American Express 2003 Annual Report Download - page 109

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related to the relocation of certain international operations. AEB’s $5 million charge consisted of $3 million of severance
costs and $2 million of other costs.
As of December 31, 2003, other liabilities include $57 million for the expected future cash outlays related to aggregate
restructuring charges recorded. In addition to employee attrition or redeployment, approximately 10,000 employees have
been terminated since the inception of the restructuring plans in 2001. The following table summarizes by category the
Company’s restructuring charges, cash payments, balance sheet charge-offs, liability reductions and resulting liability bal-
ance as of December 31, 2001, 2002 and 2003:
(Millions) Severance Other Total
Restructuring charges $369 $ 262 $ 631
Cash paid (37) (14) (51)
Balance sheet charge-offs —(120) (120)
Liability balance at December 31, 2001 332 128 460
Cash paid (226) (65) (291)
Balance sheet charge-offs —(10) (10)
Net adjustments due to revisions to 2001 plans (62) 31 (31)
Additional charges 17 7 24
Liability balance at December 31, 2002 61 91 152
Cash paid (60) (33) (93)
Net adjustments due to revisions to 2002 plans (1) (1) (2)
Liability balance at December 31, 2003 $— $57 $57
(Note 20) DISASTER RECOVERY CHARGE
As a result of the terrorist attacks on September 11, 2001, the Company incurred a $90 million ($59 million after-tax)
disaster recovery charge. This charge mainly included provisions for credit exposures to travel industry service estab-
lishments and insurance claims. $79 million of the pretax charge was incurred by TRS, while $11 million was incurred
by AEFA. In addition to the pretax charge, the Company waived approximately $8 million of finance charges and late
fees. During 2002, $7 million ($4 million after-tax) of the original AEFA charge was reversed due to lower than antici-
pated insured loss claims.
As of December 31, 2003, the Company has incurred costs of approximately $239 million related to the terrorist attacks
of September 11th, which are expected to be substantially covered by insurance and, consequently, did not impact results.
These include the cost of duplicate facilities and equipment associated with the relocation of the Company’s offices in
lower Manhattan and certain other business recovery expenses.
(Note 21) TRANSFER OF FUNDS FROM SUBSIDIARIES
Restrictions on the transfer of funds exist under debt agreements and regulatory requirements of certain of the Company’s
subsidiaries. These restrictions have not had any effect on the Company’s shareholder dividend policy and management
does not anticipate any effect in the future.
At December 31, 2003, the aggregate amount of net assets of subsidiaries that may be transferred to the Parent Company
was approximately $11.8 billion. Should specific additional needs arise, procedures exist to permit immediate transfer of
short-term funds between the Company and its subsidiaries, while complying with the various contractual and regula-
tory constraints on the internal transfer of funds.
(p.107_axp_ notes to consolidated financial statements)