Discover 2014 Annual Report Download - page 148
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-134-
14. Other Expense
Total other expense includes the following components (dollars in millions):
For the Calendar Years Ended
December 31, For the Fiscal
Year Ended
November 30,
2012
For the One
Month Ended
December 31,
2012
2014 2013
Postage ................................................................................................. $ 84 $ 86 $ 85 $ 7
Fraud losses ........................................................................................... 134 110 93 9
Supplies ................................................................................................ 23 26 22 2
Credit-related inquiry fees ....................................................................... 19 19 20 1
Litigation expense ................................................................................... — (12) 218 —
Incentive expense ................................................................................... 50 61 59 5
Other expense ........................................................................................ 165 198 107 11
Total other expense ............................................................................. $ 475 $ 488 $ 604 $ 35
15. Income Taxes
Income tax expense consisted of the following (dollars in millions):
For the Calendar Years Ended
December 31, For the Fiscal
Year Ended
November 30,
2012
For the One
Month Ended
December 31,
2012
2014 2013
Current:
U.S. federal ........................................................................................ $ 1,215 $ 1,065 $ 1,113 $ 101
U.S. state and local ............................................................................. 167 87 149 15
Total .............................................................................................. 1,382 1,152 1,262 116
Deferred:
U.S. federal ........................................................................................ (7) 295 136 (11)
U.S. state and local ............................................................................. (4) 27 10 (1)
Total .............................................................................................. (11) 322 146 (12)
Income tax expense ..................................................................... $ 1,371 $ 1,474 $ 1,408 $ 104
The following table reconciles the Company’s effective tax rate to the U.S. federal statutory income tax rate:
For the Calendar Years Ended
December 31, For the Fiscal
Year Ended
November 30,
2012
For the One
Month Ended
December 31,
2012
2014 2013
U.S. federal statutory income tax rate ....................................................... 35.0% 35.0% 35.0%35.0%
U.S. state, local and other income taxes, net of U.S. federal income tax
benefits ................................................................................................ 2.8 2.2 2.9 3.2
Other .................................................................................................... (0.7) 0.2 (0.4) (0.1)
Effective income tax rate ...................................................................... 37.1% 37.4% 37.5%38.1%