Reportable Operating Segments and Geographic Operations

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Reportable Operating Segments and Geographic Operations

REPORTABLE OPERATING SEGMENTS AND GEOGRAPHIC OPERATIONS

REPORTABLE OPERATING SEGMENTS

We consider a combination of factors when evaluating the composition of our 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 outside the United States), and regulatory environment considerations.

The following is a brief description of the primary business activities of our three reportable operating segments:

•Global Consumer Services Group (GCSG) primarily issues a wide range of proprietary consumer cards globally. GCSG also provides services to consumers, including travel and lifestyle services and non-card financing products, and manages certain international joint ventures and our partnership agreements in China.

•Global Commercial Services (GCS) primarily issues a wide range of proprietary corporate and small business cards. In addition, GCS provides payment, expense management, and commercial financing products.

•Global Merchant and Network Services (GMNS) operates a global payments network that processes and settles card transactions, acquires merchants and provides multi-channel marketing programs and capabilities, services and data analytics, leveraging our global integrated network. GMNS manages our partnership relationships with third-party card issuers, merchant acquirers and a prepaid reloadable and gift card program manager, licensing the American Express brand and extending the reach of the global network. GMNS also manages loyalty coalition businesses.

Corporate functions and certain other businesses and operations are included in Corporate & Other.

Effective for the first quarter of 2020, we made certain enhancements to our transfer pricing methodology related to the sharing of revenues between our card issuing, network and merchant businesses, and our methodology related to the allocation of certain funding costs primarily related to our Card Member loan and Card Member receivable portfolios. These enhancements resulted in certain changes to Non-interest revenues, Interest expense and operating expenses across our reportable operating segments and geographic regions. Prior period amounts have been revised to conform to the current period presentation. These changes had no impact on our Consolidated Results of Operations.

The following table presents certain selected financial information for our reportable operating segments and Corporate & Other as of or for the years ended December 31, 2020, 2019 and 2018:

(Millions, except where indicated)	GCSG		GCS		GMNS		Corporate & Other(a)		Consolidated
2020
Total non-interest revenues	$	14,178	$	9,652	$	4,595	$	(323)	$	28,102
Revenue from contracts with customers(b)	9,536		8,145		4,320		(27)		21,974
Interest income	8,199		1,586		18		280		10,083
Interest expense	1,051		619		(80)		508		2,098
Total revenues net of interest expense	21,326		10,619		4,693		(551)		36,087
Net income (loss)	2,701		736		954		(1,256)		3,135
Total assets (billions)	$	87	$	42	$	14	$	48	$	191
2019
Total non-interest revenues	$	16,702	$	12,242	$	5,903	$	89	$	34,936
Revenue from contracts with customers(b)	12,097		10,633		5,424		5		28,159
Interest income	9,413		1,900		28		743		12,084
Interest expense	1,730		1,034		(303)		1,003		3,464
Total revenues net of interest expense	24,385		13,108		6,234		(171)		43,556
Net income (loss)	3,807		2,191		2,132		(1,371)		6,759
Total assets (billions)	$	106	$	53	$	18	$	21	$	198
2018
Total non-interest revenues	$	15,357	$	11,481	$	5,790	$	47	$	32,675
Revenue from contracts with customers(b)	11,264		10,019		5,312		12		26,607
Interest income	8,323		1,621		30		632		10,606
Interest expense	1,448		898		(244)		841		2,943
Total revenues net of interest expense	22,232		12,204		6,064		(162)		40,338
Net income (loss)	3,615		2,012		1,910		(616)		6,921
Total assets (billions)	$	102	$	51	$	16	$	20	$	189

(a)Corporate & Other includes adjustments and eliminations for intersegment activity.

(b)Includes discount revenue, certain other fees and commissions and other revenues from customers.

Total Revenues Net of Interest Expense

We allocate discount revenue and certain other revenues among segments using a transfer pricing methodology. Within the GCSG and GCS segments, discount revenue generally reflects the issuer component of the overall discount revenue generated by each segment’s Card Members; within the GMNS segment, discount revenue generally reflects the network and acquirer component of the overall discount revenue.

Net card fees and other fees and commissions are directly attributable to the segment in which they are reported.

Interest and fees on loans and certain investment income is directly attributable to the segment in which it is reported. Interest expense represents an allocated funding cost based on a combination of segment funding requirements and internal funding rates.

Provisions for Credit Losses

The provisions for credit losses are directly attributable to the segment in which they are reported.

Expenses

Marketing and business development expense is included in each segment based on the actual expenses incurred. Global brand advertising is primarily allocated to the segments based on the relative levels of revenue. Rewards and Card Member services expenses are included in each segment based on the actual expenses incurred.

Salaries and employee benefits and other operating expenses reflect both costs incurred directly within each segment, as well as allocated expenses. The allocated expenses include service costs allocated based on activities directly attributable to the segment, and overhead expenses allocated based on the relative levels of revenue and Card Member loans and receivables.

Income Taxes

An income tax provision (benefit) is allocated to each reportable operating segment based on the effective tax rates applicable to various businesses that comprise the segment. 

GEOGRAPHIC OPERATIONS

The following table presents our total revenues net of interest expense and pretax income (loss) from continuing operations in different geographic regions based, in part, upon internal allocations, which necessarily involve management’s judgment:

(Millions)	United States		EMEA(a)		APAC(a)		LACC(a)		Other Unallocated(b)		Consolidated
2020
Total revenues net of interest expense	$	28,263	$	3,087	$	3,271	$	2,019	$	(553)	$	36,087
Pretax income (loss) from continuing operations	4,418		398		665		452		(1,638)		4,296
2019
Total revenues net of interest expense	$	32,629	$	4,388	$	3,934	$	2,776	$	(171)	$	43,556
Pretax income (loss) from continuing operations	7,302		1,177		853		884		(1,787)		8,429
2018
Total revenues net of interest expense	$	29,886	$	4,348	$	3,690	$	2,576	$	(162)	$	40,338
Pretax income (loss) from continuing operations	6,686		1,163		792		787		(1,306)		8,122

(a)EMEA represents Europe, the Middle East and Africa; APAC represents Asia Pacific, Australia and New Zealand; and LACC represents Latin America, Canada and the Caribbean.

(b)Other Unallocated includes net costs which are not directly allocated to specific geographic regions, including costs related to the net negative interest spread on excess liquidity funding and executive office operations expenses.