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## WE ARE STRONGER IN THE MARKETPLACE, AS WE INCREASED OUR 

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enable us to benefit from the world-class expertise of our partner while substantially lowering costs. Another example is the expansion of our global servicing net- work by accessing customer service capabilities and educated workforces around the world. For example, last year we opened a new customer service center in India as a complement to our existing network. Broad- ening our worldwide network enables us to improve both the cost and quality of our overall servicing infrastructure, expand our capacity and increase our flexibility to meet the needs of our growing business. 

## Diversification of Card Spending Base 

We also strengthened our business models through continued efforts to diversify card spending and lower our reliance on the travel and entertainment sector. Historically, about two-thirds of spending on American Express cards worldwide came from travel and entertainment and one-third from non T&E sources. We have now essentially reversed that mix. In 2002, approximately 63 percent of our billings came from retail and other non-T&E sources, and 37 percent came from T&E. 

This fundamental shift is primarily due to our ongoing efforts to encourage consumers to use American Express as their card of choice for everyday spending at establishments such as supermarkets, gas stations, drug stores and home improvement stores. We con- tinue to increase the range of merchants in retail and everyday spending categories who accept the Card. In 2002, we added a variety of key merchants in the United States including The Stop & Shop Supermarket Company, Dairy Queen, Time Warner Cable and H&R Block. In international markets, we added a broad array of merchants including Mayne Group Limited-Pharmacy Services in Australia; Canadian Tire; CORA Hypermarkets in France; Arkio in Mexico; and NTT DoCoMo, a telecommunications provider in Japan. Along with expanding merchant coverage, we also launched new card products and promotions to build spending in retail and everyday locations. 

