AMERICAN EXPRESS CO 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (GAAP), and includes those policies and procedures that: • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control —Integrated Framework (2013). Based on management’s assessment and those criteria, we conclude that, as of December 31, 2024, our internal control over financial reporting is effective. PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an audit report appearing on the following page on the effectiveness of our internal control over financial reporting as of December 31, 2024. 92 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of American Express Company Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of American Express Company and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 93 Table of Contents Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Reserves for Credit Losses on Card Member Loans As described in Note 3 to the consolidated financial statements, reserves for credit losses on Card Member loans represent management’s estimate of the expected credit losses in the Company’s outstanding portfolio of Card Member loans as of the balance sheet date. The reserves for credit losses on Card Member loans was $5.7 billion as of December 31, 2024. Management estimates lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period (R&S Period) beyond the balance sheet date. As disclosed by management, in estimating expected credit losses, management uses a combination of statistically-based models that entail a significant amount of judgment. The primary areas of judgment used in measuring the quantitative components of the Company’s reserves relate to the determination of the appropriate R&S Period, the modeling of the probability of and exposure at default, and the methodology to incorporate current and future economic conditions. Management uses these models and assumptions, combined with historical loss experience, to determine the reserve rates that are applied to the outstanding loan balances to produce its reserves for expected credit losses. Within the R&S Period, the Company’s models use past loss experience and current and future economic conditions to estimate the probability of default, exposure at default and expected recoveries to estimate net losses at default. Beyond the R&S Period, expected credit losses are estimated by immediately reverting to long-term average loss rates. Management also estimates the likelihood and magnitude of recovery of previously written off loans considering how long ago the loan was written off and future economic conditions. Additionally, management evaluates whether to include qualitative reserves to cover losses that are expected but may not be adequately represented in the quantitative methods or the economic assumptions. The qualitative reserves address possible limitations within the models or factors not included within the models, such as external conditions, emerging portfolio trends, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due accounts, or management risk actions. The principal considerations for our determination that performing procedures relating to the reserves for credit losses on Card Member loans is a critical audit matter are (i) the estimate of the reserves for credit losses on Card Member loans involved significant judgment by management, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the models, significant inputs, qualitative reserves, and significant assumptions, including the R&S Period and the loss rates used to estimate expected credit losses beyond the R&S Period and (ii) the audit effort involved the use of professionals with specialized skill and knowledge. 94 Table of Contents Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the reserves for credit losses on Card Member loans. 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. Membership Rewards Liability As described in Note 9 to the consolidated financial statements, the Membership Rewards liability represents management’s estimate of the cost of Membership Rewards points earned that are expected to be redeemed in the future. The Membership Rewards liability was $14.8 billion as of December 31, 2024. The weighted average cost (WAC) per point and the Ultimate Redemption Rate (URR) are key assumptions used to estimate the liability. As disclosed by management, the URR assumption is used by management to estimate the number of points earned that will ultimately be redeemed in future periods. Management uses statistical and actuarial models to estimate the URR based on redemption trends, card product type, enrollment tenure, card spend levels and credit attributes. The WAC per point assumption is derived from 12 months of redemptions and is adjusted as appropriate for certain changes in redemption costs that are not representative of future cost expectations and expected developments in redemption patterns. The principal considerations for our determination that performing procedures relating to the Membership Rewards liability is a critical audit matter are (i) the estimate of the URR involved significant judgment by management, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the audit evidence relating to the models, significant inputs and assumptions used by management and (ii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the estimate of the Membership Rewards liability, including the URR and WAC assumptions. These procedures also included, among others, (i) testing the completeness and accuracy of significant inputs to the statistical and actuarial models used to estimate the URR assumption, including redemption trends, card product type, enrollment tenure, and card spend levels, (ii) the involvement of professionals with specialized skill and knowledge to assist in developing an independent estimate of the URR assumption and comparing the independent estimate to management’s assumption to evaluate its reasonableness and (iii) comparing our independently calculated Membership Rewards liability to management’s estimate. /s/ PricewaterhouseCoopers LLP New York, New York February 7, 2025 We have served as the Company’s auditor since 2005. 95 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS PAGE Consolidated Statements of Income – For the Years Ended December 31, 2024, 2023 and 2022 97 Consolidated Statements of Comprehensive Income – For the Years Ended December 31, 2024, 2023 and 2022 98 Consolidated Balance Sheets – December 31, 2024 and 2023 99 Consolidated Statements of Cash Flows – For the Years Ended December 31, 2024, 2023 and 2022 100 Consolidated Statements of Shareholders’ Equity – For the Years Ended December 31, 2024, 2023 and 2022 101 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 102 Note 1 – Summary of Significant Accounting Policies 102 Note 2 – Loans and Card Member Receivables 108 Note 3 – Reserves for Credit Losses 118 Note 4 – Investment Securities 121 Note 5 – Asset Securitizations 124 Note 6 – Other Assets 125 Note 7 – Customer Deposits 127 Note 8 – Debt 128 Note 9 – Other Liabilities 131 Note 1 0 – Stock -Based Compensation 132 Note 1 1 – Retirement Plans 135 Note 1 2 – Contingencies and Commitments 136 Note 1 3 – Derivatives and Hedging Activities 139 Note 1 4 – Fair Values 142 Note 1 5 – Guarantees 147 Note 1 6 – Common and Preferred Shares 147 Note 17 – Changes in Accumulated Other Comprehensive Income (Loss) 149 Note 18 – Service Fees and Other Revenue and Other Expenses 150 Note 19 – Restructuring 150 Note 20 – Income Taxes 151 Note 21 – Earnings Per Common Share (EPS) 154 Note 22 – Regulatory Matters and Capital Adequacy 155 Note 23 – Significant Credit Concentrations 157 Note 24 – Reportable Operating Segments and Geographic Operations 158 Note 25 – Parent Company 161 96 Table of Contents CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31 (Millions, except per share amounts) 2024 2023 2022 Revenues Non-interest revenues Discount revenue $ 35,192 $ 33,416 $ 30,739 Net card fees 8,449 7,255 6,070 Service fees and other revenue 5,129 5,005 4,521 Processed revenue 1,636 1,705 1,637 Total non-interest revenues 50,406 47,381 42,967 Interest income Interest on loans 21,095 17,697 11,967 Interest and dividends on investment securities 86 128 96 Deposits with banks and other 2,614 2,158 595 Total interest income 23,795 19,983 12,658 Interest expense Deposits 5,695 4,865 1,527 Long-term debt and other 2,557 1,984 1,236 Total interest expense 8,252 6,849 2,763 Net interest income 15,543 13,134 9,895 Total revenues net of interest expense 65,949 60,515 52,862 Provisions for credit losses Card Member receivables 774 880 627 Card Member loans 4,109 3,839 1,514 Other 302 204 41 Total provisions for credit losses 5,185 4,923 2,182 Total revenues net of interest expense after provisions for credit losses 60,764 55,592 50,680 Expenses Card Member rewards 16,599 15,367 14,002 Business development 5,886 5,657 4,943 Card Member services 4,782 3,968 2,959 Marketing 6,040 5,213 5,458 Salaries and employee benefits 8,198 8,067 7,252 Other, net 6,364 6,807 6,481 Total expenses 47,869 45,079 41,095 Pretax income 12,895 10,513 9,585 Income tax provision 2,766 2,139 2,071 Net income $ 10,129 $ 8,374 $ 7,514 Earnings per Common Share — (Note 21) (a) Basic $ 14.04 $ 11.23 $ 9.86 Diluted $ 14.01 $ 11.21 $ 9.85 Average common shares outstanding for earnings per common share: Basic 712 735 751 Diluted 713 736 752 (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. 97 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31 (Millions) 2024 2023 2022 Net income $ 10,129 $ 8,374 $ 7,514 Other comprehensive income (loss): Net unrealized debt securities gains (losses), net of tax 5 50 ( 87 ) Foreign currency translation adjustments, net of hedges and tax ( 353 ) 51 ( 230 ) Net unrealized pension and other postretirement benefits, net of tax 25 37 52 Other comprehensive income (loss) ( 323 ) 138 ( 265 ) Comprehensive income $ 9,806 $ 8,512 $ 7,249 See Notes to Consolidated Financial Statements. 98 Table of Contents CONSOLIDATED BALANCE SHEETS December 31 (Millions, except share data) 2024 2023 Assets Cash and cash equivalents Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2024, $ 6 ; 2023, nil ) $ 3,413 $ 7,118 Interest-bearing deposits in other banks 37,006 39,312 Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2024, $ 82 ; 2023, $ 66 ) 221 166 Total cash and cash equivalents (includes restricted cash: 2024, $ 427 ; 2023, $ 514 ) 40,640 46,596 Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2024, $ 3,927 ; 2023, $ 4,587 ), less reserves for credit losses: 2024, $ 171 ; 2023, $ 174 59,240 60,237 Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2024, $ 28,278 ; 2023, $ 28,590 ), less reserves for credit losses: 2024, $ 5,679 ; 2023, $ 5,118 133,995 120,877 Card Member loans held for sale 758 — Other loans, less reserves for credit losses: 2024, $ 194 ; 2023, $ 126 9,038 6,960 Investment securities 1,240 2,186 Premises and equipment, less accumulated depreciation and amortization: 2024, $ 10,739 ; 2023, $ 9,911 5,371 5,138 Other assets, less reserves for credit losses: 2024, $ 27 ; 2023, $ 27 21,179 19,114 Total assets $ 271,461 $ 261,108 Liabilities and Shareholders’ Equity Liabilities Customer deposits $ 139,413 $ 129,144 Accounts payable 13,884 13,109 Short-term borrowings 1,374 1,293 Long-term debt (includes debt issued by consolidated variable interest entities: 2024, $ 13,880 ; 2023, $ 13,426 ) 49,715 47,866 Other liabilities 36,811 41,639 Total liabilities $ 241,197 $ 233,051 Contingencies and Commitments (Note 12) Shareholders’ Equity Preferred shares, $1.66 2/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2024 and 2023 (Note 16) — — Common shares, $ 0.20 par value, authorized 3.6 billion shares; issued and outstanding 702 million shares as of December 31, 2024 and 723 million shares as of December 31, 2023 141 145 Additional paid-in capital 11,370 11,372 Retained earnings 22,148 19,612 Accumulated other comprehensive income (loss) ( 3,395 ) ( 3,072 ) Total shareholders’ equity 30,264 28,057 Total liabilities and shareholders’ equity $ 271,461 $ 261,108 See Notes to Consolidated Financial Statements. 99 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31 (Millions) 2024 2023 2022 Cash Flows from Operating Activities Net income $ 10,129 $ 8,374 $ 7,514 Adjustments to reconcile net income to net cash provided by operating activities: Provisions for credit losses 5,185 4,923 2,182 Depreciation and amortization 1,676 1,651 1,626 Stock-based compensation 504 450 375 Deferred taxes ( 990 ) ( 1,329 ) ( 1,189 ) Other items (a) ( 564 ) 664 365 Originations of loans held-for-sale — ( 54 ) ( 277 ) Proceeds from sales of loans held-for-sale — 59 277 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Other assets 1,007 ( 1,244 ) 1,391 Accounts payable & other liabilities ( 2,897 ) 5,065 8,815 Net cash provided by operating activities 14,050 18,559 21,079 Cash Flows from Investing Activities Sale of investments 42 2 26 Maturities and redemptions of investments 2,179 3,888 1,892 Purchase of investments ( 1,593 ) ( 1,572 ) ( 4,175 ) Net increase in loans and Card Member receivables, including Card Member loans held for sale (b)(c) ( 23,259 ) ( 25,124 ) ( 29,562 ) Purchase of premises and equipment, net of sales: 2024, $ 6 ; 2023, $ 2 ; 2022, $ 1 ( 1,911 ) ( 1,563 ) ( 1,855 ) 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 in customer deposits 10,305 18,915 25,902 Net increase (decrease) in short-term borrowings (c) 207 ( 105 ) ( 706 ) Proceeds from long-term debt 12,602 15,674 23,230 Payments of long-term debt ( 10,759 ) ( 10,703 ) ( 18,906 ) Issuance of American Express common shares 100 28 56 Repurchase of American Express common shares and other ( 6,020 ) ( 3,650 ) ( 3,502 ) Dividends paid ( 1,999 ) ( 1,780 ) ( 1,565 ) 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 (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) 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. (c) Excludes an increase of $ 117 million related to non-cash activity during 2023. 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. See Notes to Consolidated Financial Statements. 100 Table of Contents CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Millions, except per share amounts) Total Preferred Shares Common Shares Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Balances as of December 31, 2021 $ 22,177 $ — $ 153 $ 11,495 $ ( 2,945 ) $ 13,474 Net income 7,514 — — — — 7,514 Other comprehensive income (loss) ( 265 ) — — — ( 265 ) — Repurchase of common shares ( 3,332 ) — ( 4 ) ( 302 ) — ( 3,026 ) Other changes, including employee plans 242 — — 300 — ( 58 ) Cash dividends declared preferred Series D, $ 35,993.05 per share ( 57 ) — — — — ( 57 ) Cash dividends declared common, $ 2.08 per share ( 1,568 ) — — — — ( 1,568 ) Balances as of December 31, 2022 24,711 — 149 11,493 ( 3,210 ) 16,279 Net income 8,374 — — — — 8,374 Other comprehensive income (loss) 138 — — — 138 — Repurchase of common shares ( 3,519 ) — ( 4 ) ( 334 ) — ( 3,181 ) Other changes, including employee plans 181 — — 213 — ( 32 ) Cash dividends declared preferred Series D, $ 35,993.05 per share ( 58 ) — — — — ( 58 ) Cash dividends declared common, $ 2.40 per share ( 1,770 ) — — — — ( 1,770 ) Balances as of December 31, 2023 28,057 — 145 11,372 ( 3,072 ) 19,612 Net income 10,129 — — — — 10,129 Other comprehensive income (loss) ( 323 ) — — — ( 323 ) — Repurchase of common shares ( 5,857 ) — ( 4 ) ( 377 ) — ( 5,476 ) Other changes, including employee plans 315 — — 375 — ( 60 ) Cash dividends declared preferred Series D, $ 36,288.88 per share ( 58 ) — — — — ( 58 ) Cash dividends declared common, $ 2.80 per share ( 1,999 ) — — — — ( 1,999 ) Balances as of December 31, 2024 $ 30,264 $ — $ 141 $ 11,370 $ ( 3,395 ) $ 22,148 See Notes to Consolidated Financial Statements. 101 Table of Contents NOTES TO CONSOLID ATED FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE C OMPANY 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 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 The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Significant intercompany transactions are eliminated. We consolidate entities in which we hold a “controlling financial interest.” For voting interest entities, we are considered to hold a controlling financial interest when we are able to exercise control over the investees’ operating and financial decisions. For variable interest entities (VIEs), the determination of which is based on the amount and characteristics of the entity’s equity, we are considered to hold a controlling financial interest when we are determined to be the primary beneficiary. A primary beneficiary is the party that has both: (1) the power to direct the activities that most significantly impact that VIE’s economic performance, and (2) the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. Entities in which our voting interest in common equity does not provide it with control, but allows us to exert significant influence over operating and financial decisions, are accounted for under the equity method. We also have investments in equity securities where our voting interest is below the level of significant influence, including investments that we make in non-public companies in the ordinary course of business. Such investments are initially recorded at cost and adjusted to fair value through earnings for observable price changes in orderly transactions for identical or similar instruments of the same company or if they are determined to be impaired. See Note 4 for the accounting policy for our marketable equity securities. FOREIGN CURRENCY Transactions conducted in currencies other than the applicable functional currency of an entity are converted to the functional currency at the exchange rate on the transaction date. At the period end, monetary assets and liabilities are remeasured to the functional currency using period end rates. The resulting transaction gains and losses are recorded in Other, net expenses in the Consolidated Statements of Income. For subsidiaries where the functional currency is not the U.S. dollar, the monetary assets and liabilities and results of operations are translated for consolidation purposes into U.S. dollars at period-end rates for monetary assets and liabilities and generally at average rates for results of operations. The resulting translation adjustments, along with any related qualifying hedge and tax effects, are included in accumulated other comprehensive income (loss) (AOCI), a component of shareholders’ equity. Translation adjustments, including qualifying hedge and tax effects, are reclassified to earnings upon the sale or substantial liquidation of investments in foreign operations. 102 Table of Contents AMOUNTS BASED ON ESTIMATES AND ASSUMPTIONS Accounting estimates are an integral part of the Consolidated Financial Statements. These estimates are based, in part, on management’s assumptions concerning future events. Among the more significant assumptions are those that relate to reserves for Card Member credit losses on loans and receivables, Membership Rewards liability, goodwill and income taxes. These accounting estimates reflect the best judgment of management, but actual results could differ. INCOME STATEMENT Revenue is recognized when obligations under the terms of a contract with our customers are satisfied. 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 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. Discount revenue is generally recorded at the time the Card Member transaction occurs. Card acceptance agreements, which include the agreed-upon terms for charging the merchant discount fee, vary in duration. Our contracts with small- and mid-sized merchants generally have no fixed contractual duration, while those with large merchants are generally for fixed periods, which typically range from three to seven years in duration. Our fixed-period agreements may include auto-renewal features, which may allow the existing terms to continue beyond the stated expiration date until a new agreement is reached. We satisfy our obligations under these agreements over the contract term, often on a daily basis, including through the processing of Card Member transactions and the availability of our payment network. In cases where the merchant acquirer is a third party, we receive a network rate fee in our settlement with the merchant acquirer, which is negotiated between us and that merchant acquirer and is recorded as discount revenue at the time the Card Member transaction occurs. Net Card Fees 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 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. Service Fees and Other Revenue Service fees and other revenue includes service fees earned from merchants and other customers and travel commissions and fees, which are generally recognized in the period when the service is performed, and delinquency and foreign currency-related fees, which are primarily recognized in the period when they are charged to the Card Member. In addition, Service fees and other revenue includes income (losses) from our investments in which we have significant influence and therefore account for under the equity method. Refer to Note 18 for additional information. Processed Revenue Processed revenue primarily represents revenues related to network partnership agreements, comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners. In our role as the operator of the American Express network, we settle with merchants and our third-party merchant acquirers on behalf of our network card issuing partners. The amount of fees charged for accepting American Express-branded cards is generally deducted from the payment to the merchant or third-party merchant acquirer and recorded as Processed revenue at the time the Card Member transaction occurs. 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. 103 Table of Contents Interest Income Interest on Card Member loans is assessed using the average daily balance method. Unless the loan is classified as non-accrual, interest is recognized based upon the principal amount outstanding, in accordance with the terms of the applicable account agreement, until the outstanding balance is paid, or written off. Interest and dividends on investment securities primarily relate to our performing fixed-income securities. Interest income is recognized as earned using the effective interest method, which adjusts the yield for security premiums and discounts, fees and other payments, so that a constant rate of return is recognized on the investment security’s outstanding balance. Amounts are recognized until securities are in default or when it becomes likely that future interest payments will not be made as scheduled. Interest on deposits with banks and other is recognized as earned, and primarily relates to the placement of cash, in excess of near-term funding requirements, in interest-bearing time deposits, overnight sweep accounts, and other interest-bearing demand and call accounts. Interest Expense Interest expense includes interest incurred primarily to fund Card Member loans and receivables, general corporate purposes and liquidity needs, and is recognized as incurred. Interest expense is divided principally into two categories: (i) deposits, which primarily relates to interest expense on deposits taken from customers and institutions and (ii) debt, which primarily relates to interest expense on our long-term debt and short-term borrowings, as well as the realized impact of derivatives used to hedge interest rate risk on our long-term debt. Card Member Rewards We issue credit, charge and debit cards that allow Card Members to participate in various rewards programs (e.g., Membership Rewards, cash back and cobrand). Rewards expense is recognized in the period Card Members earn rewards, generally by spending on their enrolled card products. For Membership Rewards and cash back, we record a liability that represents the rewards that are expected to be redeemed, as well as, for Membership Rewards, the estimated cost of points earned. For cobrand, we record a liability based primarily on rewards earned on Card Member spending on cobrand cards, and make associated payments to our cobrand partners. The partner is liable for providing rewards to the Card Member under the cobrand partner’s own loyalty program. 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 recorded as an increase or decrease to the Card Member rewards expense in the Consolidated Statements of Income. Business Development Business development expense includes payments to our cobrand partners, corporate client incentive payments earned on achievement of pre-set targets and certain payments to network partners. These costs are generally expensed as incurred. Card Member Services 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 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. 104 Table of Contents BALANCE SHEET Cash and Cash Equivalents Cash and cash equivalents include cash and amounts due from banks, interest-bearing bank balances, including securities purchased under resale agreements, restricted cash, and other highly liquid investments with original maturities of 90 days or less. 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 Goodwill represents the excess of the acquisition cost of an acquired business over the fair value of assets acquired and liabilities assumed. We allocate goodwill to our reporting units for the purpose of impairment testing. 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 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. Alternatively, we can perform a more detailed quantitative assessment of goodwill impairment. This qualitative assessment entails the evaluation of factors such as economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other company and reporting unit-specific events. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we then perform the impairment evaluation using the quantitative assessment. The quantitative assessment compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount exceeds the reporting unit’s fair value, an impairment loss is recognized for the amount over and above the reporting unit’s fair value. When measuring the fair value of our reporting units in the quantitative assessment, we use widely accepted valuation techniques, applying a combination of the income approach (discounted cash flows) and market approach (market multiples). When preparing discounted cash flow models under the income approach, we use internal forecasts to estimate future cash flows expected to be generated by the reporting units. To discount these cash flows, we use the expected cost of equity, determined by using a capital asset pricing model. We believe the discount rates appropriately reflect the risks and uncertainties in the financial markets generally and specifically in our internally-developed forecasts. When using market multiples under the market approach, we apply comparable publicly traded companies’ multiples (e.g., earnings or revenues) to our reporting units’ operating results. For the years ended December 31, 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. 105 Table of Contents Premises and Equipment Premises and equipment, including leasehold improvements, are carried at cost less accumulated depreciation. Costs incurred during construction are capitalized and are depreciated once an asset is placed in service. Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 10 years for equipment, furniture and building improvements, and from 40 to 50 years for premises, which are depreciated based upon their estimated useful life at the acquisition date. Certain costs associated with the acquisition or development of internal-use software are also capitalized and recorded in Premises and equipment. Once the specific software feature is ready for its intended use, these costs are amortized on a straight-line basis over the software’s estimated useful life, generally 5 years. We review these assets for impairment using the same impairment methodology used for our intangible assets. Leasehold improvements are depreciated using the straight-line method over the lesser of the remaining term of the leased facility, or the economic life of the improvement, and range from 5 to 10 years. We recognize lease restoration obligations at the fair value of the restoration liabilities when incurred and amortize the restoration assets over the lease term. Leases 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. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs and lease incentives. 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. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. OTHER SIGNIFICANT ACCOUNTING POLICIES The following table identifies our other significant accounting policies, along with the related Note: TABLE 1.1: OTHER SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policy Note Number Note Title Loans and Card Member Receivables Note 2 Loans and Card Member Receivables Reserves for Credit Losses Note 3 Reserves for Credit Losses Investment Securities Note 4 Investment Securities Asset Securitizations Note 5 Asset Securitizations Stock-Based Compensation Note 10 Stock-Based Compensation Legal Contingencies Note 12 Contingencies and Commitments Derivative Financial Instruments and Hedging Activities Note 13 Derivatives and Hedging Activities Fair Value Measurements Note 14 Fair Values Guarantees Note 15 Guarantees Income Taxes Note 20 Income Taxes Earnings Per Common Share Note 21 Earnings Per Common Share CLASSIFICATION OF VARIOUS ITEMS Certain reclassifications of prior period amounts have been made to conform to the current period presentation. 106 Table of Contents RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS 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 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. The updated guidance also requires disclosure of the amount of income taxes paid (net of refunds received) disaggregated by jurisdictional categories (federal (national), state and foreign). We are currently assessing the updated guidance, however it is not expected to have a material impact to our Consolidated Financial Statements. 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. 107 Table of Contents NOTE 2 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 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 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. These loans have varying terms such as credit limits, interest rates, fees and payment structures, which can be revised over time based on new information about Card Members and in accordance with applicable regulations and the respective product’s terms and conditions. Card Member loans are presented on the Consolidated Balance Sheets net of reserves for credit losses (refer to Note 3), and include principal and any related accrued interest and fees. 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 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. 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: TABLE 2.1: CARD MEMBER AND OTHER LOANS (Millions) 2024 2023 Consumer (a) $ 107,646 $ 98,111 Small Business 31,991 27,833 Corporate 37 51 Card Member loans 139,674 125,995 Less: Reserves for credit losses 5,679 5,118 Card Member loans, net $ 133,995 $ 120,877 Other loans, net (b) $ 9,038 $ 6,960 (a) Includes approximately $ 28.3 billion and $ 28.6 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of December 31, 2024 and 2023, respectively. (b) Other loans are presented net of reserves for credit losses of $ 194 million and $ 126 million as of December 31, 2024 and 2023, respectively. 108 Table of Contents 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 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. Card Member receivable balances are presented on the Consolidated Balance Sheets net of reserves for credit losses (refer to Note 3), and include principal and any related accrued fees. Card Member receivables as of December 31, 2024 and 2023 consisted of: TABLE 2.2: CARD MEMBER RECEIVABLES (Millions) 2024 2023 Consumer $ 25,431 $ 25,578 Small Business 18,619 19,286 Corporate (a) 15,361 15,547 Card Member receivables 59,411 60,411 Less: Reserves for credit losses 171 174 Card Member receivables, net $ 59,240 $ 60,237 (a) Includes $ 3.9 billion and $ 4.6 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of December 31, 2024 and 2023, respectively. 109 Table of Contents CARD MEMBER LOANS AND RECEIVABLES AGING 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 tables present the aging of Card Member loans and receivables as of December 31, 2024 and 2023: TABLE 2.3: CARD MEMBER LOANS AND RECEIVABLES AGING 2024 ( Millions ) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total 90+ Days Past Due and Still Accruing Interest (c) Non-Accruals (d) Card Member Loans: Consumer $ 106,155 $ 437 $ 329 $ 725 $ 107,646 $ 435 $ 464 Small Business 31,510 151 107 223 31,991 132 135 Corporate (a) (b) (b) (b) — 37 — — Card Member Receivables: Consumer $ 25,255 $ 58 $ 39 $ 79 $ 25,431 $ — $ — Small Business 18,400 77 54 88 18,619 — — Corporate (a) (b) (b) (b) 65 15,361 — — 2023 ( Millions ) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total 90+ Days Past Due and Still Accruing Interest (c) Non-Accruals (d) Card Member Loans: Consumer $ 96,779 $ 420 $ 298 $ 614 $ 98,111 $ 393 $ 344 Small Business 27,444 133 85 171 27,833 109 95 Corporate (a) (b) (b) (b) — 51 — — Card Member Receivables: Consumer $ 25,355 $ 70 $ 47 $ 106 $ 25,578 $ — $ — Small Business 19,020 104 62 100 19,286 — — Corporate (a) (b) (b) (b) 67 15,547 — — (a) For corporate accounts, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan or receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b). (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. (c) Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe will not be collected. (d) Non-accrual loans primarily include certain loans placed with outside collection agencies for which we have ceased accruing interest. 110 Table of Contents CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES The following table presents the key credit quality indicators as of or for the years ended December 31: TABLE 2.4: CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES 2024 2023 Net Write-Off Rate Net Write-Off Rate Principal Only (a) Principal, Interest & Fees (a) 30+ Days Past Due as a % of Total Principal Only (a) Principal, Interest & Fees (a) 30+ Days Past Due as a % of Total Card Member Loans: Consumer 2.2 % 2.7 % 1.4 % 1.8 % 2.2 % 1.4 % Small Business 2.3 % 2.6 % 1.5 % 1.7 % 1.9 % 1.4 % Card Member Receivables: Consumer 1.2 % 1.3 % 0.7 % 1.5 % 1.6 % 0.9 % Small Business 1.9 % 2.0 % 1.2 % 2.2 % 2.4 % 1.4 % Corporate (b) 0.6 % (c) (b) 0.6 % (c) (a) We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented. (b) Net write-off rate based on principal losses only is not available due to system constraints. (c) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. 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 % 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. 111 Table of Contents 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 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. Our loans and receivables restructurings for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan, which reflects the ongoing effort to support our customer and recover our investment in the existing loan. We offer several types of loans and receivables modification programs to customers experiencing financial difficulty. In such instances, we may modify loans and receivables with the intention to minimize losses and improve collectability, while providing customers with temporary or permanent financial relief. Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (reducing interest rates to as low as zero percent, in which case the loan is characterized as non-accrual) and/or (ii) placing the customer on a fixed payment plan not to exceed 60 months. Upon entering the modification program, the customer’s ability to make future purchases is limited, canceled or, in certain cases, suspended until the customer successfully exits from the modification program. As of December 31, 2024, we had $ 82 million of unused credit available to customers with loans and receivables modified during the year ended December 31, 2024. 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 tables provide information relating to loans and receivables modifications for borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023: TABLE 2.5: LOANS AND RECEIVABLES MODIFICATIONS FOR BORROWERS EXPERIENCING FINANCIAL DIFFICULTY Year Ended December 31, 2024 2024 ( 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 $ 1,770 1.6 % 18.3 % (b) Small Business 646 2.0 % 17.5 % (b) Corporate — — — (b) Term Extension Card Member Receivables Consumer 256 1.0 % (c) 30 Small Business 401 2.2 % (c) 30 Corporate 13 0.1 % (c) 9 Other Loans 30 0.3 % — 18 Interest Rate Reduction and Term Extension Other Loans 56 0.6 % 2.6 % 20 Total $ 3,172 112 Table of Contents 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, 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. 113 Table of Contents 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. TABLE 2.6: MODIFIED LOANS AND RECEIVABLES THAT DEFAULTED WITHIN TWELVE MONTHS OF MODIFICATION Year Ended December 31, 2024 Account Balance ( Millions ) (a) Interest Rate Reduction Term Extension Interest Rate Reduction and Term Extension Total Card Member Loans Consumer $ 88 (b) $ — $ 88 Small Business 40 (b) — 40 Corporate — (b) — — Card Member Receivables Consumer (c) $ 10 — 10 Small Business (c) 17 — 17 Corporate (c) — — — Other Loans — — 2 2 Total $ 128 $ 27 $ 2 $ 157 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. 114 Table of Contents 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: TABLE 2.7: PERFORMANCE OF MODIFIED LOANS AND RECEIVABLES As of December 31, 2024 Account Balances ( Millions ) (a) Current 30-89 Days Past Due 90+ Days Past Due Card Member Loans Consumer $ 1,615 $ 110 $ 45 Small Business 568 56 22 Corporate — — — Card Member Receivables: Consumer 234 16 6 Small Business 357 31 13 Corporate 10 2 1 Other Loans 79 5 2 Total $ 2,863 $ 220 $ 89 As of December 31, 2023 Account Balances ( Millions ) (a) Current 30-89 Days Past Due 90+ Days Past Due Card Member Loans Consumer $ 1,433 $ 103 $ 36 Small Business 489 45 16 Corporate — — — Card Member Receivables: Consumer 314 25 7 Small Business 479 52 12 Corporate 11 2 — Other Loans 59 4 2 Total $ 2,785 $ 231 $ 73 (a) The outstanding balances include principal, fees and accrued interest on loans and principal and fees on receivables. 115 Table of Contents 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. 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: TABLE 2.8: IMPAIRED LOANS AND RECEIVABLES As of December 31, 2022 Accounts Classified as a TDR (c) 2022 ( Millions ) Over 90 days Past Due & Accruing Interest (a) Non- Accruals (b) In Program (d) Out of Program (e) Total Impaired Balance Reserve for Credit Losses- TDRs Card Member Loans Consumer $ 252 $ 155 $ 781 $ 1,098 $ 2,286 $ 335 Small Business 54 34 267 380 735 108 Corporate — — — — — — Card Member Receivables Consumer — — 257 179 436 20 Small Business — — 403 402 805 40 Corporate — — 6 7 13 1 Other Loans 3 2 19 2 26 — Total $ 309 $ 191 $ 1,733 $ 2,068 $ 4,301 $ 504 (a) Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe will not be collected. Amounts presented exclude loans classified as a TDR. (b) Non-accrual loans not in modification programs primarily include certain loans placed with outside collection agencies for which we have ceased accruing interest. Amounts presented exclude loans classified as TDRs. (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 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. 116 Table of Contents LOANS AND RECEIVABLES MODIFIED AS TDRs PRIOR TO ADOPTION OF THE NEW LOAN MODIFICATION GUIDANCE The following table provides additional information with respect to loans and receivables that were modified as TDRs during the year ended December 31, 2022: TABLE 2.9: LOANS AND RECEIVABLES MODIFIED AS TDRs 2022 Number of Accounts (Thousands) Account Balances (Millions) (a) Average Interest Rate Reduction (% points) Average Payment Term Extensions (# of months) Troubled Debt Restructurings: Card Member Loans 149 $ 1,002 14 % (b) Card Member Receivables 27 900 (c) 20 Other Loans (d) 4 8 2 % 17 Total 180 $ 1,910 (a) Represents the outstanding balance immediately prior to modification. The outstanding balance includes principal, fees and accrued interest on loans and principal and fees on receivables. Modifications did not reduce the principal balance. (b) For Card Member loans, there have been no payment term extensions. (c) We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing. (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. TABLE 2.10: LOANS AND RECEIVABLES MODIFIED AS TDRs THAT DEFAULTED WITHIN TWELVE MONTHS OF MODIFICATION 2022 Number of Accounts (Thousands) Aggregated Outstanding Balances Upon Default (Millions) (a) Troubled Debt Restructurings That Subsequently Defaulted: Card Member Loans 14 $ 81 Card Member Receivables 3 38 Other Loans (b) 1 1 Total 18 $ 120 (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 installment loans and lines of credit offered to small business customers. 117 Table of Contents NOTE 3 RESERVES FOR CREDIT LOSSES Reserves for credit losses represent our best estimate of the expected credit losses in our outstanding portfolio of Card Member loans and receivables as of the balance sheet date. The CECL methodology requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period (R&S Period), which is approximately three years , beyond the balance sheet date. We make various judgments combined with historical loss experience to determine a reserve rate that is applied to the outstanding loan or receivable balance to produce a reserve for expected credit losses . We use a combination of statistically-based models that incorporate current and future economic conditions throughout the R&S Period. The process of estimating expected credit losses is based on several key models: Probability of Default (PD), Exposure at Default (EAD) and future recoveries for each month of the R&S Period. Beyond the R&S Period, we estimate expected credit losses by immediately reverting to long-term average loss rates. • PD models are used to estimate the likelihood an account will be written-off. • EAD models are used to estimate the balance of an account at the time of write-off. This includes balances less expected repayments based on historical payment and revolve behavior, which vary by customer. Due to the nature of revolving loan portfolios, the EAD models are complex and involve assumptions regarding the relationship between future spend and payment behaviors. • Recovery models are used to estimate amounts that are expected to be received from Card Members after default occurs, typically as a result of collection efforts. Future recoveries are estimated taking into consideration the time of default, time elapsed since default and macroeconomic conditions. We also estimate the likelihood and magnitude of recovery of previously written off accounts considering how long ago the account was written off and future economic conditions, even if such expected recoveries exceed expected losses. Our models are developed using historical loss experience covering the economic cycle and consider the impact of account characteristics on expected losses. This history includes the performance of loans and receivables modifications for borrowers experiencing financial difficulty, including their subsequent defaults. Future economic conditions that are incorporated over the R&S Period include multiple macroeconomic scenarios provided to us by an independent third party. Management reviews these economic scenarios each period and assigns probability weights to each scenario, generally with a consistent initial distribution. At times, due to macroeconomic uncertainty and volatility, management may apply judgment and assign different probability weights to scenarios. These macroeconomic scenarios contain certain variables, including unemployment rates and real gross domestic product (GDP), that are significant to our models. We also evaluate whether to include qualitative reserves to cover losses that are expected but, in our assessment, may not be adequately represented in the quantitative methods or the economic assumptions. We consider whether to adjust the quantitative reserves (higher or lower) to address possible limitations within the models or factors not included within the models, such as external conditions, emerging portfolio trends, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due accounts, or management risk actions. Lifetime losses for most of our loans and receivables are evaluated at an appropriate level of granularity, including assessment on a pooled basis where financial assets share similar risk characteristics, such as past spend and remittance behaviors, credit bureau scores where available, delinquency status, tenure of balance outstanding, amongst others. 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. 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. Loans and receivables in bankruptcy or owed by deceased individuals are generally written off upon notification. 118 Table of Contents The following table reflects the range of macroeconomic scenario key variables used, in conjunction with other inputs, to calculate reserves for credit losses: TABLE 3.1: KEY MACROECONOMIC VARIABLES U.S. Unemployment Rate U.S. GDP Growth (Contraction) (a) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Fourth quarter of 2024 4 % 3 % - 8 % 2 % 3 % - 1 % First quarter of 2025 4 % - 6 % 3 % - 8 % 4 % - ( 3 )% 2 % - 1 % Fourth quarter of 2025 3 % - 8 % 3 % - 7 % 3 % - 1 % 2 % Fourth quarter of 2026 3 % - 7 % 3 % - 6 % 2 % 3 % - 2 % (a) Real GDP quarter over quarter percentage change seasonally adjusted to annualized rates. 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. The following table presents changes in the Card Member loans reserve for credit losses for the years ended December 31: TABLE 3.2: CHANGES IN CARD MEMBER LOANS RESERVE FOR CREDIT LOSSES (Millions) 2024 2023 2022 Beginning Balance $ 5,118 $ 3,747 $ 3,305 Provisions (a) 4,109 3,839 1,514 Net write-offs (b) Principal ( 2,894 ) ( 2,043 ) ( 837 ) Interest and fees ( 621 ) ( 443 ) ( 229 ) Other (c) ( 33 ) 18 ( 6 ) Ending Balance $ 5,679 $ 5,118 $ 3,747 (a) Provisions for principal, interest and fee reserve components. 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 $( 33 ) million, $ 18 million and $( 6 ) million for the years ended December 31, 2024, 2023 and 2022, respectively. 119 Table of Contents 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. The following table presents changes in the Card Member receivables reserve for credit losses for the years ended December 31: TABLE 3.3: CHANGES IN CARD MEMBER RECEIVABLES RESERVE FOR CREDIT LOSSES (Millions) 2024 2023 2022 Beginning Balance $ 174 $ 229 $ 64 Provisions (a) 774 880 627 Net write-offs (b) ( 773 ) ( 937 ) ( 462 ) Other (c) ( 4 ) 2 — Ending Balance $ 171 $ 174 $ 229 (a) Provisions for principal and fee reserve components. Provisions for credit losses includes reserve build (release) and replenishment for net write-offs. (b) Net write-offs are presented less recoveries of $ 304 million, $ 297 million and $ 257 million for the years ended December 31, 2024, 2023 and 2022, respectively. (c) Primarily includes foreign currency translation adjustments of $( 4 ) million, $ 1 million and $ 2 million for the years ended December 31, 2024, 2023 and 2022, respectively. 120 Table of Contents NOTE 4 INVESTMENT SECURITIES 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. If our assessment indicates that an estimated credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the estimated credit loss through the Consolidated Statements of Income in Other loans Provision for credit losses. 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 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. Realized gains and losses are recognized upon disposition of the securities using the specific identification method and recorded in the Consolidated Statements of Income as Other, net expense. Refer to Note 14 for a description of our methodology for determining the fair value of investment securities. The following is a summary of investment securities as of December 31: TABLE 4.1: INVESTMENT SECURITIES 2024 2023 Description of Securities (Millions) Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale debt securities: State and municipal obligations $ 57 $ 1 $ ( 9 ) $ 49 $ 61 $ — $ ( 6 ) $ 55 U.S. Government agency obligations 4 — — 4 4 — — 4 U.S. Government treasury obligations 289 — ( 2 ) 287 1,217 1 ( 12 ) 1,206 Mortgage-backed securities (a) 11 — ( 1 ) 10 12 — ( 1 ) 11 Foreign government bonds and obligations 765 — — 765 770 — — 770 Other (b) 77 — — 77 74 — — 74 Equity securities (c)(d) 53 4 ( 9 ) 48 60 16 ( 10 ) 66 Total $ 1,256 $ 5 $ ( 21 ) $ 1,240 $ 2,198 $ 17 $ ( 29 ) $ 2,186 (a) Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. (b) Represents investments in debt securities issued by Community Development Financial Institutions. (c) Equity securities comprise investments in common stock and mutual funds. (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. 121 Table of Contents 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: TABLE 4.2: AFS DEBT SECURITIES WITH GROSS UNREALIZED LOSSES BY DURATION 2024 2023 Less than 12 months 12 months or more Less than 12 months 12 months or more Description of Securities (Millions) Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses State and municipal obligations $ — $ — $ 22 $ ( 9 ) $ — $ — $ 33 $ ( 6 ) U.S. Government treasury obligations — — 123 ( 2 ) — — 1,114 ( 12 ) Mortgage-backed securities — — 7 ( 1 ) — — 7 ( 1 ) Total $ — $ — $ 152 $ ( 12 ) $ — $ — $ 1,154 $ ( 19 ) 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 AFS debt securities by ratio of fair value to amortized cost as of December 31, 2024 and 2023: TABLE 4.3: AFS GROSS UNREALIZED LOSSES BY RATIO OF FAIR VALUE TO AMORTIZED COST Less than 12 months 12 months or more Total Ratio of Fair Value to Amortized Cost (Dollars in millions) Number of Securities Estimated Fair Value Gross Unrealized Losses Number of Securities Estimated Fair Value Gross Unrealized Losses Number of Securities Estimated Fair Value Gross Unrealized Losses 2024: 90%–100% — $ — $ — 30 $ 129 $ ( 3 ) 30 $ 129 $ ( 3 ) Less than 90% — — — 15 23 ( 9 ) 15 23 ( 9 ) Total as of December 31, 2024 — $ — $ — 45 $ 152 $ ( 12 ) 45 $ 152 $ ( 12 ) 2023: 90%–100% — $ — $ — 69 $ 1,140 $ ( 14 ) 69 $ 1,140 $ ( 14 ) Less than 90% — — — 2 14 ( 5 ) 2 14 ( 5 ) Total as of December 31, 2023 — $ — $ — 71 $ 1,154 $ ( 19 ) 71 $ 1,154 $ ( 19 ) 122 Table of Contents Weighted average yields and contractual maturities for AFS debt securities with stated maturities as of December 31, 2024 were as follows: TABLE 4.4: 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 State and municipal obligations (a) $ — $ — $ 23 $ 26 $ 49 U.S. Government agency obligations (a) — — — 4 4 U.S. Government treasury obligations 189 98 — — 287 Mortgage-backed securities (a)(b) — — — 10 10 Foreign government bonds and obligations 764 1 — — 765 Other (c) — 67 10 — 77 Total Estimated Fair Value $ 953 $ 166 $ 33 $ 40 $ 1,192 Total Cost $ 955 $ 166 $ 32 $ 50 $ 1,203 Weighted average yield (d) 5.33 % 3.71 % 4.81 % 2.73 % 4.98 % (a) The expected payments on state and municipal obligations, U.S. Government agency obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations. (b) Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. (c) Represents investments in debt securities issued by Community Development Financial Institutions. (d) Average yields for investment securities have been calculated using the effective yield on the date of purchase. Yields on tax-exempt investment securities have been computed on a tax-equivalent basis using the U.S. federal statutory tax rate of 21 percent. 123 Table of Contents NOTE 5 ASSET SECURITIZATIONS We periodically securitize Card Member loans and receivables arising from our card businesses through the transfer of those assets to securitization trusts, American Express Credit Account Master Trust (the Lending Trust) and American Express Issuance Trust II (the Charge Trust and together with the Lending Trust, the Trusts). The Trusts then issue debt securities collateralized by the transferred assets to third-party investors. The Trusts are considered VIEs as they have insufficient equity at risk to finance their activities, which are to issue debt securities that are collateralized by the underlying Card Member loans and receivables. Refer to Note 1 for further details on the principles of consolidation. We perform the servicing and key decision making for the Trusts, and therefore have the power to direct the activities that most significantly impact the Trusts’ economic performance, which are the collection of the underlying Card Member loans and receivables. In addition, we hold all of the variable interests in both Trusts, with the exception of the debt securities issued to third-party investors. Our ownership of variable interests in the Lending Trust was $ 14.6 billion and $ 15.3 billion as of December 31, 2024 and 2023, respectively, and in the Charge Trust was $ 3.9 billion and $ 4.6 billion as of December 31, 2024 and 2023, respectively. These variable interests held by us provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to both the Lending Trust and the Charge Trust. Based on these considerations, we are the primary beneficiary of the Trusts and therefore consolidate the Trusts. The debt securities issued by the Trusts are non-recourse to us. The securitized Card Member loans and receivables held by the Lending Trust and the Charge Trust, respectively, are available only for payment of the debt securities or other obligations issued or arising in the securitization transactions (refer to Note 2). The long-term debt of each Trust is payable only out of collections on their respective underlying securitized assets (refer to Note 8). Restricted cash and cash equivalents held by the Lending Trust was $ 88 million and $ 66 million as of December 31, 2024 and 2023, respectively, and by the Charge Trust was nil as of both December 31, 2024 and 2023. These amounts relate to collections of Card Member loans and receivables to be used by the Trusts to fund future expenses and obligations, including interest on debt securities, credit losses and upcoming debt maturities. Under the respective terms of the Lending Trust and the Charge Trust agreements, the occurrence of certain triggering events associated with the performance of the assets of each Trust could result in payment of trust expenses, establishment of reserve funds, or, in a worst-case scenario, early amortization of debt securities. During the years ended December 31, 2024 and 2023, no such triggering events occurred. 124 Table of Contents NOTE 6 OTHER ASSETS The following is a summary of Other assets as of December 31: TABLE 6.1: OTHER ASSETS (Millions) 2024 2023 Goodwill $ 4,187 $ 3,851 Right-of-use lease assets 804 770 Other intangible assets, at amortized cost 123 98 Other (a) 16,065 14,395 Total $ 21,179 $ 19,114 (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. GOODWILL The changes in the carrying amount of goodwill reported in our reportable operating segments were as follows: TABLE 6.2: GOODWILL ROLLFORWARD (Millions) USCS CS ICS GMNS Total Balance as of December 31, 2022 $ 379 $ 2,122 $ 725 $ 560 $ 3,786 Acquisitions — 30 — 18 48 Dispositions — — — — — Other (a) — ( 1 ) 18 — 17 Balance as of December 31, 2023 $ 379 $ 2,151 $ 743 $ 578 $ 3,851 Acquisitions (b) 394 — — — 394 Dispositions — — — ( 27 ) ( 27 ) Other (a) ( 1 ) ( 3 ) ( 27 ) — ( 31 ) Balance as of December 31, 2024 $ 772 $ 2,148 $ 716 $ 551 $ 4,187 (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. OTHER INTANGIBLE ASSETS Intangible assets are amortized on a straight-line basis over their estimated useful lives of 1 to 22 years. We review long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value. The gross carrying amount for Other intangible assets as of December 31, 2024 and 2023 was $ 642 million and $ 717 million, respectively, with accumulated amortization of $ 519 million and $ 619 million, respectively. Amortization expense was $ 46 million, $ 49 million and $ 51 million for the years ended December 31, 2024, 2023 and 2022, respectively. For Other intangible assets on the Consolidated Balance Sheets as of December 31, 2024, amortization expense is expected to be $ 35 million in 2025, $ 25 million in 2026, $ 23 million in 2027, $ 18 million in 2028, $ 15 million in 2029 and $ 7 million thereafter. 125 Table of Contents TAX CREDIT INVESTMENTS We hold tax credit investments that promote affordable housing, community development, and small businesses that foster economic growth in underserved areas and support compliance with the Community Reinvestment Act by our U.S. bank subsidiary, American Express National Bank (AENB). These investments generate a return primarily through the realization of income tax credits and other income tax benefits. As of December 31, 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. As of December 31, 2024, we committed to provide funding related to certain of our tax credit investments, which is expected to be paid between 2025 and 2040 , resulting in $ 682 million in unfunded commitments reported in Other liabilities, of which $ 401 million specifically related to unconsolidated VIEs. In addition, as of December 31, 2024, we had contractual off-balance sheet obligations to provide additional funding up to $ 4 million for these tax credit investments, fully related to unconsolidated VIEs. We may be required to fund these amounts between 2025 and 2034. The following table presents tax credit investment expenses and associated income tax credits and other income tax benefits for the years ended December 31: TABLE 6.3: TAX CREDIT INVESTMENT EXPENSES, INCOME TAX CREDITS AND OTHER BENEFITS (Millions) 2024 2023 2022 Proportional amortization recognized in tax provision $ 193 $ 185 $ 161 Equity method expenses recognized in Other, net expenses $ — $ — $ 9 Income tax credits and Other income tax benefits (a) recognized in tax provision $ 221 $ 204 $ 196 (a) Other income tax benefits are a result of tax deductible expenses generated by our tax credit investments. Income tax credits and other income tax benefits associated with our tax credit investments are also recognized in the Consolidated Statements of Cash Flows in the Operating activities section primarily under Accounts payable and other liabilities . 126 Table of Contents NOTE 7 CUSTOMER DEPOSITS As of December 31, customer deposits were categorized as interest-bearing or non-interest-bearing as follows: TABLE 7.1: INTEREST-BEARING AND NON-INTEREST-BEARING CUSTOMER DEPOSITS (Millions) 2024 2023 U.S.: Interest-bearing $ 138,433 $ 128,146 Non-interest-bearing (includes Card Member credit balances of: 2024, $ 513 ; 2023, $ 495 ) 566 557 Non-U.S.: Interest-bearing 17 12 Non-interest-bearing (includes Card Member credit balances of: 2024, $ 395 ; 2023, $ 426 ) 397 429 Total customer deposits $ 139,413 $ 129,144 Customer deposits by deposit type as of December 31 were as follows: TABLE 7.2: CUSTOMER DEPOSITS BY TYPE (Millions) 2024 2023 U.S. interest-bearing deposits: Savings accounts $ 108,364 $ 92,324 Checking accounts 2,045 1,398 Certificates of deposit: Direct 4,303 5,557 Third-party (brokered) 8,109 12,960 Sweep accounts ― Third-party (brokered) 15,612 15,907 Total U.S. interest-bearing deposits $ 138,433 $ 128,146 Other deposits 72 77 Card Member credit balances 908 921 Total customer deposits $ 139,413 $ 129,144 The scheduled maturities of certificates of deposit as of December 31, 2024 were as follows: TABLE 7.3: SCHEDULED MATURITIES OF CERTIFICATES OF DEPOSIT (Millions) 2025 2026 2027 2028 2029 After 5 years Total Certificates of deposit (a) $ 7,409 $ 2,244 $ 1,399 $ 701 $ 669 $ — $ 12,422 (a) Includes $ 10 million of non-U.S. direct certificates of deposit as of December 31, 2024. As of December 31, 2024 and 2023, certificates of deposit in denominations that met or exceeded the insured limit were $ 1.4 billion and $ 1.8 billion, respectively. 127 Table of Contents NOTE 8 DEBT SHORT-TERM BORROWINGS 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: TABLE 8.1: SHORT-TERM BORROWINGS 2024 2023 (Millions, except percentages) Outstanding Balance Year-End Stated Interest Rate on Debt (a) Outstanding Balance Year-End Stated Interest Rate on Debt (a) Short-term borrowings (b) $ 1,374 2.47 % $ 1,293 1.03 % Total $ 1,374 2.47 % $ 1,293 1.03 % (a) For floating-rate issuances, the stated interest rates are weighted based on the outstanding principal balances and interest rates in effect as of December 31, 2024 and 2023. (b) Includes borrowings from banks and book overdrafts with banks, which represents negative cash balances for accounts with an associated overdraft facility, due to timing differences arising in the ordinary course of business. As of December 31, 2024, we maintained a three-year committed, revolving, secured borrowing facility, with a maturity date of September 15, 2026, which gives us the right to sell up to $ 3.0 billion face amount of eligible certificates issued from the Lending Trust. This facility enhances our contingent funding resources and is also used in the ordinary course of business to fund working capital needs. The facility was undrawn as of both December 31, 2024 and 2023. 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, 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. The committed facility does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating. 128 Table of Contents LONG-TERM DEBT 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: TABLE 8.2: LONG-TERM DEBT 2024 2023 (Millions, except percentages) Original Contractual Maturity Dates Outstanding Balance (a) Year-End Interest Rate on Debt (b) Year-End Interest Rate with Swaps (b)(c) Outstanding Balance (a) Year-End Interest Rate on Debt (b) Year-End Interest Rate with Swaps (b)(c) American Express Company (Parent Company only) Fixed Rate Senior Notes 2025 - 2042 $ 14,582 3.66 % 3.80 % $ 20,930 3.48 % 4.14 % Floating Rate Senior Notes 2025 - 2028 3,000 5.49 2,400 6.21 — Fixed-to-Floating Rate Senior Notes 2026 - 2035 15,973 5.35 5.57 8,769 5.38 5.91 Fixed Rate Subordinated Notes — — — 586 3.63 6.74 Fixed-to-Floating Rate Subordinated Notes 2033 - 2035 1,742 5.44 5.80 1,257 5.24 5.92 American Express Credit Corporation Fixed Rate Senior Notes 2027 333 3.30 — 330 3.30 — Lending Trust Fixed Rate Senior Notes 2025 - 2029 13,934 4.23 4.32 13,449 3.36 3.49 Other Floating Rate Borrowings 2025 - 2027 247 0.76 — % 238 0.42 — % Unamortized Underwriting Fees ( 96 ) ( 93 ) Total Long-Term Debt $ 49,715 4.51 % $ 47,866 3.96 % (a) The outstanding balances include (i) unamortized discount, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps. Refer to Note 13 for more details on our treatment of fair value hedges. (b) For floating-rate issuances, the stated interest rate on debt is weighted based on the outstanding principal balances and interest rates in effect as of December 31, 2024 and 2023. (c) Interest rates with swaps are only presented when swaps are in place to hedge the underlying debt. The interest rates with swaps are weighted based on the outstanding principal balances and the interest rates on the floating leg of the swaps in effect as of December 31, 2024 and 2023. 129 Table of Contents Aggregate annual maturities on long-term debt obligations (based on contractual maturity or anticipated redemption dates) as of December 31, 2024 were as follows: TABLE 8.3: ANNUAL MATURITIES ON LONG-TERM DEBT (Millions) 2025 2026 2027 2028 2029 Thereafter Total American Express Company (Parent Company only) $ 5,250 $ 6,700 $ 8,012 $ 3,700 $ 2,500 $ 9,623 $ 35,785 American Express Credit Corporation — — 339 — — — 339 Lending Trust 7,250 2,100 2,200 1,350 1,000 13,900 Other 57 63 127 247 $ 12,557 $ 8,863 $ 10,678 $ 5,050 $ 3,500 $ 9,623 $ 50,271 Unamortized Underwriting Fees ( 96 ) Unamortized Discount and Premium ( 487 ) Impacts due to Fair Value Hedge Accounting 27 Total Long-Term Debt $ 49,715 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. As of December 31, 2024 and 2023, we were in compliance with the covenants contained in the credit facility. Additionally, we maintained a three-year committed, revolving, secured borrowing facility that gives us the right to sell up to $ 3.0 billion face amount of eligible notes issued from the Charge Trust at any time through July 15, 2026 . As of both December 31, 2024 and 2023, no amounts were outstanding on this facility. We paid $ 14.2 million and $ 20.2 million in fees to maintain these lines in 2024 and 2023, respectively. These committed facilities do not contain material adverse change clauses, which might otherwise preclude borrowing under the credit facilities, nor are they dependent on our credit rating. We paid total interest, primarily related to short- and long-term debt, corresponding interest rate swaps and customer deposits, of $ 8.2 billion, $ 6.4 billion and $ 2.2 billion in 2024, 2023 and 2022, respectively. 130 Table of Contents NOTE 9 OTHER LIABILITIES The following is a summary of Other liabilities as of December 31: TABLE 9.1: OTHER LIABILITIES (Millions) 2024 2023 Membership Rewards liability $ 14,752 $ 13,742 Deferred card and other fees, net 4,042 3,442 Book overdraft balances (a) 3,461 9,897 Employee-related liabilities (b) 2,676 2,567 Card Member rebate and reward accruals (c) 2,121 2,061 Income tax liability (d) 1,386 1,275 Other (e) 8,373 8,655 Total $ 36,811 $ 41,639 (a) Primarily includes negative cash balances for accounts without an associated overdraft facility, due to timing differences arising in the ordinary course of business. (b) Includes employee benefit plan obligations and incentive compensation. (c) Card Member rebate and reward accruals include payments to third-party reward partners and cash-back rewards. (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, 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 statement credits. We record a Membership Rewards liability that represents our best estimate of the cost of points earned that are expected to be redeemed by Card Members in the future. The weighted average cost (WAC) per point and the Ultimate Redemption Rate (URR) are the key assumptions used to estimate the liability. We use statistical and actuarial models to estimate the URR based on redemption trends, card product type, enrollment tenure, card spend levels and credit attributes. The WAC per point assumption is derived from 12 months of redemptions and is adjusted as appropriate for certain changes in redemption costs that are not representative of future cost expectations and expected developments in redemption patterns. The expense for Membership Rewards points is included in Card Member rewards expense. We periodically evaluate our liability estimation process and assumptions based on changes in cost per point redeemed, partner contract changes and developments in redemption patterns, which may be impacted by product refreshes, changes in redemption options and mix of proprietary cards-in-force. DEFERRED CARD AND OTHER FEES, NET 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: TABLE 9.2: DEFERRED CARD AND OTHER FEES, NET (Millions) 2024 2023 Deferred card and other fees (a) $ 4,475 $ 3,818 Deferred direct acquisition costs ( 180 ) ( 158 ) Reserves for membership cancellations ( 253 ) ( 218 ) Deferred card and other fees, net $ 4,042 $ 3,442 (a) Includes deferred fees for Membership Rewards program participants. 131 Table of Contents NOTE 10 STOCK-BASED COMPENSATION STOCK OPTION AND AWARD PROGRAMS Under our 2016 Incentive Compensation Plan (amended and restated effective May 6, 2024) and previously under our 2007 Incentive Compensation Plan, awards may be granted to colleagues and other individuals who perform services for us. These awards may be in the form of stock options, or in the form of restricted stock units and awards (collectively referred to as RSUs), or other incentives or similar awards designed to meet the requirements of non-U.S. jurisdictions. There were a total of 20 million, 7 million and 9 million common shares unissued and available for grant as of December 31, 2024, 2023 and 2022, respectively, as authorized by our Board of Directors and shareholders. We generally issue new common shares upon exercise of options, vesting of restricted stock units and granting of restricted stock awards. Stock-based compensation expense recognized in Salaries and employee benefits in the Consolidated Statements of Income was $ 508 million, $ 450 million and $ 373 million in 2024, 2023 and 2022, respectively, with corresponding income tax benefits of $ 124 million, $ 110 million and $ 90 million in those respective periods. Our stock options and RSUs outstanding as of December 31, 2024, and changes during the year, are as follows: TABLE 10.1: STOCK OPTIONS AND RSUs OUTSTANDING Stock Options Service-Based RSUs Service and Performance-Based RSUs (Numbers in thousands) Number Weighted-Average Exercise Price Number Weighted- Average Grant- Date Fair Value Number Weighted- Average Grant- Date Fair Value Outstanding as of December 31, 2023 3,553 $ 119.80 1,827 $ 159.95 3,296 $ 144.64 Granted 273 201.07 922 204.68 1,223 176.09 Options exercised/RSUs vested ( 1,108 ) 91.39 ( 844 ) 155.92 ( 1,284 ) 108.44 Forfeited — — ( 98 ) 182.64 ( 209 ) 169.93 Expired — — — — — — Outstanding as of December 31, 2024 2,718 139.54 1,807 $ 183.41 3,026 $ 170.97 Options vested and expected to vest as of December 31, 2024 2,718 139.54 Options exercisable as of December 31, 2024 1,047 $ 99.23 Stock-based compensation expense is generally recognized ratably based on the grant-date fair value of the awards, net of expected forfeitures, over the vesting period. Generally, the vesting period is the time from the grant date to the earlier of the vesting date defined in each award agreement or the date the colleague will become eligible to retire. Retirement eligibility is dependent upon age and/or years of service. STOCK OPTIONS Each stock option has an exercise price equal to the market price of our common stock on the grant date. Stock options generally vest on the third anniversary of, and have a contractual term of 10 years from, the grant date. The fair value of options without market conditions is estimated on the grant date using a Black-Scholes-Merton option-pricing model. The following weighted-average assumptions were used for options granted in 2024, 2023 and 2022: TABLE 10.2: WEIGHTED-AVERAGE ASSUMPTIONS FOR OPTIONS GRANTED 2024 2023 2022 Dividend yield 1.5 % 1.4 % 1.0 % Expected volatility (a) 31 % 32 % 31 % Risk-free interest rate 3.9 % 3.5 % 1.7 % Expected life of stock option ( in years ) (b) 6.9 7.1 7.1 Weighted-average fair value per option $ 68.79 $ 60.03 $ 55.30 (a) The expected volatility is based on historical and implied volatilities of our common stock price. (b) The expected life of stock options was determined using historical option exercise behavior. 132 Table of Contents Certain executives were awarded a grant of stock options on October 31, 2022 that vest, subject to achieving performance and market conditions. These options vest in tranches on the third and fourth anniversaries from the grant date, subject to continued employment through the applicable anniversary, and have a contractual term of seven years . The fair value was estimated at the grant date using a Monte Carlo valuation model assuming a dividend yield of 1.4 percent, expected volatility (based on 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: TABLE 10.3: WEIGHTED-AVERAGE CONTRACTUAL LIFE AND AGGREGATE INTRINSIC VALUE OF OPTIONS Outstanding Exercisable Vested and Expected to Vest Weighted-average remaining contractual life (in years) 5.3 3.7 5.3 Aggregate intrinsic value (millions) $ 427 $ 207 $ 427 As of December 31, 2024, there was $ 19 million of total unrecognized compensation cost related to unvested options, which will be recognized over the weighted-average remaining vesting period of 1.3 years. For stock options that were exercised during 2024, 2023 and 2022, the intrinsic value, based upon the fair value of our stock price at the date the options were exercised, was $ 179 million, $ 26 million and $ 56 million, respectively; cash received by the Company from the exercise of stock options was $ 100 million, $ 28 million and $ 56 million during those respective periods. The income tax benefit recognized in the Consolidated Statements of Income related to stock option exercises was $ 25 million, $ 4 million and $ 9 million in 2024, 2023 and 2022, respectively. RESTRICTED STOCK UNITS/AWARDS We grant RSUs that contain either a) service conditions or b) both service and performance conditions. RSUs containing only service conditions generally vest ratably over three years , or four years for awards granted prior to 2022, beginning with the first anniversary of the grant date. RSUs containing both service and performance conditions generally vest on the third anniversary of the grant date, and the number of shares earned generally ranges from zero to 120 percent of target depending on the achievement of predetermined Company metrics. RSU holders receive dividend equivalents or dividends. Performance-based RSUs include a relative total shareholder return (r-TSR) modifier so that our actual shareholder return relative to a comparable peer group is one of the performance conditions that determines the number of shares ultimately issued upon vesting. The fair value of RSUs that do not include the r-TSR modifier, including those that contain only service conditions, is measured using our stock price on the grant date. The fair value of service and performance-based RSUs that include the r-TSR modifier is determined using a Monte Carlo valuation model using assumptions based on the historical volatility of our common stock price, the historical correlations of our common stock price with that of each of the companies in the performance peer group and the risk-free interest rate, each for a period equal to the estimated remaining performance period. The weighted averages of the following assumptions used in 2024, 2023 and 2022 were: TABLE 10.4: RSU VALUATION MODEL WEIGHTED-AVERAGE ASSUMPTIONS 2024 2023 2022 Expected volatility 30 % 45 % 42 % Risk-free interest rate 4.0 % 3.7 % 1.4 % Remaining performance period (in years) 2.9 2.9 2.9 As of December 31, 2024, there was $ 266 million of total unrecognized compensation cost related to non-vested RSUs, which will be recognized over the weighted-average remaining vesting period of 1.8 years. The weighted-average grant-date fair value of RSUs granted in 2024, 2023 and 2022 was $ 188.37 , $ 163.88 and $ 168.26 , respectively. For RSUs vested during 2024, 2023 and 2022, the total fair value, based upon our stock price at the date the RSUs vested, was $ 437 million, $ 389 million and $ 323 million, respectively. 133 Table of Contents LIABILITY-BASED AWARDS Other incentive awards can be settled with cash or equity shares at our discretion and final approval from the Compensation and Benefits Committee. These awards are generally settled with cash and thus are classified as liabilities; therefore, the fair value is determined at the grant date and remeasured quarterly as part of compensation expense over the vesting period. Cash paid upon vesting of these awards in 2024, 2023 and 2022 was $ 60 million, $ 55 million and $ 50 million, respectively. 134 Table of Contents NOTE 11 RETIREMENT PLANS DEFINED CONTRIBUTION RETIREMENT PLANS 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 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 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. We also sponsor unfunded other postretirement benefit plans that provide health care and life insurance to certain retired colleagues in the United States. For these plans, the total net benefit was $ 18 million, $ 12 million and $ 24 million in 2024, 2023 and 2022, respectively. We recognize the funded status of our defined benefit pension plans and other postretirement benefit plans, measured as the difference between the fair value of the plan assets and the projected benefit obligation, on the Consolidated Balance Sheets. As of December 31, 2024 and 2023, the unfunded status related to the defined benefit pension plans and other postretirement benefit plans was $ 88 million and $ 212 million, respectively, and is recorded in Other liabilities. 135 Table of Contents NOTE 12 CONTINGENCIES AND COMMITMENTS CONTINGENCIES In the ordinary course of business, we and our subsidiaries are subject to various pending and potential legal actions, arbitration proceedings, claims, investigations, examinations, regulatory proceedings, information gathering requests, subpoenas, inquiries and matters relating to compliance with laws and regulations (collectively, legal proceedings). Based on our current knowledge, and taking into consideration our litigation-related liabilities, we do not believe we are a party to, nor are any of our properties the subject of, any legal proceeding that would have a material adverse effect on our consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that the outcome of legal proceedings could have a material impact on our results of operations. Certain legal proceedings involving us or our subsidiaries are described below. 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. v. 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. v. 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 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. v. 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 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. The court dismissed plaintiffs’ federal antitrust claim, numerous state antitrust and consumer protection claims and their unjust enrichment claim. For the remaining state antitrust or consumer protection claims, the court certified classes for (i) holders of Visa and MasterCard debit cards in eight states and Washington, D.C.; and (ii) holders of Visa, MasterCard and Discover credit cards that do not offer rewards or charge an annual fee in two states and Washington, D.C. On March 8, 2016, plaintiffs B&R Supermarket, Inc. d/b/a Milam’s Market and Grove Liquors LLC, on behalf of themselves and others, filed a suit, captioned B&R Supermarket, Inc. d/b/a Milam’s Market, et al. v. Visa Inc., et al. , for violations of the Sherman Antitrust Act, the Clayton Antitrust Act, California’s Cartwright Act and unjust enrichment in the United States District Court for the Northern District of California, against American Express Company, other credit and charge card networks, other issuing banks and EMVCo, LLC. Plaintiffs allege that the defendants, through EMVCo, conspired to shift liability for fraudulent, faulty and otherwise rejected consumer credit card transactions from themselves to merchants after the implementation of EMV chip payment terminals. Plaintiffs seek damages and injunctive relief. 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. 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. 136 Table of Contents In 2006, Mawarid Investments Limited filed a request for confidential arbitration under the 1998 London Court of International Arbitration Rules in connection with certain claims arising under a shareholders agreement between Mawarid and American Express Travel Related Services Company, Inc. relating to a joint venture between the parties, Amex (Middle East) BSC(c) (AEME). In 2008, the tribunal rendered a partial award, including a direction that an audit should take place to verify whether acquirer discount revenue related to transactions occurring with airlines located in the Middle East region had been properly allocated to AEME since its inception in 1992. In September 2021, the tribunal rendered a further partial award regarding the location of transactions through non-physical channels. 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) 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. 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. While we believe we have complied with all applicable tax laws, rules and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional VAT. In certain jurisdictions where we are contesting the assessments, we were required to pay the VAT assessments prior to contesting. Our legal proceedings range from cases brought by a single plaintiff to class actions with millions of putative class members to governmental proceedings. These legal proceedings involve various lines of business and a variety of claims (including, but not limited to, common law tort, contract, application of tax laws, antitrust and consumer protection claims), some of which present novel factual allegations and/or unique legal theories. While some matters pending against us specify the damages sought, many seek an unspecified amount of damages or are at very early stages of the legal process. Even when the amount of damages claimed against us are stated, the claimed amount may be exaggerated and/or unsupported. As a result, some matters have not yet progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate an amount of loss or a range of possible loss, while other matters have progressed sufficiently such that we are able to estimate an amount of loss or a range of possible loss. We have accrued for certain of our outstanding legal proceedings. An accrual is recorded when it is both (a) probable that a loss has occurred and (b) the amount of loss can be reasonably estimated. There may be instances in which an exposure to loss exceeds the accrual. We evaluate, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the accrual that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable. For those disclosed legal proceedings where a loss is reasonably possible in future periods, whether in excess of a recorded accrual for legal or tax contingencies, or where there is no such accrual, and for which we are able to estimate a range of possible loss, the current estimated range is zero to $ 160 million in excess of any accruals related to those matters. This range represents management’s estimate based on currently available information and does not represent our maximum loss exposure; actual results may vary significantly. As such legal proceedings evolve, we may need to increase our range of possible loss or recorded accruals. 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. 137 Table of Contents COMMITMENTS 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. 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: TABLE 12.1: MATURITIES OF OUTSTANDING LEASE COMMITMENTS (Millions) 2025 $ 160 2026 146 2027 129 2028 121 2029 106 Thereafter 771 Total Outstanding Fixed Lease Payments (a) $ 1,433 Less: 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 . Generally, such commitments are designed to be satisfied by the payment we make to such cobrand partners primarily based on Card Members’ spending and earning rewards on their cobrand cards and as we acquire new Card Members. In the event these payments do not fully satisfy the commitment, we generally pay the cobrand partner up to the amount of the commitment in exchange for an equivalent value of reward points. Our U.S. 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. 138 Table of Contents NOTE 13 DERIVATIVES AND HEDGING ACTIVITIES We use derivative financial instruments to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, and are carried at fair value on the Consolidated Balance Sheets. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of our market risk management. We do not transact in derivatives for trading purposes. Market risk is the risk to earnings or asset and liability values resulting from movements in market prices. Our market risk exposures include: • Interest rate risk due to changes in the relationship between the interest rates on our assets (such as loans, receivables and investment securities) and the interest rates on our liabilities (such as debt and deposits); and • Foreign exchange risk related to transactions, funding, investments and earnings in currencies other than the U.S. dollar. We centrally monitor market risks using market risk limits and escalation triggers as defined in our Asset/Liability Management Policy. Our market exposures are in large part by-products of the delivery of our products and services. Interest rate risk primarily arises through the funding of Card Member receivables and fixed-rate loans with variable-rate borrowings, as well as through the risk to net interest margin from changes in the relationship between benchmark rates such as Prime, the secured overnight financing rate and the overnight indexed swap rate. Interest rate exposure within our charge card and fixed-rate lending products is managed by varying the proportion of total funding provided by short-term and variable-rate debt and deposits compared to fixed-rate debt and deposits. In addition, interest rate swaps are used from time to time to economically convert fixed-rate debt obligations to variable-rate obligations, or to convert variable-rate debt obligations to fixed-rate obligations. We may change the mix between variable-rate and fixed-rate funding based on changes in business volumes and mix, among other factors. Foreign exchange exposures arise in four principal ways: (1) Card Member spending in currencies that are not the billing currency, (2) cross-currency transactions and balances from our funding activities, (3) cross-currency investing activities, such as in the equity of foreign subsidiaries and (4) revenues generated and expenses incurred in foreign currencies, which impact earnings. Our foreign exchange risk is managed primarily by entering into agreements to buy and sell currencies on a spot basis or by hedging this market exposure, to the extent it is economical, through various means, including the use of derivatives such as foreign exchange forwards. Derivatives may give rise to counterparty credit risk, which is the risk that a derivative counterparty will default on, or otherwise be unable to perform pursuant to, an uncollateralized derivative exposure. We manage this risk by considering the current exposure, which is the replacement cost of contracts on the measurement date, as well as estimating the maximum potential future exposure of the contracts over the next 12 months, considering such factors as the volatility of the underlying or reference index. To mitigate derivative credit risk, counterparties are required to be pre-approved by us and rated as investment grade, and counterparty risk exposures are centrally monitored. A majority of our derivative assets and liabilities as of December 31, 2024 and 2023 are subject to master netting agreements with our derivative counterparties. Accordingly, where appropriate, we have elected to present derivative assets and liabilities with the same counterparty on a net basis in the Consolidated Balance Sheets. To further mitigate counterparty credit risk, we exercise our rights under executed credit support agreements with the respective derivative counterparties for our bilateral interest rate swaps and select foreign exchange contracts. These agreements require that, in the event the fair value change in the net derivatives position between the two parties exceeds certain dollar thresholds, the party in the net liability position posts collateral to its counterparty. All derivative contracts cleared through a central clearinghouse are collateralized to the full amount of the fair value of the contracts. In relation to our credit risk, certain of our bilateral derivative agreements include provisions that allow our counterparties to terminate the relevant agreement in the event of a downgrade of our debt credit rating below investment grade and settle the outstanding net liability position. As of December 31, 2024, these derivatives were not in a material net liability position and we had no material risk exposure to any individual derivative counterparty. Based on our assessment of the credit risk of our derivative counterparties and our own credit risk as of December 31, 2024 and 2023, no credit risk adjustment to the derivative portfolio was required. Our derivatives are carried at fair value on the Consolidated Balance Sheets. The accounting for changes in fair value depends on the instruments’ intended use and the resulting hedge designation, if any, as discussed below. Refer to Note 14 for a description of our methodology for determining the fair value of derivatives. 139 Table of Contents The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of December 31: TABLE 13.1: FAIR VALUE OF DERIVATIVE ASSETS AND LIABILITIES Other Assets Fair Value Other Liabilities Fair Value (Millions) 2024 2023 2024 2023 Derivatives designated as hedging instruments: Fair value hedges - Interest rate contracts (a) $ — $ — $ 23 $ 99 Net investment hedges - Foreign exchange contracts 340 9 18 455 Total derivatives designated as hedging instruments 340 9 41 554 Derivatives not designated as hedging instruments: Foreign exchange contracts and other 666 71 90 423 Total derivatives, gross 1,006 80 131 977 Derivative asset and derivative liability netting (b) ( 91 ) ( 57 ) ( 91 ) ( 57 ) Cash collateral netting (c) ( 18 ) — ( 23 ) ( 106 ) Total derivatives, net $ 897 $ 23 $ 17 $ 814 (a) For our centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral. (b) Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement. (c) Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to cash collateral held from the counterparty or cash collateral posted with the counterparty. We posted $ 368 million and $ 175 million as of December 31, 2024 and 2023, respectively, as initial margin on our centrally cleared interest rate swaps; such amounts are recorded within Other assets on the Consolidated Balance Sheets and are not netted against the derivative balances. DERIVATIVE FINANCIAL INSTRUMENTS THAT QUALIFY FOR HEDGE ACCOUNTING Derivatives executed for hedge accounting purposes are documented and designated as such when we enter into the contracts. In accordance with our risk management policies, we structure our hedges with terms similar to those of the item being hedged. We formally assess, at inception of the hedge accounting relationship and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of the hedged items. These assessments usually are made through the application of a regression analysis method. If it is determined that a derivative is not highly effective as a hedge, we will discontinue the application of hedge accounting. FAIR VALUE HEDGES A fair value hedge involves a derivative designated to hedge our exposure to future changes in the fair value of an asset or a liability, or an identified portion thereof, that is attributable to a particular risk. Interest Rate Contracts We are exposed to interest rate risk associated with our fixed-rate debt obligations. At the time of issuance, certain fixed-rate long-term debt obligations are designated in fair value hedging relationships, using interest rate swaps, to economically convert the fixed interest rate to a floating interest rate. We had $ 18.9 billion and $ 11.7 billion of fixed-rate debt obligations designated in fair value hedging relationships as of December 31, 2024 and 2023, respectively. Gains or losses on the fair value hedging instrument principally offset the losses or gains on the hedged item attributable to the hedged risk. The changes in the fair value of the derivative and the changes in the hedged item may not fully offset due to differences between a debt obligation’s interest rate and the benchmark rate, primarily due to credit spreads at inception of the hedging relationship that are not reflected in the fair value of the interest rate swap. 140 Table of Contents 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: TABLE 13.2: GAINS AND LOSSES ASSOCIATED WITH FAIR VALUE HEDGES ON FIXED-RATE LONG TERM DEBT Gains (losses) (Millions) 2024 2023 2022 Fixed-rate long-term debt $ 26 $ ( 289 ) $ 473 Derivatives designated as hedging instruments ( 27 ) 290 ( 476 ) Total $ ( 1 ) $ 1 $ ( 3 ) 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 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. NET INVESTMENT HEDGES A net investment hedge is used to hedge future changes in currency exposure of a net investment in a foreign operation. We primarily designate foreign currency derivatives as net investment hedges to reduce our exposure to changes in currency exchange rates on our investments in non-U.S. subsidiaries. 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 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. DERIVATIVES NOT DESIGNATED AS HEDGES We have derivatives that act as economic hedges, but are not designated as such for hedge accounting purposes. Foreign currency transactions from time to time may be partially or fully economically hedged through foreign currency contracts, primarily foreign exchange forwards. These hedges generally mature within one year. 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 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 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. 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, 2024 and 2023. 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. 141 Table of Contents NOTE 14 FAIR VALUES 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. GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows: • Level 1 ― Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. • Level 2 ― Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: – Quoted prices for similar assets or liabilities in active markets; – Quoted prices for identical or similar assets or liabilities in markets that are not active; – Inputs other than quoted prices that are observable for the asset or liability; and – Inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 ― Inputs that are unobservable and reflect our own estimates about the estimates market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). We monitor the market conditions and evaluate the fair value hierarchy levels at least quarterly. For the years ended December 31, 2024 and 2023, there were no Level 3 transfers. FINANCIAL ASSETS AND FINANCIAL LIABILITIES CARRIED AT FAIR VALUE 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: TABLE 14.1: FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT FAIR VALUE 2024 2023 (Millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Investment securities: (a) Equity securities $ 48 $ 48 $ — $ — $ 66 $ 66 $ — $ — Debt securities 1,192 — 1,115 77 2,120 — 2,046 74 Derivatives, gross (a)(b) 1,006 — 975 31 80 — 62 18 Total Assets 2,246 48 2,090 108 2,266 66 2,108 92 Liabilities: Derivatives, gross (a) 131 — 131 — 977 — 977 — Total Liabilities $ 131 $ — $ 131 $ — $ 977 $ — $ 977 $ — (a) Refer to Note 4 for the fair values of investment securities and to Note 13 for the fair values of derivative assets and liabilities, on a further disaggregated basis. (b) Level 3 fair value reflects an embedded derivative. Management reviews and applies judgment to the valuation of the embedded derivative that is performed by an independent third party using a Monte Carlo simulation that models a range of probable future stock prices based on implied volatility in a risk neutral framework. Refer to Note 13 for additional information about this embedded derivative. 142 Table of Contents VALUATION TECHNIQUES USED IN THE FAIR VALUE MEASUREMENT OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES CARRIED AT FAIR VALUE For the financial assets and liabilities measured at fair value on a recurring basis (categorized in the valuation hierarchy table above), we apply the following valuation techniques: Investment Securities When available, quoted prices of identical investment securities in active markets are used to estimate fair value. Such investment securities are classified within Level 1 of the fair value hierarchy. When quoted prices of identical investment securities in active markets are not available, the fair values for our investment securities are obtained primarily from pricing services engaged by us, and we receive one price for each security. The fair values provided by the pricing services are estimated using pricing models, where the inputs to those models are based on observable market inputs or recent trades of similar securities. Such investment securities are classified within Level 2 of the fair value hierarchy. The inputs to the valuation techniques applied by the pricing services vary depending on the type of security being priced but are typically benchmark yields, benchmark security prices, credit spreads, prepayment speeds, reported trades and broker-dealer quotes, all with reasonable levels of transparency. The pricing services did not apply any adjustments to the pricing models used. In addition, we did not apply any adjustments to prices received from the pricing services. We reaffirm our understanding of the valuation techniques used by our pricing services at least annually. In addition, we corroborate the prices provided by our pricing services by comparing them to alternative pricing sources. In instances where price discrepancies are identified between different pricing sources, we evaluate such discrepancies to ensure that the prices used for our valuation represent the fair value of the underlying investment securities. Refer to Note 4 for additional information on investment securities. Within Level 3 of the fair value hierarchy are our holdings of debt securities issued by Community Development Financial Institutions. We take the carrying value for these investment securities to be a reasonable proxy for their fair value unless we determine, based on our internal credit model, that there are indicators that the contractual cash flows will not be received in full. Derivative Financial Instruments The fair value of our Level 2 derivative financial instruments is estimated by using third-party pricing models, where the inputs to those models are readily observable from active markets. The pricing models used are consistently applied and reflect the contractual terms of the derivatives as described below. We reaffirm our understanding of the valuation techniques at least annually and validate the valuation output on a quarterly basis. The fair value of our interest rate swaps is determined based on a discounted cash flow method using the following significant inputs: the contractual terms of the swap such as the notional amount, fixed coupon rate, floating coupon rate and tenor, as well as discount rates consistent with the underlying economic factors of the currency in which the cash flows are denominated. The fair value of foreign exchange forward contracts is determined based on a discounted cash flow method using the following significant inputs: the contractual terms of the forward contracts such as the notional amount, maturity dates and contract rate, as well as relevant foreign currency forward curves, and discount rates consistent with the underlying economic factors of the currency in which the cash flows are denominated. Our Level 3 derivative financial instrument represents an embedded derivative in the form of C Ordinary Shares of GBT JerseyCo Limited. The fair valuation is performed by an independent third party using a Monte Carlo Simulation technique that models a range of probable future stock prices using the following significant inputs: term of the earnout, initial stock price, annual expected volatility of the common stock over the expected term, annual risk-neutral rate of return over the contractual term and dividend yield, which is further reviewed by management. Credit valuation adjustments are necessary when the market parameters, such as a benchmark curve, used to value derivatives are not indicative of our credit quality or that of our counterparties. We consider the counterparty credit risk by applying an observable forecasted default rate to the current exposure. Refer to Note 13 for additional information on derivative financial instruments. 143 Table of Contents FINANCIAL ASSETS AND FINANCIAL LIABILITIES CARRIED AT OTHER THAN FAIR VALUE 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. TABLE 14.2: FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST 2024 (Billions) Carrying Value Corresponding Fair Value Amount Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 41 $ 41 $ 39 $ 2 $ — Other financial assets (b) 63 63 — 63 — Financial assets carried at other than fair value Card Member and Other loans, less reserves (c) 143 149 — — 149 Card Member loans HFS 1 1 — — 1 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 155 155 — 155 — Financial liabilities carried at other than fair value Certificates of deposit (d) 12 12 — 12 — Long-term debt (c) $ 50 $ 50 $ — $ 50 $ — 2023 (Billions) Carrying Value Corresponding Fair Value Amount Total Level 1 Level 2 Level 3 Financial Assets: Financial assets for which carrying values equal or approximate fair value Cash and cash equivalents (a) $ 47 $ 47 $ 45 $ 2 $ — Other financial assets (b) 63 63 — 63 — Financial assets carried at other than fair value Card Member and Other loans, less reserves (c) 128 133 — — 133 Financial Liabilities: Financial liabilities for which carrying values equal or approximate fair value 143 143 — 143 — Financial liabilities carried at other than fair value Certificates of deposit (d) 19 18 — 18 — Long-term debt (c) $ 48 $ 48 $ — $ 48 $ — (a) Level 2 fair value amounts reflect time deposits and short-term investments. (b) Balances include Card Member receivables (including fair values of Card Member receivables of $ 3.9 billion and $ 4.6 billion held by a consolidated VIE as of December 31, 2024 and 2023, respectively), other receivables and other miscellaneous assets. (c) Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $ 28.3 billion and $ 28.6 billion as of December 31, 2024 and 2023, respectively, and the fair values of Long-term debt were $ 14.0 billion and $ 13.3 billion as of December 31, 2024 and 2023, respectively. (d) Presented as a component of Customer deposits on the Consolidated Balance Sheets. 144 Table of Contents VALUATION TECHNIQUES USED IN THE FAIR VALUE MEASUREMENT OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES CARRIED AT OTHER THAN FAIR VALUE For the financial assets and liabilities that are not required to be carried at fair value on a recurring basis (categorized in the valuation hierarchy table), we apply the following valuation techniques to measure fair value: Financial Assets For Which Carrying Values Equal Or Approximate Fair Value Financial assets for which carrying values equal or approximate fair value include cash and cash equivalents, Card Member receivables, accrued interest and certain other assets. For these assets, the carrying values approximate fair value because they are short term in duration, have no defined maturity or have a market-based interest rate. Financial Assets Carried At Other Than Fair Value Card Member and Other loans, less reserves Card Member and Other loans are recorded at historical cost, less reserves, on the Consolidated Balance Sheets. In estimating the fair value for our loans, we use a discounted cash flow model. Due to the lack of a comparable whole loan sales market for similar loans and the lack of observable pricing inputs thereof, we use various inputs to estimate fair value. Such inputs include projected income, discount rates and forecasted write-offs. 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 Financial liabilities for which carrying values equal or approximate fair value include accrued interest, customer deposits (excluding certificates of deposit, which are described further below), Travelers Cheques and other prepaid products outstanding, accounts payable, short-term borrowings and certain other liabilities for which the carrying values approximate fair value because they are short term in duration, have no defined maturity or have a market-based interest rate. Financial Liabilities Carried At Other Than Fair Value Certificates of Deposit Certificates of deposit (CDs) are recorded at their historical issuance cost on the Consolidated Balance Sheets. Fair value is estimated using a discounted cash flow methodology based on the future cash flows and the discount rate that reflects the current market rates for similar types of CDs within similar markets. Long-term Debt Long-term debt is recorded at historical issuance cost on the Consolidated Balance Sheets adjusted for (i) unamortized discount and unamortized fees, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps. The fair value of our long-term debt is measured using quoted offer prices when quoted market prices are available. If quoted market prices are not available, the fair value is determined by discounting the future cash flows of each instrument at rates currently observed in publicly-traded debt markets for debt of similar terms and credit risk. For long-term debt, where there are no rates currently observable in publicly traded debt markets of similar terms and comparable credit risk, we use market interest rates and adjust those rates for necessary risks, including our own credit risk. In determining an appropriate spread to reflect our credit standing, we consider credit default swap spreads, bond yields of other long-term debt offered by us, and interest rates currently offered to us for similar debt instruments of comparable maturities. NONRECURRING FAIR VALUE MEASUREMENTS We have certain assets that are subject to measurement at fair value on a nonrecurring basis. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired or where there are observable price changes for equity investments without readily determinable fair values. 145 Table of Contents We estimate the Level 3 fair value of equity investments without readily determinable fair values, which include investments in our Amex Ventures portfolio, based on price changes as of the date of new similar equity financing transactions completed by the companies in the portfolio. In addition, impairments on such investments are recorded to account for the difference between the estimated fair value and carrying value of an investment based on a qualitative assessment of impairment indicators such as business performance, general market conditions and the economic and regulatory environment. When an impairment triggering event occurs, the fair value measurement is generally derived by taking into account all available information, such as share prices of publicly traded peer companies, internal valuations performed by our investees, and other third-party fair value data. The fair value of impaired investments represents a Level 3 fair value measurement. The carrying value of equity investments without readily determinable fair values totaled $ 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. We recorded unrealized gains of $ 85 million, $ 18 million and $ 94 million for the years ended December 31, 2024, 2023 and 2022, respectively. Unrealized losses were $ 37 million, $ 142 million and $ 388 million for the years ended December 31, 2024, 2023 and 2022, respectively. Unrealized gains and losses are recorded in Other, net on the Consolidated Statements of Income. Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $ 1.1 billion 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. Such investments were immaterial as of both December 31, 2024 and 2023. 146 Table of Contents NOTE 15 GUARANTEES The maximum potential undiscounted future payments and related liability resulting from guarantees and indemnifications provided by us in the ordinary course of business were $ 1 billion and $ 10 million, respectively, as of December 31, 2024 and $ 1 billion and $ 24 million, respectively, as of December 31, 2023, all of which were primarily related to our real estate arrangements and business dispositions. To date, we have not experienced any significant losses related to guarantees or indemnifications. Our recognition of these instruments is at fair value. In addition, we establish reserves when a loss is probable and the amount can be reasonably estimated. NOTE 16 COMMON AND PREFERRED SHARES The following table shows authorized shares and provides a reconciliation of common shares issued and outstanding for the years ended December 31: TABLE 16.1: COMMON SHARES ISSUED AND OUTSTANDING (Millions, except where indicated) 2024 2023 2022 Common shares authorized (billions) (a) 3.6 3.6 3.6 Shares issued and outstanding at beginning of year 723 743 761 Repurchases of common shares ( 24 ) ( 22 ) ( 20 ) Net shares issued for RSUs and stock option exercises (b) 3 2 2 Shares issued and outstanding as of December 31 702 723 743 (a) Of the common shares authorized but unissued as of December 31, 2024, approximately 27 million shares are reserved for issuance under employee stock and employee benefit plans. (b) Shares issued for RSUs are reported net of shares withheld for tax withholding obligations. On March 8, 2023, the Board of Directors authorized the repurchase of up to 120 million common shares from time to time, subject to market conditions and in accordance with our capital plans. This authorization replaced the prior repurchase authorization made on September 23, 2019. During 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. Common shares are generally retired by us upon repurchase (except for 2.2 million, 2.3 million and 2.4 million shares held as treasury shares as of December 31, 2024, 2023 and 2022, respectively); retired common shares and treasury shares are excluded from the shares outstanding in the table above. The treasury shares, with a cost basis of $ 243 million, $ 252 million and $ 262 million as of December 31, 2024, 2023 and 2022, respectively, are included as a reduction to Additional paid-in capital in Shareholders’ equity on the Consolidated Balance Sheets. 147 Table of Contents PREFERRED SHARES The Board of Directors may authorize the issuance of up to 20 million preferred shares at a par value of $1.66 2/3 per share without further shareholder approval. We have the following perpetual Fixed Rate Reset Noncumulative Preferred Share series issued and outstanding as of December 31, 2024: TABLE 16.2: PREFERRED SHARES ISSUED AND OUTSTANDING Series D Issuance date August 3, 2021 Securities issued 1,600 Preferred shares; represented by 1,600,000 depositary shares Dividend rate per annum 3.55 % through September 14, 2026; resets September 15, 2026 and every subsequent 5-year anniversary at 5-year Treasury rate plus 2.854 % Dividend payment date Quarterly beginning September 15, 2021 Earliest redemption date September 15, 2026 Aggregate liquidation preference $ 1,600 million Carrying value (a) $ 1,584 million (a) Carrying value, presented in the Statements of Shareholders’ Equity, represents the issuance proceeds, net of underwriting fees and offering costs. In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Company, the preferred shares then outstanding take precedence over our common shares for the payment of dividends and the distribution of assets out of funds legally available for distribution to shareholders. 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. 148 Table of Contents NOTE 17 CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) AOCI is a balance sheet item in Shareholders’ equity on the Consolidated Balance Sheets. It is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component for the three years ended December 31 were as follows: TABLE 17.1: 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 Change Ending Balance Net Change Ending Balance Net Unrealized Gains (Losses) on Debt Securities $ ( 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: TABLE 17.2: TAX IMPACT FOR CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Tax expense (benefit) (Millions) 2024 2023 2022 Net unrealized gains (losses) on debt securities $ 2 $ 16 $ ( 27 ) Foreign currency translation adjustment, net of hedges 205 ( 158 ) 75 Pension and other postretirement benefits 11 ( 3 ) 27 Total tax impact $ 218 $ ( 145 ) $ 75 Reclassifications out of AOCI into the Consolidated Statements of Income, net of taxes, for the years ended December 31, 2024, 2023 and 2022 were no t significant. 149 Table of Contents NOTE 18 SERVICE FEES AND OTHER REVENUE AND OTHER EXPENSES The following is a detail of Service fees and other revenue for the years ended December 31: TABLE 18.1: COMPONENTS OF SERVICE FEES AND OTHER REVENUE (Millions) 2024 2023 2022 Service fees $ 1,609 $ 1,518 $ 1,444 Foreign currency-related revenue 1,527 1,428 1,202 Delinquency fees 941 963 809 Travel commissions and fees 596 637 507 Other fees and revenues 456 459 559 Total Service fees and other revenue $ 5,129 $ 5,005 $ 4,521 The following is a detail of Other expenses for the years ended December 31: TABLE 18.2: COMPONENTS OF OTHER EXPENSE (Millions) 2024 2023 2022 Data processing and equipment $ 2,888 $ 2,805 $ 2,606 Professional services 2,274 2,029 2,074 Gain on sale of Accertify (a) ( 531 ) — — Other 1,733 1,973 1,801 Total Other expenses $ 6,364 $ 6,807 $ 6,481 (a) Refer to Note 1 for additional information. NOTE 19 RESTRUCTURING We periodically initiate restructuring programs to enhance our overall effectiveness and efficiency and to support new business strategies. These programs are generally completed within a year of when they are initiated. In connection with these programs, we will typically incur severance and other exit costs. We had $ 217 million, $ 216 million and $ 135 million accrued in total restructuring reserves as of December 31, 2024, 2023 and 2022, respectively. Restructuring expense, which primarily relates to new severance charges, net of revisions to existing reserves, was $ 123 million, $ 179 million and $ 142 million for the years ended December 31, 2024, 2023 and 2022, respectively, and is included within Salaries and employee benefits within our Consolidated Statements of Income. The cumulative cost relating to restructuring programs initiated in 2024 or in prior years that were in progress during 2024 was $ 400 million. There were no programs initiated prior to 2022 that were still in progress during 2024. Cumulative amounts were not material to any reportable operating segment. 150 Table of Contents NOTE 20 INCOME TAXES The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows: TABLE 20.1: COMPONENTS OF INCOME TAX EXPENSE (Millions) 2024 2023 2022 Current income tax expense: U.S. federal $ 2,368 $ 2,455 $ 2,445 U.S. state and local 494 351 339 Non-U.S. 894 662 476 Total current income tax expense 3,756 3,468 3,260 Deferred income tax (benefit) expense: U.S. federal ( 797 ) ( 952 ) ( 763 ) U.S. state and local ( 146 ) ( 139 ) ( 117 ) Non-U.S. ( 47 ) ( 238 ) ( 309 ) Total deferred income tax (benefit) expense ( 990 ) ( 1,329 ) ( 1,189 ) Total income tax expense $ 2,766 $ 2,139 $ 2,071 A reconciliation of the U.S. federal statutory rate of 21 percent as of December 31, 2024, 2023 and 2022, to our actual income tax rate was as follows: TABLE 20.2: RECONCILIATION OF ACTUAL INCOME TAX RATE 2024 2023 2022 U.S. statutory federal income tax rate 21.0 % 21.0 % 21.0 % (Decrease) increase in taxes resulting from: Tax credits and tax-exempt income ( 0.7 ) ( 0.7 ) ( 0.9 ) State and local income taxes, net of federal benefit 2.5 2.4 3.1 Non-U.S. subsidiaries’ earnings (a) ( 1.0 ) ( 0.8 ) ( 0.1 ) Tax settlements and lapse of statute of limitations ( 0.5 ) ( 2.0 ) ( 2.1 ) Valuation allowances — 0.1 ( 0.1 ) Other 0.2 0.3 0.7 Actual tax rates 21.5 % 20.3 % 21.6 % (a) In certain jurisdictions outside the United States, we benefit from agreements that temporarily lower our income tax expense. The impact of these agreements was not material to our Consolidated Statements of Income. We record a deferred income tax (benefit) provision when there are differences between assets and liabilities measured for financial reporting and for income tax return purposes. These temporary differences result in taxable or deductible amounts in future years and are measured using the tax rates and laws that will be in effect when such differences are expected to reverse. 151 Table of Contents The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table: TABLE 20.3: COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Millions) 2024 2023 Deferred tax assets: Reserves not yet deducted for tax purposes $ 4,950 $ 4,552 Employee compensation and benefits 343 335 Net operating loss and tax credit carryforwards 464 466 Capitalized developed software 1,084 743 Other 853 723 Gross deferred tax assets 7,694 6,819 Valuation allowance ( 655 ) ( 614 ) Deferred tax assets after valuation allowance 7,039 6,205 Deferred tax liabilities: Intangibles and fixed assets 673 683 Deferred revenue — 62 Deferred interest 113 114 Other 579 566 Gross deferred tax liabilities 1,365 1,425 Net deferred tax assets $ 5,674 $ 4,780 The net operating loss and tax credit carryforward balance as of December 31, 2024, shown in the table above, is related to pre-tax U.S. federal and non-U.S. net operating loss (NOL) carryforwards of $ 10 million and $ 1.2 billion, respectively, and foreign tax credit (FTC) carryforwards of $ 137 million. If not utilized, certain U.S. federal and non-U.S. NOL carryforwards will expire between 2025 and 2032, whereas others have an unlimited carryforward period. The FTC carryforwards will expire between 2029 and 2034. A valuation allowance is established when management determines that it is more likely than not that all or some portion of the benefit of the deferred tax assets will not be realized. The valuation allowances for both periods presented above are associated with certain non-U.S. deferred tax assets, state NOLs, and FTC carryforwards. Accumulated earnings of certain non-U.S. subsidiaries, which totaled approximately $ 1.2 billion as of December 31, 2024, are intended to be permanently reinvested outside the U.S. We do not provide for state income and foreign withholding taxes on foreign earnings intended to be permanently reinvested outside the U.S. Accordingly, state income and foreign withholding taxes, which would have aggregated to approximately $ 0.1 billion as of December 31, 2024, have not been provided on those earnings. Net income taxes paid by us during 2024, 2023 and 2022, were approximately $ 3.6 billion, $ 3.3 billion and $ 3.0 billion, respectively. These amounts include estimated tax payments and cash settlements relating to prior tax years. We are subject to the income tax laws of the United States, its states and municipalities and those of the foreign jurisdictions in which we operate. These tax laws are complex, and the manner in which they apply to the taxpayer’s facts is sometimes open to interpretation. Given these inherent complexities, we must make judgments in assessing the likelihood that a tax position will be sustained upon examination by the taxing authorities based on the technical merits of the tax position. A tax position is recognized only when, based on management’s judgment regarding the application of income tax laws, it is more likely than not that the tax position will be sustained upon examination. The amount of benefit recognized for financial reporting purposes is based on management’s best judgment of the largest amount of benefit that is more likely than not to be realized on ultimate settlement with the taxing authority given the facts, circumstances and information available at the reporting date. We adjust the level of unrecognized tax benefits when there is new information available to assess the likelihood of the outcome. We are under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which we have significant business operations. The tax years under examination and open for examination vary by jurisdiction. We are currently under examination by the IRS for the 2017 and 2018 tax years. 152 Table of Contents 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: TABLE 20.4: ROLLFORWARD OF UNRECOGNIZED TAX BENEFITS (Millions) 2024 2023 2022 Balance, January 1 $ 875 $ 962 $ 1,024 Increases: Current year tax positions 161 132 119 Tax positions related to prior years 47 40 30 Decreases: Tax positions related to prior years ( 4 ) ( 50 ) ( 30 ) Settlements with tax authorities ( 39 ) ( 160 ) ( 74 ) Lapse of statute of limitations ( 21 ) ( 49 ) ( 104 ) Effects of foreign currency translations ( 13 ) — ( 3 ) Balance, December 31 $ 1,006 $ 875 $ 962 Included in the unrecognized tax benefits of $ 1.0 billion, $ 0.9 billion and $ 1.0 billion for December 31, 2024, 2023 and 2022, respectively, are approximately $ 780 million, $ 670 million and $ 750 million, respectively, that, if recognized, would favorably affect the effective tax rate in a future period. We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next twelve months by as much as $ 107 million, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the deductibility of certain expenses or losses and the attribution of taxable income to a particular jurisdiction or jurisdictions. Of the $ 107 million of unrecognized tax benefits, approximately $ 84 million relates to amounts that, if recognized, would impact the effective tax rate in a future period. Interest and penalties relating to unrecognized tax benefits are reported in the income tax provision. For the years ended December 31, 2024, 2023 and 2022, we recognized approximately $ 110 million, $ 30 million and $ 10 million, respectively, in expenses for interest and penalties. We had approximately $ 500 million and $ 410 million accrued for the payment of interest and penalties as of December 31, 2024 and 2023, respectively. 153 Table of Contents NOTE 21 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: TABLE 21.1: COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (Millions, except per share amounts) 2024 2023 2022 Numerator: Basic and diluted: Net income $ 10,129 $ 8,374 $ 7,514 Preferred dividends ( 58 ) ( 58 ) ( 57 ) Net income available to common shareholders 10,071 8,316 7,457 Earnings allocated to participating share awards ( 76 ) ( 64 ) ( 57 ) Net income attributable to common shareholders $ 9,995 $ 8,252 $ 7,400 Denominator: Basic: Weighted-average common stock 712 735 751 Add: Weighted-average stock options (a) 1 1 1 Diluted 713 736 752 Basic EPS $ 14.04 $ 11.23 $ 9.86 Diluted EPS $ 14.01 $ 11.21 $ 9.85 (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. 154 Table of Contents NOTE 22 REGULATORY MATTERS AND CAPITAL ADEQUACY 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. Our U.S. 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) and a supplementary leverage ratio (SLR) (Tier 1 capital to both on-balance sheet and certain off-balance sheet exposures). 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. As of December 31, 2024 and 2023, we met all capital requirements to which we were subject and maintained regulatory capital ratios in excess of those required to qualify as well capitalized. The following table presents the regulatory capital ratios: TABLE 22.1: REGULATORY CAPITAL RATIOS (Millions, except percentages) CET 1 capital Tier 1 capital Total capital CET 1 capital ratio Tier 1 capital ratio Total capital ratio Tier 1 leverage ratio Supplementary Leverage Ratio December 31, 2024: (a) American Express Company $ 24,860 $ 26,405 $ 31,127 10.5 % 11.2 % 13.2 % 9.8 % 8.3 % American Express National Bank $ 18,748 $ 18,748 $ 21,289 11.6 % 11.6 % 13.2 % 9.6 % 8.0 % December 31, 2023: (a) 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 (e) American Express Company 7.0 % 8.5 % 10.5 % 4.0 % 3.0 % American Express National Bank 7.0 % 8.5 % 10.5 % 4.0 % 3.0 % (a) Capital ratios reported using Basel III capital definitions and risk-weighted assets using the Basel III standardized approach. (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 Certain of our subsidiaries are subject to restrictions on the transfer of net assets under debt agreements and regulatory requirements. These restrictions have not had any effect on our shareholder dividend policy and management does not anticipate any impact in the future. Procedures exist to transfer net assets between the Company and its subsidiaries, while ensuring compliance with the various contractual and regulatory constraints. As of December 31, 2024, the aggregate amount of net assets of subsidiaries that are restricted to be transferred was approximately $ 15.3 billion. 155 Table of Contents BANK HOLDING COMPANY DIVIDEND RESTRICTIONS We are limited in our ability to pay dividends by the Federal Reserve, which could prohibit a dividend that would be considered an unsafe or unsound banking practice. It is the policy of the Federal Reserve that bank holding companies generally should pay dividends on preferred and common stock only out of net income available to common shareholders generated over the past year, and only if prospective earnings retention is consistent with the organization’s current and expected future capital needs, asset quality and overall financial condition. Moreover, bank holding companies are required by statute to be a source of strength to their insured depository institution subsidiaries and should not maintain dividend levels that undermine their ability to do so. On an annual basis, we are required to develop and maintain a capital plan, which includes planned dividends. We may be subject to limitations and restrictions on our dividends, if, among other things, (i) our regulatory capital ratios do not satisfy applicable minimum requirements and buffers or (ii) we are required to resubmit our capital plan. BANK DIVIDEND RESTRICTIONS In the year ended December 31, 2024, AENB paid dividends from retained earnings to its parent of $ 5.0 billion. AENB is limited in its ability to pay dividends by banking statutes, regulations and supervisory policy. In general, applicable federal and state banking laws prohibit, without first obtaining regulatory approval, insured depository institutions, such as AENB, from making dividend distributions if such distributions are not paid out of available retained earnings or would cause the institution to fail to meet capital adequacy standards. If AENB’s risk-based capital ratios do not satisfy minimum regulatory requirements and applicable buffers, it will face graduated constraints on dividends and other capital distributions. In determining the dividends to pay its parent, AENB must also consider the effects on applicable risk-based capital and leverage ratio requirements, as well as policy statements of the federal regulatory agencies. In addition, AENB’s banking regulators have authority to limit or prohibit the payment of a dividend by AENB under a number of circumstances, including if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound banking practice in light of the financial condition of the banking organization. 156 Table of Contents NOTE 23 SIGNIFICANT CREDIT CONCENTRATIONS Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to American Express’ total credit exposure. Our customers operate in diverse industries, economic sectors and geographic regions. The following table details our maximum credit exposure of the on-balance sheet assets by category as of December 31: TABLE 23.1: MAXIMUM CREDIT EXPOSURE OF ON-BALANCE SHEET ASSETS (Billions) 2024 2023 Individuals: (a) $ 194 $ 178 United States 160 145 Outside the United States (b) 34 33 Institutions: Financial services (c) 9 12 Other (d) 17 17 Federal Reserve Bank 35 37 U.S. Government and agencies (e) — 1 Total on-balance sheet $ 255 $ 245 (a) Primarily reflects loans and receivables from global consumer and small business Card Members, which are governed by individual credit risk management. (b) The geographic regions with the largest concentration outside the United States include the United Kingdom, Japan, the European Union, Australia, Canada and Mexico. (c) Represents banks, broker-dealers, insurance companies and savings and loan associations, which are governed by institutional credit risk management. (d) Primarily reflects loans and receivables from global corporate Card Members, which are governed by institutional credit risk management. (e) Represent debt obligations of the U.S. Government and its agencies, states and municipalities and government-sponsored entities. Risk management for these balances is governed by our Asset and Liability Management Committee. As of December 31, 2024 and 2023, our most significant concentration of credit risk was with individuals. These amounts are generally advanced on an unsecured basis. However, we review each potential customer’s credit application and evaluate the applicant’s financial history and ability and willingness to repay. We also consider credit performance by customer tenure, industry and geographic location in managing credit exposure. 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. 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. 157 Table of Contents NOTE 24 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 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: • U.S. Consumer Services (USCS), which issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products. 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. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients. • 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 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, 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. 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. TABLE 24.1: SELECTED FINANCIAL INFORMATION BY SEGMENT (Millions) USCS CS ICS GMNS Corporate & Other (a) Consolidated 2024 Total non-interest revenues $ 20,137 $ 13,219 $ 10,369 $ 6,729 $ ( 48 ) $ 50,406 Revenue from contracts with customers (b) 14,481 11,559 6,766 6,051 ( 32 ) 38,825 Interest income 14,430 4,374 2,331 52 2,608 23,795 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 Expenses Card Member rewards, business development and Card Member services (c) 14,329 6,504 5,243 1,148 43 27,267 Marketing 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 $ 114,228 $ 58,969 $ 42,879 $ 17,712 $ 37,673 $ 271,461 158 Table of Contents (Millions) USCS CS ICS GMNS Corporate & Other (a) Consolidated 2023 Total non-interest revenues $ 18,464 $ 12,931 $ 9,472 $ 6,620 $ ( 106 ) $ 47,381 Revenue from contracts with customers (b) 13,715 11,379 6,155 6,006 ( 37 ) 37,218 Interest income 12,336 3,328 2,076 57 2,186 19,983 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 Expenses Card Member rewards, business development and Card Member services (c) 12,808 6,332 4,588 1,218 46 24,992 Marketing 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 $ 107,158 $ 55,361 $ 42,234 $ 23,714 $ 32,641 $ 261,108 (Millions) USCS CS ICS GMNS Corporate & Other (a) Consolidated 2022 Total non-interest revenues $ 16,440 $ 12,196 $ 8,262 $ 6,123 $ ( 54 ) $ 42,967 Revenue from contracts with customers (b) 12,478 10,844 5,301 5,603 ( 7 ) 34,219 Interest income 8,457 2,070 1,453 23 655 12,658 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 Expenses Card Member rewards, business development and Card Member services (c) 10,791 6,116 3,816 1,192 ( 11 ) 21,904 Marketing 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 $ 94,444 $ 51,411 $ 36,891 $ 20,005 $ 25,603 $ 228,354 (a) Corporate & Other includes adjustments and eliminations for intersegment activity. (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. 159 Table of Contents Total Revenues Net of Interest Expense We allocate discount revenue and certain other revenues among segments using a transfer pricing methodology. Within the USCS, CS and ICS segments, discount revenue generally reflects the issuer component of the overall discount revenue generated by each segment’s Card Members; within the GMNS segment, discount revenue generally reflects the network and acquirer component of the overall discount revenue being allocated. Net card fees, processed revenue and certain other revenues are directly attributable to the segment in which they are reported. Interest and fees on loans and certain investment income is directly attributable to the segment in which it is reported. Interest expense represents an allocated funding cost based on a combination of segment funding requirements and internal funding rates. Provisions for Credit Losses The provisions for credit losses are directly attributable to the segment in which they are reported. 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. Service costs are allocated based on activities directly attributable to the segment, and overhead expenses are allocated based on the relative levels of revenue and Card Member loans and receivables. GEOGRAPHIC OPERATIONS 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. TABLE 24.2: SUMMARY OF TOTAL REVENUE AND PRETAX INCOME BY REGION (Millions) United States EMEA (a) APAC (a) LACC (a) Other Unallocated (b) Consolidated 2024 Total revenues net of interest expense $ 51,471 $ 6,216 $ 4,698 $ 3,845 $ ( 281 ) $ 65,949 Pretax income (loss) from continuing operations 12,919 935 656 803 ( 2,418 ) 12,895 2023 Total revenues net of interest expense $ 47,140 $ 5,633 $ 4,372 $ 3,571 $ ( 201 ) $ 60,515 Pretax income (loss) from continuing operations 10,717 854 592 760 ( 2,410 ) 10,513 2022 Total revenues net of interest expense $ 41,396 $ 4,871 $ 3,835 $ 2,917 $ ( 157 ) $ 52,862 Pretax income (loss) from continuing operations 10,383 550 376 500 ( 2,224 ) 9,585 (a) EMEA represents Europe, the Middle East and Africa; APAC represents Asia Pacific, Australia and New Zealand; and LACC represents Latin America, Canada and the Caribbean. (b) Other Unallocated includes net costs which are not directly allocated to specific geographic regions, including costs related to the net negative interest spread on excess liquidity funding and executive office operations expenses. 160 Table of Contents NOTE 25 PARENT COMPANY TABLE 25.1: PARENT COMPANY – CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Years Ended December 31 (Millions) 2024 2023 2022 Revenues Non-interest revenues Other $ 390 $ 407 $ 388 Total non-interest revenues 390 407 388 Interest income 1,858 1,558 614 Interest expense 1,869 1,436 857 Total revenues net of interest expense 379 529 145 Expenses Salaries and employee benefits 474 487 408 Other 385 408 372 Total expenses 859 895 780 Loss before income tax and equity in net income of subsidiaries ( 480 ) ( 366 ) ( 635 ) Income tax benefit ( 126 ) ( 163 ) ( 244 ) Equity in net income of subsidiaries and affiliates 10,483 8,577 7,905 Net income $ 10,129 $ 8,374 $ 7,514 Net unrealized pension and other postretirement benefits, net of tax 41 5 10 Other comprehensive income (loss), net ( 364 ) 133 ( 275 ) Comprehensive income $ 9,806 $ 8,512 $ 7,249 TABLE 25.2: PARENT COMPANY – CONDENSED BALANCE SHEETS As of December 31 (Millions) 2024 2023 Assets Cash and cash equivalents $ 7,293 $ 9,652 Equity in net assets of subsidiaries and affiliates 30,165 28,019 Loans to subsidiaries and affiliates 28,897 25,471 Due from subsidiaries and affiliates 1,291 1,261 Other assets 573 349 Total assets 68,219 64,752 Liabilities and Shareholders’ Equity Liabilities Accounts payable and other liabilities 2,239 2,188 Due to subsidiaries and affiliates 404 555 Long-term debt 35,312 33,952 Total liabilities 37,955 36,695 Shareholders’ Equity Total shareholders’ equity 30,264 28,057 Total liabilities and shareholders’ equity $ 68,219 $ 64,752 161 Table of Contents TABLE 25.3: PARENT COMPANY – CONDENSED STATEMENTS OF CASH FLOWS Years Ended December 31 (Millions) 2024 2023 2022 Cash Flows from Operating Activities Net income $ 10,129 $ 8,374 $ 7,514 Adjustments to reconcile net income to cash provided by operating activities: Equity in net income of subsidiaries and affiliates ( 10,483 ) ( 8,577 ) ( 7,905 ) Dividends received from subsidiaries and affiliates 8,027 5,326 5,549 Other operating activities, primarily with subsidiaries and affiliates 14 360 160 Net cash provided by operating activities 7,687 5,483 5,318 Cash Flows from Investing Activities Net increase in loans to subsidiaries and affiliates ( 3,449 ) ( 2,836 ) ( 4,850 ) Investments in subsidiaries and affiliates ( 55 ) — ( 1 ) Other investing activities 5 — — Net cash used in investing activities ( 3,499 ) ( 2,836 ) ( 4,851 ) Cash Flows from Financing Activities Net decrease in short-term debt from subsidiaries and affiliates — — ( 136 ) Proceeds from long-term debt 8,872 9,969 13,202 Payments of long-term debt ( 7,500 ) ( 5,750 ) ( 5,675 ) Issuance of American Express common shares 100 28 56 Repurchase of American Express common shares and other ( 6,020 ) ( 3,650 ) ( 3,502 ) Dividends paid ( 1,999 ) ( 1,780 ) ( 1,565 ) Net cash (used in) provided by financing activities ( 6,547 ) ( 1,183 ) 2,380 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 $ 8,188 162 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.