What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-10 compared with 2022-02-11 · 495 added, 521 removed, 825 unchanged (55% of the section changed)

2 unchanged sentences

BUSINESS INTRODUCTION

We are a globally integrated payments company with three reportable operating segments:

Global Consumer Services Group (GCSG), Global Commercial Services (GCS) and Global Merchant and Network Services (GMNS).

We are a globally integrated payments company with four reportable operating segments:

Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS).

Corporate functions and certain other businesses and operations are included in Corporate & Other.

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• Travel and lifestyle services

Our various products and services are sold globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations.

These products and services are sold through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising.

We have a significant ownership position in, and extensive commercial arrangements with, American Express Global Business Travel (GBT).

The commercial arrangements with GBT include, among other things, a long-term trademark license agreement pursuant to which GBT uses the American Express brand, GBT’s support of certain of our partnerships, joint negotiation with travel suppliers and a strategic relationship between GBT and our GCS business.

During the fourth quarter of 2021, our economic interest in GBT was reduced to approximately 41 percent from 50 percent as a result of GBT’s acquisition of Egencia;

our voting rights remain at 50 percent.

Also during the fourth quarter of 2021, GBT entered into a business combination agreement with Apollo Strategic Growth Capital (APSG).

Upon consummation of the business combination, which is subject to the satisfaction of customary closing conditions, including approval by APSG’s shareholders and certain regulatory approvals, the terms of certain of our commercial arrangements with GBT will be amended and GBT will become a public company.

Our various products and services are offered globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations.

These products and services are offered through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising.

The following types of revenue are generated from our various products and services:

• Discount revenue, our largest revenue source, primarily represents the amount we earn on transactions occurring at merchants that have entered into a card acceptance agreement with us, or a Global Network Services (GNS) partner or other third-party merchant acquirer, for facilitating transactions between the merchants and Card Members.

The amount of fees charged for accepting our cards as payment, or merchant discount, varies with, among other factors, the industry in which the merchant does business, the merchant’s overall American Express-related transaction volume, the method of payment, the settlement terms with the merchant, the method of submission of transactions and, in certain instances, the geographic scope for the related card acceptance agreement between the merchant and us (e.g., domestic or global) and the transaction amount.

• Discount revenue, our largest revenue source, represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.

The amount of fees charged for accepting our cards as payment, or merchant discount, varies with, among other factors, the industry in which the merchant conducts business, the merchant’s overall American Express-related transaction volume, the method of payment, the settlement terms with the merchant, the method of submission of transactions and, in certain instances, the geographic scope for the card acceptance agreement between the merchant and us (e.g., local or global) and the transaction amount.

In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for “non-swiped” card transactions or for transactions using cards issued outside the United States at merchants located in the United States;

1 unchanged sentence

• Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account;

• Other fees and commissions, primarily represent Card Member delinquency fees, foreign currency conversion fees charged to Card Members, loyalty coalition-related fees, service fees earned from merchants, travel commissions and fees, and Membership Rewards program fees;

• Other revenue, primarily represents revenues arising from contracts with our GNS partners (including commissions and signing fees less issuer rate payments), cross-border Card Member spending, ancillary merchant-related fees, earnings (losses) from equity method investments (including GBT), insurance premiums, and prepaid card and Travelers Cheque-related revenue.

Effective for the first quarter of 2021, we changed the way we describe our volume metrics, replacing billed business, proprietary billed business and GNS billed business with network volumes, billed business and processed volumes, respectively.

Within processed volumes we now include transactions associated with certain alternative payment solutions that were not previously reported in our volume metrics.

Prior period amounts have been recast to conform with current period presentation.

Refer to the “Glossary of Selected Terminology” for definitions of each updated term.

• Service fees and other revenue, primarily represent service fees earned from merchants and other customers, travel commissions and fees, Card Member delinquency fees, foreign currency-related fees charged to Card Members, and income (losses) from our investments in which we have significant influence;

• Processed revenue primarily represents revenues related to network partnership agreements, comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners.

Refer to the “Glossary of Selected Terminology” for the definitions of certain key terms and related information appearing within this Form 10-K.

NON-GAAP MEASURES

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Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies.

BUSINESS ENVIRONMENT

Our results for the year reflect the strong growth momentum we have seen in our business throughout 2021, and our strategy of investing in our customers, brand and talent is helping in our effort to drive share, scale and relevance.

Spending on our network reached record levels and credit metrics remained around historic lows.

Net income more than doubled versus the prior year to $8.1 billion and exceeded 2019 levels;

contributing to this increase in Net income in the current year was a $2.5 billion credit reserve release and sizeable net gains on equity investments.

Year-over-year comparisons reflect the adverse impacts on our business in 2020 due to the COVID-19 pandemic.

As certain of the pandemic-related restrictions were lifted and macroeconomic conditions improved, and through the successful execution of our investment strategy, we saw a steady recovery in our business, with certain key areas growing beyond pre-pandemic (2019) levels in 2021.

Worldwide network volumes for the year increased 24 percent compared to the prior year and reached 2019 levels.

Billed business, which represented 85 percent of our total network volumes and drives most of our financial results, increased 25 percent and continued to show different paces of recovery for G&S and T&E spend.

G&S spend, which accounts for the majority of our billed business, grew by 19 percent on a year-over-year basis, and was 18 percent above 2019 levels.

This growth was primarily driven by ongoing strong performance in online and card-not-present spending even as offline spending fully recovered and resumed growth compared to 2019 levels.

Global T&E spend grew 59 percent versus the prior year, reflecting a steady recovery throughout the year, which resulted in fourth quarter T&E volumes reaching 82 percent of 2019 levels.

The year-over-year growth in billed business was led by the U.S., where spend increased 26 percent versus the prior year and exceeded 2019 levels by 6 percent, primarily driven by U.S.

consumers and small and mid-sized enterprises.

Total revenues net of interest expense increased 17 percent year-over-year, reflecting double digit growth in all our non-interest revenue lines.

Discount revenue, our largest revenue line, increased 26 percent year-over-year, driven primarily by growth in Card Member spending.

Other fees and commissions and Other revenues increased year-over-year, primarily driven by higher travel-related revenues.

Net card fees grew consistently throughout 2021 and were up 11 percent year over year, as new card acquisitions increased, and Card Member retention remained high, demonstrating the impact of investments we have made in our premium value propositions.

Net interest income declined 3 percent versus the prior year, primarily due to a decrease in net interest yields driven by higher paydown rates on revolving loan balances.

Card Member loans increased 21 percent, which was lower than the growth in billed business due to higher paydown rates driven in part by the continued liquidity and financial strength of our customer base.

Provisions for credit losses decreased and resulted in a net benefit, primarily due to a $2.5 billion reserve release in the current year versus a reserve build in the prior year and lower net write-offs in the current year.

The reserve release in the current year was driven by improved portfolio quality and macroeconomic outlook, partially offset by an increase in the outstanding balance of loans and receivables.

We do not expect to see reserve releases of this magnitude in 2022.

Card Member rewards, Card Member services and business development expenses are generally correlated to volumes or are variable based on usage, and increased year-over-year due to growth in spend and higher usage of travel-related benefits.

Additionally, our higher rewards expense versus last year was partially driven by an increase to our Membership Rewards liability to reflect a higher mix of redemptions in travel-related categories.

During the year we increased marketing investments to build growth momentum and accelerate new card acquisitions.

Our ongoing investments in differentiated value propositions and expansion of our digital capabilities are helping to drive increased Card Member engagement and strong retention rates.

Our operating expenses for 2021 were in line with 2020;

however, the current year included sizeable net gains associated with the Amex Ventures equity investments that we do not expect to occur with the same magnitude in 2022.

We expect to continue to invest strategically in marketing, value propositions on our products, technology and our colleagues.

During the year, we returned $9 billion of capital to our shareholders through common share repurchases and divided payments, which resulted in us ending the year with our Common Equity Tier 1 (CET1) capital ratio back within our target range of 10 to 11 percent.

We plan to continue to manage our CET1 capital ratio within our target range.

We also expect to increase our dividend payment by approximately 20 percent in the first quarter of 2022, subject to approval by our Board of Directors.

The growth momentum we generated throughout this year has strengthened our resolve to continue to focus on our strategic imperatives – expand our leadership in the premium consumer space, build on our strong position in commercial payments, strengthen our global merchant network, and make American Express an essential part of our customers’ digital lives.

We believe that continuing our strategy of investing at high levels in our customers, brand and talent will position us well as we seek to deliver sustainable and profitable long-term growth.

See “Supervision and Regulation” in “Business” for information on legislative and regulatory changes that could have a material adverse effect on our results of operations and financial condition and “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for information on additional impacts of the COVID-19 pandemic and the potential impacts of economic, geopolitical and competitive conditions and certain litigation and regulatory matters on our business.

CONSOLIDATED RESULTS OF OPERATIONS

Refer to the “Glossary of Selected Terminology” for the definitions of certain key terms used in this section.

The discussions in the “Financial Highlights”, “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the year ended December 31, 2021 compared to the year ended December 31, 2020, as presented in the accompanying tables.

These discussions should be read in conjunction with the discussion under “Business Environment,” which contains further information on the COVID-19 pandemic and the related impacts on our results.

For a discussion of the financial condition and results of operations for 2020 compared to 2019, please refer to Part II, Item 7.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 12, 2021.

SUMMARY OF FINANCIAL PERFORMANCE

Years Ended December 31, Change Change

(Millions, except percentages and per share amounts) 2021 2020 2019 2021 vs.

(Millions, except percentages, per share amounts and where indicated) 2022 2021 2020 2022 vs.

Selected Income Statement Data

Total revenues net of interest expense $ 52,862 $ 42,380 $ 36,087 $ 10,482 25 % $ 6,293 17 %

Provisions for credit losses (a)

Provisions for credit losses

2,182 (1,419) 4,730 3,601 # (6,149) #

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Net income 7,514 8,060 3,135 (546) (7) 4,925 #

Earnings per common share — diluted (b)

Earnings per common share — diluted (a)

$ 9.85 $ 10.02 $ 3.77 $ (0.17) (2) % $ 6.25 # %

Common Share Statistics (b)

Cash dividends declared per common share $ 2.08 $ 1.72 $ 1.72 $ 0.36 21 % $ — — %

Average common shares outstanding:

Basic 751 789 805 (38) (5) % (16) (2) %

Diluted 752 790 806 (38) (5) % (16) (2) %

Selected Metrics and Ratios

Network volumes (Billions)

$ 1,552.8 $ 1,284.2 $ 1,037.8 $ 269 21 % $ 246 24 %

Return on average equity (c)

32.3 % 33.7 % 14.2 %

Net interest income divided by average Card Member loans 10.4 % 10.2 % 10.7 %

Net interest yield on average Card Member loans (d)

10.6 % 10.7 % 11.5 %

Effective tax rate 21.6 % 24.6 % 27.0 %

Common Equity Tier 1 10.3 % 10.5 % 13.5 %

Selected Balance Sheet Data

Cash and cash equivalents $ 33,914 $ 22,028 $ 32,965 $ 11,886 54 % $ (10,937) (33) %

Card Member receivables 57,613 53,645 43,701 3,968 7 9,944 23

Card Member loans 107,964 88,562 73,373 19,402 22 15,189 21

Customer deposits 110,239 84,382 86,875 25,857 31 (2,493) (3)

Long-term debt $ 42,573 $ 38,675 $ 42,952 $ 3,898 10 % $ (4,277) (10) %

# Denotes a variance of 100 percent or more

(a) Results for reporting periods beginning on and after January 1, 2020 are presented using the Current Expected Credit Loss (CECL) methodology, while information as of and for the year ended December 31, 2019 continues to be reported in accordance with the incurred loss methodology then in effect.

Refer to Note 1 and Note 3 to the “Consolidated Financial Statements” for further information.

(b) Represents net income, less (i) earnings allocated to participating share awards of $56 million, $20 million and $47 million for the years ended December 31, 2021, 2020 and 2019, respectively, (ii) dividends on preferred shares of $71 million, $79 million and $81 million for the years ended December 31, 2021, 2020 and 2019, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.

(a) Represents net income, less (i) earnings allocated to participating share awards of $57 million, $56 million and $20 million for the years ended December 31, 2022, 2021 and 2020, respectively, (ii) dividends on preferred shares of $57 million, $71 million and $79 million for the years ended December 31, 2022, 2021 and 2020, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.

Refer to Note 16 and Note 21 to the “Consolidated Financial Statements” for further details on preferred shares and earnings per common share (EPS), respectively.

(c) Return on average equity (ROE) is calculated for the relevant periods by dividing the (i) preceding twelve months of net income ($8.1 billion, $3.1 billion and $6.8 billion for 2021, 2020 and 2019, respectively) by (ii) one-year monthly average of total shareholders’ equity ($23.9 billion, $22.0 billion and $22.8 billion for 2021, 2020 and 2019, respectively).

(b) Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.

(c) Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.

(d) Net interest yield on average Card Member loans reflects adjusted net interest income divided by average Card Member loans, computed on an annualized basis.

Adjusted net interest income and net interest yield on average Card Member loans are non-GAAP measures.

Refer to Table 8 for a reconciliation to Net interest income divided by average Card Member loans.

BUSINESS ENVIRONMENT

Our results for the year demonstrate that our growth strategy is working and our business is in an even stronger position today than before the pandemic.

Spending on our network reached record levels, and credit metrics remain below pre-pandemic levels.

Our investments in product innovation, technology, people and our brand has led to increased generational relevance with Millennial and Gen Z customers, record new card acquisitions, deeper relationships with customers and expanded merchant acceptance.

For 2022, we reported net income of $7.5 billion, or $9.85 per share, compared with net income of $8.1 billion, or $10.02 per share, a year ago.

The reduction in net income reflected credit reserve builds and net losses in our Amex Ventures strategic investment portfolio in the current year compared with sizeable credit reserve releases and significant net gains in our Amex Ventures strategic investment portfolio in the prior year.

Worldwide network volumes for the year increased 21 percent compared to the prior year (24 percent on an FX-adjusted basis 1 ).

Billed business, which represented 86 percent of our total network volumes and is the most significant driver of our financial results, increased 23 percent year-over-year (25 percent on an FX-adjusted basis 1 ), demonstrating our continued ability to acquire, engage and retain high-spending, premium Card Members.

Consumer billed business grew by 24 percent year-over-year, reflecting continued strength in spending trends from our premium U.S.

consumer Card Members.

Billed business in our Commercial Services segment grew by 21 percent on a year-over-year basis, reflecting continued growth from U.S.

small and mid-sized enterprise customers, as well as continued steady recovery in spending by our U.S.

large and global corporate clients.

International billed business grew by 23 percent year-over-year (36 percent on an FX-adjusted basis 1 ), driven by a strong recovery in spend across both consumer and commercial customers.

T&E spending momentum remained strong throughout the year, while year-over-year Goods & Services spending growth slowed towards the end of the year following the large pandemic recovery growth rates experienced earlier in the year.

Inflation was a modest contributor to our strong billed business growth, while the continuing strengthening of the U.S.

dollar, relative to the prior year, against most major currencies in which we operate, had a negative impact on our international billings.

Total revenues net of interest expense increased 25 percent year-over-year (27 percent on an FX-adjusted basis 1 ), reflecting strong growth in all our revenue lines.

Discount revenue, our largest revenue line, increased 25 percent year-over-year, driven primarily by the momentum in our Card Member spending volumes throughout 2022.

Net card fees increased 17 percent year over-year, as new card acquisitions reached record levels in 2022 and Card Member retention remained high, demonstrating the impact of investments we have made in our premium value propositions.

Service fees and other revenues increased 36 percent year-over-year, driven in part by higher travel-related revenues.

Net interest income increased 28 percent versus the prior year, primarily driven by growth in Card Member loans.

While the rising interest rate environment had a fairly neutral impact on our results for the full year, rising rates did have a modest negative impact on net interest income towards the end of the year.

Card Member loans increased 22 percent year-over-year, with the majority of growth coming from existing Card Members and was driven by ongoing strong growth in billed business, which began to moderate towards the end of the year as we lapped the steep phase of recovery.

Provisions for credit losses increased versus the prior year, reflecting a reserve build of $617 million compared with a reserve release of $2.5 billion in the prior year, and are expected to increase in 2023.

While delinquency and net write-off rates continued to increase throughout the year, these metrics remain strong, supported by the premium nature of our customer base, our risk management capabilities and risk actions we took throughout the year.

1 The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S.

dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared).

FX-adjusted revenues is a non GAAP measure.

We believe the presentation of information on a foreign currency adjusted basis is helpful to investors by making it easier to compare our performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.

Card Member rewards, Card Member services and Business development expenses are generally correlated to volumes or are variable based on usage, and increased year-over year due to network volume growth and higher usage of travel-related benefits.

Card Member rewards expense growth was also driven by a larger proportion of billed business in categories that earn incremental rewards such as travel.

During the year, we continued to make significant investments in marketing to drive growth momentum and accelerate new card acquisitions.

Operating expenses increased 24 percent year-over-year, primarily driven by net losses in the current year associated with our Amex Ventures equity investments as compared to net gains in the prior year, as well as higher compensation costs due to an increase in our colleague base to support business growth and compensation decisions we made.

We remain focused on driving marketing and operating expense efficiencies, while continuing to invest in our growth strategy.

During the year, we returned $4.9 billion of capital to our shareholders through common share repurchases and dividend payments, while maintaining our Common Equity Tier 1 (CET1) capital ratio within our target range of 10 to 11 percent.

We plan to continue to return to shareholders the excess capital we generate, while managing our CET1 capital ratio within our target range and supporting balance sheet growth.

We also expect to increase the regular quarterly dividend on common shares outstanding by 15 percent beginning with the first quarter 2023 dividend declaration.

Our performance continues to give us confidence in our business model and our strategy, and while we recognize the uncertainty of the geopolitical and macroeconomic environment, we remain focused on delivering sustainable and profitable growth.

See “Supervision and Regulation” in “Business” for information on legislative and regulatory changes that could have a material adverse effect on our results of operations and financial condition and “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for information on potential impacts of economic, geopolitical and competitive conditions and certain litigation and regulatory matters on our business.

CONSOLIDATED RESULTS OF OPERATIONS

The discussions in the “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the year ended December 31, 2022 compared to the year ended December 31, 2021, as presented in the accompanying tables.

For a discussion of the financial condition and results of operations for 2021 compared to 2020, please refer to Part II, Item 7.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 11, 2022.

Beginning in the first quarter of 2022, we made reporting presentation changes to our Consolidated Statements of Income to separately present revenues earned from processed volumes, previously reported in Discount revenue, Other fees and commissions and Other revenue, as Processed revenue.

The remaining balances from Other fees and commissions and Other revenue were combined as Service fees and other revenue.

We also disaggregated Marketing and business development expense into Business Development expense and Marketing expense.

Prior period amounts presented herein have been recast to conform to the current period presentation;

there was no impact to Total non-interest revenues or Total expenses.

TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY

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Discount revenue $ 30,739 $ 24,563 $ 19,435 $ 6,176 25 % $ 5,128 26 %

Net card fees (a)

5,195 4,664 4,042 531 11 622 15

Other fees and commissions 2,392 2,163 3,297 229 11 (1,134) (34)

Other 1,316 874 1,430 442 51 (556) (39)

Net card fees 6,070 5,195 4,664 875 17 531 11

Service fees and other revenue 4,521 3,316 2,702 1,205 36 614 23

Processed revenue 1,637 1,556 1,301 81 5 255 20

Total non-interest revenues 42,967 34,630 28,102 8,337 24 6,528 23

3 unchanged sentences

Total revenues net of interest expense $ 52,862 $ 42,380 $ 36,087 $ 10,482 25 % $ 6,293 17 %

(a) Effective April 1, 2021, we prospectively changed the recognition of certain costs paid to a third party previously recognized in Net card fees.

Refer to Note 1 to the “Consolidated Financial Statements” for further details.

# Denotes a variance of 100 percent or more

TOTAL REVENUES NET OF INTEREST EXPENSE

Discount revenue increased, primarily driven by an increase in worldwide network volumes of 24 percent, reflecting, in part, the recovery from the adverse impacts of the COVID-19 pandemic in the prior year.

network volumes increased 27 percent and non-U.S.

network volumes increased 17 percent.

See Tables 5 and 6 for more details on volume performance.

The increase in discount revenue was also driven by an increase in the average discount rate, primarily due to a change in the mix of spending driven by increased levels of T&E-related volumes, as compared to the prior year.

The average discount rate was 2.30 percent and 2.28 percent for 2021 and 2020, respectively.

Discount revenue increased, primarily driven by an increase in billed business of 23 percent.

See Tables 5 and 6 for more details on billed business performance.

Net card fees increased, primarily driven by growth in our premium card portfolios.

Other fees and commissions increased, primarily due to higher travel commissions and fees from our consumer travel business and higher foreign exchange conversion revenue related to cross-border Card Member spending, both of which reflect the partial recovery of travel-related revenues in the current year.

Other revenues increased, primarily driven by a non-cash gain related to an increase in GBT's total equity book value arising from GBT's acquisition of Egencia and a lower net loss in the current year from GBT as compared to the prior year.

Interest income decreased, primarily due to a decline in the interest yield on average Card Member loans driven by higher paydown rates on revolving loan balances.

Interest expense decreased, primarily driven by lower interest rates paid on deposits and a reduction in average debt.

Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending, higher travel commissions and fees from our consumer travel business, and growth in delinquency fees.

The increase was partially offset by a non-cash gain related to an increase in GBTG's total equity book value in the prior year.

Processed revenue increased, primarily driven by an increase in processed volumes, partially offset by the prior-year repositioning of certain of our alternative payment solutions.

Interest income increased, primarily driven by higher average Card Member loan balances and interest rates.

Interest expense increased, primarily driven by higher interest rates paid on deposits and debt outstanding.

PROVISIONS FOR CREDIT LOSSES SUMMARY

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(Millions, except percentages) 2022 2021 2020 2022 vs.

Card Member receivables

Card Member loans

Net write-offs $ 1,066 $ 879 $ 2,170 $ 187 21 % $ (1,291) (59) %

Reserve (release) build (a)

Reserve build (release) (a)

448 (2,034) 1,283 2,482 # (3,317) #

Total 1,514 (1,155) 3,453 2,669 # (4,608) #

Card Member loans

Card Member receivables

Net write-offs 462 129 881 333 # (752) (85)

Reserve (release) build (a)

Reserve build (release) (a)

165 (202) 134 367 # (336) #

4 unchanged sentences

15 33 27 (18) (55) 6 22

Reserve (release) build — Other loans (a)(b)

Reserve build (release) — Other loans (a)(b)

7 (185) 66 192 # (251) #

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Total 41 (191) 262 232 # (453) #

Total provisions for credit losses (d)

Total provisions for credit losses

$ 2,182 $ (1,419) $ 4,730 $ 3,601 # % $ (6,149) # %

# Denotes a variance of 100 percent or more

(a) Refer to the “Glossary of Selected Terminology” for a definition of reserve (release) build.

(a) Refer to the “Glossary of Selected Terminology” for a definition of reserve build (release).

(b) Relates to Other loans of $5.4 billion, $2.9 billion and $2.9 billion less reserves of $59 million, $52 million and $238 million, as of December 31, 2022, 2021 and 2020, respectively.

(c) Relates to Other receivables included in Other assets on the Consolidated Balance Sheets of $3.1 billion, $2.7 billion and $3.0 billion, less reserves of $22 million, $25 million and $85 million as of December 31, 2022, 2021 and 2020, respectively.

(d) Results for reporting periods beginning on and after January 1, 2020 are presented using the CECL methodology, while information as of and for the year ended December 31, 2019 continues to be reported in accordance with the incurred loss methodology then in effect.

Refer to Note 1 and Note 3 to the “Consolidated Financial Statements” for further information.

PROVISIONS FOR CREDIT LOSSES

Card Member receivables and loans provisions for credit losses decreased and resulted in a net benefit, primarily driven by reserve releases in the current year versus reserve builds in the prior year and lower net write-offs in the current year.

The reserve releases in the current year were due to improved portfolio quality and macroeconomic outlook, in large part driven by improvement in unemployment rate projections, partially offset by increases in the outstanding balances of receivables and loans.

The reserve builds in the prior year were due to the deterioration of the global macroeconomic outlook as a result of the COVID-19 pandemic, partially offset by declines in the outstanding balances of receivables and loans and lower delinquencies.

Other provision for credit losses decreased and resulted in a net benefit, primarily due to a reserve release in the current year versus a reserve build in the prior year and lower net write-offs in the current year.

The reserve release in the current year was due to improved portfolio quality and macroeconomic outlook.

The reserve build in the prior year was due to deteriorating portfolio quality and the previously mentioned deterioration of the global macroeconomic outlook, partially offset by a decline in the outstanding balance of other loans.

Refer to Note 3 to the “Consolidated Financial Statements” for the range of key variables in the macroeconomic scenarios utilized for the computation of our reserves for credit losses.

Card Member loans and receivables provisions for credit losses increased, primarily due to reserve builds in the current year, versus reserve releases in the prior year.

The reserve builds in the current year were primarily driven by increases in loans and receivables outstanding, higher delinquencies and changes in macroeconomic forecasts, partially offset by the release of COVID-19 pandemic-driven reserves for Card Member loans.

The reserve releases in the prior year were due to improved portfolio quality and macroeconomic forecasts, partially offset by increases in loans and receivables outstanding.

Other provisions for credit losses increased, primarily due to a net reserve build in the current year, versus a reserve release in the prior year.

The net reserve build in the current year was primarily driven by increases in non-card loans outstanding, partially offset by improved credit performance.

The reserve release in the prior year was due to improved portfolio quality and macroeconomic forecasts.

Refer to Note 3 to the “Consolidated Financial Statements” for further information regarding our reserves for credit losses.

EXPENSES SUMMARY

1 unchanged sentence

(Millions, except percentages) 2022 2021 2020 2022 vs.

Marketing and business development

$ 9,053 $ 6,747 $ 7,125 $ 2,306 34 % $ (378) (5) %

Card Member rewards

$ 14,002 $ 11,007 $ 8,041 $ 2,995 27 % $ 2,966 37 %

Business development 4,943 3,762 3,051 1,181 31 711 23

Card Member services 2,959 1,993 1,230 966 48 763 62

Total marketing, business development, and Card Member rewards and services 22,053 16,018 19,787 6,035 38 (3,769) (19)

Marketing 5,458 5,291 3,696 167 3 1,595 43

Salaries and employee benefits 7,252 6,240 5,718 1,012 16 522 9

1 unchanged sentence

Total expenses $ 41,095 $ 33,110 $ 27,061 $ 7,985 24 % $ 6,049 22 %

Marketing and business development expense increased, primarily due to increases in marketing investments to continue building growth momentum and higher partner payments driven by higher spending volumes.

Card Member rewards expense increased, primarily driven by increases in Membership Rewards and cash back rewards expenses of $2.2 billion and cobrand rewards expense of $769 million, both of which were primarily driven by higher billed business.

The increase in Membership Rewards expense was also driven by a larger proportion of spend in categories that earn incremental rewards and a higher mix of redemptions in travel-related categories, as compared to the prior year.

The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at December 31, 2021 and 96 percent (rounded up) at December 31, 2020.

Card Member services expense increased, primarily due to higher usage of travel-related benefits in the current year, as compared to the prior year during which travel was more negatively impacted by the COVID-19 pandemic.

Salaries and employee benefits expense increased, primarily driven by higher compensation.

Other expenses decreased, primarily driven by higher net gains in the current year on Amex Ventures equity investments, the impact of the implementation of the Proportional Amortization Method (PAM) related to investments in qualified affordable housing projects and a net reserve release in the current year versus a reserve build in the prior year associated with merchant exposure for Card Member purchases, all of which were partially offset by an increase in professional services expense.

Refer to Note 1 to the “Consolidated Financial Statements” for further information on PAM.

Card Member rewards expense increased, primarily driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $2.0 billion, and cobrand rewards expense of $1.0 billion, both of which were primarily driven by higher billed business.

The increase in Membership Rewards expense was also driven by a larger proportion of spend in categories that earn incremental rewards such as travel and a higher mix of redemptions in travel-related categories.

The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at both December 31, 2022 and 2021.

Business development expense increased, primarily due to increased partner payments and client incentives, both of which were driven by higher network volumes.

Card Member services expense increased, primarily due to higher usage of travel-related benefits.

Marketing expense increased, primarily due to business investments to drive growth momentum and accelerate new card acquisitions.

Salaries and employee benefits expense increased, primarily driven by higher compensation costs, reflecting an increase in our colleague base to support business growth as well as compensation decisions made.

Other expenses increased, primarily driven by net losses on Amex Ventures investments in the current year, as compared to net gains in the prior year.

The effective tax rate was 21.6 percent and 24.6 percent for 2022 and 2021, respectively.

The reduction in the effective tax rate primarily reflected discrete tax charges in the prior year related to the realizability of certain foreign deferred tax assets.

The reduction in the effective tax rate primarily reflected discrete tax benefits in the current year related to the resolution of prior-year tax items.

The tax rates in both years reflected the level of pretax income in relation to recurring permanent tax benefits and the geographic mix of business.

The current year's effective tax rate also reflected the implementation of PAM related to investments in qualified affordable housing projects.

Refer to Note 1 to the “Consolidated Financial Statements” for further information on PAM.

SELECTED CARD-RELATED STATISTICAL INFORMATION

1 unchanged sentence

Years Ended December 31, 2022 2021 2020 2022 vs.

Network volumes:

$ 897.0 $ 708.1 $ 840.7 27 % (16) %

Outside the U.S.

Network volumes (billions)

$ 1,552.8 $ 1,284.2 $ 1,037.8 21 % 24 %

Total $ 1,284.2 $ 1,037.8 $ 1,265.7 24 (18)

Billed business $ 1,338.3 $ 1,089.8 $ 870.7 23 25

Processed volumes $ 214.5 $ 194.4 $ 167.1 10 16

Total $ 1,284.2 $ 1,037.8 $ 1,265.7 24 (18)

Cards-in-force:

56.4 53.8 54.7 5 (2)

Outside the U.S.

65.3 58.2 59.7 12 (3)

Total 121.7 112.0 114.4 9 (2)

Proprietary 71.4 68.9 70.3 4 (2)

GNS 50.3 43.1 44.1 17 (2)

Total 121.7 112.0 114.4 9 (2)

Basic cards-in-force:

44.3 42.2 43.0 5 (2)

Outside the U.S.

Cards-in-force (millions)

133.3 121.7 112.0 10 9

Total 100.7 91.3 93.0 10 (2)

Average proprietary basic Card Member spending:

Proprietary cards-in-force 76.7 71.4 68.9 7 4

Basic cards-in-force (millions)

111.5 100.7 91.3 11 10

Outside the U.S.

Proprietary basic cards-in-force 59.1 54.7 52.7 8 4

Average proprietary basic Card Member spending (dollars)

$ 23,496 $ 20,392 $ 16,352 15 25

Worldwide Average $ 20,392 $ 16,352 $ 19,972 25 (18)

Average discount rate

11 unchanged sentences

Total billed business 23 25 25 24

Consumer billed business 29 28 (17) (18)

Commercial billed business 21 20 (21) (21)

Consumer Services 24 32

Commercial Services 21 22 21 20

International Card Services 23 36 22 18

Processed volumes 10 18 16 14

Network volumes 27 (16)

Total billed business 26 (16)

Consumer billed business 32 (15)

Commercial billed business 21 (18)

Outside the U.S.

Network volumes 17 14 (22) (24)

Total billed business 21 17 (26) (28)

Consumer billed business 23 19 (21) (24)

Commercial billed business 18 14 (32) (34)

Asia Pacific, Australia & New Zealand network volumes 12 9 (15) (18)

Latin America, Canada & Caribbean network volumes 23 22 (32) (27)

Europe, the Middle East & Africa network volumes 25 19 (29) (33)

Merchant Industry Metrics

Worldwide billed business

G&S-related (81% and 86% of worldwide billed business for 2021 and 2020, respectively)

19 18 (1) (1)

T&E-related (19% and 14% of worldwide billed business for 2021 and 2020, respectively)

59 58 (60) (60)

Airline-related (3% and 3% of worldwide billed business for 2021 and 2020, respectively)

Merchant industry billed business metrics

G&S-related (75% and 81% of billed business for 2022 and 2021, respectively)

T&E-related (25% and 19% of billed business for 2022 and 2021, respectively)

Airline-related (6% and 3% of billed business for 2022 and 2021, respectively)

119 % 125 % 63 % 61 %

billed business

G&S-related (82% and 87% of U.S.

billed business for 2021 and 2020, respectively)

T&E-related (18% and 13% of U.S.

billed business for 2021 and 2020, respectively)

Airline-related (3% and 2% of U.S.

billed business for 2021 and 2020, respectively)

(a) The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S.

3 unchanged sentences

(Millions, except percentages and where indicated) 2022 2021 2020 2022 vs.

Worldwide Card Member loans

Card Member loans:

$ 76.9 $ 64.2 $ 76.0 20 % (16) %

Outside the U.S.

11.7 9.2 11.4 27 (19)

Card Member loans (billions)

$ 108.0 $ 88.6 $ 73.4 22 % 21 %

Credit loss reserves:

Beginning balance (a)

$ 5,344 $ 4,027 $ 2,134 33 89

Beginning balance $ 3,305 $ 5,344 $ 4,027 (38) 33

Provisions — principal, interest and fees 1,514 (1,155) 3,453 # #

7 unchanged sentences

$ 95.4 $ 76.1 $ 74.6 25 2

Net write-off rate — principal only (c)

Net write-off rate — principal, interest and fees (b)

1.1 % 1.2 % 2.9 %

Net write-off rate — principal, interest and fees (c)

Net write-off rate — principal only (b)

0.9 % 0.9 % 2.4 %

1 unchanged sentence

1.0 % 0.7 % 1.0 %

Worldwide Card Member receivables

Card Member receivables:

$ 38.4 $ 30.5 $ 39.0 26 (22)

Outside the U.S.

15.2 13.2 18.4 15 (28)

Card Member receivables (billions)

$ 57.6 $ 53.6 $ 43.7 7 23

Credit loss reserves:

Beginning balance (a)

$ 267 $ 126 $ 573 # (78)

Beginning balance $ 64 $ 267 $ 126 (76) #

Provisions — principal and fees

627 (73) 1,015 # #

Net write-offs — principal and fees less recoveries (d)

(129) (881) (900) (85) (2)

Net write-offs — principal and fees less recoveries (c)

(462) (129) (881) # (85)

1 unchanged sentence

% of receivables 0.4 % 0.1 % 0.6 %

Net write-off rate — principal and fees (c)(d)(e)

Net write-off rate — principal and fees (b)(c)(d)

0.8 % 0.3 % 2.0 %

# Denotes a variance of 100 percent or more

(a) Includes an increase of $1,643 million and decrease of $493 million to the beginning reserve balances for Card Member loans and receivables, respectively, as of January 1, 2020, related to the adoption of the CECL methodology.

Refer to Note 3 to the “Consolidated Financial Statements” for further information.

(b) Other includes foreign currency translation adjustments.

(c) We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention.

(a) Other includes foreign currency translation adjustments.

(b) We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention.

In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.

(d) The net write-off rate for the year ended December 31, 2021 includes a $37 million partial recovery in Card Member receivables related to a corporate client bankruptcy, which had resulted in a $53 million write-off in the year ended December 31, 2020 in the GCS segment.

(e) Refer to Tables 10 and 13 for Net write-off rate — principal only and 30+ days past due metrics for GCSG and Global Small Business Services (GSBS) receivables, respectively.

A net write-off rate based on principal losses only for Global Corporate Payments (GCP), which reflects global, large and middle market corporate accounts, is not available due to system constraints.

(c) The net write-off rate for the year ended December 31, 2021 includes a $37 million partial recovery in Card Member receivables related to a corporate client bankruptcy, which had resulted in a write-off in the year ended December 31, 2020 in the ICS segment.

(d) Refer to Tables 10, 12 and 14 for Net write-off rate — principal only and 30+ days past due metrics for U.S.

consumer receivables, U.S.

small business receivables and International small business and consumer receivables, respectively.

A net write-off rate based on principal losses only and delinquency data for periods other than 90+ days past billing for corporate receivables are not available due to system constraints.

NET INTEREST YIELD ON AVERAGE CARD MEMBER LOANS

25 unchanged sentences

“Business” for additional discussion of products and services that comprise each segment.

As a result of organizational changes announced during the second quarter of 2021, our loyalty coalition businesses results, which were previously reported within the GMNS segment, are now reported within the GCSG segment.

Prior period segment results have been revised to conform with current period presentation.

Effective for the third quarter of 2022, we realigned our reportable segments to reflect organizational changes announced during the second quarter of 2022.

Prior periods presented herein have been recast to conform to the new reportable operating segments, which are:

USCS, CS, ICS and GMNS, with corporate functions and certain other businesses and operations included in Corporate & Other.

Refer to Note 24 to the “Consolidated Financial Statements” for additional information.

Results of the reportable operating segments generally treat each segment as a stand-alone business.

2 unchanged sentences

We allocate discount revenue and certain other revenues among segments using a transfer pricing methodology.

Within the GCSG and GCS segments, discount revenue generally reflects the issuer component of the overall discount revenue generated by each segment’s Card Members;

within the GMNS segment, discount revenue generally reflects the network and acquirer component of the overall discount revenue.

Net card fees and Other fees and commissions are directly attributable to the segment in which they are reported.

Within the USCS, CS and ICS segments, discount revenue generally reflects the issuer component of the overall discount revenue generated by each segment’s Card Members;

within the GMNS segment, discount revenue generally reflects the network and acquirer component of the overall discount revenue being allocated.

Net card fees, processed revenue and certain other revenues are directly attributable to the segment in which they are reported.

Interest and fees on loans and certain investment income is directly attributable to the segment in which it is reported.

2 unchanged sentences

The provisions for credit losses are directly attributable to the segment in which they are reported.

Marketing and business development expense is included in each segment based on the actual expenses incurred.

Card Member rewards and Card Member services expenses are included in each segment based on the actual expenses incurred.

Business development and Marketing expenses are included in each segment based on the actual expenses incurred.

Global brand advertising is primarily allocated to the segments based on the relative levels of revenue.

Rewards and Card Member services expenses are included in each segment based on the actual expenses incurred.

Salaries and employee benefits and other operating expenses reflect both costs incurred directly within each segment, as well as allocated expenses.

The allocated expenses include service costs allocated based on activities directly attributable to the segment, and overhead expenses allocated based on the relative levels of revenue and Card Member loans and receivables.

GLOBAL CONSUMER SERVICES GROUP

GCSG SELECTED INCOME STATEMENT DATA

Salaries and employee benefits and other expenses reflect both costs incurred directly within each segment, as well as allocated expenses.

The allocated expenses include service costs, which primarily reflect salaries and benefits associated with our technology and customer servicing groups, and overhead expenses.

Service costs are allocated based on activities directly attributable to the segment, and overhead expenses are allocated based on the relative levels of revenue and Card Member loans and receivables.

CONSUMER SERVICES

USCS SELECTED INCOME STATEMENT DATA

Years Ended December 31, Change Change

5 unchanged sentences

Total revenues net of interest expense 23,914 18,922 16,347 4,992 26 2,575 16

Provisions for credit losses (a)

(945) 3,150 2,636 (4,095) # 514 19

Provisions for credit losses 1,021 (919) 2,617 1,940 # (3,536) #

Total revenues net of interest expense after provisions for credit losses 22,893 19,841 13,730 3,052 15 6,111 45

Marketing, business development, and Card Member rewards and services 13,898 9,841 12,201 4,057 41 (2,360) (19)

Salaries and employee benefits and other operating expenses 5,052 5,099 5,179 (47) (1) (80) (2)

Total expenses 17,493 13,883 10,627 3,610 26 3,256 31

1 unchanged sentence

# Denotes a variance of 100 percent or more

(a) Results for reporting periods beginning on and after January 1, 2020 are presented using the CECL methodology, while information as of and for the year ended December 31, 2019 continues to be reported in accordance with the incurred loss methodology then in effect.

Refer to Note 1 and Note 3 to the “Consolidated Financial Statements” for further information.

GCSG primarily issues a wide range of proprietary consumer cards globally.

GCSG also provides services to consumers, including travel and lifestyle services and non-card financing products, and manages certain international joint ventures, our partnership agreements in China and our loyalty coalition businesses operated in certain countries.

USCS issues a wide range of proprietary consumer cards and provides services to U.S.

consumers, including travel and lifestyle services as well as banking and non-card financing products.

TOTAL REVENUES NET OF INTEREST EXPENSE

Non-interest revenues increased, primarily driven by higher Discount revenue, Net card fees and Other fees and commissions.

Discount revenue increased 31 percent, primarily driven by an increase in consumer billed business of 29 percent reflecting, in part, recovery from the adverse impacts of the COVID-19 pandemic in the prior year.

See Tables 5, 6 and 10 for more details on volume performance.

Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.

Discount revenue increased 25 percent, primarily driven by an increase in U.S.

consumer billed business of 24 percent.

See Tables 5, 6 and 10 for more details on billed business performance.

Net card fees increased 24 percent, primarily driven by growth in our premium card portfolios.

Other fees and commissions increased 11 percent, primarily due to higher travel commissions and fees from our consumer travel business and higher foreign exchange conversion revenue related to increased cross-border Card Member spending, both of which reflect the partial recovery of travel-related revenues in the current year.

Net interest income decreased, primarily due to a decline in interest income driven by lower revolving Card Member loan balances, partially offset by lower cost of funds.

Service fees and other revenue increased 50 percent, primarily driven by higher travel commissions and fees from our consumer travel business, as well as growth in delinquency fees.

Net interest income increased 26 percent, primarily driven by an increase in average Card Member loan balances.

Total revenues net of interest expense increased in 2021 compared to 2020, primarily driven by higher Discount revenue, reflecting billed business growth, partially offset by decreased Net interest income, primarily reflecting lower revolving Card Member loan balances.

PROVISIONS FOR CREDIT LOSSES

Provisions for credit losses decreased and resulted in a net benefit, primarily driven by reserve releases in the current year versus reserve builds in the prior year and lower net write-offs in the current year.

The reserve builds in the prior year were due to the deterioration of the global macroeconomic outlook as a result of the COVID-19 pandemic, partially offset by decreases in the outstanding balances of receivables and loans.

Marketing, business development, and Card Member rewards and services expenses increased across all expense categories.

The increase in Card Member rewards expense was primarily driven by higher billed business as well as a larger proportion of spend in categories that earn incremental rewards and a higher mix of redemptions in travel-related categories, as compared to the prior year.

The increase in Marketing and business development expense was primarily due to increases in marketing investments to continue building growth momentum as well as higher spending volumes.

The increase in Card Member services expense was primarily due to higher usage of travel-related benefits in the current year, as compared to the prior year during which travel was more negatively impacted by the COVID-19 pandemic.

GCSG SELECTED STATISTICAL INFORMATION

Card Member loans and receivables provisions for credit losses increased, primarily due to reserve builds in the current year, versus reserve releases in the prior year.

The reserve builds in the current year were primarily driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts, partially offset by the release of COVID-19 pandemic-driven reserves for Card Member loans.

The reserve releases in the prior year were due to improved portfolio quality and macroeconomic forecasts, partially offset by increases in loans and receivables outstanding.

Provisions for credit losses decreased in 2021 compared to 2020, primarily driven by reserve releases in 2021, versus reserve builds in 2020.

Total expenses increased, primarily driven by higher Card Member rewards expense and Card Member services expense.

Card Member rewards expense increased, primarily driven by higher billed business and a larger proportion of spend in categories that earn incremental rewards such as travel and a higher mix of redemptions in travel-related categories.

Business development expense increased, primarily due to increased partner payments driven by higher billed business.

Card Member services expense increased, primarily driven by higher usage of travel-related benefits.

Marketing expense increased, primarily due to business investments to drive growth momentum and accelerate new card acquisitions.

Salaries and employee benefits and other expenses increased, primarily due to higher compensation costs and higher service costs.

Total expenses increased in 2021 compared to 2020, primarily driven by higher customer engagement and marketing expenses, reflecting higher billed business and increases in marketing investments to continue building growth momentum.

USCS SELECTED STATISTICAL INFORMATION

As of or for the Years Ended December 31, Change Change

(Millions, except percentages and where indicated) 2022 2021 2020 2022 vs.

Billed business:

$ 444.2 $ 337.6 $ 398.8 32 % (15) %

Outside the U.S.

Billed business (billions)

$ 553.0 $ 444.2 $ 337.6 24 % 32 %

Total $ 593.1 $ 458.7 $ 552.8 29 (17)

Proprietary cards-in-force 41.7 39.0 37.7 7 3

39.0 37.7 37.9 3 (1)

Outside the U.S.

17.0 16.7 17.5 2 (5)

Total 56.0 54.4 55.4 3 (2)

Proprietary basic cards-in-force 29.2 27.3 26.6 7 3

27.3 26.6 26.9 3 (1)

Outside the U.S.

11.9 11.6 12.1 3 (4)

Total 39.2 38.2 39.0 3 (2)

Average proprietary basic Card Member spending:

$ 16,498 $ 12,641 $ 14,801 31 (15)

Outside the U.S.

Average proprietary basic Card Member spending (dollars)

$ 19,514 $ 16,498 $ 12,641 18 31

Average $ 15,368 $ 11,881 $ 14,212 29 (16)

Total segment assets (billions)

3 unchanged sentences

$ 72.7 $ 59.8 $ 51.4 22 16

Outside the U.S.

10.7 8.7 10.9 23 (20)

Total $ 70.5 $ 60.1 $ 73.3 17 (18)

Average loans (billions)

$ 63.7 $ 52.0 $ 53.0 23 (2)

Outside the U.S.

9.0 8.6 10.0 5 (14)

Total $ 61.0 $ 61.6 $ 69.4 (1) % (11) %

Net write-off rate — principal only (a)

0.8 % 2.4 % 2.3 %

Net write-off rate — principal, interest and fees (a)

1.1 % 1.1 % 2.9 %

30+ days past due as a % of total 0.7 % 1.0 % 1.6 %

Outside the U.S.

Net write-off rate — principal only (a)

0.9 % 0.8 % 2.4 %

Net write-off rate — principal, interest and fees (a)

2.2 % 3.7 % 2.9 %

30+ days past due as a % of total 1.0 % 0.7 % 1.0 %

Net write-off rate — principal only (a)

Calculation of Net Interest Yield on Average Card Member Loans:

Net interest income

$ 7,474 $ 5,933 $ 6,222

Net write-off rate — principal, interest and fees (a)

Interest expense not attributable to our Card Member loan portfolio (b)

Interest income not attributable to our Card Member loan portfolio (c)

(228) (110) (189)

30+ days past due as a % of total 0.7 % 1.1 % 1.6 %

Change Change

(Millions, except percentages and where indicated) 2021 2020 2019 2021 vs.

Card Member receivables:

Adjusted net interest income (d)

$ 7,385 $ 5,981 $ 6,321

Outside the U.S.

Average Card Member loans (billions)

$ 63.7 $ 52.0 $ 53.0

Total $ 22.4 $ 18.7 $ 22.8 20 % (18) %

Net write-off rate — principal only (a)

Net interest income divided by average Card Member loans (d)

11.7 % 11.4 % 11.7 %

Net write-off rate — principal and fees (a)

Net interest yield on average Card Member loans (d)

11.6 % 11.5 % 11.9 %

30+ days past due as a % of total 0.4 % 0.4 % 1.2 %

Outside the U.S.

Net write-off rate — principal only (a)

Card Member receivables:

Total receivables (billions)

$ 14.3 $ 14.7 $ 11.9 (3) % 24 %

1 unchanged sentence

0.6 % 0.1 % 1.4 %

30+ days past due as a % of total 0.7 % 1.0 % 1.3 %

Net write-off rate — principal only (a)

0.6 % — % 1.3 %

Net write-off rate — principal and fees (a)

0.4 % 1.9 % 1.9 %

30+ days past due as a % of total 0.9 % 0.4 % 0.4 %

(a) Refer to Table 7 footnote (c).

GCSG NET INTEREST YIELD ON AVERAGE CARD MEMBER LOANS

As of or for the Years Ended December 31,

(Millions, except percentages and where indicated) 2021 2020 2019

(a) Refer to Table 7 footnote (b).

(b) Refer to Table 8 footnote (a).

(d) Refer to Table 8 footnote (c).

COMMERCIAL SERVICES

CS SELECTED INCOME STATEMENT DATA

Years Ended December 31, Change Change

(Millions, except percentages) 2022 2021 2020 2022 vs.

Non-interest revenues $ 12,196 $ 9,833 $ 8,210 $ 2,363 24 % $ 1,623 20 %

Interest income 2,070 1,408 1,532 662 47 (124) (8)

Interest expense 697 330 508 367 # (178) (35)

Net interest income 1,373 1,078 1,024 295 27 54 5

Interest expense not attributable to our Card Member loan portfolio (a)

Interest income not attributable to our Card Member loan portfolio (b)

Total revenues net of interest expense 13,569 10,911 9,234 2,658 24 1,677 18

Provisions for credit losses 565 (420) 1,291 985 # (1,711) #

Total revenues net of interest expense after provisions for credit losses 13,004 11,331 7,943 1,673 15 3,388 43

Total expenses 10,124 8,395 6,930 1,729 21 1,465 21

Pretax segment income $ 2,880 $ 2,936 $ 1,013 $ (56) (2) % $ 1,923 # %

# Denotes a variance of 100 percent or more

CS issues a wide range of proprietary corporate and small business cards and provides services to U.S.

businesses, including payment and expense management, banking and non-card financing products.

CS also issues proprietary corporate cards and provides services to select global corporate clients.

TOTAL REVENUES NET OF INTEREST EXPENSE

Non-interest revenues increased, primarily driven by higher Discount revenue.

Discount revenue increased 25 percent, primarily driven by an increase in commercial billed business of 21 percent.

See Tables 5, 6 and 12 for more details on billed business performance.

Net card fees increased 22 percent, primarily driven by growth in our premium card portfolios.

Service fees and other revenue increased 60 percent, primarily due to higher foreign exchange related revenues associated with Card Member cross-currency spending and higher delinquency fees.

Processed revenue decreased 71 percent, primarily driven by the prior-year repositioning of certain of our alternative payment solutions.

Net interest income increased 27 percent, primarily driven by higher revolving Card Member loan balances.

Total revenues net of interest expense increased in 2021 compared to 2020, primarily driven by increased Discount revenue, reflecting billed business growth, and increased Net interest income, primarily reflecting a lower cost of funds, partially offset by lower revolving Card Member loan balances.

PROVISIONS FOR CREDIT LOSSES

Card Member loans provision for credit losses increased, primarily due to a reserve build in the current year, versus a reserve release in the prior year.

The reserve build in the current year was primarily driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts, partially offset by the release of COVID-19 pandemic-driven reserves.

The reserve release in the prior year was driven by improved portfolio quality and macroeconomic forecasts, partially offset by an increase in loans outstanding.

Card Member receivables provision for credit losses increased, primarily due to a reserve build in the current year, versus a reserve release in the prior year, and higher net write-offs in the current year.

The reserve build in the current year was primarily driven by higher delinquencies and an increase in receivables outstanding.

The reserve release in the prior year was driven by improved portfolio quality and macroeconomic forecasts, partially offset by an increase in receivables outstanding.

Provisions for credit losses decreased in 2021 compared to 2020, primarily driven by reserve releases in 2021, versus reserve builds in 2020.

Total expenses increased, primarily driven by Card Member rewards expense and Business development expense.

Card Member rewards expense increased, primarily driven by higher billed business as well as a larger proportion of spend in categories that earn incremental rewards such as travel and a higher mix of redemptions in travel-related categories.

Business development expense increased, primarily due to increased client incentive payments driven by higher billed business.

Card Member services expense increased, primarily driven by higher usage of travel-related benefits.

Marketing expense increased, primarily due to business investments to drive growth momentum and accelerate new card acquisitions.

Salaries and employee benefits and other expenses increased, primarily due to higher compensation costs and higher service costs.

CS SELECTED STATISTICAL INFORMATION

As of or for the Years Ended December 31, Change Change

(Millions, except percentages and where indicated) 2022 2021 2020 2022 vs.

Billed business (billions)

$ 499.5 $ 411.6 $ 340.0 21 % 21 %

Adjusted net interest income (c)

Proprietary cards-in-force 14.9 13.4 12.5 11 7

Average Card Member spending (dollars)

$ 35,202 $ 32,042 $ 27,045 10 18

Average Card Member loans (billions)

Total segment assets (billions)

$ 51.4 $ 44.5 $ 34.9 16 28

Net interest income divided by average Card Member loans (c)

Card Member loans:

Total loans (billions)

$ 21.4 $ 17.0 $ 12.8 26 33

Net interest yield on average Card Member loans (c)

Average loans (billions)

$ 19.3 $ 14.4 $ 12.5 34 15

Outside the U.S.

Net write-off rate — principal, interest and fees (a)

0.8 % 0.8 % 2.4 %

Net write-off rate — principal only (a)

0.7 % 0.6 % 2.1 %

30+ days past due as a % of total 0.9 % 0.5 % 0.7 %

Calculation of Net Interest Yield on Average Card Member Loans:

Net interest income $ 1,373 $ 1,078 $ 1,024

Interest expense not attributable to our Card Member loan portfolio (a)

Interest income not attributable to our Card Member loan portfolio (b)

Interest expense not attributable to our Card Member loan portfolio (b)

Interest income not attributable to our Card Member loan portfolio (c)

(89) (76) (166)

Adjusted net interest income (c)

Adjusted net interest income (d)

$ 1,714 $ 1,253 $ 1,235

1 unchanged sentence

$ 19.3 $ 14.4 $ 12.5

Net interest income divided by average Card Member loans (c)

Net interest income divided by average Card Member loans (d)

7.1 % 7.5 % 8.2 %

Net interest yield on average Card Member loans (c)

Net interest yield on average Card Member loans (d)

8.9 % 8.7 % 9.9 %

Net interest income $ 6,674 $ 7,145 $ 7,683

Interest expense not attributable to our Card Member loan portfolio (a)

Interest income not attributable to our Card Member loan portfolio (b)

Card Member receivables:

Total receivables (billions)

$ 26.9 $ 24.6 $ 19.1 9 % 29 %

Adjusted net interest income (c)

Net write-off rate — principal and fees (e)

0.7 % 0.2 % 1.8 %

Average Card Member loans (billions)

Net write-off rate — principal only (a) - small business

0.9 % 0.2 % 2.2 %

Net interest income divided by average Card Member loans (c)

30+ days past due as a % of total - small business

1.6 % 0.8 % 0.7 %

Net interest yield on average Card Member loans (c)

90+ days past billing as a % of total (e) - corporate

0.6 % 0.3 % 0.4 %

(a) Refer to Table 8 footnote (a).

(b) Refer to Table 8 footnote (b).

GLOBAL COMMERCIAL SERVICES

GCS SELECTED INCOME STATEMENT DATA

(a) Refer to Table 7 footnote (b).

(b) Refer to Table 8 footnote (a).

(d) Refer to Table 8 footnote (c).

(e) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due.

A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date.

In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing.

Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.

INTERNATIONAL CARD SERVICES

ICS SELECTED INCOME STATEMENT DATA

Years Ended December 31, Change Change

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Total revenues net of interest expense 9,061 7,435 6,742 1,626 22 693 10

Provisions for credit losses (a)

(438) 1,493 918 (1,931) # 575 63

Provisions for credit losses 584 (43) 734 627 # (777) #

Total revenues net of interest expense after provisions for credit losses 8,477 7,478 6,008 999 13 1,470 24

Marketing, business development, and Card Member rewards and services 6,592 4,991 6,237 1,601 32 (1,246) (20)

Salaries and employee benefits and other operating expenses 3,418 3,199 3,261 219 7 (62) (2)

Total expenses 7,899 6,549 5,487 1,350 21 1,062 19

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# Denotes a variance of 100 percent or more

Refer to Note 1 and Note 3 to the “Consolidated Financial Statements” for further information.

GCS primarily issues a wide range of proprietary corporate and small business cards globally.

GCS also provides payment, expense management and financing solutions to businesses.

ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States.

ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition businesses.

For 2022, ICS reported pretax income of $578 million, compared with $929 million a year ago.

Results for this segment were significantly impacted by the strengthening of the U.S.

TOTAL REVENUES NET OF INTEREST EXPENSE

Non-interest revenues increased, primarily driven by higher Discount revenue and Net card fees.

Discount revenue increased 21 percent, primarily driven by an increase in commercial billed business of 21 percent reflecting, in part, the recovery from the adverse impacts of the COVID-19 pandemic in the prior year.

See Tables 5, 6 and 13 for more details on volume performance.

Net card fees increased 9 percent, primarily driven by growth in our premium card portfolios.

Net interest income increased, primarily due to lower cost of funds, partially offset by lower average revolving Card Member loan balances.

Non-interest revenues increased across all revenue categories, primarily driven by Discount revenue and Service fees and other revenues.

Discount revenue increased 25 percent (37 percent on a FX-adjusted basis), primarily reflecting an increase in billed business of 23 percent (36 percent on a FX-adjusted basis).

2 See Tables 5, 6 and 14 for more details on billed business performance.

Net card fees increased 3 percent (14 percent on a FX-adjusted basis), primarily driven by growth in our premium card portfolios, partially offset by changes in foreign exchange rates.

Service fees and other revenue increased 39 percent (52 percent on a FX-adjusted basis), primarily due to higher foreign exchange-related revenues associated with Card Member cross-currency spending, and higher income from equity method investments, which included a portion of the revenue allocated to a joint venture partner as described in Business development expense below, versus a net loss in the prior year.

Processed revenue increased 28 percent (35 percent on a FX-adjusted basis), primarily driven by an increase in processed volumes.

Net interest income increased 19 percent (25 percent on a FX-adjusted basis), primarily driven by an increase in average Card Member loan balances, partially offset by higher cost of funds driven by higher interest rates.

Total revenues net of interest expense increased in 2021 compared to 2020, primarily driven by increased Discount revenue, reflecting billed business growth, partially offset by decreased Net interest income, primarily reflecting lower yields and lower revolving Card Member loan balances.

2 Refer to footnote 1 on page 42 for details regarding foreign currency adjusted information.

PROVISIONS FOR CREDIT LOSSES

The reserve releases in the current year were due to improved portfolio quality and macroeconomic outlook, in large part driven by improvement in unemployment rate projections.

For Card Member receivables and loans provisions for credit losses, the reserve releases were partially offset by increases in the outstanding balances of receivables and loans.

Marketing, business development, and Card Member rewards and services expenses increased across all expense categories.

The increase in Marketing and business development expense was primarily due to increases in marketing investments to continue building growth momentum.

Salaries and employee benefits and other operating expenses increased, primarily due to higher compensation and the Company's partial repayment of a prior year insurance claim associated with insured losses from a corporate client bankruptcy that were partially recovered during the current year.

GCS SELECTED STATISTICAL INFORMATION

Card Member loans and receivables provisions for credit losses increased, primarily due to reserve builds in the current year, versus reserve releases in the prior year, and higher net write-offs in the current year.

The reserve builds in the current year were primarily driven by an increase in loans and receivables outstanding and higher delinquencies.

The reserve releases in the prior year were driven by improved portfolio quality and macroeconomic forecasts, partially offset by an increase in loans and receivables outstanding.

Provisions for credit losses decreased in 2021 compared to 2020, primarily driven by reserve releases in 2021, versus reserve builds in 2020.

Total expenses increased, primarily driven by higher Card Member rewards expense and Business development expense.

Business development expense increased, primarily driven by a charge related to revenue allocated to a joint venture partner for certain categories of transactions.

Card Member services expense increased, primarily driven by higher usage of travel-related benefits.

Marketing expense decreased, but was flat when adjusted for changes in foreign exchange rates.

Salaries and employee benefits and other expenses increased, primarily due to higher compensation costs and higher service costs.

ICS SELECTED STATISTICAL INFORMATION

As of or for the Years Ended December 31, Change Change

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Proprietary cards-in-force 20.1 19.0 18.7 6 2

Average Card Member spending (dollars)

Proprietary basic cards-in-force 14.9 13.9 13.6 7 2

Average proprietary basic Card Member spending (dollars)

$ 19,519 $ 16,689 $ 13,429 17 24

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$ 36.9 $ 32.6 $ 28.2 13 16

GSBS Card Member loans:

Card Member loans - consumer and small business:

Total loans (billions)

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$ 12.3 $ 9.6 $ 9.0 28 7

Net write-off rate — principal only (a)

0.6 % 2.1 % 1.9 %

Net write-off rate — principal, interest and fees (a)

1.4 % 2.1 % 3.7 %

Net write-off rate — principal only (a)

1.2 % 1.6 % 3.0 %

30+ days past due as a % of total 1.2 % 0.8 % 1.7 %

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1.3 % 0.6 % 3.0 %

GCP Card Member receivables:

Total receivables (billions)

$ 13.3 $ 10.9 $ 17.2 22 (37)

90+ days past billing as a % of total (e)

0.3 % 0.6 % 0.8 %

Net write-off rate — principal and fees (e)(f)

— % 1.9 % 0.8 %

GSBS Card Member receivables:

Total receivables (billions)

Net write-off rate — principal only (a) - consumer and small business

1.4 % 0.8 % 2.2 %

Net write-off rate — principal only (a)

30+ days past due as a % of total - consumer and small business

1.3 % 0.7 % 0.8 %

Net write-off rate — principal and fees (a)

90+ days past billing as a % of total (e) - corporate

0.5 % 0.3 % 1.1 %

30+ days past due as a % of total 0.7 % 0.7 % 1.7 %

(a) Refer to Table 7 footnote (c).

(a) Refer to Table 7 footnote (b).

(b) Refer to Table 8 footnote (a).

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(d) Refer to Table 8 footnote (c).

(e) For GCP Card Member receivables, delinquency data is tracked based on days past billing status rather than days past due.

(e) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due.

A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date.

GCP delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.

(f) The net write-off rate for the year ended December 31, 2021 includes a $37 million partial recovery in Card Member receivables related to a corporate client bankruptcy, which had resulted in a $53 million write-off in the year ended December 31, 2020.

Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.

(f) Refer to Table 7 footnote (c).

GLOBAL MERCHANT AND NETWORK SERVICES

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Total revenues net of interest expense 6,475 5,129 4,309 1,346 26 820 19

Provisions for credit losses (a)

(37) 87 19 (124) # 68 #

Provisions for credit losses 7 (37) 87 44 # (124) #

Total revenues net of interest expense after provisions for credit losses 6,468 5,166 4,222 1,302 25 944 22

Marketing, business development, and Card Member rewards and services 1,478 1,130 1,263 348 31 (133) (11)

Salaries and employee benefits and other operating expenses 1,682 1,711 1,791 (29) (2) (80) (4)

Total expenses 3,514 3,292 2,928 222 7 364 12

Pretax segment income 2,954 1,874 1,294 1,080 58 580 45

Network volumes (billions)

1,552.8 1,284.2 1,037.8 $ 269 21 $ 246 24

Total segment assets (billions)

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# Denotes a variance of 100 percent or more

Refer to Note 1 and Note 3 to the “Consolidated Financial Statements” for further information.

GMNS operates a global payments network that processes and settles card transactions, acquires merchants and provides multi-channel marketing programs and capabilities, services and data analytics, leveraging our global integrated network.

GMNS manages our partnership relationships with third-party card issuers, merchant acquirers and a prepaid reloadable and gift card program manager, licensing the American Express brand and extending the reach of the global network.

GMNS manages our partnership relationships with third-party card issuers (including our network partnership agreements in China), merchant acquirers and a prepaid reloadable and gift card program manager, licensing the American Express brand and extending the reach of the global network.

TOTAL REVENUES NET OF INTEREST EXPENSE

Non-interest revenues increased, primarily driven by higher Discount revenue due to increases in worldwide network volumes reflecting, in part, the recovery from the adverse impacts of the COVID-19 pandemic in the prior year.

The average discount rate increased, primarily due to a change in the mix of spending driven by increased levels of T&E volumes, as compared to the prior year.

See Tables 5 and 6 for more details on volume performance.

Non-interest revenues increased across all revenue categories, primarily driven by Discount revenue and Service fees and other revenues.

Discount revenue increased 24 percent, primarily driven by an increase in billed business.

See Tables 5 and 6 for more details on billed business performance.

Service fees and other revenue increased 28 percent, primarily due to higher foreign currency-related revenue.

Processed revenue increased 14 percent, primarily driven by higher processed volumes.

GMNS receives an interest expense credit relating to internal transfer pricing due to its merchant payables.

Net interest income increased, primarily due to a higher interest expense credit, primarily driven by an increase in average merchant payables related to year-over-year network volume growth.

Marketing, business development, and Card Member rewards and services expenses increased, primarily driven by higher Marketing and business development expense, as a result of increased spend on initiatives to support merchant engagement and increased network issuer expense, reflecting higher processed volumes from certain GNS partners.

Salaries and employee benefits and other operating expenses decreased, primarily driven by a net reserve release in the current year versus a net reserve build in the prior year associated with merchant exposure for Card Member purchases, partially offset by higher compensation.

Net interest income increased, primarily due to a higher interest expense credit, largely driven by an increase in average merchant payables related to billed business growth and higher interest rates.

Total revenues net of interest expense increased in 2021 compared to 2020, primarily driven by higher Discount revenue, reflecting higher billed business, and increased Net interest income, primarily due to a higher interest expense credit, reflecting an increase in average merchant payables related to year-over-year billed business growth.

Total expenses increased, primarily driven by higher Salaries and employee benefits expense, reflecting higher compensation costs, as well as higher Business development expense, primarily resulting from increased partner payments driven by higher network volumes.

Total expenses increased in 2021 compared to 2020, primarily driven by higher Business development and Marketing expenses, reflecting increased partner payments, driven by higher network volumes, as well as increased spend on initiatives to support merchant engagement.

CORPORATE & OTHER

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Corporate & Other pretax loss was $2.2 billion and $1.0 billion in 2022 and 2021, respectively.

The decrease in the pretax loss was primarily driven by higher net gains in the current year on Amex Ventures equity investments, a non-cash gain related to an increase in GBT's total equity book value arising from GBT's acquisition of Egencia and a lower net loss in the current year from GBT as compared to the prior year, partially offset by higher compensation.

The increase in the pretax loss was primarily driven by net losses on Amex Ventures investments in the current year, as compared to net gains in the prior year, a non-cash gain in the prior year related to an increase in GBTG's total equity book value and higher compensation costs in the current year.

CONSOLIDATED CAPITAL RESOURCES AND LIQUIDITY

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• Liquidity programs that enable us to continuously meet expected future financing obligations and business requirements for at least a twelve-month period in the event we are unable to continue to raise new funds under our regular funding programs during a substantial weakening in economic conditions.

The global macroeconomic outlook continues to remain uncertain due to a variety of factors, including the Omicron variant, labor shortages, supply chain disruptions and inflation.

We monitor the changing macroeconomic environment and manage our balance sheet to reflect evolving circumstances.

We continue to see volatility in the capital markets due to a variety of factors and manage our balance sheet to reflect evolving circumstances.

CAPITAL STRATEGY

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bank subsidiary, American Express National Bank (AENB), could affect our status as a financial holding company and cause the banking regulators with oversight of American Express or AENB to take actions that could limit our business operations.

We seek to maintain capital levels and ratios in excess of the minimum regulatory requirements, specifically within a 10 to 11 percent target range for American Express' Common Equity Tier 1 (CET1) risk-based capital ratio.

We seek to maintain capital levels and ratios in excess of the minimum regulatory requirements, specifically within a 10 to 11 percent target range for American Express Company's Common Equity Tier 1 (CET1) risk-based capital ratio.

We maintain certain flexibility to shift capital across our businesses as appropriate.

For example, we may infuse additional capital into subsidiaries to maintain capital at targeted levels in consideration of debt ratings and regulatory requirements.

These infused amounts can affect our capital and liquidity positions at the American Express parent company level.

These infused amounts can affect the capital and liquidity positions at the American Express parent company level or at our subsidiaries.

We report our capital ratios using the Basel III capital definitions and the Basel III standardized approach for calculating risk-weighted assets.

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CET1 capital is common shareholders’ equity, adjusted for ineligible goodwill and intangible assets and certain deferred tax assets.

CET1 capital is also adjusted for the CECL final rules, as described below.

CET1 capital is also adjusted for the Current Expected Credit Loss (CECL) final rules, as described below.

Tier 1 Risk-Based Capital Ratio — Calculated as Tier 1 capital, divided by risk-weighted assets.

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The minimum requirement for the Tier 1 risk-based capital ratio is 1.5 percent higher than the minimum for the CET1 risk-based capital ratio.

We issue preferred shares to help address a portion of the Tier 1 capital requirements in excess of common equity requirements.

See “Preferred Shares” below for further information.

We have $1.6 billion of preferred shares outstanding to help address a portion of the Tier 1 capital requirements in excess of common equity requirements.

See Note 16 to the "Consolidated Financial Statements" for additional information on our preferred shares.

Total Risk-Based Capital Ratio — Calculated as the sum of Tier 1 capital and Tier 2 capital, divided by risk-weighted assets.

Tier 2 capital is the sum of the reserve for loan and receivable credit losses adjusted for the CECL final rules (limited to 1.25 percent of risk-weighted assets), and $870 million of eligible subordinated notes, adjusted for capital held by insurance subsidiaries.

The $240 million of eligible subordinated notes reflect a 60 percent, or $360 million, reduction of Tier 2 capital credit for the $600 million subordinated debt issued in December 2014.

The $870 million of eligible subordinated notes includes the $750 million subordinated debt issued in May 2022 and the $120 million remaining Tier 2 capital credit for the $600 million subordinated debt issued in December 2014.

Tier 1 Leverage Ratio — Calculated by dividing Tier 1 capital by our average total consolidated assets for the most recent quarter.

We elected to delay the impact of the adoption of the CECL methodology on regulatory capital for two years followed by a three-year phase-in period pursuant to rules issued by federal banking regulators (the CECL final rules).

As of December 31, 2021, our reported regulatory capital excluded the $0.9 billion impact to retained earnings upon the adoption of the CECL methodology and 25 percent of the $0.9 billion decrease in reserves for credit losses from January 1, 2020 to December 31, 2021.

We have begun phasing in the $0.7 billion cumulative amount that is not recognized in regulatory capital at 25 percent per year beginning January 1, 2022.

We elected to delay the recognition of $0.7 billion of impact to regulatory capital from the adoption of the CECL methodology for two years, followed by a three-year phase-in period at 25 percent once per year beginning January 1, 2022, pursuant to rules issued by federal banking regulators (the CECL final rules).

As of January 1, 2023, we have phased in 50 percent of such amount.

Refer to “Capital and Liquidity Regulation” under Part 1, Item 1.

“Business - Supervision and Regulation” for additional details.

As a Category IV firm, we were not subject to the Federal Reserve's supervisory stress tests in 2021 and will be participating in the Federal Reserve's supervisory stress tests in 2022.

We are required to submit to the Federal Reserve our annual capital plan, on or before April 5 of each year.

On June 24, 2021, the Federal Reserve confirmed our SCB of 2.5 percent and resulting CET1 capital ratio requirement of 7 percent, which remain unchanged from the levels announced in August 2020.

As a Category IV firm, we participated in the Federal Reserve's supervisory stress tests in 2022.

On August 4, 2022, the Federal Reserve confirmed our SCB of 2.5 percent, which resulted in a minimum CET1 ratio of 7 percent, effective October 1, 2022.

DIVIDENDS AND SHARE REPURCHASES

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These dividend and share repurchase amounts collectively represent approximately 64 percent of total capital generated during the year.

We plan to increase the regular quarterly dividend on our common shares outstanding by approximately 20 percent, from 43 cents to 52 cents per share beginning with the first quarter of 2022, subject to approval by our Board of Directors.

We plan to increase the regular quarterly dividend on our common shares outstanding by approximately 15 percent, from 52 cents to 60 cents per share, beginning with the first quarter 2023 dividend declaration.

In addition, during the year ended December 31, 2022, we paid $57 million in dividends on non-cumulative perpetual preferred shares outstanding.

Refer to Note 16 to the “Consolidated Financial Statements” for additional information on our preferred shares.

During the first six months of 2021, the Federal Reserve placed restrictions on common stock dividends and common share repurchases for bank holding companies like us that participate in the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR).

These capital distribution restrictions ceased to apply on July 1, 2021.

Our capital distributions have since returned to being governed by the SCB framework and based on managing our CET1 risk-based capital ratio within a 10 to 11 percent target range.

We may conduct share repurchases through a variety of methods, including open market purchases, 10b5-1 plans, privately negotiated transactions (including employee benefit plans) or other purchases, including block trades, accelerated share repurchase programs or any combination of such methods as market conditions warrant and at prices we deem appropriate.

Our decisions on capital distributions depend on various factors, including:

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and the supervisory stress test process.

PREFERRED SHARES

We issue preferred shares to finance a portion of the Tier 1 capital requirements in excess of common equity requirements.

On August 3, 2021, we issued $1.6 billion of 3.550% Fixed Rate Reset Noncumulative Preferred Shares, Series D.

With the proceeds from that issuance, we redeemed in full the $850 million of 4.900% Fixed Rate/Floating Rate Noncumulative Preferred Shares, Series C on September 15, 2021 and the $750 million of 5.200% Fixed Rate/Floating Rate Noncumulative Preferred Shares, Series B on November 15, 2021.

Refer to Note 16 to the “Consolidated Financial Statements” for additional information on our preferred shares.

FUNDING STRATEGY

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The diversity of funding sources by type of instrument, by tenor and by investor base, among other factors, mitigates the impact of disruptions in any one type of instrument, tenor or investor.

We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in unsecured debt, asset securitizations and deposits, and access to secured borrowing facilities and a committed bank credit facility.

Our direct retail deposits have become a larger proportion of our funding over time.

We expect the balance of these deposits to continue to grow.

We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in deposits, unsecured debt and asset securitizations, and access to secured borrowing facilities and a committed bank credit facility.

We expect the balance of our direct deposits to continue to grow.

Our funding plan is primarily driven by the size and mix of business asset growth, our liquidity position, and choice of funding sources, as well as cash requirements generated by the redemptions of deposits by our customers, the maturities of debt outstanding and related interest payments.

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Long-term debt 42.6 38.7

Total debt and customer deposits $ 125.3 $ 131.8

Total customer deposits and debt $ 154.1 $ 125.3

We may redeem from time to time certain debt securities prior to the original contractual maturity dates in accordance with the optional redemption provisions of those debt securities.

Our funding plan for the full year 2023 includes, among other sources, approximately $6.0 billion to $10.0 billion of unsecured term debt issuance and approximately $5.0 billion to $9.0 billion of secured term debt issuance.

Actual funding activities can vary from our plans due to various factors, such as future business growth, the impact of global economic, political and other events on market capacity and funding needs, demand for securities offered by us, regulatory changes, ability to securitize and sell receivables, and the performance of receivables previously sold in securitization transactions.

Actual funding activities can vary from our plans due to various factors, such as future business growth, the impact of global economic, political and other events on market capacity and funding needs, demand for securities offered by us, regulatory changes, ability to securitize and sell loans and receivables, and the performance of loans and receivables previously sold in securitization transactions.

Many of these factors are beyond our control.

In order to simplify our funding and reporting structure, in October 2021 we terminated the commercial paper program at American Express Credit Corporation (Credco) and Credco's committed syndicated bank credit facility, the undrawn amounts from which could serve as a backstop for the amount of commercial paper outstanding.

Concurrently, we established a new commercial paper program at American Express Travel Related Services Company, Inc.

(TRS) and a new credit facility with American Express Company and TRS as co-borrowers and co-obligors, as described further below.

We also completed an exchange offer on November 30, 2021, in which American Express Company issued $1.7 billion of new senior notes with a 3.300% coupon and May 3, 2027 maturity in exchange for the same amount of outstanding senior notes with the same coupon and maturity issued by Credco.

Following completion of the exchange offer, $339 million of Credco's 3.300% senior notes with May 3, 2027 maturity remain outstanding.

Due to the limited amount of publicly issued debt outstanding, Credco deregistered from ongoing SEC reporting beginning January 1, 2022.

Credco will continue to finance certain Card Member receivables and loans using intercompany borrowing as its primary funding source.

Our equity capital and funding strategies are designed, among other things, to maintain appropriate and stable unsecured debt ratings from the major credit rating agencies:

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UNSECURED DEBT RATINGS

Credit Agency American Express Entity Short-Term Ratings Long-Term Ratings Outlook

Fitch American Express Credit Corporation N/A A Stable

Fitch All other rated entities F1 A Stable

Moody’s American Express Travel Related Services Company, Inc.

Prime-1 A2 Stable

Moody's American Express Credit Corporation N/A A2 Stable

Moody’s American Express National Bank Prime-1 A3 Stable

Moody's American Express Company N/A A2 Stable

S&P American Express Travel Related Services Company, Inc.

A-2 A- Stable

S&P American Express Credit Corporation N/A A- Stable

S&P American Express National Bank A-2 A- Stable

S&P American Express Company A-2 BBB+ Stable

American Express Entity Moody's S&P Fitch

American Express Company Long Term A2 BBB+ A

Short Term N/A A-2 F1

Outlook Stable Stable Stable

American Express Travel Related Services Company, Inc.

Long Term A2 A- A

Short Term Prime-1 A-2 F1

Outlook Stable Stable Stable

American Express National Bank Long Term A3 A- A

Short Term Prime-1 A-2 F1

Outlook Stable Stable Stable

American Express Credit Corporation Long Term A2 A- A

Short Term N/A N/A N/A

Outlook Stable Stable Stable

These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.

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The amount of short-term borrowings issued in the future will depend on our funding strategy, our needs and market conditions.

As of December 31, 2021, we had nil commercial paper outstanding and an average of nil in commercial paper outstanding during 2021.

We had no commercial paper outstanding at any point during 2022.

Refer to Note 8 to the “Consolidated Financial Statements” for a further description of these borrowings.

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As of December 31, 2022, we had $42.6 billion in long-term debt outstanding, including unsecured debt and asset-backed securities.

During 2021, we issued $5.8 billion of unsecured debt and asset-backed securities with maturities ranging from 2 to 5 years.

Refer to Note 8 to the “Consolidated Financial Statements” for a further description of these borrowings and scheduled maturities of long-term debt obligations.

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Floating Rate Senior Notes (compounded SOFR (a) plus weighted-average spread of 83 basis points)

Fixed-to-Floating Rate Senior Notes (4.42% coupon during the fixed rate period and compounded SOFR (a) plus 1.76% during the floating rate period)

Fixed-to-Floating Rate Subordinated Notes (4.989% coupon during the fixed rate period and compounded SOFR (a)

plus 2.255% during the floating rate period)

American Express Credit Account Master Trust:

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(a) Secured overnight financing rate (SOFR).

In addition, American Express Company issued $1.7 billion of 3.300% new senior notes in exchange for the same amount of outstanding senior notes issued by Credco, as described above.

LIQUIDITY MANAGEMENT

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We consider other factors in determining the amount and type of liquidity we maintain, such as economic and financial market conditions, seasonality in business operations, growth in our businesses, potential acquisitions or dispositions, the cost and availability of alternative liquidity sources and credit rating agency guidelines and requirements.

We believe that we currently maintain sufficient liquidity to meet all internal and regulatory liquidity requirements.

As of December 31, 2021, we had a total of $24.6 billion in Cash and cash equivalents and Investment securities (which are substantially comprised of U.S.

Government Treasury obligations).

The decrease of $30.0 billion from $54.6 billion as of December 31, 2020 was primarily driven by the increase in the balances of our Card Member loans and receivables, debt maturities, share repurchases and a reduction in customer deposits, partially offset by the issuance of unsecured and secured debt securities.

The investment income we receive on liquidity resources is less than the interest expense on the sources of funding for these balances.

In 2021, the net interest costs to maintain these resources were substantial.

The level of future net interest costs depends on the amount of liquidity resources we maintain and the difference between our cost of funding these amounts and their investment yields.

The investment income we receive on liquidity resources has historically been less than the interest expense on the sources of funding for these balances.

The level of future net interest income or costs depends on the amount of liquidity resources we maintain and the difference between our cost of funding these amounts and their investment yields.

Securitized Borrowing Capacity

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Both facilities are used in the ordinary course of business to fund working capital needs, as well as to further enhance our contingent funding resources.

As of December 31, 2021, $2.0 billion was drawn on the Charge Trust facility, which was subsequently repaid on January 18, 2022.

No amounts were drawn on the Lending Trust facility.

As of December 31, 2022, no amounts were drawn on the Charge Trust facility or the Lending Trust facility.

Federal Reserve Discount Window

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Whether specific assets will be considered qualifying collateral and the amount that may be borrowed against the collateral remain at the discretion of the Federal Reserve.

We had approximately $80.8 billion as of December 31, 2021 in U.S.

As of December 31, 2022, we had approximately $102.8 billion in U.S.

credit card loans and charge card receivables that could be sold over time through our securitization trusts or pledged in return for secured borrowings to provide further liquidity, subject in each case to applicable market conditions and eligibility criteria.

Committed Bank Credit Facility

In addition to the secured borrowing facilities described above, we maintained a committed syndicated bank credit facility of $3.5 billion as of December 31, 2021.

This facility was maintained by our wholly owned subsidiary Credco through September 30, 2021 and the availability of the credit line was subject to compliance with certain covenants by Credco, principally the maintenance by Credco of a 1.25 ratio of its combined earnings, certain capital contributions and fixed charges, to fixed charges.

Effective October 1, 2021, this facility was terminated, and we entered into a new committed syndicated bank credit facility for the same amount with a maturity date of October 15, 2024 with American Express Company and TRS as co-borrowers and co-obligors.

The availability of the new credit facility is subject to our maintenance of a minimum CET1 risk-based capital ratio of 4.5 percent, with certain restrictions in relation to either accessing the facility or distributing capital to common shareholders in the event our CET1 risk-based capital ratio falls between 4.5 percent and 6.5 percent.

As of December 31, 2021, we were in compliance with the covenants contained in the new credit facility and no amounts were drawn on the facility.

We may, from time to time, use this facility in the ordinary course of business to fund working capital needs.

In addition to the secured borrowing facilities described above, as of December 31, 2022 we maintained a committed syndicated bank credit facility of $3.5 billion with a maturity date of October 15, 2024.

The availability of the credit facility is subject to our maintenance of a minimum CET1 risk-based capital ratio of 4.5 percent, with certain restrictions in relation to either accessing the facility or distributing capital to common shareholders in the event our CET1 risk-based capital ratio falls between 4.5 percent and 6.5 percent.

It does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating.

As of December 31, 2022, we were in compliance with the covenants contained in the credit facility and no amounts were drawn on the facility.

We use this facility from time to time in the ordinary course of business to fund working capital needs.

Any undrawn portion of this facility could serve as a backstop for the amount of commercial paper outstanding.

The new credit facility does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating.

Off-balance Sheet Arrangements

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Effect of foreign currency exchange rates on cash and cash equivalents — (0.1) 0.4

Net (decrease) increase in cash and cash equivalents $ (10.9) $ 8.5 $ (3.4)

Net increase (decrease) in cash and cash equivalents $ 11.9 $ (10.9) $ 8.5

Cash Flows from Operating Activities

Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions for credit losses, depreciation and amortization, stock-based compensation, deferred taxes and other non-cash items and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.

In 2021, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, primarily resulting from an increase in Membership Rewards liability and higher accounts payable to merchants related to growth in billed business.

In 2020, the net cash provided by operating activities was primarily driven by the cash generated from net income for the period, partially offset by lower accounts payable to merchants and purchases of loyalty program points from certain of our cobrand partners, which resulted in an increase in Other assets.

In 2022, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, resulting from higher accounts payable to merchants and an increase in Membership Rewards liability related to growth in billed business.

In 2021, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, resulting from an increase in Membership Rewards liability and higher accounts payable to merchants related to growth in billed business.

Cash Flows from Investing Activities

Our cash flows from investing activities primarily include changes in Card Member loans and receivables, as well as changes in our available-for-sale investment securities portfolio.

In 2022, the net cash used in investing activities was primarily driven by higher Card Member loan and receivable balances, resulting from higher Card Member spending and net purchases of investment securities.

In 2021, the net cash used in investing activities was primarily driven by higher Card Member loan and receivable balances, resulting from higher Card Member spending, partially offset by net maturities of our investment securities.

In 2020, the net cash provided by investing activities was primarily driven by a decline in Card Member loan and receivable balances, partially offset by net purchases of investment securities.

The decline in Card Member loan and receivable balances was due to the ongoing pay down of outstanding balances by Card Members combined with significant declines in spending that occurred due to the COVID-19 pandemic.

Cash Flows from Financing Activities

Our cash flows from financing activities primarily include changes in customer deposits, long-term debt and short-term borrowings, as well as dividend payments and share repurchases.

In 2022, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from debt, partially offset by share repurchases and dividend payments.

In 2021, the net cash used in financing activities was primarily driven by share repurchases, net debt repayments, decreases in customer deposits, dividends and redemption of preferred shares, partially offset by the proceeds from the issuance of preferred shares.

In 2020, the net cash used in financing activities was primarily driven by debt repayments, dividends and share repurchases, partially offset by growth in customer deposits.

RISK MANAGEMENT

We use our comprehensive Enterprise-wide Risk Management (ERM) program to identify, aggregate, monitor, and manage risks.

We use our comprehensive Enterprise-wide Risk Management (ERM) program to identify, aggregate, monitor, measure, report and manage risks.

The program also defines our risk appetite, governance, culture and capabilities.

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Each committee consists entirely of independent directors and provides regular reports to the full Board regarding matters reviewed at their committee.

The committees meet regularly in private sessions with our Chief Risk Officer, the Chief Compliance & Ethics Officer, the Chief Audit Executive and other senior management with regard to our risk management processes, controls, talent and capabilities.

The committees meet regularly in private sessions with our Chief Risk Officer, the Chief Compliance Officer, the Chief Audit Executive and other senior management with regard to our risk management processes, risk profile and performance, controls, talent and capabilities.

The Board monitors the “tone at the top,” our risk culture, and oversees emerging and strategic risks.

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The Risk Committee approves our ERM policy.

The ERM policy governs risk governance, risk oversight and risk appetite for risks, including individual credit risk, institutional credit risk, operational risk, compliance risk, reputational risk, market risk, funding and liquidity risk, model risk, strategic and business risk, country risk and environmental, social and governance risk.

The ERM policy governs risk governance, risk oversight and risk appetite, including credit risk (at both the individual and institutional levels), operational risk (e.g., operations, legal, conduct, third-party, information technology, information security, data management, privacy and people risks), compliance risk, reputational risk, market risk, funding and liquidity risk, model risk, strategic and business risk, country risk and environmental, social and governance risk.

Risk appetite defines the authorized risk limits to control exposures within our risk capacity and risk tolerance, including stressed forward-looking scenarios.

In addition, it establishes principles for risk taking in the aggregate and for each risk type, and is supported by a comprehensive system for monitoring limits, escalation triggers and assessing control programs.

The Risk Committee reviews and concurs with the appointment, replacement, performance and compensation of our Chief Risk Officer and receives regular updates from the Chief Risk Officer on key risks, transactions and exposures.

In addition, it establishes principles for risk taking in the aggregate and for each risk type, and is supported by a comprehensive system for monitoring performance (including limits and escalation triggers) and assessing control programs.

The Risk Committee reviews our risk profile against the tolerances specified in the Risk Appetite Framework, including significant risk exposures, risk trends in our portfolios and major risk concentrations.

The Risk Committee also provides oversight of our compliance with Regulatory capital and liquidity standards, our Internal Capital Adequacy Assessment Process, including the CCAR submissions.

The Risk Committee also provides oversight of our compliance with Regulatory capital and liquidity standards, and our Internal Capital Adequacy Assessment Process, including the CCAR submissions.

The Audit and Compliance Committee of our Board of Directors reviews and approves compliance policies, which include our Compliance Risk Tolerance Statement.

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The Audit and Compliance Committee also receives regular updates on the audit plan’s status and results, including significant reports issued by Internal Audit and the status of our corrective actions.

The Compensation and Benefits Committee of our Board of Directors works with the Chief Risk Officer to ensure our overall compensation programs, as well as those covering our risk-taking employees, appropriately balance risk with business incentives and how business performance is achieved without taking imprudent or excessive risk.

The Compensation and Benefits Committee of our Board of Directors works with the Chief Risk Officer to ensure our overall compensation programs, as well as those covering our risk-taking employees, appropriately balance risk with business incentives and that business performance is achieved without taking imprudent or excessive risk.

Our Chief Risk Officer is actively involved in setting risk goals for the Company.

Our Chief Risk Officer also reviews the current and forward-looking risk profiles of each business unit and provides input into performance evaluation.

Our Chief Risk Officer also reviews the risk profiles of each business unit and provides input into performance evaluation.

The Chief Risk Officer meets with the Compensation and Benefits Committee and attests whether performance goals and results have been achieved without taking imprudent risks.

The Compensation and Benefits Committee uses a risk-balanced incentive compensation framework to decide on our bonus pools and the compensation of senior executives.

There are several internal management committees, including the Enterprise-wide Risk Management Committee (ERMC), chaired by our Chief Risk Officer.

There are several internal management committees, including the Enterprise Risk Management Committee (ERMC), chaired by our Chief Risk Officer.

The ERMC is the highest-level management committee to oversee all firm-wide risks and is responsible for risk governance, risk oversight and risk appetite.

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The second line comprises independent functions overseeing risk-taking activities of the first line.

The Chief Risk Officer, the Chief Compliance & Ethics Officer, the Chief Operational Risk Officer and certain control groups, both at the enterprise level and within regulated entities, are part of the second line of defense.

The Chief Risk Officer, the Chief Compliance Officer, the Chief Operational Risk Officer and certain control groups, both at the enterprise level and within regulated entities, are part of the second line of defense.

The global risk oversight team oversees the policies, strategies, frameworks, models, processes and capabilities deployed by the first line teams and provides challenges and independent assessments on how the first line of defense is managing risks.

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CREDIT RISK MANAGEMENT PROCESS

Credit risk is defined as loss due to default or changes in the credit quality of a customer, obligor or security.

We define credit risk as loss due to default or changes in the credit quality of a customer, obligor or security.

Our credit risks are divided into two broad categories:

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Institutional Credit Risk

Institutional credit risk arises principally within our GCS and GMNS businesses, as well as investment and liquidity management activities.

Institutional credit risk arises principally within our CS, ICS and GMNS businesses, as well as investment and liquidity management activities.

Unlike individual credit risk, institutional credit risk is characterized by a lower loss frequency but higher severity.

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To appropriately measure and manage operational risk, we have implemented a comprehensive operational risk framework that is defined in the Operational Risk Management Policy approved by the ERMC.

The Operational Risk Management Committee (ORMC), chaired by the Chief Operational Risk Officer, coordinates with all control groups on effective risk assessments and controls and oversees the preventive, responsive and mitigation efforts by Operational Excellence teams in the business units and staff groups.

The Operational Risk Management Committee (ORMC), chaired by the Chief Operational Risk Officer, coordinates with all control groups on effective risk assessments and controls.

It also oversees the preventive, responsive and mitigation efforts by Operational Excellence teams in the business units and staff groups.

We use the operational risk framework to identify, measure, monitor and report inherent and emerging operational risks.

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We define information and cyber security risk as the risk that a security incident could impact the confidentiality, integrity or availability of American Express customer, colleague or proprietary information.

Our information and cyber security program is designed to protect the confidentiality, integrity, and availability of information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction.

The program is built upon a foundation of advanced security technology, a well-staffed and highly trained team of experts, and robust operations based on the National Institute of Standards and Technology Cybersecurity Framework.

Our information and cyber security program is designed to protect information systems from unauthorized access, use, disclosure, disruption, modification, or destruction.

The program is built upon a foundation of advanced security technology, a well-staffed and highly trained team of experts, and operations based on the National Institute of Standards and Technology Cybersecurity Framework.

This consists of controls designed to identify, protect, detect, respond and recover from information and cyber security incidents.

We continue to invest in enhancements to cyber security capabilities and engage in industry and government forums to promote advancements to the broader financial services cyber security ecosystem.

See “A major information or cyber security incident or an increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our cards” under “Risk Factors” for additional information.

See “A major information or cyber security incident or an increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services” under “Risk Factors” for additional information.

Information Technology

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Chaired by the Chief Data Officer, our Enterprise Data Committee, a sub-committee of the ERMC, provides governance and oversight for our enterprise-wide data governance and management activities.

Third Party Risk

We define third party risk as the risk that relationships with third parties (including their significant subcontractors) create unexpected outcomes and deviations from expectations or stated obligations.

The Third Party Management Policy is approved by the Risk Committee of our Board and the ERMC.

It sets forth the procurement, risk management, and contracting framework for managing third-party relationships commensurate with their risk and complexity.

Our Third Party Lifecycle Management program sets guidelines for identifying, measuring, monitoring, and reporting the risk associated with third parties through the life cycle of the relationships, which includes planning, due diligence and third-party selection, contracting, ongoing monitoring and termination.

We define conduct risk as the risk that colleagues, intentionally or unintentionally, fail to fulfill their responsibilities to American Express, our customers, colleagues or stakeholders in a manner consistent with our Code of Conduct, policies and values as well as applicable laws and regulations.

Conduct issues also have the potential to increase several other risk types, including reputational risk, which may undermine the integrity and trust upon which our brand is built.

The Conduct Risk Management Policy is approved by the ERMC.

It establishes the governance framework for conduct risk across the Company.

The policy requires annual risk assessments, implementation of detective and preventive controls, colleague training and timely escalations of conduct issues.

It also provides guidance on consequence management for any substantiated cases of misconduct.

The Conduct Risk Committee oversees conduct risk related topics and escalates such matters to the ERMC, as appropriate.

COMPLIANCE RISK MANAGEMENT PROCESS

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Pursuant to this program, we seek to manage and mitigate compliance risk by assessing, controlling, monitoring, measuring and reporting the legal and regulatory risks to which we are exposed.

The Compliance Risk Management Committee (CRMC), chaired by the Chief Compliance and Ethics Officer, is responsible for identifying, evaluating, managing, and escalating compliance risks.

The Compliance Risk Management Committee (CRMC), chaired by the Chief Compliance Officer, is responsible for identifying, evaluating, managing, and escalating compliance risks.

The CRMC has a dual reporting relationship directly to both the ERMC and the Audit and Compliance Committee.

We have a comprehensive Anti-Money Laundering program that monitors and reports suspicious activity to the appropriate government authorities.

As part of that program, the Global Risk Oversight team provides independent risk assessment of the rules used by the Anti-Money Laundering team.

The program includes an independent risk assessment of the rules used by the Anti-Money Laundering team.

In addition, the Internal Audit Group reviews the processes for practices consistent with regulatory guidance.

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MARKET RISK MANAGEMENT PROCESS

Market risk is the risk to earnings or asset and liability values resulting from movements in market prices.

We define market risk as the risk to earnings or asset and liability values resulting from movements in market prices.

Our market risk exposures include (i) interest rate risk due to changes in the relationship between the interest rates on our assets (such as loans, receivables and investment securities) and the interest rates on our liabilities (such as debt and deposits) and (ii) foreign exchange risk related to transactions, funding, investments and earnings in currencies other than the U.S.

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As of December 31, 2022, a hypothetical, immediate 100 basis point increase in market interest rates would have a detrimental impact of approximately $141 million on our annual net interest income.

A hypothetical immediate 100 basis point decrease in market interest rates, which are assumed to remain at or above zero percent, would have a smaller but still detrimental impact on our annual net interest income.

This measure first projects net interest income over the following twelve-month time horizon considering forecasted business growth and anticipated future market interest rates.

The detrimental impact from rate changes is then measured by instantaneously increasing or decreasing the anticipated future interest rates by 100 basis points.

Our estimated repricing risk assumes that our interest-rate sensitive assets and liabilities that reprice within the twelve-month horizon generally reprice by the same magnitude as benchmark rate changes.

It is further assumed that, within our interest-rate sensitive liabilities, certain deposits reprice at lower magnitudes than benchmark rate movements, and the magnitude of this repricing in turn depends on, among other factors, the direction of rate movements.

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Actual changes in our net interest income will depend on many factors, and therefore may differ from our estimated risk to changes in market interest rates.

LIBOR Transition

We have an enterprise-wide, cross-functional initiative to identify, assess and monitor risks associated with the London interbank offered rate (LIBOR), engage with industry participants, customers and regulators and to transition to new alternative reference rates, such as the secured overnight financing rate.

As part of this initiative, we have amended and continue to amend contracts to replace references to USD LIBOR tenors that will cease to be quoted after June 2023 and have updated our operational processes, IT systems and models for a timely transition.

See “ The discontinuance of LIBOR may negatively impact our access to funding and the value of our financial instruments and commercial agreements ” under “Risk Factors” for additional information.

Foreign Exchange Risk

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FUNDING & LIQUIDITY RISK MANAGEMENT PROCESS

Funding and liquidity risk is defined as our inability to meet our ongoing financial and business obligations at a reasonable cost as they become due.

We define funding and liquidity risk as our inability to meet our ongoing financial and business obligations at a reasonable cost as they become due.

Our Board-approved Liquidity Risk Policy establishes the framework that guides and governs liquidity risk management.

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We define model risk as the risk of adverse consequences, such as financial loss, poor business and strategic decision making, damage to our reputation or customer harm, from decisions based on incorrect or misused model outputs and outcomes.

Model risk is managed through a comprehensive risk management and governance framework, including policies and procedures for model development, independent model validation, model risk reporting and change management capabilities that seek to minimize erroneous model methodology, outputs, and misuse.

The Enterprise-Wide Model Risk Policy establishes the comprehensive framework for governing model risk.

This policy is approved by the ERMC.

The comprehensive risk management and governance framework includes procedures for model development, independent model validation, model risk reporting and change management capabilities that seek to minimize erroneous model methodology, outputs, and misuse.

We also assess model performance and model- related issues on an ongoing basis and seek to address deficiencies in a timely manner.

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STRATEGIC AND BUSINESS RISK MANAGEMENT PROCESS

Strategic and business risk is the risk related to our inability to achieve our business objectives due to poor strategic decisions, including decisions related to mergers, acquisitions, and divestitures, poor implementation of strategic decisions or declining demand for our products and services.

We define strategic and business risk as the risk related to our inability to achieve our business objectives due to poor strategic decisions, including decisions related to mergers, acquisitions, and divestitures, poor implementation of strategic decisions or declining demand for our products and services.

Strategic decisions are reviewed and approved by business leaders and various committees and must be aligned with company policies.

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Mergers, acquisitions and divestitures can only be approved following Executive Committee due diligence, a comprehensive risk assessment by operational, market, credit and oversight leaders provided to the Chief Risk Officer and approval by either the Chief Risk Officer or appropriate risk committees.

All new products and material changes in business processes are reviewed and approved by the New Products Committee and appropriate credit or risk committees.

All new and material changes to products and services are reviewed and approved by the New Products Committee and appropriate credit or risk committees.

COUNTRY RISK MANAGEMENT PROCESS

Country risk is defined as the risk that economic, social, and/or political conditions and events in a country present.

We define country risk as the risk that economic, social, and/or political conditions and events in a country present.

They might adversely impact us, primarily as a result of greater credit losses, increased operational or market risk or the inability to repatriate capital.

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Policies and procedures establish country risk escalation thresholds to control and limit exposure, driven by processes that enable the monitoring of conditions in countries where we have exposure.

CLIMATE-RELATED RISK

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND CLIMATE-RELATED RISK

We define climate-related risk as:

(1) risks related to the transition to a low-carbon economy, which may include extensive changes pertaining to policy, legal, technology, market and reputational risks, and (2) risks related to the physical impacts of climate change, typically driven by acute physical risk such as increased severity of extreme weather events (e.g., cyclones, hurricanes, floods) and chronic physical risk which are longer-term shifts in climate patterns (e.g., sea level rise, chronic heat waves).

Such transition and physical risk events driven by climate change can have broad impact to our customers, operations, suppliers and business.

Climate-related risk is interconnected and overarching across all risk types as it may manifest as credit risk, operational risk, market risk, liquidity risk and other risk types.

Such transition and physical risk events driven by climate change can have broad impact on our customers, operations, suppliers and business.

Climate-related risk is interconnected and overarching across all risk types as it may manifest as credit risk, operational risk, market risk, liquidity risk or other risk types.

We continue to enhance our focus on climate-related risk within our risk governance framework.

We are currently performing a risk identification process for climate-related risk to determine the meaningfulness and measurability of the risk.

Furthermore, Environmental, Social and Governance (ESG) issues with an emphasis on climate-related risk are currently identified as an “emerging risk” within our risk governance framework.

Furthermore, ESG risks, with an emphasis on climate-related risk, are currently identified as an “emerging risk” within our risk governance framework.

CRITICAL ACCOUNTING ESTIMATES

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To demonstrate the sensitivity of estimated credit losses to the macroeconomic scenarios, we compared our modeled estimates under a baseline scenario to that under a pessimistic downside scenario.

For every 10 percentage points change in weighting from the baseline scenario to the pessimistic downside scenario, the estimated credit losses increased by approximately $110 million.

As of December 31, 2022, for every 10 percentage points change in weighting from the baseline scenario to the pessimistic downside scenario, the estimated credit losses increased by approximately $120 million.

The modeled estimates under these scenarios were influenced by the duration, severity and timing of changes in economic variables within each scenario and these macroeconomic scenarios, under different conditions or using different assumptions, could result in significantly different estimated credit losses.

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A significant portion of our cards, by their terms, allow Card Members to earn bonus points for purchases at merchants in particular industry categories.

Membership Rewards points are redeemable for a broad variety of rewards, including travel, shopping, gift cards, and covering eligible charges.

Membership Rewards points are redeemable for a broad variety of rewards, including, but not limited to, travel, shopping, gift cards, and covering eligible charges.

Points typically do not expire, and there is no limit on the number of points a Card Member may earn.

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To discount these cash flows we use our expected cost of equity, determined using a capital asset pricing model.

When using the market method under the market approach, we apply comparable publicly traded companies’ multiples (e.g., earnings, revenues) to our reporting units’ actual results.

When using the market method under the market approach, we apply comparable publicly traded companies’ multiples (e.g., earnings, revenues) to our reporting units’ operating results.

The judgment in estimating forecasted cash flows, discount rates and market comparables is significant, and imprecision could materially affect the fair value of our reporting units.

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OTHER MATTERS

RECENTLY ADOPTED ACCOUNTING STANDARDS

Refer to the Recently Adopted Accounting Standards section of Note 1 to the “Consolidated Financial Statements.”

As previously disclosed, we identified during an internal review that over time certain current and former U.S.

Card Members with multiple cards were not credited certain Membership Rewards points that they had earned.

We completed our review of this matter in the fourth quarter of 2022, which resulted in an immaterial impact to our Consolidated Financial Statements for the year ended December 31, 2022.

RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS

Refer to the Recently Issued and Adopted Accounting Standards section of Note 1 to the “Consolidated Financial Statements.”

GLOSSARY OF SELECTED TERMINOLOGY

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Average discount rate — This calculation is generally designed to reflect the average pricing at all merchants accepting American Express cards and represents the percentage of network volumes retained by us from spend at merchants we acquire, or from merchants acquired by third parties on our behalf, net of amounts retained by such third parties.

The average discount rate, together with network volumes, drive our discount revenue.

Billed business — Represents transaction volumes (including cash advances) on cards and other payment products issued by American Express.

Billed business is reported as inside the United States or outside the United States based on the location of the issuer.

The average discount rate, together with billed business, drive our discount revenue.

Billed business (Card Member spending) — Represents transaction volumes (including cash advances) on payment products issued by American Express.

Capital ratios — Represents the minimum standards established by regulatory agencies as a measure to determine whether the regulated entity has sufficient capital to absorb on- and off-balance sheet losses beyond current loss accrual estimates.

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Card Member receivables — Represents transactions on our card products and card related fees that need to be paid in full on or before the Card Member's payment due date.

Cards-in-force — Represents the number of cards that are issued and outstanding by American Express (proprietary cards-in-force) and cards issued and outstanding under network partnership agreements with banks and other institutions, including joint ventures (GNS cards-in-force), except for GNS retail cobrand cards that had no out-of-store spending activity during the prior twelve months.

Cards-in-force — Represents the number of cards that are issued and outstanding by American Express (proprietary cards-in-force) and cards issued and outstanding under network partnership agreements with banks and other institutions, except for retail cobrand cards issued by network partners that had no out-of-store spending activity during the prior twelve months.

Basic cards-in-force excludes supplemental cards issued on consumer accounts.

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Plan It), grace periods, and rate and fee structures.

Discount revenue — Primarily represents the amount earned on transactions occurring at merchants that have entered into a card acceptance agreement with us, a GNS partner or other third-party merchant acquirer, for facilitating transactions between the merchants and Card Members.

Goods and Services (G&S)-related volume — Includes spend in merchant categories other than T&E-related merchant categories, which includes B2B spending by small and medium size enterprise customers in our GCS segment.

Discount revenue — Discount revenue represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.

Goods and Services (G&S)-related volume — Includes spend in merchant categories other than T&E-related merchant categories, which includes B2B spending by small and mid-sized enterprise customers in our CS and ICS segments.

Interest expense — Includes interest incurred primarily to fund Card Member loans and receivables, general corporate purposes and liquidity needs.

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Network volumes — Represents the total of billed business and processed volumes.

Network volumes are reported as United States or outside the United States based on the location of the issuer.

Operating expenses — Represents salaries and employee benefits, professional services, data processing and equipment, and other expenses.

Processed revenue — Represents revenues related to network partnership agreements, comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners.

Processed revenue also includes fees earned on alternative payment solutions facilitated by American Express.

Processed volumes — Represents transaction volumes (including cash advances) on cards issued under network partnership agreements with banks and other institutions, including joint ventures, as well as alternative payment solutions facilitated by American Express.

Processed volume is reported as United States or outside the United States based on the location of the issuer.

Reserve build (release) — Represents the portion of the provisions for credit losses for the period related to increasing or decreasing reserves for credit losses as a result of, among other things, changes in volumes, macroeconomic outlook, portfolio composition and credit quality of portfolios.

Reserve build represents the amount by which the provision for credit losses exceeds net write-offs, while reserve release represents the amount by which net write-offs exceed the provision for credit losses.

Return on average equity — Calculated by dividing the preceding twelve months of net income by one-year monthly average total shareholders’ equity.

T&E-related volume — Represents spend on travel and entertainment, which primarily includes airline, cruise, lodging and dining merchant categories.

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This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.

The forward-looking statements, which address our current expectations regarding business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “estimate,” “predict,” “potential,” “continue” and similar expressions.

The forward-looking statements, which address our current expectations regarding business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “estimate,” “potential,” “continue” and similar expressions.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.

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Factors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following:

• our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing in customers, brand and talent, controlling operating expenses, effectively managing risk and executing our share repurchase program;

any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following:

the extent and duration of the effect of the pandemic on the economy, inflation, consumer confidence, consumer and business spending, and customer behaviors, such as with respect to travel, dining, shopping and in-person events;

the impact on consumers and businesses as forbearance and government support programs end;

the continued stress on businesses due to containment measures, operational changes, supply chain issues and staffing shortages;

• our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing at high levels in areas that can drive sustainable growth (including our brand, value propositions, customers, colleagues, technology and coverage), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following:

fiscal and monetary policies and macroeconomic conditions, such as recession risks, effects of inflation, higher interest rates, labor shortages or higher rates of unemployment, supply chain issues, energy costs and the continued effects of the pandemic;

geopolitical instability, including the ongoing military conflict between Russia and Ukraine;

the impact of any future contingencies, including, but not limited to, restructurings, investment gains or losses, impairments, changes in reserves, legal costs and settlements, the imposition of fines or civil money penalties and increases in Card Member remediation;

issues impacting brand perceptions and our reputation;

the impact of any future contingencies, including, but not limited to, restructurings, investment gains, impairments, changes in reserves, legal costs, the imposition of fines or civil money penalties and increases in Card Member reimbursements;

impacts related to new or renegotiated cobrand and other partner agreements;

and the impact of regulation and litigation, which could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with partners, merchants and Card Members;

• our ability to grow revenues net of interest expense, which could be impacted by, among other things, uncertainty regarding the continued spread of COVID-19 (including new variants) and the availability, distribution and use of effective treatments and vaccines;

a deterioration in global economic and business conditions;

consumer and business spending not growing in line with expectations;

prolonged measures to contain the spread of COVID-19 (including travel restrictions), concern of the possible imposition of further containment measures or premature easing of such containment measures, any of which could further exacerbate the effects on business activity and our Card Members, partners and merchants;

health concerns associated with the pandemic continuing to affect customer behaviors, spending levels and preferences, and travel patterns and demand even after containment measures are lifted;

the amount and efficacy of investments in share, scale and relevance;

growth in Card Member loans and the yield on Card Member loans not remaining consistent with current expectations;

the average discount rate changing by a greater or lesser amount than expected;

an inability of business partners to meet their obligations to us and our customers due to slowdowns or disruptions in their businesses, bankruptcy or liquidation, or otherwise;

and an inability to address competitive pressures and implement our strategies and business initiatives, including within the premium consumer space, commercial payments, the global merchant network and digital environment;

• future credit performance, the level of future delinquency and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on changes in consumer behavior that affect loan and receivable balances (such as paydown and revolve rates);

macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies;

the ability and willingness of Card Members to pay amounts owed to us, particularly as forbearance and government support programs end;

the enrollment in, and effectiveness of, hardship programs and troubled debt restructurings;

the performance of accounts as they graduate and exit from financial relief programs;

collections capabilities and recoveries of previously written-off loans and receivables;

and governmental actions that provide forms of relief with respect to certain loans and fees, such as limiting debt collections efforts and encouraging or requiring extensions, modifications or forbearance;

• net interest income and the growth rate of loans outstanding being higher or lower than current expectations, which will depend on the behavior of Card Members and their actual spending, borrowing and paydown patterns;

• our ability to grow revenues net of interest expense and the sustainability of our future growth, which could be impacted by, among other things, the factors identified above and in the subsequent paragraphs, as well as the following:

a slowdown or increase in volatility in consumer and business spending volumes;

the strengthening of the U.S.

dollar beyond expectations;

an inability to address competitive pressures, innovate in our products and services, expand into value-adding products and services and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global merchant network;

the continued effects of the COVID-19 pandemic, including the spread and severity of the virus, the availability and effectiveness of treatments and vaccines, the imposition of further containment measures and the lingering impacts on customer behaviors, spending and travel patterns, any of which could further exacerbate the effects on economic activity and travel-related revenues;

and merchant discount rates changing by a greater or lesser amount than expected;

• net card fees not performing consistently with expectations, which could be impacted by, among other things, a deterioration in macroeconomic conditions impacting the ability and desire of Card Members to pay card fees;

higher Card Member attrition rates;

the pace of Card Member acquisition activity;

and our inability to address competitive pressures, develop attractive value propositions and implement our strategy of refreshing card products and enhancing benefits and services;

• net interest income, the effects of interest rates and the growth rate of loans outstanding being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns;

our ability to effectively manage risk and enhance Card Member value propositions;

changes in benchmark interest rates;

changes in benchmark interest rates, including where such changes affect our assets or liabilities differently than expected;

changes in capital and credit market conditions and the availability and cost of capital;

credit actions, including line size and other adjustments to credit availability;

the yield on Card Member loans not remaining consistent with current expectations;

and the effectiveness of our strategies to capture a greater share of existing Card Members’ spending and borrowings, and attract new, and retain existing, customers;

• future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies;

the ability and willingness of Card Members to pay amounts owed to us;

changes in consumer behavior that affect loan and receivable balances (such as paydown and revolve rates);

the enrollment in, and effectiveness of, financial relief programs and the performance of accounts as they exit from such programs;

collections capabilities and recoveries of previously written-off loans and receivables;

• the actual amount we spend on marketing in the future, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance;

management’s identification and assessment of attractive investment opportunities and the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives;

our ability to balance expense control and investments in the business;

and management’s ability to realize efficiencies and optimize investment spending;

our ability to realize marketing efficiencies, optimize investment spending and drive increases in revenue;

the effectiveness of management's investment optimization process, management’s identification and assessment of attractive investment opportunities and the receptivity of Card

Members and prospective customers to advertising and customer acquisition initiatives and our ability to balance expense control and investments in the business;

• the actual amount to be spent on Card Member rewards and services and business development, and the relationship of these variable customer engagement costs to revenues, which could be impacted by continued changes in macroeconomic conditions and Card Member behavior as it relates to their spending patterns (including the level of spend in bonus categories), the redemption of rewards and offers (including travel redemptions) and usage of travel-related benefits;

the costs related to reward point redemptions;

higher-than-expected customer remediation expenses;

further enhancements to product benefits to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective;

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and the pace and cost of the expansion of our global lounge collection;

• our ability to control operating expenses and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent;

costs due to new hybrid working arrangements;

supply chain issues;

a persistent inflationary environment;

our ability to realize operational efficiencies, including through automation;

management’s decision to increase or decrease spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities depending on overall business performance;

our ability to innovate efficient channels of customer interactions;

our ability to innovate efficient channels of customer interactions and the willingness of Card Members to self-service and address issues through digital channels;

restructuring activity;

supply chain issues;

information security or compliance expenses or consulting, legal and other professional services fees, including as a result of litigation or internal and regulatory reviews;

the level of M&A activity and related expenses;

information or cyber security incidents;

the payment of civil money penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements;

the performance of Amex Ventures and other of our investments;

impairments of goodwill or other assets;

and the impact of changes in foreign currency exchange rates on costs;

• net card fees not performing consistent with current expectations, which could be impacted by, among other things, a deterioration in macroeconomic conditions impacting the ability and desire of Card Members to pay card fees;

higher Card Member attrition rates;

the pace of Card Member acquisition activity;

and our inability to address competitive pressures, develop attractive value propositions and implement our strategy of refreshing card products and enhanced benefits and services;

• the average discount rate not performing consistent with current expectations, including as a result of further changes in the mix of spending by location and industry (including the level of T&E spending), merchant negotiations (including merchant incentives, concessions and volume-related pricing discounts), competition, pricing regulation (including regulation of competitors’ interchange rates) and other factors;

• our tax rate not remaining consistent with current levels, which could be impacted by, among other things, further changes in tax laws and regulation, our geographic mix of income, unfavorable tax audits and other unanticipated tax items;

• changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may materially impact the prices charged to merchants that accept American Express cards, the desirability of our premium card products, competition for new and existing cobrand relationships, competition from new and non-traditional competitors and the success of marketing, promotion and rewards programs;

• changes affecting our plans regarding the return of capital to shareholders, including increasing the level of our dividend, subject to approval by our Board of Directors, which will depend on factors such as capital levels and regulatory capital ratios;

• our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation, our geographic mix of income, unfavorable tax audits and other unanticipated tax items;

• changes affecting our plans regarding the return of capital to shareholders, including increasing the level of our dividend, which will depend on factors such as capital levels and regulatory capital ratios;

changes in the stress testing and capital planning process and new guidance from the Federal Reserve;

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our credit ratings and rating agency considerations;

required Company approvals;

and the economic environment and market conditions in any given period;

• our ability to expand our leadership in the premium consumer space, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market value propositions that appeal to Card Members and new customers and offer attractive services and rewards programs, which will depend in part on ongoing investments, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, and infrastructure to support new products, services and benefits;

• our ability to build on our leadership in commercial payments, which will depend in part on competition, the willingness and ability of companies to credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs, perceived or actual difficulties and costs related to setting up card-based B2B payment platforms, our ability to offer attractive value propositions to potential customers, our ability to enhance and expand our payment and lending solutions, and continue the rollout of the Kabbage platform to our small business customers;

• our ability to expand merchant coverage globally, which will depend in part on our success, as well as the success of OptBlue merchant acquirers and GNS partners in signing merchants to accept American Express, which could be impacted by our value propositions offered to merchants and merchant acquirers for card acceptance, as well as the awareness and willingness of Card Members to use American Express cards at merchants, our ability to increase coverage in priority international regions and execute on our plans in China, and technological developments, including capabilities that allow for greater digital integration;

• our ability to stay on the leading edge of technology and digital payment solutions, which will depend on our success in evolving our products and processes for the digital environment, developing new features in the Amex app and enhancing our digital channels, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence to address servicing and other customer needs, and supporting the use of our products as a means of payment

through online and mobile channels, all of which will be impacted by investment levels, new product innovation and development and infrastructure to support new products, services and benefits;

• our ability to expand our leadership in the premium consumer space, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits and value propositions that appeal to Card Members and new customers, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize the benefits from strategic partnerships and evolving our infrastructure to support new products, services and benefits;

• our ability to build on our leadership in commercial payments, which will depend in part on competition, the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs, perceived or actual difficulties and costs related to setting up card-based B2B payment platforms, our ability to offer attractive value propositions and new products to potential customers, our ability to enhance and expand our payment and lending solutions, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies;

• our ability to expand merchant coverage globally and our success, as well as the success of OptBlue merchant acquirers and network partners, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card Members to use American Express cards at merchants, scaling, marketing and expanding programs to increase card usage, identifying new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, increasing coverage in priority international cities and countries and key industry verticals, and executing on our plans in China and for continued technological developments, including capabilities that allow for greater digital integration and modernization of our authorization platform;

• our ability to stay on the leading edge of technology and digital payment and travel solutions, which will depend in part on our success in evolving our products and processes for the digital environment, developing new features in the Amex app and enhancing our digital channels, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence and increasing automation to address servicing and other customer needs, and supporting the

use of our products as a means of payment through online and mobile channels, all of which will be impacted by investment levels, new product innovation and development and infrastructure to support new products, services, benefits and partner integrations;

• our ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access, favoring local competitors or prohibiting or limiting foreign ownership of certain businesses;

the success of our network partners in acquiring Card Members and/or merchants;

political or economic instability or regional hostilities, including as a result of the war in Ukraine and related geopolitical impacts, which could affect commercial activities;

our ability to tailor products and services to make them attractive to local customers;

and competitors with more scale and experience and more established relationships with relevant customers, regulators and industry participants;

• a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm;

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and our credit ratings or those of our subsidiaries;

• our deposit rates increasing faster or slower than current expectations and changes affecting our ability to grow retail direct deposits, including due to market demand, changes in benchmark interest rates, competition or regulatory restrictions on our ability to obtain deposit funding or offer competitive interest rates, which could affect our net interest yield and ability to fund our businesses;

• our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions;

• our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, our ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions;

• our ability to implement our ESG strategies and initiatives, which depend in part on the amount and efficacy of our investments in product innovations, marketing campaigns, our supply chain and operations, and philanthropic, colleague and community programs;

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limit our ability to pursue business opportunities or conduct business in certain jurisdictions;

require changes to business practices or alter our relationships with Card Members, partners, merchants and other third parties, including our ability to continue certain cobrand relationships in the EU and UK;

exert further pressure on the average discount rate and GNS business;

exert further pressure on the merchant discount rates and our network business;

result in increased costs related to regulatory oversight, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or civil money penalties;

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or result in harm to the American Express brand;

• changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including of cobrand partners and merchants that represent a significant portion of our business, such as the airline industry, or partners in GNS or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations;

• factors beyond our control such as continued waves of COVID-19 cases, the severity and contagiousness of new variants, severe weather conditions, natural disasters, power loss, disruptions in telecommunications, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.

• changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including of cobrand partners and merchants that represent a significant portion of our business, such as the airline industry, network partners or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations;

• factors beyond our control such as a further escalation of the war in Ukraine and other military conflicts, future waves of COVID-19 cases, the severity and contagiousness of new variants, severe weather conditions, natural disasters, power loss, disruptions in telecommunications, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.

A further description of these uncertainties and other risks can be found in “Risk Factors” above and our other reports filed with the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis