Variable Interest Entity

6 Months Ended

Jun. 30, 2011

Variable Interest Entity

Credco has established a variable interest entity (VIE), American Express Canada Credit Corporation (AECCC), used primarily to loan funds to affiliates. Credco has a shelf registration in Canada for a medium-term note program providing for the issuance of notes by AECCC. All notes issued under this program are fully guaranteed by Credco. These medium-term note issuances are the primary source of financing loans to the Canadian affiliate. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and therefore, consolidates the entity in accordance with accounting guidance governing consolidation of variable interest entities. Total assets as of both June 30, 2011 and December 31, 2010 were $2.4 billion and are eliminated in consolidation. Total liabilities as of both June 30, 2011 and December 31, 2010 were $2.3 billion and are primarily recorded in long-term debt. As of June 30, 2011 and December 31, 2010, $126 million and $501 million, respectively, of liabilities were eliminated in consolidation. The assets of the VIE are not used solely to settle the obligations of the VIE. The note holders of the VIE have recourse to Credco.