American Express 2012 Annual Report Download - page 110

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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MasterCard in 2011, and $600 million ($372 million after-tax)
from MasterCard in 2010. These payments are included in other,
net expenses within Corporate & Other. During the second and
fourth quarter of 2011, the Company received the final payments
on the MasterCard and Visa litigation settlements, respectively.
OTHER CONTINGENCIES
The Company also has contingent obligations to make payments
under contractual agreements entered into as part of the ongoing
operation of the Company’s business, primarily with co-brand
partners. The contingent obligations under such arrangements
were approximately $4.1 billion as of December 31, 2012.
RENT EXPENSE AND LEASE COMMITMENTS
The Company leases certain facilities and equipment under
noncancelable and cancelable agreements. The total rental
expense amounted to $305 million in 2012 (including lease
termination penalties of $13 million), $280 million in 2011 and
$250 million in 2010.
As of December 31, 2012, the minimum aggregate rental
commitment under all noncancelable operating leases (net of
subleases of $22 million) was as follows:
(Millions)
2013 $ 275
2014 240
2015 199
2016 153
2017 131
Thereafter 1,005
Total $ 2,003
As of December 31, 2012, the Company’s future minimum lease
payments under capital leases or other similar arrangements is
approximately $10 million per year from 2013 through 2014, $3
million in 2015 through 2017, and $11 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:
폷USCS 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.
폷ICS issues proprietary consumer and small business cards
outside the United States.
폷GCS offers global corporate payment and travel-related
products and services to large and mid-sized companies.
폷GNMS operates a global payments network which processes
and settles proprietary and non-proprietary card
transactions. GNMS acquires merchants and provides point-
of-sale products, multi-channel marketing programs and
capabilities, services and data, leveraging the Company’s global
closed-loop network. It provides ATM services and enters into
partnership agreements with third-party card issuers and
acquirers, licensing the American Express brand and extending
the reach of the global network.
Corporate functions and auxiliary businesses, including the
Company’s publishing business, the Enterprise Growth Group
(including Global Payment Options), as well as other Company
operations are included in Corporate & Other.
108