Discover 2009 Annual Report Download - page 50

• losses in our investment portfolio;
• our ability to increase or sustain Discover card usage or attract new customers;
• our ability to attract new merchants and maintain relationships with current merchants;
• the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events;
• fraudulent activities or material security breaches of key systems;
• our ability to introduce new products or services;
• our ability to sustain our investment in new technology and manage our relationships with third-party vendors;
• our ability to collect amounts for disputed transactions from merchants and merchant acquirers;
• our ability to attract and retain employees;
• our ability to protect our reputation and our intellectual property;
• difficulty financing or integrating new businesses, products or technologies;
• new lawsuits, investigations or similar matters or unanticipated developments related to current matters; and
• resolution of our dispute with Morgan Stanley.
The foregoing review of important factors should not be construed as exclusive and should be read in conjunction with
the other cautionary statements that are included in this annual report on Form 10-K. These factors expressly qualify all
subsequent oral and written forward-looking statements attributable to us or persons acting on our behalf. Except for any
ongoing obligations to disclose material information as required under U.S. federal securities laws, we do not have any
intention or obligation to update forward-looking statements after we distribute this annual report on Form 10-K, whether
as a result of new information, future developments or otherwise.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our principal properties are located in seven states in the United States. As of January 15, 2010, we owned five
principal properties, which included our corporate headquarters, two call centers and two processing centers (one of
which we intend to close in 2010) and we leased three principal properties, which included two call centers and our
PULSE headquarters. The call centers and processing centers largely support our Direct Banking segment, formerly
referred to as our U.S. Card segment, the PULSE headquarters is used by our Payment Services segment, formerly
referred to as our Third-Party Payments segment, and our corporate headquarters is used by both our Direct Banking and
Payment Services segments. We also have five leased offices, four of which are located outside the United States, that are
used to support our Diners Club operations and a leased office in Shanghai that supports our Direct Banking segment.
Excluding the one processing center to be closed later in 2010, all of our call centers and processing centers are
operating at and being utilized to a reasonable capacity and we believe these principal facilities are both suitable and
adequate to meet our current and projected needs.
Item 3. Legal Proceedings
In the normal course of business, from time to time, we have been named as a defendant in various legal actions,
including arbitrations, class actions, and other litigation, arising in connection with our activities. Certain of the actual or
threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate
amounts of damages. We have historically relied on the arbitration clause in our cardmember agreements, which has in
some instances limited the costs of, and our exposure to, litigation, but there can be no assurance that we will continue to
be successful in enforcing our arbitration clause in the future. Legal challenges to the enforceability of these clauses have
led most card issuers and may cause us to discontinue their use, and there are bills pending in Congress to directly or
indirectly prohibit the use of pre-dispute arbitration clauses. Further, we are involved in pending legal actions challenging
our arbitration clause. We are also involved, from time to time, in other reviews, investigations and proceedings (both
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