American Express 2014 Annual Report Download - page 36

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AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
Salaries and employee benefits and other operating expenses decreased $1.2 billion or 42 percent in 2014 as compared to 2013, primarily
due to the impact of the global business travel joint venture transaction, resulting in a lack of comparability between periods, and the gain
associated with the transaction in the second quarter of 2014, partially offset by transaction-related costs and restructuring charges.
Total expenses decreased $203 million or 6 percent in 2013 as compared to 2012, primarily driven by higher restructuring costs in 2012.
INCOME TAXES
The effective tax rate for 2013 reflects the reversal of a valuation allowance related to deferred tax assets associated with certain of the
Company’s non-U.S. business travel operations, as well as the allocated share of tax benefits related to the resolution of certain prior years’
tax items.
The effective tax rate for 2012 reflects the allocated share of tax benefits related to the realization of certain foreign tax credits. The
effective tax rate for 2012 also reflects the impact of a valuation allowance primarily related to restructuring charges associated with certain
non-U.S. travel operations.
TABLE 15: GCS SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31,
(Millions, except percentages and where indicated) 2014 2013 2012
Change
2014 vs. 2013
Change
2013 vs. 2012
Card billed business (billions) $186.7$ 175.4 $ 166.4 6 % 5 %
Total cards-in-force 6.9 7.1 7.0 (3) 1
Basic cards-in-force 6.9 7.1 7.0 (3) 1
Average basic Card Member spending (dollars)*$26,706$24,924$23,737 7 5
Total segment assets (billions) $18.5$19.2$18.9 (4) 2
Segment capital $3,782$ 3,688 $ 3,625 3 2
Return on average segment capital(a) 40.9% 23.6% 17.6%
Return on average tangible segment capital(a) 74.4% 45.8% 35.1%
Card Member receivables:
Total receivables (billions) $14.6$ 14.4 $ 13.7 1% 5%
90 days past billing as a % of total 0.8% 0.9% 0.8%
Netlossratio(asa%ofchargevolume) 0.09% 0.08% 0.06%
* Proprietary cards only.
(a) Return on average segment capital is calculated by dividing (i) one-year period segment income ($1.5 billion, $860 million and $644 million for 2014, 2013 and
2012, respectively) by (ii) one-year average segment capital ($3.8 billion for 2014 and $3.6 billion for each 2013 and 2012). Return on average tangible segment
capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment
capital, a non-GAAP measure, excludes from average segment capital average goodwill and other intangibles of $1.7 billion at December 31, 2014 and $1.8 billion
at both December 31, 2013 and 2012. We believe return on average tangible segment capital is a useful measure of the profitability of our business.
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