Consolidated total revenues net of interest expense were $7.0 billion, up 7 percent from $6.6 billion a year ago. The increase largely reflects higher cardmember spending and higher travel commissions and fees, partially offset by lower interest income due to a lower yield on the loan portfolio.

Consolidated provisions for losses totaled $97 million compared to $943 million in the year-ago period reflecting continued improvement in credit quality.

Consolidated expenses totaled $5.2 billion, up 19 percent from $4.4 billion a year ago. The increase reflected significant investments in business building initiatives, as well as higher rewards costs.

The company's return on average equity (ROE) was 27.9 percent, up from 18.0 percent a year ago.

"Record earnings this quarter reflect credit quality and billed business trends that are among the best we've seen," said Kenneth I. Chenault, chairman and chief executive officer, American Express. "Cardmember spending was up 17 percent, with broad-based strength across all our businesses segments. After several years of decline, our lending portfolio leveled off and total revenues grew at the healthiest pace since before the recession.

"Continued improvement in credit quality strengthened our bottom line results and provided additional resources to enhance premium products, expand reward offerings and build technology that supports our best-in-class customer service.

"Our stepped up investment spending has helped us capitalize on opportunities during the early stages of the economic recovery and strengthen relationships with consumer, small business and corporate customers. By moving aggressively, we have also been able to expand our leadership role in online commerce, introduce the next generation of digital payments and deepen our relationships with merchants internationally.

"A good deal of our investment spending has been funded with the benefits of rapidly improvingoving credit quality and payments from the settlement of litigation with MasterCard and Visa. Now, with credit losses at historical lows and settlement payments ending in the second and fourth quarter, we are moving forward with plans to slow the growth of our operating expenses towards the end of this year and into next.

"While the economic and regulatory environment remains uncertain, we are generating strong momentum across our businesses and are well positioned to deliver strong results for our shareholders."

Segment Results
U.S. Card Services reported first-quarter net income of $555 million, up 34 percent from $414 million a year ago.

Total revenues net of interest expense increased 2 percent to $3.6 billion from $3.5 billion. Revenues reflect higher cardmember spending, partially offset by lower interest income due to a lower yield on the loan portfolio.

Provisions for losses totaled $47 million, down 93 percent from $687 million a year ago. The decline reflects continued improvement in credit quality.

Total expenses increased 21 percent. Marketing, promotion, rewards and cardmember services expenses increased 30 percent from the year-ago period, reflecting higher volume-related rewards costs and an increase in the ultimate redemption rate estimate for the U.S. Membership Rewards program due to increased cardmember engagement, as well as increased investments in marketing and promotions. Salaries and employee benefits and other operating expenses increased 8 percent from year-ago levels, reflecting a charge related to accounting for hedging the company's fixed-rate debt compared to a benefit in the year-ago period, as well as various customer service initiatives and technology investments.

The effective tax rate was 39 percent compared to 37 percent in the year-ago quarter.

International Card Services reported first-quarter net income of $189 million, up 36 percent from $139 million a year ago.

Total revenues net of interest expense increased 6 percent to $1.2 billion, from $1.1 billion, reflecting higher cardmember spending, partially offset by lower interest income due to a lower yield on the loan portfolio.

Provisions for losses totaled $5 million, down 97 percent from $158 million a year ago. The decline reflects continued improvement in credit quality.

Total expenses increased 19 percent. Marketing, promotion, rewards and cardmember services expenses increased 16 percent from year-ago levels, reflecting higher volume-related rewards costs and co-brand expenses, as well as increased investments in marketing and promotion. Salaries and employee benefits and other operating expenses increased 20 percent from year-ago levels, partially reflecting customer service initiatives and technology investments.

The effective tax rate was 21 percent compared to 16 percent in the year-ago quarter.

Global Commercial Services reported first-quarter net income of $184 million, up 116 percent from $85 million a year ago.

Total revenues net of interest expense increased 16 percent to $1.1 billion, from $965 million, reflecting increased spending by corporate cardmembers and higher travel commissions and fees.

Provisions for losses totaled $23 million, down 71 percent from $78 million a year ago, reflecting continued improvement in credit quality, as well as increased provision associated with implementing an enhanced reserve methodology in the year-ago quarter.

Total expenses increased 9 percent. Marketing, promotion, rewards and cardmember services expenses increased 10 percent from the year-ago period, primarily reflecting higher volume-related rewards costs. Salaries and employee benefits and other operating expenses increased 9 percent from the year-ago period, reflecting increases in sales force expenses, as well as a charge related to accounting for hedging the company's fixed-rate debt compared to a benefit in the year-ago period.

The effective tax rate was 31 percent, consistent with the year-ago quarter.

Global Network & Merchant Services reported first quarter net income of $313 million, up 24 percent from $253 million a year ago.

Total revenues net of interest expense increased 16 percent to $1.1 billion, from $982 million, reflecting higher merchant-related revenues driven by an increase in global card spending, as well as an increase in revenues from Global Network Services' bank partners.

Total expenses increased 13 percent. Marketing, promotion, rewards and cardmember services expenses were consistent with the year-ago period. Salaries and employee benefits and other operating expenses increased 18 percent, reflecting business-building investments.

The effective tax rate was 34 percent compared to 36 percent in the year-ago quarter.

Corporate and Other reported first-quarter net loss of $64 million compared with net loss of $6 million a year ago, partially reflecting investments in Enterprise Growth Group initiatives. The results for both periods reflect income of $220 million ($136 million after-tax) for the previously announced MasterCard and Visa settlements.