American Express 2011 Annual Report Download - page 87

AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14
COMMON AND PREFERRED SHARES
AND WARRANTS
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) 2011 2010 2009
Common shares authorized (billions)(a) 3.6 3.6 3.6
Shares issued and outstanding at beginning
of year 1,197 1,192 1,160
(Repurchases) Issuances of common shares (48) (14) 22
Other, primarily stock option exercises and
restricted stock awards granted 15 19 10
Shares issued and outstanding as of
December 31 1,164 1,197 1,192
(a) Of the common shares authorized but unissued as of December 31, 2011,
approximately 90 million shares were reserved for issuance under employee
stock and employee benefit plans.
During 2011 and 2010, the Company repurchased 48 million
common shares with a cost basis of $2.3 billion and 14 million
common shares with a cost basis of $0.6 billion, respectively. The
cost basis includes commissions paid in 2011 and 2010 of $1.0
million and $0.2 million, respectively. As of December 31, 2011,
the Company has 38 million common shares remaining under
Board 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.
Future share repurchases are subject to approval by the Federal
Reserve.
Common shares are generally retired by the Company upon
repurchase (except for 4.2 million, 4.7 million and 5.0 million
shares held as treasury shares as of December 31, 2011, 2010 and
2009, respectively); retired common shares and treasury shares
are excluded from the shares outstanding in the table above. The
treasury shares, with a cost basis of $217 million, $219 million
and $235 million as of December 31, 2011, 2010 and 2009,
respectively, are included as a reduction to additional paid-in
capital in shareholders’ equity on the Consolidated Balance
Sheets.
The Board of Directors is authorized to permit the Company
to issue up to 20 million preferred shares at a par value of
$1.66
2
⁄ 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, 2011 and 2010.
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