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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents certain selected financial information as of or for the years ended December 31, 2013, 2012 and 2011:
(Millions, except where indicated) USCS ICS GCS GNMS
Corporate &
Other(a) Consolidated
2013
Non-interest revenues $ 12,123 $ 4,644 $ 5,085 $ 5,229 $ 846 $ 27,927
Interest income 5,565 1,118 13 32 277 7,005
Interest expense 693 361 245 (252) 911 1,958
Total revenues net of interest expense 16,995 5,401 4,853 5,513 212 32,974
Total provision 1,417 444 159 69 21 2,110
Pretax income (loss) from continuing operations 4,994 643 1,244 2,469 (1,462) 7,888
Income tax provision (benefit) 1,801 12 384 894 (562) 2,529
Income (loss) from continuing operations 3,193 631 860 1,575 (900) 5,359
Total equity (billions) 9.3 3.1 3.7 2.0 1.4 19.5
2012
Non-interest revenues 11,469 4,561 4,995 5,005 897 26,927
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 5,271 183 31,555
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
(a) 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. Within the
USCS, ICS and GCS segments, discount revenue reflects the issuer
component of the overall discount revenue generated by each
segment’s Card Members; within the GNMS segment, discount
revenue reflects the network and acquirer component of the overall
discount revenue. Net card fees and travel commissions and fees 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
reflects an allocated funding cost based on a combination of segment
funding requirements and internal funding rates.
Provisions for Losses
The provisions for losses are directly attributable to the segment in
which they are reported.
Expenses
Marketing and promotion expenses are reflected in each segment
based on actual expenses incurred, with the exception of brand
advertising, which is primarily reflected in the GNMS and USCS
segments. Rewards and Card Member 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 primarily 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 a mix of each segment’s direct
consumption of services and relative level of pretax income.
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 comprise the segment.
103