Hasbro 2006 Annual Report Download - page 83

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Other Information
Hasbro markets its products primarily to customers in the retail sector. Although the Company closely
monitors the creditworthiness of its customers, adjusting credit policies and limits as deemed appropriate, a
substantial portion of its customers’ ability to discharge amounts owed is generally dependent upon the overall
retail economic environment.
Sales to the Company’s three largest customers, Wal-Mart Stores, Inc., Target Corporation and Toys ‘R
Us, Inc., amounted to 24%, 13% and 11%, respectively, of consolidated net revenues during 2006, 24%, 12%
and 12% during 2005 and 21%, 10% and 15% during 2004. These net revenues were primarily related to the
North American segment.
Hasbro purchases certain components and accessories used in its manufacturing process and certain
finished products from manufacturers in the Far East. The Company’s reliance on external sources of
manufacturing can be shifted, over a period of time, to alternative sources of supply for products it sells,
should such changes be necessary. However, if the Company were prevented from obtaining products from a
substantial number of its current Far East suppliers due to political, labor or other factors beyond its control,
the Company’s operations would be disrupted, potentially for a significant period of time, while alternative
sources of product were secured. The imposition of trade sanctions by the United States or the European
Union against a class of products imported by Hasbro from, or the loss of “normal trade relations” status by,
the People’s Republic of China could significantly increase the cost of the Company’s products imported into
the United States or Europe.
72
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)