Fair Values

3 Months Ended

Mar. 31, 2021

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy, as of March 31, 2021 and December 31, 2020


	2021								2020
(Millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Investment securities: (a)
Equity securities	$	50	$	49	$	1	$	—	$	81	$	80	$	1	$	—
Debt securities (b)	21,220		—		21,200		20		21,550		—		21,550		—
Derivatives, gross (a)	629		—		629		—		629		—		629		—
Total Assets	21,899		49		21,830		20		22,260		80		22,180		—
Liabilities:
Derivatives, gross (a)	212		—		212		—		702		—		702		—
Total Liabilities	$	212	$	—	$	212	$	—	$	702	$	—	$	702	$	—

(a)Refer to Note 4 for the fair values of investment securities and to Note 8 for the fair values of derivative assets and liabilities, on a further disaggregated basis.

(b)Level 3 fair value amount represents investments in debt securities issued by Community Development Financial Institutions.

Financial Assets and Financial Liabilities Carried at Other Than Fair Value

The following table summarizes the estimated fair values of our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of March 31, 2021 and December 31, 2020. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of March 31, 2021 and December 31, 2020, and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of American Express be estimated by aggregating the amounts presented.


	Carrying Value		Corresponding Fair Value Amount
2021 (Billions)			Total		Level 1		Level 2		Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value
Cash and cash equivalents (a)	$	40	$	40	$	39	$	1	$	—
Other financial assets (b)	44		44		—		44		—
Financial assets carried at other than fair value
Card Member and Other loans, less reserves (c)	68		72		—		—		72

Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value	103		103		—		103		—
Financial liabilities carried at other than fair value
Certificates of deposit (d)	7		7		—		7		—
Long-term debt (c)	$	42	$	44	$	—	$	44	$	—


	Carrying Value		Corresponding Fair Value Amount
2020 (Billions)			Total		Level 1		Level 2		Level 3
Financial Assets:
Financial assets for which carrying values equal or approximate fair value
Cash and cash equivalents (a)	$	33	$	33	$	31	$	2	$	—
Other financial assets (b)	46		46		—		46		—
Financial assets carried at other than fair value
Card Member and Other loans, less reserves (c)	71		75		—		—		75

Financial Liabilities:
Financial liabilities for which carrying values equal or approximate fair value	101		101		—		101		—
Financial liabilities carried at other than fair value
Certificates of deposit (d)	8		8		—		8		—
Long-term debt (c)	$	43	$	45	$	—	$	45	$	—

(a)Level 2 fair value amounts reflect time deposits and short-term investments.

(b)Balances include Card Member receivables (including fair values of Card Member receivables of $4.2 billion held by a consolidated VIE as of both March 31, 2021 and December 31, 2020), other receivables and other miscellaneous assets.

(c)Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $24.2 billion and $25.8 billion as of March 31, 2021 and December 31, 2020, respectively, and the fair values of Long-term debt were $13.0 billion as of both March 31, 2021 and December 31, 2020.

(d)Presented as a component of Customer deposits on the Consolidated Balance Sheets.

Nonrecurring Fair Value Measurements

We have certain assets that are subject to measurement at fair value on a nonrecurring basis. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired or where there are observable price changes for equity investments without readily determinable fair values. During the three months ended March 31, 2021 and the year ended December 31, 2020, we did not have any material assets that were measured at fair value due to impairment.

We estimate the Level 3 fair value of equity investments without readily determinable fair values based on price changes as of the date of new similar equity financing transactions completed by the companies in our portfolio. The carrying value of equity investments without readily determinable fair values totaled $911 million and $530 million as of March 31, 2021 and December 31, 2020, respectively. These amounts are included within Other assets on the Consolidated Balance Sheets. For the three months ended March 31, 2021 and March 31, 2020 we recorded net unrealized gains of $377 million and $15 million, respectively. Unrealized losses including any impairments were insignificant for both periods. Beginning in January 2018, cumulative net unrealized gains for equity investments without readily determinable fair values totaled $728 million and $347 million as of March 31, 2021 and December 31, 2020, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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