American Express Company · NYSE:AXP
American Express — Investor Day (March 2016)
190 slides from American Express's investor day presentation, Mar 10, 2016
Slide 1: American Express Company 2016 Investor Day
American Express Company 2016 Investor Day March 10, 2016 1
Slide 2: 2016 Investor Day presenters
2016 Investor Day Ken Chenault Chairman and Chief Executive Officer Doug Buckminster President, Global Consumer Services Group Steve Squeri Vice Chairman Anré Williams President, Global Merchant Services & Loyalty Group Jeff Campbell Executive Vice President and Chief Financial Officer
Slide 3: Agenda
Agenda 1 Context on Growth 3 Resetting our Cost Position Base Ken Chenault Steve Squeri 4 Financial Outlook 2 Growth Potential and Jeff Campbell Strategies Doug Buckminster 5 Steve Squeri Q&A Anré Williams 3
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Slide 5: What Has Changed Over the Last 12 to 18 Months?
What Has Changed Over the Last 12 to 18 Months? Slower global Dollar has continued Fuel prices economic growth to strengthen have declined Increased regulation Increased competition 5
Slide 6: What Hasn't Changed for Our Performance?
What Hasn’t Changed for Our Performance? Payments Industry 6
Slide 7: AXP Business Model
AXP Business Model Products Geographies Segments Based on Billed Business U.S. Small U.S. Global business Corporate issuer in merchant issuer * inter- issuer in Card acquirer *** the U.S.† issuer† national ** *As of 2015. **Nilson report for worldwide purchase volume (excluding U.S.) in 2014. AXP ba
Slide 8: Closed Loop
Closed Loop Aggregate Merchant Data Customer Data Industry Product Type Sub Industry Spend History Merchant Credit History Geography Geography Time 8
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Slide 10: AXP Revenue Scale
AXP Revenue Scale $B $32.8 Discover $8.7 AXP MasterCard $9.7 Visa $14.1 FY'15 Net Revenue Source: Company reports. Visa represents calendar FY'15 Net Revenue. 10
Slide 11: Card Revenue Growth vs. Issuer Peers
Card Revenue Growth vs. Issuer Peers 2013-2015 % CAGR 4.9% 3.1% 1.9% Revenue net of (0.3%) rewards (2.5%) (3.3%) US DFS COF US JPM C NA - BAC Consumer Branded Note: Total company results for Discover and Card Segment results for other issuing competitors; Consumer Lending segment for BAC, U.S. busin
Slide 12: ROCE and Payout Ratio vs. Issuer Peers
ROCE and Payout Ratio vs. Issuer Peers 2014-2015 Average ROCE 27% 21% 15% 13% 10% 10% 6% 4% AXP DFS USB WFC JPM COF C BAC 2014-2015 Cumulative Payout Ratio 101%* 89% 63% 62% 50% 49% 37% 30% AXP DFS WFC USB COF JPM BAC C Source: Bloomberg and Company reports. *AXP 2014-2015 cumulative payout ratio in
Slide 13: AXP Business Model
AXP Business Model Assets Capabilities Relationships Trusted Brand Marketing / Sales Diverse Customers Premium Positioning Risk Management Merchants Channels Data Analytics Corporate Clients Closed Loop Data and Information Servicing Business Partners Travel Network Rewar
Slide 14: Timeline of Business Model Changes
Timeline of Business Model Changes Amex completes acquisition of Loyalty Partner 2011 Launch of MR Early 90’s Opening of Amex launches AXP network Personal Savings 1996 2009 1985 1990 1995 2000 2005 2010 2015 Spin-off of AEFA to Business Launch of revolving become Ameriprise Travel Spinoff products
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Slide 16: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 16
Slide 17: Customer Focused Organization
Customer Focused Organization Merchant Global Global Services Consumer Commercial & Loyalty 17
Slide 18: Business Drivers & Performance
Business Drivers & Performance All metrics in billions unless otherwise stated 118 $1,035 $75 $32.6 $10.2 15 $11 $4.3 GMS $2.4 $399 $7 $9.7 GCS 62 $3.2 $266 $56 $5.4 $0.9 Intl Consumer & Network Svcs 41 $370 $13.2 $3.7 US Consumer Card Members Billings Loans** Revenue PTI (millions)* Note: Results r
Slide 19: Diverse Portfolio of Businesses
Diverse Portfolio of Businesses % of Marginal Contribution Fee 22% Lend 22% Spend 56% AXP U.S. Consumer International Network Global Global Services Consumer Services Commercial Merchant Services Services See Annex A for a reconciliation of total AXP. 19
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Slide 21: Potential Growth Scenario: Recent Revenue Performance
Potential Growth Scenario: Recent Revenue Performance Revenue Growth Key Drivers EPS Growth Credit Rewards Growth 4% M&P Growth Opex 5-7% Payout Ratio 21
Slide 22: Potential Growth Scenario: Stronger Revenue Performance
Potential Growth Scenario: Stronger Revenue Performance Revenue Growth Key Drivers EPS Growth Credit Rewards Growth 6% M&P Growth Opex 10-12% Payout Ratio 22
Slide 23: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 23
Slide 24: AXP Revenue Growth Drivers
AXP Revenue Growth Drivers Revenue Growth Revenue Growth Incremental Growth Drivers Organizational Grow Small Synergies Business & Middle Increase Share Market of U.S. Consumer Accelerated Lending Coverage Expansion 24
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Slide 26: Growth Potential and Strategies
Growth Potential and Strategies Doug Buckminster President, Global Consumer Services Group
Slide 27: Global Consumer
Global Consumer We Have a Large Diversified Business Existing Card Members Are a Tremendous Asset New Card Members Acquisition Has Been Strong We Believe We Have a Compelling Opportunity in Lending 27
Slide 28: Global Consumer Overview
Global Consumer Overview Challenges Opportunities Costco Exit Lending Growth Competitive Intensity Credit Quality Member Engagement Acquisition Returns Billings Growth Coverage Expansion Regulatory Changes Core Cobrands 28
Slide 29: Global Consumer Overview
Global Consumer Overview International Consumer & US Consumer Network Services 2015 % of AXP 2015 % of AXP Billed Business $370B 36% $266B 26% Card Member Loans* $56B 77% $7B 10% Cards in Force 41MM 35% 62MM 53% Revenue, net of interest expense $13B 40% $5B 16% Pre-Tax Income $4B 46% $1B 11% 2015 Re
Slide 30: Global Consumer Mix by 2015 Billings
Global Consumer Mix by 2015 Billings * US / International Issuing / Network Int’l Network 38% 26% US 62% Issuing 74% ** Proprietary Charge / Lending AXP Branded / Cobrand Charge Cobrand Lending 48% 31% 52% AXP Branded 69% *Network billings included in US/International. **Excludes Costco cobrand bill
Slide 31: International Volume Growth Has Been Solid
International Volume Growth Has Been Solid ICNS FX Adj. Billings Growth* Ex. Canada* 12% 2014 2015 11% 9% 2015 AXP Billings Growth vs Industry Growth** (28%) 15% 11% 9% 2% JAPAN MEXICO UK AUSTRALIA CANADA *See Annex B for reported billings growth rates. **Source: Industry Growth Projection (credit a
Slide 32: Costco Exit: 2016 and 2017 Growth Rates Will Be Impacted Heavily
Costco Exit: 2016 and 2017 Growth Rates Will Be Impacted Heavily US Consumer 2015 Card Member Accounts 7M Billings * $76B Loans $12B *Reflects Costco cobrand accounts and spending on other (non-Costco cobrand) American Express Cards at Costco warehouses. 32
Slide 33: US Consumer Volume Growth Has Moderated
US Consumer Volume Growth Has Moderated US Consumer Billings Growth US Consumer Revenue Growth Ex Costco * Benchmark 8.6% 6.3% 7.2% 4.7% 2014 2015 Impacted by: Impacted by: Costco Volume Deceleration Macro Economy Discount Rate Competition Benchmark: V/MC/DFS US Credit Volume growth 2014-2
Slide 34: Interest Income & Fees Have Driven Revenue Growth
Interest Income & Fees Have Driven Revenue Growth % Inc. vs. Prior Year US Consumer 2015 Reported Discount Revenue 2.4% Net Interest Income 7.8% Fee-Based Revenue * 6.6% Total 5.0% *Fee-Based Revenue reflects net card fees, other fees and commissions and other revenues. 34
Slide 35: Our US Revenue is Diversified & Our Card Members Are Loyal
Our US Revenue is Diversified & Our Card Members Are Loyal * *** US Consumer, Adjusted US Consumer Billing Attrition 2015 Fee-Based 1.4% Revenue Total Net Interest 1.2% Income 1.0% Discount Revenue 0.8% ** Credit Industry Benchmark 0.6% 2015 Other 0.4% Revenue 0.2% Net Interest 0.0% Income 2013 2014
Slide 36: Our US Card Member Base is Attractive & Engaged
Our US Card Member Base is Attractive & Engaged 2015 US Consumer Average Spend * $13.6K Average FICO * 764 Digitally Active ** 64% NPS *** +3 *Average spend/FICO excludes Costco cobrand accounts; average spend also excludes spending on other (non-Costco cobrand) American Express cards at Costco ware
Slide 37: Our Product Offerings Are Distinctive
Our Product Offerings Are Distinctive Charge Credit Cobrands 37
Slide 38: Membership Rewards is One of the World's Largest Rewards Programs
Membership Rewards is One of the World’s Largest Rewards Programs Global Card Members ~23 MM (enrolled in Membership Rewards) Annual Points Value Earned $4B+ Transfer Partners 50+ Participating Merchants Earn/Burn at All Merchants * Includes Card Members, points earned, and transfer partners from ac
Slide 39: We Continue to Innovate Through Technology and Partnerships
We Continue to Innovate Through Technology and Partnerships Airbnb SafeKey Amex Checkout Amex Offers Pay with Points 23000 USD 923.00 Your Membership Rewards Points Balance is 330042 Statement Credit Value USD Points to use 923.00 131857 Points 20000 = USD 140 Value of points redeemed through other
Slide 40: Our Core Card Member Base Represents a Large & Attractive Opportunity
Our Core Card Member Base Represents a Large & Attractive Opportunity US Consumer Spend (US) Annual Income * >200K ~45% 33% Credit Card Spend ~$35K ~55% 67% Credit Card Loans ~$10K On-Us (AXP Card Member) Off-Us (AXP Card Member) Average FICO 764 Non-AXP Data as of Dec'15. AXP Card Members reflects
Slide 41: Wallet Share is High, But Losing Ground
Wallet Share is High, But Losing Ground 2013 2014 2015 Tenured U.S. Card Member 46.9% 46.3% 45.9% Share of Wallet Tenured U.S. Card 2.2% 2.1% 1.6% Member Spend Growth Wallet Growth 3.9% 3.5% 2.5% Change in Tenured - (0.6%) (0.4%) Share of Wallet US tenured defined as AXP Proprietary Card Members for
Slide 42: A Segmented Approach to Growth From Existing Card Members
A Segmented Approach to Growth From Existing Card Members US Consumer % of Total Consolidate Defend ~66% ~50% ~25% ~25% Card Members Off-Us Spend Card Members On-Us Spend Reflects internal estimated Off-Us Spend by Card Members; excludes Card Members from discontinued partnerships, new Card Members
Slide 43: Proven Tactics Should Increase Share of Wallet
Proven Tactics Should Increase Share of Wallet Segmented Maximize Develop Maximize Intent Existing Offers Individual Offers Channels Existing Offer Spend Lift (US Consumer)* 40% 30% 20% 10% 0% Offer 1 Offer 2 Offer 3 Offer 4 43 *Incremental billed business estimate of Card Member spend in the 12 mon
Slide 44: Investments Are Producing Attractive Returns & High Quality New Card Members
Investments Are Producing Attractive Returns & High Quality New Card Members Global 2014 2015 New Accounts Acquired +12% Flat Average Spend * $8.1K $8.3K Average FICO ** 751 754 % Fee Based *** 53% 61% Includes branded and continuing cobrands and excludes new accounts post-announcements in 2015 by C
Slide 45: Core New Account Growth Has Been Strong
Core New Account Growth Has Been Strong US Consumer New Accounts Acquired Discontinued Partnerships 14% -4% AXP Core -59% 18% 12% 25% 2013 2014 2015 2014 2015 AXP Branded, Cobrand, Cobrand, AXP 41% 37% 59% Branded, 63% Discontinued partnerships reflect Costco cobrand and JetBlue cobrand new accounts
Slide 46: Digital Channels Are Driving Growth With Efficiency & Quality
Digital Channels Are Driving Growth With Efficiency & Quality International Consumer 2015 Application Volume % Acquisition Digital * 49% % Increase ** 19% Average Spend per Digitally 1.8X Non-Digital Acquired Account Billed Business Acquired 1.4X Non-Digital / $ Marketing *** % of Approved Applicant
Slide 47: Mobile is Emerging as an Acquisition Channel
Mobile is Emerging as an Acquisition Channel International Consumer Application Volume CAGR Age ≤35 54% 135% 25% 43% 10% 2013 2015 Desktop Tablet Mobile Figures for approved accounts for selected digital channels. 47
Slide 48: Mobile Creates Challenges & Opportunities
Mobile Creates Challenges & Opportunities Member Get Member Amex Offers Restaurant Save to Card and get a £50 statement credit on a transaction of £250+ at participating Restaurants by 30 April 2016. Valid once per UK Card for the first 20,000 Cardmembers to save. Terms & payments restrictions apply
Slide 49: Innovative Applications & Analytics Should Fuel Further Growth
Innovative Applications & Analytics Should Fuel Further Growth Mobile First Programmatic Affiliate / Design Display Partner Integration Referral Dynamic Site Marketing Experience 49
Slide 50: Consumer Lending – We Have Momentum & Opportunity
Consumer Lending – We Have Momentum & Opportunity US Consumer Adjusted Loan Growth * 10% 8% 6% 4% 2% 0% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 2015 US Consumer, Adjusted Benchmark ** *** Other Revenue Net Other Interest Revenue Income Net Interest Income *Adjusted US Consumer loan growth is
Slide 51: There is Significant Opportunity Within Our Card Member Base
There is Significant Opportunity Within Our Card Member Base Loan (US) ~25% 29% ~75% 71% Non-AXP Off-Us (AXP Card Member) On-Us (AXP Card Member) Data as of December 2015. AXP Card Members reflects all active US Consumer proprietary accounts as of December 2015, excluding Costco cobrand accounts . O
Slide 52: Growth is Balanced & High Quality
Growth is Balanced & High Quality US Consumer Contribution to 2015 Loan Growth Tenured Lending Card Members 34% ‒ 50% Lower Delinquency * ‒ Lower Marketing Cost ‒ Higher 12-Month Revenue New Lending Card Members 66% ‒ ~$8.9K Average Spend ** ‒ 754 Average FICO ‒ 60% AXP Branded New Card Lending
Slide 53: Focus Will be Key
Focus Will be Key US Consumer 16M Card Members / $105B* Off-Us Loans Low Volatility Revolvers High AXP Engage High Spend Digital Reach 4M Card Members / $45B* Off-Us Loans *Reflects internal estimated Off-Us loans by Card Members; excludes Card Members from discontinued partnerships, new Card Member
Slide 54: We Are Focusing a Distinctive Set of Capabilities on Existing Card Members
We Are Focusing a Distinctive Set of Capabilities on Existing Card Members Segmentation Existing Offers New Offers Channel Reach & Triggers Offer Performance * Average Balance Growth Delinquency (%) 47% 37% *Average Daily Balance at month 12 of offer population vs. control and annualized coincidenta
Slide 55: US Loan Quality is Excellent in Absolute, Competitive & Historical Terms
US Loan Quality is Excellent in Absolute, Competitive & Historical Terms Net Write-Off Rates 2008 vs 2015 * 12% Low FICO 44% 10% 8% Low Tenure 9% 6% 4% High Balance 50% 2% Balance Transfer 90% 0% Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13 Q2 14 Q4 14 Q2 15 Q4 15 AX
Slide 56: Lending Growth Can Introduce Volatility, but We Are Well Positioned
Lending Growth Can Introduce Volatility, but We Believe We Are Well Positioned to Manage Through Strong Card Member & Portfolio Quality Through-the-Cycle Underwriting Improved External Monitoring & Data Next Generation Decision Science Modernized, Flexible Collection Infrastructure 56
Slide 57: The Road Ahead – Lending
The Road Ahead – Lending Accelerated Lending Growth Focus on Growth from Existing Card Members ‒ Leverage Information Advantage ‒ Open Low Cost Channels Introduction of New, Compelling Lending Features Continued Commitment to Credit Quality 57
Slide 58: Summary
Summary Large & Existing Strong Compelling Diversified Card Members Card Member Lending Business Focus Acquisition Opportunity 58
Slide 59: Growth Potential and Strategies
Growth Potential and Strategies Steve Squeri Vice Chairman
Slide 60: Executive Summary
Executive Summary Our new Global Commercial Services segment is a significant contributor to AXP There is tremendous opportunity in the fast growing and under-penetrated small and mid-size business segment to grow spend We are well-positioned in the B2B segment ‒ Scale player ‒ Diverse product
Slide 61: Global Commercial Services
Global Commercial Services October 2015 61
Slide 62: Global Commercial Services – Snapshot
Global Commercial Services – Snapshot 2015 % of AXP Billed Business $399B 38% Loans* $11B 15% Cards in Force 15.1M 13% Revenue, net of interest expense $9.7B 30% *Includes $1B Merchant Financing loans and $2B HFS loans for Costco U.S. and JetBlue portfolios. 62
Slide 63: GCS Billings
GCS Billings 2015 Spending Mix 2015 Spend per Card Lend 11% Commercial Card Members spend 89% $26K per year on average Charge 63
Slide 64: Investment Levels
Investment Levels Total Global Commercial Services (GCS) Investment 2013-2015 CAGR 16% 2013 2014 2015 2016 Outlook 64
Slide 65: Acquisition
Acquisition Acquisition Channels Signings Performance* ($B) Face-to-Face Telesales Digital Sales $24 $24 $23 Customer Care Partnerships Professionals 2013 2014 2015 * Actual billings from new accounts acquired with less than 13 months of tenure for Corporate Card, and less than 12 months for Small B
Slide 66: Technology Investment
Technology Investment GCS Technology Investment Investment Priorities 2013-2015 CAGR Accounts receivable platforms Virtual payments 31% Non-card lending platform Cross-border payments Digital tools Customer service capabilities 2013 2014 2015 2016 2017 Outlook Outlook 66
Slide 67: Our Unique Assets
Our Unique Assets World Class Global Footprint Service Closed Loop Diverse Network Product Suite 67
Slide 68: Diverse Product Suite
Diverse Product Suite Small Accounts Cross Business Corporate Business Payable Border Financing Charge Charge (Card Member) FX International Merchant Payments Financing Buyer Initiated AccessLine Payment vPayment Lending Charge (Company) Business Travel Account 68
Slide 69: Commercial Client Segments
Commercial Client Segments Global & Large Middle Small Accounts Market Business $500M + $1M-$500M <$1M Annual Revenue Annual Revenue Annual Revenue US descriptions; international ranges vary based on local opportunity. 69
Slide 70: Global & Large Accounts
Global & Large Accounts Spend Mix Geographic Mix 39% 34% 61% 66% T&E Non-T&E US International % of 2015 Global 2015 Billings Variable Margin Commercial Billings Growth (index) 25% (1%) 100 Billings growth is FX-adjusted; see Glossary for explanations of FX-adjusted information. 70
Slide 71: Global & Large Accounts
Global & Large Accounts Leader in Card Payments Dynamics Deep, long-standing relationships Relationships Looking for an integrated spending program with 63 Intense and consolidating %* competition Our Advantage Fortune Global Global footprint 500® Data to power customers’ processes and too
Slide 72: Middle Market
Middle Market Spend Mix % of 2015 Global Commercial Billings Dynamics 28% 50% Underpenetrated in many countries around the world 72% Trend towards integration and 2015 Billings automation T&E Non-T&E Growth Geographic Mix 7% Our Advantage 11% Access to ‘big company’ Variable Margin infrastruct
Slide 73: Small Business
Small Business Spend Mix % of 2015 Global Commercial Billings Dynamics 26% 25% Expect high level of rewards Digital increasing in importance 74% for the full lifecycle 2015 Billings Cash flow continues to be top T&E Non-T&E Growth need Geographic Mix 7% Our Advantage 18% World-class brand Va
Slide 74: Growth Strategy
Growth Strategy Global & Large Accounts Small Business & Middle Market Our heritage & foundation Our growth engine Maintain leadership position Address the cash flow needs of the small and middle Scale and relevance market customer through our Focus on marquee signings diverse suite of produ
Slide 75: Small Business & Middle Market Leadership & Opportunity
Small Business & Middle Market Leadership & Opportunity AXP Leadership Est. Small Business Spend*** Based on billed business Estimated U.S. total small business (ex-payroll) in 2014 on commercial cards Small Credit and Charge Business and Middle Market Commercial Issuer Globally** Small Commercial B
Slide 76: We Are Well Positioned
We Are Well Positioned Millions of Distribution Commercial Brand & Customers Channels Underwriting Service 76
Slide 77: An Advocate for Small Business & Middle Market
An Advocate for Small Business & Middle Market 77
Slide 78: Small & Middle Market Growth Priorities
Small & Middle Market Growth Priorities Leverage our distribution channels Deepen relationship management Innovate with new products Accelerate our progress in international 78
Slide 79: Distribution: Customer-Centric Sales
Distribution: Customer-Centric Sales Current Experience Opportunity Consolidated conversation with Corporate Small access to a full suite of solutions Card Business Better customer experience with a single face to the customer Increased ability to cover additional prospects with coordinated to
Slide 80: Distribution: Digital
Distribution: Digital US Digital Acquisition* Opportunity 37 % Accelerate digital initiatives and build on rapid momentum Small Business Extend digital channels to Digital Acquisition include the Middle Market segment 8 % Expand best practices globally Middle Market Digital Acquisition *% of m
Slide 81: Relationship Management: Card Spend Lift
Relationship Management: Card Spend Lift U.S. Companies Opportunity <$300M Revenue 2x Utilize big data analytics to identify growth opportunities with customers Optimize relationship management channels (face-to- face, phone, digital) AXP spending by adding Corporate to existing Leverage produ
Slide 82: Products: Innovation
Products: Innovation Global & Large Middle Small Accounts Market Business Efficiency Cash Flow Cash Rewards/ Flow Cash Integration Rewards/Cash Rewards/Cash Efficiency Integration Cash Flow Efficiency Integration 82
Slide 83: Products: Merchant Financing
Products: Merchant Financing Ending MF Loans Outstanding $M Loans Outstanding; CAGR 83% $890 $553 $265 2013 2014 2015 83
Slide 84: Products: SimplyCash Plus
Products: SimplyCash® Plus 84
Slide 85: Accelerate International
Accelerate International FX Adjusted Int’l Growth Opportunity 2015 International Small Business & Middle Market Extend best practices and $40B +10% capabilities from the U.S. to international International 2015 Billings Unified sales and relationship Billings Growth management strategies across
Slide 86: Summary
Summary Our new commercial segment is a significant contributor to AXP We are well-positioned in the fastest-growing and most under- penetrated segment of payments globally ‒ Scale player in B2B ‒ Diverse product suite ‒ World class brand and service ‒ Spending capacity As a result of combinin
Slide 87: Key Priorities
Key Priorities Leverage our Deepen Accelerate our Innovate with distribution relationship progress in products channels management International 87
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Slide 89: Growth Potential and Strategies
Growth Potential and Strategies Anré Williams President, Global Merchant Services & Loyalty Group
Slide 90: Organizational Responsibilities
Organizational Responsibilities Global Merchant Services & Loyalty Group Global Global Merchant Accertify Loyalty Services Coalition 90
Slide 91: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 91
Slide 92: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 92
Slide 93: U.S. OptBlue Overview
U.S. OptBlue Overview OptBlue Participant Sets Merchant Price Single Statement One Settlement Process One Contact for Servicing Retain Closed Loop Data 93
Slide 94: U.S. OptBlue Overview – U.S.
U.S. OptBlue Overview – U.S. November 2013 November 2013 May 2014 May 2014 May 2014 June 2014 September 2014 October 2014 November 2014 February 2015 February 2015 April 2015 April 2015 August 2015 January 2016 April 2016 April 2016 May 2016 Signed since February 2015 94
Slide 95: U.S. – Active Locations in Force Growth
U.S. – Active Locations in Force Growth Indexed to 2012 Active LIF* Trend (2012 – 2016) 148 +48% 127 114 100 104 2012 2013 2014 2015 2016 Outlook *See Glossary of Selected Terminology for definition of Active LIF 95
Slide 96: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 96
Slide 97: France – Crédit Mutuel
France – Crédit Mutuel One Point Program AXP Partner Recruit Largest acquirer in France Contract/Rate 5,300 branches Process and Service Data and Marketing 97
Slide 98: France – Active Locations in Force Growth
France – Active Locations in Force Growth Indexed to 2013 Active LIF Trend (2013 – 2016) 145 +45% 140 100 101 2013 2014 2015 2016 Outlook *See Glossary of Selected Terminology for definition of Active LIF 98
Slide 99: Acquisition Models – Outside U.S.
Acquisition Models – Outside U.S. OptBlue Other Acquiring Partnerships Australia UK & Ireland Canada UK UK Mexico Spain Poland 99
Slide 100: Key Merchant Signings – Global
Key Merchant Signings – Global U.S. U.S. Europe Mexico UK Singapore Asia Netherlands 100
Slide 101: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 101
Slide 102: Merchant Satisfaction Research Overview
Merchant Satisfaction Research Overview Americas Europe JAPA U.S. U.K. Australia Countries Canada France Hong Kong Mexico Italy Singapore Germany Managed Segments Small 102
Slide 103: Net Promoter Score Results 2012 – 2015
Net Promoter Score* Results 2012 – 2015 +4 +2 +10 2012 2013 2014 2015 *See Glossary of Selected Terminology for definition of Net Promoter Score 103
Slide 104: Key Improvements
Key Improvements Faster Speed Of Pay Eliminated Statement Fees Redesigned Merchant Web Site New “Merchant-Friendly” Policies (e.g. Chargeback Process) Expanded Small Business Saturday/Shop Small Created “Amex Offers” 104
Slide 105: Net Promoter Score Results 2012 – 2015
Net Promoter Score* Results 2012 – 2015 +4 +2 +10 2012 2013 2014 2015 *See Glossary of Selected Terminology for definition of Net Promoter Score 105
Slide 106: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 106
Slide 107: Global Discount Rate Trend
Global Discount Rate Trend 2012 2013 2014 2015 2016 Outlook Reported Discount Rate 2.52% 2.51% 2.48% 2.46% Discount Rate Erosion (bps) (1.5) (1.2) (2.7) (1.4) ~(3.0)-(4.0) Merchant Specific Negotiations (excl. Europe) Merchant Specific Negotiations (Europe) Volume-Driven Rate Changes Accrual/Release
Slide 108: Global Discount Rate Trend – 2016
Global Discount Rate Trend – 2016 First Half – 2016 Second Half – 2016 Discount Rate Erosion (bps) ~(6.0) – (7.0) ~(1.0) – 0 Merchant Specific Negotiations (excl. Europe) Merchant Specific Negotiations (Europe) Volume-Driven Rate Changes Accrual/Release Costco U.S. Mix (excluding Costco U.S.) OptBlu
Slide 109: Global Discount Rate Outlook – 2016 to 2018
Global Discount Rate Outlook – 2016 to 2018 2016 Outlook 2017 Outlook 2018 Outlook Discount Rate Erosion (bps) ~(3.0) – (4.0) ~(1.0) – (2.0) ~(2.0) – (3.0) Merchant Specific Negotiations (excl. Europe) Merchant Specific Negotiations (Europe) Volume-Driven Rate Changes Accrual/Release Costco U.S. Mix
Slide 110: Agenda
Agenda 2 Growth Potential A Merchant Coverage: OptBlue U.S. and Strategies B Merchant Coverage: Other Third Party Acquiring Models C Merchant Relationships D Discount Rate E Global Loyalty Coalition 110
Slide 111: Loyalty Coalition Model
Loyalty Coalition Model Members earn and burn points Partners gain Coalition new members captures data Coalition sends offers to members 111
Slide 112: Loyalty Coalition – Presence
Loyalty Coalition – Presence Germany (2000) Poland (2009) U.S. (2015) Italy (2014) India (2011) Mexico (2012) 112
Slide 113: Loyalty Coalition Partners Examples
Loyalty Coalition Partners Examples U.S. Germany Italy Mexico Poland India Brand Oil Telecom Department Stores Supermarket Drugstores 113
Slide 114: Loyalty Coalition – Key Metrics
Loyalty Coalition – Key Metrics 2014 2015 Customer Metric Active Cards* (M) 59 92 Financial Metric FX Adjusted Revenues* ($M) $323 $379 *See Glossary for definition of Active Cards and an explanation of FX-adjusted information (2014 GAAP Revenues - $383M). 114
Slide 115: PAYBACK – A Strategic Asset in Germany
PAYBACK – A Strategic Asset in Germany Amex With 8 out of 10 know the Metric Consumer PAYBACK PAYBACK brand Before 2012 Co-Brand* 1 out of 3 earns PAYBACK Cards in Force Declining +7.8% annually points Billings Flat +5.3% annually Third most important card in German wallets Approval Rate 41% 60% *20
Slide 116: Key Priorities
Key Priorities Strengthen Dramatically Expand Relationships with Improve Coverage Loyalty Coalition Merchants 116
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Slide 118: Resetting Our Cost Base
Resetting Our Cost Base Steve Squeri Vice Chairman
Slide 119: Resetting Our Cost Base
Resetting Our Cost Base How are we going to achieve this target? $1B 2017 Exit Run Rate Saves How will it help enable revenue growth? 119
Slide 120: Resetting Our Cost Base
Resetting Our Cost Base 2015 2017 Exit Run Rate Card member Rewards z $7.0B Operating Expenses + Cost of Card member $1.0B Marketing & Promotion Services = Adj. Operating Expenses* $11.3B $14.4B Addressable $13.4B Marketing & Promotion $3.1B Spend (7%) Adj. Total Expenses* $22.4B *Adjusted Total exp
Slide 121: Adjusted Total Operating Expense Growth
Adjusted Total Operating Expense Growth* % Increase/(decrease) vs. prior year: 9% <3% Annual Target 2% 0% 0% (2%)** 2011 2012 2013 2014 2015 *The growth rate of adjusted total operating expenses, a non-GAAP measure, excludes Visa/MasterCard litigation settlement proceeds from 2011-2012, restructurin
Slide 122: Resetting Our Cost Base
Resetting Our Cost Base 2015 2017 Exit Run Rate Card member Rewards z $7.0B Operating Expenses + Cost of Card member $1.0B Marketing & Promotion Services = Adj. Operating Expenses* $11.3B $13.4B Marketing & Promotion $3.1B (7%) Adj. Total Expenses* $22.4B *Adjusted Total expense and adjusted operati
Slide 123: 2016 Strategic Growth Initiatives
2016 Strategic Growth Initiatives Spending on Growth & 2016 Areas of Focus Efficiency Initiatives $B Card Member Acquisition (~30%) $8.0 U.S. and International Consumer, Global Commercial Share of Wallet (~30%) Card Member engagement Expansion of merchant coverage (e.g. OptBlue) Lending on C
Slide 124: AXP Expense Base vs. Benchmarks
AXP Expense Base vs. Benchmarks Collections Customer Service Technology Marketing U.S. credit card U.S. credit card issuer Financial Services Financial Services issuer benchmark benchmark benchmark benchmark ~105 S&B/ ~50 Non- ~65 ~150 S&B / Development Card FTEs/ FTE Expense/ Transaction Revenue 10
Slide 125: Transforming How We Work
Transforming How We Work Targeted Saves Streamline Organizational Structure ~ $500MM Re-Engineer Key Processes ~ $400MM Leverage Policies ~ $100MM 125
Slide 126: Streamline Organizational Structure
Streamline Organizational Structure Customer Segments Shared Services Global Consumer Global Services Global Commercial Risk & Compliance Global Merchant & Loyalty 126
Slide 127: Global Commercial Services
Global Commercial Services October 2015 127
Slide 128: Reengineer Key Processes
Reengineer Key Processes Global Global Merchant & Global Consumer Loyalty Commercial Marketing Operations Digital Information Management Technology Development 128
Slide 129: Example: Marketing Operations & Digital Centers of Excellence
Example: Marketing Operations & Digital Centers of Excellence Marketing Operations Center of Excellence Marketing Campaign Content Compliance Execution Management Review Enterprise Digital Center of Excellence 129
Slide 130: Leverage Policies
Leverage Policies Sourcing Spending Location Policies Strategy 130
Slide 131: Example: Global Servicing Footprint
Example: Global Servicing Footprint World Service & Global Credit Administration Headcount 25K 27K 9% 5% High Cost 44% Medium Cost 60% 51% Low Cost 31% 2010 2015 131
Slide 132: We've Done It Before
We’ve Done It Before Global Credit World Service Administration Streamline Organizational Structure Re-Engineer Key Processes Global Business Technology Services Leverage Policies 132
Slide 133: Global Services Productivity
Global Services Productivity Indexed to 2009 Global Recommend to Friend (+63%) Transactions (+59%) Cards in Force (+34%) Global Services Investments Global Services Group Operating Expenses (-13%) 2009 2010 2011 2012 2013 2014 2015 See Glossary for certain key terms. 133
Slide 134: Summary – Targeted Saves
Summary – Targeted Saves Structure $1B ~$500MM Process ~$400MM 2017 Exit Run Rate Policy Saves ~$100MM 134
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Slide 136: Financial Outlook
Financial Outlook Jeff Campbell Executive Vice President and Chief Financial Officer
Slide 137: Recap
Recap 1 Context on Growth 3 Resetting Our Cost Position Base Ken Chenault Steve Squeri 2 Growth Potential and Strategies Doug Buckminster Steve Squeri Anré Williams 137
Slide 138: Agenda
Agenda 4 Financial Outlook A 2015 Results B 2016/2017 Outlook C EPS Growth Scenarios D Q1'16 Outlook 138
Slide 139: American Express has had a strong financial track record for 20+ years
American Express has had a strong financial track record for 20+ years % H/(L) vs. prior year Adjusted EPS Growth* 118% 61% 26% 20% 22% 18% 22% 18% 14% 14% 13% 14% 12% 11% 9% 8% 6% (3%) (28%) (38%) (52%) '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 *Adjusted ea
Slide 140: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 140
Slide 141: 2015 Summary Financial Performance
2015 Summary Financial Performance % H/(L) vs. LY; except per share amounts and where otherwise noted FY'15 Inc/(Dec) FY'15 Inc/(Dec) Reported Adjusted* Billed Business ($ in B) 2% 6% Total WW Card Member Loans ($B) (17%) 6% Total Revenues Net of Interest Expense (4%) 4% Total Opex (3%) 2% Diluted E
Slide 142: 2016/2017 External Environment and Outlook
2016/2017 External Environment and Outlook Build projections based on economic consensus ‒ U.S. and Global GDP growth in 2016 and 2017 expected to remain below historical average* ‒ Forward curve anticipates 50 bps increase in interest rates by end of 2017 ‒ Unemployment rate continues gradual imp
Slide 143: EPS Growth Outlook – Q4'15 Earnings Call
EPS Growth Outlook – Q4'15 Earnings Call 2016 2017 $5.40-$5.70 ≥$5.60 Forward-Looking Statements Forward-Looking Statements Expect modest uptick in billings growth Operating expenses targeted to be at least rates beginning in the first quarter 3% lower than the 2015 adjusted base of Tax rate b
Slide 144: Expect 2016 results to be uneven by quarter
Expect 2016 results to be uneven by quarter Illustrative 2016 EPS Trend Outlook Commentary $, not to scale Key Drivers Costco - Portfolio Sale Gain - Capital Impact - Related Economics Investment Level & Timing Revenue Expectations Full-Year Outlook $5.40-5.70 (ex-restructuring) H1 H2 144
Slide 145: 2017 EPS Outlook Drivers
2017 EPS Outlook Drivers 2015 2017 Outlook FX-Adj. Revenue ~5% CAGR Grow w/Loans; Provision plus seasoning Grow slightly faster Rewards & CM Services than Billed Business Marketing & Promotion $3.1 B Down $0.2-0.4B Adj. Operating Expenses $11.3 B* ≤$10.9 B Shares Outstanding (~6%) per yr EPS ≥$5.60
Slide 146: Cobrands make up a larger percentage of our loans than billings
Cobrands make up a larger percentage of our loans than billings… 2015 Loans and Billings Cobrand Loans and Billings $ billions % of AXP Loans, Billings $74 $1,040 47% 22% Cobrands 22% 47% Proprietary 19% 16% GNS U.S. Costco 8% Cobrand 16% 6% Delta 62% Non-Cobrand 53% 2% Starwood Proprietary 4% 6% Ot
Slide 147: Costco U.S. relationship ends in 2016
…but the percentage will decline with the end of the Costco U.S. relationship in 2016… AXP Billed Business Costco-Related Billed Business $ billions $ billions WW Billings $1,040 Costco-related 9% 8% U.S. Costco $99 Cobrand In-Store Other AXP Other Cobrands In-Store U.S. Costco Cobrand GNS Non-Cobra
Slide 148: ...which will reduce our core revenue
…which will reduce our core revenue. Est. Costco-Related Revenue* ~$3.1 B Other Revenue Costco U.S. Loans 19% of WW Loans Net Interest Income Costco U.S. Billings Discount Revenue 9% of WW Billings 2015 *Other revenue and Net Interest Income from Costco cobrand Card Members; Discount Revenue from Co
Slide 149: 2017 EPS Outlook Drivers
2017 EPS Outlook Drivers 2015 2017 Outlook FX-Adj. Revenue ~$29 B* ~5% CAGR*** Grow w/Loans; Provision plus seasoning Grow slightly faster Rewards & CM Services than Billed Business Marketing & Promotion $3.1 B Down $0.2-0.4B Adj. Operating Expenses $11.3 B** ≤$10.9 B Shares Outstanding (~6%) per yr
Slide 150: EPS Growth Scenarios
EPS Growth Scenarios Revenue Growth Key Drivers EPS Growth 4% 5-7% Credit Rewards Growth M&P Growth 6% Opex Payout Ratio 10-12% 150
Slide 151: Moderate EPS growth with lower revenue growth
We believe we can drive moderate EPS growth with lower revenue growth… 600bps (400bps) (400bps) 400bps 5-7% 4% Revenue OpEx Share M&P/ Provision EPS Repurchases Rewards 151
Slide 152: Expect strategic initiatives to drive improved performance
Expect strategic initiatives to drive improved performance versus current trends. Revenue Growth Revenue Growth Incremental Growth Drivers Organizational Grow Small Synergies Business & Middle Increase Share Market of U.S. Consumer Accelerated Lending Coverage Expansion 152
Slide 153: Stronger performance through higher revenue growth
…but our goal is to drive stronger performance through higher revenue growth. 600bps (400bps) (400bps) 700bps 10-12% 6% Revenue OpEx Share M&P/ Provision EPS Repurchases Rewards 153
Slide 154: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% 154
Slide 155: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion* 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr *Calculated Rate represents Discount Revenue divided by Billed Business. 155
Slide 156: The gap between the reported and calculated discount rate has grown
The gap between the reported and calculated discount rate has grown… Reported 2.52% 2.51% 2.48% 2.46% Discount Rate 55 bps 61 bps Calculated Discount Rate* 2.00% 1.96% 1.90% 1.86% 2012 2013 2014 2015 *Calculated Rate represents Discount Revenue divided by Billed Business. 156
Slide 157: Gap driven by Cashback volume & growth in GNS
…driven primarily by increases in Cashback volume & growth in GNS. Difference between reported and calculated rate. bps H/(L) 61bps vs. 2013 55bps 3 bps Cash Rebate Rewards GNS Impact 2 bps Cobrand Partners & 1 bp Client Incentives Other 0 bps 2013 2015 Note: Cash Rebate Rewards includes statement c
Slide 158: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr Revenue Growth 6% 158
Slide 159: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr Revenue Growth 6% Rewards Expense Growth 11-12% Write-Off Rate Increase 15-25 bps/yr 159
Slide 160: Provision represents a headwind over the outlook period
Provision represents a headwind over the outlook period. Lending Write-Off Rate Trend Outlook Commentary Principal only Continued strong loan growth from both existing and new Card Members 2.90% Primary drivers of upward drift in write-off 2.10% rates are seasoning and 1.80% mix 1.50% 1.40% In
Slide 161: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr Revenue Growth 6% Rewards Expense Growth 11-12% Write-Off Rate Increase 15-25 bps/yr M&P Growth 2-4% Opex Growth 1-2% 161
Slide 162: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr Revenue Growth 6% Rewards Expense Growth 11-12% Write-Off Rate Increase 15-25 bps/yr M&P Growth 2-4% Opex Growth 1-2% Payout R
Slide 163: Track record of strong capital payout
Track record of strong capital payout… Average Quarterly YoY Decrease in Average Payout Ratio Dividends per Share* Shares Outstanding 4.6% 4.6% 105% ~$0.28 86% ~$0.25 81% 3.5% ~$0.22 2013 2014 2015 2013 2014 2015 2013 2014 2015 * Average quarterly dividend calculated from full-year common dividends
Slide 164: Capital strength remaining an important driver of earnings growth
…with capital strength remaining an important driver of earnings growth. Tier 1 Common Ratio Outlook Commentary CCAR Submission in early April 12.5% 13.1% 12.4% Costco portfolio sale in June Regulatory environment 2013 2014 2015 Tier 1 Common is Tier 1 Common under Basel I for 2013 and Common
Slide 165: Scenario Assumptions
Scenario Assumptions Stronger Revenue Growth BB Growth 8-10% Loan Growth 9-11% Calculated Discount Rate Erosion 4-6 bps/yr Reported Discount Rate 2-3 bps/yr Other 2-3 bps/yr Revenue Growth 6% Rewards Expense Growth 11-12% Write-Off Rate Increase 15-25 bps/yr M&P Growth 2-4% Opex Growth 1-2% Payout R
Slide 166: Summary
Summary Payments industry in the midst of significant change Provided specific EPS targets for next two years Focused on execution across 2016 and 2017 EPS Growth scenarios frame earnings potential Environment could drive results higher or lower 166
Slide 167: Q1'16 Outlook
Q1'16 Outlook Volume and revenue trends Other notable items ‒ Sequential change vs. Q4'15 ‒ Investment Spending ‒ FX and other macro impacts ‒ JetBlue Portfolio Sale Gain ‒ Cobrand ‒ Restructuring ‒ Discount Rate 167
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Slide 169: Key Priorities
Key Priorities Accelerate Optimize Reset the Revenue Investments Cost Base Growth 169
Slide 170: Q&A
QA
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Slide 172: Appendix
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Slide 174: Glossary (1 of 2)
Glossary (1 of 2) Active Cards: Consumers who collected and/or redeemed points at a Loyalty Coalition participating merchant during the calendar year presented. Active Locations in Force (Active LIF): Reflects merchant locations with at least one American Express card transaction over the past 1
Slide 175: Glossary (2 of 2)
Glossary (2 of 2) Operating Expenses: Represents salaries and employee benefits, professional services, occupancy and equipment, communications, and other, net. Payout Ratio: Calculated by dividing the total amount returned to shareholders through dividends and share repurchases during the respe
Slide 176: Annex A
Annex A AXP Marginal Contribution ($ in millions) 2015 2015 Contribution GAAP Consolidated PTI $7,938 Fee(1) $5,055 22% Marketing & Promotion $3,109 Lend(2) $5,045 22% Operating Expenses* $11,769 Spend(3) $12,716 56% Marginal Contribution $22,816 Marginal Contribution $22,816 100% (1) Fee Revenue
Slide 177: Annex B
Annex B ICNS FX-Adjusted Billings Growth, ex-Canada % H/(L) vs. LY 2014 2015 ICNS Reported 7% (3%) FX-Adjusted 11% 9% ICNS Excl. Canada BB Reported 1% FX-Adjusted 12% See Glossary for an explanation of FX-adjusted information. 177
Slide 178: Annex C
Annex C U.S. Consumer Adjusted Loan Growth, ex-Costco ($ in billions) Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Reported Average Loans $45.6 $45.5 $46.1 $47.2 $47.4 $47.8 $48.9 $50.4 $50.9 $51.1 $52.1 $50.5 Card Member balances related to Cobrand partnership with Cost
Slide 179: Annex D
Annex D Adjusted EPS Growth ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 EPS: Reported Income from 0.90 1.03 1.30 1.38 1.54 1.81 2.07 1.00 1.61 1.75 1.98 2.38 2.91 3.44 2.47 1.54 3.35 4.09 3.89 4.88 5.56 5.05 Continuing Operations Q4'12 Charges* 0.51 Q4'1
Slide 180: Annex E
Annex E Adjusted Total Expenses Adjusted Diluted EPS ($ in billions) ($ in millions) 2015 FY’15 GAAP Total Expenses $22.9 Diluted EPS Attributable to Common Shareholders $5.05 EGG Impairment & Other Charges ($0.4) Q4’15 Enterprise Growth Impairment Charge, After-tax* $0.33 Adjusted Total Expense
Slide 181: Annex F
Annex F Adjusted Total Operating Expense Growth ($ in millions) 2010 2011 2012 2013 2013 2014 2014 2015 GAAP Total Operating Expenses $10,916 $12,243 $13,447 $12,987 $12,987 $12,184 $12,184 $11,769 Visa/MasterCard Settlement Payments $880 $580 Restructuring Charges* ($400) ($446) ($446) EGG Impair
Slide 182: Annex G
Annex G Adjusted Loan Growth Revenue Net of Interest Adjusted for FX, Global Business ($ in billions) Travel and Concur 2014 2015 ($ in millions) 2014 2015 Worldwide Loans $70.4 $58.6 GAAP Revenue Net of Interest Expense $34,188 $32,818 Worldwide Loans, FX-Adj. $69.6 Global Business Travel Reven
Slide 183: Annex H
Annex H Revenue Net of Interest Adjusted for FX and Costco ($ in billions) 2015 GAAP Revenue Net of Interest Expense $32.8 FX Adjusted Revenue Net of Interest Expense* ~$32.5 2015 Estimated Costco-related Revenue** ~$3.1 Adjusted Revenue Net of Interest Excluding Costco ~$29.4 * FX-adjusted Revenu
Slide 184: Annex I
Annex I The Tier 1 Common Risk-Based Capital Ratio is calculated as Tier 1 Common Equity, a non- GAAP measure, divided by Risk-weighted assets. Tier 1 Common Equity is calculated by reference to Total Shareholders’ Equity as shown below: 12/31/2013 Total Shareholders’ Equity $19,496 Effect of cert
Slide 185: Annex J – Outstanding Funding Composition
Annex J – Outstanding Funding Composition ($ in billions) Funding Mix $102.3 $102.5 $106.3 $108.7 3% 3% 3% 5% Short-term Debt** 39% 41% 42% 50% Deposits†† 19% 20% 18% 13% Card ABS* 39% 36% 37% 32% Unsecured Term† 2012 2013 2014 2015 *Reflects face amount of card ABS, net of securities retained by th
Slide 186: 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 the Company’s expected business and financial perfo
Slide 187: Forward Looking Statements
Forward Looking Statements • the actual amount to be spent on growth initiatives, including on marketing and promotion, technology development and commercial capabilities, as well as the timing of any such spending, which will be based in part on management’s assessment of competitive opportunities,
Slide 188: Forward Looking Statements
Forward Looking Statements • the Company’s lending write-off rates increasing more quickly than current expectations and provision expense being higher than current expectations, which will depend in part on changes in the level of loan balances, delinquency rates of Card Members, unemployment rates
Slide 189: Forward Looking Statements
Forward Looking Statements •the erosion of the average discount rate by a greater amount than anticipated during 2016, 2017 and beyond, including as a result of changes in the mix of spending by location and industry, merchant incentives and concessions, volume-related pricing discounts, strategic i
Slide 190: Forward Looking Statements
Forward Looking Statements •uncertainty relating to the ultimate outcome of the antitrust lawsuit filed against the Company by the U.S. Department of Justice and certain state attorneys general, including the success or failure of our appeal and the impact on existing private merchant cases and pote