"As you know, one of the company's chief goals is to make American Express as well known and successful in financial services as we are in card and travel. Over the past three years, we have made good progress toward this goal - despite an enormously difficult market environment - through the work we have done to strengthen American Express Financial Advisors (AEFA), American Express Bank (AEB), and our International Payments and Personal Financial Services (PFS) businesses.

"We've also made strong progress in improving and expanding our asset management capabilities, which is a key building block in our overall global financial services strategy. In one of our most significant moves to date, we announced last week the acquisition of Threadneedle Asset Management, one of the largest and most highly regarded asset management companies in the United Kingdom.

"The acquisition of Threadneedle puts us in a strong position to further expand our asset management business, not just in Europe, but also within the United States and in other leading markets around the world. With the addition of Threadneedle to our industry-leading U.S. financial advisory business and our refocused international banking and consumer financial services businesses, I believe we have the core elements that will enable us to take a major step forward in worldwide financial services.

"In doing so, we will continue to evaluate and invest in exciting growth opportunities in our existing businesses. In addition, while we are not dependent on acquisitions to meet our financial objectives, we will continue to look at acquisition opportunities that are targeted and appropriately valued. Our aim is to gain market share from our competitors and to capitalize fully on the opportunities we will have as market conditions improve.

"Given these opportunities and the challenges they present, I am making some changes in the responsibilities of two of our Global Leadership Team (GLT) members. These changes are effective July 14.

"First, I have asked Jim Cracchiolo, group president of Global Financial Services, to focus all of his time, talent and energies on taking our financial services businesses to the next level. Jim will continue to serve as chairman and CEO of AEFA and chairman of AEB, and will continue to lead Brokerage and Membership Banking and PFS, as well. Additionally, as we announced last week, Threadneedle will report directly to Jim when that transaction closes.

"With Jim focused on continuing to grow our financial services business, I have asked Ed Gilligan, group president of Global Corporate Services, to take on additional responsibility for leading the international consumer card business and International Operations. This move brings together our international card businesses for both individuals and corporations under Ed's leadership. In light of his expanded responsibilities for businesses outside the United States, Ed will move with his family to London in the near future.

"With these changes, Vijay Parekh, president of International Consumer & Small Business Payments & Retail Financial Services (ICSS), and Tom Cash, executive vice president of International Operations, will report directly to Ed. While ICSS will remain integrated as one organizational entity, Vijay will be accountable to Jim for international PFS and insurance.

"Jim, Vijay and Tom have done an excellent job of building our international consumer card business and have put in place the strategies and plans that will help us accelerate that progress going forward. Under Vijay's leadership, we have launched hundreds of new card products in markets around the world and have seen strong growth overall in spending, cards in force and lending. Additionally, we have expanded into new financial services businesses. International Operations, under Tom's leadership, has become a highly effective partner to all of our card businesses outside the United States and will continue to provide high-quality, flexible support to help drive growth in the future.

"I am also asking Ed to take the lead, partnering with his GLT colleagues, for the market optimization efforts that are important to ensuring close coordination of all American Express businesses in the international regions.

Background
"I want to give you some additional background on these changes.

"Jim has done an outstanding job of leading the GFS businesses through a tremendously difficult period for the industry. He has put in place a comprehensive strategy for turning around AEFA's business and has made excellent progress on implementing all the key elements of that strategy. Over the past three years, we have attracted strong new leaders in key areas, reduced expenses, retained and grown the advisor force, introduced an outstanding array of new products and improved investment performance. Jim has also overseen the successful shift at the Bank from corporate lending to personal banking. And, most recently, he led the team in bringing the Threadneedle deal to fruition.

"Furthermore, for the past five years under Jim's leadership, the international consumer card team has built a business that has become one of the fastest growing in the company. We have significantly expanded our presence in over 25 key markets in a challenging economic environment. In fact, since 1998, Jim and his team have introduced over 500 new products in international markets, as well as a number of critical co-brand, bank and affinity relationships. During this period, consumer credit card receivables, cards in force and billed business have all grown strongly, and we have improved our competitive positioning. In addition, we have transformed our service infrastructure and launched important new global platforms in International Operations.

"Jim's extensive experience in financial services and his successful track record in leading global businesses - along with his strong leadership and strategic skills, and his superb ability to manage change and drive results - are critical to our efforts to accelerate the growth of our financial services business.

"Likewise, Ed has done an outstanding job of leading Global Corporate Services through a deep and prolonged downturn in the corporate business and travel sector. He and his team have, in fact, substantially transformed this business over the past few years through a number of major moves that have dramatically improved the flexibility and adaptability of our business models. Despite the tough times, the team has continued to invest in a wide range of growth initiatives. As a result, our Corporate Services business has not only remained profitable - which is a terrific accomplishment in its own right - but is now in a better position than ever to grow over the mid- and long-term.

"For example, despite the dramatic slowdown in corporate spending, Ed and his team have expanded the ranks of sales people in both corporate card and travel, and they have strengthened our value propositions across all business segments. By staying focused on customers, they won or expanded relationships with a number of important clients. Additionally, we have made major investments in expanding our corporate middle market business, where we are working around the world to develop a number of exciting new products and partnerships, such as the recently announced co-branded deal with American Airlines.

"Ed has also done a superb job of growing his businesses on a global scale, where he has concentrated much of his time and attention. He has worked to strengthen our competitive position and client relationships in a number of key international markets. Ed will now apply his understanding and leadership to continuing the strong momentum of our International Consumer and Small Business Card portfolios as well.

Conclusion
"We are at a turning point in the history of our company. We have not only weathered the difficult times of the recent past, but we are emerging from them a much stronger, more focused organization. The challenges ahead will be no less daunting than those we have faced in the past. But I am confident we have what it takes to win in the marketplace. Our growth opportunities are substantial. Our strategies are in place. We have outstanding people with a strong will to win. Now, we have to execute our game plan for growth.

"The changes I have announced today will help us in that effort. But, of course, the true measure of whether or not we will be successful in achieving our goals is and always will be the commitment and contributions of American Express people everywhere.

"I thank you for your ongoing commitment to our company, our customers and our colleagues. I know I can count on you to give Jim, Ed and their teams your full support as we move forward to grow our business."

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.