EX-12 2 ex12.txt
EXHIBIT 12 AMERICAN EXPRESS COMPANY COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in millions) Nine Months Ended September 30, 2000 Years Ended December 31, ----------------------------------------------------------------------------- (Unaudited) 1999 1998 1997 1996 1995 --------- ---- ---- ---- ---- ---- Earnings: Pretax income from continuing operations $ 2,995 $ 3,438 $ 2,925 $ 2,750 $ 2,664 $ 2,183 Interest expense 2,177 2,178 2,224 2,122 2,160 2,343 Other adjustments 125 151 124 127 139 95 ---------- ----------- ----------- ----------- ----------- ----------- Total earnings (a) $ 5,297 $ 5,767 $ 5,273 $ 4,999 $ 4,963 $ 4,621 ---------- ----------- ----------- ----------- ----------- ----------- Fixed charges: Interest expense $ 2,177 $ 2,178 $ 2,224 $ 2,122 $ 2,160 $ 2,343 Other adjustments 125 152 129 129 130 135 ---------- ----------- ----------- ----------- ----------- ----------- Total fixed charges (b) $ 2,302 $ 2,330 $ 2,353 $ 2,251 $ 2,290 $ 2,478 ---------- ----------- ----------- ----------- ----------- ----------- Ratio of earnings to fixed charges (a/b) 2.30 2.48 2.24 2.22 2.17 1.86
Included in interest expense in the above computation is interest expense related to the international banking operations of American Express Company (the company) and Travel Related Services' Cardmember lending activities, which is netted against interest and dividends and Cardmember lending net finance charge revenue, respectively, in the Consolidated Statements of Income. For purposes of the "earnings" computation, other adjustments include adding the amortization of capitalized interest, the net loss of affiliates accounted for at equity whose debt is not guaranteed by the company, the minority interest in the earnings of majority-owned subsidiaries with fixed charges, and the interest component of rental expense and subtracting undistributed net income of affiliates accounted for at equity. For purposes of the "fixed charges" computation, other adjustments include capitalized interest costs and the interest component of rental expense. In the fourth quarter of 1995, the company's ownership in First Data Corporation ("FDC") was reduced to approximately 10 percent as a result of shares issued by FDC in connection with a merger transaction. Accordingly, as of December 31, 1995, the company's investment in FDC is accounted for as Investments - Available for Sale.