AMERICAN EXPRESS CO

The discussions in both “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the year ended December 31, 2025 compared to the year ended December 31, 2024, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2024 compared to 2023, please refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 7, 2025.

Beginning in the first quarter of 2025, we made a presentation change to our Consolidated Statements of Income to consolidate Processed revenue within Service fees and other revenue and renamed Processed revenue to network partnership revenue. Prior period amounts have been recast to conform to the current period presentation; there was no impact to Total non-interest revenues. Refer to Note 17 to the “Consolidated Financial Statements” for additional information.

TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY

Discount revenue increased, primarily driven by an increase in billed business of 8 percent, partially offset by lower average merchant discount rates due to shifts in geographic and merchant spend mix. See Tables 5 and 6 for more details on billed business performance.

Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary new card acquisitions, proprietary cards-in-force and average fee per card.

Service fees and other revenue increased, primarily driven by higher foreign exchange-related revenues associated with Card Member cross-currency spending, a gain related to an equity transaction by GBTG, an equity method investee, resulting from its acquisition of CWT Holdings, LLC, and increases in network partnership revenue and loyalty coalition-related fees.

Interest expense was relatively flat, primarily reflecting lower interest rates paid on customer deposits, offset by growth in customer deposits and long-term debt.

TABLE 3: PROVISIONS FOR CREDIT LOSSES SUMMARY

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

Card Member loans provision for credit losses decreased, primarily due to a lower reserve build in the current year, partially offset by higher net write-offs. The reserve build in the current year was primarily driven by an increase in loans outstanding and deterioration in the macroeconomic outlook used in our reserve models, partially offset by the release of a reserve upon the reclassification of a small business cobrand portfolio to Card Member loans HFS from held for investment. The reserve build in the prior year was primarily driven by an increase in loans outstanding.

Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve build in the current year. The reserve build in the current year was primarily driven by deterioration in the macroeconomic outlook used in our reserve models and an increase in receivables outstanding.

Other provision for credit losses increased, primarily due to a higher reserve build in the current year, partially offset by lower net write-offs. The reserve build in the current year was primarily related to partner obligations and an increase in loans outstanding.

TABLE 4: EXPENSES SUMMARY

Card Member rewards expense increased, driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $1,234 million, and cobrand rewards expense of $576 million, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense was also driven by a benefit in the prior year from enhancements to the models that estimate future redemptions of Membership Reward points by U.S. Card Members. The increase in cash back rewards expense also reflected the impact associated with a card product migration.

The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at both December 31, 2025 and 2024.

Business development expense increased, primarily due to increased partner payments and higher client incentives, both of which were driven by higher network volumes.

Card Member services expense increased, primarily due to higher usage of Card Member benefits and the introduction of new U.S. Platinum benefits.

Marketing expense increased, primarily due to higher levels of spending on customer acquisition and brand advertising.

Salaries and employee benefits expense increased, primarily driven by higher compensation and incentive costs.

Other expenses increased, primarily driven by the gain recognized in the prior year on the sale of Accertify, higher professional services and technology costs, partially offset by a prior-year increase in legal reserves and a prior-year charge associated with an increase in international non-income tax reserves.

The effective tax rate was 21.5 percent for both 2025 and 2024, primarily reflecting the continued implementation of the global minimum tax offset by discrete tax benefits in the current period.

TABLE 5: SELECTED CARD-RELATED STATISTICAL INFORMATION

(a)Average fee per card is computed on an annualized basis based on proprietary Net card fees divided by average proprietary total cards-in-force.

TABLE 6: NETWORK VOLUMES-RELATED STATISTICAL INFORMATION

(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current year apply to the corresponding prior-year period against which such results are being compared).

TABLE 7: SELECTED CREDIT-RELATED STATISTICAL INFORMATION

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

(c)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 11 for 90+ days past billing metrics for corporate receivables.

(d)Other includes foreign currency translation adjustments.