Policy

AMERICAN EXPRESS CO | 2013 | FY |

The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of December 31:

		Other Assets				Other Liabilities
		Fair Value				Fair Value
(Millions)		2013		2012		2013		2012
Derivatives designated as hedging instruments:
Interest rate contracts
	Fair value hedges	$	455	$	824	$	2	$	―
Total return contract
	Fair value hedge		8		―		―		19
Foreign exchange contracts
	Net investment hedges		174		43		116		150
Total derivatives designated as hedging instruments			637		867		118		169
Derivatives not designated as hedging instruments:
	Foreign exchange contracts, including certain embedded derivatives^(a)		64		75		95		160
Total derivatives not designated as hedging instruments			64		75		95		160
Total derivatives, gross			701		942		213		329
Cash collateral netting^(b)			(336)		(326)		―		(21)
Derivative asset and derivative liability netting^(c)			(36)		(23)		(36)		(23)
Total derivatives, net^(d)		$	329	$	593	$	177	$	285

Includes foreign currency derivatives embedded in certain operating agreements.

Represents the offsetting of derivative instruments and the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from derivative instrument(s) executed with the same counterparty under an enforceable master netting arrangement. Additionally, the Company received noncash collateral in the form of security interest in U.S. Treasury securities with a fair value of nil and $335 million as of December 31, 2013 and 2012, respectively, none of which was sold or repledged. Such noncash collateral effectively further reduces the Company's risk exposure to $329 million and $258 million as of December 31, 2013 and 2012, respectively, but does not reduce the net exposure on the Company's Consolidated Balance Sheets. Additionally, the Company posted $26 million and nil as of December 31, 2013 and 2012, respectively, as initial margin on its centrally cleared interest rate swaps not netted against the derivative balances.

Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.

The Company has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and derivative liabilities are presented within other assets and other liabilities on the Company's Consolidated Balance Sheets.

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