8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2012

AMERICAN EXPRESS COMPANY

(Exact name of registrant as specified in its charter)

New York	1-7657	13-4922250
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

200 Vesey Street, World Financial Center
New York, New York	10285
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (212) 640-2000

Not Applicable

 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure

The following information is furnished under Item 2.02 - Results of Operations and Financial Condition and Item 7.01 - Regulation FD Disclosure:

On October 17, 2012, American Express Company issued a press release announcing its financial results for the third quarter of 2012. A copy of such press release is attached to this report as Exhibit 99.1 and is hereby incorporated herein by reference. In addition, in conjunction with the announcement of its financial results, American Express Company distributed additional financial information relating to its 2012 third quarter financial results and a 2012 Third Quarter Earnings Supplement. Such additional financial information and the 2012 Third Quarter Earnings Supplement are attached to this report as Exhibits 99.2 and 99.3, respectively, and each is hereby incorporated herein by reference.

EXHIBIT

99.1 Press Release, dated October 17, 2012, of American Express Company announcing its financial results for the third quarter of 2012.

99.2 Additional financial information relating to the financial results of American Express Company for the third quarter of 2012.

99.3 2012 Third Quarter Earnings Supplement of American Express Company.

-2-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AMERICAN EXPRESS COMPANY
(REGISTRANT)
By:	/s/ Carol V. Schwartz
	Name: Carol V. Schwartz
	Title: Secretary

Date: October 17, 2012

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EXHIBIT INDEX

Exhibit No. Description

99.1 Press Release, dated October 17, 2012, of American Express Company announcing its financial results for the third quarter of 2012.

99.2 Additional financial information relating to the financial results of American Express Company for the third quarter of 2012.

99.3 2012 Third Quarter Earnings Supplement of American Express Company.

-4-

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Media Contacts:

Marina H. Norville, marina.h.norville@aexp.com, +1.212.640.2832

Mike O’Neill, mike.o’neill@aexp.com, +1.212.640.5951

Investors/Analysts Contacts:

Ken Paukowits, ken.f.paukowits@aexp.com , +1.212.640.6348

Rick Petrino, richard.petrino@aexp.com, +1.212.640.5574

AMERICAN EXPRESS THIRD QUARTER EPS UP 6% TO $1.09

REVENUES RISE, EXPENSES DECLINE

CARDMEMBER SPENDING AND LOAN PORTFOLIO GROW

AS CREDIT QUALITY REMAINS STRONG

(Millions, except percentages and per share amounts)

	Quarters Ended September 30,						Percentage Inc/(Dec)			Nine Months Ended September 30,						Percentage Inc/(Dec)
	2012			2011						2012			2011
Total Revenues Net of Interest Expense	$	7,862		$	7,571			4	%	$	23,441		$	22,220			5	%
Income From Continuing Operations	$	1,250		$	1,235			1	%	$	3,845		$	3,707			4	%
Income From Discontinued Operations, net of tax1	$	-		$	-			-		$	-		$	36			#
Net Income	$	1,250		$	1,235			1	%	$	3,845		$	3,743			3	%
Earnings Per Common Share – Diluted:
Income From Continuing Operations Attributable to Common Shareholders2	$	1.09		$	1.03			6	%	$	3.31		$	3.08			7	%
Income From Discontinued Operations1	$	-		$	-			-		$	-		$	0.03			#
Net Income Attributable to Common Shareholders2	$	1.09		$	1.03			6	%	$	3.31		$	3.11			6	%
Average Diluted Common Shares Outstanding		1,132			1,181			(4	)%		1,149			1,191			(4	)%
Return on Average Equity		26.3	%		27.8	%					26.3	%		27.8	%

# Denotes a variance of more than 100 percent

New York – October 17, 2012 - American Express Company (NYSE: AXP) today reported third-quarter net income of $1.3 billion, up 1 percent from a year ago.  Diluted earnings per share was $1.09, up 6 percent from $1.03 a year ago.

______________________________________

 1 Income from discontinued operations primarily reflects the resolution of certain prior years’ tax items related to American Express Bank Ltd., which was sold to Standard Chartered PLC during Q1’08.

 2 Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards of $14 million and $15 million for the three months ended September 30, 2012 and 2011, respectively, and $42 million and $44 million for the nine months ended September 30, 2012 and 2011, respectively.

Consolidated total revenues net of interest expense rose 4 percent to $7.9 billion in the third quarter, from $7.6 billion a year ago.  The increase was driven by a rise in cardmember spending and higher net interest income that reflected growth in the cardmember loan portfolio.

Adjusted for foreign currency translations, consolidated total revenues net of interest expense rose 5 percent from a year ago.3

Consolidated provisions for losses totaled $479 million, up 92 percent from $249 million a year ago. This increase reflects substantially lower reserve releases than the year ago period, partially offset by lower net write-offs in the current quarter. Credit indicators continued to be at historically strong levels.

Consolidated expenses totaled $5.5 billion, down 2 percent from $5.6 billion last year. The decrease reflects lower salaries and employee benefits costs and lower rewards expenses.  Year ago expenses were reduced by the receipt of the Visa settlement totaling $70 million.

Adjusted for foreign currency translations, consolidated total expenses are down 1 percent from a year ago.3

The effective tax rate was 33 percent, up from 28 percent in the year ago quarter.  The year ago tax rate reflected the realization of certain foreign tax credits.

The company's return on average equity (ROE) was 26.3 percent, down from 27.8 percent a year ago.

“We generated solid results this quarter against the backdrop of a very uneven global economy,” said Kenneth I. Chenault, chairman and chief executive officer.  “Bottom line results were driven by higher revenues and lower expenses, a combination that reflects ongoing efforts to contain operating costs while maintaining a substantial level of investment in our marketing and rewards programs.

“Cardmember spending rose 8 percent in the U.S. from a year ago and 6 percent globally (8 percent fx-adjusted). That’s a healthy pace in the current environment and an improvement from earlier in the quarter.  Nonetheless, it represents slower growth than we were generating earlier in the year, a trend that we’re seeing among major card issuers.

“Credit quality remained at the historically strong levels, but we didn’t have the same benefit from substantial reserve releases as last year when write-offs and delinquencies were declining at a faster rate.

“We continue to see many growth opportunities as new technologies drive the migration of global payments from cash and checks towards plastic and digital transactions. We are strengthening traditional products that deliver value to cardmembers and drive business for merchants.  At the same time, we are also moving to broadening our franchise with the extension of our Loyalty Partner business into new markets like Mexico and the recently announced partnership with Walmart to reach new segments of the U.S. market that are looking for an alternative to traditional debit cards and checking accounts.

______________________________________ 

3 As reported in this release, FX adjusted information, which constitute non-GAAP financial measures, assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the three months ended September 30, 2012 apply to the period(s) against which such results are being compared). The company believes the presentation of information on an F/X adjusted basis is helpful to investors by making it easier to compare the company's performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.

2

“Taking full advantage of these and other opportunities, particularly in a slow growth economy, will continue to require rigorous cost containment to help ensure that we have the investment resources needed to continue to deliver on our growth objectives.”

Segment Results

U.S. Card Services reported third-quarter net income of $699 million, down 5 percent from $733 million a year ago.

Total revenues net of interest expense increased 6 percent to $4.1 billion from $3.8 billion.  Revenues reflect an 8 percent increase in cardmember spending and a rise in net interest income, driven primarily by a 5 percent growth in average cardmember loans.

Provisions for losses totaled $339 million, up from $143 million a year ago. The increase primarily reflects lower reserve releases than the year ago period, partially offset by lower net write-offs in the current quarter.

Total expenses increased 2 percent from the year ago period, primarily reflecting higher operating expenses,4 partially offset by lower rewards-related costs.

The effective tax rate was 38 percent compared to 36 percent in the year-ago period.

International Card Services reported third-quarter net income of $164 million, down 26 percent from $221 million a year ago.

Total revenues net of interest expense decreased 3 percent to $1.3 billion.  Adjusted for foreign currency translations, revenues rose 2 percent from a year ago.3

Provisions for losses totaled $83 million, down 18 percent from $101 million a year ago.

Total expenses decreased 3 percent primarily reflecting lower operating expenses.  Adjusted for foreign currency translations, expenses were unchanged from a year ago.3

The effective tax rate was 21 percent compared to (17) percent in the year ago period, which reflected the realization of certain foreign tax credits last year.

Global Commercial Services reported third-quarter net income of $183 million, down 7 percent from $197 million a year ago.

Total revenues net of interest expense increased 2 percent to $1.2 billion, reflecting higher cardmember spending, partially offset by lower travel commissions and fees.  Adjusted for foreign currency translations, revenues rose 5 percent from a year ago.3

______________________________________ 

4 Operating expenses include salaries and employee benefits, professional services, occupancy and equipment, communications and other, net.

3

Provisions for losses totaled $32 million compared with a credit of $17 million a year ago, which included reserve releases last year.

Total expenses decreased 3 percent, reflecting lower operating expenses as well as lower costs for marketing, promotion, rewards and cardmember services expenses.  Adjusted for foreign currency translations, expenses were down 1 percent compared to a year ago.3

The effective tax rate was 33 percent compared to 27 percent in the year ago period. The year ago tax rate reflected the realization of certain foreign tax credits.

Global Network & Merchant Services reported third-quarter net income of $360 million, up 8 percent from $332 million a year ago.

Total revenues net of interest expense increased 5 percent to $1.3 billion, reflecting higher merchant-related revenues driven by an increase in global cardmember spending.  Adjusted for foreign currency translations, revenues rose 7 percent from the year ago quarter.3

Total expenses increased 2 percent. An increase in operating expenses was partially offset by lower marketing, promotion, rewards and cardmember services expenses.  Adjusted for foreign currency translations, expenses rose 4 percent from a year ago.3

The effective tax rate was 36 percent compared to 35 percent in the year ago period.

Corporate and Other reported third-quarter net loss of $156 million compared with net loss of $248 million in the year ago period. The year ago period reflected a number of items including charges related to legal exposures and $70 million ($43 million after-tax) benefit from the Visa settlement.

# # #

About American Express

American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success.  Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/companies/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products and services:  charge and credit cards, business credit cards, travel services, gift cards, prepaid cards, merchant services, business travel, and corporate card

The 2012 Third Quarter Earnings Supplement will be available today on the American Express web site at http://ir.americanexpress.com. An investor conference call will be held at 5:00 p.m. (ET) today to discuss third-quarter earnings results. Live audio and presentation slides for the investor conference call will be available to the general public at the same web site. A replay of the conference call will be available later today at the same web site address.

4

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the company’s expected business and financial performance and are subject to risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements due to a variety of factors, including those contained in the company's Annual Report on Form 10-K for the year ended December 31, 2011, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and the company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update or revise any forward-looking statements.

5

All information in the following tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. The Company revised the income statement reporting of card fees on lending products in the first quarter of 2012, increasing Net card fees and reducing Interest on loans. Corresponding amounts in prior periods have been reclassified to conform to the current period presentation. This change does not impact Total revenues net of interest expense in the income statement, or the Net interest yield on cardmember loans, a non-GAAP measure.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)
	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Revenues
Non-interest revenues
Discount revenue	$	4,425		$	4,218			5	%	$	13,164		$	12,398			6	%
Net card fees		633			622			2			1,858			1,836			1
Travel commissions and fees		465			480			(3	)		1,437			1,457			(1	)
Other commissions and fees		581			604			(4	)		1,739			1,717			1
Other		577			534			8			1,808			1,546			17
Total non-interest revenues		6,681			6,458			3			20,006			18,954			6
Interest income
Interest on loans		1,658			1,587			4			4,851			4,685			4
Interest and dividends on investment securities		60			68			(12	)		193			255			(24	)
Deposits with banks and other		21			33			(36	)		73			71			3
Total interest income		1,739			1,688			3			5,117			5,011			2
Interest expense
Deposits		118			127			(7	)		362			395			(8	)
Long-term debt and other		440			448			(2	)		1,320			1,350			(2	)
Total interest expense		558			575			(3	)		1,682			1,745			(4	)
Net interest income		1,181			1,113			6			3,435			3,266			5
Total revenues net of interest expense		7,862			7,571			4			23,441			22,220			5
Provisions for losses
Charge card		190			174			9			531			533			-
Cardmember loans		264			48			#			753			104			#
Other		25			27			(7	)		68			66			3
Total provisions for losses		479			249			92			1,352			703			92
Total revenues net of interest expense after provisions for losses		7,383			7,322			1			22,089			21,517			3
Expenses
Marketing and promotion		764			757			1			2,168			2,261			(4	)
Cardmember rewards		1,496			1,565			(4	)		4,425			4,755			(7	)
Cardmember services		201			189			6			602			526			14
Salaries and employee benefits		1,516			1,598			(5	)		4,687			4,715			(1	)
Professional services		690			690			-			2,092			2,098			-
Occupancy and equipment		453			433			5			1,337			1,218			10
Communications		93			93			-			284			280			1
Other, net		300			286			5			972			456			#
Total		5,513			5,611			(2	)		16,567			16,309			2
Pretax income from continuing operations		1,870			1,711			9			5,522			5,208			6
Income tax provision		620			476			30			1,677			1,501			12
Income from continuing operations		1,250			1,235			1			3,845			3,707			4
Income from discontinued operations, net of tax		-			-			-			-			36			#
Net income	$	1,250		$	1,235			1		$	3,845		$	3,743			3
Income from continuing operations attributable to common shareholders (A)	$	1,236		$	1,220			1		$	3,803		$	3,663			4
Net income attributable to common shareholders (A)	$	1,236		$	1,220			1		$	3,803		$	3,699			3
Effective tax rate		33.2	%		27.8	%					30.4	%		28.8	%

# - Denotes a variance of more than 100%.

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards of $14 million and $15 million for the three months ended September 30, 2012 and 2011, respectively, and $42 million and $44 million for the nine months ended September 30, 2012 and 2011, respectively.

6

(Preliminary)

American Express Company

Condensed Consolidated Balance Sheets

(Billions)
	September 30,		December 31,
	2012		2011
Assets
Cash & cash equivalents	$	25	$	25
Accounts receivable		45		44
Investment securities		6		7
Loans		61		61
Other assets		16		16
Total assets	$	153	$	153
Liabilities and Shareholders' Equity
Customer deposits	$	37	$	38
Short-term borrowings		4		4
Long-term debt		56		60
Other liabilities		37		32
Total liabilities		134		134
Shareholders' Equity		19		19
Total liabilities and shareholders' equity	$	153	$	153

7

(Preliminary)

American Express Company

Financial Summary

(Millions)
	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Total revenues net of interest expense
U.S. Card Services	$	4,055		$	3,838			6	%	$	11,976		$	11,174			7	%
International Card Services		1,313			1,347			(3	)		3,909			3,906			-
Global Commercial Services		1,156			1,130			2			3,534			3,442			3
Global Network & Merchant Services		1,310			1,250			5			3,881			3,626			7
		7,834			7,565			4			23,300			22,148			5
Corporate & Other		28			6			#			141			72			96
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,862		$	7,571			4		$	23,441		$	22,220			5
Pretax income (loss) from continuing operations
U.S. Card Services	$	1,128		$	1,151			(2	)	$	3,457		$	2,961			17
International Card Services		207			189			10			549			625			(12	)
Global Commercial Services		275			269			2			818			799			2
Global Network & Merchant Services		561			514			9			1,662			1,477			13
		2,171			2,123			2			6,486			5,862			11
Corporate & Other		(301	)		(412	)		(27	)		(964	)		(654	)		47
PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,870		$	1,711			9		$	5,522		$	5,208			6
Net income (loss)
U.S. Card Services	$	699		$	733			(5	)	$	2,169		$	1,953			11
International Card Services		164			221			(26	)		539			571			(6	)
Global Commercial Services		183			197			(7	)		579			558			4
Global Network & Merchant Services		360			332			8			1,089			969			12
		1,406			1,483			(5	)		4,376			4,051			8
Corporate & Other		(156	)		(248	)		(37	)		(531	)		(344	)		54
Income from continuing operations		1,250			1,235			1			3,845			3,707			4
Income from discontinued operations, net of tax		-			-			-			-			36			#
NET INCOME	$	1,250		$	1,235			1		$	3,845		$	3,743			3

# - Denotes a variance of more than 100%.

8

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended							Nine Months Ended
	September 30,				Percentage			September 30,				Percentage
	2012		2011		Inc/(Dec)			2012		2011		Inc/(Dec)
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations attributable to common shareholders	$	1.10	$	1.04		6	%	$	3.33	$	3.09		8	%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	1.10	$	1.04		6	%	$	3.33	$	3.12		7	%
Average common shares outstanding (millions)		1,126		1,175		(4	) %		1,143		1,184		(3	) %
DILUTED
Income from continuing operations attributable to common shareholders	$	1.09	$	1.03		6	%	$	3.31	$	3.08		7	%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	1.09	$	1.03		6	%	$	3.31	$	3.11		6	%
Average common shares outstanding (millions)		1,132		1,181		(4	) %		1,149		1,191		(4	) %
Cash dividends declared per common share	$	0.20	$	0.18		11	%	$	0.60	$	0.54		11	%

Selected Statistical Information

	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Return on average equity (A)		26.3	%		27.8	%					26.3	%		27.8	%
Return on average common equity (A)		26.0	%		27.5	%					26.0	%		27.5	%
Return on average tangible common equity (A)		33.5	%		35.7	%					33.5	%		35.7	%
Common shares outstanding (millions)		1,122			1,169			(4	)  %		1,122			1,169			(4	)  %
Book value per common share	$	17.37		$	15.49			12	%	$	17.37		$	15.49			12	%
Shareholders' equity (billions)	$	19.5		$	18.1			8	%	$	19.5		$	18.1			8	%

# - Denotes a variance of more than 100%.

(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity, a non-GAAP measure.

9

(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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
ROE
Net income	$	5,037		$	5,022		$	5,014		$	4,935		$	4,805
Average shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Return on average equity (A)		26.3	%		26.6	%		27.1	%		27.7	%		27.8	%
Reconciliation of ROCE and ROTCE
Net income	$	5,037		$	5,022		$	5,014		$	4,935		$	4,805
Earnings allocated to participating share awards and other		56			57			58			58			56
Net income attributable to common shareholders	$	4,981		$	4,965		$	4,956		$	4,877		$	4,749
Average shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Average common shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Average goodwill and other intangibles		4,272			4,330			4,380			4,215			3,992
Average tangible common shareholders' equity	$	14,873		$	14,557		$	14,145		$	13,627		$	13,285
Return on average common equity (A)		26.0	%		26.3	%		26.8	%		27.3	%		27.5	%
Return on average tangible common equity (B)		33.5	%		34.1	%		35.0	%		35.8	%		35.7	%

(A) Return on average equity and return on average common equity are calculated by dividing one year period net income/net income attributable to common shareholders by one year average total shareholders’ equity/average common shareholders' equity, respectively.

(B) Return on average tangible common equity, a non-GAAP measure, is computed in the same manner as return on average common equity except the computation of average tangible common shareholders' equity, a non-GAAP measure, excludes from average total shareholders' equity, average goodwill and other intangibles. The Company believes that return on average tangible common equity is a useful measure of the profitability of its business.

10

EX-99.2

EXHIBIT 99.2

All information in the following tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. The Company revised the income statement reporting of card fees on lending products in the first quarter of 2012, increasing Net card fees and reducing Interest on loans. Corresponding amounts in prior periods have been reclassified to conform to the current period presentation. This change does not impact Total revenues net of interest expense in the income statement, or the Net interest yield on cardmember loans, a non-GAAP measure.

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)
	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Revenues
Non-interest revenues
Discount revenue	$	4,425		$	4,218			5	%	$	13,164		$	12,398			6	%
Net card fees		633			622			2			1,858			1,836			1
Travel commissions and fees		465			480			(3	)		1,437			1,457			(1	)
Other commissions and fees		581			604			(4	)		1,739			1,717			1
Other		577			534			8			1,808			1,546			17
Total non-interest revenues		6,681			6,458			3			20,006			18,954			6
Interest income
Interest on loans		1,658			1,587			4			4,851			4,685			4
Interest and dividends on investment securities		60			68			(12	)		193			255			(24	)
Deposits with banks and other		21			33			(36	)		73			71			3
Total interest income		1,739			1,688			3			5,117			5,011			2
Interest expense
Deposits		118			127			(7	)		362			395			(8	)
Long-term debt and other		440			448			(2	)		1,320			1,350			(2	)
Total interest expense		558			575			(3	)		1,682			1,745			(4	)
Net interest income		1,181			1,113			6			3,435			3,266			5
Total revenues net of interest expense		7,862			7,571			4			23,441			22,220			5
Provisions for losses
Charge card		190			174			9			531			533			-
Cardmember loans		264			48			#			753			104			#
Other		25			27			(7	)		68			66			3
Total provisions for losses		479			249			92			1,352			703			92
Total revenues net of interest expense after provisions for losses		7,383			7,322			1			22,089			21,517			3
Expenses
Marketing and promotion		764			757			1			2,168			2,261			(4	)
Cardmember rewards		1,496			1,565			(4	)		4,425			4,755			(7	)
Cardmember services		201			189			6			602			526			14
Salaries and employee benefits		1,516			1,598			(5	)		4,687			4,715			(1	)
Professional services		690			690			-			2,092			2,098			-
Occupancy and equipment		453			433			5			1,337			1,218			10
Communications		93			93			-			284			280			1
Other, net		300			286			5			972			456			#
Total		5,513			5,611			(2	)		16,567			16,309			2
Pretax income from continuing operations		1,870			1,711			9			5,522			5,208			6
Income tax provision		620			476			30			1,677			1,501			12
Income from continuing operations		1,250			1,235			1			3,845			3,707			4
Income from discontinued operations, net of tax		-			-			-			-			36			#
Net income	$	1,250		$	1,235			1		$	3,845		$	3,743			3
Income from continuing operations attributable to common shareholders (A)	$	1,236		$	1,220			1		$	3,803		$	3,663			4
Net income attributable to common shareholders (A)	$	1,236		$	1,220			1		$	3,803		$	3,699			3
Effective tax rate		33.2	%		27.8	%					30.4	%		28.8	%

# - Denotes a variance of more than 100%.

(A) Represents income from continuing operations or net income, as applicable, less earnings allocated to participating share awards of $14 million and $15 million for the three months ended September 30, 2012 and 2011, respectively, and $42 million and $44 million for the nine months ended September 30, 2012 and 2011, respectively.

1

(Preliminary)

American Express Company

Condensed Consolidated Balance Sheets

(Billions)
	September 30,		December 31,
	2012		2011
Assets
Cash & cash equivalents	$	25	$	25
Accounts receivable		45		44
Investment securities		6		7
Loans		61		61
Other assets		16		16
Total assets	$	153	$	153
Liabilities and Shareholders' Equity
Customer deposits	$	37	$	38
Short-term borrowings		4		4
Long-term debt		56		60
Other liabilities		37		32
Total liabilities		134		134
Shareholders' Equity		19		19
Total liabilities and shareholders' equity	$	153	$	153

2

(Preliminary)

American Express Company

Financial Summary

(Millions)
	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Total revenues net of interest expense
U.S. Card Services	$	4,055		$	3,838			6	%	$	11,976		$	11,174			7	%
International Card Services		1,313			1,347			(3	)		3,909			3,906			-
Global Commercial Services		1,156			1,130			2			3,534			3,442			3
Global Network & Merchant Services		1,310			1,250			5			3,881			3,626			7
		7,834			7,565			4			23,300			22,148			5
Corporate & Other		28			6			#			141			72			96
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,862		$	7,571			4		$	23,441		$	22,220			5
Pretax income (loss) from continuing operations
U.S. Card Services	$	1,128		$	1,151			(2	)	$	3,457		$	2,961			17
International Card Services		207			189			10			549			625			(12	)
Global Commercial Services		275			269			2			818			799			2
Global Network & Merchant Services		561			514			9			1,662			1,477			13
		2,171			2,123			2			6,486			5,862			11
Corporate & Other		(301	)		(412	)		(27	)		(964	)		(654	)		47
PRETAX INCOME FROM CONTINUING OPERATIONS	$	1,870		$	1,711			9		$	5,522		$	5,208			6
Net income (loss)
U.S. Card Services	$	699		$	733			(5	)	$	2,169		$	1,953			11
International Card Services		164			221			(26	)		539			571			(6	)
Global Commercial Services		183			197			(7	)		579			558			4
Global Network & Merchant Services		360			332			8			1,089			969			12
		1,406			1,483			(5	)		4,376			4,051			8
Corporate & Other		(156	)		(248	)		(37	)		(531	)		(344	)		54
Income from continuing operations		1,250			1,235			1			3,845			3,707			4
Income from discontinued operations, net of tax		-			-			-			-			36			#
NET INCOME	$	1,250		$	1,235			1		$	3,845		$	3,743			3

# - Denotes a variance of more than 100%.

3

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended							Nine Months Ended
	September 30,				Percentage			September 30,				Percentage
	2012		2011		Inc/(Dec)			2012		2011		Inc/(Dec)
EARNINGS PER COMMON SHARE
BASIC
Income from continuing operations attributable to common shareholders	$	1.10	$	1.04		6	%	$	3.33	$	3.09		8	%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	1.10	$	1.04		6	%	$	3.33	$	3.12		7	%
Average common shares outstanding (millions)		1,126		1,175		(4	) %		1,143		1,184		(3	) %
DILUTED
Income from continuing operations attributable to common shareholders	$	1.09	$	1.03		6	%	$	3.31	$	3.08		7	%
Income from discontinued operations		-		-		-			-		0.03		#
Net income attributable to common shareholders	$	1.09	$	1.03		6	%	$	3.31	$	3.11		6	%
Average common shares outstanding (millions)		1,132		1,181		(4	) %		1,149		1,191		(4	) %
Cash dividends declared per common share	$	0.20	$	0.18		11	%	$	0.60	$	0.54		11	%

Selected Statistical Information

	Quarters Ended									Nine Months Ended
	September 30,						Percentage			September 30,						Percentage
	2012			2011			Inc/(Dec)			2012			2011			Inc/(Dec)
Return on average equity (A)		26.3	%		27.8	%					26.3	%		27.8	%
Return on average common equity (A)		26.0	%		27.5	%					26.0	%		27.5	%
Return on average tangible common equity (A)		33.5	%		35.7	%					33.5	%		35.7	%
Common shares outstanding (millions)		1,122			1,169			(4	)  %		1,122			1,169			(4	)  %
Book value per common share	$	17.37		$	15.49			12	%	$	17.37		$	15.49			12	%
Shareholders' equity (billions)	$	19.5		$	18.1			8	%	$	19.5		$	18.1			8	%

# - Denotes a variance of more than 100%.

(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity, a non-GAAP measure.

4

(Preliminary)

American Express Company

Selected Statistical Information

(Millions, except percentages and where indicated)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business (billions) (A):
United States	$	146.9		$	136.4			8	%
Outside the United States		73.2			71.3			3
Total	$	220.1		$	207.7			6
Total cards-in-force (B):
United States		51.8			50.2			3	%
Outside the United States		49.6			45.6			9
Total		101.4			95.8			6
Basic cards-in-force (B):
United States		40.2			38.9			3	%
Outside the United States		39.8			36.4			9
Total		80.0			75.3			6
Average discount rate (C)		2.53	%		2.54	%
Average basic cardmember spending (dollars) (D)	$	3,885		$	3,739			4	%
Average fee per card (dollars) (D)	$	39		$	40			(3	) %
Average fee per card adjusted (dollars) (D)	$	44		$	43			2	%

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

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

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

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

5

(Preliminary)

American Express Company

Selected Statistical Information (continued)

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Worldwide cardmember receivables:
Total receivables	$	42.3		$	39.8			6	%
Loss reserves (millions):
Beginning balance	$	392		$	415			(6	)  %
Provisions  (A)		151			125			21
Other additions (B)		39			49			(20	)
Net write-offs (C)		(141	)		(146	)		(3	)
Other deductions (D)		(32	)		(55	)		(42	)
Ending balance	$	409		$	388			5
% of receivables		1.0	%		1.0	%
Net write-off rate (principal only) - USCS (E)		1.6	%		1.8	%
Net write-off rate (principal and fees) - USCS (E)		1.7	%		1.9	%
30 days past due as a % of total - USCS		1.8	%		2.0	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.10	%
90 days past billing as a % of total - ICS/GCS		0.7	%		0.8	%
Worldwide cardmember loans:
Total loans	$	61.8		$	58.2			6	%
Loss reserves (millions):
Beginning balance	$	1,547		$	2,560			(40	)  %
Provisions (A)		231			16			#
Other additions (B)		33			32			3
Net write-offs - principal (C)		(292	)		(383	)		(24	)
Net write-offs - interest and fees (C)		(36	)		(44	)		(18	)
Other deductions (D)		(24	)		(42	)		(43	)
Ending balance	$	1,459		$	2,139			(32	)
Ending reserves - principal	$	1,411		$	2,080			(32	)
Ending reserves - interest and fees	$	48		$	59			(18	)
% of loans		2.4	%		3.7	%
% of past due		182	%		238	%
Average loans	$	61.4		$	58.9			4	%
Net write-off rate (principal only) (E)		1.9	%		2.6	%
Net write-off rate (principal, interest and fees) (E)		2.1	%		2.9	%
30 days past due loans as a % of total		1.3	%		1.5	%
Net interest income divided by average loans (F)		7.7	%		7.5	%
Net interest yield on cardmember loans (F)		9.3	%		9.1	%

# - Denotes a variance of more than 100%.

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

(B) Provisions for unauthorized transactions.

(C) Consists of principal (resulting from authorized transactions)  interest and/or fees, less recoveries.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(37) million and $(46) million for the three months ended September 30, 2012 and 2011, respectively; foreign currency translation adjustments of $6 million and $(5) million for the three months ended September 30, 2012 and 2011, respectively; and other adjustments of $(1) million and $(4) million for the three months ended September 30, 2012 and 2011, respectively. For cardmember loans, includes net write-offs for unauthorized transactions of $(31) million and $(29) million for the three months ended September 30, 2012 and 2011, respectively; foreign currency translation adjustments of $10 million and $(14) million for the three months ended September 30, 2012 and 2011, respectively; and other adjustments of $(3) million and $1 million for the three months ended September 30, 2012 and 2011, respectively.

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

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

6

(Preliminary)

American Express Company

Consolidated Statements of Income

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Revenues
Non-interest revenues
Discount revenue	$	4,425		$	4,482		$	4,257		$	4,336		$	4,218
Net card fees		633			615			610			612			622
Travel commissions and fees		465			521			451			514			480
Other commissions and fees		581			575			583			552			604
Other		577			651			580			618			534
Total non-interest revenues		6,681			6,844			6,481			6,632			6,458
Interest income
Interest on loans		1,658			1,582			1,611			1,587			1,587
Interest and dividends on investment securities		60			67			66			72			68
Deposits with banks and other		21			22			30			26			33
Total interest income		1,739			1,671			1,707			1,685			1,688
Interest expense
Deposits		118			115			129			133			127
Long-term debt and other		440			435			445			442			448
Total interest expense		558			550			574			575			575
Net interest income		1,181			1,121			1,133			1,110			1,113
Total revenues net of interest expense		7,862			7,965			7,614			7,742			7,571
Provisions for losses
Charge card		190			163			178			237			174
Cardmember loans		264			277			212			149			48
Other		25			21			22			23			27
Total provisions for losses		479			461			412			409			249
Total revenues net of interest expense after provisions for losses		7,383			7,504			7,202			7,333			7,322
Expenses
Marketing and promotion		764			773			631			735			757
Cardmember rewards		1,496			1,462			1,467			1,463			1,565
Cardmember services		201			180			221			190			189
Salaries and employee benefits		1,516			1,536			1,635			1,537			1,598
Professional services		690			711			691			853			690
Occupancy and equipment		453			446			438			467			433
Communications		93			95			96			98			93
Other, net		300			422			250			242			286
Total		5,513			5,625			5,429			5,585			5,611
Pretax income		1,870			1,879			1,773			1,748			1,711
Income tax provision		620			540			517			556			476
Net income	$	1,250		$	1,339		$	1,256		$	1,192		$	1,235
Net income attributable to common shareholders (A)	$	1,236		$	1,325		$	1,242		$	1,178		$	1,220
Effective tax rate		33.2	%		28.7	%		29.2	%		31.8	%		27.8	%

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

7

(Preliminary)

American Express Company

Financial Summary

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Total revenues net of interest expense
U.S. Card Services	$	4,055		$	4,037		$	3,884		$	3,897		$	3,838
International Card Services		1,313			1,297			1,299			1,333			1,347
Global Commercial Services		1,156			1,221			1,157			1,183			1,130
Global Network & Merchant Services		1,310			1,323			1,248			1,316			1,250
		7,834			7,878			7,588			7,729			7,565
Corporate & Other		28			87			26			13			6
CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE	$	7,862		$	7,965		$	7,614		$	7,742		$	7,571
Pretax income (loss)
U.S. Card Services	$	1,128		$	1,149		$	1,180		$	1,168		$	1,151
International Card Services		207			146			196			137			189
Global Commercial Services		275			299			244			276			269
Global Network & Merchant Services		561			562			539			502			514
		2,171			2,156			2,159			2,083			2,123
Corporate & Other		(301	)		(277	)		(386	)		(335	)		(412	)
PRETAX INCOME	$	1,870		$	1,879		$	1,773		$	1,748		$	1,711
Net income (loss)
U.S. Card Services	$	699		$	718		$	752		$	727		$	733
International Card Services		164			178			197			152			221
Global Commercial Services		183			219			177			180			197
Global Network & Merchant Services		360			372			357			324			332
		1,406			1,487			1,483			1,383			1,483
Corporate & Other		(156	)		(148	)		(227	)		(191	)		(248	)
NET INCOME	$	1,250		$	1,339		$	1,256		$	1,192		$	1,235

8

(Preliminary)

American Express Company

Financial Summary (continued)

	Quarters Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
	2012		2012		2012		2011		2011
EARNINGS PER COMMON SHARE
BASIC
Net income attributable to common shareholders	$	1.10	$	1.16	$	1.07	$	1.02	$	1.04
Average common shares outstanding (millions)		1,126		1,145		1,160		1,157		1,175
DILUTED
Net income attributable to common shareholders	$	1.09	$	1.15	$	1.07	$	1.01	$	1.03
Average common shares outstanding (millions)		1,132		1,152		1,166		1,163		1,181
Cash dividends declared per common share	$	0.20	$	0.20	$	0.20	$	0.18	$	0.18

Selected Statistical Information

	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Return on average equity (A)		26.3	%		26.6	%		27.1	%		27.7	%		27.8	%
Return on average common equity (A)		26.0	%		26.3	%		26.8	%		27.3	%		27.5	%
Return on average tangible common equity (A)		33.5	%		34.1	%		35.0	%		35.8	%		35.7	%
Common shares outstanding (millions)		1,122			1,139			1,166			1,164			1,169
Book value per common share	$	17.37		$	16.92		$	17.08		$	16.15		$	15.49
Shareholders' equity (billions)	$	19.5		$	19.3		$	19.9		$	18.8		$	18.1

(A) Refer to Appendix I for components of return on average equity, return on average common equity and return on average tangible common equity, a non-GAAP measure.

9

(Preliminary)

American Express Company

Selected Statistical Information

(Millions, except percentages and where indicated)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Card billed business (billions) (A):
United States	$	146.9		$	148.7		$	139.6		$	145.5		$	136.4
Outside the United States		73.2			72.9			71.6			73.5			71.3
Total	$	220.1		$	221.6		$	211.2		$	219.0		$	207.7
Total cards-in-force (B):
United States		51.8			51.2			50.9			50.6			50.2
Outside the United States		49.6			48.9			47.8			46.8			45.6
Total		101.4			100.1			98.7			97.4			95.8
Basic cards-in-force (B):
United States		40.2			39.8			39.6			39.3			38.9
Outside the United States		39.8			39.2			38.2			37.4			36.4
Total		80.0			79.0			77.8			76.7			75.3
Average discount rate (C)		2.53	%		2.54	%		2.53	%		2.51	%		2.54	%
Average basic cardmember spending (dollars) (D)	$	3,885		$	3,948		$	3,772		$	3,933		$	3,739
Average fee per card (dollars) (D)	$	39		$	39		$	38		$	39		$	40
Average fee per card adjusted (dollars) (D)	$	44		$	43		$	42		$	42		$	43

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

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

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

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

10

(Preliminary)

American Express Company

Selected Statistical Information (continued)

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Worldwide cardmember receivables:
Total receivables	$	42.3		$	41.5		$	41.5		$	40.9		$	39.8
Loss reserves (millions):
Beginning balance	$	392		$	424		$	438		$	388		$	415
Provisions (A)		151			134			149			199			125
Other additions (B)		39			29			29			38			49
Net write-offs (C)		(141	)		(164	)		(182	)		(154	)		(146	)
Other deductions (D)		(32	)		(31	)		(10	)		(33	)		(55	)
Ending balance	$	409		$	392		$	424		$	438		$	388
% of receivables		1.0	%		0.9	%		1.0	%		1.1	%		1.0	%
Net write-off rate (principal only) - USCS (E)		1.6	%		2.0	%		2.3	%		1.9	%		1.8	%
Net write-off rate (principal and fees) - USCS (E)		1.7	%		2.2	%		2.5	%		2.0	%		1.9	%
30 days past due as a % of total - USCS		1.8	%		1.7	%		1.9	%		1.9	%		2.0	%
Net loss ratio (as a % of charge volume) - ICS/GCS		0.10	%		0.10	%		0.11	%		0.10	%		0.10	%
90 days past billing as a % of total - ICS/GCS		0.7	%		0.7	%		0.7	%		0.9	%		0.8	%
Worldwide cardmember loans:
Total loans	$	61.8		$	61.0		$	60.1		$	62.6		$	58.2
Loss reserves (millions):
Beginning balance	$	1,547		$	1,680		$	1,874		$	2,139		$	2,560
Provisions (A)		231			253			185			122			16
Other additions (B)		33			24			27			27			32
Net write-offs - principal (C)		(292	)		(329	)		(349	)		(345	)		(383	)
Net write-offs - interest and fees (C)		(36	)		(41	)		(44	)		(42	)		(44	)
Other deductions (D)		(24	)		(40	)		(13	)		(27	)		(42	)
Ending balance	$	1,459		$	1,547		$	1,680		$	1,874		$	2,139
Ending reserves - principal	$	1,411		$	1,492		$	1,622		$	1,818		$	2,080
Ending reserves - interest and fees	$	48		$	55		$	58		$	56		$	59
% of loans		2.4	%		2.5	%		2.8	%		3.0	%		3.7	%
% of past due		182	%		202	%		201	%		206	%		238	%
Average loans	$	61.4		$	60.6		$	60.7		$	59.9		$	58.9
Net write-off rate (principal only) (E)		1.9	%		2.2	%		2.3	%		2.3	%		2.6	%
Net write-off rate (principal, interest and fees) (E)		2.1	%		2.4	%		2.6	%		2.6	%		2.9	%
30 days past due loans as a % of total		1.3	%		1.3	%		1.4	%		1.5	%		1.5	%
Net interest income divided by average loans (F)		7.7	%		7.4	%		7.5	%		7.4	%		7.5	%
Net interest yield on cardmember loans (F)		9.3	%		9.0	%		9.2	%		8.9	%		9.1	%

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

(B) Provisions for unauthorized transactions.

(C) Consists of principal (resulting from authorized transactions)  interest and/or fees, less recoveries.

(D) For cardmember receivables, includes net write-offs for unauthorized transactions of $(37) million for the three months ended September 30, 2012, $(30) million for the three months ended June 30, 2012, $(33) million for the three months ended March 31, 2012, $(38) million for the three months ended December 31, 2011 and $(46) million for the three months ended September 30, 2011; foreign currency translation adjustments of $6 million for the three months ended September 30, 2012, $(5) million for the three months ended June 30, 2012, $3 million for the three months ended March 31, 2012, $(3) million for the three months ended December 31, 2011 and $(5) million for the three months September 30, 2011; reclassified cardmember bankruptcy reserves of $18 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $(1) million for the three months ended September 30, 2012, $4 million for the three months ended June 30, 2012, $2 million for the three months ended March 31, 2012, $8 million for the three months ended December 31, 2011 and $(4) million for the three months ended September 30, 2011. For cardmember loans, includes net write-offs for unauthorized transactions of $(31) million for the three months ended September 30, 2012, $(25) million for the three months ended June 30, 2012, $(28) million for the three months ended March 31, 2012, $(27) million for the three months ended December 31, 2011 and $(29) million for the three months ended September 30, 2011; foreign currency translation adjustments of $10 million for the three months ended September 30, 2012, $(11) million for the three months ended June 30, 2012, $10 million for the three months ended March 31, 2012, $(1) million for the three months ended December 31, 2011 and $(14) million for the three months ended September 30, 2011; reclassified cardmember bankruptcy reserves of $4 million for the three months ended March 31, 2012, only (cardmember bankruptcy reserves were classified as other liabilities in prior periods); and other adjustments of $(3) million for the three months ended September 30, 2012, $(4) million for the three months ended June 30, 2012, $1 million for the three months ended March 31, 2012, $1 million for the three months ended December 31, 2011 and $1 million for the three months ended September 30, 2011.

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

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

11

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Revenues
Discount revenue, net card fees and other	$	2,887		$	2,752			5	%
Interest income		1,362			1,287			6
Interest expense		194			201			(3	)
Net interest income		1,168			1,086			8
Total revenues net of interest expense		4,055			3,838			6
Provisions for losses		339			143			#
Total revenues net of interest expense after provisions for losses		3,716			3,695			1
Expenses
Marketing, promotion, rewards and cardmember services		1,626			1,646			(1	)
Salaries and employee benefits and other operating expenses		962			898			7
Total		2,588			2,544			2
Pretax segment income		1,128			1,151			(2	)
Income tax provision		429			418			3
Segment income	$	699		$	733			(5	)
Effective tax rate		38.0	%		36.3	%

# - Denotes a variance of more than 100%.

12

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business	$	115.3		$	106.8			8	%
Total cards-in-force (millions)		41.8			40.7			3	%
Basic cards-in-force (millions)		31.1			30.2			3	%
Average basic cardmember spending (dollars)	$	3,725		$	3,542			5	%
U.S. Consumer Travel:
Travel sales (millions)	$	989		$	920			8	%
Travel commissions and fees/sales		7.6	%		8.5	%
Total segment assets	$	96.3		$	87.9			10	%
Segment capital (millions) (A)	$	9,100		$	8,233			11	%
Return on average segment capital (B)		32.5	%		34.2	%
Return on average tangible segment capital (B)		34.0	%		36.2	%
Cardmember receivables:
Total receivables	$	19.5		$	19.0			3	%
30 days past due as a % of total		1.8	%		2.0	%
Average receivables	$	19.4		$	19.1			2	%
Net write-off rate (principal only) (C)		1.6	%		1.8	%
Net write-off rate (principal and fees) (C)		1.7	%		1.9	%
Cardmember loans:
Total loans	$	52.9		$	49.9			6	%
30 days past due loans as a % of total		1.3	%		1.5	%
Average loans	$	52.8		$	50.2			5	%
Net write-off rate (principal only) (C)		1.9	%		2.6	%
Net write-off rate (principal, interest and fees) (C)		2.1	%		2.9	%
Net interest income divided by average loans (D)		8.8	%		8.6	%
Net interest yield on cardmember loans (D)		9.2	%		9.0	%

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

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

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

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

13

(Preliminary)

U.S. Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Revenues
Discount revenue, net card fees and other	$	2,887		$	2,925		$	2,754		$	2,796		$	2,752
Interest income		1,362			1,302			1,314			1,304			1,287
Interest expense		194			190			184			203			201
Net interest income		1,168			1,112			1,130			1,101			1,086
Total revenues net of interest expense		4,055			4,037			3,884			3,897			3,838
Provisions for losses		339			312			301			269			143
Total revenues net of interest expense after provisions for losses		3,716			3,725			3,583			3,628			3,695
Expenses
Marketing, promotion, rewards and cardmember services		1,626			1,566			1,472			1,540			1,646
Salaries and employee benefits and other operating expenses		962			1,010			931			920			898
Total		2,588			2,576			2,403			2,460			2,544
Pretax segment income		1,128			1,149			1,180			1,168			1,151
Income tax provision		429			431			428			441			418
Segment income	$	699		$	718		$	752		$	727		$	733
Effective tax rate		38.0	%		37.5	%		36.3	%		37.8	%		36.3	%

14

(Preliminary)

U.S. Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Card billed business	$	115.3		$	116.0		$	107.7		$	114.6		$	106.8
Total cards-in-force (millions)		41.8			41.5			41.2			40.9			40.7
Basic cards-in-force (millions)		31.1			30.8			30.6			30.4			30.2
Average basic cardmember spending (dollars)	$	3,725		$	3,776		$	3,529		$	3,779		$	3,542
U.S. Consumer Travel:
Travel sales	$	1.0		$	1.1		$	1.0		$	0.8		$	0.9
Travel commissions and fees/sales		7.6	%		7.7	%		7.4	%		8.3	%		8.5	%
Total segment assets	$	96.3		$	95.5		$	90.7		$	97.8		$	87.9
Segment capital (A)	$	9.1		$	9.0		$	9.3		$	8.8		$	8.2
Return on average segment capital (B)		32.5	%		33.6	%		33.8	%		33.0	%		34.2	%
Return on average tangible segment capital (B)		34.0	%		35.3	%		35.5	%		34.8	%		36.2	%
Cardmember receivables:
Total receivables	$	19.5		$	19.6		$	19.3		$	20.6		$	19.0
30 days past due as a % of total		1.8	%		1.7	%		1.9	%		1.9	%		2.0	%
Average receivables	$	19.4		$	19.8		$	19.6		$	19.7		$	19.1
Net write-off rate (principal only) (C)		1.6	%		2.0	%		2.3	%		1.9	%		1.8	%
Net write-off rate (principal and fees) (C)		1.7	%		2.2	%		2.5	%		2.0	%		1.9	%
Cardmember loans:
Total loans	$	52.9		$	52.5		$	51.4		$	53.7		$	49.9
30 days past due loans as a % of total		1.3	%		1.2	%		1.3	%		1.4	%		1.5	%
Average loans	$	52.8		$	52.1		$	51.9		$	51.4		$	50.2
Net write-off rate (principal only) (C)		1.9	%		2.2	%		2.3	%		2.3	%		2.6	%
Net write-off rate (principal, interest and fees) (C)		2.1	%		2.4	%		2.6	%		2.5	%		2.9	%
Net interest income divided by average loans (D)		8.8	%		8.6	%		8.8	%		8.5	%		8.6	%
Net interest yield on cardmember loans (D)		9.2	%		9.0	%		9.1	%		8.9	%		9.0	%

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

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

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

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

15

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Revenues
Discount revenue, net card fees and other	$	1,126		$	1,156			(3	) %
Interest income		289			299			(3	)
Interest expense		102			108			(6	)
Net interest income		187			191			(2	)
Total revenues net of interest expense		1,313			1,347			(3	)
Provisions for losses		83			101			(18	)
Total revenues net of interest expense after provisions for losses		1,230			1,246			(1	)
Expenses
Marketing, promotion, rewards and cardmember services		466			460			1
Salaries and employee benefits and other operating expenses		557			597			(7	)
Total		1,023			1,057			(3	)
Pretax segment income		207			189			10
Income tax provision/(benefit)		43			(32	)		#
Segment income	$	164		$	221			(26	)
Effective tax rate		20.8	%		-16.9	%

# - Denotes a variance of more than 100%.

16

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business	$	31.9		$	31.6			1	%
Total cards-in-force (millions)		15.5			15.2			2	%
Basic cards-in-force (millions)		10.6			10.4			2	%
Average basic cardmember spending (dollars)	$	3,026		$	3,032			-
International Consumer Travel:
Travel sales (millions)	$	324		$	346			(6	) %
Travel commissions and fees/sales		7.1	%		7.5	%
Total segment assets	$	30.6		$	27.8			10	%
Segment capital (millions) (A)	$	2,958		$	2,927			1	%
Return on average segment capital (B)		23.7	%		25.3	%
Return on average tangible segment capital (B)		46.9	%		45.5	%
Cardmember receivables:
Total receivables	$	7.2		$	6.7			7	%
90 days past billing as a % of total		0.9	%		0.9	%
Net loss ratio (as a % of charge volume)		0.17	%		0.16	%
Cardmember loans:
Total loans	$	8.9		$	8.3			7	%
30 days past due loans as a % of total		1.6	%		1.9	%
Average loans	$	8.6		$	8.7			(1	) %
Net write-off rate (principal only) (C)		1.6	%		2.5	%
Net write-off rate (principal, interest and fees) (C)		2.2	%		3.1	%
Net interest income divided by average loans (D)		8.7	%		8.7	%
Net interest yield on cardmember loans (D)		9.8	%		9.9	%

(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, a non-GAAP measure.

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

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

17

(Preliminary)

International Card Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Revenues
Discount revenue, net card fees and other	$	1,126		$	1,119		$	1,106		$	1,155		$	1,156
Interest income		289			276			293			282			299
Interest expense		102			98			100			104			108
Net interest income		187			178			193			178			191
Total revenues net of interest expense		1,313			1,297			1,299			1,333			1,347
Provisions for losses		83			94			54			84			101
Total revenues net of interest expense after provisions for losses		1,230			1,203			1,245			1,249			1,246
Expenses
Marketing, promotion, rewards and cardmember services		466			475			461			497			460
Salaries and employee benefits and other operating expenses		557			582			588			615			597
Total		1,023			1,057			1,049			1,112			1,057
Pretax segment income		207			146			196			137			189
Income tax provision/(benefit)		43			(32	)		(1	)		(15	)		(32	)
Segment income	$	164		$	178		$	197		$	152		$	221
Effective tax rate		20.8	%		-21.9	%		-0.5	%		-10.9	%		-16.9	%

18

(Preliminary)

International Card Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Card billed business	$	31.9		$	31.5		$	30.7		$	32.8		$	31.6
Total cards-in-force (millions)		15.5			15.5			15.4			15.3			15.2
Basic cards-in-force (millions)		10.6			10.6			10.5			10.5			10.4
Average basic cardmember spending (dollars)	$	3,026		$	2,985		$	2,927		$	3,137		$	3,032
International Consumer Travel:
Travel sales	$	0.3		$	0.3		$	0.3		$	0.3		$	0.3
Travel commissions and fees/sales		7.1	%		7.1	%		7.2	%		8.4	%		7.5	%
Total segment assets	$	30.6		$	29.3		$	30.9		$	29.1		$	27.8
Segment capital (A)	$	3.0		$	2.8		$	3.0		$	2.8		$	2.9
Return on average segment capital (B)		23.7	%		25.5	%		24.7	%		25.8	%		25.3	%
Return on average tangible segment capital (B)		46.9	%		51.1	%		50.0	%		49.8	%		45.5	%
Cardmember receivables:
Total receivables	$	7.2		$	6.8		$	6.7		$	7.2		$	6.7
90 days past billing as a % of total		0.9	%		1.0	%		1.0	%		0.9	%		0.9	%
Net loss ratio (as a % of charge volume)		0.17	%		0.16	%		0.15	%		0.15	%		0.16	%
Cardmember loans:
Total loans	$	8.9		$	8.4		$	8.6		$	8.9		$	8.3
30 days past due loans as a % of total		1.6	%		1.7	%		1.8	%		1.7	%		1.9	%
Average loans	$	8.6		$	8.5		$	8.8		$	8.5		$	8.7
Net write-off rate (principal only) (C)		1.6	%		2.0	%		2.1	%		2.2	%		2.5	%
Net write-off rate (principal, interest and fees) (C)		2.2	%		2.6	%		2.7	%		2.8	%		3.1	%
Net interest income divided by average loans (D)		8.7	%		8.4	%		8.8	%		8.3	%		8.7	%
Net interest yield on cardmember loans (D)		9.8	%		9.5	%		9.8	%		9.2	%		9.9	%

(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, a non-GAAP measure.

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

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

19

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Revenues
Discount revenue, net card fees and other	$	1,218		$	1,195			2	%
Interest income		3			3			-
Interest expense		65			68			(4	)
Net interest expense		(62	)		(65	)		(5	)
Total revenues net of interest expense		1,156			1,130			2
Provisions for losses		32			(17	)		#
Total revenues net of interest expense after provisions for losses		1,124			1,147			(2	)
Expenses
Marketing, promotion, rewards and cardmember services		139			157			(11	)
Salaries and employee benefits and other operating expenses		710			721			(2	)
Total		849			878			(3	)
Pretax segment income		275			269			2
Income tax provision		92			72			28
Segment income	$	183		$	197			(7	)
Effective tax rate		33.5	%		26.8	%

# - Denotes a variance of more than 100%.

20

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Card billed business	$	40.6		$	38.7			5	%
Total cards-in-force (millions)		7.0			7.0			-
Basic cards-in-force (millions)		7.0			7.0			-
Average basic cardmember spending (dollars)	$	5,798		$	5,520			5	%
Global Corporate Travel:
Travel sales (millions)	$	4,352		$	4,775			(9	) %
Travel commissions and fees/sales		8.4	%		7.8	%
Total segment assets	$	20.4		$	20.3			-
Segment capital (millions) (A)	$	3,638		$	3,529			3	%
Return on average segment capital (B)		20.9	%		18.2	%
Return on average tangible segment capital (B)		41.9	%		37.7	%
Cardmember receivables:
Total receivables	$	15.4		$	13.9			11	%
90 days past billing as a % of total		0.7	%		0.7	%
Net loss ratio (as a % of charge volume)		0.05	%		0.06	%

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

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

21

(Preliminary)

Global Commercial Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Revenues
Discount revenue, net card fees and other	$	1,218		$	1,284		$	1,216		$	1,249		$	1,195
Interest income		3			2			3			2			3
Interest expense		65			65			62			68			68
Net interest expense		(62	)		(63	)		(59	)		(66	)		(65	)
Total revenues net of interest expense		1,156			1,221			1,157			1,183			1,130
Provisions for losses		32			36			35			35			(17	)
Total revenues net of interest expense after provisions for losses		1,124			1,185			1,122			1,148			1,147
Expenses
Marketing, promotion, rewards and cardmember services		139			138			154			127			157
Salaries and employee benefits and other operating expenses		710			748			724			745			721
Total		849			886			878			872			878
Pretax segment income		275			299			244			276			269
Income tax provision		92			80			67			96			72
Segment income	$	183		$	219		$	177		$	180		$	197
Effective tax rate		33.5	%		26.8	%		27.5	%		34.8	%		26.8	%

22

(Preliminary)

Global Commercial Services

Selected Statistical Information

(Billions, except percentages and where indicated)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Card billed business	$	40.6		$	42.3		$	41.4		$	39.6		$	38.7
Total cards-in-force (millions)		7.0			7.0			7.0			7.0			7.0
Basic cards-in-force (millions)		7.0			7.0			7.0			7.0			7.0
Average basic cardmember spending (dollars)	$	5,798		$	6,042		$	5,920		$	5,661		$	5,520
Global Corporate Travel:
Travel sales	$	4.4		$	5.1		$	4.8		$	4.7		$	4.8
Travel commissions and fees/sales		8.4	%		8.1	%		7.2	%		8.8	%		7.8	%
Total segment assets	$	20.4		$	20.0		$	21.9		$	18.8		$	20.3
Segment capital (A)	$	3.6		$	3.6		$	3.8		$	3.6		$	3.5
Return on average segment capital (B)		20.9	%		21.1	%		20.0	%		20.4	%		18.2	%
Return on average tangible segment capital (B)		41.9	%		42.3	%		40.6	%		42.1	%		37.7	%
Cardmember receivables:
Total receivables	$	15.4		$	15.0		$	15.3		$	12.8		$	13.9
90 days past billing as a % of total		0.7	%		0.6	%		0.6	%		0.8	%		0.7	%
Net loss ratio (as a % of charge volume)		0.05	%		0.06	%		0.08	%		0.06	%		0.06	%

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

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

23

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Revenues
Discount revenue, fees and other	$	1,238		$	1,188			4	%
Interest income		7			2			#
Interest expense		(65	)		(60	)		8
Net interest income		72			62			16
Total revenues net of interest expense		1,310			1,250			5
Provisions for losses		18			21			(14	)
Total revenues net of interest expense after provisions for losses		1,292			1,229			5
Expenses
Marketing, promotion, rewards and cardmember services		192			196			(2	)
Salaries and employee benefits and other operating expenses		539			519			4
Total		731			715			2
Pretax segment income		561			514			9
Income tax provision		201			182			10
Segment income	$	360		$	332			8
Effective tax rate		35.8	%		35.4	%

# - Denotes a variance of more than 100%.

24

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended
	September 30,						Percentage
	2012			2011			Inc/(Dec)
Global Card billed business (A)	$	220.1		$	207.7			6	%
Global Network & Merchant Services:
Total segment assets	$	21.4		$	16.0			34	%
Segment capital (millions) (B)	$	2,121		$	1,979			7	%
Return on average segment capital (C)		67.6	%		64.4	%
Return on average tangible segment capital (C)		75.0	%		70.8	%
Global Network Services:
Card billed business	$	32.0		$	30.1			6	%
Total cards-in-force (millions)		37.1			32.9			13	%

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

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

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

25

(Preliminary)

Global Network & Merchant Services

Selected Income Statement Data

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Revenues
Discount revenue, fees and other	$	1,238		$	1,259		$	1,186		$	1,254		$	1,188
Interest income		7			5			4			1			2
Interest expense		(65	)		(59	)		(58	)		(61	)		(60	)
Net interest income		72			64			62			62			62
Total revenues net of interest expense		1,310			1,323			1,248			1,316			1,250
Provisions for losses		18			17			18			20			21
Total revenues net of interest expense after provisions for losses		1,292			1,306			1,230			1,296			1,229
Expenses
Marketing, promotion, rewards and cardmember services		192			200			172			180			196
Salaries and employee benefits and other operating expenses		539			544			519			614			519
Total		731			744			691			794			715
Pretax segment income		561			562			539			502			514
Income tax provision		201			190			182			178			182
Segment income	$	360		$	372		$	357		$	324		$	332
Effective tax rate		35.8	%		33.8	%		33.8	%		35.5	%		35.4	%

26

(Preliminary)

Global Network & Merchant Services

Selected Statistical Information

(Billions, except percentages and where indicated)	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Global Card billed business (A)	$	220.1		$	221.6		$	211.2		$	219.0		$	207.7
Global Network & Merchant Services:
Total segment assets	$	21.4		$	19.8		$	20.1		$	17.8		$	16.0
Segment capital (B)	$	2.1		$	2.2		$	2.1		$	2.0		$	2.0
Return on average segment capital (C)		67.6	%		67.4	%		67.1	%		66.3	%		64.4	%
Return on average tangible segment capital (C)		75.0	%		74.9	%		74.9	%		74.3	%		70.8	%
Global Network Services:
Card billed business	$	32.0		$	31.3		$	30.4		$	31.4		$	30.1
Total cards-in-force (millions)		37.1			36.1			35.1			34.2			32.9

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

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

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

27

(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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
ROE
Net income	$	5,037		$	5,022		$	5,014		$	4,935		$	4,805
Average shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Return on average equity (A)		26.3	%		26.6	%		27.1	%		27.7	%		27.8	%
Reconciliation of ROCE and ROTCE
Net income	$	5,037		$	5,022		$	5,014		$	4,935		$	4,805
Earnings allocated to participating share awards and other		56			57			58			58			56
Net income attributable to common shareholders	$	4,981		$	4,965		$	4,956		$	4,877		$	4,749
Average shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Average common shareholders' equity	$	19,145		$	18,887		$	18,525		$	17,842		$	17,277
Average goodwill and other intangibles		4,272			4,330			4,380			4,215			3,992
Average tangible common shareholders' equity	$	14,873		$	14,557		$	14,145		$	13,627		$	13,285
Return on average common equity (A)		26.0	%		26.3	%		26.8	%		27.3	%		27.5	%
Return on average tangible common equity (B)		33.5	%		34.1	%		35.0	%		35.8	%		35.7	%

(A) Return on average equity and return on average common equity are calculated by dividing one year period net income/net income attributable to common shareholders by one year average total shareholders’ equity/average common shareholders' equity, respectively.

(B) Return on average tangible common equity, a non-GAAP measure, is computed in the same manner as return on average common equity except the computation of average tangible common shareholders' equity, a non-GAAP measure, excludes from average total shareholders' equity, average goodwill and other intangibles. The Company believes that return on average tangible common equity is a useful measure of the profitability of its business.

28

(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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
U.S. Card Services
Segment income	$	2,896		$	2,930		$	2,877		$	2,680		$	2,653
Average segment capital	$	8,903		$	8,714		$	8,508		$	8,121		$	7,762
Average goodwill and other intangibles		391			403			414			425			436
Average tangible segment capital	$	8,512		$	8,311		$	8,094		$	7,696		$	7,326
Return on average segment capital (A)		32.5	%		33.6	%		33.8	%		33.0	%		34.2	%
Return on average tangible segment capital (A)		34.0	%		35.3	%		35.5	%		34.8	%		36.2	%
International Card Services
Segment income	$	691		$	748		$	731		$	723		$	670
Average segment capital	$	2,919		$	2,936		$	2,962		$	2,797		$	2,644
Average goodwill and other intangibles		1,446			1,472			1,500			1,346			1,170
Average tangible segment capital	$	1,473		$	1,464		$	1,462		$	1,451		$	1,474
Return on average segment capital (A)		23.7	%		25.5	%		24.7	%		25.8	%		25.3	%
Return on average tangible segment capital (A)		46.9	%		51.1	%		50.0	%		49.8	%		45.5	%
Global Commercial Services
Segment income	$	759		$	773		$	731		$	738		$	661
Average segment capital	$	3,629		$	3,661		$	3,649		$	3,619		$	3,632
Average goodwill and other intangibles		1,819			1,833			1,847			1,867			1,881
Average tangible segment capital	$	1,810		$	1,828		$	1,802		$	1,752		$	1,751
Return on average segment capital (A)		20.9	%		21.1	%		20.0	%		20.4	%		18.2	%
Return on average tangible segment capital (A)		41.9	%		42.3	%		40.6	%		42.1	%		37.7	%
Global Network & Merchant Services
Segment income	$	1,413		$	1,385		$	1,337		$	1,293		$	1,228
Average segment capital	$	2,090		$	2,056		$	1,993		$	1,949		$	1,908
Average goodwill and other intangibles		205			207			209			209			174
Average tangible segment capital	$	1,885		$	1,849		$	1,784		$	1,740		$	1,734
Return on average segment capital (A)		67.6	%		67.4	%		67.1	%		66.3	%		64.4	%
Return on average tangible segment capital (A)		75.0	%		74.9	%		74.9	%		74.3	%		70.8	%

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

29

(Preliminary)

American Express Company

Net Interest Yield on Cardmember Loans

Appendix III

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Net interest income	$	1,181		$	1,121		$	1,133		$	1,110		$	1,113
Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	338		$	341		$	364		$	353		$	356
Interest income not attributable to the Company's cardmember loan portfolio	$	(97	)	$	(104	)	$	(109	)	$	(113	)	$	(113	)
Adjusted net interest income (A)	$	1,422		$	1,358		$	1,388		$	1,350		$	1,356
Average loans (billions)	$	61.4		$	60.6		$	60.7		$	59.9		$	58.9
Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other (billions)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	-		$	(0.1	)
Adjusted average loans (billions) (B)	$	61.2		$	60.4		$	60.5		$	59.9		$	58.8
Net interest income divided by average loans (C)		7.7	%		7.4	%		7.5	%		7.4	%		7.5	%
Net interest yield on cardmember loans (D)		9.3	%		9.0	%		9.2	%		8.9	%		9.1	%

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

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

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

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

30

(Preliminary)

U. S. Card Services and International Card Services

Net Interest Yield on Cardmember Loans

Appendix IV

(Millions)
	Quarters Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
USCS:
Net interest income	$	1,168		$	1,112		$	1,130		$	1,101		$	1,086
Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	51		$	51		$	51		$	58		$	58
Interest income not attributable to the Company's cardmember loan portfolio	$	(3	)	$	(2	)	$	(2	)	$	(3	)	$	(2	)
Adjusted net interest income (A)	$	1,216		$	1,161		$	1,179		$	1,156		$	1,142
Average loans (billions)	$	52.8		$	52.1		$	51.9		$	51.4		$	50.2
Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans (billions)	$	-		$	-		$	-		$	0.1		$	-
Adjusted average loans (billions) (B)	$	52.8		$	52.1		$	51.9		$	51.5		$	50.2
Net interest income divided by average loans (C)		8.8	%		8.6	%		8.8	%		8.5	%		8.6	%
Net interest yield on cardmember loans (D)		9.2	%		9.0	%		9.1	%		8.9	%		9.0	%
ICS:
Net interest income	$	187		$	178		$	193		$	178		$	191
Exclude:
Interest expense not attributable to the Company's cardmember loan portfolio	$	26		$	26		$	25		$	27		$	32
Interest income not attributable to the Company's cardmember loan portfolio	$	(7	)	$	(7	)	$	(9	)	$	(11	)	$	(9	)
Adjusted net interest income (A)	$	206		$	197		$	209		$	194		$	214
Average loans (billions)	$	8.6		$	8.5		$	8.8		$	8.5		$	8.7
Exclude:
Unamortized deferred card fees, net of direct acquisition costs of cardmember loans, and other (billions)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.1	)	$	(0.1	)
Adjusted average loans (billions) (B)	$	8.4		$	8.3		$	8.6		$	8.4		$	8.6
Net interest income divided by average loans (C)		8.7	%		8.4	%		8.8	%		8.3	%		8.7	%
Net interest yield on cardmember loans (D)		9.8	%		9.5	%		9.8	%		9.2	%		9.9	%

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

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

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

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

36

EX-99.3

Exhibit 99.3

2012

Third Quarter

Earnings Supplement

The enclosed summary should be read in conjunction with the text and statistical tables included in American Express Company’s (the “Company” or “AXP”) Third Quarter 2012 Earnings Release.

This presentation contains certain forward-looking statements that are subject to risks and uncertainties and speak only as of the date on which they are made.  Important factors that could cause actual results to differ materially from these forward-looking statements, including the Company’s financial and other goals, are set forth on pages 13-15 of this Supplement, in the Company’s 2011 Annual Report to Shareholders, in its 2011 Annual Report on Form 10-K, in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and in other reports on file with the Securities and Exchange Commission. In addition, certain calculations included within this supplement constitute non-GAAP financial measures and may differ from the calculations of similarly titled measures by other companies.

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

FINANCIAL RESULTS

·   Third quarter diluted EPS attributable to common shareholders of $1.09 increased 6% from $1.03 a year ago.  Total revenues net of interest expense increased 4%. Total revenues net of interest expense on an FX adjusted basis, a non-GAAP measure, increased 5%.1  Return on average equity (“ROE”) was 26.3%.

BUSINESS METRICS

·   Compared with the third quarter of 2011:

-   Worldwide billed business of $220.1B increased 6%.  Adjusted for the impact of changes in foreign exchange rates, worldwide billings grew 8%.1

-   Worldwide cardmember loan balances of $61.8B increased 6% from $58.2B a year ago, reflecting higher cardmember spending levels.  Average cardmember loans grew 4% compared to Q3’11

-   Worldwide credit performance, which was excellent in the first half of the year, showed continued improvement, as the worldwide lending net write-off rate declined to 1.9% from 2.2% in Q2’12 and 2.6% in Q3’11.

								Percentage
								Increase/(Decrease)
								Assuming No Changes in
	Quarters Ended September 30,				Percentage Inc/(Dec)			Foreign Exchange Rates1
	2012		2011
Card billed business2(billions):
United States	$	146.9	$	136.4		8	%
Outside the United States		73.2		71.3		3			8	%
Total	$	220.1	$	207.7		6			8
Total cards-in-force (millions):
United States		51.8		50.2		3
Outside the United States		49.6		45.6		9
Total		101.4		95.8		6
Basic cards-in-force(millions):
United States		40.2		38.9		3
Outside the United States		39.8		36.4		9
Total		80.0		75.3		6
Average basic cardmember spending3 (dollars):
United States	$	4,073	$	3,854		6
Outside the United States	$	3,407	$	3,450		(1	)		3
Total	$	3,885	$	3,739		4			5

______________________________________ 

1 As reported in this Earnings Supplement, FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the three months ended September 30, 2012 apply to the period(s) against which such results are being compared).  The Company believes the presentation of information on an FX adjusted basis is helpful to investors by making it easier to compare the Company’s performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.

2 For additional information about discount rate calculations and billed business, please refer to the Third Quarter 2012 Earnings Release, American Express Company Selected Statistical page.

 

3 Proprietary card activity only.

1

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

Additional Billed Business Statistics:

				Percentage
				Increase/(Decrease)
	Percentage			AssumingNoChangesin
	Increase/(Decrease)			ForeignExchangeRates 4
Worldwide5
Total Billed Business		6	%		8	%
Proprietary billed business		6			7
GNS billed business		6			11
Airline-related volume (9% of worldwide billed business)		–			2
U.S.5
Billed Business		8
Proprietary consumer card billed business6		7
Proprietary small business billed business6		10
Proprietary commercial services billed business7		9
T&E-related volume (27% of U.S. billed business)		4
Non-T&E-related volume (73% of U.S. billed business)		9
Airline-related volume (8% of U.S. billed business)		2
Outside the U.S. 5
Billed Business		3			8
Japan, Asia Pacific & Australia ("JAPA") billed business		8			9
Latin America & Canada ("LACC") billed business		5			11
Europe, Middle East, & Africa ("EMEA") billed business		(4	)		3
Proprietary consumer and small business billed business8		1			5
JAPA billed business		3			4
LACC billed business		5			8
EMEA billed business		(4	)		3
Proprietary commerical services billed business7		(2	)		3

______________________________________ 

4See Note 1, page 1.

5 Captions not designated as “proprietary” or “GNS” include both proprietary and GNS data.

 

6  Included in USCS, see the Company’s Third Quarter 2012 Earnings Release statistical tables for additional billings information.

 

7  Included in GCS, see the Company’s Third Quarter 2012 Earnings Release statistical tables for additional billings information.

 

8 Included in ICS, see the Company’s Third Quarter 2012 Earnings Release statistical tables for additional billings information.

2

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

Statements of Income
(Preliminary)	Quarters Ended				Percentage
(Millions, except percentages and per share amounts)	September 30,				Inc/(Dec)
	2012		2011
Revenues
Non-interest revenues
Discount revenue	$	4,425	$	4,218		5	%
Net card fees		633		622		2
Travel commissions and fees		465		480		(3	)
Other commissions and fees		581		604		(4	)
Other		577		534		8
Total non-interest revenues		6,681		6,458		3
Net interest income		1,181		1,113		6
Total revenues net of interest expense		7,862		7,571		4
Provisions for losses
Charge card		190		174		9
Cardmember loans		264		48		#
Other		25		27		(7	)
Total provisions for losses		479		249		92
Total revenues net of interest expense after provisions for losses		7,383		7,322		1
Expenses
Marketing and promotion		764		757		1
Cardmember rewards		1,496		1,565		(4	)
Cardmember services		201		189		6
Salaries and employee benefits		1,516		1,598		(5	)
Professional services		690		690		-
Occupancy and equipment		453		433		5
Communications		93		93		-
Other, net		300		286		5
Total		5,513		5,611		(2	)
Pretax income		1,870		1,711		9
Income tax provision		620		476		30
Net Income	$	1,250	$	1,235		1
Net income attributable to common shareholders9	$	1,236	$	1,220		1
Earnings Per Common Share–Basic
Net Income attributable to common shareholders	$	1.10	$	1.04		6
Earnings Per Common Share–Diluted
Net Income attributable to common shareholders	$	1.09	$	1.03		6
Average Shares Outstanding
Basic		1,126		1,175		(4	)
Diluted		1,132		1,181		(4	)

# Denotes a variance of more than 100%.

______________________________________ 

9 Represents net income less earnings allocated to participating share awards of $14MM and $15MM for the three months ended September 30, 2012 and 2011, respectively.

3

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

·   Discount Revenue:  Increased 5%, reflecting 6% growth in billed business volumes, partially offset by a slight decline in the average discount rate and higher contra-revenue items, including cash rebate rewards.

-   The average discount rate10 of 2.53% in Q3’12 decreased slightly compared to 2.54% in both Q3’11 and Q2’12.  As indicated in prior quarters, certain pricing initiatives, changes in the mix of spending by location and industry, volume-related pricing discounts and strategic investments will likely result in some erosion of the average discount rate over time.

·   Net Card Fees:  Increased 2%, reflecting an increase in proprietary cards in force.

·   Travel Commissions and Fees:  Decreased 3%, reflecting a 6% decline in worldwide travel sales.  Business travel sales declined 9%, while U.S. consumer travel sales increased 8%.

·   Other Commissions and Fees:  Declined 4% versus Q3’11 but were flat year-over-year on an FX adjusted basis, a non-GAAP measure.11

·   Other Revenues:  Increased 8%, primarily reflecting a $30MM gain on the sale of an investment, which is reported in Corporate & Other.

·   Net Interest Income:  Increased 6% versus Q3’11, reflecting the 4% increase in average cardmember loans and a higher net interest yield.  Worldwide net interest yield increased to 9.3% in Q3’12 versus 9.1% a year ago.

·   Charge Card Provision for Losses:  Increased 9% in part due to higher ending receivable balances in Q3’12.  Also contributing to the growth was a significant increase year-over-year in GCS charge card provision, driven by a change in estimate for certain credit reserves in Q3’11, which resulted in a reserve release in the GCS segment.  These increases were partially offset by lower net write-offs in USCS due to improved credit performance in the current year.

-   Worldwide Charge Card:

	Q3'12				Q2’12		Q3'11
USCS Net write-off rate12		1.6	%		2.0	%		1.8	%
ICS/GCS Net loss ratio as a % of charge volume		0.10	%		0.10	%		0.10	%
USCS 30 days past due as a % of total		1.8	%		1.7	%		2.0	%
ICS/GCS 90 days past billings as a % of total		0.7	%		0.7	%		0.8	%
Worldwide Receivables (billions)	$	42.3		$	41.5		$	39.8
Reserves (millions)	$	409		$	392		$	388
% of receivables		1.0	%		0.9	%		1.0	%

______________________________________ 

10 See Note 2, page 1.

 

11 See Note 1, page 1.

 

12 Rate reflects principal losses only. Net write-off rates including interest and/or fees are included in the Company’s Third Quarter 2012 Earnings Release statistical tables.

4

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

·   Cardmember Loan Provision for Losses:  Increased significantly, primarily reflecting a smaller reserve release in Q3’12 than in Q3’11, partially offset by lower write-offs due to improving credit performance.

-   Worldwide Loans:

	Q3’12				Q2’12		Q3’11
Net write-off rate13		1.9	%		2.2	%		2.6	%
30 days past due loans as a % of total		1.3	%		1.3	%		1.5	%
Total Loans (billions)	$	61.8		$	61.0		$	58.2
Reserves (millions)	$	1,459		$	1,547		$	2,139
% of total loans		2.4	%		2.5	%		3.7	%
% of past due		182	%		202	%		238	%

·   Other Provision for Losses:  Decreased $2MM to $25MM.

·   Marketing and Promotion Expense:  Increased 1% versus a year ago and, at 9.7% of total revenues, reflects significant levels of investment in the business.

·   Cardmember Rewards Expense:Decreased 4%, reflecting greater Membership Rewards-related and co-brand spending volumes, more than offset by a larger increase in Q3’11 than Q3’12 in the Membership Rewards ultimate redemption rate (“URR”) assumption and weighted average cost per point (“WAC”) assumption.

-   The Company's Membership Rewards URR for current participants increased slightly during the quarter but rounded to 93% in both Q3’12 and Q2’12.

·   Cardmember Services Expense: Increased 6% reflecting increased costs associated with enhanced benefits to U.S. cardmembers.

·   Salaries and Employee Benefits Expense: Decreased 5%, reflecting favorable impacts from foreign exchange in the current quarter and higher severance costs related to reengineering activities in Q3’11, primarily in the ICS segment and Corporate & Other.

-   Total employee count of approximately 63.6K was relatively consistent with the prior year and last quarter.

·   Professional Services Expense: Was flat versus Q3’11.

·   Occupancy and Equipment Expense:  Increased 5%, reflecting higher data processing costs and higher rent expenses.

·   Communications Expense:  Was flat versus Q3’11.

·   Other, Net Expense: Other expense of $300MM in Q3’12 increased 5% compared to Q3’11, reflecting the Visa settlement payments received in Q3’11 and an expense related to hedging the Company’s fixed-rate debt exposures in Q3’12 versus a benefit in Q3’11, which primarily impacted the USCS and GCS segments.  These increases were partially offset by expenses related to legal exposures in Q3’11 in Corporate & Other and the reclassification of cross currency funding hedge-related income from interest expense to other, net expense beginning in Q1’12.

·   Pretax Margin:  Was 23.8% of total revenues net of interest expense in Q3’12 compared with 22.6% in Q3’11.

·   Effective Tax Rate:  Was 33.2% in Q3’12 compared with 27.8% in Q3’11. The lower effective tax rate in Q3’11 reflects the realization of certain foreign tax credits in the ICS and GCS segments.

______________________________________ 

13 See Note 12, page 4.

5

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

CAPITAL

·   Capital Distribution to Shareholders:  During Q3’12, approximately 94% of capital generated was distributed to shareholders through the Company’s quarterly common share dividend and share repurchases.

The Company repurchased 17MM common shares at an average price of $57.69 in Q3’12 versus 26MM common shares in Q3’11. The Company is executing its share repurchase program, subject to market conditions, pursuant to its capital plan to repurchase up to $4.0B of common shares in 2012.

Year to date and since the inception of repurchase programs in December 1994, the Company has distributed 86% and 65% of capital generated through share repurchases and dividends on a cumulative basis, respectively.

Shares Outstanding:

	Millions of Shares
		Q3’12		Q2’12		Q3’11
Beginning of period		1,139		1,166		1,193
Repurchase of common shares		(17	)	(30	)	(26	)
Employee benefit plans, compensation and other		-		3		2
End of period		1,122		1,139		1,169

·   Capital Ratios:  As of September 30, 2012, the Company’s key consolidated capital ratios,14 as calculated under Basel I, were as follows:

($ in billions)	September 30, 2012
Risk-Based Capital
Tier 1		12.7	%
Total		14.7	%
Tier 1 Leverage		10.8	%
Tier 1 Common Equity/Risk Weighted Assets (“RWA”)15		12.7	%
Total Shareholders’ Equity	$	19.5
Tangible Common Equity (“TCE”)16/RWA		12.6	%
Tier 1 Capital	$	15.5
Tier 1 Common Equity15	$	15.5
Tier 2 Capital	$	2.3
Total Average Assets17	$	143.2
RWA	$	121.4
TCE16	$	15.3

On June 7, 2012, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued three joint notices of proposed rulemaking text, collectively referred to as Basel III, which presents details of the new U.S. regulatory capital standards.  The Company estimates that had the new rules been in place, and were finalized as proposed, during Q3’12, the reported Tier 1 common and Tier 1 capital ratios would decline by approximately 20 basis points and the reported Tier 1 leverage ratio would decline by approximately 5 basis points, but would remain above expected regulatory thresholds, and the supplementary leverage ratio would have been approximately 9.1%.18  These ratios are calculated using the standardized approach as described in the proposed rules and are based on the Company’s reported Basel I ratios, without taking into account the potential impact of Basel II implementation. The Company is currently taking steps toward Basel II implementation in the United States.

______________________________________ 

14These ratios represent a preliminary estimate as of the date of this Earnings Supplement and may be revised in the Company’s Third Quarter 2012 Form 10-Q.

15Refer to Annex 1 for a reconciliation between Tier 1 common equity, a non-GAAP measure, and total shareholders’ equity.

 

16Tangible common equity, a non-GAAP measure, excludes goodwill and other intangibles of $4.2B from total shareholders’ equity of $19.5B.  The Company believes presenting the ratio of tangible common equity to risk-weighted assets is a useful measure of evaluating the strength of the Company’s capital position.

 

17 Presented for the purpose of calculating the Tier 1 Leverage Ratio.

18 The proposed capital ratios are non-GAAP measures. The Company believes the presentation of the proposed capital ratios is helpful to investors by showing the impact of Basel III, assuming the new rules as currently proposed are implemented by the Federal Reserve. The estimated impact of the Basel III rules will change over time based upon changes in the size and composition of the Company’s balance sheet; and the estimated impact for the third quarter of 2012 is not necessarily indicative of the impact in future periods. Refer to Annex 2 for a reconciliation of the proposed capital ratios.

6

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

FUNDING AND LIQUIDITY

·   Funding Activities:  During Q3’12, the Company primarily funded its business through deposit-taking and the issuance of asset-backed securities and unsecured debt.

-   Deposits:  The Company held the following deposits:

($ in billions)	September 30, 2012		June 30, 2012		Change
U.S. Direct Deposits19	$	17.7	$	16.4	$	1.3
U.S. 3rd Party CDs		9.0		9.1		(0.1	)
U.S. 3rd Party Sweep Accounts		10.3		10.3		-
Other Deposits		0.2		0.2		-
Total	$	37.2	$	36.0	$	1.2

The total portfolio of U.S. retail Certificates of Deposit (“CDs”) issued through the direct deposit and third-party programs had a weighted average remaining maturity of 18.3 months and a weighted average rate at issuance of 2.1%.

-   Unsecured Non-Guaranteed Debt: On August 20, 2012, American Express Credit Corporation issued an incremental $750MM of senior unsecured debt as part of a reopening of an existing $1.25B note that was issued during Q2’12 with a maturity of three years and a coupon of 1.75%.

-   Asset-Backed Securitization: On August 21, 2012, the Company issued $1.7B of asset-backed securities from the Lending Trust with a maturity of three years, which included $1.5B of Class A at 0.68%, $103MM of Class B at 0.99% and $112MM of Class C at 1.29%, as well as $1.1B of asset-backed securities from the Lending Trust with a maturity of three years, which included $1.0B of Class A at one-month LIBOR plus 15 bps and $73MM of Class B at one-month LIBOR plus 50 bps.

-   Secured Borrowing Facilities:

On August 3, 2012, the Company extended its $3.0B committed, revolving, secured facility, from its original maturity date in December 2013, to July 15, 2014.  This secured financing facility gives the Company the right to sell up to $3.0B face amount of eligible AAA notes from the Charge Trust.

On October 3, 2012, the Company entered into a new three-year committed, revolving, secured financing facility that gives the Company the right to sell up to $2.0B face amount of eligible AAA certificates from the Lending Trust at any time with a repayment date of no later than September 15, 2015. The facility is sponsored by, and with a liquidity backup provided by, a syndicate of banks. The purchasers’ commitments to fund any unfunded amounts under this facility are subject to the terms and conditions of, among other things, a purchase agreement among certain subsidiaries, the note purchasers and certain other parties.  The borrowing cost of the facility includes a fixed facility fee. In addition the drawn balance incurs a weighted average cost of funds to the participating banks plus 25 bps.

Both facilities are used in the ordinary course of business to fund seasonal working capital needs, as well as to further enhance the Company’s contingent funding resources.

______________________________________ 

  19Direct Deposits primarily includes the Personal Savings® direct deposit program, which consists of $17.0B from high-yield savings accounts and $0.7B from retail CDs.

7

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

·   Maturity Obligations: The maturities of the Company’s long-term unsecured debt, debt issued in connection with asset-backed securitizations, and long-term CDs, for the next four quarters are as follows:

($ in billions)	Funding Maturities
			Asset-Backed		Certificates of
Quarter Ending:	Unsecured Debt		Securitizations		Deposit		Total
December 31, 2012		1.5		1.1		0.9		3.5
March 31, 2013		-		-		0.8		0.8
June 30, 2013		4.5		0.9		0.9		6.3
September 30, 2013		3.1		2.0		0.6		5.7
	$	9.1	$	4.0	$	3.2	$	16.3

OTHER ITEMS OF NOTE

·   Corporate & Other: Net expense reported in Corporate & Other was $156MM in Q3’12 compared with $148MM in Q2’12 and $248MM in Q3’11.  Q3’11 results included a $43MM after-tax benefit from the Visa settlement payments offset by expenses related to legal exposures and $16MM of after-tax expense related to the Company’s reengineering activities.  Current quarter results include a $30MM pretax gain on the sale of an investment and a favorable tax rate impact versus the prior year.

·   Reengineering Initiatives: In Q3’12, the Company recorded $7MM ($5MM after-tax) of costs related to its reengineering activities versus $39MM ($28MM after-tax) of reengineering costs in Q3’11, primarily in the ICS segment and Corporate & Other.

·   Visa and MasterCard Litigation Settlements: The Company received payments from Visa and MasterCard for several years under the terms of previously disclosed settlement agreements.  The settlement with Visa was comprised of an initial payment of $1.13B ($700MM after-tax) that was recorded in Q4’07 and received in March 2008, and quarterly payments of $70MM ($43MM after-tax) for four years from Q1’08 through Q4’11. The settlement with MasterCard was comprised of twelve quarterly payments of $150MM ($93MM after-tax) received each quarter from Q3’08 to Q2’11.  Payments earned through December 2011 have been reported as a reduction to the other expense line within Corporate & Other.

·   Reclassification of Cardmember Lending Net Card Fees: In Q1’12, the Company revised the income statement reporting of annual membership card fees on lending products, increasing net card fees and reducing interest on loans. Corresponding amounts in prior periods have been reclassified to conform to the current period presentation. This change does not impact total revenues net of interest expense in the income statement or the net interest yield on cardmember loans statistic, a non-GAAP measure, as reported in the Company’s Third Quarter Earnings Release Selected Statistical pages.

8

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

EXPANDED PRODUCTS AND SERVICES

American Express continues to invest in growth opportunities through expanded products and services.

In our proprietary issuing, merchant, and network businesses, the Company:

·   Continued to sign new merchants from around the world to the American Express network.  In Australia, cardmembers can now use the card at Alto Group, a premium automotive dealer, and at True Value Solar, a leading solar power company.  In Europe, Transport for London’s Cycle Hire and dm Drugstore in Germany now accept the card.  And, in the US, we signed Murphy USA, a retail gasoline network, and Fred’s Super Dollar, a chain of discount general merchandise stores.     

·   Announced that British Airways has selected Accertify's comprehensive solution to fight e-commerce fraud and help ensure a high-quality experience for customers.

·   Joined forces with the American Independent Business Alliance to enable more small businesses and community groups to successfully launch “buy local” campaigns throughout the United States in order to inspire people to “shop small” all year around.

·   Entered into a multi-tiered alliance making American Express the Official Credit Card of Barclays Center and the Brooklyn Nets. The alliance designates American Express as the presenting sponsor of the Barclays Center restaurant and box office, and the eighth founding partner of the venue.

In our Global Network Services (“GNS”) business, the Company:

·   Launched a new partnership to issue American Express-branded cards in Canada with Scotiabank, who rolled out the Scotiabank American Express® Card, the Scotiabank Gold American Express® Card and the Scotiabank Platinum American Express® Card as part of the launch.

·   Supported GNS partners in launching a wide range of new products, including: the Jet Airways ICICI Bank American Express® Cards with ICICI Bank in India; the Samsung 7 American Express® Card series with Samsung Card in Korea; the Shinhan Corporate Point Max 2/4/6 American Express® Card and Shinhan Corporate Asiana Cobrand American Express® Card with Shinhan Card in Korea; the American Express® Business Travel Account (“BTA”) with Banco de Oro Unibank in the Philippines; the China Merchants Bank American Express® Platinum Card in China; The Platinum Card® with Interbank in Peru; Blue from American Express® with Russian Standard Bank in Russia; and the EASY Card with Garanti Bank in Turkey.

In our Enterprise Growth Group, the Company:

·   Together with Walmart, announced the launch and availability of Bluebird, an alternative to debit and checking accounts designed to help consumers better manage and control their everyday finances. Bluebird has been developed for the tens of millions of Americans who are looking for advanced capabilities such as deposits by smartphone and mobile bill pay, fee transparency, and no minimum balance, monthly, annual or overdraft fees.

·   Announced that the American Express Prepaid Card, a prepaid reloadable Card with no monthly or maintenance fees, is now available in approximately 7,300 Walgreens locations.

9

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

SUPPLEMENTAL INFORMATION

Supplemental Information – Tangible Common Equity and Total Adjusted Assets

During the third quarter of 2006, the Company issued $750MM of 6.80% Subordinated Debentures due 2036 (“Subordinated Debentures”), which are automatically extendable until 2066 unless certain events occur prior to that date. In connection with the Subordinated Debentures, the Company has undertaken to disclose on a quarterly basis the amount of its “tangible common equity” and “total adjusted assets”, as defined in the Subordinated Debentures. The Company’s consolidated “tangible common equity” amount as of the end of any fiscal quarter means total shareholders’ equity, excluding preferred stock, of the Company as reflected on its consolidated balance sheet prepared in accordance with GAAP as of such fiscal quarter end minus (i) intangible assets and goodwill and (ii) deferred acquisition costs, as determined in accordance with GAAP and reflected in such consolidated balance sheet. The Company’s “total adjusted assets” as of the end of any fiscal quarter is calculated as the sum of (i) total consolidated assets as reflected on the Company’s balance sheet minus (ii) non-securitized cardmember loan receivables (without deduction for reserves), which are set forth on the Company’s balance sheet, plus (iii) managed (i.e., securitized and non-securitized) worldwide cardmember loan receivables as reported by the Company for such fiscal quarter.  Upon the adoption of new GAAP effective  January 1, 2010, the Company’s “total consolidated assets” as reflected on the Company’s balance sheet now are the same amount as would be calculated as “total adjusted assets” as defined in the Subordinated Debentures before the change in GAAP.  As of September 30, 2012, the Company’s “tangible common equity”, a non-GAAP measure, was $15B and its “total adjusted assets” each as defined in the Subordinated Debentures, were $153B.  As of September 30, 2012, the consolidated total assets as reflected on the Company’s balance sheet were $153B.

10

AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

ANNEX 1

The Tier 1 Common Risk-Based Capital Ratio is calculated as Tier 1 Common Equity, a non-GAAP measure, divided by Risk-weighted assets.  Tier 1 Common Equity is calculated by reference to Total Shareholders’ Equity as shown below:

Tier 1 Common Equity Reconciliation as of September 30, 2012
($ in Millions)
Total Shareholders’ Equity		$  19,478
Effect of certain items in accumulated other comprehensive income/(loss) excluded from Tier 1 common equity		107
Less:
Ineligible goodwill and intangible assets		(3,936)
Ineligible deferred tax assets		(199)
Tier 1 Common Equity	$	15,450

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AMERICAN EXPRESS COMPANY

THIRD QUARTER 2012 OVERVIEW

ANNEX 2

The following table presents a comparison of the Company’s Tier 1 and Tier 1 common risk-based capital under Basel I rules to its estimated Tier 1 and Tier 1 common risk-based capital under Basel III rules, for purposes of calculating the estimated Tier 1 and Tier 1 common capital ratios and the supplementary leverage ratio. 

(Billions, except ratios)	Tier 1 /Tier 1 Common
Risk-Based Capital under Basel I	$	15.5
Adjustments related to:
AOCI for available for sale securities		0.3
Pension and other post-retirement benefit costs		(0.5	)
Other		0.1
Estimated Risk-Based Capital under Basel III(a)	$	15.4
Risk-Weighted Assets under Basel I	$	121.4
Estimated Risk-Weighted Assets under Basel III(a)(b)	$	122.6
Estimated Tier 1 ratio under Basel III rules(a)(c)		12.6	%
Estimated Tier 1 common ratio under Basel III rules(a)(d)		12.6	%
Total Assets	$	152.9
Estimated Total Assets for Leverage Capital Purposes(a)(e)	$	168.7
Estimated Supplementary Leverage Ratio under Basel III(a)(f)		9.1	%

(a)   Estimated Basel III Tier 1 capital, Tier 1 common equity, risk-weighted assets and total assets for leverage capital purposes reflect the Company’s current interpretation of the Basel III rules using the standardized approach.  The estimated Basel III amounts could change in the future as the U.S. regulatory agencies implement Basel III or if the Company’s business changes.

(b)   Differences in the calculation of risk-weighted assets between Basel I and Basel III include adjustments relating to the impact of the incremental risk weighting applied to deferred tax assets and significant investments in unconsolidated financial institutions, as well as exposures to past due accounts, equities and sovereigns.

(c)   The Basel III Tier 1 risk-based capital ratio is calculated as adjusted Tier 1 capital divided by adjusted risk-weighted assets.

(d)   The Basel III Tier 1 common risk-based capital ratio is calculated as adjusted Tier 1 common equity divided by adjusted risk-weighted assets.

(e)   Estimated total assets for leverage capital purposes includes adjustments for Tier 1 capital deductions, off-balance sheet derivatives, undrawn unconditionally cancellable commitments and other off-balance sheet liabilities.

(f)   The Basel III supplementary leverage ratio is calculated by dividing Basel III Tier 1 capital by the Company’s estimated total assets for leverage capital purposes under Basel III.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This supplement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.  The forward-looking statements, which address the Company’s expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “estimate,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions.  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 following:

·   changes in global economic and business conditions, including consumer and business spending, the availability and cost of credit, unemployment and political conditions, all of which may significantly affect spending on American Express cards, delinquency rates, loan balances and other aspects of the Company’s business and results of operations;

·   changes in capital and credit market conditions, including sovereign creditworthiness, which may significantly affect the Company’s ability to meet its liquidity needs, access to capital and cost of capital, including changes in interest rates; changes in market conditions affecting the valuation of the Company’s assets; or any reduction in the Company’s credit ratings or those of its subsidiaries, which could materially increase the cost and other terms of the Company’s funding, restrict its access to the capital markets or result in contingent payments under contracts;

·   litigation, such as class actions or proceedings brought by governmental and regulatory agencies (including the lawsuit filed against the Company by the U.S. Department of Justice and certain state attorneys general), that could result in (i) the imposition of behavioral remedies against the Company or the Company voluntarily making certain changes to its business practices, the effects of which in either case could have a material adverse impact on the Company’s financial performance; (ii) the imposition of substantial monetary damages and penalties, disgorgement and restitution; and/or (iii) damage to the Company’s global reputation and brand;

·   legal and regulatory developments wherever the Company does business, including legislative and regulatory reforms in the United States, such as the Dodd-Frank Reform Act’s stricter regulation of large, interconnected financial institutions; changes in requirements relating to securitization and the establishment of the Bureau of Consumer Financial Protection, which could make fundamental changes to many of the Company’s business practices or materially affect its capital requirements, results of operations, or ability to pay dividends or repurchase its stock; actions and potential future actions by the FDIC and credit rating agencies applicable to securitization trusts, which could impact the Company’s ABS program; or potential changes in the federal tax system that could substantially alter, among other things, the taxation of the Company’s international businesses, the allowance of deductions for significant expenses, or the incidence of consumption taxes on the Company’s transactions, products and services;

·   the ability of the Company to generate its on-average and over-time growth targets for revenues net of interest expense, earnings per share and return on average equity, which will depend on the factors such as the Company’s success in implementing its strategies and initiatives, meeting its targets for operating expenses and on factors outside management’s control including changes in the economic and business environment, the effectiveness of marketing and loyalty programs, and the willingness of cardmembers to sustain spending;

·   the Company’s net interest yield on U.S. cardmember loans not remaining at historical levels, which will be influenced by, among other things, the effects of the CARD Act (including the regulations requiring the Company to periodically reevaluate APR increases), interest rates, changes in consumer behavior that affect loan balances, such as paydown rates, the credit quality of the Company’s portfolio and the Company’s cardmember acquisition strategy, product mix, cost of funds, credit actions, including line size and other adjustments to credit availability, and potential pricing changes;

 

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·   changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may impact the prices the Company charges merchants that accept the Company’s cards and the success of marketing, promotion or rewards programs;

·   changes in technology or in the Company’s ability to protect its intellectual property (such as copyrights, trademarks, patents and controls on access and distribution), and invest in and compete at the leading edge of technological developments across the Company’s businesses, including technology and intellectual property of third parties on whom the Company relies, all of which could materially affect the Company’s results of operations;

·   data breaches and fraudulent activity, which could damage the Company’s brand, increase the Company’s costs or have regulatory implications, and changes in regulation affecting privacy and data security under federal, state and foreign law, which could result in higher compliance and technology costs to the Company or the Company’s vendors;

·   changes in the Company’s ability to attract or retain qualified personnel in the management and operation of the Company’s business, including any changes that may result from increasing regulatory supervision of compensation practices;

·   changes in the financial condition and creditworthiness of the Company’s business partners, such as bankruptcies, restructurings or consolidations, involving merchants that represent a significant portion of the Company’s business, such as the airline industry, or the Company’s partners in Global Network Services or financial institutions that the Company relies on for routine funding and liquidity, which could materially affect the Company’s financial condition or results of operations;

·   uncertainty relating to the actual growth of operating expenses in 2012 and subsequent years, which will depend in part on the Company’s ability to balance the control and management of expenses and the maintenance of competitive service levels to its businesses and customers, unanticipated increases in significant categories of operating expenses, such as consulting or professional fees, compliance or regulatory costs and technology costs, higher than expected employee levels due to lower than expected attrition rates or employee needs not currently anticipated, the Company’s decision to increase or decrease discretionary operating expenses depending on overall business performance, the impact of changes in foreign currency exchange rates on costs and results, and the level of acquisition activity and related expenses;

·   uncertainty in the growth of operating expenses relative to the growth of revenues in 2012 and subsequent years and the possibility that the ratio of total expenses to revenues will not migrate back towards historical levels over time, which will depend on (i) factors affecting revenue, such as, among other things, the growth of consumer and business spending on American Express cards, higher travel commissions and fees, the growth of and/or higher yields on the loan portfolio and the development of new revenue opportunities and (ii) the success of the Company in containing operating expenses, which will be impacted by, among other things, the factors identified in the preceding bullet, and in containing other expenses including the Company’s ability to control and manage marketing and promotion expenses as described below as well as expenses related to increased redemptions or other growth in rewards and cardmember services expenses.  Further, in any period, the ability to grow revenue faster than operating expenses and the ratio of total expenses to revenues may be impacted by rapid decreases in revenues that cannot be matched by decreases in operating expenses;

·   uncertainty in the amount of marketing and promotion expenses relative to the revenues in 2012 and subsequent years, which will depend on (i) factors affecting revenue, which will be impacted by, among other things, the factors identified in the preceding bullet and (ii) the Company’s ability to control and manage marketing and promotion expenses as described below,  the availability of opportunities to invest at a higher level due to favorable business results and changes in macroeconomic conditions;

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·   the actual amount to be spent by the Company on investments in the business, including on marketing, promotion, rewards and cardmember services and certain operating expenses, which will be based in part on management’s assessment of competitive opportunities and the Company’s performance and the ability to control and manage operating, infrastructure, advertising, promotion and rewards expenses as business expands or changes, including the changing behavior of cardmembers;

·   the ability of the Company to generate $3 billion in fee revenue by the end of 2014, which will depend on the Company’s success in implementing its strategy to increase fee revenue through growing its existing fee-based businesses such as insurance products and other services, acquiring companies with complementary businesses and capabilities, and in introducing new business initiatives, such as Loyalty Edge, Business Insights and its joint venture with Vente-Privee;

·   the effectiveness of the Company’s risk management policies and procedures, including credit risk relating to consumer debt, liquidity risk in meeting business requirements and operational risk;

·   the Company’s lending write-off rates not remaining below the average historical levels of the last ten years, which will depend in part on changes in the level of the Company’s loan balances, delinquency rates of cardmembers, unemployment rates, the volume of bankruptcies and recoveries of previously written-off loans;

·   the ability of the Company to maintain and expand its presence in the digital payments space, including as an online payments provider, which will depend on the Company’s success in evolving its business models and processes for the digital environment, building partnerships and executing programs with companies, and utilizing digital capabilities that can be leveraged for future growth;

·   changes affecting the Company’s ability to accept or maintain deposits due to market demand or regulatory constraints, such as changes in interest rates and regulatory restrictions on the Company’s ability to obtain deposit funding or offer competitive interest rates, which could affect the Company’s liquidity position and the Company’s ability to fund the Company’s business;

·   the failure of the U.S. Congress to renew legislation regarding the active financing exception to Subpart F of the Internal Revenue Code, which could increase the Company’s effective tax rate and have an adverse impact on net income; and

·   factors beyond the Company’s control such as fire, power loss, disruptions in telecommunications, severe weather conditions, natural disasters, terrorism, “hackers” or fraud, which could affect travel-related spending or disrupt the Company’s global network systems and ability to process transactions.

A further description of these uncertainties and other risks can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2012, and the Company’s other filings with the Securities and Exchange Commission.

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