American Express 2014 Annual Report Download - page 65

AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
폷our ability to meet our on-average and over-time growth targets for revenues net of interest expense, EPS and ROE, which will depend on
factors such as our success in implementing our strategies and business initiatives including growing our share of overall spending,
addressing the loss of the Costco U.S. relationship, retaining and growing our other co-brand and other partner relationships, increasing
merchant coverage, enhancing our prepaid offerings, expanding the GNS business and controlling expenses, and on factors outside
management’s control including the willingness and ability of Card Members to sustain spending, the effectiveness of marketing and
loyalty programs, regulatory and market pressures on pricing, credit trends, changes in foreign currency exchange and interest rates, and
changes in general economic conditions, such as GDP growth, consumer confidence, unemployment and the housing market;
폷our ability to meet our on-average and over-time objective to return 50 percent of capital generated to shareholders through dividends and
share repurchases, which will depend on factors such as approval of our capital plans by our regulators, the amount we spend on
acquisitions, our results of operations and capital needs in any given period, and the amount of shares issued by us to employees upon the
exercise of options;
폷uncertainty relating to the outcomes and costs associated with merchant class actions, including the success or failure of the settlement
agreement, such as objections to the settlement agreement by plaintiffs and other parties and uncertainty and timing related to the
approval of the settlement agreement by the Court, which can be impacted by appeals;
폷changes in global economic and business conditions, including consumer and business spending, the availability and cost of credit,
unemployment and political conditions, all of which may significantly affect spending on American Express cards, delinquency rates, loan
balances and other aspects of our business and results of operations;
폷changes in capital and credit market conditions, including sovereign creditworthiness, which may significantly affect our ability to meet
our liquidity needs, expectations regarding capital and liquidity ratios, access to capital and cost of capital, including changes in interest
rates; changes in market conditions affecting the valuation of our assets;oranyreductioninourcreditratingsorthoseofoursubsidiaries,
which could materially increase the cost and other terms of our funding, restrict our access to the capital markets or result in contingent
payments under contracts;
폷litigation, such as class actions or proceedings brought by governmental and regulatory agencies (including the lawsuit filed against us by
the U.S. Department of Justice and certain state attorneys general), that could result in (i) the imposition of behavioral remedies against us
or us voluntarily making certain changes to our business practices, the effects of which in either case could have a material adverse impact
on our business; (ii) the imposition of substantial monetary damages and penalties, disgorgement and restitution; and/or (iii) damage to
our global reputation and brand;
폷legal and regulatory developments wherever we do business, including legislative and regulatory reforms in the U.S., such as the actions of
the CFPB and Dodd-Frank’s stricter regulation of large, interconnected financial institutions, which could make fundamental changes to
many of our business practices or materially affect our capital or liquidity requirements, results of operations, or ability to pay dividends or
repurchase our stock; actions and potential future actions by the FDIC and credit rating agencies applicable to securitization trusts, which
could impact our ABS program; or potential changes to the taxation of our businesses, the allowance of deductions for significant
expenses, or the incidence of consumption taxes on our transactions, products and services;
폷changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may
impact the prices we charge merchants that accept our cards, competition for co-brand relationships and the success of marketing,
promotion or rewards programs;
폷changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations,
involving merchants that represent a significant portion of our business, such as the airline industry, or our partners in GNS or financial
institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations;
폷the impact of regulatory changes in the EU, including the introduction of price regulation, the elimination of honor all cards and “anti-
steering” rules and requirements on granting access to our network, among other important changes, which will depend on various factors,
including, but not limited to the actual final laws and regulations ultimately adopted in the EU and its Member States, including any
exemptions and phase-in periods, our ability to adapt and change our business model to address regulatory requirements and competitive
pressures, and our success in continuing to offer value propositions that potential partners, merchants and customers find attractive;
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