REVENUE

3 Months Ended

Mar. 31, 2020

REVENUE

REVENUE

2. REVENUE

The Company’s products and services are reported under two segments—LoyaltyOne and Card Services, as shown below. The following tables present revenue disaggregated by major source:

					Corporate/
Three Months Ended March 31, 2020	LoyaltyOne		Card Services		Other		Total
	(in millions)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	71.3	$	—	$	—	$	71.3
Short-term loyalty programs		120.3		—		—		120.3
Servicing fees, net		—		(30.7)		—		(30.7)
Other		3.3		—		0.1		3.4
Revenue from contracts with customers	$	194.9	$	(30.7)	$	0.1	$	164.3
Finance charges, net		—		1,214.3		—		1,214.3
Investment income		3.2		—		—		3.2
Total	$	198.1	$	1,183.6	$	0.1	$	1,381.8

					Corporate/
Three Months Ended March 31, 2019	LoyaltyOne		Card Services		Other		Total
	(in millions)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	71.4	$	—	$	—	$	71.4
Short-term loyalty programs		109.6		—		—		109.6
Servicing fees, net		—		(18.6)		—		(18.6)
Other		19.8		—		—		19.8
Revenue from contracts with customers	$	200.8	$	(18.6)	$	—	$	182.2
Finance charges, net		—		1,149.0		—		1,149.0
Investment income		3.0		—		—		3.0
Total	$	203.8	$	1,130.4	$	—	$	1,334.2

The following tables present revenue disaggregated by geographic region based on the location of the subsidiary that generally correlates with the location of the customer:

					Corporate/
Three Months Ended March 31, 2020	LoyaltyOne		Card Services		Other		Total
	(in millions)
Disaggregation of Revenue by Geographic Region:
United States	$	2.1	$	1,183.6	$	0.1	$	1,185.8
Canada		79.1		—		—		79.1
Europe, Middle East and Africa		68.6		—		—		68.6
Asia Pacific		37.0		—		—		37.0
Other		11.3		—		—		11.3
Total	$	198.1	$	1,183.6	$	0.1	$	1,381.8

					Corporate/
Three Months Ended March 31, 2019	LoyaltyOne		Card Services		Other		Total
	(in millions)
Disaggregation of Revenue by Geographic Region:
United States	$	6.4	$	1,130.4	$	—	$	1,136.8
Canada		89.0		—		—		89.0
Europe, Middle East and Africa		81.4		—		—		81.4
Asia Pacific		17.5		—		—		17.5
Other		9.5		—		—		9.5
Total	$	203.8	$	1,130.4	$	—	$	1,334.2

Contract Liabilities

The Company records a contract liability when cash payments are received in advance of its performance, which applies to the service and redemption of an AIR MILES^® reward mile and the reward products for its short-term loyalty programs.

A reconciliation of contract liabilities for the AIR MILES Reward Program is as follows:

	Deferred Revenue
	Service		Redemption		Total
	(in millions)
Balance at January 1, 2020	$	258.6	$	663.4	$	922.0
Cash proceeds		44.8		73.4		118.2
Revenue recognized (1)		(48.6)		(69.2)		(117.8)
Effects of foreign currency translation		(19.6)		(50.9)		(70.5)
Balance at March 31, 2020	$	235.2	$	616.7	$	851.9
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	$	131.6	$	616.7	$	748.3
Deferred revenue (non-current)	$	103.6	$	—	$	103.6

(1) Reported on a gross basis herein.

The deferred redemption obligation associated with the AIR MILES Reward Program is effectively due on demand from the collector base, thus the timing of revenue recognition is based on the redemption by the collector. Service revenue is amortized over the expected life of a mile, with the deferred revenue balance expected to be recognized into revenue in the amount of $106.8 million in 2020, $83.3 million in 2021, $40.8 million in 2022, and $4.3 million in 2023.

Additionally, contract liabilities for the Company’s short-term loyalty programs are recognized in other current liabilities in the Company’s unaudited condensed consolidated balance sheets. The beginning balance as of January 1, 2020 was $122.8 million and the closing balance as of March 31, 2020 was $79.0 million, with the change due to revenue recognized of approximately $89.6 million during the three months ended March 31, 2020, offset in part by cash payments received in advance of program performance.