American Express Reports Fourth Quarter EPS of $0.89 or $1.23 When Adjusted for Impairment and Restructuring Charges¹

Card Member Spending and Loans Continued to Rise

Company Expects 2016 EPS of $5.40-$5.70
Outlook Includes Multi-Year Plan to Take $1 Billion out of Cost Structure

January 22, 2016 02:00 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--

American Express Company (NYSE:AXP) today reported fourth-quarter net income of $899 million, down from $1.4 billion a year ago. The current and year-ago quarters included a number of significant items that affected year-over-year comparisons.

(Millions, except percentages and per share amounts)


	Quarters Ended December 31,						Percentage Inc/(Dec)		Years Ended December 31,						Percentage Inc/(Dec)
	2015			2014					2015			2014
Total Revenues Net of Interest Expense	$	8,391		$	9,081		(8	)	$	32,818		$	34,188		(4	)
Net Income	$	899		$	1,447		(38	)	$	5,163		$	5,885		(12	)
Earnings Per Common Share – Diluted:
Net Income Attributable to Common Shareholders²	$	0.89		$	1.39		(36	)	$	5.05		$	5.56		(9	)
Average Diluted Common Shares Outstanding		981			1,033		(5	)		1,003			1,051		(5	)
Return on Average Equity		24.0	%		29.1	%				24.0	%		29.1	%

The fourth quarter of 2015 included:

A $419 million charge ($335 million after-tax) that included an impairment of goodwill and technology assets, in addition to restructuring costs within the Enterprise Growth (EG) Group.

The year-ago quarter included:

A $719 million gain ($453 million after-tax) on the sale of the company’s investment in Concur Technologies;
A restructuring charge of $313 million ($206 million after-tax);
Incremental spending, which was largely reflected in higher marketing and promotion expenses;
The renewal of the company’s partnership with Delta Air Lines, which increased rewards costs by $109 million ($68 million after-tax).

The strong appreciation of the U.S. dollar had an impact on revenues and expenses and suppressed earnings in both quarters.

Diluted earnings per share for fourth quarter 2015 was $0.89, or $1.23 on an adjusted basis excluding the EG charge, compared to $1.39 a year ago.¹

Fourth-quarter consolidated total revenues net of interest expense totaled $8.4 billion, down 8 percent from $9.1 billion a year ago. Excluding the impact of foreign exchange rates and last year’s Concur gain, adjusted revenues increased 4 percent.³ The increase primarily reflected continued growth in net interest income and higher Card Member spending.

Consolidated provisions for losses totaled $572 million, down 2 percent from $582 million a year ago. The decrease primarily reflected the impact of the reclassification of certain co-brand loan portfolios to “held for sale,” as credit costs associated with those portfolios are now reported in other operating expenses, beginning in December 2015.

Consolidated expenses totaled $6.4 billion, up 1 percent from $6.3 billion a year ago. Excluding the impact of foreign exchange rates, consolidated expenses rose 4 percent.⁴ The current quarter reflected the EG charge. Last year’s quarter included the restructuring charge and co-brand partnership renewal costs. Both periods included incremental spending mentioned above.

The effective tax rate for the quarter was 38 percent, up from 35 percent a year ago. The increase primarily reflected non-deductible expenses included in the EG charge mentioned earlier.

The company's return on average equity (ROE) was 24.0 percent, down from 29.1 percent a year ago. Excluding the EG charge, adjusted ROE was 25.6 percent.¹

For the full year, the company reported net income of $5.2 billion, down 12 percent from $5.9 billion a year ago. Diluted earnings per share was $5.05, or $5.38 on an adjusted basis excluding the EG charge, compared to $5.56 a year ago.¹

Revenues net of interest expense for the full year decreased 4 percent (flat FX adjusted⁴) to $32.8 billion from $34.2 billion a year ago.

Consolidated expenses decreased 1 percent to $22.9 billion from $23.2 billion a year ago. Adjusted for foreign currency translations, consolidated expenses increased 3 percent.⁴

Outlook

“Our 2015 results and outlook reflect the reset in co-brand economics, pressures on merchant fees, the evolving regulatory environment and intense competition that have been re-shaping the payments industry,” said Kenneth I. Chenault, chairman and chief executive officer. “A number of cyclical factors in the broader economy have also weighed on our performance and influenced our outlook. Against that backdrop, and the fact that revenue growth has not accelerated as we anticipated, we are moving aggressively to streamline the company and drive efficiencies in order to take out $1 billion from our overall cost base by the end of 2017.

“We now expect 2016 EPS between $5.40 and $5.70. This reflects a substantial benefit from the planned sale of the Costco co-brand portfolio, offset in part by a continuation of elevated spending on growth opportunities as well as the loss of a partial year of Costco-related earnings. The portfolio transaction is expected to occur mid-year.

“For 2017, we are now targeting EPS of at least $5.60. That includes growing over the portfolio gain and this year’s Costco-related earnings. It also includes a combination of accelerated revenue growth, aggressive expense reductions and the use of our capital strength to create value for shareholders. The 2016-17 earnings targets do not include restructuring charges or other contingencies.

“We have a great set of assets to draw upon, including a trusted brand, financial strength, an integrated business model, world class service and a history of innovation. We’re confident that we’ll not just deal with our near-term challenges, but return to growth and position the company for long-term success.”

Segment Results

U.S. Card Services reported fourth-quarter net income of $799 million, up 20 percent from $665 million a year ago.

Total revenues net of interest expense increased 5 percent to $4.8 billion, from $4.6 billion a year ago. The rise reflected higher net interest income from growth in the loan portfolio, as well as an increase in net card fees and Card Member spending.

Provisions for losses totaled $440 million, up 10 percent from $399 million a year ago. The increase primarily reflected a larger build in reserves this quarter, compared to a year ago. The current quarter’s provisions benefited from the reclassification of certain co-brand loan portfolios to “held for sale,” as credit costs associated with those portfolios are now reported in other operating expenses, beginning in December 2015.

Total expenses were flat at $3.1 billion compared to a year ago. The current quarter reflected higher Card Member services costs and investment spending that was maintained at an elevated level. The year-ago quarter included a portion of the three significant expense items mentioned earlier.

The effective tax rate was 36 percent, down from 39 percent a year ago.

International Card Services reported fourth-quarter net income of $73 million, up from $33 million a year ago.

Total revenues net of interest expense were $1.3 billion, down 5 percent from $1.4 billion a year ago. Adjusted for foreign currency translations, revenues were up 6 percent, primarily reflecting higher Card Member spending.⁴

Total expenses were $1.1 billion, down 11 percent from $1.3 billion a year ago. Adjusted for foreign currency translations, expenses were down 4 percent from last year, which included a portion of the previously mentioned restructuring charge a year ago.⁴

The effective tax rate was 2.7 percent, reflecting the impact of recurring permanent tax benefits on varying levels of pre-tax income.

Global Commercial Services reported fourth-quarter net income of $132 million, down 78 percent from $594 million a year ago, which included the Concur gain.

Total revenues net of interest expense totaled $817 million, down 48 percent from $1.6 billion a year ago, which included the Concur gain. Excluding the Concur gain, adjusted revenues decreased 6 percent.³

Total expenses decreased 7 percent (down 4 percent FX-adjusted⁴)to $547 million, from $586 million a year ago, which included a portion of the restructuring charge in the prior year.

The effective tax rate was 44 percent, up from 37 percent a year ago, reflecting the impact of certain non-deductible foreign losses.

Global Network & Merchant Services reported fourth-quarter net income of $417 million, unchanged from a year ago.

Total revenues net of interest expense totaled $1.4 billion, down 4 percent from $1.5 billion a year ago. On an FX-adjusted basis, revenues increased 1 percent.⁴

Total expenses decreased 4 percent to $743 million, from $772 million a year ago. On an FX-adjusted basis, expenses increased 1 percent.⁴

Corporate and Other reported fourth-quarter net loss of $522 million, which included the EG charge. This compared to a net loss of $262 million a year ago.

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/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products, services and corporate responsibility information: charge and credit cards, business credit cards, Plenti rewards program, travel services, gift cards, prepaid cards, merchant services, corporate card, business travel and corporate responsibility.

The 2015 Fourth Quarter/Full Year Earnings Supplement will be available today on the American Express website at http://ir.americanexpress.com. An investor conference call will be held at 5:00 p.m. (ET) today to discuss fourth-quarter earnings results and the company’s 2016-2017 outlook. Live audio and presentation slides for the investor conference call will be available to the general public at the same website. A replay of the conference call will be available later today at the same website address.

This release 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 and which include management’s outlook for 2015-2017, among other matters, contain words such as “believe,” “expect,” “estimate,” “anticipate,” “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:

the Company’s ability to achieve earnings per common share (“EPS”) growth between $5.40 and $5.70 for 2016 and at least $5.60 for 2017, which will depend in part on the following: an acceleration of billed business and revenue growth, which could be impacted by, among other things, weakening economic conditions in the U.S. or internationally, a decline in consumer confidence impacting the willingness and ability of Card Members to sustain spending, a further decline in gas prices, a further strengthening of the U.S. dollar, a greater erosion of the average discount rate than expected and lower spending on new cards acquired than estimated; the Company’s success in addressing competitive pressures and implementing its strategies and business initiatives, including growing profitable spending through proprietary, co-brand and network products, increasing penetration among corporate, middle market and small business clients, expanding its international footprint, growing loyalty coalitions and increasing merchant acceptance; the timing and impact of any potential sale of the Costco U.S. Card Member loan portfolio; realizing incremental economics associated with the Costco U.S. contract extension, which could be impacted by, among other things, Card Member behavior, including the desire of Costco U.S. Card Members to continue to use their Costco U.S. cobrand cards and the availability to those Card Members of other payment forms; the impact of any potential restructuring charges or other contingencies, including, but not limited to, litigation-related expenses, impairments, the imposition of fines or civil money penalties, an increase in Card Member reimbursements and changes in reserves; credit performance remaining in line with current expectations; continued growth of Card Member loans held for investment; the ability to continue to realize benefits from restructuring actions and operating leverage at levels consistent with current expectations; the amount the Company spends on growth initiatives; changes in interest rates beyond current expectations; the impact of regulation and litigation, which could affect the profitability of the Company’s business activities, limit the Company’s ability to pursue business opportunities, require changes to business practices or alter the Company’s relationships with partners, merchants and Card Members; the Company’s tax rate being in the 34-35% range, which could be impacted by, among other things, the Company’s geographic mix of income being weighted more to higher tax jurisdictions than expected and unfavorable tax audits and other unanticipated tax items; the impact of accounting changes and reclassifications; and the Company’s ability to continue executing its share repurchase program;
the actual amount to be spent on growth initiatives, including on marketing and promotion, as well as the timing of any such spending, which will be based in part on management’s assessment of competitive opportunities, overall business performance, the amount of any potential gain arising from a sale of the Costco U.S. Card Member loan portfolio management decides to spend on growth initiatives, contractual obligations with business partners, management’s ability to identify attractive investment opportunities and make such investments, which could be impacted by business, regulatory or legal complexities and the Company’s performance, and the Company’s ability to realize efficiencies and control expenses to fund such spending;
the ability of the Company to reduce its overall cost base by $1 billion by the end of 2017 and to realize the full benefit of the Company’s actions by the beginning of 2018, which will depend in part on the timing and financial impact of the Company’s future reengineering plans (including whether the Company will recognize restructuring charges in future periods), which could be impacted by factors such as the Company’s inability to mitigate the operational and other risks posed by potential staff reductions, the Company’s inability to develop and implement technology resources to realize cost savings, underestimating hiring needs related to some of the job positions being eliminated and other employee needs not currently anticipated, lower than expected attrition rates and higher than expected redeployment rates; the ability of the Company to reduce annual operating expenses, which could be impacted by, among other things, the factors identified below; and the ability of the Company to optimize and lower marketing and promotion expenses, which could be impacted by higher advertising and mailing costs, competitive pressures that may require additional expenditures or limit the Company’s ability to reduce costs, contractual obligations with business partners, the availability of opportunities to invest at a higher level due to favorable business results and changes in macroeconomic conditions;
the ability to reduce annual operating expenses, which could be impacted by increases in significant categories of operating expenses, such as consulting or professional fees, including as a result of increased litigation, compliance or regulatory-related costs, technology costs or fraud costs; the ability of the Company to develop, implement and achieve substantial benefits from reengineering plans; higher than expected employee levels; the impact of changes in foreign currency exchange rates on costs; the payment of civil money penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements; impairments of goodwill or other assets; the Company’s decision to increase or decrease spending in such areas as technology, business and product development and sales forces depending on overall business performance; greater than expected inflation or merit increases; the Company’s ability to balance expense control and investments in the business; the impact of accounting changes and reclassifications; and the level of acquisition activity and related expenses;
the Company’s lending write-off rates increasing more quickly than current expectations and the Company’s provision expense being higher than current expectations, which will depend in part on changes in the level of loan balances, delinquency rates of Card Members, unemployment rates, the volume of bankruptcies and recoveries of previously written-off loans;
the Company’s ability to execute against its lending strategy and grow Card Member loans held for investment, including by targeting new lending prospects and deepening relationships with current customers, which may be affected by increasing competition, brand perceptions and reputation, the Company’s ability to manage risk in a growing Card Member loan portfolio, and the behavior of the Company’s Card Members and their actual spending and borrowing patterns, which in turn may be driven by the Company’s ability to issue new and enhanced card products, offer attractive services and rewards programs, attract new Card Members, reduce Card Member attrition and capture a greater share of existing Card Members’ spending and borrowing;
uncertainties associated with the timing and impact of any potential sale of the Costco U.S. Card Member loan portfolio and the extension of the merchant acceptance agreement, such as the negotiation and execution of definitive documentation, operational issues related to the transfer of Card Member loans and accounts, the parties’ ability to satisfy the closing conditions and the amount of any gain recognized by the Company as a result of a sale, which could be impacted by the credit quality and performance of the portfolio, the amount of any volume decline experienced by the cobrand portfolio and the timing of the potential sale as the gain will be determined by the amount of the aggregate outstanding loans transferred at closing;
the possibility that the Company will not fully execute on its plans for OptBlue to significantly increase merchant coverage and move toward parity coverage with other card networks in the U.S., which will depend in part on the success of OptBlue merchant acquirers in signing merchants to accept American Express, which could be impacted by the pricing set by the merchant acquirers, the value proposition offered to small merchants and the priority given to the Company by OptBlue merchant acquirers, as well as the willingness of Card Members to use American Express cards at small merchants and of those merchants to actively accept American Express cards;
the erosion of the average discount rate by a greater amount than anticipated during 2016 and beyond, including as a result of changes in the mix of spending by location and industry, volume-related pricing discounts, strategic investments, certain pricing initiatives, competition, pricing regulation (including regulation of competitors’ interchange rates) and other factors;
uncertainty relating to the ultimate outcome of the antitrust lawsuit filed against the Company by the U.S. Department of Justice and certain state attorneys general, including the success or failure of our appeal and the impact on existing private merchant cases and potentially additional litigation and/or arbitrations;
the ability of the Company to return capital to shareholders through dividends and share repurchases, including the opportunity for incremental capital returns related to the Costco U.S. portfolio sale, which will depend on factors such as approval of the Company’s capital plans by its primary regulators, the amount the Company spends on acquisitions and the Company’s results of operations and capital needs in any given period;
the ability of the Company to drive growth by developing and marketing value propositions that appeal to Card Members and new customers and by offering attractive services and rewards programs, which will depend in part on the Company’s ongoing investment in product innovation, marketing and promotion and acquisition efforts, including through digital channels; the ability of the Company to update its systems and platforms to support new products, services and benefits; the degree of interest of Card Members in the value proposition offered by the Company; the Company’s ability to tailor new products and services to make them attractive to Card Members; competition; and brand perceptions and reputation;
the ability of the Company to meet its long-term earnings per share growth target, which will depend on factors such as the Company’s success in implementing its strategies and business initiatives and on factors outside management’s control including the willingness and ability of Card Members to sustain spending, regulatory and competitive pressures, credit trends, currency and interest rate fluctuations, and changes in general economic conditions, such as GDP growth, consumer confidence, unemployment and the housing market; and
factors beyond the Company’s control such as changes in global economic and business conditions, including consumer and business spending, the availability and cost of capital, unemployment and political conditions, foreign currency rates, fire, power loss, disruptions in telecommunications, severe weather conditions, natural disasters, health pandemics, terrorism, cyber attacks or fraud, which could significantly affect spending on American Express cards, delinquency rates, loan balances and 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, 2014, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2015 and the Company’s other reports filed with the Securities and Exchange Commission.

¹ Adjusted EPS and adjusted ROE, non-GAAP measures, exclude a $335MM after-tax charge ($419MM pretax) in Enterprise Growth, which was driven primarily by the impairment of goodwill and technology assets in addition to restructuring costs. Management believes adjusted EPS and adjusted ROE are useful in evaluating the ongoing operating performance of the Company. See Appendix IV for reconciliations to EPS and ROE on a GAAP basis.

² Represents net income less (i) earnings allocated to participating share awards of $6 million and $11 million for the three months ended December 31, 2015 and 2014, respectively, and $38 million and $46 million for the years ended December 31, 2015 and 2014, respectively, and (ii) dividends on preferred shares of $20 million and nil for the three months ended December 31, 2015 and 2014, respectively, and $62 million and nil for the years ended December 31, 2015 and 2014, respectively.

³ Adjusted revenue growth and adjusted revenue growth on an FX adjusted basis are non-GAAP measures and exclude the Q4’14 gain on the sale of the Concur investment. Management believes adjusted revenue growth is useful in evaluating the ongoing operating performance of the Company. See footnote 4 for an explanation of FX adjusted information and Appendix IV for a reconciliation to total revenues net of interest expense on a GAAP basis.

⁴ As reported in this release, 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 December 31, 2015 apply to the period(s) against which such results are being compared). Certain amounts included in the calculation of FX-adjusted revenues and expenses, which constitute non-GAAP measures, are subject to management allocations. 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.

American Express Company

(Preliminary)

Consolidated Statements of Income

(Millions, except percentages and per share amounts)

Quarters Ended

% Change

Years Ended

% Change

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31, 2015 vs.

Dec 31,

Dec 31, 2015 vs.

2015

2014

Dec 31, 2014

2015

2014

Dec 31, 2014

Revenues

Non-interest revenues

Discount revenue (A)

4,913

4,778

4,946

4,660

4,961

)

19,297

19,389

)

Net card fees

687

679

667

671

2,700

2,712

)

Other fees and commissions (B)

704

727

708

715

)

2,866

3,626

(21

)

Other

540

504

521

468

1,310

(59

)

2,033

2,989

(32

)

Total non-interest revenues

6,844

6,688

6,861

6,503

7,657

(11

)

26,896

28,716

)

Interest income

Interest on loans

1,891

1,847

1,776

1,795

1,769

7,309

6,929

Interest and dividends on investment securities

(14

)

157

179

(12

)

Deposits with banks and other

Total interest income

1,947

1,904

1,837

1,857

1,829

7,545

7,179

Interest expense

Deposits

138

125

109

103

475

373

Long-term debt and other

262

274

305

307

308

(15

)

1,148

1,334

(14

)

Total interest expense

400

399

414

410

405

)

1,623

1,707

)

Net interest income

1,547

1,505

1,423

1,447

1,424

5,922

5,472

Total revenues net of interest expense

8,391

8,193

8,284

7,950

9,081

)

32,818

34,188

)

Provisions for losses

Charge card

195

203

165

174

198

)

737

792

)

Card Member loans

361

309

285

235

341

1,190

1,138

Other

(63

)

114

(46

)

Total provisions for losses

572

529

467

420

582

)

1,988

2,044

)

Total revenues net of interest expense after provisions for losses

7,819

7,664

7,817

7,530

8,499

)

30,830

32,144

)

Expenses

Marketing and promotion (A)

892

847

761

609

887

3,109

3,216

)

Card Member rewards

1,794

1,763

1,799

1,640

1,881

)

6,996

6,931

Card Member services and other

246

269

242

261

203

1,018

822

Salaries and employee benefits

1,209

1,212

1,250

1,305

1,607

(25

)

4,976

6,095

(18

)

Professional services

784

687

655

624

768

2,750

3,008

)

Occupancy and equipment

482

523

415

434

446

1,854

1,807

Communications

(10

)

345

383

(10

)

Other, net

870

341

380

253

384

1,844

891

Total

6,365

5,726

5,587

5,214

6,274

22,892

23,153

)

Pretax income

1,454

1,938

2,230

2,316

2,225

(35

)

7,938

8,991

(12

)

Income tax provision

555

672

757

791

778

(29

)

2,775

3,106

(11

)

Net income

899

1,266

1,473

1,525

1,447

(38

)

5,163

5,885

(12

)

Net income attributable to common shareholders (C)

873

1,234

1,442

1,514

1,436

(39

)

5,063

5,839

(13

)

Effective tax rate

38.2

34.7

33.9

34.2

35.0

34.5

Earnings Per Common Share

BASIC

Net income attributable to common shareholders

0.89

1.24

1.43

1.49

1.40

(36

)

5.07

5.58

)

Average common shares outstanding

977

994

1,009

1,019

1,028

)

999

1,045

)

DILUTED

Net income attributable to common shareholders

0.89

1.24

1.42

1.48

1.39

(36

)

5.05

5.56

)

Average common shares outstanding

981

997

1,013

1,023

1,033

)

1,003

1,051

)

Cash dividends declared per common share

0.29

0.26

1.13

1.01

# - Denotes a variance of more than 100 percent.


American Express Company	(Preliminary)
Condensed Consolidated Balance Sheets
(Billions, except percentages, per share amounts and where indicated)
	Quarters Ended															% Change
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31, 2015 vs.
	2015				2015			2015			2015			2014		Dec 31, 2014
Assets
Cash & cash equivalents	$	23		$	20		$	21		$	24		$	22		5
Card Member loans and receivables held for sale		15			-			-			-			-		-
Accounts receivable		47			46			47			46			47		-
Investment securities		4			4			5			4			4		-
Loans		59			69			69			67			70		(16	)
Other assets		13			15			15			14			16		(19	)
Total assets	$	161		$	154		$	157		$	155		$	159		1

Liabilities and Shareholders' Equity
Customer deposits	$	55		$	49		$	47		$	45		$	44		25
Short-term borrowings		5			3			4			2			3		67
Long-term debt		48			49			53			55			58		(17	)
Other liabilities		32			32			31			31			33		(3	)
Total liabilities		140			133			135			133			138		1

Shareholders' Equity		21			21			22			22			21		-
Total liabilities and shareholders' equity	$	161		$	154		$	157		$	155		$	159		1

Selected Statistical Information

Return on average equity (D)		24.0	%		26.8	%		28.1	%		29.0	%		29.1	%
Return on average common equity (D)		25.2	%		27.8	%		28.8	%		29.3	%		29.0	%
Return on average tangible common equity (D)		31.0	%		34.2	%		35.4	%		36.2	%		35.9	%
Common shares outstanding (millions)		969			985			1,002			1,016			1,023		(5	)
Book value per common share (dollars) (E)	$	19.71		$	20.06		$	20.27		$	19.93		$	19.49		1
Shareholders' equity	$	20.7		$	21.3		$	21.9		$	21.8		$	20.7		0

# - Denotes a variance of more than 100 percent.

American Express Company

(Preliminary)

Financial Summary

(Millions)

Quarters Ended

% Change

Years Ended

% Change

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31, 2015 vs.

Dec 31,

Dec 31, 2015 vs.

2015

2014

Dec 31, 2014

2015

2014

Dec 31, 2014

Total revenues net of interest expense

U.S. Card Services

4,813

4,729

4,726

4,525

4,594

18,793

17,810

International Card Services

1,281

1,238

1,258

1,241

1,355

)

5,018

5,492

)

Global Commercial Services

817

881

827

1,585

(48

)

3,342

4,948

(32

)

Global Network & Merchant Services

1,418

1,370

1,396

1,344

1,477

)

5,528

5,747

)

8,329

8,154

8,261

7,937

9,011

)

32,681

33,997

)

Corporate & Other

(11

)

137

191

(28

)

CONSOLIDATED TOTAL REVENUES NET OF INTEREST EXPENSE

8,391

8,193

8,284

7,950

9,081

)

32,818

34,188

)

Pretax income (loss)

U.S. Card Services

1,247

1,262

1,366

1,480

1,083

5,355

5,100

International Card Services

105

144

184

508

449

Global Commercial Services

237

238

314

284

949

(75

)

1,073

2,408

(55

)

Global Network & Merchant Services

659

723

695

698

670

)

2,775

2,620

2,218

2,328

2,519

2,646

2,703

(18

)

9,711

10,577

)

Corporate & Other

(764

)

(390

)

(289

)

(330

)

(478

)

(1,773

)

(1,586

)

PRETAX INCOME

1,454

1,938

2,230

2,316

2,225

(35

)

7,938

8,991

(12

)

Net income (loss)

U.S. Card Services

799

794

886

934

665

3,413

3,200

International Card Services

125

134

421

411

Global Commercial Services

132

151

203

180

594

(78

)

666

1,543

(57

)

Global Network & Merchant Services

417

462

448

444

417

1,771

1,660

1,421

1,496

1,662

1,692

1,709

(17

)

6,271

6,814

)

Corporate & Other

(522

)

(230

)

(189

)

(167

)

(262

)

(1,108

)

(929

)

NET INCOME

899

1,266

1,473

1,525

1,447

(38

)

5,163

5,885

(12

)

# - Denotes a variance of more than 100 percent.


American Express Company	(Preliminary)
Selected Statistical Information
(Billions, except percentages and where indicated)

	Quarters Ended															% Change		Years Ended						% Change
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31, 2015 vs.		Dec 31,						Dec 31, 2015 vs.
		2015			2015			2015			2015			2014		Dec 31, 2014			2015			2014		Dec 31, 2014
Card billed business (F):
United States	$	189.9		$	180.3		$	181.6		$	169.2		$	182.5		4		$	721.0		$	688.1		5
Outside the United States		83.3			78.6			80.4			76.4			86.0		(3	)		318.7			334.7		(5	)
Total	$	273.2		$	258.9		$	262.0		$	245.6		$	268.5		2		$	1,039.7		$	1,022.8		2
Total cards-in-force (G) (millions):
United States		57.6			56.4			55.3			54.8			54.9		5			57.6			54.9		5
Outside the United States		60.2			59.4			58.5			57.4			57.3		5			60.2			57.3		5
Total		117.8			115.8			113.8			112.2			112.2		5			117.8			112.2		5
Basic cards-in-force (G) (millions):
United States		44.8			43.6			42.8			42.4			42.6		5			44.8			42.6		5
Outside the United States		49.5			49.0			48.2			47.3			47.0		5			49.5			47		5
Total		94.3			92.6			91.0			89.7			89.6		5			94.3			89.6		5

Average discount rate (A) (H)		2.42	%		2.46	%		2.49	%		2.49	%		2.44	%				2.46	%		2.48	%
Average basic Card Member spending (dollars) (I)	$	4,305		$	4,165		$	4,272		$	4,008		$	4,377		(2	)	$	16,743		$	16,884		(1	)
Average fee per card (dollars) (I)	$	39		$	39		$	39		$	39		$	39		-		$	39		$	40		(3	)
Average fee per card adjusted (dollars) (I)	$	43		$	44		$	43		$	44		$	44		(2	)	$	44		$	45		(2	)

Worldwide Card Member receivables: (J)
Total receivables	$	44.1		$	44.3		$	44.9		$	43.7		$	44.9		(2	)	$	44.1		$	44.9		(2	)
Loss reserves (millions):
Beginning balance	$	441		$	420		$	429		$	465		$	432		2		$	465		$	386		20
Provisions (K)		195			203			165			174			198		(2	)		737			792		(7	)
Net write-offs (L)		(169	)		(174	)		(171	)		(199	)		(156	)	8			(713	)		(683	)	4
Other (M)		(5	)		(8	)		(3	)		(11	)		(9	)	(44	)		(27	)		(30	)	(10	)
Ending balance	$	462		$	441		$	420		$	429		$	465		(1	)	$	462		$	465		(1	)
% of receivables		1.0	%		1.0	%		0.9	%		1.0	%		1.0	%				1.0	%		1.0	%
Net write-off rate (principal only) - USCS/ICS (N)		1.7	%		1.8	%		1.7	%		2.1	%		1.5	%				1.8	%		1.7	%
Net write-off rate (principal and fees) - USCS/ICS (N)		1.9	%		2.0	%		1.9	%		2.3	%		1.7	%				2.0	%		1.9	%
30 days past due as a % of total - USCS/ICS		1.5	%		1.6	%		1.5	%		1.6	%		1.6	%				1.5	%		1.6	%
Net loss ratio (as a % of charge volume) - GCS		0.08	%		0.08	%		0.09	%		0.10	%		0.08	%				0.09	%		0.09	%
90 days past billing as a % of total - GCS		0.9	%		0.7	%		0.7	%		0.7	%		0.8	%				0.9	%		0.8	%

Worldwide Card Member loans: (J)
Total loans	$	58.6		$	68.9		$	69.0		$	66.8		$	70.4		(17	)	$	58.6		$	70.4		(17	)
Loss reserves (millions):
Beginning balance	$	1,164		$	1,132		$	1,130		$	1,201		$	1,146		2		$	1,201		$	1,261		(5	)
Provisions (K)		361			309			285			235			341		6			1,190			1,138		5
Net write-offs - principal (L)		(234	)		(231	)		(243	)		(259	)		(237	)	(1	)		(967	)		(1,023	)	(5	)
Net write-offs - interest and fees (L)		(40	)		(37	)		(42	)		(43	)		(40	)	-			(162	)		(164	)	(1	)
Reserves transferred to held for sale		(224	)		-			-			-			-		-			(224	)		-		-
Other (M)		1			(9	)		2			(4	)		(9	)	#			(10	)		(11	)	(9	)
Ending balance	$	1,028		$	1,164		$	1,132		$	1,130		$	1,201		(14	)	$	1,028		$	1,201		(14	)
Ending reserves - principal	$	975		$	1,114		$	1,076		$	1,074		$	1,149		(15	)	$	975		$	1,149		(15	)
Ending reserves - interest and fees	$	53		$	50		$	56		$	56		$	52		2		$	53		$	52		2
% of loans		1.8	%		1.7	%		1.6	%		1.7	%		1.7	%				1.8	%		1.7	%
% of past due		164	%		164	%		171	%		163	%		167	%				164	%		167	%
Average loans	$	67.1		$	69.0		$	68.0		$	67.6		$	67.7		(1	)	$	67.9		$	66.0		3
Net write-off rate (principal only) (N)		1.4	%		1.3	%		1.4	%		1.5	%		1.4	%				1.4	%		1.5	%
Net write-off rate (principal, interest and fees) (N)		1.6	%		1.6	%		1.7	%		1.8	%		1.6	%				1.7	%		1.8	%
30 days past due loans as a % of total		1.1	%		1.0	%		1.0	%		1.0	%		1.0	%				1.1	%		1.0	%
*Net interest income divided by average loans (O)**		8.7	%		8.7	%		8.4	%		8.6	%		8.4	%				8.6	%		8.3	%
*Net interest yield on Card Member loans (O)**		9.4	%		9.5	%		9.3	%		9.6	%		9.3	%				9.4	%		9.3	%

* - Annualized
# - Denotes a variance of more than 100 percent.

U.S. Card Services

(Preliminary)

Selected Income Statement Data

(Millions, except percentages)

Quarters Ended

% Change

Years Ended

% Change

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31, 2015 vs.

Dec 31,

Dec 31, 2015 vs.

2015

2014

Dec 31, 2014

2015

2014

Dec 31, 2014

Revenues

Non-interest revenues (A)

3,358

3,302

3,372

3,148

3,253

13,180

12,628

Interest income

1,628

1,593

1,517

1,529

1,490

6,267

5,786

Interest expense

173

166

163

152

149

654

604

Net interest income

1,455

1,427

1,354

1,377

1,341

5,613

5,182

Total revenues net of interest expense

4,813

4,729

4,726

4,525

4,594

18,793

17,810

Provisions for losses

440

390

327

296

399

1,453

1,396

Total revenues net of interest expense after provisions for losses

4,373

4,339

4,399

4,229

4,195

17,340

16,414

Expenses

Marketing, promotion, rewards, Card Member services and other (A)

2,018

2,029

1,996

1,733

2,038

)

7,776

7,197

Salaries and employee benefits and other operating expenses

1,108

1,048

1,037

1,016

1,074

4,209

4,117

Total

3,126

3,077

3,033

2,749

3,112

11,985

11,314

Pretax segment income

1,247

1,262

1,366

1,480

1,083

5,355

5,100

Income tax provision

448

468

480

546

418

1,942

1,900

Segment income

799

794

886

934

665

3,413

3,200

Effective tax rate

35.9

37.1

35.1

36.9

38.6

36.3

37.3

Selected Statistical Information

(Billions, except percentages and where indicated)

Card billed business

152.3

143.4

144.1

132.5

145.0

572.3

542.0

Total cards-in-force (millions)

48.3

47.4

46.3

45.9

45.6

48.3

45.6

Basic cards-in-force (millions)

36.2

35.4

34.6

34.2

34.0

36.2

34.0

Average basic Card Member spending (dollars)

4,246

4,098

4,210

3,875

4,281

)

16,413

16,294

U.S. Consumer Travel:

Travel sales (millions)

810

943

1,020

988

817

)

3,761

3,774

)

Travel commissions and fees/sales

7.3

7.1

6.6

7.5

7.0

7.2

Total segment assets (P)

117.3

107.7

108.2

107.7

113.2

117.3

113.2

Segment capital (Q)

10.3

10.8

10.4

)

10.3

10.4

)

Return on average segment capital (R)

32.4

31.4

32.6

32.1

32.5

32.4

32.5

Return on average tangible segment capital (R)

33.7

32.6

33.8

33.2

33.6

33.7

33.6

Card Member receivables: (J)

Total receivables

23.3

22.0

22.1

21.5

22.5

23.3

22.5

30 days past due as a % of total

1.5

1.6

1.5

1.7

1.5

1.7

Average receivables

22.5

22.0

21.3

21.8

22.0

21.3

Net write-off rate (principal only) (N)

1.6

2.2

1.4

1.7

1.6

Net write-off rate (principal and fees) (N)

1.8

1.9

1.8

2.4

1.6

1.9

1.8

Card Member loans: (J)

Total loans

51.4

62.1

61.7

59.9

62.6

(18

)

51.4

62.6

(18

)

30 days past due loans as a % of total

1.0

0.9

1.0

Average loans

60.1

62.1

60.9

60.4

59.7

60.8

57.8

Net write-off rate (principal only) (N)

1.3

1.4

1.5

1.3

1.4

1.5

Net write-off rate (principal, interest and fees) (N)

1.6

1.5

1.6

1.7

1.5

1.6

1.7

Net interest income divided by average loans* (O)

9.1

9.2

8.9

9.1

9.0

9.1

9.0

Net interest yield on Card Member loans* (O)

9.3

9.4

9.2

9.5

9.1

9.3

9.2

* - Annualized

# - Denotes a variance of more than 100 percent.


International Card Services	(Preliminary)
Selected Income Statement Data
(Millions, except percentages)
	Quarters Ended															% Change		Years Ended						% Change
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31, 2015 vs.		Dec 31,						Dec 31, 2015 vs.
		2015			2015			2015			2015			2014		Dec 31, 2014			2015			2014		Dec 31, 2014
Revenues
Non-interest revenues	$	1,107		$	1,071		$	1,082		$	1,061		$	1,166		(5	)	$	4,321		$	4,737		(9	)
Interest income		233			226			236			244			260		(10	)		939			1,085		(13	)
Interest expense		59			59			60			64			71		(17	)		242			330		(27	)
Net interest income		174			167			176			180			189		(8	)		697			755		(8	)
Total revenues net of interest expense		1,281			1,238			1,258			1,241			1,355		(5	)		5,018			5,492		(9	)
Provisions for losses		85			85			83			76			95		(11	)		329			370		(11	)
Total revenues net of interest expense after provisions for losses		1,196			1,153			1,175			1,165			1,260		(5	)		4,689			5,122		(8	)
Expenses
Marketing, promotion, rewards, Card Member services and other		534			500			472			437			555		(4	)		1,943			2,160		(10	)
Salaries and employee benefits and other operating expenses		587			548			559			544			704		(17	)		2,238			2,513		(11	)
Total		1,121			1,048			1,031			981			1,259		(11	)		4,181			4,673		(11	)
Pretax segment income		75			105			144			184			1		#			508			449		13
Income tax provision/(benefit)		2			16			19			50			(32	)	#			87			38		#
Segment income	$	73		$	89		$	125		$	134		$	33		#		$	421		$	411		2
Effective tax rate		2.7	%		15.2	%		13.2	%		27.2	%		#					17.1	%		8.5	%

Selected Statistical Information
(Billions, except percentages and where indicated)
Card billed business	$	32.0		$	29.6		$	30.0		$	28.7		$	34.0		(6	)	$	120.2		$	133.8		(10	)
Total cards-in-force (millions)		15.2			15.2			15.0			14.9			15.7		(3	)		15.2			15.7		(3	)
Basic cards-in-force (millions)		10.5			10.6			10.4			10.4			11.0		(5	)		10.5			11.0		(5	)
Average basic Card Member spending (dollars)	$	3,028		$	2,827		$	2,888		$	2,729		$	3,109		(3	)	$	11,459		$	12,297		(7	)

International Consumer Travel:
Travel sales (millions)	$	312		$	325		$	333		$	334		$	353		(12	)	$	1,304		$	1,422		(8	)
Travel commissions and fees/sales		6.7	%		5.8	%		6.9	%		7.2	%		7.4	%				6.7	%		6.8	%

Total segment assets (P)	$	35.4		$	34.9		$	29.2		$	29.0		$	30.7		15		$	35.4		$	30.7		15
Segment capital (Q)	$	2.9		$	3.3		$	3.5		$	3.2		$	3.0		(3	)	$	2.9		$	2.9		(1	)
Return on average segment capital (R)		13.2	%		11.9	%		13.9	%		12.7	%		13.6	%				13.2	%		13.6	%
Return on average tangible segment capital (R)		21.3	%		19.4	%		23.3	%		22.3	%		24.6	%				21.3	%		24.6	%

Card Member receivables: (J)
Total receivables	$	7.0		$	6.5		$	6.8		$	6.4		$	7.7		(9	)	$	7.0		$	7.7		(9	)
30 days past billing as a % of total		1.4	%		1.5	%		1.4	%		1.6	%		1.3	%				1.4	%		1.3	%
Net write-off rate (principal only) (N)		2.0	%		2.2	%		2.1	%		1.9	%		1.8	%				2.0	%		1.9	%
Net write-off rate (principal and fees) (N)		2.2	%		2.4	%		2.3	%		2.0	%		1.9	%				2.2	%		2.1	%

Card Member loans: (J)
Total loans	$	7.1		$	6.7		$	7.2		$	6.8		$	7.7		(8	)	$	7.1		$	7.7		(8	)
30 days past due loans as a % of total		1.6	%		1.6	%		1.6	%		1.8	%		1.6	%				1.6	%		1.6	%
Average loans	$	7.0		$	6.9		$	7.0		$	7.2		$	7.9		(11	)	$	7.0		$	8.2		(15	)
Net write-off rate (principal only) (N)		1.8	%		1.8	%		2.0	%		2.0	%		1.9	%				1.9	%		2.0	%
Net write-off rate (principal, interest and fees) (N)		2.2	%		2.3	%		2.5	%		2.5	%		2.4	%				2.4	%		2.4	%
*Net interest income divided by average loans (O)**		9.9	%		9.7	%		10.1	%		10.0	%		9.6	%				10.0	%		9.2	%
*Net interest yield on Card Member loans (O)**		10.6	%		10.5	%		10.7	%		10.9	%		10.5	%				10.6	%		10.0	%

* - Annualized
# - Denotes a variance of more than 100 percent.


Global Commercial Services	(Preliminary)
Selected Income Statement Data
(Millions, except percentages)
	Quarters Ended															% Change		Years Ended						% Change
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31, 2015 vs.		Dec 31,						Dec 31, 2015 vs.
		2015			2015			2015			2015			2014		Dec 31, 2014			2015			2014		Dec 31, 2014
Revenues
Non-interest revenues	$	860		$	858		$	924		$	871		$	1,635		(47	)	$	3,513		$	5,173		(32	)
Interest income		4			3			3			4			4		-			14			15		(7	)
Interest expense		47			44			46			48			54		(13	)		185			240		(23	)
Net interest expense		(43	)		(41	)		(43	)		(44	)		(50	)	(14	)		(171	)		(225	)	(24	)
Total revenues net of interest expense		817			817			881			827			1,585		(48	)		3,342			4,948		(32	)
Provisions for losses		33			38			42			35			50		(34	)		148			180		(18	)
Total revenues net of interest expense after provisions for losses		784			779			839			792			1,535		(49	)		3,194			4,768		(33	)
Expenses
Marketing, promotion, rewards, Card Member services and other		152			160			156			164			178		(15	)		632			682		(7	)
Salaries and employee benefits and other operating expenses		395			381			369			344			408		(3	)		1,489			1,678		(11	)
Total		547			541			525			508			586		(7	)		2,121			2,360		(10	)
Pretax segment income		237			238			314			284			949		(75	)		1,073			2,408		(55	)
Income tax provision		105			87			111			104			355		(70	)		407			865		(53	)
Segment income	$	132		$	151		$	203		$	180		$	594		(78	)	$	666		$	1,543		(57	)
Effective tax rate		44.3	%		36.6	%		35.4	%		36.6	%		37.4	%				37.9	%		35.9	%

Selected Statistical Information
(Billions, except percentages and where indicated)
Card billed business	$	45.5		$	45.0		$	46.4		$	45.3		$	47.1		(3	)	$	182.1		$	186.7		(2	)
Total cards-in-force (millions)		6.9			6.9			6.9			6.9			6.9		-			6.9			6.9		-
Basic cards-in-force (millions)		6.9			6.9			6.9			6.9			6.9		-			6.9			6.9		-
Average basic Card Member spending (dollars)	$	6,582		$	6,529		$	6,739		$	6,567		$	6,817		(3	)	$	26,420		$	26,706		(1	)

Total segment assets (P)	$	17.7		$	19.6		$	19.7		$	19.6		$	18.5		(4	)	$	17.7		$	18.5		(4	)
Segment capital (Q)	$	3.7		$	3.6		$	4.0		$	4.1		$	3.8		(2	)	$	3.7		$	3.8		(2	)
Return on average segment capital (R)		17.4	%		29.2	%		30.3	%		39.9	%		40.9	%				17.4	%		40.9	%
Return on average tangible segment capital (R)		30.8	%		51.4	%		52.8	%		70.6	%		74.4	%				30.8	%		74.4	%

Card Member receivables:
Total receivables	$	13.8		$	15.7		$	15.9		$	15.7		$	14.6		(5	)	$	13.8		$	14.6		(5	)
90 days past billing as a % of total		0.9	%		0.7	%		0.7	%		0.7	%		0.8	%				0.9	%		0.8	%
Net loss ratio (as a % of charge volume)		0.08	%		0.08	%		0.09	%		0.10	%		0.08	%				0.09	%		0.09	%

# - Denotes a variance of more than 100 percent.


Global Network & Merchant Services	(Preliminary)
Selected Income Statement Data
(Millions, except percentages)
	Quarters Ended															% Change		Years Ended						% Change
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31, 2015 vs.		Dec 31,						Dec 31, 2015 vs.
		2015			2015			2015			2015			2014		Dec 31, 2014			2015			2014		Dec 31, 2014
Revenues
Non-interest revenues	$	1,338		$	1,302		$	1,326		$	1,270		$	1,399		(4	)	$	5,236		$	5,426		(4	)
Interest income		29			26			23			20			17		71			98			52		88
Interest expense		(51	)		(42	)		(47	)		(54	)		(61	)	(16	)		(194	)		(269	)	(28	)
Net interest income		80			68			70			74			78		3			292			321		(9	)
Total revenues net of interest expense		1,418			1,370			1,396			1,344			1,477		(4	)		5,528			5,747		(4	)
Provisions for losses		16			14			13			11			35		(54	)		54			93		(42	)
Total revenues net of interest expense after provisions for losses		1,402			1,356			1,383			1,333			1,442		(3	)		5,474			5,654		(3	)
Expenses
Marketing, promotion, rewards, Card Member services and other		215			172			164			147			185		16			698			819		(15	)
Salaries and employee benefits and other operating expenses		528			461			524			488			587		(10	)		2,001			2,215		(10	)
Total		743			633			688			635			772		(4	)		2,699			3,034		(11	)
Pretax segment income		659			723			695			698			670		(2	)		2,775			2,620		6
Income tax provision		242			261			247			254			253		(4	)		1,004			960		5
Segment income	$	417		$	462		$	448		$	444		$	417		-		$	1,771		$	1,660		7
Effective tax rate		36.7	%		36.1	%		35.5	%		36.4	%		37.8	%				36.2	%		36.6	%

Selected Statistical Information
(Billions, except percentages and where indicated)
Global Card billed business (S)	$	273.2		$	258.9		$	262.0		$	245.6		$	268.5		2		$	1,039.7		$	1,022.8		2

Global Network & Merchant Services:
Total segment assets (P)	$	23.6		$	23.7		$	17.6		$	17.8		$	18.1		30		$	23.6		$	18.1		30
Segment capital (Q)	$	2.4		$	2.5		$	2.2		$	2.2		$	2.0		22		$	2.4		$	2.0		22
Return on average segment capital (R)		78.4	%		81.4	%		83.5	%		82.1	%		84.0	%				78.4	%		84.0	%
Return on average tangible segment capital (R)		86.2	%		89.5	%		92.0	%		90.6	%		92.9	%				86.2	%		92.9	%

Global Network Services:
Card billed business	$	43.9		$	41.1		$	41.9		$	39.1		$	42.5		3		$	166.0		$	160.7		3
Total cards-in-force (millions)		47.4			46.3			45.6			44.5			44.0		8			47.4			44.0		8

# - Denotes a variance of more than 100 percent.

American Express Company

(Preliminary)

Components of Return on Average Equity (ROE), Return on Average Common Equity (ROCE), and Return on Average Tangible Common Equity (ROTCE)

Appendix I

(Millions, except percentages)

For the Twelve Months Ended

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

2015

2014

ROE

Net income

5,163

5,711

5,922

5,978

5,885

Average shareholders' equity

21,494

21,349

21,050

20,606

20,254

Return on average equity (T)

24.0

26.8

28.1

29.0

29.1

Reconciliation of ROCE and ROTCE

Net income

5,163

5,711

5,922

5,978

5,885

Preferred shares dividends and related accretion

Earnings allocated to participating share awards and other

Net income attributable to common shareholders

5,063

5,626

5,858

5,933

5,839

Average shareholders' equity

21,494

21,349

21,050

20,606

20,254

Average preferred shares

1,390

1,081

716

350

114

Average common shareholders' equity

20,104

20,268

20,334

20,256

20,140

Average goodwill and other intangibles

3,782

3,796

3,802

3,845

3,888

Average tangible common shareholders' equity

16,322

16,472

16,532

16,411

16,252

Return on average common equity (T)

25.2

27.8

28.8

29.3

29.0

Return on average tangible common equity (U)

31.0

34.2

35.4

36.2

35.9

American Express Company

(Preliminary)

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

Appendix II

(Millions, except percentages)

For the Twelve Months Ended

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

2015

2014

U.S. Card Services

Segment income

3,413

3,279

3,374

3,258

3,200

Average segment capital

10,519

10,437

10,352

10,148

9,843

Average goodwill and other intangibles

395

377

358

339

319

Average tangible segment capital

10,124

10,060

9,994

9,809

9,524

Return on average segment capital (V)

32.4

31.4

32.6

32.1

32.5

Return on average tangible segment capital (V)

33.7

32.6

33.8

33.2

33.6

International Card Services

Segment income

421

381

434

386

411

Average segment capital

3,181

3,195

3,133

3,043

3,020

Average goodwill and other intangibles

1,209

1,236

1,273

1,311

1,350

Average tangible segment capital

1,972

1,959

1,860

1,732

1,670

Return on average segment capital (V)

13.2

11.9

13.9

12.7

13.6

Return on average tangible segment capital (V)

21.3

19.4

23.3

22.3

24.6

Global Commercial Services

Segment income

666

1,128

1,181

1,539

1,543

Average segment capital

3,835

3,861

3,897

3,859

3,771

Average goodwill and other intangibles

1,672

1,666

1,661

1,678

1,696

Average tangible segment capital

2,163

2,195

2,236

2,181

2,075

Return on average segment capital (V)

17.4

29.2

30.3

39.9

40.9

Return on average tangible segment capital (V)

30.8

51.4

52.8

70.6

74.4

Global Network & Merchant Services

Segment income

1,771

1,736

1,661

1,660

Average segment capital

2,260

2,177

2,080

2,024

1,976

Average goodwill and other intangibles

206

199

194

190

189

Average tangible segment capital

2,054

1,978

1,886

1,834

1,787

Return on average segment capital (V)

78.4

81.4

83.5

82.1

84.0

Return on average tangible segment capital (V)

86.2

89.5

92.0

90.6

92.9


American Express Company	(Preliminary)
Net Interest Yield on Card Member Loans
Appendix III
(Millions, except percentages and where indicated)

	Quarters Ended															Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31,
		2015			2015			2015			2015			2014			2015			2014
Consolidated:
Net interest income	$	1,547		$	1,505		$	1,423		$	1,447		$	1,424		$	5,922		$	5,472
Exclude:
Interest expense not attributable to the Company's Card Member loan portfolio	$	229		$	234		$	249		$	249		$	250		$	961		$	1,019
Interest income not attributable to the Company's Card Member loan portfolio	$	(99	)	$	(96	)	$	(97	)	$	(95	)	$	(92	)	$	(387	)	$	(359	)
Adjusted net interest income (W)	$	1,677		$	1,643		$	1,575		$	1,601		$	1,582		$	6,496		$	6,132
Average loans (billions)	$	70.9		$	69.0		$	68.0		$	67.6		$	67.7		$	69.0		$	66.0
Exclude:
Certain non-traditional Card Member loans and other fees (billions)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)	$	(0.2	)
Adjusted average loans (billions) (X)	$	70.7		$	68.8		$	67.8		$	67.4		$	67.5		$	68.8		$	65.8
*Net interest income divided by average loans (Y)**		8.7	%		8.7	%		8.4	%		8.6	%		8.4	%		8.6	%		8.3	%
*Net interest yield on Card Member loans (Z)**		9.4	%		9.5	%		9.3	%		9.6	%		9.3	%		9.4	%		9.3	%

USCS:
Net interest income	$	1,455		$	1,427		$	1,354		$	1,377		$	1,341		$	5,613		$	5,182
Exclude:
Interest expense not attributable to the Company's Card Member loan portfolio	$	43		$	42		$	41		$	38		$	39		$	164		$	157
Interest income not attributable to the Company's Card Member loan portfolio	$	(5	)	$	(4	)	$	(4	)	$	(3	)	$	(3	)	$	(16	)	$	(11	)
Adjusted net interest income (W)	$	1,493		$	1,465		$	1,391		$	1,412		$	1,377		$	5,761		$	5,328
Average loans (billions)	$	63.8		$	62.1		$	60.9		$	60.4		$	59.7		$	61.9		$	57.8
Exclude:
Certain non-traditional Card Member loans and other fees (billions)	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Adjusted average loans (billions) (X)	$	63.8		$	62.1		$	60.9		$	60.4		$	59.7		$	61.9		$	57.8
*Net interest income divided by average loans (Y)**		9.1	%		9.2	%		8.9	%		9.1	%		9.0	%		9.1	%		9.0	%
*Net interest yield on Card Member loans (Z)**		9.3	%		9.4	%		9.2	%		9.5	%		9.1	%		9.3	%		9.2	%

ICS:
Net interest income	$	174		$	167		$	176		$	180		$	189		$	697		$	755
Exclude:
Interest expense not attributable to the Company's Card Member loan portfolio	$	16		$	18		$	16		$	18		$	26		$	68		$	89
Interest income not attributable to the Company's Card Member loan portfolio	$	(9	)	$	(7	)	$	(8	)	$	(8	)	$	(9	)	$	(32	)	$	(40	)
Adjusted net interest income (W)	$	181		$	178		$	184		$	190		$	206		$	733		$	804
Average loans (billions)	$	7.0		$	6.9		$	7.0		$	7.2		$	7.9		$	7.0		$	8.2
Exclude:
Certain non-traditional Card Member loans and other fees (billions)	$	(0.1	)	$	(0.1	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	(0.1	)	$	(0.2	)
Adjusted average loans (billions) (X)	$	6.9		$	6.8		$	6.9		$	7.1		$	7.7		$	6.9		$	8.0
*Net interest income divided by average loans (Y)**		9.9	%		9.7	%		10.1	%		10.0	%		9.6	%		10.0	%		9.2	%
*Net interest yield on Card Member loans (Z)**		10.6	%		10.5	%		10.7	%		10.9	%		10.5	%		10.6	%		10.0	%

* Annualized


American Express Company														(Preliminary)
Reconciliations of Adjustments
Appendix IV
(Millions, except percentages)

	Quarters Ended					% Change		Years Ended						% Change
	Dec 31,		Dec 31,			Dec 31, 2015 vs.		Dec 31,						Dec 31, 2015 vs.
	2015			2014		Dec 31, 2014			2015			2014		Dec 31, 2014
AXP Net Income and Diluted Earnings Per Share:
Net income	$	899	$	1,447		(38	)	$	5,163		$	5,885		(12	)
EG Charge (after-tax) (AA)		335		-					335			-
Adjusted net income	$	1,234	$	1,447		(15	)	$	5,498		$	5,885		(7	)
Adjusted net income attributable to common shareholders (C)	$	1,208	$	1,436		(16	)	$	5,398		$	5,839		(8	)

Diluted net income attributable to common shareholders	$	0.89	$	1.39		(36	)	$	5.05		$	5.56		(9	)
Adjusted diluted net income attributable to common shareholders	$	1.23	$	1.39		(12	)	$	5.38		$	5.56		(3	)

Revenues Net of Interest Expense:
AXP
Reported total revenues net of interest expense	$	8,391	$	9,081		(8	)	$	32,818		$	34,188		(4	)
Global Business Travel Revenues, Net of Interest				-								(741	)
Q4'14 Gain on Sale of Concur Investment		-		(719	)				-			(719	)
Adjusted total revenues net of interest expense	$	8,391	$	8,362		-		$	32,818		$	32,728		0
FX-adjusted adjusted total revenues net of interest expense (AB)	$	8,391	$	8,100		4		$	32,818		$	31,539		4

GCS
Reported total revenues net of interest expense	$	817	$	1,585		(48	)	$	3,342		$	4,948		(32	)
Global Business Travel Revenues, Net of Interest				-								(741	)
Q4'14 Gain on Sale of Concur Investment		-		(719	)				-			(719	)
Adjusted total revenues net of interest expense	$	817	$	866		(6	)	$	3,342		$	3,488		(4	)

ROE:
Net income								$	5,163
EG Charge (after-tax) (AA)								$	335
Adjusted net income								$	5,498
Average shareholders' equity								$	21,494
Return on average equity (T)									24.0	%
Adjusted return on average equity									25.6	%


Appendix V		(Preliminary)

All Information in the preceding tables is presented on a basis prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated.
(A)	In Q1’15, the Company changed the classification related to certain payments to co-brand partners reducing both marketing and promotion and discount revenue. The misclassification in prior periods has been conformed to the current period presentation. The discount rate for prior periods has also been revised accordingly, resulting in a reduction of between zero and one basis point in any period from what was originally reported.

(B)	Beginning in Q3’15, Travel Commissions & Fees and Other Commissions & Fees are consolidated into Other Fees & Commissions.
(C)	Represents net income, less (i) earnings allocated to participating share awards of $6 million for the quarter ended December 31, 2015, $10 million for the quarter ended September 30, 2015, $11 million for the quarter ended June 30, 2015, $11 million for the quarter ended March 31, 2015 and $11 million for the quarter ended December 31, 2014; and (ii) dividends on preferred shares of $20 million for the quarter ended December 31, 2015, $22 million for the quarter ended September 30, 2015, $20 million for the quarter ended June 30, 2015 and nil for all other comparative periods.
(D)	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.
(E)	Beginning Q3’15, the calculation of Book value per common share was revised to exclude shareholders’ equity from preferred share issuances. Applicable prior periods have been revised to conform to the current period presentation.

(F)	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 issuer is located.
(G)	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 Card Members. Non-proprietary cards-in-force includes all cards that are issued and outstanding under network partnership agreements, except for retail co-brand Card Member accounts that have no out-of-store spend activity during the prior 12 month period.
(H)	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.
(I)	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 $66 million for the quarter ended December 31, 2015, $72 million for the quarter ended September 30, 2015, $62 million for the quarter ended June 30, 2015, $83 million for the quarter ended March 31, 2015, and $79 million for the quarter ended December 31, 2014. 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.
(J)	Effective December 1, 2015, the Company reclassified the Card Member loans and receivables related to its co-brand partnerships with Costco in the U.S. and JetBlue, to reflect them as held for sale on the Consolidated Balance Sheet. The loans were reclassified at their net carrying amount, inclusive of the related reserves for losses. Accordingly, related credit metrics are presented excluding the held for sale loans and receivables.

(K)	Provisions for principal (resulting from authorized transactions) and fee reserve components.
(L)	Consists of principal (resulting from authorized transactions), interest and/or fees, less recoveries.
(M)	Q4'15 includes $1 million for the Reserves transferred to held for sale. Beginning in Q1'14, reserves related for card-related fraud losses are reflected in Other liabilities. All periods include foreign currency translation adjustments and other items.
(N)	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. Beginning in January 2015, timing of charge-offs for loans in certain modification programs changed from 180 days past due to 120 days past due. Excluding the impact of the change, which was fully recognized in the first quarter, the Q1'15 USCS/ICS Charge net write-off rate – principal only was 1.9% and the USCS Lending net write-off rate - principal only was 1.4%.
(O)	See Appendix III for calculations of net interest yield on Card Member 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 Card Member loans.
(P)	Effective Q3'15, certain intercompany accounts were reclassified prospectively, as a result of systems enhancements.
(Q)	Segment capital represents capital allocated to a segment based upon specific business operational needs, risk measures, and regulatory capital requirements.
(R)	Refer to Appendix II for components of return on average segment capital and return on average tangible segment capital, a non-GAAP measure.
(S)	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.

(T)	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.
(U)	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 common 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.

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

(X)	Adjusted average loans, a non-GAAP measure, represents average Card Member loans (including loans related to the Costco and JetBlue portfolio which are classified as held for sale on the Consolidated Balance Sheets), excluding the impact of deferred card fees, net of deferred direct acquisition costs of Card Member loans, and other. The Company believes adjusted average loans is useful to investors because it is a component of net interest yield on Card Member loans.
(Y)	This calculation includes elements of total interest income and total interest expense that are not attributable to the Card Member loan portfolio, and thus is not representative of net interest yield on Card Member loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to Card Member loans, and interest expense attributable to other activities, including Card Member receivables.
(Z)	Net interest yield on Card Member 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 Card Member loans includes interest that is deemed uncollectible. For all presentations of net interest yield on Card Member loans, reserves and net write-offs related to uncollectible interest are recorded through provisions for losses - Card Member loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation. The Company believes net interest yield on Card Member loans is useful to investors because it provides a measure of profitability of the Company's Card Member loan portfolio.
(AA)	Primarily includes the impairment of goodwill and technology costs, together with some restructuring costs within Enterprise Growth.
(AB)	FX-adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (e.g., assumes the foreign exchange rates used to determine results for the three months ended December 31, 2015 apply to the period(s) against which such results are being compared). Certain amounts included in the calculations of FX-adjusted revenues and expenses, which constitute non-GAAP measures, are subject to management allocations. 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.

American Express Company
Media:
Marina H. Norville, +1-212-640-2832
marina.h.norville@aexp.com
or
Investors/Analysts:
Ken Paukowits, +1-212-640-6348
ken.f.paukowits@aexp.com
or
Toby Willard, +1-212-640-5574
sherwood.s.willardjr@aexp.com

Category Code: FR

Sequence Number: 506723

Time of Receipt (offset from UTC): 20160121T181849+0000

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