AMERICAN EXPRESS CO
For the period ended Sep 30, 2024. Filed Oct 18, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 18, 2024
AXP$320.99-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-19.
0000004962-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)Current report: 10-Q
Period ended 2024-09-30; filed 2024-10-18.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 313 previous paragraphs and 306 current paragraphs.
202 unchanged; 79 reworded; 25 added; 30 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Business Performance
Current report
Card Member loans provision for credit losses increased for both the three and nine month periods, primarily due to higher net write-offs, partially offset by lower reserve builds in the current periods. The reserve builds in the current periods were primarily driven by increases in loans outstanding. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and higher delinquencies.
Current report
Card Member receivables provision for credit losses decreased for both the three and nine month periods, primarily due to lower net write-offs, partially offset by lower reserve releases in the current periods. The reserve releases in the current periods were primarily driven by decreases in receivables outstanding. The reserve releases in the prior periods were primarily driven by lower delinquencies.
Current report
Salaries and employee benefits expense was relatively flat for the three month period and increased for the nine month period. The increase in the nine month period was primarily driven by restructuring costs, higher incentive compensation and an increase in the value of deferred compensation liabilities.
Current report
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.
Current report
Net card fees increased 19 percent and 17 percent for the three and nine month periods, respectively, primarily driven by growth in our premium card portfolios.
Current report
Card Member loans provision for credit losses increased for both the three and nine month periods, primarily due to higher net write-offs, partially offset by lower reserve builds in the current periods. The reserve builds in the current periods were primarily driven by increases in loans outstanding. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and higher delinquencies.
Current report
Total expenses increased for both the three and nine month periods. The increase in the three month period was primarily driven by higher Card Member rewards, Marketing and Card Member services expenses. The increase in the nine month period was primarily driven by higher Card Member services, Card Member rewards and Business development expenses.
Current report
Card Member rewards expense increased for both the three and nine month periods, primarily driven by higher billed business. The increase in the three month period was also driven by an increase in the Membership Rewards URR, partially offset in the nine month period by lower redemption costs.
Current report
Business development expense increased for both the three and nine month periods, primarily due to increased partner payments driven by higher billed business.
Current report
Net card fees increased 12 percent for both the three and nine month periods, primarily driven by growth in our premium card portfolios.
Current report
Service fees and other revenue decreased 13 percent and 5 percent for the three and nine month periods, respectively, primarily driven by lower travel commissions and fees.
Current report
Card Member loans provision for credit losses increased for both the three and nine month periods, primarily due to higher net write-offs, partially offset by lower reserve builds in the current periods. The reserve builds in the current periods were primarily driven by increases in loans outstanding. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and higher delinquencies.
Current report
Card Member receivables provision for credit losses for the current three month period remained relatively flat to the prior period, as lower net write-offs in the current period were largely offset by a reserve release in the prior period. Card Member receivables provision for credit losses decreased for the nine month period, primarily due to lower net write-offs, partially offset by a reserve release in the prior period. The reserve releases in the prior periods were driven by lower delinquencies and decreases in receivables outstanding.
Current report
Total expenses increased for both the three and nine month periods. The increase in the three month period was primarily driven by Card Member rewards and Marketing expenses. The increase in the nine month period was primarily driven by Marketing and Card Member services expenses, partially offset by a decrease in Business development expense.
Current report
Card Member rewards expense increased for the three month period and was relatively flat for the nine month period, primarily driven by higher billed business and an increase in the Membership Rewards URR, offset in the nine month period by a benefit from enhancements to the U.S. Membership Rewards URR model and lower redemption costs.
Current report
Interest income increased for both the three and nine month periods, primarily driven by growth in revolving loan balances.
Current report
Provisions for credit losses for both the three and nine month periods remained relatively flat to the prior year periods, as increases in Card Member loans provision for credit losses were offset by decreases in Card Member receivables provision for credit losses.
Current report
Total expenses increased for both the three and nine month periods, primarily driven by higher Card Member rewards and Card Member services expenses.
Current report
Card Member rewards expense increased for both the three and nine month periods, primarily driven by higher billed business, partially offset by lower redemption costs.
Current report
Salaries and employee benefits and other expenses were relatively flat for both the three and nine month periods. Both periods reflect increases in allocated service costs, non-income tax reserves and higher data processing costs, offset by a one-time fee from a partner. The nine month period was also offset by a decrease in compensation costs.
Current report
Discount revenue increased 3 percent for both the three and nine month periods, primarily driven by increases in billed business, partially offset by lower average merchant discount rates. See Tables 5 and 6 for more details on billed business performance.
Current report
Processed revenue decreased 1 percent and 4 percent for the three and nine month periods, respectively, and increased 3 percent and 2 percent, respectively, on an FX-adjusted basis.3
Current report
Card Member loans — Represents balances on our credit card products and revolve-eligible balances on our charge card products.
Current report
•our ability to successfully implement our dining strategy and grow our dining platform, which will depend in part on our ability to grow the number of diners, restaurants and other bookable venues using the platform and transactions on the platform; expand and innovate in the tools and capabilities offered through the platform, including integrating the Tock and Rooam acquisitions and benefiting from their added capabilities, users and/or bookable venues; successfully compete with other dining platforms and means of booking venues; and effectively utilize our dining platform to provide value to Card Members and merchants and sell our products and services;
Removed paragraphs (30)
Previous report
Refer to the “Glossary of Selected Terminology” for the definitions of certain key terms and related information appearing within this Form 10-Q.
Previous report
Business Environment
Previous report
Processed revenue decreased for both the three and six month periods, primarily driven by decreases in volumes associated with the decommission of one of our alternative payment solutions in the prior year as well as lower network partner volumes. See Tables 5 and 6 for more details on processed volume performance.
Previous report
Card Member loans provision for credit losses increased for both the three and six month periods, primarily due to higher net write-offs, partially offset by lower reserve builds in the current periods. The reserve builds in the current periods were primarily driven by increases in loans outstanding, partially offset, for the three month period, by lower delinquencies. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and, for the six month prior period, higher delinquencies.
Previous report
Card Member receivables provision for credit losses decreased for both the three and six month periods, primarily due to lower net write-offs, partially offset by reserve builds in the current periods versus reserve releases in the prior periods. The reserve build in the current three month period was primarily driven by an increase in receivables outstanding for U.S. consumer and U.S. small business customers. The reserve releases in the prior periods were primarily driven by lower delinquencies, partially offset by increases in receivables outstanding.
Previous report
Salaries and employee benefits expense increased for both the three and six month periods, primarily driven by higher incentive compensation expenses, reflecting the continued investment in our colleagues to support business growth. The increase in the three month period was partially offset by lower current and deferred compensation costs.
Previous report
The effective tax rate was 20.4 percent and 20.5 percent for the three months ended June 30, 2024 and 2023, respectively, which reflected discrete tax benefits primarily related to the sale of Accertify in the current period and a legal entity restructuring in the prior period. The effective tax rate was 21.4 percent and 18.6 percent for the six months ended June 30, 2024 and 2023, respectively. The increase for the six month period primarily reflected discrete tax benefits in the prior period related to the resolution of certain prior-year tax items.
Previous report
Effective as of the second quarter of 2023, our U.S. travel and lifestyle services (TLS) results, which were previously reported within the U.S. Consumer Services (USCS) segment, are now reported within both the USCS and Commercial Services (CS) segments, allocated based on customer usage.
Previous report
Non-interest revenues increased across all revenue categories for both the three and six month periods, primarily driven by higher Discount revenue and Net card fees.
Previous report
Card Member loans provision for credit losses increased for both the three and six month periods, primarily due to higher net write-offs, partially offset by lower reserve builds in the current periods. The reserve builds in the current periods were primarily driven by increases in loans outstanding, partially offset by lower delinquencies. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and, for the prior six month period, by higher delinquencies.
Previous report
Card Member receivables provision for credit losses increased for both the three and six month periods, primarily due to reserve builds in the current periods, versus reserve releases in the prior periods, and, for the six month period, higher net write-offs. The reserve build in the current three month period was primarily driven by an increase in receivables outstanding. The reserve releases in the prior periods were primarily driven by lower delinquencies, partially offset by increases in receivables outstanding.
Previous report
Total expenses increased for both the three and six month periods, primarily driven by higher Card Member services, Business development and Card Member rewards expenses.
Previous report
Card Member rewards expense increased for both the three and six month periods, driven by increases in Membership Rewards, cash back and cobrand rewards expenses, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense for the six month period was partially offset by the above-mentioned benefit from enhancements to the U.S. URR models as well as lower redemption costs.
Previous report
Business development expense increased for both the three and six month periods, primarily due to increased partner payments driven by higher billed business.
Previous report
Non-interest revenues increased for both the three and six month periods, primarily driven by higher Discount revenue and Net card fees.
Previous report
Net card fees increased 11 percent and 12 percent for the three and six month periods, respectively, primarily driven by growth in our premium card portfolios.
Previous report
Service fees and other revenue decreased 20 percent for the three month period and was relatively flat for the six month period. The decrease in the three month period was largely driven by the change in the allocation of TLS revenues in the prior year as described above.
Previous report
Card Member loans provision for credit losses for the three month period remained largely in line with the prior period, as the lower reserve build in the current period was offset by higher net write-offs. Card Member loans provision for credit losses increased for the six month period, primarily due to higher net write-offs, partially offset by a lower reserve build in the current period. The reserve builds in both current periods were primarily driven by increases in loans outstanding, partially offset for the current three month period by lower delinquencies. The reserve builds in the prior periods were primarily driven by increases in loans outstanding and, for the prior six month period, higher delinquencies.
Previous report
Card Member rewards expense increased for the three month period and decreased for the six month period. The increase in the three month period was driven by higher cobrand rewards and Membership Rewards expenses, both of which were primarily driven by higher billed business. The decrease in the six month period was primarily driven by lower Membership Rewards expense, primarily due to the above-mentioned benefit from enhancements to the U.S. URR models as well as lower redemption costs, partially offset by higher billed business.
Previous report
Marketing expense increased for both the three and six month periods, primarily reflecting higher levels of spending on customer acquisition and other growth initiatives.
Previous report
Salaries and employee benefits and other expenses decreased for both the three and six month periods, primarily due to higher allocated service costs in the prior year, which includes an allocation of TLS servicing costs as described above.
Previous report
Non-interest revenues increased for both the three and six month periods, primarily driven by higher Discount revenue and Net card fees.
Previous report
Net card fees increased 15 percent for both the three and six month periods, (19 percent on an FX-adjusted basis for both periods), primarily driven by growth in our premium card portfolios.2
Previous report
Card Member loans provision for credit losses increased for both the three and six month periods. The increase in the three month period was primarily due to a reserve build in the current period, versus a reserve release in the prior period, and higher net write-offs. The increase in the six month period was primarily due to higher net write-offs, partially offset by a lower reserve build in the current period. The reserve builds in both current periods were primarily driven by increases in loans outstanding, partially offset by lower delinquencies. The reserve release in the prior three month period was primarily driven by lower delinquencies, partially offset by an increase in loans outstanding. The reserve build in the prior six month period was primarily driven by an increase in loans outstanding and higher delinquencies.
Previous report
Card Member receivables provision for credit losses decreased for both the three and six month periods. The decrease in the three month period was primarily due to lower net write-offs and a higher reserve release in the current period. The decrease in the six month period was primarily due to lower net write-offs. The reserve releases in both current periods were primarily driven by lower delinquencies. The reserve releases in both prior periods were primarily driven by lower delinquencies, partially offset by increases in receivables outstanding.
Previous report
Total expenses increased for both the three and six month periods, primarily driven by higher Card Member rewards and Card Member services expenses.
Previous report
Card Member rewards expense increased for both the three and six month periods, primarily driven by higher billed business.
Previous report
Discount revenue increased 2 percent and 3 percent for the three and six month periods, respectively, primarily driven by increases in billed business. See Tables 5 and 6 for more details on billed business performance.
Previous report
Card Member loans — Represents revolve-eligible transactions on our card products, as well as any interest charges and associated card-related fees.
Previous report
•the parties’ ability to satisfy the closing conditions for the acquisitions of Tock and Rooam, including receipt of regulatory approvals, and to consummate the transactions; the underlying assumptions related to the transactions proving to be inaccurate or unrealized; and our ability to integrate Tock and Rooam and benefit from and expand the platforms, tools and capabilities, which will depend in part on management’s decisions regarding future operations, strategies and business initiatives;
Reworded paragraphs (79)
Previous wording
We compete in the global payments industry with card networks, issuers and acquirers, paper-based transactions (e.g., cash and checks), bank transfer models (e.g., wire transfers and Automated Clearing House (ACH)), as well as evolving and growing alternative mechanisms, systems and products that leverage new technologies, business models and customer relationships to create payment, financing or banking solutions. The payments industry continues to undergo dynamic changes in response to evolving technologies, consumer habits and merchant needs, such as an increased shift to digital payments.
Current wording
We compete in the global payments industry with card networks, issuers and acquirers, paper-based transactions (e.g., cash and checks), bank transfer models (e.g., wire transfers and Automated Clearing House (ACH)), as well as evolving and growing alternative mechanisms, systems and products that leverage new technologies, business models and customer relationships to create payment, financing or banking solutions. The payments industry continues to undergo dynamic changes in response to evolving technologies, consumer habits and merchant needs.
Previous wording
We will become a Category III bank holding company in the third quarter of 2024 as a result of our total consolidated assets exceeding $250 billion, calculated based on a daily average of total consolidated assets for the four quarters ended June 30, 2024, and thus become subject to heightened capital, liquidity and prudential requirements. See “Certain Legislative, Regulatory and Other Developments” for further information.
Current wording
We became a Category III bank holding company in the third quarter of 2024 as a result of our total consolidated assets exceeding $250 billion, calculated based on a daily average of total consolidated assets for the four quarters ended June 30, 2024, and thus are subject to heightened capital, liquidity and prudential requirements, which in some cases phase in over applicable transition periods. See “Certain Legislative, Regulatory and Other Developments” for further information.
Previous wording
(a)Represents net income, less (i) earnings allocated to participating share awards of $23 million and $17 million for the three months ended June 30, 2024 and 2023, respectively, and $41 million and $31 million for the six months ended June 30, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $15 million for both the three months ended June 30, 2024 and 2023, and $29 million for both the six months ended June 30, 2024 and 2023.
Current wording
(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 $59 million and $50 million for the nine 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, and $44 million and $43 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Our results for the second quarter reflect the earnings power of our business model, driven by our premium, high credit-quality customer base, as well as the greater scale and operating leverage we have achieved over the last several years and the ongoing success of our strategic investments to enhance our Membership Model. We continued to see solid momentum across the business, with stable growth in billings, strong new card acquisitions and excellent credit performance. Our second quarter results also reflect the sale of Accertify Inc. (Accertify), which closed on May 1, 2024, and resulted in a gain of $531 million ($479 million after tax; $0.66 per share). Net income for the quarter was $3.0 billion, or $4.15 per share, compared with net income of $2.2 billion, or $2.89 per share, a year ago.
Current wording
Our strong results for the third quarter reflect the momentum and earnings power of our business model and our continued investments for growth. We continued to see stable growth in billings, strong new card acquisitions and excellent credit performance. Net income for the quarter was $2.51 billion, or $3.49 per share, compared with net income of $2.45 billion, or $3.30 per share, a year ago.
Previous wording
Billed business grew by 5 percent year-over-year (6 percent on an FX-adjusted basis), consistent with the past few quarters, and in line with a slower growth environment.1 G&S grew by 5 percent year-over-year (6 percent on an FX-adjusted basis) and T&E spending grew by 6 percent (7 percent on an FX-adjusted basis), with sequential softening in airline and lodging spend growth, while growth in restaurants, our largest T&E category, remained strong.1 U.S. Consumer Services billed business grew by 6 percent year-over-year, with continued strength in spending by Millennial and Gen-Z Card Members. Commercial Services billed business grew by 2 percent on a year-over-year basis, reflecting continued modest growth from U.S. small and mid-sized enterprise (SME) Card Members. International Card Services billed business grew by 10 percent year-over-year (13 percent on an FX-adjusted basis), driven by continued growth in spend across all regions and customer types outside the United States.1
Current wording
Billed business grew by 6 percent year-over-year, consistent with the past few quarters, with both G&S and T&E spend growth at 6 percent. U.S. Consumer Services billed business grew by 6 percent year-over-year, with continued strength in spending by Millennial and Gen-Z Card Members. Commercial Services billed business grew by 1 percent on a year-over-year basis, reflecting continued modest growth from U.S. small and mid-sized enterprise (SME) Card Members. International Card Services billed business grew by 13 percent year-over-year, driven by continued strong growth in spend across all regions and customer types outside the United States.
Previous wording
Total revenues net of interest expense increased 8 percent year-over-year (9 percent on an FX-adjusted basis).1 The growth in billed business drove a 4 percent increase in Discount revenue, our largest revenue line. Net card fees increased 15 percent year-over-year, reflecting high levels of new card acquisition and Card Member retention, as well as our cycle of product refreshes. Net interest income increased 20 percent versus the prior year, primarily reflecting growth in our revolving loan balances, which has moderated over the last several quarters.
Current wording
Total revenues net of interest expense increased 8 percent year-over-year. The growth in billed business drove a 4 percent increase in Discount revenue, our largest revenue line. Net card fee growth accelerated to 18 percent year-over-year, reflecting high levels of new card acquisition and Card Member retention, as well as our cycle of product refreshes. Net interest income increased 16 percent versus the prior year, primarily reflecting growth in our revolving loan balances, and has moderated over the past several quarters.
Previous wording
Total loans and Card Member receivables increased 11 percent year-over-year, with growth continuing to moderate sequentially. Provisions for credit losses increased, primarily driven by higher net write-offs, partially offset by a lower reserve build compared to last year. Net write-off and delinquency rates remained best-in-class, supported by our premium global customer base, our strong focus on risk management and disciplined growth strategy.
Current wording
Total loans and Card Member receivables increased 10 percent year-over-year, with growth continuing to moderate sequentially. Provisions for credit losses increased, primarily driven by higher net write-offs, partially offset by a lower net reserve build compared to last year. Net write-off and delinquency rates remained best-in-class, and relatively in line with prior quarters, supported by our premium global customer base, our strong focus on risk management and disciplined growth strategy.
Previous wording
Card Member rewards, Card Member services and Business development expenses are generally correlated to volumes or are variable based on usage and collectively increased year-over-year primarily due to growth in billed business and premium card accounts, contributing to a higher usage of travel-related benefits. Marketing expense increased 5 percent year-over-year, as we continue to invest at an elevated level in acquiring high spending, high quality customers and other growth initiatives. During the quarter we acquired 3.3 million proprietary new cards. We continue to invest in and enhance our Membership Model of premium payment products, differentiated membership services and partnerships and partner-funded value, including with our announcement in the quarter to acquire Tock and Rooam to build on the success of our Resy restaurant platform.
Current wording
Card Member rewards, Card Member services and Business development expenses are generally correlated to volumes or are variable based on usage and collectively increased year-over-year primarily due to growth in billed business and premium card accounts, contributing to a higher usage of travel-related benefits. Marketing expense increased 19 percent year-over-year, as we continue to invest at an elevated level in acquiring high spending, high quality customers and other growth initiatives. During the quarter we acquired 3.3 million proprietary new cards. We continue to invest in and enhance our Membership Model of premium payment products, differentiated membership services and partnerships. Operating expenses grew at 5 percent year-over-year, a slower pace than revenue growth, reflecting continued operating expense discipline. These operating expense efficiencies demonstrate the earnings power of our core business that enables us to invest in growth initiatives at elevated levels. We remain focused on driving marketing and operating expense efficiencies over time.
Previous wording
During the second quarter, we maintained our capital ratios within our current target range of 10 to 11 percent and returned $2.3 billion of capital to our shareholders in the form of share repurchases and common stock dividends. We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet.
Current wording
During the third quarter, we maintained our capital ratios within our current target range of 10 to 11 percent and returned $2.4 billion of capital to our shareholders in the form of share repurchases and common stock dividends. We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet.
Previous wording
The discussions in both “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the three and six months ended June 30, 2024 compared to the same periods in the prior year, as presented in the accompanying tables.
Current wording
The discussions in both “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the three and nine months ended September 30, 2024 compared to the same periods in the prior year, as presented in the accompanying tables. Our results for the nine months ended September 30, 2024 reflect the sale of Accertify Inc. (Accertify), which closed on May 1, 2024, and resulted in a gain of $531 million ($479 million after tax; $0.66 per share).
Previous wording
Discount revenue increased for both the three and six month periods, primarily driven by increases in billed business of 5 percent and 6 percent, respectively. See Tables 5 and 6 for more details on billed business performance.
Current wording
Discount revenue increased for both the three and nine month periods, primarily driven by increases in billed business of 6 percent for both periods. See Tables 5 and 6 for more details on billed business performance.
Previous wording
Net card fees increased for both the three and six month periods, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Current wording
Net card fees increased for both the three and nine month periods, 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.
Previous wording
Service fees and other revenue increased for both the three and six month periods, primarily driven by higher merchant service fees, higher foreign exchange related revenues associated with Card Member cross-currency spending and higher income from equity method investments. The increase in the three month period was partially offset by Accertify revenues included in the prior year. The increase in the six month period was also driven by increases in travel commissions and fees from our consumer travel business.
Current wording
Service fees and other revenue was relatively flat for the three month period and increased for the nine month period, primarily driven by higher foreign exchange related revenues associated with Card Member cross-currency spending, higher merchant service fees and lower losses on equity method investments, partially offset by Accertify revenues included in the prior year and, in the three month period, lower travel commissions and fees from our consumer travel business.
Previous wording
Processed revenue decreased 6 percent and 5 percent for the three and six month periods, respectively, and was flat for both periods on an FX-adjusted basis.3
Current wording
Processed revenue decreased for both the three and nine month periods, and was relatively flat for both periods on an FX-adjusted basis.1 See Tables 5 and 6 for more details on processed volume performance.
Previous wording
Interest expense increased for both the three and six month periods, primarily driven by higher interest rates paid on, and growth in, customer deposits.
Current wording
Interest expense increased for both the three and nine month periods, primarily driven by growth in customer deposits and long-term debt as well as higher interest rates.
Previous wording
Other provision for credit losses increased for the three month period, primarily due to higher net write-offs and a higher reserve build in the current period. Other provision for credit losses increased for the six month period, primarily due to higher net write-offs, partially offset by a lower reserve build in the current period. The reserve builds in the current periods were primarily driven by a reserve related to amounts due from a merchant in bankruptcy, as well as increases in non-card loans outstanding. The reserve builds in the prior periods were primarily driven by increases in non-card loans outstanding.
Current wording
Other provision for credit losses increased for both the three and nine month periods, primarily due to higher net write-offs and, for the three month period, a higher reserve build in the current period. The reserve builds in the current periods were primarily driven by increases in non-card loans outstanding and, for the nine month period, a reserve related to amounts due from a merchant in bankruptcy. The reserve builds in the prior periods were primarily driven by increases in non-card loans outstanding.
Previous wording
Card Member rewards expense increased for both the three and six month periods, driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $148 million and $20 million, and cobrand rewards expense of $122 million and $259 million for the three and six month periods, respectively, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense in the six month period was partially offset by a benefit from enhancements to the models that estimate future redemptions of Membership Reward points by U.S. Card Members as well as lower redemption costs.
Current wording
Card Member rewards expense increased for both the three and nine month periods, driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $261 million and $281 million, and cobrand rewards expense of $112 million and $371 million for the three and nine month periods, respectively, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense in the three month period was also driven by an increase in the Ultimate Redemption Rate (URR), partially offset in the nine month period by lower redemption costs.
Previous wording
The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at both June 30, 2024 and 2023.
Current wording
The Membership Rewards URR for current program participants was 96 percent (rounded down) at both September 30, 2024 and 2023.
Previous wording
Business development expense increased for both the three and six month periods, primarily due to increased partner payments driven by higher network volumes, partially offset by lower client incentives. The increase in the six month period was also partially offset by a prior-year charge related to revenue allocated to a joint venture partner.
Current wording
Business development expense increased for both the three and nine month periods, primarily due to increased partner payments driven by higher network volumes, partially offset by lower client incentives. The increase in the nine month period was also partially offset by a prior-year charge related to revenue allocated to a joint venture partner.
Previous wording
Other expenses decreased for both the three and six month periods, primarily driven by the gain recognized on the sale of Accertify and net gains on Amex Ventures investments, partially offset by increases in professional services expenses.
Current wording
Other expenses increased for the three month period and decreased for the nine month period. The increase in the three month period was primarily driven by an increase in legal reserves and higher professional service costs, partially offset by foreign exchange-related gains and the release of a reserve associated with a merchant exposure for Card Member purchases. The decrease in the nine month period was also driven by the gain recognized on the sale of Accertify and net gains on Amex Ventures investments.
Previous wording
U.S. Consumer Services issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products.
Current wording
U.S. Consumer Services (USCS) issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products. USCS also manages our dining platform that provides digital tools for restaurants and reservation booking for diners.
Previous wording
Discount revenue increased 5 percent and 6 percent for the three and six month periods, respectively, primarily driven by increases in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Current wording
Discount revenue increased 5 percent and 6 percent for the three and nine month periods, respectively, primarily driven by increases in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Previous wording
Service fees and other revenue increased 16 percent and 12 percent for the three and six month periods, respectively. The increase in the three month period was primarily driven by the change in the allocation of TLS revenues in the prior year as described above. The increase in the six month period was primarily driven by higher travel commissions and fees from our consumer travel business and revenue from the sale of reward points.
Current wording
Service fees and other revenue decreased 4 percent for the three month period and increased 6 percent for the nine month period. The decrease in the three month period was primarily driven by lower travel commissions and fees from our consumer travel business. The increase in the nine month period was primarily driven by revenue from the sale of reward points and higher delinquency fees.
Previous wording
Card Member receivables provision for credit losses increased for the three month period, primarily due to a reserve build in the current period, versus a reserve release in the prior period, partially offset by lower net write-offs. Card Member receivables provision for credit losses decreased for the six month period, primarily due to lower net write-offs, partially offset by a reserve build in the current period, versus a reserve release in the prior period. The reserve build in the current three month period was primarily driven by an increase in receivables outstanding for U.S. small business customers. The reserve releases in the prior periods were primarily driven by lower delinquencies, partially offset by increases in receivables outstanding.
Current wording
Card Member receivables provision for credit losses decreased for the three month period, primarily due to a reserve release in the current period, versus a reserve build in the prior period, and lower net-write offs. Card Member receivables provision for credit losses for the current nine month period remained consistent with the prior period, with net write-offs and a reserve release in the current period largely in line with the prior period. The reserve releases in the current periods were primarily driven by decreases in receivables outstanding and, for the nine month period, lower delinquencies. The reserve build in the prior three month period was primarily driven by higher delinquencies. The reserve release in the prior nine month period was primarily driven by lower delinquencies.
Previous wording
Salaries and employee benefits and other expenses increased for both the three and six month periods. The increase in the three month period was primarily due to higher compensation expenses, partially offset by higher allocated service costs in the prior year, which includes an allocation of TLS servicing costs as described above. The increase in the six month period was primarily due to an increase in allocated service costs.
Current wording
Salaries and employee benefits and other expenses increased for both the three and nine month periods, primarily due to an increase in allocated service costs.
Previous wording
Commercial Services issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
Current wording
Commercial Services (CS) issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
Previous wording
Discount revenue increased 2 percent and 1 percent for the three and six month periods, respectively, primarily driven by increases in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Current wording
Discount revenue increased 1 percent for both the three and nine month periods, primarily driven by increases in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Previous wording
Business development expense decreased for both the three and six month periods, primarily due to lower client incentives, partially offset by increased partner payments, primarily driven by an increase in billed business.
Current wording
Business development expense decreased for both the three and nine month periods, primarily due to lower client incentives, partially offset by increased partner payments due to higher billed business.
Previous wording
Salaries and employee benefits and other expenses were flat for both the three and six month periods. The three month period was primarily driven by a decrease in allocated service costs, offset by higher compensation costs. The six month period was primarily driven by an increase in allocated service costs and technology expense, offset by a decrease in compensation costs.
Current wording
Salaries and employee benefits and other expenses increased for the three month period and were relatively flat for the nine month period. The increase in the three month period was primarily driven by an increase in allocated service costs and higher compensation costs.
Previous wording
Discount revenue increased 9 percent and 10 percent for the three and six month periods, respectively (13 percent and 12 percent, respectively, on an FX-adjusted basis), primarily reflecting increases in billed business.2 See Tables 5, 6 and 14 for more details on billed business performance.
Current wording
Discount revenue increased 12 percent and 11 percent for the three and nine month periods, respectively, primarily reflecting increases in billed business. See Tables 5, 6 and 14 for more details on billed business performance.
Previous wording
Net card fees increased 17 percent and 16 percent for the three and six month periods, respectively, primarily driven by growth in our premium card portfolios.
Current wording
Net card fees increased 18 percent and 16 percent for the three and nine month periods, respectively (20 percent and 19 percent, respectively, on an FX-adjusted basis), primarily driven by growth in our premium card portfolios.2
Previous wording
Service fees and other revenue was relatively flat for both the three and six month periods. Both the three and six month periods reflect increases in foreign exchange related revenues associated with Card Member cross-currency spending, offset for the three month period by a decrease in delinquency fees and for the six month period by a benefit in the prior year related to a portion of the revenue allocated to a joint venture partner as described in Business development expense below.
Current wording
Service fees and other revenue increased 4 percent and 1 percent for the three and nine month periods, respectively, primarily driven by higher foreign exchange related revenues associated with Card Member cross-currency spending and higher loyalty coalition-related fees, partially offset by lower delinquency fees. The increase in the nine month period was also partially offset by a benefit in the prior year related to a portion of the revenue allocated to a joint venture partner as described in Business development expense below.
Previous wording
Business development expense increased for the three month period and decreased for the six month period. The increase in both periods was primarily due to increased partner payments driven by higher billed business, which was more than offset in the six month period by a prior-year charge related to revenue allocated to a joint venture partner.
Current wording
Business development expense increased for the three month period and decreased for the nine month period. Both periods reflect increases in partner payments driven by higher billed business, which was partially offset in the three month period by lower client incentives and more than offset in the nine month period by a prior-year charge related to revenue allocated to a joint venture partner.
Previous wording
Non-interest revenues increased for both the three and six month periods, primarily driven by higher Discount revenue and Service fees and other revenue, partially offset by lower Processed revenue.
Current wording
Non-interest revenues increased for both the three and nine month periods, primarily driven by higher Discount revenue, partially offset in the three month period by lower Service fees and other revenue and in the three and nine month periods by lower Processed revenue.
Previous wording
Service fees and other revenue increased 3 percent and 8 percent for the three and six month periods, respectively, primarily driven by higher merchant service fees and foreign exchange related revenues associated with Card Member cross-currency spending, partially offset by Accertify revenues included in the prior year.
Current wording
Service fees and other revenue decreased 4 percent for the three month period and increased 4 percent for the nine month period. The decrease in the three month period was primarily driven by Accertify revenues included in the prior year, partially offset by foreign exchange related revenues associated with Card Member cross-currency spending. The increase in the nine month period was primarily driven by higher merchant service fees and foreign exchange related revenues associated with Card Member cross-currency spending, partially offset by Accertify revenues included in the prior year.
Previous wording
GMNS receives an interest expense credit relating to internal transfer pricing due to its merchant payables. Net interest income increased for both the three and six month periods, primarily due to higher interest expense credits, primarily driven by increases in average merchant payables and higher interest rates.
Current wording
GMNS receives an interest expense credit relating to internal transfer pricing due to its merchant payables. Net interest income decreased for the three month period and increased for the nine month period. The decrease for the three month period was primarily due to lower interest expense credits, primarily driven by lower liabilities. The increase for the nine month period was primarily due to higher interest expense credits, primarily driven by increases in average merchant payables and higher interest rates.
Previous wording
Other provision for credit losses increased for both the three and six month periods, primarily due to higher reserve builds in the current periods driven by a reserve related to amounts due from a merchant in bankruptcy.
Current wording
Other provision for credit losses increased for both the three and nine month periods, primarily due to higher reserve builds in the current periods driven by a reserve related to amounts due from a merchant in bankruptcy.
Previous wording
Total expenses increased for the three month period and were flat for the six month period. The increase in the three month period was primarily driven by higher Marketing expense, partially offset by a decrease in Operating expenses.
Current wording
Total expenses decreased for both the three and nine month periods. The decrease in the three month period was primarily driven by lower Business development expense, partially offset by higher Marketing expense. The decrease in the nine month period was primarily driven by lower Operating expenses.
Previous wording
Business development expense decreased for both the three and six month periods, primarily due to decreased partner payments driven by lower contractual rates.
Current wording
Business development expense decreased for both the three and nine month periods, primarily due to decreased partner payments driven by lower volumes from certain network issuing partners.
Previous wording
Marketing expense decreased for both the three and six month periods, reflecting lower levels of spending on merchant engagement initiatives.
Current wording
Marketing expense increased for the three month period and decreased for the nine month period. Both periods reflect the levels of spending on merchant engagement and other growth initiatives compared to the prior year periods.
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Previous report — wording carried elsewhere
Operating expenses decreased 13 percent, primarily reflecting the gain recognized on the sale of Accertify, partially offset by higher compensation costs to support business growth. Excluding the Accertify gain, operating expenses grew at a slower pace than revenue growth, reflecting continued operating expense discipline. These operating expense efficiencies demonstrate the earnings power of our core business that enables us to invest in growth initiatives at elevated levels. We remain focused on driving marketing and operating expense efficiencies over time.
Previous report — wording carried elsewhere
Total expenses decreased for both the three and six month periods, primarily driven by lower Operating expenses.