American Express 2012 Annual Report Download - page 99

AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18
EARNINGS PER COMMON SHARE (EPS)
The computations of basic and diluted EPS for the years ended
December 31 were as follows:
(Millions, except per share amounts) 2012 2011 2010
Numerator:
Basic and diluted:
Income from continuing operations $ 4,482 $ 4,899 $ 4,057
Earnings allocated to participating
share awards(a) (49) (58) (51)
Income from discontinued operations,
net of tax —36 —
Net income attributable to
common shareholders $ 4,433 $ 4,877 $ 4,006
Denominator:(a)
Basic: Weighted-average common stock 1,135 1,178 1,188
Add: Weighted-average stock options(b) 667
Diluted 1,141 1,184 1,195
Basic EPS:
Income from continuing operations
attributable to common shareholders $3.91$ 4.11 $ 3.37
Income from discontinued operations —0.03 —
Net income attributable to common
shareholders $3.91$ 4.14 $ 3.37
Diluted EPS:
Income from continuing operations
attributable to common shareholders $3.89$ 4.09 $ 3.35
Income from discontinued operations —0.03 —
Net income attributable to common
shareholders $3.89$ 4.12 $ 3.35
(a) 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
exclude from the numerator any dividends paid or owed on participating
securities and any undistributed earnings considered to be attributable to
participating securities. The related participating securities are similarly
excluded from the denominator.
(b) For the years ended December 31, 2012, 2011 and 2010, the dilutive effect of
unexercised stock options excludes 8 million, 19 million and 36 million
options, respectively, from the computation of EPS because inclusion of the
options would have been anti-dilutive.
For the years ended December 31, 2012, 2011 and 2010, the
Company met specified performance measures related to the
Subordinated Debentures of $750 million issued in 2006, which
resulted in no impact to EPS. If the performance measures were
not achieved in any given quarter, the Company would be
required to issue common shares and apply the proceeds to make
interest payments.
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) 2012 2011 2010
Foreign currency conversion revenue $ 855 $ 861 $ 838
Delinquency fees 604 567 605
Service fees 362 355 328
Other 496 486 260
Total other commissions and fees $ 2,317 $ 2,269 $ 2,031
The following is a detail of other revenues for the years ended
December 31:
(Millions) 2012 2011 2010
Global Network Services partner revenues $ 664 $ 655 $ 530
Net gain (loss) on investment securities 126 16 (5)
Other 1,662 1,493 1,402
Total other revenues $ 2,452 $ 2,164 $ 1,927
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, Travelers Cheques related
revenues, 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) 2012 2011 2010
Marketing and promotion $ 2,890 $ 2,996 $ 3,147
Cardmember rewards 6,282 6,218 5,000
Cardmember services 799 716 591
Total marketing, promotion, rewards
and cardmember services $ 9,971 $ 9,930 $ 8,738
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) and co-brand arrangements. Cardmember services
expense includes protection plans and complimentary services
provided to cardmembers.
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