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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18
EARNINGS PER COMMON SHARE
The computations of basic and diluted EPS for the years ended
December 31 were as follows:
(Millions, except per share amounts) 2011 2010 2009
Numerator:
Basic and diluted:
Income from continuing operations $ 4,899 $ 4,057 $ 2,137
Preferred shares dividends, accretion
and recognition of remaining
unaccreted dividends(a) –– (306)
Earnings allocated to participating
share awards and other items(b) (58) (51) (22)
Income (loss) from
discontinued operations, net of tax 36 –(7)
Net income attributable to
common shareholders $ 4,877 $ 4,006 $ 1,802
Denominator:
Basic: Weighted-average common stock 1,178 1,188 1,168
Add: Weighted-average stock options
and warrants(c) 673
Diluted 1,184 1,195 1,171
Basic EPS:
Income from continuing operations
attributable to common shareholders $4.11$ 3.37 $ 1.55
Income (loss) from discontinued
operations 0.03 – (0.01)
Net income attributable to common
shareholders $4.14$ 3.37 $ 1.54
Diluted EPS:
Income from continuing operations
attributable to common shareholders $4.09$ 3.35 $ 1.54
Income (loss) from discontinued
operations 0.03 ––
Net income attributable to common
shareholders $4.12$ 3.35 $ 1.54
(a) Includes the 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 on June 17, 2009 issued as part of the CPP. Also includes
$74 million of preferred dividends paid and $20 million of preferred
dividend accretion during 2009.
(b) The Company’s unvested restricted stock awards, which include the right to
receive non-forfeitable dividends or dividend equivalents, are considered
participating securities. Calculations of EPS under the two-class method
(i) exclude any dividends paid or owed on participating securities and any
undistributed earnings considered to be attributable to participating
securities from the numerator and (ii) exclude the participating securities
from the denominator.
(c) For the years ended December 31, 2011, 2010 and 2009, the dilutive effect of
unexercised stock options excludes 19 million, 36 million and 71 million
options, respectively, from the computation of EPS because inclusion of the
options would have been anti-dilutive.
Subordinated debentures of $750 million issued by the Company
in 2006 would affect the EPS computation only in the unlikely
event the Company fails to achieve specified performance
measures related to the Company’s tangible common equity and
consolidated net income. In that circumstance the Company
would reflect the additional common shares in the EPS
computation.
NOTE 19
DETAILS OF CERTAIN CONSOLIDATED
STATEMENTS OF INCOME LINES
The following is a detail of other commissions and fees for the
years ended December 31:
(Millions) 2011 2010 2009
Foreign currency conversion revenue $ 861 $ 838 $ 672
Delinquency fees 567 605 526
Service fees 355 328 335
Other 486 260 245
Total other commissions and fees $ 2,269 $ 2,031 $ 1,778
The following is a detail of other revenues for the years ended
December 31:
(Millions) 2011 2010 2009
Global Network Services partner revenues $ 655 $ 530 $ 463
Insurance premium revenue 241 255 293
Gain (Loss) on investment securities 16 (5) 225
Other 1,252 1,147 1,109
Total other revenues $ 2,164 $ 1,927 $ 2,090
Other revenues include revenues arising from contracts with
Global Network Services (GNS) partners including royalties and
signing fees, insurance premiums earned from cardmember
travel and other insurance programs, publishing revenues and
other miscellaneous revenue and fees.
The following is a detail of marketing, promotion, rewards and
cardmember services for the years ended December 31:
(Millions) 2011 2010 2009
Marketing and promotion $ 2,996 $ 3,147 $ 2,010
Cardmember rewards 6,218 5,000 4,005
Cardmember services 716 591 548
Total marketing, promotion, rewards
and cardmember services $ 9,930 $ 8,738 $ 6,563
Marketing and promotion expense includes advertising costs,
which are expensed in the year in which the advertising first
takes place. Cardmember rewards expense includes the costs of
rewards programs (including Membership Rewards, discussed in
Note 11). Cardmember services expense includes protection
plans and complimentary services provided to cardmembers.
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