Go Daddy 2015 Annual Report Download - page 44

Table of Contents
We operate in areas of the world experiencing corruption by government officials to some degree and, in certain circumstances, compliance with anti-bribery
and anti-corruption laws may conflict with local customs and practices. We operate in several countries and sell our products to customers around the world, which
geographically stretches our compliance obligations. In addition, changes in laws could result in increased regulatory requirements and compliance costs which
could adversely affect our business, financial condition and results of operations. While we are committed to complying with all applicable anti-bribery and anti-
corruption laws, we cannot assure our employees or other agents will not engage in prohibited conduct and render us responsible under the FCPA or the U.K.
Bribery Act.
If we are found to be in violation of the FCPA, the U.K. Bribery Act or other anti-bribery and anti-corruption laws (either due to acts or inadvertence of our
employees, or due to the acts or inadvertence of others), we could suffer criminal or civil penalties or other sanctions, which could have a material adverse effect
on our business. Any violation of the FCPA or other applicable anti-corruption or anti-bribery laws could result in whistleblower complaints, adverse media
coverage, investigations, loss of export privileges, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government
contracts, which could have a material and adverse effect on our reputation, business, operating results and prospects. In addition, responding to any enforcement
action may result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our
operating results and financial condition.
We are subject to income taxes in the United States and various foreign jurisdictions, and our domestic and international tax liabilities will be subject to the
allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:
• changes in the valuation of our deferred tax assets and liabilities;
• expected timing and amount of the release of any tax valuation allowances;
• expiration of, or detrimental changes in, research and development tax credit laws;
• tax effects of equity-based compensation;
• costs related to intercompany restructurings;
• changes in tax laws, regulations or interpretations thereof; or
• future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries
where we have higher statutory tax rates.
In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state and foreign tax authorities. Outcomes from
these audits could have an adverse effect on our operating results and financial condition.
Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events and to interruption by man-made problems such
as terrorism.
A significant natural disaster, such as an earthquake, fire or flood could have a material adverse impact on our business, operating results and financial
condition. Natural disasters could lead to significant power outages and otherwise affect our data centers as well as our infrastructure vendors’ abilities to provide
connectivity and perform services on a timely basis. In the event our or our service providers’ IT systems abilities are hindered by any of the events discussed
above, we and our customers’ websites could experience downtime, and our products could become unavailable. In addition, acts of terrorism and other
geopolitical unrest could cause disruptions in our business or the business of our infrastructure vendors, partners or customers or the economy as a whole. Any
disruption in the business or operations of our data center hosting providers or customers could have a significant adverse effect on our operating results and
financial performance in a given period. All of the aforementioned risks may be further increased if our disaster recovery plans prove to be ineffective in the event
of such a disaster.
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