American Express 2010 Annual Report Download - page 116

RENT EXPENSE AND LEASE COMMITMENTS
The Company leases certain facilities and equipment under
noncancelable and cancelable agreements. The total rental
expense amounted to $250 million in 2010, $362 million in
2009 (including lease termination penalties of $36 million) and
$337 million in 2008.
As of December 31, 2010, the minimum aggregate rental
commitment under all noncancelable operating leases (net of
subleases of $25 million) was as follows:
(Millions)
2011 $ 222
2012 196
2013 183
2014 167
2015 138
Thereafter 1,071
Total $ 1,977
As of December 31, 2010, the Company’s future minimum lease
payments under capital leases or other similar arrangements is
approximately $12 million per annum from 2011 through 2013,
$14 million in 2014, $6 million in 2015 and
$35 million thereafter.
NOTE 25
REPORTABLE OPERATING SEGMENTS
AND GEOGRAPHIC OPERATIONS
REPORTABLE OPERATING SEGMENTS
The Company is a leading global payments and travel company
that is principally engaged in businesses comprising four
reportable operating segments: USCS, ICS, GCS and GNMS.
The Company considers a combination of factors when
evaluating the composition of its reportable operating
segments, including the results reviewed by the chief
operating decision maker, economic characteristics, products
and services offered, classes of customers, product distribution
channels, geographic considerations (primarily United States
versus non-U.S.), and regulatory environment considerations.
The following is a brief description of the primary business
activities of the Company’s four reportable operating segments:
•USCS issues a wide range of card products and services to
consumers and small businesses in the United States, and
provides consumer travel services to cardmembers and
other consumers.
•ICS issues proprietary consumer and small business cards
outside the United States.
•GCS offers global corporate payment and travel-related
products and services to large and mid-sized companies.
•GNMS operates a global general-purpose charge and credit
card network, which includes both proprietary cards and cards
issued under network partnership agreements. It also
manages merchant services globally, which includes signing
merchants to accept cards as well as processing and settling
card transactions for those merchants. This segment also
offers merchants point-of-sale products, servicing and
settlements, and marketing and information programs
and services.
Corporate functions and auxiliary businesses, including the
Company’s publishing business, the Enterprise Growth Group
(including the Global Prepaid Group), as well as other company
operations are included in Corporate & Other.
Beginning in the first quarter of 2010, the Company made
changes to the manner in which it allocates equity capital as well
as funding and the related interest expense charged to its
reportable operating segments. The changes reflect the
inclusion of additional factors in its allocation methodologies
that the Company believes more accurately reflect the capital
characteristics and funding requirements of its segments. The
segment results for 2009 and 2008 have been revised for
this change.
Beginning in 2009, the Company changed the manner by
which it assesses the performance of its reportable operating
segments to exclude the impact of its excess liquidity funding
levels. Accordingly, the debt, cash and investment balances
associated with the Company’s excess liquidity funding and
the related net negative interest spread are not included
within the reportable operating segment results (primarily
USCS and GCS segments) and are reported in the
Corporate & Other segment for 2010 and 2009. The segment
results for 2008 have not been revised for this change.
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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS