Hasbro 2013 Annual Report Download - page 35

intellectual property has been internally developed and has no carrying value on our consolidated balance sheets.
However, as of December 29, 2013, we had $375,999 of acquired product and licensing rights included in other
assets on our consolidated balance sheets. Declines in the profitability of the acquired brands or licensed products
or our decision to reduce our focus or exit these brands may impact our ability to recover the carrying value of
the related assets and could result in an impairment charge. Reduction in our net earnings caused by impairment
charges could harm our financial results.
We may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those benefits
may be delayed or reduced in their realization.
Acquisitions and investments have been a component of our historical growth and have enabled us to further
broaden and diversify our product offerings. In making acquisitions or investments, we target companies that we
believe offer attractive family entertainment products or offerings and/or the ability for us to leverage our
entertainment offerings. In the case of our joint venture with Discovery, we looked to partner with a company
that has shown 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. 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.
Failure to 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 management of our supply chain, sale and delivery of our products and various
other process transactions. We are 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, 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 and also contains certain customer and consumer 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
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