Hasbro 2008 Annual Report Download - page 27

From time to time, we are involved in litigation, arbitration or regulatory matters where the outcome is
uncertain and which could entail significant expense.
As is the case with many large multinational corporations, we are subject from time to time to regulatory
investigations, litigation and arbitration disputes. Because the outcome of litigation, arbitration and regulatory
investigations is inherently difficult to predict, it is possible that the outcome of any of these matters could
entail significant expense for us and harm our business. The fact that we operate in significant numbers of
international markets also increases the risk that we may face legal and regulatory exposures as we attempt to
comply with a large number of varying legal and regulatory requirements.
We have a material amount of goodwill which, if it becomes impaired, would result in a reduction in our
net earnings.
Goodwill is the amount by which the cost of an acquisition exceeds the fair value of the net assets we
acquire. Current accounting standards require that goodwill no longer be amortized but instead be periodically
evaluated for impairment based on the fair value of the reporting unit. At December 28, 2008, approximately
$474,497 or 15.0%, of our total assets represented goodwill. Declines in our profitability may impact the fair
value of our reporting units, which could result in a write-down of our goodwill. Reductions in our net
earnings caused by the write-down of goodwill could harm our results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Hasbro owns its corporate headquarters in Pawtucket, Rhode Island consisting of approximately
343,000 square feet, which is used in the U.S. and Canada, Global Operations and Other segments as well as
for corporate functions. The Company also owns an adjacent building consisting of approximately
23,000 square feet that is used in the corporate function. In addition, the Company leases a building in East
Providence, Rhode Island consisting of approximately 120,000 square feet that is used in the corporate
function as well as in the Global Operations and Other segments. In addition to the above facilities, the
Company also leases office space consisting of approximately 95,400 square feet in Renton, Washington as
well as warehouse space aggregating approximately 1,950,000 square feet in Georgia, California, Texas and
Quebec that are also used in the U.S. and Canada segment.
The Company owns manufacturing plants in East Longmeadow, Massachusetts and Waterford, Ireland.
The East Longmeadow plant consists of approximately 1,148,000 square feet and is used in the U.S. and
Canada and Global Operations segments. The Waterford plant consists of approximately 244,000 square feet
and is used in our Global Operations segment. The Global Operations segment also leases an aggregate of
95,300 square feet of office and warehouse space in Hong Kong used in this segment as well as approximately
52,300 square feet of office space leased in China.
In the International segment, the Company leases or owns property in over 25 countries. The primary
locations in the International segment are in the United Kingdom, Mexico, Germany, France, Spain, and
Australia, all of which are comprised of both office and warehouse space.
The above properties consist, in general, of brick, cinder block or concrete block buildings which the
Company believes are in good condition and well maintained.
The Company believes that its facilities are adequate for its needs. The Company believes that should it
not be able to renew any of the leases related to its leased facilities that it could secure similar substitute
properties without a material adverse impact on its operations.
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