American Express 2014 Annual Report Download - page 4

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3AMERICAN EXPRESS COMPANY | ANNUAL REPORT 2014
is influencing the course of digital commerce. We’ve come a long way, yet,
in many respects, I believe we are just scratching the surface of what we
can eventually do.
The steps we took during 2014 moved us further along in this journey.
There were highlights, some disappointments, and no shortage of ongoing
challenges, but we made very good progress. In particular, we took steps
to make our brand more welcoming and inclusive, and used technology to
bring greater convenience and benefits to our existing customers.
I’d like to show you how this played out in our numbers and actions.
American Express earned a record $5.9 billion in net income in 2014, up
10 percent from the prior year. Earnings per share rose 14 percent due to
business growth and a strong balance sheet that allowed us to continue to
return substantial capital to shareholders through share repurchases. While
delivering solid earnings, we also increased spending on business-building
investments like marketing and promotion, new product development and
Card Member acquisition.
Revenues rose by 4 percent, which was below our long-term target
of 8 percent. Still, we feel this was a positive result in a challenging
environment. Ultimately, higher Card Member spending and borrowing,
excellent credit quality, and disciplined expense controls drove our profits.
Let’s take a closer look at each of these factors.
HIGHER CARD MEMBER SPENDING
Spending on our network rose 7 percent, which brought us to a total
of $1.02 trillion for the year. Adjusting for changes in foreign currency
exchange rates, worldwide billings increased by 9 percent. We experienced
broad-based growth in spending among consumers, small businesses and
large corporations. This was true despite an economy that, while growing,
remained weak in many parts of the world.
Financial Results