EX-99.2 3 exhibit99_2financials.txt EXHIBIT 99.2 FINANCIALS 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. (Preliminary) AMERICAN EXPRESS COMPANY CONSOLIDATED STATEMENTS OF INCOME (Millions)
Quarters Ended Six Months Ended June 30, June 30, ----------------- Percentage ------------------ Percentage 2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- Revenues Non-interest revenues Discount revenue $3,305 $3,991 (17)% $ 6,371 $ 7,709 (17)% Net card fees 532 542 (2) 1,064 1,073 (1) Travel commissions and fees 407 573 (29) 772 1,067 (28) Other commissions and fees 439 590 (26) 892 1,212 (26) Securitization income, net (2) 227 # 139 671 (79) Other 670 578 16 1,120 1,038 8 ------ ------ ------- ------- Total non-interest revenues 5,351 6,501 (18) 10,358 12,770 (19) ------ ------ ------- ------- Interest income Interest and fees on loans 1,081 1,564 (31) 2,373 3,235 (27) Interest and dividends on investment securities 196 217 (10) 350 403 (13) Deposits with banks and other 11 76 (86) 39 161 (76) ------ ------ ------- ------- Total interest income 1,288 1,857 (31) 2,762 3,799 (27) ------ ------ ------- ------- Interest expense Deposits 105 123 (15) 190 272 (30) Short-term borrowings 7 136 (95) 34 297 (89) Long-term debt 431 631 (32) 865 1,281 (32) Other 4 13 (69) 13 24 (46) ------ ------ ------- ------- Total interest expense 547 903 (39) 1,102 1,874 (41) ------ ------ ------- ------- Net interest income 741 954 (22) 1,660 1,925 (14) ------ ------ ------- ------- Total revenues net of interest expense 6,092 7,455 (18) 12,018 14,695 (18) ------ ------ ------- ------- Provisions for losses Charge card 237 241 (2) 573 586 (2) Cardmember lending 1,303 1,537 (15) 2,717 2,346 16 Other 44 46 (4) 97 103 (6) ------ ------ ------- ------- Total provisions for losses 1,584 1,824 (13) 3,387 3,035 12 ------ ------ ------- ------- Total revenues net of interest expense after provisions for losses 4,508 5,631 (20) 8,631 11,660 (26) ------ ------ ------- ------- Expenses Marketing and promotion 352 663 (47) 697 1,257 (45) Cardmember rewards 1,029 1,129 (9) 1,875 2,169 (14) Cardmember services 131 132 (1) 242 254 (5) Salaries and employee benefits 1,370 1,495 (8) 2,623 2,965 (12) Professional services 599 606 (1) 1,118 1,156 (3) Occupancy and equipment 392 412 (5) 750 787 (5) Communications 106 115 (8) 210 230 (9) Other, net 111 305 (64) 154 607 (75) ------ ------ ------- ------- Total 4,090 4,857 (16) 7,669 9,425 (19) ------ ------ ------- ------- Pretax income from continuing operations 418 774 (46) 962 2,235 (57) Income tax provision 76 114 (33) 177 531 (67) ------ ------ ------- ------- Income from continuing operations 342 660 (48) 785 1,704 (54) Loss from discontinued operations, net of tax (5) (7) (29) (11) (60) (82) ------ ------ ------- ------- Net income $ 337 $ 653 (48) $ 774 $ 1,644 (53) ====== ====== ======= ======= Income from continuing operations attributable to common shareholders (A) $ 107 $ 657 (84) $ 474 $ 1,695 (72) ====== ====== ======= ======= Net income attributable to common shareholders (A) $ 102 $ 650 (84) $ 463 $ 1,635 (72) ====== ====== ======= =======
# - Denotes a variance of more than 100%. (A) Represents income from continuing operations or net income, as applicable, less (i) accelerated preferred dividend accretion of $212 million for the three and six months ended June 30, 2009 due to the repurchase of $3.39 billion of preferred shares issued as part of the Capital Purchase Program (CPP), (ii) preferred shares dividends and related accretion of $22 million and $94 million for the three and six months ended June 30, 2009, and (iii) earnings allocated to participating share awards of $1 million and $3 million for the three months ended June 30, 2009 and 2008, respectively, and $5 million and $9 million for the six months ended June 30, 2009 and 2008, respectively. -1- (Preliminary) AMERICAN EXPRESS COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Billions)
June 30, December 31, 2009 2008 -------- ------------ Assets Cash $ 16 $ 21 Accounts receivable 35 37 Investment securities 22 13 Loans 30 41 Other assets 14 14 ---- ---- Total assets $117 $126 ==== ==== Liabilities and Shareholders' Equity Customer deposits $ 20 $ 15 Short-term borrowings 2 9 Long-term debt 54 60 Other liabilities 28 30 ---- ---- Total liabilities 104 114 ---- ---- Shareholders' equity 13 12 ---- ---- Total liabilities and shareholders' equity $117 $126 ==== ====
-2- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (Millions)
Quarters Ended Six Months Ended June 30, June 30, ----------------- Percentage ------------------ Percentage 2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec) ------ ------ ---------- ------- ------- ---------- TOTAL REVENUES NET OF INTEREST EXPENSE U.S. Card Services $2,805 $3,593 (22)% $ 5,879 $ 7,315 (20)% International Card Services 1,091 1,256 (13) 2,114 2,451 (14) Global Commercial Services 1,003 1,308 (23) 1,947 2,452 (21) Global Network & Merchant Services 910 1,083 (16) 1,746 2,086 (16) ------ ------ ------- ------- 5,809 7,240 (20) 11,686 14,304 (18) Corporate & Other, including adjustments and eliminations 283 215 32 332 391 (15) ------ ------ ------- ------- CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE $6,092 $7,455 (18) $12,018 $14,695 (18) ====== ====== ======= ======= PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS U.S. Card Services $ (332) $ (63) # $ (382) $ 728 # International Card Services 49 73 (33) 57 190 (70) Global Commercial Services 99 326 (70) 227 544 (58) Global Network & Merchant Services 360 455 (21) 725 790 (8) ------ ------ ------- ------- 176 791 (78) 627 2,252 (72) Corporate & Other 242 (17) # 335 (17) # ------ ------ ------- ------- PRETAX INCOME FROM CONTINUING OPERATIONS $ 418 $ 774 (46) $ 962 $ 2,235 (57) ====== ====== ======= ======= NET INCOME (LOSS) U.S. Card Services $ (200) $ 21 # $ (225) $ 544 # International Card Services 64 115 (44) 103 248 (58) Global Commercial Services 71 227 (69) 157 378 (58) Global Network & Merchant Services 236 299 (21) 473 522 (9) ------ ------ ------- ------- 171 662 (74) 508 1,692 (70) Corporate & Other 171 (2) # 277 12 # ------ ------ ------- ------- Income from continuing operations 342 660 (48) 785 1,704 (54) Loss from discontinued operations, net of tax (5) (7) (29) (11) (60) (82) ------ ------ ------- ------- NET INCOME $ 337 $ 653 (48) $ 774 $ 1,644 (53) ====== ====== ======= =======
# - Denotes a variance of more than 100%. -3- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (CONTINUED)
Quarters Ended Six Months Ended June 30, June 30, ----------------- Percentage ---------------- Percentage 2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- EARNINGS PER COMMON SHARE BASIC Income from continuing operations attributable to common shareholders $ 0.09 $ 0.57 (84)% $ 0.41 $ 1.47 (72)% Loss from discontinued operations - (0.01) # (0.01) (0.05) (80) ------ ------ ------ ------ Net income attributable to common shareholders $ 0.09 $ 0.56 (84)% $ 0.40 $ 1.42 (72)% ====== ====== ====== ====== Average common shares outstanding (millions) 1,162 1,154 1% 1,159 1,153 1% ====== ====== ====== ====== DILUTED Income from continuing operations attributable to common shareholders $ 0.09 $ 0.56 (84)% $ 0.41 $ 1.46 (72)% Loss from discontinued operations - - - (0.01) (0.05) (80) ------ ------ ------ ------ Net income attributable to common shareholders $ 0.09 $ 0.56 (84)% $ 0.40 $ 1.41 (72)% ====== ====== ====== ====== Average common shares outstanding (millions) 1,165 1,163 -% 1,161 1,163 -% ====== ====== ====== ====== Cash dividends declared per common share $ 0.18 $ 0.18 -% $ 0.36 $ 0.36 -% ====== ====== ====== ======
SELECTED STATISTICAL INFORMATION
Quarters Ended Six Months Ended June 30, June 30, ----------------- Percentage ---------------- Percentage 2009 2008 Inc/(Dec) 2009 2008 Inc/(Dec) ------ ------ ---------- ------ ------ ---------- Return on average equity (A) 13.2% 31.1% 13.2% 31.1% Return on average common equity (A) 12.0% 30.9% 12.0% 30.9% Return on average tangible common equity (A) 15.6% 37.5% 15.6% 37.5% Common shares outstanding (millions) 1,189 1,159 3% 1,189 1,159 3% Book value per common share $11.28 $10.58 7% $11.28 $10.58 7% Shareholders' equity (billions) $13.4 $12.3 9% $13.4 $12.3 9%
# - 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. -4- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended June 30, ----------------- Percentage 2009 2008 Inc/(Dec) ------ ------ ---------- Card billed business (A): United States $104.8 $123.5 (15)% Outside the United States 46.6 57.4 (19) ------ ------ Total $151.4 $180.9 (16) ====== ====== Total cards-in-force (millions) (B): United States 49.8 53.5 (7)% Outside the United States 38.7 36.6 6 ------ ------ Total 88.5 90.1 (2) ====== ====== Basic cards-in-force (millions) (B): United States 38.7 41.9 (8)% Outside the United States 33.9 31.6 7 ------ ------ Total 72.6 73.5 (1) ====== ====== Average discount rate (C) 2.55% 2.56% Average basic cardmember spending (dollars) (D) $2,712 $3,199 (15)% Average fee per card (dollars) (D) $ 35 $ 34 3% Average fee per card adjusted (dollars) (D) $ 39 $ 39 -%
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. 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 basic cards-in-force includes all cards that are issued and outstanding under network partnership agreements. (C) This calculation is designed to approximate merchant pricing. 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 cardmember 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, plus card fees included in interest and fees on loans (including related amortization of deferred direct acquisition costs), divided by average worldwide proprietary cards-in-force. The card fees related to cardmember loans included in interest and fees on loans were $45 million and $34 million for the quarters ended June 30, 2009 and 2008, respectively. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs (a portion of which is charge card related and included in net card fees and a portion of which is lending related and included in interest and fees on loans). The amount of amortization excluded was $62 million and $82 million for the quarters ended June 30, 2009 and 2008, respectively. The Company presents adjusted average fee per card because management believes that this metric presents a useful indicator of card fee pricing across a range of its proprietary card products. -5- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (CONTINUED) (Billions, except percentages and where indicated)
Quarters Ended June 30, --------------------------------- Percentage 2009 2008 Inc/(Dec) -------------- -------------- -------------- Worldwide cardmember receivables: Total receivables $ 31.4 $ 39.9 (21)% Loss reserves (millions): Beginning balance $ 810 $1,221 (34)% Provision 237 241 (2) Net write-offs (340) (293) 16 Other 7 (23) # ------ ------ Ending balance $ 714 $1,146 (38) ====== ====== % of receivables 2.3% 2.9% Net write-off rate - USCS 5.2% 3.9% 30 days past due as a % of total - USCS 2.6% 3.0% Net loss ratio as a % of charge volume - ICS 0.36% 0.22% 90 days past due as a % of total - ICS 3.0% 2.4% Net loss ratio as a % of charge volume - GCS 0.22% 0.10% 90 days past due as a % of total - GCS 1.9% 1.6% Worldwide cardmember lending - owned basis (A): Total loans $ 32.5 $ 49.6 (34)% 30 days past due loans as a % of total 4.3% 3.4% Loss reserves (millions): Beginning balance $3,013 $1,919 57% Provision 1,291 1,506 (14) Net write-offs - principal (847) (678) 25 Write-offs - interest and fees (131) (149) (12) Other (B) (107) (4) # ------ ------ Ending balance $3,219 $2,594 24 ====== ====== Ending Reserves - principal $3,035 $2,395 27 Ending Reserves - interest and fees $ 184 $ 199 (8) % of loans 9.9% 5.2% % of past due 230% 155% Average loans $ 35.2 $ 49.6 (29)% Net write-off rate 9.6% 5.5% Net interest yield on cardmember loans (C) 9.7% 8.5% Worldwide cardmember lending - managed basis (D): Total loans $ 62.9 $ 76.5 (18)% 30 days past due loans as a % of total 4.3% 3.3% Net write-offs - principal (millions) $1,541 $ 974 58 Average loans $ 63.9 $ 75.8 (16)% Net write-off rate 9.7% 5.1% Net interest yield on cardmember loans (C) 9.9% 9.0%
# - Denotes a variance of more than 100%. (A) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (B) For the quarter ended June 30, 2009, this amount primarily includes $144 million of reserves that were removed in connection with securitizations during the period. The offset is in the allocated cost of the associated retained subordinated securities. This amount also includes foreign currency translation adjustments. The prior period primarily included foreign currency translation adjustments. (C) See Appendix III for discussion of net interest yield on cardmember loans. (D) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. -6- (Preliminary) AMERICAN EXPRESS COMPANY CONSOLIDATED STATEMENTS OF INCOME (Millions)
Quarters Ended ----------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Revenues Non-interest revenues Discount revenue $3,305 $3,066 $3,468 $3,848 $3,991 Net card fees 532 532 536 541 542 Travel commissions and fees 407 365 444 499 573 Other commissions and fees 439 453 522 573 590 Securitization income, net (2) 141 199 200 227 Other 670 450 566 553 578 ------ ------ ------ ------ ------ Total non-interest revenues 5,351 5,007 5,735 6,214 6,501 ------ ------ ------ ------ ------ Interest income Interest and fees on loans 1,081 1,292 1,364 1,560 1,564 Interest and dividends on investment securities 196 154 168 200 217 Deposits with banks and other 11 28 36 74 76 ------ ------ ------ ------ ------ Total interest income 1,288 1,474 1,568 1,834 1,857 ------ ------ ------ ------ ------ Interest expense Deposits 105 85 73 109 123 Short-term borrowings 7 27 72 114 136 Long-term debt 431 434 646 646 631 Other 4 9 6 15 13 ------ ------ ------ ------ ------ Total interest expense 547 555 797 884 903 ------ ------ ------ ------ ------ Net interest income 741 919 771 950 954 ------ ------ ------ ------ ------ Total revenues net of interest expense 6,092 5,926 6,506 7,164 7,455 ------ ------ ------ ------ ------ Provisions for losses Charge card 237 336 426 351 241 Cardmember lending 1,303 1,414 927 958 1,537 Other 44 53 51 50 46 ------ ------ ------ ------ ------ Total provisions for losses 1,584 1,803 1,404 1,359 1,824 ------ ------ ------ ------ ------ Total revenues net of interest expense after provision for losses 4,508 4,123 5,102 5,805 5,631 ------ ------ ------ ------ ------ Expenses Marketing and promotion 352 345 524 649 663 Cardmember rewards 1,029 846 1,088 1,132 1,129 Cardmember services 131 111 140 148 132 Salaries and employee benefits 1,370 1,253 1,660 1,465 1,495 Professional services 599 519 649 608 606 Occupancy and equipment 392 358 456 398 412 Communications 106 104 118 118 115 Other, net 111 43 199 209 305 ------ ------ ------ ------ ------ Total 4,090 3,579 4,834 4,727 4,857 ------ ------ ------ ------ ------ Pretax income from continuing operations 418 544 268 1,078 774 Income tax provision (benefit) 76 101 (38) 217 114 ------ ------ ------ ------ ------ Income from continuing operations 342 443 306 861 660 Loss from discontinued operations, net of tax (5) (6) (66) (46) (7) ------ ------ ------ ------ ------ Net income $ 337 $ 437 $ 240 $ 815 $ 653 ====== ====== ====== ====== ====== Income from continuing operations attributable to common shareholders (A) $ 107 $ 367 $ 305 $ 856 $ 657 ====== ====== ====== ====== ====== Net income attributable to common shareholders (A) $ 102 $ 361 $ 239 $ 810 $ 650 ====== ====== ====== ====== ======
(A) Represents income from continuing operations or net income, as applicable, less (i) accelerated preferred dividend accretion of $212 million for the quarter ended June 30, 2009 due to the repurchase of $3.39 billion of preferred shares issued as part of the Capital Purchase Program (CPP), (ii) preferred shares dividends and related accretion of $22 million for the quarter ended June 30, 2009 and $72 million for the quarter ended March 31, 2009, respectively, and (iii) earnings allocated to participating share awards of $1 million for the quarter ended June 30, 2009, $4 million for the quarter ended March 31, 2009, $1 million for the quarter ended December 31, 2008, $5 million for the quarter ended September 30, 2008, and $3 million for the quarter ended June 30, 2008, respectively. -7- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (Millions)
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES NET OF INTEREST EXPENSE U.S. Card Services $2,805 $3,074 $3,223 $3,459 $3,593 International Card Services 1,091 1,023 1,098 1,232 1,256 Global Commercial Services 1,003 944 1,044 1,200 1,308 Global Network & Merchant Services 910 836 945 1,071 1,083 ------ ------ ------ ------ ------ 5,809 5,877 6,310 6,962 7,240 Corporate & Other, including adjustments and eliminations 283 49 196 202 215 ------ ------ ------ ------ ------ CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE $6,092 $5,926 $6,506 $7,164 $7,455 ====== ====== ====== ====== ====== PRETAX INCOME (LOSS) FROM CONTINUING OPERATIONS U.S. Card Services $ (332) $ (50) $ 49 $ 364 $ (63) International Card Services 49 8 (38) 1 73 Global Commercial Services 99 128 (42) 191 326 Global Network & Merchant Services 360 365 303 397 455 ------ ------ ------ ------ ------ 176 451 272 953 791 Corporate & Other 242 93 (4) 125 (17) ------ ------ ------ ------ ------ PRETAX INCOME FROM CONTINUING OPERATIONS $ 418 $ 544 $ 268 $1,078 $ 774 ====== ====== ====== ====== ====== NET INCOME (LOSS) U.S. Card Services $ (200) $ (25) $ 64 $ 244 $ 21 International Card Services 64 39 36 67 115 Global Commercial Services 71 86 (7) 134 227 Global Network & Merchant Services 236 237 215 258 299 ------ ------ ------ ------ ------ 171 337 308 703 662 Corporate & Other 171 106 (2) 158 (2) ------ ------ ------ ------ ------ Income from continuing operations 342 443 306 861 660 Loss from discontinued operations, net of tax (5) (6) (66) (46) (7) ------ ------ ------ ------ ------ NET INCOME $ 337 $ 437 $ 240 $ 815 $ 653 ====== ====== ====== ====== ======
-8- (Preliminary) AMERICAN EXPRESS COMPANY FINANCIAL SUMMARY (CONTINUED)
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- EARNINGS PER COMMON SHARE BASIC Income from continuing operations attributable to common shareholders $ 0.09 $ 0.32 $ 0.26 $ 0.74 $ 0.57 Loss from discontinued operations - (0.01) (0.05) (0.04) (0.01) ------ ------ ------ ------ ------ Net income attributable to common shareholders $ 0.09 $ 0.31 $ 0.21 $ 0.70 $ 0.56 ====== ====== ====== ====== ====== Average common shares outstanding (millions) 1,162 1,156 1,155 1,154 1,154 ====== ====== ====== ====== ====== DILUTED Income from continuing operations attributable to common shareholders $ 0.09 $ 0.32 $ 0.26 $ 0.74 $ 0.56 Loss from discontinued operations - (0.01) (0.05) (0.04) - ------ ------ ------ ------ ------ Net income attributable to common shareholders $ 0.09 $ 0.31 $ 0.21 $ 0.70 $ 0.56 ====== ====== ====== ====== ====== Average common shares outstanding (millions) 1,165 1,156 1,155 1,158 1,163 ====== ====== ====== ====== ====== Cash dividends declared per common share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 ====== ====== ====== ====== ======
SELECTED STATISTICAL INFORMATION
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Return on average equity (A) 13.2% 16.3% 22.3% 27.8% 31.1% Return on average common equity (A) 12.0% 16.7% 22.1% 27.6% 30.9% Return on average tangible common equity (A) 15.6% 21.6% 28.0% 34.2% 37.5% Common shares outstanding (millions) 1,189 1,168 1,160 1,160 1,159 Book value per common share $11.28 $10.61 $10.21 $10.79 $10.58 Shareholders' equity (billions) $ 13.4 $ 15.8 $ 11.8 $ 12.5 $ 12.3
(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity. -9- (Preliminary) AMERICAN EXPRESS COMPANY SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Card billed business (A): United States $104.8 $ 97.4 $112.7 $120.3 $123.5 Outside the United States 46.6 41.8 47.8 55.2 57.4 ------ ------ ------ ------ ------ Total $151.4 $139.2 $160.5 $175.5 $180.9 ====== ====== ====== ====== ====== Total cards-in-force (millions) (B): United States 49.8 53.4 54.0 54.3 53.5 Outside the United States 38.7 38.2 38.4 37.8 36.6 ------ ------ ------ ------ ------ Total 88.5 91.6 92.4 92.1 90.1 ====== ====== ====== ====== ====== Basic cards-in-force (millions) (B): United States 38.7 41.6 42.0 42.3 41.9 Outside the United States 33.9 33.3 33.4 32.8 31.6 ------ ------ ------ ------ ------ Total 72.6 74.9 75.4 75.1 73.5 ====== ====== ====== ====== ====== Average discount rate (C) 2.55% 2.56% 2.53% 2.56% 2.56% Average basic cardmember spending (dollars) (D) $2,712 $2,443 $2,792 $3,049 $3,199 Average fee per card (dollars) (D) $ 35 $ 34 $ 34 $ 34 $ 34 Average fee per card adjusted (dollars) (D) $ 39 $ 38 $ 38 $ 39 $ 39
(A) Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. 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 basic cards-in-force includes all cards that are issued and outstanding under network partnership agreements. (C) This calculation is designed to approximate merchant pricing. 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 cardmember 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, plus card fees included in interest and fees on loans (including related amortization of deferred direct acquisition costs), divided by average worldwide proprietary cards-in-force. The card fees related to cardmember loans included in interest and fees on loans were $45 million for the quarter ended June 30, 2009, $40 million for the quarter ended March 31, 2009, $41 million for the quarter ended December 31, 2008, $35 million for the quarter ended September 30, 2008, and $34 million for the quarter ended June 30, 2008, respectively. The adjusted average fee per card is computed in the same manner, but excludes amortization of deferred direct acquisition costs (a portion of which is charge card related and included in net card fees and a portion of which is lending related and included in interest and fees on loans). The amount of amortization excluded for these periods was $62 million for the quarter ended June 30, 2009, $70 million for the quarter ended March 31, 2009, $76 million for the quarter ended December 31, 2008, $84 million for the quarter ended September 30, 2008, and $82 million for the quarter ended June 30, 2008, respectively. The Company presents adjusted average fee per card because management believes that this metric presents a useful indicator of card fee pricing across a range of its proprietary card products. -10- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Worldwide cardmember receivables: Total receivables $ 31.4 $ 30.3 $ 33.0 $ 37.6 $ 39.9 Loss reserves (millions): Beginning balance $810 $810 $1,134 $1,146 $1,221 Provision 237 336 426 351 241 Net write-offs (A) (340) (332) (669) (333) (293) Other 7 (4) (81) (30) (23) ------ ------ ------ ------ ------ Ending balance $ 714 $ 810 $ 810 $1,134 $1,146 ====== ====== ====== ====== ====== % of receivables 2.3% 2.7% 2.5% 3.0% 2.9% Net write-off rate - USCS (A) 5.2% 4.9% 3.5% 3.4% 3.9% 30 days past due as a % of total - USCS 2.6% 3.7% 3.7% 3.3% 3.0% Net loss ratio as a % of charge volume - ICS 0.36% 0.35% 0.30% 0.25% 0.22% 90 days past due as a % of total - ICS 3.0% 3.3% 3.1% 2.7% 2.4% Net loss ratio as a % of charge volume - GCS 0.22% 0.17% 0.14% 0.15% 0.10% 90 days past due as a % of total - GCS 1.9% 2.4% 2.7% 1.8% 1.6% Worldwide cardmember lending - owned basis (B): Total loans $ 32.5 $ 36.7 $ 42.2 $ 45.7 $ 49.6 30 days past due loans as a % of total 4.3% 4.9% 4.4% 3.7% 3.4% Loss reserves (millions): Beginning balance $3,013 $2,570 $2,640 $2,594 $1,919 Provision 1,291 1,401 897 927 1,506 Net write-offs - principal (847) (782) (702) (697) (678) Write-offs - interest and fees (131) (155) (143) (161) (149) Other (C) (107) (21) (122) (23) (4) ------ ------ ------ ------ ------ Ending balance $3,219 $3,013 $2,570 $2,640 $2,594 ====== ====== ====== ====== ====== Ending Reserves - principal $3,035 $2,806 $2,379 $2,426 $2,395 Ending Reserves - interest and fees $ 184 $ 207 $ 191 $ 214 $ 199 % of loans 9.9% 8.2% 6.1% 5.8% 5.2% % of past due 230% 168% 137% 154% 155% Average loans $ 35.2 $ 39.0 $ 43.0 $ 47.7 $ 49.6 Net write-off rate 9.6% 8.0% 6.5% 5.8% 5.5% Net interest yield on cardmember loans (D) 9.7% 10.7% 8.8% 8.9% 8.5% Worldwide cardmember lending - managed basis (E): Total loans $ 62.9 $ 65.0 $ 72.0 $ 75.5 $ 76.5 30 days past due loans as a % of total 4.3% 5.0% 4.6% 3.8% 3.3% Net write-offs - principal (millions) $1,541 $1,392 $1,181 $1,090 $ 974 Average loans $ 63.9 $ 67.9 $ 72.8 $ 76.1 $ 75.8 Net write-off rate 9.7% 8.2% 6.5% 5.7% 5.1% Net interest yield on cardmember loans (D) 9.9% 10.9% 8.9% 9.2% 9.0%
(A) In the fourth quarter of 2008, the Company revised the time period in which past due cardmember receivables in U.S. Card Services are written off to 180 days past due, consistent with applicable regulatory guidance. Previously, receivables were written off when 360 days past due. The net write-offs for the fourth quarter of 2008 include write-offs of $341 million resulting from this write-off methodology change, which is not reflected in the net write-off rate for U.S. Card Services. Including the $341 million in write-offs, the net write-off rate was 11.0 percent for the fourth quarter of 2008. (B) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (C) For the quarter ended June 30, 2009, this amount primarily includes $144 million of reserves that were removed in connection with securitizations during the period. The offset is in the allocated cost of the associated retained subordinated securities. This amount also includes foreign currency translation adjustments. Prior periods included foreign currency translation and other adjustments primarily related to the reclassification of waived fee reserves to a contra-cardmember receivable. (D) See Appendix III for discussion of net interest yield on cardmember loans. (E) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. -11- (Preliminary) U.S. CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended June 30, ----------------- Percentage 2009 2008 Inc/(Dec) ------ ------ ---------- Revenues Discount revenue, net card fees and other $2,273 $2,716 (16)% Securitization income, net (2) 227 # Interest income 748 1,189 (37) Interest expense 214 539 (60) ------ ------ Net interest income 534 650 (18) ------ ------ Total revenues net of interest expense 2,805 3,593 (22) ------ ------ Provisions for losses 1,190 1,516 (22) ------ ------ Total revenues net of interest expense after provisions for losses 1,615 2,077 (22) ------ ------ Expenses Marketing, promotion, rewards and cardmember services 1,021 1,240 (18) Salaries and employee benefits and other operating expenses 926 900 3 ------ ------ Total 1,947 2,140 (9) ------ ------ Pretax segment loss (332) (63) # Income tax benefit (132) (84) 57 ------ ------ Segment (loss) income $ (200) $ 21 # ====== ======
# - Denotes a variance of more than 100%. -12- (Preliminary) U.S. CARD SERVICES SELECTED FINANCIAL INFORMATION MANAGED BASIS PRESENTATION (Millions)
Quarters Ended June 30, ------------------ Percentage 2009 2008 Inc/(Dec) ------ ------ ---------- INCOME STATEMENT DATA Discount revenue, net card fees and other: Reported for the period (GAAP) $2,273 $2,716 (16)% Securitization adjustments 79 95 (17) ------ ------ Managed discount revenue, net card fees and other $2,352 $2,811 (16) ------ ------ Interest income: Reported for the period (GAAP) $ 748 $1,189 (37) Securitization adjustments 771 824 (6) ------ ------ Managed interest income $1,519 $2,013 (25) ------ ------ Securitization income, net: Reported for the period (GAAP) $ (2) $ 227 # Securitization adjustments 2 (227) # ------ ------ Managed securitization income, net $ - $ - - ------ ------ Interest expense: Reported for the period (GAAP) $ 214 $ 539 (60) Securitization adjustments 48 184 (74) ------ ------ Managed interest expense $ 262 $ 723 (64) ------ ------ Provisions for losses: Reported for the period (GAAP) $1,190 $1,516 (22) Securitization adjustments 836 409 # ------ ------ Managed provisions for losses $2,026 $1,925 5 ------ ------
# - Denotes a variance of more than 100%. For U.S. Card Services, the managed basis presentation assumes that there have been no off-balance sheet securitization transactions, i.e., all securitized cardmember loans and related income effects are reflected as if they were in the Company's balance sheets and income statements, respectively. For the managed basis presentation, revenue and expenses related to securitized cardmember loans are reflected in other commissions and fees (included above in discount revenue, net card fees and other), interest income, interest expense, and provisions for losses. On a managed basis, there is no securitization income, net as the managed basis presentation assumes no securitization transactions have occurred. The Company presents U.S. Card Services 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. Management also believes that use of a managed basis presentation presents a more comprehensive portrayal of the key dynamics of the cardmember lending business. Irrespective of the on and off-balance sheet funding mix, it is important for management and investors to see metrics 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 in order to evaluate market share. These metrics are significant in evaluating the Company's performance and can only be properly assessed when all non-securitized and securitized cardmember loans are viewed together on a managed basis. The Company does not currently securitize international loans. -13- (Preliminary) U.S. CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended June 30, ----------------- Percentage 2009 2008 Inc/(Dec) ------ ------ ---------- Card billed business $ 84.1 $100.0 (16)% Total cards-in-force (millions) 40.2 44.2 (9)% Basic cards-in-force (millions) 29.8 33.0 (10)% Average basic cardmember spending (dollars) $2,667 $3,047 (12)% U.S. Consumer Travel: Travel sales (millions) $ 696 $ 884 (21)% Travel commissions and fees/sales 8.5% 9.0% Total segment assets $ 54.1 $ 83.5 (35)% Segment capital (millions) (A) $5,861 $4,850 21% Return on average segment capital (B) 1.6% 25.0% Return on average tangible segment capital (B) 1.7% 26.1% Cardmember receivables: Total receivables $ 15.9 $ 19.8 (20)% 30 days past due receivables as a % of total 2.6% 3.0% Average receivables $ 15.7 $ 19.6 (20)% Net write-off rate 5.2% 3.9% Cardmember lending - owned basis (C): Total loans $ 23.6 $ 37.8 (38)% 30 days past due loans as a % of total 4.4% 3.5% Average loans $ 26.5 $ 37.9 (30)% Net write-off rate 10.3% 5.8% Net interest yield on cardmember loans (D) 8.9% 8.2% Cardmember lending - managed basis (E): Total loans $ 54.0 $ 64.7 (17)% 30 days past due loans as a % of total 4.4% 3.3% Average loans $ 55.1 $ 64.2 (14)% Net write-off rate 10.0% 5.3% Net interest yield on cardmember loans (D) 9.5% 8.9%
(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. (C) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (D) See Appendix IV for discussion of net interest yield on cardmember loans. (E) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. -14- (Preliminary) U.S. CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Revenues Discount revenue, net card fees and other $2,273 $2,205 $2,465 $2,597 $2,716 Securitization income, net (2) 141 199 200 227 Interest income 748 946 1,049 1,190 1,189 Interest expense 214 218 490 528 539 ------ ------ ------ ------ ------ Net interest income 534 728 559 662 650 ------ ------ ------ ------ ------ Total revenues net of interest expense 2,805 3,074 3,223 3,459 3,593 ------ ------ ------ ------ ------ Provisions for losses 1,190 1,383 1,051 941 1,516 ------ ------ ------ ------ ------ Total revenues net of interest expense after provisions for losses 1,615 1,691 2,172 2,518 2,077 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 1,021 889 1,208 1,245 1,240 Salaries and employee benefits and other operating expenses 926 852 915 909 900 ------ ------ ------ ------ ------ Total 1,947 1,741 2,123 2,154 2,140 ------ ------ ------ ------ ------ Pretax segment (loss) income (332) (50) 49 364 (63) Income tax (benefit) provision (132) (25) (15) 120 (84) ------ ------ ------ ------ ------ Segment (loss) income $ (200) $ (25) $ 64 $ 244 $ 21 ====== ====== ====== ====== ======
-15- (Preliminary) U.S. CARD SERVICES SELECTED FINANCIAL INFORMATION MANAGED BASIS PRESENTATION (Millions)
Quarters Ended ----------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- INCOME STATEMENT DATA Discount revenue, net card fees and other: Reported for the period (GAAP) $2,273 $2,205 $2,465 $2,597 $2,716 Securitization adjustments 79 99 110 122 95 ------ ------ ------ ------ ------ Managed discount revenue, net card fees and other $2,352 $2,304 $2,575 $2,719 $2,811 ------ ------ ------ ------ ------ Interest income: Reported for the period (GAAP) $ 748 $ 946 $1,049 $1,190 $1,189 Securitization adjustments 771 886 902 883 824 ------ ------ ------ ------ ------ Managed interest income $1,519 $1,832 $1,951 $2,073 $2,013 ------ ------ ------ ------ ------ Securitization income, net: Reported for the period (GAAP) $ (2) $ 141 $ 199 $ 200 $ 227 Securitization adjustments 2 (141) (199) (200) (227) ------ ------ ------ ------ ------ Managed securitization income, net $ - $ - $ - $ - $ - ------ ------ ------ ------ ------ Interest expense: Reported for the period (GAAP) $ 214 $ 218 $ 490 $ 528 $ 539 Securitization adjustments 48 83 230 196 184 ------ ------ ------ ------ ------ Managed interest expense $ 262 $ 301 $ 720 $ 724 $ 723 ------ ------ ------ ------ ------ Provisions for losses: Reported for the period (GAAP) $1,190 $1,383 $1,051 $ 941 $1,516 Securitization adjustments 836 636 577 629 409 ------ ------ ------ ------ ------ Managed provisions for losses $2,026 $2,019 $1,628 $1,570 $1,925 ------ ------ ------ ------ ------
See page 21 for discussion of managed basis presentation. -16- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Card billed business $ 84.1 $ 78.0 $ 92.0 $ 97.9 $100.0 Total cards-in-force (millions) 40.2 43.4 44.2 44.7 44.2 Basic cards-in-force (millions) 29.8 32.3 32.9 33.4 33.0 Average basic cardmember spending (dollars) $2,667 $2,391 $2,758 $2,950 $3,047 U.S. Consumer Travel: Travel sales $ 0.7 $ 0.6 $ 0.7 $ 0.8 $ 0.9 Travel commissions and fees/sales 8.5% 8.1% 7.8% 8.2% 9.0% Total segment assets $ 54.1 $ 55.6 $ 77.8 $ 80.5 $ 83.5 Segment capital (A) $ 5.9 $ 4.8 $ 4.8 $ 5.1 $ 4.9 Return on average segment capital (B) 1.6% 6.3% 18.0% 17.0% 25.0% Return on average tangible segment capital (B) 1.7% 6.7% 19.0% 17.7% 26.1% Cardmember receivables: Total receivables $ 15.9 $ 15.6 $ 17.8 $ 18.8 $ 19.8 30 days past due receivables as a % of total 2.6% 3.7% 3.7% 3.3% 3.0% Average receivables $ 15.7 $ 16.1 $ 18.1 $ 19.3 $ 19.6 Net write-off rate (C) 5.2% 4.9% 3.5% 3.4% 3.9% Cardmember lending - owned basis (D): Total loans $ 23.6 $ 28.2 $ 32.7 $ 34.6 $ 37.8 30 days past due loans as a % of total 4.4% 5.1% 4.7% 3.9% 3.5% Average loans $ 26.5 $ 30.2 $ 33.2 $ 36.3 $ 37.9 Net write-off rate 10.3% 8.5% 7.0% 6.1% 5.8% Net interest yield on cardmember loans (E) 8.9% 10.4% 8.5% 8.6% 8.2% Cardmember lending - managed basis (F): Total loans $ 54.0 $ 56.5 $ 62.4 $ 64.3 $ 64.7 30 days past due loans as a % of total 4.4% 5.1% 4.7% 3.9% 3.3% Average loans $ 55.1 $ 59.1 $ 63.0 $ 64.6 $ 64.2 Net write-off rate 10.0% 8.5% 6.7% 5.9% 5.3% Net interest yield on cardmember loans (E) 9.5% 10.8% 8.7% 9.1% 8.9%
(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. (C) In the fourth quarter of 2008, the Company revised the time period in which past due cardmember receivables in U.S. Card Services are written off to 180 days past due, consistent with applicable regulatory guidance. Previously, receivables were written off when 360 days past due. The net write-offs for the fourth quarter of 2008 include write-offs of $341 million resulting from this write-off methodology change, which is not reflected in the net write-off rate for U.S. Card Services. Including the $341 million in write-offs, the net write-off rate was 11.0 percent for the fourth quarter of 2008. (D) "Owned," a GAAP basis measurement, reflects only cardmember loans included in the Company's Consolidated Balance Sheets. (E) See Appendix IV for discussion of net interest yield on cardmember loans. (F) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. The difference between the "owned basis" (GAAP) information and "managed basis" information is attributable to the effects of securitization activities. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. -17- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended June 30, ----------------------- Percentage 2009 2008 Inc/(Dec) ---------- --------- ---------- Revenues Discount revenue, net card fees and other $ 823 $ 992 (17)% ------ ------ Interest income 399 524 (24) Interest expense 131 260 (50) ------ ------ Net interest income 268 264 2 ------ ------ Total revenues net of interest expense 1,091 1,256 (13) ------ ------ Provisions for losses 302 242 25 ------ ------ Total revenues net of interest expense after provisions for losses 789 1,014 (22) ------ ------ Expenses Marketing, promotion, rewards and cardmember services 287 404 (29) Salaries and employee benefits and other operating expenses 453 537 (16) ------ ------ Total 740 941 (21) ------ ------ Pretax segment income 49 73 (33) Income tax benefit (15) (42) (64) ------ ------ Segment income $ 64 $ 115 (44) ====== ======
# - Denotes variance of more than 100%. -18- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended June 30, -------------------------------- Percentage 2009 2008 Inc/(Dec) -------------- -------------- -------------- Card billed business $ 22.7 $ 28.3 (20)% Total cards-in-force (millions) 15.5 16.3 (5)% Basic cards-in-force (millions) 10.8 11.5 (6)% Average basic cardmember spending (dollars) $2,083 $2,476 (16)% International Consumer Travel: Travel sales (millions) $ 231 $ 369 (37)% Travel commissions and fees/sales 8.7% 8.1% Total segment assets $ 19.3 $ 22.7 (15)% Segment capital (millions) (A) $2,180 $2,179 -% Return on average segment capital (B) 9.7% 15.8% Return on average tangible segment capital (B) 13.1% 21.5% Cardmember receivables: Total receivables $ 5.4 $ 6.6 (18)% 90 days past due as a % of total 3.0% 2.4% Net loss ratio as a % of charge volume 0.36% 0.22% Cardmember lending: Total loans $ 8.9 $ 11.8 (25)% 30 days past due loans as a % of total 4.0% 3.1% Average loans $ 8.7 $ 11.6 (25)% Net write-off rate 7.5% 4.5% Net interest yield on cardmember loans (C) 12.2% 9.6%
(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. (C) See Appendix IV for discussion of net interest yield on cardmember loans. -19- (Preliminary) INTERNATIONAL CARD SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Revenues Discount revenue, net card fees and other $ 823 $ 772 $ 864 $ 965 $ 992 ------ ------ ------ ------ ------ Interest income 399 400 427 523 524 Interest expense 131 149 193 256 260 ------ ------ ------ ------ ------ Net interest income 268 251 234 267 264 ------ ------ ------ ------ ------ Total revenues net of interest expense 1,091 1,023 1,098 1,232 1,256 ------ ------ ------ ------ ------ Provisions for losses 302 335 243 316 242 ------ ------ ------ ------ ------ Total revenues net of interest expense after provisions for losses 789 688 855 916 1,014 ------ ------ ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 287 258 303 388 404 Salaries and employee benefits and other operating expenses 453 422 590 527 537 ------ ------ ------ ------ ------ Total 740 680 893 915 941 ------ ------ ------ ------ ------ Pretax segment income (loss) 49 8 (38) 1 73 Income tax benefit (15) (31) (74) (66) (42) ------ ------ ------ ------ ------ Segment income $ 64 $ 39 $ 36 $ 67 $ 115 ====== ====== ====== ====== ======
-20- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Card billed business $ 22.7 $ 20.5 $ 24.2 $ 27.5 $ 28.3 Total cards-in-force (millions) 15.5 15.8 16.3 16.4 16.3 Basic cards-in-force (millions) 10.8 11.0 11.4 11.5 11.5 Average basic cardmember spending (dollars) $2,083 $1,823 $2,109 $2,393 $2,476 International Consumer Travel: Travel sales $ 0.2 $ 0.2 $ 0.3 $ 0.3 $ 0.4 Travel commissions and fees/sales 8.7% 8.3% 7.5% 8.4% 8.1% Total segment assets $ 19.3 $ 17.7 $ 20.4 $ 22.6 $ 22.7 Segment capital (A) $ 2.2 $ 2.0 $ 2.0 $ 2.3 $ 2.2 Return on average segment capital (B) 9.7% 12.3% 16.7% 11.8% 15.8% Return on average tangible segment capital (B) 13.1% 16.6% 22.5% 15.9% 21.5% Cardmember receivables: Total receivables $ 5.4 $ 5.0 $ 5.6 $ 6.1 $ 6.6 90 days past due as a % of total 3.0% 3.3% 3.1% 2.7% 2.4% Net loss ratio as a % of charge volume 0.36% 0.35% 0.30% 0.25% 0.22% Cardmember lending: Total loans $ 8.9 $ 8.5 $ 9.5 $ 11.1 $ 11.8 30 days past due loans as a % of total 4.0% 4.2% 3.6% 3.3% 3.1% Average loans $ 8.7 $ 8.8 $ 9.8 $ 11.4 $ 11.6 Net write-off rate 7.5% 6.4% 5.1% 5.1% 4.5% Net interest yield on cardmember loans (C) 12.2% 11.7% 9.8% 9.7% 9.6%
(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. (C) See Appendix IV for discussion of net interest yield on cardmember loans. -21- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended June 30, -------------------------------- Percentage 2009 2008 Inc/(Dec) -------------- -------------- -------------- Revenues Discount revenue, net card fees and other $1,035 $1,405 (26)% ------ ------ Interest income 21 49 (57) Interest expense 53 146 (64) ------ ------ Net interest income (32) (97) (67) ------ ------ Total revenues net of interest expense 1,003 1,308 (23) ------ ------ Provisions for losses 53 40 33 ------ ------ Total revenues net of interest expense after provisions for losses 950 1,268 (25) ------ ------ Expenses Marketing, promotion, rewards and cardmember services 74 99 (25) Salaries and employee benefits and other operating expenses 777 843 (8) ------ ------ Total 851 942 (10) ------ ------ Pretax segment income 99 326 (70) Income tax provision 28 99 (72) ------ ------ Segment income $ 71 $ 227 (69) ====== ======
# - Denotes variance of more than 100%. -22- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended June 30, -------------------------------- Percentage 2009 2008 Inc/(Dec) -------------- -------------- -------------- Card billed business $ 27.2 $ 35.4 (23)% Total cards-in-force (millions) 7.2 7.0 3% Basic cards-in-force (millions) 7.2 7.0 3% Average basic cardmember spending (dollars) $3,746 $5,083 (26)% Global Corporate Travel: Travel sales $ 3.6 $ 6.2 (42)% Travel commissions and fees/sales 9.1% 7.5% Total segment assets $ 21.1 $ 25.8 (18)% Segment capital (millions) (A) $3,344 $3,280 2% Return on average segment capital (B) 8.3% 23.6% Return on average tangible segment capital (B) 18.9% 46.7% Cardmember receivables: Total receivables $ 9.9 $ 13.4 (26)% 90 days past due as a % of total 1.9% 1.6% Net loss ratio as a % of charge volume 0.22% 0.10%
(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. -23- (Preliminary) GLOBAL COMMERCIAL SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ----------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Revenues Discount revenue, net card fees and other $1,035 $981 $1,150 $1,291 $1,405 ------ ---- ------ ------ ------ Interest income 21 21 30 43 49 Interest expense 53 58 136 134 146 ------ ---- ------ ------ ------ Net interest income (32) (37) (106) (91) (97) ------ ---- ------ ------ ------ Total revenues net of interest expense 1,003 944 1,044 1,200 1,308 ------ ---- ------ ------ ------ Provisions for losses 53 47 69 60 40 ------ ---- ------ ------ ------ Total revenues net of interest expense after provisions for losses 950 897 975 1,140 1,268 ------ ---- ------ ------ ------ Expenses Marketing, promotion, rewards and cardmember services 74 79 79 113 99 Salaries and employee benefits and other operating expenses 777 690 938 836 843 ------ ---- ------ ------ ------ Total 851 769 1,017 949 942 ------ ---- ------ ------ ------ Pretax segment income (loss) 99 128 (42) 191 326 Income tax provision (benefit) 28 42 (35) 57 99 ------ ---- ------ ------ ------ Segment income (loss) $ 71 $ 86 $ (7) $ 134 $ 227 ====== ==== ====== ====== ======
-24- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Card billed business $ 27.2 $ 25.1 $ 28.7 $ 32.3 $ 35.4 Total cards-in-force (millions) 7.2 7.3 7.1 7.0 7.0 Basic cards-in-force (millions) 7.2 7.3 7.1 7.0 7.0 Average basic cardmember spending (dollars) $3,746 $3,517 $4,070 $4,611 $5,083 Global Corporate Travel: Travel sales $ 3.6 $ 3.4 $ 4.3 $ 5.1 $ 6.2 Travel commissions and fees/sales 9.1% 8.6% 8.4% 8.0% 7.5% Total segment assets $ 21.1 $ 19.0 $ 25.1 $ 23.6 $ 25.8 Segment capital (A) $ 3.3 $ 3.4 $ 3.6 $ 3.6 $ 3.3 Return on average segment capital (B) 8.3% 12.8% 15.8% 21.2% 23.6% Return on average tangible segment capital (B) 18.9% 29.2% 34.3% 43.9% 46.7% Cardmember receivables: Total receivables $ 9.9 $ 9.6 $ 9.4 $ 12.5 $ 13.4 90 days past due as a % of total 1.9% 2.4% 2.7% 1.8% 1.6% Net loss ratio as a % of charge volume 0.22% 0.17% 0.14% 0.15% 0.10%
(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. -25- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended June 30, ----------------------- Percentage 2009 2008 Inc/(Dec) ---------- --------- ---------- Revenues Discount revenue, fees and other $888 $1,025 (13)% ---- ------ Interest income 1 1 - Interest expense (21) (57) (63) ---- ------ Net interest income 22 58 (62) ---- ------ Total revenues net of interest expense 910 1,083 (16) ---- ------ Provisions for losses 33 26 27 ---- ------ Total revenues net of interest expense after provision for losses 877 1,057 (17) ---- ------ Expenses Marketing and promotion 94 149 (37) Salaries and employee benefits and other operating expenses 423 453 (7) ---- ------ Total 517 602 (14) ---- ------ Pretax segment income 360 455 (21) Income tax provision 124 156 (21) ---- ------ Segment income $236 $ 299 (21) ==== ======
-26- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED STATISTICAL INFORMATION (Billions, except percentages and where indicated)
Quarters Ended June 30, ----------------------- Percentage 2009 2008 Inc/(Dec) ---------- --------- ---------- Global Card billed business (A) $151.4 $180.9 (16)% Global Network & Merchant Services: Total segment assets $ 8.1 $ 7.2 13% Segment capital (millions) (B) $1,751 $1,378 27% Return on average segment capital (C) 61.2% 88.1% Return on average tangible segment capital (C) 62.6% 90.7% Global Network Services: Card billed business $ 17.0 $ 17.5 (3)% Total cards-in-force (millions) 25.6 22.6 13%
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (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. -27- (Preliminary) GLOBAL NETWORK & MERCHANT SERVICES SELECTED INCOME STATEMENT DATA (Millions)
Quarters Ended ----------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Revenues Discount revenue, fees and other $888 $813 $893 $1,015 $1,025 ---- ---- ---- ------ ------ Interest income 1 1 1 2 1 Interest expense (21) (22) (51) (54) (57) ---- ---- ---- ------ ------ Net interest income 22 23 52 56 58 ---- ---- ---- ------ ------ Total revenues net of interest expense 910 836 945 1,071 1,083 ---- ---- ---- ------ ------ Provisions for losses 33 35 36 34 26 ---- ---- ---- ------ ------ Total revenues net of interest expense after provisions for losses 877 801 909 1,037 1,057 ---- ---- ---- ------ ------ Expenses Marketing and promotion 94 64 118 150 149 Salaries and employee benefits and other operating expenses 423 372 488 490 453 ---- ---- ---- ------ ------ Total 517 436 606 640 602 ---- ---- ---- ------ ------ Pretax segment income 360 365 303 397 455 Income tax provision 124 128 88 139 156 ---- ---- ---- ------ ------ Segment income $236 $237 $215 $ 258 $ 299 ==== ==== ==== ====== ======
-28- (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, 2009 2009 2008 2008 2008 ------------ ------------ ------------ ------------- ------------ Global Card billed business (A) $151.4 $139.2 $160.5 $175.5 $180.9 Global Network & Merchant Services: Total segment assets $ 8.1 $ 6.6 $ 7.0 $ 8.0 $ 7.2 Segment capital (B) $ 1.8 $ 1.7 $ 1.5 $ 1.4 $ 1.4 Return on average segment capital (C) 61.2% 70.6% 75.4% 82.4% 88.1% Return on average tangible segment capital (C) 62.6% 72.4% 77.4% 84.7% 90.7% Global Network Services: Card billed business $ 17.0 $ 14.8 $ 16.0 $ 18.2 $ 17.5 Total cards-in-force (millions) 25.6 25.1 24.8 24.0 22.6
(A) Global Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. (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. -29- (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, 2009 2009 2008 2008 2008 ---------- ------------ ------------ ------------- ------------ ROE Net income $ 1,829 $ 2,145 $ 2,699 $ 3,290 $ 3,542 Average shareholders' equity $13,892 $13,147 $12,127 $11,833 $11,396 Return on average equity (A) 13.2% 16.3% 22.3% 27.8% 31.1% RECONCILIATION OF ROCE AND ROTCE Net income $ 1,829 $ 2,145 $ 2,699 $ 3,290 $ 3,542 Preferred shares dividends and related accretion $ 306 $ 72 $ - $ - $ - Earnings allocated to participating share awards $ 11 $ 13 $ 16 $ 19 $ 20 ------- ------- ------- ------- ------- Net income attributable to common shareholders $ 1,512 $ 2,060 $ 2,683 $ 3,271 $ 3,522 ------- ------- ------- ------- ------- Average shareholders' equity $13,892 $13,147 $12,127 $11,833 $11,396 Average preferred shares $ 1,303 $ 782 ------- ------- ------- ------- ------- Average common shareholders' equity $12,589 $12,365 $12,127 $11,833 $11,396 ------- ------- ------- ------- ------- Average goodwill and other intangibles 2,886 2,830 2,533 2,264 2,006 ------- ------- ------- ------- ------- Average tangible common shareholders' equity $ 9,703 $ 9,535 $ 9,594 $ 9,569 $ 9,390 ------- ------- ------- ------- ------- Return on average common equity (A) 12.0% 16.7% 22.1% 27.6% 30.9% Return on average tangible common equity (A) 15.6% 21.6% 28.0% 34.2% 37.5%
(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. Return on average tangible common equity is computed in the same manner as return on average common equity except the computation of average tangible common shareholders' equity excludes 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 growth. -30- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- U.S. CARD SERVICES Segment income $ 83 $ 304 $ 852 $ 795 $1,143 Average segment capital 5,083 4,814 4,736 4,672 4,567 Average goodwill and other intangibles 338 294 243 188 182 ------ ------ ------ ------ ------ Average tangible segment capital $4,745 $4,520 $4,493 $4,484 $4,385 ------ ------ ------ ------ ------ Return on average segment capital (A) 1.6% 6.3% 18.0% 17.0% 25.0% Return on average tangible segment capital (A) 1.7% 6.7% 19.0% 17.7% 26.1% INTERNATIONAL CARD SERVICES Segment income $ 206 $ 257 $ 351 $ 247 $ 321 Average segment capital 2,123 2,096 2,107 2,102 2,032 Average goodwill and other intangibles 546 544 544 544 538 ------ ------ ------ ------ ------ Average tangible segment capital $1,577 $1,552 $1,563 $1,558 $1,494 ------ ------ ------ ------ ------ Return on average segment capital (A) 9.7% 12.3% 16.7% 11.8% 15.8% Return on average tangible segment capital (A) 13.1% 16.6% 22.5% 15.9% 21.5% GLOBAL COMMERCIAL SERVICES Segment income $ 284 $ 440 $ 505 $ 622 $ 623 Average segment capital 3,435 3,437 3,197 2,933 2,637 Average goodwill and other intangibles 1,933 1,930 1,724 1,515 1,303 ------ ------ ------ ------ ------ Average tangible segment capital $1,502 $1,507 $1,473 $1,418 $1,334 ------ ------ ------ ------ ------ Return on average segment capital (A) 8.3% 12.8% 15.8% 21.2% 23.6% Return on average tangible segment capital (A) 18.9% 29.2% 34.3% 43.9% 46.7% GLOBAL NETWORK & MERCHANT SERVICES Segment income $ 946 $1,009 $ 995 $1,034 $1,042 Average segment capital 1,547 1,430 1,320 1,255 1,183 Average goodwill and other intangibles 35 36 35 34 34 ------ ------ ------ ------ ------ Average tangible segment capital $1,512 $1,394 $1,285 $1,221 $1,149 ------ ------ ------ ------ ------ Return on average segment capital (A) 61.2% 70.6% 75.4% 82.4% 88.1% Return on average tangible segment capital (A) 62.6% 72.4% 77.4% 84.7% 90.7%
(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 is computed in the same manner as return on average segment capital except the computation of average tangible segment capital 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 growth. -31- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- Owned Basis: Net interest income $ 741 $ 919 $ 771 $ 950 $ 954 Average loans (billions) $ 35.2 $ 39.0 $ 43.0 $ 47.7 $ 49.6 Adjusted net interest income (A) $ 853 $1,033 $ 951 $1,068 $1,056 Adjusted average loans (billions) (B) $ 35.4 $ 39.1 $ 43.1 $ 47.8 $ 49.7 Net interest yield on cardmember loans (C) 9.7% 10.7% 8.8% 8.9% 8.5% Managed Basis (D): Net interest income (E) $1,464 $1,722 $1,443 $1,637 $1,594 Average loans (billions) $ 63.9 $ 67.9 $ 72.8 $ 76.1 $ 75.8 Adjusted net interest income (F) $1,576 $1,835 $1,622 $1,756 $1,695 Adjusted average loans (billions) (G) $ 64.0 $ 68.0 $ 72.9 $ 76.2 $ 76.0 Net interest yield on cardmember loans (C) 9.9% 10.9% 8.9% 9.2% 9.0%
(A) Represents net interest income allocable to the Company's cardmember lending portfolio, which excludes the impact of card fees on loans and balance transfer fees attributable to the Company's cardmember lending portfolio. (B) Represents average loans excluding the impact of deferred card fees net of deferred direct acquisition costs for cardmember loans. (C) Net interest yield on cardmember loans represents the net spread earned on cardmember loans. Net interest yield on cardmember loans (both on an owned and managed basis) 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 (both on an owned and managed basis) includes interest and fees that are deemed uncollectible. For the owned basis presentation, reserves and net write-offs related to uncollectible interest and fees are recorded through provisions for losses - cardmember lending, and for the managed basis presentation, reserves and net write-offs related to uncollectible interest and fees are included as a reduction to securitization income, net; 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 (on both an owned and managed basis) is useful to investors because it provides a measure of profitability of the Company's cardmember lending portfolio. (D) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. (E) Includes the GAAP to managed basis securitization adjustments to interest income and interest expense as set forth under U.S. Card Services Selected Financial Information managed basis presentation. (F) Represents net interest income allocable to the Company's managed cardmember lending portfolio, which excludes the impact of card fees on managed loans and balance transfer fees attributable to the Company's managed cardmember lending portfolio. (G) Represents average managed loans excluding the impact of deferred card fees net of deferred direct acquisition costs for managed cardmember loans. -32- (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, 2009 2009 2008 2008 2008 ------------- ------------- ------------- ------------- ------------- USCS Owned Basis: Net interest income $ 534 $ 728 $ 559 $ 662 $ 650 Average loans (billions) $ 26.5 $ 30.2 $ 33.2 $ 36.3 $ 37.9 Adjusted net interest income (A) $ 588 $ 778 $ 709 $ 787 $ 776 Adjusted average loans (billions) (B) $ 26.6 $ 30.3 $ 33.3 $ 36.3 $ 38.0 Net interest yield on cardmember loans (C) 8.9% 10.4% 8.5% 8.6% 8.2% USCS Managed Basis (D): Net interest income (E) $1,257 $1,531 $1,231 $1,349 $1,290 Average loans (billions) $ 55.1 $ 59.1 $ 63.0 $ 64.6 $ 64.2 Adjusted net interest income (F) $1,311 $1,581 $1,380 $1,475 $1,416 Adjusted average loans (billions) (G) $ 55.2 $ 59.2 $ 63.1 $ 64.7 $ 64.2 Net interest yield on cardmember loans (C) 9.5% 10.8% 8.7% 9.1% 8.9% ICS: Net interest income $ 268 $ 251 $ 234 $ 267 $ 264 Average loans (billions) $ 8.7 $ 8.8 $ 9.8 $ 11.4 $ 11.6 Adjusted net interest income (A) $ 265 $ 254 $ 242 $ 281 $ 280 Adjusted average loans (billions) (B) $ 8.8 $ 8.8 $ 9.8 $ 11.5 $ 11.7 Net interest yield on cardmember loans (C) 12.2% 11.7% 9.8% 9.7% 9.6%
(A) Represents net interest income allocable to the Company's cardmember lending portfolio, which excludes the impact of card fees on loans and balance transfer fees attributable to the Company's cardmember lending portfolio. (B) Represents average loans excluding the impact of deferred card fees net of deferred direct acquisition costs for cardmember loans. (C) Net interest yield on cardmember loans represents the net spread earned on cardmember loans. Net interest yield on cardmember loans (both on an owned and managed basis) 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 (both on an owned and managed basis) includes interest and fees that are deemed uncollectible. For the owned basis presentation, reserves and net write-offs related to uncollectible interest and fees are recorded through provisions for losses - cardmember lending, and for the managed basis presentation, reserves and net write-offs related to uncollectible interest and fees are included as a reduction to securitization income, net; 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 (on both an owned and managed basis) is useful to investors because it provides a measure of profitability of the Company's cardmember lending portfolio. (D) Includes on-balance sheet cardmember loans and off-balance sheet securitized cardmember loans. Refer to the information set forth under U.S. Card Services Selected Financial Information for further discussion of the managed basis presentation. (E) Includes the GAAP to managed basis securitization adjustments to interest income and interest expense as set forth under U.S. Card Services Selected Financial Information managed basis presentation. (F) Represents net interest income allocable to the Company's managed cardmember lending portfolio, which excludes the impact of card fees on managed loans and balance transfer fees attributable to the Company's managed cardmember lending portfolio. (G) Represents average managed loans excluding the impact of deferred card fees net of deferred direct acquisition costs for managed cardmember loans. -33-