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American Express Fourth Quarter EPS Rises To $1.21 From $0.56 Last Year; Revenues And Loans Increase As Card Member Spending Ends Year On Strong Note; Credit Indicators Remain At Historical Lows; Operating Expenses Well Contained In The Quarter

The effective tax rate was 33 percent compared to 31 percent a year ago.

International Card Services reported fourth-quarter net income of $103 million, up 8 percent from $95 million a year ago.

Total revenues net of interest expense increased 2 percent (7 percent FX adjusted 3) to $1.4 billion. The increase primarily reflected higher Card Member spending and higher net card fees.

Provisions for losses totaled $120 million, up 21 percent from $99 million a year ago. The increase reflected higher net write offs and a reserve build in the current quarter.

Total expenses increased 1 percent (5 percent FX adjusted 3) to $1.2 billion. The increase primarily reflected higher rewards costs, partially offset by a decline in operating expenses from year-ago levels which included a portion of the restructuring charge mentioned above.

The effective tax rate was 5 percent compared to 14 percent a year ago.

Global Commercial Services reported fourth-quarter net income of $182 million, up from $65 million a year ago.

Total revenues net of interest expense increased 2 percent to $1.2 billion. The increase primarily reflected higher Card Member spending.

Total expenses decreased 13 percent (12 percent FX adjusted 3) to $910 million from $1.0 billion a year ago. The decline primarily reflected lower operating expenses related to the restructuring charge in the year-ago period mentioned above.

The effective tax rate was 37 percent compared to 54 percent from a year ago. The year-ago quarter’s higher tax rate reflected lower tax benefits from the restructuring charge in certain international markets.

Global Network & Merchant Services reported fourth-quarter net income of $399 million, up 13 percent from $354 million a year ago.

Total revenues net of interest expense increased 4 percent (6 percent FX adjusted 3) to $1.4 billion. The increase primarily reflected higher merchant-related revenues driven by an increase in global Card Member spending.

Total expenses decreased 1 percent to $801 million from $812 million a year ago. The year-ago period included a portion of the previously mentioned restructuring charge, and the current quarter reflected higher operating expenses driven by the merchant litigation settlement. Adjusted for foreign currency translations, expenses were unchanged from a year ago. 3

The effective tax rate was 37 percent compared to 36 percent a year ago.

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