Hasbro 2010 Annual Report Download - page 28

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licensing rights included in other assets on our balance sheet. Declines in the profitability of the acquired
brands or licensed products may impact our ability to recover the carrying value of the related assets and
could result in an impairment charge. Reduction in our net earnings caused by impairment charges could harm
our financial results.
We may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those
benefits may be delayed or reduced in their realization.
Acquisitions have been a significant part of our historical growth and have enabled us to further broaden
and diversify our product offerings. In making acquisitions, we target companies that we believe offer
attractive family entertainment products or the ability for us to leverage our entertainment offerings. In the
case of our joint venture with Discovery, we looked to partner with a company that has shown the ability to
establish and operate compelling entertainment channels. However, we cannot be certain that the products of
companies we may acquire, or acquire an interest in, in the future will achieve or maintain popularity with
consumers or that any such acquired companies or investments will allow us to more effectively market our
products. In some cases, we expect that the integration of the companies that we acquire into our operations
will create production, marketing and other operating synergies which will produce greater revenue growth
and profitability and, where applicable, cost savings, operating efficiencies and other advantages. However, we
cannot be certain that these synergies, efficiencies and cost savings will be realized. Even if achieved, these
benefits may be delayed or reduced in their realization. In other cases, we acquire companies that we believe
have strong and creative management, in which case we plan to operate them more autonomously rather than
fully integrating them into our operations. We cannot be certain that the key talented individuals at these
companies will continue to work for us after the acquisition or that they will develop popular and profitable
products or services in the future.
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. Goodwill is not amortized and is required to be periodically evaluated for impairment. At
December 26, 2010, $474,813, or 11.6%, 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 or our investment in the joint venture
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 by the U.S. and Canada, Global Operations and Entertainment and
Licensing 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
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