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Guarantees

9 Months Ended

Sep. 30, 2013

9. Guarantees

The Company provides Card Member protection plans that cover losses associated with purchased products, as well as certain other guarantees in the ordinary course of business which are within the scope of GAAP governing the accounting for guarantees.

In relation to its maximum potential undiscounted future payments as shown in the table that follows, to date the Company has not experienced any significant losses related to guarantees. The Company's initial recognition of guarantees is at fair value, which has been determined in accordance with GAAP governing fair value measurement. In addition, the Company establishes reserves when a loss is probable and the amount can be reasonably estimated.

The following table provides information related to such guarantees as of September 30, 2013 and December 31, 2012:

	Maximum potential
	undiscounted future
	payments^(a)				Related liability^(b)
	(Billions)				(Millions)
Type of Guarantee	2013		2012		2013		2012
Card and travel operations^(c)	$	44	$	44	$	87	$	93
Other^(d)		1		1		74		93
Total	$	45	$	45	$	161	$	186

Represents the notional amounts that could be lost under the guarantees and indemnifications if there were a total default by the guaranteed parties. The Merchant Protection guarantee is calculated using management's best estimate of maximum exposure based on all eligible claims as measured against annual billed business volumes. The Company mitigates this risk by withholding settlement from the merchant or obtaining deposits and other guarantees from merchants considered higher risk due to various factors. The amounts being held by the Company are not significant when compared to the maximum potential undiscounted future payments.
Included as part of other liabilities on the Company's Consolidated Balance Sheets.
Primarily includes Merchant Protection and Return Protection.
Primarily includes guarantees related to the Company's business dispositions and real estate.