American Express 2006 Annual Report Download - page 112

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[ 110 ]
notes to consolidated fi nancial statements
american express company
The following table summarizes by category the Company’s restructuring charge activity for each of the Company’s
reportable operating segments (U.S. Card Services (USCS), International Card & Global Commercial Services
(ICGCS), and Global Network & Merchant Services (GNMS)).
Liability balance at
December 31, 2005
2006 Restructuring
charges, net of reversals Cash paid during 2006 Other-non-cash(b)
Liability balance at
December 31, 2006
(Millions) Severance Other Total Severance(a) Other Total Severance Other Total Severance Other Total Severance Other Total
USCS $ 4 $— $ 4 $21 $ 6 $ 27 $ (4) $ (2) $ (6) $— $ (4) $ (4) $21 $— $21
ICGCS 48 4 52 55 5 60 (60) (3) (63) (2) (2) (4) 41 4 45
GNMS 2 — 2 7 — 7 (2) — (2) — — — 7 — 7
Corporate & Other 44 5 49 6 — 6 (30) (5) (35) — — — 20 — 20
Total $98 $ 9 $107 $89 $11 $100 $(96) $(10) $(106) $ (2) $ (6) $ (8) $89 $ 4 $ 93
(a) Reversals of $21 million ($3 million, $3 million, $1 million, and $14 million, primarily due to a greater portion of impacted employees finding
other opportunities with the Company than was originally anticipated, were recorded in USCS, ICGCS, GNMS, and Corporate & Other,
respectively), for the year ended December 31, 2006.
(b) Represents primarily asset write-downs and non-cash severance.
Liability balance at
December 31, 2004
2005 Restructuring
charges Cash paid during 2005
Liability balance at
December 31, 2005
(Millions) Severance Other Total Severance Other Total Severance Other Total Severance Other Total
USCS $— $— $— $ 10 $— $ 10 $ (6) $ — $ (6) $ 4 $— $ 4
ICGCS 63 13 76 88 12 100 (103) (21) (124) 48 4 52
GNMS — — — 3 — 3 (1) — (1) 2 — 2
Corporate & Other 3 — 3 63 17 80 (22) (12) (34) 44 5 49
Total $66 $13 $79 $164 $29 $193 $ (132) $(33) $(165) $98 $ 9 $107
2004 Restructuring
charges Cash paid during 2004
Liability balance at
December 31, 2004
(Millions) Severance Other Total Severance Other Total Severance Other Total
USCS $— $— $— $— $— $ — $— $— $—
ICGCS 71 19 90 (8) (6) (14) 63 13 76
GNMS — — — — — — — — —
Corporate & Other 5 4 9 (2) (4) (6) 3 — 3
Total $76 $23 $99 $(10) $(10) $(20) $66 $13 $79
The Company makes decisions on restructuring
initiatives as the economic environment dictates. As of
December 31, 2006, the total expenses to be incurred for
previously approved restructuring activities that were in-
progress during 2006 are not expected to be materially
different than the cumulative expenses incurred to date
for these programs. The amounts in the table below
relate to the in-progress restructuring programs initiated
at various dates between the fourth quarter of 2004 and
the fourth quarter of 2006.
CUMULATIVE RESTRUCTURING EXPENSE
INCURRED TO DATE ON IN-PROGRESS
RESTRUCTURING PROGRAMS
(Millions) Severance Other Total
USCS $31 $6$37
ICGCS 214 36 250
GNMS 10 — 10
Corporate & Other 74 21 95
Tota l $329 $63 $392