American Express 2013 Annual Report Download - page 31

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AMERICAN EXPRESS COMPANY
2013 FINANCIAL REVIEW
Salaries and employee benefits and other operating expenses
decreased $89 million or 4 percent in 2013 as compared to the prior
year, primarily driven by lower salaries and employee benefits, as well
as lower other operating expenses reflecting the restructuring charge
in the fourth quarter of 2012. Excluding the impact of changes in
foreign exchange rates, salaries and employee benefits and other
operating expenses decreased 1 percent in 2013 as compared to the
prior year.4Salaries and employee benefits and other operating
expenses increased $38 million or 2 percent in 2012 as compared to
the prior year, primarily due to higher restructuring charges, partially
offset by lower other operating expenses.
4Refer to footnote 2 on page 19 relating to changes in foreign
exchange rates.
INCOME TAXES
The effective tax rate in all periods reflects the recurring permanent
tax benefit related to the segment’s ongoing funding activities outside
the U.S., which is allocated to ICS under the Company’s internal tax
allocation process. The effective tax rate for 2013 also reflects the
allocated share of tax benefits related to the resolution of certain prior
years’ items and the effective tax rate for 2012 and 2011 reflects the
allocated share of tax benefits related to the realization of certain
foreign tax credits. In addition, the effective tax rate in each of the
periods reflects the impact of recurring permanent tax benefits on
varying levels of pretax income.
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