AXP — 10-K Filing

could be materially affected for the period in which the matter is resolved.144Table of ContentsThe following table presents changes in unrecognized tax benefits:TABLE 19.7: ROLLFORWARD OF UNRECOGNIZED TAX BENEFITS(Millions)202520242023Balance, January 1$1,006 $875 $962 Increases:Current year tax positions153 161 132 Tax positions related to prior years46 47 40 Effects of foreign currency translations13 — — Decreases:Tax positions related to prior years(12)(4)(50)Settlements with tax authorities(85)(39)(160)Lapse of statute of limitations(18)(21)(49)Effects of foreign currency translations— (13)— Balance, December 31$1,102 $1,006 $875 Included in the unrecognized tax benefits of $1.1 billion, $1.0 billion and $0.9 billion for December 31, 2025, 2024 and 2023, respectively, are approximately $840 million, $780 million and $670 million, respectively, that, if recognized, would favorably affect the effective tax rate in a future period. Interest and penalties relating to unrecognized tax benefits are reported in the income tax provision. For the years ended December 31, 2025, 2024 and 2023, we recognized approximately $120 million, $110 million and $30 million, respectively, in expenses for interest and penalties. We had approximately $640 million and $500 million accrued for the payment of interest and penalties as of December 31, 2025 and 2024, respectively.145Table of ContentsNOTE 20EARNINGS 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.

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