American Express 2008 Annual Report Download - page 63

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2008 financial review
american express company
portfolio and, in particular, those investments that are not readily
marketable, including the valuation of the interest-only strip
relating to the Company’s lending securitizations and the ability
of our charge card and lending trusts to maintain excess spreads
at levels sufficient to avoid material set-asides or early amortization
of our charge card and lending securitizations, which will depend
on various factors such as income derived from the relevant
portfolios and their respective credit performances; the Company’s
ability to avoid material losses on its investment portfolio,
including its investments in state and municipal obligations, the
issuers of which could be adversely affected by the challenging
economic environment; the Company’s ability to invest in
technology advances across all areas of its business to stay on the
leading edge of technologies applicable to the payment industry;
the Company’s ability to attract and retain executive management
and other key employees in light of the limitations on
compensation imposed on participants in the U.S. Department
of the Treasury’s Capital Purchase Program in which the
Company is a participant; the Company’s ability to protect its
intellectual property rights (IP) and avoid infringing the IP of
other parties; the potential negative effect on the Company’s
businesses and infrastructure, including information technology,
of terrorist attacks, natural disasters or other catastrophic events
in the future; political or economic instability in certain regions
or countries, which could affect lending and other commercial
activities, among other businesses, or restrictions on convertibility
of certain currencies; changes in laws or government regulations;
the potential impact of regulations recently adopted by federal
bank regulators relating to certain credit and charge card practices,
including, among others, the imposition by card issuers of interest
rate increases on outstanding balances and the allocation of
payments in respect of outstanding balances with different
interest rates, which could have an adverse impact on the
Company’s net income; accounting changes; outcomes and costs
associated with litigation and compliance and regulatory matters;
and competitive pressures in all of the Company’s major
businesses. A further description of these and other risks and
uncertainties can be found in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008, and the
Company’s other reports filed with the SEC.
61