Summary
This 8-K filing from American Express (AXP) on March 8, 2016, announces a significant change in its financial reporting structure. Effective for the first quarter of 2016, the company is realigning its business segments to better reflect its organizational structure, which was updated in the fourth quarter of 2015. This change primarily combines its corporate and small business units into a business-to-business focused group and reorganizes its merchant-related businesses. The new reporting segments are U.S. Consumer Services (USCS), International Consumer and Network Services (ICNS), Global Commercial Services (GCS), and Global Merchant Services (GMS), with Corporate & Other remaining for corporate functions. The filing includes preliminary historical financial information (Exhibit 99.1) that shows how these new segments would have been presented for eight quarters from Q1 2014 through Q4 2015. Investors should note that this is a reclassification for reporting purposes and does not alter previously reported net income, EPS, assets, equity, or regulatory capital.
Key Highlights
- 1American Express is implementing a new business segment reporting structure effective Q1 2016.
- 2The organizational changes combine corporate and small business units into a B2B-focused group.
- 3New segments include U.S. Consumer Services (USCS), International Consumer and Network Services (ICNS), Global Commercial Services (GCS), and Global Merchant Services (GMS).
- 4Preliminary historical segment data for eight quarters (Q1 2014 - Q4 2015) is provided to illustrate the new structure.
- 5This is a reclassification of historical data, not a restatement of financial statements.
- 6The segment realignment does not impact previously reported net income, EPS, total assets, or equity.