2.2.0.25falsefalse0224 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Jan-01-2010_Dec-31-2010http://www.sec.gov/CIK0000004962duration2010-01-01T00:00:002010-12-31T00:00:00PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0axp_CommitmentsAndContingenciesDisclosureAbstractaxpfalsenadurationCommitments And Contingencies Disclosure.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringCommitments And Contingencies Disclosure.falsefalse3false0us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<font style="font-family: 'Times New Roman', Times; color: #009baa">NOTE 24
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<b><font style="font-family: 'Times New Roman', Times; color: #009baa">COMMITMENTS
AND CONTINGENCIES</font></b>
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<font style="font-family: 'Times New Roman', Times; color: #009baa">LEGAL
CONTINGENCIES
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The Company and its subsidiaries are involved in a number of
legal proceedings concerning matters arising in connection with
the conduct of their respective business activities and are
periodically subject to governmental examinations (including by
regulatory authorities), information gathering requests,
subpoenas, inquiries and investigations (collectively,
“governmental examinations”). As of December 31,
2010, the Company and various of its subsidiaries were named as
a defendant or were otherwise involved in numerous legal
proceedings and governmental examinations in various
jurisdictions, both in the United States and outside the United
States. The Company discloses certain of its more significant
legal proceedings and governmental examinations under
“Legal Proceedings” in its Annual Report on
<font style="white-space: nowrap">Form 10-K</font>
for the year ended December 31, 2010 (“Legal
Proceedings”).
</div>
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The Company has recorded liabilities for certain of its
outstanding legal proceedings and governmental examinations. A
liability is accrued when it is both (a) probable that a
loss with respect to the legal proceeding has occurred and
(b) the amount of loss can be reasonably estimated
(although, as discussed below, there may be an exposure to loss
in excess of the accrued liability). The Company evaluates, on a
quarterly basis, developments in legal proceedings and
governmental examinations that could cause an increase or
decrease in the amount of the liability that has been previously
accrued.
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 1%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s legal proceedings range from cases brought by
a single plaintiff to class actions with hundreds of thousands
of putative class members. These legal proceedings, as well as
governmental examinations, involve various lines of business of
the Company and a variety of claims (including, but not limited
to, common law tort, contract, antitrust and consumer protection
claims), some of which present novel factual allegations
<font style="white-space: nowrap">and/or</font>
unique legal theories. While some matters pending against the
Company specify the damages claimed by the plaintiff, many seek
a not-yet-quantified amount of damages or are at very early
stages of the legal process. Even when the amount of damages
claimed against the Company are stated, the claimed amount may
be exaggerated
<font style="white-space: nowrap">and/or</font>
unsupported. As a result, some matters have not yet progressed
sufficiently through discovery
<font style="white-space: nowrap">and/or</font>
development of important factual information and legal issues to
enable the Company to estimate a range of possible loss.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 1%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Other matters have progressed sufficiently through discovery
<font style="white-space: nowrap">and/or</font>
development of important factual information and legal issues
such that the Company is able to estimate a range of possible
loss. Accordingly, for those legal proceedings and governmental
examination disclosed in Legal Proceedings as to which a loss is
reasonably possible in future periods, whether in excess of a
related accrued liability or where there is no accrued
liability, and for which the Company is able to estimate a range
of possible loss, the current estimated range is zero to
$500 million in excess of the accrued liability (if any)
related to those matters. This aggregate range represents
management’s estimate of possible loss with respect to
these matters and is based on currently available information.
This estimated range of possible loss does not represent the
Company’s maximum loss exposure. The legal proceedings and
governmental examinations underlying the estimated range will
change from time to time and actual results may vary
significantly from the current estimate.
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 1%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Based on its current knowledge, and taking into consideration
its litigation-related liabilities, the Company believes it is
not a party to, nor are any of its properties the subject of,
any pending legal proceeding or governmental examination that
would have a material adverse effect on the Company’s
consolidated financial condition or liquidity. However, in light
of the uncertainties involved in such matters, the ultimate
outcome of a particular matter could be material to the
Company’s operating results for a particular period
depending on, among other factors, the size of the loss or
liability imposed and the level of the Company’s income for
that period.
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<font style="font-family: 'Times New Roman', Times; color: #009baa">VISA
AND MASTERCARD SETTLEMENTS
</font>
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As previously disclosed, the Company reached settlement
agreements with Visa and MasterCard. Under the terms of the
settlement agreements, the Company will receive aggregate
maximum payments of $4.05 billion. The settlement with Visa
comprised an initial payment of $1.13 billion
($700 million after-tax) that was recorded as a gain in
2007. Having met quarterly performance criteria, the Company
recognized $280 million ($172 million after-tax) from
Visa in 2010, 2009 and 2008, and $600 million
($372 million after-tax) from MasterCard in 2010 and 2009,
respectively, and $300 million ($186 million
after-tax) in 2008. The remaining Visa and MasterCard quarterly
payments, subject to the Company achieving certain quarterly
performance criteria, continue through the fourth and second
quarters of 2011, respectively. These payments are included in
other, net expenses within the Corporate & Other
segment.
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<font style="font-family: 'Times New Roman', Times; color: #009baa">OTHER
CONTINGENCIES
</font>
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
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 $7.5 billion as of
December 31, 2010.
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<font style="font-family: 'Times New Roman', Times; color: #009baa">RENT
EXPENSE AND LEASE COMMITMENTS
</font>
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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.
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As of December 31, 2010, the minimum aggregate rental
commitment under all noncancelable operating leases (net of
subleases of $25 million) was as follows:
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<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left"><!-- TABLE 01 -->
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</td>
<td>
 
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<i>(Millions)</i>
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</td>
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</td>
<td>
 
</td>
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<div style="text-indent: -7pt; margin-left: 7pt">
2011
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>222</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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<div style="text-indent: -7pt; margin-left: 7pt">
2012
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>196</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -7pt; margin-left: 7pt">
2013
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>183</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
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<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -7pt; margin-left: 7pt">
2014
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>167</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -7pt; margin-left: 7pt">
2015
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>138</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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Thereafter
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1,071</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
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<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -7pt; margin-left: 7pt">
Total
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1,977</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
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<td colspan="5" valign="top">
 
</td>
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<td colspan="5" style="border-top: 1px solid #000000">
 
</td>
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<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
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.
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