Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated June 13, 2012, discloses information provided by Vice Chairman Edward Gilligan at the Morgan Stanley Financials Conference. The report focuses on credit quality metrics for May 2012 and billings growth trends for the quarter ended May 31, 2012.
Key Financial Metrics
- U.S. Cardmember Loan Portfolio (May 2012): Net write-off rate was 2.2% (principal only); 30 days past due rate was 1.2%.
- Billings Growth (Q2 2012 to date): Worldwide billings growth on an F/X adjusted basis was 9% to 10%. U.S. billings growth for the same period was also 9% to 10%.
- Regional Performance: EMEA billings growth was approximately 5% on an F/X adjusted basis.
Material Changes and Commentary
Management noted that current billings growth is slower than the first quarter of 2012, which benefited from an extra day due to the leap year. Additionally, difficult year-over-year comparisons impacted growth figures. The strengthening of the U.S. dollar is expected to negatively impact reported worldwide billed business growth, causing reported rates to appear weaker than the F/X adjusted rates.
Guidance, Risks, and Contingencies
The filing contains forward-looking statements regarding expected business and financial performance. These statements are subject to risks and uncertainties, including factors detailed in the Company's 2011 Form 10-K and Q1 2012 Form 10-Q. The Company explicitly states it undertakes no obligation to update or revise these forward-looking statements.
Investor Verification Checklist
- Verify the full audio replay of Edward Gilligan's remarks on the American Express Investor Relations website.
- Review the Q1 2012 Form 10-Q to compare the leap year benefit impact on billings.
- Monitor foreign exchange rate fluctuations to assess the divergence between reported and F/X adjusted growth rates.
- Check subsequent filings for updates on the U.S. Cardmember Loan portfolio credit quality trends.