Capital One Financial Corporation: 10-K Risk Factor Changes

The successful integration of two independent businesses is complex, difficult, time-consuming and costly. The success of the Transaction depends, in part, on our ability to successfully integrate Discover’s operations in a manner that results in various benefits and that does not materially disrupt existing customer relationships or materially decrease revenues due to loss of customers. Additionally, the success of the Transaction depends on our ability to successfully integrate Discover into our Risk Management Framework (the “Framework”), compliance systems and corporate culture, which we believe requires extensive investment, including to enhance the risk management function at Discover consistent with our risk management standards and those of regulators, as well as to address remediation obligations under existing and possible future regulatory orders. The difficulties of combining the operations of our businesses include, among others: •difficulties integrating operations, systems and networks, including related technology, operations and compliance programs; •difficulties managing our expanded operations, including challenges related to management and monitoring of new operations and associated increased costs and complexity; 24Capital One Financial Corporation (COF) 24Capital One Financial Corporation (COF) 24Capital One Financial Corporation (COF) 24 Table of Contents Table of Contents •difficulties managing our expanded international business footprint, including risks adapting to new markets, legal and regulatory regimes, languages, businesses and cultural practices; •challenges in conforming standards, controls, procedures and accounting and other policies, such as the integration of Discover into our Framework and corporate culture; •risks arising from increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Transaction, including those related to the integration process or the size, scope and complexity of our expanded business operations; •difficulties in retaining existing personnel or hiring and integrating new personnel; •difficulties retaining existing customers or maintaining existing customer relationships; •diversion of management’s attention to integration matters; •potential failures, outages, interruptions, compromises and other disruptions resulting from the integration of certain systems, networks and infrastructures, such as our third-party cloud infrastructure platforms or mainframes; •changes in laws or regulations or in the interpretation of existing laws or regulations; •risks arising from known or potential unknown contingencies and liabilities of Discover assumed in connection with the consummation of the Transaction; and •risks related to the outcome of any legal, regulatory, political or community group proceedings or inquiries that may be currently pending or later instituted against us in connection with the Transaction. The successful combination of our businesses depends on the result of the factors listed above and on the resolution of any potential unknown liabilities, adverse consequences and unforeseen events and increased expenses associated with the Transaction, some or all of which may be outside of our control. If we are unable to successfully integrate our businesses or manage risks related to the above factors, the anticipated benefits of the Transaction may not be fully realized or at all, or may take longer to realize than expected, all of which may have an adverse effect on our business, financial condition and results of operations.