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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS COMPANY
AVAILABLE-FOR-SALE INVESTMENTS
The following is a summary of investments classified as Available-for-Sale at December 31:
2007 2006
(Millions) Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
State and municipal obligations $ 6,795 $ 102 $ (136) $ 6,761 $ 6,678 $195 $ (10) $ 6,863
U.S. Government and agencies obligations 5,034 76 — 5,110 5, 080 10 (15) 5,075
Mortgage and other asset-backed securities 79 1 (1) 79 3,102 5 (56) 3,051
Corporate debt securities 285 1 (4) 282 1,987 3 (42) 1,948
Foreign government bonds and obligations 51 2 — 53 21 2 — 23
Other 929 — — 929 993 2 (1) 994
Total $13,173 $ 182 $ (141) $13,214 $17,861 $217 $(124) $17,954
The following tables provide information about Available-for-Sale investments with gross unrealized losses and the length of time
that individual securities have been in a continuous unrealized loss position as of December 31, 2007 and 2006:
As of December 31, 2007
(Millions) Less than 12 months 12 months or more
Description of Securities
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
State and municipal obligations $2,680 $(120) $195 $(16)
U.S. Government and agencies
obligations — — — —
Mortgage and other asset-backed
securities — — 20 (1)
Corporate debt securities 110 (2) 116 (2)
Foreign government bonds and
obligations — — 20 —
Other — — 10 —
Total $2,790 $(122) $361 $(19)
As of December 31, 2006
(Millions) Less than 12 months 12 months or more
Description of Securities
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
State and municipal obligations $ 818 $(10) $ 23 $ —
U.S. Government and agencies
obligations 1,520 (3) 1,536 (12)
Mortgage and other asset-backed
securities 229 (1) 2,056 (55)
Corporate debt securities 232 (3) 1,502 (39)
Foreign government bonds and
obligations 6 — — —
Other — — 16 (1)
Total $2,805 $(17) $5,133 $(107)
The Company reviews and evaluates investments at least quarterly and more often as market conditions may require to identify
investments that have indications of other-than-temporary impairments. The determination of other-than-temporary impairment
is a subjective process, requiring the use of judgments and assumptions. Accordingly, the Company considers several factors when
evaluating securities for an other-than-temporary impairment, including the extent to which amortized cost exceeds fair value, the
duration and size of that difference, and the issuer’s credit rating. Key metrics in performing this evaluation are the ratio of fair value
to amortized cost and the determination of the extent to which the difference is due to increased default risk for the specific issuer
or market interest rate risk, and with respect to market interest rate risk, whether the Company has the intent and ability to hold the
securities for a time sufficient to recover the unrealized losses.
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