Hasbro 2014 Annual Report Download - page 37

Not only may our individual financial performance impact our ability to access sources of external
financing, but significant disruptions to credit markets in general may also harm our ability to obtain financing.
In times of severe economic downturn and/or distress in the credit markets, it is possible that one or more sources
of external financing may be unable or unwilling to provide funding to us. In such a situation, it may be that we
would be unable to access funding under our existing credit facilities, and it might not be possible to find
alternative sources of funding.
We also may choose to finance our capital needs, from time to time, through the issuance of debt securities.
Our ability to issue such securities on satisfactory terms, if at all, will depend on the state of our business and
financial condition, any ratings issued by major credit rating agencies, market interest rates, and the overall
condition of the financial and credit markets at the time of the offering. The condition of the credit markets and
prevailing interest rates have fluctuated significantly in the past and are likely to fluctuate in the future.
Variations in these factors could make it difficult for us to sell debt securities or require us to offer higher interest
rates in order to sell new debt securities. The failure to receive financing on desirable terms, or at all, could
damage our ability to support our future operations or capital needs or engage in other business activities.
As of December 28, 2014, we had $1,559,895 of total principal amount of long-term debt outstanding. If we
are unable to generate sufficient available cash flow to service our outstanding debt we would need to refinance
such debt or face default. There is no guarantee that we would be able to refinance debt on favorable terms, or at all.
As a manufacturer of consumer products and a large multinational corporation, we are subject to various
government regulations and may be subject to additional regulations in the future, violation of which could
subject us to sanctions or otherwise harm our business. In addition, we could be the subject of future
product liability suits or product recalls, which could harm our business.
As a manufacturer of consumer products, we are subject to significant government regulations, including, in
the United States, under The Consumer Products Safety Act, The Federal Hazardous Substances Act, and The
Flammable Fabrics Act, as well as under product safety and consumer protection statutes in our international
markets. In addition, certain of our products are subject to regulation by the Food and Drug Administration or
similar international authorities. In addition, advertising to children is subject to regulation by the Federal Trade
Commission, the Federal Communications Commission and a host of other agencies globally, and the collection
of information from children under the age of thirteen is subject to the provisions of the Children’s Online
Privacy Protection Act and other privacy laws around the world. While we take all the steps we believe are
necessary to comply with these acts, there can be no assurance that we will be in compliance and failure to
comply with these acts could result in sanctions which could have a negative impact on our business, financial
condition and results of operations. We may also be subject to involuntary product recalls or may voluntarily
conduct a product recall. While costs associated with product recalls have generally not been material to our
business, the costs associated with future product recalls individually or in the aggregate in any given fiscal year
could be significant. In addition, any product recall, regardless of direct costs of the recall, may harm consumer
perceptions of our products and have a negative impact on our future revenues and results of operations.
Governments and regulatory agencies in the markets where we manufacture and sell products may enact
additional regulations relating to product safety and consumer protection in the future and may also increase the
penalties for failure to comply with product safety and consumer protection regulations. In addition, one or more
of our customers might require changes in our products, such as the non-use of certain materials, in the future.
Complying with any such additional regulations or requirements could impose increased costs on our business.
Similarly, increased penalties for non-compliance could subject us to greater expense in the event any of our
products were found to not comply with such regulations. Such increased costs or penalties could harm our
business.
As a large, multinational corporation, we are subject to a host of governmental regulations throughout the
world, including antitrust, customs and tax requirements, anti-boycott regulations, environmental regulations and
the Foreign Corrupt Practices Act. Complying with these regulations imposes costs on us which can reduce our
profitability and our failure to successfully comply with any such legal requirements could subject us to
monetary liabilities and other sanctions that could further harm our business and financial condition.
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