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AMERICAN EXPRESS COMPANY
CONSOLIDATED RESULTS
OF OPERATIONS
Refer to “Glossary of Selected Terminology” for the definitions
of certain key terms and related information appearing in the
tables below.
SUMMARY OF THE COMPANY’S
FINANCIAL PERFORMANCE
Years Ended December 31,
(Millions, except per share
amounts and ratio data) 2010 2009 2008
Total revenues net of interest expense $ 27,819 $ 24,523 $ 28,365
Provisions for losses $ 2,207 $ 5,313 $ 5,798
Expenses $ 19,648 $ 16,369 $ 18,986
Income from continuing operations $ 4,057 $ 2,137 $ 2,871
Net income $ 4,057 $ 2,130 $ 2,699
Earnings per common share from
continuing operations — diluted
(a)
$ 3.35 $ 1.54 $ 2.47
Earnings per common share — diluted
(a)
$ 3.35 $ 1.54 $ 2.32
Return on average equity
(b)
27.5% 14.6% 22.3%
Return on average tangible common
equity
(c)
35.1% 17.6% 28.0%
(a) Earnings per common share from continuing operations — diluted and
Earnings per common share — diluted were both reduced by the impact
of (i) accelerated preferred dividend accretion of $212 million for the year
ended December 31, 2009, due to the repurchase of $3.39 billion of preferred
shares issued as part of the Capital Purchase Program (CPP), (ii) preferred
share dividends and related accretion of $94 million for the year ended
December 31, 2009, and (iii) earnings allocated to participating share awards
and other items of $51 million, $22 million and $15 million for the years
ended December 31, 2010, 2009 and 2008, respectively.
(b) ROE is calculated by dividing (i) one-year period net income ($4.1 billion,
$2.1 billion and $2.7 billion for 2010, 2009 and 2008, respectively) by
(ii) one-year average total shareholders’ equity ($14.8 billion, $14.6 billion
and $12.1 billion for 2010, 2009 and 2008, respectively).
(c) Return on average tangible common equity is computed in the same manner
as ROE except the computation of average tangible common equity excludes
from average total shareholders’ equity average goodwill and other
intangibles of $3.3 billion, $3.0 billion and $2.5 billion as of December 31,
2010, 2009 and 2008, respectively.
SELECTED STATISTICAL INFORMATION
Years Ended December 31,
(Billions, except percentages
and where indicated) 2010 2009 2008
Card billed business:
United States $ 479.3 $ 423.7 $ 471.1
Outside the United States 234.0 196.1 212.2
Total $ 713.3 $ 619.8 $ 683.3
Total cards-in-force (millions)
(a)
United States 48.9 48.9 54.0
Outside the United States 42.1 39.0 38.4
Total 91.0 87.9 92.4
Basic cards-in-force (millions)
(a)
United States 37.9 38.2 42.0
Outside the United States 37.4 34.3 33.4
Total 75.3 72.5 75.4
Average discount rate 2.55% 2.54% 2.55%
Average basic cardmember
spending (dollars)
(b)
$ 13,259 $ 11,213 $ 12,025
Average fee per card (dollars)
(b)
$38$36$34
Average fee per card adjusted (dollars)
(b)
$41$40$39
(a) As previously discussed, in the third quarter of 2010 the definition of
cards-in-force was changed for certain retail co-brand cards in GNS. The
change caused a reduction of 1.6 million to reported cards-in-force in the
third quarter.
(b) Average basic cardmember spending and average fee per card are computed
from proprietary card activities only. Average fee per card is computed based
on net card fees, including the amortization of deferred direct acquisition
costs, plus card fees included in interest and fees on loans (including related
amortization of deferred direct acquisition costs), divided by average
worldwide proprietary cards-in-force. The card fees related to
cardmember loans included in interest and fees on loans were
$220 million, $186 million and $146 million for the years ended
December 31, 2010, 2009 and 2008, respectively. The adjusted average
fee per card is computed in the same manner, but excludes amortization
of deferred direct acquisition costs (a portion of which is charge card related
and included in net card fees and a portion of which is lending related and
included in interest and fees on loans). The amount of amortization excluded
was $207 million, $243 million and $320 million for the years ended
December 31, 2010, 2009 and 2008, respectively. The Company presents
adjusted average fee per card because management believes that this metric
presents a useful indicator of card fee pricing across a range of its proprietary
card products.
31
AMERICAN EXPRESS COMPANY
2010 FINANCIAL REVIEW