Hasbro 2012 Annual Report Download - page 30

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capital funding and liquidity. There is no guarantee that we will be able to issue commercial paper on favorable
terms, or at all, at any given point in time. At December 30, 2012 there was $209,200 outstanding under this
program.
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 30, 2012, we had $1,384,895 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 Childrens’ Online
Privacy Protection Act. 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.
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