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AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
RECENTLY ISSUED ACCOUNTING STANDARDS
Refer to the Recently Issued Accounting Standards section of Note 1 to the Consolidated Financial Statements.
GLOSSARY OF SELECTED TERMINOLOGY
Adjusted average loans — Represents average Card Member loans excluding the impact of certain non-traditional Card Member loans and
other fees.
Adjusted net interest income — Represents net interest income attributable to our Card Member loans portfolio excluding the impact of
interest expense and interest income not attributable to our Card Member loans portfolio.
Asset securitizations — Asset securitization involves the transfer and sale of receivables or loans to a special-purpose entity created for the
securitization activity, typically a trust. The trust, in turn, issues securities, commonly referred to as asset-backed securities that are secured
by the transferred receivables or loans. The trust uses the proceeds from the sale of such securities to pay the purchase price for the
underlying receivables or loans. The receivables and loans of our Charge Trust and Lending Trust being securitized are reported as assets on
our Consolidated Balance Sheets.
Average discount rate — This calculation is generally designed to reflect pricing at merchants accepting general purpose American Express
cards. It represents the percentage of billed business (generated from both proprietary and GNS Card Member spend) retained by us from
merchants we acquire or, for merchants acquired by a third party on our behalf, net of amounts retained by such third party.
Basel III supplementary leverage ratio — Refer to the Capital Strategy section under “Consolidated Capital Resources and Liquidity” for
the definition.
Basic cards-in-force — 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 basic cards-in-force includes cards that are issued and
outstanding under network partnership agreements, except for supplemental cards and retail co-brand Card Member accounts which have
had no out-of-store spend activity during the prior 12-month period.
Billed business — Includes activities (including cash advances) related to proprietary cards, cards issued under network partnership
agreements (non-proprietary billed business), corporate payments and certain insurance fees charged on proprietary cards. In-store spend
activity within retail co-brand portfolios in GNS, from which we earn no revenue, is not included in non-proprietary billed business. Card
billed business is included in the U.S. or outside the U.S. based on where the issuer is located.
Capital ratios — Represents the minimum standards established by the regulatory agencies as a measure to determine whether the
regulated entity has sufficient capital to absorb on- and off-balance sheet losses beyond current loss accrual estimates.
Card Member — The individual holder of an issued American Express-branded charge, credit card and certain prepaid cards.
Card Member loans — Represents the outstanding amount due from Card Members for charges made on their American Express credit
cards, as well as any interest charges and card-related fees. Card Member loans also include revolving balances on certain American Express
charge card products.
Card Member receivables — Represents the outstanding amount due from Card Members for charges made on their American Express
charge cards as well as any card-related fees.
Charge cards — Represents cards that generally carry no pre-set spending limits and are primarily designed as a method of payment and
not as a means of financing purchases. Charge Card Members generally must pay the full amount billed each month. No finance charges are
assessed on charge cards. Each charge card transaction is authorized based on its likely economics reflecting a customer’s most recent credit
information and spend patterns. Some charge card accounts have an additional lending-on-charge feature that allows revolving certain
balances.
Common Equity Tier 1 risk-based capital ratio — Refer to the Capital Strategy section under “Consolidated Capital Resources and
Liquidity” for the definitions under Transitional Basel III and Fully Phased-in Basel III.
Credit cards — Represents cards that have a range of revolving payment terms, grace periods, and rate and fee structures.
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