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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 1-7657
AMERICAN EXPRESS COMPANY
------------------------
(Exact name of registrant as specified in its charter)
New York State 13-4922250
- ----------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
World Financial Center, 200 Vesey Street, New York, NY 10285
- --------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 640-2000
------------------
None
- ---------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 31, 1996
- -------------------------------- -------------------------------
Common Shares (par value $.60 per share) 473,870,465 shares
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AMERICAN EXPRESS COMPANY
FORM 10-Q
INDEX
Part I. Financial Information:
Consolidated Statement of Income--Three and 1-2
nine months ended September 30, 1996 and 1995
Consolidated Balance Sheet--September 30, 3
1996 and December 31, 1995
Consolidated Statement of Cash Flows--Nine 4
months ended September 30, 1996 and 1995
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of 6-17
Financial Condition and Results of Operations
Review Report of Independent Accountants 18
Part II. Other Information 19
PART I--FINANCIAL INFORMATION
AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
------------------
1996 1995
Net Revenues: --------- ---------
Discount revenue $ 1,256 $ 1,116
Interest and dividends, net 796 896
Net card fees 418 439
Travel commissions and fees 316 316
Other commissions and fees 320 323
Management and distribution fees 302 241
Cardmember lending net finance charge 255 270
revenue
Insurance premiums 99 218
Other 294 235
------ ------
Total 4,056 4,054
------ ------
Expenses:
Human resources 1,103 1,010
Provisions for losses and benefits:
Annuities and investment certificates 348 358
Life insurance and other 134 226
Charge card 172 207
Cardmember lending 107 132
Interest:
Charge card 175 169
Other 94 141
Occupancy and equipment 281 271
Marketing and promotion 293 261
Professional services 212 208
Communications 119 101
Other 397 399
------ ------
Total 3,435 3,483
------ ------
Pretax income 621 571
Income tax provision 163 155
------ ------
Net income $ 458 $ 416
======= =======
Net income per common share $ 0.95 $ 0.83
======= =======
Average common and common equivalent
shares outstanding 481.9 496.5
======= =======
Cash dividends declared per
common share $ 0.225 $ 0.225
======= =======
See notes to Consolidated Financial Statements.
1
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AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30,
---------------------
1996 1995
---------- ---------
Net Revenues:
Discount revenue $ 3,644 $ 3,246
Interest and dividends, net 2,478 2,642
Net card fees 1,253 1,311
Travel commissions and fees 943 931
Other commissions and fees 935 959
Management and distribution fees 878 673
Cardmember lending net finance charge 779 758
revenue
Insurance premiums 295 634
Other 777 638
------ ------
Total 11,982 11,792
------ ------
Expenses:
Human resources 3,177 3,000
Provisions for losses and benefits:
Annuities and investment certificates 1,045 1,037
Life insurance and other 403 652
Charge card 630 571
Cardmember lending 421 364
Interest:
Charge card 513 495
Other 356 437
Occupancy and equipment 830 795
Marketing and promotion 762 755
Professional services 609 584
Communications 329 301
Other 1,086 1,160
------ ------
Total 10,161 10,151
------ ------
Pretax income 1,821 1,641
Income tax provision 514 462
------ -------
Net income $ 1,307 $ 1,179
======= =======
Net income per common share $ 2.68 $ 2.34
======= =======
Average common and common equivalent
shares outstanding 486.6 499.4
======== =======
Cash dividends declared per
common share $ 0.675 $0.675
======= =======
See notes to Consolidated Financial Statements.
2
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AMERICAN EXPRESS COMPANY
CONSOLIDATED BALANCE SHEET
(millions)
(Unaudited)
September 30, December 31,
Assets 1996 1995
- ------ ------------ ------------
Cash and cash equivalents $ 4,884 $ 3,200
Accounts receivable and accrued interest:
Cardmember receivables, less reserves:
1996, $759; 1995, $753 16,080 17,154
Other receivables, less reserves:
1996, $53; 1995, $76 2,380 2,760
Investments 39,306 42,561
Loans:
Cardmember lending, less reserves:
1996, $420; 1995, $489 10,571 10,268
International banking, less reserves:
1996, $116; 1995, $111 5,524 5,317
Other, net 538 506
Separate account assets 17,485 14,974
Deferred acquisition costs 2,519 2,262
Land, buildings and equipment--at cost, less
accumulated depreciation: 1996, $1,838;
1995, $1,763 1,666 1,783
Other assets 5,714 6,620
-------- --------
Total assets $106,667 $107,405
======== ========
Liabilities and Shareholders' Equity
- ------------------------------------
Customers' deposits $ 9,550 $ 9,889
Travelers Cheques outstanding 6,340 5,697
Accounts payable 4,477 4,686
Insurance and annuity reserves:
Fixed annuities 21,625 21,405
Life and disability policies 3,891 3,752
Investment certificate reserves 3,177 3,606
Short-term debt 16,901 17,654
Long-term debt 8,233 7,570
Separate account liabilities 17,485 14,974
Other liabilities 6,745 9,952
-------- -------
Total liabilities 98,424 99,185
Shareholders' equity:
Preferred shares, $1.66 2/3 par value,
authorized 20 million shares
Convertible Exchangeable Preferred shares,
issued and outstanding 4 million
shares at December 31, 1995, stated at
liquidation value - 200
Common shares, $.60 par value, authorized
1.2 billion shares; issued and outstanding
473.5 million shares in 1996 and 483.1
million shares in 1995 284 290
Capital surplus 3,907 3,781
Net unrealized securities gains 577 875
Foreign currency translation adjustment (91) (85)
Retained earnings 3,566 3,159
-------- ---------
Total shareholders' equity 8,243 8,220
-------- ---------
Total liabilities and shareholders' equity $106,667 $107,405
======== =========
See notes to Consolidated Financial Statements.
3
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AMERICAN EXPRESS COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(millions)
(Unaudited)
Nine Months Ended
September 30,
-------------------
1996 1995
---- ----
Cash Flows from Operating Activities
Net income $1,307 $1,179
Adjustments to reconcile net income to
net cash provided by operating activities:
Provisions for losses and benefits 1,490 1,463
Depreciation, amortization, deferred taxes and
other 202 237
Changes in operating assets and liabilities,
net of effects of acquisitions and dispositions:
Accounts receivable and accrued interest 477 (410)
Other assets 688 104
Accounts payable and other liabilities (1,066) (445)
Increase in Travelers Cheques outstanding 643 1,438
Increase in insurance reserves 154 364
------ ------
Net cash provided by operating activities 3,895 3,930
------ ------
Cash Flows from Investing Activities
Sale of investments 3,921 2,015
Maturity and redemption of investments 4,797 3,538
Purchase of investments (8,015) (7,200)
Net increase in Cardmember receivables (941) (1,695)
Proceeds from repayment of loans 16,703 15,963
Cardmember receivables/loans sold to Trust 2,242 -
Issuance of loans (18,811) (17,183)
Purchase of land, buildings and equipment (299) (224)
Sale of land, buildings and equipment 223 19
Acquisitions, net of cash acquired/sold - (7)
------ ------
Net cash used by investing activities (180) (4,774)
------ ------
Cash Flows from Financing Activities
Net decrease in customers' deposits (215) (604)
Sale of annuities and investment certificates 4,053 4,907
Redemption of annuities and investment (4,403) (3,166)
certificates
Net increase (decrease) in debt with maturities of
3 months or less 5,233 (4,732)
Issuance of debt 8,797 15,412
Principal payments on debt (14,381) (9,064)
Issuance of American Express common shares 116 202
Repurchase of American Express common shares (886) (665)
Dividends paid (330) (344)
------ -----
Net cash (used) provided by financing activities (2,016) 1,946
Effect of exchange rate changes on cash (15) 42
----- -----
Net increase in cash and cash equivalents 1,684 1,144
Cash and cash equivalents at beginning of period 3,200 3,433
----- -----
Cash and cash equivalents at end of period $4,884 $4,577
====== ======
See notes to Consolidated Financial Statements.
4
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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
1. The consolidated financial statements should be read in conjunction
with the financial statements presented in the Annual Report on Form 10-
K of American Express Company (the "Company" or "American Express") for the
year ended December 31, 1995. Certain prior year's amounts have been
reclassified to conform to the current year's presentation.
Significant accounting policies disclosed therein have not changed.
The consolidated financial statements are unaudited; however, in the
opinion of management, they include all normal recurring adjustments
necessary for a fair presentation of the consolidated financial
position of the Company at September 30, 1996 and December 31, 1995,
the consolidated results of its operations for the three and nine
months ended September 30, 1996 and 1995 and cash flows for the nine
months ended September 30, 1996 and 1995. Results of operations
reported for interim periods are not necessarily indicative of results
for the entire year.
2. Cardmember Lending Net Finance Charge Revenue is presented net of
interest expense of $122 million and $126 million for the three months
ended September 30, 1996 and 1995, respectively, and $373 million and
$368 million for the nine months ended September 30, 1996 and 1995,
respectively. Interest and Dividends is presented net of interest
expense of $128 million and $140 million for the three months ended
September 30, 1996 and 1995, respectively, and $396 million and $450
million for the nine months ended September 30, 1996 and 1995,
respectively, related to the Company's international banking
operations.
3. The following is a summary of investments:
September 30, December 31,
(In millions) 1996 1995
-------------- -------------
Held to Maturity, at amortized cost
(fair value: 1996, $13,539; 1995,
$17,549) $13,317 $16,790
Available for Sale, at fair value
(cost: 1996, $19,998; 1995, $20,452)
21,802 22,435
Investment mortgage loans (fair value:
1996, $3,714; 1995, $3,434)
3,672 3,180
Trading 515 156
------- -------
$39,306 $42,561
======= =======
4. Net income taxes paid during the nine months ended September 30, 1996
and 1995 were approximately $455 million and $475 million,
respectively. Interest paid during the nine months ended September 30,
1996 and 1995 was approximately $1.8 billion.
5
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Consolidated Results Of Operations For The Three and Nine Months Ended
September 30, 1996 and 1995
The Company's consolidated net income increased 10 percent and 11 percent
in the quarter and nine months ended September 30, 1996, respectively,
compared with a year ago. Net income per share in the third quarter and
first nine months of 1996 rose by 14 percent and 15 percent, respectively,
reflecting higher revenues, improved margins and a reduction in average
shares outstanding. Excluding AMEX Life Assurance Company (AMEX Life), a
subsidiary that was sold in October 1995, consolidated revenues increased
4 percent and 6 percent in the quarter and nine months ended September 30,
1996, respectively, compared with last year. Proceeds from this sale were
used to fund a portion of the Company's share repurchase program which is
discussed below.
Consolidated Liquidity and Capital Resources
On October 28, 1996, the Company's Board of Directors approved a plan to
repurchase up to 40 million common shares over the next two to three
years, from time to time as market conditions allow. The plan is
primarily designed to allow the Company to offset share issuances under
employee compensation plans. Under certain conditions, the Company may
purchase additional shares to increase economic value for shareholders.
As of October 31, 1996, the Company had repurchased 57.7 million shares at
an average price of $38.19 per share under two previously authorized share
repurchase plans. The total authorization under those plans was 60
million shares.
During the nine months ended September 30, 1996, 2.3 million put options
issued in connection with the two prior share repurchase programs expired
unexercised. At September 30, 1996, the Company had a total of 500,000
put options outstanding with a weighted average strike price of $41.74 per
share. These options expired unexercised in October 1996.
On October 15, 1996, the Company completed the exchange of its DECS (Debt
Exchangeable for Common Stock) for shares of common stock of First Data
Corporation (FDC). Prior to the exchange, the Company had outstanding
23,618,500 DECS. Based on the appreciation of FDC shares during the three-
year term of the DECS, holders received 0.819 FDC shares for each DECS
held, or 19,343,536 FDC shares. As a result of the exchange, the
Company's holdings in FDC were reduced to 3,274,964 shares. In the fourth
quarter of 1996, the Company will recognize a $480 million pretax ($300
million after-tax) gain on the exchange.
On May 6, 1996, after receiving a redemption notice from the Company,
Nippon Life Insurance Company converted all of its four million $3.875
Convertible Exchangeable Preferred shares into 4,705,882 of the Company's
common shares. For purposes of computing earnings per common share, the
increase in outstanding common shares was offset by the elimination of the
preferred dividend. As a result, the conversion has no impact on earnings
per common share.
6
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<PAGE>
Travel Related Services
Results of Operations For The Three and Nine Months Ended September 30,
1996 and 1995
<TABLE>
<CAPTION>
Statement of Income
-------------------
(Unaudited)
(Dollars in millions)
Three Months Ended Nine Months Ended
September 30, Percentage September 30, Percentage
----------------- ---------------
1996 1995 Inc/(Dec) 1996 1995 Inc/(Dec)
---------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Discount Revenue $1,256 $1,116 12.5% $3,644 $3,246 12.3%
Net Card Fees 418 439 (4.6) 1,253 1,311 (4.4)
Travel Commissions and Fees 316 316 0.1 943 931 1.3
Interest and Dividends 167 261 (36.3) 568 761 (25.3)
Other Revenues 508 570 (10.9) 1,384 1,608 (14.0)
---------------- ---------------
2,665 2,702 (1.4) 7,792 7,857 (0.8)
---------------- ---------------
Lending:
Finance Charge Revenue 377 396 (4.9) 1,152 1,126 2.3
Interest Expense 122 126 (3.0) 373 368 1.5
---------------- ---------------
Net Finance Charge
Revenue 255 270 (5.7) 779 758 2.8
---------------- ---------------
Total Net Revenues 2,920 2,972 (1.8) 8,571 8,615 (0.5)
---------------- ---------------
Expenses:
Marketing and Promotion 278 252 10.3 730 731 (0.2)
Provision for Losses and
Claims:
Charge Card 172 207 (16.8) 630 571 10.4
Lending 107 132 (18.8) 421 364 15.9
Other 28 137 (79.9) 79 382 (79.6)
----------------- ----------------
Total 307 476 (35.4) 1,130 1,317 (14.2)
----------------- ----------------
Interest Expense:
Charge Card 175 169 3.5 513 495 3.5
Other 72 114 (36.4) 282 338 (16.3)
----------------- ----------------
Total 247 283 (12.5) 795 833 (4.5)
Net Discount Expense 128 101 26.5 379 309 22.9
Human Resources 764 700 9.1 2,190 2,098 4.4
Other Operating Expenses 755 752 0.2 2,031 2,119 (4.1)
----------------- ----------------
Total Expenses 2,479 2,564 (3.3) 7,255 7,407 (2.1)
----------------- ----------------
Pretax Income 441 408 8.2 1,316 1,208 8.9
Income Tax Provision 118 111 6.5 384 349 10.1
----------------- ----------------
Net Income $323 $297 8.8 $932 $859 8.5
================= ================
</TABLE>
7<PAGE>
<PAGE>
<TABLE>
<CAPTION>
The impact on the Statement of Income related to TRS' securitized receivables
and loans was as follows:
<S> <C> <C> <C> <C>
Increase Net Card Fees $4 - $4 -
Increase Other Revenues 45 $20 120 $63
Decrease Lending Finance
Charge Revenue (43) - (76) -
Decrease Lending Interest
Expense 17 - 25 -
Decrease Provision for
Losses and Claims:
Charge Card 51 40 160 124
Lending 11 - 22 -
Decrease Interest Expense:
Charge Card 43 41 124 122
Increase Net Discount
Expense (128) (101) (379) (309)
--------------- ----------------
Pretax Income $0 $0 $0 $0
=============== ================
Travel Related Services
</TABLE>
<TABLE>
<CAPTION>
Selected Statistical Information
--------------------------------
(Unaudited)
(Amounts in billions, except
percentages and where indicated)
Three Months Ended Nine Months Ended
September 30, Percentage September 30, Percentage
------------------ ------------------
1996 1995 Inc/(Dec) 1996 1995 Inc/(Dec)
----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Cards in Force (millions):
United States 28.4 25.9 9.4% 28.4 25.9 9.4%
Outside the United States* 11.9 11.5 4.1 11.9 11.5 4.1
------------ ----------------
Total 40.3 37.4 7.8 40.3 37.4 7.8
============ ================
Basic Cards in Force (millions):
United States 21.7 19.4 12.0 21.7 19.4 12.0
Outside the United States* 9.4 9.0 4.2 9.4 9.0 4.2
------------ ----------------
Total 31.1 28.4 9.5 31.1 28.4 9.5
============ ================
Card Billed Business:
United States $32.7 $29.2 11.8 $94.8 $83.9 13.0
Outside the United States* 13.2 11.8 12.4 38.4 34.6 10.9
------------- ----------------
Total $45.9 $41.0 12.0 $133.2 $118.5 12.4
============= ================
Travelers Cheque Sales $8.6 $8.3 3.2 $20.5 $20.5 -
Average Travelers Cheques
Outstanding $6.6 $6.7 (1.8) $6.1 $6.0 1.0
Travel Sales $3.8 $3.7 4.1 $11.5 $11.0 3.9
* Both years include Cards issued by strategic alliance partners
and independent operators as well as business billed on those Cards.
8
<PAGE>
<PAGE>
Travel Related Services' ("TRS") 1995 results included income from AMEX
Life. Excluding AMEX Life results from the three and nine month periods
ended September 30, 1995, TRS' net income grew approximately 13 percent in
both periods, revenues increased approximately 4 percent and 5 percent,
respectively, and expenses were up approximately 2 percent and 4 percent,
respectively.
For the three and nine months ended September 30, 1996, net revenues
reflected higher worldwide billed business on American Express Cards and
growth in Cardmember loans outstanding. The rise in billed business
resulted from greater spending per Cardmember, due in part to the benefits
of rewards programs and broader merchant coverage, and an increase in the
number of Cards outstanding. These improvements were partially offset by
a decrease in net Card fees consistent with TRS' strategy of expanding its
lending portfolio through the issuance of low- and no-fee credit cards.
Lending net finance charge revenue reflects the effect of the $1 billion
asset securitization completed in the second quarter of 1996 (see TRS'
Liquidity and Capital Resources discussion). Excluding this asset
securitization, lending net finance charge revenue rose 4 percent and 9
percent for the three and nine months ended September 30, 1996,
respectively, reflecting higher average loan balances, but lower net
interest spreads on introductory interest rates on new products. Interest
and dividends and other revenues declined primarily as a result of the
sale of AMEX Life. In addition, the decline in the third quarter also
reflects a lower level of investments due to a change in investment
strategy related to consolidation of certain legal entities within the
U.S. Consumer Lending business. This effect was offset by an equal
reduction in other interest expense.
Credit quality has improved since last year, particularly in Latin
America. Accordingly, the provision for losses for both charge and
lending products declined significantly during the third quarter.
Management expects the amount of the fourth quarter provision to be
similar to that of the third quarter.* The Charge Card provision for
losses rose in the nine month period primarily due to volume growth. The
lending provision for losses was higher for the nine month period because
of higher loss rates earlier in the year and volume growth. The other
provision for losses declined with the sale of AMEX Life. In the third
quarter of 1996, operating expenses increased from last year, primarily
relating to the cost of Cardmember loyalty programs, business growth and
investment spending.
* This is a forward-looking statement. See Part II, Item 5 of this 10-Q
report for certain risks and uncertainties relating to such statement.
9
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<PAGE>
Travel Related Services
Liquidity and Capital Resources
Selected Balance Sheet Information
----------------------------------
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
(Dollars in billions)
September 30, December 31, Percentage September 30, Percentage
1996 1995 Inc/(Dec) 1995 Inc/(Dec)
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Accounts Receivable,
net $17.4 $18.9 (8.0%) $18.1 (4.0%)
Cardmember Loans, net $10.6 $10.3 3.0 $9.3 13.7
Owned and Managed Cardmember
Receivables (excluding
Revolving Card Products):
Total Cardmember
Receivables $20.7 $20.5 1.1 $18.7 10.5
90 Days Past Due as
a % of Total
Cardmember
Receivables 3.6% 3.5% - 3.6% -
Total Loss
Reserves (millions) $996 $952 4.6 $915 8.8
% of Cardmember
Receivables 4.8% 4.6% - 4.9% -
% of 90 Days Past Due 134% 131% - 135% -
Cardmember Receivables
Loss Ratio,
Net of Recoveries* 0.52% 0.51% - 0.49% -
Owned and Managed
U.S. Cardmember
Lending (including
Revolving Card
Products):
Total Cardmember Loans $11.2 $10.0 12.5 $9.0 24.2
30 Days Past Due
as a % of Total
Cardmember Loans 3.2% 3.8% - 3.5% -
Total Loss
Reserves (millions) $427 $443 (3.6) $389 9.8
% of Cardmember Loans 3.8% 4.5% - 4.3% -
% of 30 Days Past Due 119% 116% - 122% -
Write-Off Rates* 5.1% 4.4% - 4.4% -
Investments $6.5 $9.2 (28.9) $11.9 (45.3)
Total Assets $41.7 $45.2 (7.6) $47.1 (11.4)
Travelers Cheques
Outstanding $6.3 $5.7 11.3 $6.7 (5.5)
Short-term Debt $16.8 $17.9 (6.2) $16.9 (0.6)
Long-term Debt $5.0 $4.4 14.6 $3.4 47.7
Total Liabilities $36.7 $40.3 (8.8) $42.3 (13.2)
Total Shareholder's
Equity $5.0 $4.9 2.2 $4.8 4.6
Return on Average
Equity 25.1% 24.6% - 24.6% -
</TABLE>
* For the year-to-date period
Note: Owned and Managed Cardmember Receivables and Loans include securitized
assets not reflected in the Consolidated Balance Sheet.
10
<PAGE>
<PAGE>
American Express Centurion Bank ("Centurion Bank") and American Express
Receivables Financing Corporation II, a newly formed wholly owned
subsidiary of TRS, created a new trust, the American Express Credit
Account Master Trust (the "Trust"), for the securitization of revolving
credit loans. On May 16, 1996, the Trust securitized $1 billion of loans
through the public issuance of two classes of investor certificates and a
privately placed collateral interest in the assets of the Trust. The
securitized assets consist of loans arising in a portfolio of designated
Optima Card, Optima Line of Credit and Sign & Travel revolving credit
accounts owned by Centurion Bank.
On September 18, 1996, the American Express Master Trust (the "Master Trust")
issued an additional $1.25 billion Class A Floating Rate Accounts
Receivable Trust Certificates. The securitized assets consist of
receivables generated under designated American Express Card, American
Express Gold Card and Platinum Card consumer accounts. The Master Trust
was formed in 1992 to securitize Charge Card receivables.
The decline in investments reflects a change in investment strategy
related to consolidation of certain legal entities within the U.S.
Consumer Lending business, which was offset by a corresponding decrease in
other liabilities.
11
<PAGE>
<PAGE>
American Express Financial Advisors
Results of Operations For The Three and Nine Months Ended September 30,
1996 and 1995
Statement of Income
--------------------
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in millions, except
where indicated)
Three Months Ended Nine Months Ended
September 30, Percentage September 30, Percentage
--------------- ----------------
1996 1995 Inc/(Dec) 1996 1995 Inc/(Dec)
----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Investment Income $560 $555 0.9% $1,691 $1,639 3.2%
Management and
Distribution Fees 302 241 25.4 878 673 30.4
Other Income 159 138 15.5 472 406 16.3
----------------- ---------------
Total Revenues 1,021 934 9.4 3,041 2,718 11.9
----------------- ---------------
Expenses:
Provision for Losses and
Benefits:
Annuities 303 293 3.7 898 855 5.1
Insurance 102 99 2.8 312 296 5.3
Investment Certificates 45 55 (17.2) 147 150 (2.4)
---------------- ----------------
Total 450 447 0.9 1,357 1,301 4.3
Human Resources 259 226 14.4 757 650 16.4
Other Operating Expenses 82 64 28.3 270 214 25.9
---------------- -----------------
Total Expenses 791 737 7.5 2,384 2,165 10.1
---------------- -----------------
Pretax Income 230 197 16.6 657 553 19.0
Income Tax Provision 74 63 16.6 218 183 19.8
---------------- -----------------
Net Income $156 $134 16.5 $439 $370 18.5
================ =================
Selected Statistical Information
--------------------------------------
Life Insurance
in Force (billions) $65.2 $57.6 13.2 $65.2 $57.6 13.2
=============== ===============
Assets Owned and/or
Managed (billions):
Assets managed
for institutions $35.8 $32.3 10.9 $35.8 $32.3 10.9
Assets owned and
managed for individuals:
Owned Assets 50.8 46.2 9.9 50.8 46.2 9.9
Managed Assets 56.3 46.3 21.6 56.3 46.3 21.6
---------------- ----------------
Total $142.9 $124.8 14.5 $142.9 $124.8 14.5
================ ================
Sales of Selected Products:
Mutual Funds $3,313 $2,584 28.2 $10,644 $7,236 47.1
Annuities $946 $699 35.3 $3,226 $2,757 17.0
Investment Certificates $182 $363 (49.9) $503 $1,379 (63.5)
Life and Other
Insurance Sales $109 $94 16.2 $318 $273 16.3
Number of Financial Advisors 8,092 7,930 2.0 8,092 7,930 2.0
Fees From Financial
Plans (thousands) $11,660 $9,798 19.0 $34,867 $29,842 16.8
Product Sales Generated
from Financial Plans as
a Percentage of
Total Sales 64.7% 65.3% - 63.7% 64.3% -
</TABLE>
12
<PAGE>
<PAGE>
During the three and nine months ended September 30, 1996, the increase in
American Express Financial Advisors' investment income reflected higher
average asset levels, but lower investment yields compared with the year-
ago periods. Management and distribution fees rose reflecting increases
in management fees earned on a higher asset base and distribution fees
attributable to greater mutual fund sales. The growth in managed assets
was due to market appreciation and positive net sales. Other income
increased primarily due to higher life insurance contract charges and
premiums.
The provisions for annuity and insurance benefits grew as higher business
in force was offset, in part, by lower accrual rates. The provision for
investment certificates declined due to lower average investment
certificates in force in the third quarter and lower accrual rates. Human
resources expense was higher as financial advisors' compensation increased
as a result of greater commissionable sales and, to a lesser extent, more
employees compared with last year. Other operating expenses grew
primarily as a result of higher data processing support costs. The growth
in other operating expenses in the nine month period also included a
higher provision for insurance industry guarantee association assessments.
American Express Financial Advisors
Liquidity and Capital Resources
September 30, December 31, Percentage September 30, Percentage
1996 1995 Inc/(Dec) 1995 Inc/(Dec)
--------------------------------------------------------------
Investments $28.2 $28.8 (2.0%) $28.0 0.6%
Separate Account
Assets $17.5 $15.0 16.8 $14.1 23.8
Total Assets $50.8 $48.3 5.2 $46.2 9.9
Reserves for
Losses and Benefits $28.6 $28.6 (0.2) $27.7 3.2
Total Liabilities $47.7 $45.2 5.6 $43.4 10.0
Total Shareholder's
Equity $3.0 $3.1 (0.9) $2.8 7.2
Return on Average
Equity 20.2% 19.4% - 19.2% -
American Express Financial Advisors' total assets grew from year end due
to an increase in separate account assets as a result of market
appreciation and positive net sales. The declines in investments and
total shareholder's equity from year end reflect a lower level of
unrealized securities gains due to a decline in market value resulting
from higher market interest rates.
13
<PAGE>
<PAGE>
American Express Bank
Results of Operations For The Three and Nine Months Ended September 30,
1996 and 1995
<TABLE>
<CAPTION>
Statement of Income
--------------------
(Unaudited)
(Dollars in millions)
Three Months Ended Nine Months Ended
September 30, Percentage September 30, Percentage
-------------- -------------
1996 1995 Inc/(Dec) 1996 1995 Inc/(Dec)
--------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Interest Income $206 $221 (6.9%) $619 $693 (10.7%)
Interest Expense 128 140 (8.4) 396 450 (12.0)
------------- ---------------
Net Interest Income 78 81 (4.3) 223 243 (8.4)
Commissions, Fees and
Other Revenues 57 59 (4.8) 156 180 (13.6)
Foreign Exchange Income 16 21 (21.7) 56 61 (7.5)
------------- ---------------
Total Net Revenues 151 161 (6.7) 435 484 (10.2)
------------- ---------------
Provision for Credit Losses 5 1 # 13 5 #
------------- ------------
Expenses:
Human Resources 59 62 (5.0) 168 190 (11.7)
Other Operating Expenses 59 65 (9.2) 175 206 (14.9)
------------- ---------------
Total Expenses 118 127 (7.1) 343 396 (13.4)
------------- ---------------
Pretax Income 28 33 (16.3) 79 83 (5.0)
Income Tax Provision 10 11 (11.6) 28 26 5.3
------------- ---------------
Net Income $18 $22 (18.8) $51 $57 (9.8)
============= ===============
# Denotes variance of more than 100%.
</TABLE>
The decline in American Express Bank's (the "Bank") earnings for the three
and nine months ended September 30, 1996 resulted from lower revenues,
partly offset by expense savings. These results also reflect the Bank's
continued efforts to focus on strategic markets and eliminate low return
activities.
Net interest income was down primarily as a result of higher short-term
funding costs, as well as a balance sheet reduction in the nine month
period. The decreases in commissions, fees and other revenues and
operating expenses were primarily due to exiting nonstrategic businesses,
including the transfer of certain aircraft assets to the Bank's parent,
American Express Company, in January 1996.
14
<PAGE>
<PAGE>
American Express Bank
Liquidity and Capital Resources
Selected Balance Sheet Information
----------------------------------
(Unaudited)
(Dollars in billions, except
where indicated)
<TABLE>
<CAPTION>
September 30, December 31, Percentage September 30, Percentage
1996 1995 Inc/(Dec) 1995 Inc/(Dec)
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments $2.5 $2.5 (0.4%) $2.6 (2.0%)
Total Loans $5.6 $5.4 3.9 $5.4 4.8
Reserve for
Credit Losses (millions) $116 $111 4.5 $115 0.7
Reserves as a Percentage
of Total Loans 2.1% 2.0% - 2.1% -
Total Nonperforming
Loans (millions) $31 $34 (8.2) $32 (2.8)
Other Real Estate
Owned (millions) $34 $44 (21.8) $43 (20.6)
Total Assets $12.1 $12.3 (1.9) $12.5 (3.3)
Deposits $8.4 $8.5 (0.5) $8.4 0.4
Total Liabilities $11.3 $11.5 (1.5) $11.7 (3.2)
Total Shareholder's
Equity (millions) $777 $837 (7.3) $809 (4.0)
Risk-Based Capital Ratios:
Tier 1 9.0% 8.9% - 8.7% -
Total 12.8% 13.0% - 13.9% -
Leverage Ratio 6.0% 5.8% - 5.6% -
Return on Average Assets* 0.58% 0.59% - 0.57% -
Return on Average
Common Equity* 9.34% 9.99% - 9.80% -
* For the year-to-date peiod
</TABLE>
The Bank's total balance sheet declined modestly from year end. Liquidity
created from the transfer of certain aircraft assets to the parent was
used to pay a special dividend and fund higher loans, while deposits
declined slightly. The decrease in other real estate owned primarily resulted
from the sale of a foreclosed asset.
Corporate and Other
Corporate and Other reported third quarter 1996 net expenses of $39
million, compared with net expenses of $37 million a year ago.
Corporate and Other reported net expenses of $115 million in the nine
months ended September 30, 1996, compared with $107 million last year.
Results for the first nine months of 1996 and 1995 include the Company's
share of the Travelers Inc. revenue participation in accordance with an
agreement related to the 1993 sale of the Shearson Lehman Brothers
Division, which was offset by expenses related to business building
initiatives.
15
<PAGE>
<PAGE>
INDEPENDENT ACCOUNTANTS REVIEW REPORT
The Shareholders and Board of Directors
American Express Company
We have reviewed the accompanying consolidated balance sheet of
American Express Company (the "Company") as of September 30, 1996, the
related consolidated statements of income for the three and
nine month periods ended September 30, 1996 and 1995, and the
consolidated statement of cash flows for the nine month periods
ended September 30, 1996 and 1995. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the
objective of expressing an opinion regarding the consolidated
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying
consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of the Company
as of December 31, 1995, and the related consolidated statements
of income, shareholders' equity, and cash flows for the year then
ended (not presented herein), and in our report dated February 8,
1996, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth
in the accompanying consolidated balance sheet as of December 31,
1995 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
/s/Ernst & Young LLP
New York, New York
November 14, 1996
16
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
AMERICAN EXPRESS COMPANY
Item 5. Other Information
(a) Forward-looking statements
--------------------------
A statement in Part I of this 10-Q is identified under "Travel Related
Services -- Results of Operations For The Three and Nine Months Ended
September 30, 1996 and 1995" as a "forward-looking statement." This statement
involves risks and uncertainties. Important factors which may cause actual
results to differ materially from this forward looking statement include, but
are not limited to, the following: consumer and/or business spending per
Cardmember, which may result from general economic conditions affecting
consumers or businesses, including the overall levels of consumer debt;
other general economic and business conditions, such as interest rates and
consumer credit trends, which could affect the ability of consumers and
businesses to repay credit and charge card debt to TRS; the rate of
bankruptcies of consumers and businesses; and the volume of new card products
issued by TRS, which typically involve higher provisioning.
(b) By-law Amendment
----------------
On October 28, 1996, Section 2.2 of the Company's By-laws was amended,
generally giving the Secretary of the Company the authority to fix a date
for special meetings of shareholders demanded by holders of a majority of
the Company's shares outstanding and entitled to vote in the election of
directors (which currently includes holders of the Company's common shares).
The amended section provides that the Secretary shall fix a date for such
meetings no less than 60 days nor more than 90 days after receipt of a
properly submitted demand by shareholders. See Exhibit 3.2 to this Form 10-Q
Report for the full text of the amended section.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on page E-1 hereof.
(b) Reports on Form 8-K:
Form 8-K, dated July 22, 1996, Item 5, relating to the
registrant's earnings for the quarter ended June 30, 1996.
Form 8-K, dated October 29, 1996, Item 5, relating to
the registrant's earnings for the quarter ended
September 30, 1996.
17
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AMERICAN EXPRESS COMPANY
------------------------
(Registrant)
Date: November 14, 1996 By /s/ Richard K. Goeltz
- ----------------------- -------------------------
Richard K. Goeltz
Vice Chairman and
Chief Financial Officer
Date: November 14, 1996 /s/ Daniel T. Henry
- ----------------------- --------------------------
Daniel T. Henry
Senior Vice President and
Comptroller
(Chief Accounting Officer)
18<PAGE>
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Quarterly
Report:
Exhibit Description
3.2 Registrant's By-laws, as amended on October 28, 1996.
12 Computation in Support of Ratio of Earnings to Fixed Charges.
15 Letter re Unaudited Interim Financial Information.
27 Financial Data Schedule.
<PAGE>
<PAGE>
Exhibit 3.2
BY-LAWS
OF
AMERICAN EXPRESS COMPANY
(A New York Corporation)
(As Amended through October 28, 1996)
ARTICLE I
OFFICES
SECTION 1.1 Principal Office. The principal office of the corporation
within the State of New York shall be located in the City of New York, County
of New York.
SECTION 1.2 Other Offices. The corporation may have such other offices
and places of business within and without the State of New York as the
business of the corporation may require.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of other business shall be
held at the principal office of the corporation within the State of New York,
or at such other place either within or without the State of New York as may
be fixed by the Board of Directors (hereinafter referred to as the "Board")
from time to time. The annual meeting shall be held on such full business day
in each year not earlier than March 15 nor later than April 30 and at such
hour as shall be fixed by the Board. If the election of directors shall not
be held on the date so fixed for the annual meeting, a special meeting of the
shareholders for the election of directors shall be called forthwith in the
manner provided herein for special meetings, or as may otherwise be provided
by law. (B.C.L. Section 602.)<F1>
- ---------------------------
<F1>
This and other references to the New York Business
Corporation Law are not part of the by-laws, but are
included solely for convenience in locating relevant
portions of the statute.
<PAGE>
<PAGE>
SECTION 2.2 Special Meetings. Special Meetings of the shareholders may
be held for such purpose or purposes (other than for the election of directors,
except as provided in Section 2.1) as shall be specified in a call for such
meeting made by resolution of the Board or by a majority of the directors then
in office or by the Chief Executive Officer, or by the Secretary upon written
demand by the holder or holders of a majority of shares of the corporation then
outstanding and entitled to vote in the election of directors. Any such demand
by shareholders shall be delivered to the Secretary at the principal executive
offices of the corporation, and shall set forth (i) the purpose or purposes of
the meeting, and a description of each proposed matter to be approved or
addressed at such meeting, including the text of any proposed amendments to the
certificate of incorporation or these by-laws, (ii) the name and record address
of the shareholder or shareholders demanding the special meeting and (iii) the
number of shares of each class of stock of the corporation that are
beneficially owned by such shareholders. Upon receiving a demand for a special
meeting by shareholders that conforms to the requirements set forth herein, the
Secretary shall call, and in accordance with these by-laws, give notice of the
special meeting, and shall fix a date of any such meeting not less than sixty
(60) days nor more than ninety (90) days after the receipt by the Secretary
of the demand by shareholders. At any such special meeting only such
business may be transacted which is related to the purpose or purposes set
forth in the notice of meeting. (B.C.L. Section 602(c).)
SECTION 2.3 Notice of Meetings. Notice of all meetings of shareholders
shall be in writing and shall state the place, date and hour of the meeting
and such other matters as may be required by law. Notice of any special
meeting shall also state the purpose or purposes for which the meeting is
called and shall indicate that it is being issued by or at the direction of
the person or persons calling the meeting. A copy of the notice of any
meeting, shall be given, personally or by mail, not less than ten nor more
than fifty days before the date of the meeting to each shareholder entitled to
vote at such meeting. If mailed, such notice shall be deemed given when
deposited in the United States mail, with postage thereon prepaid, directed to
the shareholder at his address as it appears on the record of shareholders,
or, if he shall have filed with the Secretary of the corporation a written
request that notices to him be mailed at some other address, then directed to
him at such other address. Notice of any adjourned meeting of the
shareholders shall not be required if the time and place to which the meeting
is adjourned are announced at the meeting at which the adjournment is taken,
but if after the adjournment the Board or Chief Executive Officer fixes a new
record date for the adjourned meeting, notice of the adjourned meeting shall
be given to each shareholder of record on the new record date. (B.C.L.
Section 605.)
SECTION 2.4 Quorum and Voting. Except as otherwise provided by law or
the certificate of incorporation, the holders of a majority of the shares
entitled to vote thereat shall constitute a quorum at any meeting of the
shareholders for the transaction of any business, but a lesser interest may
adjourn any meeting from time to time and from place to place until a quorum
is obtained. Any business may be transacted at any adjourned meeting that
might have been transacted at the original meeting. When a quorum is once
present to organize a meeting of shareholders, it is not broken by the
subsequent withdrawal of any shareholders. Directors shall, except as
otherwise required by law or the certificate of incorporation, be elected by a
plurality of the votes cast at a meeting of shareholders by the holders of
shares entitled to vote in the election. Any other corporate action taken by
vote of the shareholders shall, except as otherwise required by law or the
certificate of incorporation, be authorized by a majority of the votes cast at
a meeting of shareholders by the holders of shares entitled to vote thereon.
Every shareholder of record shall be entitled at every meeting of shareholders
to one vote for each share standing in his name on the record of shareholders,
unless otherwise provided in the certificate of incorporation. Neither
treasury shares, nor shares held by any other corporation, if a majority of
the shares entitled to vote in the election of directors of such other
corporation is held by the corporation, shall be voted at any meeting or
counted in determining the total number of outstanding shares then entitled to
vote. (B.C.L. Sections 608, 614.)
SECTION 2.5 Proxies. Every shareholder entitled to vote at a meeting of
the shareholders may authorize another person to act for him by proxy. Every
proxy must be in writing and signed by the shareholder or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven
months from the date thereof, unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the shareholder executing it,
except that a proxy which is entitled "irrevocable proxy" and which states
that it is irrevocable shall be irrevocable when and to the extent permitted
by law. (B.C.L. Section 609.)
<PAGE>
<PAGE>
SECTION 2.6 List of Shareholders at Meetings. A list of shareholders as
of the record date, certified by the Secretary or by the transfer agent of the
corporation, shall be produced at any meeting of shareholders upon the request
thereat or prior thereto of any shareholder. If the right to vote at any
meeting is challenged, the inspectors of election or person presiding thereat
shall require such list of shareholders to be produced as evidence of the
right of the persons challenged to vote at such meeting, and all persons who
appear from such list to be shareholders entitled to vote thereat may vote at
such meeting. (B.C.L. Section 607.)
SECTION 2.7 Waiver of Notice. Notice of a shareholders'
meeting need not be given to any shareholder who submits a signed waiver of
notice, in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him. (B.C.L. Section 606.)
SECTION 2.8 Inspectors at Shareholders' Meetings. The Board, in advance
of any shareholders' meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof and to perform such duties thereat as are
prescribed by law. If inspectors are not so appointed, the person presiding
at a shareholders' meeting shall appoint one or more inspectors. In case any
person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board in advance of the meeting or at the meeting by
the person presiding thereat. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of inspector at such meeting with strict impartiality and according to
the best of his ability. (B.C.L. Section 610.)
SECTION 2.9 Business to Be Transacted at Shareholders' Meetings. No
business shall be transacted at any annual meeting of shareholders, except as
may be (i) specified in the notice of the meeting given by or at the direction
of the Board (including, if so specified, any shareholder proposal submitted
pursuant to the rules and regulations of the Securities and Exchange
Commission), (ii) otherwise brought before the meeting by or at the direction
of the Board or (iii) otherwise brought before the meeting in accordance with
the procedure set forth in the following paragraph, by a shareholder of the
corporation entitled to vote at such meeting.
For business to be brought by a shareholder before an annual meeting of
shareholders pursuant to clause (iii) above, the shareholder must have given
written notice thereof to the Secretary of the corporation, such notice to be
received at the principal executive offices of the corporation not less than
90 nor more than 120 days prior to the one year anniversary of the date of the
annual meeting of shareholders of the previous year; provided, however, that
in the event that the annual meeting of shareholders is called for a date that
is not within 30 days before or after such anniversary date, notice by the
shareholder must be received at the principal executive offices of the
corporation not later than the close of business on the tenth day following
the day on which the corporation's notice of the date of the meeting is first
given or made to the shareholders or disclosed to the general public (which
disclosure may be effected by means of a publicly available filing with the
Securities and Exchange Commission), whichever occurs first. A shareholder's
notice to the Secretary shall set forth, as to each matter the shareholder
proposes to bring before the annual meeting of shareholders, (i) a brief
<PAGE>
<PAGE>
description of the business proposed to be brought before the annual meeting
of shareholders and of the reasons for bringing such business before the
meeting and, if such business includes a proposal to amend either the
certificate of incorporation or these by-laws, the text of the proposed
amendment, (ii) the name and record address of the shareholder proposing such
business, (iii) the number of shares of each class of stock of the corporation
that are beneficially owned by such shareholder, (iv) any material interest of
the shareholder in such business and (v) such other information relating to
the proposal that is required to be disclosed in solicitations pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission or other applicable law.
Notwithstanding anything in these by-laws to the contrary, no business shall
be conducted at an annual meeting of shareholders except in accordance with
the procedures set forth in this Section 2.9; provided, however, that nothing
in this Section 2.9 shall be deemed to preclude discussion by any shareholder
of any business properly brought before the annual meeting of shareholders in
accordance with such procedures. The chairman of an annual meeting of
shareholders shall, if the facts warrant, determine and declare to the meeting
that the business was not properly brought before the meeting in accordance
with the provisions of this Section 2.9, and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the annual meeting of shareholders shall not be transacted.
ARTICLE III
DIRECTORS
SECTION 3.1 Powers, Number, Qualifications and Term of Office. The
business of the corporation shall be managed by its Board, which shall consist
of not less than seven persons, each of whom shall be at least twenty-one
years of age. Subject to such limitation, the number of directors shall be
fixed and may be increased or decreased from time to time by a majority of the
entire Board. Directors need not be shareholders. Except as otherwise
provided by law or these by-laws, the directors shall be elected at the annual
meetings of the shareholders, and each director shall hold office until the
next annual meeting of shareholders, and until his successor has been elected
and qualified. Newly created directorships resulting from an increase in the
number of directors and any vacancies occurring in the Board for any reason,
including vacancies occurring by reason of the removal of any of the directors
with or without cause, may be filled by vote of a majority of the directors
then in office, although less than a quorum exists. No decrease in the number
of directors shall shorten the terms of any incumbent director. A director
elected to fill a vacancy shall be elected to hold office for the unexpired
term of his predecessor. If the Board has not elected a Chairman of the Board
as an officer, it may choose a Chairman of the Board from among its members to
preside at its meetings. (B.C.L. Sections 701,702,703,705.)
SECTION 3.2 Regular Meetings. There shall be regular meetings of the
Board, which may be held on such dates and without notice or upon such notice
as the Board may from time to time determine. Regular meetings shall be held
at the principal office of the corporation within the State of New York or at
such other place either within or without the State of New York and at such
specific time as may be fixed by the Board from time to time. There shall
also be a regular meeting of the Board, which may be held without notice or
upon such notice as the Board may from time to time determine, after the
annual meeting of the shareholders or any special meeting of the shareholders
at which an election of directors is held. (B.C.L. Sections 710, 711.)
<PAGE>
<PAGE>
SECTION 3.3 Special Meetings. Special meetings of the Board may be held
at any place within or without the State of New York at any time when called
by the Chairman of the Board or the President or four or more directors.
Notice of the time and place of special meetings shall be given to each
director by serving such notice upon him personally within the City of New
York at least one day prior to the time fixed for such meeting, or by mailing
or telegraphing it, prepaid, addressed to him at his post office address, as
it appears on the books of the corporation, at least three days prior to the
time fixed for such meeting. Neither the call or notice nor any waiver of
notice need specify the purpose of any meeting of the Board. (B.C.L. Sections
710, 711.)
SECTION 3.4 Waiver of Notice. Notice of a meeting need not be given to
any director who signs a waiver of notice whether before or after the meeting,
or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him. (B.C.L. Section 711(c).)
SECTION 3.5 Quorum and Voting. One-third of the entire Board shall
constitute a quorum. A majority of the directors present, whether or not a
quorum is present, may adjourn any meeting to another time and place. Notice
of any adjournment shall be given to the directors who were not present at the
time of the adjournment and, unless the time and place of such adjournment are
announced at the meeting, to the other directors. The vote of a majority of
the directors present at the time of the vote, if a quorum is present at such
time, shall be the act of the Board, except where a larger vote is required by
law, the certificate of incorporation or these by-laws. (B.C.L. Sections 701,
708, 711(d).)
SECTION 3.6 Action by the Board. Any reference in these by-laws to
corporate action to be taken by the Board shall mean such action at a meeting
of the Board. However, any action required or permitted to be taken by the
Board or any committee thereof may be taken without a meeting if all members
of the Board or the committee consent in writing to the adoption of a
resolution authorizing the action. The resolution and the written consent
thereto by the members of the Board or committee shall be filed with the
minutes of the proceedings of the Board or committee. Any one or more members
of the Board or any committee thereof may participate in a meeting of such
Board or committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting. (B.C.L. Section 708.)
SECTION 3.7 Committees of the Board. The Board by resolution adopted by
a majority of the entire Board may designate from among its members one or
more committees, each consisting of three or more directors. Each such
committee shall have all the authority of the Board to the extent provided in
such resolution, except as limited by law. No such committee shall exercise
its authority in a manner inconsistent with any action, direction, or
instruction of the Board.
The Board may appoint a Chairman of any committee (except for the
Executive Committee, if one is established, in the case where the Chairman of
the Executive Committee has been elected pursuant to Section 4.1 of these
by-laws), who shall preside at meetings of their respective committees. The
Board may fill any vacancy in any committee and may designate one or more
<PAGE>
<PAGE>
directors as alternate members of such committee, who may replace any absent
member or members at any meeting of such committee. Each such committee shall
serve at the pleasure of the Board, but in no event beyond its first meeting
following the annual meeting of the shareholders.
All acts done and powers conferred by any committee pursuant to the
foregoing authorization shall be deemed to be and may be certified as being
done or conferred under authority of the Board.
A record of the proceedings of each committee shall be kept and
submitted at the next regular meeting of the Board.
At least one-third but not less than two of the members of any committee
shall constitute a quorum for the transaction of business, and the vote of a
majority of the members present at the time of the vote, if a quorum is
present at such time, shall be the act of the committee. If a committee or
the Board shall establish regular meetings of any committee, such meetings may
be held without notice or upon such notice as the committee may from time to
time determine. Notice of the time and place of special meetings of any
committee shall be given to each member of the committee in the same manner as
in the case of special meetings of the Board. Notice of a meeting need not be
given to any member of a committee who signs a waiver of notice whether before
or after the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to him. Except as
otherwise provided in these by-laws, each committee shall adopt its own rules
of procedure. (B.C.L. Section 712.)
SECTION 3.8 Compensation of Directors. The Board shall have authority
to fix the compensation of directors for services in any capacity. (B.C.L.
Section 713(e).)
SECTION 3.9 Resignation and Removal of Directors. Any director may
resign at any time by giving written notice thereof to the Chief Executive
Officer or to the Board, and such resignation shall take effect at the time
therein specified without the necessity of further action. Any director may
be removed with or without cause by vote of the shareholders, or with cause by
action of the Board. (B.C.L. Section 706.)
SECTION 3.10 The "Entire Board". As used in these by-laws the term "the
entire Board" or "the entire Board of Directors" means the total number of
directors which the corporation would have if there were no vacancies.
(B.C.L Section 702.)
SECTION 3.11 Nomination of Directors. Subject to the rights of holders
of any class or series of stock having a preference over the common shares as
to dividends or upon liquidation, nominations for the election of directors
may only be made (i) by the Board or a committee appointed by the Board or
(ii) by a shareholder of the corporation entitled to vote at the meeting at
which a person is to be nominated in accordance with the procedure set forth
in the following paragraph.
A shareholder may nominate a person or persons for election as directors
only if the shareholder has given written notice of its intent to make such
nomination to the Secretary of the corporation, such notice to be received at
the principal executive offices of the corporation (i) with respect to an
<PAGE>
<PAGE>
annual meeting of shareholders, not less than 90 nor more than 120 days prior
to the one year anniversary of the date of the annual meeting of shareholders
of the previous year; provided, however, that in the event that the annual
meeting of shareholders is called for a date that is not within 30 days before
or after such anniversary date, notice by the shareholder must be received at
the principal executive offices of the corporation not later than the close of
business on the tenth day following the day on which the corporation's notice
of the date of the meeting is first given or made to the shareholders or
disclosed to the general public (which disclosure may be effected by means of
a publicly available filing with the Securities and Exchange Commission),
whichever occurs first and (ii) with respect to a special meeting of
shareholders called for the purpose of electing directors, not later than the
close of business on the tenth day following the day on which the
corporation's notice of the date of the meeting is first given or made to the
shareholders or disclosed to the general public (which disclosure may be
effected by means of a publicly available filing with the Securities and
Exchange Commission), whichever occurs first. A shareholder's notice to the
Secretary shall set forth (i) the name and record address of the shareholder
who intends to make such nomination, (ii) the name, age, business and
residence addresses and principal occupation of each person to be nominated,
(iii) the number of shares of each class of stock of the corporation that are
beneficially owned by the shareholder, (iv) a description of all arrangements
and understandings between the shareholder and each proposed nominee and any
other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (v) such other information
relating to the person(s) that is required to be disclosed in solicitations
for proxies for election of directors pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission or other applicable law and (vi) the written consent of
each proposed nominee to be named as a nominee and to serve as a director of
the corporation if elected, together with an undertaking, signed by each
proposed nominee, to furnish to the corporation any information it may request
upon the advice of counsel for the purpose of determining such proposed
nominee's eligibility to serve as a director. The chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the foregoing procedures and if he
should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
ARTICLE IV
OFFICERS AND OFFICIALS
SECTION 4.1 Officers. The Board shall elect a Chairman of the Board or
a President or both, and a Secretary, a Treasurer and a Comptroller and may
elect such other officers, including a Chairman of the Executive Committee and
one or more Vice Chairmen of the Board, as the Board shall determine. Each
officer shall have such powers and perform such duties as are provided in
these by-laws and as may be provided from time to time by the Board or by the
Chief Executive Officer. Each officer shall at all times be subject to the
control of the Board, and any power or duty assigned to an officer by these
by-laws or the Board or the Chief Executive Officer shall be subject to
control, withdrawal or limitation by the Board. (B.C.L. Section 715.)
<PAGE>
<PAGE>
SECTION 4.2 Qualifications. Any person may hold two or more offices,
except that neither the Chairman nor the President shall be Secretary or
Treasurer. The Board may require any officer to give security for the
faithful performance of his duties. (B.C.L. Sections 715(e) and (f).)
SECTION 4.3 Election and Termination. The Board shall elect officers at
the meeting of the Board following the annual meeting of the shareholders and
may elect additional officers and fill vacancies at any other time. Unless
the Board shall otherwise specify, each officer shall hold office until the
meeting of the Board following the next annual meeting of the shareholders,
and until his successor has been elected and qualified, except as hereinafter
provided. The Board may remove any officer or terminate his duties and
powers, at any time, with or without cause. Any officer may resign at any
time by giving written notice thereof to the Chief Executive Officer or to the
Board, or by retiring or by leaving the employ of the corporation (without
being employed by a subsidiary or affiliate) and any such action shall take
effect as a resignation without necessity of further action. The Chief
Executive Officer may suspend any officer until the next meeting of the Board.
(B.C.L. Sections 715, 716.)
SECTION 4.4 Delegation of Powers. Each officer may delegate to any
other officer and to any official, employee or agent of the corporation, such
portions of his powers as he shall deem appropriate, subject to such
limitations and expirations as he shall specify, and may revoke such
delegation at any time.
SECTION 4.5 Chairman of the Board. The Chairman of the Board may be,
but need not be, a person other than the Chief Executive Officer of the
corporation. The Chairman of the Board may be, but need not be, an officer or
employee of the corporation. The Chairman of the Board shall preside at
meetings of the Board of Directors and shall establish agendas for such
meetings. In addition, he shall assure that matters of significant interest
to shareholders and the investment community are addressed by management. The
Chairman of the Board shall be an ex-officio member of each of the standing
committees of the Board, except for the Executive Committee, of which he shall
be a member.
SECTION 4.6 Chief Executive Officer. The Chief Executive Officer shall,
subject to the direction of the Board, have general and active control of the
affairs and business of the corporation and general supervision of its
officers, officials, employees and agents. He shall preside at all meetings
of the shareholders. He shall also preside at all meetings of the Board and
any committee thereof of which he is a member, unless the Board or such
committee shall have chosen another chairman. He shall see that all orders
and resolutions of the Board are carried into effect, and in addition he shall
have all the powers and perform all the duties generally appertaining to the
office of the Chief Executive Officer of a corporation.
The Chief Executive Officer shall designate the person or persons who
shall exercise his powers and perform his duties in his absence or disability
and the absence or disability of the President.
SECTION 4.7 President. The President may be Chief Executive Officer if
so designated by the Board. If not, he shall have such powers and perform
such duties as are prescribed by the Chief Executive Officer or by the Board,
<PAGE>
<PAGE>
and, in the absence or disability of the Chief Executive Officer, he shall
have the powers and perform the duties of the Chief Executive Officer, except
to the extent that the Board shall have otherwise provided.
SECTION 4.8 Chairman of the Executive Committee. The Chairman of the
Executive Committee shall be a member of the Executive Committee. He shall
preside at meetings of the Executive Committee and shall have such other
powers and perform such other duties as are prescribed by the Board or by the
Chief Executive Officer.
SECTION 4.9 Vice Chairman of the Board. Each Vice Chairman of the Board
shall have such powers and perform such duties as are prescribed by the Chief
Executive Officer or by the Board.
SECTION 4.10 Secretary. The Secretary shall attend all meetings and
keep the minutes of all proceedings of the shareholders, the Board, the
Executive Committee and any other committee unless it shall have chosen
another secretary. He shall give notice of all such meetings and all other
notices required by law or by these by-laws. He shall have custody of the
seal of the corporation and shall have power to affix it to any instrument and
to attest thereto. He shall have charge of the record of shareholders
required by law, which may be kept by any transfer agent or agents under his
direction. He shall maintain the records of directors and officers as
required by law. He shall have charge of all documents and other records,
except those for which some other officer or agent is properly accountable,
and shall generally perform all duties appertaining to the office of secretary
of a corporation. (B.C.L. Sections 605, 624, 718.)
SECTION 4.11 Treasurer. The Treasurer shall have the care and custody
of all of the funds, securities and other valuables of the corporation, except
to the extent they shall be entrusted to other officers, employees or agents
by direction of the Chief Executive Officer or the Board. The Treasurer may
hold the funds, securities and other valuables in his care in such vaults or
safe deposit facilities, or may deposit them in and entrust them to such bank,
trust companies and other depositories, all as he shall determine with the
written concurrence of the Chief Executive Officer or his delegate. The
Treasurer shall account regularly to the Comptroller for all of his receipts,
disbursements and deliveries of funds, securities and other valuables.
The Treasurer or his delegate, jointly with the Chief Executive Officer
or his delegate, may designate in writing and certify to any bank, trust
company, safe deposit company or other depository the persons (including
themselves) who are authorized, singly or jointly as they shall specify in
each case, to open accounts in the name of the corporation with banks, trust
companies and other depositories, to deposit therein funds, instruments and
securities belonging to the corporation, to draw checks or drafts on such
accounts in amounts not exceeding the credit balances therein, to order the
delivery of securities therefrom, to rent safe deposit boxes or vaults in the
name of the corporation, to have access to such facility and to deposit
therein and remove therefrom securities and other valuables. Any such
designation and certification shall contain the regulations, terms and
conditions applicable to such authority and may be amended or terminated at
any time.
<PAGE>
<PAGE>
Such powers may also be granted to any other officer, official, employee
or agent of the corporation by resolution of the Board or by power of attorney
authorized by the Board.
SECTION 4.12 Comptroller. The Comptroller shall be the chief accounting
officer of the corporation and shall have control of all its books of account.
He shall see that correct and complete books and records of account are kept
as required by law, showing fully, in such form as he shall prescribe, all
transactions of the corporation, and he shall require, keep and preserve all
vouchers relating thereto for such period as may be necessary.
The Comptroller shall render periodically such financial statements and
such other reports relating to the corporation's business as may be required
by the Chief Executive Officer or the Board. He shall generally perform all
duties appertaining to the office of comptroller of a corporation. (B.C.L.
Section 624.)
SECTION 4.13 Officials and Agents. The Chief Executive Officer or his
delegate may appoint such officials and agents of the corporation as the
conduct of its business may require and assign to them such titles, powers,
duties and compensation as he shall see fit and may remove or suspend or
modify such titles, powers, duties or compensation at any time with or without
cause.
ARTICLE V
SHARES
SECTION 5.1 Certificates. The shares of the corporation shall be
represented by certificates in such form, consistent with law, as prescribed
by the Board, and signed and sealed as provided by law. (B.C.L. Section 508.)
SECTION 5.2 Transfer of Shares. Except as provided in the certificate
of incorporation, upon surrender to the corporation or to its transfer agent
of a certificate representing shares, duly endorsed or accompanied with proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto and to cancel the old certificate. The corporation shall be entitled
to treat the holder of record of any shares as the holder in fact thereof,
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such shares on the part of any other person, whether or not
the corporation shall have express or other notice thereof, except as may be
required by law. (B.C.L. Section 508(d).)
SECTION 5.3 Record of Shareholders. The corporation shall keep at its
principal office within the State of New York, or at the office of its
transfer agent or registrar in the State of New York, a record in written
form, or in any other form capable of being converted into written form within
a reasonable time, which shall contain the names and addresses of all
shareholders, the numbers and class of shares held by each, and the dates when
they respectively became the owners of record thereof. (B.C.L. Section 624(a).)
SECTION 5.4 Lost or Destroyed Certificates. In case of the alleged
loss, destruction or mutilation of a certificate or certificates representing
shares, the Board may direct the issuance of a new certificate or certificates
in lieu thereof upon such terms and conditions in conformity with law as the
Board may prescribe. (B.C.L. Section 508(e).)
<PAGE>
<PAGE>
SECTION 5.5 Fixing Record Date. The Board or the Chief Executive
Officer may fix, in advance, a date as the record date for the purpose of
determining the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or for the purpose of determining
shareholders entitled to receive payment of any dividend or the allotment of
any rights, or for the purpose of any other action. Such date shall not be
more than fifty nor less than ten days before the date of such meeting, nor
more than fifty days prior to any other action. (B.C.L. Section 604.)
ARTICLE VI
INDEMNIFICATION OF CORPORATION PERSONNEL
SECTION 6.1 Directors and Officers. The corporation shall, to the
fullest extent permitted by applicable law as the same exists or may hereafter
be in effect, indemnify any person who is or was or has agreed to become a
director or officer of the corporation and who is or was made or threatened to
be made a party to, and may, in its discretion, indemnify, any person who is
or was or has agreed to become a director or officer and is otherwise involved
in, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, legislative or investigative, including an
action by or in the right of the corporation to procure a judgment in its
favor and an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which such person is serving or has served
or has agreed to serve in any capacity at the request of the corporation, by
reason of the fact that he is or was or has agreed to become a director or
officer of the corporation, or is or was serving or has agreed to serve such
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity, against judgments, fines, amounts paid or to
be paid in settlement, penalties, costs, charges and expenses, including
attorneys' fees, incurred in connection with such action or proceeding or any
appeal thereof; provided, however, that no indemnification shall be provided
to any such person if a judgment or other final adjudication adverse to the
director or officer establishes that (i) his acts were committed in bad faith
or were the result of active and deliberate dishonesty and, in either case,
were material to the cause of action so adjudicated, or (ii) he personally
gained in fact a financial profit or other advantage to which he was not
legally entitled. The benefits of this Section 6.1 shall extend to the heirs,
executors, administrators and legal representatives of any person entitled to
indemnification under this Section. (B.C.L. Sections 721, 722.)
SECTION 6.2 Other Personnel. The Board in its discretion may authorize
the corporation to indemnity any person, other than a director or officer, for
expenses incurred or other amounts paid in any civil or criminal action, suit
or proceeding, to which such person was, or was threatened to be, made a party
by reason of the fact that he, his testator or intestate is or was an employee
of the corporation.
SECTION 6.3 Other Indemnification. The corporation may indemnify any
person to whom the corporation is permitted by applicable law or these by-laws
to provide indemnification or the advancement of expenses, whether pursuant to
rights granted pursuant to, or provided by, the New York Business Corporation
Law or any other law or these by-laws or other rights created by (i) a
<PAGE>
<PAGE>
resolution of shareholders, (ii) a resolution of directors, or (iii) an
agreement providing for such indemnification, it being expressly intended that
these by-laws authorize the creation of other rights in any such manner. The
right to be indemnified and to the reimbursement or advancement of expenses
incurred in defending a proceeding in advance of its final disposition
authorized by this Section 6.3, shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, by-laws, agreement, vote of shareholders or
disinterested directors or otherwise. (B.C.L. Sections 721, 723(c).)
SECTION 6.4 Miscellaneous. The right to indemnification conferred by
Section 6.1, and any indemnification extended under Section 6.3, (i) is a
contract right pursuant to which the person entitled thereto may bring suit as
if the provisions thereof were set forth in a separate written contract
between the corporation and such person, (ii) is intended to be retroactive to
events occurring prior to the adoption of this Article VI, to the fullest
extent permitted by applicable law, and (iii) shall continue to exist after
the rescission or restrictive modification thereof with respect to events
occurring prior thereto.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Fiscal Year. The fiscal year of the corporation shall be
the calendar year.
SECTION 7.2 Voting of Shares of Other Corporations. The Board may
authorize any officer, agent or proxy to vote shares of any domestic or
foreign corporation of any type or kind standing in the name of this
corporation and to execute written consents respecting the same, but in the
absence of such specific authorization the Chief Executive Officer of this
corporation or his delegate may vote such shares and may execute proxies and
written consents with relation thereto.
ARTICLE VIII
AMENDMENTS
SECTION 8.1 General. Except as otherwise provided by law, these by-
laws may be amended or repealed or new by-laws may be adopted by the Board of
Directors, or by vote of the holders of the shares at the time entitled to
vote in the election of any directors, except that the Board may not amend or
repeal any by-law, or adopt any new by-law with respect to the subject matter
of any by-law, which specifically states that it may be amended or repealed
only by the shareholders. (B.C.L. Section 601.)
SECTION 8.2 Amendment of this Article. This Article VIII may be amended
or repealed only by the shareholders entitled to vote hereon as provided in
Section 8.1 above.
<PAGE>
<PAGE>
EXHIBIT 12
AMERICAN EXPRESS COMPANY
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Years Ended December 31,
---------------------------------------
1996 1995 1994 1993 1992 1991
(Unaudited) ---- ---- ---- ---- ----
-----------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pretax income from
continuing operations $1,821 $2,183 $1,891 $2,326 $ 896 $ 622
Interest expense 1,639 2,343 1,925 1,776 2,171 2,761
Other adjustments 108 95 103 88 196 142
------- ------ ------ ----- ------ ------
Total earnings (a) $3,568 $4,621 $3,919 $4,190 $3,263 $3,525
------- ------ ------ ------ ------ ------
Fixed charges:
Interest expense $1,639 $2,343 $1,925 $1,776 $2,171 $2,761
Other adjustments 100 135 142 130 154 147
------ ------ ------ ------ ------ ------
Total fixed charges(b) $1,739 $2,478 $2,067 $1,906 $2,325 $2,908
------ ------ ------ ------ ------ ------
Ratio of earnings to
fixed charges (a/b) 2.05 1.86 1.90 2.20 1.40 1.21
</TABLE>
Included in interest expense in the above computation is interest expense
related to the international banking operations of American Express
Company (the "Company") and Travel Related Services' Cardmember lending
activities, which is netted against interest and dividends and Cardmember
lending net finance charge revenue, respectively, in the Consolidated
Statement of Income.
For purposes of the "earnings" computation, other adjustments include
adding the amortization of capitalized interest, the net loss of
affiliates accounted for under the equity method whose debt is not
guaranteed by the Company, the minority interest in the earnings of
majority-owned subsidiaries with fixed charges, and the interest component
of rental expense and subtracting undistributed net income of affiliates
accounted for under the equity method.
For purposes of the "fixed charges" computation, other adjustments include
capitalized interest costs and the interest component of rental expense.
On May 31, 1994, the Company completed the spin-off of Lehman Brothers
through a dividend to American Express common shareholders. Accordingly,
Lehman Brothers' results are reported as a discontinued operation and are
excluded from the above computation for all periods presented. In March
1993, the Company reduced its ownership in First Data Corporation to
approximately 22 percent through a public offering. As a result,
beginning in 1993, FDC was reported as an equity investment in the above
computation. In the fourth quarter of 1995, the Company's ownership was
further reduced to approximately 10 percent as a result of shares issued
by FDC in connection with a merger transaction. Accordingly, as of
December 31, 1995, the Company's investment in FDC is accounted for as
Investments - Available for Sale.
<PAGE>
Exhibit 15
November 14, 1996
The Shareholders and Board of Directors
American Express Company
We are aware of the incorporation by reference in the Registration Statements
(Form S-8 No. 2-46918, No. 2-59230, No. 2-64285, No. 2-73954,
No. 2-89680, No. 33-01771, No. 33-02980, No. 33-28721, No. 33-33552,
No. 33-36422, No. 33-38777, No. 33-48629, No. 33-62124, No. 33-65008 and
No. 33-53801 and No. 333-12683; Form S-3 No. 2-89469, No. 33-17706,
No. 33-43268, No. 33-66654 and No. 33-50997) of American Express Company of our
report dated November 14, 1996 relating to the unaudited consolidated interim
financial statements of American Express Company which are included in its
Form 10-Q for the three and nine month periods ended September 30, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
/s/Ernst & Young LLP
New York, New York
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Consolidated Balance Sheet at September 30, 1996 and Consolidated
Statement of Income for the nine months ended September 30, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,884
<SECURITIES> 39,306
<RECEIVABLES> 19,272
<ALLOWANCES> 812
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,504
<DEPRECIATION> 1,838
<TOTAL-ASSETS> 106,667
<CURRENT-LIABILITIES> 0
<BONDS> 25,134
0
0
<COMMON> 284
<OTHER-SE> 7,959
<TOTAL-LIABILITY-AND-EQUITY> 106,667
<SALES> 0
<TOTAL-REVENUES> 11,982
<CGS> 0
<TOTAL-COSTS> 5,707
<OTHER-EXPENSES> 1,086
<LOSS-PROVISION> 2,499
<INTEREST-EXPENSE> 869
<INCOME-PRETAX> 1,821
<INCOME-TAX> 514
<INCOME-CONTINUING> 1,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,307
<EPS-PRIMARY> 2.68
<EPS-DILUTED> 0
</TABLE>
