5133--4/29/2010--AMERICAN_GREETINGS

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{product, market, service}

{customer, product, revenue}

{system, service, information}

{operation, international, foreign}

{cost, operation, labor}

{cost, contract, operation}

{cost, regulation, environmental}

{condition, economic, financial}

{product, liability, claim}

{capital, credit, financial}

{financial, litigation, operation}

{property, intellectual, protect}

{personnel, key, retain}

{debt, indebtedness, cash}

{regulation, change, law}

{stock, price, operating}

{operation, natural, condition}

There are factors outside of our control that may decrease the demand for our products and services, which may adversely affect our performance. Providing new and compelling products is critical to our future profitability and cash flow. We rely on a few customers for a significant portion of our sales. Difficulties in integrating acquisitions could adversely affect our business and we may not achieve the cost savings and increased revenues anticipated as a result of these acquisitions. If Schurman Fine Papers is unable to operate its retail stores successfully, it could have a material adverse effect on us. Our business, results of operations and financial condition may be adversely affected by retail consolidations. Bankruptcy of key customers could give rise to an inability to pay us and increase our exposure to losses from bad debts. We rely on foreign sources of production and face a variety of risks associated with doing business in foreign markets. We have foreign currency translation and transaction risks that may materially and adversely affect our operating results. The greeting card and gift wrap industries are extremely competitive, and our business, results of operations and financial condition will suffer if we are unable to compete effectively. We face intense competition from a range of competitors in the digital photography products and services industries and may be unsuccessful in competing against current and future competitors. We are subject to a number of restrictive covenants under our borrowing arrangements, which could affect our flexibility to fund ongoing operations, uses of capital and strategic initiatives, and, if we are unable to maintain compliance with such covenants, could lead to significant challenges in meeting our liquidity requirements. We may be unsuccessful in completing the divestiture of the Strawberry Shortcake and Care Bears properties. Pending litigation could have a material, adverse effect on our business, financial condition, liquidity, results of operations, and cash flows. We may not realize the full benefit of the material we license from third parties if the licensed material has less market appeal than expected or if sales revenue from the licensed products is not sufficient to earn out the minimum guaranteed royalties. Our inability to protect or defend our intellectual property rights could reduce the value of our products and brands. Rapidly changing trends in the children s entertainment market could adversely affect our business. Our results of operations fluctuate on a seasonal basis. Increases in raw material and energy costs may materially raise our costs and materially impact our profitability. The loss of key members of our senior management and creative teams could adversely affect our business. If we fail to extend or renegotiate our primary collective bargaining contracts with our labor unions as they expire from time to time, or if our unionized employees were to engage in a strike, or other work stoppage, our business and results of operations could be materially adversely affected. Employee benefit costs constitute a significant element of our annual expenses, and funding these costs could adversely affect our financial condition. Various environmental regulations and risks applicable to a manufacturer and/or distributor of consumer products may require us to take actions, which will adversely affect our results of operations. We may be subject to product liability claims and our products could be subject to voluntary or involuntary recalls and other actions. Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could harm our business and results of operations. Information technology infrastructure failures could significantly affect our business.

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5133--4/29/2010--AMERICAN_GREETINGS_CORP