Hasbro 2006 Annual Report Download - page 14

accessories. In 2007, we plan to continue to increase the visibility of our PLAYSKOOL brand through an
agreement with the CVS/pharmacy retail chain whereby PLAYSKOOL will serve as the private label brand for
CVS’ baby care products.
Our tweens toys category generally markets products under the TIGER ELECTRONICS and NERF
brands and seeks to target those children who have outgrown traditional toys. The age group targeted by this
category is generally 8 to 12 years old. In recent years, we have used our consumer insights and electronic
innovation to develop a strong line of products focusing on this target audience. Our major tweens toys
product lines in 2006 included I-DOG and NERF. As demonstrated through our I-DOG product, an interactive
pet that acts as an accessory to an MP3 player, we seek to draw on the popularity of electronic trends in our
tween product offerings. In 2007, we will seek to leverage the interest of this age group in music and musical
instruments through the introduction of the POWER TOUR GUITAR product.
International
In addition to our business in the United States, Mexico and Canada, in 2006 we operated in more than
20 other countries, selling a representative range of the toy and game products marketed in North America,
together with some items that are sold only internationally. The major geographic regions included in the
International segment are Europe, Asia Pacific, South America and Latin America, excluding Mexico. In
addition to growing core brands and leveraging opportunistic toy lines and licenses, we seek to grow our
international business by continuing to expand into Eastern Europe and emerging markets in Asia and Latin
and South America. Key international brands for 2006 included MONOPOLY, MY LITTLE PONY,
PLAYSKOOL, STAR WARS, and LITTLEST PET SHOP.
Other Segments
In our Global Operations segment, we manufacture and source production of substantially all of our toy
and game products. The Company operates manufacturing facilities in East Longmeadow, Massachusetts and
Waterford, Ireland. Sourcing of our other production is done through unrelated manufacturers in various Far
East countries, principally China, using a Hong Kong based subsidiary for quality control and order
coordination purposes. See “Manufacturing and Importing” below for more details concerning overseas
manufacturing.
Through our other segment, the Hasbro Products Group, we generate revenue through the out-licensing
worldwide of certain of our intellectual properties to third parties for promotional and merchandising uses in
businesses which do not compete directly with our own product offerings.
Other Information
To further extend our range of products in the various segments of our business, we sell our toy and game
products directly to retailers, primarily on a direct import basis from the Far East. These sales are reflected in
the revenue of the related segment where the customer resides.
Certain of our products are licensed to other companies for sale in selected countries where we do not
otherwise have a direct business presence.
No individual line of products accounted for 10% or more of our consolidated net revenues during our
2006 or 2004 fiscal years. During the 2005 fiscal year, revenues generated from the sale of STAR WARS
products produced under our license with Lucas Licensing and Lucasfilm were approximately $494,000, which
was 16% of our consolidated net revenues in 2005. No other line of products constituted 10% or more of our
consolidated net revenues in 2005.
Working Capital Requirements
Our working capital needs are primarily financed through cash generated from operations and, when
necessary, short-term borrowings and proceeds from our accounts receivable securitization program. Our
borrowings and the use of our accounts receivable program generally reach peak levels during the fourth
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