American Express Fixed income Presentation March 2010 Agenda AXP - - PowerPoint PPT Presentation

American Express Fixed income Presentation

March 2010

■ AXP Overview ■ Performance ■ AXP Capital & Funding Management

Agenda

2 2

AXP Franchise

• American Express is the world’s largest issuer of charge and credit cards as measured by

purchase volume.

• Our focus is on the premium market sector.
• Average spending per card is substantially higher for us versus our network competitors.
• The global diversity of our business includes:

– 87.9 million cards in force worldwide, – More than 120 card issuing or merchant acquiring arrangements with banks and

• ther institutions,

– Over 900 American Express network branded products.

• American Express is a brand recognized around the world for exceptional service and

customer care.

• American Express is ranked highest in overall satisfaction among 21 of the largest card

issuers in the U.S. according to J.D. Power and Associates third annual nationwide credit card satisfaction study.

• Our spend-centric model is a significant competitive advantage.

3

2008 2009 Revenues Net of Interest Exp. $28,365 $24,523 Income from Continuing Ops $2,871 $2,137 Net Income $2,699 $2,130 Return on Avg. Common Equity* 22% 14%

AMERICAN EXPRESS COMPANY

*Calculated by dividing one-year period net income attributable to common shareholders/segment income by one-year average common shareholders’ equity/average segment capital, respectively.

• U.S. Proprietary Consumer

and Small Business Cards and Services

• U.S. Consumer Travel

Network

• Int’l Proprietary

Consumer and Small Business Cards and Services

• Int’l Consumer

Travel Network

• Global Merchant

Services

• Global Network

Services

• Global Network

Card Partnerships

• Corporate HQ
• Global Travelers

Cheque and Pre- paid Services

• Publishing

Corporate & Other U.S. Card Services International Card Services Global Network & Merchant Services Global Commercial Services

2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 Revenues Net of Interest Exp. $13,997 $11,891 $4,781 $4,483 $4,696 $4,046 $4,102 $3,716 $789 $387 Segment Income $852 $249 $351 $303 $505 $390 $995 $898 $168 $297 Return on Avg. Segment Capital* 18% 5% 17% 14% 16% 11% 75% 53%

• Corporate Card
• Corporate

Purchasing Solutions

• Business Travel

Services

Company Overview

($ in millions, except percentages)

4

Spend-Centric Model

High Average Spending Investments in Premium Value Premium Economics Attractive Customer Base

The AXP spend-centric business model focuses primarily on generating revenues by driving spending on our cards, and secondarily finance charges and fees, allowing us to grow market share in the payments industry.

5

■ AXP Overview ■ Performance ■ AXP Capital & Funding Management

Agenda

6 6

Summary Financial Performance

Total Revenues Net of Interest Expense Return on Average Common Equity Income from Continuing Ops* Diluted EPS from Continuing Ops** 132%

• $6,506

22% $306 $6,489 127% $0.26 $0.59 14% $710 3% 1,155 1,184 Average Diluted Shares Outstanding

($ in millions, except per share amounts)

*Net income, including results from discontinued operations, was $716MM and $240MM in 4Q’09 and 4Q’08, respectively, and increased more than 100% versus the prior year. **Attributable to common shareholders. Excludes earnings allocated to participating share awards and other items of $9MM and $1MM for 4Q’09 and 4Q’08, respectively. Diluted EPS on a net income basis, including results from discontinued operations, was $0.60 and $0.21 in 4Q’09 and 4Q’08, respectively, and increased more than 100% versus the prior year.

4Q’09 4Q’08

% Inc/(Dec)

7

Historical Financial Performance

*Net income, including results from discontinued operations, was $4.0B for 2007, 8% growth vs. the prior year; $2.7B for 2008, (33% decline) and $2.1B for 2009 (21% decline). Net income was $437MM for Q1’09, (56% decline); $337MM for Q2’09, (48% decline), $640MM in Q3’09 (21% decline), and $716MM in Q4’09, an increase of 198%. **Q3’09 results include a $180MM ($113MM after-tax) nonrecurring benefit associated with the company’s accounting for a net investment in consolidated foreign subsidiaries.

11% 3%

Total Revenues Net of Interest Expense

$27.6 $28.4

14% (30%)

Income from Continuing Operations*

$4.1 $2.9

Year over Year % Change Year over Year % Change

$ in Billions

Return on Average Common Equity

37% 22%

8

(14%)

$24.5

(26%)

$2.1 14%

(18%) (18%)

$5.9 $6.1

(58%) (48%)

$0.4 $0.3

(0%)

$6.5

132%

$0.7

(16%)

$6.0

(25%)

$0.6** 17% 12% 10% 14%

Full Year and 2009 Quarterly Metric Trends

9

• Mgd. Cardmember

Loans*** Credit Performance

• Avg. Basic

Cardmember Spending** Total Cards In Force

*Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. **Computed from proprietary card activities only. ***Managed basis includes owned and securitized

• loans. On a GAAP basis, owned loan growth was 26% in 2007, (22%) in 2008, (26)% in Q1'09, (34%) in Q2'09, (31%) in Q3'09, (22%) in Q4'09, and (22%)

for the full year 2009.

Billed Business*

% increase/(decrease)

• vs. prior year:

Worldwide Billed Business

($ in billions)

*FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars. (e.g., assumes foreign exchange rate used for Dec’09 applies to Dec’08; rate used for Nov’09 applies to Nov’08, etc.)

10

$173 $161 $144 $69 $62 $47

Citi* BofA*** JPM** Cap One AXP Discover

$173 $95 $84 $55 $27 $22

AXP Citi* JPM** BofA*** Cap One Discover

Q4'09 Relative Performance

Growth

• vs. PY

8% (4%) (5%) (3%) (3%) (1%)

*Includes Citi-Branded Cards and Citi Holdings Retail Partners North America Cards. **Excludes the impact of the Washington Mutual acquisition. Including Washington Mutual, billings of $87B declined 9% and loans of $163B declined 14%. Reported billings shown above include balance transfers. Sales volumes, which exclude balance transfers, increased 2% versus prior year. ***Credit Card, includes US consumer and foreign credit card. †Global Card. ††Fiscal year ends November 30. US Card. Billed business is credit card sales volume; disclosed credit card volume was $23B as of 11/30/09 and declined 8%. ‡On a GAAP basis, owned loans were $33B and decreased 22%.

Growth

• vs. PY (4%)

(12%) (11%) (14%) (14%) (4%)

11

$ in millions $ in millions ‡ † †† † ††

*See Annex 1 for GAAP basis. **Fiscal year ends November 30. US Card. ***Excluding the impact of the Washington Mutual acquisition. Including Washington Mutual Q4’08, Q1’09, Q2’09, Q3’09 and Q4’09 rates were 5.6%, 7.7%, 10.0%, 10.3% and 9.3%, respectively. †Global Card. ††Credit Card, includes US consumer and foreign credit

• card. ‡Citi-Branded Cards.

6.5% 5.6% 5.3% 6.9% 7.2% 7.0% 9.7% 9.4% 12.9% 10.3% 7.3% 8.8% 8.6% 9.6% 11.9% 9.4%

AXP Discover JPMorgan Cap One Bank of America Citi

AXP Lending Managed Net Write-off Rates versus Competitors

12

Q4'08 Q4'09

†† † *** ** * ‡

4.6% 4.7% 4.4% 4.9% 6.7% 5.1% 5.0% 7.9% 5.9% 3.6% 5.6% 5.5% 5.9% 7.2% 5.4%

AXP Discover JPMorgan Cap One Bank of America Citi

*See Annex 1 for GAAP basis. ** Fiscal year ends November 30. US Card. ***Excludes the impact of the Washington Mutual acquisition. Including Washington Mutual, Q4'08, Q1'09, Q2'09, Q3'09 and Q4'09 rates were 5.0%, 6.2%, 5.9%, 6.0% and 6.3%, respectively. †Global Card. ††Credit Card, includes US consumer and foreign credit card. ‡Citi-Branded Cards.

AXP Lending Managed 30 Day Past Due Rates versus Competitors

13

Q4'08 Q4'09

†† † *** ** * ‡

Peer Comparison Trust FICO Distributions*

*Trust data as of March 2009 for Capital One (COMET), November 2009 for JP Morgan (CHAIT), December 2009 for Bank of America (BACCT), Citi (CCCIT), Discover (DCENT) and AXP Lending (AMXCA) and Charge (AEIT) Trusts. **Data on AEIT excludes the Commercial charge card accounts, a substantial portion of which do not have associated FICO scores. †For AMXCA, FICO > 720 (“Super-prime”) category includes 2/3’s of the A/R within the 700 – 759 category.

8% 17% 20% 25% 27% 28% 29%

AXP Charge Trust** AXP Lending Trust† JP Morgan Bank of America Citi Discover Cap One

14

FICO <660 (“Sub-prime”)

73% 57% 56% 44% 43% 42% 40%

AXP Charge Trust** AXP Lending Trust† JP Morgan Bank of America Cap One Discover Citi

FICO >720 (“Super-prime”)

14

■ AXP Overview ■ Performance ■ AXP Capital & Funding Management

Agenda

15 15

Capital Management

We continuously monitor our aggregate and subsidiary capital positions to:

• Manage our exposures across credit, market and operational risk
• Support business growth
• Consider rating agency and regulatory requirements
• Maintain flexibility in our capital plan and structure

Notable events - Implementation of SFAS 166/167

• The implementation of the revised accounting guidance for the transfers of financial

assets and consolidation of variable entities (formally SFAS 166/167) on January 1, 2010, resulted in the consolidation of the Lending Trust’s assets and liabilities into American Express Travel Related Services (TRS), a wholly owned subsidiary of AXP

• The assets of the Lending Trust have been included in the regulatory capital ratios since

Q2'09 due to the actions taken to enhance the Trust. Beginning 2010 the related credit reserves will be included. This impact is included in the Q4 pro forma capital ratios

16

*Pro Forma for SFAS 166/167 assumes the recognition of reserves and other adjustments related to the securitized cardmember loans as of 12/31/09, which would result in TCE, Tier 1 Common Equity, Tier 1 Capital and RWA decreasing by $1.8B, $1.6B, $1.6B and $1.8B, respectively, and Total Average Assets increasing by $23.7B. **The regulatory benchmark of 4% was used within the Supervisory Capital Assessment Program conducted earlier in 2009. †TCE equals common shareholders' equity of $14.4B and pro forma shareholders’ equity of $12.6B, less goodwill and intangibles of $3.0B for 4Q’09. RWA is $116.6B for 4Q’09 and pro forma RWA is $114.8B.

Tangible Common Equity to Risk- Weighted Assets (“TCE/RWA”)† Tier 1 Leverage Tier 1 Risk-Based Capital Total Risk-Based Capital Tier 1 Common Risk-Based 9.7% 9.7% 9.8% 11.9% 9.8% 8.4% 7.0% 8.6% 10.8% 8.6% 5.0% 6.0% 10.0% 4.0%**

Capital Ratios and Regulatory Benchmarks

4Q’09 4Q’09 Pro Forma* Current Benchmark

17

Funding & Liquidity

• Our liquidity strategy is to maintain sufficient cash and readily marketable securities to meet all

maturing funding obligations for the next 12 months, without access to unsecured or secured debt capital markets or raising further retail deposits

• At year end, we held approximately $26 billion in excess cash and readily marketable securities, and
• ur 2010 maturing funding obligations were $20 billion
• We continue to focus on maintaining a strong liquidity profile:

– Diversifying our funding sources, in particular continuing to grow retail deposits – Laddering out maturities – Maintaining substantial levels of both cash and readily marketable securities on hand, as well as contingent funding sources

• Q4'09 activity

– Both direct and brokered deposits increased in the quarter, with outstanding US retail deposits

• f $26 billion at year end

– We accessed the UK and Canadian unsecured debt markets issuing GBP750 million (US$1.2 billion) and C$950 million (US$0.9 billion) respectively. We also re-entered the retail note market in December 2009 with issues totaling $79 million

• In March, 2010 we sold $117 million of our retained subordinate ABS securities

18

Cash* $19 Operating Cash (3) Q1‘10 6 CP and Short-Term Deposits Outstanding (3) Q2'10 4 Readily Marketable Securities 13 Q3'10 4

$26 $20**

* Includes $15.5B, which is classified as Cash and Equivalents on the balance sheet. Also includes $3.5B, classified in Other Assets and Other Receivables on the balance sheet, which is held against certain forthcoming asset-backed securitization maturities in 1Q’10. **Includes maturities of long term unsecured debt of $7.4B, asset-backed securitization liabilities of $10.2B and long-term certificates of deposit of $2.6B.

($ in Billions)

Q4'10 6 Excess Cash & Securities 2010 Maturities

Q4'09 Liquidity Snapshot

Resources Funding Maturities

19

US Retail Deposit Programs

(3.2) Amount Raised During 4Q’09 0.9 4.7 December 31, 2009 Balance $10.5 $15.1 Average Duration at Origination 29 Months Average Coupon 2.3% 4Q’09 Maturities September 30, 2009 Balance $9.6 $13.6 (3.2) 5.6 $25.6 $23.2

*Retail savings accounts includes brokered sweep accounts and high yield savings accounts from the Personal Savings Program.

Retail CDs Retail Savings Accounts* Total Deposits

($ in Billions)

20

American Express Primary Issuance Structure

American Express

Credit Corporation (Credco)

American Express

Centurion Bank (AECB)

American Express

Bank, Federal Savings Bank (AEFSB)

American Express

Travel Related Services (TRS)

American Express

Company (AXP)

Total Assets1: $32B Credit Ratings2: A2/BBB+/A+/A(High) Regulated By: OTS Total Assets1: $26B Credit Ratings2: A2/BBB+/A+/A(High) Regulated By: FDIC & State of Utah Total Assets1: $114B Credit Ratings2: A2/BBB+/A+/A(High) Regulated By: FRB & Various State Regulators Total Assets1: $120B Credit Ratings2: A3/BBB+/A+/A(High) Regulated By: SEC & FRB

1) Total assets as of September 30, 2009. Includes off-balance sheet loans of $29.2 billion, $29.2 billion, $18.0 billion and $11.2 billion for AXP, TRS, AECB and AEFSB, respectively. 2) Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS. Credit Outlook: Moody’s-stable for all issuing entities except AXP - negative, S&P-stable, Fitch–negative, DBRS-stable.

American Express

Issuance Trust (AEIT)

American Express

Credit Account Master Trust (AMXCA)

Total Assets1: $27B Credit Ratings2: A2/BBB+/A+/A(High) Regulated By: SEC

21

AXP & TRS

American Express

Travel Related Services (TRS)

American Express

Company (AXP)

Credit Ratings1: A2/BBB+/A+/A(High) Credit Ratings1: A3/BBB+/A+/A(High)

1) Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS. Credit Outlook: Moody’s-stable for all issuing entities except for AXP - negative, S&P-stable, Fitch–negative, DBRS-stable.

22

AXP and TRS are Bank and Financial Holding Companies

• Leading global payments and travel company
• Sources of funding:
• Dividends from subsidiaries
• Unsecured long-term notes
• Issues corporate charge cards and prepaid products
• Sells corporate charge cards to Credco
• Sources of funding:
• Unsecured medium and long-term notes
• Asset backed securities (ABS) issued by

American Express Issuance Trust

Credco

1) Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS. Credit Outlook: Moody’s-stable for all issuing entities except for AXP - negative, S&P-stable, Fitch–negative, DBRS-stable.

23

• Funds the following products:
• US and Non-US charge cards
• Non-US revolving cards
• Sources of funding:
• Inter-company borrowings
• Issuance of US and non-US unsecured long term debt
• Asset backed securities (ABS) issued by American Express Issuance Trust
• Retail notes
• Borrowings under bank credit facilities in certain international markets
• Direct issuance of 3(a)(3) commercial paper (P-1/A-2/F1/R-1)
• Terms of purchase of receivables:
• Credco has an agreement with TRS such that sales of card receivables by

TRS to Credco will be at a discounted rate that will yield earnings for fixed charges of not less than 1.25 times such charges

• Credco may also purchase American Express card receivables from AECB,

AEFSB and other AXP card issuers

American Express

Travel Related Services (TRS)

Credit Ratings1: A2/BBB+/A+/A(High)

American Express

Credit Corporation (Credco) 100% owned by TRS 2007 2008 2009 1.38 1.62 1.59 Credco-Ratio of Earnings to Fixed Charges

US Banks

1) Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS. Credit Outlook: Moody’s-stable for all issuing entities except for AXP - negative, S&P-stable, Fitch–negative, DBRS-stable.

24

American Express

Travel Related Services (TRS)

• Incorporated in 1987
• Issues and funds the following charge and revolving cards:
• Consumer Charge (including Lending on Charge)
• Proprietary Lending
• Sources of funding:
• Retail deposits
• Inter-company borrowings
• Unsecured medium and long-term notes
• Asset backed securities (ABS) issued by American

Express Credit Account Master Trust

• Short-term money market instruments
• Incorporated in 2000
• Issues and funds the following charge and revolving cards:
• Strategic Co-Brand
• OPEN (Small Business Services)
• Sources of funding:
• Retail deposits
• Inter-company borrowings
• Unsecured medium and long-term notes
• Asset backed securities (ABS) issued by American

Express Credit Account Master Trust

• Short-term money market instruments

American Express

Centurion Bank (AECB) 100% owned by TRS

Credit Ratings1: A2/BBB+/A+/A(High)

American Express

Bank, Federal Savings Bank (AEFSB) 100% owned by TRS

Credit Ratings1: A2/BBB+/A+/A(High)

52.2 55.1 47.4 25.7 32.5 30 17.8 9.0 2.4 15.4 15.5 26.3 31-Dec-07 31-Dec-08 31-Dec-09 Deposits Short-term Debt* Card ABS** Unsecured Term

$111.1 $112.1 $106.1

Outstanding Funding Composition

25

*Short-term Debt includes Commercial Paper **Card ABS reflects on and off balance sheet funding; on balance sheet ABS funding was $3.1 billion, $5.0 billion, and $5.0 billion at 12/31/07, 12/31/08, and 12/31/09, respectively. Both on and off-balance sheet securitizations are presented net of securities that have been retained by the company

$ in Billions

49% 45% 10-35% 29% 28% 20-40% 10% 22% 20-50% 12% 5% <5% 31-Dec-08 31-Dec-09 Prospective* Short-term** LT Retail Deposits Card ABS*** Unsecured Term

Illustrative Future Mix of Funding

26

*Not a forecast. For illustrative purposes only to show various possible funding mixes ** Short-term includes short-term debt, short-term retail deposits and institutional deposits. ***Card ABS reflects on and off-balance sheet debt and excludes retained interests

7.4 8.8 7.6 7.9 4.8 10.9 10.2 5.3 6.8 1.9 2.7 3.1 2.6 5.0 2.1 1.7 1.0 0.4 2010* 2011 2012** 2013 2014 Thereafter 12/31/09 $ in Billions

Long term CDs*** Card ABS Unsecured

$20.2

Term Maturity profile – Debt and LT CDs

27

14.9 7.4 8.5 6.9 8.0 9.4 4.8 10.2 5.3 5.8 1.9 4.6 1.7 1.0 0.4 0.9 2009 2010* 2011 2012** 2013 Thereafter 12/31/08

Long term CDs*** Card ABS Unsecured

$21.4 $18.6 $14.2 $12.7 $10.8 $14.0

Numbers are presented on a GAAP basis except as follows: *2010 Unsecured Term Debt excludes $3.4 billion of on balance sheet Charge ABS debt at both 12/31/09 and 12/31/08, which is included in the Card ABS

• number. **2012 Unsecured Term Debt excludes $1.6 billion of on balance sheet Charge ABS debt at both 12/31/09 and 12/31/08, which is included in the Card ABS number. Both on and off-balance sheet

securitizations are presented net of securities that have been retained by the company. ***Long Term CDs include US$ CDs only

$19.1 $16.5 $11.5 $8.5 $14.4

American Express ABS Trusts

Trust Established Eligible Receivables Assets currently in trust Trust Size: - Principal AR (1) Investor Interest (1) Seller Interest (1) Accounting Treatment Minimum Sellers Interest Credit Enhancement based on most recent floating rate issuance

• 2005
• All US charge receivables
• Consumer, small business charge and

Corporate card

• $6.9 billion
• $3.2 billion
• $3.7 billion
• Securitized receivables accounted for on-

balance sheet with no gain on sale

• 15% of trust principal
• 7%
• Class B - 3%
• Class C - 4%
• 1996
• All US lending receivables
• Consumer lending
• $33.1 billion
• $26.6 billion
• $6.5 billion
• Beginning 1/1/2010, on a consolidated

basis securitized receivables accounted for on-balance sheet with no gain on sale

• 7% of outstanding debt
• 17.5%
• Class B - 6.0%
• Class C - 6.5%
• Class D - 5%

1) As of February 28, 2010.

American Express Issuance Trust (AEIT) American Express Credit Account Master Trust (AMXCA)

28

Issuance Trust Performance Trend

Source: AEIT 10D Filings.

29 Days Delinquencies

$ MM $20 MM $40 MM $60 MM $80 MM $100 MM $120 MM

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1 31

• 60

61

• 90

90+

Monthly Payment Rate

0% 20% 40% 60% 80% 100% 120%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1

Trust Portfolio Yield

0% 5% 10% 15% 20% 25% 30% 35%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1

Past Due vs. Default Rate

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1 Past Due Rate (Calculated) Annualized Default Rate, Net

Credit Account Master Trust Performance Trend

Source: AMXCA 10D Filings.

30 Days Delinquencies

$ MM $200 MM $400 MM $600 MM $800 MM $1000 MM $1200 MM

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1 31

• 60

61

• 90

90+

Trust Portfolio Yield

0% 3% 6% 9% 12% 15% 18%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1

Monthly Payment Rate

0% 5% 10% 15% 20% 25% 30%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1

Past Due Rate* vs. Default Rate

0% 2% 4% 6% 8% 10% 12%

1 /09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 1 0/09 1 1 /09 1 2/09 1 /1 2/1 Past Due Rate (Calculated)* Annualized Default Rate, Net

Supplemental Slides on Risk Mitigation Actions

Presented at AXP Financial Community Meeting – February 3, 2010

USCS Managed Lending Net Write-off Rate vs. Competitors

33 *Competitors include Bank of America Credit Card, JPMorgan (excluding Washington Mutual), Citi Branded North America, Citi Holdings North America Retail Partners, Capital One US Card, Discover US Card and Wells Fargo Credit Card. Excludes Wells Fargo and Citi prior to 1Q '08. **See Annex 1 for

• wned basis.

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09

Competitors* US Card Services**

USCS Managed Lending 30 Days Past Due Rate vs. Competitors

34 *Competitors include Bank of America Credit Card, JPMorgan (excluding Washington Mutual), Citi Branded North America, Citi Holdings North America Retail Partners, Capital One US Card, Discover US Card and Wells Fargo Credit Card. Excludes Wells Fargo and Citi prior to 1Q'08. **See Annex 1 for

• wned basis.

0% 1% 2% 3% 4% 5% 6% 7% Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09

Competitors* US Card Services**

35

High Quality Customer Base

744 753 2005 2006 2007 2008 2009

*For Lending accounts in US Consumer and OPEN portfolios. **Argus September 2009 Credit Card Payments Study. US Consumer Credit only. Sample

• f consumer credit cards provided by 24 issuers, including AXP.

754 722 AXP US Consumer Industry (excl. AXP)

■ Recognized economic weakness early ■ Built new set of capabilities / models ■ Developed new set of programs to manage

high risk customers

■ Managed high balances

Risk Mitigation

36

Industry ** (excl. AXP)

US Consumer Lending Credit Line Decrease vs. Competitors

0% 1% 2% 3% 4%

Jan'08 May'08 Sep'08 Jan'09 May'09 Sep'09

37

*Argus March 2009 and September 2009 Credit Card Payments Study. US Consumer Credit only. **Sample of consumer credit cards provided by 24 issuers, including AXP.

% of accounts with a credit line decrease*: US Consumer Lending

Customer Assistance and Relief – CARE

$ in millions

1,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

38

0% 100% USCS Managed Loans in CARE* Rest of USCS Managed Loans

*Loans in CARE includes In-House loans only and excludes CARE loans managed by outside agencies.

December '09

USCS High Balance Accounts

1Q '08 4Q '09 High Balance >$10k Low Balance <$10k

0% 8%

Jan '08 Jul '08 Jan '09 Jul '09 High Balance >$10k Low Balance <$10k

39 Note: Data reflect USCS Lending products, including Lending on Charge.

Dec '09

40

$3,000 $9,000 Dec '05 Jun '06 Dec '06 Jun '07 Dec '07 Jun '08 Dec '08 Jun '09 Dec '09

US Consumer Managed Lending Average Write-off Balance

US Consumer Lending

41

$3,000 $9,000 Oct '08 Jan '09 Apr '09 Jul '09 Sep'09

US Consumer Managed Lending Average Write-off Balance vs. Competitors*

Industry** (excl. AXP) US Consumer Lending

*Argus March 2009 and September 2009 Credit Card Payments Study. US Consumer Credit only. **Sample of consumer credit cards provided by 24 issuers, including AXP.

30% (16%)

■ High balance customers continue to be

important

– Represent affluent, high spending base ■ Delinquency rates for segment improving ■ Percentage of high balance loans declining

High Balance Summary

42

Annex 1

4Q'09 3Q'09 2Q'09 1Q'09 4Q'08 3Q'08 2Q'08 1Q'08 4Q'07 3Q'07 2Q'07 1Q'07 Cardmember Lending Owned Basis Total Loans ($ in B) USCS 23.5 $ 22.7 $ 23.6 $ 28.2 $ 32.7 $ 34.6 $ 37.8 $ 38.0 $ 43.3 $ 39.9 $ 38.2 $ 33.0 $ AXP 32.8 $ 31.5 $ 32.5 $ 36.7 $ 42.2 $ 45.7 $ 49.6 $ 49.4 $ 54.4 $ 50.4 $ 48.2 $ 42.2 $ 30 Days Past Due Loans as a % of Total USCS 3.7% 4.2% 4.4% 5.1% 4.7% 3.9% 3.5% 3.4% 2.8% 2.4% 2.1% 2.3% AXP 3.6% 4.0% 4.3% 4.9% 4.4% 3.7% 3.4% 3.3% 2.8% 2.5% 2.2% 2.5% Average Loans ($ in B) USCS 22.7 $ 23.4 $ 26.5 $ 30.2 $ 33.2 $ 36.3 $ 37.9 $ 39.6 $ 40.8 $ 38.6 $ 35.9 $ 33.0 $ AXP 31.8 $ 32.3 $ 35.2 $ 39.0 $ 43.0 $ 47.7 $ 49.6 $ 50.7 $ 51.6 $ 48.7 $ 45.5 $ 42.4 $ Net Write-off Rate USCS 8.0% 9.8% 10.3% 8.5% 7.0% 6.1% 5.8% 4.5% 3.5% 3.0% 2.9% 2.9% AXP 7.4% 9.1% 9.6% 8.0% 6.5% 5.8% 5.5% 4.5% 3.7% 3.4% 3.4% 3.4% Cardmember Lending Managed Basis Total Loans ($ in B) USCS 52.6 $ 51.9 $ 54.0 $ 56.5 $ 62.4 $ 64.3 $ 64.7 $ 63.6 $ 65.9 $ 61.4 $ 58.5 $ 53.8 $ AXP 61.8 $ 60.7 $ 62.9 $ 65.0 $ 72.0 $ 75.5 $ 76.5 $ 75.1 $ 77.1 $ 71.9 $ 68.5 $ 63.1 $ 30 Days Past Due Loans as a % of Total USCS 3.7% 4.1% 4.4% 5.1% 4.7% 3.9% 3.3% 3.2% 2.8% 2.4% 2.1% 2.4% AXP 3.6% 4.0% 4.3% 5.0% 4.6% 3.8% 3.3% 3.2% 2.8% 2.5% 2.3% 2.5% Average Loans ($ in B) USCS 51.8 $ 52.9 $ 55.1 $ 59.1 $ 63.0 $ 64.6 $ 64.2 $ 64.5 $ 63.2 $ 59.9 $ 56.2 $ 53.4 $ AXP 60.9 $ 61.8 $ 63.9 $ 67.9 $ 72.8 $ 76.1 $ 75.8 $ 75.7 $ 74.0 $ 70.1 $ 65.9 $ 62.7 $ Net Write-off Rate USCS 7.5% 8.9% 10.0% 8.5% 6.7% 5.9% 5.3% 4.3% 3.4% 3.0% 2.9% 2.9% AXP 7.3% 8.6% 9.7% 8.2% 6.5% 5.7% 5.1% 4.3% 3.6% 3.2% 3.3% 3.3% 43

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NOTE RELATING TO NON-GAAP FINANCIAL DISCLOSURES These slides contain certain non-GAAP financial disclosures, including information that is reported on a "managed" basis. Managed basis assumes no securitization transactions, i.e., all securitized loans and related income effects are reflected as if they were in the Company's balance sheet and income statement, respectively. Information relating to comparable GAAP financial measures may be found on the relevant slides both attached hereto and located on American Express Company's investor relations website at http://ir.americanexpress.com. INFORMATION RELATED TO FORWARD-LOOKING STATEMENTS The accompanying slides include forward-looking statements, which are subject to risks and uncertainties. The forward-looking statements, which address the Company's expected business and financial performance, among other matters, contain words such as "believe," "expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should," "could," "would," "likely" and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the Company’s ability to manage credit risk related to consumer debt, business loans, merchants and other credit trends, which will depend in part on (i) the economic environment, including, among other things, the housing market, the rates of bankruptcies and unemployment, which can affect spending on card products, debt payments by individual and corporate customers and businesses that accept the Company’s card products, (ii) the effectiveness of the Company’s credit models and (iii) the impact of recently enacted statutes and proposed legislative initiatives affecting the credit card business, including, without limitation, The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”); the impact of the Company’s efforts to deal with delinquent cardmembers in the current challenging economic environment, which may affect payment patterns of cardmembers and the perception of the Company’s services, products and brands; the Company’s near-term write-off rates, including those for the first and second quarters of 2010, which will depend in part on changes in the level of the Company’s loan balances, delinquency rates of cardmembers, unemployment rates, the volume of bankruptcies and recoveries of previously written-off loans; consumer and business spending

• n the Company’s credit and charge card products and Travelers Cheques and other prepaid products and growth in card lending balances, which

depend in part on the economic environment, and the ability to issue new and enhanced card and prepaid products, services and rewards programs, and increase revenues from such products, attract new cardmembers, reduce cardmember attrition, capture a greater share of existing cardmembers’ spending, and sustain premium discount rates on its card products in light of regulatory and market pressures, increase merchant coverage, retain cardmembers after low introductory lending rates have expired, and expand the Global Network Services business; the write-off and delinquency rates in the medium- to long-term of cardmembers added by the Company during the past few years, which could impact their profitability to the Company; the Company’s ability to effectively implement changes in the pricing of certain of its products and services; fluctuations in interest rates (including fluctuations in benchmarks, such as LIBOR and other benchmark rates that may give rise to basis risk, and credit spreads), which impact the Company’s borrowing costs, return on lending products and the value of the Company’s investments;

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the Company’s net interest yield on cardmember loans trending downward over time closer to historical levels, which will be impacted by the affects of the CARD Act and changes in consumer behavior that affect loan balances; the actual amount to be spent by the Company on marketing, promotion, rewards and cardmember services based on management’s assessment of competitive opportunities and other factors affecting its judgment and during 2010, the extent

• f provision benefit, if any, from lower than expected write-offs; the ability of the Company to meet its objectives with respect to the growth of its brokered

retail CD program, brokerage sweep account program and the direct deposit initiative, which will depend in part on customer demand, the perception of the Company’s brand and regulatory capital requirements; trends in travel and entertainment spending and the overall level of consumer confidence; the triggering of obligations to make payments to certain co-brand partners, merchants, vendors and customers under contractual arrangements with such parties under certain circumstances; a downturn in the Company’s businesses and/or negative changes in the Company’s and its subsidiaries’ credit ratings, which could result in contingent payments under contracts, decreased liquidity and higher borrowing costs; the ability of the Company to satisfy its liquidity needs and execute on its funding plans, which will depend on, among other things, the Company’s future business growth, its credit ratings, market capacity and demand for securities offered by the Company, performance by the Company’s counterparties under its bank credit facilities and other lending facilities, regulatory changes, including changes to the policies, rules and regulations of the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of San Francisco, the Company’s ability to securitize and sell receivables and the performance of receivables previously sold in securitization transactions; accuracy of estimates for the fair value of the assets in the Company’s investment portfolio and, in particular, those investments that are not readily marketable; the ability of the Company’s charge card and lending trusts to maintain excess spreads at levels sufficient to avoid material set-asides or early amortization of the Company’s charge card and lending securitizations, which will depend on various factors such as income derived from the relevant portfolios and their respective credit performances; the increase in excess spread resulting from the designation of discount option receivables with respect to the American Express Credit Account Master Trust, which will depend in part on the monthly principal payment rate posted to accounts in, and the credit performance of, the securitized lending portfolio; changes in laws or government regulations; the potential impact of the CARD Act and regulations adopted by federal bank regulators relating to certain credit and charge card practices, including, among others, the imposition by card issuers of interest rate increases on outstanding balances and the allocation of payments in respect of outstanding balances with different interest rates, which could have an adverse impact on the Company’s net income; and accounting changes, including the implementation of changes to the accounting for off-balance sheet activities or other potential regulatory interpretations in this area, which, effective January 1, 2010, requires the Company to consolidate the assets and liabilities of the lending securitization trust, thereby requiring the Company to reestablish loss reserves, which has in turn resulted in a reduction to the Company’s regulatory capital ratios and will also result in a change with respect to the presentation of its financial statements beginning in the first quarter of 2010, and which also could result in lower credit ratings on securities issued by the Company’s off-balance sheet securitization trusts as a result of the uncertainty with respect to the ability of rating agencies to continue to rely on the FDIC’s safe harbor rule regarding the isolation of securitized assets in the event of a sponsoring bank’s receivership or conservatorship, which in turn could adversely impact the Company’s ability to utilize securitizations as a component of its funding strategy. A further description of these and other risks and uncertainties can be found in the Company's Annual Report on Form 10- K for the year ended December 31, 2009, and the Company's other reports filed with the Securities and Exchange Commission.