XML 111 R35.htm IDEA: XBRL DOCUMENT v2.4.0.6
Reportable Operating Segment
 12 Months Ended
Dec. 31, 2012
Segment Reporting Disclosure [Abstract]  
Reportable Operating Segments

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 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.

The following table presents certain selected financial information as of or for the years ended December 31, 2012, 2011 and 2010.

              Corporate &   
(Millions, except where indicated) USCS ICS GCS GNMS Other (a)Consolidated
2012                  
Non-interest revenues $ 11,469 $ 4,561 $ 4,995 $ 5,005 $ 924 $ 26,954
Interest income   5,342   1,147   11   23   331   6,854
Interest expense   765   402   257   (243)   1,045   2,226
Total revenues net of interest expense   16,046   5,306   4,749   5,271   210   31,582
Total provision   1,429   330   136   74   21   1,990
Pretax income (loss) from continuing operations   4,069   659   960   2,219   (1,456)   6,451
Income tax provision (benefit)   1,477   25   316   776   (625)   1,969
Income (loss) from continuing operations $ 2,592 $ 634 $ 644 $ 1,443 $ (831) $ 4,482
Total equity (billions) $8.7 $2.9 $3.6 $2.0 $1.7 $18.9
2011                  
Non-interest revenues $10,804 $4,470 $4,880 $4,713 $ 719 $25,586
Interest income  5,074  1,195  9  5   413  6,696
Interest expense  807  426  264  (224)   1,047  2,320
Total revenues net of interest expense  15,071  5,239  4,625  4,942   85  29,962
Total provision  687  268  76  75   6  1,112
Pretax income (loss) from continuing operations  4,129  762  1,075  1,979   (989)  6,956
Income tax provision (benefit)  1,449  39  337  686   (454)  2,057
Income (loss) from continuing operations $2,680 $723 $738 $1,293 $ (535) $4,899
Total equity (billions) $8.8 $2.8 $3.6 $2.0 $1.6 $18.8
2010                  
Non-interest revenues $9,997 $3,784 $4,347 $4,101 $ 703 $22,932
Interest income  5,277  1,287  7  4  498  7,073
Interest expense  812  428  227   (200)   1,156  2,423
Total revenues net of interest expense  14,462  4,643  4,127  4,305  45  27,582
Total provision  1,591  392  157  61  6  2,207
Pretax income (loss) from continuing operations  3,504  589  723  1,589   (441)  5,964
Income tax provision (benefit)   1,279   52  273  564   (261)  1,907
Income (loss) from continuing operations $2,225 $537 $450 $1,025 $ (180) $4,057
Total equity (billions) $7.4 $2.2 $3.7 $1.9 $1.0 $16.2

  • Corporate & Other includes adjustments and eliminations for intersegment activity.

Total Revenues Net of Interest Expense

The Company allocates discount revenue and certain other revenues among segments using a transfer pricing methodology. Segments earn discount revenue based on the volume of merchant business generated by cardmembers. Within the USCS, ICS and GCS segments, discount revenue reflects the issuer component of the overall discount rate; within the GNMS segment, discount revenue reflects the network and merchant component of the overall discount rate. Total interest income and net card fees are directly attributable to the segment in which they are reported.

 

Provisions for Losses

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

 

Expenses

Marketing, promotion, rewards and cardmember services expenses are reflected in each segment based on actual expenses incurred, with the exception of brand advertising, which is reflected in the GNMS segment. Rewards and cardmember services expenses are reflected in each segment based on actual expenses incurred within each segment. Salaries and employee benefits and other operating expenses reflect expenses such as professional services, occupancy and equipment and communications incurred directly within each segment. In addition, expenses related to the Company's support services, such as technology costs, are allocated to each segment based on support service activities directly attributable to the segment.

 

Other overhead expenses, such as staff group support functions, are allocated from Corporate & Other to the other segments based on each segment's relative level of pretax income. Financing requirements are managed on a consolidated basis. Funding costs are allocated based on segment funding requirements.

 

Capital

Each business segment is allocated capital based on established business model operating requirements, risk measures and regulatory capital requirements. Business model operating requirements include capital needed to support operations and specific balance sheet items. The risk measures include considerations for credit, market and operational risk.

Income Taxes

An income tax provision (benefit) is allocated to each business segment based on the effective tax rates applicable to various businesses that make up the segment.

Geographic Operations

The following table presents the Company's total revenues net of interest expense and pretax income (loss) from continuing operations in different geographic regions:

(Millions) United States EMEA (a)JAPA (a)LACC (a)Other Unallocated (b)Consolidated
2012(c)                  
 Total revenues net of interest expense $ 22,631 $ 3,594 $ 3,106 $ 2,774 $ (523) $ 31,582
 Pretax income (loss) from continuing operations $ 6,468 $ 505 $ 426 $ 605 $ (1,553) $ 6,451
2011(c)                  
 Total revenues net of interest expense $ 21,254 $ 3,551 $ 3,071 $ 2,706 $ (620) $29,962
 Pretax income (loss) from continuing operations $ 6,971 $ 620 $ 430 $ 583 $ (1,648) $6,956
2010(c)                  
 Total revenues net of interest expense $ 19,976 $ 3,132 $ 2,630 $ 2,451 $ (607) $27,582
 Pretax income (loss) from continuing operations $ 6,137 $ 444 $ 273 $ 469 $ (1,359) $5,964

  • EMEA represents Europe, Middle East and Africa; JAPA represents Japan, Asia/Pacific and Australia; and LACC represents Latin America, Canada and Caribbean.
  • Other Unallocated includes net costs which are not directly allocable to specific geographic regions, including costs related to the net negative interest spread on excess liquidity funding and executive office operations expenses.
  • The data in the above table is, in part, based upon internal allocations, which necessarily involve management's judgment.