American Express 2001 Annual Report Download - page 57

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axp_55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Investments classified as Available-for-Sale and Held-to-Maturity at December 31 are distributed by type and maturity as presented
below:
Available-for-Sale
2001 2000
Gross Gross Gross Gross
Unrealized Unrealized Fair Unrealized Unrealized Fair
(Millions) Cost Gains (Losses) Value Cost Gains (Losses) Value
Corporate debt securities $ 16,644 $ 393 $ (276) $ 16,761 $ 12,714 $ 124 $ (908) $ 11,930
Mortgage-backed securities 14,043 188 (55) 14,176 9,259 126 (25) 9,360
State and municipal obligations 6,715 276 (21) 6,970 5,886 267 (15) 6,138
Foreign government bonds
and obligations 1,078 41 (7) 1,112 993 13 (4) 1,002
U.S. Government and
agencies obligations 70 3
—
73 48 3
—
51
Equity securities 495 51 (11) 535 510 197 (27) 680
Other 2,605 6 (13) 2,598 1,891
——
1,891
Total $ 41,650 $ 958 $ (383) $ 42,225 $ 31,301 $ 730 $ (979) $ 31,052
Held-to-Maturity
2000
Gross Gross
Unrealized Unrealized Fair
(Millions) Cost Gains (Losses) Value
Corporate debt securities $ 5,304 $ 138 $ (130) $ 5,312
Mortgage-backed securities 1,785 12
—
1,797
State and municipal obligations 986 47
—
1,033
Foreign government bonds
and obligations 83 10
—
93
U.S. Government and
agencies obligations 50 4
—
54
Other 196 2 (1) 197
Total $ 8,404 $ 213 $ (131) $ 8,486
Available-for-Sale
December 31, 2001 (Millions) Cost Fair Value
Due within 1 year $ 3,630 $ 3,663
Due after 1 year through 5 years 7,384 7,605
Due after 5 years through 10 years 8,032 8,142
Due after 10 years 8,066 8,104
27,112 27,514
Mortgage-backed securities 14,043 14,176
Equity securities 495 535
Total $ 41,650 $ 42,225
Generally, investment securities are carried at fair value on the balance sheet. Gains and losses are recognized in the results of oper-
ations upon disposition of the securities. In addition, losses are also recognized when management determines that a decline in
value is not temporary, which requires judgment regarding the amount and timing of recovery. Typically, the company defines an
event of impairment for debt securities as issuer default or bankruptcy. Fair value is generally based on quoted market prices. How-
ever, the company’s investment portfolio also contains structured investments of various asset quality, including Collateralized
Debt Obligations (CDOs) and Structured Loan Trusts (backed by high-yield bonds and bank loans, respectively) which are not