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American Express

Australian Debt Investor Presentation

October, 2006


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," "intend," "plan," " estimate," "plan," "will," "may,"

"should,“ "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 are made. Neither American Express Company (the "Company") nor

American Express Credit Corporation ("Credco") undertakes any obligation to update or revise any forwardlooking

statements. Factors that could cause actual results to differ materially from these forward-looking

statements include, but are not limited to, credit trends and the rate of bankruptcies, which can affect

spending on card products and debt payments by individual and corporate customers; Credco's ability to

accurately estimate the provision for losses in its outstanding portfolio of cardmember receivables and loans;

fluctuations in foreign currency exchange rates; negative changes in Credco's credit ratings. which could

result in decreased liquidity and increased borrowing costs; the effect of fluctuating interest rates, which

could affect Credco's borrowing costs; and the impact on the Company's business resulting from continuing

geopolitical uncertainty. A further discussion of these and other risks and uncertainties can be found in the

reports that the Company and Credco file with the United States Securities and Exchange Commission

(including their annual reports on Form 10-K for the fiscal year ended December 31, 2005).

NOTE REGARDING U.S. SECURITIES LAW

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or

sold in the United States or to U.S persons unless made in compliance with the registration requirements of

the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from such requirements.

1


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

2


AXP Global Footprint

• A brand recognized around the world for exceptional service and

customer care.

• American Express is the world’s largest issuer of charge and

credit cards as measured by purchase volume.

• We have leading positions in the consumer, small business,

middle market and large corporate sectors.

• The global diversity of our business includes:

– 74 million cards in force worldwide,

– more than 90 card issuing or merchant acquiring

arrangements with banks and other institutions,

– with over 450 American Express branded products.

• US customers on average spend close to 4 to 5 times more on

their American Express cards than Mastercard or Visa.

• A significant competitive advantage is our spend-centric model.

3


Spend-Centric Model

• The AXP spend-centric business model focuses primarily on generating revenues

by driving spending on our cards, and secondarily finance charges and fees.

• This has significant competitive advantages for AXP to grow our share of the

payments industry.

Investments

in Premium

Value

Attractive

Customer

Base

Premium

Economics

High

Average

Spending

4


Company Overview

Full Year ended December 2005

American Express Company

Revenues: $ 24.3B

Income from Continuing Ops $ 3.2B

Net Income $ 3.7B

Pro Forma Return on Equity: 31.5% (1) Corporate and Other

U.S. Card Services

Global Network &

Merchant Services

International Card &

Global Commercial Services

1. Calculated based on $3.2 billion of income from continuing operations and $10.2 billion of average month end shareholders equity for the quarter ending

December, 31 2005.

5


AXP Performance vs. Long Term Targets

Revenue

Target 1

8%

2003

8%

2004

12%

2005

10%

YTD’06

13%

EPS

12-15%

15%

12% 2

16% 2

22% 2

17% 2

ROE

Pre-Spin

3

18-20%

21%

22%

25%

30%

Post-Spin

28-30%

31% 4

33% 4

1. Targets are on average, over time.

2. Income from continuing operations. EPS growth on a net income basis b

was 14% in 2003, 17% in 2004, 11% in 2005 and (7%) YTD as of June 30,

2006.

3. Calculated on a trailing 12-month basis using reported net income over average total shareholders’ equity (including discontinued operations).

4. Pro forma ROE, is determined on a trailing 12-month basis using income from continuing operations (which excludes discontinued operations) over

average month-end shareholders’ equity for the period from 9/30/05 through 12/31/05 for 2005 and from 9/30/05 through 6/30/06 for YTD, 2006.

Source: 2003-2004 2004 Revenue and EPS growth for AXP continuing operations based on data reported in Company’s 8-K 8 K reports dated 10/6/2005

and 4/5/06.

6


AXP Revenue

• AXP has globally diverse sources of revenue across four business segments.

AXP Revenue by Business (1) AXP Revenue by Geography (1)

Global

Network &

Merchant

Services

12%

Corporate &

Other

2%

All Other

11%

Asia/Pacific

10%

International

Card & Global

Commercial

Services

37%

U.S. Card

Services

49%

Europe

14%

United

States

65%

1. Full Year ended December 2005.

7


Returns: AXP ROE 1995 – YTD’06

40%

35%

30%

25%

20%

15%

23%

22% 21%

22% 23% 25% 26% 11%

26%

28%

29%

31%

32%

22%

30%

31%

33%

31%

33%

30%

25%

20% 21% 22%

10%

5%

0%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005*

YTD'06 *

Historical AXP

Historical TRS

Pro Forma AXP*

ROE is calculated on a trailing 12-month basis using reported net income over average total shareholders’ equity (including discontinued operations).

*Pro forma ROE, is determined on a trailing 12-month basis using income from continuing operations (which excludes discontinued operations) over average month-end

shareholders’ equity for the period from 9/30/05 through 12/31/05 5 for 2005 and from 9/30/05 through 6/30/06 for YTD, 2006.

8


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

9


Metric Trends

FY 2003

FY 2004

FY 2005

YTD 2006

Billed Business* 13%

18%

16%

16%

Cards In Force 6% 8% 9% 11%

Avg. Basic Cardmember

Spending**

Mgd. Cardmember

Loans***

9% 13% 10% 8%

14% 8% 15% 16%

Credit Performance

Travel Sales 3% 25% 4% 5%

Travelers Cheque

and Prepaid Sales (13%) 4% (1%) 2%

Pvt. Bank Holdings 16% 15%

10% 7%

*Activities related to proprietary cards, including cash advances s and certain insurance fees, and cards issued under network partnership agreements.

**Computed from proprietary card activities only.

***On a GAAP basis, loan growth was 14% in 2003, 10% in 2004, 23% % in 2005 and 29% YTD as of June 30, 2006.

10


Worldwide Billed Business

YTD, June 30

16% 16%

16%

11%

10% 9%

9%

8%

6%

AXP

COF*

Citi

JPM

Discover

2006 vs. 2005 2005 vs. 2004

*U.S. Card portfolio only. Not reported prior to Q4, 2004.

Source: Company reports.

11


AXP Average Spend vs. Visa/MasterCard

(U.S., $ in 000s)

$14.0

$12.0

$11.7

$10.0

$8.0

$6.0

$4.0

$2.0

$0.0

AXP*

VISA

$3.0

$2.1

MC

1999 2000 2001 2002 2003 2004 2005

AXP gap

vs. Visa/

MC:

4-5x

*Proprietary cards only.

Source: Company data, and The Nilson Report.

12


AXP Share of U.S. Purchase Volume *

General Purchase Charge and Credit

19.90%

20.60%

19.90%

19.50%

20.30%

21.20% 22.30%

1999 2000 2001 2002 2003 2004 2005

* Purchase volume excludes cash advances.

Source: The Nilson Report.

13


Worldwide Total Cards-In-Force

1999 – YTD 2006 CAGR : 8%

75

60

(in millions)

45

30

15

0

1999 2000 2001 2002 2003 2004 2005 YTD'06

US Outside US

14


2005 Spend Velocity

• AXP’s business model focuses on driving cardmember spending, unlike most of

our competitors, whose models are primarily based on lending.

• This is an important distinction as our model generally produces higher returns

and is less capital intensive.

6.0x

AXP Citi JPM MBNA Discover COF*

Note: Spend velocity is defined as annual billed business divided d by average managed receivables. AXP spend velocity determined using average

GAAP (i.e., owned) receivables was 8.1x for 2005.

*Capital One Finance: U.S. Cards portfolio only.

Source: Company data and public filings.

15


Average Discount Rate

3.50%

3.35%

3.20%

3.05%

2.90%

2.75%

2.60%

2.45%

2.30%

2.15%

2.00%

3.22%

2.57%

1990 1992 1994 1996 1998 2000 2002 2004 Q2'06

See Note in Appendix for computation methodology.

16


Worldwide Managed Loans

Q2’06 vs. Q2’05

16%

6%

5% 5%

4%

1%

AXP* Citi BAC

(w/MBNA)

COF** Discover JPM

* On a GAAP basis, loans increased 29%.

**Capital One Finance: U.S. Card portfolio only.

Source: Company reports.

17


Managed Cardmember Loans

12/31/05

Other

Lending 6%

Costco

10%

Other

Co Brand 4%

Blue

Family

27%

Optima

Products 14%

Total =

$46B

Delta

16%

Lending

on Charge

23%

On a GAAP basis, total loans were $24.8B, which were comprised of: o

Proprietary Lending (Blue Family, Optima Products, Other Lending) = 53%;

Co Brand (Costco, Delta, Other Co Brand) = 27%; and Lending on Charge C

= 20%.

18


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

19


Risk Management

• Credit loss and delinquency trends have been extremely well controlled.

• Reserve coverage ratios and past due coverage remain strong.

Card Credit Quality

(US$ billions, unless stated)

2Q05 3Q05 4Q05 1Q06 2Q06 2003 2004 2005

Worldwide Charge Card

Receivables (managed)

Total Receivables $ 31.5 $ 31.9 $ 34.2 $ 33.2 $ 34.7 $ 28.4 $ 31.1 $ 34.2

90 Days past due as a % of total 1.7% 1.7% 1.6% 1.8% 1.8% 1.9% 1.8% 1.6%

Loss Reserves $ 0.8 $ 0.9 $ 0.9 $ 1.0 $ 0.9 $ 0.9 $ 0.8 $ 0.9

% of Receivables 2.7% 2.9% 2.8% 2.9% 2.7% 3.2% 2.6% 2.8%

% 90 Days past due 160% 173% 177% 163% 150% 171% 146% 177%

Net Loss Ratio 0.24% 0.27% 0.26% 0.19% 0.24% 0.28% 0.26% 0.26%

Worldwide Lending (managed):

Total Loans $ 48.8 $ 50.6 $ 54.3 $ 53.5 $ 56.5 $ 45.3 $ 47.2 $ 54.3

30 Days past due as a % of total 2.3% 2.4% 2.4% 2.5% 2.5% 2.7% 2.4% 2.4%

Loss Reserves $ 1.4 $ 1.4 $ 1.5 $ 1.6 $ 1.5 $ 1.5 $ 1.5 $ 1.5

% of Loans 2.8% 2.8% 2.7% 2.9% 2.7% 3.4% 3.1% 2.7%

% of 30 Days past due 121% 114% 114% 116% 110% 127% 129% 114%

Net Write off Rate 4.10% 4.00% 4.60% 3.00% 3.40% 5.20% 4.30% 4.20%

20


Relative Credit Quality

7.0%

6.5%

6.0%

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06

Coincidental

Write-Off Rates

30+ days Past

Due Rates

AXP: W/Off Rate 1 AXP: 30+Days Past Due 2

Industry: W/Off Rate

Industry: 30+Days Past Due

Note: Industry average calculations include COF (U.S.), MWD, BAC/MBNA, B

JPM and C (U.S.). Both metrics are calculated off of managedm

anaged-basis

Cardmember loans.

1 On a GAAP basis, the write-off rate on owned loans was 4.2% in 1Q’04, 4.1% in 2Q’04, 3.9% in 3Q’04 and 4Q’04, 4.1% in 1Q’05 and 2Q’05, 4.0% in

3Q’05, 4.2% in 4Q’05, 3.3% in 1Q’06, and 3.8% in 2Q’06.

2 The 30+ days past due rate on owned loans was 2.8% in 1Q’04, 2.5% in 2Q’04 and 3Q’04, 2.4% in 4Q’04, 2.6% in 1Q’05, 2.4% in 2Q’05, 2.5% in

3Q’05 and 4Q’05, 2.6% in 1Q’06, and 2.7% in 2Q’06.

Source: Company reports.

21


Credit Performance – U.S. Industry Trends

Loan Trust Data (as of 6/06)

Loss Rates

Past Due Rates

8%

Change in Bankruptcy

Legislation, 10/05

8%

6%

6%

4%

4%

2%

2%

0%

2001 2002 2003 2004 2005 2006

0%

2001 2002 2003 2004 2005 2006

Industry Securitization trust data

AXP Credit Account Master Trust*

*On a GAAP basis, AXP U.S. loss rates were 5.9% in 2002, 4.9% in 2003, 4.0% in 2004, 4.1% in 2005, 3.3% in Q1’06, and 4.1% in Q2’06 respectively. Past

due rates on a GAAP basis for AXP were 3.3% in 2002, 2.6% in 2003, 2.4% in 2004, 2.5% in 2005, 2.6% in Q1’06, and 2.4% in Q2’06 respectively.

Source: AXP – American Express Credit Account Master Trust filings; Industry - S&P Credit Card Quality Index

22


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

23


Forecasted U.S. Consumer Spend Growth

2004: $6.4T Market: +5%

2009: $8.2T

8%

38%

Plastic: +10%

14%

38%

48%

54%

Plastic

Cash & Checks

Electronic

Source: The Nilson Report.

24


Plastic Opportunity by Segment

• There is significant opportunity to increase plastic usage in all of AXP’s

business segments.

% of Plastic Penetration

U.S. Consumer

International Consumer

U.S. Small Business

Global Middle Market

< 40%

< 25%

< 15%

< 10%

Source: 2004/2005 internal data and The Nilson Report.

25


AXP U.S. GNS Partners

YTD 2006 Visa/MasterCard Credit Card Volume

Remaining V/MC

Charge Volume

Citi

UBS Juniper

GE

USAA

HSBC

Bank of America

Source: CardData. Excludes debit volumes.

26


Premium Value Proposition

U.S., Consumer and Small Business Cardmembers

1/1/03 – 12/31/05

A m e r i c a n E x p r e s s ®

• Partners

• Cards in Force enrolled

• Spend earning MR points*

• Improvement in A/R Days*

*Full Year 2005 vs. Full Year 2002

+50%

+57%

+77%

Consumer: 2.5 days

OPEN: 1.2 days

27


Cardmember Behavior

U.S. Results, 2005 Membership Rewards vs. Non-Rewards

Spend per Card

5 times

Attrition

Better

Delinquency rate

Better

Source: Company estimates. Reflects Consumer and Small Business cards. Excludes cash rebate cards and co-brand products.

28


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

29


Company Overview

Full Year ended December 2005

American Express Company

Revenues:

$24.3B

Income from Continuing Ops: $ 3.2B

Net Income: $ 3.7B

Pro Forma Return on Equity: 31.5%

• Effective September 30, 2005, the company realigned its business into four

segments and successfully spun-off American Express Financial Advisors into

Ameriprise Financial.

• This change made AXP more focused on our strengths – global payments and

network services. This enabled us to sharpen our focus on high-growth, highreturn

businesses and our growth opportunities.

• We achieved record earnings in 2005:

• Income from continuing operations rose 20% to $3.2b,

• Revenues rose 10% to $24.3b,

• Pro forma return on equity from continuing operations (excluding Ameriprise)

was 31%.

30


US Card Services

U.S. Card Services

Revenues:

$11.9B

Inc from Cont Ops: $ 1.8B

Ret on Segment Capital: 39 %(2)

• U.S. Consumer and Small Business Cards

• Consumer Travel Network

• Global Travelers Cheque and Pre-paid Services

Full Year ended December 2005

• U.S. Card Services :

• generates revenue for the Company primarily through discount revenue, net

finance charge revenue and card fees.

• is the largest business segment, earning 49% of total company revenue in 2005

and 57% of income.

• billed business rose 15% on consumer cards and 20% on small-business cards

in 2005.

2. Return on Segment Capital is computed on a trailing 12-month basis using equity capital allocated to segments based upon n specific business operational

needs, risk measures and regulatory capital requirements.

31


Global Network & Merchant Services

Global Network &

Merchant Services

Revenues: $ 2.8B

Inc from Cont Ops: $ 564M

Ret on Segment Capital: 48 %(2)

• Network card partnerships

• Merchant relationships

• Proprietary cards (selected emerging markets)

Full Year ended December 2005

• Global Network & Merchant Services:

• Generates revenues primarily from discount revenue charged to merchants.

• Other revenues include royalties, contributions from joint venture partnerships and fees

charged to merchants and partners.

• 2005 was the first year of operating our network business in the United States, following

court rulings that barred the anticompetitive practices of Visa and Mastercard.

• Spending on cards issued by AXP’s bank partners rose 36% globally in 2005, and

network cards-in-force rose 23%.

• The expansion of bank relationships allows us to leverage our existing network with the

distribution capabilities of our partner banks.

• AXP has signed seven leading U.S. card issuers to issue on the American Express

network, including Bank of America, Citibank, HSBC Bank Nevada and GE Money Bank.

2. Return on Segment Capital is computed on a trailing 12-month basis using equity capital allocated to segments based upon n specific business

operational needs, risk measures and regulatory capital al requirements.

32


International Card &

Global Commercial Services

International Card &

Global Commercial Services

Revenues: $ 9.0B

Inc from Cont Ops: $934M

Ret. On Segment Capital: 24 %(2)

• International Proprietary Consumer Card Business

• Global Commercial Services

− Corporate Card

− Corporate Purchasing Solutions

− Business Travel Services

• American Express Bank Ltd.

Full Year ended December 2005

• International Card & Global Commercial Services:

• Generates revenue from a number of sources including:

• discount revenue from business billed on its proprietary card and corporate,

• payment and expense management products,

• net finance charge revenue,

• net interest income from its international banking operations,

• various revenues and fees from corporate travel management services and other

products.

• Earned 37% of the Company’s revenue in 2005, and 29% of income, making it the second

largest business segment.

• Consumer and small-business spending rose 13%, excluding the impact of foreign

exchange translation.

2. Return on Segment Capital is computed on a trailing 12-month basis using equity capital allocated to segments based upon n specific business

operational needs, risk measures and regulatory capital al requirements.

33


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

34


Australian Business Overview

Card Business Travel Business Foreign Exchange

Services

• Proprietary Card Issuer • Business Travel

• Retail and

• Merchant Acquirer • Travelers Cheques

Wholesale foreign

• Network card

• Retail Travel via a

exchange services

Partnerships

Partnership

Correspondent Banking

(representative office)

• International

Payments and trade

transactions to

Australian Banks

• Australia is a high-spend market with favourable economic trends.

• The business leverages our global brand platform to deliver premium economics and

leading market positions across all affluent customer and consumer segments.

• Established in 1954 and now with 3000 staff, American Express operates four distinct

business in Australia.

• Recent significant developments include:

• Strategic alliances with Qantas on consumer and commercial payment products,

• Launch of network products with Westpac and NAB,

• Introduction of personal loans to consumer base,

• Marketing alliance with Telstra,

• Expanded retail travel footprint to 650 Travel representative offices, through alliance

with TravelScene.

• Card Market share: 16%* (*Approx based on RBA Bulletin figures for all credit and charge

card spend).

35


Agenda

• Overview of American Express Co. (“AXP”)

– Business Metrics

– Credit Performance

– Opportunities

• Business Segments

• Australian Business

• American Express Credit Corp (“Credco”)

• Appendix

36


Credco Corporate Structure

ISSUER

American Express

Co. (AXP) (A1,A+)

Travel Related

Services (TRS)

(Aa3, A+)

American Express

Credit Corporation

(Credco) (Aa3,A+)

• Credco (Aa3/A+) is a wholly owned subsidiary of

Travel Related Services (“TRS”) and is the captive

financing subsidiary of AXP.

• Primary business is financing most non-interest

interest-

bearing charge cardmember receivables arising

from card usage through card purchase at a

discount.

• Total cardmember receivables were approx $26

billion as at June 30, 2006.

– Finances receivables through:

• Direct issuance of commercial paper,

• Sale of medium and long term notes,

• Bank lines.

– The bank lines require Credco to maintain

earnings available for fixed charges of at least

1.25 times

• Credco’s securities are widely recognized and held

by global investors.

37


Credco Key Financial Metrics

American Express Credit Corp - Key Financial Metrics

(US$ millions, unless stated)

As of June 30 As of June 30

2006

2005

Volume of Cardmember Charges Purchased $ 138,675 $ 123,265

Total Cardmember Receivables $ 25,825 $ 22,799

Revenues $ 1,333 $ 1,070

Net Income $ 293 $ 199

Ratio of Earnings to Fixed Charges 1.46 x 1.46 x

Credit Lines as % of Short Term Debt 198 % 131 %

90 days past due as a % of Total Cardmember

Receivables 2.0 % 1.9 %

Write-offs, Net of Recoveries $ 5 $ 12

38


Capital Structure

Credco Capitalization (US$39B) (1)

Shareholders

Equity 9%

Commercial

Paper 19%

Bank Credit

Facilities 8%

Medium

and Short

Term Debt

44%

1. As at June 30, 2006

Short Term

Debt with

Affiliates 20%

39


Liquidity Management

• Philosophy of maintaining solid equity capital base, stable debt rating and

uninterrupted funding diversification.

• Diversified funding sources available.

• The objective of the contingent liquidity plan is to ensure daily funding

obligations to maintain normal business operations for at least a 12-month

period.

• Contingent liquidity resources are available:

– Allows for contingent funding through difficult economic, financial market

and business conditions,

– CP backup liquidity,

– $3 billion of U.S. treasury notes held under program as at June 30, 2006.

• Committed bank credit facilities totaling $12 billion as at June 30, 2006.

40


Credco Funding Strategy

• Credco has a balanced funding and liquidity strategy.

• This has been strengthened by:

– Lengthened average maturities,

– Establishment of a $3B liquidity portfolio,

– Continuous access to capital markets,

– Enhanced contingent liquidity sources.

Funding Sources as at 06/30/06

Amount

Commercial Paper $ 7.1B

Medium & Long Term Notes

$19.7B

Bank Credit Facilities $ 3.0B

41


Credco A$ Financing Objectives

• The Australian business is currently financed primarily through an A$4 billion

bank credit facility.

• The financing objectives of American Express Credit Corp (“Credco”) (Aa3,A+)

is to expand the funding base by accessing the A$ and NZ$ MTN markets.

• This will achieve:

– Diversification of funding,

– Increased liquidity and flexibility,

– Efficient cost of funds.

• Credco is currently completing documentation for an A$ and NZ$ debt

programme.

42


Thank you

'

43


Appendix - Credco Income Statements

• Credco’s earnings are stable reflecting target fixed charge coverage

ratio of 1.25x.

American Express Credit Corp.

(US$ millions, unless stated) 6 Months ended 12 Months ended

June 30,

June,30

December 31, December 31,

2006

2005

2005 2004

Revenues

Discount revenue earned from purchased $ 968 $ 781 $ 1,680 $ 1,266

cardmember receivables and loans

Finance charge revenue 24 36 69 339

Interest income from investments 97 65 125 104

Interest income from affiliates 240 186 396 119

Other 4 2 6 4

Total revenues 1,333 1,070 2,276 1,832

Expenses

Provision for losses, net of recoveries 215 284 662 628

Interest expense 602 458 943 758

Interest expense to affiliates 147 75 198 105

Other 26 10 8 32

Total expenses 990 827 1,811 1,523

Pretax income 343 243 465 309

Income tax provision 50 44 50 75

Net income 293 199 415 234

Dividends (100) (200) (125)

Retained earnings at beginning of period 3,080 2,865 2,865 2,756

Retained earnings at end of period $ 3,273 $ 3,064 $ 3,080 $ 2,865

44


Appendix - Credco Key Statistics

• Key financial metrics are strong.

American Express Credit Corp - Key Statistics

(US$ millions, unless stated)

As of June 30 As of December 31 As of June 30

2006 2005

2005

Consolidated

Ratio to Total Debt to Equity - Net of Cash Equivalents 9.54 x 9.74 x 9.42 x

Ratio to Total Debt to Equity 9.95 x 10.06 x 9.89 x

Volume of Cardmember Charges - Purchased (US$ millions) $ 138,675 $ 259,945 $ 123,265

Ratio of Earnings to Fixed Charges 1.46 x 1.41 x 1.46 x

Credit Lines as % of Short Term Debt 198 % 134 % 131 %

Cardmember Receivables

Total cardmember receivables $ 25,825 $ 24,421 $ 22,799

90 days past due as a % of total 2.0% 1.7% 1.9 %

Loss reserves $ 665 $ 671 $ 651

as a % of receivables 2.6 % 2.7 % 2.8 %

as a % of 90 days past due 125 % 159 % 149 %

Write-offs, net of recoveries $ 224 $ 320 $ 258

Net write-off rate 0.16 % 0.22 % 0.21 %

Average life of cardmember receivables (in days) 32 32 33

Lending Receivables

Total cardmember loans $ 321 $ 569 $ 570

Past due cardmember loans as a % of total:

30-89 days 6.2 % 4.9 % 5.4 %

90+ days 2.1 % 1.4 % 1.8 %

Loss reserves $ 9 $ 15 $ 25

as a % of cardmember loans 3.0 % 2.6 4.3 %

as a % of past due 37 % 41 % 59 %

Write-offs, net of recoveries $ 5 $ 21 $ 12

Net write-off rate 2.11 % 3.57 % 4.15 %

45


Appendix - Note

• Discount rate is computed as follows:

• Discount Revenue from all card spending (proprietary and Global Network

Services) at merchants divided by all billed business (proprietary and

Global Network Services) generating discount revenue at such merchants.

• Only merchants acquired by the Company are included in the

computation.

• Discount rates have been restated on a historical basis from those

previously disclosed, primarily to retain in the computation the Global

Network Services partner portion of discount revenue, as well as the

Company's portion of discount revenue.

• Discount rate reported for 1990-2003 is based on proprietary card

business only.

• The 2004 and 2005 discount rates reflect certain reclassifications as

presented in the Company’s 8-K report dated April 5, 2006.

46

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