American Express 2015 Annual Report Download - page 107

• our ability to execute against our lending strategy and grow Card Member loans held for investment, including
by targeting new lending prospects and deepening relationships with current customers, which may be affected
by increasing competition, brand perceptions and reputation, our ability to manage risk in a growing Card
Member loan portfolio, and the behavior of Card Members and their actual spending and borrowing patterns,
which in turn may be driven by our ability to issue new and enhanced card products, offer attractive services
and rewards programs, attract new Card Members, reduce Card Member attrition and capture a greater share
of existing Card Members’ spending and borrowing;
• uncertainties associated with the timing and impact of any potential sale of the Costco U.S. Card Member loan
portfolio and the extension of the merchant acceptance agreement, such as the negotiation and execution of
definitive documentation, operational issues related to the transfer of Card Member loans and accounts, the
parties’ ability to satisfy the closing conditions and the amount of any gain we recognize as a result of a sale,
which could be impacted by the credit quality and performance of the portfolio, the amount of any volume
decline experienced by the cobrand portfolio and the timing of the potential sale as the gain will be determined
by the amount of the aggregate outstanding loans transferred at closing;
• the erosion of the average discount rate by a greater amount than anticipated during 2016 and beyond,
including as a result of changes in the mix of spending by location and industry, merchant incentives and
concessions, volume-related pricing discounts, strategic investments, certain pricing initiatives, competition,
pricing regulation (including regulation of competitors’ interchange rates) and other factors;
• the possibility that we will not fully execute on our plans for OptBlue to significantly increase merchant
coverage, which will depend in part on the success of OptBlue merchant acquirers in signing merchants to
accept American Express, which could be impacted by the pricing set by the merchant acquirers, the value
proposition offered to small merchants and the efforts of OptBlue merchant acquirers to sign merchants for
American Express acceptance, as well as the willingness of Card Members to use American Express cards at
small merchants and of those merchants to accept American Express cards;
• uncertainty relating to the ultimate outcome of the antitrust lawsuit filed against us by the U.S. Department of
Justice and certain state attorneys general, including the success or failure of our appeal and the impact on
existing private merchant cases and potentially additional litigation and/or arbitrations;
• changes affecting our ability or desire to return capital to shareholders through dividends and share
repurchases, including the opportunity for incremental capital returns related to the Costco U.S. portfolio sale,
which will depend on factors such as approval of our capital plans by our primary regulators, the amount we
spend on acquisitions and results of operations and capital needs in any given period;
• our funding plan for the full year 2016 being implemented in a manner inconsistent with current expectations,
which will depend on various factors such as future business growth, the impact of global economic, political
and other events on market capacity, demand for securities we offer, regulatory changes, ability to securitize
and sell receivables and the performance of receivables previously sold in securitization transactions;
• our ability to drive growth by developing and marketing value propositions that appeal to Card Members and
new customers and by offering attractive services and rewards programs, which will depend in part on ongoing
investment in product innovation, marketing and promotion and acquisition efforts, including through digital
channels; our ability to update our systems and platforms to support new products, services and benefits;
competition; and brand perceptions and reputation;
• changes 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;
• changes 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; or any reduction in our credit ratings or those of our subsidiaries, 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;
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