American Express 2007 Annual Report Download - page 23

• Commercial Advances—Capturing more of the spending of large and midsize companies helped
us grow our commercial card business in countries around the world. With a focus on enhancing
expense management solutions for our clients and broadening card usage in new spending categories,
we attracted more new customers and deepened relationships within our existing base. We also
launched cobranded products with Aeromexico and India’s Kingfisher Airlines, as well as premium
corporate card products in the U.K., France, Germany, Spain and the Netherlands.
• Global Network Services—Our fast-growing GNS business marked its 10-year anniversary in 2007 by
continuing to gain momentum, announcing nine new or expanded partnerships with card-issuing
financial institutions in Argentina, Brazil, China, Japan and other countries. New card products
launched include three airline loyalty cobrands in international markets—such as our first in China,
the ICBC Hainan Airlines American Express Card—and premier card products for wealthy clients
in the U.S. issued by Citibank and Bank of America.
• Global Merchant Services—With the aim of enabling cardmembers to use American Express
to pay for all kinds of goods and services, we continued to expand acceptance of our products for
everyday spending—particularly in international markets. The ongoing expansion of GNS has
been a catalyst for broadening merchant coverage in the 125 markets where we have issuing partners.
In addition, in the United States, new agreements announced recently with First Data, NOVA
Information Systems and Heartland Payment Systems should enable us to increase signings among
smaller merchants by simplifying their process for accepting credit cards and settling accounts.
• After several years of transforming its business model from transaction processing to value
creation, Global Business Travel is now growing profitably. In 2007, we signed or renewed client
contracts representing $6.3 billion in business volume. New business signings increased 26 percent
from a year ago and our retention rate remained strong. New services like Axis@Work, a Web-
based data reporting solution, demonstrate our continued commitment to simplifying the lives
of business travelers.
OTHER SIGNIFICANT EVENTS
Beyond the performance of our core businesses, I want to mention two other noteworthy events that
took place in 2007.
Sale of American Express Bank—Last September, we announced an agreement to sell the private and
correspondent banking businesses of American Express Bank Ltd. (AEB) to Standard Chartered PLC. The
sale, which closed on February 29, 2008, is a winning proposition for both American Express and AEB.
It will enable American Express to further sharpen our strategic focus on our high-growth, high-potential
payments businesses. Meanwhile, AEB becomes part of an institution for which international banking
is a primary focus. I would like to thank all the employees of AEB for the important contributions they
have made to our company.
Lawsuit Settlement—A little over three years ago, we filed a lawsuit against Visa, MasterCard and
certain of their member banks for illegally conspiring to prevent American Express from entering the
network business in the United States. In November 2007, we announced that Visa agreed to pay us
$2.25 billion to settle the lawsuit.
Per the terms of the agreement, we recognized a $1.13 billion gain in the fourth quarter ($700 million after tax)
for the initial payment from Visa. The remainder, payable in installments of up to $70 million per quarter over
the next four years, is subject to certain performance criteria that our U.S. network business must meet.
We are optimistic about our ability to do so.
LETTER TO SHAREHOLDERS
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