American Express Company · NYSE:AXP
American Express — Debt Investor Presentation (February 2022)
39 slides from American Express's debt investor presentation, February 2022
Slide 1: Fixed Income Investor Presentation
American Express Company Fixed Income Investor Presentation FEBRUARY 2022
Slide 2: Summary Financial Performance
Summary Financial Performance ($ in millions; except per share amounts) YoY% YoY% Notable Impacts, Q4’21 FY’21 FY’21 Pre-tax Income Inc/(Dec) Inc/(Dec) Total Revenues Net of Interest $12,145 30% $42,380 17% Credit Reserve releases: Expense $2,481 FX-Adjusted* 31% 17% Net gains on Amex Ventures equit
Slide 3: Total Network Volumes Growth
Total Network Volumes Growth Q3’21 Q4’21 FY’21 % of FY Total vs. ’19 % 4% 12% 1% Billed Business 85% YoY% 31% 33% 24% vs. ’19 % 3% 3% (1%) Processed 15% Volumes YoY% 18% 15% 14% % Increase/(decrease) vs. 2019: vs. ’19 % 4% 11% 1% Total Netw ork 100% 20% Volum es YoY% 29% 30% 23% Billed Business 10%
Slide 4: Billed Business
Billed Business G&S vs. T&E G&S vs. T&E Growth $ in Billions, % of Total % Increase/(decrease) vs. 2019 (FX-adjusted): vs. ’19 vs. ’19 $1,090 1% 40% $1,071 G&S 20% Billed $871 (19%) 0% Business 70% (20%) T&E G&S 81% 18% 85% (1%) (40%) (60%) T&E 30% (80%) 15% (60%) 19% (37%) (100%) FY'19 FY'20 FY'21
Slide 5: Goods & Services Billed Business
Goods & Services Billed Business G&S by Online vs. Offline % Increase/(decrease) vs. 2019 (FX-adjusted): 40% Online Total G&S 20% Offline 0% (20%) (40%) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q4’21 Online Offline Total vs. ‘19 31% 12% 24% YoY 16% 28% 19% % of Total 66% 34% 100% 5 Note: Onli
Slide 6: Billed Business T&E Growth
Billed Business T&E Growth T&E by Customer Type % Increase/(decrease) vs. 2019 (FX-adjusted): Q4’21 % of Q4’19 US Consumer 108% 0% Total SME 83% Total T&E 82% (20%) Intl Consumer 78% (40%) (60%) Large & Global 36% Corporate (80%) (100%) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 US Intl Total Q
Slide 7: Billed Business Growth by Region
Billed Business Growth by Region US vs. International G&S vs. T&E by Region % Increase/(decrease) vs. 2019 (FX-adjusted): % Increase/(decrease) vs. 2019 (FX-adjusted): US US G&S 20% 20% Intl G&S Total 0% AXP 0% Intl US T&E (20%) (20%) (40%) (40%) Intl T&E (60%) (60%) (80%) (80%) (100%) (100%) Q1'20
Slide 8: Worldwide Total Loans and Card Member Receivables
Worldwide Total Loans and Card Member Receivables Total Ending Loans (Q3-Q4) Total Ending CM Receivables (Q3-Q4) ($ in billions) ($ in billions) 2019 2020 2021 2019 2020 2021 $92.2 $91.5 $88.1 $76.2 $79.4 $73.1 $56.6 $57.4 $53.6 $48.8 $40.8 $43.7 9% 8% (17%) (17%) 9% 20% YoY 2% 3% (28%) (24%) 19% 23
Slide 9: Card Member Credit Metrics
Card Member Credit Metrics Card Member Loans Net Write-off Rates Card Member Receivables Net Write-off Rates (excluding GCP) 2.5% 1.9% 2.0% 1.4% 1.0% 1.0% 0.6% 0.6% 0.5% 0.3% 0.2% 0.3% Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 30+ Days 30+ Days Past Due 1.2% 1.0% 0.9% 0
Slide 10: Total Reserves
Total Reserves Balance Sheet Credit Reserves* ($ in billions) $1.5 $5.8 ($2.2) $0.1 $0.3 ($0.3) Card Member $1.4 Receivables $4.3 ($2.0) $0.1 $5.6 $3.6 ($0.2) Total $3.4 $4.2 $0.0 Loans $0.1 $3.6 ($0.2) $3.4 Q1'20 Q4'20 Ending Q3'21 Ending Q4'21 Ending Beginning Reserves Reserves Reserves Reserves R
Slide 11: Funding Strategy
Funding Strategy Business Funding Needs Strong Liquidity Profile Maturities 11
Slide 12: Funding and Deposits
Funding and Deposits • We seek to diversify our funding sources by maintaining scale and market relevance in unsecured debt, asset securitizations and deposits. Our funding plan for the full year 2022 includes, among other sources, approximately $8.0 billion to $12.0 billion of unsecured term debt i
Slide 13: Funding Programs
Funding Programs • Our funding programs can access a range of funding sources to support our global business. American Express Company (AXP) Unsecured Term Debt, Senior Debt Rating † : A2/BBB+/A Committed Bank Credit Facility American Express Travel Related Services (TRS) Secured Borrowing Facility,
Slide 14: Term Maturity
Term Maturity ($ in billions) 12/31/21 $17.4 CDs * ** Card ABS $3.2 Unsecured† $6.4 $9.3 $10.2 $0.3 $0.8 $4.8 $2.7 $2.5 $3.3 $7.8 $5.8 $5.1 $1.0 $0.2 $2.5 $3.3 $0.8 2022 2023 2024 2025 2026 Thereafter *Reflects long-term CDs issued with an original maturity of 12 months or greater. **Reflects the fa
Slide 15: Capital Management
Capital Management Capital Strength CET1 Capital Ratio Target of 10-11% Return on Equity (ROE) Business Needs Share Repurchases and and Acquisitions Dividends 15
Slide 16: Capital
Capital Common Equity Tier 1 Capital Return ($ in billions) $9.0 13.5% 10.7% 10.5% $6.0 $2.3 Q4'19 Q4'20 Q4'21 Q4 FY'19 FY'20 FY'21 Div idend CET1 Ratio Target: 10-11% per $0.43 $0.43 $0.43 Common Share* 16 * Dividends per Common Share reflects quarterly dividend declared in Q4 of 2019-2021.
Slide 17: Takeaways
Takeaways Business • Q4’21 Net Income of $1.7B Results • FY’21 Net Income of $8.1B • Q4’21 Diluted EPS † of $2.18 • FY’21 Diluted EPS † of $10.02 Strong Balance • We continued to maintain a robust liquidity position and ended 2021 with our CET1 ratio back Sheet within our target range. • As of Decem
Slide 18: Appendix
Appendix
Slide 19: Worldwide Total Loans and Card Member Receivables Mix
Worldwide Total Loans and Card Member Receivables Mix Q4’21 Total Loan Mix Q4’21 Card Member Receivables Mix Intl. Small Business Small Business Consumer 20% 14% 34% Intl. U.S. Consumer 12% 28% Consumer 68% U.S. Consumer 24% Corporate Card 19 Note: Total Loans reflect Card Member loans and Other loa
Slide 20: Global Corporate Payments Card Member Credit Metrics
Global Corporate Payments Card Member Credit Metrics GCP Card Member Receivables Client Bankruptcy Recovery Impact to Net Write-Offs Adjusted Net Write-off rates* Increase/(Decrease) Q2’21 Net Write-Off ($37M) Amount/(Recovery) 2.4% Credit Insurance Claim (Proceeds)/Repayment within Other, net $33M
Slide 21: Credit Reserve Build Macroeconomic Assumptions
Credit Reserve Build Macroeconomic Assumptions US Unemployment Rate % US GDP Growth* % 18% 40% 16% 35% 14% 30% 25% 12% 20% 10% 15% 8% 10% 6% 5% 4% 0% 2% (5%) 0% (10%) Q4'20 Q1'21 Q4'21 Q3'22 Q4'22 Q3'23 Q4'23 Q3'20 Q2'21 Q3'21 Q1'22 Q2'22 Q1'23 Q2'23 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q
Slide 22: Delinquent and Financial Relief Program Balances
Delinquent and Financial Relief Program Balances ($ in billions) $11.5 $8.5* Customer Pandemic Relief $4.0 (CPR) Program Enrolled** $2.8 $0.0 Financial Relief $2.3 $2.2 $0.7 $0.9 $3.0 Programs (FRP) $0.0 $0.0 Enrolled *** $2.1 $2.0 $1.5 $1.3 $1.0 Delinquent $0.8 $0.9 Dec'19 Apr'20 Dec'20 Sep'21 Dec'
Slide 23: Funding Mix
Funding Mix Funding Mix ($ in billions) $138 $132 4% $126 1% 2% Short-term Funding 53% 66% 67% Deposits 14% 10% 11% Card ABS* 28% 23% Unsecured 20% Term** Q4'19 Q4'20 Q4'21 Note: % of total may not foot due to rounding. * Reflects face amount of Card ABS, net of securities retained by the Company. I
Slide 24: American Express Credit Account Master Trust (AMXCA)
American Express Credit Account Master Trust (AMXCA) A merican 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 $6 .4 Trust Size: ▪ $24.4
Slide 25: 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% 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 9/21 10/21 11/21 12/21 1/22 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 9/21 10/21 11/21 12/21 1/22 Past Due Rate (Calculate
Slide 26: Environmental, Social and Governance (ESG) Strategy
Environmental, Social and Governance (ESG) Strategy MISSION: BACK PEOPLE AND BUSINESSES TO THRIVE AND CREATE EQUITABLE, RESILIENT, AND SUSTAINABLE COMMUNITIES GLOBALLY STAKEHOLDERS INCLUDING SHAREHOLDERS, COLLEAGUES, CUSTOMERS, AND COMMUNITIES SOUND GOVERNANCE INCLUDING BUSINESS ETHICS, TRANSPARENCY
Slide 27: 2021 ESG Highlights
2021 ESG Highlights • Prom oting Diversity, Equity, and Inclusion (DE&I): We are committed to supporting a diverse, equitable, and inclusive w orkforce, marketplace, and society. – We announced a $1 Billion DE&I Action Plan in October 2020, w hich outlined our initiatives to promote DE&I for our col
Slide 28: Annex 1 (1 of 2)
Annex 1 (1 of 2) Network Volumes – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q1’21 Q2’21 Q3’21 Q4’21 FY’21 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 FY’21 vs. vs. vs. vs. vs. Q1’19 Q2’19 Q3’19 Q4’19 FY’19 Int’l Consumer Reported 8% 10% 10% 11% (6%)
Slide 29: Annex 1 (2 of 2)
Annex 1 (2 of 2) Network Volumes – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q1’21 Q2’21 Q3’21 Q4’21 FY’21 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 FY’21 vs. vs. vs. vs. vs. Q1’19 Q2’19 Q3’19 Q4’19 FY’19 Large & Global Corporate Reported (20%) (64%) (54%) (50%) (43%) 37%
Slide 30: Annex 2
Annex 2 Troubled Debt Restructurings (TDR) Balance ($ in billions) Dec’19 Apr’20 Dec’20 Jun’21 Sep’21 Dec’21 In-Program TDR Balance $0.8 $1.0 $3.1 $1.9 $1.5 $1.3 Delinquent Financial Relief Programs (FRP) balance 0.1 0.1 0.1 0.1 0.1 0.1 Non-delinquent FRP balance $0.7 $0.9 $3.0 $1.8 $1.5 $1.3 30 N
Slide 31: Annex 3
Annex 3 GCP Card Member Receivables Net Write-Off rates ($ 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 Mem ber Receivables $11,087 Reported Net Write-Off rates (0.9%) Adjusted Net Write-Off rat
Slide 32: 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 33: Forward Looking Statements
Forward Looking Statements This presentation includes forw ard-looking statements w ithin the meaning of the Private Securities Litigation Reform Act of 1995, w hich are subject to risks and uncertainties. The forw ard-looking statements, w hich address American Express Company’s current expectation
Slide 34: Forward Looking Statements
Forward Looking Statements • the company’s ability to grow revenues net of interest expense, w hich could be impacted by, among other things, uncertainty r egarding the continued spread of COVID-19 (including new variants) and the availability, distribution and use of effective treatments and vaccin
Slide 35: Forward Looking Statements
Forward Looking Statements • the actual amount the company spends on marketing in the future, w hich w ill be based in part on continued changes in the macr oeconomic and competitive environment and business performance; management’s identification and assessment of attractive investment opportuniti
Slide 36: Forward Looking Statements
Forward Looking Statements • the average discount rate not performing consistent w ith current expectations, including as a result of further changes in the mix of spending by location and industry (including the level of T&E spending), merchant negotiations (including merchant incentives, concessio
Slide 37: Forward Looking Statements
Forward Looking Statements • the company’s ability to expand merchant coverage globally, w hich w ill depend in part on the company’s success, as w ell as the success of OptBlue merchant acquirers and GNS partners in signing merchants to accept American Express, w hich could be impacted by the value
Slide 38: Forward Looking Statements
Forward Looking Statements • the company’s ability to implement its ESG strategies and initiatives, w hich depend in part on the amount and efficacy of its investments in product innovations, marketing campaigns, its supply chain and operations, and philanthropic, colleague and community programs; c
Slide 39: American Express
AMERICAN EXPRESS
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