Financial Analysis

DEBT SHORT-TERM BORROWINGS Our short-term borrowings outstanding, defined as borrowings with original contractual maturity dates of one year or less than one year as of December 31, 2025 and 2024 were as follows: TABLE 8.1: SHORT-TERM BORROWINGS 2025 2024 (Millions, except percentages) Outstanding Balance Year-End Stated Interest Rate on Debt (a) Outstanding Balance Year-End Stated Interest Rate on Debt (a) Short-term borrowings (b) $ 1,371 4.41 % $ 1,374 2.47 % Total $ 1,371 4.41 % $ 1,374 2.47 % (a) For floating-rate issuances, the stated interest rates are weighted based on the outstanding principal balances and interest rates in effect as of December 31, 2025 and 2024. (b) Includes borrowings from banks and book overdrafts with banks, which represents negative cash balances for accounts with an associated overdraft facility, due to timing differences arising in the ordinary course of business. As of December 31, 2025, we maintained a committed, revolving, secured borrowing facility, with a maturity date of September 15, 2028, which gives us the right to sell up to $2.0 billion face amount of eligible certificates issued from the Lending Trust. This facility enhances our contingent funding resources and is also used in the ordinary course of business to fund working capital needs. The facility was undrawn as of both December 31, 2025 and 2024. Additionally, certain of our subsidiaries maintained total committed lines of credit of $123 million and $191 million as of Decembe …

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STOCK-BASED COMPENSATION STOCK OPTION AND AWARD PROGRAMS Under our 2016 Incentive Compensation Plan (amended and restated effective May 6, 2024) and previously under our 2007 Incentive Compensation Plan, awards may be granted to colleagues and other individuals who perform services for us. These awards may be in the form of stock options, or in the form of restricted stock units and awards (collectively referred to as RSUs), or other incentives or similar awards designed to meet the requirements of non-U.S. jurisdictions. There were a total of 18 million, 20 million and 7 million common shares unissued and available for grant as of December 31, 2025, 2024 and 2023, respectively, as authorized by our Board of Directors and shareholders. We generally issue new common shares upon exercise of options, vesting of restricted stock units and granting of restricted stock awards. Stock-based compensation expense recognized in Salaries and employee benefits in the Consolidated Statements of Income was $550 million, $508 million and $450 million in 2025, 2024 and 2023, respectively, with corresponding income tax benefits of $171 million, $124 million and $110 million in those respective periods. Our stock options and RSUs outstanding as of December 31, 2025, and changes during the year, are as follows: TABLE 10.1: STOCK OPTIONS AND RSUs OUTSTANDING Stock Options Service-Based RSUs Service and Performance-Based RSUs (Numbers in thousands) Number Weighted-Average Exercise Price Number Wei …

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FAIR VALUES Fair value is defined as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the principal or, in the absence of a principal, most advantageous market for the specific asset or liability. GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows: Level 1 Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in markets that are not active; Inputs other than quoted prices that are observable for the asset or liability; and Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs that are unobservable and reflect our own estimates about the estimates market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). We monitor the market conditions and evaluate …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES In December 2023, the Financial Accounting Standards Board issued updated accounting guidance on disclosure for income taxes which the Company adopted prospectively as of January 1, 2025. Refer to Note 1 for additional information. As required under the updated guidance, the components of pretax income for the year ended December 31, 2025 included in the Consolidated Statements of Income were as follows: TABLE 19.1: COMPONENTS OF PRETAX INCOME (Millions) 2025 Income (loss) from continuing operations before income tax expense (benefit): U.S. $ 8,302 Non-U.S. 5,493 Total $ 13,795 The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows: TABLE 19.2: COMPONENTS OF INCOME TAX EXPENSE (Millions) 2025 2024 2023 Current income tax expense: U.S. federal $ 1,735 $ 2,368 $ 2,455 U.S. state and local 497 494 351 Non-U.S. 1,272 894 662 Total current income tax expense 3,504 3,756 3,468 Deferred income tax (benefit) expense: U.S. federal (328) (797) (952) U.S. state and local (120) (146) (139) Non-U.S. (95) (47) (238) Total deferred income tax (benefit) expense (542) (990) (1,329) Total income tax expense $ 2,962 $ 2,766 $ 2,139 A reconciliation of the U.S. federal statutory rate of 21 percent to our actual income tax rate as of December 31, 2025, prepared under the updated guidance was as follows: TABLE 19.3: RECONCILIATION OF ACTUAL INCOME TAX RATE FOR 2025 2025 (Millions, except percentages) $ % U …

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RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS In December 2023, the Financial Accounting Standards Board issued updated accounting guidance on Disclosures for Income Taxes, effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The updated guidance requires additional disclosure and disaggregated information in the Income Tax Rate reconciliation using both percentages and reporting currency amounts, with additional qualitative explanations of individually significant reconciling items. The updated guidance also requires disclosure of the amount of income taxes paid (net of refunds received) disaggregated by jurisdictional categories (federal (national), state and foreign). We adopted the updated guidance prospectively for the annual reporting period beginning January 1, 2025, which did not result in a material impact to our Consolidated Financial Statements. Refer to Note 19 for related disclosures about income taxes. In November 2024 and as amended in January 2025, the Financial Accounting Standards Board issued updated accounting guidance on the Disaggregation of Income Statement Expenses for annual reporting periods beginning after December 15, 2026 and for interim reporting periods beginning December 15, 2027, with early adoption permitted. The updated guidance includes the requirement for a new tabular disclosure within a Note to the Consolidated Financial Statements, to disaggregate defined expense categories from the …

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RETIREMENT PLANS DEFINED CONTRIBUTION RETIREMENT PLANS We sponsor defined contribution retirement plans, the principal plan being the Retirement Savings Plan (RSP), a 401(k) savings plan with a profit-sharing component. The RSP is a tax-qualified retirement plan subject to the Employee Retirement Income Security Act of 1974 and covers most colleagues in the United States. The total expense for all defined contribution retirement plans globally was $398 million, $365 million and $380 million in 2025, 2024 and 2023, respectively. DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Our primary defined benefit pension plans that cover certain colleagues in the United States and United Kingdom are closed to new entrants and existing participants do not accrue any additional benefits. Some colleagues outside the United States and United Kingdom are covered by local retirement plans, some of which are funded, while other colleagues receive payments at the time of retirement or termination under applicable labor laws or agreements. We comply with minimum funding requirements in all countries. We also sponsor unfunded other postretirement benefit plans that provide health care and life insurance to certain retired colleagues in the United States. For these plans, the total net cost recognized in Salaries and employee benefits was $28 million in 2025 and the total net benefit recognized was $18 million and $12 million in 2024 and 2023, respectively. We recognize the funded s …

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RESTRUCTURING We periodically initiate restructuring programs to enhance our overall effectiveness and efficiency and to support new business strategies. These programs are generally completed within a year of when they are initiated. In connection with these programs, we will typically incur severance and other exit costs. We had $201 million, $217 million and $216 million accrued in total restructuring reserves as of December 31, 2025, 2024 and 2023, respectively. Restructuring expense, which primarily relates to new severance charges, net of revisions to existing reserves, was $96 million, $123 million and $179 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included within Salaries and employee benefits within our Consolidated Statements of Income. The cumulative expense for restructuring programs in progress during 2025 was $443 million. These programs were initiated from 2022 through 2025. Cumulative amounts were not material to any reportable operating segment.

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REPORTABLE OPERATING SEGMENTS AND GEOGRAPHIC OPERATIONS REPORTABLE OPERATING SEGMENTS We consider a combination of factors when evaluating the composition of our reportable operating segments, including the results regularly provided to our Chief Executive Officer, who is our chief operating decision maker (CODM), economic characteristics, products and services offered, classes of customers, product distribution channels, geographic considerations (primarily United States versus outside the United States), and regulatory environment considerations. The following is a brief description of the primary business activities of our four reportable operating segments: U.S. Consumer Services (USCS), which issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products. USCS also manages our dining platform that provides digital tools for restaurants and reservation bookings for diners. Commercial Services (CS), which issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients. International Card Services (ICS), which issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provid …

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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 GAAPs fair value hierarchy, as of June 30, 2026 and December 31, 2025: Table 9.1: Financial Assets and Financial Liabilities measured at Fair Value 2026 2025 (Millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Investment securities: (a) Equity securities $ 45 $ 45 $ $ $ 46 $ 46 $ $ Debt securities 4,029 3,948 81 997 916 81 Derivatives, gross (a)(b) 832 832 174 164 10 Total Assets 4,905 45 4,780 81 1,216 46 1,080 91 Liabilities: Derivatives, gross (a) 172 172 1,120 1,120 Total Liabilities $ 172 $ $ 172 $ $ 1,120 $ $ 1,120 $ (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. Financial Assets and Financial Liabilities Carried at Other Than Fair Value The following tables summarize the estimated fair values of our financial assets …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The effective tax rate was 23.6 percent and 18.7 percent for the three months ended June 30, 2026 and 2025, respectively, and 22.5 percent and 20.5 percent for the six months ended June 30, 2026 and 2025, respectively. The higher effective tax rates for the three and six month periods primarily reflected discrete tax benefits in the prior periods related to the resolution of certain prior-year tax items. 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. In December 2024, we received a Notice of Proposed Adjustment (Notice) from the IRS regarding transfer pricing between our U.S. and foreign subsidiaries for the 2017 and 2018 tax years currently under examination. The Notice proposes an increase to our U.S. taxable income that would result in an additional estimated U.S. federal income tax payment of approximately $185 million for 2017 and 2018, excluding interest and state income taxes, and asserts penalties of approximately $50 million for the same period. Although the Notice only applies to the 2017 and 2018 tax years currently under examination, the IRS may seek similar adjustments for subsequent tax years. We strongly disagree with the IRSs positions and plan to pursue all available …

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Recently Issued Accounting Standards In November 2024 and as amended in January 2025, the Financial Accounting Standards Board issued updated accounting guidance on the Disaggregation of Income Statement Expenses for annual reporting periods beginning after December 15, 2026 and for interim reporting periods beginning December 15, 2027, with early adoption permitted. The updated guidance includes the requirement for a new tabular disclosure within a Note to the Consolidated Financial Statements, to disaggregate defined expense categories from the expense report lines presented on the Consolidated Statements of Income. We are currently assessing the updated guidance; however, it is not expected to have a material impact to our Consolidated Financial Statements. In September 2025, the Financial Accounting Standards Board issued updated guidance on accounting for internal-use software, effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments modernize guidance to consider different methods of software development, updating the requirements for capitalization of software costs. We are currently assessing the updated guidance; however, it is not expected to have a material impact to our Consolidated Financial Statements.

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Reportable Operating Segments The following tables present certain selected financial information for our reportable operating segments and Corporate & Other as of or for the three and six months ended June 30: Table 14.1: Selected Financial Information by Segment Three Months Ended June 30, 2026 (Millions) USCS CS ICS GMNS Total Reportable Operating Segments Corporate & Other (a) Consolidated Total non-interest revenues $ 6,229 $ 3,591 $ 3,261 $ 1,919 $ 15,000 $ (11) $ 14,988 Revenue from contracts with customers (b) 4,346 3,097 2,051 1,728 11,222 (10) 11,212 Interest income 4,052 1,343 733 8 6,136 471 6,607 Interest expense 757 432 375 (169) 1,395 564 1,958 Net interest income 3,295 912 358 178 4,743 (93) 4,649 Total revenues net of interest expense 9,524 4,503 3,619 2,096 19,742 (104) 19,637 Provisions for credit losses 498 353 223 10 1,084 1,084 Total revenues net of interest expense after provisions for credit losses 9,025 4,149 3,396 2,086 18,656 (104) 18,553 Expenses Card Member rewards, business development and Card Member services (c) 4,745 1,994 1,683 328 8,750 5 8,755 Marketing 813 379 352 100 1,644 7 1,650 Salaries and employee benefits and other operating expenses 1,403 806 884 530 3,623 453 4,077 Total expenses 6,961 3,179 2,919 958 14,017 465 14,482 Pretax income (loss) $ 2,065 $ 970 $ 477 $ 1,128 $ 4,640 $ (569) $ 4,071 Total assets $ 123,404 $ 65,567 $ 52,291 $ 19,401 $ 260,663 $ 47,540 $ 308,203 Six Months Ended June 30, 2026 (Millions) USCS CS ICS G …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing