American Express 2010 Annual Report Download - page 99

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NOTE 14
COMMON AND PREFERRED SHARES
AND WARRANTS
As of December 31, 2010, the Company has 86 million common
shares remaining under share repurchase authorizations. Such
authorizations do not have an expiration date, and at present,
there is no intention to modify or otherwise rescind the
current authorizations.
Common shares are generally retired by the Company upon
repurchase (except for 4.7 million, 5.0 million and 0.4 million
shares held as treasury shares as of December 31, 2010, 2009
and 2008, respectively); retired common shares and treasury
shares are excluded from the shares outstanding in the table
below. The treasury shares, with a cost basis of $219 million,
$235 million and $21 million as of December 31, 2010, 2009 and
2008, respectively, are included as a reduction to additional
paid-in capital in shareholders’ equity on the Consolidated
Balance Sheets.
The following table shows authorized shares and provides a
reconciliation of common shares issued and outstanding for the
years ended December 31:
(Millions, except where indicated) 2010 2009 2008
Common shares authorized (billions)
(a)
3.6 3.6 3.6
Shares issued and outstanding at
beginning of year 1,192 1,160 1,158
(Repurchases) Issuances of common
shares (14) 22 (5)
Other, primarily stock option exercises
and RSAs granted 19 10 7
Shares issued and outstanding as of
December 31 1,197 1,192 1,160
(a) Of the common shares authorized but unissued as of December 31, 2010,
approximately 104 million shares were reserved for issuance under
employee stock and employee benefit plans.
The Board of Directors is authorized to permit the Company
to issue up to 20 million preferred shares at a par value of $1.662⁄3
without further shareholder approval.
On January 9, 2009, under the United States Department of the
Treasury (Treasury Department) Capital Purchase Program
(CPP), the Company issued to the Treasury Department as
consideration for aggregate proceeds of $3.39 billion:
(1) 3.39 million shares of Fixed Rate (5 percent) Cumulative
Perpetual Preferred Shares Series A (the Preferred Shares), and
(2) a ten-year warrant (the Warrant) for the Treasury Department
to purchase up to 24 million common shares at an exercise price of
$20.95 per share.
On June 17, 2009, the Company repurchased the Preferred
Shares at their face value of $3.39 billion and the $212 million in
excess of the amortized carrying amount represented an in-
substance Preferred Share dividend that reduced earnings per
share (EPS) attributable to common shareholders by $0.18 for
the year ended December 31, 2009. Refer to Note 18.
On July 29, 2009, the Company repurchased the Warrant for
$340 million. There were no preferred shares or warrants issued
and outstanding as of December 31, 2010 and 2009.
97
AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS