Aetna 2013 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2013 Aetna annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

Annual Report- Page 72
• Integrate the companies' products and services (including their PBM programs) to avoid overlap and
achieve anticipated cost savings;
• Identify and eliminate redundant and underperforming operations and assets;
• Maintain agreements with existing customers, providers and vendors (including PBM services suppliers)
and avoid delays in entering into new agreements with prospective customers, providers and vendors;
• Grow profitably in certain geographic areas and lines of business that historically have not been an area of
focus for Aetna; or
• Accurately assess and effectively contain and manage known and unknown liabilities of Coventry.
If we are not able to fully realize the anticipated cost savings and other benefits of the Coventry transaction, or if
they take longer to realize than expected, the combined businesses and operations may not perform as expected,
which could have an adverse effect on the financial condition or operating results of the combined business.
The Coventry integration process could result in the disruption of the ongoing business and/or operations of
Aetna and Coventry.
At times the attention of certain members of our management and certain of our resources may be focused on the
integration of the businesses of the two companies and diverted from day-to-day business operations and
opportunities, which may adversely affect our ongoing business and operations.
Aetna's and Coventry's business relationships may be subject to disruption as customers, providers, vendors and
others attempt to negotiate changes in existing business relationships or if the changes resulting from the acquisition
cause them to consider entering into business relationships with competitors of Aetna. These disruptions could have
an adverse effect on the businesses, operations, financial condition, or operating results of the combined business
and our ability to realize the anticipated benefits of the acquisition.
As we expand our international operations, we will increasingly face political, legal and compliance,
operational, regulatory, economic and other risks that we do not face or are more significant than in our
domestic operations. Our exposure to these risks is expected to increase.
As we expand our international operations, including through our proposed acquisition of the InterGlobal group, we
will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do
not face or that are more significant than in our domestic operations. These risks vary widely by country and
include varying regional and geopolitical business conditions and demands, government intervention and
censorship, discriminatory regulation, nationalization or expropriation of assets and pricing constraints. Our
international products need to meet country-specific customer and member preferences as well as country-specific
legal requirements, including those related to privacy, data storage, location, protection and security.
Our international operations increase our exposure to, and require us to devote significant management resources to
comply with, the privacy laws of non-U.S. jurisdictions and the anti-bribery, anti-corruption and anti-money
laundering laws of the U.S. (including the FCPA) and the United Kingdom (including the Bribery Act 2010) and
similar laws in other jurisdictions. Implementing our compliance policies, internal controls and other systems upon
our expansion into new countries and geographies may require the investment of considerable management time
and management, financial and other resources over a number of years before any significant revenues or profits are
generated.
Our international operations require us to overcome logistical and other challenges based on differing languages,
cultures, legal and regulatory schemes and time zones. Our international operations encounter labor laws, customs
and employee relationships that can be difficult, less flexible than in our domestic operations and expensive to
modify or terminate. In some countries we are required to, or choose to, operate with local business partners, which
requires us to manage our partner relationships and may reduce our operational flexibility and ability to quickly
respond to business challenges.