AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - FINANCIALS

Attached files

file	filename
8-K - 8-K - AMERICAN EXPRESS CO	form8k.htm
EX-99.3 - EARNINGS SUPPLEMENT - AMERICAN EXPRESS CO	ex99_3.htm
EX-99.1 - PRESS RELEASE - AMERICAN EXPRESS CO	ex99_1.htm

Exhibit 99.2

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. The Company revised the income statement reporting of card fees on lending products in the first quarter of 2012, increasing Net card fees and reducing Interest on loans. Corresponding amounts in prior periods have been reclassified to conform to the current period presentation. This change does not impact Total revenues net of interest expense in the income statement, or the Net interest yield on cardmember loans, a non-GAAP measure.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)
	Quarters Ended							Six Months Ended
	June 30,				Percentage			June 30,				Percentage
	2012		2011		Inc/(Dec)			2012		2011		Inc/(Dec)

Revenues
Non-interest revenues
Discount revenue	$	4,482	$	4,278		5	%	$	8,739	$	8,180		7	%
Net card fees		615		613		-			1,225		1,214		1
Travel commissions and fees		521		523		-			972		977		(1	)
Other commissions and fees		575		584		(2	)		1,158		1,113		4
Other		651		537		21			1,231		1,012		22
Total non-interest revenues		6,844		6,535		5			13,325		12,496		7
Interest income
Interest on loans		1,582		1,543		3			3,193		3,098		3
Interest and dividends on investment securities		67		99		(32	)		133		187		(29	)
Deposits with banks and other		22		18		22			52		38		37
Total interest income		1,671		1,660		1			3,378		3,323		2
Interest expense
Deposits		115		131		(12	)		244		268		(9	)
Short-term borrowings		6		1		#			11		1		#
Long-term debt and other		429		445		(4	)		869		901		(4	)
Total interest expense		550		577		(5	)		1,124		1,170		(4	)
Net interest income		1,121		1,083		4			2,254		2,153		5
Total revenues net of interest expense		7,965		7,618		5			15,579		14,649		6
Provisions for losses
Charge card		163		161		1			341		359		(5	)
Cardmember loans		277		176		57			489		56		#
Other		21		20		5			43		39		10
Total provisions for losses		461		357		29			873		454		92
Total revenues net of interest expense after provisions for losses		7,504		7,261		3			14,706		14,195		4

Expenses
Marketing and promotion		773		795		(3	)		1,404		1,504		(7	)
Cardmember rewards		1,462		1,613		(9	)		2,929		3,190		(8	)
Cardmember services		180		173		4			401		337		19
Salaries and employee benefits		1,536		1,595		(4	)		3,171		3,117		2
Professional services		711		745		(5	)		1,402		1,408		-
Occupancy and equipment		446		391		14			884		785		13
Communications		95		92		3			191		187		2
Other, net		422		92		#			672		170		#
Total		5,625		5,496		2			11,054		10,698		3
Pretax income from continuing operations		1,879		1,765		6			3,652		3,497		4
Income tax provision		540		470		15			1,057		1,025		3
Income from continuing operations		1,339		1,295		3			2,595		2,472		5
Income from discontinued operations, net of tax		-		36		#			-		36		#
Net income	$	1,339	$	1,331		1		$	2,595	$	2,508		3
Income from continuing operations attributable to common shareholders (A)	$	1,325	$	1,280		4		$	2,567	$	2,442		5
Net income attributable to common shareholders (A)	$	1,325	$	1,316		1		$	2,567	$	2,478		4

# - Denotes a variance of more than 100%.

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards of $14 million and $15 million for the three months ended June 30, 2012 and 2011, respectively, and $28 million and $30 million for the six months ended June 30, 2012 and 2011, respectively.

(Preliminary)

American Express Company

Condensed Consolidated Balance Sheets

(Billions)

	June 30,		December 31,
	2012		2011

Assets
Cash & cash equivalents	$	22	$	25
Accounts receivable		44		44
Investment securities		6		7
Loans		60		61
Other assets		16		16
Total assets	$	148	$	153

Liabilities and Shareholders' Equity
Customer deposits	$	36	$	38
Short-term borrowings		4		4
Long-term debt		56		60
Other liabilities		33		32
Total liabilities		129		134

Shareholders' Equity		19		19
Total liabilities and shareholders' equity	$	148	$	153

(Preliminary)

American Express Company

Financial Summary

(Millions)
	Quarters Ended									Six Months Ended
	June 30,						Percentage			June 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Total revenues net of interest expense
U.S. Card Services	$	4,037		$	3,759			7	%	$	7,921		$	7,336			8	%
International Card Services		1,297			1,351			(4	)		2,596			2,559			1
Global Commercial Services		1,221			1,191			3			2,378			2,312			3
Global Network & Merchant Services		1,323			1,239			7			2,571			2,376			8
		7,878			7,540			4			15,466			14,583			6
Corporate & Other		87			78			12			113			66			71

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,965		$	7,618			5		$	15,579		$	14,649			6

Pretax income (loss) from continuing operations
U.S. Card Services	$	1,149		$	900			28		$	2,329		$	1,810			29
International Card Services		146			196			(26	)		342			436			(22	)
Global Commercial Services		299			265			13			543			530			2
Global Network & Merchant Services		562			487			15			1,101			963			14
		2,156			1,848			17			4,315			3,739			15
Corporate & Other		(277	)		(83	)		#			(663	)		(242	)		#

PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,879		$	1,765			6		$	3,652		$	3,497			4

Net income (loss)
U.S. Card Services	$	718		$	665			8		$	1,470		$	1,220			20
International Card Services		178			161			11			375			350			7
Global Commercial Services		219			177			24			396			361			10
Global Network & Merchant Services		372			324			15			729			637			14
		1,487			1,327			12			2,970			2,568			16
Corporate & Other		(148	)		(32	)		#			(375	)		(96	)		#
Income from continuing operations		1,339			1,295			3			2,595			2,472			5
Income from discontinued operations, net of tax		-			36			#			-			36			#
NET INCOME	$	1,339		$	1,331			1		$	2,595		$	2,508			3

# - Denotes a variance of more than 100%.

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended									Six Months Ended
	June 30,						Percentage			June 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
EARNINGS PER COMMON SHARE

BASIC
Income from continuing operations attributable to common shareholders	$	1.16		$	1.08			7	%	$	2.23		$	2.05			9	%
Income from discontinued operations		-			0.03			#			-			0.03			#
Net income attributable to common shareholders	$	1.16		$	1.11			5	%	$	2.23		$	2.08			7	%

Average common shares outstanding (millions)		1,145			1,190			(4	)%		1,151			1,190			(3	)%

DILUTED
Income from continuing operations attributable to common shareholders	$	1.15		$	1.07			7	%	$	2.22		$	2.04			9	%
Income from discontinued operations		-			0.03			#			-			0.03			#
Net income attributable to common shareholders	$	1.15		$	1.10			5	%	$	2.22		$	2.07			7	%

Average common shares outstanding (millions)		1,152			1,197			(4	)%		1,158			1,197			(3	)%

Cash dividends declared per common share	$	0.20		$	0.18			11	%	$	0.40		$	0.36			11	%


Selected Statistical Information

	Quarters Ended									Six Months Ended
	June 30,						Percentage			June 30,						Percentage
		2012			2011		Inc/(Dec)				2012			2011		Inc/(Dec)

Return on average equity (A)		26.6	%		28.2	%					26.6	%		28.2	%
Return on average common equity (A)		26.3	%		27.9	%					26.3	%		27.9	%
Return on average tangible common equity (A)		34.1	%		36.1	%					34.1	%		36.1	%
Common shares outstanding (millions)		1,139			1,193			(5	) %		1,139			1,193			(5	) %
Book value per common share	$	16.92		$	15.26			11	%	$	16.92		$	15.26			11	%
Shareholders' equity (billions)	$	19.3		$	18.2			6	%	$	19.3		$	18.2			6	%

# - Denotes a variance of more than 100%.

(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

Selected Statistical Information

(Millions, except percentages and where indicated)
	Quarters Ended June 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business (billions) (A):
United States	$	148.7		$	136.8			9	%
Outside the United States		72.9			70.8			3
Total	$	221.6		$	207.6			7
Total cards-in-force (B):
United States		51.2			49.8			3	%
Outside the United States		48.9			44.2			11
Total		100.1			94.0			6
Basic cards-in-force (B):
United States		39.8			38.7			3	%
Outside the United States		39.2			35.3			11
Total		79.0			74.0			7

Average discount rate (C)		2.54	%		2.54	%
Average basic cardmember spending (dollars) (D)	$	3,948		$	3,767			5	%
Average fee per card (dollars) (D)	$	39		$	39			-	%
Average fee per card adjusted (dollars) (D)	$	43		$	43			-	%

(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business. Card billed business is reflected in the United States or outside the United States based on where the cardmember is domiciled.

(B) Total cards-in-force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand cardmember accounts that have no out-of-store spend activity during the prior 12 month period.

(C) This calculation is designed to reflect pricing at merchants accepting general purpose American Express cards. It represents the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance.

(D) Average basic card member spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs divided by average worldwide proprietary cards-in-force. The adjusted average fee per card, which is a non-GAAP measure, is computed in the same manner, but excludes amortization of deferred direct acquisition costs. The amount of amortization excluded was $64 million and $56 million for the quarter ended June 30, 2012 and 2011, respectively. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fees pricing across a range of its proprietary card products.

(Preliminary)

American Express Company

Selected Statistical Information (continued)


(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)
Worldwide cardmember receivables:
Total receivables	$	41.5		$	40.1			3	%
Loss reserves (millions):
Beginning balance	$	424		$	421			1	%
Provisions (A)		134			119			13
Other additions (B)		29			42			(31	)
Net write-offs (C)		(164	)		(128	)		28
Other deductions (D)		(31	)		(39	)		(21	)
Ending balance	$	392		$	415			(6	)
% of receivables		0.9	%		1.0	%
Net write-off rate (principal only) - USCS (E)		2.0	%		1.5	%
Net write-off rate (principal and fees) - USCS (E)		2.2	%		1.7	%
30 days past due as a % of total - USCS		1.7	%		1.7	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.09	%
90 days past billing as a % of total - ICS/GCS		0.7	%		0.8	%

Worldwide cardmember loans:
Total loans	$	61.0		$	58.7			4	%
30 days past due loans as a % of total		1.3	%		1.6	%
Loss reserves (millions):
Beginning balance	$	1,680		$	2,921			(42	)%
Provisions (A)		253			146			73
Other additions (B)		24			30			(20	)
Net write-offs - principal (C)		(329	)		(457	)		(28	)
Net write-offs - interest and fees (C)		(41	)		(54	)		(24	)
Other deductions (D)		(40	)		(26	)		54
Ending balance	$	1,547		$	2,560			(40	)
Ending reserves - principal	$	1,492		$	2,488			(40	)
Ending reserves - interest and fees	$	55		$	72			(23	)
% of loans		2.5	%		4.4	%
% of past due		202	%		273	%
Average loans	$	60.6		$	58.5			4	%
Net write-off rate (principal only) (E)		2.2	%		3.1	%
Net write-off rate (principal, interest and fees) (E)		2.4	%		3.5	%
Net interest income divided by average loans (F)		7.4	%		7.4	%
Net interest yield on cardmember loans (F)		9.0	%		9.0	%

# - Denotes a variance of more than 100%.

(A) Provisions for principal (resulting from authorized transactions) and fee reserve components.

(B) Provisions for unauthorized transactions.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(30) million and $(41) million for the three months ended June 30, 2012 and 2011, respectively; foreign currency translation adjustments of $(5) million and $2 million for the three months ended June 30, 2012 and 2011, respectively; and other adjustments of $4 million and nil for the three months ended June 30, 2012 and 2011, respectively. For cardmember loans, includes net write-offs for unauthorized transactions of $(25) million and $(28) million for the three months ended June 30, 2012 and 2011, respectively; foreign currency translation adjustments of $(11) million and $2 million for the three months ended June 30, 2012 and 2011, respectively; and other adjustments of $(4) million and nil for the three months ended June 30, 2012 and 2011, respectively.

(E) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest and/or fees is also presented.

(F) See Appendix III for calculations of net interest yield on cardmember loans, a non-GAAP measure, and net interest income divided by average loans, a GAAP measure, and the Company's rationale for presenting net interest yield on cardmember loans.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)
	Quarters Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2012		2012		2011		2011		2011

Revenues
Non-interest revenues
Discount revenue	$	4,482	$	4,257	$	4,336	$	4,218	$	4,278
Net card fees		615		610		612		622		613
Travel commissions and fees		521		451		514		480		523
Other commissions and fees		575		583		552		604		584
Other		651		580		618		534		537
Total non-interest revenues		6,844		6,481		6,632		6,458		6,535
Interest income
Interest on loans		1,582		1,611		1,587		1,587		1,543
Interest and dividends on investment securities		67		66		72		68		99
Deposits with banks and other		22		30		26		33		18
Total interest income		1,671		1,707		1,685		1,688		1,660
Interest expense
Deposits		115		129		133		127		131
Short-term borrowings		6		5		5		5		1
Long-term debt and other		429		440		437		443		445
Total interest expense		550		574		575		575		577
Net interest income		1,121		1,133		1,110		1,113		1,083
Total revenues net of interest expense		7,965		7,614		7,742		7,571		7,618
Provisions for losses
Charge card		163		178		237		174		161
Cardmember loans		277		212		149		48		176
Other		21		22		23		27		20
Total provisions for losses		461		412		409		249		357
Total revenues net of interest expense after provisions for losses		7,504		7,202		7,333		7,322		7,261

Expenses
Marketing and promotion		773		631		735		757		795
Cardmember rewards		1,462		1,467		1,463		1,565		1,613
Cardmember services		180		221		190		189		173
Salaries and employee benefits		1,536		1,635		1,537		1,598		1,595
Professional services		711		691		853		690		745
Occupancy and equipment		446		438		467		433		391
Communications		95		96		98		93		92
Other, net		422		250		242		286		92
Total		5,625		5,429		5,585		5,611		5,496
Pretax income from continuing operations		1,879		1,773		1,748		1,711		1,765
Income tax provision		540		517		556		476		470
Income from continuing operations		1,339		1,256		1,192		1,235		1,295
Income from discontinued operations, net of tax		-		-		-		-		36
Net income	$	1,339	$	1,256	$	1,192	$	1,235	$	1,331
Income from continuing operations attributable to common shareholders (A)	$	1,325	$	1,242	$	1,178	$	1,220	$	1,280
Net income attributable to common shareholders (A)	$	1,325	$	1,242	$	1,178	$	1,220	$	1,316

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards of $14 million for the quarter ended June 30, 2012, $14 million for the quarter ended March 31, 2012, $14 million for the quarter ended December 31, 2011, $15 million for the quarter ended September 30, 2011 and $15 million for the quarter ended June 30, 2011.

(Preliminary)

American Express Company

Financial Summary

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Total revenues net of interest expense
U.S. Card Services	$	4,037		$	3,884		$	3,897		$	3,838		$	3,759
International Card Services		1,297			1,299			1,333			1,347			1,351
Global Commercial Services		1,221			1,157			1,183			1,130			1,191
Global Network & Merchant Services		1,323			1,248			1,316			1,250			1,239
		7,878			7,588			7,729			7,565			7,540
Corporate & Other		87			26			13			6			78

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,965		$	7,614		$	7,742		$	7,571		$	7,618

Pretax income (loss) from continuing operations
U.S. Card Services	$	1,149		$	1,180		$	1,168		$	1,151		$	900
International Card Services		146			196			137			189			196
Global Commercial Services		299			244			276			269			265
Global Network & Merchant Services		562			539			502			514			487
		2,156			2,159			2,083			2,123			1,848
Corporate & Other		(277	)		(386	)		(335	)		(412	)		(83	)

PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,879		$	1,773		$	1,748		$	1,711		$	1,765

Net income (loss)
U.S. Card Services	$	718		$	752		$	727		$	733		$	665
International Card Services		178			197			152			221			161
Global Commercial Services		219			177			180			197			177
Global Network & Merchant Services		372			357			324			332			324
		1,487			1,483			1,383			1,483			1,327
Corporate & Other		(148	)		(227	)		(191	)		(248	)		(32	)
Income from continuing operations		1,339			1,256			1,192			1,235			1,295
Income from discontinued operations, net of tax		-			-			-			-			36

NET INCOME	$	1,339		$	1,256		$	1,192		$	1,235		$	1,331

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2012		2012		2011		2011		2011
EARNINGS PER COMMON SHARE

BASIC
Income from continuing operations attributable to common shareholders	$	1.16	$	1.07	$	1.02	$	1.04	$	1.08
Income from discontinued operations		-		-		-		-		0.03
Net income attributable to common shareholders	$	1.16	$	1.07	$	1.02	$	1.04	$	1.11

Average common shares outstanding (millions)		1,145		1,160		1,157		1,175		1,190

DILUTED
Income from continuing operations attributable to common shareholders	$	1.15	$	1.07	$	1.01	$	1.03	$	1.07
Income from discontinued operations		-		-		-		-		0.03
Net income attributable to common shareholders	$	1.15	$	1.07	$	1.01	$	1.03	$	1.10

Average common shares outstanding (millions)		1,152		1,166		1,163		1,181		1,197

Cash dividends declared per common share	$	0.20	$	0.20	$	0.18	$	0.18	$	0.18

Selected Statistical Information

	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Return on average equity (A)		26.6	%		27.1	%		27.7	%		27.8	%		28.2	%
Return on average common equity (A)		26.3	%		26.8	%		27.3	%		27.5	%		27.9	%
Return on average tangible common equity (A)		34.1	%		35.0	%		35.8	%		35.7	%		36.1	%
Common shares outstanding (millions)		1,139			1,166			1,164			1,169			1,193
Book value per common share	$	16.92		$	17.08		$	16.15		$	15.49		$	15.26
Shareholders' equity (billions)	$	19.3		$	19.9		$	18.8		$	18.1		$	18.2

(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

Selected Statistical Information

(Millions, except percentages and where indicated)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Card billed business (billions) (A):
United States	$	148.7		$	139.6		$	145.5		$	136.4		$	136.8
Outside the United States		72.9			71.6			73.5			71.3			70.8
Total	$	221.6		$	211.2		$	219.0		$	207.7		$	207.6
Total cards-in-force (B):
United States		51.2			50.9			50.6			50.2			49.8
Outside the United States		48.9			47.8			46.8			45.6			44.2
Total		100.1			98.7			97.4			95.8			94.0
Basic cards-in-force (B):
United States		39.8			39.6			39.3			38.9			38.7
Outside the United States		39.2			38.2			37.4			36.4			35.3
Total		79.0			77.8			76.7			75.3			74.0

Average discount rate (C)		2.54	%		2.53	%		2.51	%		2.54	%		2.54	%
Average basic cardmember spending (dollars) (D)	$	3,948		$	3,772		$	3,933		$	3,739		$	3,767
Average fee per card (dollars) (D)	$	39		$	38		$	39		$	40		$	39
Average fee per card adjusted (dollars) (D)	$	43		$	42		$	42		$	43		$	43

(D) Average basic card member spending and average fee per card are computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct acquisition costs divided by average worldwide proprietary card-in-force. The adjusted average fee per card, which is a non-GAAP measure, is computed in the same manner, but excludes amortization of deferred direct acquisition costs. The amount of amortization excluded for these periods were $64 million for the quarter ended June 30, 2012, $65 million for the quarter ended March 31, 2012, $57 million for the quarter ended December 31, 2011, $52 million for the quarter ended September 30, 2011 and $56 million for the quarter ended June 30, 2011. The Company presents adjusted average fee per card because the Company believes this metric presents a useful indicator of card fee pricing across a range of its proprietary card products.

(Preliminary)

American Express Company

Selected Statistical Information (continued)

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Worldwide cardmember receivables:
Total receivables	$	41.5		$	41.5		$	40.9		$	39.8		$	40.1
Loss reserves (millions):
Beginning balance	$	424		$	438		$	388		$	415		$	421
Provisions (A)		134			149			199			125			119
Other additions (B)		29			29			38			49			42
Net write-offs (C)		(164	)		(182	)		(154	)		(146	)		(128	)
Other deductions (D)		(31	)		(10	)		(33	)		(55	)		(39	)
Ending balance	$	392		$	424		$	438		$	388		$	415
% of receivables		0.9	%		1.0	%		1.1	%		1.0	%		1.0	%
Net write-off rate (principal only) - USCS (E)		2.0	%		2.3	%		1.9	%		1.8	%		1.5	%
Net write-off rate (principal and fees) - USCS (E)		2.2	%		2.5	%		2.0	%		1.9	%		1.7	%
30 days past due as a % of total - USCS		1.7	%		1.9	%		1.9	%		2.0	%		1.7	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.11	%		0.10	%		0.10	%		0.09	%
90 days past billing as a % of total - ICS/GCS		0.7	%		0.7	%		0.9	%		0.8	%		0.8	%

Worldwide cardmember loans:
Total loans	$	61.0		$	60.1		$	62.6		$	58.2		$	58.7
30 days past due loans as a % of total		1.3	%		1.4	%		1.5	%		1.5	%		1.6	%
Loss reserves (millions):
Beginning balance	$	1,680		$	1,874		$	2,139		$	2,560		$	2,921
Provisions (A)		253			185			122			16			146
Other additions (B)		24			27			27			32			30
Net write-offs - principal (C)		(329	)		(349	)		(345	)		(383	)		(457	)
Net write-offs - interest and fees (C)		(41	)		(44	)		(42	)		(44	)		(54	)
Other deductions (D)		(40	)		(13	)		(27	)		(42	)		(26	)
Ending balance	$	1,547		$	1,680		$	1,874		$	2,139		$	2,560
Ending reserves - principal	$	1,492		$	1,622		$	1,818		$	2,080		$	2,488
Ending reserves - interest and fees	$	55		$	58		$	56		$	59		$	72
% of loans		2.5	%		2.8	%		3.0	%		3.7	%		4.4	%
% of past due		202	%		201	%		206	%		238	%		273	%
Average loans	$	60.6		$	60.7		$	59.9		$	58.9		$	58.5
Net write-off rate (principal only) (E)		2.2	%		2.3	%		2.3	%		2.6	%		3.1	%
Net write-off rate (principal, interest and fees) (E)		2.4	%		2.6	%		2.6	%		2.9	%		3.5	%
Net interest income divided by average loans (F)		7.4	%		7.5	%		7.4	%		7.5	%		7.4	%
Net interest yield on cardmember loans (F)		9.0	%		9.2	%		8.9	%		9.1	%		9.0	%

(A) Provisions for principal (resulting from authorized transactions) and fee reserve components.

(B) Provisions for unauthorized transactions.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(30) million for the three months ended June 30, 2012, $(33) million for the three months ended March 31, 2012, $(38) million for the three months ended December 31, 2011, $(46) million for the three months ended September 30, 2011 and $(41) million for the three months ended June 30, 2011; foreign currency translation adjustments of $(5) million for the three months ended June 30, 2012, $3 million for the three months ended March 31, 2012, $(3) million for the three months ended December 31, 2011, $(5) million for the three months September 30, 2011 and $2 million for the three months ended June 30, 2011; reclassified cardmember bankruptcy reserves of $18 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $4 million for the three months ended June 30, 2012, $2 million for the three months ended March 31, 2012, $8 million for the three months ended December 31, 2011, $(4) million for the three months ended September 30, 2011 and nil for the three months ended June 30, 2011. For cardmember loans, includes net write-offs for unauthorized transactions of $(25) million for the three months ended June 30, 2012, $(28) million for the three months ended March 31, 2012, $(27) million for the three months ended December 31, 2011, $(29) million for the three months ended September 30, 2011 and $(28) million for the three months ended June 30, 2011; foreign currency translation adjustments of $(11) million for the three months ended June 30, 2012, $10 million for the three months ended March 31, 2012, $(1) million for the three months ended December 31, 2011, $(14) million for the three months ended September 30, 2011 and $2 million for the three months ended June 30, 2011; reclassified cardmember bankruptcy reserves of $4 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $(4) million for the three months ended June 30, 2012, $1 million for the three months ended March 31, 2012, $1 million for the three months ended December 31, 2011, $1 million for the three months ended September 30, 2011 and nil for the three months ended June 30, 2011.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,				Percentage
	2012		2011		Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	2,925	$	2,734		7	%
Interest income		1,302		1,225		6
Interest expense		190		200		(5	)
Net interest income		1,112		1,025		8
Total revenues net of interest expense		4,037		3,759		7
Provisions for losses		312		228		37
Total revenues net of interest expense after provisions for losses		3,725		3,531		5
Expenses
Marketing, promotion, rewards and cardmember services		1,566		1,689		(7	)
Salaries and employee benefits and other operating expenses		1,010		942		7
Total		2,576		2,631		(2	)
Pretax segment income		1,149		900		28
Income tax provision		431		235		83
Segment income	$	718	$	665		8

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended June 30,						Percentage
	2012			2011			Inc/(Dec)

Card billed business	$	116.0		$	106.8			9	%
Total cards-in-force (millions)		41.5			40.4			3	%
Basic cards-in-force (millions)		30.8			30.1			2	%
Average basic cardmember spending (dollars)	$	3,776		$	3,567			6	%

U.S. Consumer Travel:
Travel sales (millions)	$	1,123		$	1,000			12	%
Travel commissions and fees/sales		7.7	%		8.4	%

Total segment assets	$	95.5		$	85.8			11	%
Segment capital (millions) (A)	$	9,027		$	8,155			11	%
Return on average segment capital (B)		33.6	%		34.4	%
Return on average tangible segment capital (B)		35.3	%		36.6	%

Cardmember receivables:
Total receivables	$	19.6		$	19.2			2	%
30 days past due as a % of total		1.7	%		1.7	%
Average receivables	$	19.8		$	18.4			8	%
Net write-off rate (principal only) (C)		2.0	%		1.5	%
Net write-off rate (principal and fees) (C)		2.2	%		1.7	%

Cardmember loans:
Total loans	$	52.5		$	49.9			5	%
30 days past due loans as a % of total		1.2	%		1.5	%
Average loans	$	52.1		$	49.7			5	%
Net write-off rate (principal only) (C)		2.2	%		3.2	%
Net write-off rate (principal, interest and fees) (C)		2.4	%		3.5	%
Net interest income divided by average loans (D)		8.6	%		8.3	%
Net interest yield on cardmember loans (D)		9.0	%		8.7	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(C) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest and/or fees is also presented.

(D) See Appendix IV for calculations of net interest yield on cardmember loans, a non-GAAP measure, and net interest income divided by average loans, a GAAP measure, and the Company's rationale for presenting net interest yield on cardmember loans.

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2012		2012		2011		2011		2011

Revenues
Discount revenue, net card fees and other	$	2,925	$	2,754	$	2,796	$	2,752	$	2,734
Interest income		1,302		1,314		1,304		1,287		1,225
Interest expense		190		184		203		201		200
Net interest income		1,112		1,130		1,101		1,086		1,025
Total revenues net of interest expense		4,037		3,884		3,897		3,838		3,759
Provisions for losses		312		301		269		143		228
Total revenues net of interest expense after provisions for losses		3,725		3,583		3,628		3,695		3,531
Expenses
Marketing, promotion, rewards and cardmember services		1,566		1,472		1,540		1,646		1,689
Salaries and employee benefits and other operating expenses		1,010		931		920		898		942
Total		2,576		2,403		2,460		2,544		2,631
Pretax segment income		1,149		1,180		1,168		1,151		900
Income tax provision		431		428		441		418		235
Segment income	$	718	$	752	$	727	$	733	$	665

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Card billed business	$	116.0		$	107.7		$	114.6		$	106.8		$	106.8
Total cards-in-force (millions)		41.5			41.2			40.9			40.7			40.4
Basic cards-in-force (millions)		30.8			30.6			30.4			30.2			30.1
Average basic cardmember spending (dollars)	$	3,776		$	3,529		$	3,779		$	3,542		$	3,567

U.S. Consumer Travel:
Travel sales	$	1.1		$	1.0		$	0.8		$	0.9		$	1.0
Travel commissions and fees/sales		7.7	%		7.4	%		8.3	%		8.5	%		8.4	%

Total segment assets	$	95.5		$	90.7		$	97.8		$	87.9		$	85.8
Segment capital (A)	$	9.0		$	9.3		$	8.8		$	8.2		$	8.2
Return on average segment capital (B)		33.6	%		33.8	%		33.0	%		34.2	%		34.4	%
Return on average tangible segment capital (B)		35.3	%		35.5	%		34.8	%		36.2	%		36.6	%

Cardmember receivables:
Total receivables	$	19.6		$	19.3		$	20.6		$	19.0		$	19.2
30 days past due as a % of total		1.7	%		1.9	%		1.9	%		2.0	%		1.7	%
Average receivables	$	19.8		$	19.6		$	19.7		$	19.1		$	18.4
Net write-off rate (principal only) (C)		2.0	%		2.3	%		1.9	%		1.8	%		1.5	%
Net write-off rate (principal and fees) (C)		2.2	%		2.5	%		2.0	%		1.9	%		1.7	%

Cardmember loans:
Total loans	$	52.5		$	51.4		$	53.7		$	49.9		$	49.9
30 days past due loans as a % of total		1.2	%		1.3	%		1.4	%		1.5	%		1.5	%
Average loans	$	52.1		$	51.9		$	51.4		$	50.2		$	49.7
Net write-off rate (principal only) (C)		2.2	%		2.3	%		2.3	%		2.6	%		3.2	%
Net write-off rate (principal, interest and fees) (C)		2.4	%		2.6	%		2.5	%		2.9	%		3.5	%
Net interest income divided by average loans (D)		8.6	%		8.8	%		8.5	%		8.6	%		8.3	%
Net interest yield on cardmember loans (D)		9.0	%		9.1	%		8.9	%		9.0	%		8.7	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,					Percentage
	2012			2011		Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,119		$	1,142		(2	)%
Interest income		276			317		(13	)
Interest expense		98			108		(9	)
Net interest income		178			209		(15	)
Total revenues net of interest expense		1,297			1,351		(4	)
Provisions for losses		94			78		21
Total revenues net of interest expense after provisions for losses		1,203			1,273		(5	)
Expenses
Marketing, promotion, rewards and cardmember services		475			493		(4	)
Salaries and employee benefits and other operating expenses		582			584		-
Total		1,057			1,077		(2	)
Pretax segment income		146			196		(26	)
Income tax (benefit)/provision		(32	)		35		#
Segment income	$	178		$	161		11

# - Denotes a variance of more than 100%.

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)

Card billed business	$	31.5		$	31.5			-	%
Total cards-in-force (millions)		15.5			15.1			3	%
Basic cards-in-force (millions)		10.6			10.4			2	%
Average basic cardmember spending (dollars)	$	2,985		$	3,032			(2	)%

International Consumer Travel:
Travel sales (millions)	$	336		$	328			2	%
Travel commissions and fees/sales		7.1	%		7.6	%

Total segment assets	$	29.3		$	28.2			4	%
Segment capital (millions) (A)	$	2,847		$	3,041			(6	)%
Return on average segment capital (B)		25.5	%		24.1	%
Return on average tangible segment capital (B)		51.1	%		40.1	%

Cardmember receivables:
Total receivables	$	6.8		$	6.9			(1	)%
90 days past billing as a % of total		1.0	%		1.0	%
Net loss ratio (as a % of charge volume)		0.16	%		0.15	%

Cardmember loans:
Total loans	$	8.4		$	8.8			(5	)%
30 days past due loans as a % of total		1.7	%		2.1	%
Average loans	$	8.5		$	8.8			(3	)%
Net write-off rate (principal only) (C)		2.0	%		2.9	%
Net write-off rate (principal, interest and fees) (C)		2.6	%		3.6	%
Net interest income divided by average loans (D)		8.4	%		9.5	%
Net interest yield on cardmember loans (D)		9.5	%		10.7	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Revenues
Discount revenue, net card fees and other	$	1,119		$	1,106		$	1,155		$	1,156		$	1,142
Interest income		276			293			282			299			317
Interest expense		98			100			104			108			108
Net interest income		178			193			178			191			209
Total revenues net of interest expense		1,297			1,299			1,333			1,347			1,351
Provisions for losses		94			54			84			101			78
Total revenues net of interest expense after provisions for losses		1,203			1,245			1,249			1,246			1,273
Expenses
Marketing, promotion, rewards and cardmember services		475			461			497			460			493
Salaries and employee benefits and other operating expenses		582			588			615			597			584
Total		1,057			1,049			1,112			1,057			1,077
Pretax segment income		146			196			137			189			196
Income tax (benefit)/provision		(32	)		(1	)		(15	)		(32	)		35
Segment income	$	178		$	197		$	152		$	221		$	161

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Card billed business	$	31.5		$	30.7		$	32.8		$	31.6		$	31.5
Total cards-in-force (millions)		15.5			15.4			15.3			15.2			15.1
Basic cards-in-force (millions)		10.6			10.5			10.5			10.4			10.4
Average basic cardmember spending (dollars)	$	2,985		$	2,927		$	3,137		$	3,032		$	3,032

International Consumer Travel:
Travel sales	$	0.3		$	0.3		$	0.3		$	0.3		$	0.3
Travel commissions and fees/sales		7.1	%		7.2	%		8.4	%		7.5	%		7.6	%

Total segment assets	$	29.3		$	30.9		$	29.1		$	27.8		$	28.2
Segment capital (A)	$	2.8		$	3.0		$	2.8		$	2.9		$	3.0
Return on average segment capital (B)		25.5	%		24.7	%		25.8	%		25.3	%		24.1	%
Return on average tangible segment capital (B)		51.1	%		50.0	%		49.8	%		45.5	%		40.1	%

Cardmember receivables:
Total receivables	$	6.8		$	6.7		$	7.2		$	6.7		$	6.9
90 days past billing as a % of total		1.0	%		1.0	%		0.9	%		0.9	%		1.0	%
Net loss ratio (as a % of charge volume)		0.16	%		0.15	%		0.15	%		0.16	%		0.15	%

Cardmember loans:
Total loans	$	8.4		$	8.6		$	8.9		$	8.3		$	8.8
30 days past due loans as a % of total		1.7	%		1.8	%		1.7	%		1.9	%		2.1	%
Average loans	$	8.5		$	8.8		$	8.5		$	8.7		$	8.8
Net write-off rate (principal only) (C)		2.0	%		2.1	%		2.2	%		2.5	%		2.9	%
Net write-off rate (principal, interest and fees) (C)		2.6	%		2.7	%		2.8	%		3.1	%		3.6	%
Net interest income divided by average loans (D)		8.4	%		8.8	%		8.3	%		8.7	%		9.5	%
Net interest yield on cardmember loans (D)		9.5	%		9.8	%		9.2	%		9.9	%		10.7	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)

Revenues
Discount revenue, net card fees and other	$	1,284		$	1,259			2	%
Interest income		2			2			-
Interest expense		65			70			(7	)
Net interest expense		(63	)		(68	)		(7	)
Total revenues net of interest expense		1,221			1,191			3
Provisions for losses		36			35			3
Total revenues net of interest expense after provisions for losses		1,185			1,156			3
Expenses
Marketing, promotion, rewards and cardmember services		138			138			-
Salaries and employee benefits and other operating expenses		748			753			(1	)
Total		886			891			(1	)
Pretax segment income		299			265			13
Income tax provision		80			88			(9	)
Segment income	$	219		$	177			24

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business	$	42.3		$	39.3			8	%
Total cards-in-force (millions)		7.0			7.1			(1	)%
Basic cards-in-force (millions)		7.0			7.1			(1	)%
Average basic cardmember spending (dollars)	$	6,042		$	5,533			9	%

Global Corporate Travel:
Travel sales	$	5.1		$	5.3			(4	)%
Travel commissions and fees/sales		8.1	%		7.8	%

Total segment assets	$	20.0		$	20.3			(1	)%
Segment capital (millions) (A)	$	3,616		$	3,794			(5	)%
Return on average segment capital (B)		21.1	%		16.9	%
Return on average tangible segment capital (B)		42.3	%		35.4	%

Cardmember receivables:
Total receivables	$	15.0		$	13.8			9	%
90 days past billing as a % of total		0.6	%		0.7	%
Net loss ratio (as a % of charge volume)		0.06	%		0.06	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Revenues
Discount revenue, net card fees and other	$	1,284		$	1,216		$	1,249		$	1,195		$	1,259
Interest income		2			3			2			3			2
Interest expense		65			62			68			68			70
Net interest expense		(63	)		(59	)		(66	)		(65	)		(68	)
Total revenues net of interest expense		1,221			1,157			1,183			1,130			1,191
Provisions for losses		36			35			35			(17	)		35
Total revenues net of interest expense after provisions for losses		1,185			1,122			1,148			1,147			1,156
Expenses
Marketing, promotion, rewards and cardmember services		138			154			127			157			138
Salaries and employee benefits and other operating expenses		748			724			745			721			753
Total		886			878			872			878			891
Pretax segment income		299			244			276			269			265
Income tax provision		80			67			96			72			88
Segment income	$	219		$	177		$	180		$	197		$	177

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Card billed business	$	42.3		$	41.4		$	39.6		$	38.7		$	39.3
Total cards-in-force (millions)		7.0			7.0			7.0			7.0			7.1
Basic cards-in-force (millions)		7.0			7.0			7.0			7.0			7.1
Average basic cardmember spending (dollars)	$	6,042		$	5,920		$	5,661		$	5,520		$	5,533

Global Corporate Travel:
Travel sales	$	5.1		$	4.8		$	4.7		$	4.8		$	5.3
Travel commissions and fees/sales		8.1	%		7.2	%		8.8	%		7.8	%		7.8	%

Total segment assets	$	20.0		$	21.9		$	18.8		$	20.3		$	20.3
Segment capital (A)	$	3.6		$	3.8		$	3.6		$	3.5		$	3.8
Return on average segment capital (B)		21.1	%		20.0	%		20.4	%		18.2	%		16.9	%
Return on average tangible segment capital (B)		42.3	%		40.6	%		42.1	%		37.7	%		35.4	%

Cardmember receivables:
Total receivables	$	15.0		$	15.3		$	12.8		$	13.9		$	13.8
90 days past billing as a % of total		0.6	%		0.6	%		0.8	%		0.7	%		0.7	%
Net loss ratio (as a % of charge volume)		0.06	%		0.08	%		0.06	%		0.06	%		0.06	%

(A) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(B) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)
Revenues
Discount revenue, fees and other	$	1,259		$	1,183			6	%
Interest income		5			1			#
Interest expense		(59	)		(55	)		7
Net interest income		64			56			14
Total revenues net of interest expense		1,323			1,239			7
Provisions for losses		17			13			31
Total revenues net of interest expense after provisions for losses		1,306			1,226			7
Expenses
Marketing, promotion, rewards and cardmember services		200			213			(6	)
Salaries and employee benefits and other operating expenses		544			526			3
Total		744			739			1
Pretax segment income		562			487			15
Income tax provision		190			163			17
Segment income	$	372		$	324			15

# - Denotes a variance of more than 100%.

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended
	June 30,						Percentage
	2012			2011			Inc/(Dec)
Global Card billed business (A)	$	221.6		$	207.6			7	%

Global Network & Merchant Services:
Total segment assets	$	19.8		$	16.7			19	%
Segment capital (millions) (B)	$	2,171		$	1,955			11	%
Return on average segment capital (C)		67.4	%		61.5	%
Return on average tangible segment capital (C)		74.9	%		66.5	%

Global Network Services:
Card billed business	$	31.3		$	29.3			7	%
Total cards-in-force (millions)		36.1			31.4			15	%

(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), and certain insurance fees charged on proprietary cards. In-store spend activity within retail co-brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non-proprietary billed business.

(B) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(C) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Revenues
Discount revenue, fees and other	$	1,259		$	1,186		$	1,254		$	1,188		$	1,183
Interest income		5			4			1			2			1
Interest expense		(59	)		(58	)		(61	)		(60	)		(55	)
Net interest income		64			62			62			62			56
Total revenues net of interest expense		1,323			1,248			1,316			1,250			1,239
Provisions for losses		17			18			20			21			13
Total revenues net of interest expense after provisions for losses		1,306			1,230			1,296			1,229			1,226
Expenses
Marketing, promotion, rewards and cardmember services		200			172			180			196			213
Salaries and employee benefits and other operating expenses		544			519			614			519			526
Total		744			691			794			715			739
Pretax segment income		562			539			502			514			487
Income tax provision		190			182			178			182			163
Segment income	$	372		$	357		$	324		$	332		$	324

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Global Card billed business (A)	$	221.6		$	211.2		$	219.0		$	207.7		$	207.6

Global Network & Merchant Services:
Total segment assets	$	19.8		$	20.1		$	17.8		$	16.0		$	16.7
Segment capital (B)	$	2.2		$	2.1		$	2.0		$	2.0		$	2.0
Return on average segment capital (C)		67.4	%		67.1	%		66.3	%		64.4	%		61.5	%
Return on average tangible segment capital (C)		74.9	%		74.9	%		74.3	%		70.8	%		66.5	%

Global Network Services:
Card billed business	$	31.3		$	30.4		$	31.4		$	30.1		$	29.3
Total cards-in-force (millions)		36.1			35.1			34.2			32.9			31.4

(B) Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.

(C) Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, 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
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
ROE

Net income	$	5,022		$	5,014		$	4,935		$	4,805		$	4,663
Average shareholders' equity	$	18,887		$	18,525		$	17,842		$	17,277		$	16,508
Return on average equity (A)		26.6	%		27.1	%		27.7	%		27.8	%		28.2	%

Reconciliation of ROCE and ROTCE

Net income	$	5,022		$	5,014		$	4,935		$	4,805		$	4,663
Earnings allocated to participating share awards and other		57			58			58			56			55
Net income attributable to common shareholders	$	4,965		$	4,956		$	4,877		$	4,749		$	4,608

Average shareholders' equity	$	18,887		$	18,525		$	17,842		$	17,277		$	16,508
Average common shareholders' equity	$	18,887		$	18,525		$	17,842		$	17,277		$	16,508
Average goodwill and other intangibles		4,330			4,380			4,215			3,992			3,744
Average tangible common shareholders' equity	$	14,557		$	14,145		$	13,627		$	13,285		$	12,764
Return on average common equity (A)		26.3	%		26.8	%		27.3	%		27.5	%		27.9	%
Return on average tangible common equity (B)		34.1	%		35.0	%		35.8	%		35.7	%		36.1	%

(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

Components of Return on Average Segment Capital (ROSC) and Return on Average Tangible Segment Capital (ROTSC)

Appendix II

(Millions)
	For the Twelve Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

U.S. Card Services
Segment income	$	2,930		$	2,877		$	2,680		$	2,653		$	2,515
Average segment capital	$	8,714		$	8,508		$	8,121		$	7,762		$	7,315
Average goodwill and other intangibles		403			414			425			436			446
Average tangible segment capital	$	8,311		$	8,094		$	7,696		$	7,326		$	6,869
Return on average segment capital (A)		33.6	%		33.8	%		33.0	%		34.2	%		34.4	%
Return on average tangible segment capital (A)		35.3	%		35.5	%		34.8	%		36.2	%		36.6	%

International Card Services
Segment income	$	748		$	731		$	723		$	670		$	593
Average segment capital	$	2,936		$	2,962		$	2,797		$	2,644		$	2,464
Average goodwill and other intangibles		1,472			1,500			1,346			1,170			987
Average tangible segment capital	$	1,464		$	1,462		$	1,451		$	1,474		$	1,477
Return on average segment capital (A)		25.5	%		24.7	%		25.8	%		25.3	%		24.1	%
Return on average tangible segment capital (A)		51.1	%		50.0	%		49.8	%		45.5	%		40.1	%

Global Commercial Services
Segment income	$	773		$	731		$	738		$	661		$	614
Average segment capital	$	3,661		$	3,649		$	3,619		$	3,632		$	3,628
Average goodwill and other intangibles		1,833			1,847			1,867			1,881			1,895
Average tangible segment capital	$	1,828		$	1,802		$	1,752		$	1,751		$	1,733
Return on average segment capital (A)		21.1	%		20.0	%		20.4	%		18.2	%		16.9	%
Return on average tangible segment capital (A)		42.3	%		40.6	%		42.1	%		37.7	%		35.4	%

Global Network & Merchant Services
Segment income	$	1,385		$	1,337		$	1,293		$	1,228		$	1,148
Average segment capital	$	2,056		$	1,993		$	1,949		$	1,908		$	1,866
Average goodwill and other intangibles		207			209			209			174			140
Average tangible segment capital	$	1,849		$	1,784		$	1,740		$	1,734		$	1,726
Return on average segment capital (A)		67.4	%		67.1	%		66.3	%		64.4	%		61.5	%
Return on average tangible segment capital (A)		74.9	%		74.9	%		74.3	%		70.8	%		66.5	%

(A) Return on average segment capital is calculated by dividing one year period segment income by one year average segment capital. Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes average goodwill and other intangibles. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business.

(Preliminary)

American Express Company

Net Interest Yield on Cardmember Loans

Appendix III

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011

Net interest income	$	1,121		$	1,133		$	1,110		$	1,113		$	1,083

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	341		$	364		$	353		$	356		$	360

Interest income not attributable to the Company's cardmember loan portfolio	$	(104	)	$	(109	)	$	(113	)	$	(113	)	$	(130	)


Adjusted net interest income (A)	$	1,358		$	1,388		$	1,350		$	1,356		$	1,313

Average loans (billions)	$	60.6		$	60.7		$	59.9		$	58.9		$	58.5

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other	$	(0.2	)	$	(0.2	)	$	-		$	(0.1	)	$	(0.3	)

Adjusted average loans (billions) (B)	$	60.4		$	60.5		$	59.9		$	58.8		$	58.2

Net interest income divided by average loans (C)		7.4	%		7.5	%		7.4	%		7.5	%		7.4	%
Net interest yield on cardmember loans (D)		9.0	%		9.2	%		8.9	%		9.1	%		9.0	%

(A) Adjusted net interest income, a non-GAAP measure, represents net interest income allocated to the Company's cardmember loan portfolio excluding the impact of interest expense and interest income not attributable to the Company’s cardmember loan portfolio. The Company believes adjusted net interest income is useful to investors because it is a component of net interest yield on cardmember loans.

(B) Adjusted average loans, a non-GAAP measure, represents average cardmember loans excluding the impact of deferred card fees, net of deferred direct acquisition costs of cardmember loans, and other. The Company believes adjusted average loans is useful to investors because it is a component of net interest yield on cardmember loans.

(C) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to cardmember loans, and interest expense attributable to other activities, including cardmember receivables.

(D) Net interest yield on cardmember loans, a non-GAAP measure, is computed by dividing adjusted net interest income by adjusted average loans, computed on an annualized basis. The calculation of net interest yield on cardmember loans includes interest that is deemed uncollectible. For all presentations of net interest yield on cardmember loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - cardmember loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation. The Company believes net interest yield on cardmember loans is useful to investors because it provides a measure of profitability of the Company's cardmember loan portfolio.

(Preliminary)

U. S. Card Services and International Card Services

Net Interest Yield on Cardmember Loans

Appendix IV

(Millions)
	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
USCS:
Net interest income	$	1,112		$	1,130		$	1,101		$	1,086		$	1,025

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	51		$	51		$	58		$	58		$	58

Interest income not attributable to the Company's cardmember loan portfolio	$	(2	)	$	(2	)	$	(3	)	$	(2	)	$	(3	)

Adjusted net interest income (A)	$	1,161		$	1,179		$	1,156		$	1,142		$	1,080

Average loans (billions)	$	52.1		$	51.9		$	51.4		$	50.2		$	49.7

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans	$	-		$	-		$	0.1		$	-		$	(0.2	)

Adjusted average loans (billions) (B)	$	52.1		$	51.9		$	51.5		$	50.2		$	49.5

Net interest income divided by average loans (C)		8.6	%		8.8	%		8.5	%		8.6	%		8.3	%
Net interest yield on cardmember loans (D)		9.0	%		9.1	%		8.9	%		9.0	%		8.7	%

ICS:
Net interest income	$	178		$	193		$	178		$	191		$	209

Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	26		$	25		$	27		$	32		$	34

Interest income not attributable to the Company's cardmember loan portfolio	$	(7	)	$	(9	)	$	(11	)	$	(9	)	$	(10	)

Adjusted net interest income (A)	$	197		$	209		$	194		$	214		$	233

Average loans (billions)	$	8.5		$	8.8		$	8.5		$	8.7		$	8.8

Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other	$	(0.2	)	$	(0.2	)	$	(0.1	)	$	(0.1	)	$	(0.1	)

Adjusted average loans (billions) (B)	$	8.3		$	8.6		$	8.4		$	8.6		$	8.7

Net interest income divided by average loans (C)		8.4	%		8.8	%		8.3	%		8.7	%		9.5	%
Net interest yield on cardmember loans (D)		9.5	%		9.8	%		9.2	%		9.9	%		10.7	%

AMERICAN EXPRESS CO - FORM 8-K - EX-99.2 - FINANCIALS - July 18, 2012

Attached files

AMERICAN EXPRESS CO Reports