Hasbro 2007 Annual Report Download

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ANNUAL REPORT 

Table of contents

  • Page 1
    ANNUAL REPORT ï™...

  • Page 2
    ...quarterly dividend of $0.16 per common share. Also in February of 2008, the Board of Directors authorized the Company to repurchase an additional $500 million in common stock. Products Shown: Are You Smarter Than A 5th Grader? Transformers® Bumblebee™ Turbo Tooth Tunes™ Toothbrush Littlest Pet...

  • Page 3
    ... and exciting new product, and in 2008, we plan to continue this with the introduction of FURREAL FRIENDS BISCUIT, MY LOVIN' PUP, the worldwide launch of LITTLEST PET SHOP VIRTUAL INTERACTIVE PETS (VIPs), and the 25th birthday celebration of MY LITTLE PONY. PLAYSKOOL also had a good year and is...

  • Page 4
    ...of all the latest happenings within your company by visiting Hasbro's website at www.hasbro.com. There you will find the latest information on earnings, new products, corporate social responsibility, as well as other important updates. We thank you for your continued support, and we look forward to...

  • Page 5
    ...Chairwoman The Stern Group, Inc. Kenneth A. Bronfin President Hearst Interactive Media Jack M. Connors, Jr. Chairman Emeritus Hill, Holliday, Connors, Cosmopulos, Inc. Executive Officers Alfred J. Verrecchia President and Chief Executive Officer Duncan Billing Global Development Officer Brian...

  • Page 6
    ... business plans, product introductions, entertainment releases, revenues, earnings and other aspects of our future financial performance and use of funds. See the discussion of uncertainties, risks and assumptions associated with these statements in Item 1A of our enclosed annual report on Form...

  • Page 7
    ...Rhode Island (Address of Principal Executive Offices) 02862 (Zip Code) Registrant's telephone number, including area code (401) 431-8697 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock Preference Share Purchase...

  • Page 8
    ... 15. PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accountant Fees...

  • Page 9
    ... products and services, including the design, manufacture and marketing of games and toys. Internationally and in the United States, our widely recognized core brands such as PLAYSKOOL, TRANSFORMERS, MY LITTLE PONY, LITTLEST PET SHOP, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER...

  • Page 10
    ..., the Company also develops and markets products designed for collectors, which has been a key component of the success of the STAR WARS brand. In our girls' toys category, we seek to provide a traditional and wholesome play experience. Girls' toys include LITTLEST PET SHOP, MY LITTLE PONY, FURREAL...

  • Page 11
    ... PET SHOP, MONOPOLY, MARVEL, MY LITTLE PONY, and PLAYSKOOL. Other Segments In our Global Operations segment, we manufacture and source production of substantially all of our toy and game products. The Company owns and operates manufacturing facilities in East Longmeadow, Massachusetts and Waterford...

  • Page 12
    ... by our internal staff of designers, artists, model makers and engineers. In addition to the design and development work performed by our own staff, we deal with a number of independent toy and game designers for whose designs and ideas we compete with other toy and game manufacturers. Rights to...

  • Page 13
    ... increases in sales of the related products in those years. Marketing and Sales Our products are sold nationally and internationally to a broad spectrum of customers, including wholesalers, distributors, chain stores, discount stores, mail order houses, catalog stores, department stores and other...

  • Page 14
    ... United States and international toy and game designers, manufacturers and marketers. Competition is based primarily on meeting consumer entertainment preferences and on the quality and play value of our products. To a lesser extent, competition is also based on product pricing. In addition to...

  • Page 15
    .... Availability of Information Our internet address is http://www.hasbro.com. We make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act...

  • Page 16
    ... our profitability, business and financial condition. In our industry, it is important to identify and offer what are considered to be the "hot" toys and games on children's "wish lists". Our continued success will depend on our ability to develop, market and sell popular toys, games and children...

  • Page 17
    .... Any delay or cancellation of planned product development work, introductions, or media support may decrease the number of products we sell and harm our business. Our business is seasonal and therefore our annual operating results will depend, in large part, on our sales during the relatively brief...

  • Page 18
    ... the purchasing policies of our major customers could have a significant impact on us. We depend upon a relatively small retail customer base to sell the majority of our products. For the fiscal year ended December 30, 2007, Wal-Mart Stores, Inc., Target Corporation, and Toys "R" Us, Inc., accounted...

  • Page 19
    ... or exploitive conditions. The Global Business Ethics Principles address a number of issues, including working hours and compensation, health and safety, and abuse and discrimination. In addition, Hasbro requires that our products supplied by third-party manufacturers be produced in compliance with...

  • Page 20
    ... and international sourcing of manufacturing to our business, our financial condition and results of operations could be significantly harmed if any of the risks described above were to occur. Market conditions, including commodity and fuel prices, public health conditions and other third party...

  • Page 21
    ...of direct costs of the recall, may harm consumer perceptions of our products and have a negative impact on our future sales and results of operations. Governments and regulatory agencies in the markets where we manufacture and sell products may enact additional regulations relating to product safety...

  • Page 22
    ... intellectual property rights could harm our business and competitive position. Much of our intellectual property has been internally developed and has no carrying value on our balance sheet. As of December 30, 2007, we had approximately $486,232 of acquired product and licensing rights included in...

  • Page 23
    ...seasonal nature of our business, in order to meet our working capital needs, particularly those in the third and fourth quarters, we rely on our revolving credit facility and our other credit facilities for working capital. We currently have a five-year revolving credit agreement, which provides for...

  • Page 24
    ... Unresolved Staff Comments Hasbro owns its corporate headquarters in Pawtucket, Rhode Island consisting of approximately 343,000 square feet, which is used in the North American and Global Operations segments as well as for corporate functions. The Company also owns an adjacent building consisting...

  • Page 25
    ...Marketing Officer, U.S. Toy Group since 2004; prior thereto, General Manager, Big Kids Division, since 2002. (6) Prior thereto, Vice President and Assistant Controller from 1998 to 2003. (7) Effective May 22, 2008, Mr. Verrecchia will step down as President and Chief Executive Officer of the Company...

  • Page 26
    ... Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock, par value $.50 per share (the "Common Stock"), is traded on the New York Stock Exchange under the symbol "HAS". The following table sets forth the high and low sales prices as reported on the...

  • Page 27
    ... on a number of factors, including the price of the Company's stock. The Company may suspend or discontinue the program at any time and there is no expiration date. Item 6. Selected Financial Data (Thousands of dollars and shares except per share data and ratios) 2007 2006 Fiscal Year 2005 2004...

  • Page 28
    ... with a core brand. By focusing on core brands, the Company is working to build a more consistent revenue stream and basis for future growth. In 2007 the Company had strong sales of core brand products, namely TRANSFORMERS, LITTLEST PET SHOP, MY LITTLE PONY, PLAYSKOOL, MONOPOLY, NERF, and PLAY-DOH...

  • Page 29
    ..., such as mobile phones, gaming consoles and personal computers, based on a broad spectrum of the Company's intellectual properties, including MONOPOLY, SCRABBLE, YAHTZEE, NERF, TONKA and LITTLEST PET SHOP. As part of this agreement, the Company has also obtained the rights to create toys and non...

  • Page 30
    ...each of the three fiscal years ended December 30, 2007. 2007 2006 2005 Net revenues ...Cost of sales ...Gross profit ...Amortization ...Royalties ...Research and product development ...Advertising ...Selling, distribution and administration ...Operating profit ...Interest expense ...Interest income...

  • Page 31
    ... quarter of 2007 related to the July 2007 EASY-BAKE oven recall. The increase in gross profit was also partially offset by higher royalty expense as the result of the increased sales of MARVEL and TRANSFORMERS movie-related products. Operating profit was also impacted by higher advertising expense...

  • Page 32
    ...from LITTLEST PET SHOP, PLAYSKOOL and MONOPOLY products. To a lesser extent, 2006 net revenues were also positively impacted by increased sales of MY LITTLE PONY, TRANSFORMERS and PLAY-DOH products as well as the reintroduction of the BABY ALIVE doll. International segment operating profit decreased...

  • Page 33
    ...products that have higher gross margins, such as LITTLEST PET SHOP products and traditional board games, such as MONOPOLY. Gross profit in 2006 was negatively impacted by a charge of approximately $10,300 related to the Company's decision to transfer certain manufacturing activities from its Ireland...

  • Page 34
    ... 123R in 2006 which required that the Company measure all stock-based compensation awards using a fair value method and record such expense in its financial statements. The remainder of the increase primarily related to increased sales and marketing expense in 2006 associated with the higher level...

  • Page 35
    ... to revenues from STAR WARS products, most of which had been paid in prior years. In 2007, 2006 and 2005, operating cash flows were impacted by royalty advances paid of $70,000, $105,000 and $35,000 related to MARVEL in 2007 and 2006 and STAR WARS in 2005, respectively. Accounts receivable increased...

  • Page 36
    ... three years ended December 30, 2007, depreciation and amortization of plant and equipment was $88,804, $67,773, and $78,097, respectively. The Company commits to inventory production, advertising and marketing expenditures prior to the peak third and fourth quarter retail selling season. Accounts...

  • Page 37
    ...a cost-effective source of working capital. Based on the amount of eligible accounts receivable as of December 30, 2007, the Company had $266,550 available to sell under this program of which $250,000 was utilized. The Company has a revolving credit agreement (the "Agreement") which provides it with...

  • Page 38
    ... may also put the notes back to Hasbro in December 2011 and December 2016 at the original principal amount. At that time, the purchase price may be paid in cash, shares of common stock or a combination of the two, at the Company's discretion. While the Company's current intent is to settle in cash...

  • Page 39
    ... consolidated statements of operations. The Company routinely commits to promotional sales allowance programs with customers. These allowances primarily relate to fixed programs, which the customer earns based on purchases of Company products during the year. Discounts are recorded as a reduction of...

  • Page 40
    ... based upon rates of return at the measurement date on high quality corporate bond investments currently available and expected to be available during the period to maturity of the pension benefits. Based on this long-term corporate bond yield at December 30, 2007, the Company's measurement date for...

  • Page 41
    ... to based only on historical volatility. In 2007 and 2006, as part of its employee stock-based compensation plan, the Company issued contingent stock performance awards, which provide the recipients with the ability to earn shares of the Company's common stock based on the Company's achievement of...

  • Page 42
    ...yet been recognized on the Company's tax return. During 2007, the Mexican Government instituted a tax structure which will result in companies paying the higher of an incomebased tax or an alternative flat tax commencing in 2008. Should the Company be subject to the alternative flat tax, it would be...

  • Page 43
    ... of credit and related instruments of approximately $70,000 at December 30, 2007. Financial Risk Management The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates primarily as the result of sourcing products priced in U.S. dollars, Hong Kong dollars...

  • Page 44
    ... tight and compressed shipping schedules. The business of the Company is characterized by customer order patterns which vary from year to year largely because of differences in the degree of consumer acceptance of a product line, product availability, marketing strategies, inventory levels, policies...

  • Page 45
    ... that an acquirer expense all acquisition related costs. This Statement is required to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of fiscal 2009. In December 2007, the FASB issued Statement of Financial Accounting Standards No...

  • Page 46
    .... 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans". We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Hasbro, Inc.'s internal control over financial reporting as of December 30, 2007, based...

  • Page 47
    ...Additional paid-in capital ...Retained earnings ...Accumulated other comprehensive earnings ...Treasury stock, at cost, 64,487,616 shares in 2007 and 49,074,215 shares in 2006 ...Total shareholders' equity ...Total liabilities and shareholders' equity ...$ 774,458 654,789 259,081 199,912 1,888,240...

  • Page 48
    ...Statements of Operations Fiscal Years Ended in December (Thousands of Dollars Except Per Share Data) 2007 2006 2005 Net revenues ...$3,837,557 Cost of sales ...1,576,621 Gross profit...Expenses Amortization ...Royalties ...Research and product development ...Advertising ...Selling, distribution and...

  • Page 49
    ...of other short-term borrowings ...(1,150) (3,726) (3,685) Purchases of common stock ...(584,349) (456,744) (48,030) Purchase of Lucas warrants ...(200,000) - - Stock option transactions ...82,661 86,257 45,278 Excess tax benefits from stock-based compensation ...17,009 14,959 - Dividends paid ...(94...

  • Page 50
    ... Compensation Retained Earnings Accumulated Other Comprehensive Earnings Treasury Stock Total Shareholders' Equity Balance, December 26, 2004 ...Net earnings ...Other comprehensive loss ...Comprehensive earnings . Stock option and warrant transactions ...Purchases of common stock . Restricted stock...

  • Page 51
    .... For customers on credit who are experiencing financial difficulties, management performs additional financial analyses before shipping orders. The Company uses a variety of financial transactions based on availability and cost, to increase the collectibility of certain of its accounts, including...

  • Page 52
    ... of Dollars and Shares Except Per Share Data) The Company records an allowance for doubtful accounts at the time revenue is recognized based on management's assessment of the business environment, customers' financial condition, historical collection experience, accounts receivable aging and...

  • Page 53
    ... Company royalties as products are sold, in some cases subject to annual minimum guaranteed amounts. Royalty revenues are recognized as they are reported as earned and payment becomes assured, over the life of the agreement. Revenue from product sales less related provisions for discounts, rebates...

  • Page 54
    ... during which the production is first aired. The costs of other advertising, promotion and marketing programs are charged to operations in the fiscal year incurred. Shipping and Handling Hasbro expenses costs related to the shipment and handling of goods to customers as incurred. For 2007, 2006, and...

  • Page 55
    ... has several plans covering certain groups of employees, which may provide benefits to such employees following their period of employment but prior to their retirement. The Company measures the costs of these obligations based on actuarial computations. Risk Management Contracts Hasbro uses foreign...

  • Page 56
    ...swap contracts are with major financial institutions in order to minimize counterparty credit risk. The Company believes that any default by a counterparty would not have a material adverse effect on the financial condition of the Company. Accounting for Stock-Based Compensation At December 30, 2007...

  • Page 57
    ...For the year ended December 25, 2005, the warrants had a more dilutive impact on earnings per share assuming they were treated as an equity contract. Accordingly for 2005, the numerator includes an adjustment to net earnings for the income included therein related to the fair market value adjustment...

  • Page 58
    ... $2,099. The reclassification adjustment for 2006 includes an impairment charge relating to other than temporary decreases in the value of the Company's available-for-sale securities. In accordance with Hasbro's marketable securities accounting policy, as the result of the decline in the fair value...

  • Page 59
    ... annual impairment tests in the fourth quarters of 2007, 2006 and 2005, which indicated that there was no impairment. A portion of the Company's goodwill and other intangible assets reside in the Corporate segment of the business. For purposes of testing pursuant to Statement of Financial Accounting...

  • Page 60
    ...the remaining digital gaming rights for its owned or controlled properties held by Infogrames Entertainment SA (Infogrames). The acquisition price of $19,000 included $18,000 in cash and $1,000 of non-cash consideration in the form of the return of 39 shares of preferred stock held by the Company in...

  • Page 61
    ..., the adjusted purchase price, which may be subject to further adjustment, totaled approximately $69,000. (5) Financing Arrangements Short-Term Borrowings At December 30, 2007, Hasbro had available an unsecured committed line and unsecured uncommitted lines of credit from various banks approximating...

  • Page 62
    ... to purchase the warrants from Lucas for a price to be paid at the Company's election of either $200,000 in cash or the equivalent of $220,000 in shares of the Company's common stock, such stock being valued at the time of the exercise of the option. Also, the warrant amendment agreement provided...

  • Page 63
    ... day period ending on the last trading day of the calendar quarter, the holders have the right to convert the notes to shares of the Company's common stock at the initial conversion price of $21.60 in the next calendar quarter. At December 30, 2007, this contingent conversion feature was met and...

  • Page 64
    ... times, the purchase price may be paid in cash, shares of common stock or a combination of the two, at the discretion of the Company. In 2006, the Company repaid in principal amount $32,743 of 8.50% notes due in March 2006. The Company is a party to interest rate swap agreements in order to adjust...

  • Page 65
    ...received deduction for certain international earnings. The deduction was available to corporations during the tax year that includes October 22, 2004 or in the immediately subsequent tax year. In the fourth quarter of 2005, the Company's Board of Directors approved a plan to repatriate approximately...

  • Page 66
    ... are: 2007 2006 Deferred tax assets: Accounts receivable ...$ 20,524 Inventories ...24,608 Losses and tax credit carryforwards ...39,094 Operating expenses ...42,759 Pension ...9,990 Deferred compensation and stock options ...24,477 Postretirement benefits...13,507 Other ...37,274 Gross deferred...

  • Page 67
    .... At December 30, 2007, the Company had accrued potential interest and penalties of $12,020. The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by...

  • Page 68
    ...will entitle its holder to purchase until June 30, 2009, in certain merger or other business combination or recapitalization transactions, at the Right's then current exercise price, a number of the acquiring company's or Hasbro's, as the case may be, common shares having a market value at that time...

  • Page 69
    ...of total unrecognized compensation cost related to restricted stock is $431 and the weighted average period over which this will be expensed is 25 months. In 2007 and 2006, as part of its annual equity grant to executive officers and certain other employees, the Company's Board of Directors approved...

  • Page 70
    ... Share Data) Total compensation expense related to stock options and the stock performance awards recognized under SFAS 123R for the years ended December 30, 2007 and December 31, 2006 was $28,229 and $21,684, respectively, and was recorded as follows: 2007 2006 Cost of sales...Research and product...

  • Page 71
    ...of total unrecognized compensation cost related to stock options is $18,221 and the weighted average period over which this will be expensed is 23.69 months. In 2007 and 2006, the Company granted 31 and 52 shares of common stock, respectively, to its nonemployee members of its Board of Directors. Of...

  • Page 72
    ... by additional employer contributions to the Company's defined contribution plan beginning in 2008. At December 30, 2007, the measurement date, the fair value of the plan assets of the funded plans were in excess of those plans' benefit obligations while the unfunded plans of the Company had an...

  • Page 73
    ... Fair value of plan assets - beginning . Actual return on plan assets ...Employer contribution ...Benefits paid ...Expenses paid ...$ 270,926 . 30,556 . 2,556 . (19,781) . (779) Fair value of plan assets - ending ...$ 283,478 Reconciliation of Funded Status Projected benefit obligation ...$(288,045...

  • Page 74
    ... Return Fund ... 5% 8 14 17 40 16 30% 14 20 - 20 16 100% 100% Hasbro's two major funded plans (the "Plans") are defined benefit pension plans intended to provide retirement benefits to participants in accordance with the benefit structure established by Hasbro, Inc. The Plans' investment managers...

  • Page 75
    ... fiscal year follow: 2007 2006 2005 Weighted average discount rate ...5.83% 5.50% 5.75% Rate of future compensation increases ...4.00% 4.00% 4.00% Long-term rate of return on plan assets ...8.75% 8.75% 8.75% Hasbro works with external benefit investment specialists to assist in the development of...

  • Page 76
    ...482; 2011: $1,635; 2012: $2,398; and 2013 through 2017: $16,091. Postemployment Benefits Hasbro has several plans covering certain groups of employees, which may provide benefits to such employees following their period of active employment but prior to their retirement. These plans include certain...

  • Page 77
    ... Hasbro had unused open letters of credit and related instruments of approximately $70,000 and $71,000 at December 30, 2007 and December 31, 2006, respectively. The Company enters into license agreements with inventors, designers and others for the use of intellectual properties in its products...

  • Page 78
    ... interactive products, tween electronic products, toy-related specialty products, traditional board games and puzzles, DVD- based games, fiction books, and trading card and role-playing games within the United States, Canada and Mexico. Within the International segment, the Company develops, markets...

  • Page 79
    ... Except Per Share Data) Information by segment and a reconciliation to reported amounts are as follows: Revenues from External Customers Affiliate Revenue Operating Profit (Loss) Depreciation and Amortization Capital Additions Total Assets 2007 North America ...$2,460,016 International...1,278,589...

  • Page 80
    ...,539 Principal international markets include Europe, Canada, Mexico, Australia, and Hong Kong. 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...

  • Page 81
    ... 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...

  • Page 82
    ... of Dollars and Shares Except Per Share Data) (16) Quarterly Financial Data (Unaudited) First Second Quarter Third Fourth Full Year 2007 Net revenues ...Gross profit ...Earnings before income taxes ...Net earnings ...Per common share Net earnings Basic ...Diluted ...Market price High ...Low ...Cash...

  • Page 83
    ...2007. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. Management's Report on Internal Control over Financial Reporting The Company's management...

  • Page 84
    ... Hasbro, Inc.: We have audited Hasbro, Inc.'s internal control over financial reporting as of December 30, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management...

  • Page 85
    ...including the Company's Chief Executive Officer, Chief Financial Officer and Controller. A copy of the Code of Conduct is available on the Company's website under Corporate Information, Investors, Corporate Governance. The Company's website address is http://www.hasbro.com. Although the Company does...

  • Page 86
    ... Ownership of Management" and "Equity Compensation Plans" in the Company's definitive proxy statement for the 2008 Annual Meeting of Shareholders and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by...

  • Page 87
    ... the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 1-6682.) (e) Certificate of Designations of Series C Junior Participating Preference Stock of Hasbro, Inc. dated June 29, 1999. (Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report...

  • Page 88
    ... 10(j) to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 29, 2002, File No. 1-6682.) (l) Receivables Purchase Agreement dated as of December 10, 2003 among Hasbro Receivables Funding, LLC, as the Seller, CAFCO LLC and Starbird Funding Corporation, as Investors, Citibank...

  • Page 89
    ... Company's Quarterly Report on Form 10-Q for the period ended April 2, 2006, File No. 1-6682.) Executive Compensation Plans and Arrangements (p) 1992 Stock Incentive Plan. (Incorporated by reference to Appendix A to the Company's definitive proxy statement for its 1992 Annual Meeting of Shareholders...

  • Page 90
    ... 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended June 27, 2004, File No. 1-6682.) Third Amendment to Hasbro, Inc. Retirement Plan for Directors, dated October 3, 2007. Form of Director's Indemnification Agreement. Hasbro, Inc. Deferred Compensation Plan for Non-Employee...

  • Page 91
    ...2007 Annual Meeting of Shareholders, File No. 1-6682.) Sixth Amendment to Hasbro, Inc. 2003 Stock Incentive Performance Plan. Form of Fair Market Value Stock Option Agreement under the 2003 Stock Incentive Performance Plan. (Incorporated by Reference to Exhibit 10.1 to the Company's Quarterly Report...

  • Page 92
    ....) (hhh) Amendment to Post-Employment Agreement by and between the Company and Alfred J. Verrecchia. (iii) Hasbro, Inc. 2007 Management Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended April 1, 2007, File No. 1-6682.) (jjj...

  • Page 93
    ... consolidated financial statements, we also audited the related consolidated financial statement schedule of Valuation and Qualifying Accounts in the Form 10-K. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion...

  • Page 94
    ... from assets to which they apply - for doubtful accounts receivable: 2007 ...2006 ...2005 ... $27,700 $29,800 $37,000 2,296 (1,020) 582 - - - 604 (1,080) (7,782) $30,600 $27,700 $29,800 (a) Based on an assessment of accounts receivable, the Company made an adjustment to reduce its allowance for...

  • Page 95
    ... by the undersigned, thereunto duly authorized. HASBRO, INC. (Registrant) By: /s/ Alfred J. Verrecchia Alfred J. Verrecchia President and Chief Executive Officer Date: February 27, 2008 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 96
    Signature Title Date /s/ Jack M. Greenberg Jack M. Greenberg /s/ Claudine B. Malone Claudine B. Malone /s/ Edward M. Philip Edward M. Philip /s/ Paula Stern Paula Stern Director February 27, 2008 Director February 27, 2008 Director February 27, 2008 Director February 27, 2008 88

  • Page 97
    Notes

  • Page 98
    5-Year Total Shareholder Return Hasbro vs. S&P 500 and Russell 1000 Consumer Discretionary Economic Sector The following graph tracks an assumed investment of $100 at the end of 2002 in the Company's Common Stock, the S&P 500 Index and the Russell 1000 Consumer Discretionary Economic Sector, ...

  • Page 99
    ... Securities analysts, investors and others who wish information about Hasbro are invited to contact: Investor Relations 1027 Newport Avenue P.O. Box 1059 Pawtucket, Rhode Island 02862-1059 (401) 431-8697 Internet Address: www.hasbro.com Dividend Reinvestment and Cash Stock Purchase Program...

  • Page 100
    ï™... Newport Avenue, Pawtucket, Rhode Island ï™...ï™...- www.hasbro.com 002CS-16405