(Dollars in millions, except per share amounts)

*Net revenues are presented on a managed basis.

NEW YORK, October 23, 2000 -- American Express Company today reported quarterly net income of $737 million, up from $648 million in the same period a year ago. Diluted earnings per share rose 15 percent to $0.54 compared with $0.47. Net revenues on a managed basis totaled $5.6 billion, up 13 percent from $4.9 billion. The company's return on equity was 25.5 percent. These results reflected strong earnings growth in all business segments, and met the company's long-term targets of 12-15 percent earnings per share growth, at least 8 percent growth in revenues and a return on equity of 18-20 percent.

Travel Related Services (TRS) reported record quarterly net income of $507 million, up 14 percent from $446 million in the third quarter a year ago.

The TRS segment now includes earnings from Travelers Cheque (TC) operations, which were unchanged from year-ago levels. Excluding TC, net income for the remaining TRS business rose 15 percent from last year's third quarter. TC results had previously been included in the American Express Bank/TC segment.

TRS net revenues increased 14 percent, reflecting higher billed business as well as strong growth in Cardmember loans. These improvements resulted from an increase of 5.6 million cards in force, up 13 percent from a year ago, and higher average spending per Cardmember. The higher spending was driven by several factors, including rewards programs and expanded merchant coverage. The net interest yield on Cardmember loans decreased from a year ago, but increased from second quarter levels. The year-to-year decline mainly reflects a higher percentage of loan balances on lower-rate products. Other revenues increased, primarily reflecting higher fee income.

The provision for losses on the charge card and lending portfolios rose from the prior year as a result of higher volume, partly offset by improvement in credit quality in the lending portfolio. Charge Card interest expense grew as a result of higher volumes and an increased cost of funds. Other operating expenses rose, reflecting in part the cost of Cardmember loyalty programs, business growth and investment spending.

The above discussion presents TRS results "on a managed basis" as if there had been no securitization transactions, which conforms to industry practice. The attached financials present TRS results on both a managed and reported basis. Net income is the same in both formats.

On a reported basis, TRS results for the third quarter of 2000 included a securitization gain of $26 million ($17 million after-tax), compared with a similar gain of $55 million ($36 million after-tax) a year ago. These gains were offset by higher expenses related to card acquisition activities and therefore had no material impact on net income or total expenses.

American Express Financial Advisors (AEFA) reported quarterly net income of $269 million, up 12 percent from $240 million a year ago.

Net revenues and earnings growth benefited from higher fee revenues due to an increase in managed assets, which was partially offset by narrower spreads on the investment portfolio. This increase reflected positive net sales and market appreciation over the past 12 months. AEFA reported increases in sales of mutual funds, annuities, and life and other insurance products. Human resources expenses rose primarily as a result of an increase in financial advisors' compensation, which reflected growth in sales and asset levels, the new advisor platforms, and an increase in the total number of financial advisors.

American Express Bank (AEB) reported quarterly net income of $7 million compared with $5 million a year ago.

Results for the current quarter reflect greater commission and fee revenues and lower operating expenses, reflecting savings from reengineering initiatives. These were partially offset by a decline in net interest income, mainly due to higher funding costs.

Corporate and Other reported net expenses of $46 million, compared with $43 million a year ago.

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American Express Company, founded in 1850, is a global travel, financial and network services provider.

Note: The quarterly earnings conference call conducted by the Investor Relations Department will be broadcast live on the Internet starting at 5 p.m. ET, October 23, 2000. Click here to access the live conference call.

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