FINANCIAL COMMUNITY MEETING

Al Kelly - Talking Points

August 6, 2008

Slide 1 - American Express US Card Services

Good Afternoon.

Today I am deviating from our normal approach of giving a comprehensive overview of a business.
Clearly one of the big questions on your minds is: Why is American Express -- with the best customer
base in the industry -- showing the drop off in spending and credit indicators that you saw in our second
quarter results.

My aim today is to address this question head on by focusing on the current environment in the United
States and how it has impacted our card business.

Slide 2 – Agenda: Headlines

I will share headlines of what we’ve seen in this downturn.

I’ll also share data in a number of ways to give you a closer look into why this downturn differs markedly
from the ones that came before.

Then, I’ll give you some insights into how we have responded to this environment, including new analytics
we’ve developed to isolate the problem areas and to continue to surgically drive healthy growth.

And I will close with a look going forward and how we are leveraging our knowledge to weather this
downturn, target our investment dollars, and come through the other end in a stronger position than our
competitors.

Slide 3 – Blue Box

But first, let me start with some context. Historically, the affluent segment holds up quite well even in a
weak economy and certainly better than the population as a whole. That is still true.

But this downturn is different. In fact, by most measures, this is less a downturn and more a collapse of
the housing sector, with some areas seeing home prices falling faster, and more than at any time since the
1930s.

The drop in home prices has led to an unprecedented loss of asset value for consumers. This, combined
with high oil prices, has eroded consumer confidence and curtailed discretionary spending – even among
the most affluent segment in the U.S. – our target cardmember base.

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When you isolate cardmember mortgage exposure, and overlay it with parts of the country with the biggest
drop in home prices – namely California and Florida -- you see trends among affluent consumers that are
equal to – or greater than – our experience with the rest of the portfolio.

Slide 4 – Headlines

With that as a backdrop, let’s start with the headlines:

• Since December, we have seen an increasing slow down in spending growth, with June 2008
establishing a low point. The trend has been very broad-based, driven by the shaky economy, and
is worse in areas impacted by housing price declines. Nevertheless, we are still growing spending
and growing faster than the competition.

• Our credit metrics began to deteriorate in the second half of 2007. They have continued to
worsen through the first half of 2008 with June metrics a good deal worse than May. We thought
the second quarter would establish a high watermark for write-offs and delinquencies, but that no
longer appears to be the case.

We have continued to enhance our credit models with what we have learned from this situation,
just as we have in the past. And, we have made some tactical adjustments to help us come through
the current period and, very importantly, enhance our business model into the future.

• Our industry-leading growth in accounts receivable has resulted from our spend-centric strategy,
not from a change in our target customer, portfolio mix or any other measurable departure from
past practices.

• Our growth rate over the past three to four years has been positive on a number of dimensions
and we believe the cardmember relationships we have built over this period will produce attractive
economics over the long term. That said, it obviously comes against the current backdrop of an
economic storm, and we are being impacted.

• Today’s economic situation is lousy and we remain cautious about the outlook. Nonetheless, we
are committed to growing our core segments in a very targeted manner in both the United States
and in International to position us well coming out of this period.

Slide 5 – Agenda: Spending Performance

So let’s get into the data with a look at spending performance. Unless otherwise noted, all data is U.S.
Card Services, which includes both our Consumer and Small Business portfolios. All lending metrics are
shown on a managed basis.

Slide 6 – 2007 US Card Services Spending Diversification (By Region)

This is a slide Ken showed in February highlighting our U.S. Card spending geographically. We looked at
figures to update the slide, and they haven’t changed.

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In the next few slides, I’ll show you that our cardmembers are concentrated predominantly in the states
with the most overall spending capacity as measured by total GDP per state. This is consistent with our
spend-centric strategy.

Slide 7 – 2007 US Card Services Spending Diversification (By Region and Spending)
Here the map highlights the top 15 states in terms of GDP for full-year 2007.

Slide 8 – 2007 US Card Services Spending Diversification (By Region, Spending and State)
And here you see our top 15 states in terms of 2007 charge volume, again skewed toward the states with
the most spending. As you can see, we have an overlap in 14 of the 15 states. If we analyze the states with
the most millionaires and compare them to our top states in terms of charge volume, we again see an
overlap in 14 of 15 states.

Slide 9 – 2007 US Card Services Spending Diversification (By Region and Home Price Declines)
Likewise, if you look at the areas of the country where housing prices have declined by five to 20 percent
or more from their peak, you see that our base is skewed toward these geographies, with an overlap in 12
of our top 15 states.

It is not surprising that affluence drove up housing prices. Or that it drove new inventory in anticipation
of future demand. But now, as the economy tightens, households are not looking to move and upgrade,
so inventory is exceeding demand and prices are falling.

Slide 10 – US Card Services Spending by Segment

Now let me share some specifics that illustrate the broad-based decline in spending growth by segment,
industry, product and geography.

First, if you look by segment, this chart shows the following:

• In Consumer Card, the slow down in spending growth that we showed from November to
December 2007 has continued through the first half of 2008. The numbers look a bit choppy
because of the extra day in February this year and the fact that Easter fell in March versus April
last year.

• In Small Business, we also saw a drop off in spending growth between November and December
2007. From January through June, charge volume growth again was a little choppy, but up a
relatively healthy 10+ percent in most months. However, it dropped below six percent in June.

Slide 11 – US Card Services Spending by Select Industry Groupings

Now let’s look at spending by industry, where the story is quite similar. In this slide you see slowed
growth in all categories over the first half of 2008, with the exception of oil, where consumers have shifted
from cash to plastic given the higher price at the pump.

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Slide 12 – Blue Box
In terms of spending by product, we again are seeing softness across the portfolio. Growth has slowed
significantly from full year 2007 rates for virtually every product, and performance in June was a low point
for many of our products.

Slide 13 – US Card Services Spending by Product (Consumer Spending Growth)

In this chart, you see a few of our consumer products, with the 2007 full-year growth rate indexed to one.
Subsequent bars show the first quarter 2008, the second quarter 2008, and the month of June growth rates
over the prior year. You can clearly see the major shifts down in 2008, with even our highest-end products
experiencing a pronounced drop in growth rates. This further illustrates that the economic downturn is
not a sub-prime phenomena.

Slide 14 – US Card Services Spending by Product (Small Business Spending Growth)

In terms of Small Business, the story is similar. This chart, in the same format, shows the data for several
leading Small Business products. And, again, we are seeing significant slow downs in most of the portfolio,
including in our premium products. Only cobrand spending increased during the last two quarters, but did
show a slower trend in June.

Slide 15 – US Consumer Discretionary vs. Non-Discretionary Spending

Returning now to the Consumer segment, let’s take a look at discretionary versus non-discretionary
spending based on tracking the largest categories of spending within each. This is where you really begin
to see how premium cardmembers are feeling the negative wealth effect.

This slide clearly shows a significant separation in growth. Our non-discretionary spending, which is an
aggregate of oil, supermarket and warehouse spending, is holding up quite well. In fact, our June year-to-
date growth is only 230 basis points below full-year 2007 levels. The rate of growth in June 2008 is almost
the same as last year. And it is clearly benefiting from the increase in the price at the pump.

Discretionary growth, however, has taken a big hit. Our June year-to-date discretionary spending growth
is down significantly from a year ago. Cardmembers are clearly less prone to travel and make purchases
they don’t necessarily need right now.

While the travel category is a much smaller percentage of our spending mix, as everyday spending has
grown significantly over recent years, it tends to have the highest average transaction sizes and gives us
insight into the economy overall.

In June, we had nearly 120,000 fewer consumer airline transactions than in June 2007, and 200,000 fewer
lodging transactions than a year ago.

Slide 16 – US Consumer Discretionary Spending: Department Stores

Let’s look more closely at a few discretionary Consumer industry categories by wallet size. In this chart for
department stores, we have indexed the growth rate from June 2006 to June 2007 for wallets less than
$20,000 at one.
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As a reminder, “size of wallet” describes a customer’s total spending on general purpose plastic overall.

Now let’s build the slide, adding wallets from $20,000 to $30,000 for the same timeframe.

Then wallets from $30,000 to $80,000.

Wallets from $80,000 to $200,000.

And finally wallets over $200,000.

Now let’s look at the growth rates from June 2007 to June 2008. First, for wallets less than $20,000.

Then look at $20,000 to $30,000 wallets.

$30,000 to $80,000 wallets.

Wallets from $80,000 to $200,000.

And finally the largest wallets of over $200,000.

You clearly see a major drop off in every wallet size, with only wallets of more than $200,000 posting
positive growth in June 2008. The drop off is greatest in the smallest wallets.

Slide 17 – US Consumer Discretionary Spending: Restaurants

Here is a look at restaurants, where there is a drop off for all wallet sizes, although wallets of $30,000 and
above still had positive growth.

We saw a similar trend in many other discretionary industry categories.

Slide 18 – US Consumer Discretionary Spending: Home Improvement

Now let me show you home improvement, where all wallets are down in 2008.

Slide 19 – US Consumer Discretionary Spending: Home Improvement (With Home Price

Decline)
This chart now shows home improvement spending from another perspective. You see spending in
geographies with home price declines of greater than 20 percent, versus geographies where home prices
haven’t declined. As you probably guessed, spending growth has declined more in areas where home
prices are falling.

You can see the dramatic impact that housing prices have had on spending in this category – even among
our most premium cardmembers.

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Slide 20 – US Card Services Spending for Top 5 States
Now, let’s look at spending by geography. At this point, you will not be surprised to see that again the
slowdown is happening across the board.

This chart shows the top five states for U.S. Card Services in terms of charge volume. Similar to earlier
slides that we showed for some of our products, the first bar is full-year 2007 year-over-year spend growth
indexed to one. The second bar is first quarter 2008. The third bar is second quarter 2008 and the last bar
is June 2008 spend growth over June of 2007.

Again, the trend is clear. Spending has softened significantly in this relatively short time period. In fact,
for 49 of 50 states, spending growth in the first half of 2008 was below the spending growth rate for full-
year 2007, with Florida actually moving to negative growth in June.

Slide 21 – Agenda: Credit Performance

Now let’s turn to credit and before we take a deeper dive, let me offer some context.

Slide 22 – Blue Box

As I said before, affluent customers tend to hold up well in a weak economy, and better than the
population as a whole. But as you’ll see in some of the data I’ll share, they are not immune from the
effects of a housing collapse – particularly when they are carrying the costs of large mortgages and
expensive homes.

The picture today is pretty similar to what we showed you in February: a relatively high correlation
between housing price declines and credit deterioration.

Unfortunately, since February more of the country is experiencing sharp downturns in housing.
Additionally, unemployment and oil prices have risen, consumer confidence has declined and the personal
savings rate is near an all time low.

The rich capabilities of our risk models, which I believe are the most sophisticated in the industry, help us
dissect the trends.

We began to tighten credit in mid-2007, ahead of the economic downturn. Based on our experience with
prior downturns, we expected these steps to do a better job of cushioning the impact. But the current
environment is less about the weak economy alone, and more about the weak economy led by a decline in
the housing sector.

Slide 23 – US Card Services Credit Response: Examples of 2007 Credit Actions

Here’s a quick summary of what we have done:
• In the summer of 2007:

o We integrated housing information into our decisions.

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 o We adjusted our risk models for Small Businesses in the mortgage industry.

o We changed our rules to restrict the number of line increases a cardmember could receive
in a given period of time.

o And, we continued to cancel inactive, low-FICO accounts.

• In the fall of 2007:

o We reduced lines for cardmembers who we could determine had a subprime mortgage.
And,

o We curtailed cross-sell activity for customers who we assessed as having mortgage risk in
certain geographies.

Our credit actions have intensified throughout the first half of 2008, and I’ll talk more about this in a few
moments.

With that in mind, let me specifically address our performance versus competitors, provide more insight to
the further deterioration that we saw in June and review credit performance by geography.

Slide 24 – US Card Services Lending Managed 30 Day Past Due Rate

This chart shows the 30 day past due rate for the last nine quarters. It highlights that we have continued to
perform better than our major competitors that report this statistic, although the gap has now narrowed. 1

Slide 25 – US Card Services Lending Managed Net Write-Off Rate

This slide shows our write-off rates excluding interest and fees compared to our major competitors. This
format is consistent with industry methodology. Here again, you see that our write-off rates remain lower
than the average for our major competitors, but the gap has narrowed. 1

Slide 26 – US Card Services Lending Managed Net Write-Off Rate (Versus Competition)
Here you see that our rate jumped 100 basis points from the first quarter of this year to the second quarter.
All of the major issuers went up, but ours was among the highest increases in the industry.1

Our internal analysis estimates that roughly two-thirds of our jump is a result of the economy and, more
specifically, the sharp drop in the housing sector.

Looking at it another way, the average increase in the write-off rate for our top five competitors on the
slide -- who were not able to grow their businesses very much in recent years -- was 68 basis points, or
two-thirds of the increase we experienced.

So, what drove the increase in write-off rates for American Express, beyond the effect of the economy?

1 See Annex 1 for information on an owned basis.

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Three things.

-- First is our higher-than-industry growth in the last three years, driven by the levels of new cards acquired
and line increases to drive spending. In any environment, newer vintages have higher write off rates. In
times like these, those write offs are higher still.

By contrast, most of the issuers on this chart have not generated much growth in their portfolios for some
time. Therefore, they only have a minor impact from the newer vintages.

-- Second is our higher proportion of Small Business accounts than our competitors. This business has
been growing at a strong rate in recent years and has grown at a higher level than the Consumer segment.

The Small Business portfolio typically has a higher write-off rate in all economic cycles than Consumer
accounts. Average spending is significantly higher on Small Business accounts; therefore, our economic
model can allow for higher write offs in this portfolio while still generating attractive economics.

-- And a third factor is our geographic mix, which is somewhat more skewed toward Florida and California
than the other major issuers. Again, as you saw earlier, these are the two states most negatively impacted
by housing price declines. Using industry trust data, we can see that we have between five and 11
percentage points higher concentration in these two states than our major competitors.

So these three factors in the period drove higher write offs rates. At the same time, they have been very
positive contributors to profitable growth in the past, and we believe will be positive contributors to
profitable growth in the future as well.

With that as a backdrop, let’s turn to more recent performance, looking at the deterioration we saw in June.

Slide 27 – US Card Services Lending Managed Current to 30 Days Past Billed Rate by FICO
An account falling 30 days past billed is, as you know, an early indicator of problems to come. In the next
three slides, we have indexed the rate of change in this indicator to the highest curve on each slide.

Here, you see that from March to May, the current to 30 day past billed rate was actually improving. That
changed quickly in June, when we saw an uptick in cardmembers going past billed across all FICO bands.

Slide 28 – US Card Services Lending Managed Current to 30 Days Past Billed Rate by Tenure
If you look at the past billed rate broken out by the tenure of the accounts, you see a pronounced uptick in
June that is spread across all vintages – indicating that the stress in the portfolio is not isolated to those
newer accounts brought on in the last several years.

Slide 29 – US Card Services Lending Managed Current to 30 Days Past Billed Rate by Mortgage
Type
A good way to see what is driving the trend is to look at this same past billed data broken down by the
type of mortgage held by our cardmembers. Here, you see an increase in June overall, with the largest
increase for cardmembers with a superprime mortgage, which we define as mortgages of cardmembers

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with FICOs of 750+ at the time of origination.

This is not the correlation you would expect – or the pattern that we have seen historically. Typically, the
weakness is more pronounced among the subprime and prime tiers.

We see this as a further illustration of a point I made earlier: that while affluent consumers tend to
weather an economic downturn better than the population as a whole, they are not immune from the
damage that is being done by the collapse of the housing market.

Slide 30 – US Card Services Lending Managed 30 Day Past Due Rate by Change in Home Price
Now let’s look at our 30 day past due rates against the change in home prices within specific markets. You
can see a clear line of demarcation.

Areas where housing prices declined less than 10 percent show virtually no change. In areas where home
prices dropped more than 10 percent, the delinquency rates rose two to three times higher than the total
portfolio.

Slide 31 – US Card Services Lending Managed 30 Day Past Due Rate by Outstanding Mortgage
Balance
I said earlier that the affluent sector is not weathering the housing market the way they typically handle an
economic downturn. More specifically, that’s the case for people who are carrying large mortgages.

In June, cardmembers with an outstanding mortgage above $500,000 had the highest 30 day past due rate,
representing growth double that of the overall portfolio year-over-year.

Slide 32 – US Card Services Lending Managed 30 Day Past Due Rate by Unemployment Rate
Finally, when we look at a correlation between unemployment and 30 day past due rates, we see that areas
with unemployment rates greater than six percent, such as Sacramento and Detroit, have a much higher
past due rate. Not surprisingly, these areas track closely with the states that are experiencing the biggest
drops in home prices.

As you know, the level of unemployment historically has been pretty tightly correlated with credit quality
and we would expect that to hold in the future. So if unemployment were to rise above the current 5.7
percent rate, we would expect credit to be impacted for the industry, and for American Express.

Slide 33 – Blue Box

I’ve shared a lot of data, and these are just a few of the indicators we track. We also use the correlations of
these and various other data points to enhance our models further.

Slide 34 – US Card Services Credit Actions: Select Data Capabilities

In doing so, we utilize a database that enables us to cut credit and spending data back to 2001 by any
number of variables, including:

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 • Cardmember tenure
• Product
• Geography
• Mortgage type
• Unemployment level
• FICO score
• Internal credit score
• Share of wallet size
• Pay-down rate, and
• Spending level, just to name a few.

And we can analyze this data for any period of time. In this way, we continually test and learn to
determine what combination of data will enable us to discriminate even more precisely in our credit
decisions – from underwriting to collections.

In all, we have made hundreds of changes to models we use to run our business to address these credit
challenges, using this and other data. So, for example:

Slide 35 – US Card Services Credit Actions: Examples of our Response

• We have declined card applications from prospects by incorporating mortgage information. And
we’ve used mortgage data to adjust our internal risk scores across the board.

• Similarly, we have changed our risk evaluations using geographic information on where
cardmembers live and what is happening to housing in these markets.

• With Small Business industry information, we have made line assignment changes by looking at
industries that are facing, or might face, incremental stress.

In addition, we have:

• Put in place increased levels of credit monitoring for cardmembers with higher lines.

• Continued to cancel low balance and high risk customers. And,

• Changed our Collections process, including calling cardmembers in earlier stages of delinquency.
We have also increased the range of solutions we offer customers in short term financial difficulty,
such as payment plans that provide flexibility around the interest rate, fees and plan length, based
on our economics.

With that as background on credit, let me now move to the next topic and discuss how we are feeling
about our industry-leading accounts receivable growth over the past few years.

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Slide 36 – Agenda: Spend-Centric Strategy

We’ve generated very good growth in charge volume, accounts receivable and grown share over the last
several years. While we build our strategies around cardmember spending, we know that our customers
want the flexibility to revolve some charges, at least some times, and that we want to accommodate them.

We offer lending products in order to grow overall spending and share. Even within that context, you
may be asking: did A/R grow too fast and is the growth rate profitable? So let me address this question.

Slide 37 – Q2’08 US Card Services Managed Loans Distribution

First, our recent share growth has largely been driven by the performance of the new credit cards we
acquired. As you can see from this chart, our A/R is not concentrated heavily in any one portfolio. It is:
• 28 percent in Blue
• 22 percent in Lending on Charge
• 13 percent Delta
• 14 percent Costco
• 8 percent Other Small Business, and
• 15 percent Other Consumer Credit Cards

These relative percentages haven’t changed much since I presented at this meeting in February 2006.

Slide 38 – US Card Services Credit Card Spending Growth

From first quarter 2004 to fourth quarter 2007, the spending we generated from credit cards -- as opposed
to our traditional charge card products -- increased by just under $61 billion for a three year compounded
annual growth rate of 15.5 percent.

We estimate that between 50 and 60 percent of the volume growth was driven by new cards acquired, with
the balance coming from existing cardmembers -- some driven by spend stimulation strategies in late 2006
and early 2007.

Slide 39 – Blue Box

In terms of new card acquisitions we saw a window to invest in, which we seized. We were in a very strong
competitive position, driven by our existing product set, as well as some new or enhanced cobrand
products and an expanded rewards program with features such as Pay with Points.

These and other offerings represented a real competitive advantage that resonated with many affluent
Consumer and Small Business prospects.

As has always been the case throughout our business model, when we look to acquire a prospect, our
decision is fundamentally based on driving profitability over the moderate and long term versus managing
a particular expense line such as rewards or credit.

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Slide 40 – US Card Services Recent Acquisition Vintages
This chart shows the overall levels of new cards acquired in the four years from 2004 to 2007. It is the
aggregate of credit cards – both proprietary and cobrand – as well as charge cards, each of which plays an
important role in driving spending.

Given time constraints, as I talk about acquisitions, I’ll limit the balance of my points to lending.

Slide 41 – US Card Services Recent Credit Card Acquisition Vintages

Let’s start with our most important metric – spending. This chart shows total first-year spending for new
cards. As you can see, it has grown nicely over time and the average spend per card has remained strong.

In 2007, we reduced somewhat our acquisition investments in U.S. credit cards and focused even more on
Small Business and on the highest end of the Consumer segments. As a result, average spend for cards
acquired in the first half of 2007 increased by more than 13 percent from 2006.

Slide 42 – US Consumer Lending Managed Net Write-off Rates by Acquisition Vintage

This is a slide Dan showed during the second quarter earnings call. It shows net write-off rates by vintage.
You’ll see that, with the exception of the 2001 vintage, credit has deteriorated for our cardmember base
overall, and our 2005 and 2006 vintages have been impacted most.

Why? Two major reasons:

First, a good portion of the cards in these vintages are reaching the height of their seasoning curve right as
we hit up against this unprecedented housing decline.

Second, we made some targeted acquisitions that increased credit risk modestly versus prior years but were
within our acceptable range of risk tolerance. I said earlier that our aim is not simply to minimize risk but
to achieve overall levels of profitability.

Two examples were incremental OPEN Small Business acquisitions where margins are higher, as well as
additional cobrand card acquisitions where the average acquisition cost per card was much lower and we
were willing and able to accept a modestly higher level of risk.

So let me be very clear. We did not stray from our primary target of the affluent segment or assume
incremental risk that was outside our historic tolerance range.

Slide 43 – US Card Services Recent Acquisition Vintages: Lending

Net, net, if you look at the FICO scores of the lending vintages for the 2004 – 2007 period, you see that
they remained well within our high target range. And, we believe they will drive attractive economics over
the long term.

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Slide 44 – US Card Services Line Changes
Let me spend a moment on another aspect of risk management: line changes. We continually look at lines
of credit that we offer cardmembers. It is important to give creditworthy cardmembers the capacity to
increase their spending and share of wallet with us. It is equally important to reduce our exposure to
cardmembers whose credit profile has worsened.

In a typical year, less than 20 percent of cardmembers will have their line adjusted. Of those cardmembers
who do receive line changes, our usual ratio is 80 percent line increases to 20 percent line decreases.
Obviously, given the current environment, the mix changed starting in mid-2007. Today the ratio is about
50 to 50.

So as you have seen in this section, our growth in A/R over the past four years was driven by a focus on
our spend centric strategy.

Slide 45 – Agenda: Industry Leading Growth

Now let me take a brief step back and offer some additional thoughts on how we feel about our growth
over the past three to four years given the current environment.

Slide 46 – US Credit Card Issuer Performance

For the three years 2005 to 2007, the U.S. Card Services Segment:

• Increased charge volume by $124 billion; 72 percent higher than JP Morgan Chase, the next closest
competitor shown.

• We increased managed revenue by $4.6 billion; 44 percent better than the closest competitor 2 .
And,

• We increased A/R by $26 billion; 19 percent more than the closest competitor.2

Slide 47 – US Credit Card Issuer Spending

As you can see, in this time period American Express increased its share of issuer spending by almost 240
basis points in the United States.

Slide 48 – US Card Services Performance (Scenario Impact on Spending & Managed Net
Revenue)
We went back and built a hypothetical scenario based on American Express growing U.S. A/R at industry
levels in 2005, 2006 and 2007. In doing so, we made a number of assumptions about fewer line increases
and lower levels of acquisition.

Under this scenario, our cumulative charge volume and managed revenue would have been substantially

2
See Annex 2 for information on an owned basis.

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lower. You can see the change in the dark blue bubbles. Cumulative charge volume would have been $84
billion less; and cumulative managed revenue would have almost been $4 billion less.2

Slide 49 – US Card Services Performance (Scenario Impact on Spending Share)

We estimate we would have ended with share 220 basis points below where we are and, more important,
we would not have expanded our premium portfolio as much as we did.

This premium portfolio with higher wallets is a valuable asset and major advantage for the medium to
longer term.

Slide 50 – Blue Box

Hindsight is always 20/20 and given the extreme way that home prices have fallen in some parts of the
country, we clearly would have done some things differently. Had we known, pulling back from some
otherwise attractive cardmembers with exposure to the housing sector would have been a benefit.

That said, no one in the industry had built into their models the likelihood of a 20, 25, let alone 30 percent
drop in home prices.

Slide 51 – Agenda: Looking Ahead

As I look ahead, I am still very cautious about the economic outlook. We see the situation getting worse at
least through the end of the year.

This view is informed by the forecasts of GDP, inflation, unemployment and housing from the Blue Chip
Panel of leading economists, as well as the trends we are observing in our own business metrics.

We will continue to watch the economy in the United States and in International markets, and, as always,
will adapt our risk models accordingly.

That said, our aim in calibrating the risk models is to make sure that we enable good spending, while
choking off bad spending by cardmembers less likely to meet their obligations.

We are not planning to hunker down. Others might, but we believe that would be a mistake. We will
continue to identify attractive areas for growth in both the United States and International markets – and
they do exist. Among them, by theme, are:

Slide 52 – Attractive Areas of Growth

• New product opportunities, including: the Plum Card in OPEN, our Small Business division; a
new cobrand deal with Cathay Pacific in Hong Kong and Taiwan; and a cobrand deal with David
Jones, the leading Australian department store chain.

In the case of Cathay Pacific, we recently won this business from Citi. We launched cards six
weeks ago and are off to a strong start. In fact, Hong Kong charge volume has been very strong
this year; up 23 percent June year-to-date. Our new cobrand card should further accelerate this

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 growth.

• Program expansions – are another excellent area for investment and growth. We are moving
aggressively to take our full suite of learnings and tools about the Small Business segment in the
U.S. and expand them north into Canada. We are also investing in upgrading some of our
Membership Rewards programs in International markets.

And, we are leveraging what we’ve learned from our proprietary charge cards to drive our cobrand
model with exclusive or premium upgrades. Examples are our new Delta Pay with Miles benefit
and Delta Reserve – a $450 premium card with added benefits.

• New card acquisition – activity will continue to be a very significant area of investment for us and
there are still excellent areas to focus. In the U.S., we have allocated more investment dollars to
attracting high wallet prospects using our charge card product with Membership Rewards, our
cobrand partner customer lists and distribution channels, as well as the Internet.

In International, we have dialed up our new card activity in at least a dozen markets leveraging, for
example, the new BMW cobrand relationship in Germany and Austria, and the relatively new
Kingfisher Airlines partnership in India. And throughout our International markets, we are
increasingly using the Internet as an effective acquisition channel.

• Driving gains in share of wallet -- is another area of focus in the United States and International
markets. In the U.S., we continue to drive spending in recurring payment categories and industries
that are newer to plastic, such as raw materials and inventory.

In selected International markets, we are using special incentives to increase wallet penetration.
For example, in several markets we are establishing a threshold level of spending at the individual
customer level and incenting incremental volume above the threshold.

So we are investing to grow even if near-term prospects for growth in the United States are at lower levels
than the last few years. And I remain very confident in our model, and in our medium-term and longer-
term growth prospects.

Slide 53 – Confidence in Strong Base/Assets

Even in the current environment, I am confident because:

• The month of June was the fourth best month ever in U.S. Card Services in terms of charge
volume and transaction levels.

• Our new cardmembers have higher average spend than new cardmembers acquired historically.
Despite lower growth, our share of wallet is holding steady and in some cases increasing.

• While share numbers are reported on a lagged basis, we grew spending faster than our card issuing
competitors in the first half of the year and, therefore, believe we have continued to gain share.

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 • Our premium cards, with higher average spend, have grown faster than our overall card growth in
the first half of 2008.

• And, we are using our enhanced data capabilities to direct our investments to high-wallet
Consumers and Small Business prospects.

Slide 54 – Confidence in Strong Base/Assets

Additionally I’m confident because we have attractive and clearly differentiated assets in comparison to
our major competitors. These include:

• Our charge card product line -- Today I have focused almost completely on our credit card line-up,
but the majority of our spending is still done on charge cards and this product set is unique to us.
Charge cards represent a key element of our premium brand and remain an important part of our
growth.

• Our diverse lending product line up – Which we talked about in its aggregate today. This includes
dozens of attractive proprietary and cobrand value propositions.

• Our global footprint -- We share this differentiation with Citi and HSBC, but the other major
players are limited to the U.S. and a few International markets.

• Membership Rewards – A truly “one of a kind” program that we continue to enhance.

• Our Small Business segment – We are the largest issuer by a significant margin and continue to
innovate in serving this important segment.

• Our customer base – The most premium base in the market. It provides a wonderful foundation
for future growth. It is largely this customer base that has driven industry-leading spending and
credit performance over the last five years.

• Our servicing network – American Express was ranked highest among credit card issuers in J.D.
Power & Associates 2007 Credit Card Study.

• And our brand, which for 158 years has stood for service, trust and integrity.

Slide 55 – Blue Box

Thank you. I’ll be happy to respond to questions at the end of our session. Now let me turn the program
over to my colleague Ed Gilligan.

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 Annex 1
Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08
Cardmember Lending Owned Basis
Total Loans
USCS 27.6 29.3 33.6 33.0 38.3 40.0 43.3 38.1 37.9
AXP 36.3 38.3 43.3 42.3 48.3 50.5 54.5 49.6 49.7
30 Days Past Due Loans as a % of Total
USCS 2.5% 2.7% 2.7% 2.9% 2.7% 3.1% 3.5% 4.1% 4.1%
AXP 2.7% 2.8% 2.7% 3.0% 2.8% 3.0% 3.4% 3.8% 3.9%
Average Loans
USCS 26.4 28.6 30.9 33.1 35.9 38.6 40.9 39.6 38.0
AXP 35.2 37.5 40.2 42.4 45.6 48.8 51.7 50.8 49.7
Net Write-off Rate
USCS 2.9% 3.1% 3.5% 3.7% 3.7% 3.7% 4.3% 5.5% 7.1%
AXP 3.8% 3.8% 4.0% 4.1% 4.1% 4.1% 4.5% 5.5% 6.7%

Cardmember Lending Managed Basis

Total Loans
USCS 47.8 49.5 53.8 53.9 58.6 61.5 66.0 63.7 64.7
AXP 56.5 58.5 63.5 63.2 68.6 72.0 77.2 75.2 76.6
30 Days Past Due Loans as a % of Total
USCS 2.4% 2.6% 2.6% 2.8% 2.6% 2.9% 3.2% 3.7% 3.7%
AXP 2.5% 2.7% 2.6% 2.8% 2.6% 2.8% 3.2% 3.6% 3.6%
Average Loans
USCS 46.5 48.7 51.1 53.4 56.3 60.0 63.2 64.6 64.2
AXP 55.3 57.6 60.4 62.8 65.9 70.1 74.1 75.8 75.9
Net Write-off Rate
USCS 2.9% 3.0% 3.3% 3.7% 3.7% 3.7% 4.3% 5.3% 6.5%
AXP 3.4% 3.5% 3.7% 4.0% 4.0% 4.0% 4.4% 5.3% 6.3%

Annex 2
Managed basis presentation assumes that there have been no off-balance sheet securitization transactions,
i.e., all securitized cardmember loans and related income effects are reflected as if they were in the
company balance sheets and income statements.

“Managed revenue net of interest expense” reflects “GAAP revenue net of interest expense” adjusted for
certain amounts found in the following line items in the income statement:
• Discount revenue, net card fees and other,
• Cardmember lending finance revenue,
• Securitization income, and
• Cardmember lending interest income.

On a GAAP basis the change in owned revenue from the baseline of 2004 to 2007 was $4.7B, with the
adjustments described above in the aggregate totaling $0.1B.
On a GAAP basis owned revenue for 2005-2007 was $37.8B.

Managed loans include owned and securitized loans. On a GAAP basis, the change in owned loans was
$23.7B.

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