Slide 1: American Express Earnings Conference Call 1Q'10
American Express Earnings Conference Call 1Q’10 April 22, 2010 Exhibit 99.2
Slide 2: Annex: GAAP to Managed Revenue Reconciliation
Annex 1 2 ($ in millions) GAAP Net Interest Income Securitization Adjustments: Interest income Interest expense Managed Net Interest Income ($ in millions) GAAP All Other Revenues Securitization Adjustments: Discount revenue, net card fees and other Managed All Other Revenues ($ in millions) GAAP To
Slide 3: Summary Financial Performance
Summary Financial Performance 1Q'10 1Q'09 % Inc/(Dec) 3 Total Revenues Net of Interest Expense Return on Average Common Equity Income from Continuing Ops** Diluted EPS from Continuing Ops*** 100% 11% $5,926 17% $443 $6,606 128% $0.32 $0.73 17% $885 3% 1,156 1,191 Average Diluted Shares Outstanding (
Slide 4: Impact of Consolidating Off-Balance Sheet Assets and Liabilities
Impact of Consolidating Off-Balance Sheet Assets and Liabilities 4 12/31/09 Adjustments* 1/1/10 Cardmember Loans Long Term Debt $32.8 52.3 $29.0 25.0 Shareholders’ Equity 14.4 (1.8) ($ in billions) $61.8 77.3 12.6 Investment Securities 24.3 (3.6) 20.7 Other Assets 13.2 2.2 15.4 Loss Reserves (CM Loa
Slide 5: Metric Performance
Metric Performance % Inc/(Dec) FX Adj.* 1Q'10 1Q'09 5 Billed Business ($ in B)** - Total Portfolio Total Cards In Force (MM) Avg. Basic Cardmember Spending (Dollars)*** *FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation i
Slide 6: Worldwide Billed Business
Worldwide Billed Business 6 ($ in billions) *FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars. (e.g., assumes foreign exchange rate used for Jan’10 applies to Jan’09; rate used for Dec’09 applies to Dec
Slide 7: Worldwide Network Spending
Worldwide Network Spending 7 Transaction Size Transactions Total Spending
Slide 8: Annex: Segment Billed Business - Reported & FX Adjusted
Annex 2 8 Segment Billed Business - Reported & FX Adjusted" % increase/(decrease) vs. prior year: 1Q'08 2Q'Q8 3Q'08 4Q'08 ICS Reported 21% 20% 11% (14%) FX Adjusted 9% 10% 8% 1% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 (21%) (20%) (12%) 14% 19% (5%) (7%) (6%) 0% 6% GCS Reported 13% 14% 8% (11%) FX Adjusted 9%
Slide 9: Billed Business Growth by Segment
Billed Business Growth by Segment 9 *See Annex 2 for reported billings growth rates.
Slide 10: USCS Spending by Product
USCS Spending by Product 10 % increase/(decrease) vs. prior year:
Slide 11: Charge Card Billed Business vs. Receivables Growth
Charge Card Billed Business vs. Receivables Growth 11 % increase/(decrease) vs. prior year: *Lending on charge billed business included in proprietary credit card billed business, not in proprietary charge card billed business.
Slide 12: Annex: Worldwide Cardmember Lending
Annex 3 12 Worldwide Cardmember Lending ($ in billions, except percentages) 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 Total Worldwide Ending Loans GAAP $ 42.2 $ 48.2 $ 50.4 $ 54.4 $ 49.4 $ 49.6 $ 45.7 $ 42.2 Growth vs PY 29% 33% 32% 26% 17% 3% (9%) (22%) Total Portfolio* $ 63.1 $ 68.5 $ 71.9 $
Slide 13: Lending Billed Business vs. Loan Growth
Lending Billed Business vs. Loan Growth 13 % increase/(decrease) vs. prior year, Total Portfolio: *Lending on charge billed business included in proprietary credit card billed business. **See Annex 3 for GAAP basis.
Slide 14: Annex: Net Interest Yield on Cardmember Loans
Annex 4 (A) 14 ($ in millions, except percentages) Quarters Ended GAAP basis portfolio (B1): Net interest income Average loans (billions) Adjusted net interest income(C) Adjusted average loans (billions) (D) Net interest income divided by average loans Net interest yield on cardmember loans (E) Tota
Slide 15: USCS Net Interest Yield
USCS Net Interest Yield Total Portfolio Cardmember Loans 15 February implementation of the CARD Act Increased Cost of Funds due to spike in October 1M LIBOR rate Repriced additional segments of US lending portfolio Loss of revenue due to August CARD Act implementation Impact of Collections Strategy
Slide 16: Revenue Performance
Revenue Performance 1Q’10 1Q’09 16 Rptd Mgd* Discount Revenue Net Card Fees Travel Commissions & Fees Net Interest Income All Other Revenue** Total Revenues Net of Interest Expense*** $3,466 1,307 $6,606 13% (2%) 6% 42% 3% 11% $3,066 $5,926 ($ in millions) (24%) (8%) (1%) Securitization Income, Net
Slide 17: Provisions for Losses
Provisions for Losses 1Q'10 1Q'09 % Inc/(Dec) 17 *On an FX adjusted basis, provision decreased 49%. Charge Card Cardmember Lending $227 (32%) (51%) $336 1,414 Other (47%) Total* $943 (48%) $1,803 ($ in millions)
Slide 18: Expense Performance
Expense Performance 1Q'10 1Q'09 % Inc/(Dec) 18 $3,579 Marketing and Promotion Other Operating Expenses* Total Expenses** $595 1,122 $4,411 72% 10% 23% $345 1,024 # Denotes a percent change greater than 100%. *Includes professional services, occupancy and equipment, communications and other, net expe
Slide 19: Marketing and Promotion Expense
Marketing and Promotion Expense 19
Slide 20: Operating Expense Analysis
20 Operating Expense Analysis 1Q’10 Average Growth 8% Small Medium Large Examples of Above Avg. Opex Growth Examples of Below Avg. Opex Growth Technology Investments FDIC Deposit Assessments Global Services Group Support Functions Collections Partner Investments Global Network Services
Slide 21: Net Write-off Rate and Days Past Due Rate
Net Write-off Rate 30 Days Past Due Rate 5.2% 3.7% 3.2% 2.6% 2.2% HS gos 1.8% 1.9% r Yr sy 1q’09 2Q'09 3Q'09 4qQ'09 1Q'10 1q’09 2Q'09 3Q'09 4Q'09 1Q'10
Slide 22: ICS/GCS Charge Card Net Loss and Days Past Billings Ratios
22 ICS/GCS Charge Card Net Loss and 90 Days Past Billings Ratios Net Loss Ratio 90 Days Past Billings Ratio Impact of change in write-off methodology
Slide 23: Charge Card Reserve Coverage
Charge Card Reserve Coverage 23 1Q'10 4Q’09 1Q'09 US Card Services % of 30 days Past Due 81% 82% International Card Services % of 90 Days Past Billing 183% 102% Global Commercial Services 156% 73% % of Receivables 1.5% 3.0% % of 90 Days Past Billing % of Receivables 1.9% 3.3% 1.2% 1.7% % of Receivab
Slide 24: Annex: Cardmember Lending GAAP Basis
Annex 5 24 1Q’07 2Q’07 3Q’07 4Q’07 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 2Q’09 3Q’09 4Q’09 1Q’10 Cardmember Lending GAAP Basis Total Loans ($ in 8} USCS $ 33.0 $ 38.2 $ 39.9 $ 43.3 $ 38.0 $ 37.8 $ 34.6 $ 32.7 $ 28.2 $ 23.6 $ 22.7 $ 23.5 $ 49.2 AXP $ 42.2 $ 48.2 $ S0.4 $ 54.4 $ 49.4 $ 49.6 $ 45.7 $ 42.2 $ 36
Slide 25: Total Portfolio Lending Net Write-off Rates
25 Total Portfolio Lending Net Write-off Rates* USCS AXP ICS *See Annex 5 for GAAP basis for USCS and AXP. There are no off-balance sheet ICS securitizations; therefore, the net write-off rates for ICS are on an GAAP basis.
Slide 26: Total Portfolio Lending Days Past Due
26 Total Portfolio Lending 30 Days Past Due* USCS AXP ICS *See Annex 5 for GAAP basis for USCS and AXP. There are no off-balance sheet ICS securitizations; therefore, the net write-off rates for ICS are on an GAAP basis.
Slide 27: Current to Days Past Due and Bankruptcy Filings
Current to 30 Days Past Due Number of Bankruptcy Filings 30 Days Past Due to Write-off Mar’10 Mar’10
Slide 28: AXP WW Lending Reserve Levels
AXP WW Lending Reserve Levels ($ in billions) Securitized Loans Non-Securitized Loans $0.5 $0.7 1Q’10 Write-Offs Related to:
Slide 29: Lending Reserve Coverage
Lending Reserve Coverage 1Q'10 4Q’09 1Q'09 29 US Card Services Worldwide % of Past Due 283% 175% % of Loans 9.5% 9.0% Principal Months Coverage* 14.9x 11.0x % of Past Due 277% 168% % of Loans 9.2% 8.2% Principal Months Coverage* 15.0x 10.8x *Calculated by dividing the ending principal reserve balanc
Slide 30: Capital Ratios and Regulatory Benchmarks
Capital Ratios and Regulatory Benchmarks 1Q'10 Current Benchmark 30 Note: These ratios represent a preliminary estimate as of the date of these earnings slides and may be revised in the Company’s first quarter Form 10-Q. *TCE equals common shareholders' equity of $13.4B, less goodwill and intangible
Slide 31: 1Q'10 Liquidity Snapshot
1Q'10 Liquidity Snapshot Resources Funding Maturities 31 Cash* $22 Operating Cash (3) CP and Short-Term Deposits Outstanding (3) 2Q'10 Readily Marketable Securities 3Q'10 $27 $20** *Includes $21.1B classified as Cash and Cash Equivalents and $0.4B classified as Other Assets on the Company’s consolid
Slide 32: US Retail Deposit Programs
US Retail Deposit Programs Retail CDs Retail Savings Accounts* Total Deposits 32 (2.3) Amount Raised During 1Q'10 1.3 2.8 March 31, 2010 Balance $11.8 $15.6 Weighted Avg., Original Maturity 31 Months Average Rate at Issuance 2.3% 1Q'10 Maturities December 31, 2009 Balance $10.5 $15.1 (2.3) 4.1 $27.4
Slide 33: American Express logo
Slide 34: Forward-Looking Statements
Forward-Looking Statements 34 This release 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 the Company’s expected business and financial perform
Slide 35: Forward-Looking Statements (Cont.)
Forward-Looking Statements (Cont.) 35 existing operations; the success, timeliness and financial impact (including costs, cost savings, and other benefits, including increased revenues), and beneficial effect on the Company’s operating expense to revenue ratio, both in the short-term and over time,