Hasbro 2008 Annual Report Download - page 13

SUPER SOAKER products have been highly successful and starting in 2009 will be managed as part of the
boys’ toys category.
International
In addition to our business in the United States and Canada, our International segment sells a
representative range of the toy and game products marketed in the U.S. and Canada segment as discussed
above, together with some items that are sold only internationally. These products are sold directly to retailers
and wholesalers in most countries in Europe, Asia Pacific and Latin and South America and through
distributors in those countries where we have no presence. The products sold internationally are managed
under the same categories as in the U.S. and Canada. The major geographic regions included in the
International segment are Europe, Asia Pacific and Latin and South America, including 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. In 2008, we expanded our operations in Brazil, China, Russia, the Czech Republic and Korea. Key
international brands for 2008 included LITTLEST PET SHOP, PLAYSKOOL, TRANSFORMERS, STAR
WARS, MONOPOLY, MY LITTLE PONY and MARVEL.
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, Ireland. Sourcing of our other production is done through unrelated manufactur-
ers in various Far East countries, principally China, using a Hong Kong based wholly-owned subsidiary
operation for quality control and order coordination purposes. See “Manufacturing and Importing” below for
more details concerning overseas manufacturing and sourcing.
Through our Other segment 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. During 2008, our Other segment out-licensed our brands
primarily in apparel, publishing, home goods and electronics, and certain brands in the digital area. One of the
primary goals of this segment is to further expand our brands into the digital world through strategic licenses.
As an example, we have a long-term strategic licensing alliance with Electronic Arts Inc. (“EA”), which
provides EA with the exclusive worldwide rights to create digital games for all major platforms, including
mobile phones, personal computers, and game consoles such as XBOX, PLAYSTATION and WII, based on
most of our toy and game intellectual properties. The first games generated under this strategic alliance were
introduced in 2008, with a full line expected in 2009. In 2009, the Company expects its licensing revenues to
be positively impacted by the major motion picture releases of G.I. JOE: RISE OF COBRA and TRANS-
FORMERS: REVENGE OF THE FALLEN.
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
2008 and 2006 fiscal years. During the 2007 fiscal year, revenues generated from TRANSFORMERS products
were approximately $482,000, which was 12.6% of our consolidated net revenues in 2007. No other line of
products constituted 10% or more of our consolidated net revenues in 2007.
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