Hasbro 2008 Annual Report Download - page 70

Mexican government related to the 2000 to 2002 assessments, allowing the Company to defend its positions.
The Company will be required to either post an additional bond or pay a deposit of $25,688 (at year-end 2008
exchange rates) related to the 2003 assessment. The Company expects to be successful in sustaining its
position with respect to these assessments as well as similar positions that may be taken by the Mexican tax
authorities for periods subsequent to 2003.
Upon the settlements of other examinations in various tax jurisdictions and the expiration of several
statutes of limitation, the Company believes that it is reasonably possible that the related unrecognized tax
benefits and accrued interest may decrease income tax expense by up to approximately $3,000 in the next
12 months.
The cumulative amount of undistributed earnings of Hasbro’s international subsidiaries held for reinvestment
is approximately $718,000 at December 28, 2008. In the event that all international undistributed earnings were
remitted to the United States, the amount of incremental taxes would be approximately $167,000.
(9) Capital Stock
Preference Share Purchase Rights
Hasbro maintains a Preference Share Purchase Rights Plan (the “Rights Plan”). Under the terms of the
Rights Plan, each share of common stock is accompanied by a Preference Share Purchase Right (“Right”).
Each Right is only exercisable under certain circumstances and, until exercisable, the Rights are not
transferable apart from Hasbro’s common stock. When exercisable, each Right 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 of twice the Right’s exercise price. Under certain
circumstances, the Company may substitute cash, other assets, equity securities or debt securities for the
common stock. At the option of the Board of Directors of Hasbro (“the Board”), the rightholder may, under
certain circumstances, receive shares of Hasbro’s common stock in exchange for Rights.
Prior to the acquisition by a person or group of beneficial ownership of a certain percentage of Hasbro’s
common stock, the Rights are redeemable for $0.01 per Right. The Rights Plan contains certain exceptions
with respect to the Hassenfeld family and related entities.
Common Stock
In February 2008 the Company’s Board of Directors authorized the repurchase of up to $500,000 in
common stock after three previous authorizations dated May 2005, July 2006 and August 2007 with a
cumulative authorized repurchase amount of $1,200,000 were fully utilized. Purchases of the Company’s
common stock may be made from time to time, subject to market conditions, and may be made in the open
market or through privately negotiated transactions. The Company has no obligation to repurchase shares
under the authorization and the timing, actual number, and the value of the shares which are repurchased will
depend on a number of factors, including the price of the Company’s common stock. This authorization
replaced all prior authorizations. In 2008, the Company repurchased 11,736 shares at an average price of
$30.44. The total cost of these repurchases, including transaction costs, was $357,589. At December 28, 2008,
$252,364 remained under this authorization.
(10) Fair Value of Financial Instruments
On December 31, 2007, the first day of fiscal 2008, the Company adopted Statement of Financial
Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), for financial assets and
liabilities and No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)