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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) 2013 2012 2011
Numerator:
Basic and diluted:
Income from continuing operations $ 5,359 $ 4,482 $ 4,899
Earnings allocated to participating share
awards(a) (47) (49) (58)
Income from discontinued operations, net
of tax —— 36
Net income attributable to
common shareholders $ 5,312 $ 4,433 $ 4,877
Denominator:(a)
Basic: Weighted-average common stock 1,082 1,135 1,178
Add: Weighted-average stock options(b) 766
Diluted 1,089 1,141 1,184
Basic EPS:
Income from continuing operations
attributable to common shareholders $ 4.91 $ 3.91 $ 4.11
Income from discontinued operations —— 0.03
Net income attributable to common
shareholders $ 4.91 $ 3.91 $ 4.14
Diluted EPS:
Income from continuing operations
attributable to common shareholders $ 4.88 $ 3.89 $ 4.09
Income from discontinued operations —— 0.03
Net income attributable to common
shareholders $ 4.88 $ 3.89 $ 4.12
(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, 2013, 2012 and 2011, the dilutive effect of
unexercised stock options excludes 0.1 million, 7.6 million and 19.2 million
options, respectively, from the computation of EPS because inclusion of the
options would have been anti-dilutive.
For the years ended December 31, 2013, 2012 and 2011, 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) 2013 2012 2011
Foreign currency conversion revenue $ 877 $ 855 $ 861
Delinquency fees 667 604 567
Service fees 375 362 355
Other(a) 495 496 486
Total other commissions and fees $ 2,414 $ 2,317 $ 2,269
(a) Other primarily includes fee revenue from the Loyalty Partner business and
fees related to Membership Rewards programs.
The following is a detail of other revenues for the years ended
December 31:
(Millions) 2013 2012 2011
Global Network Services partner
revenues $ 650 $ 664 $ 655
Net gain on investment securities 136 126 16
Other(a) 1,488 1,635 1,493
Total other revenues $ 2,274 $ 2,425 $ 2,164
(a) Other includes revenues arising from insurance premiums earned from Card
Member 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 Card
Member services for the years ended December 31:
(Millions) 2013 2012 2011
Marketing and promotion $ 3,043 $ 2,890 $ 2,996
Card Member rewards 6,457 6,282 6,218
Card Member services 767 772 716
Total marketing, promotion, rewards
and Card Member services $ 10,267 $ 9,944 $ 9,930
Marketing and promotion expense includes advertising costs, which
are expensed in the year in which the advertising first takes place.
Card Member rewards expense includes the costs of rewards
programs, including Membership Rewards and co-brand
arrangements. Card Member services expense includes protection
plans and complimentary services provided to Card Members.
The following is a detail of other, net for the years ended December 31:
(Millions) 2013 2012 2011
Professional services $ 3,102 $ 2,963 $ 2,951
Occupancy and equipment 1,904 1,823 1,685
Communications 379 383 378
MasterCard and Visa settlements, net of
legal fees —— (562)
Other(a) 1,133 1,404 1,260
Total other, net $ 6,518 $ 6,573 $ 5,712
(a) Other expense includes general operating expenses, gains (losses) on sale of
assets or businesses not classified as discontinued operations, litigation,
certain internal and regulatory review-related reimbursements and insurance
costs or settlements, investment impairments and certain Loyalty Partner
expenses.
96