American Express Company (AXP)
Q3 2008 Earnings Call Transcript
October 20, 2008 5:00 p.m. ET

Executives

Ronald Stovall – Senior Vice President, Investor Relations
Kenneth Chenault – Chairman, and Chief Executive Officer
Daniel Henry – Executive Vice President and Chief Financial Officer

Analysts

Robert Napoli – Piper Jaffray & Co.
Christopher Brendler – Stifel Nicolaus & Co.
Craig Maurer – Calyon Securities
Sanjay Sakhrani – Keefe, Bruyette & Woods
David Hochstim – Buckingham Research Group
Kenneth Bruce – Merrill Lynch & Co., Inc.
Bruce Harting – Barclays Capital
Kevin Stera – Sanford C. Bernstein
Scott Valentin - FBR Capital Markets

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. If you should require assistance during the call, please press “*” then “0”. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, the SVP of Investor Relations, Mr. Ron Stovall. Please go ahead.

Ronald Stovall

Okay. Thank you Ernie. I appreciate that and I appreciate all of you for joining us for today’s discussion and certainly want to apologize for the slight delay, we had a couple of issues with our conference provider to the web. It is my job to remind you that the discussion today contains certain forward-looking statements about the company’s future financial performance and business prospects, which are subject to risks and uncertainties and speak only as of today.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “should,” “could,” “likely,” and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements included in the company’s financial and other goals are set forth within today’s earnings press release, which was filed in an 8-K Report and in the company’s 2007 10-K Report already on file with the Securities & Exchange Commission.

In the third quarter 2008 earnings release, supplement and presentation slides which are now posted on our website at www.ir.americanexpress.com and on file with the SEC in an 8-K Report, we have provided information that describes the company’s managed basis and other non-GAAP financial measures and the comparable GAAP financial information and we explain why these presentations are useful to management and to investors. We urge you to review that information in conjunction with today’s discussion.

Ken Chenault, Chairman, and Chief Executive Officer of American Express will provide some brief opening comments, then Dan Henry, Executive Vice President and Chief Financial Officer will review some key points related to the quarter’s earnings through the series of slides included with the earnings documents and provide some brief summary comments.

Once Dan completes his remarks, we will turn to the moderator who will announce your opportunity to get in to the queue for the Q&A period where both Ken and Dan will be available to respond to your questions.

Up until then no one has actually registered their questions. While we will attempt to respond to as many of your questions as possible before we end the call we do have a limited amount of time, based on this we ask that you limit yourself to one question at a time during the Q&A. With that, let me turn the discussion over to Ken.

Kenneth Chenault

Thanks Ron, before Dan covers the results, I wanted to say a few words about the economic environment, the reengineering efforts planned for the fourth quarter and our perspective on funding.

Now given the difficult operating environment our business performed relatively well this quarter. Now we’ve been very cautious about the economic outlook for most of this year, and that certainly continues today.

But based on recent trends, we believe consumer and business sentiment is likely to deteriorate further and we see this translating into weaker economies around the globe well into 2009.

Now the market turmoil of the past few weeks is clearly going to make conditions even more challenging. Card member spending in such an environment is likely to be very soft. Loan growth will be restrained and some of that will reflect the steps we’re taking to lower credit risks.