Hasbro 2015 Annual Report Download - page 35

the ability to establish and operate compelling entertainment channels. Additionally, through our acquisition of a
70% interest in Backflip Studios, we looked to strengthen our mobile gaming expertise. However, we cannot be
certain that the products and offerings of companies we may acquire, or acquire an interest in, will achieve or
maintain popularity with consumers in the future or that any such acquired companies or investments will allow
us to more effectively market our products or to grow our business. In some cases, we expect that the integration
of the companies that we may 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 may acquire or invest in companies that we believe have strong and creative management, in
which case we may 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 would continue to work for
us after the acquisition or that they would develop popular and profitable products or services in the future. There
is no guarantee that any acquisition or investment we may make will be successful or beneficial, and acquisitions
can consume significant amounts of management attention and other resources, which may negatively impact
other aspects of our business.
Failure to successfully operate our information systems and implement new technology effectively could
disrupt our business or reduce our sales or profitability.
We rely extensively on various information technology systems and software applications to manage many
aspects of our business, including product development, management of our supply chain, sale and delivery of our
products, financial reporting and various other processes and transactions. We are critically dependent on the integrity,
security and consistent operations of these systems and related back-up systems. These systems are subject to damage
or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other
security breaches, catastrophic events such as hurricanes, fires, floods, earthquakes, tornadoes, acts of war or terrorism
and usage errors by our employees. The efficient operation and successful growth of our business depends on these
information systems, including our ability to operate them effectively and to select and implement appropriate
upgrades or new technologies and systems and adequate disaster recovery systems successfully. The failure of our
information systems to perform as designed or our failure to implement and operate them effectively could disrupt our
business, require significant capital investments to remediate a problem or subject us to liability.
If our electronic data is compromised our business could be significantly harmed.
We maintain significant amounts of data electronically in locations around the world. This data relates to all
aspects of our business, including current and future products and entertainment under development, and also
contains certain customer, consumer, supplier, partner and employee data. We maintain systems and processes
designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion or
tampering that could compromise the integrity and privacy of this data. In addition, we provide confidential and
proprietary information to our third-party business partners in certain cases where doing so is necessary to
conduct our business. While we obtain assurances from those parties that they have systems and processes in
place to protect such data, and where applicable, that they will take steps to assure the protections of such data by
third parties, nonetheless those partners may also be subject to data intrusion or otherwise compromise the
protection of such data. Any compromise of the confidential data of our customers, consumers, suppliers,
partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through
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 a large multinational corporation, 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
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