American Express 2001 Annual Report Download - page 49

axp_47
FINANCIAL REVIEW
FORWARD-LOOKING STATEMENTS
This Annual Report includes forward-looking statements about the company’s financial performance and business prospects.
These are subject to certain risks and uncertainties which could cause actual results to differ materially from such statements. These
statements are contained in the sections “Letter to Shareholders” and “Financial Review,” among others. The words “believe,”
“expect,”“anticipate,”“optimistic,”“intend,”“aim,”“will,”“should,”“could,” and similar expressions are intended to identify such for-
ward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements,which speak only
as of the date on which they are made. The company undertakes no obligation to update or revise any forward-looking statements.
In addition to those described elsewhere in this Report, factors that could cause actual results to differ materially from these for-
ward-looking statements include, but are not limited to: fluctuation in the equity markets, which can affect the amount and types
of investment products sold by AEFA,the market value of its managed assets,and management and distribution fees received based
on those assets; potential deterioration in the high-yield sector and other investment areas, which could result in further losses in
AEFA’s investment portfolio; the ability of AEFA to sell certain high-yield investments at expected values and within anticipated
timeframes and to maintain its high-yield portfolio at certain levels in the future; developments relating to AEFA’s new platform
structure for financial advisors,including the ability to increase advisor productivity, moderate the growth of new advisors and cre-
ate efficiencies in the infrastructure; AEFA’s ability to roll out new and attractive products in a timely manner and effectively man-
age the economics in selling a growing volume of non-proprietary products; investment performance in AEFA’s businesses; the
success, timeliness and financial impact, including costs, cost savings and other benefits of reengineering initiatives being imple-
mented or considered by the company, including cost management, structural and strategic measures such as vendor,process, facil-
ities and operations consolidation, outsourcing, relocating certain functions to lower cost overseas locations, moving internal and
external functions to the Internet to save costs, the scale-back of corporate lending in certain regions, and planned staff reductions
relating to certain of such reengineering actions; the ability to control and manage operating, infrastructure, advertising and pro-
motion and other expenses as business expands or changes, including balancing the need for longer-term investment spending;
the impact on the company’s businesses and uncertainty created by the September 11th terrorist attacks, and the potential nega-
tive effect on the company of any such attacks in the future; the company’s ability to recover under its insurance policies for losses
resulting from the September 11th terrorist attacks; consumer and business spending on the company’s travel related services
products, particularly credit and charge cards and growth in card lending balances, which depend in part on the ability to issue
new and enhanced card products and increase revenues from such products, attract new Cardholders, capture a greater share of
existing Cardholders’spending, sustain premium discount rates,increase merchant coverage, retain Cardmembers after low intro-
ductory lending rates have expired, and expand the global network services business; the ability to execute the company’s global
corporate services strategy including greater penetration of middle market companies, increasing capture of non-T&E spending
through greater use of the company’s purchasing card and other means, and further globalizing business capabilities; successfully
expanding the company’s on-line and off-line distribution channels and cross-selling financial, travel, card and other products and
services to its customer base, both in the U.S. and abroad; effectively leveraging the company’s assets, such as its brand, customers
and international presence in the Internet environment; investing in and competing at the leading edge of technology across all
businesses; a downturn in the company’s businesses and/or negative changes in the company’s and its subsidiaries’ credit ratings
which could result in contingent payments under contracts, decreased liquidity and higher borrowing costs; increasing competi-
tion in all of the company’s major businesses; fluctuations in interest rates, which impact the company’s borrowing costs, return
on lending products and spreads in the investment and insurance businesses; credit trends and the rate of bankruptcies, which
can affect spending on card products, debt payments by individual and corporate customers and businesses that accept the com-
pany’s card products and returns on the company’s investment portfolios; foreign currency exchange rates; political or economic
instability in certain regions or countries, which could affect commercial and other lending activities, among other businesses;
legal and regulatory developments, such as in the areas of consumer privacy and data protection; acquisitions; and outcomes in lit-
igation. A further description of these and other risks and uncertainties can be found in the company’s most recent 10-K, 10-Q and
8-K reports filed with the SEC.