Yahoo 2015 Annual Report Download - page 28

experience may adversely impact our financial results, cash flows and financial condition. Further, we
hedge a portion of our net investment in Yahoo Japan Corporation (“Yahoo Japan”) with currency
forward contracts and option contracts. If the Japanese yen has appreciated at maturity beyond the
contract execution rate, we would be required to settle the contract by making a cash payment
which could be material and could adversely impact our cash flows and financial condition. See Part I,
Item 3—“Quantitative and Qualitative Disclosures About Market Risk” of this Annual Report.
Acquisitions and strategic investments could result in adverse impacts on our operations and in
unanticipated liabilities.
We have acquired, and have made strategic investments in, a number of companies (including
through joint ventures) in the past, and we may make additional acquisitions and strategic
investments in the future. Such transactions may result in use of our cash resources, dilutive
issuances of our equity securities, or incurrence of debt. Such transactions may also result in
amortization expenses related to intangible assets. Our acquisitions and strategic investments to
date were accompanied by a number of risks, including:
• the difficulty of integrating the operations, personnel, systems, and controls of acquired
companies as a result of cultural, regulatory, systems, and operational differences;
• the potential disruption of our ongoing business and distraction of management;
• the incurrence of additional operating losses and operating expenses of the businesses we
acquired or in which we invested;
• the difficulty of integrating acquired technology and rights into our services and unanticipated
expenses related to such integration;
• the failure to successfully further develop an acquired business or technology and any resulting
impairment of amounts currently capitalized as intangible assets;
• the failure of strategic investments to perform as expected or to meet financial projections;
• the potential for patent and trademark infringement and data privacy and security claims against
the acquired companies, or companies in which we have invested;
• litigation or other claims in connection with acquisitions, acquired companies, or companies in
which we have invested;
• the impairment or loss of relationships with customers and partners of the companies we
acquired or in which we invested or with our customers and partners as a result of the integration
of acquired operations;
• the impairment of relationships with, or failure to retain, employees of acquired companies or our
existing employees as a result of integration of new personnel;
• our lack of, or limitations on our, control over the operations of our joint venture companies;
• in the case of foreign acquisitions and investments, the impact of particular economic, tax,
currency, political, legal and regulatory risks associated with specific countries; and
• the impact of known potential liabilities or liabilities that may be unknown, including as a result of
inadequate internal controls, associated with the companies we acquired or in which we invested.
We are likely to experience similar risks in connection with our future acquisitions and strategic
investments. Our failure to be successful in addressing these risks or other problems encountered in
connection with our past or future acquisitions and strategic investments could cause us to fail to
realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and
harm our business generally.
24