American Express Company · NYSE:AXP
American Express — Debt Investor Presentation (July 2023)
28 slides from American Express's debt investor presentation, July 2023
Slide 1: Fixed Income Investor Presentation
American Express Company Fixed Income Investor Presentation JULY 2023
Slide 2: Summary Financial Performance
Summary Financial Performance ($ in millions; except per share amounts) YoY% Q2’23 Q2’22 Inc/(Dec) Total Revenues Net of Interest Expense $15,054 $13,395 12% FX-Adjusted* $13,361 13% Net Income $2,174 $1,964 11% Diluted EPS† $2.89 $2.57 12% Average Diluted Shares Outstanding 741 753 (2%) * Total Rev
Slide 3: Total Network Volumes Growth
Total Network Volumes Growth % Increase/(decrease) vs. Prior Year (FX-adjusted): Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Billed Business 35% 30% 24% 15% 16% 8% Processed Volumes 15% 19% 19% 17% 15% 13% Total Network Volumes 32% 28% 23% 16% 16% 9% $ in Billions $427 $413 $395 $394 $399 $59 Total Network
Slide 4: Worldwide Total Loans and Card Member Receivables
Worldwide Total Loans and Card Member Receivables Total Ending Loans and Card Member Receivables $ in billions Pre- Pandemic FICO <660 % US CM Loans & 10% 8% Receivables* $179.2 $171.0 $172.4 $155.5 $159.2 $149.6 Card Member $145.3 4% 7% 8% Receivables 18% 13% 3% 27% YoY Growth Total Loans 8% 27% 28
Slide 5: Card Member Loans and Card Member Receivables Credit Metrics
Card Member Loans and Card Member Receivables Credit Metrics 30+ Days Past Due* Net Write-off Rates* Pre- Pre- Pandemic Pandemic 2.2% 1.8% 1.5% 1.6% 1.2% 1.2% 1.2% 1.1% 0.9% 0.9% 0.8% 0.7% 0.8% 0.7% Q4'19 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q4'19 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Corporate Net Wri
Slide 6: Total Reserves
Total Reserves Balance Sheet Credit Reserves* ($ in billions) $4.7 Card Member $4.3 $4.4 $0.3 $0.2 $0.3 Receivables $0.1 $0.2 $0.3 Total $4.5 $4.2 $4.1 Loans Q1'20 Beginning Reserves Q1'23 Ending Reserves Q2'23 Ending Reserves Reserves as a % of: Total Loans & CM Receivables 2.9% 2.5% 2.6% Total Loa
Slide 7: Funding Strategy
Funding Strategy Business Funding Needs Strong Liquidity Profile Maturities 7
Slide 8: Funding and Deposits
Funding and Deposits We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in unsecured debt, asset securitizations and deposits, and access to secured borrowing facilities and a committed bank credit facility. Our current funding plan for
Slide 9: Funding Programs
Funding Programs Our funding programs can access a range of funding sources to support our global business. American Express Company (AXP) Unsecured Term Debt, Committed Senior Debt Rating † : A2/BBB+/A Bank Credit Facility Secured Borrowing Facility, American Express Travel Related Services (TRS) C
Slide 10: Term Maturity
Term Maturity ($ in billions) 6/30/23 $22.1 CDs* $9.8 $16.3 Card ABS** $3.8 Unsecured† $9.0 $4.8 $7.3 $7.1 $4.1 $0.7 $6.0 $6.6 $1.3 $0.8 $0.5 $0.5 $1.1 $7.6 $5.3 $5.2 $5.3 $5.5 $3.8 2023 2024 2025 2026 2027 Thereafter *Reflects long-term CDs issued with an original maturity of 12 months or greater.
Slide 11: Capital Management
Capital Management Capital Strength CET1 Capital Ratio Target of 10-11% Return on Equity (ROE) Business Needs Share Repurchases and Acquisitions and Dividends 11
Slide 12: Capital
Capital Common Equity Tier 1 Capital Return ($ in billions) 10.4% 10.3% 10.6% 10.3% 10.6% 10.6% $1.9 $1.6 $1.0 $1.0 $1.0 $0.6 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 CET1 Ratio Target: 10-11% 12
Slide 13: Takeaways
Takeaways Business Results • Q2’23 Net Income of $2.2B • Q2’23 Diluted EPS† of $2.89 Balance Sheet • We continued to maintain a robust liquidity position and CET1 ratio within our target range. • As of June 30, 2023: • 10.6% CET1 Ratio • Strong liquidity position with $43B in Cash and cash equivalen
Slide 14: Appendix
Appendix 14
Slide 15: Travel & Entertainment Billed Business
Travel & Entertainment Billed Business Q2’23 Restaurants Lodging Airlines Other Total T&E YoY Growth 15% 12% 12% 18% 14% % of Total Billed Business 7% 6% 7% 8% 27% 15 Note: All growth rates reflect FX-adjusted rates. Subtotals may not add to 100% due to rounding
Slide 16: Card Member Credit Metrics
Card Member Credit Metrics Q4’19 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Card Member Loans Net Write-off Rate* 2.3% 0.8% 0.8% 0.8% 1.1% 1.5% 1.7% Card Member Receivables Net Write-off Rates* 1.9% 0.6% 0.8% 1.0% 1.4% 1.9% 1.9% Corporate Net Write-off Rates** 0.8% 0.2% 0.3% 0.4% 0.6% 0.6% 0.6% Card Member
Slide 17: Credit Reserve Macroeconomic Scenarios: Select Variables
Credit Reserve Macroeconomic Scenarios: Select Variables US Unemployment Rate % US GDP Growth* % 10% 8% 9% 6% 8% 7% 4% 6% 5% 2% 4% 0% 3% 2% (2%) 1% 0% (4%) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22
Slide 18: American Express Credit Account Master Trust (AMXCA)
American Express Credit Account Master Trust (AMXCA) American Express Credit Account Master Trust Funding Maturities* (AMXCA) ($ in billions) Eligible assets US Consumer Card Member loans US Small Business Card Member loans Assets in trust Consumer Card Member loans $7.3 Trust Size: $26.1 bi
Slide 19: American Express Credit Account Master Trust (AMXCA)
American Express Credit Account Master Trust (AMXCA) 30+ Days Past Due Rate Annualized Net Default Rate 1.2% 1.0% 1.0% 0.8% 0.8% 0.6% 0.6% 0.4% 0.4% 0.2% 0.2% 0.0% 0.0% 6/22 7/22 8/22 9/22 10/22 11/22 12/22 1/23 2/23 3/23 4/23 5/23 6/23 6/22 7/22 8/22 9/22 10/22 11/22 12/22 1/23 2/23 3/23 4/23 5/23
Slide 20: Annex 1
Annex 1 Network Volumes – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q2'23 Billed Business Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Reported FX-Adj.* Billed Business G&S 6% 6% Reported 34% 27% 21% 13% 15% 8% T&E 14% 14% FX-Adjusted* 35% 30% 24% 15% 16% 8% Processed Volumes Reported 12
Slide 21: Contact Information
Contact Information James Zhou Vice President, Capital Markets & Debt Investor Relations Phone: (212) 640-4967 E-mail: James.Zhou@aexp.com Amy L Rice Director, Capital Markets & Debt Investor Relations Phone: (212) 225-0672 E-mail: Amy.L.Rice@aexp.com American Express Company 200 Vesey Street New Yo
Slide 22: Forward Looking Statements
Forward Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements, which address American Express Company’s current expectations reg
Slide 23: Forward Looking Statements
Forward Looking Statements • the company’s ability to achieve its 2023 revenue growth outlook and its longer-term revenue growth aspirations for 2024 and beyond, and the sustainability of the company’s future growth, which could be impacted by, among other things, the factors identified above and in
Slide 24: Forward Looking Statements
Forward Looking Statements • future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies; the
Slide 25: Forward Looking Statements
Forward Looking Statements • the company’s ability to control operating expenses, including relative to future revenue growth, and the actual amount spent on operating expenses in 2023 and beyond, which could be impacted by, among other things, salary and benefit expenses to attract and retain talen
Slide 26: Forward Looking Statements
Forward Looking Statements • the company’s ability to expand its leadership in the premium consumer space, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and the company’s ability to develop and market new benefit
Slide 27: Forward Looking Statements
Forward Looking Statements • the company’s ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, favoring local competitors or prohibiting or limiting foreign owne
Slide 28: American Express
AMERICAN EXPRESS
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