What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-09 compared with 2023-02-10 · 325 added, 262 removed, 1614 unchanged (27% of the section changed)

19 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for credit losses on certain financial instruments in 2020.

Basis for Opinions

37 unchanged sentences

These procedures also included, among others, testing management’s process for estimating the reserves for credit losses on Card Member loans through (i) evaluating the appropriateness of management’s methodology, (ii) testing the completeness and accuracy of significant inputs and (iii) evaluating the reasonableness of certain qualitative reserves and significant assumptions used to estimate the reserves.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of management’s methodology and the reasonableness of certain qualitative reserves and certain significant assumptions, including the R&S Period and the loss rates used to estimate expected credit losses beyond the R&S Period.

Professionals with specialized skill and knowledge

were used to assist in evaluating the appropriateness of management’s methodology and the reasonableness of certain qualitative reserves and certain significant assumptions, including the R&S Period and the loss rates used to estimate expected credit losses beyond the R&S Period.

Membership Rewards Liability

94 unchanged sentences

Net income $ 8,374 $ 7,514 $ 8,060

Other comprehensive (loss) income:

Net unrealized debt securities (losses) gains, net of tax ( 87 ) ( 42 ) 32

Other comprehensive income (loss):

Net unrealized debt securities gains (losses), net of tax

50 ( 87 ) ( 42 )

Foreign currency translation adjustments, net of hedges and tax 51 ( 230 ) ( 163 )

Net unrealized pension and other postretirement benefits, net of tax 37 52 155

Other comprehensive (loss) income ( 265 ) ( 50 ) ( 158 )

Other comprehensive income (loss)

138 ( 265 ) ( 50 )

Comprehensive income $ 8,512 $ 7,249 $ 8,010

8 unchanged sentences

39,312 28,097

28,097 20,548

Short-term investment securities (includes restricted investments of consolidated variable interest entities:

Total cash and cash equivalents 33,914 22,028

Total cash and cash equivalents (includes restricted cash:

2023, $ 514 ;

2022, $ 544 )

46,596 33,914

Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity:

10 unchanged sentences

Other loans, less reserves for credit losses:

2023, $ 126 ;

Investment securities 2,186 4,578

46 unchanged sentences

Cash Flows from Investing Activities

Sale of investment securities 26 62 69

Maturities and redemptions of investment securities 1,892 20,032 7,159

Sale of investments 2 26 62

Maturities and redemptions of investments 3,888 1,892 20,032

Purchase of investments ( 1,572 ) ( 4,175 ) ( 1,517 )

Net (increase) decrease in Card Member loans and receivables, and other loans ( 29,562 ) ( 27,557 ) 26,906

Net increase in Card Member loans and receivables, and other loans (b)

( 25,124 ) ( 29,562 ) ( 27,557 )

Purchase of premises and equipment, net of sales:

( 1,563 ) ( 1,855 ) ( 1,550 )

Acquisitions/dispositions, net of cash acquired ( 15 ) 1 ( 597 )

Other investing activities — — 135

Net cash (used in) provided by investing activities ( 33,689 ) ( 10,529 ) 11,632

Net (Acquisitions)/dispositions, net of cash acquired ( 64 ) ( 15 ) 1

Net cash used in investing activities ( 24,433 ) ( 33,689 ) ( 10,529 )

Cash Flows from Financing Activities

Net increase (decrease) in customer deposits 18,915 25,902 ( 2,468 )

Net (decrease) increase in short-term borrowings ( 706 ) 461 ( 4,627 )

Net (decrease) increase in short-term borrowings (b)

( 105 ) ( 706 ) 461

Proceeds from long-term debt 15,674 23,230 7,788

10 unchanged sentences

Cash and cash equivalents at end of year $ 46,596 $ 33,914 $ 22,028

Supplemental cash flow information

Cash and cash equivalents reconciliation 2022 2021 2020

Cash and cash equivalents per Consolidated Balance Sheets $ 33,914 $ 22,028 $ 32,965

Restricted balances included in Cash and cash equivalents 544 525 606

Total cash and cash equivalents, excluding restricted balances $ 33,370 $ 21,503 $ 32,359

(a) Includes net gains and losses on fair value hedges, net gains and losses on Amex Ventures investments and changes in equity method investments.

(a) Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.

(b) Excludes an increase of $ 117 million related to non-cash activity during 2023.

Net income taxes paid during 2023, 2022 and 2021 were $ 3.3 billion, $ 3.0 billion and $ 1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $ 6.4 billion, $ 2.2 billion and $ 1.1 billion, respectively.

See Notes to Consolidated Financial Statements.

5 unchanged sentences

Balances as of December 31, 2020 $ 22,984 $ — $ 161 $ 11,881 $ ( 2,895 ) $ 13,837

Cumulative effect of change in accounting principle - Reserve for Credit Losses (a)

( 882 ) — — — — ( 882 )

Net income 8,060 — — — — 8,060

Other comprehensive loss ( 50 ) — — — ( 50 ) —

Preferred shares issued 1,584 — — 1,584 — —

Redemption of preferred shares ( 1,600 ) — — ( 1,584 ) — ( 16 )

Repurchase of common shares ( 7,598 ) — ( 9 ) ( 631 ) — ( 6,958 )

4 unchanged sentences

( 23 ) — — — — ( 23 )

Cash dividends declared preferred Series D, $ 13,213.89 per share

( 21 ) — — — — ( 21 )

Cash dividends declared common, $ 1.72 per share

3 unchanged sentences

Other comprehensive loss ( 265 ) — — — ( 265 ) —

Preferred shares issued 1,584 — — 1,584 — —

Redemption of preferred shares ( 1,600 ) — — ( 1,584 ) — ( 16 )

Repurchase of common shares ( 3,332 ) — ( 4 ) ( 302 ) — ( 3,026 )

Other changes, primarily employee plans 242 — — 300 — ( 58 )

Cash dividends declared preferred Series B, $ 36,419.41 per share

( 27 ) — — — — ( 27 )

Cash dividends declared preferred Series C, $ 26,317.47 per share

( 23 ) — — — — ( 23 )

Cash dividends declared preferred Series D, $ 35,993.05 per share

4 unchanged sentences

Net income 8,374 — — — — 8,374

Other comprehensive loss ( 265 ) — — — ( 265 ) —

Other comprehensive income

138 — — — 138 —

Repurchase of common shares ( 3,519 ) — ( 4 ) ( 334 ) — ( 3,181 )

5 unchanged sentences

Balances as of December 31, 2023 $ 28,057 $ — $ 145 $ 11,372 $ ( 3,072 ) $ 19,612

(a) Represents $ 1,170 million, net of tax of $ 288 million, related to the impact as of January 1, 2020 of adopting the Current Expected Credit Loss (CECL) methodology for the recognition of credit losses on certain financial instruments.

See Notes to Consolidated Financial Statements.

2 unchanged sentences

We are a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success.

Our principal products and services are credit and charge card products, along with travel and lifestyle related services, offered to consumers and businesses around the world.

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

39 unchanged sentences

We satisfy our obligations under these agreements over the contract term, often on a daily basis, including through the processing of Card Member transactions and the availability of our payment network.

In cases where the merchant acquirer is a third party (which is the case, for example, under our OptBlue program, or with certain of our network partners), we receive a network rate fee in our settlement with the merchant acquirer, which is individually negotiated between us and that merchant acquirer and is recorded as discount revenue at the time the Card Member transaction occurs.

In cases where the merchant acquirer is a third party, we receive a network rate fee in our settlement with the merchant acquirer, which is negotiated between us and that merchant acquirer and is recorded as discount revenue at the time the Card Member transaction occurs.

Net Card Fees

26 unchanged sentences

Card Member Rewards

We issue charge and credit cards that allow Card Members to participate in various rewards programs (e.g., Membership Rewards, cash back and cobrand).

We issue credit, charge and debit cards that allow Card Members to participate in various rewards programs (e.g., Membership Rewards, cash back and cobrand).

Rewards expense is recognized in the period Card Members earn rewards, generally by spending on their enrolled card products.

18 unchanged sentences

A reporting unit is defined as an operating segment, or a business that is one level below an operating segment, for which discrete financial information is regularly reviewed by the operating segment manager.

We evaluate goodwill for impairment annually as of June 30, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of one or more of our reporting units below its carrying value.

Prior to completing the assessment of goodwill for impairment, we also perform a recoverability test of certain long-lived assets.

Prior to completing the annual assessment of goodwill for impairment, we perform a recoverability test of certain long-lived assets.

We have historically evaluated goodwill for impairment annually as of June 30, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of one or more of our reporting units below its carrying value.

In the fourth quarter of 2023, we changed our annual impairment assessment date to November 1 for all reporting units.

The change in the annual testing date for goodwill impairment is considered a change in accounting principle, which we believe is preferable as the new date better aligns with our long-term planning and forecasting process.

We have determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each November 1 of the prior reporting periods without the use of hindsight.

As such, we prospectively applied the change in annual goodwill impairment testing date beginning November 1, 2023.

The change in assessment date did not delay, accelerate or avoid a potential impairment charge.

We have the option to perform a qualitative assessment of goodwill impairment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

9 unchanged sentences

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

For the years ended December 31, 2022 and 2021, we performed a qualitative assessment in connection with our annual goodwill impairment evaluation and determined that it was more likely than not that the fair values of each of our reporting units exceeded their carrying values.

During the year ended December 31, 2023, we performed assessments for each reporting unit in connection with our annual goodwill impairment evaluation as of both June 30, 2023 and November 1, 2023, in accordance with the change in goodwill impairment testing date.

As of both testing dates, we determined that it was more likely than not that the fair values of each of our reporting units exceeded their carrying values and accordingly no impairment was recognized.

In addition, during the year ended December 31, 2022, we performed a quantitative goodwill impairment assessment for those reporting units which were impacted by the realignment of our operating segments and concluded that their fair values exceeded their carrying values.

Refer to Note 24 for further information on the realignment of our operating segments.

Premises and Equipment

27 unchanged sentences

Certain reclassifications of prior period amounts have been made to conform to the current period presentation.

RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS

In March 2022, the Financial Accounting Standards Board issued new accounting guidance on troubled debt restructuring (TDR) and write-offs, effective January 1, 2023, with early adoption permitted.

The amendments eliminate the existing TDR guidance for those entities that have adopted Update 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, create a single loan modification accounting model and enhance disclosure requirements for loan modifications and write-offs.

Beginning with the quarter ending March 31, 2023, our financial statements will reflect the adoption of this standard on a prospective basis.

The updated guidance will not have a material impact to our Consolidated Financial Statements.

Effective January 1, 2020, we adopted the new credit reserving methodology, applicable to certain financial instruments, known as the Current Expected Credit Loss (CECL) methodology resulting in an increase in the reserves for total loans and receivables credit losses on adoption, which was recorded under a modified retrospective transition with an offset to the opening balance of retained earnings.

Refer to Note 3 for how management estimates reserves for credit losses in accordance with the CECL methodology.

RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Effective January 1, 2023, we adopted new accounting guidance on troubled debt restructurings (TDR) and vintage disclosures on a prospective basis.

The new guidance eliminated the existing TDR guidance for those entities that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, created a single loan modification accounting model and enhanced disclosure requirements for loan modifications and write-offs.

The implementation did not have a material impact to our Consolidated Financial Statements.

Refer to Note 2 for further information, including the enhanced disclosures.

In March 2023, the Financial Accounting Standards Board issued updated accounting guidance to allow the proportional amortization method (PAM) to be applied to tax credit structures beyond low-income housing tax credit (LIHTC) investments.

Having implemented PAM in relation to LIHTC investments in January 2021, we early adopted the updated guidance with respect to other qualifying investments in the fourth quarter of 2023.

The impact of this change is immaterial to our Consolidated Financial Statements, therefore we implemented the updated guidance on a prospective basis.

In November 2023, the Financial Accounting Standards Board issued updated accounting guidance for Segment Reporting, effective January 1, 2024, with early adoption permitted.

The updated guidance requires enhanced disclosures for significant expenses by reportable operating segment.

Significant expense categories and amounts are those regularly provided to the chief operating decision maker (CODM) and included in the measure of a segment’s profit or loss.

The updated guidance will also require us to disclose the title and position of our CODM, including an explanation of how our CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

We plan to adopt the new standard for the annual reporting period beginning January 1, 2024, and for interim periods beginning January 1, 2025.

The updated guidance is not expected to have a material impact to our Consolidated Financial Statements.

In December 2023, the Financial Accounting Standards Board issued updated accounting guidance on Disclosures for Income Taxes, effective January 1, 2025, with early adoption permitted.

The updated guidance requires additional disclosure and disaggregated information in the Income Tax Rate reconciliation using both percentages and reporting currency amounts, with additional qualitative explanations of individually significant reconciling items.

The updated guidance also requires disclosure of the amount of income taxes paid (net of refunds received) disaggregated by jurisdictional categories (federal (national), state and foreign).

We are currently assessing the updated guidance, however it is not expected to have a material impact to our Consolidated Financial Statements.

LOANS AND CARD MEMBER RECEIVABLES

23 unchanged sentences

(a) Includes approximately $ 28.6 billion and $ 28.5 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of December 31, 2023 and 2022, respectively.

(b) Other loans represent consumer and commercial non-card financing products, and Small Business Administration Paycheck Protection Program (PPP) loans.

There were $ 7 million and $ 36 million of gross PPP loans outstanding as of December 31, 2022 and 2021, respectively.

Other loans are presented net of reserves for credit losses of $ 59 million and $ 52 million as of December 31, 2022 and 2021, respectively.

(b) Other loans are presented net of reserves for credit losses of $ 126 million and $ 59 million as of December 31, 2023 and 2022, respectively.

CARD MEMBER RECEIVABLES

11 unchanged sentences

Card Member receivables, net $ 60,237 $ 57,384

(a) Includes $ 5.2 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of both December 31, 2022 and 2021.

(a) Includes $ 4.6 billion and $ 5.2 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of December 31, 2023 and 2022, respectively.

CARD MEMBER LOANS AND RECEIVABLES AGING

1 unchanged sentence

The following table presents the aging of Card Member loans and receivables as of December 31, 2023 and 2022:

2022 (Millions) Current 30-59

Days Past Due 60-89

Days Past Due 90+

2023 ( Millions )

Current 30-59

Past Due 60-89

Past Due Total 90+ Days Past Due and Still Accruing Interest (c)

Non-Accruals (d)

Card Member Loans:

8 unchanged sentences

(b) (b) (b) $ 67 $ 15,547 $ — $ —

2021 (Millions) Current 30-59

2022 ( Millions )

Current 30-59

Days Past Due 60-89

18 unchanged sentences

The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.

We establish reserves for interest that we believe will not be collected.

(d) Non-accrual loans primarily include certain loans placed with outside collection agencies for which we have ceased accruing interest.

CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES

10 unchanged sentences

Small Business 2.2 % 2.4 % 1.4 % 1.1 % 1.2 % 1.5 %

Corporate (d)

(b) 0.6 % (c) (b) 0.4 % (c)

5 unchanged sentences

90+ days past billing as a % of total was 0.4 % and 0.6 % as of December 31, 2023 and 2022, respectively.

(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 write-off in the year ended December 21, 2020.

Refer to Note 3 for additional indicators, including external environmental qualitative factors, management considers in its evaluation process for reserves for credit losses.

IMPAIRED LOANS AND RECEIVABLES

Impaired loans and receivables are individual larger balance or homogeneous pools of smaller balance loans and receivables for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the customer agreement.

We consider impaired loans and receivables to include (i) loans over 90 days past due still accruing interest, (ii) non-accrual loans and (iii) loans and receivables modified as troubled debt restructurings (TDRs).

In instances where the customer is experiencing financial difficulty, we may modify, through various financial relief programs, loans and receivables with the intention to minimize losses and improve collectability, while providing customers with temporary or permanent financial relief.

We have classified loans and receivables in these modification programs as TDRs and continue to classify customer accounts that have exited a modification program as a TDR, with such accounts identified as “Out of Program TDRs.”

Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (possibly as low as zero percent, in which case the loan is characterized as non-accrual in our TDR disclosures), (ii) placing the customer on a fixed payment plan not to exceed 60 months and (iii) suspending delinquency fees until the customer exits the modification program.

Upon entering the modification program, the customer’s ability to make future purchases is either limited, canceled, or in certain cases suspended until the customer successfully exits from the modification program.

In accordance with the modification agreement with the customer, loans and/or receivables may revert back to the original contractual terms (including the contractual interest rate where applicable) when the customer exits the modification program, which is (i) when all payments have been made in accordance with the modification agreement or (ii) when the customer defaults out of the modification program.

Reserves for modifications deemed TDRs are measured individually and incorporate a discounted cash flow model.

All changes in the impairment measurement are included within provisions for credit losses.

The following tables provide additional information with respect to our impaired loans and receivables as of December 31, 2022, 2021 and 2020:

Refer to Note 3 for additional indicators, including external qualitative factors, management considers in its evaluation process for reserves for credit losses.

LOANS AND RECEIVABLES RESTRUCTURINGS FOR BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

Effective January 1, 2023, we prospectively adopted the new guidance that eliminated the recognition and measurement of TDRs.

Following the adoption of this guidance, we evaluate all loans and receivables restructurings according to the accounting guidance for loan refinancing and restructuring to determine whether such loan modification should be accounted for as a new loan or a continuation of the existing loan.

Our loans and receivables restructurings for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan, which reflects the ongoing effort to support our customer and recover our investment in the existing loan.

We offer several types of loans and receivables modification programs to customers experiencing financial difficulty.

In such instances, we may modify loans and receivables with the intention to minimize losses and improve collectability, while providing customers with temporary or permanent financial relief.

Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (reducing interest rates to as low as zero percent, in which case the loan is characterized as non-accrual) and/or (ii) placing the customer on a fixed payment plan not to exceed 60 months.

Upon entering the modification program, the customer’s ability to make future purchases is limited, canceled or, in certain cases, suspended until the customer successfully exits from the modification program.

As of December 31, 2023, we had $ 83 million of unused credit available to customers with loans and receivables modified during the year ended December 31, 2023.

In accordance with the modification agreement with the customer, loans and/or receivables may revert to the original contractual terms (including the contractual interest rate where applicable) when the customer exits the modification program, which is either (i) when all payments have been made in accordance with the modification agreement or (ii) when the customer defaults out of the modification program.

The following table provides information relating to loans and receivables modifications for borrowers experiencing financial difficulty during the year ended December 31, 2023:

As of December 31, 2023

Accounts Classified

2022 (Millions) Over 90 days Past Due & Accruing Interest (a)

Non-Accruals (b)

In Program (d)

Out of Program (e)

Total Impaired Balance Reserve for Credit Losses - TDRs

2023 ( Millions )

Account Balances

( Millions ) (a)

% of Total Class of

Financing Receivables Weighted Average Interest Rate Reduction

(% points) Weighted Average Payment

Term Extensions

(# of months)

Interest Rate Reduction

Card Member Loans

$ 252 $ 155 $ 781 $ 1,098 $ 2,286 $ 335

Consumer $ 1,572 1.6 % 16.4 % (b)

Small Business 550 2.0 % 15.9 % (b)

Corporate — — — (b)

Term Extension

Card Member Receivables

Consumer 346 1.4 % (c) 27

Small Business 543 2.8 % (c) 28

Corporate 13 0.1 % (c) 9

Other Loans 23 0.3 % — 18

Interest Rate Reduction

and Term Extension

Other Loans $ 42 0.6 % 2.1 % 20

Total $ 3,089

(a) Represents the outstanding balances as of December 31, 2023 of all modifications undertaken in the last year for loans and receivables that remain in modification programs as of, or that defaulted on or before, December 31, 2023.

The outstanding balances include principal, fees and accrued interest on loans and principal and fees on receivables.

Modifications did not reduce the principal balance.

(b) For Card Member loans, there have been no payment term extensions.

(c) We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.

The following table provides information with respect to loans and receivables modified on or after January 1, 2023 that subsequently defaulted in the period presented.

A customer can miss up to three payments before being considered in default, depending on the terms of the modification program.

As of December 31, 2023

Account Balance ( Millions ) (a)

Interest Rate Reduction

Term Extension Interest Rate Reduction and Term Extension Total

Card Member Loans

Consumer $ 53 (b) $ — $ 53

Small Business 20 (b) — 20

Corporate — (b) — —

Card Member Receivables

Consumer (c) 9 — 9

Small Business (c) 14 — 14

Corporate (c) — — —

Other Loans — — 1 1

Total $ 73 $ 23 $ 1 $ 97

(a) Represents the outstanding balances as of December 31, 2023 of all modifications undertaken on or after January 1, 2023 and subsequently defaulted in the past year.

The outstanding balance includes principal, fees and accrued interest on loans and principal and fees on receivables.

(b) For Card Member loans, there have been no payment term extensions.

(c) We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.

The following table provides information relating to the performance of loans and receivables that were modified on or after January 1, 2023.

As of December 31, 2023

Account Balances ( Millions ) (a)

30-89 Days Past Due

90+ Days Past Due

Card Member Loans

Consumer $ 1,433 $ 103 $ 36

Small Business 489 45 16

4 unchanged sentences

Corporate 11 2 —

Other Loans (f)

3 2 19 2 26 —

Other Loans 59 4 2

Total $ 2,785 $ 231 $ 73

(a) Represents the outstanding balances as of December 31, 2023 of all modifications undertaken on or after January 1, 2023 for loans and receivables that remain in modification programs as of, or that defaulted on or before, December 31, 2023.

The outstanding balance includes principal, fees and accrued interest on loans and principal and fees on receivables

TROUBLED DEBT RESTRUCTURING DISCLOSURES PRIOR TO ADOPTION OF THE NEW LOAN MODIFICATION GUIDANCE

Prior to adoption of the new loan modification guidance, we accounted for a modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a TDR.

Loans that were classified as a TDR prior to adoption will continue to be accounted for under the historical TDR accounting until the loan is entirely paid off or written off.

The following tables provide additional information with respect to our impaired loans and receivables as of December 31, 2022 and 2021:

As of December 31, 2022

Accounts Classified

2021 (Millions) Over 90 days Past Due & Accruing Interest (a)

Non-Accruals (b)

In Program (d)

Out of Program (e)

Total Impaired Balance Reserve for Credit Losses - TDRs

Accounts Classified as a

2022 (Millions)

Over 90 days Past Due & Accruing Interest (a)

Balance Reserve for Credit

Card Member Loans

$ 149 $ 82 $ 708 $ 997 $ 1,936 $ 415

Consumer 252 155 781 1,098 2,286 335

Small Business 54 34 267 380 735 108

4 unchanged sentences

Corporate — — 6 7 13 1

Other Loans (f)

1 — 67 2 70 1

Other Loans 3 2 19 2 26 —

Total 309 $ 191 1,733 $ 2,068 $ 4,301 $ 504

As of December 31, 2021

Accounts Classified

2020 (Millions) Over 90 days Past Due & Accruing Interest (a)

Non-Accruals (b)

In Program (d)

Out of Program (e)

Total Impaired Balance Reserve for Credit Losses - TDRs

Accounts Classified as a

2021 (Millions)

Over 90 days Past Due & Accruing Interest (a)

Balance Reserve for Credit

Card Member Loans

6 unchanged sentences

Corporate — — 1 6 7 —

Other Loans (f)

2 1 248 6 257 80

Other Loans 1 — 67 2 70 1

Total 169 $ 96 1,332 $ 1,764 $ 3,361 $ 596

4 unchanged sentences

Amounts presented exclude loans classified as TDRs.

(c) Accounts classified as a TDR include $ 48 million, $ 41 million and $ 32 million that are over 90 days past due and accruing interest and $ 17 million, $ 19 million and $ 11 million that are non-accruals as of December 31, 2022, 2021 and 2020, respectively.

(c) Accounts classified as a TDR include $ 48 million and $ 41 million that were over 90 days past due and accruing interest and $ 17 million and $ 19 million that were non-accruals as of December 31, 2022 and 2021, respectively.

(d) In Program TDRs include accounts that are currently enrolled in a modification program.

(e) Out of Program TDRs include $ 1,922 million, $ 1,621 million and $ 316 million of accounts that have successfully completed a modification program and $ 146 million, $ 143 million and $ 114 million of accounts that were not in compliance with the terms of the modification programs as of December 31, 2022, 2021 and 2020, respectively.

(f) Other loans primarily represent consumer and commercial non-card financing products.

LOANS AND RECEIVABLES MODIFIED AS TDRs

The following tables provide additional information with respect to loans and receivables that were modified as TDRs during the years ended December 31:

2022 Number of Accounts

(thousands) Account Balances

(millions) (a)

Average Interest Rate Reduction

(% points) Average Payment Term Extensions

(# of months)

Troubled Debt Restructurings:

Card Member Loans 149 $ 1,002 14 (b)

Card Member Receivables 27 900 (c) 20

Other Loans (d)

Total 180 $ 1,910

2021 Number of Accounts

(thousands) Account Balances

(millions) (a)

Average Interest Rate Reduction

(% points) Average Payment Term Extensions

(e) Out of Program TDRs include $ 1,922 million and $ 1,621 million of accounts that have successfully completed a modification program and $ 146 million and $ 143 million of accounts that were not in compliance with the terms of the modification programs as of December 31, 2022 and 2021, respectively.

LOANS AND RECEIVABLES MODIFIED AS TDRs PRIOR TO ADOPTION OF THE NEW LOAN MODIFICATION GUIDANCE

The following tables provide additional information with respect to loans and receivables that were modified as TDRs during the years ended December 31, 2022 and 2021:

2022 Number of

Accounts (Thousands)

Balances (Millions) (a)

Average Interest Rate Reduction (% points)

Average Payment Term Extensions

(# of months)

4 unchanged sentences

Total 180 $ 1,910

2020 Number of Accounts

(thousands) Account Balances

(millions) (a)

Average Interest Rate Reduction

(% points) Average Payment Term Extensions

2021 Number of

Accounts (Thousands)

Balances (Millions) (a)

Average Interest Rate Reduction (% points)

Average Payment Term Extensions

(# of months)

10 unchanged sentences

(d) Other loans primarily represent consumer and commercial non-card financing products.

LOANS AND RECEIVABLES MODIFIED AND SUBSEQUENTLY DEFAULTED PRIOR TO ADOPTION OF THE NEW LOAN MODIFICATION GUIDANCE

The following tables provide information with respect to loans and receivables modified as TDRs that subsequently defaulted within twelve months of modification.

1 unchanged sentence

2022 Number of Accounts

(thousands) Aggregated

Outstanding Balances

6 unchanged sentences

2021 Number of Accounts

(thousands) Aggregated

Outstanding Balances

5 unchanged sentences

Total 32 $ 239

2020 Number of Accounts

(thousands) Aggregated

Outstanding Balances

(millions) (a)

Troubled Debt Restructurings That Subsequently Defaulted:

Card Member Loans 17 $ 127

Card Member Receivables 3 55

Other Loans (b)

Total 23 $ 188

(a) The outstanding balances upon default include principal, fees and accrued interest on loans, and principal and fees on receivables.

16 unchanged sentences

Our models are developed using historical loss experience covering the economic cycle and consider the impact of account characteristics on expected losses.

This history includes the performance of loans and receivables modifications for borrowers experiencing financial difficulty, including their subsequent defaults.

Future economic conditions that are incorporated over the R&S Period include multiple macroeconomic scenarios provided to us by an independent third party.

Management reviews these economic scenarios each period and applies judgment to weight them in order to reflect the uncertainty surrounding these scenarios.

Management reviews these economic scenarios each period and assigns probability weights to each scenario, generally with a consistent initial distribution.

At times, due to macroeconomic uncertainty and volatility, management may apply judgment and assign different probability weights to scenarios.

These macroeconomic scenarios contain certain variables, including unemployment rates and real gross domestic product (GDP), that are significant to our models.

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Separate models are used for accounts deemed a troubled debt restructuring, which are measured individually and incorporate a discounted cash flow model.

See Note 2 for information on troubled debt restructurings.

See Note 2 for information on TDRs.

Loans and receivable balances are written off when we consider amounts to be uncollectible, which is generally determined by the number of days past due and is typically no later than 180 days past due for pay in full or revolving loans and 120 days past due for term loans.

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CHANGES IN CARD MEMBER LOANS RESERVE FOR CREDIT LOSSES

Card Member loans reserve for credit losses increased for the year ended December 31, 2022, 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.

Card Member loans reserve for credit losses decreased for the year ended December 31, 2021, primarily due to improved portfolio quality and macroeconomic forecasts, in large part driven by improvement in unemployment rate projections, partially offset by an increase in loans outstanding.

Card Member loans reserve for credit losses increased for the year ended December 31, 2023, primarily driven by an increase in loans outstanding and higher delinquencies.

Card Member loans reserve for credit losses increased for the year ended December 31, 2022, primarily driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.

The following table presents changes in the Card Member loans reserve for credit losses for the years ended December 31:

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Recoveries of interest and fees were not significant.

Amounts include net (write-offs) recoveries from TDRs of $( 209 ) million, $( 171 ) million and $( 134 ) million for the years ended December 31, 2022, 2021 and 2020, respectively.

(c) Primarily includes foreign currency translation adjustments of $( 6 ) million for both the years ended December 31, 2022 and 2021, and $ 35 million for the year ended December 31, 2020.

(c) Primarily includes foreign currency translation adjustments of $ 18 million for the year ended December 31, 2023, and $( 6 ) million for both the years ended December 31, 2022 and 2021.

CHANGES IN CARD MEMBER RECEIVABLES RESERVE FOR CREDIT LOSSES

Card Member receivables reserve for credit losses increased for the year ended December 31, 2022, primarily driven by higher delinquencies and growth in receivables outstanding.

Card Member receivables reserve for credit losses decreased for the year ended December 31, 2021, primarily due to improved portfolio quality and macroeconomic forecasts, in large part driven by improvement in unemployment rate projections, partially offset by an increase in receivables outstanding.

Card Member receivables reserve for credit losses decreased for the year ended December 31, 2023, primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.

Card Member receivables reserve for credit losses increased for the year ended December 31, 2022, primarily driven by higher delinquencies and an increase in receivables outstanding.

The following table presents changes in the Card Member receivables reserve for credit losses for the years ended December 31:

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(b) Net write-offs are presented less recoveries of $ 297 million, $ 257 million and $ 378 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Amounts include net recoveries (write-offs) from TDRs of $( 73 ) million, $( 64 ) million and $( 47 ) million, for the years ended December 31, 2022, 2021 and 2020, respectively.

(c) Primarily includes foreign currency translation adjustments of $ 1 million, $ 2 million and $( 1 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax.

We had accrued interest on our available-for-sale debt securities totaling $ 12 million as of both December 31, 2022 and 2021, presented as Other assets on the Consolidated Balance Sheets.

We had accrued interest on our available-for-sale debt securities totaling $ 5 million and $ 12 million as of December 31, 2023 and 2022, respectively, presented as Other assets on the Consolidated Balance Sheets.

Investment securities also include equity securities carried at fair value on the Consolidated Balance Sheets with unrealized gains and losses recorded in the Consolidated Statements of Income as Other, net expense.

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74 — — 74 47 — — 47

Equity securities (c)

Equity securities (c)(d)

60 16 ( 10 ) 66 50 — ( 9 ) 41

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(b) Represents investments in debt securities issued by Community Development Financial Institutions.

Investments as of December 31, 2021 also include corporate debt securities.

(d) During the third quarter of 2023, certain equity securities were reclassified from Other assets to Investment securities following the completion of transactions pursuant to which the issuers of the securities became public companies.

The investments had a fair value of $ 24 million with an associated cost basis of $ 10 million as of December 31, 2023.

The gross unrealized gain and loss amounts include net unrealized gains of $ 37 million that were recognized prior to such transactions.

The following table provides information about our available-for-sale debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2023 and 2022:

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Government treasury obligations — — 1,114 ( 12 ) 3,710 ( 72 ) 52 ( 1 )

Mortgage-backed securities

— — 7 ( 1 ) — — — —

Foreign government bonds and obligations — — — — 549 ( 1 ) — —

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The long-term debt of each Trust is payable only out of collections on their respective underlying securitized assets (refer to Note 8).

Restricted cash and cash equivalents held by the Lending Trust was $ 59 million and $ 42 million as of December 31, 2022 and 2021, respectively, and by the Charge Trust was nil and $ 1 million as of December 31, 2022 and 2021, respectively.

Restricted cash and cash equivalents held by the Lending Trust was $ 66 million and $ 59 million as of December 31, 2023 and 2022, respectively, and by the Charge Trust was nil as of both December 31, 2023 and 2022.

These amounts relate to collections of Card Member loans and receivables to be used by the Trusts to fund future expenses and obligations, including interest on debt securities, credit losses and upcoming debt maturities.

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(a) Primarily includes foreign currency translation.

During the year ended December 31, 2022, we performed a quantitative goodwill impairment assessment for those reporting units which were impacted by the realignment of our operating segments and concluded that their fair values exceeded their carrying values.

Accumulated impairment losses were $ 221 million as of both December 31, 2023 and 2022.

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TAX CREDIT INVESTMENTS

We account for our qualified affordable housing (QAH) investments using the proportional amortization method (PAM), which we elected to implement on January 1, 2021 on a prospective basis, and other tax credit investments using the equity method of accounting.

As of December 31, 2022 and 2021, we had $ 1,207 million and $ 1,124 million in tax credit investments, respectively, included in Other assets on the Consolidated Balance Sheets, of which $ 1,146 million and $ 1,084 million, respectively, related to QAH investments.

Included in QAH investments as of December 31, 2022 and 2021, we had $ 980 million and $ 994 million, respectively, related to investments in unconsolidated VIEs for which we do not have a controlling financial interest.

As of December 31, 2022, we committed to provide funding related to certain of these QAH investments, which is expected to be paid between 2023 and 2040 , resulting in $ 348 million in unfunded commitments reported in Other liabilities, of which $ 222 million specifically related to unconsolidated VIEs.

In addition, as of December 31, 2022 we had contractual off-balance sheet obligations to provide additional funding up to $ 13 million for these QAH investments, fully related to unconsolidated VIEs.

We hold tax credit investments that promote affordable housing, community development, and small businesses that foster economic growth in underserved areas and support compliance with the Community Reinvestment Act by our U.S.

bank subsidiary, American Express National Bank (AENB).

These investments generate a return primarily through the realization of income tax credits and other income tax benefits.

As of December 31, 2023 and 2022, we had $ 1,369 million and $ 1,207 million in tax credit investments, respectively, included in Other assets on the Consolidated Balance Sheets, comprised of LIHTC investments (previously referred to as Qualified Affordable Housing investments) and other qualifying investments.

We account for such tax credit investments using the Proportional Amortization Method, which we elected to implement prospectively on January 1, 2021 for LIHTC investments and in the fourth quarter of 2023 for other qualifying investments.

As of December 31, 2023 and 2022, $ 1,126 million and $ 1,042 million of our tax credit investments, respectively, related to investments in unconsolidated VIEs for which we do not have a controlling financial interest.

As of December 31, 2023, we committed to provide funding related to certain of our tax credit investments, which is expected to be paid between 2024 and 2040 , resulting in $ 573 million in unfunded commitments reported in Other liabilities, of which $ 409 million specifically related to unconsolidated VIEs.

In addition, as of December 31, 2023, we had contractual off-balance sheet obligations to provide additional funding up to $ 3 million for these tax credit investments, fully related to unconsolidated VIEs.

We may be required to fund these amounts between 2024 and 2034.

During the years ended December 31, 2022 and 2021, we recognized QAH investment losses of $ 161 million and $ 226 million, respectively, with associated tax credits of $ 141 million and $ 135 million, respectively, in Income tax provision.

During the year ended December 31, 2020 we recognized QAH investment equity method losses of $ 128 million, in Other, net expenses, with associated tax credits of $ 129 million, recognized in Income tax provision.

The following table presents tax credit investment expenses and associated income tax credits and other income tax benefits for the years ended December 31:

(Millions) 2023 2022 2021

Proportional amortization recognized in tax provision $ 185 $ 161 $ 226

Equity method expenses recognized in Other, net expenses $ — $ 9 $ 13

Income tax credits and Other income tax benefits (a) recognized in tax provision

$ 204 $ 196 $ 182

(a) Other income tax benefits are a result of tax deductible expenses generated by our tax credit investments.

Income tax credits and other income tax benefits associated with our tax credit investments are also recognized in the Consolidated Statements of Cash Flows in the Operating activities section primarily under Accounts payable and other liabilities.

CUSTOMER DEPOSITS

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(Millions) 2023 2022

retail deposits:

Savings and transaction accounts $ 93,722 $ 76,731

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Sweep accounts ― Third-party (brokered)

15,907 16,297

retail deposits

$ 128,146 $ 109,119

Other deposits 77 76

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(Millions) 2024 2025 2026 2027 2028 After 5 years Total

Certificates of deposit $ 5,790 $ 6,554 $ 2,939 $ 27 $ 786 $ — $ 16,096

As of December 31, certificates of deposit in denominations of $250,000 or more, in the aggregate, were as follows:

(Millions) 2022 2021

Total $ 999 $ 522

Certificates of deposit (a)

$ 11,740 $ 4,370 $ 933 $ 776 $ 704 $ — $ 18,523

(a) Includes $ 6 million of non-U.S.

direct certificates of deposit as of December 31, 2023.

As of December 31, 2023 and 2022, certificates of deposit in denominations that met or exceeded the insured limit were $ 1.8 billion and $ 1.0 billion, respectively.

SHORT-TERM BORROWINGS

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(a) For floating-rate issuances, the stated interest rates are weighted based on the outstanding principal balances and interest rates in effect as of December 31, 2023 and 2022.

(b) Includes borrowings from banks and book overdrafts with banks due to timing differences arising in the ordinary course of business.

We maintained a three-year committed, revolving, secured borrowing facility that gives us the right to sell up to $ 2.0 billion face amount of eligible certificates issued from the Lending Trust at any time through September 16, 2024 .

(b) Includes borrowings from banks and book overdrafts with banks, which represents negative cash balances for accounts with an associated overdraft facility, due to timing differences arising in the ordinary course of business.

As of December 31, 2023, we maintained a three-year committed, revolving, secured borrowing facility, with a maturity date of September 15, 2026, which gives us the right to sell up to $ 3.0 billion face amount of eligible certificates issued from the Lending Trust.

This facility enhances our contingent funding resources and is also used in the ordinary course of business to fund working capital needs.

The facility was undrawn as of both December 31, 2023 and 2022.

Additionally, certain of our subsidiaries maintained total committed lines of credit of $ 185 million and $ 186 million as of December 31, 2023 and 2022, respectively.

As of December 31, 2022 and 2021, $ 20.9 million and $ 7.2 million were drawn on these committed lines, respectively.

We paid $ 7.8 million in fees to maintain the secured borrowing facility in both 2022 and 2021.

As of December 31, 2023 and 2022, nil and $ 20.9 million were drawn on these committed lines, respectively.

We paid $ 12.0 million and $ 7.8 million in fees to maintain the secured borrowing facility in 2023 and 2022, respectively.

The committed 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.

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Fixed Rate Senior Notes 2027 330 3.30 328 3.30 —

Floating Rate Senior Notes — — — 300 0.87 —

Lending Trust

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Floating Rate Senior Notes — — — 2,125 4.67 —

Fixed Rate Subordinated Notes — — — 212 2.72 —

Floating Rate Subordinated Notes — — — 61 4.89 —

Floating Rate Conduit Borrowings — — — 2,000 0.40 —

Finance Leases — — 3 5.76 —

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Total Long-Term Debt $ 47,866

We maintained a committed syndicated bank credit facility of $ 3.5 billion as of December 31, 2022 and 2021, all of which was undrawn as of the respective dates.

We maintained a committed syndicated bank credit facility of $ 4.0 billion as of December 31, 2023 and $ 3.5 billion as of December 31, 2022, all of which was undrawn as of the respective dates.

The facility has a maturity date of October 30, 2026, and the availability of the facility is subject to compliance with certain covenants, principally our maintenance of a minimum Common Equity Tier 1 (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.

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Additionally, we maintained a three-year committed, revolving, secured borrowing facility that gives us the right to sell up to $ 3.0 billion face amount of eligible notes issued from the Charge Trust at any time through July 15, 2026 .

As of December 31, 2022 and 2021, nil and $ 2.0 billion were outstanding on this facility, respectively.

As of both December 31, 2023 and 2022, no amounts were outstanding on this facility.

We paid $ 20.2 million and $ 14.1 million in fees to maintain these lines in 2023 and 2022, respectively.

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$ 13,742 $ 12,789

Book overdraft balances (a)

Deferred card and other fees, net

Employee-related liabilities (a)

Card Member rebate and reward accruals (b)

Income tax liability (c)

15,227 10,670

Employee-related liabilities (b)

Card Member rebate and reward accruals (c)

Income tax liability (d)

$ 41,639 $ 37,350

(a) Includes employee benefit plan obligations and incentive compensation.

(b) Card Member rebate and reward accruals include payments to third-party reward partners and cash-back rewards.

(c) Includes repatriation tax liability of $ 1,012 million as of both December 31, 2022 and 2021, which represents our remaining obligation under the Tax Cuts and Jobs Act enacted on December 22, 2017 (Tax Act) to pay a one-time transition tax on unrepatriated earnings and profits of certain foreign subsidiaries, the net position for current federal, state and non-U.S.

(a) Primarily includes negative cash balances for accounts without an associated overdraft facility, due to timing differences arising in the ordinary course of business.

(b) Includes employee benefit plan obligations and incentive compensation.

(d) Includes repatriation tax liability of $ 998 million and $ 1,012 million as of December 31, 2023 and 2022, respectively, which represents our remaining obligation under the Tax Cuts and Jobs Act enacted on December 22, 2017 (Tax Act) to pay a one-time transition tax on unrepatriated earnings and profits of certain foreign subsidiaries, the net position for current federal, state and non-U.S.

income tax liabilities and deferred tax liabilities for foreign jurisdictions.

(d) Primarily includes negative cash balances for accounts without an associated overdraft credit facility, Travelers Cheques and other prepaid products, lease liabilities, accruals for general operating expenses, payments to cobrand partners, client incentives and dividends payable.

(e) Primarily includes prepaid products and Travelers Cheques, lease liabilities, derivative liabilities, accruals for general operating expenses, payments to cobrand partners, unfunded commitments for tax credit investments, client incentives and dividends payable.

MEMBERSHIP REWARDS

The Membership Rewards program allows enrolled Card Members to earn points that can be redeemed for a broad variety of rewards including, but not limited to, travel, shopping, gift cards, and covering eligible charges.

We record a Membership Rewards liability that represents management’s best estimate of the cost of points earned that are expected to be redeemed by Card Members in the future.

The weighted average cost (WAC) per point and the Ultimate Redemption Rate (URR) are key assumptions used to estimate the liability.

We record a Membership Rewards liability that represents our best estimate of the cost of points earned that are expected to be redeemed by Card Members in the future.

The weighted average cost (WAC) per point and the Ultimate Redemption Rate (URR) are the key assumptions used to estimate the liability.

We use statistical and actuarial models to estimate the URR based on redemption trends, card product type, enrollment tenure, card spend levels and credit attributes.

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The expense for Membership Rewards points is included in Card Member rewards expense.

We periodically evaluate our liability estimation process and assumptions based on developments in redemption patterns, cost per point redeemed, partner contract changes and other factors.

We periodically evaluate our liability estimation process and assumptions based on changes in cost per point redeemed, partner contract changes and developments in redemption patterns, which may be impacted by product refreshes, changes in redemption options and mix of proprietary cards-in-force.

DEFERRED CARD AND OTHER FEES, NET

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STOCK OPTION AND AWARD PROGRAMS

Under our 2016 Incentive Compensation Plan (amended and restated effective May 5, 2020) and previously under our 2007 Incentive Compensation Plan (collectively, Incentive Compensation Plans), awards may be granted to employees and other key individuals who perform services for us and our participating subsidiaries.

These awards may be in the form of stock options, restricted stock units or awards (collectively referred to as RSUs) or other incentives or similar awards designed to meet the requirements of non-U.S.

Under our 2016 Incentive Compensation Plan (amended and restated effective May 5, 2020) and previously under our 2007 Incentive Compensation Plan, awards may be granted to colleagues and other individuals who perform services for us.

These awards may be in the form of stock options, or in the form of restricted stock units and awards (collectively referred to as RSUs), or other incentives or similar awards designed to meet the requirements of non-U.S.

jurisdictions.

For our Incentive Compensation Plans, there were a total of 9 million, 12 million and 14 million common shares unissued and available for grant as of December 31, 2022, 2021 and 2020, respectively, as authorized by our Board of Directors and shareholders.

We generally issue new common shares upon exercise of options and vesting of RSUs.

There were a total of 7 million, 9 million and 12 million common shares unissued and available for grant as of December 31, 2023, 2022 and 2021, respectively, as authorized by our Board of Directors and shareholders.

We generally issue new common shares upon exercise of options, vesting of restricted stock units and granting of restricted stock awards.

Stock-based compensation expense recognized in Salaries and employee benefits in the Consolidated Statements of Income was $ 450 million, $ 373 million and $ 326 million in 2023, 2022 and 2021, respectively, with corresponding income tax benefits of $ 110 million, $ 90 million and $ 78 million in those respective periods.

A summary of stock option and RSU activity as of December 31, 2022, and corresponding changes during the year, are as follows:

Our stock options and RSUs outstanding as of December 31, 2023, and changes during the year, are as follows:

Stock Options Service-Based RSUs Service and Performance-Based RSUs

(Shares in thousands) Shares Weighted-Average

Exercise Price Shares Weighted-

(Numbers in thousands)

Weighted-Average

Exercise Price Number

Average Grant-

Price Shares Weighted-

Date Fair Value

Average Grant-

Date Fair Value

Outstanding as of December 31, 2022 3,634 $ 113.80 1,788 $ 142.92 3,472 $ 135.57

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Stock-based compensation expense is generally recognized ratably based on the grant-date fair value of the awards, net of expected forfeitures, over the vesting period.

Generally, the vesting period is the shorter of the vesting schedule as defined in each award agreement or the date an individual will become eligible to retire.

Generally, the vesting period is the time from the grant date to the earlier of the vesting date defined in each award agreement or the date the colleague will become eligible to retire.

Retirement eligibility is dependent upon age and/or years of service.

STOCK OPTIONS

Each stock option has an exercise price equal to the market price of our common stock on the date of grant.

Stock options generally vest on the third anniversary of the grant date and have a contractual term of 10 years from the date of grant.

The fair value of options without market conditions is estimated on the date of grant using a Black-Scholes-Merton option-pricing model.

Each stock option has an exercise price equal to the market price of our common stock on the grant date.

Stock options generally vest on the third anniversary of, and have a contractual term of 10 years from, the grant date.

The fair value of options without market conditions is estimated on the grant date using a Black-Scholes-Merton option-pricing model.

The following weighted-average assumptions were used for options granted in 2023, 2022 and 2021:

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Weighted-average fair value per option $ 60.03 $ 55.30 $ 32.38

(a) The expected volatility is based on both weighted historical and implied volatilities of our common stock price.

(b) The expected life of stock options was determined using both historical data and expectations of option exercise behavior.

(a) The expected volatility is based on historical and implied volatilities of our common stock price.

(b) The expected life of stock options was determined using historical option exercise behavior.

Certain executives were awarded a grant of stock options on October 31, 2022 that vest, subject to achieving performance and market conditions.

These options vest in tranches on the third and fourth anniversaries from the grant date, subject to continued employment through the applicable anniversary, and have a contractual term of seven years .

The fair value was estimated at the

grant date using a Monte Carlo valuation model assuming a dividend yield of 1.4 percent, expected volatility (based on both weighted historical and implied volatilities of our common stock price) of 34 percent, risk-free rate of 3.9 percent and an expected life of seven years , resulting in a fair value of $ 50.10 .

The fair value was estimated at the grant date using a Monte Carlo valuation model assuming a dividend yield of 1.4 percent, expected volatility (based on historical

and implied volatilities of our common stock price) of 34 percent, risk-free rate of 3.9 percent and an expected life of seven years , resulting in a fair value of $ 50.10 .

The weighted-average remaining contractual life and the aggregate intrinsic value (the amount by which the fair value of our stock price exceeds the exercise price of the option) of the stock options outstanding, exercisable, and vested and expected to vest as of December 31, 2023, were as follows:

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RSUs containing only service conditions generally vest ratably over three years , or four years for awards granted prior to 2022, beginning with the first anniversary of the grant date.

RSUs containing both service and performance conditions generally vest on the third anniversary of the grant date, and the number of shares earned depends on the achievement of predetermined Company metrics.

RSUs containing both service and performance conditions generally vest on the third anniversary of the grant date, and the number of shares earned generally ranges from zero to 120 percent of target depending on the achievement of predetermined Company metrics.

RSU holders receive dividend equivalents or dividends.

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The fair value of RSUs that do not include the r-TSR modifier, including those that contain only service conditions, is measured using our stock price on the grant date.

The fair value of service and performance-based RSUs that include the r-TSR modifier is determined using a Monte Carlo valuation model with the following weighted-average assumptions in 2022, 2021 and 2020:

The fair value of service and performance-based RSUs that include the r-TSR modifier is determined using a Monte Carlo valuation model using assumptions based on the historical volatility of our common stock price, the historical correlations of our common stock price with that of each of the companies in the performance peer group and the risk-free interest rate, each for a period equal to the estimated remaining performance period.

The weighted averages of the following assumptions used in 2023, 2022 and 2021 were:

2023 2022 2021

Expected volatility (a)

Expected volatility

45 % 42 % 41 %

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Remaining performance period (in years)

(a) The expected volatility is based on historical volatility of our common stock price.

As of December 31, 2023, there was $ 258 million of total unrecognized compensation cost related to non-vested RSUs, which will be recognized over the weighted-average remaining vesting period of 1.7 years.

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LIABILITY-BASED AWARDS

Other incentive awards can be settled with cash or equity shares at our discretion and final Compensation and Benefits Committee approval.

Other incentive awards can be settled with cash or equity shares at our discretion and final approval from the Compensation and Benefits Committee.

These awards are generally settled with cash and thus are classified as liabilities;

therefore, the fair value is determined at the date of grant and remeasured quarterly as part of compensation expense over the vesting period.

therefore, the fair value is determined at the grant date and remeasured quarterly as part of compensation expense over the vesting period.

Cash paid upon vesting of these awards in 2023, 2022 and 2021 was $ 55 million, $ 50 million and $ 53 million, respectively.

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We comply with minimum funding requirements in all countries.

We also sponsor unfunded other postretirement benefit plans that provide health care and life insurance to certain retired U.S.

We also sponsor unfunded other postretirement benefit plans that provide health care and life insurance to certain retired colleagues in the United States.

For these plans, the total net benefit was $ 12 million, $ 24 million and $ 26 million in 2023, 2022 and 2021, respectively.

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Based on our current knowledge, and taking into consideration our litigation-related liabilities, we do not believe we are a party to, nor are any of our properties the subject of, any legal proceeding that would have a material adverse effect on our consolidated financial condition or liquidity.

However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, it is possible that the outcome of legal proceedings could have a material impact on our results of operations.

However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that the outcome of legal proceedings could have a material impact on our results of operations.

Certain legal proceedings involving us or our subsidiaries are described below.

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American Express Company and American Express Travel Related Services Company Inc.

, in which the plaintiffs are holders of MasterCard, Visa and/or Discover credit cards (but not American Express cards) and allege they paid higher prices as a result of our anti-steering and non-discrimination provisions in violation of federal antitrust law and the antitrust and consumer laws of various states.

, in which the plaintiffs are holders of MasterCard, Visa and/or Discover credit and/or debit cards (but not American Express cards) and allege they paid higher prices as a result of our anti-steering and non-discrimination provisions in violation of federal antitrust law and the antitrust and consumer laws of various states.

Plaintiffs seek unspecified damages and other forms of relief.

The court dismissed plaintiffs’ federal antitrust claim, numerous state antitrust and consumer protection claims and their unjust enrichment claim.

The remaining claims in plaintiffs’ complaint arise under the antitrust laws of 11 states and the consumer protection laws of six states.

For the remaining state antitrust or consumer protection claims, the court certified classes for (i) holders of Visa and MasterCard debit cards in eight states and Washington, D.C.;

and (ii) holders of Visa, MasterCard and Discover credit cards that do not offer rewards or charge an annual fee in two states and Washington, D.C.

We have appealed the court’s class certification decisions.

On March 8, 2016, plaintiffs B&R Supermarket, Inc.

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The plaintiffs in this action seek injunctive relief and an unspecified amount of damages.

In 2006, Mawarid Investments Limited filed a request for confidential arbitration under the 1998 London Court of International Arbitration Rules in connection with certain claims arising under a shareholders agreement between Mawarid and TRS relating to a joint venture between the parties, Amex (Middle East) BSC(c) (AEME).

In 2006, Mawarid Investments Limited filed a request for confidential arbitration under the 1998 London Court of International Arbitration Rules in connection with certain claims arising under a shareholders agreement between Mawarid and American Express Travel Related Services Company, Inc.

relating to a joint venture between the parties, Amex (Middle East) BSC(c) (AEME).

In 2008, the tribunal rendered a partial award, including a direction that an audit should take place to verify whether acquirer discount revenue related to transactions occurring with airlines located in the Middle East region had been properly allocated to AEME since its inception in 1992.

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In May 2022, the tribunal further clarified the 2021 partial award and the discount rate that should apply to transactions through non-physical channels.

A final award is now expected in 2023.

In May 2020, we began responding to a review by the Office of the Comptroller of the Currency (OCC) and the Department of Justice (DOJ) Civil Division regarding historical sales practices relating to sales to small business customers in the United States.

In January 2021, we received a grand jury subpoena from the United States Attorney’s Office for the Eastern District of New York (EDNY) regarding these sales practices issues, as well as a Civil Investigative Demand from the Consumer Protection Bureau (CFPB) pertaining to its investigation into sales practices related to consumers.

In January 2021, we received a grand jury subpoena from the United States Attorney’s Office for the Eastern District of New York (EDNY) regarding these sales practices issues, as well as a Civil Investigative Demand from the Consumer Financial Protection Bureau (CFPB) pertaining to its investigation into sales practices related to consumers.

We have also been made aware of a related investigation by the New York Department of Financial Services (NYDFS).

In January 2023, the CFPB notified us that its investigation was completed and that it does not intend to recommend an enforcement action be taken against us at this time.

The OCC, DOJ and EDNY reviews and investigations are ongoing and could result in enforcement actions or other regulatory proceedings against us seeking fines or other remedial actions.

We are cooperating with all inquiries.

In July 2023, we reached a settlement with the OCC to resolve its review of historical sales practices to certain U.S.

small business card customers that occurred between 2015 and 2017.

The DOJ, EDNY and NYDFS investigations are ongoing, and we are cooperating with all inquiries.

We are being challenged in a number of countries regarding our application of value-added taxes (VAT) to certain of our international transactions, which are in various stages of audit, or are being contested in legal actions.

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As of December 31, 2023, we had approximately $ 14.0 billion in financial commitments outstanding related to agreements with certain cobrand partners under which we are required to make a certain level of minimum payments over the life of the agreement, generally ranging from five to ten years .

Such commitments are designed to be satisfied by the payment we make to such cobrand partners primarily based on Card Members’ spending and earning rewards on their cobrand cards and as we acquire new Card Members.

Generally, such commitments are designed to be satisfied by the payment we make to such cobrand partners primarily based on Card Members’ spending and earning rewards on their cobrand cards and as we acquire new Card Members.

In the event these payments do not fully satisfy the commitment, we generally pay the cobrand partner up to the amount of the commitment in exchange for an equivalent value of reward points.

bank subsidiary, AENB, is a member of the Federal Reserve System (the Federal Reserve) and is therefore required to subscribe to a certain amount of shares issued by its Federal Reserve District Bank, with half of the subscribed amount paid up front.

As of both December 31, 2023 and 2022, AENB held shares with a carrying value of $ 132 million, with the remaining half subject to call by the Federal Reserve District Bank Board, the likelihood of which we believe is remote.

DERIVATIVES AND HEDGING ACTIVITIES

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All derivative contracts cleared through a central clearinghouse are collateralized to the full amount of the fair value of the contracts.

In relation to our credit risk, certain of our bilateral derivative agreements include provisions that allow our counterparties to terminate the agreement in the event of a downgrade of our debt credit rating below investment grade and settle the outstanding net liability position.

In relation to our credit risk, certain of our bilateral derivative agreements include provisions that allow our counterparties to terminate the relevant agreement in the event of a downgrade of our debt credit rating below investment grade and settle the outstanding net liability position.

As of December 31, 2023, these derivatives were not in a material net liability position and we had no material risk exposure to any individual derivative counterparty.

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The carrying values of the hedged liabilities, recorded within Long-term debt on the Consolidated Balance Sheets, were $ 11.7 billion and $ 7.8 billion as of December 31, 2023 and 2022, respectively, including the cumulative amount of fair value hedging adjustments of $ 53 million and $( 236 ) million for the respective periods.

We recognized in Interest expense on Long-term debt a net decrease of $ 57 million for the year ended December 31, 2022 and net decreases of $ 256 million for both the years ended December 31, 2021 and 2020.

We recognized in Interest expense on Long-term debt a net increase of $ 189 million for the year ended December 31, 2023 and net decreases of $ 57 million and $ 256 million for the years ended December 31, 2022 and 2021, respectively.

These were primarily related to the net settlements including interest accruals on our interest rate derivatives designated as fair value hedges.

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We had notional amounts of approximately $ 14.1 billion and $ 12.5 billion of foreign currency derivatives designated as net investment hedges as of December 31, 2023 and 2022, respectively.

The gain or loss on net investment hedges, net of taxes, recorded in AOCI as part of the cumulative translation adjustment, were gains of $ 237 million and $ 176 million and losses of $ 253 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The gain or loss on net investment hedges, net of taxes, recorded in AOCI as part of the cumulative translation adjustment, was a loss of $ 640 million and gains of $ 237 million and $ 176 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Net investment hedge reclassifications out of AOCI into the Consolidated Statements of Income were no t significant for the years ended December 31, 2023, 2022 and 2021, respectively.

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We had notional amounts of approximately $ 25.3 billion and $ 21.7 billion as of December 31, 2023 and 2022, respectively.

The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in a net gain of $ 8 million, a net loss of $ 21 million and a net gain of $ 10 million for the years ended December 31, 2022, 2021 and 2020, respectively, that are recognized in Other, net expenses in the Consolidated Statements of Income.

In 2022, we recorded an embedded derivative with a notional amount of $ 78 million, related to seller earnout shares granted to us upon the completion of a business combination between our equity method investee, Global Business Travel Group, and Apollo Strategic Growth Capital.

This embedded derivative had a fair value of $ 27 million as of December 31, 2022.

The changes in the fair value of the embedded derivative resulted in gains of $ 4 million for the year ended December 31, 2022, which were recognized in Service fees and other revenue in the Consolidated Statements of Income.

The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in a net gains of $ 82 million and $ 8 million and a net loss of $ 21 million for the years ended December 31, 2023, 2022 and 2021, respectively, that are recognized in Other, net expenses in the Consolidated Statements of Income.

Our embedded derivative related to seller earnout shares granted to us upon the completion of a business combination in the second quarter of 2022 between our equity method investee, American Express Global Business Travel, and Apollo Strategic Growth Capital (C Ordinary Shares of GBT JerseyCo Limited) had a notional amount of $ 78 million as of both December 31, 2023 and 2022.This embedded derivative had a fair value of $ 18 million and $ 27 million as of December 31, 2023 and 2022, respectively.

The changes in the fair value of the embedded derivative resulted in a loss of $ 9 million and a gain of $ 4 million for the years ended December 31, 2023 and 2022, respectively, which were recognized in Service fees and other revenue in the Consolidated Statements of Income.

Fair value is defined as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

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the contractual terms of the forward contracts such as the notional amount, maturity dates and contract rate, as well as relevant foreign currency forward curves, and discount rates consistent with the underlying economic factors of the currency in which the cash flows are denominated.

Our Level 3 derivative financial instrument represents an embedded derivative in the form of seller earnout shares granted to us following the completion of a business combination between our equity method investee, Global Business Travel Group, and Apollo Strategic Growth Capital.

Our Level 3 derivative financial instrument represents an embedded derivative in the form of C Ordinary Shares of GBT JerseyCo Limited.

The fair valuation is performed by an independent third party using a Monte Carlo Simulation technique that models a range of probable future stock prices using the following significant inputs:

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Card Member and Other loans, less reserves (c)

110 113 — — 113

Financial Liabilities:

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(a) Level 2 fair value amounts reflect time deposits and short-term investments.

(b) Balances include Card Member receivables (including fair values of Card Member receivables of $ 5.2 billion held by a consolidated VIE as of both December 31, 2022 and 2021), other receivables and other miscellaneous assets.

(b) Balances include Card Member receivables (including fair values of Card Member receivables of $ 4.6 billion and 5.2 billion held by a consolidated VIE as of December 31, 2023 and 2022, respectively), other receivables and other miscellaneous assets.

(c) Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $ 28.6 billion and $ 28.4 billion as of December 31, 2023 and 2022, respectively, and the fair values of Long-term debt were $ 13.3 billion and $ 12.3 billion as of December 31, 2023 and 2022, respectively.

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For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired or where there are observable price changes for equity investments without readily determinable fair values.

We estimate the Level 3 fair value of equity investments without readily determinable fair values based on price changes as of the date of new similar equity financing transactions completed by the companies in our portfolio.

Impairments on such investments are recorded to account for the difference between the estimated fair value and carrying value of an investment based on a qualitative assessment of impairment indicators such as business performance, general market conditions and the economic and regulatory environment.

We estimate the Level 3 fair value of equity investments without readily determinable fair values, which include investments in our Amex Ventures portfolio, based on price changes as of the date of new similar equity financing transactions completed by the companies in the portfolio.

In addition, impairments on such investments are recorded to account for the difference between the estimated fair value and carrying value of an investment based on a qualitative assessment of impairment indicators such as business performance, general market conditions and the economic and regulatory environment.

When an impairment triggering event occurs, the fair value measurement is generally derived by taking into account all available information, such as share prices of publicly traded peer companies, internal valuations performed by our investees, and other third-party fair value data.

The fair value of impaired investments represents a Level 3 fair value measurement.

The carrying value of equity investments without readily determinable fair values totaled $ 1.0 billion and $ 1.3 billion as of December 31, 2022 and 2021, respectively.

As of December 31, 2022, approximately $ 0.6 billion represented a nonrecurring Level 3 fair value measurement for certain of our equity investments.

There were no nonrecurring Level 3 fair value measurements related to our equity investments without readily determinable fair values as of December 31, 2021.

The carrying value of equity investments without readily determinable fair values totaled $ 0.9 billion and $ 1.0 billion as of December 31, 2023 and 2022, respectively, of which approximately nil and $ 0.6 billion as of December 31, 2023 and 2022, respectively, represented a nonrecurring Level 3 fair value measurement for certain of our equity investments.

These amounts are included within Other assets on the Consolidated Balance Sheets.

We recorded unrealized gains of $ 18 million, $ 94 million and $ 729 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Unrealized losses representing impairments were $ 388 million, $ 2 million and $ 20 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $ 1.2 billion and $ 1.1 billion as of December 31, 2022 and 2021, respectively, and cumulative unrealized losses representing impairments were $ 394 million and $ 10 million as of December 31, 2022 and 2021, respectively.

Unrealized losses were $ 142 million, $ 388 million and $ 2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Unrealized gains and losses are recorded in Other, net on the Consolidated Statements of Income.

Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $ 1.1 billion and $ 1.2 billion as of December 31, 2023 and 2022, respectively, and cumulative unrealized losses were $ 431 million and $ 394 million as of December 31, 2023 and 2022, respectively.

In addition, we also have certain equity investments measured at fair value using the net asset value practical expedient.

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Repurchases of common shares ( 22 ) ( 20 ) ( 46 )

Other, primarily stock option exercises and restricted stock awards granted 2 2 2

Net shares issued for RSUs and stock option exercises (b)

Shares issued and outstanding as of December 31 723 743 761

(a) Of the common shares authorized but unissued as of December 31, 2023, approximately 16 million shares are reserved for issuance under employee stock and employee benefit plans.

On September 23, 2019, the Board of Directors authorized the repurchase of up to 120 million common shares from time to time, subject to market conditions and in accordance with our capital plans.

This authorization replaced the prior repurchase authorization and does not have an expiration date.

(b) Shares issued for RSUs are reported net of shares withheld for tax withholding obligations.

On March 8, 2023, the Board of Directors authorized the repurchase of up to 120 million common shares from time to time, subject to market conditions and in accordance with our capital plans.

This authorization replaced the prior repurchase authorization made on September 23, 2019.

During 2023, 2022 and 2021, we repurchased 22 million common shares with a cost basis of $ 3.5 billion, 20 million common shares with a cost basis of $ 3.3 billion, and 46 million common shares with a cost basis of $ 7.6 billion, respectively.

The cost basis includes commissions paid of $ 4.2 million, $ 5.6 million and $ 1.0 million in 2022, 2021 and 2020, respectively.

The cost basis includes excise tax and commissions of $ 32 million in 2023, and commissions of $ 4 million and $ 6 million in 2022 and 2021, respectively.

As of December 31, 2023, we had approximately 99 million common shares remaining under the Board share repurchase authorization.

Common shares are generally retired by us upon repurchase (except for 2.4 million shares held as treasury shares as of December 31, 2022 and 2.5 million shares held as treasury shares as of both December 31, 2021 and 2020);

Common shares are generally retired by us upon repurchase (except for 2.3 million, 2.4 million and 2.5 million shares held as treasury shares as of December 31, 2023, 2022 and 2021, respectively);

retired common shares and treasury shares are excluded from the shares outstanding in the table above.

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The difference between the redemption value and carrying value of the redeemed Series B and Series C preferred shares resulted in a $ 16 million reduction to net income available to common shareholders for the year ended December 31, 2021.

There were no warrants issued and outstanding as of December 31, 2022, 2021 and 2020.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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(Millions) 2023 2022 2021

Net unrealized (losses) gains on debt securities $ ( 27 ) $ ( 13 ) $ 9

Net unrealized gains (losses) on debt securities

$ 16 $ ( 27 ) $ ( 13 )

Foreign currency translation adjustment, net of hedges ( 158 ) 75 51

1 unchanged sentence

Total tax impact $ ( 145 ) $ 75 $ 90

Reclassifications out of AOCI into the Consolidated Statements of Income, net of taxes, were no t significant for the years ended December 31, 2022, 2021 and 2020.

Reclassifications out of AOCI into the Consolidated Statements of Income, net of taxes, for the years ended December 31, 2023, 2022 and 2021 were no t significant.

SERVICE FEES AND OTHER REVENUE AND OTHER EXPENSES

11 unchanged sentences

Professional services 2,029 2,074 1,958

Net unrealized and realized losses (gains) on Amex Ventures investments 302 ( 767 ) ( 152 )

Net unrealized and realized losses (gains) on Amex Ventures investments (a)

152 302 ( 767 )

1,821 1,499 1,195

Total Other expenses $ 6,807 $ 6,481 $ 4,817

(a) Refer to Note 14 for further information regarding Amex Ventures investments accounted for as equity investments without readily determinable fair values.

RESTRUCTURING

We periodically initiate restructuring programs to support new business strategies and to enhance our overall effectiveness and efficiency.

We periodically initiate restructuring programs to enhance our overall effectiveness and efficiency and to support new business strategies.

These programs are generally completed within a year of when they are initiated.

In connection with these programs, we will typically incur severance and other exit costs.

We had $ 216 million, $ 135 million and $ 67 million accrued in total restructuring reserves as of December 31, 2023, 2022 and 2021, respectively.

Restructuring expense , which primarily relates to new severance charges, net of revisions to existing reserves, was $ 142 million, $( 10 ) million and $ 125 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The cumulative expense relating to the restructuring programs that were in progress during 2022 and initiated at various dates between 2019 and 2022 was $ 270 million, the majority of which has been reflected within Corporate & Other.

Restructuring expense, which primarily relates to new severance charges, net of revisions to existing reserves, was $ 179 million, $ 142 million and $( 10 ) million for the years ended December 31, 2023, 2022 and 2021, respectively, and is included within Salaries and employee benefits within our Consolidated Statements of Income.

The cumulative cost relating to restructuring programs initiated in 2023 or in prior years that were in progress during 2023 was $ 277 million.

There were no programs initiated prior to 2022 that were still in progress during 2023.

Cumulative amounts were not material to any reportable operating segment.

The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows:

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(Decrease) increase in taxes resulting from:

Tax credits and tax-exempt income (a)

Tax credits and tax-exempt income

( 0.7 ) ( 0.9 ) ( 0.1 )

State and local income taxes, net of federal benefit 2.4 3.1 3.0

subsidiaries' earnings

subsidiaries’ earnings (a)

( 0.8 ) ( 0.1 ) 1.1

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Valuation allowances

0.1 ( 0.1 ) —

Other 0.3 0.7 ( 0.1 )

Actual tax rates 20.3 % 21.6 % 24.6 %

(a) Includes the implementation of PAM related to investments in QAH projects for the year ended December 31, 2021.

(a) In certain jurisdictions outside the United States, we benefit from agreements that temporarily lower our income tax expense.

The impact of these agreements was not material to our Consolidated Statements of Income.

We record a deferred income tax (benefit) provision when there are differences between assets and liabilities measured for financial reporting and for income tax return purposes.

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Net operating loss and tax credit carryforwards 466 411

Capitalized developed software

Other 723 776

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Tax positions related to prior years 40 30 225

Effects of foreign currency translations — — —

Tax positions related to prior years

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For the years ended December 31, 2023, 2022 and 2021, we recognized approximately $ 30 million, $ 10 million and $ 40 million, respectively, in expenses for interest and penalties.

We had approximately $ 380 million accrued for the payment of interest and penalties as of both December 31, 2022 and 2021 .

We had approximately $ 410 million and $ 380 million accrued for the payment of interest and penalties as of December 31, 2023 and 2022, respectively.

EARNINGS PER COMMON SHARE (EPS)

22 unchanged sentences

REGULATORY MATTERS AND CAPITAL ADEQUACY

We are supervised and regulated by the Board of Governors of the Federal Reserve System (the Federal Reserve) and are subject to the Federal Reserve’s requirements for risk-based capital and leverage ratios.

bank subsidiary, American Express National Bank (AENB), is subject to supervision and regulation, including regulatory capital and leverage requirements, by the OCC.

We are supervised and regulated by the Board of Governors of the Federal Reserve and are subject to the Federal Reserve’s requirements for risk-based capital and leverage ratios.

bank subsidiary, AENB, is subject to supervision and regulation, including regulatory capital and leverage requirements, by the OCC.

Under the risk-based capital guidelines of the Federal Reserve, we are required to maintain minimum ratios of CET1, Tier 1 and Total (Tier 1 plus Tier 2) capital to risk-weighted assets, as well as a minimum Tier 1 leverage ratio (Tier 1 capital to average adjusted on-balance sheet assets).

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Financial services (c)

Federal Reserve Bank

Government and agencies (e)

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We also consider credit performance by customer tenure, industry and geographic location in managing credit exposure.

As of December 31, 2022 and 2021, we had approximately $ 350 billion and $ 327 billion, respectively of unused credit, primarily available to customers as part of established lending product agreements, of which approximately 80 percent was related to customers within the United States in both periods.

As of December 31, 2023, we had approximately $ 398 billion of unused credit available to customers, approximately 80 percent of which was related to customers within the United States.

As of December 31, 2022, we had approximately $ 350 billion of unused credit, primarily available to customers as part of established lending product agreements, of which approximately 80 percent was related to customers within the United States.

Total unused credit does not represent potential future cash requirements, as a significant portion of this unused credit will likely not be drawn.

Our charge card products generally have no pre-set spending limit and therefore are not reflected in unused credit.

Charge card products with no pre-set spending limits are not reflected in unused credit for either period.

REPORTABLE OPERATING SEGMENTS AND GEOGRAPHIC OPERATIONS

1 unchanged sentence

We consider a combination of factors when evaluating the composition of our reportable operating segments, including the results reviewed by the chief operating decision maker, economic characteristics, products and services offered, classes of customers, product distribution channels, geographic considerations (primarily United States versus outside the United States), and regulatory environment considerations.

Effective for the first quarter of 2022, we updated the methodology used to allocate certain revenues;

prior period amounts have been recast to conform to 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 have been recast to conform to the new reportable operating segments.

The following is a brief description of the primary business activities of our four new reportable operating segments:

The following is a brief description of the primary business activities of our four reportable operating segments:

Consumer Services (USCS), which issues a wide range of proprietary consumer cards and provides services to U.S.

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The following table presents our total revenues net of interest expense and pretax income (loss) from continuing operations in different geographic regions based, in part, upon internal allocations, which necessarily involve management’s judgment.

Effective for the first quarter of 2022, we changed the way in which we allocate certain overhead expenses by geographic region.

As a result, prior period pretax income (loss) from continuing operations by geography has been recast to conform to current period presentation;

there was no impact at a consolidated level.

(Millions) United States EMEA (a)

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Total expenses 895 780 705

Pretax loss ( 635 ) ( 748 ) ( 817 )

Loss before income tax and equity in net income of subsidiaries

( 366 ) ( 635 ) ( 748 )

Income tax benefit ( 163 ) ( 244 ) ( 248 )

Net loss before equity in net income of subsidiaries and affiliates ( 391 ) ( 500 ) ( 581 )

Equity in net income of subsidiaries and affiliates 8,577 7,905 8,560

1 unchanged sentence

Net unrealized pension and other postretirement benefits, net of tax 5 10 151

Other comprehensive (loss) income, net ( 275 ) ( 201 ) ( 67 )

Other comprehensive income (loss), net

133 ( 275 ) ( 201 )

Comprehensive income $ 8,512 $ 7,249 $ 8,010

10 unchanged sentences

Due to subsidiaries and affiliates 555 632

Debt with subsidiaries and affiliates — 136

Long-term debt 33,952 29,432

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Cash Flows from Investing Activities

(Increase) decrease in loans to subsidiaries and affiliates ( 4,850 ) ( 176 ) 11,434

Net increase in loans to subsidiaries and affiliates ( 2,836 ) ( 4,850 ) ( 176 )

Investments in subsidiaries and affiliates — ( 1 ) ( 60 )

Other investing activities — — 74

Net cash (used in) provided by investing activities ( 4,851 ) ( 236 ) 11,456

Net cash used in investing activities ( 2,836 ) ( 4,851 ) ( 236 )

Cash Flows from Financing Activities

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Dividends paid ( 1,780 ) ( 1,565 ) ( 1,448 )

Net cash provided by (used in) financing activities 2,380 ( 13,688 ) ( 7,748 )

Net cash (used in) provided by financing activities ( 1,183 ) 2,380 ( 13,688 )

Net increase (decrease) in cash and cash equivalents 1,464 2,847 ( 5,627 )

7 unchanged sentences

Non-Cash Financing Activities

Short-term debts from subsidiaries and affiliates — — 4,971

Proceeds from long-term debt $ — $ — $ 1,787

2 unchanged sentences

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 8. Financial Statements and Supplementary Data