What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-07 compared with 2024-02-09 · 350 added, 328 removed, 1065 unchanged (39% of the section changed)

7 unchanged sentences

• Credit card, charge card, banking and other payment and financing products

• Merchant acquisition and processing, servicing and settlement, and point-of-sale marketing and information products and services for merchants

• Merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services for merchants

• Network services

• Other fee services, including fraud prevention services and the design and operation of customer loyalty programs

• Expense management products and services

• Travel and lifestyle services

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

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

• Expense management products and services

• Other services, such as the design and operation of customer loyalty programs

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

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

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

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

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

In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for card-not-present transactions or for transactions using cards issued outside the United States at merchants located in the United States;

• Interest income, principally represents interest earned on outstanding loan balances;

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

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

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

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

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

Refer to the “Glossary of Selected Terminology” below for the definitions of certain key terms and related information appearing within this Form 10-K and “Critical Accounting Estimates” below for a discussion of certain of our accounting policies requiring significant management assumptions and judgements.

NON-GAAP MEASURES

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Total revenues net of interest expense $ 65,949 $ 60,515 $ 52,862 $ 5,434 9 % $ 7,653 14 %

Total revenues net of interest expense (FX-adjusted) (a)

60,179 52,833 5,770 10 7,682 15

Provisions for credit losses

5 unchanged sentences

Net income 10,129 8,374 7,514 1,755 21 860 11

Earnings per common share — diluted (a)

Earnings per common share — diluted (b)

$ 14.01 $ 11.21 $ 9.85 $ 2.80 25 % $ 1.36 14 %

5 unchanged sentences

Long-term debt $ 49,715 $ 47,866 $ 42,573 $ 1,849 4 % $ 5,293 12 %

Common Share Statistics (b)

Common Share Statistics (c)

Cash dividends declared per common share $ 2.80 $ 2.40 $ 2.08 $ 0.40 17 % $ 0.32 15 %

7 unchanged sentences

1,550.9 1,459.6 1,338.3 91 6 121 9

Total loans and Card Member receivables (d)

208,317 193,492 170,993 14,825 8 22,499 13

Total loans and Card Member receivables (FX-adjusted) (a)(d)

$ 190,826 $ 171,594 $ 17,491 9 % $ 21,898 13 %

Card Member loans and receivables

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

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

2.3 % 2.0 % 1.0 %

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

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

2.0 % 1.8 % 0.9 %

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

30+ days past due as a % of total — consumer and small business (g)

1.3 % 1.3 % 1.1 %

Effective tax rate 21.5 % 20.3 % 21.6 %

Return on average equity (f)

Return on average equity (h)

34.6 % 31.5 % 32.3 %

1 unchanged sentence

# Denotes a variance of 100 percent or more

(a) Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.

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

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

FX-adjusted Total revenues net of interest expense and Total loans and Card Member receivables are non-GAAP measures.

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

(b) Represents net income, less (i) earnings allocated to participating share awards of $76 million, $64 million and $57 million for the years ended December 31, 2024, 2023 and 2022, respectively, and (ii) dividends on preferred shares of $58 million, $58 million and $57 million for the years ended December 31, 2024, 2023 and 2022, respectively.

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

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

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

(d) Total loans reflects Card Member loans and Other loans.

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

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

(d) A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.

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

(f) A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.

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

Refer to Table 12 for 90+ days past billing metrics for corporate receivables.

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

BUSINESS ENVIRONMENT

Our results for the year reflect the engagement and loyalty of our customers, the success of the investments we have made to refresh and expand our product offerings and our focus on effective risk management and expense discipline.

The successful execution of our growth strategy, along with the strength of our premium customer base and differentiated business model, drove net income of $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.

Billed business, the most significant driver of our financial results, increased 9 percent year-over-year.

Billed business growth was particularly strong in the first quarter, in part reflecting the negative impacts of the Omicron variant in the prior year, with a softer spend environment towards the end of the year.

Goods & Services (G&S) spend increased 6 percent year-over-year.

T&E spend grew by 19 percent on a full-year basis, reflecting ongoing demand from our premium customers, while airline spend growth slowed sequentially in the fourth quarter.

USCS billed business grew by 10 percent year-over-year, with the largest portion of this growth coming from our Millennial and Gen-Z Card Members.

ICS billed business grew by 17 percent year-over-year, driven by continued growth in spend across all regions and customer types outside the United States.

CS billed business grew by 3 percent on a year-over-year basis, reflecting the continued modest growth from U.S.

SME Card Members and decelerating growth for U.S.

large and global corporate clients.

Total revenues net of interest expense increased 14 percent year-over-year, reflecting growth in all our revenue lines.

The growth in billed business drove a 9 percent increase in Discount revenue, our largest revenue line.

Net card fees increased 20 percent year-over-year, reflecting the high levels of new card acquisition and Card Member retention, as well as our cycle of product refreshes.

Service fees and other revenues increased 11 percent year-over-year, driven in part by higher travel-related revenues.

Net interest income increased 33 percent versus the prior year, primarily reflecting growth in our revolving loan balances, which moderated over the course of the year, as well as net yield expansion versus the prior year.

Total loans and Card Member receivables increased 13 percent year-over-year, as our Card Members continue to spend and rebuild balances.

Provisions for credit losses increased, primarily driven by higher net write-offs and a higher net reserve build in the current year, reflecting the growth in total loans and higher delinquencies.

Net write-off and delinquency rates remained best-in-class, supported by our premium global customer base, our strong focus on risk management and disciplined growth strategy.

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

Marketing expense decreased 4 percent year-over-year, primarily driven by lower levels of spend on customer acquisition.

Operating expenses increased 8 percent year-over-year, primarily driven by higher compensation expense and technology costs to support business growth.

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

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

BUSINESS PERFORMANCE

Our strong results for the year reflect the momentum and earnings power of our business model and our continued investments for growth.

We saw record levels of annual Card Member spending, strong new card acquisitions, excellent credit performance and disciplined expense management.

Net income for the year was $10.1 billion, or $14.01 per share, compared with net income of $8.4 billion, or $11.21 per share, a year ago.

Our full year results reflect the sale of Accertify Inc.

(Accertify), which resulted in a gain of $531 million ($479 million after tax or $0.66 per share).

Billed business grew by 6 percent, reflecting a stable spend environment for most of the year with an acceleration in the fourth quarter.

This growth was broad-based across geographies and across both G&S and T&E categories.

Consumer Services billed business grew by 7 percent year-over-year, with continued strength in spending by Millennial and Gen-Z Card Members as our products continue to resonate with these cohorts.

Commercial Services billed business grew by 2 percent on a year-over-year basis, reflecting continued modest growth from U.S.

small and mid-sized enterprise (SME) Card Members.

Spending by existing U.S.

SME Card Members declined slightly year-over-year, although we saw an improvement in small business sentiment in the fourth quarter and strong new card acquisitions for the year.

International Card Services billed business grew by 11 percent year-over-year (14 percent on an FX-adjusted basis), driven by continued strong growth in spend across all regions and customer types outside the United States.

1 The continued global expansion of our merchant network contributed to our growth, as we added millions of new merchant locations globally in 2024 and continued to increase coverage across our top international countries.

Total revenues net of interest expense increased 9 percent year-over-year (10 percent on an FX-adjusted basis).

1 Growth in billed business drove a 5 percent increase in Discount revenue, our largest revenue line.

Net card fees increased 16 percent year-over-year, reflecting high levels of new card acquisitions and Card Member retention, as well as the ongoing execution of our product refresh strategy.

Net interest income increased 18 percent versus the prior year, outpacing growth in Total loans and Card Member receivables of 8 percent year-over-year, primarily due to higher growth in our revolving loan balances.

The growth in Total loans and Card Member receivables and revolving loan balances both moderated over the course of the year.

During the fourth quarter, we reclassified $758 million of Card Member loans related to the Lowe’s small business cobrand portfolio from held for investment to held for sale (HFS).

Provisions for credit losses increased, primarily driven by higher net write-offs, partially offset by a lower reserve build compared to last year.

Net write-off and delinquency rates were relatively stable throughout the year and remain best-in-class supported by our premium global customer base, our strong focus on risk management and disciplined growth strategy.

Card Member rewards, Card Member services and Business development expenses, which are generally correlated to volumes or are variable based on usage, collectively grew slightly faster than revenues as we continue to enhance our value propositions, drive Card Member engagement and acquire more Card Members on premium products.

Marketing expense increased 16 percent year-over-year, as we invested at an elevated level in growth initiatives, including acquiring high spending, high credit-quality customers.

During the year we acquired a record 13 million proprietary new cards.

Operating expenses decreased 2 percent, primarily reflecting the gain recognized on the sale of Accertify and our continued operating expense discipline.

We remain focused on driving marketing and operating expense efficiencies over time.

During the year, we maintained our capital ratios within our current target range of 10 to 11 percent and returned $7.9 billion of capital to our shareholders in the form of share repurchases and common stock dividends.

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

We also expect to increase the regular quarterly dividend on common shares outstanding by 17 percent beginning with the first quarter 2024 dividend declaration.

We also expect to increase the regular quarterly dividend on common shares outstanding by approximately 17 percent beginning with the first quarter 2025 dividend declaration.

Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet.

On January 16, 2024, we announced that we signed an agreement to sell fraud prevention solutions provider Accertify Inc., a wholly owned subsidiary we acquired in 2010, and whose operations are reported within the GMNS segment.

The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2024.

Upon closing, we expect to recognize a sizeable pre-tax gain, which will be recorded as a reduction to Other expense and is expected to be substantially reinvested back into our business.

Our performance continues to give us confidence in our business model and while we recognize the uncertainty of the geopolitical and macroeconomic environment, we remain committed to executing on our strategy to deliver sustainable and profitable long-term growth.

Our performance continues to give us confidence in our business model and while we recognize the uncertainty of the geopolitical and macroeconomic environment and the evolving regulatory and competitive landscape, we remain committed to executing on our strategy to deliver sustainable and profitable long-term growth.

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

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

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

FX-adjusted revenues is a non-GAAP measure.

CONSOLIDATED RESULTS OF OPERATIONS

The discussions in the “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables.

The discussions in both “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the year ended December 31, 2024 compared to the year ended December 31, 2023, as presented in the accompanying tables.

For a discussion of the financial condition and results of operations for 2023 compared to 2022, please refer to Part II, Item 7.

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

See Table 5 for more details on proprietary cards-in-force and average fee per card.

Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.

Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions.

See Table 5 for more details on proprietary new card acquisitions, proprietary cards-in-force and average fee per card.

Service fees and other revenue increased, primarily driven by increases in foreign exchange related revenues associated with Card Member cross-currency spending, loyalty coalition-related fees and merchant service fees, partially offset by Accertify revenues included in the prior year.

Processed revenue decreased, and was relatively flat on an FX-adjusted basis.

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

Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.

Interest expense increased, primarily driven by higher interest rates paid on customer deposits.

Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.

Interest expense increased, primarily driven by higher interest rates paid on, and growth in, customer deposits and long-term debt.

2 Refer to footnote 1 on page 45 for details regarding foreign currency adjusted information.

PROVISIONS FOR CREDIT LOSSES SUMMARY

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Net write-offs 773 937 462 (164) (18) 475 #

Reserve (release) build (a)

Reserve build (release) (a)

1 (57) 165 58 # (222) #

Total 774 880 627 (106) (12) 253 40

Net write-offs — Other loans (b)

Net write-offs — Other loans

187 107 22 80 75 85 #

Net write-offs — Other receivables (c)

Net write-offs — Other receivables

44 25 15 19 76 10 67

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

Reserve build (release) — Other loans (a)

69 67 7 2 3 60 #

Reserve build (release) — Other receivables (a)(c)

Reserve build (release) — Other receivables (a)

2 5 (3) (3) (60) 8 #

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

(b) Relates to Other loans of $7.1 billion, $5.4 billion and $2.9 billion less reserves of $126 million, $59 million and $52 million, as of December 31, 2023, 2022 and 2021, respectively.

(c) Relates to Other receivables included in Other assets on the Consolidated Balance Sheets of $3.7 billion, $3.1 billion and $2.7 billion, less reserves of $27 million, $22 million and $25 million as of December 31, 2023, 2022 and 2021, respectively.

PROVISIONS FOR CREDIT LOSSES

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

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

The reserve build in the prior year was primarily driven by an increase in loans outstanding, higher delinquencies and deterioration in the macroeconomic outlook at that time, partially offset by a reduction in COVID-19 pandemic-driven reserves.

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

The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.

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

Other provisions for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year.

The reserve build in the current year was primarily driven by an increase in non-card loans outstanding.

The reserve build in the prior year was primarily driven by an increase in non-card loans outstanding, partially offset by improved credit performance.

Card Member loans provision for credit losses increased, primarily due to higher net write-offs driven by growth in loans outstanding, partially offset by a lower reserve build in the current year.

The reserve build in the current year was primarily driven by an increase in loans outstanding.

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

Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve release in the prior year.

The reserve release in the prior year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.

Other provision for credit losses increased, primarily due to higher net write-offs.

EXPENSES SUMMARY

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Total expenses $ 47,869 $ 45,079 $ 41,095 $ 2,790 6 % $ 3,984 10 %

Card Member rewards expense increased, primarily driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $680 million and cobrand rewards expense of $685 million, all of which were primarily driven by higher billed business.

The increase in Membership Rewards expense was also driven by a larger proportion of spend in categories that earn higher levels of rewards, partially offset by lower redemption costs and changes in expected redemption behaviors associated with certain products.

The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at both December 31, 2023 and 2022.

Business development expense increased, primarily due to increased partner payments driven by higher contractual rates and network volumes.

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

Marketing expense decreased, primarily reflecting lower levels of spending on customer acquisitions.

Salaries and employee benefits expense increased, primarily driven by higher compensation costs reflecting the continued investment in our colleagues to support business growth and changes in the value of deferred compensation.

Other, net expenses increased, primarily driven by higher technology costs, foreign exchange losses related to the devaluation of the Argentine peso, a reserve associated with a merchant exposure for Card Member purchases and the FDIC special assessment described in “Supervision and Regulation — Other Banking Regulations” under “Business”, all of which were partially offset by lower net losses on Amex Ventures investments and lower professional services expenses.

Card Member rewards expense increased, driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $705 million, and cobrand rewards expense of $527 million, all of which were primarily driven by higher billed business.

In the second half of the year, the increase in Membership Rewards expense was also driven by an increase in the Ultimate Redemption Rate (URR) and slightly higher redemption costs reflecting a shift in the mix of Card Member redemptions.

The Membership Rewards URR for current program participants was 96 percent (rounded down) at both December 31, 2024 and 2023.

Business development expense increased, primarily due to increased partner payments driven by higher network volumes, partially offset by lower client incentives and a prior-year charge related to revenue allocated to a joint venture partner.

Card Member services expense increased, primarily due to growth in premium card accounts, contributing to a higher usage of travel-related benefits.

Marketing expense increased, reflecting higher levels of spending on customer acquisition and other growth initiatives.

Salaries and employee benefits expense increased, primarily driven by higher incentive and compensation costs, partially offset by lower restructuring costs.

Other expenses decreased, primarily driven by the gain recognized on the sale of Accertify, foreign exchange-related gains and net gains on Amex Ventures investments, partially offset by an increase in legal reserves, higher professional service costs and a charge associated with an increase in international non-income tax reserves.

The effective tax rate was 21.5 percent and 20.3 percent for 2024 and 2023, respectively.

The reduction in the effective tax rate primarily reflected changes in the geographic mix of income.

The tax rates in both years reflected discrete tax benefits related to the resolution of prior-year tax items.

The increase in the effective tax rate primarily reflected discrete tax benefits in the prior year.

SELECTED CARD-RELATED STATISTICAL INFORMATION

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$ 103 $ 92 $ 82 12 % 12 %

Proprietary new cards acquired (millions)

13.0 12.2 12.5

Discount revenue as a % of Billed business

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T&E spend (27% and 28% of billed business for 2024 and 2023, respectively)

Airline spend (7% and 6% of billed business for 2023 and 2022, respectively)

5 % 8 % 19 % 19 %

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

(Millions, except percentages and where indicated) 2023 2022 2021 2023 vs.

(Millions, except percentages)

2024 2023 2022 2024 vs.

Card Member loans and receivables:

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Card Member loans:

Card Member loans (billions)

Card Member loans

$ 139,674 $ 125,995 $ 107,964 11 % 17 %

8 unchanged sentences

% of past due 288 % 297 % 348 %

Average loans (billions)

Average loans

$ 130,758 $ 114,816 $ 95,369 14 20

6 unchanged sentences

Card Member receivables:

Card Member receivables (billions)

Card Member receivables

$ 59,411 $ 60,411 $ 57,613 (2) 5

3 unchanged sentences

774 880 627 (12) 40

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

Net write-offs — principal and fees less recoveries

(773) (937) (462) (18) #

1 unchanged sentence

% of receivables 0.3 % 0.3 % 0.4 %

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

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

1.3 % 1.6 % 0.8 %

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(d) Other includes foreign currency translation adjustments.

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

NET INTEREST YIELD ON AVERAGE CARD MEMBER LOANS

Years Ended December 31,

(Millions, except percentages and where indicated) 2023 2022 2021

(Millions, except percentages)

2024 2023 2022

Net interest income $ 15,543 $ 13,134 $ 9,895

5 unchanged sentences

$ 15,543 $ 13,181 $ 10,140

Average Card Member loans (billions)

Average Card Member loans including loans held for sale (d)

$ 130,817 $ 114,816 $ 95,369

10 unchanged sentences

Net interest income divided by average Card Member loans, computed on an annualized basis, a GAAP measure, includes elements of total interest income and total interest expense that are not attributable to the Card Member loan portfolio, and thus is not representative of net interest yield on average Card Member loans.

(d) For purposes of the calculation of net interest yield on Card Member loans, average loans includes loans held for sale (HFS) as we continue to recognize interest income on these loans until they are sold.

Refer to Note 1 to the Consolidated Financial Statements for further information on loans HFS.

BUSINESS SEGMENT RESULTS OF OPERATIONS

1 unchanged sentence

Refer to Note 24 to the “Consolidated Financial Statements” and “Business” for additional discussion of products and services that comprise each segment.

Effective as of the second quarter of 2023, our U.S.

travel and lifestyle services (TLS) results, which were previously reported within the USCS segment, are now reported within both USCS and CS segments, allocated based on customer usage.

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

28 unchanged sentences

Total revenues net of interest expense after provisions for credit losses 28,398 25,261 22,893 3,137 12 2,368 10

Card Member rewards, business development, Card Member services and marketing

Card Member rewards, business development and Card Member services

14,329 12,808 10,791 1,521 12 2,017 19

3,051 2,585 2,744 466 18 (159) (6)

Salaries and employee benefits and other operating expenses

5 unchanged sentences

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

USCS also manages our dining platform that provides digital tools for restaurants and reservation bookings for diners.

TOTAL REVENUES NET OF INTEREST EXPENSE

4 unchanged sentences

Net card fees increased 18 percent, primarily driven by growth in our premium card portfolios.

Service fees and other revenue increased 5 percent, primarily driven by higher travel commissions and fees from our consumer travel business and growth in delinquency fees, partially offset by the change in the allocation of TLS revenues described above.

Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.

Interest expense increased, primarily driven by a higher cost of funds.

Service fees and other revenue increased 5 percent, primarily driven by revenue from the sale of reward points and higher delinquency fees, partially offset by lower travel commissions and fees from our Amex Travel business.

Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.

Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth and higher interest rates.

PROVISIONS FOR CREDIT LOSSES

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

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

The reserve build in the prior year was 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 reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding.

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

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

Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.

The reserve build in the current year was primarily driven by an increase in loans outstanding.

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

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

The reserve releases in both the current and prior years were primarily driven by lower delinquencies and a decrease in receivables outstanding.

Other provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year.

The reserve builds in both the current and prior years were primarily driven by increases in Other loans outstanding.

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

Card Member rewards expense increased, primarily driven by higher billed business.

The increase was also driven by a larger proportion of spend in categories that earn higher levels of rewards, partially offset by lower redemption costs and changes in expected redemption behaviors associated with certain products.

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

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

Marketing expense decreased, reflecting lower levels of spending on customer acquisitions.

Salaries and employee benefits and other expenses increased, primarily due to an increase in allocated service costs, partially offset by the change in the allocation of TLS servicing costs described above.

In the second half of the year, the increase in Membership Rewards expense was also driven by an increase in the URR and slightly higher redemption costs reflecting a shift in the mix of Card Member redemptions.

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

Card Member services expense increased, primarily due to growth in premium card accounts, contributing to a higher usage of travel-related benefits.

Marketing expense increased, reflecting higher levels of spending on customer acquisition and other growth initiatives.

Salaries and employee benefits and other expenses increased, primarily due to an increase in allocated service costs.

USCS SELECTED STATISTICAL INFORMATION

7 unchanged sentences

$ 20,707 $ 20,303 $ 19,514 2 4

Total segment assets (billions)

Total segment assets

$ 114,228 $ 107,158 $ 94,444 7 13

Card Member loans:

Total loans (billions)

$ 92,632 $ 83,207 $ 72,660 11 15

Average loans (billions)

Average loans

$ 85,264 $ 75,975 $ 63,720 12 19

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$ 10,931 $ 9,458 $ 7,385

Average Card Member loans (billions)

Average Card Member loans

$ 85,264 $ 75,975 $ 63,720

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Card Member receivables:

Total receivables (billions)

Total receivables

$ 14,419 $ 14,789 $ 14,263 (3) % 4 %

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Total revenues net of interest expense after provisions for credit losses 14,470 13,463 13,004 1,007 7 459 4

Card Member rewards, business development, Card Member services and marketing

Card Member rewards, business development and Card Member services

6,504 6,332 6,116 172 3 216 4

1,319 1,090 1,122 229 21 (32) (3)

Salaries and employee benefits and other operating expenses

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TOTAL REVENUES NET OF INTEREST EXPENSE

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

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

Discount revenue increased 2 percent, primarily driven by an increase in commercial billed business.

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Net card fees increased 12 percent, primarily driven by growth in our premium card portfolios.

Service fees and other revenue increased 53 percent, largely driven by the change in the allocation of TLS revenues described above, as well as growth in delinquency fees.

Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.

Interest expense increased, primarily driven by a higher cost of funds.

Service fees and other revenue decreased 7 percent, primarily driven by lower travel commissions and fees from our Amex Travel business.

Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.

Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth and higher interest rates.

PROVISIONS FOR CREDIT LOSSES

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

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

The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding.

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

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

Card Member rewards expense increased, primarily driven by a larger proportion of spend in categories that earn higher levels of rewards, as well as higher billed business, partially offset by lower redemption costs and changes in expected redemption behaviors associated with certain products.

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

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

Marketing expense decreased, reflecting lower levels of spending on customer acquisitions.

Salaries and employee benefits and other expenses increased, primarily due to an increase in allocated service costs, which includes an allocation of TLS servicing costs as described above.

Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.

The reserve build in the current year was primarily driven by an increase in loans outstanding.

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

Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve release in the prior year.

The reserve release in the prior year was primarily driven by lower delinquencies and a decrease in receivables outstanding.

Total expenses increased, primarily driven by higher Marketing and Card Member rewards expenses, partially offset by a decrease in Operating expenses and Business development expense.

Card Member rewards expense increased, primarily driven by higher billed business and slightly higher redemption costs in the second half of the year, partially offset by a decrease in the Membership Rewards URR.

Business development expense decreased, primarily due to lower client incentives, partially offset by increased partner payments due to higher billed business.

Card Member services expense increased, primarily due to growth in premium card accounts, contributing to a higher usage of travel-related benefits.

Marketing expense increased, reflecting higher levels of spending on customer acquisition and other growth initiatives.

Salaries and employee benefits and other expenses decreased, primarily driven by a decrease in allocated service costs and lower restructuring costs, partially offset by higher compensation.

CS SELECTED STATISTICAL INFORMATION

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$ 34,130 $ 33,745 $ 35,202 1 (4)

Total segment assets (billions)

Total segment assets

$ 58,969 $ 55,361 $ 51,411 7 8

Card Member loans:

Total loans (billions)

$ 29,647 $ 25,838 $ 21,406 15 21

Average loans (billions)

Average loans

$ 28,518 $ 23,877 $ 19,271 19 24

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$ 3,080 $ 2,352 $ 1,714

Average Card Member loans (billions)

Average Card Member loans including loans held for sale (e)

$ 28,576 $ 23,877 $ 19,271

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Card Member receivables:

Total receivables (billions)

Total receivables

$ 24,945 $ 26,222 $ 26,876 (5) % (2) %

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

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

1.3 % 1.5 % 0.7 %

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1.3 % 1.5 % 1.6 %

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

90+ days past billing as a % of total (f) — corporate

0.4 % 0.4 % 0.6 %

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

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

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

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

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

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Total revenues net of interest expense after provisions for credit losses 10,735 9,703 8,477 1,032 11 1,226 14

Card Member rewards, business development, Card Member services and marketing

Card Member rewards, business development and Card Member services

5,243 4,588 3,816 655 14 772 20

1,235 1,081 1,146 154 14 (65) (6)

Salaries and employee benefits and other operating expenses

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Pretax segment income $ 1,031 $ 973 $ 578 $ 58 6 % $ 395 68 %

# Denotes a variance of 100 percent or more

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

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

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

TOTAL REVENUES NET OF INTEREST EXPENSE

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

Discount revenue increased 17 percent, primarily reflecting an increase in billed business.

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

Discount revenue increased 10 percent (13 percent on an FX-adjusted basis), primarily reflecting an increase in billed business.

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

Net card fees increased 17 percent, primarily driven by growth in our premium card portfolios.

Service fees and other revenue increased 9 percent, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.

Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.

Interest expense increased, primarily driven by a higher cost of funds.

Net card fees increased 16 percent (20 percent on an FX-adjusted basis), primarily driven by growth in our premium card portfolios.

Service fees and other revenue increased 2 percent, primarily driven by higher foreign exchange related revenues associated with Card Member cross-currency spending and loyalty coalition-related fees, partially offset by a benefit in the prior year related to a portion of the revenue allocated to a joint venture partner as described in Business development expense below, as well as lower delinquency fees.

Interest income increased, primarily driven by growth in revolving loan balances, partially offset by lower interest rates.

Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth.

PROVISIONS FOR CREDIT LOSSES

Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.

The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets.

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

The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.

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

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

Card Member rewards expense increased, primarily driven by higher billed business.

Business development expense decreased, primarily driven by a prior-year charge related to revenue allocated to a joint venture partner, partially offset by an increase in partner payment expenses driven by higher billed business.

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

Marketing expense decreased, reflecting lower levels of spending on customer acquisitions.

Salaries and employee benefits and other expenses increased, primarily due to an increase in allocated service costs, partially offset by lower compensation costs.

The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by lower delinquencies.

The reserve build in the prior year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets.

Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve build in the current year versus a reserve release in the prior year.

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

The reserve release in the prior year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.

3 Refer to footnote 1 on page 45 for details regarding foreign currency adjusted information.

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

Card Member rewards expense increased, primarily driven by higher billed business and an increase in the Membership Rewards URR, partially offset by lower redemption costs.

Business development expense increased, primarily due to increased partner payments driven by higher billed business, partially offset by a prior-year charge related to revenue allocated to a joint venture partner.

Card Member services expense increased, primarily due to growth in premium card accounts, contributing to a higher usage of travel-related benefits.

Marketing expense increased, reflecting higher levels of spending on customer acquisition and other growth initiatives.

Salaries and employee benefits and other expenses increased, primarily due to a charge associated with an increase in international non-income tax reserves and higher allocated service costs, partially offset by a one-time fee from a partner.

ICS SELECTED STATISTICAL INFORMATION

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$ 22,965 $ 21,550 $ 19,519 7 10

Total segment assets (billions)

Total segment assets

$ 42,879 $ 42,234 $ 36,891 2 14

Card Member loans - consumer and small business:

Total loans (billions)

$ 17,395 $ 16,950 $ 13,844 3 22

Average loans (billions)

Average loans

$ 16,976 $ 14,964 $ 12,314 13 22

11 unchanged sentences

$ 1,532 $ 1,371 $ 1,041

Average Card Member loans (billions)

Average Card Member loans

$ 16,976 $ 14,964 $ 12,378

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Card Member receivables:

Total receivables (billions)

Total receivables

$ 20,047 $ 19,400 $ 16,474 3 % 18 %

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

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

1.4 % 2.1 % 1.3 %

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

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

GLOBAL MERCHANT AND NETWORK SERVICES

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Total revenues net of interest expense after provisions for credit losses 7,442 7,369 6,468 73 1 901 14

Business development, Card Member services and marketing

Business development and Card Member services

1,148 1,218 1,192 (70) (6) 26 2

411 437 419 (26) (6) 18 4

Salaries and employee benefits and other operating expenses

4 unchanged sentences

1,764.8 1,680.1 1,552.8 $ 85 5 $ 127 8

Total segment assets (billions)

Total segment assets

$ 17,712 $ 23,714 $ 20,005 (25) % 19 %

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

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

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

TOTAL REVENUES NET OF INTEREST EXPENSE

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

Discount revenue increased 7 percent, primarily driven by an increase in billed business.

Non-interest revenues increased, primarily driven by higher Discount revenue, partially offset by lower Processed revenue.

Discount revenue increased 3 percent, primarily driven by an increase in billed business, partially offset by lower average merchant discount rates.

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

Service fees and other revenue increased 14 percent, primarily due to higher foreign exchange related revenues associated with Card Member cross-currency spending.

Processed revenue increased 6 percent, primarily driven by higher processed volumes.

Service fees and other revenue increased 1 percent, primarily driven by higher merchant service fees and foreign exchange-related revenues associated with Card Member cross-currency spending, largely offset by Accertify revenues included in the prior year.

Processed revenue decreased 2 percent and increased 4 percent on an FX-adjusted basis.

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

Net interest income increased, primarily due to a higher interest expense credit, largely driven by higher interest rates.

Total expenses increased, primarily driven by higher Operating expenses.

Business development expense increased, primarily due to increased partner payments driven by higher network volumes.

Marketing expense increased, primarily driven by higher levels of spending on merchant engagement and other growth initiatives.

Salaries and employee benefits and other expenses increased, primarily due to a reserve associated with a merchant exposure for Card Member purchases, an increase in allocated service costs and higher compensation costs.

Net interest income decreased, primarily due to a lower interest expense credit, largely driven by a decrease in interest rates in international markets, partially offset by higher average merchant payables.

4 Refer to footnote 1 on page 45 for details regarding foreign currency adjusted information.

Total expenses decreased, primarily driven by lower Operating expenses.

Business development expense decreased, primarily due to decreased partner payments driven by lower volumes from certain network issuing partners.

Marketing expense decreased, reflecting lower levels of spending on merchant engagement and other growth initiatives.

Salaries and employee benefits and other expenses decreased, primarily driven by the gain recognized on the sale of Accertify included in the Other, net component of operating expenses, partially offset by an increase in allocated service costs.

CORPORATE & OTHER

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

Corporate & Other pretax loss was $2.4 billion and $2.2 billion in 2023 and 2022, respectively.

The increase in the pretax loss was primarily driven by changes in the value of deferred compensation, higher current and incentive compensation costs and a contribution to the American Express Foundation, all of which were partially offset by lower net losses on Amex Ventures investments.

Corporate & Other pretax loss was $2.4 billion in both 2024 and 2023.

Increases in foreign exchange gains and net gains on Amex Ventures investments year-over-year were offset largely by an increase in legal reserves.

CONSOLIDATED CAPITAL RESOURCES AND LIQUIDITY

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We believe capital allocated to growing businesses with a return on risk-adjusted equity in excess of our costs will generate shareholder value.

Our objective is to retain sufficient levels of capital generated through net income and other sources, such as the exercise of stock options by colleagues, to maintain a strong balance sheet, provide flexibility to support future business growth and distribute excess capital to shareholders through dividends and share repurchases.

Our objective is to retain sufficient levels of capital generated through net income and other sources, such as the issuance of subordinated debt and preferred shares, as well as the exercise of stock options by colleagues, to maintain a strong balance sheet, provide flexibility to support future business growth and distribute excess capital to shareholders through dividends and share repurchases.

See “Dividends and Share Repurchases” below.

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

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

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

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

On July 27, 2023, the U.S.

federal bank regulatory agencies issued a notice of proposed rulemaking that would significantly revise U.S.

regulatory capital requirements for large banking organizations, including American Express Company and AENB.

As discussed above, we became a Category III firm in the third quarter of 2024 and thus are subject to a CET1 countercyclical capital buffer requirement (if enacted by the Federal Reserve) and a minimum supplementary leverage ratio.

See “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for more information.

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American Express National Bank 9.6

Supplementary Leverage Ratio

American Express Company

American Express National Bank

(a) Represents Basel III minimum requirements and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer (SCB) for American Express Company and the capital conservation buffer for AENB.

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Average Total Assets to calculate the Tier 1 Leverage Ratio 268.8

The following are definitions for our regulatory risk-based capital ratios and leverage ratio, which are calculated as per standard regulatory guidance:

Total Leverage Exposure to calculate the Supplementary Leverage Ratio

The following are definitions for our regulatory risk-based capital and leverage ratios, which are calculated as per standard regulatory guidance:

Risk-Weighted Assets — Assets are weighted for risk according to a formula used by the Federal Reserve to conform to capital adequacy guidelines.

On- and off-balance sheet items are weighted for risk, with off-balance sheet items converted to balance sheet equivalents, using risk conversion factors, before being allocated a risk-adjusted weight.

On- and off-balance sheet items are risk weighted, with off-balance sheet items converted to balance sheet equivalents, using risk conversion factors, before being assigned a risk weight.

Off-balance sheet exposures comprise a minimal part of the total risk-weighted assets.

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

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

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

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

Tier 1 capital is the sum of CET1 capital, preferred shares and third-party non-controlling interests in consolidated subsidiaries, adjusted for capital held by insurance subsidiaries.

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

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

1 unchanged sentence

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

Tier 2 capital is the sum of the allowance for credit losses adjusted for the CECL final rules (limited to 1.25 percent of risk-weighted assets), and $1,250 million of eligible subordinated notes, adjusted for capital held by insurance subsidiaries.

The $1,250 million of eligible subordinated notes includes the $500 million subordinated debt issued in July 2023 and the $750 million subordinated debt issued in May 2022.

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

Tier 2 capital is the sum of the allowable allowance for credit losses adjusted for the CECL final rules, and $1,750 million of eligible subordinated notes, adjusted for capital held by insurance subsidiaries.

The $1,750 million of eligible subordinated notes includes the $500 million subordinated debt issued in April 2024, the $500 million subordinated debt issued in July 2023 and the $750 million subordinated debt issued in May 2022.

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

Supplementary Leverage Ratio — Calculated as Tier 1 capital divided by total leverage exposure.

Total leverage exposure includes total average on-balance sheet assets and certain off-balance sheet exposures, less amounts permitted to be deducted from Tier 1 capital.

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

As of January 1, 2025, we have phased in 100 percent of such amount.

Refer to “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for additional details.

We continue to include accumulated other comprehensive income (loss) in regulatory capital.

We were not subject to the Federal Reserve’s supervisory stress tests in 2023 and will be participating in the Federal Reserve’s supervisory stress tests in 2024.

We participated in the Federal Reserve’s supervisory stress tests in 2024.

We submitted our annual capital plan to the Federal Reserve in April 2024.

On July 27, 2023, the Federal Reserve confirmed our SCB of 2.5 percent, which resulted in a minimum CET1 ratio of 7 percent, effective October 1, 2023 to September 30, 2024.

On August 28, 2024, the Federal Reserve confirmed our SCB of 2.5 percent, which resulted in a minimum CET1 ratio of 7 percent, effective October 1, 2024 to September 30, 2025.

DIVIDENDS AND SHARE REPURCHASES

1 unchanged sentence

The share repurchases reduce common shares outstanding and generally more than offset the issuance of new shares as part of employee compensation plans.

During the year ended December 31, 2023, we returned $5.3 billion to our shareholders in the form of common stock dividends of $1.8 billion and share repurchases of $3.5 billion.

During the year ended December 31, 2024, we returned $7.9 billion to our shareholders in the form of share repurchases of $5.9 billion and common stock dividends of $2.0 billion.

We repurchased 23.9 million common shares at an average price of $242.65 in 2024.

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

In particular, we are focused on continuing to grow our direct retail deposit program as a funding source.

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

In particular, we are focused on continuing to grow our direct deposit program as a funding source.

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

In executing our funding plan, we aim to maintain a balanced debt maturity profile with an appropriate mix of short-term and long-term refinancing requirements.

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We believe our funding mix, including the proportion of U.S.

retail deposits insured by the FDIC to total funding, should reduce the impact that credit rating downgrades would have on our funding capacity and costs.

On August 29, 2023, the U.S.

direct deposits insured by the FDIC to total funding, should reduce the impact that credit rating downgrades would have on our funding capacity and costs.

In August, 2023, the U.S.

federal bank regulatory agencies issued a notice of proposed rulemaking that would require covered bank holding companies such as American Express Company to issue and maintain minimum amounts of eligible external long-term debt and certain insured depository institutions such as AENB to issue and maintain minimum amounts of eligible internal long-term debt.

3 unchanged sentences

bank subsidiary, AENB.

These funds are currently insured up to an amount that is at least $250,000 per account holder through the FDIC;

These funds are currently insured up to an amount that is at least $250,000 per depositor, per ownership category through the FDIC;

as of December 31, 2024, approximately 92 percent of these deposits were insured.

Our ability to obtain deposit funding and offer competitive interest rates is dependent on, among other factors, the capital level of AENB.

Direct retail deposits offered by AENB is our primary deposit product channel, which makes FDIC-insured high-yield savings account, certificates of deposit (CDs), business checking and consumer rewards checking account products available directly to customers.

As of December 31, 2023, our direct retail deposit program had approximately 2.4 million accounts.

The direct deposit program offered by AENB is our primary deposit product channel, which makes FDIC-insured high-yield savings account, certificates of deposit (CDs), business checking and consumer rewards checking account products available directly to customers.

As of December 31, 2024, our direct deposit program had approximately 3.3 million accounts.

AENB also sources deposits through third-party distribution channels as needed to meet our overall funding objectives.

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Refer to Note 7 to the “Consolidated Financial Statements” for a further description of these deposits and scheduled maturities of certificates of deposits.

The following table sets forth the average interest rate we paid on different types of deposits during the years ended December 31, 2023, 2022 and 2021.

The following table sets forth the average interest rates we paid on different types of deposits during the years ended December 31, 2024, 2023 and 2022.

Changes in the average interest rate we paid on our deposits were primarily due to the impact of higher market interest rates offered for retail deposits.

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Average Balance Interest Expense Average Interest Rate Average Balance Interest Expense Average Interest Rate Average Balance Interest Expense Average Interest Rate

Savings and transaction accounts $ 86,102 $ 3,357 3.9 % $ 71,458 $ 967 1.4 % $ 65,694 $ 275 0.4 %

Savings accounts

$ 101,705 $ 4,210 4.1 % $ 84,913 $ 3,320 3.9 % $ 70,990 $ 961 1.4 %

Checking accounts

1,677 29 1.7 1,189 37 3.1 468 6 1.3

Certificates of deposit:

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Sweep accounts — Third-party (brokered) 15,419 845 5.5 15,676 824 5.3 15,039 301 2.0

retail interest-bearing deposits

interest-bearing deposits

$ 133,497 $ 5,692 4.3 % $ 120,130 $ 4,858 4.0 % $ 95,854 $ 1,522 1.6 %

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American Express Company:

Fixed Rate Senior Notes (coupon of 4.90%)

Floating Rate Senior Notes (compounded SOFR (a) plus weighted-average spread of 90 basis points)

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Through our U.S.

bank subsidiary, AENB, we also hold collateral eligible for use at the Federal Reserve’s discount window.

bank subsidiary, AENB, we have also pledged collateral eligible for use at the Federal Reserve’s discount window.

The amount and type of liquidity resources we maintain can vary over time, based upon the results of stress scenarios required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as additional stress scenarios required under our liquidity risk policy.

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Scenarios under our liquidity risk policy include market-wide, firm-specific and combined liquidity stresses.

Additionally, we anticipate becoming a Category III firm in 2024 and thus being subject to the regulatory requirements under LCR and NSFR rules.

Additionally, as discussed above, we became a Category III firm in the third quarter of 2024 and thus are subject to the regulatory requirements under LCR and NSFR rules, subject to applicable transition periods.

See “Supervision and Regulation — Enhanced Prudential Standards” under “Business” for more information.

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

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As of December 31, 2024 and 2023, we had $40.6 billion and $46.6 billion in Cash and cash equivalents, respectively.

The year-over-year decline was primarily due to the deployment of cash to fund the growth of our business.

Refer to “Cash Flows” below for a discussion of the major drivers impacting cash flows for the year ended December 31, 2024.

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

From time to time, including during 2023, interest income may exceed the interest expense associated with the liquidity portfolio.

Depending on the interest rate environment, our funding composition and the amount of liquidity resources we maintain, the level of future net interest income or expense associated with our liquidity resources will vary.

During 2024, interest income exceeded the interest expense associated with the liquidity portfolio.

Securitized Borrowing Capacity

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Committed Bank Credit Facility

As of December 31, 2023, we maintained a committed syndicated bank credit facility of $4.0 billion.

During the quarter ended December 31, 2023, we extended this facility by two years to mature on October 20, 2026, and increased the maximum borrowing capacity from $3.5 billion to $4.0 billion.

As of December 31, 2024, we maintained a committed syndicated bank credit facility of $4.0 billion with a maturity date of October 30, 2026.

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

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

As of December 31, 2023, we were in compliance with the covenants contained in the credit facility and no amount was drawn on the facility.

As of December 31, 2024, we were in compliance with the covenants contained in the credit facility and no amounts were drawn on this facility.

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

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As of December 31, 2024, AENB had available borrowing capacity of $76.9 billion based on the amount and collateral valuation of receivables that were pledged to the Federal Reserve Bank of San Francisco.

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

Following its regular annual review, the Federal Reserve updated the collateral margins for amounts pledged by its member banks, effective November 1, 2023, which reduced AENB’s available borrowing capacity through the discount window.

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

Due to regulatory restrictions, liquidity generated by AENB can generally be used only to fund obligations within AENB, and transfers to the parent company or non-bank affiliates may be subject to prior regulatory approval.

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Effect of foreign currency exchange rates on cash and cash equivalents — 0.2 —

Net increase (decrease) in cash and cash equivalents $ 12.7 $ 11.9 $ (10.9)

Net (decrease) increase in cash and cash equivalents

$ (6.0) $ 12.7 $ 11.9

Cash Flows from Operating Activities

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

In 2023, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, primarily driven by higher book overdrafts due to timing differences arising in the ordinary course of business, higher accounts payable to merchants and an increase in the Membership Rewards liability related to growth in billed business.

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

In 2024, the net cash provided by operating activities was driven by cash generated from net income for the period, partially offset by lower net operating liabilities, primarily driven by lower book overdrafts due to timing differences arising in the ordinary course of business.

Cash Flows from Investing Activities

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

In 2023, the net cash used in investing activities was primarily driven by higher Card Member loan and receivable balances, resulting from higher Card Member spending, partially offset by net maturities of investment securities.

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

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

In both 2024 and 2023, the net cash used in investing activities was primarily driven by higher Loans and Card Member receivables outstanding, partially offset by net maturities of investment securities.

Cash Flows from Financing Activities

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

In both 2023 and 2022, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from debt, partially offset by share repurchases and dividend payments.

In both 2024 and 2023, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from long-term debt, partially offset by share repurchases and dividend payments.

RISK MANAGEMENT

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The Risk Committee of our Board of Directors provides oversight of our ERM framework, processes and methodologies.

The Risk Committee approves our ERM policy.

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

The Risk Committee approves our ERM and select other risk policies.

The ERM policy also guides the monitoring of emerging risks, as appropriate.

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

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

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

Our Chief Risk Officer also reviews the risk profiles of each business unit and, in conjunction with the Chief Audit Executive, provides input into performance evaluation through the Risk Performance Program.

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

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individual and institutional.

Each has distinct risk management capabilities, strategies, and tools.

Each has distinct risk management profiles, capabilities, strategies, and tools.

Business units that create individual or institutional credit risk exposures of significant importance are supported by dedicated risk management teams, each led by a Chief Credit Officer.

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A centralized risk rating unit provides risk assessment of our institutional obligors.

Exposure to the Airline and Travel Industry

We have multiple important cobrand, rewards, merchant acceptance and corporate payments arrangements with airlines.

The ERM program evaluates the risks posed by our airline partners and the overall airline strategy company-wide through comprehensive business analysis of global airlines, and the travel industry more broadly, including cruise lines, travel agencies and tour operators.

Our largest airline partner is Delta, and this relationship includes an exclusive cobrand credit card partnership and other arrangements including Membership Rewards redemption, merchant acceptance, travel and corporate payments.

See “ We face intense competition for partner relationships, which could result in a loss or renegotiation of these arrangements that could have a material adverse impact on our business and results of operations ” and “ Arrangements with our business partners represent a significant portion of our business.

We are exposed to risks associated with our business partners, including reputational issues, business slowdowns, bankruptcies, liquidations, restructurings and consolidations, and the possible obligation to make payments to our partners ” under “Risk Factors” for additional information.

Debt Exposure

As part of our ongoing risk management process, we monitor our financial exposure to both sovereign and non-sovereign customers and counterparties, and measure and manage concentrations of risk by geographic regions, as well as by economic sectors and industries.

A primary focus area for monitoring is credit deterioration due to weaknesses in economic and fiscal profiles.

We evaluate countries based on the market assessment of the riskiness of their sovereign debt and our assessment of the economic and financial outlook and closely monitor those deemed high risk.

As of December 31, 2023, we considered our gross credit exposures to government entities, financial institutions and corporations in those countries deemed high risk to be individually and collectively not material.

OPERATIONAL RISK MANAGEMENT PROCESS

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

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

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

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

The framework includes programs established for risk management activities related to processes and the launch of new products and services.

The framework also defines guidelines and risk management requirements for the (a) identification of operational risk events, (b) related control enhancements and (c) reporting of key trends and escalation of risks.

The framework also defines guidelines and risk management requirements for the (a) identification of issues and operational risk events, (b) related control enhancements and (c) reporting of key trends and escalation of risks.

Outcomes from the operational risk framework are discussed and escalated to various risk management committees and incorporated within our accountability framework for executive compensation.

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

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

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

The CRMC has a dual reporting relationship to both the Risk Committee (through the ERMC) and the Audit and Compliance Committee.

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

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

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

REPUTATIONAL RISK MANAGEMENT PROCESS

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Market risk is managed by the Market Risk Management Committee.

The Market Risk Oversight Officer provides an independent risk assessment and oversight over the policies and exposure management for market risk and Asset Liability Management activities, as well as overseeing compliance with associated regulatory requirements.

Market risk management is also guided and governed by policies covering the use of derivative financial instruments, funding, liquidity and investments.

The Market Risk Oversight Officer provides an independent risk assessment and oversight over the policies and exposure management for market risk and Asset Liability Management activities.

Interest Rate Risk

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With respect to anticipated earnings denominated in foreign currencies for the next twelve months, the adverse impact on pretax income of a hypothetical 10 percent strengthening of the U.S.

dollar would be approximately $242 million as of December 31, 2023.

dollar, net of hedges, would be approximately $136 million as of December 31, 2024.

The actual impact of interest rate and foreign exchange rate changes will depend on, among other factors, the timing of rate changes, the extent to which different rates do not move in the same direction or in the same direction to the same degree, changes in the cost, volume and mix of our hedging activities and changes in the volume and mix of our businesses.

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Our liquidity risk management processes are designed in alignment with regulatory guidelines.

As discussed in more detail under “Supervision and Regulation — Enhanced Prudential Standards” and “— Capital and Liquidity Regulation” under “Business,” we anticipate becoming a Category III firm in 2024 under U.S.

federal bank regulatory agencies’ rules that tailor the application of enhanced prudential standards, which would result in heightened capital, liquidity and prudential requirements, including more stringent liquidity risk management requirements.

As a Category III firm under U.S.

federal bank regulatory agencies’ rules, we are subject to heightened capital, liquidity and prudential requirements, including more stringent liquidity risk management requirements.

See “Supervision and Regulation – Capital and Liquidity Regulation” under “Business” for more information.

MODEL RISK MANAGEMENT PROCESS

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

In addition, we utilize artificial intelligence and machine learning (AI/ML) models for a variety of business use cases.

In addition, we utilize artificial intelligence and machine learning (AI/ML) models, including Generative AI tools, for a variety of business use cases.

We perform extensive reviews and testing to reduce the risk that these AI/ML techniques result in adverse consequences.

STRATEGIC AND BUSINESS RISK MANAGEMENT PROCESS

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

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

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

We seek to manage strategic and business risks through risk controls embedded in these processes as well as overall risk management oversight over business goals.

Existing product performance is reviewed periodically by committees and business leaders.

Launch of key new products as well as existing product performance is reviewed periodically by committees and business leaders to inform business decisions as appropriate.

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

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

CLIMATE-RELATED RISK

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

We define climate-related risk as:

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

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

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

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

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

EMERGING RISKS

We also identify, monitor and report on emerging risks through our risk governance framework.

Emerging risks arise due to changes in the external environment or internal initiatives and may manifest across multiple risk types.

For example, climate-related risk is currently identified as an emerging risk and may manifest as credit risk, operational risk, market risk, liquidity risk or other risk types.

Emerging risks are monitored and reported periodically to members of management, as well as to the ERMC and the Risk Committee of our Board of Directors.

CRITICAL ACCOUNTING ESTIMATES

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

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

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

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

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Goodwill represents the excess of acquisition cost of an acquired business over the fair value of assets acquired and liabilities assumed.

Goodwill is not amortized but is tested for impairment at the reporting unit level annually or when events or circumstances arise, such as adverse changes in the business climate, that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Goodwill is not amortized but is tested for impairment at the reporting unit level annually or when events or circumstances arise, such as adverse changes in the business environment, that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Our methodology for conducting this goodwill impairment testing contains both a qualitative and quantitative assessment.

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Adjusted net interest income — A non-GAAP measure that represents net interest income attributable to our Card Member loans (which includes, on a GAAP basis, interest that is deemed uncollectible), excluding the impact of interest expense and interest income not attributable to our Card Member loans.

Airline spend — Represents spend at airlines as a merchant, which is included within T&E spend.

Allocated service costs — Represents salaries and benefits associated with our technology and customer servicing groups, allocated based on activities directly attributable to our reportable operating segments, as well as overhead expenses, which are allocated to our reportable operating segments based on their relative levels of revenue and Card Member loans and receivables.

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Card Member — The individual holder of an issued American Express-branded card.

Card Member loans — Represents revolve-eligible transactions on our card products, as well as any interest charges and associated card-related fees.

Card Member receivables — Represents transactions on our card products and card related fees that need to be paid in full on or before the Card Member’s payment due date.

Card Member loans — Represents balances on our credit card products and revolve-eligible balances on our charge card products.

Card Member receivables — Represents balances on our charge card products that need to be paid in full on or before the Card Member’s payment due date.

Cards-in-force — Represents the number of cards that are issued and outstanding by American Express (proprietary cards-in-force) and cards issued and outstanding under network partnership agreements with banks and other institutions, except for retail cobrand cards issued by network partners that had no out-of-store spending activity during the prior twelve months.

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The partner is then liable for providing rewards to the Card Member under the cobrand partner’s own loyalty program.

Credit cards — Represents cards that have a range of revolving payment terms, structured payment features (e.g.

Plan It), grace periods, and rate and fee structures.

Discount revenue — Represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.

Credit cards — Represents cards that have a range of revolving payment terms, structured payment features (e.g., Plan It, Expanded Buying Power), grace periods, and rate and fee structures.

Discount revenue — Primarily represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.

Goods & Services (G&S) spend — Includes spend in merchant categories other than T&E-related merchant categories, which includes B2B spending by small and mid-sized enterprise customers in our CS and ICS segments.

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Operating expenses — Represents salaries and employee benefits, professional services, data processing and equipment, and other expenses.

Other loan s — Represents balances on non-card payment and financing products that are not associated with a Card Member agreement, and instead are governed by a separate borrowing relationship.

Other loans consist primarily of consumer installment loans and lines of credit offered to small business customers.

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

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Processed volumes — Represents transaction volumes (including cash advances) on cards issued under network partnership agreements with banks and other institutions, including joint ventures, as well as alternative payment solutions facilitated by American Express.

Proprietary new cards acquired — Represents the number of new cards issued by American Express during the referenced period, net of replacement cards.

Proprietary new cards acquired is useful as a measure of the effectiveness of our customer acquisition strategy.

Reserve build (release) — Represents the portion of the provisions for credit losses for the period related to increasing or decreasing reserves for credit losses as a result of, among other things, changes in volumes, macroeconomic outlook, portfolio composition and credit quality of portfolios.

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Factors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following:

• our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing at high levels in areas that can drive sustainable growth (including our brand, value propositions, customers, colleagues, marketing, technology and coverage), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following:

macroeconomic conditions, such as recession risks, changes in interest rates, effects of inflation, labor shortages and strikes or higher rates of unemployment, supply chain issues, energy costs and fiscal and monetary policies;

geopolitical instability, including the ongoing Ukraine and Israel wars and tensions involving China and the United States;

• our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing at high levels in areas that can drive sustainable growth (including our brand, value propositions, coverage, marketing, technology and talent), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following:

macroeconomic conditions, higher rates of unemployment, changes in interest rates, effects of inflation, tariffs, supply chain issues, energy costs and fiscal and monetary policies;

geopolitical instability, hostilities and tensions, such as involving China and the United States;

the impact of any future contingencies, including, but not limited to, legal costs and settlements, the imposition of fines or monetary penalties, increases in Card Member remediation, investment gains or losses, restructurings, impairments and changes in reserves;

issues impacting brand perceptions and our reputation;

impacts related to new or renegotiated cobrand and other partner agreements and joint ventures;

and the impact of regulation and litigation, which could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with Card Members, partners and merchants;

impacts related to acquisitions, cobrand and other partner agreements, portfolio sales and joint ventures;

and the impact of regulation and litigation, which may be heightened due to the uncertain regulatory environment and could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with Card Members, partners and merchants;

• our ability to grow revenues net of interest expense and the sustainability of our future growth, which could be impacted by, among other things, the factors identified above and in the subsequent paragraphs, as well as the following:

spending volumes and the spending environment not being consistent with expectations, including T&E spend growing slower than expected, further slowing in spend by U.S.

small and mid-sized enterprise or U.S.

large and global corporate customers, or a general slowdown or increase in volatility in consumer and business spending volumes;

changes in foreign currency exchange rates;

an inability to address competitive pressures, innovate and expand our products and services, leverage the advantages of our differentiated business model, attract customers across generations and age cohorts, including Millennial and Gen Z customers and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global merchant network;

the effects of the end of the moratorium on student loan repayments;

the impact of the decommissioning of one of our alternative payment solutions;

and merchant discount rates changing by a greater or lesser amount than expected;

• net card fees not performing consistently with expectations, which could be impacted by, among other things, a deterioration in macroeconomic conditions impacting the ability and desire of Card Members to pay card fees;

spending volumes and the spending environment not being consistent with expectations, including a decline in spending by U.S.

small and mid-sized enterprise Card Members or slowdowns in U.S.

consumer or international spending volumes;

an inability to address competitive pressures, attract and retain customers, invest in and enhance our Membership Model of premium products, differentiated services and partnerships, successfully refresh our card products, grow spending and lending with customers across age cohorts, including Millennial and Gen Z customers, and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global network;

the effects of regulatory initiatives, including pricing and network regulation;

merchant coverage growing less than expected or the reduction of merchant acceptance or the perception of coverage;

increased surcharging, steering, suppression or differential acceptance of our products;

merchant discount rates changing from our expectations;

and changes in foreign currency exchange rates;

• net card fees not performing consistently with expectations, which could be impacted by, among other things, a decrease in the ability and desire of Card Members to pay card fees, such as due to a deterioration in macroeconomic conditions;

higher Card Member attrition rates;

the pace of Card Member acquisition activity and demand for our fee-based products;

and our inability to address competitive pressures, develop attractive premium value propositions and implement our strategy of refreshing card products, enhancing benefits and services and continuing to innovate with respect to our products;

• net interest income, the effects of changes in interest rates and the growth of loans and Card Member receivables outstanding, and the portion of which that is interest bearing, being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns;

our ability to effectively manage risk and enhance Card Member value propositions;

and our inability to address competitive pressures, develop attractive premium value propositions and implement our strategy of refreshing card products and realize our anticipated growth from those refreshes, enhancing and delivering benefits and services and continuing to innovate with respect to our products;

• net interest income, the effects of changes in interest rates and the growth of loans and Card Member receivables outstanding and revolving balances, being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns;

the effectiveness of our strategies to enhance Card Member value propositions, capture a greater share of Card Members’ spending and borrowings and attract new, and retain existing, customers;

our ability to effectively manage underwriting risk;

changes in benchmark interest rates, including where such changes affect our assets or liabilities differently than expected;

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the yield on Card Member loans not remaining consistent with current expectations;

our deposit levels or the interest rates we offer on deposits changing from current expectations;

and the effectiveness of our strategies to capture a greater share of existing Card Members’ spending and borrowings, and attract new, and retain existing, customers;

and our deposit levels or the interest rates we offer on deposits changing from current expectations;

loss or impacts to cobrand relationships;

and governmental actions to cap interest rates;

• future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies;

the ability and willingness of Card Members to pay amounts owed to us;

changes in consumer behavior that affect loan and receivable balances (such as paydown and revolve rates);

the credit profiles of new customers acquired;

changes in loans and receivables outstanding, such as from the implementation of our strategy to capture spending and borrowings, or from changes in consumer behavior that affect loan and receivable balances (e.g., paydown and revolve rates);

changes in the levels of customer acquisitions and the credit profiles of new customers acquired;

the enrollment in, and effectiveness of, financial relief programs and the performance of accounts as they exit from such programs;

collections capabilities and recoveries of previously written-off loans and receivables;

and governmental actions providing forms of relief with respect to certain loans and fees and the termination of such actions;

the impact of the usage of debt settlement companies;

and collections capabilities and recoveries of previously written-off loans and receivables;

• the actual amount to be spent on Card Member rewards and services and business development, and the relationship of these variable customer engagement costs to revenues, which could be impacted by continued changes in macroeconomic conditions and Card Member behavior as it relates to their spending patterns (including the level of spend in bonus categories), the redemption of rewards and offers (including travel redemptions) and usage of travel-related benefits;

related to reward point redemptions;

further enhancements to product benefits to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective;

new and renegotiated contractual obligations with business partners;

the costs related to reward point redemptions;

further enhancements to our rewards programs and product benefits, including to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective;

new and renegotiated contractual obligations with business partners, which may be affected by business partners with greater scale and leverage;

our ability to identify and negotiate partner-funded value for Card Members;

and the pace and cost of the expansion of our global lounge collection;

• the actual amount we spend on marketing in the future, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance;

management’s decisions regarding the timing of spending on marketing and the effectiveness of management’s investment optimization process;

management’s identification and assessment of attractive investment opportunities;

management’s ability to develop attractive premium value propositions and drive customer demand;

• the actual amount we spend on marketing in the future and the effectiveness and efficiency of our marketing spend, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance, including the levels of demand for our products;

management’s decisions regarding the timing of spending on marketing and the effectiveness of management’s investment optimization process, management’s identification and assessment of attractive investment opportunities;

management’s ability to develop premium value propositions and drive customer demand, including continued customer spend growth and retention;

the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives;

our ability to realize marketing efficiencies and balance expense control and investments in the business;

• our ability to control operating expenses, including relative to future revenue growth, and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent;

a persistent inflationary environment;

our ability to realize operational efficiencies, including through automation;

management’s decision to increase or decrease spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities depending on overall business performance;

and our ability to realize marketing efficiencies and balance expense control and investments in the business;

• our ability to control operating expenses, including relative to revenue growth, and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent;

our ability to realize operational efficiencies, including through increased scale and automation and continued adoption of artificial intelligence technologies;

management’s decisions regarding spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities;

our ability to innovate efficient channels of customer interactions and the willingness of Card Members to self-service and address issues through digital channels;

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supply chain issues;

compliance expenses and consulting, legal and other professional services fees, including as a result of litigation or internal and regulatory reviews;

expenses related to control management and compliance and consulting, legal and other professional services fees, including as a result of litigation or internal and regulatory reviews;

regulatory assessments;

the level of M&A activity and related expenses, including the completion of our sale of Accertify Inc.;

information or cybersecurity incidents;

the level of M&A activity and related expenses;

information security or cybersecurity incidents;

the payment of fines, penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements;

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impairments of goodwill or other assets;

and the impact of changes in foreign currency exchange rates on costs, such as due to the devaluation of foreign currencies;

• our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation (or related legislative or regulatory inaction), the timing and manner of the implementation of tax guidelines by jurisdictions, our geographic mix of income, unfavorable tax audits and other unanticipated tax items;

• changes affecting our plans regarding the return of capital to shareholders, including increasing the level of our dividend, which will depend on factors such as our capital levels and regulatory capital ratios;

changes in the stress testing and capital planning process and new rulemakings and guidance from the Federal Reserve and other banking regulators, including changes to regulatory capital requirements, such as final rules resulting from the U.S.

federal bank regulatory agencies’ capital rule proposal;

and the impact of changes in foreign currency exchange rates on costs;

• our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation (or the expiration of provisions of tax laws or regulations), the implementation of the OECD’s global minimum tax guidelines by jurisdictions, our geographic mix of income, unfavorable tax audits, assessments and tax litigation outcomes;

• changes affecting our plans regarding the return of capital to shareholders, including increasing the level of the dividend, which will depend on factors such as our capital levels and regulatory capital ratios;

the results of our stress testing and capital planning process and new rulemakings and guidance from the Federal Reserve and other banking regulators, including changes to regulatory capital requirements, such as from the U.S.

federal bank regulatory agencies’ Basel III rulemaking;

our results of operations and financial condition;

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and the economic environment and market conditions in any given period;

• changes affecting the expected timing for closing the sale of Accertify Inc., the amount of the potential gain we recognize upon the closing and the portion of such gain management determines to reinvest back into our business, which will depend on regulatory and other approvals, consultation requirements, the execution of ancillary agreements, the cost and availability of financing for the purchaser to fund the transaction and the potential loss of key customers, vendors and other business partners and management’s decisions regarding future operations, strategies and business initiatives;

• changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may materially impact the prices charged to merchants that accept American Express cards, the desirability of our premium card products, competition for new and existing cobrand relationships, competition with respect to new products, services and technologies, competition from new and non-traditional competitors and the success of marketing, promotion and rewards programs;

• our ability to expand our leadership in the premium consumer space, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits and value propositions that appeal to Card Members and new customers, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize the benefits from strategic partnerships and evolving our infrastructure to support new products, services and benefits;

• our ability to build on our leadership in commercial payments, which will depend in part on competition, the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs, perceived or actual difficulties and costs related to setting up card-based B2B payment platforms, our ability to offer attractive value propositions and new products to potential customers, our ability to enhance and expand our payment and lending solutions, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies;

• our ability to expand merchant coverage globally and our success, as well as the success of OptBlue merchant processors and network partners, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card

Members to use American Express cards at merchants, scaling marketing and expanding programs to increase card usage, identifying new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, increasing coverage in priority international cities and countries and key industry verticals, and executing on our plans in China and for continued technological developments, including capabilities that allow for greater digital integration and modernization of our authorization platform;

• our ability to successfully invest in and compete with respect to technological developments and digital payment and travel solutions, which will depend in part on our success in evolving our products and processes for the digital environment, developing new features in the Amex app and enhancing our digital channels, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence and machine learning and increasing automation to address servicing and other customer needs, and supporting the use of our products as a means of payment through online and mobile channels, all of which will be impacted by investment levels, new product innovation and development and infrastructure to support new products, services, benefits and partner integrations;

• changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure and competitor settlements and mergers that may materially impact the prices charged to merchants that accept American Express cards;

surcharging, steering and suppression by merchants and merchant acceptance;

the desirability of our premium card products;

competition for new and existing cobrand relationships;

competition from new and non-traditional competitors, and with respect to new products, services and technologies, such as the emergence or increase in popularity of alternative payment mechanisms;

and the success of marketing, promotion and rewards programs;

• our ability to expand our leadership in the premium consumer space, including with Millennial and Gen-Z consumers, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits and value propositions that appeal to Card Members and new customers, grow spending with new and younger age cohort Card Members, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize the benefits from strategic partnerships, successfully implementing our dining strategy and evolving our infrastructure to support new products, services and benefits;

• our ability to build on our leadership in commercial payments, which will depend in part on competition;

the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs;

perceived or actual difficulties and costs related to setting up B2B payment platforms;

our ability to offer attractive value propositions and new products to current and potential customers;

our ability to enhance and expand our payment, lending and cash flow management solutions, increase customer engagement, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies;

and the success of our initiatives to support businesses, such as Small Business Saturday and other Shop Small campaigns;

• our ability to expand merchant coverage globally and our success, as well as the success of third-party merchant acquirers, aggregators and processors, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card Members to use American Express cards at merchants, scaling marketing and expanding programs to increase card usage, identifying and growing acceptance in low- and new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, executing on our plans to increase coverage in priority international cities, destinations, countries and industry verticals, and continued network investments, including in capabilities that allow for greater digital integration and modernization of our authorization platform;

• our ability to successfully invest in, benefit from and expand the use of technological developments, digital payments, servicing and travel solutions and other technological capabilities, which will depend in part on our success in evolving our products and processes for the digital environment, developing new features in the Amex ® app and enhancing our digital channels, effectively utilizing data and data platforms, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence and machine learning and increasing automation, including to address servicing and other business and customer needs, and supporting the use of our products as a means of payment through online and mobile channels, all of which will be impacted by investment levels, customer and colleague receptiveness and ability to adopt new technologies, new product innovation and development and the platforms and infrastructure to support new products, services, benefits and partner integrations;

• our ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, favoring local competitors or prohibiting or limiting foreign ownership of certain businesses;

our inability to tailor products and services to make them attractive to local customers;

our inability to successfully replicate aspects of our business model internationally and tailor products and services to make them attractive to local customers;

competitors with more scale, local experience and established relationships with relevant customers, regulators and industry participants;

the success of our network partners in acquiring Card Members and/or merchants;

political or economic instability or regional hostilities, including as a result of the Ukraine and Israel wars;

• a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm;

the success of us and our network partners in acquiring Card Members and/or merchants;

and political or economic instability or regional hostilities;

• our ability to successfully implement our dining strategy and grow our dining platform, which will depend in part on our ability to grow the number of diners, restaurants and other bookable venues using the platform and transactions on the platform;

expand and innovate in the tools and capabilities offered through the platform, including integrating the Tock and Rooam acquisitions and benefiting from their added capabilities, users and/or bookable venues;

successfully compete with other dining platforms and means of booking venues;

and effectively utilize our dining platform to provide value to Card Members and merchants and sell our products and services;

• a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks or outages, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm;

• changes in capital and credit market conditions, which may significantly affect our ability to meet our liquidity needs and expectations regarding capital ratios;

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• our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, our ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions;

• our ability to implement our ESG strategies and initiatives, which depend in part on the amount and efficacy of our investments in product innovations, marketing campaigns, our supply chain and operations, and philanthropic, colleague and community programs;

• our ability to achieve our climate-related goals, which depend in part on the amount and efficacy of our investments in emissions reduction projects, the ability of our partners to set and achieve sustainability targets, the success of our supply chain and sustainability initiatives, and colleague programs;

customer preferences and behaviors;

and the cost and availability of solutions for a low carbon economy;

the cost and availability of renewable energy, carbon removal and carbon offset projects and energy attribute certificates;

changes in our real estate, technology and colleague strategies or an inability to execute those strategies;

and brand perceptions and reputation;

• legal and regulatory developments, which could affect the profitability of our business activities;

limit our ability to pursue business opportunities or conduct business in certain jurisdictions;

require changes to business practices or governance, or alter our relationships with Card Members, partners, merchants and other third parties, including our ability to continue certain cobrand relationships in the EU;

exert further pressure on merchant discount rates and our network business;

require changes to business practices or governance, or alter our relationships with Card Members, partners, merchants and other third parties, including affecting our network operations and practices governing merchant acceptance, as well as our ability to continue certain cobrand relationships in the EU;

impact card fees and rewards programs;

exert further pressure on merchant discount rates and our network business, as well as result in an increase in surcharging, steering or other differential acceptance practices;

alter the competitive landscape;

result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or monetary penalties;

subject us to heightened regulatory scrutiny and result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or monetary penalties;

materially affect capital or liquidity requirements, results of operations or ability to pay dividends;

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• changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including of cobrand partners, merchants that represent a significant portion of our business, network partners or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations;

• factors beyond our control such as global economic and business conditions, consumer and business spending generally, unemployment rates, geopolitical conditions, including further escalations or widening of ongoing military conflicts, adverse developments affecting third parties, including other financial institutions, merchants or vendors, as well as severe weather conditions, natural disasters, power loss, disruptions in telecommunications, health pandemics, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances, deposit levels and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.

• factors beyond our control such as global economic and business conditions, consumer and business spending generally, unemployment rates, geopolitical conditions, including resulting from recent political developments or further escalations or widening of ongoing military conflicts and regional hostilities, adverse developments affecting third parties, including other financial institutions, merchants or vendors, as well as severe weather conditions and natural disasters (e.g., hurricanes and wildfires), power loss, disruptions in telecommunications, pandemics, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances, deposit levels, foreign exchange rates and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.

A further description of these uncertainties and other risks can be found in “Risk Factors” and our other reports filed with the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis