Hasbro 2014 Annual Report Download - page 39

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breach of our information technology systems or other means could substantially disrupt our operations, harm
our customers, consumers and other business partners, damage our reputation, violate applicable laws and
regulations and subject us to additional costs and liabilities and loss of business that could be material.
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, including potential liability from personal injury or property
damage claims by the users of products that have been or may be developed by us as well as claims by third
parties that our products infringe upon or misuse such third parties’ property or rights. 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 cost 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. Any
successful claim against us could significantly harm our business, financial condition and results of operations.
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 28,
2014, $593,438, or 13.1%, 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 and consequently 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 corporate functions as well as the Global Operations and Entertainment and
Licensing segments. The Company also owns an adjacent building consisting of approximately 23,000 square
feet and leases a building in East Providence, Rhode Island consisting of approximately 120,000 square feet, both
of which are used by corporate functions. The Company leases a facility in Providence, Rhode Island consisting
of approximately 136,000 square feet which is used primarily by the U.S. and Canada segment, as well as the
Entertainment and Licensing and Global Operations segments. In addition to the above facilities, the Company
also leases office space consisting of approximately 111,300 square feet in Renton, Washington as well as
warehouse space aggregating approximately 2,238,000 square feet in Georgia, California, Texas and Quebec that
are also used by the U.S. and Canada segment. The Company leases approximately 51,000 square feet in
Burbank, California and 24,000 square feet in Boulder, Colorado that are used by the Entertainment and
Licensing segment.
The Company owns manufacturing plants in East Longmeadow, Massachusetts and Waterford, Ireland used
in our Global Operations segment. The East Longmeadow plant consists of approximately 1,148,000 square feet.
The Waterford plant consists of approximately 244,000 square feet. The Global Operations segment also leases
an aggregate of 98,000 square feet of office and warehouse space in Hong Kong as well as approximately 82,000
square feet of office space leased in the People’s Republic of China.
Outside of its United States and Canada facilities, the Company leases or owns property in over 30
countries. The primary locations for facilities in the International segment are in the United Kingdom, Mexico,
Germany, France, Spain, Australia, Russia and Brazil, all of which are comprised of both office and warehouse
space. In addition, the Company also leases offices in Switzerland and the Netherlands which are primarily used
in corporate functions.
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