American Express 2010 Annual Report Download - page 102

Download and view the complete annual report

Please find page 102 of the 2010 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 127

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127

The following table summarizes the Company’s restructuring reserves activity for the years ended December 31, 2010, 2009 and 2008:
(Millions) Severance
(a)
Other
(b)
Total
Liability balance as of December 31, 2007 $60$ 9$69
Restructuring charges, net of $10 in adjustments
(c)(d)
366 68 434
Payments (63) (13) (76)
Other non-cash
(e)
2 (2) —
Liability balance as of December 31, 2008 365 62 427
Restructuring charges, net of $52 in adjustments
(c)
161 24 185
Payments (287) (45) (332)
Other non-cash
(e)
14 (9) 5
Liability balance as of December 31, 2009 253 32 285
Restructuring charges, net of $27 in adjustments
(f)
98 (2) 96
Payments (141) (14) (155)
Other non-cash
(e)
(11) — (11)
Liability balance as of December 31, 2010
(g)
$ 199 $ 16 $ 215
(a) Accounted for in accordance with the GAAP governing the accounting for nonretirement postemployment benefits and for costs associated with exit or
disposal activities.
(b) Other primarily includes facility exit, asset impairment and contract termination costs.
(c) Adjustments primarily relate to higher than anticipated redeployments of displaced employees to other positions within the Company.
(d) Includes $17 million related to discontinued operations.
(e) Consists primarily of foreign exchange impacts. During 2009, the amounts in other also include asset impairments directly related to restructuring activity.
(f) Net adjustments of $27 million were recorded in the Company’s reportable operating segments as follows: $4 million in USCS, $13 million in ICS,
$(2) million in GCS, and $12 million in Corporate & Other. These adjustments primarily relate to higher employee redeployments to other positions within
the Company, business changes and modifications to existing initiatives.
(g) The majority of cash payments related to the remaining restructuring liabilities are expected to be completed in 2012, with the exception of certain smaller
amounts related to contractual long-term severance arrangements which are expected to be completed in 2013, and certain lease obligations which will
continue until their expiration in 2018.
The following table summarizes the Company’s restructuring charges, net of adjustments, by reportable segment for the year ended
December 31, 2010, and the cumulative amounts relating to the restructuring programs that were in progress during 2010 and initiated
at various dates between 2007 and 2010.
(Millions)
Total Restructuring
Charges net of
adjustments Severance Other Total
2010
Cumulative Restructuring Expense Incurred To Date On
In-Progress Restructuring Programs
USCS $52$ 99 $ 6 $ 105
ICS 12 92 3 95
GCS 21 241 31 272
GNMS 16 64 9 73
Corporate & Other (5) 116 33 149
(a)
Total $96$ 612 $ 82 $ 694
(b)
(a) The Corporate & Other segment includes certain severance and other charges of $125 million, related to Company-wide support functions which were not allocated to
the Company’s operating segments, as these were corporate initiatives, which is consistent with how such charges were reported internally.
(b) As of December 31, 2010, the total expenses to be incurred for previously approved restructuring activities that were in progress are not expected to be materially
different than the cumulative expenses incurred to date for these programs, except for those 2011 charges noted above.
100
AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS