3rd Quarter Results American Express Reports Record Third Quarter
Earnings of $770 Million Results Reflect Record Cardmember
Billings, Strong Growth in Lending Balances, Improved Credit
Quality and Higher Client Assets (Dollars in millions, except per
share amounts) Quarters Ended Percentage Nine Months Ended
Percentage September 30 Inc/(Dec) September 30 Inc/(Dec) 2003 2002
Net Income $770 $687 12% $2,224 $1,988 12% Revenues $6,419 $5,907
9% $18,798 $17,611 7% Per Share Net Income: Basic $0.60 $0.52 15%
$1.73 $1.50 15% Diluted $0.59 $0.52 13% $1.71 $1.49 15% Average
Common Shares Outstanding Basic 1,278 1,323 (3%) 1,287 1,324 (3%)
Diluted 1,297 1,330 (2%) 1,298 1,334 (3%) Return on Average Total
Shareholders' 20.4% 17.8% - 20.4% 17.8% - Equity* *Computed on a
trailing 12-month basis using total Shareholders' Equity as
reported in the Consolidated Financial Statements prepared in
accordance with accounting principles generally accepted in the
United States (GAAP). Certain prior period amounts have been
restated to conform to current year presentation. NEW YORK, Oct. 27
-- American Express Company today reported record net income of
$770 million for the third quarter, up 12 percent from $687 million
a year ago. Diluted earnings per share (EPS) rose to $0.59, up 13
percent from $0.52. The company's return on equity was 20.4
percent. Revenues on a GAAP basis totaled $6.4 billion, up nine
percent from $5.9 billion a year ago. This growth reflects a rise
in cards-in-force, average cardmember spending and lending
balances. It also reflects increased revenue from higher asset
levels at American Express Financial Advisors (AEFA). Consolidated
expenses on a GAAP basis totaled $5.4 billion, up eight percent
from $4.9 billion a year ago. This increase primarily reflects
higher marketing, promotion, rewards and cardmember services
expenses, as well as higher human resources expense. Kenneth I.
Chenault, Chairman and CEO said: "The results this quarter
benefited from an acceleration of revenue growth, outstanding
credit quality, a winning set of products and reengineering
initiatives that helped to fund a significantly higher level of
business-building investments. "The changes we've made to our
business model over the last few years are delivering results now.
They are also putting us in an excellent position to capitalize on
competitive opportunities -- particularly in the card business.
"During the quarter, we met all three of our long-term financial
targets: 12 to 15 percent earnings per share growth, eight percent
revenue growth and a return on equity of 18 to 20 percent. And, we
did this while substantially increasing the level of investment
spending designed to generate both short- and longer-term growth.
"We see excellent competitive opportunities and we plan to continue
a higher level of investment spending through the remainder of the
year. Because of the momentum we're generating, we now believe that
our 2003 earnings per share before accounting changes will be at
the high end of our previous guidance of $2.26 to $2.29." Third
Quarter Results/GAAP Basis The third quarter revenue growth from
year-ago levels reflected increases of eight percent at Travel
Related Services (TRS) and 10 percent at AEFA. Revenue at American
Express Bank (AEB) was essentially unchanged. More specifically, *
Discount revenue increased 13 percent, reflecting a 15 percent rise
in cardmember spending. * Net finance charge revenue increased 18
percent, reflecting continued strong growth in the cardmember
lending portfolio. * Net securitization income rose 10 percent,
primarily reflecting a higher level of securitized lending balances
in this portfolio. * Management and distribution fees rose 10
percent, reflecting in part higher asset levels at AEFA. *
Insurance and annuity-related revenues rose 14 percent. The rise in
third quarter expenses from a year ago reflected increases of seven
percent at TRS and 10 percent at AEFA, slightly offset by a one
percent decrease at AEB. More specifically, the overall increase
reflected: * A 26 percent increase in marketing, promotion, rewards
and cardmember services expenses, driven by a 25 percent increase
at TRS. * A five percent increase in other operating expenses,
including an eight percent increase at TRS. * A 10 percent increase
in human resources expense, reflecting merit increases, employee
benefits and management incentives. Total staffing levels were
essentially unchanged from the year-ago period. These items were
slightly offset by a 10 percent decline in interest expense,
reflecting a 25 percent decline in charge card interest expense at
TRS. Travel Related Services (TRS) reported net income of $606
million for the third quarter, up 10 percent from $553 million a
year ago. The following discussion of third quarter results
presents TRS segment results on a "managed basis," as if there had
been no cardmember lending securitization transactions. This is the
basis used by management to evaluate operations and is consistent
with industry practice. For further information about managed basis
and reconciliation of GAAP and managed TRS information, see the
"Managed Basis" section below. The AEFA, AEB and Corporate and
Other sections below are presented on a GAAP basis. Total net
revenues increased seven percent from the year-ago period,
reflecting continued strong growth in spending and borrowing on
American Express cards. This strength in the card business was
partially offset by continued weakness in the travel and Travelers
Cheque businesses. Record cardmember spending contributed to a 13
percent rise in discount revenue. The spending increase reflected
growth in the number of American Express Cards, higher average
cardmember spending and the continued benefit of rewards programs.
The higher cardmember spending was driven by strong growth in
retail and everyday spending, and by a notable improvement in the
traditional travel and entertainment category. Net finance charge
revenue increased eight percent, reflecting 14 percent growth in
loan balances offset in part by a lower net interest yield. Net
card fees increased primarily as a result of a higher number of
cards-in-force. Total expenses increased six percent. In line with
the plans announced at mid-year, marketing, promotion, rewards and
cardmember services expenses rose 26 percent from year-ago levels,
primarily reflecting the continued expansion of card-acquisition
programs, as well as increased cardmember loyalty program
participation. Human resources expense increased eight percent
largely due to higher costs related to merit increases, employee
benefits and management incentives. Other operating expenses
increased nine percent. Credit quality remained very strong in both
the charge and credit card portfolios. The total provision for
losses declined seven percent, reflecting a decline of 12 percent
in the lending provision, partially offset by an 11 percent
increase in the charge card provision. The increase in the charge
card provision is primarily a result of higher receivable balances,
which rose nine percent from last year. Reserve coverage ratios
remained at historically strong levels. Charge card interest
expense decreased 24 percent largely due to lower funding costs.
This decrease was partially offset by higher average receivable
balances. American Express Financial Advisors (AEFA) reported third
quarter net income of $197 million, up 30 percent from $152 million
a year ago. Total revenues increased 10 percent. Investment income
rose seven percent, reflecting the benefit of a higher level of
owned investments that was partially offset by lower yields.
Invested assets increased due to strong sales over the past year of
annuities, insurance and certificate products. Management and
distribution fees and assets under management -- excluding the
acquisition of Threadneedle -- increased from year-ago levels. This
increase reflected higher average equity values for the quarter,
partially offset by net outflows. Human resources and other
operating expenses rose a combined 10 percent from year-ago levels,
reflecting merit increases, higher employee benefits and management
incentive costs. These increases were partially offset by a slight
net benefit resulting from AEFA's Deferred Acquisition Cost (DAC)
review. As discussed in prior reports, AEFA annually reviews its
DAC assumptions and related practices in the third quarter. On a
gross basis, this year's review resulted in both significant
favorable and unfavorable changes to DAC amortization, which net to
a $2 million benefit. The after-tax results reflect a tax benefit,
which was partially offset by net investment losses and higher
legal and acquisition-related costs. American Express Bank (AEB)
reported net income for the third quarter of $27 million, up five
percent from $25 million a year ago. AEB's results reflect lower
provisions for losses primarily due to the continued stabilization
of write-offs in the consumer lending portfolio. The results also
reflected higher fee-related, foreign exchange and other revenues
in Private Banking and the Financial Institutions Group. These
benefits were partially offset by lower net interest income due to
lower volumes in the Personal Financial Services and corporate loan
portfolios and higher human resources and technology expenses.
Corporate and Other reported third quarter net expenses of $60
million in 2003 compared with $43 million in 2002. Other Items In
October 2003, the Financial Accounting Standards Board (FASB)
issued a statement delaying the effective date of its accounting
rule, FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" (FIN 46). FIN 46 requires the consolidation for
reporting purposes of assets within certain structured investments
that AEFA both owns and manages for third parties. Detailed
interpretations of FIN 46 continue to emerge and the FASB will
likely issue further interpretations of the rule over the next few
months. Accordingly, the company has decided to delay its plans to
adopt FIN 46 in the third quarter 2003 until the revised effective
date of December 31, 2003. In July 2003, the company preliminarily
estimated the impact of FIN 46 to be a below-the-line charge of
approximately $150 million after tax. Based on current
interpretations of the rules and market factors as of September 30,
2003, the charge is now expected to be lower than originally
estimated. However, the charge upon adoption of FIN 46 is dependent
upon further interpretations of the rules and market factors as of
December 31, 2003. The charge will have no effect on cash flow, and
the company expects that it will be reversed at a later date as the
structured investments mature. Managed Basis - TRS Managed basis
means the presentation assumes there have been no securitization
transactions, i.e. all securitized cardmember loans and related
income effects are reflected as if they were in the company's
balance sheet and income statements, respectively. The company
presents TRS information on a managed basis because that is the way
the company's management views and manages the business. Management
believes that a full picture of trends in the company's cardmember
lending business can only be derived by evaluating the performance
of both securitized and non-securitized cardmember loans. Asset
securitization is just one of several ways for the company to fund
cardmember loans. Use of a managed basis presentation, including
non- securitized and securitized cardmember loans, presents a more
accurate picture of the key dynamics of the cardmember lending
business, avoiding distortions due to the mix of funding sources at
any particular point in time. For example, irrespective of the
funding mix, it is important for management and investors to see
metrics, such as changes in delinquencies and write-off rates, for
the entire cardmember lending portfolio because they are more
representative of the economics of the aggregate cardmember
relationships and ongoing business performance and trends over
time. It is also important for investors to see the overall growth
of cardmember loans and related revenue and changes in market
share, which are all significant metrics in evaluating the
company's performance and which can only be properly assessed when
all non-securitized and securitized cardmember loans are viewed
together on a managed basis. The Consolidated Section of this press
release and attachments provide the GAAP presentation for items
described on a managed basis. The following table reconciles the
GAAP-basis TRS income statements to the managed-basis information.
Travel Related Services Selected Financial Information (Unaudited)
Quarters Ended September 30, (millions) Preliminary GAAP Basis
------------------------------- Percentage 2003 2002 Inc/(Dec)
------------------------------- Net revenues: Discount revenue
$2,221 $1,967 13.0% Net card fees 462 439 5.4 Lending: Finance
charge revenue 566 504 12.0 Interest expense 116 124 (7.3) --------
-------- Net finance charge revenue 450 380 18.3 Travel commissions
and fees 349 342 1.9 Other commissions and fees 465 467 (0.4)
Travelers Cheque investment income 90 96 (7.0) Securitization
income, net 327 298 9.6 Other revenues 394 406 (3.0) --------
-------- Total net revenues 4,758 4,395 8.2 -------- --------
Expenses: Marketing, promotion, rewards and cardmember services 994
796 24.8 Provision for losses and claims: Charge card 213 191 11.1
Lending 279 319 (12.6) Other 31 38 (17.8) -------- -------- Total
523 548 (4.7) Charge card interest expense 186 249 (25.3) Human
resources 938 871 7.6 Other operating expenses 1,225 1,133 8.3
-------- -------- Total expenses 3,866 3,597 7.5 -------- --------
Pretax income 892 798 11.7 Income tax provision 286 245 16.3
-------- -------- Net income $606 $553 9.7 ======== ======== Note:
Certain prior period amounts have been reclassified to conform to
current year presentation. Travel Related Services Selected
Financial Information (Unaudited) Quarters Ended September 30,
(millions) Preliminary Securitization Effect Managed Basis
---------------- ---------------------------- Percentage 2003 2002
2003 2002 Inc/(Dec) ---------------- ----------------------------
Net revenues: Discount revenue Net card fees Lending: Finance
charge revenue $611 $630 $1,177 $1,134 3.7% Interest expense 74 98
190 222 (15.1) ------- ------- -------- -------- Net finance charge
revenue 537 532 987 912 8.2 Travel commissions and fees Other
commissions and fees 45 48 510 515 (0.9) Travelers Cheque
investment income Securitization income, net (327) (298) - - -
Other revenues - (4) 394 402 (2.1) ----- ---- ------ ------ Total
net revenues 255 278 5,013 4,673 7.3 ----- ---- ------ ------
Expenses: Marketing, promotion, rewards and cardmember services -
(5) 994 791 25.6 Provision for losses and claims: Charge card
Lending 255 291 534 610 (12.3) Other ------- ------- --------
-------- Total 255 291 778 839 (7.2) Charge card interest expense -
(4) 186 245 (24.2) Human resources Other operating expenses - (4)
1,225 1,129 8.6 ------- ------- -------- -------- Total expenses
$255 $278 $4,121 $3,875 6.4 ------- ------- -------- -------- Note:
Certain prior period amounts have been reclassified to conform to
current year presentation. American Express Company
(www.americanexpress.com), founded in 1850, is a global travel,
financial and network services provider. Note: The 2003 Third
Quarter Earnings Supplement, as well as CFO Gary Crittenden's
presentation from the investor conference call referred to below,
will be available today on the American Express web site at
http://ir.americanexpress.com. An investor conference call to
discuss third quarter earnings results, operating performance and
other topics that may be raised during the discussion will be held
at 5:00 p.m. (ET) today. Live audio of the conference call will be
accessible to the general public on the American Express web site
athttp://ir.americanexpress.com. A replay of the conference call
also will be available today at the same web site address. This
release includes forward-looking statements, which are subject to
risks and uncertainties. The words "believe," "expect,"
"anticipate," "optimistic," "intend," "plan," "aim," "will," "may,"
"should," "could," "would," "likely," and similar expressions are
intended to identify forward-looking statements. 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. Factors that could cause actual results
to differ materially from these forward-looking statements include,
but are not limited to: the company's ability to successfully
implement a business model that allows for significant earnings
growth based on revenue growth that is lower than historical
levels, including the ability to improve its operating expense to
revenue ratio both in the short-term and over time, which will
depend in part on the effectiveness of re-engineering and other
cost-control initiatives, as well as factors impacting the
company's revenues; the company's ability to grow its business and
meet or exceed its return on shareholders' equity target by
reinvesting approximately 35% of annually- generated capital, and
returning approximately 65% of such capital to shareholders, over
time, which will depend on the company's ability to manage its
capital needs and the effect of business mix, acquisitions and
rating agency requirements; the ability of the company to generate
sufficient revenues for expanded investment spending and to
actually spend such funds over the remainder of the year to the
extent available, particularly if funds for discretionary spending
are higher than anticipated, and the ability to capitalize on such
investments to improve business metrics; credit risk related to
consumer debt, business loans, merchant bankruptcies and other
credit exposures both in the U.S. and internationally; fluctuation
in the equity and fixed income markets, which can affect the amount
and types of investment products sold by AEFA, the market value of
its managed assets, and management, distribution and other fees
received based on the value of those assets; AEFA's ability to
recover Deferred Acquisition Costs (DAC), as well as the timing of
such DAC amortization, in connection with the sale of annuity,
insurance and certain mutual fund products; changes in assumptions
relating to DAC, which could impact the amount of DAC amortization;
the ability to improve investment performance in AEFA's businesses,
including attracting and retaining high-quality personnel; the
success, timeliness and financial impact, including costs, cost
savings and other benefits, including increased revenues, of
re-engineering initiatives being implemented or considered by the
company, including cost management, structural and strategic
measures such as vendor, process, facilities and operations
consolidation, outsourcing (including, among others, technologies
operations), relocating certain functions to lower cost overseas
locations, moving internal and external functions to the Internet
to save costs, and planned staff reductions relating to certain of
such re-engineering actions; the ability to control and manage
operating, infrastructure, advertising and promotion and other
expenses as business expands or changes, including balancing the
need for longer-term investment spending; the potential negative
effect on the company's businesses and infrastructure, including
information technology systems, of terrorist attacks, disasters or
other catastrophic events in the future; the impact on the
company's businesses resulting from continuing geopolitical
uncertainty; the overall level of consumer confidence; consumer and
business spending on the company's travel related services
products, particularly credit and charge cards and growth in card
lending balances, which depend in part on the ability to issue new
and enhanced card products and increase revenues from such
products, attract new cardholders, capture a greater share of
existing cardholders' spending, sustain premium discount rates,
increase merchant coverage, retain cardmembers after low
introductory lending rates have expired, and expand the global
network services business; the ability to manage and expand
cardmember benefits, including Membership Rewards(R), in a
cost-effective manner and to accurately estimate the provision for
the cost of the Membership Rewards program; the triggering of
obligations to make payments to certain co-brand partners,
merchants, vendors and customers under contractual arrangements
with such parties under certain circumstances; successfully
cross-selling financial, travel, card and other products and
services to the company's customer base, both in the U.S. and
internationally; a downturn in the company's businesses and/or
negative changes in the company's and its subsidiaries' credit
ratings, which could result in contingent payments under contracts,
decreased liquidity and higher borrowing costs; fluctuations in
interest rates, which impact the company's borrowing costs, return
on lending products and spreads in the investment and insurance
businesses; credit trends and the rate of bankruptcies, which can
affect spending on card products, debt payments by individual and
corporate customers and businesses that accept the company's card
products and returns on the company's investment portfolios;
fluctuations in foreign currency exchange rates; political or
economic instability in certain regions or countries, which could
affect lending and other commercial activities, among other
businesses, or restrictions on convertibility of certain
currencies; changes in laws or government regulations; the costs
and integration of acquisitions; the ability to accurately
interpret the recently issued accounting rules related to the
consolidation of variable interest entities, including those
involving collateralized debt obligations and secured loan trusts
and limited partnerships that the company manages and/or invests
in, the impact of which on both the company's balance sheet and
results of operations could be greater or less than that estimated
by management to the extent that after additional experience with
and interpretation of such rules the company would need to revise
estimates of the consolidation impact with respect to such
investments and re-evaluate the impact of the rules on certain
types of structures; and outcomes and costs associated with
litigation and compliance and regulatory matters. A further
description of these and other risks and uncertainties can be found
in the company's Annual Report on Form 10-K for the year ended
December 31, 2002, and its other reports filed with the SEC. All
information in the following tables is presented on a basis
prepared in accordance with accounting principles generally
accepted in the United States (GAAP), unless otherwise indicated.
(Preliminary) AMERICAN EXPRESS COMPANY CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (Millions) Quarters Ended
September 30, ------------------ Percentage 2003 2002 Inc/(Dec)
------ ------ ---------- Revenues Discount revenue $2,221 $1,967
13.0% Interest and dividends, net 730 759 (3.8) Management and
distribution fees 603 551 9.5 Cardmember lending net finance charge
revenue 450 380 18.3 Net card fees 462 439 5.4 Travel commissions
and fees 349 342 1.9 Other commissions and fees 514 490 5.1
Insurance and annuity revenues 345 303 13.9 Securitization income,
net 327 298 9.6 Other 418 378 10.4 ------ ------ Total revenues
6,419 5,907 8.7 Expenses Human resources 1,559 1,414 10.3 Provision
for losses and benefits 1,080 1,073 0.6 Marketing, promotion,
rewards and cardmember services 1,016 805 26.2 Interest 239 264
(9.7) Other operating expenses 1,463 1,394 5.0 Restructuring
charges (2) (2) 32.3 Disaster recovery charge - - - ------ ------
Total expenses 5,355 4,948 8.2 ------ ------ Pretax income 1,064
959 11.0 Income tax provision 294 272 8.0 ------ ------ Net income
$770 $687 12.1% ====== ====== Note: Certain prior period amounts
have been reclassified to conform to current year presentation.
(Preliminary) AMERICAN EXPRESS COMPANY CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (Millions) Nine Months Ended
September 30, ------------------ Percentage 2003 2002 Inc/(Dec)
------ ------ ---------- Revenues Discount revenue $6,349 $5,809
9.3% Interest and dividends, net 2,277 2,175 4.7 Management and
distribution fees 1,692 1,757 (3.7) Cardmember lending net finance
charge revenue 1,400 1,240 12.9 Net card fees 1,368 1,291 6.0
Travel commissions and fees 1,062 1,039 2.1 Other commissions and
fees 1,490 1,423 4.8 Insurance and annuity revenues 1,000 901 11.0
Securitization income, net 968 883 9.7 Other 1,192 1,093 8.9 ------
------ Total revenues 18,798 17,611 6.7 Expenses Human resources
4,625 4,346 6.4 Provision for losses and benefits 3,265 3,336 (2.2)
Marketing, promotion, rewards and cardmember services 2,735 2,297
19.1 Interest 700 812 (13.8) Other operating expenses 4,318 4,070
6.1 Restructuring charges (2) (21) 91.6 Disaster recovery charge -
(7) - ------ ------ Total expenses 15,641 14,833 5.4 ------ ------
Pretax income 3,157 2,778 13.7 Income tax provision 933 790 18.2
------ ------ Net income $2,224 $ 1,988 11.9% ====== ====== Note:
Certain prior period amounts have been reclassified to conform to
current year presentation. (Preliminary) AMERICAN EXPRESS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Billions)
September 30, December 31, 2003 2002 ------------ ------------
Assets Cash and cash equivalents $ 6 $ 10 Accounts receivable 30 29
Investments 56 54 Loans 28 28 Separate account assets 28 22 Other
assets 16 14 ------------ ------------ Total assets $ 164 $ 157
============ ============ Liabilities and Shareholders' Equity
Separate account liabilities $ 28 $ 22 Short-term debt 16 21
Long-term debt 19 16 Other liabilities 86 84 ------------
------------ Total liabilities 149 143 ------------ ------------
Shareholders' Equity 15 14 ------------ ------------ Total
liabilities and shareholders' equity $ 164 $ 157 ============
============ Note: Certain prior period amounts have been
reclassified to conform to current year presentation. (Preliminary)
AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (Unaudited) (Millions)
Quarters Ended September 30, ------------------ Percentage 2003
2002 Inc/(Dec) ------ ------ ---------- REVENUES (A) Travel Related
Services $4,758 $4,395 8% American Express Financial Advisors 1,525
1,388 10 American Express Bank 199 199 - ------ ------ 6,482 5,982
8 Corporate and other, including adjustments and eliminations (63)
(75) 16 ------ ------ CONSOLIDATED REVENUES $6,419 $5,907 9% ======
====== PRETAX INCOME (LOSS) Travel Related Services $892 $798 12%
American Express Financial Advisors 224 205 9 American Express Bank
41 38 5 ------ ------ 1,157 1,041 11 Corporate and other (93) (82)
(12) ------ ------ PRETAX INCOME $1,064 $959 11% ====== ====== NET
INCOME (LOSS) Travel Related Services $606 $553 10% American
Express Financial Advisors 197 152 30 American Express Bank 27 25 5
------ ------ 830 730 14 Corporate and other (60) (43) (39) ------
------ NET INCOME $770 $687 12% ====== ====== (A) Managed net
revenues are reported net of American Express Financial Advisors'
provision for losses and benefits and exclude the effect of TRS'
securitization activities. The following table reconciles
consolidated GAAP revenues to Managed Basis net revenues: GAAP
revenues $ 6,419 $ 5,907 9% Effect of TRS securitizations 255 278
Effect of AEFA provisions (535) (487) ------ ------ Managed net
revenues $ 6,139 $ 5,698 8% ====== ====== (Preliminary) AMERICAN
EXPRESS COMPANY FINANCIAL SUMMARY (Unaudited) (Millions) Nine
Months Ended September 30, ------------------ Percentage 2003 2002
Inc/(Dec) ------ ------ ---------- REVENUES (A) Travel Related
Services $13,978 $13,056 7% American Express Financial Advisors
4,432 4,173 6 American Express Bank 596 557 7 ------ ------ 19,006
17,786 7 Corporate and other, including adjustments and
eliminations (208) (175) (19) ------ ------ CONSOLIDATED REVENUES
$18,798 $17,611 7% ====== ====== PRETAX INCOME (LOSS) Travel
Related Services $2,687 $2,286 18% American Express Financial
Advisors 611 659 (7) American Express Bank 109 85 28 ------ ------
3,407 3,030 12 Corporate and other (250) (252) 1 ------ ------
PRETAX INCOME $3,157 $2,778 14% ====== ====== NET INCOME (LOSS)
Travel Related Services $1,824 $1,585 15% American Express
Financial Advisors 487 479 2 American Express Bank 73 56 29 ------
------ 2,384 2,120 12 Corporate and other (160) (132) (21) ------
------ NET INCOME $2,224 $1,988 12% ====== ====== (A) Managed net
revenues are reported net of American Express Financial Advisors'
provision for losses and benefits and exclude the effect of TRS'
securitization activities. The following table reconciles
consolidated GAAP revenues to Managed Basis net revenues: GAAP
revenues $18,798 $17,611 7% Effect of TRS securitizations 735 724
Effect of AEFA provisions (1,567) (1,415) ------ ------ Managed net
revenues $17,966 $16,920 6% ====== ====== (Preliminary) AMERICAN
EXPRESS COMPANY FINANCIAL SUMMARY (CONTINUED) (UNAUDITED) Quarters
Ended September 30, ---------------- Percentage 2003 2002 Inc/(Dec)
------ ------ ---------- EARNINGS PER SHARE Per share net income:
Basic $ 0.60 $ 0.52 15% ====== ====== Diluted $ 0.59 $ 0.52 13%
====== ====== Average common shares outstanding for earnings per
common share (millions): Basic 1,278 1,323 (3)% ====== ======
Diluted 1,297 1,330 (2)% ====== ====== Cash dividends declared per
common share $0.10 $0.08 25% ====== ====== SELECTED STATISTICAL
INFORMATION (Unaudited) Quarters Ended September 30,
---------------- Percentage 2003 2002 Inc/(Dec) ------ ------
---------- Return on average total shareholders' equity (A) 20.4%
17.8% - Common shares outstanding (millions) 1,285 1,325 (3)% Book
value per common share $11.54 $10.55 9% Shareholders' equity
(billions) $14.8 $14.0 6% (A) Computed on a trailing 12-month basis
using total shareholders' equity as reported in the Consolidated
Financial Statements prepared in accordance with GAAP. All return
on average total shareholders' equity and return on average total
asset calculations in this and following tables are revised from
amounts previously reported. (Preliminary) AMERICAN EXPRESS COMPANY
FINANCIAL SUMMARY (CONTINUED) (UNAUDITED) Nine Months Ended
September 30, ----------------- Percentage 2003 2002 Inc/(Dec)
------ ------ ---------- EARNINGS PER SHARE Per share net income:
Basic $1.73 $1.50 15% ====== ====== Diluted $1.71 $1.49 15% ======
====== Average common shares outstanding for earnings per common
share (millions): Basic 1,287 1,324 (3)% ====== ====== Diluted
1,298 1,334 (3)% ====== ====== Cash dividends declared per common
share $0.28 $0.24 17% ====== ====== SELECTED STATISTICAL
INFORMATION (Unaudited) Nine Months Ended September 30,
----------------- Percentage 2003 2002 Inc/(Dec) ------ ------
----------- Return on average total shareholders' equity (A) 20.4%
17.8% - Common shares outstanding (millions) 1,285 1,325 (3)% Book
value per common share $11.54 $10.55 9% Shareholders' equity
(billions) $14.8 $14.0 6% (A) Computed on a trailing 12-month basis
using total shareholders' equity as reported in the Consolidated
Financial Statements prepared in accordance with GAAP. All return
on average total shareholders' equity and return on average total
asset calculations in this and following tables are revised from
amounts previously reported. To view additional business segment
financials go to: http://ir.americanexpress.com SOURCE American
Express Company -0- 10/27/2003 /CONTACT: Molly Faust of the
American Express Company, +1-212-640-0624, molly.faust@aexp.com /
/Web site: http://www.americanexpress.com / (AXP) END
Copyright