Hasbro 2012 Annual Report Download - page 33

square feet which was used as temporary space for our Gaming Center of Excellence. In addition to the above
facilities, the Company also leases office space consisting of approximately 95,400 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 also leases approximately
51,000 square feet in Burbank, California that is 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 88,000 square feet of office and warehouse space in Hong Kong as well as approximately
128,000 square feet of office space leased in the People’s Republic of China.
In the International segment, the Company leases or owns property in over 35 countries. The primary
locations 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. The Company also leases
offices in Switzerland and the Netherlands which are primarily used in corporate functions.
The above properties consist, in general, of brick, cinder block or concrete block buildings which the
Company believes are in good condition and well maintained.
The Company believes that its facilities are adequate for its needs. The Company believes that, should it not
be able to renew any of the leases related to its leased facilities, it could secure similar substitute properties
without a material adverse impact on its operations.
Item 3. Legal Proceedings.
The Company has outstanding tax assessments in Mexico relating to the years 2000 through 2005 and 2007.
These tax assessments, which total approximately $206 million (at year-end 2012 exchange rates) in aggregate
(including interest, penalties, and inflation updates), are based on transfer pricing issues between the Company’s
subsidiaries with respect to the Company’s operations in Mexico. The Company has filed suit in the Federal
Tribunal of Fiscal and Administrative Justice in Mexico challenging the 2000 through 2004 assessments. The
Company filed the suit related to the 2000 and 2001 assessments in May 2009; the 2002 assessment in June
2008; the 2003 assessment in March 2009; and the 2004 assessment in July 2011. The Company is challenging
the 2005 assessment through administrative appeals and expects to file for administrative appeal with respect to
the 2007 assessment. The Company expects to be successful in sustaining its positions for all of these years.
However, in order to challenge the outstanding tax assessments related to 2000 through 2004 in court, as is usual
and customary in Mexico in these matters, the Company was required to either make a deposit or post a bond in
the full amount of the assessments. The Company elected to post bonds and accordingly, as of December 30,
2012, bonds totaling approximately $175 million (at year-end 2012 exchange rates) have been posted related to
the assessments for the years 2000 through 2004. These bonds guarantee the full amounts of the related
outstanding tax assessments in the event the Company is not successful in its challenge to them. The Company
does not currently expect that it will be required to make a deposit or post a bond related to the 2005 or 2007
assessments as the Company is challenging, or plans to challenge, these through administrative appeals.
We are currently party to certain other legal proceedings, none of which we believe to be material to our
business or financial condition.
Item 4. Mine Safety Disclosures.
None.
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