Hasbro 2007 Annual Report Download - page 63

(7) Long-Term Debt
Components of long-term debt are as follows:
2007 2006
6.15% Notes Due 2008 ......................................... $135,092 135,092
6.30% Notes Due 2017 ......................................... 350,000 —
2.75% Debentures Due 2021 ..................................... 249,828 249,996
6.60% Notes Due 2028 ......................................... 109,895 109,895
Total principal amount of long-term debt ............................ 844,815 494,983
Fair value adjustment related to interest rate swaps .................... 256 (66)
Total long-term debt ........................................... 845,071 494,917
Less current portion ........................................... 135,348 —
Long-term debt excluding current portion ........................... $709,723 494,917
The schedule of contractual maturities of long-term debt for the next five years and thereafter is as
follows:
2008 ............................................................... $135,092
2009 ............................................................... —
2010 ............................................................... —
2011 ............................................................... —
2012 ............................................................... —
Thereafter ........................................................... 709,723
$844,815
In September 2007 the Company issued $350,000 of notes that are due in 2017 (the “Notes”). The Notes
bear interest at a rate of 6.30%, which may be adjusted upward in the event that the Company’s credit rating
from Moody’s Investor Services, Inc., Standard & Poor’s Ratings Services or Fitch Ratings is decreased two
levels below the Company’s credit ratings on the date of issuance of the Notes. From the date of issuance
through December 30, 2007, the Company’s ratings from Moody’s Investor Services, Inc., Standard & Poor’s
Ratings Services and Fitch Ratings were BBB, Baa2 and BBB, respectively. The interest rate adjustment is
dependent on the degree of decrease of the Company’s ratings and could range from 0.25% to a maximum of
2%. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or
the present value of the remaining scheduled payments discounted using the effective interest rate on
applicable U.S. Treasury bills at the time of repurchase.
The Company currently has $249,828 outstanding in principal amount of contingent convertible
debentures due 2021. These debentures bear interest at 2.75%, which could be subject to an upward
adjustment depending on the price of the Company’s stock. If the closing price of the Company’s stock
exceeds $23.76 for at least 20 trading days, within the 30 consecutive trading 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 the debentures are convertible through March 31, 2008, at
which time the requirements of the contingent conversion feature will be reevaluated. In addition, if the
closing price of the Company’s stock exceeds $27.00 for at least 20 trading days in any thirty day period, the
Company has the right to call the debentures by giving notice to the holders of the debentures. During a
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)