american express fixed income presentation

American Express Fixed Income Presentation

May 2008 Update

2

Agenda

AXP Overview

Performance

AXP Capital & Funding Management

3

U.S. Card Services

American Express Company

Full Year ended December 31, 2007Full Year ended December 31, 2007

Company Overview

% ContributionRevenues*: 51%Income** : 45%

International Card Services

Global CommercialServices

Global Network &Merchant Services

Corporate & Other

% ContributionRevenues*: 4%Income**: 10%

% ContributionRevenues*: 16%Income**: 7%



Includes:

• Travelers Cheques & Prepaid Services

• Publishing

Global Consumer Group Global Business-to-Business Group

American Express is a leading global payments and travel company

12/31/07 03/31/08

Revenues Net of Interest Expense: $ 27.7B $7.2B

Income from Continuing Ops: $ 4.0B $1.0B

Return on Average Equity: 37.3% 35.9%

founded in 1850.

*Revenues Net of Interest Expense. **Income from Continuing Operations.

4

AXP Franchise

American Express is the world’s largest issuer of charge and credit cards as measured by purchase volume. Our focus on the premium market sector enables us to have best in class credit quality.Average spending per card is substantially higher for us versus our competitors.The global diversity of our business includes:

88 million cards in force worldwide,More than 115 card issuing or merchant acquiring arrangements with banks and other institutions,Over 650 American Express network branded products.

American Express is a brand recognized around the world for exceptional service and customer care.American Express is ranked #1 as the “Most Admired” megabank/credit card company according to Fortune magazine’s 2008 annual survey.Our spend-centric model is a significant competitive advantage.

5

Spend-Centric Model

High Average Spending

Investmentsin 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.

6

Customer Focus Advantages

Affluent global baseMarketing expertiseAcquisition channelsRisk capabilities

Corporate, merchant and GNS relationshipsSales & client management expertiseProcessingReturn on Equity

GlobalConsumer

Global Businessto Business

BrandBrandPremium positioningPremium positioning

Blue Box Advantages:Blue Box Advantages:ServicingServicingInformation managementInformation management

Rewards platformsRewards platformsReengineeringReengineering

7

Agenda

AXP Overview

Performance


8

Performance vs. Targets

ROE Pre-Spin

Revenue net of interest expense2

EPS3

ROE Post-Spin 33-36%5

18-20%

12-15%

≥8%

Target1

1. Targets are on average, over time.2. Please see the revised Statements of Income presentation described in the Company’s 3/30/07 8-K filing.3. Income from continuing operations. EPS growth on a net income basis was 11% in 2005, 1% in 2006, 12% in 2007 and (2%) in Q1’08.4. Reported ROE, which is determined on a trailing 12-month basis using reported net income of $3.7B over average month-end shareholders’ equity

(including discontinued operations) for the twelve months ending 12/31/05 of $14.7B.5. Revised from 28-30%, effective 11/7/06.

2006

12%

20%

35%

2007

10%

16%

37%

2005

10%

19%

25%4

Q1’08

11%

(7%)

36%

9

Credit Performance

Metric Trends

Billed Business*

Mgd. Cardmember Loans***

Cards In Force

Avg. Basic Cardmember Spending**

*Billed business represents the dollar amount of charges related to proprietary cards, including cash advances and certain insurance fees, and cards issued under network partnership agreements. **Computed from proprietary card activities only. ***Managed basis includes owned and securitized loans. On a GAAP basis, owned loan growth was 23% in 2005, 31% in 2006, 26% in 2007 and 17% in Q1’08.

2005 2006

16% 16%

9% 10%

10% 7%

15% 17%

2007

15%

11%

8%

22%

15%

Q1’08

15%

10%

6%

19%

14%

10

$194

$161$151

$75 $67$47

Citi Bank ofAmerica***

JPMorgan AXP* Cap One Discover

($B)

† ‡

Total Managed Loans

$166

$106

$85

$57

$25 $23

AXP Citi JPMorgan** Bank ofAmerica***

Cap One Discover

($B)

† ‡

Total Billed Business

Growth vs. LY 14% 13% 5% 2% 2% 5%

Growth vs. LY 14% 11% 3% 19% 3% 2%

Q1’08 Worldwide Key Metric Comparison

*On a GAAP basis, owned loans were $50B and increased 17%. **Billed business is charge volume; sales volume growth was 10%. ***US Consumer & Business Card. †US Card. ‡ Fiscal year ends November 30. US Card. Billed business is net sales volume; transaction volume which includes cash advances was $26B and declined 3%.

11

Q1’08 Worldwide Key Metric Comparison

5.9%5.7% 5.7%

4.4%4.4%

4.3%

5.3%

Cap One** Bank ofAmerica***

Citi Discover JPMorgan AXP*†

Ex. Interest & Fees

Lending Managed Net Write-off Rates

†*On a GAAP basis, owned net write-off rate and net interest margin were 5.5% and 9.6%, respectively. **US Card. ***Net write-off rate is US Consumer & Business Card and net interest margin is Card Services. † Fiscal year ends November 30. US Card.

11.3%10.2%

9.0%8.3% 8.1% 8.0%

10.0%

Citi Cap One** AXP* JPMorgan Discover Bank ofAmerica***

†

Ex. Interest & Fees

Lending Managed Net Interest Margin

12

Worldwide Lending Managed Net Write-off Rates

5.1%5.3% 5.1% 5.3%

3.7%4.0%

5.7%

4.3% 4.4%

US Card Services* International Card Services Total AXP*

Q1'07 Q4'07 Q1'08

*On a GAAP basis, owned US Card Services net write-off rates were 3.7%, 4.3% and 5.5% and owned Total AXP net write-off rates were 4.1%, 4.5% and 5.5% for Q1’07, Q4’07 and Q1’08, respectively. On an owned basis, US Card Services net write-off rates were 3.0% and 3.9% and Total AXP net write-off rates were 3.7% and 4.2% for 2006 and 2007, respectively. On a managed basis, US Card Services net write-off rates were 2.9% and 3.8% and Total AXP net write-off rates were 3.4% and 4.1% for 2006 and 2007, respectively. There are no off-balance sheet International Card Services securitizations; therefore, the net write-off rates for International Card Services are on an owned basis.

13

5.9%

3.7%

4.6%4.8%

3.9%3.6%

2.9%

4.8%5.1%5.0%

3.9%3.9%3.4%

5.8%5.7%

4.4% 4.4%4.3%

US CardServices*

Discover** JPMorgan*** Bank ofAmerica****

Citi Cap One

Q1'07 Q4'07 Q1'08

Excluding write-offs of accrued

interest and fees

*On a reported, GAAP basis, owned US Card Services net write-off rates were 3.7%, 4.3% and 5.5% for Q1’07, Q4’07 and Q1’08, respectively. On an owned basis, US Card Services net write-off rates were 3.0% and 3.9% for 2006 and 2007, respectively. On a managed basis, US Card Services net write-off rates were 2.9% and 3.8% for 2006 and 2007, respectively. **Fiscal year ends November 30. ***Includes some international volumes. ****US Consumer & Business Card.

US Lending Managed Net Write-off Rates versus Competitors

14

US Lending Managed 30+ Day Past Due Rates versus Competitors

5.5%

3.1%3.1% 3.3%2.8%

5.7%

4.3%3.6%3.5%

3.2%

5.9%

4.0%3.7% 3.9%3.7%

US CardServices*

JPMorgan** Discover*** Cap One Bank ofAmerica****

Q1'07 Q4'07 Q1'08

*On a GAAP basis, owned US Card Services 30+ day past due rates were 2.9%, 3.5% and 4.1% in Q1’07, Q4’07 and Q1’08, respectively. **Includes some international volumes. ***Fiscal year ends November 30. ****US Consumer and Business Card.

15

FICO Score Peer Comparison

65.5%

54.2% 54.0%

43.1% 42.0%39.4%

34.5%

AEIT** JPMorgan

AMXCA** Cap One Citi Discover Bank ofAmerica

FICO > 720 (“Super-prime”)

11.7%

16.6%

19.7%

24.1%

27.2%28.7% 29.3%

AEIT AMXCA JPMorgan

Citi Discover Cap One Bank ofAmerica

FICO < 660 (“Sub-prime”)

The following peer comparison is based on US Lending & Charge Trust Data*:

* Trust data as of March 31, 2008 for AMXCA, Discover, and Bank of America, March 28, 2008 for Cap One, February 29, 2008 for AEIT and JP Morgan, and December 30, 2007 for Citi. ** AEIT and AMXCA FICO > 720 (“Super-prime”) category includes 2/3’s of the A/R within the 700 – 759 category.

16

Agenda

AXP Overview

Performance


17

Capital Management

Maintain our debt rating

Meet all statutory, regulatory and tax requirements

Cover our exposures across credit, market and operational risk

Support business growth

Maintain flexibility in our capital plan and structure

We continuously monitor our aggregate and subsidiary capital positions to ensure we:

American Express has historically generated capital well in excess of its needs.

18

Liquidity Management

As of March 31, 2008, we have $19 billion of cash and cash equivalents on hand.We estimate that we have access to over $40 billion as part of our contingent liquidity plan that would enable us to meet our daily obligations when access to unsecured funds in the debt capital markets becomes impaired. Sources include, but are not limited to*:

Liquidity investment portfolio ($5B)Undrawn committed bank credit facilities ($9B)Sale of consumer, commercial card, and small business loans and cardmember receivables through our existing securitization programs, and sale of other eligible receivables (~$25B)

We also have substantial flexibility to manage our cash requirements:Share repurchasesDiscretionary expenses and investmentsSubstantial intra-company ability to mobilize liquidity where needed

Liquidity is managed through the breadth of sources of our funding programs, as well as through the quality and liquidity of our funded assets.

*As of March 31, 2008.

19

AXP Funding Strategy

Short-Term

Unsecured Term

Term ABS

Category

Our short-term funding programs are used primarily to meet working capital needs.

Our 2008 long-term issuance plan provides for the refinancing of maturities and funding for business growth.

Our goal is to achieve this through a broad and globally diversified mix of maturities, markets, and securities, including issuance from both lending and charge receivables trusts.

We plan to issue large, liquid benchmark issues and to continue to efficiently leverage a multi-issuer strategy.

20

American Express Issuance Structure

American ExpressCredit Corporation (Credco)

American ExpressCenturion Bank (AECB)

American ExpressFederal Savings Bank (AEFSB)

American ExpressTravel Related Services (TRS)

American ExpressCompany (AXP)

Total Assets1,2: $32BCredit Ratings3: Aa3/A+/A+Regulated By: OTS

Total Assets1,2: $41BCredit Ratings3: Aa3/A+/A+Regulated By: FDIC & Utah State

Total Assets1: $46BCredit Ratings3: Aa3/A+/A+/A(High)Regulated By: SEC

Total Assets1,2: $147BCredit Ratings3: Aa3/A+/A+/A(High)Regulated By: State Money

Transmitter Laws

Total Assets1,2: $173BCredit Ratings3: A1/A+/A+/A(High)Regulated By: SEC & OTS

1) Total Assets as of December 31, 2007. 2) Includes off-balance sheet loans of $21.5 billion, $21.5 billion, $14.6 billion and $6.8 billion for AXP, TRS, AECB and AEFSB, respectively. 3) Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS.

American ExpressIssuance Trust (AEIT)

American ExpressCredit Account Master Trust (AMXCA)

21

AXP & TRS


American ExpressCompany (AXP)

Leading global payments and travel company

Finances through:

Dividends from subsidiaries

Unsecured long-term notes

Issues charge cards and traveler’s cheques

Sells charge card receivables to Credco

Finances through:

Unsecured medium and long-term notes

Asset backed securities (ABS)

– A.E. Issuance Trust

Credit Ratings*: A1/A+/A+/A(High)

Credit Ratings*: Aa3/A+/A+/A(High)

*Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS.

22

Credco

Funds charge card products

Finances through:

Direct issuance of commercial paper (P-1/A-1/F1)


Asset backed securities (ABS)

– A.E. Issuance Trust

Credco and TRS have an agreement whereby Credco purchases receivables from TRS at a discounted rate that will provide earnings of Credco available for fixed charges of at least 1.25 times.

American ExpressCredit Corporation (Credco)

100% owned by TRS


Credit Ratings*: Aa3/A+/A+/A(High)

*Credit Ratings indicated are from Moody’s/S&P/Fitch/DBRS.

2005 2006 2007 1Q 2008

1.41 1.44 1.38 1.37

Credco - Ratio of Earnings to Fixed Charges

23

US Banks

Incorporated in 1987

Issues and funds revolving products

Proprietary Lending

Lending on Charge

Finances receivables through:

Deposits

Short-term money market instruments


Asset Backed Securities (ABS)

– A.E. Credit Account Master Trust

Incorporated in 2000

Issues and funds revolving products

Strategic Co-Brand

OPEN (Small Business Services)

Finances receivables through:

Deposits

Short-term money market instruments


Asset Backed Securities (ABS)

– A.E. Credit Account Master Trust

American ExpressCenturion Bank (AECB)

American ExpressFederal Savings Bank (AEFSB)


100% owned by TRS 100% owned by TRSCredit Ratings*: Aa3/A+/A+ Credit Ratings*: Aa3/A+/A+

*Credit Ratings indicated are from Moody’s/S&P/Fitch.

24

41.552.2 52.4

21.4

25.8 28.09.5

7.3 4.95.8

10.5 14.112.0

15.4 14.0

2006 2007 3/31/2008

DepositsCommercial PaperOther Short-termCard ABS*Unsecured Term

$111.2

$90.2

* Card ABS reflects on and off balance sheet funding; on balance sheet ABS funding was $1.2 billion, $3.1 billion and $3.1 billion at 12/31/06, 12/31/07 and 03/31/08, respectively.

$113.4

Outstanding Funding CompositionAs of March 31, 2008$ billions

25

Term Managed Debt Maturity Profile

11.815.0

5.73.2

7.5 8.9

4.7

4.8

6.2

2.8

5.9 1.5

2008 2009 2010* 2011 2012** Thereafter

Card ABS

Unsecured

$19.8

$11.9

$16.5

Numbers are presented on a GAAP basis except as follows: *2010 Unsecured Term Debt excludes $1.6 billion of on balance sheet Charge ABS debt, which is included in the Card ABS number. **2012 Unsecured Term Debt excludes $1.6 billion of on balance sheet Charge ABS debt, which is included in the Card ABS number.

$6.0

$13.4

12/31/07

03/31/08

$10.4

8.6

15.1

5.83.2

7.712.0

2.7

4.8

6.2

5.7

5.9

2.9

2008 2009 2010* 2011 2012** Thereafter

Card ABS

Unsecured

$19.9

$12.0$11.3$8.8

$13.5$14.9

26

26.621.5 23.0

5.7

3.58.0

11.0

6.6

2006** 2007*** 2008Forecast†

2008 to Date(4/30)††

Unsecured Card ABSGlobal Term Unsecured & Card ABS Issuance

2008 Projected Managed Funding

*

$30.1 $29.5

$34.0

$ billions

Our 2008 funding plan includes approximately $32 to 36 billion of term debt to:Refinance maturing debtReplace a portion of maturing short-term debt with long-term debtFund business growth

Objectives for 2008 issuance: Lengthen our weighted average maturities Expand non-USD fundingExpand alternative funding sources

*Except as further noted below, unsecured term debt is presented on a “managed” basis. On a GAAP basis, the corresponding amounts are $18.6 billion, $20.9 billion, $27.0 billion and $6.5 billion in 2006, 2007, 2008 Forecast and 2008 YTD Actuals, respectively. **2006 Unsecured Term Debt includes $2.0 billion of remarketed floating rate notes and $6.0 billion of other term debt classified as short-term for GAAP purposes. ***2007 Unsecured Term Debt includes $2.6 billion of other term debt classified as short-term for GAAP purposes and excludes $2.0 billion of on balance sheet Charge ABS Debt, which is included in the Card ABS number. †2008 Forecast Unsecured Term Debt excludes $0.9 billion of on balance sheet Charge ABS Debt, which is included in the Card ABS number. ††2008 YTD Actuals Unsecured Term Debt excludes $0.9 billion of on balance sheet Charge ABS Debt, which is included in the Card ABS number.

$12.3

27

American Express ABS Trusts

Trust Established

Vehicle Purpose

Eligible Receivables

Assets currently in trust

Trust Size: - Principal AR*Investor Interest*Seller Interest*

Accounting Treatment

Minimum Sellers Interest

Credit Enhancement

2005

Primary contingent funding capacity

All US charge receivables

Consumer and small business charge

$7.2 billion- $4.1 billion- $3.1 billion

Securitized receivables accounted for on-balance sheet as a secured financingNo gain on sale at issuance

15% of trust principal

7% (Class B is 3% and Class C is 4%)

1996

Ongoing Business as Usual funding and contingent funding capacity

All US lending receivables

Consumer Lending

$33.2 billion- $26.0 billion- $7.2 billion

Securitized receivables accounted for off-balance sheetGain-on-Sale at issuance

7% of outstandings

12% (Class B is 5.5% and Class C is 6.5%)

* As of March 31, 2008; Adjusted for April 2008 issuances and maturities

American ExpressIssuance Trust (AEIT)

American ExpressCredit Account Master Trust (AMXCA)

28

AMXCA Performance Trend*Ending Balance & Default Rates

$20 B

$25 B

$30 B

$35 B

$40 B

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/080%

1%

2%

3%

4%

5%

6%

Principal Balance (ending) Annualized Default Rate, Gross

30+ Days Delinquencies & Past Due Rate

$500 MM

$600 MM

$700 MM

$800 MM

$900 MM

$1000 MM

$1100 MM

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/082.0%2.2%2.4%2.6%2.8%3.0%3.2%3.4%

30+ days Delinquent Past Due Rate (Calculated)

Yield

10%

15%

20%

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08

Monthly Payment Rate

20%

22%

24%

26%

28%

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08

* Source: 10D AMXCA Monthly Filings

29

AEIT Performance Trend*

30+ Days Delinquencies & Past Due Rate

$ MM

$100 MM

$200 MM

$300 MM

$400 MM

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/080%

1%

2%

3%

4%

30+ Days Delinquent Past Due Rate (Calculated)

Monthly Payment Rate

82%

84%

86%

88%

90%

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08

Yield

10%

15%

20%

25%

30%

35%

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08

* Source: 10D AEIT Monthly Filings

Ending AR & Default Rates

$2 B

$4 B

$6 B

$8 B

$10 B

2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/080%

1%

2%

3%

4%

Ending Receivables Annualized Default Rate, Net

30

American Express has a:

Spend-centric model which offers a substantial competitive advantage

Balanced funding strategy in terms of mix, market and maturity

Best in class credit quality portfolio

Robust liquidity risk management program

Brand recognized globally for excellent service and customer care

Key Takeaways

American Express is committed to continued expansion of its debt investor relations program.

32

NOTE RELATING TO NON-GAAP FINANCIAL DISCLOSURES

This presentation contains certain non-GAAP financial disclosures, including the Company’s pro forma return on equity, as well as 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 RELATING TO FORWARD LOOKING STATEMENTS

This presentation includes forward looking statements, which are subject to risks and uncertainties. The words "believe," "expect," "anticipate," "optimistic," "objective," "intend," "plan," "will", "may," "could," "would," "likely" and similar expressions are intended to identify forward looking statements. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date on which they were made. American Express 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, disruption of financial markets, market capacity and demand for securities offered by the Company, regulatory changes, ability to sell receivables and the performance of receivables previously sold in securitization transactions. A further discussion of these and other risks and uncertainties canbe found in the reports of the Company filed with the U.S. Securities and Exchange Commission (including its annual report on Form 10-K for the fiscal year ended December 31, 2007).

http://ir.americanexpress.com/

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