American Express Company (Exact Name of Registrant As Specified in Its Charter)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 1-7657 American Express Company (Exact name of registrant as specified in its charter) New York 13-4922250 (State or other jurisdiction of incorporation or (I.R.S. Employer organization) Identification No.) World Financial Center 200 Vesey Street New York, New York 10285 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (212) 640-2000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Shares (par value $0.20 per Share) New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes √ No ___ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ___ No √ √ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes √ No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ___ √ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer √ Accelerated filer ___ Non-accelerated filer ___ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ___ No √ √ As of June 30, 2006, the aggregate market value of the registrant’s voting shares held by non-affiliates of the registrant was approximately $63.0 billion based on the closing sale price as reported on the New York Stock Exchange. As of February 22, 2007, there were 1,192,339,538 common shares of the registrant outstanding. Documents Incorporated By Reference Parts I, II and IV: Portions of Registrant’s 2006 Annual Report to Shareholders. Part III: Portions of Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Shareholders to be held on April 23, 2007. TABLE OF CONTENTS Form 10-K Item Number PART I 1. Business .................................................................................................................................. 1 Introduction....................................................................................................................... 1 Global Network & Merchant Services.............................................................................. 4 U.S. Card Services ............................................................................................................ 15 International Card & Global Commercial Services .......................................................... 27 Corporate & Other ............................................................................................................ 37 Foreign Operations............................................................................................................ 40 Segment Information and Classes of Similar Services ..................................................... 41 Executive Officers of the Company.................................................................................. 41 Employees......................................................................................................................... 42 1A. Risk Factors............................................................................................................................. 43 1B. Unresolved Staff Comments ................................................................................................... 52 2. Properties................................................................................................................................. 52 3. Legal Proceedings................................................................................................................... 53 4. Submission of Matters to a Vote of Security Holders............................................................. 60 PART II 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................................. 61 6. Selected Financial Data........................................................................................................... 62 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.............................................................................................................................. 63 7A. Quantitative and Qualitative Disclosures about Market Risk ................................................. 63 8. Financial Statements and Supplementary Data....................................................................... 63 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............................................................................................................................. 63 9A. Controls and Procedures ......................................................................................................... 63 9B. Other Information.................................................................................................................... 64 PART III 10. Directors, Executive Officers and Corporate Governance...................................................... 64 11. Executive Compensation......................................................................................................... 64 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ............................................................................................................. 64 13. Certain Relationships and Related Transactions, and Director Independence........................ 64 14. Principal Accounting Fees and Services ................................................................................. 65 PART IV 15. Exhibits and Financial Statement Schedules........................................................................... 65 Signatures.......................................................................................................................... 66 Index to Financial Statements........................................................................................... F-1 Exhibit Index..................................................................................................................... E-1 PART I∗ ITEM 1. BUSINESS INTRODUCTION Overview American Express Company, together with its consolidated subsidiaries (“American Express,” the “Company,” “we,” “us” or “our”), is a leading global payments, network and travel company that offers its products and services throughout the world. We were founded in 1850 as a joint stock association. We were incorporated in 1965 as a New York corporation. Our headquarters are located in New York, New York in lower Manhattan. We also have offices in other locations in North America, as well as throughout the world. We have three reportable operating segments: Global Network & Merchant Services, U.S. Card Services and International Card & Global Commercial Services, and a Corporate & Other section, which we describe below. Securities Exchange Act Reports and Additional Information We maintain an Investor Relations Web site on the Internet at http://ir.americanexpress.com. We make available free of charge, on or through this Web site, our annual, quarterly and current reports and any amendments to those reports as soon as reasonably practicable following the time they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). To access these, just click on the “SEC Filings” link under the caption “Financial Information & Filings” found on our Investor Relations homepage. You can also access our Investor Relations Web site through our main Web site at www.americanexpress.com by clicking on the “About American Express” link, which is located at the bottom of our homepage. Information contained on our Investor Relations Web site and our main Web site is not incorporated by reference into this report or any other report filed with or furnished to the SEC. ∗ Some of the statements in this report constitute forward-looking statements. You can identify forward-looking statements by words such as “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “estimate,” “predict,”