Item 1. FINANCIAL STATEMENTS

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended September 30 (Millions, except per share amounts)						2024						2023
Revenues
Non-interest revenues
Discount revenue						$	8,780					$	8,408
Net card fees						2,170						1,846
Service fees and other revenue						1,267						1,261
Processed revenue						413						424
Total non-interest revenues						12,630						11,939
Interest income
Interest on loans						5,442						4,635
Interest and dividends on investment securities						18						33
Deposits with banks and other						689						572
Total interest income						6,149						5,240
Interest expense
Deposits						1,446						1,290
Long-term debt and other						697						508
Total interest expense						2,143						1,798
Net interest income						4,006						3,442
Total revenues net of interest expense						16,636						15,381
Provisions for credit losses
Card Member receivables						170						206
Card Member loans						1,114						982
Other						72						45
Total provisions for credit losses						1,356						1,233
Total revenues net of interest expense after provisions for credit losses						15,280						14,148
Expenses
Card Member rewards						4,168						3,794
Business development						1,430						1,393
Card Member services						1,179						973
Marketing						1,470						1,236
Salaries and employee benefits						2,049						2,047
Other, net						1,780						1,605
Total expenses						12,076						11,048
Pretax income						3,204						3,100
Income tax provision						697						649
Net income						$	2,507					$	2,451
Earnings per Common Share (Note 14)(a)
Basic						$	3.50					$	3.30
Diluted						$	3.49					$	3.30
Average common shares outstanding for earnings per common share:
Basic						708						732
Diluted						709						733

(a)Represents net income less (i) earnings allocated to participating share awards of $18 million and $19 million for the three months ended September 30, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $15 million and $14 million for the three months ended September 30, 2024 and 2023, respectively.

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Nine Months Ended September 30 (Millions, except per share amounts)						2024						2023
Revenues
Non-interest revenues
Discount revenue						$	26,015					$	24,836
Net card fees						6,204						5,348
Service fees and other revenue						3,839						3,711
Processed revenue						1,207						1,291
Total non-interest revenues						37,265						35,186
Interest income
Interest on loans						15,592						12,787
Interest and dividends on investment securities						68						97
Deposits with banks and other						2,058						1,547
Total interest income						17,718						14,431
Interest expense
Deposits						4,298						3,480
Long-term debt and other						1,915						1,421
Total interest expense						6,213						4,901
Net interest income						11,505						9,530
Total revenues net of interest expense						48,770						44,716
Provisions for credit losses
Card Member receivables						592						658
Card Member loans						3,098						2,691
Other						203						137
Total provisions for credit losses						3,893						3,486
Total revenues net of interest expense after provisions for credit losses						44,877						41,230
Expenses
Card Member rewards						12,169						11,516
Business development						4,249						4,174
Card Member services						3,504						2,905
Marketing						4,426						3,985
Salaries and employee benefits						6,096						5,936
Other, net						4,294						4,713
Total expenses						34,738						33,229
Pretax income						10,139						8,001
Income tax provision						2,180						1,560
Net income						$	7,959					$	6,441
Earnings per Common Share (Note 14)(a)
Basic						$	10.99					$	8.60
Diluted						$	10.97					$	8.59
Average common shares outstanding for earnings per common share:
Basic						715						738
Diluted						716						739

(a)Represents net income less (i) earnings allocated to participating share awards of $59 million and $50 million for the nine months ended September 30, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $44 million and $43 million for the nine months ended September 30, 2024 and 2023, respectively.

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Net income						$	2,507					$	2,451					$	7,959					$	6,441
Other comprehensive income (loss):
Net unrealized debt securities gains (losses), net of tax						4						14						8						34
Foreign currency translation adjustments, net of hedges and tax						1						(110)						(135)						(57)
Net unrealized pension and other postretirement benefits, net of tax						—						4						4						57
Other comprehensive income (loss)						5						(92)						(123)						34
Comprehensive income						$	2,512					$	2,359					$	7,836					$	6,475

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Millions, except share data)						September 30, 2024						December 31, 2023
Assets
Cash and cash equivalents
Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2024, $13; 2023, nil)						$	3,205					$	7,118
Interest-bearing deposits in other banks						44,593						39,312
Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2024, $88; 2023, $66)						120						166
Total cash and cash equivalents (includes restricted cash: 2024, $471; 2023, $514)						47,918						46,596
Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2024, $4,530; 2023, $4,587), less reserves for credit losses: 2024, $156; 2023, $174						58,886						60,237
Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2024, $26,935; 2023, $28,590), less reserves for credit losses: 2024, $5,588; 2023, $5,118						128,960						120,877
Other loans, less reserves for credit losses: 2024, $154; 2023, $126						8,306						6,960
Investment securities						1,268						2,186
Premises and equipment, less accumulated depreciation and amortization: 2024, $10,867; 2023, $9,911						5,308						5,138
Other assets, less reserves for credit losses: 2024, $49; 2023, $27						20,333						19,114
Total assets						$	270,979					$	261,108
Liabilities and Shareholders’ Equity
Liabilities
Customer deposits						$	135,438					$	129,144
Accounts payable						13,162						13,109
Short-term borrowings						1,457						1,293
Long-term debt (includes debt issued by consolidated variable interest entities: 2024, $16,626; 2023, $13,426)						53,546						47,866
Other liabilities						37,669						41,639
Total liabilities						$	241,272					$	233,051
Contingencies (Note 7)
Shareholders’ Equity
Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of September 30, 2024 and December 31, 2023						—						—
Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 704 million shares as of September 30, 2024 and 723 million shares as of December 31, 2023						141						145
Additional paid-in capital						11,295						11,372
Retained earnings						21,466						19,612
Accumulated other comprehensive income (loss)						(3,195)						(3,072)
Total shareholders’ equity						29,707						28,057
Total liabilities and shareholders’ equity						$	270,979					$	261,108

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30 (Millions)						2024						2023
Cash Flows from Operating Activities
Net income						$	7,959					$	6,441
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for credit losses						3,893						3,486
Depreciation and amortization						1,248						1,229
Stock-based compensation						393						341
Deferred taxes						(917)						(1,227)
Other items (a)						(333)						393
Originations of loans held-for-sale						—						(54)
Proceeds from sales of loans held-for-sale						—						59
Changes in operating assets and liabilities, net of effects of dispositions and acquisitions:
Other assets						(222)						(710)
Accounts payable & other liabilities						(3,749)						1,832
Net cash provided by operating activities						8,272						11,790
Cash Flows from Investing Activities
Sale of investments						35						1
Maturities and redemptions of investments						1,875						1,571
Purchase of investments						(1,210)						(1,173)
Net increase in loans and Card Member receivables (b)						(11,945)						(15,462)
Purchase of premises and equipment, net of sales: 2024, $4; 2023, $1						(1,416)						(1,137)
Acquisitions, net of cash acquired						(90)						(64)
Dispositions, net of cash disposed						594						—
Net cash used in investing activities						(12,157)						(16,264)
Cash Flows from Financing Activities
Net increase in customer deposits						6,305						14,217
Net increase in short-term borrowings (b)						169						269
Proceeds from long-term debt						12,519						13,148
Payments of long-term debt						(7,358)						(9,270)
Issuance of American Express common shares						49						23
Repurchase of American Express common shares and other						(4,989)						(2,749)
Dividends paid						(1,489)						(1,326)
Net cash provided by financing activities						5,206						14,312
Effect of foreign currency exchange rates on cash and cash equivalents						1						156
Net increase in cash and cash equivalents						1,322						9,994
Cash and cash equivalents at beginning of period						46,596						33,914
Cash and cash equivalents at end of period						$	47,918					$	43,908

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

(b)Excludes an increase of $117 million related to non-cash activity during the three months ended March 31, 2023.

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

Three months ended September 30, 2024 (Millions, except per share amounts)						Total						Preferred Shares						Common Shares						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Retained Earnings
Balances as of June 30, 2024						$	29,540					$	—					$	143					$	11,332					$	(3,200)					$	21,265
Net income						2,507						—						—						—						—						2,507
Other comprehensive income (loss)						5						—						—						—						5						—
Repurchase of common shares						(1,919)						—						(2)						(121)						—						(1,796)
Other changes, including employee plans						83						—						—						84						—						(1)
Cash dividends declared preferred Series D, $9,072.22 per share						(15)						—						—						—						—						(15)
Cash dividends declared common, $0.70 per share						(494)						—						—						—						—						(494)
Balances as of September 30, 2024						$	29,707					$	—					$	141					$	11,295					$	(3,195)					$	21,466

Nine months ended September 30, 2024 (Millions, except per share amounts)						Total						Preferred Shares						Common Shares						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Retained Earnings
Balances as of December 31, 2023						$	28,057					$	—					$	145					$	11,372					$	(3,072)					$	19,612
Net income						7,959						—						—						—						—						7,959
Other comprehensive income (loss)						(123)						—						—						—						(123)						—
Repurchase of common shares						(4,822)						—						(4)						(321)						—						(4,497)
Other changes, including employee plans						184						—						—						244						—						(60)
Cash dividends declared preferred Series D, $27,315.27 per share						(44)						—						—						—						—						(44)
Cash dividends declared common, $2.10 per share						(1,504)						—						—						—						—						(1,504)
Balances as of September 30, 2024						$	29,707					$	—					$	141					$	11,295					$	(3,195)					$	21,466

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

Three months ended September 30, 2023 (Millions, except per share amounts)						Total						Preferred Shares						Common Shares						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Retained Earnings
Balances as of June 30, 2023						$	26,703					$	—					$	148					$	11,509					$	(3,084)					$	18,130
Net income						2,451						—						—						—						—						2,451
Other comprehensive income (loss)						(92)						—						—						—						(92)						—
Repurchase of common shares						(1,299)						—						(2)						(123)						—						(1,174)
Other changes, including employee plans						14						—						—						15						—						(1)
Cash dividends declared preferred Series D, $9,072.22 per share						(14)						—						—						—						—						(14)
Cash dividends declared common, $0.60 per share						(439)						—						—						—						—						(439)
Balances as of September 30, 2023						$	27,324					$	—					$	146					$	11,401					$	(3,176)					$	18,953

Nine months ended September 30, 2023 (Millions, except per share amounts)						Total						Preferred Shares						Common Shares						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Retained Earnings
Balances as of December 31, 2022						$	24,711					$	—					$	149					$	11,493					$	(3,210)					$	16,279
Net income						6,441						—						—						—						—						6,441
Other comprehensive income (loss)						34						—						—						—						34						—
Repurchase of common shares						(2,611)						—						(3)						(246)						—						(2,362)
Other changes, including employee plans						126						—						—						154						—						(28)
Cash dividends declared preferred Series D, $27,019.44 per share						(43)						—						—						—						—						(43)
Cash dividends declared common, $1.80 per share						(1,334)						—						—						—						—						(1,334)
Balances as of September 30, 2023						$	27,324					$	—					$	146					$	11,401					$	(3,176)					$	18,953

See Notes to Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The Company

We are a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success. We are a leader in providing credit and charge cards to consumers, small businesses, mid-sized companies and large corporations around the world. Our 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.

The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the 2023 Form 10-K). If not materially different, certain note disclosures included therein have been omitted from these Consolidated Financial Statements.

The interim Consolidated Financial Statements included in this report have not been audited. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim Consolidated Financial Statements, have been made. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.

The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. These accounting estimates reflect the best judgment of management, but actual results could differ.

Business Events

On May 1, 2024, we completed the previously announced transaction to sell fraud prevention solutions provider Accertify, Inc. (Accertify), a wholly owned subsidiary we acquired in 2010, the operations of which were reported within the Global Merchant and Network Services (GMNS) segment. The transaction resulted in a gain of $531 million ($479 million after tax), which was reported as a reduction to Other expense in the second quarter of 2024. Prior to the completion of the transaction, the carrying amount of Accertify’s net assets were not material to the Company’s financial position.

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board issued updated accounting guidance for segment reporting, effective for annual reporting periods beginning after December 15, 2023 and for interim reporting periods beginning January 1, 2025. The updated guidance requires enhanced disclosures for significant expenses by reportable operating segment. Significant expense categories and amounts are those regularly provided to the chief operating decision maker (CODM) and included in the measure of a segment’s profit or loss. The updated guidance will also require us to disclose the title and position of our CODM, including an explanation of how our CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. We have completed our evaluation of the updated guidance and have determined it will not have a material impact to our Consolidated Financial Statements.

In December 2023, the Financial Accounting Standards Board issued updated accounting guidance on Disclosures for Income Taxes, effective January 1, 2025, with early adoption permitted. The updated guidance requires additional disclosure and disaggregated information in the Income Tax Rate reconciliation using both percentages and reporting currency amounts, with additional qualitative explanations of individually significant reconciling items. The updated guidance also requires disclosure of the amount of income taxes paid (net of refunds received) disaggregated by jurisdictional categories (federal (national), state and foreign). We are currently assessing the updated guidance; however, it is not expected to have a material impact to our Consolidated Financial Statements.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. Loans and Card Member Receivables

Our lending and charge payment card products that we offer to consumer, small business and corporate customers result in the generation of Card Member loans and Card Member receivables. We also extend credit to customers through non-card financing products, resulting in Other loans.

Card Member and Other loans as of September 30, 2024 and December 31, 2023 consisted of:

(Millions)						2024						2023
Consumer (a)						$	102,236					$	98,111
Small Business						32,275						27,833
Corporate						37						51
Card Member loans						134,548						125,995
Less: Reserves for credit losses						5,588						5,118
Card Member loans, net						$	128,960					$	120,877
Other loans, net (b)						$	8,306					$	6,960

(a)Includes approximately $26.9 billion and $28.6 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of September 30, 2024 and December 31, 2023, respectively.

(b)Other loans are presented net of reserves for credit losses of $154 million and $126 million as of September 30, 2024 and December 31, 2023, respectively.

Card Member receivables as of September 30, 2024 and December 31, 2023 consisted of:

(Millions)						2024						2023
Consumer						$	23,426					$	25,578
Small Business						18,925						19,286
Corporate (a)						16,691						15,547
Card Member receivables						59,042						60,411
Less: Reserves for credit losses						156						174
Card Member receivables, net						$	58,886					$	60,237

(a)Includes $4.5 billion and $4.6 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of September 30, 2024 and December 31, 2023, respectively.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Card Member Loans and Receivables Aging

Generally, a Card Member account is considered past due if payment due is not received within 30 days after the billing statement date. The following tables present the aging of Card Member loans and receivables as of September 30, 2024 and December 31, 2023:

2024 (Millions)						Current						30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						Total						90+ Days Past Due and Still Accruing Interest (c)						Non-Accruals(d)
Card Member Loans:
Consumer						$	100,819					$	446					$	327					$	644					$	102,236					$	409					$	391
Small Business						31,813						154						108						200						32,275						125						116
Corporate (a)						(b)						(b)						(b)						—						37						—						—
Card Member Receivables:
Consumer						23,245						59						41						81						23,426						—						—
Small Business						$	18,704					$	83					$	51					87						18,925						—						—
Corporate (a)						(b)						(b)						(b)						$	67					$	16,691					$	—					$	—

2023 (Millions)						Current						30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						Total						90+ Days Past Due and Still Accruing Interest (c)						Non-Accruals(d)
Card Member Loans:
Consumer						$	96,779					$	420					$	298					$	614					$	98,111					$	393					$	344
Small Business						27,444						133						85						171						27,833						109						95
Corporate (a)						(b)						(b)						(b)						—						51						—						—
Card Member Receivables:
Consumer						25,355						70						47						106						25,578						—						—
Small Business						$	19,020					$	104					$	62					100						19,286						—						—
Corporate (a)						(b)						(b)						(b)						$	67					$	15,547					$	—					$	—

(a)For corporate accounts, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan or receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).

(b)Delinquency data for periods other than 90+ days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.

(c)Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe will not be collected.

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

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Credit Quality Indicators for Card Member Loans and Receivables

The following table presents the key credit quality indicators as of or for the nine months ended September 30:

						2024																		2023
			Net Write-Off Rate																		Net Write-Off Rate
			Principal Only (a)						Principal, Interest & Fees (a)						30+ Days Past Due as a % of Total						Principal Only (a)						Principal, Interest & Fees (a)						30+ Days Past Due as a % of Total
Card Member Loans:
Consumer						2.2		%				2.8		%				1.4		%				1.7		%				2.1		%				1.3		%
Small Business						2.2		%				2.6		%				1.4		%				1.5		%				1.8		%				1.3		%
Card Member Receivables:
Consumer						1.3		%				1.4		%				0.8		%				1.6		%				1.7		%				1.0		%
Small Business						2.0		%				2.1		%				1.2		%				2.3		%				2.4		%				1.3		%
Corporate						(b)						0.6		%				(c)						(b)						0.6		%				(c)

(a)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.

(b)Net write-off rate based on principal losses only is not available due to system constraints.

(c)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Delinquency data for periods other than 90+ days past billing is not available due to system constraints. 90+ days past billing as a % of total was 0.4% and 0.5% as of September 30, 2024 and 2023, respectively.

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

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Loans and Receivables Restructurings for Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, we prospectively adopted the new guidance that eliminated the recognition and measurement of troubled debt restructurings. Following the adoption of this guidance, we evaluate all loans and receivables restructurings according to the accounting guidance for loan refinancing and restructuring to determine whether such loan modification should be accounted for as a new loan or a continuation of the existing loan. Our loans and receivables restructurings for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan, which reflects the ongoing effort to support our customer and recover our investment in the existing loan.

We offer several types of loans and receivables modification programs to customers experiencing financial difficulty. In such instances, we may modify loans and receivables with the intention to minimize losses and improve collectability, while providing customers with temporary or permanent financial relief.

Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (reducing interest rates to as low as zero percent, in which case the loan is characterized as non-accrual), and/or (ii) placing the customer on a fixed payment plan not to exceed 60 months. Upon entering the modification program, the customer’s ability to make future purchases is limited, canceled or, in certain cases, suspended until the customer successfully exits from the modification program. As of September 30, 2024 and 2023, we had $70 million and $48 million, respectively, of unused credit available to customers with loans and receivables modified during each of the respective nine month periods. In accordance with the modification agreement with the customer, loans and/or receivables may revert to the original contractual terms (including the contractual interest rate where applicable) when the customer exits the modification program, which is either (i) when all payments have been made in accordance with the modification agreement or (ii) when the customer defaults out of the modification program.

The following tables provide information relating to loans and receivables modifications for borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 and 2023:

						Three Months Ended September 30,
						2024																								2023
						Account Balances (Millions) (a)						% of Total Class of Financing Receivables						Weighted Average Interest Rate Reduction (% points)						Weighted Average Payment Term Extensions (# of months)						Account Balances (Millions) (a)						% of Total Class of Financing Receivables						Weighted Average Interest Rate Reduction (% points)						Weighted Average Payment Term Extensions (# of months)
Interest Rate Reduction
Card Member Loans
Consumer						$	511					0.5		%				18.3		%				(b)						$	542					0.6		%				16.4		%				(b)
Small Business						185						0.6		%				17.6		%				(b)						167						0.6		%				15.9		%				(b)
Corporate						—						—						—						(b)						—						—						—						(b)
Term Extension
Card Member Receivables
Consumer						89						0.4		%				(c)						31						126						0.6		%				(c)						30
Small Business						138						0.7		%				(c)						31						181						0.9		%				(c)						30
Corporate						9						0.1		%				(c)						10						4						0.02		%				(c)						10
Other Loans						8						0.1		%				—						16						8						0.1		%				—						19
Interest Rate Reduction and Term Extension
Other Loans						16						0.2		%				2.5		%				20						16						0.2		%				2.1		%				20
Total						$	956																							$	1,044

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

						Nine Months Ended September 30,
						2024																								2023
						Account Balances (Millions) (a)						% of Total Class of Financing Receivables						Weighted Average Interest Rate Reduction (% points)						Weighted Average Payment Term Extensions (# of months)						Account Balances (Millions) (a)						% of Total Class of Financing Receivables						Weighted Average Interest Rate Reduction (% points)						Weighted Average Payment Term Extensions (# of months)
Interest Rate Reduction
Card Member Loans
Consumer						$	1,438					1.4		%				18.2		%				(b)						$	1,113					1.2		%				16.1		%				(b)
Small Business						514						1.6		%				17.5		%				(b)						411						1.5		%				15.7		%				(b)
Corporate						—						—						—						(b)						—						—						—						(b)
Term Extension
Card Member Receivables
Consumer						232						1.0		%				(c)						30						282						1.3		%				(c)						27
Small Business						359						1.9		%				(c)						30						455						2.3		%				(c)						27
Corporate						15						0.1		%				(c)						9						12						0.1		%				(c)						10
Other Loans						26						0.3		%				—						18						19						0.3		%				—						18
Interest Rate Reduction and Term Extension
Other Loans						46						0.5		%				2.5		%				20						28						0.4		%				2.0		%				19
Total						$	2,630																							$	2,320

(a)Represents the outstanding balances as of September 30, 2024 and 2023 of all modifications undertaken in the prior three and nine months, respectively, for loans and receivables that remain in modification programs as of, or that defaulted on or before, September 30, 2024 and 2023, respectively. The outstanding balances include principal, fees, and accrued interest on loans and principal and fees on receivables. Modifications did not reduce the principal balance.

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

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

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides information with respect to modified loans and receivables that defaulted during the periods presented and were modified in the twelve months prior to the payment default. A customer can miss up to three payments before being considered in default, depending on the terms of the modification program. For loans and receivables modified on or after January 1, 2023, the amounts of defaulted balances were immaterial for the three and nine months ended September 30, 2023.

						Three Months Ended September 30, 2024																								Nine Months Ended September 30, 2024
Account Balance (Millions) (a)						Interest Rate Reduction						Term Extension						Interest Rate Reduction and Term Extension						Total						Interest Rate Reduction						Term Extension						Interest Rate Reduction and Term Extension						Total
Card Member Loans
Consumer						$	52					(b)						$	—					$	52					$	75					(b)						$	—					$	75
Small Business						23						(b)						—						23						33						(b)						—						33
Corporate						—						(b)						—						—						—						(b)						—						—
Card Member Receivables
Consumer						(c)						$	6					—						6						(c)						$	8					—						8
Small Business						(c)						12						—						12						(c)						16						—						16
Corporate						(c)						—						—						—						(c)						—						—						—
Other Loans						—						—						2						2						—						—						2						2
Total						$	75					$	18					$	2					$	95					$	108					$	24					$	2					$	134

(a)Represents the outstanding balances as of September 30, 2024 of all modifications that defaulted in the three and nine months ended September 30, 2024, respectively, and were modified in the twelve months prior to payment default. The outstanding balances include principal, fees and accrued interest on loans and principal and fees on receivables.

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

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

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides information relating to the performance of loans and receivables that were modified during the prior twelve months and that remain in modification programs as of, or that defaulted on or before, September 30, 2024:

						As of September 30, 2024
Account Balances (Millions) (a)						Current						30-89 Days Past Due						90+ Days Past Due
Card Member Loans
Consumer						$	1,647					$	124					$	48
Small Business						556						59						23
Corporate						—						—						—
Card Member Receivables:
Consumer						261						19						6
Small Business						386						41						14
Corporate						11						3						2
Other Loans						78						6						2
Total						$	2,939					$	252					$	95

(a)The outstanding balance as of September 30, 2024 includes principal, fees and accrued interest on loans and principal and fees on receivables.

The following table provides information relating to the performance of loans and receivables that were modified on or after January 1, 2023 and that remained in modification programs as of, or that defaulted on or before, September 30, 2023:

						As of September 30, 2023
Account Balances (Millions) (a)						Current						30-89 Days Past Due						90+ Days Past Due
Card Member Loans
Consumer						$	1,020					$	73					$	20
Small Business						366						34						11
Corporate						—						—						—
Card Member Receivables:
Consumer						257						20						5
Small Business						402						43						10
Corporate						9						2						1
Other Loans						42						4						1
Total						$	2,096					$	176					$	48

(a)The outstanding balance as of September 30, 2023 includes principal, fees and accrued interest on loans and principal and fees on receivables.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. Reserves for Credit Losses

Reserves for credit losses represent our best estimate of the expected credit losses in our outstanding portfolio of Card Member loans and receivables as of the balance sheet date. The CECL methodology requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period (R&S Period), which is approximately three years, beyond the balance sheet date. We make various judgments combined with historical loss experience to determine a reserve rate that is applied to the outstanding loan or receivable balance to produce a reserve for expected credit losses.

We use a combination of statistically-based models that incorporate current and future economic conditions throughout the R&S Period. The process of estimating expected credit losses is based on several key models: Probability of Default (PD), Exposure at Default (EAD), and future recoveries for each month of the R&S Period. Beyond the R&S Period, we estimate expected credit losses by immediately reverting to long-term average loss rates.

• PD models are used to estimate the likelihood an account will be written-off.

• EAD models are used to estimate the balance of an account at the time of write-off. This includes balances less expected repayments based on historical payment and revolve behavior, which vary by customer. Due to the nature of revolving loan portfolios, the EAD models are complex and involve assumptions regarding the relationship between future spend and payment behaviors.

• Recovery models are used to estimate amounts that are expected to be received from Card Members after default occurs, typically as a result of collection efforts. Future recoveries are estimated taking into consideration the time of default, time elapsed since default and macroeconomic conditions.

We also estimate the likelihood and magnitude of recovery of previously written off accounts considering how long ago the account was written off and future economic conditions, even if such expected recoveries exceed expected losses. Our models are developed using historical loss experience covering the economic cycle and consider the impact of account characteristics on expected losses. This history includes the performance of loans and receivables modifications for borrowers experiencing financial difficulty, including their subsequent defaults.

Future economic conditions that are incorporated over the R&S Period include multiple macroeconomic scenarios provided to us by an independent third party. Management reviews these economic scenarios each period and assigns probability weights to each scenario, generally with a consistent initial distribution. At times, due to macroeconomic uncertainty and volatility, management may apply judgment and assign different probability weights to scenarios. These macroeconomic scenarios contain certain variables, including unemployment rates and real gross domestic product (GDP), that are significant to our models.

We also evaluate whether to include qualitative reserves to cover losses that are expected but, in our assessment, may not be adequately represented in the quantitative methods or the economic assumptions. We consider whether to adjust the quantitative reserves (higher or lower) to address possible limitations within the models or factors not included within the models, such as external conditions, emerging portfolio trends, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due accounts, or management risk actions.

Lifetime losses for most of our loans and receivables are evaluated at an appropriate level of granularity, including assessment on a pooled basis where financial assets share similar risk characteristics, such as past spend and remittance behaviors, credit bureau scores where available, delinquency status, tenure of balance outstanding, amongst others. Credit losses on accrued interest are measured and presented as part of Reserves for credit losses on the Consolidated Balance Sheets and within the Provisions for credit losses in the Consolidated Statements of Income, rather than reversing interest income. Separate models are used for accounts deemed a troubled debt restructuring, which are measured individually and incorporate a discounted cash flow model.

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

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

						U.S. Unemployment Rate												U.S. GDP Growth (Contraction) (a)
						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023
Third quarter of 2024						4%						3% - 7%						2%						4% - (3)%
Fourth quarter of 2024						4% - 6%						3% - 8%						4% - (3)%						3% - 1%
Fourth quarter of 2025						3% - 8%						3% - 7%						3% - 1%						2%
Fourth quarter of 2026						3% - 7%						3% - 6%						3% - 2%						3% - 2%

(a)Real GDP quarter over quarter percentage change seasonally adjusted to annualized rates.

Changes in Card Member Loans Reserve for Credit Losses

Card Member loans reserve for credit losses increased for both the three and nine months ended September 30, 2024, primarily driven by increases in loans outstanding.

Card Member loans reserve for credit losses increased for both the three and nine months ended September 30, 2023, primarily driven by increases in loans outstanding and higher delinquencies.

The following table presents changes in the Card Member loans reserve for credit losses for the three and nine months ended September 30:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Beginning Balance						$	5,321					$	4,390					$	5,118					$	3,747
Provisions (a)						1,114						982						3,098						2,691
Net write-offs (b)
Principal						(701)						(525)						(2,159)						(1,412)
Interest and fees						(152)						(114)						(462)						(310)
Other (c)						6						(12)						(7)						5
Ending Balance						$	5,588					$	4,721					$	5,588					$	4,721

(a)Provisions for principal, interest and fee reserve components. Provisions for credit losses includes reserve build (release) and replenishment for net write-offs.

(b)Principal write-offs are presented less recoveries of $192 million and $138 million for the three months ended September 30, 2024 and 2023, respectively, and $530 million and $396 million for the nine months ended September 30, 2024 and 2023, respectively. Recoveries of interest and fees were not significant.

(c)Primarily includes foreign currency translation adjustments.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Changes in Card Member Receivables Reserve for Credit Losses

Card Member receivables reserve for credit losses decreased for both the three and nine months ended September 30, 2024 primarily driven by decreases in receivables outstanding.

Card Member receivables reserve for credit losses decreased for both the three and nine months ended September 30, 2023, primarily driven by lower delinquencies.

The following table presents changes in the Card Member receivables reserve for credit losses for the three and nine months ended September 30:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Beginning Balance						$	171					$	210					$	174					$	229
Provisions (a)						170						206						592						658
Net write-offs (b)						(187)						(241)						(609)						(714)
Other (c)						2						(1)						(1)						1
Ending Balance						$	156					$	174					$	156					$	174

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

(b)Net write-offs are presented less recoveries of $74 million and $73 million for the three months ended September 30, 2024 and 2023, respectively, and $228 million and $218 million for the nine months ended September 30, 2024 and 2023, respectively.

(c)Primarily includes foreign currency translation adjustments.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. Investment Securities

Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets. Unrealized losses attributable to credit deterioration are recorded in the Consolidated Statements of Income in Other loans Provision for credit losses. Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. We had accrued interest on our available-for-sale debt securities totaling $3 million and $5 million as of September 30, 2024 and December 31, 2023, respectively, presented as Other assets on the Consolidated Balance Sheets.

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

Realized gains and losses are recognized upon disposition of the securities using the specific identification method and recorded in the Consolidated Statements of Income as Other, net expense.

The following is a summary of investment securities as of September 30, 2024 and December 31, 2023:

						2024																								2023
Description of Securities (Millions)						Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value						Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
Available-for-sale debt securities:
State and municipal obligations						$	57					$	1					$	(8)					$	50					$	61					$	—					$	(6)					$	55
U.S. Government agency obligations						4						—						—						4						4						—						—						4
U.S. Government treasury obligations						270						1						(2)						269						1,217						1						(12)						1,206
Mortgage-backed securities (a)						11						—						—						11						12						—						(1)						11
Foreign government bonds and obligations						817						—						—						817						770						—						—						770
Other (b)						74						—						—						74						74						—						—						74
Equity securities (c)						50						—						(7)						43						60						16						(10)						66
Total						$	1,283					$	2					$	(17)					$	1,268					$	2,198					$	17					$	(29)					$	2,186

(a)Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.

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

(c)Equity securities comprise investments in common stock and mutual funds.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides information about our available-for-sale debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2024 and December 31, 2023:

						2024																								2023
						Less than 12 months												12 months or more												Less than 12 months												12 months or more
Description of Securities (Millions)						Estimated Fair Value						Gross Unrealized Losses						Estimated Fair Value						Gross Unrealized Losses						Estimated Fair Value						Gross Unrealized Losses						Estimated Fair Value						Gross Unrealized Losses
State and municipal obligations						$	—					$	—					$	23					$	(8)					$	—					$	—					$	33					$	(6)
U.S. Government treasury obligations						—						—						122						(2)						—						—						1,114						(12)
Mortgage-backed securities						—						—						—						—						—						—						7						(1)
Total						$	—					$	—					$	145					$	(10)					$	—					$	—					$	1,154					$	(19)

The gross unrealized losses on our available-for-sale debt securities are primarily attributable to an increase in the current benchmark interest rate. Overall, for the available-for-sale debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses, and (iii) we expect that the contractual principal and interest will be received on the securities. We concluded that there was no credit loss attributable to the securities in an unrealized loss position for the periods presented.

The following table summarizes the gross unrealized losses for available-for-sale debt securities by ratio of fair value to amortized cost as of September 30, 2024 and December 31, 2023:

						Less than 12 months																		12 months or more																		Total
Ratio of Fair Value to Amortized Cost (Dollars in millions)						Number of Securities						Estimated Fair Value						Gross Unrealized Losses						Number of Securities						Estimated Fair Value						Gross Unrealized Losses						Number of Securities						Estimated Fair Value						Gross Unrealized Losses
2024:
90–100%						—						$	—					$	—					7						$	129					$	(2)					7						$	129					$	(2)
Less than 90%						—						$	—					$	—					3						$	16					$	(8)					3						$	16					$	(8)
Total as of September 30, 2024						—						$	—					$	—					10						$	145					$	(10)					10						$	145					$	(10)
2023:
90–100%						—						$	—					$	—					69						$	1,140					$	(14)					69						$	1,140					$	(14)
Less than 90%						—						$	—					$	—					2						$	14					$	(5)					2						$	14					$	(5)
Total as of December 31, 2023						—						$	—					$	—					71						$	1,154					$	(19)					71						$	1,154					$	(19)

Contractual maturities for available-for-sale debt securities with stated maturities as of September 30, 2024 were as follows:

(Millions)						Cost						Estimated Fair Value
Due within 1 year						$	867					$	867
Due after 1 year but within 5 years						285						284
Due after 5 years but within 10 years						32						33
Due after 10 years						49						41
Total						$	1,233					$	1,225

The expected payments on state and municipal obligations, U.S. Government agency obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5. Asset Securitizations

We periodically securitize Card Member loans and receivables arising from our card businesses through the transfer of those assets to securitization trusts, American Express Credit Account Master Trust (the Lending Trust) and American Express Issuance Trust II (the Charge Trust and together with the Lending Trust, the Trusts). The Trusts then issue debt securities collateralized by the transferred assets to third-party investors.

The Trusts are considered VIEs as they have insufficient equity at risk to finance their activities, which are to issue debt securities that are collateralized by the underlying Card Member loans and receivables. We perform the servicing and key decision making for the Trusts, and therefore have the power to direct the activities that most significantly impact the Trusts’ economic performance, which are the collection of the underlying Card Member loans and receivables. In addition, we hold all of the variable interests in both Trusts, with the exception of the debt securities issued to third-party investors. Our ownership of variable interests for the Lending Trust was $10.5 billion and $15.3 billion as of September 30, 2024 and December 31, 2023, respectively, and for the Charge Trust was $4.5 billion and $4.6 billion as of September 30, 2024 and December 31, 2023, respectively. These variable interests held by us provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to both the Lending Trust and the Charge Trust. Based on these considerations, we are the primary beneficiary of the Trusts and therefore consolidate the Trusts.

Restricted cash and cash equivalents held by the Lending Trust was $101 million and $66 million as of September 30, 2024 and December 31, 2023, respectively, and for the Charge Trust was nil as of both September 30, 2024 and December 31, 2023. These amounts relate to collections of Card Member loans and receivables to be used by the Trusts to fund future expenses and obligations, including interest on debt securities, credit losses and upcoming debt maturities.

Under the respective terms of the Lending Trust and the Charge Trust agreements, the occurrence of certain triggering events associated with the performance of the assets of each Trust could result in payment of trust expenses, establishment of reserve funds, or, in a worst-case scenario, early amortization of debt securities. During the nine months ended September 30, 2024 and the year ended December 31, 2023, no such triggering events occurred.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Customer Deposits

As of September 30, 2024 and December 31, 2023, customer deposits were categorized as interest-bearing or non-interest-bearing as follows:

(Millions)						2024						2023
U.S.:
Interest-bearing						$	134,476					$	128,146
Non-interest-bearing (includes Card Member credit balances of: 2024, $483; 2023, $495)						532						557
Non-U.S.:
Interest-bearing						17						12
Non-interest-bearing (includes Card Member credit balances of: 2024, $410; 2023, $426)						413						429
Total customer deposits						$	135,438					$	129,144

Customer deposits by deposit type as of September 30, 2024 and December 31, 2023 were as follows:

(Millions)						2024						2023
U.S. interest-bearing deposits:
Savings accounts						$	105,465					$	92,324
Checking accounts						1,839						1,398
Certificates of deposit:
Direct						4,882						5,557
Third-party (brokered)						6,851						12,960
Sweep accounts – Third-party (brokered)						15,439						15,907
Total U.S. interest-bearing deposits						$	134,476					$	128,146
Other deposits						69						77
Card Member credit balances						893						921
Total customer deposits						$	135,438					$	129,144

The scheduled maturities of certificates of deposit as of September 30, 2024 were as follows:

(Millions)						2024						2025						2026						2027						2028						After 5 Years						Total
Certificates of deposit (a)						$	1,810					$	6,575					$	1,453					$	1,001					$	701					$	204					$	11,744

(a)Includes $11 million of non-U.S. direct certificates of deposit as of September 30, 2024.

As of September 30, 2024 and December 31, 2023, certificates of deposit in denominations that met or exceeded the insured limit were $1.6 billion and $1.8 billion, respectively.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7. Contingencies

In the ordinary course of business, we and our subsidiaries are subject to various pending and potential legal actions, arbitration proceedings, claims, investigations, examinations, regulatory proceedings, information gathering requests, subpoenas, inquiries and matters relating to compliance with laws and regulations (collectively, legal proceedings).

Based on our current knowledge, and taking into consideration our litigation-related liabilities, we do not believe we are a party to, nor are any of our properties the subject of, any legal proceeding that would have a material adverse effect on our consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, it is possible that the outcome of legal proceedings could have a material impact on our results of operations. Certain legal proceedings involving us or our subsidiaries are described below.

On September 30, 2024, we were named as a defendant in a case filed in the United States District Court for the District of Massachusetts, captioned Pizza Hazel, Inc., et al. v. American Express Co., et al., in which plaintiffs allege that the anti-steering and non-discrimination provisions in our merchant agreements violate federal antitrust law and that the arbitration provision in our merchant agreements violates federal antitrust law to the extent it prevents antitrust challenges to our anti-steering and non-discrimination provisions. Plaintiffs seek, on behalf of themselves and a class of merchants that accept through the OptBlue Program, unspecified damages and an injunction prohibiting us from enforcing our anti-steering and non-discrimination provisions and prohibiting us from enforcing our arbitration provision to the extent it prevents antitrust challenges to our anti-steering and non-discrimination provisions.

On March 21, 2024, we were named as a defendant in a case filed in the United States District Court for the District of Rhode Island, captioned 5-Star General Store aka Bento LLC, et al. v. American Express Co., et al., in which plaintiffs allege that the anti-steering and non-discrimination provisions in our merchant agreements violate federal antitrust law and seek, on behalf of themselves and a class of merchants, an injunction prohibiting us from enforcing our anti-steering and non-discrimination provisions and a declaration that we have violated antitrust laws.

On January 29, 2019, we were named in a putative class action brought in the United States District Court for the Eastern District of New York, captioned Anthony Oliver, et al. v. American Express Company and American Express Travel Related Services Company Inc., in which the plaintiffs are holders of MasterCard, Visa and/or Discover credit and/or debit cards (but not American Express cards) and allege they paid higher prices as a result of the anti-steering and non-discrimination provisions in our merchant agreements in violation of federal antitrust law and the antitrust and consumer laws of various states. Plaintiffs seek unspecified damages and other forms of relief. The court dismissed plaintiffs’ federal antitrust claim, numerous state antitrust and consumer protection claims and their unjust enrichment claim. For the remaining state antitrust or consumer protection claims, the court certified classes for (i) holders of Visa and MasterCard debit cards in eight states and Washington, D.C.; and (ii) holders of Visa, MasterCard and Discover credit cards that do not offer rewards or charge an annual fee in two states and Washington, D.C.

On March 8, 2016, plaintiffs B&R Supermarket, Inc. d/b/a Milam’s Market and Grove Liquors LLC, on behalf of themselves and others, filed a suit, captioned B&R Supermarket, Inc. d/b/a Milam’s Market, et al. v. Visa Inc., et al., for violations of the Sherman Antitrust Act, the Clayton Antitrust Act, California’s Cartwright Act and unjust enrichment in the United States District Court for the Northern District of California, against American Express Company, other credit and charge card networks, other issuing banks and EMVCo, LLC. Plaintiffs allege that the defendants, through EMVCo, conspired to shift liability for fraudulent, faulty and otherwise rejected consumer credit card transactions from themselves to merchants after the implementation of EMV chip payment terminals. Plaintiffs seek damages and injunctive relief. An amended complaint was filed on July 15, 2016. On September 30, 2016, the court denied our motion to dismiss as to claims brought by merchants who do not accept American Express cards, and on May 4, 2017, the California court transferred the case to the United States District Court for the Eastern District of New York. On August 28, 2020, the court granted plaintiffs’ motion for class certification.

In July 2004, we were named as a defendant in a putative class action filed in the Southern District of New York and subsequently transferred to the Eastern District of New York, captioned The Marcus Corporation v. American Express Co., et al., in which the plaintiffs allege an unlawful antitrust tying arrangement between certain of our charge cards and credit cards in violation of various state and federal laws. The plaintiffs in this action seek injunctive relief and an unspecified amount of damages.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In 2006, Mawarid Investments Limited filed a request for confidential arbitration under the 1998 London Court of International Arbitration Rules in connection with certain claims arising under a shareholders agreement between Mawarid and American Express Travel Related Services Company, Inc. relating to a joint venture between the parties, Amex (Middle East) BSC(c) (AEME). In 2008, the tribunal rendered a partial award, including a direction that an audit should take place to verify whether acquirer discount revenue related to transactions occurring with airlines located in the Middle East region had been properly allocated to AEME since its inception in 1992. In September 2021, the tribunal rendered a further partial award regarding the location of transactions through non-physical channels. In May 2022, the tribunal further clarified the 2021 partial award and the discount rate that should apply to transactions through non-physical channels.

In May 2020, we began responding to a review by the Office of the Comptroller of the Currency (OCC) and the Department of Justice (DOJ) Civil Division regarding historical sales practices relating to sales to small business customers in the United States. In January 2021, we received a grand jury subpoena from the United States Attorney’s Office for the Eastern District of New York (EDNY) regarding these sales practices issues, as well as a Civil Investigative Demand from the Consumer Financial Protection Bureau (CFPB) pertaining to its investigation into sales practices related to consumers. We have also been made aware of a related investigation by the New York Department of Financial Services (NYDFS) and have provided information regarding these sales practices issues to The Board of Governors of the Federal Reserve System (Federal Reserve).

In January 2023, the CFPB notified us that its investigation was completed and that it did not intend to recommend an enforcement action be taken against us at that time. In July 2023, we reached a settlement with the OCC to resolve its review of historical sales practices to certain U.S. small business card customers that occurred between 2015 and 2017. The DOJ, EDNY and NYDFS investigations are ongoing, and we are cooperating with all inquiries. We are also engaged in discussions with the Federal Reserve to resolve its review of this matter.

We are being challenged in a number of countries regarding our application of value-added taxes (VAT) to certain of our international transactions, which are in various stages of audit, or are being contested in legal actions. While we believe we have complied with all applicable tax laws, rules and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional VAT. In certain jurisdictions where we are contesting the assessments, we were required to pay the VAT assessments prior to contesting.

Our legal proceedings range from cases brought by a single plaintiff to class actions with millions of putative class members to governmental proceedings. These legal proceedings involve various lines of business and a variety of claims (including, but not limited to, common law tort, contract, application of tax laws, antitrust and consumer protection claims), some of which present novel factual allegations and/or unique legal theories. While some matters pending against us specify the damages sought, many seek an unspecified amount of damages or are at very early stages of the legal process. Even when the amount of damages claimed against us are stated, the claimed amount may be exaggerated and/or unsupported. As a result, some matters have not yet progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate an amount of loss or a range of possible loss, while other matters have progressed sufficiently such that we are able to estimate an amount of loss or a range of possible loss.

We have accrued for certain of our outstanding legal proceedings. An accrual is recorded when it is both (a) probable that a loss has occurred and (b) the amount of loss can be reasonably estimated. There may be instances in which an exposure to loss exceeds the accrual. We evaluate, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the accrual that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable.

For those disclosed legal proceedings where a loss is reasonably possible in future periods, whether in excess of a recorded accrual for legal or tax contingencies, or where there is no such accrual, and for which we are able to estimate a range of possible loss, the current estimated range is zero to $450 million in excess of any accruals related to those matters. This range represents management’s estimate based on currently available information and does not represent our maximum loss exposure; actual results may vary significantly. As such legal proceedings evolve, we may need to increase our range of possible loss or recorded accruals. In addition, it is possible that significantly increased merchant steering or other actions impairing the Card Member experience as a result of an adverse resolution in one or any combination of the disclosed merchant cases could have a material adverse effect on our business and results of operations.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8. Derivatives and Hedging Activities

We use derivative financial instruments to manage exposures to various market risks. These instruments derive their value from an underlying variable or multiple variables, including interest rates and foreign exchange rates, and are carried at fair value on the Consolidated Balance Sheets. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of our market risk management. We do not transact in derivatives for trading purposes.

A majority of our derivative assets and liabilities as of September 30, 2024 and December 31, 2023 are subject to master netting agreements with our derivative counterparties. Accordingly, where appropriate, we have elected to present derivative assets and liabilities with the same counterparty on a net basis in the Consolidated Balance Sheets.

In relation to our credit risk, certain of our bilateral derivative agreements include provisions that allow our counterparties to terminate the relevant agreement in the event of a downgrade of our debt credit rating below investment grade and settle the outstanding net liability position. As of September 30, 2024, these derivatives were not in a material net liability position. Based on our assessment of the credit risk of our derivative counterparties and our own credit risk as of September 30, 2024 and December 31, 2023, no credit risk adjustment to the derivative portfolio was required.

The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of September 30, 2024 and December 31, 2023:

						Other Assets Fair Value												Other Liabilities Fair Value
(Millions)						2024						2023						2024						2023
Derivatives designated as hedging instruments:
Fair value hedges - Interest rate contracts (a)						$	—					$	—					$	19					$	99
Net investment hedges - Foreign exchange contracts						186						9						319						455
Total derivatives designated as hedging instruments						186						9						338						554
Derivatives not designated as hedging instruments:
Foreign exchange contracts and other						185						71						420						423
Total derivatives, gross						371						80						758						977
Derivative asset and derivative liability netting (b)						(234)						(57)						(234)						(57)
Cash collateral netting (c)						—						—						(30)						(106)
Total derivatives, net						$	137					$	23					$	494					$	814

(a)For our centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral.

(b)Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.

(c)Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to cash collateral held from the counterparty or cash collateral posted with the counterparty.

We posted $405 million and $175 million as of September 30, 2024 and December 31, 2023, respectively, as initial margin on our centrally cleared interest rate swaps; such amounts are recorded within Other assets on the Consolidated Balance Sheets and are not netted against the derivative balances.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fair Value Hedges

We are exposed to interest rate risk associated with our fixed-rate debt obligations. At the time of issuance, certain fixed-rate long-term debt obligations are designated in fair value hedging relationships, using interest rate swaps, to economically convert the fixed interest rate to a floating interest rate. We had $19.6 billion and $11.7 billion of fixed-rate debt obligations designated in fair value hedging relationships as of September 30, 2024 and December 31, 2023, respectively.

The following table presents the gains and losses recognized in Interest expense on the Consolidated Statements of Income associated with the fair value hedges of our fixed-rate long-term debt for the three and nine months ended September 30:

						Gains (losses)
						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Fixed-rate long-term debt						$	(554)					$	52					$	(481)					$	14
Derivatives designated as hedging instruments						550						(52)						476						(15)
Total						$	(4)					$	—					$	(5)					$	(1)

The carrying values of the hedged liabilities, recorded within Long-term debt on the Consolidated Balance Sheets, were $20.0 billion and $11.7 billion as of September 30, 2024 and December 31, 2023, respectively, including the cumulative amount of fair value hedging adjustments of $534 million and $53 million for the respective periods.

We recognized in Interest expense on Long-term debt net increases of $82 million and $47 million for the three months ended September 30, 2024 and 2023, respectively, and net increases of $214 million and $130 million for the nine months ended September 30, 2024 and 2023, respectively, primarily related to the net settlements including interest accruals on our interest rate derivatives designated as fair value hedges.

Net Investment Hedges

We primarily designate foreign currency derivatives as net investment hedges to reduce our exposure to changes in currency exchange rates on our investments in non-U.S. subsidiaries. We had notional amounts of approximately $14.5 billion and $14.1 billion of foreign currency derivatives designated as net investment hedges as of September 30, 2024 and December 31, 2023, respectively. The gain or loss on net investment hedges, net of taxes, recorded in Accumulated other comprehensive income (loss) (AOCI) as part of the cumulative translation adjustment, was a loss of $96 million and a gain of $244 million for the three months ended September 30, 2024 and 2023, respectively, and a gain of $187 million and a loss of $261 million for the nine months ended September 30, 2024 and 2023, respectively. Net investment hedge reclassifications out of AOCI into the Consolidated Statements of Income were not significant for any of the three and the nine months ended September 30, 2024 and 2023.

Derivatives Not Designated as Hedges

The changes in the fair value of derivatives that are not designated as hedges are primarily intended to offset the related foreign exchange gains or losses of the underlying foreign currency exposures. We had notional amounts of approximately $28.4 billion and $25.3 billion as of September 30, 2024 and December 31, 2023, respectively. The changes in the fair value of the derivatives and the related underlying foreign currency exposures resulted in net gains of $24 million and $26 million for the three months ended September 30, 2024 and 2023, respectively, and net gains of $67 million and $56 million for the nine months ended September 30, 2024 and 2023, respectively, that are recognized in Other, net expenses in the Consolidated Statements of Income.

Our embedded derivative related to seller earnout shares granted to us upon the completion of a business combination in the second quarter of 2022 between our equity method investee, American Express Global Business Travel, and Apollo Strategic Growth Capital had a notional amount of $78 million as of both September 30, 2024 and December 31, 2023. The changes in the fair value of the embedded derivative resulted in a gain of $5 million and a loss of $12 million for the three months ended September 30, 2024 and 2023, respectively, and a gain of $4 million and a loss of $12 million for the nine months ended September 30, 2024 and 2023, respectively, which were recognized in Service fees and other revenue in the Consolidated Statements of Income.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

9. Fair Values

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy, as of September 30, 2024 and December 31, 2023:

						2024																								2023
(Millions)						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3
Assets:
Investment securities: (a)
Equity securities						$	43					$	43					$	—					$	—					$	66					$	66					$	—					$	—
Debt securities						1,225						—						1,151						74						2,120						—						2,046						74
Derivatives, gross (a)(b)						371						—						349						22						80						—						62						18
Total Assets						1,639						43						1,500						96						2,266						66						2,108						92
Liabilities:
Derivatives, gross (a)						758						—						758						—						977						—						977						—
Total Liabilities						$	758					$	—					$	758					$	—					$	977					$	—					$	977					$	—

(a)Refer to Note 4 for the fair values of investment securities and to Note 8 for the fair values of derivative assets and liabilities on a further disaggregated basis.

(b)Level 3 fair value reflects an embedded derivative. Management reviews and applies judgment to the valuation of the embedded derivative that is performed by an independent third party using a Monte Carlo simulation that models a range of probable future stock prices based on implied volatility in a risk neutral framework. Refer to Note 8 for additional information about this embedded derivative.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Financial Assets and Financial Liabilities Carried at Other Than Fair Value

The following table summarizes the estimated fair values of our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of September 30, 2024 and December 31, 2023. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of September 30, 2024 and December 31, 2023, and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of American Express be estimated by aggregating the amounts presented.

						Carrying Value						Corresponding Fair Value Amount
2024 (Billions)									Total						Level 1						Level 2						Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value
Cash and cash equivalents (a)						$	48					$	48					$	47					$	1					$	—
Other financial assets (b)						62						62						—						62						—
Financial assets carried at other than fair value
Card Member and Other loans, less reserves (c)						137						143						—						—						143
Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value						151						151						—						151						—
Financial liabilities carried at other than fair value
Certificates of deposit (d)						12						12						—						12						—
Long-term debt (c)						$	54					$	54					$	—					$	54					$	—

						Carrying Value						Corresponding Fair Value Amount
2023 (Billions)									Total						Level 1						Level 2						Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value
Cash and cash equivalents (a)						$	47					$	47					$	45					$	2					$	—
Other financial assets (b)						63						63						—						63						—
Financial assets carried at other than fair value
Card Member and Other loans, less reserves (c)						128						133						—						—						133
Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value						143						143						—						143						—
Financial liabilities carried at other than fair value
Certificates of deposit (d)						19						18						—						18						—
Long-term debt (c)						$	48					$	48					$	—					$	48					$	—

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

(b)Balances include Card Member receivables (including fair values of Card Member receivables of $4.5 billion and $4.6 billion held by a consolidated VIE as of September 30, 2024 and December 31, 2023, respectively), other receivables and other miscellaneous assets.

(c)Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $27.0 billion and $28.6 billion as of September 30, 2024 and December 31, 2023, respectively, and the fair values of Long-term debt were $16.8 billion and $13.3 billion as of September 30, 2024 and December 31, 2023, respectively.

(d)Presented as a component of Customer deposits on the Consolidated Balance Sheets.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Nonrecurring Fair Value Measurements

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

We estimate the Level 3 fair value of equity investments without readily determinable fair values, which include investments in our Amex Ventures portfolio, based on price changes as of the date of new similar equity financing transactions completed by the companies in the portfolio. In addition, impairments on such investments are recorded to account for the difference between the estimated fair value and carrying value of an investment based on a qualitative assessment of impairment indicators such as business performance, general market conditions and the economic and regulatory environment. When an impairment triggering event occurs, the fair value measurement is generally derived by taking into account all available information, such as share prices of publicly traded peer companies, internal valuations performed by our investees, and other third-party fair value data. The fair value of impaired investments represents a Level 3 fair value measurement.

The carrying value of equity investments without readily determinable fair values totaled $0.9 billion as of both September 30, 2024 and December 31, 2023, of which investments representing nonrecurring Level 3 fair value measurement were $13.0 million and nil as of September 30, 2024 and December 31, 2023, respectively. These amounts are included within Other assets on the Consolidated Balance Sheets.

We recorded unrealized gains of $1 million and nil for the three months ended September 30, 2024 and 2023, respectively, and $68 million and nil for the nine months ended September 30, 2024 and 2023, respectively. Unrealized losses were $20 million and $17 million for the three months ended September 30, 2024 and 2023, respectively, and $31 million and $122 million for the nine months ended September 30, 2024 and 2023, respectively. Unrealized gains and losses are recorded in Other, net on the Consolidated Statements of Income. Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $1.1 billion as of both September 30, 2024 and December 31, 2023, and cumulative unrealized losses were $456 million and $431 million as of September 30, 2024 and December 31, 2023, respectively.

In addition, we also have certain equity investments measured at fair value using the net asset value practical expedient. Such investments were immaterial as of both September 30, 2024 and December 31, 2023.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

10. Guarantees

The maximum potential undiscounted future payments and related liability resulting from guarantees and indemnifications provided by us in the ordinary course of business were $1 billion and $12 million, respectively, as of September 30, 2024 and $1 billion and $24 million, respectively, as of December 31, 2023, all of which were primarily related to our real estate arrangements and business dispositions.

To date, we have not experienced any significant losses related to guarantees or indemnifications. Our recognition of these instruments is at fair value. In addition, we establish reserves when a loss is probable and the amount can be reasonably estimated.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

11. Changes in Accumulated Other Comprehensive Income (Loss)

AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component for the three and nine months ended September 30, 2024 and 2023 were as follows:

Three Months Ended September 30, 2024 (Millions), net of tax						Net Unrealized Gains (Losses) on Debt Securities						Foreign Currency Translation Adjustment Gains (Losses), net of hedges (a)						Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)						Accumulated Other Comprehensive Income (Loss)
Balances as of June 30, 2024						$	(10)					$	(2,707)					$	(483)					$	(3,200)
Net change						4						1						—						5
Balances as of September 30, 2024						$	(6)					$	(2,706)					$	(483)					$	(3,195)

Nine Months Ended September 30, 2024 (Millions), net of tax						Net Unrealized Gains (Losses) on Debt Securities						Foreign Currency Translation Adjustment Gains (Losses), net of hedges (a)						Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)						Accumulated Other Comprehensive Income (Loss)
Balances as of December 31, 2023						$	(14)					$	(2,571)					$	(487)					$	(3,072)
Net change						8						(135)						4						(123)
Balances as of September 30, 2024						$	(6)					$	(2,706)					$	(483)					$	(3,195)

Three Months Ended September 30, 2023 (Millions), net of tax						Net Unrealized Gains (Losses) on Debt Securities						Foreign Currency Translation Adjustment Gains (Losses), net of hedges (a)						Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)						Accumulated Other Comprehensive Income (Loss)
Balances as of June 30, 2023						$	(44)					$	(2,569)					$	(471)					$	(3,084)
Net change						14						(110)						4						(92)
Balances as of September 30, 2023						$	(30)					$	(2,679)					$	(467)					$	(3,176)

Nine Months Ended September 30, 2023 (Millions), net of tax						Net Unrealized Gains (Losses) on Debt Securities						Foreign Currency Translation Adjustment Gains (Losses), net of hedges (a)						Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)						Accumulated Other Comprehensive Income (Loss)
Balances as of December 31, 2022						$	(64)					$	(2,622)					$	(524)					$	(3,210)
Net change						34						(57)						57						34
Balances as of September 30, 2023						$	(30)					$	(2,679)					$	(467)					$	(3,176)

(a)Refer to Note 8 for additional information on hedging activity.

The following table shows the tax impact for the three and nine months ended September 30 for the changes in each component of AOCI presented above:

						Tax expense (benefit)
						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Net unrealized gains on debt securities						$	—					$	5					$	2					$	11
Foreign currency translation adjustment, net of hedges						(26)						66						30						(32)
Pension and other postretirement benefits						(7)						6						(5)						6
Total tax impact						$	(33)					$	77					$	27					$	(15)

Reclassifications out of AOCI into the Consolidated Statements of Income, net of taxes, for the three and nine months ended September 30, 2024 and 2023 were not significant.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12. Service Fees and Other Revenue and Other Expenses

The following is a detail of Service fees and other revenue for the three and nine months ended September 30:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Service fees						$	370					$	375					$	1,197					$	1,114
Foreign currency-related revenue						401						374						1,140						1,071
Delinquency fees						236						245						705						717
Travel commissions and fees						157						183						481						476
Other fees and revenues						103						84						316						333
Total Service fees and other revenue						$	1,267					$	1,261					$	3,839					$	3,711

The following is a detail of Other expenses for the three and nine months ended September 30:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Data processing and equipment						$	725					$	704					$	2,083					$	2,041
Professional services						579						477						1,576						1,384
Gain on sale of Accertify (a)						—						—						(531)						—
Other						476						424						1,166						1,288
Total Other expenses						$	1,780					$	1,605					$	4,294					$	4,713

(a)Refer to Note 1 for additional information.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

13. Income Taxes

The effective tax rate was 21.8 percent and 20.9 percent for the three months ended September 30, 2024 and 2023, respectively, and 21.5 percent and 19.5 percent for the nine months ended September 30, 2024 and 2023, respectively. The higher effective tax rates for the three and nine month periods primarily reflected discrete tax benefits in the prior periods.

We are under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which we have significant business operations. The tax years under examination and open for examination vary by jurisdiction. We are currently under examination by the IRS for the 2017 and 2018 tax years.

We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next twelve months by as much as $102 million, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the deductibility of certain expenses or losses and the attribution of taxable income to a particular jurisdiction or jurisdictions. Of the $102 million of unrecognized tax benefits, approximately $81 million relates to amounts that, if recognized, would impact the effective tax rate in a future period.

Tax Credit Investments

As of September 30, 2024 and 2023, we had $1,558 million and $1,263 million in tax credit investments, respectively, included in Other assets on the Consolidated Balance Sheets, comprised of Low Income Housing Tax Credit investments and other qualifying investments. We account for such tax credit investments using the Proportional Amortization Method.

The following table presents tax credit investment expenses and associated income tax credits and other income tax benefits for the three and nine months ended September 30:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions)						2024						2023						2024						2023
Proportional amortization recognized in tax provision						$	48					$	39					$	143					$	122
Income tax credits and Other income tax benefits (a) recognized in tax provision						51						49						164						153

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

Income tax credits and other income tax benefits associated with our tax credit investments are also recognized in the Consolidated Statements of Cash Flows in the Operating activities section primarily under Accounts payable and other liabilities. Refer to Note 6 to our “Consolidated Financial Statements” in the 2023 Form 10-K for additional information on our tax credit investments for the year ended December 31, 2023.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

14. Earnings Per Common Share (EPS)

The computations of basic and diluted EPS for the three and nine months ended September 30 were as follows:

						Three Months Ended September 30,												Nine Months Ended September 30,
(Millions, except per share amounts)						2024						2023						2024						2023
Numerator:
Basic and diluted:
Net income						$	2,507					$	2,451					$	7,959					$	6,441
Preferred dividends						(15)						(14)						(44)						(43)
Net income available to common shareholders						$	2,492					$	2,437					$	7,915					$	6,398
Earnings allocated to participating share awards (a)						(18)						(19)						(59)						(50)
Net income attributable to common shareholders						$	2,474					$	2,418					$	7,856					$	6,348
Denominator:(a)
Basic: Weighted-average common stock						708						732						715						738
Add: Weighted-average stock options (b)						1						1						1						1
Diluted						709						733						716						739
Basic EPS						$	3.50					$	3.30					$	10.99					$	8.60
Diluted EPS						$	3.49					$	3.30					$	10.97					$	8.59

(a)Our unvested restricted stock awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator.

(b)The dilutive effect of unexercised stock options excludes from the computation of EPS 0.1 million of options for both the three and nine months ended September 30, 2024 and 1.4 million of options for both the three and nine months ended September 30, 2023, because inclusion of the options would have been anti-dilutive.

AMERICAN EXPRESS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

15. Reportable Operating Segments

The following table presents certain selected financial information for our reportable operating segments and Corporate & Other:

As of or for the Three Months Ended September 30, 2024 (Millions)						USCS						CS						ICS						GMNS						Corporate & Other (a)						Consolidated
Total non-interest revenues						$	5,028					$	3,304					$	2,659					$	1,667					$	(28)					$	12,630
Revenue from contracts with customers (b)						3,620						2,886						1,724						1,493						(7)						9,716
Interest income						3,722						1,142						588						11						686						6,149
Interest expense						806						448						311						(169)						747						2,143
Total revenues net of interest expense						7,944						3,998						2,936						1,847						(89)						16,636
Pretax income (loss)						1,659						908						455						991						(809)						3,204
Total assets						$	106,201					$	59,716					$	43,073					$	17,739					$	44,250					$	270,979

For the Nine Months Ended September 30, 2024 (Millions)						USCS						CS						ICS						GMNS						Corporate & Other (a)						Consolidated
Total non-interest revenues						$	14,823					$	9,831					$	7,644					$	5,006					$	(39)					$	37,265
Revenue from contracts with customers (b)						10,785						8,603						4,983						4,505						(3)						28,873
Interest income						10,677						3,198						1,748						41						2,054						17,718
Interest expense						2,325						1,292						921						(543)						2,218						6,213
Total revenues net of interest expense						23,175						11,737						8,471						5,590						(203)						48,770
Pretax income (loss)						$	4,832					$	2,691					$	997					$	3,545					$	(1,926)					$	10,139

As of or for the Three Months Ended September 30, 2023 (Millions)						USCS						CS						ICS						GMNS						Corporate & Other (a)						Consolidated
Total non-interest revenues						$	4,680					$	3,257					$	2,390					$	1,656					$	(44)					$	11,939
Revenue from contracts with customers (b)						3,464						2,864						1,558						1,499						(8)						9,377
Interest income						3,228						881						538						14						579						5,240
Interest expense						700						391						285						(181)						603						1,798
Total revenues net of interest expense						7,208						3,747						2,643						1,851						(68)						15,381
Pretax income (loss)						1,584						852						387						986						(709)						3,100
Total assets						$	98,218					$	56,585					$	38,553					$	20,764					$	36,467					$	250,587

For the Nine Months Ended September 30, 2023 (Millions)						USCS						CS						ICS						GMNS						Corporate & Other (a)						Consolidated
Total non-interest revenues						$	13,682					$	9,665					$	7,006					$	4,927					$	(94)					$	35,186
Revenue from contracts with customers (b)						10,182						8,505						4,527						4,470						(28)						27,656
Interest income						8,937						2,379						1,502						42						1,571						14,431
Interest expense						1,898						1,076						770						(486)						1,643						4,901
Total revenues net of interest expense						20,721						10,968						7,738						5,455						(166)						44,716
Pretax income (loss)						$	3,964					$	2,195					$	829					$	2,834					$	(1,821)					$	8,001

(a)Corporate & Other includes adjustments and eliminations for intersegment activity.

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