Hasbro 2014 Annual Report Download - page 38

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. 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 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 process 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
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