What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-07 compared with 2024-02-09 · 371 added, 253 removed, 1686 unchanged (27% of the section changed)

58 unchanged sentences

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

Professionals with specialized skill and knowledge

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

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

Membership Rewards Liability

88 unchanged sentences

Diluted 713 736 752

(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) 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.

See Notes to Consolidated Financial Statements.

5 unchanged sentences

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

50 ( 87 ) ( 42 )

Foreign currency translation adjustments, net of hedges and tax ( 353 ) 51 ( 230 )

9 unchanged sentences

$ 3,413 $ 7,118

Interest-bearing deposits in other banks (includes securities purchased under resale agreements:

2022, $ 318 )

Interest-bearing deposits in other banks

37,006 39,312

15 unchanged sentences

133,995 120,877

Card Member loans held for sale

Other loans, less reserves for credit losses:

51 unchanged sentences

Purchase of investments ( 1,593 ) ( 1,572 ) ( 4,175 )

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

Net increase in loans and Card Member receivables, including Card Member loans held for sale (b)(c)

( 23,259 ) ( 25,124 ) ( 29,562 )

1 unchanged sentence

( 1,911 ) ( 1,563 ) ( 1,855 )

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

Acquisitions, net of cash acquired ( 454 ) ( 64 ) ( 15 )

Dispositions, net of cash disposed 594 — —

Net cash used in investing activities ( 24,402 ) ( 24,433 ) ( 33,689 )

Cash Flows from Financing Activities

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

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

Net increase in customer deposits 10,305 18,915 25,902

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

207 ( 105 ) ( 706 )

1 unchanged sentence

Payments of long-term debt ( 10,759 ) ( 10,703 ) ( 18,906 )

Issuance of American Express preferred shares — — 1,584

Redemption of American Express preferred shares — — ( 1,600 )

Issuance of American Express common shares 100 28 56

1 unchanged sentence

Dividends paid ( 1,999 ) ( 1,780 ) ( 1,565 )

Net cash provided by (used in) financing activities 18,379 24,509 ( 14,933 )

Net cash provided by financing activities 4,436 18,379 24,509

Effect of foreign currency exchange rates on cash and cash equivalents ( 40 ) 177 ( 13 )

Net increase (decrease) in cash and cash equivalents 12,682 11,886 ( 10,937 )

Net (decrease) increase in cash and cash equivalents ( 5,956 ) 12,682 11,886

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

Cash and cash equivalents at end of year $ 40,640 $ 46,596 $ 33,914

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

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

(a) Primarily includes the gain recognized on the sale of Accertify (See Note 1), losses on tax credit investments, changes in reserves, net gains and losses on Amex Ventures investments, gains/losses on fair value hedges and changes in equity method investments.

(b) Includes Card Member loans held for sale (HFS) which were previously held for investment within Card Member loans and were reclassified on the Consolidated Balance Sheets effective December 1, 2024.

Refer to Note 1 for additional information.

Net income taxes paid during 2024, 2023 and 2022 were $ 3.6 billion, $ 3.3 billion and $ 3.0 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $ 8.2 billion, $ 6.4 billion and $ 2.2 billion, respectively.

7 unchanged sentences

Net income 7,514 — — — — 7,514

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

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

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

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

Other changes, primarily employee plans 227 — 1 245 — ( 19 )

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

Other comprehensive income (loss)

( 265 ) — — — ( 265 ) —

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

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

Other changes, including employee plans

242 — — 300 — ( 58 )

5 unchanged sentences

Net income 8,374 — — — — 8,374

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

Other comprehensive income (loss)

138 — — — 138 —

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

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

Other changes, including employee plans

181 — — 213 — ( 32 )

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

4 unchanged sentences

Net income 10,129 — — — — 10,129

Other comprehensive income

Other comprehensive income (loss)

( 323 ) — — — ( 323 ) —

Repurchase of common shares ( 5,857 ) — ( 4 ) ( 377 ) — ( 5,476 )

Other changes, primarily employee plans 181 — — 213 — ( 32 )

Other changes, including employee plans

315 — — 375 — ( 60 )

Cash dividends declared preferred Series D, $ 36,288.88 per share

7 unchanged sentences

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

Our 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.

Our various products and services are offered globally to consumers, small businesses, mid-sized companies and large corporations through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, in-house sales teams, direct mail, telephone and direct response advertising.

Refer to Note 24 for additional discussion of the products and services that comprise each segment.

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

BUSINESS EVENTS

On May 1, 2024, we completed the previously announced transaction to sell fraud prevention solutions provider Accertify, Inc.

(Accertify), a wholly owned subsidiary we acquired in 2010, the operations of which were reported within the Global Merchant and Network Services (GMNS) segment.

The transaction resulted in a gain of $ 531 million ($ 479 million after tax), which was reported as a reduction to Other expense in the second quarter of 2024.

Prior to the completion of the transaction, the carrying amount of Accertify’s net assets were not material to the Company’s financial position.

PRINCIPLES OF CONSOLIDATION

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Revenue is recognized when obligations under the terms of a contract with our customers are satisfied.

We are not required to disclose revenue that is expected to be recognized in future periods related to contracts that have an original expected duration of one year or less and contracts with variable consideration (e.g., discount revenue).

We have elected to not disclose revenue that is expected to be recognized in future periods related to contracts with variable consideration (e.g., discount revenue).

Non-interest revenue expected to be recognized in future periods related to all other contracts with customers is not material.

Payments made pursuant to contractual arrangements with our merchants, network partners and other customers are classified as contra-revenue, except where we receive goods, services or other benefits for which the fair value is determinable and measurable, in which case they are recorded as expense.

Discount Revenue

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

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.

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 of the card acceptance agreement between the merchant and us (e.g., local or global) and the transaction amount.

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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.

These fees, net of acquisition costs and a reserve for projected refunds for Card Member cancellations, are deferred and recognized on a straight-line basis over the twelve-month card membership period as Net card fees in the Consolidated Statements of Income and are therefore more stable in relation to short term business or economic shifts.

These fees, net of qualifying acquisition costs and a reserve for projected refunds for Card Member cancellations, are deferred and recognized on a straight-line basis over the twelve-month card membership period as Net card fees in the Consolidated Statements of Income and are therefore more stable in relation to short term business or economic shifts.

The unamortized net card fee balance is reported in Other liabilities on the Consolidated Balance Sheets.

8 unchanged sentences

Our network card issuing partners receive an issuer rate that is individually negotiated between that issuer and us and is recorded as contra-revenue within Processed revenue to the extent that there is revenue from the same customer, after which any additional issuer rate is recorded as expense in Business development.

Processed revenue also includes fees related to alternative payment solutions, which are generally recognized when the service is performed.

Contra-revenue

Interest Income

16 unchanged sentences

Card Member rewards liabilities are impacted over time by enrollment levels, attrition, the volume of points earned and redeemed, and the associated redemption costs.

Changes in the Card Member rewards liabilities during the period are taken as an increase or decrease to the Card Member rewards expense in the Consolidated Statements of Income.

Changes in the Card Member rewards liabilities during the period are recorded as an increase or decrease to the Card Member rewards expense in the Consolidated Statements of Income.

Business Development

3 unchanged sentences

Card Member services expense represents costs incurred in providing our Card Members with various value-added benefits and services, which are generally expensed as incurred.

Marketing expense includes costs incurred in the development and initial placement of advertising, which are expensed in the period in which the advertising first takes place.

Marketing expense includes the cost of promotional activities to attract, engage and retain customers.

Customer acquisition activities include initiatives such as welcome offers, where bonus points or statement credits are issued for the purpose of incentivizing Card Members to apply for a new product and are awarded either on acquisition or upon the Card Member achieving specified spend volume within a stipulated time period, as well as affiliate marketing, direct mail campaigns and telemarketing.

In addition, Marketing also includes agency services (such as marketing research, strategy consulting, creative production and placement), sponsorship programs, promotional events, distribution of branded materials and advertising via digital, television, radio and print media.

Marketing expenses incurred in the development and initial placement of advertising are expensed in the period in which the advertising first takes place.

All other marketing expenses are generally expensed as incurred.

3 unchanged sentences

Restricted cash primarily represents amounts related to Card Member credit balances as well as upcoming debt maturities of consolidated VIEs.

Card Member Loans HFS

When we decide to sell Card Member loans, they are reclassified on the Consolidated Balance Sheets as Card Member loans held for sale and measured at the lower of amortized cost or fair value (LOCOM).

Refer to Note 14 for additional information regarding the valuation methodology for Card Member loans HFS.

At the time of HFS reclassification, we first write-off amounts in accordance with our policy and then reverse any remaining reserves for credit losses associated with the HFS loans, the net impact of which is recognized within Provisions for credit losses in the Consolidated Statements of Income.

HFS loans will continue to be remeasured at LOCOM until they are sold, with any changes in valuation recognized in Other, net in the Consolidated Statements of Income.

We will continue to recognize discount revenue, interest income and other revenues and expenses related to the HFS loans until they are sold.

Effective December 1, 2024, we reclassified $ 758 million of Card Member loans related to the Lowe’s small business cobrand portfolio to Card Member loans held for sale on the Consolidated Balance Sheets and reversed $ 49 million of associated reserves for credit losses.

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

1 unchanged sentence

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

We evaluate goodwill for impairment annually as of November 1, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of one or more of our reporting units below its carrying value.

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

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

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

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

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

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

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

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

9 unchanged sentences

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

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

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

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

For the years ended December 31, 2024 and 2023, we performed assessments for each reporting unit in connection with our annual goodwill impairment evaluation and determined that it was more likely than not that the fair values of each of our reporting units exceeded their carrying values and accordingly no impairment was recognized.

Premises and Equipment

7 unchanged sentences

We recognize lease restoration obligations at the fair value of the restoration liabilities when incurred and amortize the restoration assets over the lease term.

We have operating leases worldwide for facilities and equipment, which, for those leases with terms greater than 12 months, are recorded as lease-related assets and liabilities.

We have operating leases worldwide for facilities, primarily office locations and airport lounges, and equipment, which, for those leases with terms greater than 12 months, are recorded as lease-related assets and liabilities.

We do not separate lease and non-lease components.

4 unchanged sentences

The following table identifies our other significant accounting policies, along with the related Note:

OTHER SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policy Note

4 unchanged sentences

Asset Securitizations Note 5 Asset Securitizations

Stock-Based Compensation

Legal Contingencies Note 12 Contingencies and Commitments

3 unchanged sentences

Income Taxes Note 20 Income Taxes

Earnings Per Common Share

CLASSIFICATION OF VARIOUS ITEMS

1 unchanged sentence

RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

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

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

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

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

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

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

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

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

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

In November 2023, the Financial Accounting Standards Board issued updated accounting guidance for segment reporting, effective for annual reporting periods beginning after December 15, 2023 and for interim reporting periods beginning January 1, 2025.

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

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

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

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

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

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

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

We adopted the updated guidance for the annual reporting period beginning January 1, 2024, which did not result in a material impact to our Consolidated Financial Statements.

Refer to Note 24 for related disclosures about our reportable operating segments.

In December 2023, the Financial Accounting Standards Board issued updated accounting guidance on Disclosures for Income Taxes, effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

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

1 unchanged sentence

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

In November 2024, the Financial Accounting Standards Board issued updated accounting guidance on the Disaggregation of Income Statement Expenses for annual reporting periods beginning after December 15, 2026 and for interim reporting periods beginning December 15, 2027, with early adoption permitted.

The updated guidance includes the requirement for a new tabular disclosure within a Note to the Consolidated Financial Statements, to disaggregate defined expense categories from the expense report lines presented on the Consolidated Statements of Income.

We are currently assessing the updated guidance and its impact to our Consolidated Financial Statements.

LOANS AND CARD MEMBER RECEIVABLES

Our lending and charge payment card products that we offer to consumer, small business and corporate customers result in the generation of Card Member loans and Card Member receivables.

We also extend credit to customers through non-card financing products, resulting in Other loans.

We also extend credit to customers through financing products that are not associated with a Card Member agreement, and instead are governed by a separate borrowing relationship, resulting in Other loans.

CARD MEMBER AND OTHER LOANS

Card Member loans are generally recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent revolve-eligible transactions on our card products, as well as any finance charges and associated card-related fees.

Card Member loans are generally recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent revolve-eligible balances on our card products, as well as any finance charges and associated card-related fees.

Card Members with outstanding revolving loans are required to make a minimum monthly payment, and the balances that Card Members choose to revolve are subject to finance charges.

2 unchanged sentences

Our policy generally is to cease accruing interest on a Card Member loan at the time the account is written off, and establish reserves for interest that we believe will not be collected.

Other loans are recorded at the time any extension of credit is provided to consumer and commercial customers for non-card financing products.

These loans have a range of fixed terms such as interest rates, fees and repayment periods.

Other loans are recorded at the time any extension of credit is provided to consumer and commercial customers for financing products not associated with a Card Member agreement, such as consumer installment loans and lines of credit offered to small business customers.

These loans have a range of fixed and variable terms such as interest rates, fees and repayment periods.

Borrowers are typically required to make pre-established monthly payments over the term of the loan.

Non-card financing products are not associated with a Card Member agreement, and instead are governed by a separate borrowing relationship.

Other loans are presented on the Consolidated Balance Sheets net of reserves for credit losses and include principal and any related accrued interest and fees.

Card Member and Other loans as of December 31, 2024 and 2023 consisted of:

CARD MEMBER AND OTHER LOANS

(Millions) 2024 2023

10 unchanged sentences

CARD MEMBER RECEIVABLES

Card Member receivables are recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent amounts due 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 receivables are recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent balances due 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.

Charge Card Members generally must pay the full amount billed each month.

1 unchanged sentence

Card Member receivables as of December 31, 2024 and 2023 consisted of:

CARD MEMBER RECEIVABLES

(Millions) 2024 2023

9 unchanged sentences

Generally, a Card Member account is considered past due if payment due is not received within 30 days after the billing statement date.

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

The following tables present the aging of Card Member loans and receivables as of December 31, 2024 and 2023:

CARD MEMBER LOANS AND RECEIVABLES AGING

2024 ( Millions )

17 unchanged sentences

Days Past Due 90+

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

Non-Accruals (d)

Card Member Loans:

13 unchanged sentences

See also (b).

(b) Delinquency data for periods other than 90+ days past billing is not available due to system constraints.

Therefore, such data has not been utilized for risk management purposes.

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

(b) Delinquency data for periods other than 90+ days past billing has not historically been available due to system constraints.

Therefore, such data has not been a material input for risk management purposes.

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

2 unchanged sentences

CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES

The following tables present the key credit quality indicators as of or for the years ended December 31:

The following table presents the key credit quality indicators as of or for the years ended December 31:

CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES

Net Write-Off Rate Net Write-Off Rate

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Delinquency data for periods other than 90+ days past billing is not available due to system constraints.

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

90+ days past billing as a % of total was 0.4 % as of both December 31, 2024 and 2023.

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

LOANS AND RECEIVABLES RESTRUCTURINGS FOR BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

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

Effective January 1, 2023, we prospectively adopted the new guidance that eliminated the recognition and measurement of troubled debt restructurings (TDRs).

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

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

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

As of December 31, 2023

The following tables provide information relating to loans and receivables modifications for borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023:

LOANS AND RECEIVABLES MODIFICATIONS FOR BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

Year Ended December 31, 2024

2024 ( Millions )

21 unchanged sentences

Total $ 3,172

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

Year Ended December 31, 2023

2023 ( Millions )

Account Balances

( Millions ) (a)

% of Total Class of

Financing Receivables Weighted Average Interest Rate Reduction

(% points) Weighted Average Payment

Term Extensions

(# of months)

Interest Rate Reduction

Card Member Loans

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

Small Business 550 2.0 % 15.9 % (b)

Corporate — — — (b)

Term Extension

Card Member Receivables

Consumer 346 1.4 % (c) 27

Small Business 543 2.8 % (c) 28

Corporate 13 0.1 % (c) 9

Other Loans 23 0.3 % — 18

Interest Rate Reduction

and Term Extension

Other Loans 42 0.6 % 2.1 % 20

Total $ 3,089

(a) Represents the outstanding balances as of December 31, 2024 and 2023, respectively, of all modifications undertaken in the current and preceding year for loans and receivables that remain in modification programs as of, or that defaulted on or before, December 31, 2024 and 2023, respectively.

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

Modifications did not reduce the principal balance.

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

(b) For Card Member loans, we generally do not offer payment term extensions.

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

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

The following tables provide information with respect to loans and receivables modified on or after January 1, 2023 that defaulted in the periods presented and were modified in the twelve months prior to the payment default.

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

As of December 31, 2023

MODIFIED LOANS AND RECEIVABLES THAT DEFAULTED WITHIN TWELVE MONTHS OF MODIFICATION

Year Ended December 31, 2024

Account Balance ( Millions ) (a)

11 unchanged sentences

Total $ 128 $ 27 $ 2 $ 157

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

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

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

Year Ended December 31, 2023

Account Balance ( Millions ) (a)

Interest Rate Reduction

Term Extension Interest Rate Reduction and Term Extension Total

Card Member Loans

Consumer $ 53 (b) $ — $ 53

Small Business 20 (b) — 20

Corporate — (b) — —

Card Member Receivables

Consumer (c) $ 9 — 9

Small Business (c) 14 — 14

Corporate (c) — — —

Other Loans — — 1 1

Total $ 73 $ 23 $ 1 $ 97

(a) Represents the outstanding balances as of December 31, 2024 and 2023, respectively, of all modifications undertaken on or after January 1, 2023 that defaulted in the periods presented and were modified in the twelve months prior to payment default.

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

(b) For Card Member loans, we generally do not offer payment term extensions.

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

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

The following tables provide information relating to the performance of loans and receivables that were modified during the years ended December 31, 2024 and 2023 and that remain in modification programs as of, or that defaulted on or before, December 31, 2024 and 2023, respectively:

PERFORMANCE OF MODIFIED LOANS AND RECEIVABLES

As of December 31, 2024

12 unchanged sentences

Total $ 2,863 $ 220 $ 89

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

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

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

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

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

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

As of December 31, 2023

Accounts Classified as a

2022 (Millions)

Over 90 days Past Due & Accruing Interest (a)

Balance Reserve for Credit

Account Balances ( Millions ) (a)

30-89 Days Past Due

90+ Days Past Due

Card Member Loans

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Total $ 2,785 $ 231 $ 73

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

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

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

As of December 31, 2024, there are no remaining loans which are accounted for under the historical TDR accounting.

The following table provides additional information with respect to our impaired loans and receivables as of December 31, 2022:

IMPAIRED LOANS AND RECEIVABLES

As of December 31, 2022

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Amounts presented exclude loans classified as TDRs.

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

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

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

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

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

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

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

2022 Number of

Accounts (Thousands)

Balances (Millions) (a)

Average Interest Rate Reduction (% points)

Average Payment Term Extensions

(# of months)

Troubled Debt Restructurings:

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

Card Member Receivables 27 900 (c) 20

Other Loans (d)

Total 180 $ 1,910

The following table provides additional information with respect to loans and receivables that were modified as TDRs during the year ended December 31, 2022:

LOANS AND RECEIVABLES MODIFIED AS TDRs

2022 Number of

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

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

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

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

(d) Other loans primarily represent consumer installment loans and lines of credit offered to small business customers.

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

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

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

2022 Number of Accounts

Outstanding Balances

(Millions) (a)

Troubled Debt Restructurings That Subsequently Defaulted:

Card Member Loans 14 $ 81

Card Member Receivables 3 38

Other Loans (b)

Total 18 $ 120

LOANS AND RECEIVABLES MODIFIED AS TDRs THAT DEFAULTED WITHIN TWELVE MONTHS OF MODIFICATION

2022 Number of Accounts

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

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

(b) Other loans primarily represent consumer installment loans and lines of credit offered to small business customers.

RESERVES FOR CREDIT LOSSES

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Credit losses on accrued interest are measured and presented as part of Reserves for credit losses on the Consolidated Balance Sheets and within the Provisions for credit losses in the Consolidated Statements of Income, rather than reversing interest income.

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

See Note 2 for information on TDRs.

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

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The following table reflects the range of macroeconomic scenario key variables used, in conjunction with other inputs, to calculate reserves for credit losses:

KEY MACROECONOMIC VARIABLES

Unemployment Rate U.S.

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CHANGES IN CARD MEMBER LOANS RESERVE FOR CREDIT LOSSES

Card Member loans reserve for credit losses increased for the year ended December 31, 2024, primarily driven by an increase in loans outstanding.

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

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

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

CHANGES IN CARD MEMBER LOANS RESERVE FOR CREDIT LOSSES

(Millions) 2024 2023 2022

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Provisions for credit losses includes reserve build (release) and replenishment for net write-offs.

In addition, provisions for the year ended December 31, 2024 includes the reserve release of $ 49 million upon the reclassification of Card Member loans related to the Lowe’s small business cobrand portfolio as HFS in the fourth quarter of 2024.

See Note 1 for additional information.

(b) Principal write-offs are presented less recoveries of $ 730 million, $ 537 million and $ 539 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Recoveries of interest and fees were not significant.

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

(c) Primarily includes foreign currency translation adjustments of $( 33 ) million, $ 18 million and $( 6 ) million for the years ended December 31, 2024, 2023 and 2022, respectively.

CHANGES IN CARD MEMBER RECEIVABLES RESERVE FOR CREDIT LOSSES

Card Member receivables reserve for credit losses remained relatively flat for the year ended December 31, 2024.

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

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

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

CHANGES IN CARD MEMBER RECEIVABLES RESERVE FOR CREDIT LOSSES

(Millions) 2024 2023 2022

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Provisions (a)

880 627 ( 73 )

Net write-offs (b)

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INVESTMENT SECURITIES

Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets.

The methodology for estimating credit losses for available for sale debt securities requires us to estimate lifetime credit losses for all available-for-sale debt securities in an unrealized loss position.

Investment securities principally include available-for-sale (AFS) debt securities carried at fair value on the Consolidated Balance Sheets.

The methodology for estimating credit losses for AFS debt securities requires us to estimate lifetime credit losses for all AFS debt securities in an unrealized loss position.

When estimating a security’s probability of default and the recovery rate, we assess the security’s credit indicators, including credit ratings.

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

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

We had accrued interest on our AFS debt securities totaling $ 3 million and $ 5 million as of December 31, 2024 and 2023, respectively, presented as Other assets on the Consolidated Balance Sheets.

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

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The following is a summary of investment securities as of December 31:

INVESTMENT SECURITIES

Description of Securities (Millions)

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

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

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

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

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

(d) During 2024, an equity investment transferred from Other assets to Investment securities following the completion of an initial public offering by the issuer of the securities.

The investment had a fair value of $ 7 million with an associated cost of $ 3 million as of December 31, 2024.

The following table provides information about our AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2024 and 2023:

AFS DEBT SECURITIES WITH GROSS UNREALIZED LOSSES BY DURATION

Less than 12 months 12 months or more Less than 12 months 12 months or more

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— — 7 ( 1 ) — — 7 ( 1 )

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

Total $ — $ — $ 152 $ ( 12 ) $ — $ — $ 1,154 $ ( 19 )

The gross unrealized losses on our available-for-sale debt securities are primarily attributable to an increase in the current benchmark interest rate.

Overall, for the available-for-sale debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses and (iii) we expect that the contractual principal and interest will be received on the securities.

The gross unrealized losses on our AFS debt securities are primarily attributable to an increase in the current benchmark interest rate.

Overall, for the AFS debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses and (iii) we expect that the contractual principal and interest will be received on the securities.

We concluded that there was no credit loss attributable to the securities in an unrealized loss position for the periods presented.

The following table summarizes the gross unrealized losses for available-for-sale debt securities by ratio of fair value to amortized cost as of December 31, 2023 and 2022:

The following table summarizes the gross unrealized losses for AFS debt securities by ratio of fair value to amortized cost as of December 31, 2024 and 2023:

AFS GROSS UNREALIZED LOSSES BY RATIO OF FAIR VALUE TO AMORTIZED COST

Less than 12 months 12 months or more Total

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Total as of December 31, 2023 — $ — $ — 71 $ 1,154 $ ( 19 ) 71 $ 1,154 $ ( 19 )

Weighted average yields and contractual maturities for available-for-sale debt securities with stated maturities as of December 31, 2023 were as follows:

Weighted average yields and contractual maturities for AFS debt securities with stated maturities as of December 31, 2024 were as follows:

WEIGHTED AVERAGE YIELDS AND CONTRACTUAL MATURITIES OF AFS DEBT SECURITIES

(Millions) Due within 1 year Due after 1 year but within 5 years Due after 5 years but within 10 years Due after 10 years Total

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Goodwill $ 4,187 $ 3,851

Right-of-use lease assets

Other intangible assets, at amortized cost 123 98

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Total $ 21,179 $ 19,114

(a) Primarily includes net deferred tax assets, other receivables net of reserves, investments in non-consolidated entities, prepaid assets, tax credit investments and right-of-use lease assets.

(a) Primarily includes net deferred tax assets, other receivables net of reserves, investments in non-consolidated entities, tax credit investments, prepaid assets and derivative assets.

The changes in the carrying amount of goodwill reported in our reportable operating segments were as follows:

GOODWILL ROLLFORWARD

(Millions) USCS CS ICS GMNS Total

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Balance as of December 31, 2023 $ 379 $ 2,151 $ 743 $ 578 $ 3,851

Acquisitions (b)

394 — — — 394

Dispositions — — — ( 27 ) ( 27 )

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(a) Primarily includes foreign currency translation.

(b) Includes the acquisition of a reservation, table and event management technology provider.

Accumulated impairment losses were $ 221 million as of both December 31, 2024 and 2023.

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

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

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

As of December 31, 2024 and 2023, we had $ 1,568 million and $ 1,369 million in tax credit investments, respectively, included in Other assets on the Consolidated Balance Sheets, comprised of Low-Income Housing Tax Credit (LIHTC) investments and other qualifying investments.

We account for such tax credit investments using the Proportional Amortization Method.

As of December 31, 2024 and 2023, $ 1,168 million and $ 1,126 million of our tax credit investments, respectively, related to investments in unconsolidated VIEs for which we do not have a controlling financial interest.

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

TAX CREDIT INVESTMENT EXPENSES, INCOME TAX CREDITS AND OTHER BENEFITS

(Millions) 2024 2023 2022

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As of December 31, customer deposits were categorized as interest-bearing or non-interest-bearing as follows:

INTEREST-BEARING AND NON-INTEREST-BEARING CUSTOMER DEPOSITS

(Millions) 2024 2023

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Customer deposits by deposit type as of December 31 were as follows:

CUSTOMER DEPOSITS BY TYPE

(Millions) 2024 2023

retail deposits:

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

interest-bearing deposits:

Savings accounts

$ 108,364 $ 92,324

Checking accounts

Certificates of deposit:

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15,612 15,907

retail deposits

interest-bearing deposits

$ 138,433 $ 128,146

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The scheduled maturities of certificates of deposit as of December 31, 2024 were as follows:

SCHEDULED MATURITIES OF CERTIFICATES OF DEPOSIT

(Millions) 2025 2026 2027 2028 2029 After 5 years Total

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Our short-term borrowings outstanding, defined as borrowings with original contractual maturity dates of less than one year, as of December 31 were as follows:

SHORT-TERM BORROWINGS

(Millions, except percentages) Outstanding Balance Year-End Stated

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Additionally, certain of our subsidiaries maintained total committed lines of credit of $ 191 million and $ 185 million as of December 31, 2024 and 2023, respectively.

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

As of December 31, 2024 and 2023, $ 16 million and nil were drawn on these committed lines of credit, respectively.

We paid $ 11.9 million and $ 12.0 million in fees to maintain the secured borrowing facility in 2024 and 2023, respectively.

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Our long-term debt outstanding, defined as debt with original contractual maturity dates of one year or greater, as of December 31 was as follows:

LONG-TERM DEBT

(Millions, except percentages) Original

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Fixed Rate Senior Notes 2025 - 2029 13,934 4.23 4.32 13,449 3.36 3.49

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

Floating Rate Subordinated Notes — — — 61 4.89 —

Finance Leases — — 3 5.76 —

Floating Rate Borrowings 2025 - 2027 247 0.76 — % 238 0.42 — %

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Aggregate annual maturities on long-term debt obligations (based on contractual maturity or anticipated redemption dates) as of December 31, 2024 were as follows:

ANNUAL MATURITIES ON LONG-TERM DEBT

(Millions) 2025 2026 2027 2028 2029 Thereafter Total

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Total Long-Term Debt $ 49,715

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

We maintained a committed syndicated bank credit facility of $ 4.0 billion as of both December 31, 2024 and 2023, all of which was undrawn as of the respective dates.

The facility has a maturity date of October 30, 2026, and the availability of the facility is subject to compliance with certain covenants, principally our maintenance of a minimum Common Equity Tier 1 (CET1) risk-based capital ratio of 4.5 percent, with certain restrictions in relation to either accessing the facility or distributing capital to common shareholders in the event our CET1 risk-based capital ratio falls between 4.5 percent and 6.5 percent.

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The following is a summary of Other liabilities as of December 31:

OTHER LIABILITIES

Membership Rewards liability

$ 14,752 $ 13,742

Book overdraft balances (a)

Deferred card and other fees, net

Book overdraft balances (a)

Employee-related liabilities (b)

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

(d) Includes repatriation tax liability of $ 749 million and $ 998 million as of December 31, 2024 and 2023, respectively, which represents our remaining obligation under the Tax Cuts and Jobs Act enacted on December 22, 2017 to pay a one-time transition tax on unrepatriated earnings and profits of certain foreign subsidiaries, the net position for current federal, state and non-U.S.

income tax liabilities and deferred tax liabilities for foreign jurisdictions.

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

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

MEMBERSHIP REWARDS

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

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

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The carrying amount of deferred card and other fees, net of deferred direct acquisition costs and reserves for membership cancellations, as of December 31 was as follows:

DEFERRED CARD AND OTHER FEES, NET

(Millions) 2024 2023

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Our stock options and RSUs outstanding as of December 31, 2024, and changes during the year, are as follows:

STOCK OPTIONS AND RSUs OUTSTANDING

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

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The following weighted-average assumptions were used for options granted in 2024, 2023 and 2022:

WEIGHTED-AVERAGE ASSUMPTIONS FOR OPTIONS GRANTED

2024 2023 2022

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

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

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

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

The weighted-average remaining contractual life and the aggregate intrinsic value (the amount by which the fair value of our stock price exceeds the exercise price of the option) of the stock options outstanding, exercisable, and vested and expected to vest as of December 31, 2024, were as follows:

WEIGHTED-AVERAGE CONTRACTUAL LIFE AND AGGREGATE INTRINSIC VALUE OF OPTIONS

Outstanding Exercisable Vested and

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The weighted averages of the following assumptions used in 2024, 2023 and 2022 were:

RSU VALUATION MODEL WEIGHTED-AVERAGE ASSUMPTIONS

2024 2023 2022

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We sponsor defined contribution retirement plans, the principal plan being the Retirement Savings Plan (RSP), a 401(k) savings plan with a profit-sharing component.

The RSP is a tax-qualified retirement plan subject to the Employee Retirement Income Security Act of 1974 and covers most employees in the United States.

The RSP is a tax-qualified retirement plan subject to the Employee Retirement Income Security Act of 1974 and covers most colleagues in the United States.

The total expense for all defined contribution retirement plans globally was $ 365 million, $ 380 million and $ 259 million in 2024, 2023 and 2022, respectively.

DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

Our primary defined benefit pension plans that cover certain employees in the United States and United Kingdom are closed to new entrants and existing participants do not accrue any additional benefits.

Some employees outside the United States and United Kingdom are covered by local retirement plans, some of which are funded, while other employees receive payments at the time of retirement or termination under applicable labor laws or agreements.

Our primary defined benefit pension plans that cover certain colleagues in the United States and United Kingdom are closed to new entrants and existing participants do not accrue any additional benefits.

Some colleagues outside the United States and United Kingdom are covered by local retirement plans, some of which are funded, while other colleagues receive payments at the time of retirement or termination under applicable labor laws or agreements.

We comply with minimum funding requirements in all countries.

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

On February 25, 2020, we were named as a defendant in a case filed in the Superior Court of California, Los Angeles County, captioned Laurelwood Cleaners LLC v.

On September 30, 2024, we were named as a defendant in a case filed in the United States District Court for the District of Massachusetts, captioned Pizza Hazel, Inc., et al.

American Express Co., et al., in which plaintiffs allege that the anti-steering and non-discrimination provisions in our merchant agreements violate federal antitrust law and that the arbitration provision in our merchant agreements violates federal antitrust law to the extent it prevents antitrust challenges to our anti-steering and non-discrimination provisions.

Plaintiffs seek, on behalf of themselves and a class of merchants that accept through the OptBlue Program, unspecified damages and an injunction prohibiting us from enforcing our anti-steering and non-discrimination provisions and prohibiting us from enforcing our arbitration provision to the extent it prevents antitrust challenges to our anti-steering and non-discrimination provisions.

On March 21, 2024, we were named as a defendant in a case filed in the United States District Court for the District of Rhode Island, captioned 5-Star General Store aka Bento LLC, et al.

American Express Co., et al.

, in which the plaintiff seeks a public injunction in California prohibiting American Express from enforcing its anti-steering and non-discrimination provisions and from requiring merchants “to offer the service of Amex-card acceptance for free.” The case has been stayed pending the outcome of arbitration proceedings.

, in which plaintiffs allege that the anti-steering and non-discrimination provisions in our merchant agreements violate federal antitrust law and seek, on behalf of themselves and a class of merchants, an injunction prohibiting us from enforcing our anti-steering and non-discrimination provisions and a declaration that we have violated antitrust laws.

On January 29, 2019, we were named in a putative class action brought in the United States District Court for the Eastern District of New York, captioned Anthony Oliver, et al.

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

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

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

Plaintiffs seek unspecified damages and other forms of relief.

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

We have appealed the court’s class certification decisions.

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

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Plaintiffs seek damages and injunctive relief.

An amended complaint was filed on July 15, 2016.

On September 30, 2016, the court denied our motion to dismiss as to claims brought by merchants who do not accept American Express cards, and on May 4, 2017, the California court transferred the case to the United States District Court for the Eastern District of New York.

On May 4, 2017, the California court transferred the case to the United States District Court for the Eastern District of New York.

On August 28, 2020, the court granted plaintiffs’ motion for class certification.

In July 2004, we were named as a defendant in a putative class action filed in the Southern District of New York and subsequently transferred to the Eastern District of New York, captioned The Marcus Corporation v.

American Express Co., et al.

, in which the plaintiffs allege an unlawful antitrust tying arrangement between certain of our charge cards and credit cards in violation of various state and federal laws.

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

On August 14, 2024, the court granted our motion to compel arbitration as to class members who are subject to our merchant agreements, but did not stay the claims pending arbitration.

On November 15, 2024, we appealed to the Second Circuit requesting a stay of all claims against us that are subject to arbitration.

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

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

In December 2024, the tribunal rendered a further partial award providing further clarifications on the allocation of revenue.

A final award is expected in 2025.

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

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

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

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

We have also been made aware of a related investigation by the New York Department of Financial Services (NYDFS) and have provided information regarding these sales practices issues to The Board of Governors of the Federal Reserve System (Federal Reserve).

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

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

small business card customers that occurred between 2015 and 2017.

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

In January 2025, we announced that we entered into agreements with the EDNY and DOJ Civil Division and reached an agreement in principle with the Staff of the Federal Reserve to resolve their investigations into historical sales practices for certain U.S.

small business customers, which we ended in 2021 or earlier.

Pursuant to the agreements and after crediting, we are required to pay approximately $ 230 million in total to resolve these matters.

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

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In addition, it is possible that significantly increased merchant steering or other actions impairing the Card Member experience as a result of an adverse resolution in one or any combination of the disclosed merchant cases could have a material adverse effect on our business and results of operations.

Total lease expense includes rent expenses, adjustments for rent concessions, rent escalations and leasehold improvement allowances and is recognized on a straight-line basis over the lease term.

Total lease expense for the years ended December 31, 2023, 2022 and 2021 was $ 164 million, $ 188 million and $ 161 million, respectively.

Total lease expense is recorded in Other, net expenses in the Consolidated Statements of Income and includes rent expenses, adjustments for rent concessions, rent escalations and leasehold improvement allowances and is recognized on a straight-line basis over the lease term.

Total lease expense was $ 189 million, $ 164 million and $ 188 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Lease liabilities are recognized at the present value of the contractual fixed lease payments, discounted using our incremental borrowing rate as of the lease commencement date or upon modification of the lease.

For lease liabilities outstanding as of December 31, 2023, the weighted average remaining lease term was 19 years and the weighted average rate used to discount lease commitments was 3 percent.

Lease liabilities outstanding were $ 933 million and $ 926 million as of December 31, 2024 and 2023, respectively.

The weighted average remaining lease term was 17 years and 19 years as of December 31, 2024 and 2023, respectively.

The weighted average rate used to discount lease commitments was 4 percent and 3 percent as of December 31, 2024 and 2023, respectively.

The following represents the maturities of our outstanding lease commitments as of December 31, 2024:

MATURITIES OF OUTSTANDING LEASE COMMITMENTS

Thereafter 771

Total Outstanding Fixed Lease Payments $ 1,462

Total Outstanding Fixed Lease Payments (a)

Amount representing interest $ ( 500 )

Lease Liabilities $ 933

(a) Excludes $ 346 million related to leases that were not yet commenced but were commitments as of December 31, 2024.

As of December 31, 2024, we had approximately $ 12.9 billion in financial commitments outstanding related to agreements with certain cobrand partners under which we are required to make a certain level of minimum payments over the life of the agreement, generally ranging from five to ten years .

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

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

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

As of both December 31, 2024 and 2023, AENB held shares with a carrying value of $ 132 million, with the remaining half subject to call by the Federal Reserve District Bank Board, the likelihood of which we believe is remote.

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The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of December 31:

FAIR VALUE OF DERIVATIVE ASSETS AND LIABILITIES

Other Assets Fair Value Other Liabilities Fair Value

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The following table presents the gains and losses recognized in Interest expense on the Consolidated Statements of Income associated with the fair value hedges of our fixed-rate long-term debt for the years ended December 31:

GAINS AND LOSSES ASSOCIATED WITH FAIR VALUE HEDGES ON FIXED-RATE LONG TERM DEBT

Gains (losses)

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The carrying values of the hedged liabilities, recorded within Long-term debt on the Consolidated Balance Sheets, were $ 18.9 billion and $ 11.7 billion as of December 31, 2024 and 2023, respectively, including the cumulative amount of fair value hedging adjustments of $ 27 million and $ 53 million for the respective periods.

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

We recognized in Interest expense on Long-term debt net increases of $ 254 million and $ 189 million for the years ended December 31, 2024 and 2023, respectively and a net decrease of $ 57 million for the year ended December 31, 2022.

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

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We had notional amounts of approximately $ 14.3 billion and $ 14.1 billion of foreign currency derivatives designated as net investment hedges as of December 31, 2024 and 2023, respectively.

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

The gain or loss on net investment hedges, net of taxes, recorded in AOCI as part of the cumulative translation adjustment, was a gain of $ 816 million, a loss of $ 640 million and a gain of $ 237 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Net investment hedge reclassifications out of AOCI into the Consolidated Statements of Income were no t significant for the years ended December 31, 2024, 2023 and 2022, respectively.

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Foreign currency contracts involve the purchase and sale of designated currencies at an agreed upon rate for settlement on a specified date.

The changes in the fair value of derivatives that are not designated as hedges are intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures.

The changes in the fair value of derivatives that are not designated as hedges are primarily intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures.

We had notional amounts of approximately $ 28.8 billion and $ 25.3 billion as of December 31, 2024 and 2023, respectively.

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

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

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

The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in net gains of $ 102 million, $ 82 million and $ 8 million for the years ended December 31, 2024, 2023 and 2022, respectively, that are recognized in Other, net expenses in the Consolidated Statements of Income.

This embedded derivative had a fair value of $ 31 million and $ 18 million as of December 31, 2024 and 2023, respectively.

The changes in the fair value of the embedded derivative resulted in a gain of $ 13 million, a loss of $ 9 million and a gain of $ 4 million for the years ended December 31, 2024, 2023 and 2022, respectively, which were recognized in Service fees and other revenue in the Consolidated Statements of Income.

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

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The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy (as described in the preceding paragraphs), as of December 31:

FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT FAIR VALUE

(Millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

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FINANCIAL ASSETS AND FINANCIAL LIABILITIES CARRIED AT OTHER THAN FAIR VALUE

The following table summarizes the estimated fair values of our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31, 2023 and 2022.

The following tables summarize the estimated fair values of our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31, 2024 and 2023.

The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of December 31, 2024 and 2023, and require management’s judgment.

These figures may not be indicative of future fair values, nor can the fair value of American Express be estimated by aggregating the amounts presented.

FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST

2024 (Billions)

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143 149 — — 149

Card Member loans HFS

Financial Liabilities:

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The valuation does not include economic value attributable to future receivables generated by the accounts associated with the loans.

Card Member loans HFS

The fair value of Card Member loans HFS is generally determined on an aggregate portfolio basis, using similar methodologies and inputs as those used for estimating the fair value of Card Member loans not HFS, as described above.

Financial Liabilities For Which Carrying Values Equal Or Approximate Fair Value

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

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

The carrying value of equity investments without readily determinable fair values totaled $ 0.9 billion as of both December 31, 2024 and 2023, of which investments representing nonrecurring Level 3 fair value measurement were $ 1 million and nil as of December 31, 2024 and 2023, respectively.

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

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

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

Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $ 1.1 billion as of both December 31, 2024 and 2023, and cumulative unrealized losses were $ 460 million and $ 431 million as of December 31, 2024 and 2023, respectively.

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

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The following table shows authorized shares and provides a reconciliation of common shares issued and outstanding for the years ended December 31:

COMMON SHARES ISSUED AND OUTSTANDING

(Millions, except where indicated) 2024 2023 2022

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

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

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

During 2024, 2023 and 2022, we repurchased 24 million common shares with a cost of $ 5.9 billion, 22 million common shares with a cost of $ 3.5 billion, and 20 million common shares with a cost of $ 3.3 billion, respectively.

The cost includes excise tax and commissions of $ 55 million and $ 32 million in 2024 and 2023, respectively, and commissions of $ 4 million in 2022.

As of December 31, 2024, we had approximately 75 million common shares remaining under the Board share repurchase authorization.

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We have the following perpetual Fixed Rate Reset Noncumulative Preferred Share series issued and outstanding as of December 31, 2024:

PREFERRED SHARES ISSUED AND OUTSTANDING

Issuance date August 3, 2021

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We may redeem the outstanding series of preferred shares at $ 1 million per preferred share (equivalent to $ 1,000 per depositary share) plus any declared but unpaid dividends in whole or in part, from time to time, on any dividend payment date on or after the earliest redemption date, or in whole, but not in part, within 90 days of certain bank regulatory changes.

In 2021, we paid $ 1.6 billion to redeem in full the previously outstanding Series B and Series C preferred shares.

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

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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Changes in each component for the three years ended December 31 were as follows:

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

As of or for the years ended December 31,

(Millions) , net of tax

2024 2023 2022 2021

Ending Balance

Net Change Ending Balance

Net Unrealized Gains (Losses) on Debt

Securities Foreign Currency

Translation Adjustment

Gains (Losses), Net of Hedges (a)

Net Unrealized Pension

and Other Postretirement Benefit

Gains (Losses) Accumulated Other

Comprehensive Income (Loss)

Balances as of December 31, 2020 $ 65 $ ( 2,229 ) $ ( 731 ) $ ( 2,895 )

Net change ( 42 ) ( 163 ) 155 ( 50 )

Balances as of December 31, 2021 23 ( 2,392 ) ( 576 ) ( 2,945 )

Net change ( 87 ) ( 230 ) 52 ( 265 )

Balances as of December 31, 2022 ( 64 ) ( 2,622 ) ( 524 ) ( 3,210 )

Net change 50 51 37 138

Balances as of December 31, 2023 $ ( 14 ) $ ( 2,571 ) $ ( 487 ) $ ( 3,072 )

$ ( 9 ) $ 5 $ ( 14 ) $ 50 $ ( 64 ) $ ( 87 ) $ 23

Foreign Currency Translation Adjustment Gains (Losses), Net of Hedges (a)

( 2,924 ) ( 353 ) ( 2,571 ) 51 ( 2,622 ) ( 230 ) ( 2,392 )

Net unrealized pension and other postretirement benefit gains (losses)

( 462 ) 25 ( 487 ) 37 ( 524 ) 52 ( 576 )

Accumulated other comprehensive income (loss) $ ( 3,395 ) $ ( 323 ) $ ( 3,072 ) $ 138 $ ( 3,210 ) $ ( 265 ) $ ( 2,945 )

(a) Refer to Note 13 for additional information on hedging activity.

The following table shows the tax impact for the years ended December 31 for the changes in each component of AOCI presented above:

TAX IMPACT FOR CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Tax expense (benefit)

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The following is a detail of Service fees and other revenue for the years ended December 31:

COMPONENTS OF SERVICE FEES AND OTHER REVENUE

(Millions) 2024 2023 2022

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The following is a detail of Other expenses for the years ended December 31:

COMPONENTS OF OTHER EXPENSE

(Millions) 2024 2023 2022

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Professional services 2,274 2,029 2,074

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

152 302 ( 767 )

Gain on sale of Accertify (a)

1,733 1,973 1,801

Total Other expenses $ 6,364 $ 6,807 $ 6,481

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

(a) Refer to Note 1 for additional information.

RESTRUCTURING

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

COMPONENTS OF INCOME TAX EXPENSE

(Millions) 2024 2023 2022

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federal statutory rate of 21 percent as of December 31, 2024, 2023 and 2022, to our actual income tax rate was as follows:

RECONCILIATION OF ACTUAL INCOME TAX RATE

2024 2023 2022

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The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table:

COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES

(Millions) 2024 2023

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Deferred interest 113 114

Investment in joint ventures

Other 579 566

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We are currently under examination by the IRS for the 2017 and 2018 tax years.

In December 2024, we received a Notice of Proposed Adjustment (Notice) from the IRS regarding transfer pricing between our U.S.

and foreign subsidiaries for the 2017 and 2018 tax years currently under examination.

The Notice proposes an increase to our U.S.

taxable income that would result in an additional estimated U.S.

federal income tax payment of approximately $ 185 million for 2017 and 2018, excluding interest and state income taxes, and asserts penalties of approximately $ 50 million for the same period.

Although the Notice only applies to the 2017 and 2018 tax years currently under examination, the IRS may seek similar adjustments for subsequent tax years.

We strongly disagree with the IRS’s positions and plan to pursue all available remedies to vigorously contest the adjustments made by the IRS.

We believe our income tax reserves are appropriate for all open tax years and that final resolution of this matter will not have a material impact on our results of operations.

However, the ultimate outcome of this matter is uncertain, and if we are required to pay the IRS additional U.S.

taxes, interest and/or potential penalties, our results of operations could be materially affected for the period in which the matter is resolved.

The following table presents changes in unrecognized tax benefits:

ROLLFORWARD OF UNRECOGNIZED TAX BENEFITS

(Millions) 2024 2023 2022

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EARNINGS PER COMMON SHARE (EPS)

EPS is calculated using the two-class method.

Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities.

Undistributed earnings are calculated after deducting dividends on preferred shares, common shares and RSUs.

RSUs granted under our 2016 Incentive Compensation Plan entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends on common shares.

These unvested awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities and are not included in computing basic EPS.

Diluted EPS is also calculated under the treasury stock method and the more dilutive amount is reported.

Participating securities are not included as incremental shares in computing diluted EPS.

The computations of basic and diluted EPS for the years ended December 31 were as follows:

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

(Millions, except per share amounts)

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Preferred dividends ( 58 ) ( 58 ) ( 57 )

Equity-related adjustments (a)

Net income available to common shareholders 10,071 8,316 7,457

Earnings allocated to participating share awards (b)

Earnings allocated to participating share awards

( 76 ) ( 64 ) ( 57 )

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Weighted-average common stock

Weighted-average stock options (c)

Weighted-average stock options (a)

$ 14.04 $ 11.23 $ 9.86

Diluted EPS $ 14.01 $ 11.21 $ 9.85

(a) Represents the difference between the redemption value and carrying value of the Series C and Series B preferred shares, which were redeemed on September 15, 2021 and November 15, 2021, respectively.

The carrying value represents the original issuance proceeds, net of underwriting fees and offering costs for the preferred shares.

(b) Our unvested restricted stock awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered participating securities.

Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities.

The related participating securities are similarly excluded from the denominator.

(c) The dilutive effect of unexercised stock options excludes from the computation of EPS 1.38 million, 0.39 million and 0.01 million of options for the years ended December 31, 2023, 2022 and 2021, respectively, because inclusion of the options would have been anti-dilutive.

(a) The dilutive effect of unexercised stock options excludes from the computation of EPS 0.05 million, 1.38 million and 0.39 million of options for the years ended December 31, 2024, 2023 and 2022, respectively, because inclusion of the options would have been anti-dilutive.

REGULATORY MATTERS AND CAPITAL ADEQUACY

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

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

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

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

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional, discretionary actions by regulators, that, if undertaken, could have a direct material effect on our operating activities.

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The following table presents the regulatory capital ratios:

REGULATORY CAPITAL RATIOS

(Millions, except percentages) CET 1

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ratio Tier 1 leverage

ratio Supplementary

December 31, 2024:

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December 31, 2023:

American Express Company $ 20,030 $ 21,627 $ 24,926 10.3 % 11.1 % 12.8 % 9.9 %

American Express National Bank $ 14,820 $ 14,820 $ 17,273 11.3 % 11.3 % 13.2 % 9.7 %

Well-capitalized ratios (b)

American Express Company N/A 6.0 % 10.0 % N/A

American Express National Bank 6.5 % 8.0 % 10.0 % 5.0 %

Minimum capital ratios (c)

American Express Company $ 23,174 $ 24,779 $ 28,784 10.5 % 11.3 % 13.1 % 9.9 % (b)

American Express National Bank $ 17,038 $ 17,038 $ 19,548 11.6 % 11.6 % 13.3 % 9.5 % (b)

Well-capitalized ratios (c)

American Express Company N/A 6.0 % 10.0 % N/A N/A

American Express National Bank 6.5 % 8.0 % 10.0 % 5.0 % N/A

Minimum capital ratios (d)

4.5 % 6.0 % 8.0 % 4.0 % 3.0 %

Effective Minimum (d)

Effective Minimum (e)

American Express Company 7.0 % 8.5 % 10.5 % 4.0 % 3.0 %

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(a) Capital ratios reported using Basel III capital definitions and risk-weighted assets using the Basel III standardized approach.

(b) Represents requirements for bank holding companies and banking subsidiaries to be considered “well capitalized” pursuant to regulations issued under the Federal Reserve Regulation Y and the Federal Deposit Insurance Corporation Improvement Act, respectively.

There is no CET1 capital ratio or Tier 1 leverage ratio requirement for a bank holding company to be considered “well capitalized.”

(d) Represents Basel III minimum capital requirement and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer for American Express Company and the capital conservation buffer for American Express National Bank.

(b) We became a Category III firm in the third quarter of 2024 and thus are subject to a minimum SLR of 3 percent beginning with the fourth quarter of 2024.

(c) Represents requirements for bank holding companies and banking subsidiaries to be considered “well capitalized” pursuant to regulations issued under the Federal Reserve Regulation Y and the Federal Deposit Insurance Corporation Improvement Act, respectively.

There is no CET1 capital ratio, Tier 1 leverage ratio or SLR requirement for a bank holding company to be considered “well capitalized.”

(d) As defined by the regulations issued by the Federal Reserve and OCC.

(e) Represents Basel III minimum capital requirement and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer for American Express Company and the capital conservation buffer for American Express National Bank.

RESTRICTED NET ASSETS OF SUBSIDIARIES

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The following table details our maximum credit exposure of the on-balance sheet assets by category as of December 31:

MAXIMUM CREDIT EXPOSURE OF ON-BALANCE SHEET ASSETS

(Billions) 2024 2023

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As of December 31, 2024, we had approximately $ 468 billion of unused credit available to customers, approximately 80 percent of which was related to customers within the United States.

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

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

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

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

REPORTABLE OPERATING SEGMENTS AND GEOGRAPHIC OPERATIONS

REPORTABLE OPERATING SEGMENTS

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

We consider a combination of factors when evaluating the composition of our reportable operating segments, including the results regularly provided to our Chief Executive Officer, who is our chief operating decision maker (CODM), economic characteristics, products and services offered, classes of customers, product distribution channels, geographic considerations (primarily United States versus outside the United States), and regulatory environment considerations.

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

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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.

• Commercial Services (CS), which issues a wide range of proprietary corporate and small business cards and provides services to U.S.

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• International Card Services (ICS), which 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.

• Global Merchant and Network Services (GMNS), which 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.

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

The following table presents certain selected financial information for our reportable operating segments and Corporate & Other as of or for the years ended December 31, 2023, 2022 and 2021:

(Millions, except where indicated) USCS CS ICS GMNS Corporate & Other (a)

Pretax income is used by our CODM to assess the relative performance of our operating segments and their contribution to enterprise profitability.

Decisions on resource allocation by operating segment are made at the enterprise level as a function of strategic priority, operational requirements and expected return on investment of growth opportunities.

The following tables present certain selected financial information for our reportable operating segments and Corporate & Other as of or for the years ended December 31, 2024, 2023 and 2022.

SELECTED FINANCIAL INFORMATION BY SEGMENT

USCS CS ICS GMNS Corporate & Other (a)

Total non-interest revenues $ 20,137 $ 13,219 $ 10,369 $ 6,729 $ ( 48 ) $ 50,406

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Interest expense 3,140 1,734 1,239 ( 703 ) 2,842 8,252

Net interest income 11,290 2,640 1,092 755 ( 234 ) 15,543

Total revenues net of interest expense 31,427 15,859 11,461 7,484 ( 282 ) 65,949

Provisions for credit losses

3,029 1,389 726 42 ( 1 ) 5,185

Total revenues net of interest expense after provisions for credit losses

28,398 14,470 10,735 7,442 ( 281 ) 60,764

Card Member rewards, business development and Card Member services (c)

14,329 6,504 5,243 1,148 43 27,267

3,051 1,319 1,235 411 24 6,040

Salaries and employee benefits and other operating expenses

4,641 3,142 3,226 1,485 2,068 14,562

Total expenses

22,021 10,965 9,704 3,044 2,135 47,869

Pretax income (loss) $ 6,377 $ 3,505 $ 1,031 $ 4,398 $ ( 2,416 ) $ 12,895

Total assets (billions)

$ 114,228 $ 58,969 $ 42,879 $ 17,712 $ 37,673 $ 271,461

USCS CS ICS GMNS Corporate & Other (a)

Total non-interest revenues $ 18,464 $ 12,931 $ 9,472 $ 6,620 $ ( 106 ) $ 47,381

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Interest expense 2,684 1,483 1,118 ( 719 ) 2,283 6,849

Net interest income 9,652 1,845 958 776 ( 97 ) 13,134

Total revenues net of interest expense 28,116 14,776 10,430 7,396 ( 203 ) 60,515

Provisions for credit losses

2,855 1,313 727 27 1 4,923

Total revenues net of interest expense after provisions for credit losses

25,261 13,463 9,703 7,369 ( 204 ) 55,592

Card Member rewards, business development and Card Member services (c)

12,808 6,332 4,588 1,218 46 24,992

2,585 1,090 1,081 437 20 5,213

Salaries and employee benefits and other operating expenses

4,435 3,180 3,061 2,058 2,140 14,874

Total expenses

19,828 10,602 8,730 3,713 2,206 45,079

Pretax income (loss) $ 5,433 $ 2,861 $ 973 $ 3,656 $ ( 2,410 ) $ 10,513

Total assets (billions)

$ 107,158 $ 55,361 $ 42,234 $ 23,714 $ 32,641 $ 261,108

(Millions) USCS CS ICS GMNS Corporate & Other (a)

Total non-interest revenues $ 16,440 $ 12,196 $ 8,262 $ 6,123 $ ( 54 ) $ 42,967

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Interest expense 983 697 654 ( 329 ) 758 2,763

Net interest income 7,474 1,373 799 352 ( 103 ) 9,895

Total revenues net of interest expense 23,914 13,569 9,061 6,475 ( 157 ) 52,862

Provisions for credit losses

1,021 565 584 7 5 2,182

Total revenues net of interest expense after provisions for credit losses

22,893 13,004 8,477 6,468 ( 162 ) 50,680

Card Member rewards, business development and Card Member services (c)

10,791 6,116 3,816 1,192 ( 11 ) 21,904

2,744 1,122 1,146 419 27 5,458

Salaries and employee benefits and other operating expenses

3,958 2,886 2,937 1,903 2,049 13,733

Total expenses

17,493 10,124 7,899 3,514 2,065 41,095

Pretax income (loss) $ 5,400 $ 2,880 $ 578 $ 2,954 $ ( 2,227 ) $ 9,585

Total assets (billions)

$ 94,444 $ 51,411 $ 36,891 $ 20,005 $ 25,603 $ 228,354

1 unchanged sentence

(b) Includes discount revenue, certain service fees and other revenue and processed revenues from customers.

(c) Card Member rewards, business development and Card Member services expenses are generally correlated to volumes or are variable based on usage.

Total Revenues Net of Interest Expense

7 unchanged sentences

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

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

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

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

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

Card Member rewards, Business development and Card Member services expenses, as well as Marketing expenses, are generally included in each segment based on the actual expenses incurred.

Global brand advertising, a component of Marketing expense, is primarily allocated to the segments based on the relative levels of revenue.

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

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

2 unchanged sentences

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

SUMMARY OF TOTAL REVENUE AND PRETAX INCOME BY REGION

(Millions) United States EMEA (a)

61 unchanged sentences

Investments in subsidiaries and affiliates ( 55 ) — ( 1 )

Other investing activities 5 — —

Net cash used in investing activities ( 3,499 ) ( 2,836 ) ( 4,851 )

3 unchanged sentences

Payments of long-term debt ( 7,500 ) ( 5,750 ) ( 5,675 )

Issuance of American Express preferred shares — — 1,584

Redemption of American Express preferred shares — — ( 1,600 )

Issuance of American Express common shares 100 28 56

2 unchanged sentences

Net cash (used in) provided by financing activities ( 6,547 ) ( 1,183 ) 2,380

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

Net (decrease) increase in cash and cash equivalents ( 2,359 ) 1,464 2,847

Cash and cash equivalents at beginning of year 9,652 8,188 5,341

Cash and cash equivalents at end of year $ 7,293 $ 9,652 $ 8,188

Supplemental cash flow information

Years Ended December 31 (Millions)

2023 2022 2021

Non-Cash Investing Activities

Loans to subsidiaries and affiliates $ — $ — $ ( 1,787 )

Non-Cash Financing Activities

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

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data