American Express Company
2015 Investor Day
March 25, 2015
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
Agenda
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Q&A
Ken
Ed & Steve
Steve
Jeff
3
Payments Landscape
Note: The trademarks, logos and service marks used on this slide and throughout this presentation are the property of their respective owners.
Merchant
acquirer
Merchant
processor
Issuer
processor
Payment
issuer
American Express Business Model
Network
4
Leveraging Our Resources
Core Businesses
Segments
Products
Geographies
Assets
■ Trusted Brand
■ Premium Positioning
■ Channels
■ Closed Loop Data and
Information
■ Travel Network
■ Processing Infrastructure
Capabilities
■ Marketing / Sales
■ Risk Management
■ Data Analytics
■ Servicing
■ Rewards
■ Partnering
■ Expense Leverage
Relationships
■ Diverse Customers
■ Merchants
■ Corporate Clients
■ Business Partners
■ GNS Partners
5
Leveraging Our Resources
Core Businesses
Segments
Products
Geographies
Assets
■ Trusted Brand
■ Premium Positioning
■ Channels
■ Closed Loop Data and
Information
■ Travel Network
■ Processing Infrastructure
Capabilities
■ Marketing / Sales
■ Risk Management
■ Data Analytics
■ Servicing
■ Rewards
■ Partnering
■ Expense Leverage
Relationships
■ Diverse Customers
■ Merchants
■ Corporate Clients
■ Business Partners
■ GNS Partners
7
Integrated
Model
Relationships
AXP Brand
Closed Loop
8
Integrated
Model
Relationships
AXP Brand
Closed Loop
AXP Global Platform Opportunity
9
Platform Opportunity with Partners
10
Financial Growth Drivers
Growth Businesses
OpEx Leverage
Capital Strength
EPS Growth
11
Financial Growth Drivers
Growth Businesses
OpEx Leverage
Capital Strength
EPS Growth
12
Growth Businesses
Global
Commercial Services
.
Consumer
Global
Merchant Services
.
Small Business
International
Businesses
New
Businesses
Growth Businesses
13
Global
Commercial Services
.
Consumer
Global
Merchant Services
.
Small Business
International
Businesses
New
Businesses
Growth Businesses
14
Load
Spend
2012 2013 2014 2015
Increase in platform load
from 2012 to 2014
Increase in merchant
spend from 2012 to 2014
Bluebird
Launch
Serve Retail
Launch
Bluebird and Serve
Load Volume & Merchant Spend
300+%
300+%
15
Bluebird and Serve
Spend & Customer Demographics
Customer Diversity
15%
85%
Spend by Category
T&E
Spend
Non-T&E
Spend
90%
of customers are new to
the American Express
brand or are former
Card Members
44% of customers are under 35
53% of customers are female
16
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
17
American Express Company
2015 Investor Day
March 25, 2015
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
19
Metric Trends
% increase/(decrease) vs. prior year
*See Glossary of Selected Terminology for the definition of Card Billed business and an explanation of FX adjusted information. †Principal Only. See Statistical tables in Q4’14 and Q4’13
Earnings Releases for net write-off rates including interest and/or fees.
Billed Business* 7% 8% 7%
Worldwide Lending Write-off Rate† % % %
Card Member Loans 3% 4% 5%
Billed Business FX Adjusted* 8% 9% 9%
2012 2013 2014
20
*Total Revenues Net of Interest adjusted for FX and excluding Business Travel revenues from 2H’13 and the gain on the Q4’14 sale of the Concur investment and the related growth rate are
non-GAAP measures. Refer to Annex 1 for a reconciliation. †Attributable to common shareholders. Represents net income less earnings allocated to participating share awards and other
items. **Diluted EPS adjusted for Q2’14 Business Travel JV gain, transaction costs, foundation contribution, and incremental growth initiatives as well as Q4’14 Concur gain, restructuring
charge, upfront cost of renewed Delta relationship and incremental growth initiatives and related growth rate are non-GAAP measures. Refer to Annex 2 for a reconciliation.
Diluted EPS †
Financial Performance
Return on Average Equity
($ in billions; except per share amounts)
FY'14
$
29%
Total Revenues Net of Interest Expense $
$
28%
FY'13
$
$
$
Adj. for FX, Business Travel JV and Concur*
FY'14
Inc/(Dec)
14%
4%
5%
Adj. for Q2'14 BT JV Transaction and Concur** 12%
$
21
February '13 Potential Slow Growth Scenarios
5%
700bps
500bps (500bps)
12%
Sc
en
ar
io
1
Sc
en
ar
io
2
Sc
en
ar
io
3
*See Glossary of Selected Terminology for definition of Operating expense (OpEx)
5%
500bps
400bps (500bps)
9%
7%
700bps
600bps (500bps)
15%
Revenue OpEx* Share Repurchase Provision/M&P/
Rewards/Other
EPS
22
7%
4%
4%
(3%)
12%
Adj. Revenue* Adj. Opex* Share Repurchase Adj.
Rewards/Provision/
M&P/Taxes/Other*
Adj. EPS*
Contribution to Adjusted EPS Growth:
2012-2014 CAGR
Note: Figures rounded. *The compounded annual growth rates of adjusted revenue and adjusted diluted earnings per share, as well as the EPS contributions of adjusted operating expense and
adjusted rewards/provision/M&P/taxes/other, are non-GAAP measures. Refer to Annex 3 and 4 for a breakdown of these amounts and a reconciliation to revenue, operating expense,
rewards expense/provision/M&P/taxes and diluted EPS on a GAAP basis. 23
5%
4%
3%
6%
(4%)
14%
Adj. Revenue* Adj. Opex* Share Repurchase Adj.
Rewards/Provision/
M&P/Taxes/Other*
V/MA Payments EPS
Contribution to EPS Growth:
2010-2014 CAGR
Note: Figures rounded. *The compounded annual growth rate of adjusted revenue , as well as the EPS contributions of adjusted operating expense and adjusted
rewards/provision/M&P/taxes/other, are non-GAAP measures. Refer to Annex 3 and 4 for a breakdown of these amounts and a reconciliation to revenue, operating expense and rewards
expense/provision/M&P/taxes on a GAAP basis. 24
Financial Growth Drivers
Growth Businesses
OpEx Leverage
Capital Strength
EPS Growth
25
Revenue Growth vs. Issuer Peers
Source: Company reports.
Note: Total company results for Discover and Card Segment results for other issuing competitors. Consumer Lending segment for BofA. Issuing competitors reflect rewards costs as a
contra revenue item whereas the majority of AXP rewards costs are reported as an expense. *Includes impact of HSBC portfolio acquisition.
Card Segment Revenue: 2010-2014 CAGR
6% 6% 6% 5%
(2%) (3%)
(11%)
CapOne* DFS AXP USCS Citi JPM BofA
26
9%
7%
4%
0%
(5%) (6%)
(14%)
AXP* USCS* DFS CapOne** Citi JPM BofA***
Pre-Provision PTI Growth vs. Issuer Peers
Source: Company reports. Note: Total company results for Discover and Card Segment results for other issuing competitors. *Pre-provision profit , a non-GAAP measure represents revenues
net of interest less total expense (excluding provision for losses). See Annex 5 for a reconciliation and pre-tax income for AXP and USCS. **Includes impact of HSBC portfolio acquisition.
***Consumer Lending segment, adjusted for $ goodwill adjustment in 2010.
Card Segment Pre-Provision Profit: 2010-2014 CAGR
27
. Share of Credit/Charge Purchase Volume
and Loans
AXP as a % of Total .
Revolving Credit Loans**
AXP as a % of Total .
Credit/Charge Purchase Volume*
*Source: Nilson General purpose charge and credit. Excludes cash advances. **Source: AXP data and Federal Reserve, Consumer Credit Release, February 2015. Non-seasonally adjusted
. consumer revolving credit outstanding.
%
%
2010 2014
%
%
2010 2014
28
%
%
ROE*
%
%
Net Income/Revenue PTI/Billings
Profitability Metrics
*Return on average equity is calculated by dividing one year period net income by one year average total shareholders’ equity.
2010 2014 2010 2014 2010 2014
%
%
29
'10 '11 '12 '13 '14
%
%
%
%
% % %
% %
%
'10 '11 '12 '13 '14
Global GDP Growth – IMF
Real GDP % increase / (decrease) vs. prior year
*Source: . 2010-2014 Real GDP – Department of Commerce, Bureau of Economic Analysis, chained 2009 dollars; Worldwide 2010-2014 Real GDP – IMF, exchange rates fixed as of
October, 2014
. Worldwide
30
Competitive Environment
New Entrants Traditional Players
31
AXP Financial Targets
On average and over time:
8%+
Revenue
12-15%
EPS
25%+
ROE
33
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
34
2015 Investor Day
Ed Gilligan
President
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
37
Today’s Discussion
Transformation of the Core
Core Business Performance
Global Strategies to Drive Growth
38
Today’s Discussion
Transformation of the Core
Core Business Performance
Global Strategies to Drive Growth
39
Operate Across Multiple Businesses
Global
Commercial Services
.
Small Business
International
Businesses
New
Businesses
Global
Merchant Services
.
Consumer
40
Strong Market Fundamentals
Attractive Tailwinds 2014 Global Payments Volume
Multi-trillion dollar global payments
opportunity
Secular electronification underway
with much room left to run (.
global shift to plastic from cash and
check)
Robust e-commerce and m-
commerce growth continues
Credit /
Charge
$7T
Debit
$10T
Check &
Cash
$20T
Prepaid
$875B
Source: Euromonitor database. Data pulled October, 2014. Estimate based on partial year of actuals. Excludes ACH. 41
Leadership Positions
*As of 2014. **Nilson report for worldwide purchase volume (excluding .) in 2013. AXP based on internal data. ***Nilson report for top 5 global merchant acquirers’ volume in 2013. AXP
based on internal data.
. issuer
based
on billed
business* .
Consumer
.
Small Business
. issuer in
international
based on
billed business** International
Businesses
Global merchant
acquirer based on
billed business***
Global
Merchant
Services
Corporate card
issuer based on
billed business*
Global
Commercial
Services
42
Differentiated Economics by Business
*Number of customers reflect “cards-in-force” other than Loyalty Coalition, which reflects active collectors (consumers who collected and/or redeemed points during 2014).
Lower
Higher Lower
Higher
N
um
be
r o
f
C
us
to
m
er
s*
Revenue per Customer
.
Consumer
Loyalty Coalition
Global Network
Services
International
Consumer &
Small Business
. Small
Business
Global Corporate
Card
43
2014 Return-on-Avg-Tangible-Capital by Segment*
AXP ROE
Target
25%
. Card Services
36%
25%
34%
Global Commercial
Services
International Card
Services
93%
Global Network
and Merchant
Services
*Return on average tangible common equity, a non-GAAP measure, is computed by dividing (i) 2014 segment income ($ billion for USCS, $411 million for ICS, $ billion for GCS as
adjusted for the gains and associated transaction costs for the GBT JV transaction in Q2 and Concur gain in Q4 of $806 million and $ billion for GNMS) by (ii) 2014 average segment
capital ($ billion for USCS, $ billion for ICS, $ for GCS and $ billion for GNMS), excluding average goodwill and other intangibles of $319 million for USCS, $ billion for
ICS, $1,7 billion for GCS and $189 million for GNMS. 44
Strong Global Issuing Economics vs. Competitors
45
MM, 2014 USD, 2014
Total Number of Accounts* for Consumer
and Small Business Issuing Businesses
Adjusted Revenue per Account** for Consumer
and Small Business Issuing Businesses
*Accounts reflect Q4 2014 ending. **Adjusted revenue per account for Consumer and Small business issuing businesses, a non-GAAP measure, is calculated by dividing (i) total revenues net of
interest expense for USCS and ICS ($23,406M for 2014), adjusted for Card Member rewards expense for USCS and ICS ($6,323M for 2014) by (ii) basic cards-in-force for USCS and ICS (45M as
of 12/31/14). Issuing competitors reflect rewards costs as a contra revenue item whereas the majority of AXP rewards costs are reported as an expense, so adjusted revenue is presented for
AXP. ***Citi branded and Citi retail services credit card. ****Capital One total . accounts per 2015 Nilson report and total . net revenue. *****JPM open credit card accounts (excluding
commercial card) and total net revenue of Card Services. †Discover total accounts issued directly by Discover per 2015 Nilson report and revenue net of interest expense of Direct Banking.
††BofA total accounts per 2015 Nilson report. BofA total revenue net of interest expense of Consumer Lending.
Citi*** CapOne**** JPM***** AXP
USCS+ICS
AXP
USCS+ICS
JPM***** CapOne**** Citi*** BofA†† Discover†
139
69 65
45 44 37
394 380
233
186 178 154
BofA†† Discover†
45
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
Today’s Discussion
Transformation of the Core
Core Business Performance
Global Strategies to Drive Growth
47
Our Value Proposition in a Challenging
Environment
External Context
Uncertain macroeconomic environment
Increased regulatory activity
Intense competition
Rapid technological change
48
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
Partner network
Closed loop data
49
Global Strategies to Drive Growth
Drive AXP Growth
Share of
lend wallet
Share of
spend wallet
New customer and
merchant acquisition
Digital Transformation
Global Suite of Partnerships
50
Investment Profiles
Share of Spend Wallet
Lower marketing
costs
Proven marketing
strategies
Higher returns
New Customer Acquisition
Higher upfront
acquisition costs
Long-term
relationships
Strong returns
Diversification of
revenue
Higher capital
requirements
Deepened customer
relationships by
meeting borrowing
needs
Share of Lend Wallet
51
Global Customer Acquisition
Note: Data reflects USCS and ICS segments. See Glossary of Selected Terminology for an explanation of Spend from New Customers.
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 upfront investment cost to acquire the new Card
Member.
Acquisition Investments Spend from New Customers
2013
YoY 12%
2014 2013 2014
Indexed to 2013 Indexed to 2013
YoY 16%
52
. Billed Business Volume and Net
Interest Income Growth Relative Performance
*JPM Card Services which includes card issuing and merchant services. **BofA Consumer Lending which includes consumer and small business credit cards, debit cards, direct and indirect
consumer loans such as automotive, marine, aircraft, recreational vehicle and consumer personal loans. ***Citi NA Citi-Branded Cards. ****Discover card sales volume and net interest income
of Direct Banking which includes Discover-branded credit cards issued to individuals on the Discover Network and other consumer banking products and services, including private student
loans, personal loans, home loans, home equity loans, prepaid cards and other consumer lending and deposit products.
2012-2014 CAGR
. Consumer & Small Business Billed Business Growth in . Net Interest Income
$B
BofA**
(7%)
JPM*
(1%)
Citi***
0%
CapOne
1%
AXP
USCS
6%
Discover****
9%
462
381
194 167
161
106
2012 2013 2014
AXP USCS
JPM
BofA
CapOne
Citi***
Discover****
212
466
542
116
209
172
53
6%
5%
2%
0%
(1%)
(4%)
. Revenue Growth Rate Relative Performance
*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 includes consumer and
small business credit cards, debit cards, direct and indirect consumer loans such as automotive, marine, aircraft, recreational vehicle and consumer personal loans. ***Citi NA Citi-Branded
Cards. ****Discover Direct Banking’s net interest income plus other income which includes Discover-branded credit cards issued to individuals on the Discover Network and other consumer
banking products and services, including private student loans, personal loans, home loans, home equity loans, prepaid cards and other consumer lending and deposit products. Note: Issuing
competitors reflect rewards costs as a contra revenue item whereas the majority of AXP rewards costs are reported as an expense. The adjusted 2012-2014 CAGR for total revenues net of
interest expense excluding Card Member rewards expense for USCS, a non-GAAP measure, was 6%.
Citi*** BofA** JPM* CapOne Discover**** AXP USCS
2012-2014 CAGR
54
Spend From New Customers
. Consumer: Strong Spend From New
Customers
100 106
124
2012
CAGR 11%
2014 2013
Indexed to 2012
55
Driving Acquisition Efficiency Through Digital
*Investment efficiency is defined as spend from new customers / total upfront investment dollars.
Spend From New . Customers
Through Digital Acquisition
Investment Efficiency* of . Digital
Acquisition
2012
CAGR 14%
2014 2014 2012
CAGR 12%
100
100 129
124
Indexed to 2012 Indexed to 2012
56
Attracting New Prospect Segments
*As of 1/19/2015. Q2 2014 acquisitions only.
“A credit card with no annual fee,
designed for your everyday”
Amex EveryDay Impact
More than 10% of total .
consumer accounts acquired
in 2014
Everyday accounts are 2x
likely to have revolving
balance vs. AXP .
consumer proprietary card
accounts
~50% increase in AXP spend
of existing customers who got
an Amex EveryDay card*
1
2
3
57
Continued Leadership of . Premium Spend*
Source: Experian data at Acxiom and internal modeling.
Estimated Share of Card Spend from Card Members and Prospects
*“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 paydown rate. For the opportunity sizing,
target customer spend includes credit and charge.
2012 2014
AXP
Competitors
AXP
Competitors
58
Strong Performance of Platinum and Gold
*Based on American Express estimates of average share of wallet.
High and stable share of
wallet*
Low and stable spend
attrition
17 branded lounges globally,
with 2 more by mid-2015
Centurion Meet and Greet in
10 international airports
New benefits for Premier
Rewards Gold Card
Continued focus of
investments going forward
Strong Performance Enhanced Value Proposition
59
Significant Opportunity in Share of Spend Wallet
*2014 April spend on AXP card per Card Member.
1
~5x
~10x
Above average
estimated share of
spend wallet (75%+)
Average estimated
share of spend wallet
(25-75%)
Below average
estimated share of
spend wallet (<25%)
Estimated Spend per Customer* (indexed to <25% Estimated share of wallet level)
60
Methodical Approach to Drive Share
of Spend Wallet
*Incremental billed business estimate of Card Member spend in the 12 months following an offer (. cross-sell, upgrade, line increase).
Key AXP Assets Estimated incremental Spending From Existing . Customers Who Acted On an Offer*
Indexed to 2013
YoY 24%
2014 2013
Big data driven
segmentation
Multiple
customer
channels
Wide range of
proven techniques
100
124
61
Driving Growth in Lending
Industry Source: Federal Reserve, Consumer Credit Release, January 2015. Non-seasonality adjusted . consumer revolving credit outstanding.
2014 2013 2012
CAGR 6%
Indexed to 2012
. Consumer Card Member Loans Outstanding
Industry growth rate 2012-2014: ~2%
100 104
112
62
Exploring the Untapped Lending Opportunity
*Based on self-reported survey conducted of . AXP Card Members in Q4 2013 ages 25-65 who have borrowed the amount of $500 or more on credit cards in the preceding 12 months.
Approach to Lending
On-AXP
Off-AXP
. AXP CM Card-based Borrowing*
Enhance strong lending value
proposition
‒ Broad lending product suite
‒ Lending on charge features
Explore innovative product
constructs to capture higher share
of lending wallet
Deliver in a brand consistent way
with high customer satisfaction
Maintain appropriate company risk
profile
63
Update on Costco Co-Brand
Costco co-brand Card Members
are AXP's customers
‒ Over 70% of the spending on
the product occurs outside of
Costco warehouses
‒ High customer satisfaction
with AXP
Offer relevant proprietary AXP
products
Explore new partnerships
Portfolio sale – TBD
Update Card Member Base
64
. 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
Member acquisition and increasing revenue per Card
Member through growing share of spend and lend wallet
65
. Small Business: Doubling Our Billed Business
CAGR 9%
2014 2013 2009 2008 2007 2012 2011 2010 2006 2005
Indexed to 2005
Billed Business
100
117
134 144 126 139
159
178
196
216
66
2014 Estimated Share of Spend on Small Business
Cards
2014
AXP
Competitors
Source: McKinsey.
2014 Estimated Share of Card Spend from Card Members and Prospects*
*”Small business credit card spend” is an internal term to define the spend opportunity for features/benefits suited to needs of a small business.
67
Significant Opportunity With . Small Businesses
Source: McKinsey.
*“Estimated total small business spend” . small businesses with less than $10MM in revenue based on McKinsey Payments Map (March 2015)” from McKinsey. The McKinsey Payments
Map reports on the following payment methods for small businesses: cash, small business credit card, debit, wire, ACH, and check and it does not include spend on consumer cards by
owners/employees of small businesses. Small business plastic spend includes small business credit card and debit spend. Small business non-plastic spend includes all non-payroll small
business expenditures not included in small business credit card or debit.
$ estimated total small business spend (ex. payroll) in 2014*
Office products
Telecommunications
Computer hardware
and software
Example Spend Categories
Small Business
plastic spend
Non-plastic spend
10%
90%
68
Strong . Small Business Acquisition
Performance
Spend From New Customers
Indexed to 2012
2014 2012 2013
CAGR 10%
100 103
120
69
Differentiated Value Proposition for Small
Businesses
*“. small business credit card industry average” calculated using Visa and MasterCard . issuers of small business credit cards listed by the August 2014 Nilson Report. Nilson data does
not report Discover figures. The industry average is the sum of purchase volumes divided by the sum of total cards for all . bank issuers who report both purchase volumes and total cards.
Average AXP small business is calculated by dividing 2013 OPEN Billed Business by total ending cards in force for 2013.
Source: The Nilson Report.
Enable B2B spend
Provide higher spend capacity
Deliver dedicated service
Offer rewards and savings
Create additional value add
(., Small Business Saturday)
AXP Value Proposition
Average AXP
small business
. small business
credit card industry
average
2013, Indexed to industry average
Average Small Business Card Spend
vs. Industry*
70
. 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 an opportunity and we are exploring new
product constructs
Small business will continue to be a focal point of future
investment and growth
71
Global Merchant Services:
Expanding Coverage Through Partnerships
Merchant Acquirers in
Key International Countries OptBlue Partners in .
Feb 2015 Feb 2015
May 2014 Nov 2013 Nov 2013
Jun 2014 May 2014 May 2014
Nov 2014 Sep 2014 Oct 2014
Apr 2014 May 2014
Jul 2014
Aug 2014
Jul 2014
Dec 2013
May 2014
72
Continued Signing of Merchants Globally
Note: Selected signings completed in 2012 to 2014. 73
Delivering Locations Growth
*Locations in force not including merchants acquired through aggregators.
Global Locations Growth*
100
120
2012
CAGR 10%
2014
Indexed to 2012
400K+ OptBlue signings in . in 2014
74
Merchant Financing Growth
*Net-Promoter Score is the percentage of customer 'promoters' (., customers who are likely to recommend the product to friends and colleagues) less its 'detractors' (., customers who
express low ratings when asked if they would recommend the product to friends and colleagues). Based on GMS 2014 Net Promoter Score Survey, executed in Q3 2014.
Overview of Merchant
Financing Product
Ending Loans Outstanding
Cost effective funding
remains a challenge for
small merchants
AXP has a competitive
product and rates
Merchants with financing
have significantly higher
satisfaction based on
average Net Promoter
Score*
192
265
553
2012
CAGR 70%
2014 2013
$ in MM
75
Global Merchant Services Summary
We have accelerated merchant signings in the . with OptBlue
We are seeking to leverage similar constructs outside the .
We have made progress in signing key merchants globally
We believe merchant financing represents a good opportunity,
but it is early days in the expansion of this business
76
International: Our Reach
*Nilson report for worldwide purchase volume (excluding .) in 2013.
**Outside the United States (including cards issued by third-parties).
*** Worldwide.
#1 . issuer in international * ~$335 billion**
2014 billings:
130+ countries Presence in
~57 MM** 2014 cards-in-force: 150+ network partner arrangements***
77
Growth Markets Established Markets
Focus on Two Categories of Markets
Offer a full range of products
from proprietary and network
business
Work through strong local
issuers and acquirers
France
UK Canada Japan Australia Italy
Brazil Turkey China India
Mexico
78
19
11
8 6 5 4 4
28
16
6
62
AXP Billed Business 2014 Growth
AXP Growing in All 11 Countries
UK Canada Japan Australia Brazil France Turkey Italy China India
Established markets Growth markets
Mexico
% Increase/(Decrease) vs. Prior year
79
% Increase/(Decrease) vs. Prior year
19
11
8 6 5 4 4
28
16
6 6
3 5
6
0
6
31
22
13 15
AXP Industry
And Growing Faster Than the Industry in 8 Out of 11
Industry Source: Euromonitor as of Sep 26 2014.
AXP Billed Business 2014 Growth vs. Industry
62
UK Canada Japan Australia Brazil France Turkey Italy China India
Established markets Growth markets
Mexico
-3
80
Growth Markets Established Markets
Growth Themes in International
Focus on digital acquisition
Continue to enhance our
premium consumer offering
Drive growth in lending
Grow in small business
Expand bank partner network
in select key countries
Capture higher share of
partner business by bringing
skills learned from proprietary
issuing
81
Case Studies
Acquisition through
digital channels
Launching
premium
products
Large
network
of partners
Exploring other relationships
Expanding bank
partnerships
Premium lending
product offering
Small Business
Saturday
90%+ of first
year spend
UK China
82
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 strong return on capital
Our international business continues to offer attractive
growth opportunities
83
Loyalty Coalition: Proven Model
. .
Consumers can
earn and redeem
rewards points at
sponsors
Coalition
captures data
Industry-leading
sponsors in key
everyday spend
categories
2
5
1
Relevant personalized offers are
distributed via multiple channels
3
4
Sponsors get
measurable results
and gain customer
insight
84
Operating in 5 Countries
Poland India Mexico Germany Italy
Note: Indicative coalition partners in each country. *Consumers who collected and/or redeemed points at a Loyalty Coalition merchant during 2014.
60MM active collectors* currently in the program globally
85
Coalition Members
Multi-partner loyalty program
with a single points platform
Anticipated new AXP co-brand
card
Robust pipeline of potential
partners
Launching . Loyalty Coalition this Spring
86
Partnerships Are an Enabler of Executing
Global Strategies
Drive AXP Growth
Share of
lend wallet
Share of
spend wallet
Digital Transformation
New customer and
merchant acquisition
Global Suite of Partnerships
87
Broad Network of Partnerships
Note: Delta logo is a registered trademark of Delta Air Lines, Inc.
Network Partners Proprietary Co-brand Partners
Digital Partners Loyalty Partners
150+ global network partners 48 proprietary co-brand partners
. International
88
Today’s Discussion
Transformation of the Core
Core Business Performance
Global Strategies to Drive Growth
89
Digital Transformation Across Our Growth
Strategies
Drive AXP Growth
Share of
lend wallet
Share of
spend wallet
Digital Transformation
New customer and
merchant acquisition
Global Suite of Partnerships
90
Driving Growth Through Digital Engagement
Focused on younger,
affluent, higher spending
Card Members
Offer new value
to Card Members
through digital offers
Increase use of Pay
with Points
Fuel growth in online
and mobile through
enhanced security
and service
Integrate across
relevant devices
and form factors
91
Digital Offers
*Worldwide Card-linked offers statement credit; Jan 2010-Feb 2015.
Offer new value
to Card Members
through digital
offers*
Increase use of Pay
with Points
Fuel growth in online
and mobile through
enhanced security
and service
Integrate across
relevant devices
and form factors
“$140MM+
in savings”
92
Pay With Points
Offer new value
to Card Members
through digital offers
Increase use of Pay
with Points
Fuel growth in online
and mobile through
enhanced security
and service
Integrate across
relevant devices
and form factors
93
Integrate Across Devices
Offer new value
to Card Members
through digital offers
Increase use of Pay
with Points
Fuel growth in online
and mobile through
enhanced security
and service
Integrate across
relevant devices
and form factors
94
Enhanced Security Service
Offer new value
to Card Members
through digital offers
Fuel growth in online
and mobile through
enhanced security
and service
95
Platform Opportunity with Partners
96
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 of the world’s largest digital brands that to create
more opportunities for future growth
97
Significant number of growth opportunities
going forward with attractive returns
Summary
Continue to maintain leadership position with premium consumers
. 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 opportunities
Merchant footprint continues to grow at an accelerated pace
Loyalty Coalition presents great opportunity to scale customers and
redefine relationships with merchants
Innovation brings the AXP business model to life in a new way
98
2015 Investor Day
Stephen Squeri
Group President
Global Corporate Services
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
101
Global Corporate Payments Snapshot – 2014
63%*
2014 Fortune Global 500®
Merchant Value
18%
AXP Billed Business
34%
International Spend
*As determined by an analysis conducted by American Express Global Corporate Payments. FORTUNE® and Global 500® are registered trademarks of Time Inc. and are used under
license. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, Licensee. Claim not confirmed by FORTUNE or Time Inc.
52% T&E Spend
Cards in force
102
100
120
137 144 124
148
172 186
196 209
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GCP Billed Business
+9%
Indexed to 2005
We have doubled our volume since 2005
103
Strong Win Engine
2009 2010 2011 2012 2013 2014
Growth in B2B
Billed Business Growth Drivers
+14%
Spend from New Signings*
2009 2010 2011 2012 2013 2014
+19%
B2B Billed Business**
*Incremental billed business from a sales signing for the first 13 months. ** Total billed business from corporate purchasing card, vPay, Buyer Initiated Payments and Jet Fuel 104
Global Footprint Track Record of Innovation
Our Unique Assets
Closed Loop
Advantage
World Class
Service
105
GCG
Large
Market
Middle Market
. Segment Profile
Global Corporations
Centrally managed T&E programs
$500MM+ in Annual Revenue
$10MM - $500MM in Annual Revenue
Global Prospect Universe*
11,000+
1,100,000+
% of GCP Clients
< 1%
96%
Commercial Client Segments
< $10MM in Annual Revenue Small Business
*Based on 2014 Prospect Database analysis, including marketable prospects only (excludes known risky, do not contact, hierarchy and known subsidiary companies)
4%
106
2011 2012 2013 2014 2011 2012 2013 2014
Billed Business Revenue
Middle Market Performance Trends
+10%
+9%
107
Middle Market Profitability
GCP Large & Global Accounts GCP Middle Market
133
100
2014 Variable Margin (indexed)
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 volume 108
Strategy to Accelerate Middle Market Growth
Accelerate AXP Growth
Continued Product
Innovation
Increase Share
of Spend
World Class Customer Service
Acquire New Clients
109
Acquire New Clients
Priority Markets
110
Current AXP Spend Potential AXP Spend
Increase Share of Spend
Leveraging Our Closed Loop to Unlock New Categories of Spend
111
Continued Product Innovation
Germany Italy Japan
112
11%
18%
21%
22%
26%
Early Results Are Promising
Italy
Mexico
.
Japan
UK
YOY Middle Market Billed Business Growth*
* 2013 vs. 2014 middle market billed business at local currency rates. 113
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 global
corporate payments platform to increase share of spend with
our current clients and attract new ones
114
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
115
Financial Growth Driver Model
Growth Businesses
OpEx Leverage
Capital Strength
EPS Growth
116
7%
4%
4%
(3%)
12%
Adj. Revenue* Adj. Opex* Share Repurchase Adj.
Rewards/Provision/
M&P/Taxes/Other*
Adj. EPS*
Contribution to Adjusted EPS Growth:
2012-2014 CAGR
Note: Figures rounded. *The compounded annual growth rates of adjusted revenue and adjusted diluted earnings per share, as well as the EPS contributions of adjusted operating expense and
adjusted rewards/provision/M&P/taxes/other, are non-GAAP measures. Refer to Annex 3 and 4 for a breakdown of these amounts and a reconciliation to revenue, operating expense,
rewards expense/provision/M&P/taxes and diluted EPS on a GAAP basis. 117
Total Operating Expense < Revenue Growth
Global Services Group Flat to 2%
Technology Development Spending Flat to 2%
Investment Opex
- Sales Force, New Business Initiatives,
Acquisitions & GNS
Flexible;
Tied to Revenue Generation
- Regulatory & Control Infrastructure Requirement Based
All Other Opex < 5%
Foreign Exchange Impact TBD
Operating Expense Growth Targets – Feb 2012
2-3 Year Target
118
Total Operating Expense < Revenue Growth
Global Services Group Flat to 2%
Technology Development Spending Flat to 2%
Investment Opex
- Sales Force, New Business Initiatives,
Acquisitions & GNS
Flexible;
Tied to Revenue Generation
- Regulatory & Control Infrastructure Requirement Based
All Other Opex < 5%
Foreign Exchange Impact TBD
Operating Expense Growth Targets – Feb 2013
2-3 Year Target 2013 & 2014
< 3%
119
Adjusted Total Operating Expense Growth*
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, Q4’12 restructuring charges,
Q3’13-Q4’13 Business Travel operating expenses (with respect to the 2014 growth rate only), Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation
contribution, and Q2’14 and Q4’14 restructuring charges from total operating expenses. Reported operating expense growth rates were 9%, 12%, 10%, (3%), and (6%) for 2010, 2011,
2012, 2013, and 2014, respectively. Refer to Annex 8 for a reconciliation of adjusted growth rates and their components.
<3% Annual Target
% Increase/(decrease) vs. Prior year:
2%
9% 9%
0% 0%
5% Revenue Growth
120
'11-'14
CAGR
Adjusted Total Operating Expense* by Function
2011 2012 2013 2014
Adj. Global Services
Group**
(%)
Adj. Other
Opex**
(%)
See Glossary of Selected Terminology for certain key terms. *Adjusted Total Operating Expenses is a non-GAAP measure. See Annex 8 for a breakdown of the adjustments and a
reconciliation. **Adjusted Global Services Expenses, a non-GAAP measure, excludes Business Travel operating expenses. Adjusted Other Opex, a non-GAAP measure, is operating expenses
for business units and support functions (not included in Global Services Group, Technology Development and Investment Opex) on a GAAP basis as adjusted for Visa/MasterCard litigation
settlement proceeds from 2010-2012, the impact of the Q4'12 and Q4’14 restructuring charges, Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation
contribution and Business Travel operating expenses. See Annex 9 for CAGRs on a GAAP basis.
%
Excludes GBT
121
'11-'14
CAGR
Adjusted Total Operating Expense* by Function
2011 2012 2013 2014
Adj. Investment
Opex**
Adj. Technology
Development**
%
%
See Glossary of Selected Terminology for certain key terms. *Adjusted Total Operating Expenses is a non-GAAP measure. See Annex 8 for a breakdown of the adjustments and a
reconciliation. **Adjusted Technology Development Expenses and Adjusted Investment Opex, non-GAAP measures, exclude Business Travel operating expenses. “Run the Business” Opex,
a non-GAAP measure, is operating expenses for Global Services Group and business units and support functions (not included in Technology Development and Investment Opex) on a GAAP
basis as adjusted for Visa/MasterCard litigation settlement proceeds from 2010-2012, the impact of the Q4'12 and Q4’14 restructuring charges, Q2’14 Business Travel JV gain and
transaction-related costs, Q2’14 AXP Foundation contribution and Business Travel operating expenses. See Annex 9 for CAGRs on a GAAP basis.
“Run the Business”
Opex**
(%) 71% 66%
%
Excludes GBT
122
'11-'14
CAGR
Adjusted Total Operating Expense* by Function
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 breakdown of the adjustments and a
reconciliation. **Total Adjusted Investment Opex, a non-GAAP measure, excludes Business Travel operating expenses. “Run the Business” Opex, a non-GAAP measure, is operating expenses
for Global Services Group and business units and support functions (not included in Total Investment Opex) on a GAAP basis as adjusted for Visa/MasterCard litigation settlement proceeds
from 2010-2012, the impact of the Q4'12 and Q4’14 restructuring charges, Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation contribution and Business
Travel operating expenses. See Annex 9 for CAGRs on a GAAP basis.
Total Adj.
Investment Opex**
71% 66%
29% 34%
%
“Run the Business”
Opex**
(%)
Excludes GBT
123
Operating Expense Growth Trends
2011 2012 2013 2014
Total Adj. Investment
Operating Expense *
(+22%)
“Run the Business”
Operating Expense*
(-6%)
Adj. Total Operating
Expense*
(+2%)
*Adjusted Total Operating Expenses is a non-GAAP measure. See Annex 8 for a breakdown of the adjustments and a reconciliation. Total Adjusted Investment Opex, a non-GAAP measure,
excludes Business Travel operating expenses. “Run the Business” Opex, a non-GAAP measure, is operating expenses for Global Services Group and business units and support functions (not
included in Total Investment Opex) on a GAAP basis as adjusted for Visa/MasterCard litigation settlement proceeds from 2010-2012, the impact of the Q4'12 and Q4’14 restructuring
charges, Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation contribution and Business Travel operating expenses. See Annex 9 for CAGRs on a GAAP basis.
Excludes GBT
124
2015 Target*
Operating Expense Growth 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 for CAGRs on a GAAP
basis.* Excluding any potential restructuring charges. 125
Two Questions
Can we continue to create sustainable
leverage from operating expense to fund
investments for growth?
1
Can we also continue to have operating
expense control drive EPS growth? 2
126
Approach
Focus Internal Mindset
Create Global
Networks
Transform AXP’s
Platforms
Evolve Superior
Service
Empower Employees
127
Focus Internal Mindset: Waste Elimination
75%
Reduction in
number of AXP
Suppliers
38%
Increase in
workstation
capacity
Avg. of
1,500
Servers
decommissioned
annually
Note: 2010-2014 with exception of supplier reduction which reflects April 2010-Jan 2015. 128
2011 2014
+9 ppt >80M
calls handled
by our
customer care
professionals
in 2014
Focus Internal Mindset: End to End Opportunities
Paperless Statement Enrollment
Every 10% reduction in call volume and paper statements represents
a potential cost savings opportunity of $70 million
Call Volume Electronic Statements
129
Consolidate
Organizations
Globalize Key
Processes
Create Global Networks
Optimize Global
Footprint
Enhance
Capabilities
SDN
13%
reduction in S&B
cost per
employee*
* World Service 2010-2014 130
Global, Integrated Servicing Network
Hello
Hola
G’day
Hello
131
Transform AXP’s Platforms
132
Technology Platform Blueprint
Rationalize & Consolidate
Create New
Enhance
Approachability
Cost Effectiveness
133
Global Authorizations Platform
1958
1960’s
1972 2008
1999
2013 2011
2010 2012 2014
134
Evolve Superior Service
A brand is born
1850 Today
To become the
world’s most
respected
service brand
Service has been the foundation since the beginning
135
Global Recommend to Friend
2009 2010 2011 2012 2013 2014
Increased Satisfaction Driving Spend and Loyalty
Superior Service Driving Growth
+25 ppt
16%
higher
annual
spend
4X
lower
attrition
RTF Promoter vs. RTF Detractor*
Note: See Glossary of Selected Terminology for definition of Recommend to a Friend (RTF) and non-credit attrition. *2013 average annual spend and non-credit attrition. 136
2012 2014
Digital Servicing Strategy
24 Hour Resolution Rate
>75%
+11ppt
self-service
growth rate*
Recommend to a Friend
+7 ppt
*2012-2014 growth of customers who used digital self-service tools to address fraud concerns. 137
Big Data Capabilities New Tools Relationship Care®
Service as a Platform for Growth
138
New Facilities
Empower Employees
New Work Styles
New Workplace Tools
At Your Desk
On Campus
While Mobile
With Your Team
139
Co-Location Iterative Development Process
Delivery Transformation
Co-locating technologists with product
owners in collaborative workspaces
Agile
140
Creating Sustainable Operating Expense Leverage
<3%
2015
Operating Expense
Growth Target
Investment
Opex
Generating
EPS
growth
“Run the
Business”
Opex
141
2015 Investor Day
Jeffrey Campbell
Executive Vice President
and Chief Financial Officer
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
144
Financial Growth Drivers
Growth Businesses
OpEx Leverage
Capital Strength
EPS Growth
145
%
%
%
2012 2013 2014
%
% %
2012 2013 2014
98%
81% 86%
2012 2013 2014
Track record of strong capital payout
YoY Decrease in Average
Shares Outstanding Tier 1 Common Ratio**
Payout Ratio*
* Payout Ratio is calculated by dividing the total amount returned to shareholders through dividends and share repurchases during the respective period by the total capital generated through
net income attributable to common shareholders and employee plans during the respective period. ** Tier 1 Common is Tier 1 Common under Basel I for 2012 and 2013, and Common Equity
Tier 1 under Basel III, inclusive of transition provisions, for 2014. The Tier 1 Common Risk-Based Capital Ratio is calculated as Tier 1 Common Equity, a non-GAAP measure, divided by Risk-
Weighted Assets. See Annex 6 for a reconciliation between Tier 1 Common Equity and Total Shareholders’ Equity. 146
2015 CCAR results were again in the top tier…
Cumulative Pre-Tax Income
147
as a % of average assets, Q4'14-Q4'16
%
(%)
Minimum Tier 1 Common Ratio
%
%
%
with capital
actions
%
with capital
actions
AXP Median
DFAST Result
AXP Median
DFAST Result
Q4'14-Q4'16
5%
Minimum
Performance Under Fed Severely Adverse Scenario
Source: Federal Reserve estimates in the severely adverse scenario, DFAST Supervisory Stress Test Methodology and Results (March 2015). The Federal Reserve’s stress test results shown
above (other than where planned capital actions are indicated) assume common stock dividend payments continue at the same level as the previous year and repurchases of common stock
are zero. The stress test results represent estimates under a hypothetical macroeconomic scenario that is more adverse than the current and economist consensus forecasted macroeconomic
environments. Thus, these estimates are not forecasts of pre-tax net income or capital ratios and are not necessarily indicative of future performance under a severe stress scenario. Actual
results could differ materially. 147
$
$
Up to
…leading to higher potential capital distributions…
Dividend per Share
148
$
$
Q1'15 Beginning
Q2'15*
Maximum Share Repurchase
2015 CCR
Q2'15 – Q2'16
(5 Quarters)
$ in billions Up to $ per share, per quarter
2014 CCAR
Q2'14 – Q1'15
(4 Quarters)
* Subject to Board approval. 148
…and a fourth consecutive year of payouts well
above our long-term target in 2015
149
98%
81% 86%
2012 2013 2014 On Average and
Over Time Target
% of Capital Generated Returned to Shareholders*
50%
* See slide 146 for description of payout ratio calculation. 149
Our funding mix remains well-diversified
4% 3% 3%
39% 36% 37%
21% 20% 18%
38% 41% 42%
2012 2013 2014
$ $ $
($ in billions)
All ABS debt is presented net of securities that have been retained by the Company. * Principal only. Excludes capitalized leases and certain adjustments classified as long-term debt on
the Company’s consolidated balance sheet. ** Beginning the first quarter of 2013, the Company reclassified prospectively Card Member credit balances from Card Member loans, Card
Member receivables and Other liabilities to Customer deposits.
Deposits **
Card ABS*
Unsecured Term*
Short-term Debt
150
AXP Growth Opportunities
Financial Performance and Business Update
AXP Growth Businesses and Strategies
Operating Expense Leverage
Capital Strength
Financial Outlook
Agenda
Ken
Ed & Steve
Steve
Jeff
151
EPS Growth Outlook – Feb 12th Investor Call
EPS growth
likely flat to
down modestly
2015 2016 2017 & Beyond
Return to
positive EPS
growth
Return to
12-15% EPS
growth target
152
%
%
%
%
% % %
% %
%
. Worldwide
% % %
%
%
%
. Worldwide
Global GDP Expectations
Real GDP % increase/(decrease) vs. prior year
Source: . Real GDP 2010-2014 – Department of Commerce, Bureau of Economic Analysis, chained 2009 dollars; . Real GDP Forecast 2015-2017 – Blue Chip Economic
Indicators, chained 2009 dollars; 2010-2017 Worldwide Real GDP – IMF, exchange rates fixed as of October, 2014.
'10 '11 '12 '13 '14 '15 '16 '17 '10 '11 '12 '13 '14 '15 '16 '17
153
. Interest Rate Expectations
3 Year . 1 Month LIBOR Projection
Source: Bloomberg estimate of interbank lending rate as of 3/11/15.
%
%
Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
%
%
154
. Unemployment Expectations
* Bureau of Labor Statistics. ** Blue Chip report, March 2015.
%
%
. Unemployment Rate Blue Chip Consensus as of March 2015
Q1'00 Q4'14
Unemployment Rate
Q4'17
* **
155
7%
4%
4%
(3%)
12%
Adj. Revenue Adj. Opex Share Repurchase Adj.
Rewards/Provision/
M&P/Taxes/ Other
Adj. EPS
Demonstrated track record of driving earnings
growth in a modest growth environment
Note: Figures rounded. *The compounded annual growth rates of adjusted revenue and adjusted diluted earnings per share, as well as the EPS contributions of adjusted operating expense and
adjusted rewards/provision/M&P/taxes/other, are non-GAAP measures. Refer to Annex 3 and 4 for a breakdown of these amounts and a reconciliation to revenue, operating expense,
rewards expense/provision/M&P/taxes and diluted EPS on a GAAP basis.
Contribution to Adjusted EPS Growth: 2012-2014 CAGR
1 1
*
1
Underlying
Business
Headwinds
157
FX
Co-brands
Incremental Growth Initiatives
Discrete
'15-'16
Impacts
EPS Growth
2015 2016 2017
Core
Underlying
Performance
Revenue
OpEx Leverage
Capital Strength
Underlying Business Headwinds
Expected Larger
YoY Impact
Expected Moderate
YoY Impact
Flat to
Down
Financial outlook – expected drivers of EPS growth
or or
Return to
Positive
12 to 15%
Target
158
2015 2016 2017
Core
Underlying
Performance
Revenue
OpEx Leverage
Capital Strength
Underlying Business Headwinds
12 to 15%
Target
Expected Larger
YoY Impact
Expected Moderate
YoY Impact
EPS Growth
Core performance drivers remain in place
159
Growth opportunities exist across all major
businesses…
Global
Commercial Services
.
Consumer
Global
Merchant Services
.
Small Business
International
Businesses
New
Businesses
160
…as evidenced by recent
revenue growth trends…
4%
7%
10%
12%
7% 6%
4% 4%
8%
6% 6% 5%
3%
6% 5% 5% 6% 5%
6%
5%
. Consumer &
Small Business
Int'l Consumer &
Small Business
Global Commercial
Services
Global Network and
Merchant Services
Total AXP
* Total revenues net of interest expense adjusted for FX and excluding Business Travel revenues from 2H’13 and the gain on the Q4’14 sale of the Concur investment for the purposes of 2014
growth rates only, the related growth rates and adjusted revenue growth by segment as a % of total adjusted AXP revenue are non-GAAP measures. Refer to Annex 7 for a reconciliation
2015 2016 2017
56% 15% 10% 17%
% of Total Adjusted AXP Revenue :
Adjusted Revenue Growth by Segment*
'11 '12 '13 '14
Expected Driver: Revenue
161
…providing a foundation for
continued growth
Base Assumptions
Reflects recent trends, including discount rate
and loan growth
Reflects new EU legislation
Opportunities & Risks
Economic growth versus expectations
Traction on growth business initiatives
Regulatory impacts
Other Commentary
Reported revenue growth will be impacted by
Concur gain, GBT, co-brand renegotiations and
non-renewals, and FX
Outlook Commentary
7%
6%
5% 5%
Adjusted Revenue Growth*
% increase vs. prior year
'11 '12 '13 '14
* The growth rate of total revenues net of interest expense adjusted for FX and excluding Business Travel revenues from 2H’13 and the gain on the Q4’14 sale of the Concur investment for the
purposes of 2014 growth rate only is a non-GAAP measure. Refer to Annex 7 for a reconciliation.
2015 2016 2017
Expected Driver: Revenue
162
Revenue mix remains spend-driven, despite
strong net interest income performance
AXP Net Interest Income as a % of Adj. Revenue Net of Interest*
15% 15% 16%
17%
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 for net interest income as a % of total revenue net of interest
expense on a GAAP basis. 163
2015 2016 2017
Expected Driver: OpEx Leverage
Outlook Commentary
9%
2%
0% 0%
2011 2012 2013 2014 2015
< 3% Annual Target
Expect leverage from operating
expenses to remain sustainable
Adj. Operating Expense Growth*
% increase/(decrease) vs. LY Base Assumptions
Incorporates benefits from 2014
restructuring
Opportunities & Risks
Incremental reengineering efforts and
investments
Cost of control/compliance/litigation
Costco . “right-sizing” related actions
Other Commentary
Excludes any future restructuring charges
Reported operating expense growth will be
impacted by GBT, GBT JV transaction,
restructuring charges and FX
*The growth rate of adjusted total operating expenses, a non-GAAP measure, excludes Visa/MasterCard litigation settlement proceeds from 2011-2012, Q4’12 restructuring charges, Q3’13-
Q4’13 Business Travel operating expenses (with respect to the 2014 growth rate only), Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation contribution, and
Q2’14 and Q4’14 restructuring charges from total operating expenses. Reported operating expense growth rates were 12%, 10%, (3%), and (6%) for 2011, 2012, 2013, and 2014, respectively.
Refer to Annex 8 for a reconciliation of adjusted growth rates and their components. 164
Outlook Commentary
Capital strength expected to
continue driving EPS growth
Average Shares Outstanding
%
%
%
%
2011 2012 2013 2014
% decline in average shares outstanding Base Assumptions
2015 Capital Plan
Opportunities & Risks
CCAR / Basel Advanced evolution
Loan growth / Trajectory of Costco . loan
decline
Potential for incremental M&A
Other Commentary
Preferred dividends
2015 2016 2017
Expected Driver: Capital Strength
165
2015 2016 2017
Expected Driver: Underlying Business Headwinds Underlying business
headwinds likely to continue
*Adjusted for Q4'12 Membership Rewards . URR estimation process enhancement expense. Refer to Annex 11 for a reconciliation.
Provision for Losses
2010 2011 2012 2013 2014
Adj. Rewards Expense*
2010 2011 2012 2013 2014
Tax Rate
%
% %
%
%
2010 2011 2012 2013 2014
$B, unless otherwise stated
166
2015 2016 2017
Core
Underlying
Performance
Revenue
OpEx Leverage
Capital Strength
Underlying Business Headwinds
12 to 15%
Target
Expected Larger
YoY Impact
Expected Moderate
YoY Impact
EPS Growth
Core performance drivers remain in place…
167
12 to 15%
Target EPS Growth
2015 2016 2017
FX
Co-brands
Incremental Growth Initiatives
Discrete
'15-'16
Impacts
Expected Larger
YoY Impact
Expected Moderate
YoY Impact
Flat to
Down
…though discrete '15-'16 impacts will depress
earnings growth
or or
Return to
Positive
168
2015 2016 2017
Expected Driver: FX
3/1/14 4/1/14 5/1/14 6/1/14 7/1/14 8/1/14 9/1/14 10/1/14 11/1/14 12/1/14 1/1/15 2/1/15
. Dollar continues to
strengthen
YoY% Decline vs. USD
Euro €
Canada $
UK £
Japan ¥
Mexico $
(18%)
(11%)
(15%)
(7%)
(11%)
Indexed to 3/1/14, based on a two-week rolling average
Base Assumptions
FX rates generally steady with recent
levels
Opportunities & Risks
USD strengthening/weakening
Other Commentary
Significant drag on revenue growth;
benefit to expense growth
Outlook Commentary
Australia $
(13%)
GBP
MXN
CAD
AUD
JPY
EUR
2/27/15
Source: Bloomberg, data as of 2/28/15. 169
2015 2016 2017
Expected Driver: Co-brands
Outlook Commentary
Co-brands impact, without
factoring in Costco .
Base Assumptions
Lap majority of 2014 renewal impact in 2016
Costco Canada expired 12/31/14; JetBlue
12/31/15
Opportunities & Risks
Growth potential of renewed partnerships
New co-brand opportunities
Other Commentary
Renewal impact on multiple P&L lines
— Discount Revenue
— Rewards
— Cost of CM Services
Non-renewal impact across P&L and volume
metrics
Non Co-Brand
Prop Spend
Co-Brand
Prop Spend
GNS Spend 16%
61%
$ T
23%
Costco .: 8%
Delta & Renewals*: 9%
50+ Remaining: 6%
Over 150 bank partners
Every GNS partner ≤ 1%
* Other renewals include Starwood, British Airways and Iberia, and Cathay Pacific.
2014 AXP Billed Business
170
2015 2016 2017
Outlook Commentary – Costco .
Co-brands impact, including
Costco .
Base Assumptions
Costco . set to expire 3/31/16
Excludes any gain on portfolio sale
Opportunities & Risks
Success of investment to capture future spend
and lend from relationships with Costco CMs
Trajectory of volume decline
Transition period for acceptance
Other Commentary
Impact across P&L and volume metrics
Positive impact to reported discount rate
Non Co-Brand
Prop Spend
Co-Brand
Prop Spend
GNS Spend
2014 AXP Billed Business
$ T
* Other renewals include Starwood, British Airways and Iberia, and Cathay Pacific.
Costco .: 8%
Delta & Renewals*: 9%
50+ Remaining: 6%
Over 150 bank partners
Every GNS partner ≤ 1%
Expected Driver: Co-brands
16%
61%
23%
171
2015 2016 2017
Expected Driver: Incremental Growth Initiatives
Outlook Commentary
Investing in growth now to
position for the long-term or
Base Assumptions
Invest to drive growth over longer term
— Capture future spend and lend from
relationships with Costco CMs
— Other growth business initiatives
Majority of investment in M&P (some in OpEx)
Opportunities & Risks
Timing and level of investments, based on
return performance and funding capacity
Other Commentary
Will create quarterly growth unevenness
Marketing & Promotion Expense
2012 2013 2014 2015/
2016
or
*Estimated Marketing & Promotion Expense from incremental growth initiatives funded by GBT JV transaction and Concur gain.
*
$B
172
12 to 15%
Target EPS Growth
2015 2016 2017
Core
Underlying
Performance
Revenue
OpEx Leverage
Capital Strength
FX
Co-brands
Incremental Growth Initiatives
Discrete
'15-'16
Impacts
Underlying Business Headwinds
Expected Larger
YoY Impact
Expected Moderate
YoY Impact
Flat to
Down
Financial outlook – expected drivers of EPS growth
or or
Return to
Positive
173
EPS Growth Outlook – Feb 12th Investor Call
EPS growth
likely flat to
down modestly
2015 2016 2017 & Beyond
Return to
positive EPS
growth
Return to
12-15% EPS
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 quarter
than has been typical of our business.” – Investor Call
2/12/15
174
Q1 Outlook
EPS growth
Volume and revenue trends
‒ FX impact
‒ Co-brand
Other notable items
‒ Share repurchases
Beyond Q1'15
175
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…
‒ . Consumer & Small Business, International, Corporate, Network and Merchant
Partners, Newer Businesses
Powered by:
‒ Brand strength providing competitive advantage
‒ Closed-loop integrated payments platform for enabling commerce
Consistent and flexible financial model
‒ Growth Businesses + Operating Leverage + Capital Strength drive EPS Growth
Experienced management team with proven track record
177
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 billed
business is included in the . or outside the . based on where the issuer is located.
FX Adjusted Information - Assumes a constant exchange rate between the periods being compared for purposes of currency translation
into . dollars (., assumes FY’14 foreign exchange rates apply to FY'13 results).
Global Services Group Expenses – Represents operating expenses for Technology (technology non-development expenses and technology
development expenses related to the Global Services Group), World Service, Global Credit Administration, Global Security and Global
Business Services.
GNS Opex – Represents operating expenses for the Global Network Services business, which resides within the Global Network &
Merchant Services segment.
Investment Opex – Represents operating expense associated with investments in sales force, client management, regulatory and control
infrastructure, GNS and New Business Initiatives.
New Business Initiatives – Represents operating expenses for new business activities and the impact of acquisitions. This expense
category includes Loyalty Edge, Loyalty Partner, Mobile and Online capabilities, Accertify, Serve and Business Insights.
Operating expenses — Represents salaries and employee benefits, professional services, occupancy and equipment, communications and
other expenses.
Glossary of Selected Terminology
179
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
recent service experience, how likely are you to recommend American Express to a friend or colleague? Please use a 1 to 10 scale where
‘10’ means ‘extremely likely’ and ‘1’ means ‘extremely unlikely.’” Card Members who respond with a rating of 9 or 10 are “Promoters” while
Card Members who respond with a rating between 1 and 6 are “Detractors.” RTF is the difference between the percentage of Card
Members who are “Promoters” vs. “Detractors.” Survey is conducted via email and administered by an independent research company on
behalf of American Express. Responses across three channels (Telephone Servicing Center, Membership Rewards and Disputes) are
gathered, and represents approx. 500K surveys in a 12 month period.
Regulatory and Control Infrastructure – Represents operating expenses related to regulatory reporting and other requirements. This
category includes costs for items such as Basel II compliance, Bank Holding Company infrastructure, Internal Audit and Compliance.
“Run the Business” Opex – Represents operating expenses for Global Services Group Expenses and business and support functions (not
included in Total Investment Opex).
Salesforce and Client Management – Represents operating expenses for salesforce and client management personnel, as well as
payments to external sales agents.
Spend from new customers – Reflects the first 12 months of spending for a new customer acquired. For customers acquired less than 12
months prior, internal estimates have been used for their expected spending over the 12 month period (. a new customer acquired
8/1/14 includes 5 months of actual spend and 7 months of internally forecasted spend).
Technology Development Expenses – Represents operating expenses associated with modernizing our application portfolio for AXP’s lines
of business and staff group functions (exclusive of the Global Services Group).
Total Investment Opex – Represents Investment Opex and Technology Development Expenses.
Glossary of Selected Terminology (cont.)
180
Annex 1
($ in millions)
Revenue Net of Interest Adjusted for FX, Global Business Travel and Concur
*Represents operating performance of Global Business Travel as reported in Q3’13 and Q4’13. Does not include other Global Business Travel-related items, including equity earnings from the
joint venture and impacts related to a transition services agreement that will phase out over time. **See Glossary of Selected Terminology for an explanation of FX Adjusted information.
2010 2011 2012 2013 2013
for 2014 growth rate
2014
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 Concur Investment ($719)
Revenue Net of Interest Excluding GBT* and Concur $27,582 $29,962 $31,555 $32,974 $32,173 $33,573
FX** - Adjusted Revenue Net of Interest Excluding
GBT* and Concur $26,404 $28,189 $31,278 $31,832
YoY% Increase/(Decrease) in GAAP Revenue Net of
Interest 9% 5% 4% 4%
YoY% Increase/(Decrease) in Adjusted Revenue Net of
Interest Excluding GBT* and Concur 9% 5% 4% 4%
YoY% Increase/(Decrease) in FX- Adjusted Revenue Net
of Interest Excluding GBT* and Concur 7% 6% 5% 5%
181
Annex 2
EPS Adjusted for Global Business Travel and Concur
*Represents Q2'14 GBT Gain Net of Transaction costs, Incremental investments, restructuring & foundation contribution. **Represents Q4’14 Concur Gain net of restructuring, Delta
renewal, and incremental investments.
2013 2014
GAAP Diluted EPS $ $
Net Impact of Q2'14 Global Business Travel Transaction* ~($)
Net Impact of Q4'14 Concur Sale** ~($)
Diluted EPS Excluding GBT and Concur $
YoY% Increase/(Decrease) in GAAP Diluted EPS 14%
YoY% Increase/(Decrease) in Diluted EPS Excluding GBT and Concur 12%
($ in millions)
182
Annex 3
($ in millions)
Adjusted Revenue Net of Interest and Diluted EPS
*Represents operating performance of Global Business Travel as reported in Q3’10, Q4’10, Q3’12 and Q4’12. Does not include other Global Business Travel-related items, including equity
earnings from the joint venture and impacts related to a transition services agreement that will phase out over time.
2010 2012 2014 2014 vs. 2010 CAGR
2014 vs.
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 Incremental Investments and Global
Business Travel Transaction Costs ~$30
Adjusted Revenue Net of Interest $26,805 $30,868 $33,603
Increase/(Decrease) in GAAP Revenue Net of Interest (CAGR) 6% 4%
Increase/(Decrease) in Adjusted Revenue Net of Interest (CAGR) 6% 4%
GAAP EPS $ $ $
Q4’12 restructuring charge, Membership Rewards expense,
and card member reimbursements $
Adjusted EPS $ $ $
Increase/(Decrease) in GAAP EPS (CAGR) 14% 20%
Increase/(Decrease) in Adjusted EPS (CAGR) 12%
183
Annex 4
Adjusted Operating Expenses and Rewards/Provision/M&P/Taxes/Other
*Adjusted for operating performance of Global Business Travel as reported in Q3’10, Q4’10, Q3’12 and Q4’12, Visa/Mastercard settlement payments in 2010, Q2’14 GBT JV gain net of
transaction costs, incremental investments, restructuring, and foundation contribution, and Q4’14 restructuring and incremental investments. Does not adjust for other Global Business
Travel-related items, including equity earnings from the joint venture and impacts related to a transition services agreement that will phase out over time. GBT Gain net of transaction costs
and incremental investments, and Q4’14 Concur Gain net of incremental investments. **Refer to Annex 3 for a reconciliation to GAAP Diluted EPS .
2014 vs. 2010
CAGR
2014 vs. 2012
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&P/Taxes/Other Contribution to GAAP Diluted EPS Growth (1%) (6%)
Adjusted Rewards/Provision/M&P/Taxes/Other Contribution to Adjusted Diluted EPS**
Growth 3% (3%)
184
Annex 5
Pre-Provision Pre-Tax Income
($ in millions)
2010 2014
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 (CAGR) 9%
USCS GAAP Pre-Tax Income $3,504 $5,100
USCS GAAP Provision Expense $1,465 $1,396
USCS Pre-Provision Pre-Tax Income $4,969 $6,496
Increase/(Decrease) in USCS Pre-Tax Income (CAGR) 10%
Increase/(Decrease) in USCS Pre-Provision Pre-Tax Income (CAGR) 7%
185
Annex 6
The Tier 1 Common Risk-Based Capital Ratio is calculated as Tier 1 Common Equity, a
non-GAAP measure, divided by Risk-weighted assets. Tier 1 Common Equity is
calculated by reference to Total Shareholders’ Equity as shown below:
($ in millions, unless otherwise noted)
12/31/2012 12/31/2013
Total Shareholders’ Equity $18,886 $19,496
Effect of certain items in accumulated other comprehensive loss
excluded from Tier 1 common equity $173 $336
Less
Ineligible goodwill and intangible assets ($3,921) ($3,474)
Ineligible deferred tax assets ($228) ($192)
Other Basel III deductions
Tier 1 Common Equity $14,910 $16,166
Risk-Weighted Assets under Basel I ($B) $ $
186
Annex 7 (1 of 2)
*See Glossary of Selected Terminology for an explanation of FX adjusted information. **Total revenues net of interest expense excluding Business Travel revenues from 2H’13 and the
gain on the Q4’14 sale of the Concur investment for the purposes of 2014 growth rates only.
% Increase/(decrease) vs. prior year
Segment Revenue Net of Interest Expense – Reported & FX Adjusted*
187
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 10% 4% 3% 5%
Global Commercial Services
Reported 12% 3% 2% 2%
FX Adjusted 10% 4% 3% 3%
Global Network & Merchant Services
Reported 15% 7% 5% 4%
FX Adjusted 12% 8% 6% 6%
Total AXP, Adjusted**
Reported 9% 5% 4% 4%
FX Adjusted 7% 6% 5% 5%
Total AXP
Reported 9% 5% 4% 4%
FX Adjusted 7% 6% 5% 5%
Annex 7 (2 of 2)
*Total revenues net of interest expense excludes Business Travel revenues and the gain on the Q4’14 sale of the Concur investment from both GCS and Total AXP.
% of Total AXP FX-Adjusted Revenue Net of Interest Expense– Reported & Adjusted*
2014
. Consumer & Small Business
Reported 54%
Adjusted* 56%
International Consumer & Small Business
Reported 15%
Adjusted* 15%
Global Commercial Services
Reported 14%
Adjusted* 10%
Global Network & Merchant Services
Reported 17%
Adjusted* 17%
188
Annex 8
*To the extent comparable categories of charges were recognized in periods other than Q4’12, Q2’14 or Q4’14, they have not been excluded. **Represents operating performance of Global
Business Travel as reported in Q3’13 and Q4’13. Does not include other Global Business Travel-related items, including transaction-related costs and impacts related to a transition services
agreement that will phase out over time.
($ in millions)
Adjusted Total Operating Expense Growth
2010 2011 2012 2013 2013
for 2014 growth rate
2014
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 Travel Transaction
Q2’14 GBT Transaction Gain $626
Q2’14 GBT Trans-related Costs ($79)
AXP Foundation Contribution* ($40)
GBT Operating Expenses** ($696)
Adjusted Total Operating Expenses $11,796 $12,823 $13,047 $12,987 $12,291 $12,245
YoY% Increase/(Decrease) in GAAP Total Operating Expenses 9% 12% 10% (3%) (6%)
YoY% Increase/(Decrease) in Adjusted Total Operating
Expenses 9% 9% 2% 0% 0%
189
*Total Operating Expense ,Other Opex and “Run the Business” Opex have been adjusted for Visa/MasterCard litigation settlement proceeds from 2010-2012, the impact of the Q4'12 and
Q4’14 restructuring charges, Q2’14 Business Travel JV gain and transaction-related costs, Q2’14 AXP Foundation contribution and Business Travel operating expenses. To the extent
restructuring charges, Business Travel JV gains and transaction-related costs and Foundation contributions were recognized in periods other than those indicated, they have not been
excluded.**Global Services Group, Technology Development, Investment Opex, Total Investment Opex exclude Business Travel operating expenses related to those categories. Does not
exclude other Global Business Travel-related items, including transaction-related costs and impacts related to a transition services agreement that will phase out over time.
2011 v. 2014 CAGR
Adjusted GAAP Basis
Total Operating Expense* 1% 0%
Global Services Group** (2%) (2%)
Other Opex* (2%) (3%)
Technology Development** 3% 3%
Investment Opex** 9% 7%
“Run the Business” Opex* (2%) (3%)
Total Investment Opex* 7% 6%
2011 2014
“Run the Business” Opex as a % of GAAP Total Opex 72% 67%
“Run the Business” Opex as a % of Adj Total Opex 71% 66%
Total Investment Opex as a % of GAAP Total Opex 28% 33%
Total Investment Opex as a % of Adj Total Opex 29% 34%
Annex 9
Adjusted Total Operating Expense Growth
GAAP Basis Adjusted
2011 vs. 2014 CAGR
2014 2011
190
Annex 10
($ in millions)
Net Interest Income as a % of Adjusted Revenue Net of Interest
* Represents operating performance of Global Business Travel from 2011-2014. Does not include other Global Business Travel-related items, including equity earnings from the joint
venture and impacts related to a transition services agreement that will phase out over time.
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 Net of Interest Excluding GBT and Concur $28,390 $30,008 $31,425 $32,832
Net Interest Income $4,376 $4,628 $5,047 $5,472
Net Interest Income as a % of GAAP Revenue Net of Interest 15% 15% 15% 16%
Net Interest Income as a % of Adjusted Revenue Net of Interest 15% 15% 16% 17%
191
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 $6,931
Annex 11
($ in millions)
Adjusted Rewards Expense
* To the extent comparable categories of charges were recognized in periods other than Q4’12, they have not been excluded. 192
American Express Company
2015 Investor Day
Agenda
Payments Landscape
Leveraging Our Resources
Slide Number 6
Leveraging Our Resources
Slide Number 8
AXP Global Platform Opportunity
Platform Opportunity with Partners
Financial Growth Drivers
Financial Growth Drivers
Slide Number 13
Slide Number 14
Bluebird and Serve �Load Volume & Merchant Spend
Bluebird and Serve �Spend & Customer Demographics
Agenda
American Express Company
Agenda
Metric Trends
Financial Performance
February '13 Potential Slow Growth Scenarios
Contribution to Adjusted EPS Growth: �2012-2014 CAGR
Contribution to EPS Growth: �2010-2014 CAGR
Financial Growth Drivers
Revenue Growth vs. Issuer Peers
Pre-Provision PTI Growth vs. Issuer Peers
. Share of Credit/Charge Purchase Volume and Loans
Profitability Metrics
Global GDP Growth – IMF
Competitive Environment
Slide Number 32
AXP Financial Targets
Agenda
Slide Number 35
2015 Investor Day
Agenda
Today’s Discussion
Today’s Discussion
Operate Across Multiple Businesses
Strong Market Fundamentals
Leadership Positions
Differentiated Economics by Business
2014 Return-on-Avg-Tangible-Capital by Segment*
Strong Global Issuing Economics vs. Competitors
Core Business Summary
Today’s Discussion
Our Value Proposition in a Challenging Environment
Our Value Proposition in a Challenging Environment
Global Strategies to Drive Growth
Investment Profiles
Global Customer Acquisition
. Billed Business Volume and Net �Interest Income Growth Relative Performance
. Revenue Growth Rate Relative Performance
. Consumer: Strong Spend From New Customers
Driving Acquisition Efficiency Through Digital
Attracting New Prospect Segments
Continued Leadership of . Premium Spend*
Strong Performance of Platinum and Gold
Significant Opportunity in Share of Spend Wallet
Methodical Approach to Drive Share �of Spend Wallet
Driving Growth in Lending
Exploring the Untapped Lending Opportunity
Update on Costco Co-Brand
. Consumer Summary
. Small Business: Doubling Our Billed Business
2014 Estimated Share of Spend on Small Business Cards
Significant Opportunity With . Small Businesses
Strong . Small Business Acquisition Performance
Differentiated Value Proposition for Small Businesses
. Small Business Summary
Global Merchant Services: �Expanding Coverage Through Partnerships
Continued Signing of Merchants Globally
Delivering Locations Growth
Merchant Financing Growth
Global Merchant Services Summary
International: Our Reach
Focus on Two Categories of Markets
AXP Growing in All 11 Countries
And Growing Faster Than the Industry in 8 Out of 11
Growth Themes in International
Case Studies
International Summary
Loyalty Coalition: Proven Model
Operating in 5 Countries
Launching . Loyalty Coalition this Spring
Partnerships Are an Enabler of Executing�Global Strategies
Broad Network of Partnerships
Today’s Discussion
Digital Transformation Across Our Growth Strategies
Driving Growth Through Digital Engagement
Digital Offers
Pay With Points
Integrate Across Devices
Enhanced Security Service
Platform Opportunity with Partners
Transformation of the Core Summary
Summary
Slide Number 99
2015 Investor Day
Agenda
Global Corporate Payments Snapshot – 2014
GCP Billed Business
Billed Business Growth Drivers
Our Unique Assets
Commercial Client Segments
Middle Market Performance Trends
Middle Market Profitability
Strategy to Accelerate Middle Market Growth
Acquire New Clients
Increase Share of Spend
Continued Product Innovation
Early Results Are Promising
Closing
Agenda
Financial Growth Driver Model
Contribution to Adjusted EPS Growth: �2012-2014 CAGR
Operating Expense Growth Targets – Feb 2012
Operating Expense Growth Targets – Feb 2013
Adjusted Total Operating Expense Growth*
Adjusted Total Operating Expense* by Function
Adjusted Total Operating Expense* by Function
Adjusted Total Operating Expense* by Function
Operating Expense Growth Trends
Operating Expense Growth Target
Two Questions
Approach
Focus Internal Mindset: Waste Elimination
Focus Internal Mindset: End to End Opportunities
Create Global Networks
Global, Integrated Servicing Network
Transform AXP’s Platforms
Technology Platform Blueprint
Global Authorizations Platform
Evolve Superior Service
Superior Service Driving Growth
Digital Servicing Strategy
Service as a Platform for Growth
Empower Employees
Delivery Transformation
Creating Sustainable Operating Expense Leverage
Slide Number 142
2015 Investor Day
Agenda
Financial Growth Drivers
Track record of strong capital payout
2015 CCAR results were again in the top tier…
…leading to higher potential capital distributions…
…and a fourth consecutive year of payouts well above our long-term target in 2015
Our funding mix remains well-diversified
Agenda
EPS Growth Outlook – Feb 12th Investor Call
Global GDP Expectations
. Interest Rate Expectations
. Unemployment Expectations
Slide Number 156
Demonstrated track record of driving earnings growth in a modest growth environment
Financial outlook – expected drivers of EPS growth
Core performance drivers remain in place
Growth opportunities exist across all major businesses…
…as evidenced by recent revenue growth trends…
…providing a foundation for continued growth
Revenue mix remains spend-driven, despite �strong net interest income performance
Expect leverage from operating expenses to remain sustainable
Capital strength expected to continue driving EPS growth
Underlying business headwinds likely to continue
Core performance drivers remain in place…
…though discrete '15-'16 impacts will depress earnings growth
. Dollar continues to strengthen
Co-brands impact, without factoring in Costco .
Co-brands impact, including Costco .
Investing in growth now to position for the long-term
Financial outlook – expected drivers of EPS growth
EPS Growth Outlook – Feb 12th Investor Call
Q1 Outlook
Slide Number 176
The American Express Story
Slide Number 178
Glossary of Selected Terminology
Glossary of Selected Terminology (cont.)
Annex 1
Annex 2
Annex 3
Annex 4
Annex 5
Annex 6
Annex 7 (1 of 2)
Annex 7 (2 of 2)
Annex 8
Annex 9
Annex 10
Annex 11
Forward-Looking Statements
Forward-Looking Statements
Forward-Looking Statements
Forward-Looking Statements
Forward-Looking Statements
Forward-Looking Statements
