Hasbro 2006 Annual Report Download - page 3

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To Our Shareholders,
We would like to begin this Shareholder letter by thanking you
for the investment you made in Hasbro. Equally important, we
want you to know that Hasbro’s management team is committed
to seeing your investment grow. 2006 was a year of signifi cant
achievement for Hasbro, one of the strongest in our Company’s
history. Not only did we achieve record fi nancial results, we made
critical process improvements that will improve our execution in
the years ahead. 2006 was particularly rewarding as it not only
represented the highest net earnings in our history but was
also our 6th consecutive year of earnings per share growth.
Financial Results
In 2006 we delivered:
• Earnings per share growth of 18% to $1.29 per share, compared to $1.09 per
share in 2005.
• Worldwide net revenue growth of 2% to $3.2 billion, driven principally by the excellent
performance of our core brands. Excluding STAR WARS, revenues grew 11% or $273
million for the year, further proof that our core brand strategy is working.
• Operating profi t of $376 million or 11.9% of revenue, the highest operating profi t in our
history and a 21% improvement compared to $311 million or 10.1% of revenue in 2005.
In recognition of our strong fi nancial performance and our commitment to creating value for our
shareholders, the Board of Directors increased the quarterly dividend in February by $0.04 per share
to $0.16 per share, the highest quarterly dividend in Hasbro’s history. In addition, since June of 2005,
we have repurchased 25.2 million shares of common stock, or 14% of our shares outstanding, at
a total cost of $504.8 million. As we have delivered on our goals over the years, it is rewarding for
us, and surely for you, our shareholders, to see our accomplishments refl ected in our share price.
At the end of 2006, our share price was $27.25, representing a 34% increase in our stock price
from the prior year end. In comparison, it is even more meaningful to go back to 2000. If you had
invested $100 in Hasbro stock at the end of 2000, your investment would have been worth $276 at
the end of 2006, including reinvestment of dividends and stock price appreciation, far exceeding
the performance of the S&P 500 Index and the Russell 1000 Consumer Discretionary Index.