Aetna 2013 Annual Report Download - page 79

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Annual Report- Page 73
In some countries we may be exposed to currency exchange controls or other restrictions that prevent us from
transferring funds internationally or converting local currencies into U.S. dollars or other currencies. Fluctuations in
foreign currency exchange rates may have an impact on our revenues, operating results and cash flows from our
international operations. Some of our operations are, and are increasingly likely to be, in emerging markets where
these risks are heightened. Any measures we may implement to reduce the effect of volatile currencies and other
risks on our international operations may not be effective.
Our exposure to all of the above risks is expected to increase as a result of the completion of the proposed
acquisition of the InterGlobal group and as we seek to grow our foreign operations over the next several years.
We may not be able to compete effectively in the HIT business and earn a profit. Our HIT business increases our
risk of patent infringement and other intellectual property litigation and may become subject to significant
regulation in the future.
With our 2011 acquisition of Medicity and our current focus on consumer engagement, ACOs, collaborative
provider networks and optimizing our business platforms, we have increased our commitment to HIT products and
solutions, a business that is rapidly changing and highly competitive. There is no assurance that we will be able to
successfully adapt to changes to the HIT marketplace, or compete effectively and earn a profit in our HIT business.
Our technology products and solutions may not operate as intended. Moreover, we may not have identified and
mitigated, or be able to identify and mitigate, the significant risks of pursuing the HIT business, including the risk
that we will be unable to protect our proprietary rights and the risks of patent infringement and other intellectual
property litigation against us.
In addition, although the HIT industry is not currently subject to significant regulation, we face an uncertain and
rapidly evolving federal, state and international legislative and regulatory framework and certain of our HIT
products and/or solutions could be subject to FDA regulation. New legislation and/or regulation may make it
difficult to achieve and maintain compliance and could adversely affect both our ability to compete in the HIT
business and the operating results of our HIT business.
We expect to continue to pursue acquisitions and other inorganic growth opportunities, which may be
unsuccessful, cause us to assume unanticipated liabilities, disrupt our existing business, be dilutive or lead us to
assume significant debt, among other things.
We completed the Coventry acquisition in May 2013 and expect to continue to pursue acquisitions and other
inorganic growth opportunities as part of our growth strategy. In addition to integration risks, some other risks we
face with respect to acquisitions and other inorganic growth strategies include:
• We frequently compete with other firms, some of which may have greater financial and other resources and
a greater tolerance for risk, to acquire attractive companies;
• The acquired businesses may not perform as projected;
• We may not obtain the projected synergies as we integrate the acquired businesses (including Coventry);
• We may assume unanticipated liabilities, including those that were not disclosed to us or which we
underestimated;
• The acquired businesses, or the pursuit of other inorganic growth strategies, could disrupt or compete with
our existing businesses, distract management, divert resources and make it difficult to maintain our current
business standards, controls, procedures and performance;
• We may finance future acquisitions and other inorganic growth strategies by issuing common stock for
some or all of the purchase price, which would dilute the ownership interests of our shareholders;
• We may incur significant debt (whether to finance acquisitions or by assuming debt from the businesses we
acquire);
• We may not have the expertise to manage and profitably grow the businesses we acquire, and we may need
to rely on the retention of key personnel and other suppliers of companies we acquire, which may be
difficult to accomplish;