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What changed in American Express's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of American Express's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+579 added−569 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-09)

Top changes in American Express's 2024 10-K

579 paragraphs added · 569 removed · 455 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

117 edited+51 added−42 removed97 unchanged
Biggest changeOur various products and services are offered globally to diverse customer groups through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams and direct response advertising.
Biggest changeOur range of products and services includes: • Credit card, charge card, banking and other payment and financing products • Merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services • Network services • Travel and lifestyle services • Expense management products and services • Other services, such as the design and operation of customer loyalty programs These products and services are offered through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, in-house sales teams, direct mail, telephone and direct response advertising.
See “ Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition ” under “Risk Factors.” In various countries, such as certain Member States in the EU, Australia and Canada (other than in Quebec), merchants are permitted by law to surcharge card purchases.
See “ Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition ” under “Risk Factors.” In various countries, such as certain Member States in the EU, Australia and Canada (other than in the Province of Quebec), merchants are permitted by law to surcharge card purchases.
Rewards and Holistic Well-Being We aim to provide our colleagues with competitive compensation and leading benefits and take a holistic approach to well-being, providing resources that address the physical, financial and mental health of our colleagues. Our financial well-being program, Smart Saving, provides tools and resources to help colleagues build their knowledge and skills for all life stages.
We aim to provide our colleagues with competitive compensation and leading benefits and take a holistic approach to well-being, providing resources that address the physical, financial and mental health of our colleagues. Our financial well-being program, Smart Saving, provides tools and resources to help colleagues build their knowledge and skills for all life stages.
As noted above, each of the Company and TRS is a bank holding company and each has elected to become a financial holding company, which is authorized to engage in a broader range of financial and related activities. In order to remain eligible for financial holding company status, we must meet certain eligibility requirements.
As noted above, each of the Company and TRS is a bank holding company and each has elected to become a financial holding company, which is authorized to engage in a broader range of financial and related activities. In order to remain eligible for financial holding company status, the Company and TRS must meet certain eligibility requirements.
Banking regulators have broad examination and enforcement power, including the power to impose substantial fines, limit dividends and other capital distributions, restrict operations and acquisitions and require divestitures, any of which could compromise our competitive position.
Banking regulators have broad examination and enforcement powers, including the power to impose substantial fines, limit dividends and other capital distributions, restrict operations and acquisitions and require divestitures, any of which could compromise our competitive position.
Under these rules, each such bank holding company, as well as its bank subsidiaries, is assigned to one of four categories based on its status as a U.S. global systemically important banking organization and five other risk-based indicators: (i) total assets, (ii) cross-jurisdictional activity, (iii) non-bank assets, (iv) off-balance sheet exposure, and (v) weighted short-term wholesale funding, with the most stringent requirements applying to Category I firms and the least stringent requirements applying to Category IV firms.
Under these rules, each such bank holding company is assigned to one of four categories based on its status as a U.S. global systemically important banking organization and five other risk-based indicators: (i) total assets, (ii) cross-jurisdictional activity, (iii) non-bank assets, (iv) off-balance sheet exposure, and (v) weighted short-term wholesale funding, with the most stringent requirements applying to Category I firms and the least stringent requirements applying to Category IV firms.
Resolution Planning Certain bank holding companies are required to submit resolution plans to the Federal Reserve and FDIC providing for the company’s strategy for rapid and orderly resolution in the event of its material financial distress or failure.
Resolution and Recovery Planning Certain bank holding companies are required to submit resolution plans to the Federal Reserve and FDIC providing for the company’s strategy for rapid and orderly resolution in the event of its material financial distress or failure.
Economic Sanctions National governments and international bodies, such as the United Nations and the EU, have imposed economic sanctions against individuals, entities, vessels, governments and countries that endanger their interests or violate international norms of behavior.
Economic Sanctions National governments and international bodies, such as the United Nations and the EU, have imposed economic sanctions against individuals, entities, vessels, governments, regions and countries that endanger their interests or violate international norms of behavior.
There is uncertainty as to when or how interchange fee caps and other provisions of the EU payments legislation might apply when we work with cobrand partners and agents in the EU.
In addition, there is uncertainty as to when or how interchange fee caps and other provisions of the EU payments legislation might apply when we work with cobrand partners and agents in the EU.
We also have a significant ownership position in, and extensive commercial arrangements with, Global Business Travel Group, Inc. (GBTG), which provides business travel-related services. Delta is our largest strategic partner. Our relationships with, and revenues and expenses related to, Delta are significant and represent an important source of value for our Card Members.
We also have an ownership position in, and commercial arrangements with, Global Business Travel Group, Inc. (GBTG), which provides business travel-related services. Delta is our largest strategic partner. Our relationships with, and revenues and expenses related to, Delta are significant and represent an important source of value for our Card Members.
Compliance with such laws results in higher technology, administrative and other costs for us, could limit our ability to optimize the use of our closed-loop data, and could require use of local technology services. Some of these laws also require us to provide foreign governments and other third parties broader access to our data and intellectual property.
Compliance with such laws results in higher technology, administrative and other costs for us, could limit our ability to optimize the use of our data, and could require use of local technology services. Some of these laws also require us to provide foreign governments and other third parties broader access to our data and intellectual property.
In some cases, regulations also extend to certain aspects of our business, such as network and cobrand arrangements or the terms of card acceptance for merchants, and we have exited our network businesses in the EU and Australia as a result of regulation in those jurisdictions, for example.
In some cases, regulations also extend to certain aspects of our business, such as network and cobrand arrangements or the terms of card acceptance for merchants. For example, we exited our network business in the EU and Australia as a result of regulation in those jurisdictions.
Our data protection programs have become the subject of heightened scrutiny in certain Member States in the EU and we continue to make changes to our privacy practices and data governance to comply with these requirements.
Our data protection programs have become the subject of heightened scrutiny in certain Member States in the EU and we continue to make changes to our privacy practices and data management to comply with these requirements.
The following chart provides a summary of our diverse set of customers and broad geographic footprint based on worldwide network volumes: 3 Table of Contents Partners and Relationships Our integrated payments platform allows us to work with a range of business partners, and our partners in return help drive the scale and relevance of the platform.
Diverse Customer Base and Global Footprint The following chart provides a summary of our diverse set of customers and broad geographic footprint based on worldwide network volumes: 3 Table of Contents Partners and Relationships Our integrated payments platform allows us to work with a range of business partners, and our partners in return help drive the scale and relevance of the platform.
Various competitors are integrating more financial services into their product offerings and competitors are seeking to attain the benefits of closed-loop, loyalty and rewards functionalities, such as ours. 9 Table of Contents In addition to the discussion in this section, see “ Our operating results may materially suffer because of substantial and increasingly intense competition worldwide in the payments industry ” under “Risk Factors” for further discussion of the potential impact of competition on our business, and “ Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition ” and “ Legal proceedings regarding provisions in our merchant contracts, including non-discrimination and honor-all-cards provisions, could have a material adverse effect on our business and result in additional litigation and/or arbitrations, changes to our merchant agreements and/or business practices, substantial monetary damages and damage to our reputation and brand ” under “Risk Factors” for a discussion of the potential impact on our ability to compete effectively due to government regulations or if ongoing legal proceedings limit our ability to prevent merchants from engaging in various actions to discriminate against our card products. 10 Table of Contents SUPERVISION AND REGULATION Overview We are subject to evolving and extensive government regulation and supervision in jurisdictions around the world, and the costs of ongoing compliance are substantial.
Additionally, various competitors are integrating more financial services into their product offerings and competitors are seeking to attain the benefits of an integrated payments platform, such as ours. 9 Table of Contents In addition to the discussion in this section, see “ Our operating results may materially suffer because of substantial and increasingly intense competition worldwide in the payments industry ” under “Risk Factors” for further discussion of the potential impact of competition on our business, and “ Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition ” and “ Legal proceedings regarding provisions in our merchant contracts, including non-discrimination and honor-all-cards provisions, could have a material adverse effect on our business and result in additional litigation and/or arbitrations, changes to our merchant agreements and/or business practices, substantial monetary damages and damage to our reputation and brand ” under “Risk Factors” for a discussion of the potential impact on our ability to compete effectively due to government regulations or if ongoing legal proceedings limit our ability to prevent merchants from engaging in various actions to discriminate against our card products. 10 Table of Contents SUPERVISION AND REGULATION Overview We are subject to evolving and extensive government regulation and supervision in jurisdictions around the world, and the costs of ongoing compliance are substantial.
For example, on October 24, 2023, the U.S. federal bank regulatory agencies issued “Principles for Climate-Related Financial Risk Management for Large Financial Institutions.” The principles would apply to financial institutions with more than $100 billion in total consolidated assets, like the Company and AENB, and are broadly designed to provide a high-level framework for the safe and sound management of exposures to climate-related financial risks consistent with existing U.S. federal bank regulatory agencies’ rules and guidance.
Climate Risk Management In October 2023, the U.S. federal bank regulatory agencies issued “Principles for Climate-Related Financial Risk Management for Large Financial Institutions.” The principles apply to financial institutions with more than $100 billion in total consolidated assets, like the Company and AENB, and are broadly designed to provide a high-level framework for the safe and sound management of exposures to climate-related financial risks consistent with existing U.S. federal bank regulatory agencies’ rules and guidance.
If these or other regulations are adopted in a form similar to what has been proposed, they will impose limitations on the manner in which we may structure compensation for our colleagues, which could adversely affect our ability to hire, retain and motivate key colleagues. 20 Table of Contents ADDITIONAL INFORMATION We maintain an Investor Relations website at http://ir.americanexpress.com.
If these or other regulations are adopted in a form similar to what has been proposed, they will impose limitations on the manner in which we may structure compensation for our colleagues, which could adversely affect our ability to hire, retain and motivate key colleagues. 21 Table of Contents ADDITIONAL INFORMATION We maintain an Investor Relations website at https://ir.americanexpress.com.
The principal competitive factors that affect the card-issuing, merchant and network businesses include: • The features, value and quality of the products and services, including customer care, rewards programs, partnerships, travel and lifestyle-related benefits, and digital and mobile services, as well as the costs associated with providing such features and services • Reputation and brand recognition • The number, spending characteristics and credit performance of customers • The quantity, diversity and quality of the establishments where the cards can be used • The attractiveness of the value proposition to card issuers, merchant acquirers, cardholders, corporate clients and merchants (including the relative cost of using or accepting the products and services, and capabilities such as fraud prevention and data analytics) • The number and quality of other cards and other forms of payment and financing available to customers • The success of marketing and promotional campaigns • The speed of innovation and investment in systems, technologies and product and service offerings • The nature and quality of expense management tools, electronic payment methods and data capture and reporting capabilities, particularly for business customers • The security of cardholder, merchant and network partner information Another aspect of competition is the dynamic and rapid growth of alternative payment and financing mechanisms, systems and products, which include payment facilitators and aggregators, digital payment, open banking and electronic wallet platforms, point-of-sale lenders and buy now, pay later products, real-time settlement and processing systems, financial technology companies, digital currencies developed by both central banks and the private sector, blockchain and similar distributed ledger technologies, prepaid systems and gift cards, and systems linked to customer accounts or that provide payment solutions.
The principal competitive factors that affect card-issuing, merchant and network businesses include: • The features, value and quality of the products and services, including customer care, rewards programs and offers, partnerships, travel and lifestyle-related benefits (including lounges, dining and other entertainment), banking services and digital and mobile services, as well as the costs associated with providing such features and services • Reputation and brand recognition • The number, spending characteristics and credit performance of customers • The quantity, diversity and quality of the establishments where the cards can be used • The attractiveness of the value proposition to card issuers, merchant acquirers, third-party processors, cardholders, corporate clients, merchants and other payment intermediaries (including the relative cost and ease of using or accepting the products and services, and capabilities such as fraud prevention and data analytics) • The number, quality and cost of other cards and other forms of payment and financing available to customers, as well as the integration and connectivity of those products • The security of cardholder, merchant and network partner information • The success of marketing and promotional campaigns • The speed of innovation and investment in systems, technologies and product and service offerings • The nature and quality of expense management tools, electronic payment methods and data capture and reporting capabilities, particularly for business customers Another aspect of competition is the dynamic and rapid growth of alternative payment and financing mechanisms, systems and products, which include payment facilitators and aggregators, digital payment, open banking and electronic wallet platforms, point-of-sale lenders and buy now, pay later products, real-time settlement and processing systems, financial technology companies, digital currencies developed by both central banks and the private sector, blockchain and similar distributed ledger technologies, prepaid systems and gift cards, and systems linked to customer accounts or that provide payment solutions.
We have established, and continue to maintain, policies and a governance framework to comply with applicable privacy, data protection, data governance and information security and cybersecurity laws and requirements, meet evolving customer and industry expectations and support and enable business innovation and growth; however, our policies and governance framework may be insufficient given the size and complexity of our business and heightened regulatory scrutiny.
We have established, and continue to maintain, policies and a governance framework to comply with applicable privacy, data protection, data management, artificial intelligence, resiliency, information security and cybersecurity laws and requirements, meet evolving customer and industry expectations and support and enable business innovation and growth; however, our policies and governance framework may be insufficient given the size and complexity of our business and heightened regulatory scrutiny.
Regulation and other governmental actions relating to pricing or practices could affect all networks directly or indirectly, as well as adversely impact consumers and merchants.
Regulation and other governmental actions relating to operations, pricing or practices could affect all networks and/or acquirers directly or indirectly, as well as adversely impact consumers and merchants.
Banking organizations whose ratios of CET1 capital, Tier 1 capital or Total capital to risk-weighted assets are below these effective minimum ratios face constraints on discretionary distributions such as dividends, repurchases and redemptions of capital securities, and executive compensation.
Banking organizations with ratios of CET1 capital, Tier 1 capital or Total capital to risk-weighted assets below these effective minimum ratios face constraints on discretionary distributions such as dividends, repurchases and redemptions of capital securities and executive compensation.
We are also subject to certain privacy, data protection, data governance and information security and cybersecurity laws in other countries in which we operate (including Member States in the EU, Australia, Canada, China, Japan, Hong Kong, India, Indonesia, Mexico, Singapore, Thailand and the United Kingdom), some of which are more stringent and/or expansive than those in the United States and some of which may conflict with each other.
We are also subject to certain privacy, data protection, data management, artificial intelligence, resiliency, information security and cybersecurity laws in other countries in which we operate (including Member States in the EU, Australia, Canada, China, Japan, Hong Kong, India, Indonesia, Mexico, Singapore, Thailand and the United Kingdom), some of which are more stringent and/or expansive than those in the United States and may conflict with each other.
For additional information regarding our capital ratios, see “Consolidated Capital Resources and Liquidity” under “MD&A.” Under the Capital Rules, banking organizations are required to maintain minimum ratios for Common Equity Tier 1 (CET1 capital), Tier 1 capital (that is, CET1 capital plus additional Tier 1 capital) and Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets.
For additional information regarding our capital ratios, see “Consolidated Capital Resources and Liquidity” under “MD&A.” 12 Table of Contents Under the Capital Rules, banking organizations are required to maintain minimum ratios for Common Equity Tier 1 (CET1 capital), Tier 1 capital (that is, CET1 capital plus additional Tier 1 capital) and Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets.
Radhakrishnan joined American Express from Wells Fargo & Company, where he served as Chief Information Officer for the Commercial Banking and Corporate & Investment Banking businesses since May 2020. Prior thereto, he had been Chief Information Officer, Wholesale, Wealth & Investment Management and Innovation from May 2019 to May 2020.
Radhakrishnan joined American Express from Wells Fargo & Company, where he served as Chief Information Officer for the Commercial Banking and Corporate & Investment Banking businesses since May 2020. Prior thereto, he had been Chief Information Officer, Wholesale, Wealth & Investment Management and Innovation from May 2019 to May 2020. ELIZABETH RUTLEDGE — Chief Marketing Officer Ms.
The payments industry continues to undergo dynamic changes in response to evolving technologies, consumer habits and merchant needs, such as an increased shift to digital payments. As a card issuer, we compete with financial institutions that issue general-purpose credit and debit cards, as well as businesses that issue private label cards, operate mobile wallets, provide payment services or extend credit.
The payments industry continues to undergo dynamic changes in response to evolving technologies, consumer habits and merchant needs. As a card issuer, we compete with financial institutions that issue general-purpose credit and debit cards, as well as businesses that issue private label cards, operate mobile wallets, provide payment services or extend credit.
Our cross-jurisdictional activity was $67 billion as of December 31, 2023, and the four-quarter trailing average was $60 billion. Capital and Liquidity Regulation Capital Rules The Company and AENB are required to comply with the applicable capital adequacy rules established by federal banking regulators.
Our cross-jurisdictional activity was $66 billion as of December 31, 2024, and the four-quarter trailing average was $67 billion. Capital and Liquidity Regulation Capital Rules The Company and AENB are required to comply with the applicable capital adequacy rules established by federal banking regulators.
For further information about our reportable operating segments, see “Business Segment Results of Operations” under “MD&A.” Our Integrated Payments Platform and Technology Through our general-purpose card-issuing, merchant-acquiring and card network businesses, we are able to connect participants and provide differentiated value across the commerce path.
For further information about our reportable operating segments, see “Business Segment Results of Operations” under “MD&A.” 1 Table of Contents Our Integrated Payments Platform and Technology Through our card-issuing, merchant-acquiring and card network businesses, we are able to connect participants and provide differentiated value across the commerce path.
Our regulators are increasingly focused on ensuring that our privacy, data protection, data governance and cybersecurity-related policies and practices are adequate to inform customers of our data collection, use, sharing and/or security practices, to provide them with choices, if required, about how we use and share their information, and to appropriately safeguard their personal information and account access.
Our regulators are increasingly focused on ensuring that our privacy, data protection, data management, artificial intelligence, resiliency and cybersecurity-related policies and practices are adequate to inform customers of our data collection, use, sharing and/or security practices, to provide them with choices, if required, about how we use and share their information, and to appropriately safeguard their personal information and account access.
In a ruling issued on February 7, 2018, the EU Court of Justice confirmed the validity of fee capping and other provisions in circumstances where three-party networks issue cards with a cobrand partner or through an agent, although the ruling provided only limited guidance as to when or how the provisions might apply in such circumstances and remains subject to differing interpretations by regulators and participants in cobrand arrangements.
In 2018, the EU Court of Justice (CJEU) confirmed the validity of fee capping and other provisions in circumstances where three-party networks issue cards with a cobrand partner or through an agent, although its ruling provided only limited guidance as to when or how the provisions might apply in such circumstances and remains subject to differing interpretations by regulators and participants in cobrand arrangements.
Spending on our cards, which is higher on average on a per-card basis versus our network competitors, offers superior value to merchants in the form of loyal customers and larger transactions.
Spending on our cards, which is higher on average on a per-card basis versus our network competitors, offers superior value to merchants in the form of loyal customers and larger transactions, and attracts partners to provide value to our Card Members and merchants.
Any errors, failures or delays in complying with AML/CFT laws, perceived deficiencies in our AML/CFT programs or association of our business with money laundering, terrorist financing, tax fraud or other illicit activity can give rise to significant supervisory, criminal and civil proceedings and lawsuits, which could result in significant penalties and forfeiture of assets, loss of licenses or restrictions on business activities, or other enforcement actions.
Our AML/CFT programs have become the subject of heightened scrutiny and any errors, failures or delays in complying with AML/CFT laws, deficiencies in our AML/CFT programs or association of our business with money laundering, terrorist financing, tax fraud or other illicit activity can give rise to significant supervisory, criminal and civil proceedings and lawsuits, which could result in significant penalties and forfeiture of assets, loss of licenses or restrictions on business activities, or other enforcement actions.
Moreover, further changes in the risk-based indicators described above, such as if we have $75 billion or more in cross-jurisdictional activity (calculated based on a four-quarter trailing average), could result in us becoming a Category II firm and subject to more stringent capital, liquidity and prudential requirements.
Further changes in the levels of risk-based indicators described above, such as if we have $75 billion or more in cross-jurisdictional activity (based on a four-quarter trailing average), could result in the Company becoming a Category II firm and subject to more stringent capital, liquidity and prudential requirements.
We may be required to revise and resubmit our capital plan following certain events or developments, such as a significant acquisition or an event that could result in a material change in our risk profile or financial condition.
The Company may be required to revise and resubmit its capital plan following certain events or developments, such as a significant acquisition or an event that could result in a material change in its risk profile or financial condition.
There are many examples of how we work with partners, including: issuing cards under cobrand arrangements with other corporations and institutions (e.g., Delta Air Lines (Delta), Marriott International, Hilton Worldwide Holdings and British Airways); offering innovative ways for our Card Members to earn and use points with our merchants (e.g., Pay with Points at Amazon.com); providing greater value to our Card Members (e.g., Amex Offers and statement credits for purchases with partners); expanding merchant acceptance with third-party acquirers and processors (e.g., OptBlue partners); operating through joint ventures in certain jurisdictions (e.g., in China, the Middle East and Switzerland); developing new capabilities and features with our digital partners (e.g., PayPal and i2c); integrating into the supplier payment processes of our business customers (e.g., BILL and Extend); and enhancing our travel benefits and services (e.g., Fine Hotels and Resorts).
There are many examples of how we work with partners, including: issuing cards under cobrand arrangements with other corporations and institutions (e.g., Delta Air Lines (Delta), Hilton Worldwide Holdings, Marriott International and British Airways); providing greater value to our Card Members (e.g., Amex Offers and statement credits for purchases with partners); offering innovative ways for our Card Members to earn and use points with our merchants (e.g., Pay with Points at Amazon.com); expanding merchant acceptance with third-party acquirers and processors (e.g., OptBlue partners); operating through joint ventures in certain jurisdictions (e.g., in China, the Middle East and Switzerland); developing new capabilities and features with our digital partners (e.g., PayPal and i2c); enhancing our travel benefits and services (e.g., Fine Hotels and Resorts ® ); and providing experiences and entertainment for Card Members (e.g., via Formula 1 and AEG Worldwide).
See “ Surcharging or steering by merchants could materially adversely affect our business and results of operations ” under “Risk Factors.” In some countries, governments have established regulatory regimes that require international card networks to be locally licensed and/or to localize aspects of their operations.
See “ Surcharging, steering or other differential acceptance practices by merchants could materially adversely affect our business and results of operations ” under “Risk Factors.” 18 Table of Contents In some countries, governments have established regulatory regimes that require international card networks to be locally licensed and/or to localize aspects of their operations.
On July 27, 2023, the Federal Reserve confirmed the SCB for the Company of 2.5 percent, which remained unchanged from the level announced in August 2022.
On August 28, 2024, the Federal Reserve confirmed the SCB for the Company of 2.5 percent, which remained unchanged from the level announced in July 2023.
Under the proposal, resolution plans would be subject to more stringent standards with respect to their assumptions and content, as well as enhanced credibility standards for the FDIC’s evaluation of resolution plans and expanded expectations regarding engagement and capabilities testing.
Under the final rule, resolution plans are subject to more stringent standards with respect to their assumptions and content, as well as enhanced credibility standards for the FDIC’s evaluation of resolution plans and expanded expectations regarding engagement and capabilities testing.
The Company and TRS engage in various activities permissible only for financial holding companies, including, in particular, providing travel agency 11 Table of Contents services, acting as a finder and engaging in certain insurance underwriting and agency services.
The Company, TRS and their subsidiaries engage in various activities permissible only for financial holding companies, including, in particular, providing travel agency services, acting as a finder and engaging in certain insurance underwriting and agency services.
For the year ended December 31, 2023, worldwide billed business (spending on American Express cards issued by us) was $1,460 billion and at December 31, 2023, we had 80.2 million proprietary cards-in-force worldwide. Merchant Acquiring Business Our GMNS reportable operating segment builds and manages relationships with millions of merchants around the world that choose to accept American Express cards.
For the year ended December 31, 2024, worldwide billed business (spending on American Express cards issued by us) was $1,551 billion and as of December 31, 2024, we had 83.6 million proprietary cards-in-force worldwide. 2 Table of Contents Merchant Acquiring Business Our GMNS reportable operating segment builds and manages relationships with millions of merchants around the world that choose to accept American Express cards.
Each officer’s age is indicated by the number in parentheses next to his or her name. DOUGLAS E. BUCKMINSTER — Vice Chairman Mr. Buckminster (63) has been Vice Chairman since April 2021. Prior thereto, he had been Group President, Global Consumer Services Group since February 2018. JEFFREY C. CAMPBELL — Vice Chairman Mr.
Each officer’s age is indicated by the number in parentheses next to his or her name. DOUGLAS E. BUCKMINSTER — Vice Chairman Mr. Buckminster (64) has been Vice Chairman since April 2021. Prior thereto, he had been Group President, Global Consumer Services Group since February 2018. HOWARD GROSFIELD — Group President, U.S. Consumer Services Mr.
In October 2023 , the U.S. federal bank 16 Table of Contents regulatory agencies adopted a final rule that makes extensive revisions to the CRA regulatory framework, including to the definition of “limited purpose bank,” which could impact AENB and alter its CRA compliance obligations.
AENB is currently designated a “limited purpose bank” under CRA regulations. In October 2023 , the U.S. federal bank regulatory agencies adopted a final rule that makes extensive revisions to the CRA regulatory framework, including to the definition of “limited purpose bank,” which could impact AENB and alter its CRA compliance obligations.
A bank holding company’s SCB requirement is effective on October 1 of each year and will remain in effect through September 30 of the following year unless it is reset in connection with resubmission of a capital plan, as discussed below.
A bank holding company’s SCB requirement is effective on October 1 of each year and will remain in effect through September 30 of the following year unless it is reset in connection with resubmission of a capital plan, as discussed below. The Company is also required to comply with minimum leverage ratio requirements.
After making these adjustments, we believe we maintained 100 percent pay equity in 2023 for colleagues across genders globally and across races and ethnicities in the United States. 6 Table of Contents Information About Our Executive Officers Set forth below, in alphabetical order, is a list of our executive officers as of February 9, 2024, including each executive officer’s principal occupation and employment during the past five years.
In 2024, we maintained 100 percent pay equity, meaning no statistical differences in pay, for colleagues across genders globally and across races and ethnicities in the United States. 6 Table of Contents Information About Our Executive Officers Set forth below, in alphabetical order, is a list of our executive officers as of February 7, 2025, including each executive officer’s principal occupation and employment during the past five years.
Common stock dividend payments and share repurchases by the Company are subject to the oversight of the Federal Reserve, as described above.
Common stock dividend payments and share repurchases by the Company are subject to the oversight of the Federal Reserve and the outcome of the annual CCAR stress testing exercise, as described above.
Surcharging is an adverse customer experience and could have a material adverse effect on us, particularly where it only or disproportionately impacts credit card usage or card usage generally, our Card Members or our business. In addition, other steering or differential acceptance practices that are permitted by regulation in some jurisdictions could also have a material adverse effect on us.
Surcharging is an adverse customer experience and could have a material adverse effect on us, particularly where it only or disproportionately impacts credit card usage or card usage generally, our Card Members or our business. In addition, we also encounter steering or differential acceptance practices by merchants, which could also have a material adverse effect on us.
In 2016, the federal banking regulators, the SEC, the Federal Housing Finance Agency and the National Credit Union Administration proposed revised rules on incentive-based compensation practices, which have not yet been finalized.
In 2016, the federal banking regulators, the SEC, the Federal Housing Finance Agency and the National Credit Union Administration proposed revised rules on incentive-based compensation practices, which were reproposed by certain of those agencies in 2024, but have not yet been finalized.
Stress Testing and Capital Planning Under the Federal Reserve’s regulations, the Company is subject to supervisory stress testing requirements that are designed to evaluate whether a bank holding company has sufficient capital on a total consolidated basis to absorb losses and support operations under adverse economic conditions.
Stress Testing and Capital Planning Under the Federal Reserve’s regulations, the Company is subject to annual supervisory stress testing requirements and biennial company-run stress testing requirements (commonly referred to as Dodd-Frank Act Stress Tests or “DFASTs”) that are designed to evaluate whether a bank holding company has sufficient capital on a total consolidated basis to absorb losses and support operations under adverse economic conditions.
The UK Bribery Act also prohibits commercial bribery and the receipt of a bribe, and makes it a corporate offense to fail to prevent bribery by an associated person, in addition to prohibiting improper payments to foreign government officials.
The FCPA also requires us to strictly comply with certain accounting and internal controls standards. The UK Bribery Act also prohibits commercial bribery and the receipt of a bribe, and makes it a corporate offense to fail to prevent bribery by an associated person, in addition to prohibiting improper payments to foreign government officials.
Bankruptcy Code, including the right of the FDIC under the OLA to disregard the strict priority of creditor claims in limited circumstances, the use of an administrative claims procedure to determine creditor claims (as opposed to the judicial procedure used in bankruptcy proceedings), and the right of the FDIC to transfer claims to a “bridge” entity. 15 Table of Contents The FDIC has developed a strategy under OLA, referred to as the “single point of entry” or “SPOE” strategy, under which the FDIC would resolve a failed financial holding company by transferring its assets (including shares of its operating subsidiaries) and, potentially, very limited liabilities to a “bridge” holding company; utilize the resources of the failed financial holding company to recapitalize the operating subsidiaries; and satisfy the claims of unsecured creditors of the failed financial holding company and other claimants in the receivership by delivering securities of one or more new financial companies that would emerge from the bridge holding company.
The FDIC has developed a strategy under OLA, referred to as the “single point of entry” or “SPOE” strategy, under which the FDIC would resolve a failed financial holding company by transferring its assets (including shares of its operating subsidiaries) and, potentially, very limited liabilities to a “bridge” holding company; utilize the resources of the failed financial holding company to recapitalize the operating subsidiaries; and satisfy the claims of unsecured creditors of the failed financial holding company and other claimants in the receivership by delivering securities of one or more new financial companies that would emerge from the bridge holding company.
We support our colleagues’ physical health and well-being through our corporate wellness program, Healthy Living. We also provide resources and support to increase awareness about mental health among our colleagues through our Healthy Minds Program.
We support our colleagues’ physical health and well-being through our corporate wellness program, Healthy Living and we provide resources and support to increase awareness about mental health among our colleagues through our Healthy Minds Program. We also have policies and processes in place to help ensure we compensate colleagues fairly and equitably.
Category II firms and their depository institution subsidiaries are subject to the full requirements of the LCR and NSFR, as well as a requirement to submit a liquidity monitoring report on a daily (rather than monthly) basis.
Category II firms and their depository institution subsidiaries are subject to the full requirements of the LCR and NSFR, as well as a requirement to submit a liquidity monitoring report on a daily (rather than monthly) basis. In addition, the Federal Reserve’s enhanced prudential standards rule includes heightened liquidity and risk management requirements.
In 2023, we continued to invest in our colleagues, building on a wide range of learning and development opportunities and enhancing our competitive benefits in key areas including holistic health and wellness, total compensation and flexibility.
In 2024, we continued to invest in our colleagues, building on a wide range of learning and development opportunities and enhancing our competitive benefits in key areas including total compensation and holistic health and wellness. We continuously invest in programs, benefits and resources to foster the personal and professional growth of our colleagues.
We maintain direct relationships with Card Members (as a card issuer) and merchants (as an acquirer), which provides us with direct access to information at both ends of the card transaction, distinguishing our integrated payments platform from the bankcard networks.
We maintain direct relationships with Card Members (as a card issuer) and merchants (as an acquirer), which provides us with access to information at both ends of the card transaction, distinguishing our integrated payments platform from the bankcard networks. Through contractual relationships, we also obtain information from third-party card issuers, merchant acquirers, aggregators and processors with whom we do business.
For the year ended December 31, 2023, worldwide network services processed volume (spending on American Express cards issued by third parties) was $220.5 billion and at December 31, 2023, we had 61.0 million cards-in-force issued by third parties worldwide.
For the year ended December 31, 2024, worldwide network services processed volume (spending on American Express cards issued by third parties) was $213.9 billion and as of December 31, 2024, we had 62.8 million cards-in-force issued by third parties worldwide.
Finally, we want to continue to build on our unique global position, seeking ways to use our differentiated business model and global presence as we progress against our other strategic imperatives. We also have an Environmental, Social and Governance (ESG) strategy that focuses on three pillars.
Finally, we want to continue to build on our unique global position, seeking ways to use our differentiated business model and global presence as we progress against our other strategic imperatives.
In addition, we routinely post financial and other information, some of which could be material to investors, on our Investor Relations website. Information regarding our corporate sustainability initiatives, including our Environmental, Social and Governance reports, are available on the Corporate Sustainability section of our website at http://about.americanexpress.com/corporate-sustainability.
In addition, we routinely post financial and other information, some of which could be material to investors, on our Investor Relations website. Information regarding our corporate sustainability initiatives and related disclosures are available on the Corporate Sustainability section of our website at https://go.amex/esg.
On August 29, 2023, the Dutch Trade and Industry Appeals Tribunal referred questions to the EU Court of Justice on the interpretation of the application of the interchange fee caps in connection with an administrative proceeding by the Netherlands Authority for Consumers and Markets regarding our cobrand relationship with KLM Royal Dutch Airlines.
In December 2024, the CJEU held a hearing on questions referred by the Dutch Trade and Industry Appeals Tribunal regarding the interpretation of the application of the interchange fee caps in connection with an administrative proceeding by the Netherlands Authority for Consumers and Markets regarding our cobrand relationship with KLM Royal Dutch Airlines; the CJEU has not yet issued a decision.
Prior thereto, he had been Deputy CFO since December 2021 and Head of Corporate Planning since February 2019. He also served as Business CFO for the Global Consumer Services Group from May 2016 to February 2019. RAFAEL MARQUEZ — President, International Card Services Mr. Marquez (52) has been President, International Card Services since May 2022.
Prior thereto, he had been Deputy CFO since December 2021 and Head of Corporate Planning since February 2019. RAFAEL MARQUEZ — President, International Card Services Mr. Marquez (53) has been President, International Card Services since May 2022. Prior thereto, he had been President, International Consumer Services and Global Loyalty Coalition since September 2019.
Marrs (50) has been Group President, Commercial Services and Credit & Fraud Risk since April 2021. Prior thereto, she had been President, Commercial Services since September 2018. GLENDA MCNEAL — Chief Partner Officer Ms. McNeal (63) has been Chief Partner Officer since February 2024. Prior thereto, she had been President, Enterprise Strategic Partnerships since March 2017.
ANNA MARRS — Group President, Global Merchant and Network Services Ms. Marrs (51) has been Group President, Global Merchant and Network Services since February 2025. Prior thereto, she had been Group President, Global Commercial Services and Credit & Fraud Risk since April 2021 and President, Global Commercial Services since September 2018. GLENDA MCNEAL — Chief Partner Officer Ms.
In addition, the laws of a number of states in the United States that prohibit surcharging have been overturned and certain states have passed or are considering laws to permit surcharging by merchants.
In addition, the laws of a number of states in the United States that prohibit surcharging have been overturned and certain states have passed or are considering laws to permit surcharging by merchants. In jurisdictions allowing surcharging, we have seen an increase in merchant surcharging on American Express cards, particularly in certain merchant categories.
In addition to such networks, a range of companies globally, including merchant acquirers, processors and web- and mobile-based payment platforms (e.g., Alipay, PayPal and Venmo), as well as regional payment networks (such as the National Payments Corporation of India), carry out some activities similar to those performed by our GMNS business.
In addition to such networks, we compete against a range of companies globally, including merchant acquirers, processors and web- and mobile-based payment platforms (e.g., Alipay, PayPal and Shop Pay), as well as regional payment networks (such as the National Payments Corporation of India).
We face intense competition in the premium space and for cobrand relationships, as both card issuer and network competitors have targeted high-spending customers and key business partners with attractive value propositions. We also face competition for partners and other differentiated offerings, such as lounge space in U.S. and global hub airports, restaurant reservation capabilities and other experiential offerings to customers.
We face intense competition in the premium space and for cobrand relationships, as both card issuer and network competitors have targeted high-spending customers and key business partners with attractive value propositions.
As a result, the amount of Card Member loans and receivables outstanding tend to be moderately higher during that quarter. Additionally, we tend to have a higher proportion of retail-related billed business in the fourth quarter, which on average has a slightly lower merchant discount rate. 21 Table of Contents
Additionally, we tend to have a higher proportion of retail-related billed business in the fourth quarter, which on average has a slightly lower merchant discount rate. 22 Table of Contents
We issue cards under cobrand arrangements with Delta and the Delta cobrand portfolio represented approximately 10 percent of worldwide network volumes and approximately 21 percent of worldwide Card Member loans as of December 31, 2023.
We issue cards under cobrand arrangements with Delta and the Delta cobrand portfolio continued to represent approximately 12 percent of worldwide billed business and approximately 21 percent of worldwide Card Member loans as of December 31, 2024.
Williams also serves as the Chief Executive Officer of American Express National Bank. 8 Table of Contents COMPETITION We compete in the global payments industry with card networks, issuers and acquirers, paper-based transactions (e.g., cash and checks), bank transfer models (e.g., wire transfers and Automated Clearing House, or ACH), as well as evolving and growing alternative mechanisms, systems and products that leverage new technologies, business models and customer relationships to create payment, financing or banking solutions.
Prior thereto, he had been Executive Vice President and General Manager of Global Card & Risk Operations since January 2020. 8 Table of Contents COMPETITION We compete in the global payments industry with networks, issuers, acquirers and other payment service providers and methods of payment, including paper-based transactions (e.g., cash and checks) and electronic transfers (e.g., wire transfers and Automated Clearing House (ACH)), as well as evolving and growing alternative mechanisms, systems and products that leverage new technologies, business models and customer relationships to create payment, financing or banking solutions.
We acquire and retain high-spending, engaged and creditworthy Card Members by: • Designing innovative credit, charge and debit card products and payment and lending solutions that appeal to our target customer base and meet their spending and borrowing needs • Using incentives to drive spending on our various card products and increase customer engagement, including our Membership Rewards ® and Amex ® Offers programs, cash-back reward features, interest rates offered on deposits and participation in loyalty programs sponsored by our cobrand and other partners • Providing digital and mobile services and an array of benefits and experiences across card products, such as lounge access, dining experiences and other travel and lifestyle benefits • Creating world-class service experiences by delivering exceptional customer care • Developing a wide range of partner relationships, including with other corporations and institutions that sponsor certain of our cards under cobrand arrangements and provide benefits and services to our Card Members Over the last several years, we have focused on broadening the appeal of our products to attract new customers, particularly Millennial and Gen Z customers, as well as expanding our position with small and mid-sized enterprise (SME) customers by providing more ways to help them manage and grow their businesses.
We acquire and retain high-spending, engaged and creditworthy Card Members by: • Designing innovative credit, charge and debit card products and payment and lending solutions that appeal to our target customer base and meet their spending and borrowing needs • Using incentives to drive spending on our various card products and increase customer engagement, including our Membership Rewards ® and Amex Offers ™ programs, cash-back reward features, statement credits for purchases with partners, interest rates offered on deposits and participation in loyalty programs sponsored by our cobrand and other partners • Providing digital and mobile services and an array of benefits and experiences across card products, such as lounge access, dining experiences and other travel and lifestyle benefits • Creating world-class service experiences by delivering exceptional customer care • Developing a wide range of partner relationships, including designing, cobranding and distributing certain of our cards and providing benefits and services to our Card Members We have a number of products that complement our card products, such as our business checking and consumer rewards checking account products, expense management and business-to-business (B2B) payment products and other non-card payment and financing products.
Prior thereto, she had been Chief Risk Officer and President, Global Risk, Banking & Compliance since February 2018. 7 Table of Contents RAVI RADHAKRISHNAN — Chief Information Officer Mr. Radhakrishnan (52) has been Chief Information Officer since January 2022. Mr.
Prior thereto, she had been President, Global Services Group since September 2019. 7 Table of Contents RAVI RADHAKRISHNAN — Chief Information Officer Mr. Radhakrishnan (53) has been Chief Information Officer since January 2022. Mr.
Regulators’ expectations of firms in relation to their compliance, risk and control frameworks continue to increase and regulators are placing significant emphasis on a firm’s systems and controls relating to the identification and resolution of issues. 17 Table of Contents Payments Regulation Legislators and regulators in various countries in which we operate have focused on the operation of card networks, including through enforcement actions, legislation and regulations to change certain practices or pricing of card issuers, merchant acquirers and payment networks, and, in some cases, to establish broad regulatory regimes for payment systems.
Payments Regulation Legislators and regulators in various countries in which we operate have focused on the operation of card networks, including through enforcement actions, legislation and regulations to change certain practices or pricing of card issuers, merchant acquirers and payment networks, and, in some cases, to establish broad regulatory regimes for payment systems.
The United States has imposed economic sanctions that affect transactions involving targeted jurisdictions, parties or activities. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers most U.S. sanctions.
Failure to comply with such requirements could subject us to serious legal and reputational consequences, including criminal penalties. The United States has imposed economic sanctions that affect transactions involving targeted jurisdictions, parties or activities. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers most U.S. sanctions.
Community Reinvestment Act AENB is subject to the CRA, which imposes affirmative, ongoing obligations on depository institutions to meet the credit needs of their local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. AENB is currently designated a “limited purpose bank” under CRA regulations.
The FDIC’s deposit insurance fund is funded by assessments on insured depository institutions, including AENB, which are subject to adjustment by the FDIC. 16 Table of Contents Community Reinvestment Act AENB is subject to the CRA, which imposes affirmative, ongoing obligations on depository institutions to meet the credit needs of their local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution.
Additionally, we are focused on driving growth and efficiencies internationally, including a greater focus on local priorities in international jurisdictions. Jurisdictions that represent a significant portion of our billed business outside of the United States include the United Kingdom (UK), the European Union (EU), Australia, Japan, Canada and Mexico.
Jurisdictions that represent a significant portion of our billed business outside of the United States include the United Kingdom (UK), the European Union (EU), Australia, Japan, Canada and Mexico.
The development and enforcement of these and other similar laws, regulations and policies may adversely affect our ability to compete effectively and maintain and extend our global network. Privacy, Data Protection, Data Governance, Information Security and Cybersecurity Regulatory and legislative activity in the areas of privacy, data protection, data governance and information security and cybersecurity continues to increase worldwide.
The development and enforcement of these and other similar laws, regulations and policies may adversely affect our ability to compete effectively and maintain and extend our global network.
Because the Company is currently a Category IV firm, it is required to participate in the supervisory stress tests every other year and is subject to the Federal Reserve’s supervisory stress tests in 2024. The Company is required to develop and submit to the Federal Reserve an annual capital plan on or before April 5 of each year.
As a Category III firm, the Company is required to develop and submit to the Federal Reserve an annual capital plan and stress testing results on or before April 5 of each year.
Category III firms are subject to heightened capital, liquidity and prudential requirements, single-counterparty credit limits and additional stress tests, which in some cases are subject to a transition period following a financial institution becoming a Category III firm.
Category III firms are subject to heightened capital, liquidity and prudential requirements, single-counterparty credit limits and additional stress tests, which in some cases are subject to a transition period. AENB, as a depository institution subsidiary of a Category III firm, is also subject to certain enhanced prudential standards under these tailoring rules as described below.
As of December 31, 2023, we employed approximately 74,600 people, whom we refer to as colleagues, with approximately 26,000 colleagues in the United States and approximately 48,600 colleagues outside the United States.
As of December 31, 2024, we employed approximately 75,100 people, whom we refer to as colleagues, with approximately 25,800 colleagues in the United States and approximately 49,300 colleagues outside the United States.
Many aspects of our business also are subject to rigorous regulation by other U.S. federal and state regulatory agencies and by non-U.S. government agencies and regulatory bodies. For example, non-U.S. regulators supervising our international regulated financial institutions use many of the same principles of regulation and supervision that are used by U.S. federal bank regulators.
Many aspects of our business also are subject to rigorous regulation by other U.S. federal and state regulatory agencies and by non-U.S. government agencies and regulatory bodies.
Prior thereto, he had been President, Global Risk and Compliance and Chief Risk Officer since September 2019. He also served as President of International Consumer Services and Global Travel and Lifestyle Services from February 2018 to September 2019. CHRISTOPHE Y. LE CAILLEC — Chief Financial Officer Mr. Le Caillec (58) has been CFO since August 2023.
Prior thereto, he had been Group President, Global Merchant and Network Services since April 2021 and President, Global Risk and Compliance and Chief Risk Officer since September 2019. CHRISTOPHE Y. LE CAILLEC — Chief Financial Officer Mr. Le Caillec (59) has been Chief Financial Officer (CFO) since August 2023.
As of December 31, 2023, women represented 53.2 percent of our global workforce and Asian, Black/African American and Hispanic/Latinx people represented 20.6 percent, 15.6 percent and 14.3 percent, respectively, of our U.S. workforce based on preliminary data for our 2023 U.S. EEO-1 submission.
As of December 31, 2024, women represented 52.6 percent of our global workforce; Asian, Black/African American and Hispanic/Latino/a people represented 22.4 percent, 14.2 percent and 14.5 percent, respectively, of our U.S. workforce based on preliminary data for our 2024 U.S. EEO-1 submission; and 55 percent of our Executive Committee were women or from diverse races and ethnic backgrounds.
The rule requires the maintenance of a liquidity buffer, consisting of highly liquid assets, that is sufficient to meet projected net outflows for 30 days over a range of liquidity stress scenarios, and a minimum liquidity coverage ratio (LCR) that measures a firm’s high-quality liquid assets to its projected net outflows.
The rule requires the maintenance of a liquidity buffer, consisting of highly liquid assets, that is sufficient to meet projected net outflows for 30 days over a range of liquidity stress scenarios. In contrast to the LCR, which is a standardized approach, the liquidity buffer requirement is calculated based on the Company’s own models.
OFAC regulations prohibit U.S. persons from engaging in financial transactions with or relating to, or other dealings involving, a targeted individual, entity, vessel, government or country without a license or other authorization and require U.S. persons to block property and property interests of parties on OFAC’s Specially Designated Nationals and Blocked Persons List and entities owned 50 percent or more by one or more Specially Designated Nationals.
OFAC regulations prohibit U.S. persons from engaging in financial transactions with or relating to, or other dealings involving, a targeted individual, entity, vessel, government or country without a license or other authorization.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeLaws and business practices that favor local competitors, require card transactions to be routed over domestic networks or prohibit or limit foreign ownership of certain businesses could limit our growth in international regions. 23 Table of Contents We may face additional compliance and regulatory risks to the extent that we expand into new business areas, and we may need to dedicate more expense, time and resources to comply with regulatory requirements than our competitors, particularly those that are not regulated financial institutions.
Biggest changeWe may face additional compliance and regulatory risks to the extent that we expand into new business areas, and we may need to dedicate more expense, time and resources to comply with regulatory requirements than our competitors, particularly those that are not regulated financial institutions. 24 Table of Contents Many of our competitors are subject to different, and in some cases, less stringent, legislative and regulatory regimes, and some may have lower cost structures and more agile business models and systems.
For example, we work with partners such as Delta, Marriott, Hilton and British Airways to offer cobranded cards for consumers and small businesses, and with partners in many industries, including Delta, to offer benefits and rewards to Card Members. See “Partners and Relationships” under “Business” for additional information on our business partnerships, including with Delta.
For example, we work with partners such as Delta, Hilton, Marriott and British Airways to offer cobranded cards for consumers and small businesses, and with partners in many industries, including Delta, to offer benefits and rewards to Card Members. See “Partners and Relationships” under “Business” for additional information on our business partnerships, including with Delta.
Successful cyberattacks, data breaches, disruptions or other incidents related to the actual or perceived failures to maintain confidentiality, integrity, data availability, privacy and/or security at other large financial institutions, large retailers, travel and hospitality companies, government agencies or other market participants, whether or not we are impacted, could lead to a general loss of customer confidence that could negatively affect us, including harming the market perception of the effectiveness of our security measures or harming the reputation of the financial system in general, which could result in reduced use of our products and services.
Successful cyberattacks, data breaches, disruptions or other incidents related to the actual or perceived failures to maintain confidentiality, integrity, availability of services and data, privacy and/or security at other large financial institutions, large retailers, travel and hospitality companies, government agencies or other market participants, whether or not we are impacted, could lead to a general loss of customer confidence that could negatively affect us, including harming the market perception of the effectiveness of our security measures or harming the reputation of the financial system in general, which could result in reduced use of our products and services.
Information, operational or cybersecurity incidents, fraudulent activity and other actual or perceived failures to maintain confidentiality, integrity, availability of services, privacy and/or security has led to increased regulatory scrutiny and may lead to regulatory investigations and intervention (such as mandatory card reissuance), consent decrees, increased litigation (including class action litigation), response costs (including notification and remediation costs), fines, negative assessments of us and our subsidiaries by banking regulators and rating agencies, reputational and financial damage to our brand, negative impacts to our partner relationships, and reduced usage of our products and services, all of which could have a material adverse impact on our business.
Information, operational or cybersecurity incidents, fraudulent activity and other actual or perceived failures to maintain confidentiality, integrity, availability of services and data, privacy and/or security has led to increased regulatory scrutiny and may lead to regulatory investigations and intervention (such as mandatory card reissuance), consent decrees, increased litigation (including class action litigation), response costs (including notification and remediation costs), fines, negative assessments of us and our subsidiaries by banking regulators and rating agencies, reputational and financial damage to our brand, negative impacts to our partner relationships, and reduced usage of our products and services, all of which could have a material adverse impact on our business.
Such disruptions could interrupt or compromise the quality of our services to customers, impact the confidentiality, integrity, availability and security of our data, lead to fraudulent transactions on our cards or other products, impact our business, cause brand or reputational damage, and lead to costs associated with responding to such a disruption, including notification and remediation costs, costs to switch service providers or move operations in house, regulatory investigations and fines and increased regulatory oversight and litigation.
Such disruptions or other events could interrupt or compromise the quality of our services to customers, impact the confidentiality, integrity, availability and security of our data, lead to fraudulent transactions on our cards or other products, impact our business, cause brand or reputational damage, and lead to costs associated with responding to such a disruption, including notification and remediation costs, costs to switch service providers or move operations in house, regulatory investigations and fines and increased regulatory oversight and litigation.
Global financial institutions like us, as well as our customers, colleagues, regulators, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of increasingly sophisticated cyberattacks, including computer viruses, malicious or destructive code, ransomware, social engineering attacks (including phishing, impersonation and identity takeover attempts), artificial intelligence-assisted deepfake attacks and disinformation campaigns, corporate espionage, hacking, website defacement, denial-of-service attacks, exploitation of vulnerabilities and other attacks and similar disruptions from the misconfiguration or unauthorized use of or access to computer systems.
Global financial institutions like us, as well as our customers, colleagues, regulators, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of increasingly sophisticated cyberattacks, including computer viruses, malicious or destructive code, ransomware, social engineering attacks (including phishing, impersonation and identity takeover attempts), artificial intelligence-assisted deepfake attacks and disinformation campaigns, corporate espionage, hacking, website defacement, denial-of-service attacks, exploitation of vulnerabilities and other attacks and similar disruptions from the misconfiguration or unauthorized use of or access to computer systems and company accounts.
We are, and have been in the past, a defendant in a number of actions, including legal proceedings and proposed class actions, challenging certain provisions of our card acceptance agreements. See Note 12 to the “Consolidated Financial Statements” for a description of certain outstanding legal proceedings.
We are, and have been in the past, a defendant in a number of actions, including legal proceedings, arbitrations and proposed class actions, challenging certain provisions of our card acceptance agreements. See Note 12 to the “Consolidated Financial Statements” for a description of certain outstanding legal proceedings.
We are exposed to risks associated with our business partners, including reputational issues, business slowdowns, bankruptcies, liquidations, restructurings and consolidations, and the possible obligation to make payments to our partners. Our success is, in many ways, dependent on the success of our partners.
We are exposed to risks associated with our business partners, including reputational issues, business slowdowns, bankruptcies, liquidations, restructurings, consolidations and outages, and the possible obligation to make payments to our partners. Our success is, in many ways, dependent on the success of our partners.
RISK FACTORS This section highlights certain risks that could affect us and our businesses, broadly categorized in accordance with the risk types identified in our Enterprise Risk Management (ERM) Framework: “Strategic & Business, Reputational and Country Risks,” “Operational and Compliance/Legal Risks” and “Market, Funding & Liquidity, Credit and Model Risks.” You should carefully consider each of the following risks and all of the other information set forth in this Annual Report on Form 10-K, including in “Risk Management” under “MD&A,” which describes our approach to identifying, monitoring and managing the risks we assume in conducting our businesses and provides certain quantitative and qualitative disclosures about market risks.
RISK FACTORS This section highlights certain risks that could affect us and our businesses, broadly categorized in accordance with the risk types identified in our Enterprise Risk Management (ERM) Framework: “Strategic & Business, Reputational and Country Risks,” “Operational and Compliance/Legal Risks” and “Model, Credit, Market and Funding & Liquidity Risks.” You should carefully consider each of the following risks and all of the other information set forth in this Annual Report on Form 10-K, including in “Risk Management” under “MD&A,” which describes our approach to identifying, monitoring and managing the risks we assume in conducting our businesses and provides certain quantitative and qualitative disclosures about market risks.
Some merchants, including large tech companies and other large merchants, continue to invest in their own payment and financing solutions, such as proprietary-branded mobile wallets, using both traditional and new technology platforms. If merchants are able to drive broad consumer adoption and usage, it could adversely impact our merchant discount rates and network and loan volumes.
Some merchants, including large tech companies and other large merchants, continue to invest in their own payment and financing solutions, such as proprietary-branded digital wallets, using both traditional and new technology platforms. If merchants are able to drive broad consumer adoption and usage, it could adversely impact our merchant discount rates and network and loan volumes.
Legislators and regulators in the United States and other countries in which we operate are increasingly adopting or revising privacy, data protection, data governance, resiliency, data transfer, third party oversight, account access, artificial intelligence and machine learning and information security and cybersecurity laws, including data localization, authentication and notification laws.
Legislators and regulators in the United States and other countries in which we operate are increasingly adopting or revising privacy, data protection, data management, resiliency, data transfer, third party oversight, account access, artificial intelligence and machine learning and information security and cybersecurity laws, including data localization, authentication and notification laws.
We may not be successful in our efforts to promote card usage or attract new Card Members, including through marketing and promotion, merchant acceptance and Card Member rewards and services, or to effectively control the costs of such investments, both of which may materially impact our profitability.
We may not be successful in our efforts to promote card usage or attract new Card Members, including through marketing and promotion, merchant acceptance and Card Member rewards and services, or to effectively control the costs of such investments, all of which may materially impact our profitability.
Regulation in the areas of privacy, data protection, data governance, resiliency, data transfer, third party oversight, account access, artificial intelligence and machine learning and information security and cybersecurity could increase our costs and affect or limit our business opportunities and how we collect and/or use personal information.
Regulation in the areas of privacy, data protection, data management, resiliency, data transfer, third party oversight, account access, artificial intelligence and machine learning and information security and cybersecurity could increase our costs and affect or limit our business opportunities and how we collect and/or use personal information.
Our information technology systems and those of our third parties upon which we rely, including our transaction authorization, clearing and settlement systems, and data centers, have experienced and may continue to experience service disruptions or degradation, which may result from technology malfunction, sudden increases in processing or other volumes, natural disasters and weather events, fires, accidents, technology change management issues, power outages, internet outages, telecommunications failures, fraud, denial-of-service, ransomware and other cyberattacks, inadequate infrastructure in lesser-developed markets, technology capacity management issues, terrorism, computer viruses, vulnerabilities in hardware or software, physical or electronic break-ins, or similar events.
We rely extensively on our information technology systems and those of our third parties, including our transaction authorization, clearing and settlement systems, and data centers, which have experienced and may continue to experience service disruptions or degradation that may result from technology malfunction, sudden increases in processing or other volumes, natural disasters and weather events, fires, accidents, technology change management issues, power outages, internet outages, telecommunications failures, fraud, denial-of-service, ransomware and other cyberattacks, inadequate infrastructure in lesser-developed markets, technology capacity management issues, terrorism, computer viruses, vulnerabilities or failures in hardware or software, physical or electronic break-ins, or similar events.
In addition, many credit card issuers have instituted rewards and cobrand programs and other benefits and services that are similar to ours and may be more attractive. An inability to differentiate our products and services could materially adversely affect us.
In addition, many credit card issuers and certain other companies have instituted rewards and cobrand programs and other benefits and services that are similar to ours and may be more attractive. An inability to differentiate our products and services could materially adversely affect us.
See “Supervision and Regulation” under “Business” for more information about certain laws and regulations to which we are subject and their impact on us. Litigation and regulatory actions could subject us to significant fines, penalties, judgments and/or requirements resulting in significantly increased expenses, damage to our reputation and/or a material adverse effect on our business and results of operations.
See “Supervision and Regulation” under “Business” for more information about certain laws and regulations to which we are subject and their impact on us. 31 Table of Contents Litigation and regulatory actions could subject us to significant fines, penalties, judgments and/or requirements resulting in significantly increased expenses, damage to our reputation and/or a material adverse effect on our business and results of operations.
Given the complex, rapidly changing and competitive technological and business environments in which we operate, and the potential risks and uncertainties of intellectual property-related litigation, a future assertion of an infringement or misappropriation claim against us could cause us to lose significant revenues, incur significant defense, license, royalty or technology development expenses, and/or pay significant monetary damages.
Given the complex, rapidly changing and competitive technological and business environments in which we operate, and the potential risks and uncertainties of intellectual property-related litigation, a future assertion of an infringement or 33 Table of Contents misappropriation claim against us could cause us to lose significant revenues, incur significant defense, license, royalty or technology development expenses, and/or pay significant monetary damages.
Similarly, we are exposed to risk from bankruptcies, liquidations, insolvencies, financial distress, restructurings, consolidations, operational outages, cybersecurity incidents and other similar events that may occur in any industry representing a significant portion of our network volumes, which could negatively impact particular card products and services (and volumes generally) and our financial condition and results of operations.
Similarly, we are exposed to risk from bankruptcies, liquidations, insolvencies, financial distress, restructurings, consolidations, operational outages, cybersecurity incidents and other similar events that may occur in any industry representing a significant portion of our billed business, which could negatively impact particular card products and services (and volumes generally) and our financial condition and results of operations.
Service disruptions or degradations can prevent access to our online services and account information, compromise or limit access to company or customer data, impede or prevent transaction processing, communications to customers and financial reporting, disrupt ordinary business operations, result in contractual penalties or obligations, trigger regulatory reporting obligations, and lead to regulatory investigations and fines, increased regulatory oversight, and litigation (including class action litigation).
Service disruptions or degradations impacting us or our partners can prevent access to online services and account information, compromise or limit access to company or customer data, impede or prevent transaction processing, communications to customers and financial reporting, disrupt ordinary business operations, result in contractual penalties or obligations, trigger regulatory reporting obligations, and lead to regulatory investigations and fines, increased regulatory oversight, and litigation (including class action litigation).
Additionally, a decrease in confidence in the soundness of us or in the banking sector more broadly, such as following the occurrence of bank failures, or in the level of insurance available on deposits may cause rapid deposit withdrawals or an unwillingness to maintain deposits with us, which could materially adversely affect us and our ability to fund our business.
Additionally, a decrease in confidence in the soundness of us or in the banking sector more broadly, such as following the occurrence of bank failures, or in the level of insurance available on deposits may cause rapid deposit withdrawals or an unwillingness to maintain deposits with us, 36 Table of Contents which could materially adversely affect us and our ability to fund our business.
If we are not able to effectively manage these triggering events, we could unexpectedly have to make payments to these partners, which could have a negative effect on our financial condition and results of operations. See Note 12 to the “Consolidated Financial Statements” for additional information on financial commitments related to agreements with certain cobrand partners.
If we are not able to effectively manage these triggering events, we could unexpectedly have to make payments to these partners, which could have a negative effect on our 25 Table of Contents financial condition and results of operations. See Note 12 to the “Consolidated Financial Statements” for additional information on financial commitments related to agreements with certain cobrand partners.
Negative public opinion could result from actual or alleged conduct in any number of activities or circumstances, including card practices, regulatory compliance, the use and protection of 26 Table of Contents customer information, conduct by our colleagues and policy engagement, including activities of the American Express Company Political Action Committee, and from actions taken by regulators or others in response thereto.
Negative public opinion could result from actual or alleged conduct in any number of activities or circumstances, including card practices, regulatory compliance, the use and protection of customer information, conduct by our colleagues and policy engagement, including activities of the American Express Company Political Action Committee, and from actions taken by regulators or others in response thereto.
Geopolitical conditions, terrorist attacks, military conflicts, natural disasters, severe weather, widespread health emergencies or pandemics, information or cybersecurity incidents (including intrusion into or degradation or unavailability of systems or technology by cyberattacks), operational incidents and other catastrophic events can have a material adverse effect on our business.
Geopolitical conditions, terrorist attacks, military conflicts, supply chain issues, natural disasters, severe weather, widespread health emergencies or pandemics, information or cybersecurity incidents (including intrusion into or degradation or unavailability of systems or technology by cyberattacks), operational incidents and other catastrophic events can have a material adverse effect on our business.
If we are not able to differentiate ourselves from our competitors, develop compelling value propositions for our customers and/or effectively grow in areas such as mobile and online payments and emerging technologies, we may not be able to compete effectively. We believe Visa and Mastercard are larger than we are in most countries based on purchase volume.
If we are not able to differentiate ourselves from our competitors, develop compelling value propositions for our customers and/or effectively grow in areas such as digital payments and emerging technologies, we may not be able to compete effectively. We believe Visa and Mastercard are larger than we are in most countries based on purchase volume.
Defaults, threats of defaults or economic disruptions, even in countries or territories in which we do not have material investment exposure, conduct business or have operations, could adversely affect us. 36 Table of Contents
Defaults, threats of defaults or economic disruptions, even in countries or territories in which we do not have material investment exposure, conduct business or have operations, could adversely affect us. 37 Table of Contents
Supervision efforts and the enforcement of existing laws and regulations impact the scope and profitability of our existing business activities, limit our ability to pursue certain business opportunities and adopt new technologies, compromise our competitive position, and affect our relationships with Card Members, partners, merchants, service providers and other third parties.
Supervision efforts and the enforcement of existing laws 30 Table of Contents and regulations impact the scope and profitability of our existing business activities, limit our ability to pursue certain business opportunities and adopt new technologies, compromise our competitive position, and affect our relationships with Card Members, partners, merchants, service providers and other third parties.
Even if we were not required to change our merchant agreements, 31 Table of Contents changes in Visa’s and Mastercard’s policies or practices as a result of legal proceedings, lawsuit settlements or regulatory actions pending against them could result in changes to our business practices and materially and adversely impact our profitability.
Even if we were not required to change our merchant agreements, changes in Visa’s and Mastercard’s policies or practices as a result of legal proceedings, lawsuit settlements or regulatory actions pending against them could result in changes to our business practices and materially and adversely impact our profitability.
Tax legislative initiatives or assessments could adversely affect our results of operations and financial condition. We are subject to income and other taxes in the United States and in various foreign jurisdictions. The laws and regulations related to tax matters are extremely complex and subject to varying interpretations.
Tax legislative initiatives or assessments could adversely affect our results of operations and financial condition. We are subject to income and other taxes in the United States and in various foreign jurisdictions. The laws and regulations related to tax matters are extremely complex, require significant judgment and are subject to varying interpretations.
Operational risk includes, among others, the risk that error or misconduct could result in a material financial misstatement, a failure to monitor a third party’s compliance with regulatory or legal requirements, a failure to adequately monitor and control access to, or use of, data in our systems we grant to third parties or a failure to satisfy our obligations to our customers with respect to our products and services.
Operational risk includes, among others, the risk that error or misconduct could result in a material financial misstatement, a failure to monitor a third party’s compliance with regulatory or legal requirements, a failure to adequately monitor and control access to, or use of, data in our systems we grant to third parties or a failure to satisfy our obligations to our customers with respect to our products and services (e.g., rewards and benefits).
Card Members were responsible for approximately 87 percent of our total Card Member loans outstanding as of December 31, 2023), increases in the level of loan balances, changes in our mix of business or otherwise, could require us to increase our provisions for losses and could have a material adverse effect on our results of operations and financial condition.
Card Members were responsible for approximately 88 percent of our total Card Member loans outstanding as of December 31, 2024), increases in the level of loan balances, changes in our mix of business or otherwise, could require us to increase our provisions for losses and could have a material adverse effect on our results of operations and financial condition.
Such market conditions may also limit our ability to replace, in a timely manner, 35 Table of Contents maturing liabilities, satisfy regulatory capital requirements and access the funding necessary to grow our business. In some circumstances, we may incur an unattractive cost to raise capital, which could decrease profitability and significantly reduce financial flexibility.
Such market conditions may also limit our ability to replace, in a timely manner, maturing liabilities, satisfy regulatory capital requirements and access the funding necessary to grow our business. In some circumstances, we may incur an unattractive cost to raise capital, which could decrease profitability and significantly reduce financial flexibility.
Our merchant discount rates have been impacted by regulatory changes affecting competitor pricing in certain international countries and may in the future be impacted by pricing regulation. We have also experienced erosion of our merchant discount rates as we increase merchant acceptance.
Our merchant discount rates have been impacted by regulatory changes affecting competitor pricing in certain international countries and U.S. states and may in the future be impacted by pricing regulation. We have also experienced erosion of our merchant discount rates as we increase merchant acceptance.
Furthermore, as a corporation with headquarters and operations located in the United States and a brand name referring to the United States, a negative perception of the United States arising from its political or other positions could harm the perception of our company and our brand.
Furthermore, as a corporation with headquarters and operations located in the United States and a brand name 27 Table of Contents referring to the United States, a negative perception of the United States arising from its political or other positions could harm the perception of our company and our brand.
As such laws are interpreted and applied (in some cases, with significant differences or conflicting requirements across 32 Table of Contents jurisdictions), compliance and technology costs will continue to increase, particularly in the context of ensuring that adequate data governance, data management, data protection, incident management, resiliency, third party management, data transfer, security controls, account access mechanisms and controls related to artificial intelligence and machine learning are in place.
As such laws are interpreted and applied (in some cases, with significant differences or conflicting requirements across jurisdictions), compliance and technology costs will continue to increase, particularly in the context of ensuring that adequate privacy, data protection, data management, incident management, resiliency, third party management, data transfer, security controls, account access mechanisms and controls related to artificial intelligence and machine learning are in place.
Political and social conditions, including actions upending geopolitical stability (such as from tensions involving China and the U.S.), fiscal and monetary policies (including developments related to the U.S. federal debt ceiling, budgetary issues and government shutdowns), trade wars and tariffs, labor shortages, regional or domestic hostilities, economic sanctions and the prospect or occurrence of more widespread conflicts could also negatively affect our business, operations and partners, consumer and business spending, including travel patterns and business investment, and demand for credit.
Political and social conditions, including geopolitical instability (such as from tensions involving China and the U.S.), fiscal and monetary policies (including developments related to the U.S. federal deficit, debt ceiling, government shutdowns and other budgetary issues), trade wars and tariffs, labor shortages, regional or domestic hostilities, economic sanctions and the prospect or occurrence of more widespread conflicts could also negatively affect our business, operations and partners, consumer and business spending, including travel patterns and business investment, and demand for credit.
Slow economic growth, economic contraction or shifts in broader consumer and business trends significantly impact customer behaviors, including spending on our cards, the ability and willingness of Card Members to borrow and pay amounts owed to us and demand for fee-based products and services.
Slow economic growth, economic contraction or shifts in broader consumer and business trends significantly impact customer behaviors, including spending on our cards, the ability and willingness of Card Members to borrow and pay amounts owed to us, demand for fee-based products and services and levels of customers’ deposits with us.
For more information on regulatory and legislative activity in this area, see “Supervision and Regulation — Privacy, Data Protection, Data Governance, Information Security and Cybersecurity” under “Business.” If we are not able to protect our intellectual property, or successfully defend against any infringement or misappropriation assertions brought against us, our revenue and profitability could be negatively affected.
For more information on regulatory and legislative activity in this area, see “Supervision and Regulation — Privacy, Data Protection, Data Management, Artificial Intelligence, Resiliency, Information Security and Cybersecurity” under “Business.” If we are not able to protect our intellectual property, or successfully defend against any infringement or misappropriation assertions brought against us, our revenue and profitability could be negatively affected.
We are subject to significant supervision and regulation with respect to compliance with AML/CFT laws and sanctions regimes in numerous jurisdictions.
We are subject to significant supervision and regulation with respect to compliance with AML/CFT laws, sanctions regimes and anti-corruption laws in numerous jurisdictions.
Third parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. General economic factors, such as gross domestic product, unemployment, inflation and interest rates, may result in greater delinquencies that lead to greater credit losses.
Third parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. General economic factors, such as recession, unemployment, inflation and interest rates, may result in greater delinquencies that lead to greater credit losses.
Negative perceptions or publicity regarding these matters — even if related to seemingly isolated incidents and whether or not factually correct—could erode trust and confidence and damage our reputation among existing and potential Card Members, corporate clients, merchants and partners, which could make it difficult for us to attract new customers and maintain existing ones.
Negative perceptions or publicity regarding these matters — even if related to seemingly isolated incidents and whether or not factually correct—could erode trust and confidence and damage our reputation among existing and potential Card Members, corporate clients, merchants and partners, which could make it difficult for us to attract new customers and maintain existing ones, and could subject us to heightened legal and regulatory scrutiny.
Card Member loans related to our cobrand portfolios accounted for approximately 36 percent of our worldwide Card Member loans as of December 31, 2023.
Card Member loans related to our cobrand portfolios accounted for approximately 36 percent of our worldwide Card Member loans as of December 31, 2024.
Factors such as consumer spending and confidence, household income and housing prices, unemployment rates, business investment and inventory levels, bankruptcies, geopolitical instability, public policy decisions, government spending, international trade relationships, interest rates, taxes, inflation and deflation (including the effects of related governmental responses), energy costs, availability of capital and credit and the lingering impacts of the COVID-19 pandemic all affect the economic environment and, ultimately, our profitability.
Factors such as consumer spending and confidence, household income and housing prices, unemployment rates, business investment and inventory levels, bankruptcies, geopolitical instability, public policy decisions, government spending, international trade relationships, tariffs, interest rates, taxes, inflation and deflation (including the effects of related governmental responses), energy costs and availability of capital and credit all affect the economic environment and, ultimately, our profitability.
Adverse currency fluctuations and foreign exchange controls could decrease earnings we receive from our international operations and impact our capital. During 2023, approximately 22 percent of our total revenues net of interest expense were generated from activities outside the United States.
Adverse currency fluctuations and foreign exchange controls could decrease earnings we receive from our international operations. During 2024, approximately 22 percent of our total revenues net of interest expense were generated from activities outside the United States.
Likewise, spending by small business and corporate clients, which comprised approximately 43 percent of our worldwide billed business during 2023, depends in part on the economic environment and a favorable climate for continued business investment and new business formation.
Likewise, spending by small business and corporate clients, which comprised approximately 42 percent of our worldwide billed business during 2024, depends in part on the economic environment and a favorable climate for continued business investment and new business formation.
Despite our efforts and the efforts of third parties that process, transmit or store our data and data of our customers and colleagues or support our operations, such as service providers, merchants and regulators, the possibility of information, operational and cybersecurity incidents, malicious social engineering, password mismanagement, corporate espionage, fraudulent or other malicious activities and human error or malfeasance cannot be eliminated entirely and will evolve as new and emerging technology is deployed, including quantum computing and the increasing use of platforms that are outside of our network and control environments.
Despite our efforts and the efforts of third parties that process, transmit or store our data and data of our customers and colleagues or support our operations, such as service providers, merchants and regulators, the possibility of information, operational and cybersecurity incidents, malicious social engineering, password mismanagement, corporate espionage, fraudulent or other malicious activities and human error or malfeasance cannot be eliminated entirely and will evolve as new and emerging technology is deployed by threat actors, including the use of artificial intelligence and quantum computing, and we increasingly use platforms that are outside of our network and control environments.
If such operations are interrupted, suspended, terminated or otherwise experience further issues in the future, it could further negatively impact our customers’ 24 Table of Contents experience, result in additional costs, litigation and regulatory action, and harm our business and reputation.
If such operations are interrupted, suspended, terminated or otherwise experience further issues in the future, it could further negatively impact our customers’ experience, result in additional costs, litigation and regulatory action, and harm our business and reputation.
In recent years, there has been increasing regulatory enforcement and litigation activity in the areas of privacy, data protection and information security and cybersecurity in the United States, the EU and various other countries in which we operate and our data protection and governance programs have become the subject of heightened scrutiny.
In recent years, there has been increasing regulatory enforcement and litigation activity in the areas of privacy, data protection, data management, artificial intelligence and machine learning and information security and cybersecurity in the United States, the EU and various other countries in which we operate and our data protection and governance programs have become the subject of heightened scrutiny.
Climate change may exacerbate certain of these threats, including the frequency and severity of weather-related events.
Climate-related risks may exacerbate certain of these threats, including the frequency and severity of weather-related events.
As merchants become even larger (such as the largest tech companies), we may have to increase the amount of incentives and/or concessions we provide to them.
As these parties become even larger (such as the largest tech companies), we may have to increase the amount of incentives and/or concessions we provide to them.
As of December 31, 2023, we held approximately $2.2 billion of investment securities, primarily consisting of debt securities, and equity investments, including certain equity method investments, totaling approximately $2.0 billion.
As of December 31, 2024, we held approximately $1.2 billion of investment securities, primarily consisting of debt securities, and equity investments, including certain equity method investments, totaling approximately $2.0 billion.
There can be no assurance that our investments will continue to be effective, particularly as consumer and business behaviors continue to change. In addition, if we develop new products or offers that attract customers looking for short-term incentives rather than incentivize long-term loyalty, Card Member attrition and costs could increase.
There can be no assurance that our investments will continue to be effective, particularly as consumer and business behaviors continue to change. In addition, to the extent our products or offers attract customers looking for short-term incentives rather than incentivize long-term loyalty, Card Member attrition and costs could increase.
We develop and maintain systems and processes aimed at detecting and preventing information security and cybersecurity incidents and fraudulent activity, which require significant investment, maintenance and ongoing monitoring and updating as technologies and regulatory requirements change, new vulnerabilities and exploits are discovered and as efforts to overcome security measures become more sophisticated.
We develop and maintain systems and processes aimed at detecting and preventing information security and cybersecurity incidents and fraudulent activity, including our cyber crisis response procedures, which require significant investment, maintenance and ongoing monitoring and updating as technologies and regulatory requirements change, new vulnerabilities and exploits are discovered and as efforts to overcome security measures become more sophisticated.
New products, such as debit cards on the American Express network, could fail to gain market acceptance and American Express cards could become less desirable to consumers and businesses generally due to surcharging, steering or other forms of discrimination, which could result in a decrease in cards-in-force, coverage and transaction volumes.
Recently introduced products, such as debit cards on the American Express network, could fail to gain market acceptance and American Express cards could become less desirable to consumers and businesses generally due to surcharging, steering or other 26 Table of Contents forms of discrimination, which could result in a decrease in cards-in-force, coverage and transaction volumes.
Business decisions or other actions or omissions of a joint venture partner, other shareholders or management of our joint ventures and companies in which we have minority investments may adversely affect the value of our investment, result in litigation or regulatory action against us and otherwise damage our reputation and brand.
Business decisions or other actions or omissions of a joint venture partner, other shareholders or management of our joint ventures and companies in which we have minority investments may adversely affect the value of our investment or any commercial benefit to us from the relationship, result in litigation or regulatory action against us and otherwise damage our reputation and brand.
Merchants, business partners and third-party merchant acquirers and aggregators are also able to negotiate incentives, pricing concessions and other favorable contractual provisions from us as a condition to accepting our cards, being cobrand partners, offering benefits to our Card Members or signing merchants on our behalf.
Merchants, business partners and third-party merchant acquirers, aggregators and processors are also able to negotiate incentives, pricing concessions and other favorable contractual provisions from us as a condition to accepting our cards, being cobrand partners, offering benefits to our Card Members or signing merchants to accept American Express cards.
For example, we are aware that certain of our third-party service providers have been the victims of ransomware and other cyberattacks, in some instances that affected our data or the services they provide to us.
For example, we are aware that certain of our third-party service providers and joint ventures have been the victims of ransomware and other cyberattacks, in some instances that affected our data or services provided to us.
As processes or organizations are changed or become more complex, we grow in size, new products and services are introduced, such as new lending features, debit products, checking accounts and digital collectibles, or we become subject to more stringent or complicated regulatory requirements, we may not identify or address new operational risks.
As processes or organizations are changed or become more complex, we grow in size, new products and services are introduced, such as new lending features, banking products, dining capabilities and digital collectibles, or we become subject to more stringent or complicated regulatory requirements, we may not identify or address new operational risks.
These risks to our brand and reputation, as well as other risks described in this Risk Factors section, are heightened by the increasing sophistication and availability of artificial intelligence technology that can assist with the creation of deepfakes and increase the velocity of distribution of disinformation.
These risks to our brand and reputation, as well as other risks described in this Risk Factors section, are heightened by the increasing sophistication and availability of artificial intelligence technology, including by assisting with the creation of deepfakes and increasing the velocity of distribution of disinformation.
To the extent we expand into, or further grow in, new business areas and new geographic regions, such as mainland China, we will face competitors with more experience and more established relationships with relevant customers, regulators and industry participants, which could adversely affect our ability to compete.
To the extent we expand into, or further grow in, new business areas, such as new products and services that complement our card products, and new geographic regions, we will face competitors with more experience and more established relationships with relevant customers, regulators and industry participants, which could adversely affect our ability to compete.
Some of our competitors have developed, or may develop, substantially greater financial and other resources than we have and may offer richer value propositions or a wider range of programs and services than we offer or may use more effective strategies to acquire and retain more customers, capture a greater share of spending and borrowings, develop more attractive cobrand card and other partner programs and maintain greater merchant acceptance than we have.
Some of our competitors have substantially greater scale and resources than we have and may offer richer value propositions or a wider range of programs and services than we offer or may use more effective strategies to acquire and retain more customers, capture a greater share of spending and borrowings, develop more attractive cobrand card and other partner programs, obtain more favorable terms with merchants and maintain greater merchant acceptance than we have.
From customer acquisition to cobranding arrangements, from participation in our rewards programs to facilitating B2B supplier payments for our corporate clients, we rely on our business partners across many aspects of our company and our arrangements with business partners represent a significant portion of our business.
From customer acquisition to cobranding arrangements, from participation in our rewards programs to facilitating B2B supplier payments for our corporate clients, we rely on our business partners across many aspects of our company and our arrangements with business partners represent a significant portion of our business. For example, our two largest redemption partners are Amazon and Delta.
Establishing and retaining attractive cobrand card partnerships is particularly competitive among card issuers and networks as these partnerships typically appeal to high-spending loyal customers. All of our cobrand portfolios in the aggregate accounted for approximately 21 percent of our worldwide network volumes for the year ended December 31, 2023.
Establishing and retaining attractive cobrand card partnerships is particularly competitive among card issuers and networks as these partnerships typically appeal to high-spending loyal customers. All of our cobrand portfolios in the aggregate accounted for approximately 25 percent of our worldwide billed business for the year ended December 31, 2024.
The management and oversight of an increasing number of third parties increases our operational complexity and governance challenges and decreases our control. Additionally, third-party oversight and practices related to third parties such as outsourcing have become subject to heightened regulatory scrutiny both in the United States and internationally.
The management and oversight of an increasing number of third parties increases our operational complexity and governance challenges and decreases our control. Additionally, third-party oversight and practices related to third parties such as outsourcing have become subject to heightened regulatory scrutiny both in the United States and internationally, including in some cases restricting or requiring approval for outsourcing.
These threats can arise from external parties, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities.
These threats have arisen from external parties, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities.
In addition, new products and services, such as checking accounts and non-card lending, may lead to an increase in the number or types of cyber attacks and our exposure to fraud and other malfeasance.
In addition, recently introduced products and services, such as checking accounts and non-card lending, may lead to an increase in the number or types of cyberattacks and our exposure to fraud and other malfeasance.
This may be exacerbated to the extent information we have historically relied upon to make credit decisions does not accurately portray a customer’s creditworthiness, including as a result of the current high rates of inflation and economic slowdown.
This may be exacerbated to the extent information we have historically relied upon to make credit decisions does not accurately portray a customer’s creditworthiness, including as a result of the current interest rate and economic conditions.
In addition, our ability to manage credit risk or collect amounts owed to us may be adversely affected by legal or regulatory changes (such as restrictions on collections or changes in bankruptcy laws, minimum payment regulations and re-age guidance).
In addition, our ability to manage credit risk or collect amounts owed to us may be adversely affected by legal or regulatory changes (such as restrictions on collections or changes in bankruptcy laws, minimum payment regulations and re-age guidance) or changes in customer behavior (such as the increased use of debt settlement companies).
Although we have devoted significant resources to develop our risk management policies and procedures and expect to continue to do so in the future, these policies and procedures, as well as our risk management techniques, such as our hedging strategies, may not be fully effective.
Although we have devoted significant resources to develop our risk management policies and procedures and expect to continue to do so in the future, these policies and procedures, as well as our risk management techniques, may not be fully effective in managing the risks to which we are exposed.
Increasing spending on our cards also depends on our continued expansion of merchant acceptance of our cards. If we are unable to continue growing merchant acceptance and perceptions of coverage or merchants decide to no longer accept American Express cards, our business could suffer.
Increasing spending on our cards also depends on our continued expansion of merchant acceptance of our cards. If we are unable to continue growing merchant acceptance and perceptions of coverage, or if merchants decide to no longer accept American Express cards or more greatly engage in surcharging, steering or other differential acceptance practices, our business could suffer.
Increased credit risk, whether resulting from underestimating the credit losses inherent in our 34 Table of Contents portfolio of loans and receivables, deteriorating economic conditions (particularly in the United States where, for example, U.S.
Increased credit risk, whether resulting from underestimating the credit losses inherent in our portfolio of loans and receivables, deteriorating economic conditions (particularly in the United States, as U.S.
We face the risk that we could lose partner relationships, even after we have invested significant resources in the relationships. Additionally, partners may make changes to the products and services they offer, which may lower the value of our products, such as the cobranded cards we issue to our customers. We may also choose to not renew certain cobrand relationships.
We face the risk that we could lose partner relationships, even after we have invested significant resources in the relationships. Additionally, partners may make changes to the products and services they offer or otherwise become less desirable to our customers, which may lower the value of our products, such as the cobranded cards we issue to our customers.
Foreign exchange regulations or capital controls might restrict or prohibit the conversion of other currencies into U.S. dollars or our ability to transfer them.
Foreign exchange regulations or capital controls might restrict or prohibit the conversion of other currencies into U.S. dollars or our ability to transfer them and the availability of foreign exchange could further impact our results of operations.
Our use of artificial intelligence and machine learning is subject to various risks including the use of personal information, flaws in our models or datasets that may result in biased or inaccurate results, ethical considerations regarding artificial intelligence, and our ability to safely deploy and implement governance and controls for artificial intelligence systems.
Our and our partners’ use of artificial intelligence and machine learning is subject to various risks including flaws in models or datasets that may result in biased or inaccurate results, unintended or unexpected outcomes, ethical considerations regarding artificial intelligence, infringement of intellectual property rights, exposure of proprietary or personal information, heightened security risks and the ability to safely deploy and implement governance and controls for artificial intelligence systems.
If such expenses increase beyond our expectations, we will need to find ways to offset the financial impact by increasing other areas of revenues such as fee-based revenues, decreasing operating expenses or other investments in our business, or both. We may not succeed in doing so, particularly in the current competitive and regulatory environment.
If such expenses increase beyond our expectations, we will need to find ways to offset the financial impact by increasing other areas of revenues such as fee-based revenues, decreasing operating expenses or other investments in our business, or both.
While we have historically relied on our arbitration clause in agreements with customers to limit our exposure to class action litigation, there can be no assurance that we will continue to be successful in enforcing our arbitration clause in the future, including as a result of possible regulation that would require that our consumer arbitration clause not apply to cases filed in court as class actions, and claims of the type we previously arbitrated could be subject to the complexities, risks and costs associated with class action cases.
While we have historically relied on our arbitration clause in agreements with customers to limit our exposure to class action litigation, there can be no assurance that we will continue to be successful in enforcing our arbitration clause in the future, including as a result of legal challenges to, and new regulations affecting, our arbitration provisions, and claims of the type we previously arbitrated could be subject to the complexities, risks and costs associated with class action cases.
Given differing interpretations by regulators and participants in cobrand arrangements, we are subject to regulatory action, penalties and the possibility we will not be able to maintain our existing cobrand and agent relationships in the EU.
See “Supervision and Regulation — Payments Regulation” under “Business” for more information. Given differing interpretations by regulators and participants in cobrand arrangements, we are subject to regulatory action, penalties and the possibility we will not be able to maintain our existing cobrand and agent relationships in the EU.
We have acquired a number of businesses and have made a number of strategic investments, and continue to evaluate potential transactions. There is no assurance that we will be able to successfully identify suitable candidates, value potential investment or acquisition opportunities accurately, negotiate acceptable terms for those opportunities, or complete proposed acquisitions and investments.
There is no assurance that we will be able to successfully identify suitable candidates, value potential investment or acquisition opportunities accurately, negotiate acceptable terms for those opportunities, or complete proposed acquisitions and investments.
These third parties may act in ways that could materially harm our business ” below and for the general risks related to the airline industry, see “Risk Management — Institutional Credit Risk — Exposure to the Airline and Travel Industry” under “MD&A.” We face continued intense competitive pressure that may materially impact the prices we charge for accepting our cards for payment, as well as the risk of losing merchant relationships, which could have a material adverse impact on our business and results of operations.
These third parties may act in ways that could materially harm our business ” below. We face continued intense competitive pressure that may materially impact the prices we charge for accepting our cards for payment, as well as the risk of losing merchant relationships, which could have a material adverse impact on our business and results of operations.
Any errors, failures or delays in complying with AML/CFT and sanctions laws, perceived deficiencies in our related compliance programs or association of our business with money laundering, terrorist financing, tax fraud or other illicit activities or sanctioned persons, entities, governments or countries can give rise to significant supervisory, criminal and civil proceedings and lawsuits, which could result in significant penalties and forfeiture of assets, loss of licenses or restrictions on business activities, or other enforcement actions, and our reputation may suffer due to our customers’ association with certain countries, persons or entities or the existence of any such transactions.
For example, we recently voluntarily reported certain transactions and accounts to OFAC, some of which related to Iran, as described in “Supervision and Regulation — Anti-Money Laundering, Countering the Financing of Terrorism, Economic Sanctions and Anti-Corruption Compliance” under “Business.” Errors, failures or delays in complying with AML/CFT, sanctions and anti-corruption laws, deficiencies in our related compliance programs or association of our business with money laundering, terrorist financing, tax fraud or other illicit activities or sanctioned persons, entities, governments or countries can give rise to significant supervisory, criminal and civil proceedings and lawsuits, which could result in significant penalties and forfeiture of assets, loss of licenses or restrictions on business activities, or other enforcement actions, and our reputation may suffer due to our customers’ association with certain countries, persons or entities or the existence of any such transactions.
Legislators and regulators around the world are aware of each other’s approaches to the regulation of the financial services industry. Consequently, a development in one country, state or region may influence regulatory approaches in another.
Political developments can result in legislative and regulatory uncertainty and changes to supervisory and enforcement priorities. In addition, legislators and regulators around the world are aware of each other’s approaches to the regulation of the financial services industry. Consequently, a development in one country, state or region may influence regulatory approaches in another.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur current CISO has held a series of roles in telecommunications, networking and information security at American Express, including promotion to the CISO role in 2013 and the addition of responsibility for technology risk management in 2023.
Biggest changeOur current CISO has held a series of roles in telecommunications, networking and information security at American Express, including promotion to the CISO role in 2013, and is also responsible for technology risk management. Prior to joining American Express, our current CISO served in a variety of technology leadership roles at a public pharmaceutical and biotechnology company for 14 years.
For more information on risks to us from cybersecurity threats, see “ A major information or cybersecurity incident or an increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services .” under “Risk Factors.” 37 Table of Contents Cybersecurity Governance Under our cybersecurity governance framework, our Board and our Risk Committee are primarily responsible for overseeing and governing the development, implementation and maintenance of our TRIS program, with the Board designating our Risk Committee to provide oversight and governance of technology and cybersecurity risks.
For more information on risks to us from cybersecurity threats, see “ A major information or cybersecurity incident or an increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services .” under “Risk Factors.” 38 Table of Contents Cybersecurity Governance Under our cybersecurity governance framework, our Board and Risk Committee are primarily responsible for overseeing and governing the development, implementation and maintenance of our TRIS program, with our Board designating our Risk Committee to provide oversight and governance of technology and cybersecurity risks.
While we do not believe that our business strategy, results of operations or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our customers, colleagues, regulators, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks.
While we do not believe that our business strategy, results of operations or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our customers, colleagues, regulators, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyberattacks.
Our CISO reports to the Chief Information Officer, information about whom is included in “Information About Our Executive Officers” under “Business.” For more information on our risk governance structure, see “Risk Management — Governance” and “Risk Management —Operational Risk Management Process” under “MD&A.” 38 Table of Contents
Our CISO reports to the Chief Information Officer, information about whom is included in “Information About Our Executive Officers” under “Business.” For more information on our risk governance structure, see “Risk Management — Governance” and “Risk Management —Operational Risk Management Process” under “MD&A.” 39 Table of Contents
Removed
Prior to joining American Express, our current CISO served in a variety of technology leadership roles at a public pharmaceutical and biotechnology company for 14 years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Shares Purchased Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2023 Repurchase program (a) 1,056,705 $ 143.46 1,056,705 103,744,000 Employee transactions (b) 14,403 $ 142.55 N/A N/A November 1-30, 2023 Repurchase program (a) 3,923,088 $ 158.36 3,923,088 99,820,912 Employee transactions (b) — $ — N/A N/A December 1-31, 2023 Repurchase program (a) 740,155 $ 171.63 740,155 99,080,757 Employee transactions (b) — $ — N/A N/A Total Repurchase program (a) 5,719,948 $ 157.33 5,719,948 99,080,757 Employee transactions (b) 14,403 $ 142.55 N/A N/A (a) 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.
Biggest changeTotal Number of Shares Purchased Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2024 Repurchase program (a) 387,722 $ 270.74 387,722 78,271,238 Employee transactions (b) 16,467 $ 273.50 N/A N/A November 1-30, 2024 Repurchase program (a) 1,137,974 $ 289.86 1,137,974 77,133,264 Employee transactions (b) — $ — N/A N/A December 1-31, 2024 Repurchase program (a) 1,962,445 $ 301.08 1,962,445 75,170,819 Employee transactions (b) — $ — N/A N/A Total Repurchase program (a) 3,488,141 $ 294.05 3,488,141 75,170,819 Employee transactions (b) 16,467 $ 273.50 N/A N/A (a) 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.
The information to be found under such caption is incorporated herein by reference. Our definitive 2024 proxy statement for our Annual Meeting of Shareholders is expected to be filed with the SEC in March 2024 (and, in any event, not later than 120 days after the close of our most recently completed fiscal year).
The information to be found under such caption is incorporated herein by reference. Our definitive 2025 proxy statement for our Annual Meeting of Shareholders is expected to be filed with the SEC in March 2025 (and, in any event, not later than 120 days after the close of our most recently completed fiscal year).
The following graph compares the cumulative total shareholder return on our common shares with the total return on the S&P 500 Index and the S&P Financial Index for the last five years. It shows the growth of a $100 investment on December 31, 2018, including the reinvestment of all dividends.
The following graph compares the cumulative total shareholder return on our common shares with the total return on the S&P 500 Index and the S&P Financial Index for the last five years. It shows the growth of a $100 investment on December 31, 2019, including the reinvestment of all dividends.
(c) Issuer Purchases of Securities The table below sets forth the information with respect to purchases of our common stock made by or on behalf of us during the three months ended December 31, 2023.
(c) Issuer Purchases of Securities The table below sets forth the information with respect to purchases of our common stock made by or on behalf of us during the three months ended December 31, 2024.
You can find dividend information concerning our common stock in the Consolidated Statements of Shareholders’ Equity in the “Consolidated Financial Statements.” For information on dividend restrictions, see “Supervision and Regulation — Dividends and Other Capital Distributions” under “Business” and Note 22 to the “Consolidated Financial Statements.” You can find information on securities authorized for issuance under our equity compensation plans under the caption “Executive Compensation — Equity Compensation Plans” to be contained in our definitive 2024 proxy statement for our Annual Meeting of Shareholders, which is scheduled to be held on May 6, 2024.
You can find dividend information concerning our common stock in the Consolidated Statements of Shareholders’ Equity in the “Consolidated Financial Statements.” For information on dividend restrictions, see “Supervision and Regulation — Dividends and Other Capital Distributions” under “Business” and Note 22 to the “Consolidated Financial Statements.” You can find information on securities authorized for issuance under our equity compensation plans under the caption “Executive Compensation — Equity Compensation Plans” to be contained in our definitive 2025 proxy statement for our Annual Meeting of Shareholders, which is scheduled to be held on April 29, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP. As of December 31, 2023, we had 17,300 common shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP. As of December 31, 2024, we had 16,641 common shareholders of record.
Year-end Data 2018 2019 2020 2021 2022 2023 American Express $ 100.00 $ 132.52 $ 131.00 $ 179.32 $ 164.02 $ 211.08 S&P 500 Index $ 100.00 $ 131.47 $ 155.65 $ 200.29 $ 163.98 $ 207.04 S&P Financial Index $ 100.00 $ 132.09 $ 129.77 $ 175.02 $ 156.52 $ 175.46 40 Table of Contents (b) Not applicable.
Year-end Data 2019 2020 2021 2022 2023 2024 American Express $ 100.00 $ 98.85 $ 135.31 $ 123.77 $ 159.28 $ 255.35 S&P 500 Index $ 100.00 $ 118.39 $ 152.34 $ 124.73 $ 157.48 $ 196.85 S&P Financial Index $ 100.00 $ 98.24 $ 132.50 $ 118.49 $ 132.83 $ 173.35 41 Table of Contents (b) Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFactors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following: • our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing at high levels in areas that can drive sustainable growth (including our brand, value propositions, customers, colleagues, marketing, technology and coverage), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following: macroeconomic conditions, such as recession risks, changes in interest rates, effects of inflation, labor shortages and strikes or higher rates of unemployment, supply chain issues, energy costs and fiscal and monetary policies; geopolitical instability, including the ongoing Ukraine and Israel wars and tensions involving China and the United States; the impact of any future contingencies, including, but not limited to, legal costs and settlements, the imposition of fines or monetary penalties, increases in Card Member remediation, investment gains or losses, restructurings, impairments and changes in reserves; issues impacting brand perceptions and our reputation; impacts related to new or renegotiated cobrand and other partner agreements and joint ventures; and the impact of regulation and litigation, which could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with Card Members, partners and merchants; • our ability to grow revenues net of interest expense and the sustainability of our future growth, which could be impacted by, among other things, the factors identified above and in the subsequent paragraphs, as well as the following: spending volumes and the spending environment not being consistent with expectations, including T&E spend growing slower than expected, further slowing in spend by U.S. small and mid-sized enterprise or U.S. large and global corporate customers, or a general slowdown or increase in volatility in consumer and business spending volumes; changes in foreign currency exchange rates; an inability to address competitive pressures, innovate and expand our products and services, leverage the advantages of our differentiated business model, attract customers across generations and age cohorts, including Millennial and Gen Z customers and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global merchant network; the effects of the end of the moratorium on student loan repayments; the impact of the decommissioning of one of our alternative payment solutions; and merchant discount rates changing by a greater or lesser amount than expected; • net card fees not performing consistently with expectations, which could be impacted by, among other things, a deterioration in macroeconomic conditions impacting the ability and desire of Card Members to pay card fees; higher Card Member attrition rates; the pace of Card Member acquisition activity and demand for our fee-based products; and our inability to address competitive pressures, develop attractive premium value propositions and implement our strategy of refreshing card products, enhancing benefits and services and continuing to innovate with respect to our products; • net interest income, the effects of changes in interest rates and the growth of loans and Card Member receivables outstanding, and the portion of which that is interest bearing, being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns; our ability to effectively manage risk and enhance Card Member value propositions; changes in benchmark interest rates, including where such changes affect our assets or liabilities differently than expected; changes in capital and credit market conditions and the availability and cost of capital; credit actions, including line size and other adjustments to credit availability; the yield on Card Member loans not remaining consistent with current expectations; our deposit levels or the interest rates we offer on deposits changing from current expectations; and the effectiveness of our strategies to capture a greater share of existing Card Members’ spending and borrowings, and attract new, and retain existing, customers; • future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies; the ability and willingness of Card Members to pay amounts owed to us; changes in consumer behavior that affect loan and receivable balances (such as paydown and revolve rates); the credit profiles of new customers acquired; the enrollment in, and effectiveness of, financial relief programs and the performance of accounts as they exit from such programs; collections capabilities and recoveries of previously written-off loans and receivables; and governmental actions providing forms of relief with respect to certain loans and fees and the termination of such actions; • the actual amount to be spent on Card Member rewards and services and business development, and the relationship of these variable customer engagement costs to revenues, which could be impacted by continued changes in macroeconomic conditions and Card Member behavior as it relates to their spending patterns (including the level of spend in bonus categories), the redemption of rewards and offers (including travel redemptions) and usage of travel-related benefits; the costs 86 Table of Contents related to reward point redemptions; further enhancements to product benefits to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective; new and renegotiated contractual obligations with business partners; and the pace and cost of the expansion of our global lounge collection; • the actual amount we spend on marketing in the future, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance; management’s decisions regarding the timing of spending on marketing and the effectiveness of management’s investment optimization process; management’s identification and assessment of attractive investment opportunities; management’s ability to develop attractive premium value propositions and drive customer demand; the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives; our ability to realize marketing efficiencies and balance expense control and investments in the business; • our ability to control operating expenses, including relative to future revenue growth, and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent; a persistent inflationary environment; our ability to realize operational efficiencies, including through automation; management’s decision to increase or decrease spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities depending on overall business performance; our ability to innovate efficient channels of customer interactions and the willingness of Card Members to self-service and address issues through digital channels; restructuring activity; supply chain issues; fraud costs; compliance expenses and consulting, legal and other professional services fees, including as a result of litigation or internal and regulatory reviews; regulatory assessments; the level of M&A activity and related expenses, including the completion of our sale of Accertify Inc.; information or cybersecurity incidents; the payment of fines, penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements; the performance of Amex Ventures and other of our investments; impairments of goodwill or other assets; and the impact of changes in foreign currency exchange rates on costs, such as due to the devaluation of foreign currencies; • our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation (or related legislative or regulatory inaction), the timing and manner of the implementation of tax guidelines by jurisdictions, our geographic mix of income, unfavorable tax audits and other unanticipated tax items; • changes affecting our plans regarding the return of capital to shareholders, including increasing the level of our dividend, which will depend on factors such as our capital levels and regulatory capital ratios; changes in the stress testing and capital planning process and new rulemakings and guidance from the Federal Reserve and other banking regulators, including changes to regulatory capital requirements, such as final rules resulting from the U.S. federal bank regulatory agencies’ capital rule proposal; our results of operations and financial condition; our credit ratings and rating agency considerations; required Company approvals; and the economic environment and market conditions in any given period; • changes affecting the expected timing for closing the sale of Accertify Inc., the amount of the potential gain we recognize upon the closing and the portion of such gain management determines to reinvest back into our business, which will depend on regulatory and other approvals, consultation requirements, the execution of ancillary agreements, the cost and availability of financing for the purchaser to fund the transaction and the potential loss of key customers, vendors and other business partners and management’s decisions regarding future operations, strategies and business initiatives; • changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may materially impact the prices charged to merchants that accept American Express cards, the desirability of our premium card products, competition for new and existing cobrand relationships, competition with respect to new products, services and technologies, competition from new and non-traditional competitors and the success of marketing, promotion and rewards programs; • our ability to expand our leadership in the premium consumer space, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits and value propositions that appeal to Card Members and new customers, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize the benefits from strategic partnerships and evolving our infrastructure to support new products, services and benefits; • our ability to build on our leadership in commercial payments, which will depend in part on competition, the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs, perceived or actual difficulties and costs related to setting up card-based B2B payment platforms, our ability to offer attractive value propositions and new products to potential customers, our ability to enhance and expand our payment and lending solutions, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies; • our ability to expand merchant coverage globally and our success, as well as the success of OptBlue merchant processors and network partners, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card 87 Table of Contents Members to use American Express cards at merchants, scaling marketing and expanding programs to increase card usage, identifying new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, increasing coverage in priority international cities and countries and key industry verticals, and executing on our plans in China and for continued technological developments, including capabilities that allow for greater digital integration and modernization of our authorization platform; • our ability to successfully invest in and compete with respect to technological developments and digital payment and travel solutions, which will depend in part on our success in evolving our products and processes for the digital environment, developing new features in the Amex app and enhancing our digital channels, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence and machine learning and increasing automation to address servicing and other customer needs, and supporting the use of our products as a means of payment through online and mobile channels, all of which will be impacted by investment levels, new product innovation and development and infrastructure to support new products, services, benefits and partner integrations; • our ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, favoring local competitors or prohibiting or limiting foreign ownership of certain businesses; our inability to tailor products and services to make them attractive to local customers; competitors with more scale, local experience and established relationships with relevant customers, regulators and industry participants; the success of our network partners in acquiring Card Members and/or merchants; political or economic instability or regional hostilities, including as a result of the Ukraine and Israel wars; • a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm; • changes in capital and credit market conditions, which may significantly affect our ability to meet our liquidity needs and expectations regarding capital ratios; our access to capital and funding costs; the valuation of our assets; and our credit ratings or those of our subsidiaries; • our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, our ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions; • our ability to implement our ESG strategies and initiatives, which depend in part on the amount and efficacy of our investments in product innovations, marketing campaigns, our supply chain and operations, and philanthropic, colleague and community programs; customer preferences and behaviors; and the cost and availability of solutions for a low carbon economy; • legal and regulatory developments, which could affect the profitability of our business activities; limit our ability to pursue business opportunities or conduct business in certain jurisdictions; require changes to business practices or governance, or alter our relationships with Card Members, partners, merchants and other third parties, including our ability to continue certain cobrand relationships in the EU; exert further pressure on merchant discount rates and our network business; alter the competitive landscape; result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or monetary penalties; materially affect capital or liquidity requirements, results of operations or ability to pay dividends; or result in harm to the American Express brand; • changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including of cobrand partners, merchants that represent a significant portion of our business, network partners or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations; and • factors beyond our control such as global economic and business conditions, consumer and business spending generally, unemployment rates, geopolitical conditions, including further escalations or widening of ongoing military conflicts, adverse developments affecting third parties, including other financial institutions, merchants or vendors, as well as severe weather conditions, natural disasters, power loss, disruptions in telecommunications, health pandemics, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances, deposit levels and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.
Biggest changeFactors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following: • our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and our ability to continue investing at high levels in areas that can drive sustainable growth (including our brand, value propositions, coverage, marketing, technology and talent), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following: macroeconomic conditions, higher rates of unemployment, changes in interest rates, effects of inflation, tariffs, supply chain issues, energy costs and fiscal and monetary policies; geopolitical instability, hostilities and tensions, such as involving China and the United States; the impact of any future contingencies, including, but not limited to, legal costs and settlements, the imposition of fines or monetary penalties, increases in Card Member remediation, investment gains or losses, restructurings, impairments and changes in reserves; issues impacting brand perceptions and our reputation; impacts related to acquisitions, cobrand and other partner agreements, portfolio sales and joint ventures; and the impact of regulation and litigation, which may be heightened due to the uncertain regulatory environment and could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with Card Members, partners and merchants; • our ability to grow revenues net of interest expense and the sustainability of our future growth, which could be impacted by, among other things, the factors identified above and in the subsequent paragraphs, as well as the following: spending volumes and the spending environment not being consistent with expectations, including a decline in spending by U.S. small and mid-sized enterprise Card Members or slowdowns in U.S. consumer or international spending volumes; an inability to address competitive pressures, attract and retain customers, invest in and enhance our Membership Model of premium products, differentiated services and partnerships, successfully refresh our card products, grow spending and lending with customers across age cohorts, including Millennial and Gen Z customers, and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global network; the effects of regulatory initiatives, including pricing and network regulation; merchant coverage growing less than expected or the reduction of merchant acceptance or the perception of coverage; increased surcharging, steering, suppression or differential acceptance of our products; merchant discount rates changing from our expectations; and changes in foreign currency exchange rates; • net card fees not performing consistently with expectations, which could be impacted by, among other things, a decrease in the ability and desire of Card Members to pay card fees, such as due to a deterioration in macroeconomic conditions; higher Card Member attrition rates; the pace of Card Member acquisition activity and demand for our fee-based products; and our inability to address competitive pressures, develop attractive premium value propositions and implement our strategy of refreshing card products and realize our anticipated growth from those refreshes, enhancing and delivering benefits and services and continuing to innovate with respect to our products; • net interest income, the effects of changes in interest rates and the growth of loans and Card Member receivables outstanding and revolving balances, being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns; the effectiveness of our strategies to enhance Card Member value propositions, capture a greater share of Card Members’ spending and borrowings and attract new, and retain existing, customers; our ability to effectively manage underwriting risk; changes in benchmark interest rates, including where such changes affect our assets or liabilities differently than expected; changes in capital and credit market conditions and the availability and cost of capital; credit actions, including line size and other adjustments to credit availability; the yield on Card Member loans not remaining consistent with current expectations; and our deposit levels or the interest rates we offer on deposits changing from current expectations; loss or impacts to cobrand relationships; and governmental actions to cap interest rates; 88 Table of Contents • future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as unemployment rates, GDP and the volume of bankruptcies; the ability and willingness of Card Members to pay amounts owed to us; changes in loans and receivables outstanding, such as from the implementation of our strategy to capture spending and borrowings, or from changes in consumer behavior that affect loan and receivable balances (e.g., paydown and revolve rates); changes in the levels of customer acquisitions and the credit profiles of new customers acquired; the enrollment in, and effectiveness of, financial relief programs and the performance of accounts as they exit from such programs; the impact of the usage of debt settlement companies; and collections capabilities and recoveries of previously written-off loans and receivables; • the actual amount to be spent on Card Member rewards and services and business development, and the relationship of these variable customer engagement costs to revenues, which could be impacted by continued changes in macroeconomic conditions and Card Member behavior as it relates to their spending patterns (including the level of spend in bonus categories), the redemption of rewards and offers (including travel redemptions) and usage of travel-related benefits; the costs related to reward point redemptions; further enhancements to our rewards programs and product benefits, including to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective; new and renegotiated contractual obligations with business partners, which may be affected by business partners with greater scale and leverage; our ability to identify and negotiate partner-funded value for Card Members; and the pace and cost of the expansion of our global lounge collection; • the actual amount we spend on marketing in the future and the effectiveness and efficiency of our marketing spend, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance, including the levels of demand for our products; management’s decisions regarding the timing of spending on marketing and the effectiveness of management’s investment optimization process, management’s identification and assessment of attractive investment opportunities; management’s ability to develop premium value propositions and drive customer demand, including continued customer spend growth and retention; the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives; and our ability to realize marketing efficiencies and balance expense control and investments in the business; • our ability to control operating expenses, including relative to revenue growth, and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent; our ability to realize operational efficiencies, including through increased scale and automation and continued adoption of artificial intelligence technologies; management’s decisions regarding spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities; our ability to innovate efficient channels of customer interactions and the willingness of Card Members to self-service and address issues through digital channels; restructuring activity; fraud costs; inflation; supply chain issues; expenses related to control management and compliance and consulting, legal and other professional services fees, including as a result of litigation or internal and regulatory reviews; regulatory assessments; the level of M&A activity and related expenses; information security or cybersecurity incidents; the payment of fines, penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements; the performance of Amex Ventures and other of our investments; impairments of goodwill or other assets; and the impact of changes in foreign currency exchange rates on costs; • our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation (or the expiration of provisions of tax laws or regulations), the implementation of the OECD’s global minimum tax guidelines by jurisdictions, our geographic mix of income, unfavorable tax audits, assessments and tax litigation outcomes; • changes affecting our plans regarding the return of capital to shareholders, including increasing the level of the dividend, which will depend on factors such as our capital levels and regulatory capital ratios; the results of our stress testing and capital planning process and new rulemakings and guidance from the Federal Reserve and other banking regulators, including changes to regulatory capital requirements, such as from the U.S. federal bank regulatory agencies’ Basel III rulemaking; our results of operations and financial condition; our credit ratings and rating agency considerations; required company approvals; and the economic environment and market conditions in any given period; • changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure and competitor settlements and mergers that may materially impact the prices charged to merchants that accept American Express cards; surcharging, steering and suppression by merchants and merchant acceptance; the desirability of our premium card products; competition for new and existing cobrand relationships; competition from new and non-traditional competitors, and with respect to new products, services and technologies, such as the emergence or increase in popularity of alternative payment mechanisms; and the success of marketing, promotion and rewards programs; 89 Table of Contents • our ability to expand our leadership in the premium consumer space, including with Millennial and Gen-Z consumers, which will be impacted in part by competition, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits and value propositions that appeal to Card Members and new customers, grow spending with new and younger age cohort Card Members, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize the benefits from strategic partnerships, successfully implementing our dining strategy and evolving our infrastructure to support new products, services and benefits; • our ability to build on our leadership in commercial payments, which will depend in part on competition; the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs; perceived or actual difficulties and costs related to setting up B2B payment platforms; our ability to offer attractive value propositions and new products to current and potential customers; our ability to enhance and expand our payment, lending and cash flow management solutions, increase customer engagement, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies; and the success of our initiatives to support businesses, such as Small Business Saturday and other Shop Small campaigns; • our ability to expand merchant coverage globally and our success, as well as the success of third-party merchant acquirers, aggregators and processors, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card Members to use American Express cards at merchants, scaling marketing and expanding programs to increase card usage, identifying and growing acceptance in low- and new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, executing on our plans to increase coverage in priority international cities, destinations, countries and industry verticals, and continued network investments, including in capabilities that allow for greater digital integration and modernization of our authorization platform; • our ability to successfully invest in, benefit from and expand the use of technological developments, digital payments, servicing and travel solutions and other technological capabilities, which will depend in part on our success in evolving our products and processes for the digital environment, developing new features in the Amex ® app and enhancing our digital channels, effectively utilizing data and data platforms, building partnerships and executing programs with other companies, effectively utilizing artificial intelligence and machine learning and increasing automation, including to address servicing and other business and customer needs, and supporting the use of our products as a means of payment through online and mobile channels, all of which will be impacted by investment levels, customer and colleague receptiveness and ability to adopt new technologies, new product innovation and development and the platforms and infrastructure to support new products, services, benefits and partner integrations; • our ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, favoring local competitors or prohibiting or limiting foreign ownership of certain businesses; our inability to successfully replicate aspects of our business model internationally and tailor products and services to make them attractive to local customers; competitors with more scale, local experience and established relationships with relevant customers, regulators and industry participants; the success of us and our network partners in acquiring Card Members and/or merchants; and political or economic instability or regional hostilities; • our ability to successfully implement our dining strategy and grow our dining platform, which will depend in part on our ability to grow the number of diners, restaurants and other bookable venues using the platform and transactions on the platform; expand and innovate in the tools and capabilities offered through the platform, including integrating the Tock and Rooam acquisitions and benefiting from their added capabilities, users and/or bookable venues; successfully compete with other dining platforms and means of booking venues; and effectively utilize our dining platform to provide value to Card Members and merchants and sell our products and services; • a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks or outages, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our operations, reduce the use and acceptance of American Express cards and lead to regulatory scrutiny, litigation, remediation and response costs, and reputational harm; • changes in capital and credit market conditions, which may significantly affect our ability to meet our liquidity needs and expectations regarding capital ratios; our access to capital and funding costs; the valuation of our assets; and our credit ratings or those of our subsidiaries; 90 Table of Contents • our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, our ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions; • our ability to achieve our climate-related goals, which depend in part on the amount and efficacy of our investments in emissions reduction projects, the ability of our partners to set and achieve sustainability targets, the success of our supply chain and sustainability initiatives, and colleague programs; customer preferences and behaviors; the cost and availability of renewable energy, carbon removal and carbon offset projects and energy attribute certificates; changes in our real estate, technology and colleague strategies or an inability to execute those strategies; and brand perceptions and reputation; • legal and regulatory developments, which could affect the profitability of our business activities; limit our ability to pursue business opportunities or conduct business in certain jurisdictions; require changes to business practices or governance, or alter our relationships with Card Members, partners, merchants and other third parties, including affecting our network operations and practices governing merchant acceptance, as well as our ability to continue certain cobrand relationships in the EU; impact card fees and rewards programs; exert further pressure on merchant discount rates and our network business, as well as result in an increase in surcharging, steering or other differential acceptance practices; alter the competitive landscape; subject us to heightened regulatory scrutiny and result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or monetary penalties; materially affect capital or liquidity requirements, results of operations or ability to pay dividends; or result in harm to the American Express brand; • changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, including of cobrand partners, merchants that represent a significant portion of our business, network partners or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations; and • factors beyond our control such as global economic and business conditions, consumer and business spending generally, unemployment rates, geopolitical conditions, including resulting from recent political developments or further escalations or widening of ongoing military conflicts and regional hostilities, adverse developments affecting third parties, including other financial institutions, merchants or vendors, as well as severe weather conditions and natural disasters (e.g., hurricanes and wildfires), power loss, disruptions in telecommunications, pandemics, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, delinquency rates, loan and receivable balances, deposit levels, foreign exchange rates and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.
A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing.
A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing.
Cash Flows from Investing Activities Our cash flows from investing activities primarily include changes in Card Member loans and receivables, as well as changes in our available-for-sale investment securities portfolio.
Cash Flows from Investing Activities Our cash flows from investing activities primarily include changes in loans and Card Member receivables, as well as changes in our available-for-sale investment securities portfolio.
Long Term A2 A- A Short Term P-1 A-2 F1 Outlook Stable Stable Stable American Express National Bank Long Term A3 A- A Short Term P-1 A-2 F1 Outlook Stable Stable Stable American Express Credit Corporation Long Term A2 A- A Short Term N/R N/R N/R Outlook Stable Stable Stable These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.
Long Term A2 A A Short Term P-1 A-1 F1 Outlook Stable Stable Stable American Express National Bank Long Term A3 A A Short Term P-1 A-1 F1 Outlook Stable Stable Stable American Express Credit Corporation Long Term A2 A A Short Term N/R N/R N/R Outlook Stable Stable Stable These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.
(c) We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. 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.
(e) We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in deposits, unsecured debt and asset securitizations, and access to secured borrowing facilities and a committed bank credit facility. In particular, we are focused on continuing to grow our direct retail deposit program as a funding source.
We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in deposits, unsecured debt and asset securitizations and access to secured borrowing facilities and a committed bank credit facility. In particular, we are focused on continuing to grow our direct deposit program as a funding source.
Our credit risks are divided into two broad categories: individual and institutional. Each has distinct risk management capabilities, strategies, and tools. Business units that create individual or institutional credit risk exposures of significant importance are supported by dedicated risk management teams, each led by a Chief Credit Officer.
Our credit risks are divided into two broad categories: individual and institutional. Each has distinct risk management profiles, capabilities, strategies, and tools. Business units that create individual or institutional credit risk exposures of significant importance are supported by dedicated risk management teams, each led by a Chief Credit Officer.
We may conduct share repurchases through a variety of methods, including open market purchases, plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, privately negotiated transactions or other purchases, including block trades, accelerated share repurchase programs or any combination of such methods as market conditions warrant and at prices we deem appropriate. 64 Table of Contents FUNDING STRATEGY Our principal funding objective is to maintain broad and well-diversified funding sources to allow us to finance our global businesses and to maintain a strong liquidity profile.
We may conduct share repurchases through a variety of methods, including open market purchases, plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, privately negotiated transactions or other purchases, including block trades, accelerated share repurchase programs or any combination of such methods as market conditions warrant and at prices we deem appropriate. 66 Table of Contents FUNDING STRATEGY Our principal funding objective is to maintain broad and well-diversified funding sources to allow us to finance our global businesses and to maintain a strong liquidity profile.
The Operational Risk Management Committee (ORMC), chaired by the Chief Operational Risk Officer, coordinates with all control groups on effective risk assessments and controls. It also oversees the preventive, responsive and mitigation efforts by Operational Excellence teams in the business units and staff groups.
The Operational Risk Management Committee (ORMC), chaired by the Chief Operational Risk Officer, coordinates with all control groups on effective risk assessments and controls. It also oversees the preventive, responsive and mitigation efforts by control management teams in the business units and staff groups.
Changes in facts or circumstances can lead to changes in the ultimate realization of deferred tax assets due to uncertainties. 82 Table of Contents OTHER MATTERS RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS Refer to the Recently Adopted and Issued Accounting Standards section of Note 1 to the “Consolidated Financial Statements.” GLOSSARY OF SELECTED TERMINOLOGY Adjusted net interest income — A non-GAAP measure that represents net interest income attributable to our Card Member loans (which includes, on a GAAP basis, interest that is deemed uncollectible), excluding the impact of interest expense and interest income not attributable to our Card Member loans.
Changes in facts or circumstances can lead to changes in the ultimate realization of deferred tax assets due to uncertainties. 84 Table of Contents OTHER MATTERS RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS Refer to the Recently Adopted and Issued Accounting Standards section of Note 1 to the “Consolidated Financial Statements.” GLOSSARY OF SELECTED TERMINOLOGY Adjusted net interest income — A non-GAAP measure that represents net interest income attributable to our Card Member loans (which includes, on a GAAP basis, interest that is deemed uncollectible), excluding the impact of interest expense and interest income not attributable to our Card Member loans.
(b) Refer to Table 8 footnote (a). (c) Refer to Table 8 footnote (b). (d) Refer to Table 8 footnote (c). (e) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due.
(b) Refer to Table 8 footnote (a). (c) Refer to Table 8 footnote (b). (d) Refer to Table 8 footnote (c). (e) Refer to Table 8 footnote (d). (f) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due.
Discount revenue — Represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.
Discount revenue — Primarily represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.
For more information on these obligations, refer to Note 12, Note 15 and Note 23 to the “Consolidated Financial Statements.” 69 Table of Contents CASH FLOWS The following table summarizes our cash flow activity, followed by a discussion of the major drivers impacting operating, investing and financing cash flows for the year ended December 31, 2023 compared to the year ended December 31, 2022: TABLE 22: CASH FLOWS (Billions) 2023 2022 2021 Total cash provided by (used in): Operating activities $ 18.5 $ 21.1 $ 14.6 Investing activities (24.4) (33.7) (10.5) Financing activities 18.4 24.5 (14.9) Effect of foreign currency exchange rates on cash and cash equivalents 0.2 — (0.1) Net increase (decrease) in cash and cash equivalents $ 12.7 $ 11.9 $ (10.9) Cash Flows from Operating Activities Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions for credit losses, depreciation and amortization, stock-based compensation, deferred taxes and other non-cash items and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.
For more information on these obligations, refer to Note 12, Note 15 and Note 23 to the “Consolidated Financial Statements.” 71 Table of Contents CASH FLOWS The following table summarizes our cash flow activity, followed by a discussion of the major drivers impacting operating, investing and financing cash flows for the year ended December 31, 2024 compared to the year ended December 31, 2023: TABLE 22: CASH FLOWS (Billions) 2024 2023 2022 Total cash provided by (used in): Operating activities $ 14.0 $ 18.5 $ 21.1 Investing activities (24.4) (24.4) (33.7) Financing activities 4.4 18.4 24.5 Effect of foreign currency exchange rates on cash and cash equivalents — 0.2 — Net (decrease) increase in cash and cash equivalents $ (6.0) $ 12.7 $ 11.9 Cash Flows from Operating Activities Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions for credit losses, depreciation and amortization, stock-based compensation, deferred taxes and other non-cash items and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.
In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for “non-swiped” card transactions or for transactions using cards issued outside the United States at merchants located in the United States; • Interest income, principally represents interest earned on outstanding loan balances; • Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account; • Service fees and other revenue, primarily represent service fees earned from merchants and other customers, travel commissions and fees, Card Member delinquency fees, foreign currency-related fees charged to Card Members, and income (losses) from our investments in which we have significant influence; and • 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 some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for card-not-present transactions or for transactions using cards issued outside the United States at merchants located in the United States; • Interest income, principally represents interest earned on outstanding loan balances; • Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account; • Service fees and other revenue, primarily represent service fees earned from merchants and other customers, foreign currency-related fees charged to Card Members, Card Member delinquency fees, travel commissions and fees, and income (losses) from our investments in which we have significant influence; and • 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.
Our short-term funding programs are used primarily to fund working capital needs, such as managing seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on our funding strategy, our needs and market conditions. We had no commercial paper outstanding at any point during 2023.
Our short-term funding programs are used primarily to fund working capital needs, such as managing seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on our funding strategy, our needs and market conditions. We had no commercial paper outstanding at any point during 2024.
The ERM policy defines and governs risk governance, risk oversight and risk appetite, including credit risk (at both the individual and institutional levels), operational risk (e.g., operations and process, legal, conduct, third-party, information technology, information security, data management, privacy and people risks), compliance risk, reputational risk, market risk, funding and liquidity risk, model risk, strategic and business risk, country risk and emerging risks (e.g., climate risk).
The ERM policy defines and governs risk governance, risk oversight and risk appetite, including credit risk (at both the individual and institutional levels), operational risk (e.g., operations and process, legal, conduct, third-party, information technology, information security, data management, privacy and people risks), compliance risk, reputational risk, market risk, funding and liquidity risk, model risk, strategic and business risk and country risk.
To the extent our expected credit loss models are not indicative of future performance, actual losses could differ significantly from our judgments and expectations, resulting in either higher or lower future provisions for credit losses in any period. 80 Table of Contents LIABILITY FOR MEMBERSHIP REWARDS The Membership Rewards program is our largest card-based rewards program.
To the extent our expected credit loss models are not indicative of future performance, actual losses could differ significantly from our judgments and expectations, resulting in either higher or lower future provisions for credit losses in any period. 82 Table of Contents LIABILITY FOR MEMBERSHIP REWARDS The Membership Rewards program is our largest card-based rewards program.
T&E spend — Represents spend on travel and entertainment, which primarily includes airline, cruise, lodging and dining merchant categories. 85 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.
T&E spend — Represents spend on travel and entertainment, which primarily includes airline, cruise, lodging and dining merchant categories. 87 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.
The absence of large losses in any given year or over several years is not necessarily representative of the level of risk of institutional portfolios, given the infrequency of loss events in such portfolios. 72 Table of Contents Similar to individual credit risk, business units taking institutional credit risks are supported by Chief Credit Officers.
The absence of large losses in any given year or over several years is not necessarily representative of the level of risk of institutional portfolios, given the infrequency of loss events in such portfolios. 74 Table of Contents Similar to individual credit risk, business units taking institutional credit risks are supported by Chief Credit Officers.
We could also directly perform this quantitative assessment for any reporting unit, bypassing the qualitative assessment. 81 Table of Contents Our methodology for conducting the quantitative goodwill impairment testing is fundamentally based on the measurement of fair value for our reporting units, which inherently entails the use of significant management judgment.
We could also directly perform this quantitative assessment for any reporting unit, bypassing the qualitative assessment. 83 Table of Contents Our methodology for conducting the quantitative goodwill impairment testing is fundamentally based on the measurement of fair value for our reporting units, which inherently entails the use of significant management judgment.
With respect to translation exposure of foreign subsidiary equity balances, including related foreign exchange forward contracts outstanding, a hypothetical 10 percent strengthening of the U.S. dollar would result in an immaterial reduction in other comprehensive income and equity as of December 31, 2023.
With respect to translation exposure of foreign subsidiary equity balances, including related foreign exchange forward contracts outstanding, a hypothetical 10 percent strengthening of the U.S. dollar would result in an immaterial reduction in other comprehensive income and equity as of December 31, 2024.
The following table sets forth the average interest rate we paid on different types of deposits during the years ended December 31, 2023, 2022 and 2021. Changes in the average interest rate we paid on our deposits were primarily due to the impact of higher market interest rates offered for retail deposits.
The following table sets forth the average interest rates we paid on different types of deposits during the years ended December 31, 2024, 2023 and 2022. Changes in the average interest rate we paid on our deposits were primarily due to the impact of higher market interest rates offered for retail deposits.
These macroeconomic scenarios contain certain variables, including unemployment rates and real GDP, that are significant to our models. 79 Table of Contents Macroeconomic Sensitivity To demonstrate the sensitivity of estimated credit losses to the macroeconomic scenarios, we compared our modeled estimates under a baseline scenario to that under a pessimistic downside scenario.
These macroeconomic scenarios contain certain variables, including unemployment rates and real GDP, that are significant to our models. 81 Table of Contents Macroeconomic Sensitivity To demonstrate the sensitivity of estimated credit losses to the macroeconomic scenarios, we compared our modeled estimates under a baseline scenario to that under a pessimistic downside scenario.
Goodwill is not amortized but is tested for impairment at the reporting unit level annually or when events or circumstances arise, such as adverse changes in the business climate, that would more likely than not reduce the fair value of the reporting unit below its carrying value.
Goodwill is not amortized but is tested for impairment at the reporting unit level annually or when events or circumstances arise, such as adverse changes in the business environment, that would more likely than not reduce the fair value of the reporting unit below its carrying value.
Increases in expenses year-over-year driven by allocated costs primarily reflect the changes in salaries and employee benefit costs and other costs related to our technology or servicing organizations and the growth in business volume within our operating segments. 51 Table of Contents U.S.
Increases in expenses year-over-year driven by allocated costs primarily reflect the changes in salaries and employee benefit costs and other costs related to our technology or servicing organizations and the growth in business volume within our operating segments. 52 Table of Contents U.S.
For example, we may infuse additional capital into subsidiaries to maintain capital at targeted levels in consideration of debt ratings and regulatory requirements. These infused amounts can affect the capital and liquidity positions at the American Express parent company level or at our subsidiaries.
For example, we may infuse additional capital into subsidiaries to maintain capital at targeted levels in consideration of debt ratings and regulatory requirements. These infused amounts can affect the capital and liquidity positions at American Express Company or at our subsidiaries.
These facilities enhance our contingent funding resources and are also used in the ordinary course of business to fund working capital needs. As of December 31, 2023, no amounts were drawn on the Charge Trust facility or the Lending Trust facility.
These facilities enhance our contingent funding resources and are also used in the ordinary course of business to fund working capital needs. As of December 31, 2024, no amounts were drawn on the Charge Trust facility or the Lending Trust facility.
The Compensation and Benefits Committee uses a risk-balanced incentive compensation framework to decide on our bonus pools and the compensation of senior executives. 71 Table of Contents There are several internal management committees, including the Enterprise Risk Management Committee (ERMC), chaired by our Chief Risk Officer.
The Compensation and Benefits Committee uses a risk-balanced incentive compensation framework to decide on our bonus pools and the compensation of senior executives. 73 Table of Contents There are several internal management committees, including the Enterprise Risk Management Committee (ERMC), chaired by our Chief Risk Officer.
Our funding plan is primarily driven by the size and mix of business asset growth, our liquidity position and choice of funding sources, as well as cash requirements generated by the redemptions of deposits by our customers, the maturities of debt outstanding and related interest payments.
Our funding plan is primarily driven by the size and mix of business asset growth, our liquidity position and choice of funding sources, as well as cash requirements generated by withdrawals of deposits by our customers, the maturities of debt outstanding and related interest payments.
See Tables 5 and 6 for more details on billed business performance. Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
See Tables 5 and 6 for more details on billed business performance. Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary new card acquisitions, proprietary cards-in-force and average fee per card.
Our ability to obtain deposit funding and offer competitive interest rates is dependent on, among other factors, the capital level of AENB. Direct retail deposits offered by AENB is our primary deposit product channel, which makes FDIC-insured high-yield savings account, certificates of deposit (CDs), business checking and consumer rewards checking account products available directly to customers.
Our ability to obtain deposit funding and offer competitive interest rates is dependent on, among other factors, the capital level of AENB. The direct deposit program offered by AENB is our primary deposit product channel, which makes FDIC-insured high-yield savings account, certificates of deposit (CDs), business checking and consumer rewards checking account products available directly to customers.
We believe our funding mix, including the proportion of U.S. retail deposits insured by the FDIC to total funding, should reduce the impact that credit rating downgrades would have on our funding capacity and costs.
We believe our funding mix, including the proportion of U.S. direct deposits insured by the FDIC to total funding, should reduce the impact that credit rating downgrades would have on our funding capacity and costs.
We seek to maintain access to a diverse set of on-balance sheet and off-balance sheet liquidity sources, including cash and other liquid assets, secured borrowing facilities and a committed bank credit facility. Through our U.S. bank subsidiary, AENB, we also hold collateral eligible for use at the Federal Reserve’s discount window.
We seek to maintain access to a diverse set of on-balance sheet and off-balance sheet liquidity sources, including cash and other liquid assets, secured borrowing facilities and a committed bank credit facility. Through our U.S. bank subsidiary, AENB, we have also pledged collateral eligible for use at the Federal Reserve’s discount window.
Chaired by the Chief Data Officer, our Enterprise Data Committee, a sub-committee of the ERMC, provides governance and oversight for our enterprise-wide data governance and management activities. 74 Table of Contents Third Party Risk We define third party risk as the risk that relationships with third parties (including their significant subcontractors) create unexpected outcomes and deviations from expectations or stated obligations.
Chaired by the Chief Data Officer, our Enterprise Data Committee, a sub-committee of the ERMC, provides governance and oversight for our enterprise-wide data governance and management activities. Third Party Risk We define third party risk as the risk that relationships with third parties (including their significant subcontractors) create unexpected outcomes and deviations from expectations or stated obligations.
On August 29, 2023, the U.S. federal bank regulatory agencies issued a notice of proposed rulemaking that would require covered bank holding companies such as American Express Company to issue and maintain minimum amounts of eligible external long-term debt and certain insured depository institutions such as AENB to issue and maintain minimum amounts of eligible internal long-term debt.
In August, 2023, the U.S. federal bank regulatory agencies issued a notice of proposed rulemaking that would require covered bank holding companies such as American Express Company to issue and maintain minimum amounts of eligible external long-term debt and certain insured depository institutions such as AENB to issue and maintain minimum amounts of eligible internal long-term debt.
We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. We also expect to increase the regular quarterly dividend on common shares outstanding by 17 percent beginning with the first quarter 2024 dividend declaration.
We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. We also expect to increase the regular quarterly dividend on common shares outstanding by approximately 17 percent beginning with the first quarter 2025 dividend declaration.
The ERMC is responsible for ensuring reputational risk considerations are included in the scope of appropriate subordinate risk policies and committees and properly reflected in all decisions escalated to the ERMC. 75 Table of Contents MARKET RISK MANAGEMENT PROCESS We define market risk as the risk to earnings or asset and liability values resulting from movements in market prices.
The ERMC is responsible for ensuring reputational risk considerations are included in the scope of appropriate subordinate risk policies and committees and properly reflected in all decisions escalated to the ERMC. MARKET RISK MANAGEMENT PROCESS We define market risk as the risk to earnings or asset and liability values resulting from movements in market prices.
Refer to Note 13 to the “Consolidated Financial Statements” for further discussion of our derivative financial instruments. To measure the sensitivity of net interest income to interest rate changes, we first project net interest income over the following twelve-month time horizon considering forecasted business growth and anticipated future market interest rates.
Refer to Note 13 to the “Consolidated Financial Statements” for further discussion of our derivative financial instruments. 77 Table of Contents To measure the sensitivity of net interest income to interest rate changes, we first project net interest income over the following twelve-month time horizon considering forecasted business growth and anticipated future market interest rates.
For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
For a discussion of the financial condition and results of operations for 2023 compared to 2022, please refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024.
The CRMC has a dual reporting relationship directly to both the ERMC and the Audit and Compliance Committee. We have a comprehensive Anti-Money Laundering program that monitors and reports suspicious activity to the appropriate government authorities. The program includes an independent risk assessment of the rules used by the Anti-Money Laundering team.
The CRMC has a dual reporting relationship to both the Risk Committee (through the ERMC) and the Audit and Compliance Committee. Additionally, we have a comprehensive Anti-Money Laundering program that monitors and reports suspicious activity to the appropriate government authorities. The program includes an independent risk assessment of the rules used by the Anti-Money Laundering team.
Our asset securitization activities are rated separately. 65 Table of Contents TABLE 19: UNSECURED DEBT RATINGS American Express Entity Moody’s S&P Fitch American Express Company Long Term A2 BBB+ A Short Term N/R A-2 F1 Outlook Stable Stable Stable American Express Travel Related Services Company, Inc.
Our asset securitization activities are rated separately. 67 Table of Contents TABLE 19: UNSECURED DEBT RATINGS American Express Entity Moody’s S&P Fitch American Express Company Long Term A2 A- A Short Term N/R A-2 F1 Outlook Stable Stable Stable American Express Travel Related Services Company, Inc.
We also assess model performance and model- related issues on an ongoing basis and seek to address deficiencies in a timely manner. In addition, we utilize artificial intelligence and machine learning (AI/ML) models for a variety of business use cases.
We also assess model performance and model- related issues on an ongoing basis and seek to address deficiencies in a timely manner. In addition, we utilize artificial intelligence and machine learning (AI/ML) models, including Generative AI tools, for a variety of business use cases.
A further description of these uncertainties and other risks can be found in “Risk Factors” and our other reports filed with the SEC. 88 Table of Contents
A further description of these uncertainties and other risks can be found in “Risk Factors” and our other reports filed with the SEC. 91 Table of Contents
We plan to increase the regular quarterly dividend on our common shares outstanding by 17 percent, from 60 cents to 70 cents per share, beginning with the first quarter 2024 dividend declaration. In addition, during the year ended December 31, 2023, we paid $58 million in dividends on non-cumulative perpetual preferred shares outstanding.
We plan to increase the regular quarterly dividend on our common shares outstanding by 17 percent, from 70 cents to 82 cents per share, beginning with the first quarter 2025 dividend declaration. In addition, during the year ended December 31, 2024, we paid $58 million in dividends on non-cumulative perpetual preferred shares outstanding.
See “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for more information. 62 Table of Contents The following table presents our regulatory risk-based capital and leverage ratios and those of AENB, as of December 31, 2023: TABLE 16: REGULATORY RISK-BASED CAPITAL AND LEVERAGE RATIOS Effective Minimum (a) Ratios as of December 31, 2023 Risk-Based Capital Common Equity Tier 1 7.0 % American Express Company 10.5 % American Express National Bank 11.6 Tier 1 8.5 American Express Company 11.3 American Express National Bank 11.6 Total 10.5 American Express Company 13.1 American Express National Bank 13.3 Tier 1 Leverage 4.0 % American Express Company 9.9 American Express National Bank 9.5 % (a) Represents Basel III minimum requirements and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer (SCB) for American Express Company and the capital conservation buffer for AENB.
See “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for more information. 64 Table of Contents The following table presents our regulatory risk-based capital and leverage ratios and those of AENB, as of December 31, 2024: TABLE 16: REGULATORY RISK-BASED CAPITAL AND LEVERAGE RATIOS Effective Minimum (a) Ratios as of December 31, 2024 Risk-Based Capital Common Equity Tier 1 7.0 % American Express Company 10.5 % American Express National Bank 11.6 Tier 1 8.5 American Express Company 11.2 American Express National Bank 11.6 Total 10.5 American Express Company 13.2 American Express National Bank 13.2 Tier 1 Leverage 4.0 American Express Company 9.8 American Express National Bank 9.6 Supplementary Leverage Ratio 3.0 % American Express Company 8.3 American Express National Bank 8.0 % (a) Represents Basel III minimum requirements and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer (SCB) for American Express Company and the capital conservation buffer for AENB.
On- and off-balance sheet items are weighted for risk, with off-balance sheet items converted to balance sheet equivalents, using risk conversion factors, before being allocated a risk-adjusted weight. Off-balance sheet exposures comprise a minimal part of the total risk-weighted assets. Common Equity Tier 1 Risk-Based Capital Ratio — Calculated as CET1 capital, divided by risk-weighted assets.
On- and off-balance sheet items are risk weighted, with off-balance sheet items converted to balance sheet equivalents, using risk conversion factors, before being assigned a risk weight. Off-balance sheet exposures comprise a minimal part of the total risk-weighted assets. Common Equity Tier 1 Risk-Based Capital Ratio — Calculated as CET1 capital, divided by risk-weighted assets.
(d) A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints. (e) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f) A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints. (g) For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
All new and material changes to products and services are reviewed and approved by the New Products Committee and appropriate credit or risk committees. COUNTRY RISK MANAGEMENT PROCESS We define country risk as the risk that economic, social, and/or political conditions and events in a country present.
All new and material changes to products and services are reviewed and approved by the New Products Committee and appropriate credit or risk committees. 79 Table of Contents COUNTRY RISK MANAGEMENT PROCESS We define country risk as the risk that economic, social, and/or political conditions and events in a country present.
Our performance continues to give us confidence in our business model and while we recognize the uncertainty of the geopolitical and macroeconomic environment, we remain committed to executing on our strategy to deliver sustainable and profitable long-term growth.
Our performance continues to give us confidence in our business model and while we recognize the uncertainty of the geopolitical and macroeconomic environment and the evolving regulatory and competitive landscape, we remain committed to executing on our strategy to deliver sustainable and profitable long-term growth.
PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies.
PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by lower delinquencies.
In both 2023 and 2022, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from debt, partially offset by share repurchases and dividend payments. 70 Table of Contents RISK MANAGEMENT GOVERNANCE Risk management is overseen by our Board of Directors through three Board committees: the Risk Committee, the Audit and Compliance Committee, and the Compensation and Benefits Committee.
In both 2024 and 2023, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from long-term debt, partially offset by share repurchases and dividend payments. 72 Table of Contents RISK MANAGEMENT GOVERNANCE Risk management is overseen by our Board of Directors through three Board committees: the Risk Committee, the Audit and Compliance Committee, and the Compensation and Benefits Committee.
See “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for more information. DEPOSIT PROGRAMS We offer deposits within our U.S. bank subsidiary, AENB. These funds are currently insured up to an amount that is at least $250,000 per account holder through the FDIC; as of December 31, 2023, approximately 92 percent of these deposits were insured.
See “Supervision and Regulation — Capital and Liquidity Regulation” under “Business” for more information. DEPOSIT PROGRAMS We offer deposits within our U.S. bank subsidiary, AENB. These funds are currently insured up to an amount that is at least $250,000 per depositor, per ownership category through the FDIC; as of December 31, 2024, approximately 92 percent of these deposits were insured.
The level and composition of our consolidated capital position are determined through our Internal Capital Adequacy Assessment Process, which takes into account our business activities, as well as marketplace conditions and requirements or expectations of credit rating agencies, regulators and shareholders, among others.
See “Dividends and Share Repurchases” below. The level and composition of our consolidated capital position are determined through our Internal Capital Adequacy Assessment Process, which takes into account our business activities, as well as marketplace conditions and requirements or expectations of credit rating agencies, regulators and shareholders, among others.
Strategic decisions are reviewed and approved by business leaders and various committees and must be aligned with company policies. We seek to manage strategic and business risks through risk controls embedded in these processes as well as overall risk management oversight over business goals. Existing product performance is reviewed periodically by committees and business leaders.
Strategic decisions are reviewed and approved by business leaders and various committees and must be aligned with company policies. We seek to manage strategic and business risks through risk controls embedded in these processes as well as overall risk management oversight over business goals.
As of December 31, 2023, our direct retail deposit program had approximately 2.4 million accounts. AENB also sources deposits through third-party distribution channels as needed to meet our overall funding objectives. CDs carry stated maturities while high-yield savings account, checking account and third-party sweep deposit products do not.
As of December 31, 2024, our direct deposit program had approximately 3.3 million accounts. AENB also sources deposits through third-party distribution channels as needed to meet our overall funding objectives. CDs carry stated maturities while high-yield savings account, checking account and third-party sweep deposit products do not.
The partner is then liable for providing rewards to the Card Member under the cobrand partner’s own loyalty program. Credit cards — Represents cards that have a range of revolving payment terms, structured payment features (e.g. Plan It), grace periods, and rate and fee structures.
The partner is then liable for providing rewards to the Card Member under the cobrand partner’s own loyalty program. 85 Table of Contents Credit cards — Represents cards that have a range of revolving payment terms, structured payment features (e.g., Plan It, Expanded Buying Power), grace periods, and rate and fee structures.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.
The reserve build in the current year was primarily driven by an increase in loans outstanding. The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies. Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve release in the prior year.
As of December 31, 2023, for every 10 percentage points change in weighting from the baseline scenario to the pessimistic downside scenario, the estimated credit losses increased by approximately $160 million.
As of December 31, 2024, for every 10 percentage points change in weighting from the baseline scenario to the pessimistic downside scenario, the estimated credit losses increased by approximately $230 million.
As of December 31, 2023, foreign currency derivative instruments with total notional amounts of approximately $39 billion were outstanding. 76 Table of Contents With respect to Card Member spending and cross-currency transactions, including related foreign exchange forward contracts outstanding, the impact of a hypothetical 10 percent strengthening of the U.S. dollar would have been immaterial to projected earnings as of December 31, 2023.
As of December 31, 2024, foreign currency derivative instruments with total notional amounts of approximately $43 billion were outstanding. With respect to Card Member spending and cross-currency transactions, including related foreign exchange forward contracts outstanding, the impact of a hypothetical 10 percent strengthening of the U.S. dollar would have been immaterial to projected earnings as of December 31, 2024.
It does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating. As of December 31, 2023, we were in compliance with the covenants contained in the credit facility and no amount was drawn on the facility.
It does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating. As of December 31, 2024, we were in compliance with the covenants contained in the credit facility and no amounts were drawn on this facility.
We manage the duration of our maturing obligations, including CDs, to reduce concentration and refinancing risk. As of December 31, 2023, we had $129.1 billion in deposits. Refer to Note 7 to the “Consolidated Financial Statements” for a further description of these deposits and scheduled maturities of certificates of deposits.
We manage the duration of our maturing obligations, including CDs, to reduce concentration and refinancing risk. As of December 31, 2024, we had $139.4 billion in deposits. Refer to Note 7 to the “Consolidated Financial Statements” for a further description of these deposits and scheduled maturities of certificates of deposits.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates. Interest expense increased, primarily driven by a higher cost of funds. PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.
Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth and higher interest rates. PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.
CET1 capital is common shareholders’ equity, adjusted for ineligible goodwill and intangible assets and certain deferred tax assets. CET1 capital is also adjusted for the Current Expected Credit Loss (CECL) final rules, as described below. 63 Table of Contents Tier 1 Risk-Based Capital Ratio — Calculated as Tier 1 capital, divided by risk-weighted assets.
CET1 capital is common shareholders’ equity, adjusted for ineligible goodwill and intangible assets and certain deferred tax assets. CET1 capital is also adjusted for the CECL final rules, as described below. 65 Table of Contents Tier 1 Risk-Based Capital Ratio — Calculated as Tier 1 capital divided by risk-weighted assets.
On July 27, 2023, the Federal Reserve confirmed our SCB of 2.5 percent, which resulted in a minimum CET1 ratio of 7 percent, effective October 1, 2023 to September 30, 2024. DIVIDENDS AND SHARE REPURCHASES We return capital to common shareholders through dividends and share repurchases.
On August 28, 2024, the Federal Reserve confirmed our SCB of 2.5 percent, which resulted in a minimum CET1 ratio of 7 percent, effective October 1, 2024 to September 30, 2025. DIVIDENDS AND SHARE REPURCHASES We return capital to common shareholders through dividends and share repurchases.
With respect to anticipated earnings denominated in foreign currencies for the next twelve months, the adverse impact on pretax income of a hypothetical 10 percent strengthening of the U.S. dollar would be approximately $242 million as of December 31, 2023.
With respect to anticipated earnings denominated in foreign currencies for the next twelve months, the adverse impact on pretax income of a hypothetical 10 percent strengthening of the U.S. dollar, net of hedges, would be approximately $136 million as of December 31, 2024.
Refer to Note 8 to the “Consolidated Financial Statements” for a further description of these borrowings. LONG-TERM DEBT AND ASSET SECURITIZATION PROGRAMS As of December 31, 2023, we had $47.9 billion in long-term debt outstanding, including unsecured debt and asset-backed securities.
Refer to Note 8 to the “Consolidated Financial Statements” for a further description of these borrowings. LONG-TERM DEBT AND ASSET SECURITIZATION PROGRAMS As of December 31, 2024, we had $49.7 billion in long-term debt outstanding, including unsecured debt and asset-backed securities.
Pursuant to the cobrand agreements, we make payments to our cobrand partners, which can be significant, based primarily on the amount of Card Member spending and corresponding rewards earned on such spending and, under certain arrangements, on the number of accounts acquired and retained.
Cobrand cards — Represents cards issued under cobrand agreements with selected commercial partners. Pursuant to the cobrand agreements, we make payments to our cobrand partners, which can be significant, based primarily on the amount of Card Member spending and corresponding rewards earned on such spending and, under certain arrangements, on the number of accounts acquired and retained.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding.
The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies. Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve release in the prior year.
As of December 31, 2023, an increase in the estimated URR of current enrollees of 25 basis points would increase the Membership Rewards liability and corresponding rewards expense by approximately $179 million. Similarly, an increase in the WAC per point of 1 basis point would increase the Membership Rewards liability and corresponding rewards expense by approximately $201 million.
As of December 31, 2024, an increase in the estimated URR of current enrollees of 25 basis points would increase the Membership Rewards liability and corresponding rewards expense by approximately $197 million. Similarly, an increase in the WAC per point of 1 basis point would increase the Membership Rewards liability and corresponding rewards expense by approximately $220 million.
The $1,250 million of eligible subordinated notes includes the $500 million subordinated debt issued in July 2023 and the $750 million subordinated debt issued in May 2022. Tier 1 Leverage Ratio — Calculated by dividing Tier 1 capital by our average total consolidated assets for the most recent quarter.
The $1,750 million of eligible subordinated notes includes the $500 million subordinated debt issued in April 2024, the $500 million subordinated debt issued in July 2023 and the $750 million subordinated debt issued in May 2022. Tier 1 Leverage Ratio — Calculated as Tier 1 capital divided by average total consolidated assets for the most recent quarter.
In 2023, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, primarily driven by higher book overdrafts due to timing differences arising in the ordinary course of business, higher accounts payable to merchants and an increase in the Membership Rewards liability related to growth in billed business.
In 2023, the net cash provided by operating activities was primarily driven by cash generated from net income for the period and higher net operating liabilities, primarily driven by higher book overdrafts due to timing differences arising in the ordinary course of business and higher accounts payable to merchants.
The following table presents American Express Company’s regulatory risk-based capital and risk-weighted assets as of December 31, 2023: TABLE 17: REGULATORY RISK-BASED CAPITAL COMPONENTS AND RISK-WEIGHTED ASSETS American Express Company ($ in Billions) December 31, 2023 Risk-Based Capital Common Equity Tier 1 $ 23.2 Tier 1 Capital 24.8 Tier 2 Capital 4.0 Total Capital 28.8 Risk-Weighted Assets 219.7 Average Total Assets to calculate the Tier 1 Leverage Ratio $ 249.6 The following are definitions for our regulatory risk-based capital ratios and leverage ratio, which are calculated as per standard regulatory guidance: Risk-Weighted Assets — Assets are weighted for risk according to a formula used by the Federal Reserve to conform to capital adequacy guidelines.
The following table presents American Express Company’s regulatory risk-based capital and risk-weighted assets as of December 31, 2024: TABLE 17: REGULATORY RISK-BASED CAPITAL COMPONENTS AND RISK-WEIGHTED ASSETS American Express Company ($ in Billions) December 31, 2024 Risk-Based Capital Common Equity Tier 1 $ 24.9 Tier 1 Capital 26.4 Tier 2 Capital 4.7 Total Capital 31.1 Risk-Weighted Assets 235.8 Average Total Assets to calculate the Tier 1 Leverage Ratio 268.8 Total Leverage Exposure to calculate the Supplementary Leverage Ratio $ 317.0 The following are definitions for our regulatory risk-based capital and leverage ratios, which are calculated as per standard regulatory guidance: Risk-Weighted Assets — Assets are weighted for risk according to a formula used by the Federal Reserve to conform to capital adequacy guidelines.
Our objective is to retain sufficient levels of capital generated through net income and other sources, such as the exercise of stock options by colleagues, to maintain a strong balance sheet, provide flexibility to support future business growth and distribute excess capital to shareholders through dividends and share repurchases. See “Dividends and Share Repurchases” below.
Our objective is to retain sufficient levels of capital generated through net income and other sources, such as the issuance of subordinated debt and preferred shares, as well as the exercise of stock options by colleagues, to maintain a strong balance sheet, provide flexibility to support future business growth and distribute excess capital to shareholders through dividends and share repurchases.
The share repurchases reduce common shares outstanding and generally more than offset the issuance of new shares as part of employee compensation plans. During the year ended December 31, 2023, we returned $5.3 billion to our shareholders in the form of common stock dividends of $1.8 billion and share repurchases of $3.5 billion.
The share repurchases reduce common shares outstanding and generally more than offset the issuance of new shares as part of employee compensation plans. During the year ended December 31, 2024, we returned $7.9 billion to our shareholders in the form of share repurchases of $5.9 billion and common stock dividends of $2.0 billion.
FUNDING PROGRAMS AND ACTIVITIES We had the following customer deposits and consolidated debt outstanding as of December 31: TABLE 18: SUMMARY OF CUSTOMER DEPOSITS AND CONSOLIDATED DEBT (Billions) 2023 2022 Customer deposits $ 129.1 $ 110.2 Short-term borrowings 1.3 1.3 Long-term debt 47.9 42.6 Total customer deposits and debt $ 178.3 $ 154.1 We may redeem from time to time certain debt securities prior to the original contractual maturity dates in accordance with the optional redemption provisions of those debt securities.
FUNDING PROGRAMS AND ACTIVITIES We had the following customer deposits and consolidated debt outstanding as of December 31: TABLE 18: SUMMARY OF CUSTOMER DEPOSITS AND CONSOLIDATED DEBT (Billions) 2024 2023 Customer deposits $ 139.4 $ 129.1 Short-term borrowings 1.4 1.3 Long-term debt 49.7 47.9 Total customer deposits and debt $ 190.5 $ 178.3 We may redeem from time to time certain debt securities prior to the original contractual maturity dates in accordance with the optional redemption provisions of those debt securities.
Charge Card Members must pay the full amount of balances billed each month, with the exception of balances that can be revolved under lending features offered on certain charge cards, such as Pay Over Time and Plan It, that allow Card Members to pay for eligible purchases with interest over time. 83 Table of Contents Cobrand cards — Represents cards issued under cobrand agreements with selected commercial partners.
Charge Card Members must pay the full amount of balances billed each month, with the exception of balances that can be revolved under lending features offered on certain charge cards, such as Pay Over Time and Plan It ® , that allow Card Members to pay for eligible purchases with interest over time.
The Risk Committee of our Board of Directors provides oversight of our ERM framework, processes and methodologies. The Risk Committee approves our ERM policy.
The Risk Committee of our Board of Directors provides oversight of our ERM framework, processes and methodologies. The Risk Committee approves our ERM and select other risk policies.
TABLE 21: DEBT ISSUANCES (Billions) 2023 American Express Company: Fixed Rate Senior Notes (coupon of 4.90%) $ 1.2 Floating Rate Senior Notes (compounded SOFR (a) plus weighted-average spread of 103 basis points) 0.9 Fixed-to-Floating Rate Senior Notes (weighted-average coupon of 5.54% during the fixed rate period and compounded SOFR (a) plus weighted-average spread of 137 basis points during the floating rate period) 7.4 Fixed-to-Floating Rate Subordinated Notes (coupon of 5.63% during the fixed rate period and compounded SOFR (a) plus spread of 193 basis points during the floating rate period) 0.5 American Express Credit Account Master Trust: Fixed Rate Class A Certificates (weighted-average coupon of 5.02%) 3.5 Total $ 13.5 (a) Secured overnight financing rate (SOFR). 67 Table of Contents LIQUIDITY MANAGEMENT Our liquidity objective is to maintain access to a diverse set of on- and off-balance sheet liquidity sources.
TABLE 21: DEBT ISSUANCES (Billions) 2024 American Express Company: Floating Rate Senior Notes (compounded SOFR (a) plus weighted-average spread of 90 basis points) $ 1.1 Fixed-to-Floating Rate Senior Notes (weighted-average coupon of 5.31% during the fixed rate period and compounded SOFR (a) plus weighted-average spread of 106 basis points during the floating rate period) 7.3 Fixed-to-Floating Rate Subordinated Notes (coupon of 5.92% during the fixed rate period and compounded SOFR (a) plus spread of 163 basis points during the floating rate period) 0.5 American Express Credit Account Master Trust: Fixed Rate Class A Certificates (weighted-average coupon of 5.02%) 3.2 Total $ 12.1 (a) Secured overnight financing rate (SOFR). 69 Table of Contents LIQUIDITY MANAGEMENT Our liquidity objective is to maintain access to a diverse set of on- and off-balance sheet liquidity sources.
Refer to Note 16 and Note 21 to the “Consolidated Financial Statements” for further details on preferred shares and earnings per common share (EPS), respectively. (b) Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
Refer to Note 16 and Note 21 to the “Consolidated Financial Statements” for further details on preferred shares and earnings per common share (EPS), respectively. (c) Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP. (d) Total loans reflects Card Member loans and Other loans.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances. Interest expense increased, primarily driven by a higher cost of funds. PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year.
Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth and higher interest rates. PROVISIONS FOR CREDIT LOSSES Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year.

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