Inc/(Dec)
                                                                                                                
Total revenues
net of
interest
expense
U.S. Card                $ 4,388       $ 4,070       8       %            $ 16,995       $ 16,046       6       %
Services
International              1,429         1,397       2                      5,401          5,306        2
Card Services
Global
Commercial                 1,238         1,215       2                      4,853          4,749        2
Services
Global Network
& Merchant                1,447       1,390      4                     5,513        5,271       5
Services
                           8,502         8,072       5                      32,762         31,372       4
Corporate &               45          69         (35  )                212          183         16
Other
                                                                                                                
CONSOLIDATED
TOTAL REVENUES
NET OF                   $ 8,547      $ 8,141      5                    $ 32,974      $ 31,555      4
INTEREST
EXPENSE
                                                                                                                
Pretax income
(loss)
U.S. Card                $ 1,292       $ 612         #                    $ 4,994        $ 4,069        23
Services
International              108           110         (2   )                 643            659          (2   )
Card Services
Global
Commercial                 287           142         #                      1,244          960          30
Services
Global Network
& Merchant                632         557        13                    2,469        2,219       11
Services
                           2,319         1,421       63                     9,350          7,907        18
Corporate &               (339  )      (492  )     (31  )                (1,462 )      (1,456 )     -
Other
                                                                                                                
PRETAX INCOME            $ 1,980      $ 929        #                    $ 7,888       $ 6,451       22
                                                                                                                
Net income
(loss)
U.S. Card                $ 864         $ 423         #                    $ 3,193        $ 2,592        23
Services
International              103           95          8                      631            634          -
Card Services
Global
Commercial                 182           65          #                      860            644          34
Services
Global Network
& Merchant                399         354        13                    1,575        1,443       9
Services
                           1,548         937         65                     6,259          5,313        18
Corporate &               (240  )      (300  )     (20  )                (900   )      (831   )     8
Other
                                                                                                                
NET INCOME               $ 1,308      $ 637        #                    $ 5,359       $ 4,482       20
                                                                                                                
# - Denotes a variance of more than 100 percent.
                                                                                                                
                                                                                                                
(Preliminary)
American Express Company
Financial Summary (continued)
                                                                                                                
                                                                                                                
                         Quarters Ended                                   Years Ended
                         December 31,                Percentage           December 31,                  Percentage
                         2013          2012          Inc/(Dec)            2013           2012           Inc/(Dec)
EARNINGS PER
COMMON SHARE
                                                                                                                
BASIC
Net income
attributable             $ 1.22       $ 0.57       #                    $ 4.91        $ 3.91        26      %
to common
shareholders
                                                                                                                
Average common
shares                    1,067       1,110      (4   )  %             1,082        1,135       (5   )  %
outstanding
(millions)
                                                                                                                
DILUTED
Net income
attributable             $ 1.21       $ 0.56       #                    $ 4.88        $ 3.89        25      %
to common
shareholders
                                                                                                                
Average common
shares                    1,073       1,116      (4   )  %             1,089        1,141       (5   )  %
outstanding
(millions)
                                                                                                                
Cash dividends
declared per             $ 0.23       $ 0.20       15      %            $ 0.89        $ 0.80        11      %
common share
                                                                                                                
                                                                                                                
Selected Statistical Information
                                                                                                                
                         Quarters Ended                                   Years Ended
                         December 31,                Percentage           December 31,                  Percentage
                         2013          2012          Inc/(Dec)            2013           2012           Inc/(Dec)
                                                                                                                
Return on
average equity             27.8  %       23.1  %                            27.8   %       23.1   %
(A)
Return on
average common             27.6  %       22.8  %                            27.6   %       22.8   %
equity (A)
Return on
average
tangible                   34.9  %       29.2  %                            34.9   %       29.2   %
common equity
(A)
Common shares
outstanding                1,064         1,105       (4   )  %              1,064          1,105        (4   )  %
(millions)
Book value per           $ 18.32       $ 17.09       7       %            $ 18.32        $ 17.09        7       %
common share
Shareholders'
equity                   $ 19.5        $ 18.9        3       %            $ 19.5         $ 18.9         3       %
(billions)
                                                                                                                
# - Denotes a variance of more than 100 percent.
                                                                                                                
(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
                   December     September    June 30,     March 31,    December
                   31,          30,                                    31,
                   2013         2013         2013         2013         2012
                                                                       
ROE
                                                                       
Net income         $ 5,359      $ 4,688      $ 4,572      $ 4,506      $ 4,482
Average
shareholders'      $ 19,254     $ 19,289     $ 19,372     $ 19,426     $ 19,425
equity
Return on
average equity       27.8   %     24.3   %     23.6   %     23.2   %     23.1   %
(A)
                                                                       
Reconciliation
of ROCE and
ROTCE
                                                                       
Net income         $ 5,359      $ 4,688      $ 4,572      $ 4,506      $ 4,482
Earnings
allocated to
participating       47         43         45         46         49     
share awards
and other
Net income
attributable       $ 5,312     $ 4,645     $ 4,527     $ 4,460     $ 4,433  
to common
shareholders
                                                                       
Average
shareholders'      $ 19,254    $ 19,289    $ 19,372    $ 19,426    $ 19,425 
equity
Average common
shareholders'      $ 19,254    $ 19,289    $ 19,372    $ 19,426    $ 19,425 
equity
Average
goodwill and        4,055      4,091      4,128      4,181      4,232  
other
intangibles
Average
tangible
common             $ 15,199    $ 15,198    $ 15,244    $ 15,245    $ 15,193 
shareholders'
equity
Return on
average common       27.6   %     24.1   %     23.4   %     23.0   %     22.8   %
equity (A)
Return on
average
tangible             34.9   %     30.6   %     29.7   %     29.3   %     29.2   %
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.



                                                       
(Preliminary)
American Express Company
Net Income and EPS Reconciliation
Appendix V
                                                                
(Millions, except per                   Quarter Ended           Year Ended
share amounts)                          December 31,            December 31,
                                        2013                    2013
                                                                
Net income:
                                                                
Reported Net income                     $     1,308             $     5,359
                                                                
Q4'13 Merchant
Litigation Settlement                   $     41                $     41
(after-tax)
                                                                
Adjusted Net income                     $     1,349             $     5,400
(A)
                                                                
Diluted EPS:
                                                                
Reported Net income
attributable to common                  $     1.21              $     4.88
shareholders
                                                                
Q4'13 Merchant
Litigation Settlement                   $     0.04              $     0.03
(after-tax)
                                                                
Adjusted Net income
attributable to common                  $     1.25              $     4.91
shareholders (A)
                                                                
(A) Adjusted net income and adjusted net income attributable to common
shareholders, which are non-GAAP measures, represent net income excluding the
impact of the merchant litigation settlement recognized in Q4’13. The Company
believes adjusted net income and adjusted net income attributable to common
shareholders provide useful metrics to evaluate the ongoing operating
performance of the Company.



Media Contacts:
Marina H. 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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