American Express Company · NYSE:AXP
American Express — Debt Investor Presentation (July 2022)
28 slides from American Express's debt investor presentation, July 2022
Slide 1: Fixed Income Investor Presentation
American Express Company Fixed Income Investor Presentation JULY 2022
Slide 2: Summary Financial Performance
Summary Financial Performance ($ in millions; except per share amounts) YoY% Q2’22 Q2’21 Inc/(Dec) Total Revenues Net of Interest Expense $13,395 $10,243 31% FX-Adjusted* $10,044 33% Net Income $1,964 $2,280 (14%) Diluted EPS† $2.57 $2.80 (8%) Average Diluted Shares Outstanding 753 802 (6%) * Total
Slide 3: Total Network Volumes Growth
Total Network Volumes Growth % Increase/(decrease) vs. Prior Year: Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Billed Business (9%) 51% 31% 33% 35% 30% Processed Volumes (1%) 26% 18% 15% 15% 19% Total Network Volumes (8%) 46% 29% 30% 32% 28% $395 $368 $350 $54 $ in Billions $331 $316 $52 $49 Total Network V
Slide 4: Billed Business G&S Growth
Billed Business G&S Growth G&S by Online vs. Offline % Increase/(decrease) vs. Prior Year (FX-adjusted): 50% 30% Offline Total G&S Online 10% (10%) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2’22 Online Offline Total YoY 15% 23% 18% % of Total 66% 34% 100% 4 Note: G&S = Goods & Services spending. Online =
Slide 5: Billed Business T&E Growth
Billed Business T&E Growth T&E by Customer Type % Increase/(decrease) vs. 2019 (FX-adjusted): 60% Q2’22 % of Q2’19 40% US Consumer 136% Intl Consumer 109% 20% Total SME 108% 0% Total T&E 108% (20%) Large & Global (40%) 60% Corporate (60%) (80%) (100%) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 US Intl Tota
Slide 6: Worldwide Total Loans and Card Member Receivables
Worldwide Total Loans and Card Member Receivables Total Ending Loans Total Ending CM Receivables ($ in billions) ($ in billions) $99.5 $91.5 $92.1 $77.8 $79.4 $53.6 $53.2 $56.0 $47.6 $48.8 YoY 4% 9% 20% 27% 28% 27% 19% 23% 27% 18% Growth Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 No
Slide 7: Card Member Credit Metrics
Card Member Credit Metrics Card Member Loans Net Write-off Rates Card Member Receivables Net Write-off Rates (excluding GCP) 1.0% 0.8% 0.8% 0.8% 0.6% 0.6% 0.6% 0.3% 0.2% 0.3% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 30+ Days 30+ Days Past Due 0.6% 0.7% 0.7% 0.7% 0.7% Past Due* 0.5
Slide 8: Total Reserves
Total Reserves Balance Sheet Credit Reserves* ($ in billions) $1.5 $5.8 ($2.4) $0.1 $0.3 ($0.2) $4.3 $1.4 Card Member ($2.2) Receivables $0.1 $3.4 ($0.3) $3.1 $0.1 $3.2 $0.1 $5.6 $0.1 $0.1 Total $4.2 Loans $3.4 $3.0 $3.0 Q1'20 Q4'20 Q4'21 Q1'22 Q2'22 Beginning Ending Ending Ending Ending Reserves Re
Slide 9: Funding Strategy
Funding Strategy Business Funding Needs Strong Liquidity Profile Maturities 9
Slide 10: Funding and Deposits
Funding and Deposits We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in unsecured debt, asset securitizations and deposits, and access to secured borrowing facilities and a committed bank credit facility. Our funding plan for the full
Slide 11: Funding Programs
Funding Programs • Our funding programs can access a range of funding sources to support our global business. American Express Company (AXP) Unsecured Term Debt, Senior Debt Rating † : A2/BBB+/A Committed Bank Credit Facility American Express Travel Related Services (TRS) Secured Borrowing Facility,
Slide 12: Term Maturity
Term Maturity ($ in billions) 06/30/22 CDs * ** Card ABS Unsecured† $13.2 $10.6 $2.8 $8.4 $7.5 $2.1 $2.8 $1.3 $7.2 $1.4 $2.7 $0.4 $2.6 $4.0 $7.6 $2.5 $6.8 $5.8 $3.5 $3.1 $2.5 2022 2023 2024 2025 2026 Thereafter *Reflects long-term CDs issued with an original maturity of 12 months or greater. **Refle
Slide 13: Capital Management
Capital Management Capital Strength CET1 Capital Ratio Target of 10-11% Return on Equity (ROE) Business Needs Share Repurchases and and Acquisitions Dividends 13
Slide 14: Capital
Capital Common Equity Tier 1 Capital Return ($ in billions) $3.6 14.2% $3.4 12.6% 10.5% 10.4% 10.3% $1.9 $1.3 $1.0 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 CET1 Ratio Target: 10-11% 14
Slide 15: Takeaways
Takeaways Business • Q2’22 Net Income of $2.0B Results • Q2’22 Diluted EPS † of $2.57 Strong Balance • We continued to maintain a robust liquidity position and CET1 ratio within our target range. Sheet • As of June 30, 2022: • 10.3% CET1 Ratio • Diversified funding mix ‒ Year to date growth of $12.0
Slide 16: Appendix
Appendix
Slide 17: Global Corporate Payments Card Member Credit Metrics
Global Corporate Payments Card Member Credit Metrics Client Bankruptcy Recovery Impact to GCP Card Member Receivables Net Write-Offs Adjusted Net Write-off rates* Increase/(Decrease) Q2’21 Net Write-Off ($37M) Amount/(Recovery) Credit Insurance Claim (Proceeds)/Repayment within Other, net $33M 0.5%
Slide 18: Credit Reserve Build Macroeconomic Assumptions
Credit Reserve Build Macroeconomic Assumptions US Unemployment Rate % US GDP Growth* % 18% 8% 16% 6% 14% 4% 12% 2% 10% 0% 8% (2%) 6% (4%) 4% 2% (6%) 0% (8%) Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Slide 19: American Express Credit Account Master Trust (AMXCA)
American Express Credit Account Master Trust (AMXCA) American Express Credit Account Master Trust Funding Maturities* (AMXCA) ($ in billions) Eligible assets US Consumer Card Member loans US Small Business Card Member loans Assets in trust Consumer Card Member loans $4.0 $2.7 $2.8 Trust Size:
Slide 20: American Express Credit Account Master Trust (AMXCA)
American Express Credit Account Master Trust (AMXCA) Past Due Rate Default Rate 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% 6/21 7/21 8/21 9/21 10/21 11/21 12/21 1/22 2/22 3/22 4/22 5/22 6/22 6/21 7/21 8/21 9/21 10/21 11/21 12/21 1/22 2/22 3/22 4/22 5/22 6/22 Past Due Rate (Calculate
Slide 21: Annex 1
Annex 1 Network Volumes – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Billed Business Reported (7%) 53% 31% 32% 34% 27% FX-Adjusted (9%) 51% 31% 33% 35% 30% Processed Volumes Reported 3% 33% 20% 13% 12% 12% FX-Adjusted (1%) 26% 18% 15% 15% 19% W
Slide 22: Annex 2
Annex 2 GCP Card Member Receivables Net Write-Off rates ($ in millions) Q2’21 GCP Net Write-Offs - Principal and Fees* ($24) Client Bankruptcy Recovery Impact $37 Adjusted Net Write-Offs $13 GCP Average Card Member Receivables $11,087 Reported Net Write-Off rates (0.9%) Adjusted Net Write-Off rate
Slide 23: 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 24: 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 25: Forward Looking Statements
Forward Looking Statements • the company’s ability to achieve its 2022 revenue growth outlook, its revenue growth expectations for 2023 and its revenue growth aspirations for 2024 and beyond, which could be impacted by, among other things, the factors identified above and in the subsequent paragraph
Slide 26: Forward Looking Statements
Forward Looking Statements • the actual amount the company spends on marketing in 2022 and beyond, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance; the effectiveness of management’s investment optimization process, management
Slide 27: Forward Looking Statements
Forward Looking Statements • the company’s funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we of
Slide 28: American Express
AMERICAN EXPRESS
American Express Company — Debt Investor Presentation (July 2022) on 6ix