American Express Company · NYSE:AXP
American Express — Investor Day (August 2013)
94 slides from American Express's investor day presentation, Aug 8, 2013
Slide 1: American Express Company Financial Community Meeting
American Express Company Financial Community Meeting Kenneth Chenault Chairman and Chief Executive Officer Dan Schulman Group President, Enterprise Growth John Hayes Executive Vice President and Chief Marketing Officer August 8, 2013
Slide 2: Agenda
Agenda Year-to-Date Financial and Business Performance Growth Opportunities Enterprise Growth Update The Brand Q&A 2
Slide 3: Financial Performance
Financial Performance $ in billions; except per share amounts Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Total Revenues Net of Interest $8.0 $7.9 $8.1 $7.9 $8.2 Expense Growth vs. Prior Year 5% 4% 5% 4% 4% FX Adjusted Growth vs. Prior Year† 7% 5% 5% 5% 4% Net Income $1.3 $1.3 $0.6 $1.3 $1.4 Diluted EPS* $1.15 $1
Slide 4: Metric Trends
Metric Trends % increase/(decrease) vs. prior year Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Billed Business* 7% 6% 8% 6% 7% Billed Business FX Adjusted** 9% 8% 7% 7% 8% Total Cards In Force 6% 6% 5% 5% 4% Cardmember Loans 4% 6% 4% 4% 3% Worldwide Lending Write-off Rate† 2.2% 1.9% 2.0% 1.9% 2.0% *Card billed bu
Slide 5: Billed Business Growth by Region
Billed Business Growth by Region % increase/(decrease) vs. prior year: 20% 15% 13% 10% 10% 8% 7% 6% 5% 0% Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 US EMEA (FX Adj)* JAPA (FX Adj)* LACC (FX Adj)* Total (FX Adj)* *See Annex 2 for reported billings growth rates. 5
Slide 6: Billings Growth – U.S.
Billings Growth – U.S. % increase/(decrease) vs. prior year 15% 10% 5% 0% (5%) (10%) AXP (15%) MasterCard/Visa - Credit & Charge Volume (20%) Q2'09 Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Q4'12 Q2'13 Source: Company filed reports. 6
Slide 7: Billings Growth – Global
Billings Growth – Global FX adjusted† % increase/(decrease) vs. prior year 15% 10% 5% 0% (5%) AXP (10%) MasterCard/Visa - Credit & Charge Volume (15%) Q2'09 Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Q4'12 Q2'13 Source: Company filed reports. Note: Visa results exclude Visa Europe, which is a separate enti
Slide 8: First Half 2013 Volumes – Relative Performance
First Half 2013 Volumes – Relative Performance Billed Business $ in billions Growth vs. PY 7% 9% 1% 5% 20% 4% Ex. Acq 7% † $462 $200 $177 $99 $96 $52 AXP JPM* Citi** BofA*** CapOne † Discover†† Note: AXP “Billed Business” includes activities (including cash advances) related to proprietary cards, ca
Slide 9: U.S. General Purpose Credit and Charge Card Billings
U.S. General Purpose Credit and Charge Card Billings $ in billions Change in billings '07 vs. '12 +$117 +$99 -$9 -$27 +$42 +$15 $568 $451 $416 $317 $263 $254 $223 $196 $148 $106 $90 $105 2007 2012 AXP JPM BofA Citi CapOne Discover Note: AXP figures reflect U.S. proprietary billed business. Competito
Slide 10: First Half 2013 Volumes – Relative Performance
First Half 2013 Volumes – Relative Performance Billed Business Ending Loans $ in billions $ in billions Growth Growth vs. PY 7% 9% 1% 5% 20% 4% vs. PY (5%) (0%) (4%) (12%) 3% 5% Ex. Acq 7% † Ex. Acq (2%) † $462 $139 $124 $91 $78 $200 $63 $177 $50 $99 $96 $52 AXP JPM* Citi** BofA*** CapOne † Discover
Slide 11: Dependency Upon Balance Transfer Offers
Dependency Upon Balance Transfer Offers % of Offers With 0% Intro Rate on Balance Transfers - LTM 91% 90% 83% 63% 50% 5% AXP Discover BofA Citi JPM CapOne Source: Comperemedia. Represents mail volume in LTM (Q3’12-Q2’13) that had an introductory offer of 0% for balance transfers. Based on a sample o
Slide 12: Spend Velocity vs. Industry
Spend Velocity vs. Industry* USCS USCS Lending Industry (excl. AXP)** 8.7x 6.4x 3.6x 3.0x 1.7x 2.1x 2007 2012 2007 2012 2007 2012 * Spend velocity is full year billed business for the period specified divided by average ending loans (calculated on a five point quarterly average). “USCS” includes car
Slide 13: Revenue Growth vs. Issuing Competitors
Revenue Growth vs. Issuing Competitors % increase/(decrease) vs. prior year 44% 40% 41% 17% 11% 10% 9% 8% 5% 4% 4% 4% 4% 2% 1% 1% 0% Q3 Q4 Q1 Q2 (1%) (1%) ‘12 ‘12 ‘13 ‘13 (3%) (4%) (6%) (7%) (18%) † †† AXP BofA* Citi** JPM Discover CapOne Source: Company Reports. Note: Issuing Competitors reflect re
Slide 14: Lending Managed Net Write-off Rate
Lending Managed Net Write-off Rate* US Lending ICS Lending 10.0% 7.3% 5.8% 4.3% 4.5% 5.3% 3.8% 1.9% 2.0% Q2'08 Q2'09 Q2'10 Q2'11 Q2'12 Q2'13 Q2'08 Q2'09 Q2'10 Q2'11 Q2'12 Q2'13 AXP USCS Industry (Excluding AXP)** AXP ICS *Managed Net Write-off Rate (Principal Only). See Statistical Tables in the Com
Slide 15: Peer Card Segment Net Income vs. Adjusted Net Income
Peer Card Segment Net Income vs. Adjusted Net Income $ in millions Impact of Reserve Activity † $1,405 $1,339 $1,280 $1,232 $1,163 $1,191 $1,113 $1,093 $1,041 $983 $908 $860 $804 $718 $743 $719 $686 $673 $1,373 $602 $1,232 $1,201 $525 $977 $1,003 $903 $883 $347 $734 $713 $786 $734 $689 $631 $624 $56
Slide 16: Annualized Peer Card Segment Return on Assets
Annualized Peer Card Segment Return on Assets H1'13 Adj. Pre-Tax Income (ex. Reserve Release) as % of Loans 7.0% 6.2% 6.0% 4.6% 4.3% 4.3% 4.1% AXP† USCS† DFS CapOne* JPM Citi BofA** Source: Company reports. Pre-tax income as a % of average loans calculated on a two point quarterly basis; Total Compa
Slide 17: Total Adjusted Operating Expense Growth
Total Adjusted Operating Expense Growth* % increase/(decrease) vs. prior year 9% 8% <3% Annual Target 2% (2%) 2010 2011 2012 H1'13 Note: Operating Expense includes salaries and employee benefits, professional services, occupancy and equipment, communications, and other, net.*The growth rate of adjus
Slide 18: Marketing and Promotion Expense
Marketing and Promotion Expense Marketing and Promotion Expense as % of Managed Revenue* 11.4% 9.3% 8.3% 10.0% 9.7% 9.7% 9.5% 9.2% 8.9% 7.4% 7.9% 2007 2008 2009 2010 2011 2012 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Note: Beginning in 2011, the Company reclassified certain contractual payments to partners as
Slide 19: Adjusted Expense to Revenue Ratio
Adjusted Expense to Revenue Ratio Adjusted Expenses as % of Managed Revenue* 74% 75% 73% 69% 67% 71% Adj. 64% 63% 2007 2008 2009 2010 2011 2012 H1'13 Note: Beginning in 2011, the Company reclassified certain contractual lump sum payments to partners as either contra discount revenue or marketing and
Slide 20: Total Payout Ratio
Total Payout Ratio Percentage of Capital Generated Returned to Shareholders 172% 132% 98% 94% 97% 70% 56% 35% 29% 30% ($ in billions) 2008 2009* 2010 2011 2012 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Share Repurchases $0.2 - $0.6 $2.3 $4.0 $1.8 $1.0 $1.0 $0.8 $1.4 Note: Payout Ratio is calculated by dividing
Slide 21: Potential Slow Growth Scenarios
February '13 Potential Slow Growth Scenarios 700bps (200bps) 500bps 12% Scenario 1 (300bps) 5% Scenario 2 500bps (200bps) 400bps 9% (300bps) 5% (200bps) 600bps 15% 700bps Scenario 3 (300bps) 7% Revenue OPEX M&P/Rewards Provision/Credit Share Repurchase EPS 21
Slide 22: H1'13 Contribution to EPS Growth
H1'13 Contribution to EPS Growth 900 bps (100 bps) (500 bps) 600 bps 9% (400 bps) 4% Revenue OPEX M&P/Rewards Provision/Credit Taxes Share EPS Repurchases Note: Figures rounded 22
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Slide 24: Voice of the Customer
Voice of the Customer Improvement in Recommend to a Friend* (U.S.) Indexed to 2009 35% 2009 2010 2011 2012 June '13 YTD *Recommend to a Friend (RTF) measures a cardmember’s satisfaction with the level of servicing provided by American Express customer care professionals. The metric is calculated fro
Slide 25: USCS Cardmember Non-credit Attrition
USCS Cardmember Non-credit Attrition* Indexed to Q2'07 levels 1.2x 1.0x 0.8x 0.6x 0.7x 0.4x Q2'07 Q2'08 Q2'09 Q2'10 Q2'11 Q2'12 Q2'13 Note: Q4'08, Q1'09 and Q2'09 were normalized for inactive card cancellations of 300K cards in Q4'08, 500K cards in Q1'09 and 2.6MM cards in Q2'09. *Non-Credit attriti
Slide 26: European Commission Update
European Commission Update 26
Slide 27: Agenda
Agenda Year-to-Date Financial and Business Performance Growth Opportunities Enterprise Growth Update The Brand Q&A 27
Slide 28: Consumer and Small Business Card Acquisition
Consumer and Small Business Card Acquisition New First Year Spend* by Product Type YOY Growth 21% Prop Lending 3% Co-Brand 15% Charge Cards Acquired in Cards Acquired in 1H'12 1H'13 Note: Includes customers acquired in the USCS and ICS segments. *First Year Spend reflects the first 12 months of spen
Slide 29: Average Cardmember Spend Per Account vs. Peers
Average Cardmember Spend Per Account vs. Peers 2012 Average Cardmember Spend $16,425 $6,423 $6,204 $4,626 $3,074 $2,653 AXP U.S. BofA JPM Citi CapOne Discover* Proprietary Note: AXP U.S. Proprietary represents U.S. Proprietary Billed Business divided by U.S. Proprietary Basic cards-in-force. Peer av
Slide 30: USCS Loans Growth vs. Industry
USCS Loans Growth vs. Industry % increase/(decrease) vs. prior year: 8% 6% 5% 4% 4% 4% 4% 4% 4% 2% 2% 1% 1% 1% 1% 0% 1% 0% 0% Q2'11 (3%) Q4'11 Q2'12 Q4'12 Q2'13 (4%) (5%) (8%) USCS YoY Loan Growth Industry U.S. Revolving Consumer Credit* *Source: Federal Reserve, Consumer Credit Release, July 2013.
Slide 31: Improved Risk Profile in U.S. Lending Portfolio
Improved Risk Profile in U.S. Lending Portfolio Loan Tenure* Transactor vs. Revolver Loans 76% 70% 89% 84% 24% 30% 11% 16% Q2'08 Q2'13 Q2'08 Q2'13 ≤ 2 years of Tenure > 2 years of Tenure % Transactor ** % Revolver *Tenure measures the longevity of the relationship with the cardmember from the time o
Slide 32: Master Trust Principal Payment Rate vs. Issuing Competitors
Master Trust Principal Payment Rate vs. Issuing Competitors 33% 27% 24% 24% 22% 21% 20% 19% 19% 17% 16% 15% Q2'08 Q2'13 AXP Lending JPM CapOne Citi Discover BofA Trust Source: 10-D Filings. Note: Represents quarterly average principal payment rates from the following trusts: AXP (AMXCA), JPMorgan (C
Slide 33: U.S. Corporate Card Performance
U.S. Corporate Card Performance AXP Peer Issuers* Indexed to 2010 Indexed to 2010 +10% CAGR +5% CAGR 121 113 108 110 100 100 2010 2011 2012 2010 2011 2012 Note: AXP figures represent Corporate Card volumes *Includes Visa and MasterCard Corporate credit volumes for JPM, US Bank, Citi, BMO Harris and
Slide 34: B2B Global Billed Business
B2B Global Billed Business* Global B2B Billed Business Indexed to 2010, FX adjusted** Indexed to H1'12, FX adjusted** +23% CAGR +11% 150 111 100 121 100 2010 2011 2012 H1'12 H1'13 *Includes vPayment, Buyer-Initiated Payments (BIP), Purchasing Card (P-Card). ** See slide 3 for an explanation of FX ad
Slide 35: U.S. Small Business Performance
U.S. Small Business Performance U.S. Small Business Billed Business Indexed to 2010 Indexed to H1'12 +13% CAGR +11% 127 114 111 100 100 2010 2011 2012 H1'12 H1'13 % of BB 77% 77% 78% 78% 78% on charge 35
Slide 36: International Small Business Performance
International Small Business Performance 36
Slide 37: GNS Performance
GNS Performance Billed Business New Deals ($ in billions) CAGR 1999-2012: $140 $120 $100 $80 $60 $40 $20 $0 1999 2002 2005 2008 2011 37
Slide 38: Loyalty Partner Update
Loyalty Partner Update Customers (Collectors) ~34MM ~50MM ~54MM +58% Mexico Mexico India India India Poland Poland Poland Germany Germany Germany Oct'11 Dec'12 Jun'13 38
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Slide 40: Agenda
Agenda A Look Back The Opportunity for Growth How We Win Early Results Looking Forward 40
Slide 41: Enterprise Growth: A Look Back
Enterprise Growth: A Look Back Combination of multiple Drive new revenue models businesses: through software platforms ‒ Travelers Cheques & mobile devices ‒ PASS & Gift Cards Deploy technology assets of ‒ Loyalty Edge Revolution Money acquisition ‒ Foreign Exchange 41
Slide 42: Aspiration to Drive Scale and Diversity for AXP
Aspiration to Drive Scale and Diversity for AXP Advanced payments Electronification of Underserved cash Alternatives to Banking Millennials Emerging Digital Wallets economies Digitally savvy Frictionless Commerce Cross border payments 42
Slide 43: Industry “Predictions”
Industry “Predictions” Mobile payment transactions to be $4.5 billion by 2012 One in six mobile subscribers globally will have NFC by 2014 By 2012, mobile payments will be considered “mainstream” WW mobile payment users will surpass 141M by the end of 2011 Consumer Spending on Deal-a-Day Offers Like
Slide 44: Our Mission: Breathe Life Into The Words “Financial Inclusion”
Our Mission: Breathe Life Into The Words “Financial Inclusion” Bring financial services from the margin to the mainstream for tens of millions of people across the globe Transform the consumer retail financial services landscape Inspire our employees, customers, and partners 44
Slide 45: Payments Landscape Opportunity Globally: The Other 80%
Payments Landscape Opportunity Globally: The Other 80% 2012 Global Payments Volume Competing in Trad’l Prepaid: ~$425B Prepaid ($T)* $425B Check Replacing Debit and Checks: +$10T $3T Debit Credit/ Electronifying Cash: +$15T Charge $7T $25 $6T Global Payments volume in payments outside of credit/char
Slide 46: Opportunity to Address the Needs of Millions of People
Opportunity to Address the Needs of Millions of People ~100M ~2.5B Sources: 2011 FDIC National Survey of Unbanked and Underbanked Households, US Census, Javelin Strategy and Research 2012, World Bank 2012 46
Slide 47: It’s Expensive to Be Poor
It’s Expensive to Be Poor Bank Costs Alternative Services Costs Opportunity Costs • $723 average minimum • 400-650% APR for payday loans • Long wait times and lines for cash balance for free • Up to 5% for a $100 money order some services checking account • 3-15% to send money home to • Cost to merc
Slide 48: Evolution of a World Class Software Platform
Evolution of a World Class Software Platform MARKETING & JANUARY 2010 PROMOTIONS Promotions (Revolution Money @ Acquisition) Spend-Based PAYMENTS ONBOARDING Funds In P2P Funds Out Funds Out (Digital) (Cards/Cash/Check) Account Types ACH Receive Online Purchase Limited Merchant Basic Credit Negotiate
Slide 49: Evolution of a World Class Software Platform
Evolution of a World Class Software Platform MARKETING & MARCH 2011 PROMOTIONS Marketing Promotions Serve Launch Marketing Site Spend-Based Load-Based PAYMENTS ONBOARDING Funds In P2P Funds Out Funds Out ACH (Digital) (Cards/Cash/Check) Account Types Credit Receive Online Purchase Card (Offline POS)
Slide 50: Evolution of a World Class Software Platform
Evolution of a World Class Software Platform MARKETING & DECEMBER 2012 DIGITAL COMMERCE PROMOTIONS Marketing Promotions Serve Platform Marketing Site Spend-Based Load-Based Event-Based PAYMENTS ONBOARDING Funds In P2P Funds Out Funds Out ACH (Digital) (Cards/Cash/Check) Virtual Currency Account Type
Slide 51: Evolution of a World Class Software Platform
Evolution of a World Class Software Platform MARKETING & ALTERNATIVE TO BANKING DIGITAL COMMERCE PROMOTIONS Personal Financial Management Alternative to Banking Features Marketing Promotions Deals and Offers – Consumer Deals and Offers – Merchant Savings Tools Eligibility for FDIC Marketing Site Spe
Slide 52: Technology Enables a Superior Operating Environment
Technology Enables a Superior Operating Environment “Faster, Better, Cheaper” Continuous Release Platform Performance Ability to Scale Improved Customer Experience Flexible and Nimble Cost Advantage 52
Slide 53: Cost Advantage
Cost Advantage Cost to Payment Provider per Customer Cost Advantage ~2.5x Estimated 50% of average cost per checking account lies in branch and ATM network Our partnership model with retailers enables larger footprint without overhead of branch network Checking Account Bluebird Sources: Novantas
Slide 54: Unifying Our Feature Set on the Serve Platform
Unifying Our Feature Set on the Serve Platform Products Leverage Feature Sets from a Common Platform BLUEBIRD AMERICAN PREPAID EXPRESS SERVE OFFERINGS 54
Slide 55: Building on Assets and Capabilities Core to American Express
Building on Assets and Capabilities Core to American Express American Express Fraud Controls, Big Driving Benefit Back to Amex Assets Data, and Compliance Expertise Enhancing the brand World Class Service Increased relevance to drive Merchant Services Merchant Coverage Future prospect pool for
Slide 56: Early Overall Results – Customer Trends
Early Overall Results – Customer Trends Figures in millions Enterprise Growth Customers* 4.7 5.0 3.9 3.1 2.1 1.0 1.5 0.6 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2 '13 July '13 *Cumulative customer orders for General Purpose Reloadable Cards, Serve, Bluebird, and Travel Cards; Vente-Privee registered us
Slide 57: Early Overall Results – Volume Trends
Early Overall Results – Volume Trends Figures in millions Transaction Volume* $1,100 $800 $600 $300 $150 $200 $100 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 *Transaction volumes are across reloadable prepaid products (i.e. Serve, Bluebird , General Purpose Reloadable and Travel Cards), and includes
Slide 58: Bluebird: Checking and Debit Alternative with Walmart
Bluebird: Checking and Debit Alternative with Walmart ADD FUNDS: SPEND FUNDS: Direct Deposit Global POS Cash E-commerce ACH Bill Pay Debit Card Global ATM MANAGING FUNDS: P2P Online Interactive Voice P2P management Response Remote Check Bluebird Capture Mobile app ACH Sub-Accounts Check By Mail 24/7
Slide 59: Bluebird Results and Learnings
Bluebird Results and Learnings Update: Bluebird Reminder: Economic Drivers 1M+ accounts Added more than $1B in funds to date ~39% funded via Direct Deposit ~87% enrollees new to AXP Franchise ~47% enrollees under age 35 Data as of July 31, 2013 *Note: Accounts include customer orders for m
Slide 60: Bluebird Centers in Select Walmart Stores
Bluebird Centers in Select Walmart Stores 60
Slide 61: Targeting the Underbanked in the United States
Targeting the Underbanked in the United States 70% outside of Credit / Charge 2012e US Payments Volume ($T)* Prepaid $0.3T Checks $1.4T Credit / Charge $5.3 $2.3T Non-credit/charge payment opportunity Cash in the US $1.7T Debit $2.0T *excludes electronic payments (preauthorized and remote) Re-Launch
Slide 62: Partnership with Isis
Partnership with Isis® Isis® American Express Serve open mobile wallet open platform with platform that will money movement and enable consumers to management features, make NFC transactions including card swipe, POS, e-bill pay, P2P, and direct deposit Enable users to access Serve’s features and ta
Slide 63: International – Breaking into New Geographies
International – Breaking into New Geographies 1 2 3 RETAIL AROUND THE PARTNERSHIP WITH WORLD CHINA PARTNERSHIPS PAYBACK 4 5 CROSS BORDER EMERGING ECONOMIES PAYMENTS & COMMERCE 63
Slide 64: Potential Financial Opportunity
Potential Financial Opportunity Addressable Populations Revenue Potential (illustrative) $1.4T* 10% U.S. share*** ~100M $140B 2% revenue margin*** ~$3B Annual Spend Share Revenue Potential $2.7T** ~$3.5B 1% International ~2.5B share*** 2% revenue margin*** $27B ~$0.5B Annual Spend Share Revenue Pote
Slide 65: Business Transformation Opportunity
Business Transformation Opportunity Expanding the Reach of Opportunity to Make a American Express Difference around the World 65
Slide 66: Our Future
Our Future Though still early in our journey… American Express’ Bluebird card soars past rivals American Express Launches All- in Consumer Reports’ first ranking of prepaid cards. New Digital Payments Platform American Express’ Bluebird prepaid card is to Attack PayPal’s Bread and flying high. -July
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Slide 68: Trust, Security, Service
TRUST SECURITY SERVICE
Slide 69: Consistent Brand Tenets: Trust, Security, Service
Consistent Brand Tenets: Trust, Security, Service 69
Slide 70: Trademarks, logos and service marks note
Note: The trademarks, logos and service marks used on this slide and throughout this presentation are the property of their respective owners. 70
Slide 71: Strong Brand Equity Among AXP Cardmembers (Global)
Strong Brand Equity Among AXP Cardmembers (Global) (%) 100 75 50 25 0 Brand Stature Brand Strength 1993 to 1999 2000 to 2003 2004 to 2006 2007 to 2009 2010 to 2013 Source: BAV® Insights (www.bavinsights. com). The BrandAsset Valuator Model: Brand Stature represents Esteem and Knowledge metrics (corr
Slide 72: Worldwide Total Cards in Force
Worldwide Total Cards in Force (MM) 102.4 104.3 35.4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q2'13 Note: Total cards-in-force represents the number of cards that are issued and outstanding. 72
Slide 73: Maintained Strong Brand Equity
Maintained Strong Brand Equity (%) 100 75 50 25 0 Brand Stature Brand Strength 1993 to 1999 2000 to 2003 2004 to 2006 2007 to 2009 2010 to 2013 Source: BAV® Brand Asset Consulting. The Brand Asset Valuator Model: Brand Stature represents Esteem and Knowledge metrics (Current Operating Value); Brand
Slide 74: Key Brand Attributes Among AXP Cardmembers (U.S.)
Key Brand Attributes Among AXP Cardmembers (U.S.) (%) 100 75 50 25 0 Leader Reliable Intelligent Prestigious Distinctive High Quality Innovative 1993 to 1999 2000 to 2003 2004 to 2006 2007 to 2009 2010 to 2013 Source: BAV® Insights. Subset of brand attributes BAV® U.S. 1993-2013, among American Expr
Slide 75: Key Brand Attributes Among AXP Cardmembers (U.S.)
Key Brand Attributes Among AXP Cardmembers (U.S.) (%) 100 75 50 25 0 Leader Reliable Intelligent Prestigious Distinctive High Quality Innovative 1993 to 1999 2000 to 2003 2004 to 2006 2007 to 2009 2010 to 2013 American Express Competitor Issuer Average Source: BAV® Insights. Subset of brand attribut
Slide 76: Key Brand Attributes Among Prospects (U.S.)
Key Brand Attributes Among Prospects (U.S.) Leader Reliable Intelligent Prestigious Distinctive High Quality Innovative Card Members General Population Prospects Source: BAV® Insights. Subset of brand attributes BAV® U.S. 2010-2013, among American Express cardmembers and Prospects (General Populatio
Slide 77: Importance of AXP Brand Association
Importance of AXP Brand Association Among Serve Customers, Top 5 Reasons for Signing-Up It is associated with American Express 61% No monthly fees 55% I wanted an alternative to another prepaid card 42% See how it works 33% I wanted an alternative to Paypal 33% Source: AXP Global Marketplace Insight
Slide 78: Good Value Perceptions: Prospects (U.S.)
Good Value Perceptions: Prospects (U.S.) % of Prospects WITH NO % of Prospects WITH knowledge of Bluebird knowledge of Bluebird Source: BAV® Insights. BAV® U.S. July 2012- June 2013, among American Express cardmembers and Prospects (General Population); those who know Bluebird rate Knowledge 2+ for
Slide 79: Good Value Perceptions: AXP Cardmembers (U.S.)
Good Value Perceptions: AXP Cardmembers (U.S.) % of Cardmembers WITH NO % of Cardmembers WITH knowledge of Bluebird knowledge of Bluebird Source: BAV® Insights. BAV® U.S. July 2012- June 2013, among American Express cardmembers and Prospects (General Population); those who know Bluebird rate Knowled
Slide 80: Perceptions of AXP Cardmembers (U.S.)
Perceptions of AXP Cardmembers (U.S.) Relevance Reappraisal Products services meet needs Access to special events Respected/Special Company to do business with Customer service Not Aware of AXP Bluebird Accounts Aware of AXP Innovation Advocacy Bluebird Accounts Peace of mind Access no one else can
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Slide 82: Managing The Brand: Measurement Tools & Listening Posts
Managing The Brand: Measurement Tools & Listening Posts Network International Net Merchant Value Consumer Promoter Satisfaction Brand Study Brand Health Score Study (US + UK) Tracker US Small Merchant Social Media Business Owner Value Enterprise-wide Brand Health Research Listening System Tracker US
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Slide 84: Annex 1
Annex 1 Adjusted Diluted EPS Reconciliation Q4'11 Q4'12 YoY Growth Income from Continuing Operations $1.01 $0.56 (45%) Q4'12 Restructuring Charges* $0.26 Q4'12 Membership Rewards Estimation Process Enhancement Expense* $0.19 Q4'12 Cardmember Reimbursements * $0.08 Adjusted Diluted EPS on a Net Incom
Slide 85: Annex 2
Annex 2 Region Billed Business - Reported & FX Adjusted* % increase/(decrease) vs. prior year: Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 EMEA Reported 23% 15% 4% 4% (4%) (4%) 5% 2% 7% FX Adjusted 11% 8% 4% 6% 4% 3% 5% 4% 6% JAPA Reported 36% 31% 18% 22% 10% 8% 11% 6% 8% FX Adjusted 19% 1
Slide 86: Annex 3
Annex 3 Billed Business - Reported & FX Adjusted* % increase/(decrease) vs. prior year: Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Total Reported (16%) (11%) 8% 16% 16% 14% 15% 17% 18% 16% 11% 12% 7% 6% 8% 6% 7% FX Adjusted (13%) (9%) 4% 12%
Slide 87: Annex 4
Annex 4 Owned/Managed Credit Data Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 USCS Net Write-Off Rate Cardmember Lending GAAP Basis 5.8% 6.1% 7.0% 8.5% 10.3% 9.8% 8.0% Cardmember Lending Managed Basis 5.3% 5.9% 6.7% 8.5% 10.0% 8.9% 7.5% Note: For periods ended on or prior to December 31, 2009, informa
Slide 88: Annex 5
Annex 5 ($ in millions) AXP Q2'12 Q1'13 Q2'13 GAAP Net Income $ 1,339 $ 1,280 $ 1,405 Credit Reserve Release (165) (122) (49) 35% Tax-Effect on Reserve Release 58 43 17 Adjusted Net Income $ 1,232 $ 1,201 $ 1,373 USCS Q2'12 Q1'13 Q2'13 GAAP Net Income $ 718 $ 804 $ 743 Credit Reserve Release (144) (
Slide 89: Annex 6
Annex 6 ($ in millions unless otherwise noted) AXP USCS H1'13 GAAP Pre-tax Income $ 3,904 $ 2,445 H1'13 Reserve Releases 171 154 H1'13 Adjusted Pre-tax Income $ 3,733 $ 2,291 Annualized H1'13 GAAP Pre-tax Income $ 7,808 $ 4,890 Annualized Adjusted H1'13 Pre-tax Income $ 7,466 $ 4,582 Average Cardmem
Slide 90: Annex 7
Annex 7 2009 2010 2011 2012 H1'12 H1'13 GAAP Total Operating Expenses $9,619 $10,673 $11,964 $13,170 $6,320 $6,222 Visa/MasterCard Settlement Payments 880 880 580 Net Investment in a Foreign Subsidiary 180 Q4'12 Charges: Restructuring Charges* (400) Adjusted Total Operating Expenses $10,679 $11,553
Slide 91: Annex 8
Annex 8 ($ in millions) 2007 2008 2009 2010 2011 2012 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 GAAP Total Revenues Net of Interest Expense $27,462 $28,227 $24,336 $27,582 $29,962 $31,555 $7,965 $7,862 $8,141 $7,881 $8,245 Securitization Adjustments: Discount revenue, net card fees and other 310 400 331 NA NA N
Slide 92: Annex 9
Annex 9 ($ in millions) 2007 2008 2009 2010 2011 2012 H1'13 GAAP Total Revenues Net of Interest Expense $27,462 $28,227 $24,336 $27,582 $29,962 $31,555 $16,126 Securitization Adjustments: Discount revenue, net card fees and other 310 400 331 NA NA NA NA Interest income 3,130 3,512 3,097 NA NA NA NA
Slide 93: Annex 10
Annex 10 Adjusted Total Revenue Net of Interest Expense for Cardmember Reimbursements ($ in millions) YoY % Q2'13 Q2'12 Inc/(Dec) GAAP Total Revenues Net of Interest Expense $ 8,245 $ 7,965 4% Total Revenues Net of Interest Expense (FX adj.) 7,922 4% Cardmember Reimbursements 82 8 Adjusted Total Rev
Slide 94: Annex 11
Annex 11 Adjusted Earnings Per Share Growth for H1'12 Tax Rate ($ in millions) Reported H1'12 vs. H1'13 H1'12 H1'13 YoY % Inc/(Dec) Pretax Income 3,652 3,904 Taxes (1,057) (1,219) Net Income 2,595 2,685 Effective Tax Rate 29% 31% Average Shares Outstanding 1,158 1,101 Earnings per Share $ 2.22 $ 2.4
American Express Company — Investor Day (August 2013) on 6ix