American Express Company · NYSE:AXP
American Express — Investor Day (March 2015)
198 slides from American Express's investor day presentation, Mar 25, 2015
Slide 1: American Express Company 2015 Investor Day
American Express Company 2015 Investor Day March 25, 2015
Slide 2: 2015 Investor Day
2015 Investor Day Kenneth Chenault Chairman and Chief Executive Officer Edward Gilligan President Stephen Squeri Group President, Global Corporate Services Jeffrey Campbell Executive Vice President and Chief Financial Officer
Slide 3: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook Q&A 3
Slide 4: Payments Landscape
Payments Landscape Merchant Merchant Network Issuer Payment acquirer processor processor issuer American Express Business Model Note: The trademarks, logos and service marks used on this slide and throughout this presentation are the property of their respective owners. 4
Slide 5: Leveraging Our Resources
Leveraging Our Resources Core Businesses Segments Geographies Products Assets Capabilities Relationships ■ Trusted Brand ■ Marketing / Sales ■ Diverse Customers ■ Premium Positioning ■ Risk Management ■ Merchants ■ Channels ■ Data Analytics ■ Corporate Clients ■ Closed Loop Data and ■ Servicing ■ Bu
Slide 6: Slide 6
Slide 7: Leveraging Our Resources
Leveraging Our Resources Core Businesses Segments Geographies Products Assets Capabilities Relationships ■ Trusted Brand ■ Marketing / Sales ■ Diverse Customers ■ Premium Positioning ■ Risk Management ■ Merchants ■ Channels ■ Data Analytics ■ Corporate Clients ■ Closed Loop Data and ■ Servicing ■ Bu
Slide 8: AXP Brand Integrated Model
Integrated AXP Brand Model Closed Loop Relationships 8
Slide 9: AXP Global Platform Opportunity
AXP Global Platform Opportunity Integrated AXP Brand Model Closed Loop Relationships 9
Slide 10: Platform Opportunity with Partners
Platform Opportunity with Partners 10
Slide 11: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 11
Slide 12: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 12
Slide 13: Growth Businesses
Growth Businesses Growth Businesses U.S. U.S. International Consumer Small Business Businesses Global Global New Merchant Services Commercial Services Businesses 13
Slide 14: Growth Businesses
Growth Businesses U.S. U.S. International Consumer Small Business Businesses Global Global New Merchant Services Commercial Services Businesses 14
Slide 15: Bluebird and Serve Load Volume & Merchant Spend
Bluebird and Serve Load Volume & Merchant Spend Load Spend 300+% Increase in platform load from 2012 to 2014 Serve Retail Launch Bluebird Launch 300+% Increase in merchant 2012 2013 2014 2015 spend from 2012 to 2014 15
Slide 16: Bluebird and Serve Spend & Customer Demographics
Bluebird and Serve Spend & Customer Demographics Spend by Category Customer Diversity T&E of customers are new to 15% Spend 90% the American Express brand or are former Card Members 44% of customers are under 35 85% Non-T&E Spend 53% of customers are female 16
Slide 17: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 17
Slide 18: American Express Company 2015 Investor Day
American Express Company 2015 Investor Day March 25, 2015
Slide 19: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 19
Slide 20: Metric Trends
Metric Trends % increase/(decrease) vs. prior year 2012 2013 2014 Billed Business* 8% 7% 7% Billed Business FX Adjusted* 9% 8% 9% Card Member Loans 4% 3% 5% Worldwide Lending Write-off Rate† 2.1% 1.8% 1.5% *See Glossary of Selected Terminology for the definition of Card Billed business and an explan
Slide 21: Financial Performance
Financial Performance ($ in billions; except per share amounts) FY'14 FY'14 FY'13 Inc/(Dec) Total Revenues Net of Interest Expense $34.2 $33.0 4% Adj. for FX, Business Travel JV and Concur* $33.6 $31.8 5% Diluted EPS† $5.56 $4.88 14% Adj. for Q2'14 BT JV Transaction and Concur** $5.46 12% Return on
Slide 22: February '13 Potential Slow Growth Scenarios
February '13 Potential Slow Growth Scenarios 500bps (500bps) 12% Scenario 1 700bps 5% 400bps (500bps) Scenario 2 500bps 9% 5% 600bps (500bps) 700bps 15% Scenario 3 7% Revenue OpEx* Share Repurchase Provision/M&P/ EPS Rewards/Other *See Glossary of Selected Terminology for definition of Operating exp
Slide 23: Contribution to Adjusted EPS Growth: 2012-2014 CAGR
Contribution to Adjusted EPS Growth: 2012-2014 CAGR 4% (3%) 7% 12% 4% Adj. Revenue* Adj. Opex* Share Repurchase Adj. Adj. EPS* Rewards/Provision/ M&P/Taxes/Other* Note: Figures rounded. *The compounded annual growth rates of adjusted revenue and adjusted diluted earnings per share, as well as the EP
Slide 24: Contribution to EPS Growth: 2010-2014 CAGR
Contribution to EPS Growth: 2010-2014 CAGR 3% (4%) 4% 14% 5% 6% Adj. Revenue* Adj. Opex* Share Repurchase Adj. V/MA Payments EPS Rewards/Provision/ M&P/Taxes/Other* Note: Figures rounded. *The compounded annual growth rate of adjusted revenue , as well as the EPS contributions of adjusted operating
Slide 25: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 25
Slide 26: Revenue Growth vs. Issuer Peers
Revenue Growth vs. Issuer Peers Card Segment Revenue: 2010-2014 CAGR 6% 6% 6% 5% (2%) (3%) (11%) CapOne* DFS AXP USCS Citi JPM BofA Source: Company reports. Note: Total company results for Discover and Card Segment results for other issuing competitors. Consumer Lending segment for BofA. Issuing com
Slide 27: Pre-Provision PTI Growth vs. Issuer Peers
Pre-Provision PTI Growth vs. Issuer Peers Card Segment Pre-Provision Profit: 2010-2014 CAGR 9% 7% 4% 0% (5%) (6%) (14%) AXP* USCS* DFS CapOne** Citi JPM BofA*** Source: Company reports. Note: Total company results for Discover and Card Segment results for other issuing competitors. *Pre-provision pr
Slide 28: U.S. Share of Credit/Charge Purchase Volume and Loans
U.S. Share of Credit/Charge Purchase Volume and Loans AXP as a % of Total U.S. AXP as a % of Total U.S. Credit/Charge Purchase Volume* Revolving Credit Loans** 26.0% 25.4% 7.0% 6.1% 2010 2014 2010 2014 *Source: Nilson General purpose charge and credit. Excludes cash advances. **Source: AXP data and
Slide 29: Profitability Metrics
Profitability Metrics ROE* Net Income/Revenue PTI/Billings 29.1% 17.2% 0.88% 0.84% 27.5% 14.7% 2010 2014 2010 2014 2010 2014 *Return on average equity is calculated by dividing one year period net income by one year average total shareholders’ equity. 29
Slide 30: Global GDP Growth – IMF
Global GDP Growth – IMF Real GDP % increase / (decrease) vs. prior year U.S. Worldwide 4.1% 2.9% 2.5% 2.5% 2.6% 2.3% 2.4% 2.4% 2.2% 1.6% '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 *Source: U.S. 2010-2014 Real GDP – U.S Department of Commerce, Bureau of Economic Analysis, chained 2009 dollars; Worldwide
Slide 31: Competitive Environment
Competitive Environment Traditional Players New Entrants 31
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Slide 33: AXP Financial Targets
AXP Financial Targets On average and over time: Revenue EPS ROE 8%+ 12-15% 25%+ 33
Slide 34: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 34
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Slide 36: 2015 Investor Day – Ed Gilligan
2015 Investor Day Ed Gilligan President
Slide 37: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 37
Slide 38: Today's Discussion
Today’s Discussion Core Business Performance Global Strategies to Drive Growth Transformation of the Core 38
Slide 39: Today's Discussion
Today’s Discussion Core Business Performance Global Strategies to Drive Growth Transformation of the Core 39
Slide 40: Operate Across Multiple Businesses
Operate Across Multiple Businesses U.S. U.S. International Consumer Small Business Businesses Global Global New Merchant Services Commercial Services Businesses 40
Slide 41: Strong Market Fundamentals
Strong Market Fundamentals 2014 Global Payments Volume Attractive Tailwinds Multi-trillion dollar global payments opportunity Credit / Charge Secular electronification underway $7T with much room left to run (i.e. Check & global shift to plastic from cash and Cash check) $20T Debit $10T Robust
Slide 42: Leadership Positions
Leadership Positions U.S. issuer U.S. issuer in based international on billed based on business* U.S. U.S. billed business** International Consumer Small Business Businesses Global merchant Corporate card acquirer based on issuer based on billed business*** billed business* Global Global Merchant Co
Slide 43: Differentiated Economics by Business
Differentiated Economics by Business Higher Loyalty Coalition Global Network Customers* Services Number of U.S. Consumer International Global Corporate Consumer & Card U.S. Small Small Business Business Lower Lower Higher Revenue per Customer *Number of customers reflect “cards-in-force” other than
Slide 44: 2014 Return-on-Avg-Tangible-Capital by Segment
2014 Return-on-Avg-Tangible-Capital by Segment* 93% 34% 36% AXP ROE Target 25% 25% U.S. Card Services International Card Global Commercial Global Network Services Services and Merchant Services *Return on average tangible common equity, a non-GAAP measure, is computed by dividing (i) 2014 segment in
Slide 45: Strong Global Issuing Economics vs. Competitors
Strong Global Issuing Economics vs. Competitors Total Number of Accounts* for Consumer Adjusted Revenue per Account** for Consumer and Small Business Issuing Businesses and Small Business Issuing Businesses MM, 2014 USD, 2014 139 394 380 233 69 65 186 178 45 44 154 37 Citi*** CapOne**** JPM***** AXP
Slide 46: Core Business Summary
Core Business Summary We operate in businesses that are forecasted to have positive underlying growth fundamentals We have a strong position in each business we operate Our businesses bring different sources of value to the franchise (number of customers, revenue per customer, returns) 46
Slide 47: Today's Discussion
Today’s Discussion Core Business Performance Global Strategies to Drive Growth Transformation of the Core 47
Slide 48: Our Value Proposition in a Challenging Environment
Our Value Proposition in a Challenging Environment External Context Uncertain macroeconomic environment Increased regulatory activity Intense competition Rapid technological change 48
Slide 49: Our Value Proposition in a Challenging Environment
Our Value Proposition in a Challenging Environment Our Differentiated Assets Dynamic business model Integrated payments platform Distinctive service & brand Leader in innovation Strong position with premium consumers, small businesses & corporates Industry-leading risk management Partn
Slide 50: Global Strategies to Drive Growth
Global Strategies to Drive Growth Drive AXP Growth New customer and Share of Share of merchant acquisition spend wallet lend wallet Global Suite of Partnerships Digital Transformation 50
Slide 51: Investment Profiles
Investment Profiles New Customer Acquisition Share of Spend Wallet Share of Lend Wallet Higher upfront Lower marketing Diversification of acquisition costs costs revenue Long-term Proven marketing Higher capital relationships strategies requirements Strong returns Higher returns De
Slide 52: Global Customer Acquisition
Global Customer Acquisition Acquisition Investments Spend from New Customers Indexed to 2013 Indexed to 2013 YoY 12% YoY 16% 2013 2014 2013 2014 2014 ROI* of 400%+ *ROI is an estimated measure of investment return based on the predicted lifetime value of the new Card Member as compared to our total
Slide 53: U.S. Billed Business Volume and Net Interest Income Growth Relative Performance
U.S. Billed Business Volume and Net Interest Income Growth Relative Performance U.S. Consumer & Small Business Billed Business Growth in U.S. Net Interest Income $B 2012-2014 CAGR 542 AXP USCS 9% 462 JPM 6% 466 381 212 BofA 1% 209 194 CapOne 167 Citi*** 0% 161 172 (1%) Discover**** 106 116 (7%) 2012
Slide 54: U.S. Revenue Growth Rate Relative Performance
U.S. Revenue Growth Rate Relative Performance 2012-2014 CAGR 6% 5% 2% 0% (1%) (4%) AXP USCS Discover**** CapOne Citi*** JPM* BofA** *JPM total net revenue of Card Services which includes card issuing and merchant services. **BofA Consumer Lending’s total revenue net of interest expense which include
Slide 55: U.S. Consumer: Strong Spend From New Customers
U.S. Consumer: Strong Spend From New Customers Spend From New Customers Indexed to 2012 CAGR 11% 124 100 106 2012 2013 2014 55
Slide 56: Driving Acquisition Efficiency Through Digital
Driving Acquisition Efficiency Through Digital Spend From New U.S. Customers Investment Efficiency* of U.S. Digital Through Digital Acquisition Acquisition Indexed to 2012 Indexed to 2012 CAGR 12% CAGR 14% 124 129 100 100 2012 2014 2012 2014 *Investment efficiency is defined as spend from new custom
Slide 57: Attracting New Prospect Segments
Attracting New Prospect Segments Amex EveryDay Impact 1 More than 10% of total U.S. consumer accounts acquired in 2014 2 Everyday accounts are 2x likely to have revolving balance vs. AXP U.S. consumer proprietary card accounts “A credit card with no annual fee, 3 ~50% increase in AXP spend design
Slide 58: Continued Leadership of U.S. Premium Spend
Continued Leadership of U.S. Premium Spend* Estimated Share of Card Spend from Card Members and Prospects 2012 2014 AXP AXP Competitors Competitors *“Premium spend” is an internal term to define the spend opportunity for a stable, low risk consumer pool based on specific FICO, spend velocity and pay
Slide 59: Strong Performance of Platinum and Gold
Strong Performance of Platinum and Gold Strong Performance Enhanced Value Proposition 17 branded lounges globally, with 2 more by mid-2015 Centurion Meet and Greet in 10 international airports High and stable share of wallet* New benefits for Premier Rewards Gold Card Low and stable spend
Slide 60: Significant Opportunity in Share of Spend Wallet
Significant Opportunity in Share of Spend Wallet Estimated Spend per Customer* (indexed to <25% Estimated share of wallet level) Above average estimated share of ~10x spend wallet (75%+) Average estimated share of spend wallet ~5x (25-75%) Below average estimated share of 1 spend wallet (<25%) *2014
Slide 61: Methodical Approach to Drive Share of Spend Wallet
Methodical Approach to Drive Share of Spend Wallet Estimated incremental Spending From Existing Key AXP Assets U.S. Customers Who Acted On an Offer* Indexed to 2013 Big data driven segmentation YoY 24% 124 100 Wide range of proven techniques Multiple customer channels 2013 2014 *Incremental billed b
Slide 62: Driving Growth in Lending
Driving Growth in Lending U.S. Consumer Card Member Loans Outstanding Indexed to 2012 CAGR 6% 112 100 104 2012 2013 2014 Industry growth rate 2012-2014: ~2% Industry Source: Federal Reserve, Consumer Credit Release, January 2015. Non-seasonality adjusted U.S. consumer revolving credit outstanding. 6
Slide 63: Exploring the Untapped Lending Opportunity
Exploring the Untapped Lending Opportunity U.S. AXP CM Card-based Borrowing* Approach to Lending Enhance strong lending value proposition On-AXP ‒ Broad lending product suite ‒ Lending on charge features Explore innovative product constructs to capture higher share of lending wallet Deliver in
Slide 64: Update on Costco Co-Brand
Update on Costco Co-Brand Card Member Base Update Costco co-brand Card Members Offer relevant proprietary AXP are AXP's customers products ‒ Over 70% of the spending on Explore new partnerships the product occurs outside of Costco warehouses Portfolio sale – TBD ‒ High customer satisfaction
Slide 65: U.S. Consumer Summary
U.S. Consumer Summary We have maintained our position in the premium space We have grown our revenue faster than the other 5 large issuers We have achieved success with acquisition, especially with digital and reaching new segments Our areas of focus for driving growth include premium Card M
Slide 66: U.S. Small Business: Doubling Our Billed Business
U.S. Small Business: Doubling Our Billed Business Billed Business Indexed to 2005 216 CAGR 9% 196 178 159 144 139 134 126 117 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 66
Slide 67: 2014 Estimated Share of Spend on Small Business Cards
2014 Estimated Share of Spend on Small Business Cards 2014 Estimated Share of Card Spend from Card Members and Prospects* 2014 AXP Competitors *”Small business credit card spend” is an internal term to define the spend opportunity for features/benefits suited to needs of a small business. Source: Mc
Slide 68: Significant Opportunity With U.S. Small Businesses
Significant Opportunity With U.S. Small Businesses $4.8T estimated total small business spend (ex. payroll) in 2014* Small Business plastic spend 10% Example Spend Categories Office products Telecommunications Computer hardware 90% and software Non-plastic spend *“Estimated total small busines
Slide 69: Strong U.S. Small Business Acquisition Performance
Strong U.S. Small Business Acquisition Performance Spend From New Customers Indexed to 2012 CAGR 10% 120 100 103 2012 2013 2014 69
Slide 70: Differentiated Value Proposition for Small Businesses
Differentiated Value Proposition for Small Businesses Average Small Business Card Spend AXP Value Proposition vs. Industry* 2013, Indexed to industry average Enable B2B spend Provide higher spend capacity Deliver dedicated service 2.7x Offer rewards and savings Create additional value add
Slide 71: U.S. Small Business Summary
U.S. Small Business Summary We maintain a leading position in the small business segment Acquisition continues to be a strong driver of growth We have an approach to drive increasing share of wallet consolidation focused on shifting B2B spend from cash / check to plastic Share of lending is
Slide 72: Global Merchant Services: Expanding Coverage Through Partnerships
Global Merchant Services: Expanding Coverage Through Partnerships Merchant Acquirers in OptBlue Partners in U.S. Key International Countries Nov 2013 Nov 2013 May 2014 Apr 2014 May 2014 May 2014 May 2014 Jun 2014 Jul 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Nov 2014 May 2014 Feb 2015 Feb 2015 Dec 20
Slide 73: Continued Signing of Merchants Globally
Continued Signing of Merchants Globally Note: Selected signings completed in 2012 to 2014. 73
Slide 74: Delivering Locations Growth
Delivering Locations Growth Global Locations Growth* Indexed to 2012 CAGR 10% 120 100 2012 2014 400K+ OptBlue signings in U.S. in 2014 *Locations in force not including merchants acquired through aggregators. 74
Slide 75: Merchant Financing Growth
Merchant Financing Growth Ending Loans Outstanding Overview of Merchant Financing Product $ in MM 553 Cost effective funding remains a challenge for CAGR 70% small merchants AXP has a competitive 265 product and rates 192 Merchants with financing have significantly higher satisfaction based on
Slide 76: Global Merchant Services Summary
Global Merchant Services Summary We have accelerated merchant signings in the U.S. with OptBlue We are seeking to leverage similar constructs outside the U.S. We have made progress in signing key merchants globally We believe merchant financing represents a good opportunity, but it is early
Slide 77: International: Our Reach
International: Our Reach 1 2014 billings: # ~$ 335 U.S. issuer in international * billion** Presence in 130 + countries 2014 cards-in-force: ~ 57 MM** 150 + network partner arrangements*** *Nilson report for worldwide purchase volume (excluding U.S.) in 2013. **Outside the United States (including c
Slide 78: Focus on Two Categories of Markets
Focus on Two Categories of Markets Established Markets Growth Markets Offer a full range of products Work through strong local from proprietary and network issuers and acquirers business Japan UK Italy Canada Australia China India Turkey Brazil France Mexico 78
Slide 79: AXP Growing in All 11 Countries
AXP Growing in All 11 Countries AXP Billed Business 2014 Growth % Increase/(Decrease) vs. Prior year 62 28 19 16 11 8 6 5 6 4 4 Japan UK Italy Canada Australia France Mexico China India Turkey Brazil Established markets Growth markets 79
Slide 80: Growing Faster Than the Industry in 8 Out of 11
And Growing Faster Than the Industry in 8 Out of 11 AXP Billed Business 2014 Growth vs. Industry % Increase/(Decrease) vs. Prior year AXP Industry 62 31 28 22 19 16 15 13 11 8 6 6 6 5 5 6 6 3 4 4 -3 0 Japan UK Italy Canada Australia France Mexico China India Turkey Brazil Established markets Growth
Slide 81: Growth Themes in International
Growth Themes in International Established Markets Growth Markets Focus on digital acquisition Expand bank partner network in select key countries Continue to enhance our premium consumer offering Capture higher share of partner business by bringing Drive growth in lending skills learned f
Slide 82: Case Studies
Case Studies UK China Acquisition through 90%+ of first Large digital channels year spend network of partners Premium lending product offering Launching Expanding bank premium partnerships products Small Business Exploring other relationships Saturday 82
Slide 83: International Summary
International Summary We are growing faster than the industry in most of our priority international countries We operate in established markets with a full service business model that can be adjusted based on country conditions Growth markets represent a good long-term opportunity and offer st
Slide 84: Loyalty Coalition: Proven Model
Loyalty Coalition: Proven Model Industry-leading Consumers can sponsors in key earn and redeem 1 2 everyday spend rewards points at categories sponsors Sponsors get measurable results 5 . . 3 Coalition captures data and gain customer insight 4 Relevant personalized offers are distributed via multipl
Slide 85: Operating in 5 Countries
Operating in 5 Countries Germany Poland India Mexico Italy 60MM active collectors* currently in the program globally Note: Indicative coalition partners in each country. *Consumers who collected and/or redeemed points at a Loyalty Coalition merchant during 2014. 85
Slide 86: Launching U.S. Loyalty Coalition this Spring
Launching U.S. Loyalty Coalition this Spring Coalition Members Multi-partner loyalty program with a single points platform Anticipated new AXP co-brand card Robust pipeline of potential partners 86
Slide 87: Partnerships Are an Enabler of Executing Global Strategies
Partnerships Are an Enabler of Executing Global Strategies Drive AXP Growth New customer and Share of Share of merchant acquisition spend wallet lend wallet Global Suite of Partnerships Digital Transformation 87
Slide 88: Broad Network of Partnerships
Broad Network of Partnerships Proprietary Co-brand Partners Network Partners U.S. International 48 proprietary co-brand partners 150+ global network partners Loyalty Partners Digital Partners Note: Delta logo is a registered trademark of Delta Air Lines, Inc. 88
Slide 89: Today's Discussion
Today’s Discussion Core Business Performance Global Strategies to Drive Growth Transformation of the Core 89
Slide 90: Digital Transformation Across Our Growth Strategies
Digital Transformation Across Our Growth Strategies Drive AXP Growth New customer and Share of Share of merchant acquisition spend wallet lend wallet Global Suite of Partnerships Digital Transformation 90
Slide 91: Driving Growth Through Digital Engagement
Driving Growth Through Digital Engagement Offer new value to Card Members Increase use of Pay through digital offers with Points Fuel growth in online Integrate across and mobile through relevant devices enhanced security and form factors and service Focused on younger, affluent, higher spending Car
Slide 92: Digital Offers
Digital Offers Offer new value to Card Members Increase use of Pay through digital “$140MM+ with Points offers* in savings” Fuel growth in online Integrate across and mobile through relevant devices enhanced security and form factors and service *Worldwide Card-linked offers statement credit; Jan 20
Slide 93: Pay With Points
Pay With Points Offer new value to Card Members Increase use of Pay through digital offers with Points Fuel growth in online Integrate across and mobile through relevant devices enhanced security and form factors and service 93
Slide 94: Integrate Across Devices
Integrate Across Devices Offer new value to Card Members Increase use of Pay through digital offers with Points Fuel growth in online Integrate across and mobile through relevant devices enhanced security and form factors and service 94
Slide 95: Enhanced Security Service
Enhanced Security Service Offer new value to Card Members through digital offers Fuel growth in online and mobile through enhanced security and service 95
Slide 96: Platform Opportunity with Partners
Platform Opportunity with Partners 96
Slide 97: Transformation of the Core Summary
Transformation of the Core Summary We have a multi-pronged approach to increase our relevance and engagement with digitally savvy customers We are the largest integrated payments platform that processed over $1 trillion in volume in 2014 We are extending our model through connection with some
Slide 98: Summary
Summary Continue to maintain leadership position with premium consumers U.S. Consumer business presents growth opportunities through acquisition, share of spend and share of lend Small Business continues to be an engine of growth International businesses provide attractive growth opportuniti
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Slide 100: 2015 Investor Day – Stephen Squeri
2015 Investor Day Stephen Squeri Group President Global Corporate Services
Slide 101: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 101
Slide 102: Global Corporate Payments Snapshot – 2014
Global Corporate Payments Snapshot – 2014 18% 34% AXP Billed Business International Spend Merchant Value 6.9MM 63 %* Cards in force 2014 Fortune Global 500® 52% T&E Spend *As determined by an analysis conducted by American Express Global Corporate Payments. FORTUNE® and Global 500® are registered tr
Slide 103: GCP Billed Business
GCP Billed Business We have doubled our volume since 2005 Indexed to 2005 209 +9% 186 196 172 144 148 137 120 124 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 103
Slide 104: Billed Business Growth Drivers
Billed Business Growth Drivers Strong Win Engine Growth in B2B Spend from New Signings* B2B Billed Business** +14% +19% 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 *Incremental billed business from a sales signing for the first 13 months. ** Total billed business from corporate purch
Slide 105: Our Unique Assets
Our Unique Assets Track Record of Global Footprint Innovation Closed Loop World Class Advantage Service 105
Slide 106: Commercial Client Segments
Commercial Client Segments U.S. Segment Profile % of GCP Clients Global Prospect Universe* Global Corporations Centrally managed T&E programs GCG < 1% Large 11,000+ Market $500MM+ in Annual Revenue 4% 1,100,000+ $10MM - $500MM in Annual Revenue Middle Market 96% < $10MM in Annual Revenue Small Busin
Slide 107: Middle Market Performance Trends
Middle Market Performance Trends Billed Business Revenue +9% +10% 2011 2012 2013 2014 2011 2012 2013 2014 107
Slide 108: Middle Market Profitability
Middle Market Profitability 2014 Variable Margin (indexed) 133 100 GCP Large & Global Accounts GCP Middle Market Variable margin is a representation of the profitability of charge volume incorporating only direct revenue and expense lines that can be directly attributed to the associated charge volu
Slide 109: Strategy to Accelerate Middle Market Growth
Strategy to Accelerate Middle Market Growth Accelerate AXP Growth Acquire New Clients Increase Share Continued Product of Spend Innovation World Class Customer Service 109
Slide 110: Acquire New Clients
Acquire New Clients Priority Markets 110
Slide 111: Increase Share of Spend
Increase Share of Spend Leveraging Our Closed Loop to Unlock New Categories of Spend Current AXP Spend Potential AXP Spend 111
Slide 112: Continued Product Innovation
Continued Product Innovation Germany Italy Japan 112
Slide 113: Early Results Are Promising
Early Results Are Promising YOY Middle Market Billed Business Growth* Italy 26% Japan 22% UK 21% Mexico 18% U.S. 11% * 2013 vs. 2014 middle market billed business at local currency rates. 113
Slide 114: Closing
Closing The commercial payments segment is forecasted to be the fastest growing space in the payments industry We are the leader in corporate payments globally Middle market is our most profitable and largest growth opportunity globally We are increasing investments to further advance our gl
Slide 115: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 115
Slide 116: Financial Growth Driver Model
Financial Growth Driver Model Growth Businesses OpEx Leverage Capital Strength EPS Growth 116
Slide 117: Contribution to Adjusted EPS Growth: 2012-2014 CAGR
Contribution to Adjusted EPS Growth: 2012-2014 CAGR 4% (3%) 7% 12% 4% Adj. Revenue* Adj. Opex* Share Repurchase Adj. Adj. EPS* Rewards/Provision/ M&P/Taxes/Other* Note: Figures rounded. *The compounded annual growth rates of adjusted revenue and adjusted diluted earnings per share, as well as the EP
Slide 118: Operating Expense Growth Targets – Feb 2012
Operating Expense Growth Targets – Feb 2012 2-3 Year Target Total Operating Expense < Revenue Growth Global Services Group Flat to 2% Technology Development Spending Flat to 2% Investment Opex - Sales Force, New Business Initiatives, Flexible; Acquisitions & GNS Tied to Revenue Generation - Regulato
Slide 119: Operating Expense Growth Targets – Feb 2013
Operating Expense Growth Targets – Feb 2013 2-3 Year Target 2013 & 2014 Total Operating Expense < Revenue Growth < 3% Global Services Group Flat to 2% Technology Development Spending Flat to 2% Investment Opex - Sales Force, New Business Initiatives, Flexible; Acquisitions & GNS Tied to Revenue Gene
Slide 120: Adjusted Total Operating Expense Growth
Adjusted Total Operating Expense Growth* % Increase/(decrease) vs. Prior year: 9% 9% 5% Revenue Growth <3% Annual Target 2% 0% 0% 2010 2011 2012 2013 2014 *The growth rate of adjusted total operating expenses, a non-GAAP measure, excludes Visa/MasterCard litigation settlement proceeds from 2010-2012
Slide 121: Adjusted Total Operating Expense by Function
Adjusted Total Operating Expense* by Function Excludes GBT '11-'14 CAGR 0.6% Adj. Other (2.0%) Opex** Adj. Global Services Group** (2.2%) 2011 2012 2013 2014 See Glossary of Selected Terminology for certain key terms. *Adjusted Total Operating Expenses is a non-GAAP measure. See Annex 8 for a breakd
Slide 122: Adjusted Total Operating Expense by Function
Adjusted Total Operating Expense* by Function Excludes GBT '11-'14 CAGR 0.6% Adj. Investment 9.5% Opex** Adj. Technology 3.1% Development** 71% 66% “Run the Business” (2.1%) Opex** 2011 2012 2013 2014 See Glossary of Selected Terminology for certain key terms. *Adjusted Total Operating Expenses is a
Slide 123: Adjusted Total Operating Expense by Function
Adjusted Total Operating Expense* by Function Excludes GBT '11-'14 CAGR 0.6% 29% 34% Total Adj. 6.8% Investment Opex** 71% 66% “Run the Business” (2.1%) Opex** 2011 2012 2013 2014 See Glossary of Selected Terminology for certain key terms. *Adjusted Total Operating Expenses is a non-GAAP measure. Se
Slide 124: Operating Expense Growth Trends
Operating Expense Growth Trends Excludes GBT Total Adj. Investment Operating Expense * (+22%) Adj. Total Operating Expense* (+2%) “Run the Business” Operating Expense* (-6%) 2011 2012 2013 2014 *Adjusted Total Operating Expenses is a non-GAAP measure. See Annex 8 for a breakdown of the adjustments a
Slide 125: Operating Expense Growth Target
Operating Expense Growth Target 2015 Target* Total Operating Expense < 3% Total Investment Operating Expense “Run the Business” Operating Expense *Adjusted Total Operating Expense, Total Adjusted Investment Operating Expense and “Run the Business” Operating Expense are non-GAAP measures. See Annex 9
Slide 126: Two Questions
Two Questions Can we continue to create sustainable 1 leverage from operating expense to fund investments for growth? Can we also continue to have operating 2 expense control drive EPS growth? 126
Slide 127: Approach
Approach Focus Internal Mindset Create Global Networks Transform AXP’s Platforms Evolve Superior Service Empower Employees 127
Slide 128: Focus Internal Mindset: Waste Elimination
Focus Internal Mindset: Waste Elimination Avg. of 75% 1,500 38% Reduction in Servers Increase in number of AXP decommissioned workstation Suppliers annually capacity Note: 2010-2014 with exception of supplier reduction which reflects April 2010-Jan 2015. 128
Slide 129: Focus Internal Mindset: End to End Opportunities
Focus Internal Mindset: End to End Opportunities Call Volume Electronic Statements Paperless Statement Enrollment >80M +9 ppt calls handled by our customer care professionals in 2014 2011 2014 Every 10% reduction in call volume and paper statements represents a potential cost savings opportunity of
Slide 130: Create Global Networks
Create Global Networks Consolidate Organizations Globalize Key SDN Processes Optimize Global Footprint Enhance 13% Capabilities reduction in S&B cost per employee* * World Service 2010-2014 130
Slide 131: Global, Integrated Servicing Network
Global, Integrated Servicing Network Hello Hello G’day Hola 131
Slide 132: Transform AXP's Platforms
Transform AXP’s Platforms 132
Slide 133: Technology Platform Blueprint
Technology Platform Blueprint Rationalize & Consolidate Approachability Enhance Cost Effectiveness Create New 133
Slide 134: Global Authorizations Platform
Global Authorizations Platform 1960’s 1999 2010 2012 2014 1958 1972 2008 2011 2013 134
Slide 135: Evolve Superior Service
Evolve Superior Service Service has been the foundation since the beginning 1850 Today To become the world’s most A brand is born respected service brand 135
Slide 136: Superior Service Driving Growth
Superior Service Driving Growth Increased Satisfaction Driving Spend and Loyalty Global Recommend to Friend RTF Promoter vs. RTF Detractor* +25 ppt 16% 4X higher lower annual attrition spend 2009 2010 2011 2012 2013 2014 Note: See Glossary of Selected Terminology for definition of Recommend to a Fri
Slide 137: Digital Servicing Strategy
Digital Servicing Strategy +11ppt self-service growth rate* Recommend to a Friend 24 Hour Resolution Rate +7 ppt >75% 2012 2014 *2012-2014 growth of customers who used digital self-service tools to address fraud concerns. 137
Slide 138: Service as a Platform for Growth
Service as a Platform for Growth Big Data Capabilities New Tools Relationship Care® 138
Slide 139: Empower Employees
Empower Employees New Facilities New Work Styles New Workplace Tools At Your Desk While Mobile With Your Team On Campus 139
Slide 140: Delivery Transformation
Delivery Transformation Co-Location Iterative Development Process Co-locating technologists with product owners in collaborative workspaces Agile 140
Slide 141: Creating Sustainable Operating Expense Leverage
Creating Sustainable Operating Expense Leverage “Run the <3% Business” Opex Generating 2015 EPS Operating Expense growth Growth Target Investment Opex 141
Slide 142: Slide 142
Slide 143: 2015 Investor Day – Jeffrey Campbell
2015 Investor Day Jeffrey Campbell Executive Vice President and Chief Financial Officer
Slide 144: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 144
Slide 145: Financial Growth Drivers
Financial Growth Drivers Growth Businesses OpEx Leverage Capital Strength EPS Growth 145
Slide 146: Track record of strong capital payout
Track record of strong capital payout YoY Decrease in Average Payout Ratio* Tier 1 Common Ratio** Shares Outstanding 4.6% 12.5% 13.1% 98% 11.9% 86% 3.6% 3.5% 81% 2012 2013 2014 2012 2013 2014 2012 2013 2014 * Payout Ratio is calculated by dividing the total amount returned to shareholders through di
Slide 147: 2015 CCAR results were again in the top tier
2015 CCAR results were again in the top tier… Performance Under Fed Severely Adverse Scenario Cumulative Pre-Tax Income Minimum Tier 1 Common Ratio as a % of average assets, Q4'14-Q4'16 Q4'14-Q4'16 6.3% 12.6% 8.5% 8.2% with capital 7.3% actions 5% with capital actions Minimum (1.3%) AXP Median AXP M
Slide 148: …leading to higher potential capital distributions…
…leading to higher potential capital distributions… Dividend per Share Maximum Share Repurchase $ per share, per quarter $ in billions Up to $0.29 $6.6 $0.26 Up to $4.4 Q1'15 Beginning 2014 CCAR 2015 CCR Q2'15* Q2'14 – Q1'15 Q2'15 – Q2'16 (4 Quarters) (5 Quarters) * Subject to Board approval. 148
Slide 149: …and a fourth consecutive year of payouts well above our long-term target
…and a fourth consecutive year of payouts well above our long-term target in 2015 % of Capital Generated Returned to Shareholders* 98% 86% 81% 50% 2012 2013 2014 On Average and Over Time Target * See slide 146 for description of payout ratio calculation. 149
Slide 150: Our funding mix remains well-diversified
Our funding mix remains well-diversified ($ in billions) $102.3 $102.5 $106.3 38% 41% 42% Deposits ** 21% 20% 18% Card ABS* 39% 36% 37% Unsecured Term* 4% 3% 3% Short-term Debt 2012 2013 2014 All ABS debt is presented net of securities that have been retained by the Company. * Principal only. Exclud
Slide 151: Agenda
Agenda Ken AXP Growth Opportunities Financial Performance and Business Update Ed & Steve AXP Growth Businesses and Strategies Steve Operating Expense Leverage Jeff Capital Strength Financial Outlook 151
Slide 152: EPS Growth Outlook – Feb 12th Investor Call
EPS Growth Outlook – Feb 12th Investor Call 2015 2016 2017 & Beyond EPS growth Return to Return to likely flat to positive EPS 12-15% EPS down modestly growth growth target 152
Slide 153: Global GDP Expectations
Global GDP Expectations Real GDP % increase/(decrease) vs. prior year U.S. 4.1% Worldwide 3.4% 3.4% 3.1% 3.2% 2.9% 2.9% 2.7% 2.6% 2.5% 2.4% 2.4% 2.5% 2.3% 2.2% 1.6% '10 '11 '12 '13 '14 '15 '16 '17 '10 '11 '12 '13 '14 '15 '16 '17 Source: U.S. Real GDP 2010-2014 – U.S Department of Commerce, Bureau of
Slide 154: U.S. Interest Rate Expectations
U.S. Interest Rate Expectations 3 Year U.S. 1 Month LIBOR Projection 2.08% 1.54% 0.71% 0.18% Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Source: Bloomberg estimate of interbank lending rate as of 3/11/15. 154
Slide 155: U.S. Unemployment Expectations
U.S. Unemployment Expectations Unemployment Rate 5.6% 4.9% Q1'00 Q4'14 Q4'17 ** U.S. Unemployment Rate * Blue Chip Consensus as of March 2015 * Bureau of Labor Statistics. ** Blue Chip report, March 2015. 155
Slide 156: Slide 156
Slide 157: Demonstrated track record of driving earnings growth in a modest growth environment
Demonstrated track record of driving earnings growth in a modest growth environment Contribution to Adjusted EPS Growth: 2012-2014 CAGR 4% (3%) 7% 12% Underlying Business 4% Headwinds Adj. Revenue 1 Adj. Opex1 Share Repurchase Adj. Adj. EPS1 Rewards/Provision/ M&P/Taxes/ Other * Note: Figures rounde
Slide 158: Financial outlook – expected drivers of EPS growth
Financial outlook – expected drivers of EPS growth 2015 2016 2017 Revenue Core OpEx Leverage Underlying Capital Strength Performance Underlying Business Headwinds FX Discrete '15-'16 Co-brands Impacts Incremental Growth Initiatives or or Flat to Return to 12 to 15% EPS Growth Down Positive Target Ex
Slide 159: Core performance drivers remain in place
Core performance drivers remain in place 2015 2016 2017 Revenue Core OpEx Leverage Underlying Capital Strength Performance Underlying Business Headwinds 12 to 15% EPS Growth Target Expected Moderate Expected Larger YoY Impact YoY Impact 159
Slide 160: Growth opportunities exist across all major businesses
Growth opportunities exist across all major businesses… U.S. U.S. International Consumer Small Business Businesses Global Global New Merchant Services Commercial Services Businesses 160
Slide 161: …as evidenced by recent revenue growth trends…
…as evidenced by recent Expected Driver: Revenue 2015 2016 2017 revenue growth trends… Adjusted Revenue Growth by Segment* % of Total Adjusted AXP Revenue : 56% 15% 10% 17% 12% 10% 8% 6% 6% 7% 7% 6% 6% 6% 5% 5% 6% 5% 5% 5% 4% 4% 4% 3% '11 '12 '13 '14 U.S. Consumer & Int'l Consumer & Global Commercia
Slide 162: …providing a foundation for continued growth
…providing a foundation for Expected Driver: Revenue 2015 2016 2017 continued growth Adjusted Revenue Growth* Outlook Commentary % increase vs. prior year Base Assumptions 7% Reflects recent trends, including discount rate 6% and loan growth 5% 5% Reflects new EU legislation Opportunities & Risk
Slide 163: Revenue mix remains spend-driven, despite strong net interest income performance
Revenue mix remains spend-driven, despite strong net interest income performance AXP Net Interest Income as a % of Adj. Revenue Net of Interest* 16% 17% 15% 15% 2011 2012 2013 2014 * Net interest income as a % of adjusted total revenue net of interest expense is a non-GAAP measure. Refer to Annex 10
Slide 164: Expect leverage from operating expenses to remain sustainable
Expected Driver: OpEx Leverage Expect leverage from operating 2015 2016 2017 expenses to remain sustainable Adj. Operating Expense Growth* Outlook Commentary % increase/(decrease) vs. LY Base Assumptions 9% Incorporates benefits from 2014 restructuring Opportunities & Risks Incremental reenginee
Slide 165: Capital strength expected to continue driving EPS growth
Capital strength expected to Expected Driver: Capital Strength 2015 2016 2017 continue driving EPS growth Average Shares Outstanding Outlook Commentary % decline in average shares outstanding Base Assumptions 2015 Capital Plan 4.6% Opportunities & Risks CCAR / Basel Advanced evolution 3.6% 3.5%
Slide 166: Underlying business headwinds likely to continue
Underlying business Expected Driver: Underlying Business Headwinds 2015 2016 2017 headwinds likely to continue $B, unless otherwise stated Provision for Losses Adj. Rewards Expense* Tax Rate 6.9 6.5 6.2 5.9 5.0 34.5% 32.0% 32.1% 2.2 30.5% 2.0 29.6% 1.7 1.8 1.1 2010 2011 2012 2013 2014 2010 2011 2012
Slide 167: Core performance drivers remain in place…
Core performance drivers remain in place… 2015 2016 2017 Revenue Core OpEx Leverage Underlying Capital Strength Performance Underlying Business Headwinds 12 to 15% EPS Growth Target Expected Moderate Expected Larger YoY Impact YoY Impact 167
Slide 168: …though discrete '15-'16 impacts will depress earnings growth
…though discrete '15-'16 impacts will depress earnings growth 2015 2016 2017 FX Discrete '15-'16 Co-brands Impacts Incremental Growth Initiatives or or Flat to Return to 12 to 15% EPS Growth Down Positive Target Expected Moderate Expected Larger YoY Impact YoY Impact 168
Slide 169: U.S. Dollar continues to strengthen
U.S. Dollar continues to Expected Driver: FX 2015 2016 2017 strengthen Indexed to 3/1/14, based on a two-week rolling average YoY% Decline vs. USD UK £ (7%) Mexico $ Outlook Commentary (11%) Base Assumptions Canada $ GBP FX rates generally steady with recent (11%) levels MXN Australia $ Opportunit
Slide 170: Co-brands impact, without factoring in Costco U.S.
Co-brands impact, without Expected Driver: Co-brands 2015 2016 2017 factoring in Costco U.S. 2014 AXP Billed Business Outlook Commentary Base Assumptions $1.0 T Lap majority of 2014 renewal impact in 2016 Costco U.S.: 8% Costco Canada expired 12/31/14; JetBlue Co-Brand Delta & Renewals*: 9%
Slide 171: Co-brands impact, including Costco U.S.
Co-brands impact, including Expected Driver: Co-brands 2015 2016 2017 Costco U.S. 2014 AXP Billed Business Outlook Commentary – Costco U.S. Base Assumptions $1.0 T Costco U.S. set to expire 3/31/16 Costco U.S.: 8% Excludes any gain on portfolio sale Co-Brand Delta & Renewals*: 9% Prop Spend
Slide 172: Investing in growth now to position for the long-term
Investing in growth now to Expected Driver: Incremental Growth Initiatives 2015 2016 2017 position for the long-term or or Marketing & Promotion Expense Outlook Commentary $B Base Assumptions Invest to drive growth over longer term — Capture future spend and lend from 3.3 relationships with Costco
Slide 173: Financial outlook – expected drivers of EPS growth
Financial outlook – expected drivers of EPS growth 2015 2016 2017 Revenue Core OpEx Leverage Underlying Capital Strength Performance Underlying Business Headwinds FX Discrete '15-'16 Co-brands Impacts Incremental Growth Initiatives or or Flat to Return to 12 to 15% EPS Growth Down Positive Target Ex
Slide 174: EPS Growth Outlook – Feb 12th Investor Call
EPS Growth Outlook – Feb 12th Investor Call 2015 2016 2017 & Beyond EPS growth Return to Return to likely flat to positive EPS 12-15% EPS down modestly growth growth target “As all of these items play out over the next few years, we will likely have more unevenness in our performance from quarter to
Slide 175: Q1 Outlook
Q1 Outlook EPS growth Volume and revenue trends ‒ FX impact ‒ Co-brand Other notable items ‒ Share repurchases Beyond Q1'15 175
Slide 176: Slide 176
Slide 177: The American Express Story
The American Express Story Payments Space Remains Attractive ‒ Secular trends continue to drive lower use of cash and checks ‒ Digital and Big Data create new opportunities ‒ Strong profitability and returns Diverse growth business opportunities… ‒ U.S. Consumer & Small Business, International,
Slide 178: Slide 178
Slide 179: Glossary of Selected Terminology
Glossary of Selected Terminology Card Billed Business - Includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), corporate payments and certain insurance fees charged on proprietary cards. Card
Slide 180: Glossary of Selected Terminology (cont.)
Glossary of Selected Terminology (cont.) Recommend to a Friend (RTF) – Measures a Card Member’s satisfaction with the level of servicing provided by American Express customer care professionals. The metric is calculated from ratings given by Card Members in response to the question: “Based on this
Slide 181: Annex 1
Annex 1 Revenue Net of Interest Adjusted for FX, Global Business Travel and Concur ($ in millions) 2010 2011 2012 2013 2013 2014 for 2014 growth rate GAAP Revenue Net of Interest $27,582 $29,962 $31,555 $32,974 $32,974 $34,292 Global Business Travel Revenue Net of Interest* ($801) Gain on Sale of Co
Slide 182: Annex 2
Annex 2 EPS Adjusted for Global Business Travel and Concur ($ in millions) 2013 2014 GAAP Diluted EPS $4.88 $5.56 Net Impact of Q2'14 Global Business Travel Transaction* ~($0.05) Net Impact of Q4'14 Concur Sale** ~($0.05) Diluted EPS Excluding GBT and Concur $5.46 YoY% Increase/(Decrease) in GAAP Di
Slide 183: Annex 3
Annex 3 Adjusted Revenue Net of Interest and Diluted EPS 2014 vs. 2014 vs. ($ in millions) 2010 2012 2014 2010 CAGR 2012 CAGR GAAP Revenue Net of Interest $27,582 $31,555 $34,292 Global Business Travel Revenue Net of Interest* ($777) ($780) Gain on Sale of Concur Investment ($719) Q2’14 and Q4’14 In
Slide 184: Annex 4
Annex 4 Adjusted Operating Expenses and Rewards/Provision/M&P/Taxes/Other 2014 vs. 2010 2014 vs. 2012 CAGR CAGR GAAP Total Operating Expenses Contribution to GAAP Diluted EPS Growth 5% 17% Adjusted Total Operating Expenses* Contribution to Adjusted Diluted EPS** Growth 5% 7% GAAP Rewards/Provision/M
Slide 185: Annex 5
Annex 5 Pre-Provision Pre-Tax Income 2010 2014 ($ in millions) AXP GAAP Pre-Tax Income $5,964 $8,991 AXP GAAP Provision Expense $1,965 $2,044 AXP Pre-Provision Pre-Tax Income $7,929 $11,035 Increase/(Decrease) in AXP Pre-Tax Income (CAGR) 11% Increase/(Decrease) in AXP Pre-Provision Pre-Tax Income (
Slide 186: Annex 6
Annex 6 The Tier 1 Common Risk-Based Capital Ratio is calculated as Tier 1 Common Equity, a non-GAAP measure, divided by Risk-weighted assets. Tier 1 Common Equity is calculated by reference to Total Shareholders’ Equity as shown below: ($ in millions, unless otherwise noted) 12/31/2012 12/31/2013 T
Slide 187: Annex 7 (1 of 2)
Annex 7 (1 of 2) Segment Revenue Net of Interest Expense – Reported & FX Adjusted* % Increase/(decrease) vs. prior year 2011 2012 2013 2014 International Consumer & Small Business Reported 13% 1% 2% 2% FX Adjusted 7% 4% 5% 6% Global Commercial Services, Adjusted** Reported 12% 3% 2% 5% FX Adjusted 1
Slide 188: Annex 7 (2 of 2)
Annex 7 (2 of 2) % of Total AXP FX-Adjusted Revenue Net of Interest Expense– Reported & Adjusted* 2014 U.S. Consumer & Small Business Reported 54% Adjusted* 56% International Consumer & Small Business Reported 15% Adjusted* 15% Global Commercial Services Reported 14% Adjusted* 10% Global Network & M
Slide 189: Annex 8
Annex 8 Adjusted Total Operating Expense Growth ($ in millions) 2010 2011 2012 2013 2013 2014 for 2014 growth rate GAAP Total Operating Expenses $10,916 $12,243 $13,447 $12,987 $12,987 $12,184 Visa/MasterCard Settlement Payments $880 $580 Restructuring Charges* ($400) ($446) Q2’14 Global Business Tr
Slide 190: Annex 9
Annex 9 Adjusted Total Operating Expense Growth 2011 vs. 2014 CAGR 2011 v. 2014 CAGR Adjusted Adjusted GAAP Basis GAAP Basis Total Operating Expense* 1% 0% Global Services Group** (2%) (2%) Other Opex* (2%) (3%) Technology Development** 3% 3% Investment Opex** 9% 7% “Run the Business” Opex* (2%) (3%
Slide 191: Annex 10
Annex 10 Net Interest Income as a % of Adjusted Revenue Net of Interest ($ in millions) 2011 2012 2013 2014 GAAP Revenue Net of Interest $29,962 $31,555 $32,974 $34,292 Global Business Travel Revenue Net of Interest* $1,590 $1,547 $1,549 $741 Gain on Sale of Concur Investment $719 Adjusted Revenue N
Slide 192: Annex 11
Annex 11 Adjusted Rewards Expense ($ in millions) 2010 2011 2012 2013 2014 GAAP Card Member Rewards Expense $5,000 $6,218 $6,282 $6,457 $6,931 Q4’12 Membership Rewards Estimation Process Enhancement ($342) Adjusted Card Member Rewards Expense $5,000 $6,218 $5,940 $6,457 $6,931 * To the extent compar
Slide 193: 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 194: Forward-Looking Statements
Forward-Looking Statements the actual amount to be spent by the Company on investments in the business, including in such areas as consumers, small businesses, corporate payments, merchant coverage, international growth, prepaid and online/mobile commerce, as well as the timing of any such investm
Slide 195: Forward-Looking Statements
Forward-Looking Statements the Company’s ability to execute against its lending strategy, which may be affected by increasing competition, brand perceptions and reputation, and the behavior of the Company’s Card Members and their actual spending patterns, which in turn may be driven by the Company
Slide 196: Forward-Looking Statements
Forward-Looking Statements the possibility the actual amount the Company’s new Card Members spend during their first full year as Card Members or the estimated return on investment for such new Card Members will be lower than estimated, which will depend in part on factors such as changes in the e
Slide 197: Forward-Looking Statements
Forward-Looking Statements the ability of the Company to open airport lounges, which will depend in part on the Company’s ability to identify and attain space in terminals, the Company’s ability to tailor services to make them attractive to local customers, and the ability to obtain necessary lice
Slide 198: Forward-Looking Statements
Forward-Looking Statements uncertainty relating to the outcome of the lawsuit filed against us by the U.S. Department of Justice and certain state attorneys general, including the success or failure of any appeal and the timing of any future decisions; changes affecting the Company’s ability or