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AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
폷Interest on loans, which principally represents interest income earned on outstanding balances.
FINANCIAL HIGHLIGHTS
For 2014, we reported net income of $5.9 billion and diluted earnings per share of $5.56. This compared to $5.4 billion of net income and
$4.88 diluted earnings per share for 2013 and $4.5 billion of net income and $3.89 diluted earnings per share for 2012.
2014 results included:
폷A $719 million ($453 million after-tax) gain on the sale of our investment in Concur Technologies (Concur) in the fourth quarter;
폷A $626 million ($409 million after-tax) gain as a result of the business travel joint venture transaction in the second quarter;
폷$420 million ($277 million after-tax) of net charges for costs related to reengineering initiatives, including $313 million ($206 million
after-tax) and $133 million ($90 million after-tax) of restructuring charges in the fourth and second quarter, respectively; and
폷A $109 million ($68 million after-tax) charge related to the renewal of our partnership with Delta Air Lines (Delta) in the fourth quarter.
2013 results included:
폷A $66 million ($41 million after-tax) charge related to a proposed merchant litigation settlement in the fourth quarter.
2012 results included:
폷$461 million ($328 million after-tax) of net charges for costs related to reengineering initiatives, including a $400 million ($287 million
after-tax) restructuring charge in the fourth quarter;
폷$342 million ($212 million after-tax) in expense resulting from enhancements to the process that estimates future redemptions of
Membership Rewards points by U.S. Card Members; and
폷A tax benefit of $146 million related to the realization of certain foreign tax credits.
FINANCIAL TARGETS
We seek to achieve three financial targets, on average and over time:
폷Earnings per share (EPS) growth of 12 to 15 percent;
폷Revenues net of interest expense growth of at least 8 percent; and
폷Return on average equity (ROE) of 25 percent or more.
If we achieve our EPS and ROE targets, we will seek to return on average and over time approximately 50 percent of the capital we generate
to shareholders as dividends or through the repurchases of common stock, which may be subject to certain regulatory restrictions as
described herein. See “Current Business Environment/Outlook” for a discussion of certain factors regarding our ability to achieve our
financial targets.
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES
Certain of the statements in this Annual Report are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Refer to the “Cautionary Note Regarding Forward-Looking Statements” section. We prepare our Consolidated Financial
Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain
information included within this Annual Report constitutes non-GAAP financial measures. Our calculations of non-GAAP financial
measures may differ from the calculations of similarly titled measures by other companies.
BANK HOLDING COMPANY
American Express Company is a bank holding company under the Bank Holding Company Act of 1956 and The Board of Governors of the
Federal Reserve (the Federal Reserve) is our primary federal regulator. As such, we are subject to the Federal Reserve’s regulations, policies
and minimum capital standards.
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