Hasbro 2013 Annual Report Download - page 23

scheduled new product introductions or our expectations concerning the future acceptance of products by
customers, the content and timing of planned entertainment releases including motion pictures, television and
digital products; and marketing and promotional efforts, research and development activities, liquidity, and
similar matters. Forward-looking statements are inherently subject to risks and uncertainties. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These
statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,”
“could,” “expect,” “intend,” “looking forward,” “may,” “planned,” “potential,” “should,” “will” and “would” or
any variations of words with similar meanings. We note that a variety of factors could cause our actual results
and experience to differ materially from the anticipated results or other expectations expressed or anticipated in
our forward-looking statements. The factors listed below are illustrative and other risks and uncertainties may
arise as are or may be detailed from time to time in our public announcements and our filings with the Securities
and Exchange Commission, such as on Forms 8-K, 10-Q and 10-K. We undertake no obligation to make any
revisions to the forward-looking statements contained in this Annual Report on Form 10-K or in our annual
report to shareholders to reflect events or circumstances occurring after the date of the filing of this report.
Unless otherwise specifically indicated, all dollar or share amounts herein are expressed in thousands of dollars
or shares, except for per share amounts.
We are focusing our global efforts around our brand architecture, which includes a heightened emphasis
and reliance on our franchise and partner brands.
We have made a strategic decision to focus on fewer, larger global brands as we build our business. We are
moving away from SKU making behaviors, which involve building a large number of products across many
brands, towards global brand building with an emphasis on our franchise and partner brands, which we view as
having the largest global potential. As we concentrate our efforts on a more select group of brands, our future
success depends to a greater extent on our ability to successfully develop those brands across our brand blue print
and to maintain and extend the reach and relevance of those brands to global consumers in wide array of
markets. In 2013 revenues from our seven franchise brands, LITTLEST PET SHOP, MAGIC: THE
GATHERING, MONOPOLY, NERF, MY LITTLE PONY, PLAY-DOH and TRANSFORMERS, totaled 44%
of our aggregate net revenues. Our key partner brands, such as DISNEY, MARVEL, LUCASFILM, SESAME
STREET and ROVIO, also constitute a significant portion of our overall business. Together our franchise and
partner brands are critical to our business. If we are unable to successfully execute this strategy and to maintain
and develop our franchise and key partner brands in the future, such that our product offerings based on these
brands are not sought after by consumers, our revenues and profits will decline and our business performance
will be harmed.
Consumer interests change rapidly, making it difficult to design and develop products which will be popular
with children and families.
The interests of children and families evolve extremely quickly and can change dramatically from year to
year. To be successful we must correctly anticipate the types of entertainment content, products and play patterns
which will capture children’s and families’ interests and imagination and quickly develop and introduce
innovative products which can compete successfully for consumers’ limited time, attention and spending. This
challenge is more difficult with the ever increasing utilization of technology and digital media in entertainment
offerings, and the increasing breadth of entertainment available to consumers. Evolving consumer tastes and
shifting interests, coupled with an ever changing and expanding pipeline of entertainment and consumer
properties and products which compete for children’s and families’ interest and acceptance, create an
environment in which some products can fail to achieve consumer acceptance, and other products can be popular
during a certain period of time but then be rapidly replaced. As a result, individual child and family entertainment
products and properties often have short consumer life cycles. If we devote time and resources to developing
entertainment and products that consumers do not find interesting enough to buy in significant quantities to be
profitable to us, our revenues and profits may decline and our business performance may be damaged.
Additionally, our business is increasingly global and depends on interest in and acceptance of our child and
family entertainment products and properties by consumers in diverse markets around the world with different
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