American Express 2014 Annual Report Download - page 33

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AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
EXPENSES
Marketing, promotion, rewards and Card Member services and other expenses increased $147 million or 7 percent in 2014 as compared to
2013, and increased 11 percent excluding the impact of foreign exchange rates.3The increase was primarily driven by higher marketing and
promotion expenses, as a result of the reinvestment of a significant portion of the gains from the business travel joint venture transaction and
the sale of our investment in Concur in growth initiatives, and higher Loyalty Partner expenses.
Salaries and employee benefits and other operating expenses increased $156 million or 7 percent in 2014 as compared to 2013, primarily
driven by restructuring charges in 2014.
Total expenses increased $2 million in 2013 as compared to 2012, primarily driven by a charge related to a change in the Membership
Rewards URR estimation process for certain international countries in 2013, substantially offset by the restructuring charge in the fourth
quarter of 2012.
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 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.
3Refer to footnote 1 on page 22 relating to changes in foreign exchange rate.
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