AMERICAN EXPRESS COAXP

AMERICAN EXPRESS CO Earnings Per Share Disclosure

10-KFiled Feb 6, 20262 min read
EARNINGS PER COMMON SHARE (EPS)
EPS is calculated using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities. Undistributed earnings are calculated after deducting dividends on preferred shares, common shares and RSUs. RSUs granted under our 2016 Incentive Compensation Plan generally entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends on common shares. These unvested awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities and are not included in computing basic EPS. Diluted EPS is also calculated under the treasury stock method and the more dilutive amount is reported. Participating securities are not included as incremental shares in computing diluted EPS.
The computations of basic and diluted EPS for the years ended December 31 were as follows:
TABLE 20.1: COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE
(Millions, except per share amounts)
202520242023
Numerator:
Basic and diluted:
Net income
$10,833 $10,129 $8,374 
Preferred dividends(58)(58)(58)
Net income available to common shareholders10,775 10,071 8,316 
Earnings allocated to participating share awards
(74)(76)(64)
Net income attributable to common shareholders
$10,701 $9,995 $8,252 
Denominator:
Basic: Weighted-average common stock
695 712 735 
Add: Weighted-average stock options (a)
1 1 1 
Diluted
696 713 736 
Basic EPS
$15.41 $14.04 $11.23 
Diluted EPS$15.38 $14.01 $11.21 
(a)The dilutive effect of unexercised stock options excludes from the computation of EPS 0.16 million, 0.05 million and 1.38 million of options for the years ended December 31, 2025, 2024 and 2023, respectively, because inclusion of the options would have been anti-dilutive.

Historical Timeline

Fiscal YearFiled
2025Feb 6, 2026Showing above
2024Feb 7, 2025

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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