Walgreens 2015 Annual Report Download - page 17

benefits of the Alliance Boots transaction is subject to a number of significant challenges and uncertainties,
including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and
effective manner, the coordination of geographically separate organizations, the possibility of faulty assumptions
underlying expectations regarding potential synergies and the integration process, unforeseen expenses or delays,
and competitive factors in the marketplace.
Prior to the Alliance Boots acquisition on December 31, 2014, Alliance Boots was a privately-held company and
was not subject to the information and reporting requirements of the Securities Exchange Act of 1934, as
amended and other federal securities laws, and the compliance obligations of the Sarbanes-Oxley Act of 2002.
Compliance with these new obligations as a result of Alliance Boots becoming a part of a public company has
required and may continue to require significant resources and management attention, and any failure to comply
could have a material adverse effect on us. In addition, some current and prospective employees may experience
uncertainty about their roles within the combined company, which may adversely affect our ability to retain or
recruit key managers and other employees. We could also encounter unforeseen transaction and integration-
related costs or other circumstances, such as unforeseen liabilities or other issues existing or arising with respect
to the business of Alliance Boots or otherwise resulting from the transaction. Many of these potential
circumstances are outside of our control and any of them could result in increased costs, decreased revenue,
decreased synergies and the diversion of management time and attention. If we are unable to achieve our
objectives within the anticipated time frame, or at all, the expected benefits may not be realized fully or at all, or
may take longer to realize than expected, which could have a material adverse impact on our business operations,
financial condition and results of operations. In addition, we have incurred significant transaction costs related to
the acquisition and have incurred and will continue to incur integration and related costs as we integrate the
Alliance Boots businesses. These integration and acquisition-related costs, including legal, accounting, financial
and tax advisory and other fees and costs, may be higher than expected and some of these costs may be material.
Our operations outside of the United States subject us to a number of operating, economic, political,
regulatory and other international business risks.
Together with our equity method investments, we had a presence in over 25 countries as of August 31, 2015. The
strategic combination with Alliance Boots in December 2014 greatly increased the importance of international
business to our operations, growth and prospects as, historically, substantially all of Walgreens’ business
operations had been conducted within the United States and its territories. A substantial portion of Alliance
Boots’ revenues are generated in the European Union and neighboring countries, and substantially all of Alliance
Boots’ revenues are generated outside the United States. Our international business operations are subject to a
number of risks, including:
• compliance with a wide variety of foreign laws and regulations, including retail and wholesale
pharmacy, licensing, tax, foreign trade, intellectual property, privacy and data protection, currency,
political and other business restrictions and requirements and local laws and regulations, whose
interpretation and enforcement vary significantly among jurisdictions and can change significantly over
time;
• additional U.S. and other regulation of non-domestic operations, including regulation under the Foreign
Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws;
• potential difficulties in managing foreign operations, mitigating credit risks in foreign markets,
enforcing agreements and collecting receivables through foreign legal systems;
• price controls imposed by foreign countries;
• tariffs, duties or other restrictions on foreign currencies or trade sanctions and other trade barriers
imposed by foreign countries;
• potential adverse tax consequences, including tax withholding laws and policies and restrictions on
repatriation of funds to the United States;
-13-