Hasbro 2009 Annual Report Download

Download and view the complete annual report

Please find the complete 2009 Hasbro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

ANNUAL REPORT 2009

Table of contents

  • Page 1
    ANNUAL REPORT 2009

  • Page 2
    ...herein, "GAAP" refers to accounting principles generally accepted in the United States of America. See Management's Discussion and Analysis of Financial Condition and Results of Operations in the enclosed annual report for a detailed discussion of the Company's business. The discussion set forth in...

  • Page 3
    ...re-ignite our brands. It begins with toy and game product innovation and extends to all consumer touch points including lifestyle licensing, entertainment - television, movies and online - as well as digital gaming. We then employ this blueprint across our mature, developing and emerging markets. In...

  • Page 4
    ...Mexico in 2009. • We also made key strides in entertainment, including movies, TV and online. We formed a joint venture with Discovery Communications to establish a new children's television network, being re-branded as THE HUB; we formed Hasbro Studios to develop compelling television programming...

  • Page 5
    ... the Fallen video game was the number one movie game in 2009. Since our first digital games from EA hit the market in 2008, EA has sold at retail eight million units of Hasbro branded digital games. In 2009, EA successfully launched games for brands from LITTLEST PET SHOP to TRIVIAL PURSUIT to NERF...

  • Page 6
    ...our business and developing the tools we need to be successful in the years to come. It required every member of the Hasbro team to perform at a high level and they did. As we go forward into 2010 and beyond, the strength of our brands, the growth of our business globally, including emerging markets...

  • Page 7
    ...HASSENFELD Retired Chairman and Chief Executive Officer Hasbro, Inc. FRANK J. BIONDI, JR. Senior Managing Director WaterView Advisors LLC TRACY A. LEINBACH Retired Executive Vice President and Chief Financial Officer Ryder System, Inc. KENNETH A. BRONFIN President Hearst Interactive Media EDWARD...

  • Page 8
    ... $147 $143 $140 $129 $122 Indexed Stock Price $120 $108 $100 $107 $99 $80 $108 $104 $78 $103 $92 $60 $64 $40 $20 $0 2004 2005 Hasbro 2006 S&P 500 2007 2008 Russell 1000 Consumer Discretionary Economic Sector 2009 2004 Hasbro S&P 500 Russell 1000 Consumer Discretionary Economic Sector...

  • Page 9
    ... Avenue, Pawtucket, 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 New...

  • Page 10
    ... with Accountants on Accounting and Financial Disclosure ...Item 9A. Controls and Procedures ...Item 9B. Other Information ...Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership...

  • Page 11
    ...Discovery"). This joint venture operates a television network in the United States dedicated to high-quality children's and family entertainment and educational programming. Product Categories We market our brands under the following primary product categories: (1) boys' toys; (2) games and puzzles...

  • Page 12
    ... brands through entertainment experiences such as motion pictures, television and publishing. Major 2009 brands and products included TRANSFORMERS, LITTLEST PET SHOP, STAR WARS, NERF, MONOPOLY, PLAYSKOOL, PLAY-DOH, MARVEL products, MAGIC: THE GATHERING, G.I. JOE, MY LITTLE PONY and FURREAL FRIENDS...

  • Page 13
    ... toy and game intellectual properties. As noted above, in 2009, we purchased a 50% interest in a joint venture with Discovery that operates a television network in the United States. This network is dedicated to providing high-quality children's and family entertainment and educational programming...

  • Page 14
    ... to employ to promote sales in 2010 are substantially the same as those we employed in 2009. Historically, we commit to the majority of our inventory production and advertising and marketing expenditures for a given year prior to the peak third and fourth quarter retail selling season. Our accounts...

  • Page 15
    ... marketing programs. The costs of this group are allocated to the selling entities which comprise our principal operating segments. Our products are sold nationally and internationally to a broad spectrum of customers, including wholesalers, distributors, chain stores, discount stores, mail order...

  • Page 16
    ... toys, but our business is highly competitive. We compete with several large toy and game companies in our product categories, as well as many smaller United States and international toy and game designers, manufacturers and marketers. We also compete with companies that offer branded entertainment...

  • Page 17
    ...creates new opportunities for existing competitors and start-ups to develop products which compete with our toy and game offerings. Employees At December 27, 2009, we employed approximately 5,800 persons worldwide, approximately 3,100 of whom were located in the United States. Trademarks, Copyrights...

  • Page 18
    ... operating margins, which would in turn harm our profitability, business and financial condition. In our industry, it is critical to identify and offer what are considered to be the next "hot" toys and games on children's "wish lists" and to effectively anticipate children's evolving entertainment...

  • Page 19
    ... basis to meet constantly changing consumer demands, a risk that is heightened by our customers' compressed shipping schedules and the seasonality of our business. In developing new products and product lines, we have anticipated dates for the associated product introductions. When we state that we...

  • Page 20
    ... times we may need to reduce the price of our products, increase our promotional spending, or take other steps to encourage retailer and consumer purchase of our products. Those steps may lower our net revenues, decrease our operating margins, increase our costs and/or lower our profitability. 10

  • Page 21
    ... to entertainment products on beneficial terms, if at all, and to attract and retain the talented employees necessary to design, develop and market successful products based on these properties. The loss of rights granted pursuant to any of our licensing agreements could harm our business and...

  • Page 22
    ... in their control of inventory levels through quick response inventory management techniques. Customers are timing their orders so that they are being filled by suppliers, such as us, closer to the time of purchase by consumers. For toys, games and other family entertainment products which we...

  • Page 23
    ...sales 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. If the exchange rate between the United States dollar and a local currency for an international market...

  • Page 24
    ... are designed to prevent products manufactured by or for us from being produced under inhumane 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...

  • Page 25
    ... associated with our other family entertainment products, also face certain additional risks. Our costs for designing, developing and producing electronic products tend to be higher than for many of our other more traditional products, such as board games and action figures. The ability to recoup...

  • Page 26
    .... On December 1, 2011 and December 1, 2016, and upon the occurrence of certain fundamental corporate changes, holders of the 2.75% senior convertible debentures may require us to purchase their debentures. At that time, the purchase price may be paid in cash, shares of common stock or a combination...

  • Page 27
    ... case we plan to operate them more autonomously rather than fully integrating them into our operations. We cannot be certain that the key talented individuals at these companies will continue to work for us after the acquisition or that they will develop popular and profitable products or services...

  • Page 28
    ... venture could harm our results of operations. Item 1B. None. Item 2. Properties Unresolved Staff Comments Hasbro owns its corporate headquarters in Pawtucket, Rhode Island consisting of approximately 343,000 square feet, which is used in the U.S. and Canada, Global Operations and Entertainment...

  • Page 29
    ... Chief Executive Officer Chief Operating Officer Senior Vice President and Chief Financial Officer Global Chief Marketing Officer Global Chief Development Officer Senior Vice President, Chief Legal Officer and Secretary Senior Vice President and Treasurer Since 2008 Since 2008 Since 2009 Since 2008...

  • Page 30
    ...Stock as of February 8, 2010 was 9,300. See Part III, Item 12 of this report for the information concerning the Company's "Equity Compensation Plans". Dividends Declaration of dividends is at the discretion of the Company's Board of Directors and will depend upon the earnings and financial condition...

  • Page 31
    Item 6. Selected Financial Data (Thousands of dollars and shares except per share data and ratios) 2009 2008 Fiscal Year 2007 2006 2005 Statement of Operations Data: Net revenues ...Net earnings ...Per Common Share Data: Net Earnings Basic ...Diluted ...Cash dividends declared ...Balance Sheet ...

  • Page 32
    ... licensing, digital gaming, movie, television and online entertainment operations. In addition to these three primary segments, the Company's world-wide manufacturing and product sourcing operations are managed through its Global Operations segment. The Company seeks to make its brands relevant in...

  • Page 33
    ... MONOPOLY, SCRABBLE, YAHTZEE, NERF, TONKA, G.I. JOE and LITTLEST PET SHOP. A number of products under this agreement have been released in 2008 and 2009 and the line will continue to be updated and expanded in 2010. The Company is also investing to grow its business in emerging markets. During...

  • Page 34
    ... Discovery joint venture discussed above, another example of this includes the acquisition of Cranium, Inc., a developer and marketer of CRANIUM branded games and related products, in 2008. In addition, in the second quarter of 2008, the Company acquired the rights to TRIVIAL PURSUIT, a brand which...

  • Page 35
    ... the results of operations, stated as a percent of net revenues, are illustrated below for each of the three fiscal years ended December 27, 2009. 2009 2008 2007 Net revenues ...Cost of sales ...Gross profit ...Amortization ...Royalties ...Research and product development ...Advertising ...Selling...

  • Page 36
    ... sales of entertainment-based products in 2009 as compared to 2008. The increase in operating profit for 2009 also reflects decreased selling, distribution and administration expenses which primarily reflect lower shipping and distribution costs as well as decreased marketing and sales expenses...

  • Page 37
    ...to address the weak retail environment. The increase in gross profit in dollars was more than offset by increased product development and sales and marketing expenses related to investments the Company made in both core brands and its digital initiative related to its Wizards of the Coast subsidiary...

  • Page 38
    ...-based products are generally higher than many of the Company's other products, sales from these products, including Company owned or controlled brands based on a movie release, also incur royalty expense. Such royalties reduce the benefit of these higher gross margins. Gross profits in 2009 were...

  • Page 39
    ...of net revenues in 2008. The decrease in 2009 primarily reflects an effort to reduce the Company's overall SKU count and make research and development spending more efficient as part of the Company's ongoing cost control efforts. Research and product development expense increased in 2008 to $191,424...

  • Page 40
    ... start up of the Company's television studio and continued investments in emerging markets. Selling, distribution and administration expense in 2009 was also positively impacted by lower shipping and distribution costs in 2009. In addition, selling, distribution and administration expenses in 2008...

  • Page 41
    ...in 2008. Other (income) expense, net in 2009 includes income of $(3,856) representing the Company's 50% share in the earnings of the joint venture with Discovery. The remainder of the change in other (income) expense in 2009 as compared to 2008 primarily reflects the impact of foreign exchange gains...

  • Page 42
    ...27, 2009 as compared to December 28, 2008. Absent the impact of foreign exchange, accounts payable and accrued expenses decreased approximately $8,300. Decreases in accounts payable and accrued expenses in 2009 primarily relate to decreased accrued pension benefits, as well as lower accounts payable...

  • Page 43
    ... term of the license agreement related to the STAR WARS brand and approximately $26,500 used to acquire certain other intellectual properties. The 2008 utilization includes the Company's purchase of the intellectual property rights related to the TRIVIAL PURSUIT brand for a total cost of $80,800 as...

  • Page 44
    ... employee stock options. At December 27, 2009, the Company has outstanding $249,828 in principal amount of senior convertible debentures due 2021. The senior convertible debentures bear interest at 2.75%, which could be subject to an upward adjustment in the rate, not to exceed 11%, should the price...

  • Page 45
    ...its right to call the debentures. Currently, this economic benefit includes a lower cash cost of paying interest on the debentures than the Company would pay in dividends on the incremental number of shares that would be outstanding. The Company will continue to assess, at times when it is available...

  • Page 46
    ...the 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 and allowances are recorded...

  • Page 47
    ... 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. The Company's discount rate for its U.S. plans used for the calculation of 2009 pension expense averaged...

  • Page 48
    ... of the Company's 2009 grant. In 2009, 2008 and 2007, 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 stated...

  • Page 49
    ... tax assets related to its Mexican operations, which may result in additional tax expense. Contractual Obligations and Commercial Commitments In the normal course of its business, the Company enters into contracts related to obtaining rights to produce product under license, which may require the...

  • Page 50
    ... through its lines of credit and accounts receivable securitization program will allow the Company to meet these and other obligations described above. Financial Risk Management The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates primarily as...

  • Page 51
    ... 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 of...

  • Page 52
    ... its environmental compliance costs or liabilities to be material to its operating results or financial position. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by this item is included in Item 7 of Part II of this Report and is incorporated herein...

  • Page 53
    ...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 27, 2009, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring...

  • Page 54
    ... 600,000,000 shares; issued 209,694,630 shares in 2009 and 2008 ...Additional paid-in capital ...Retained earnings...Accumulated other comprehensive earnings ...Treasury stock, at cost, 72,597,140 shares in 2009 and 70,465,216 shares in 2008 ...Total shareholders' equity ...Total liabilities...

  • Page 55
    ... Ended in December (Thousands of Dollars Except Per Share Data) 2009 2008 2007 Net revenues ...$4,067,947 Cost of sales ...1,676,336 Gross profit...Expenses Amortization ...Royalties ...Research and product development ...Advertising ...Selling, distribution and administration ...2,391,611 85,029...

  • Page 56
    ... of liabilities potentially settleable in common stock ...Deferred income taxes ...Stock-based compensation ...Change in operating assets and liabilities: Increase in accounts receivable ...Decrease (increase) in inventories ...Decrease in prepaid expenses and other current assets ...Increase in...

  • Page 57
    ... declared ...Balance, December 28, 2008 ...Net earnings ...Other comprehensive loss ...Comprehensive earnings ...Stock-based compensation transactions ...Purchases of common stock . . Stock-based compensation expense ...Dividends declared ...Balance, December 27, 2009 ... $104,847 - - 322,254...

  • Page 58
    ... 27, 2009 the Company purchased a 50% interest in a joint venture with Discovery Communications, Inc. that is accounted for under the equity method. See note 5 for additional information. All significant intercompany balances and transactions have been eliminated. Preparation of Financial Statements...

  • Page 59
    ... 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 60
    ... with a major entertainment property and are being amortized in proportion to projected sales of the licensed products over the contract life. Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using accelerated and straight-line methods to...

  • Page 61
    ... first aired. The costs of other advertising, promotion and marketing programs are charged to operations in the fiscal year incurred. Film and Programming Costs In 2009, the Company incurred certain costs to commence the production of films and television programming. These costs are capitalized by...

  • Page 62
    ...all employees who retire under any of its United States defined benefit pension plans and meet certain age and length of service requirements. The cost of providing these benefits on behalf of employees who retired prior to 1993 is and will continue to be substantially borne by the Company. The cost...

  • Page 63
    ... a number of major financial institutions in order to minimize counterparty credit risk. The Company believes that it is unlikely that any of its counterparties will be unable to perform under the terms of the contracts. Accounting for Stock-Based Compensation The Company has a stock-based employee...

  • Page 64
    ...1.97 The net earnings per share calculations for each of the three years ended December 27, 2009 include adjustments to add back to earnings the interest expense, net of tax, incurred on the Company's senior convertible debentures due 2021, as well as to add back to outstanding shares the amount of...

  • Page 65
    .... At December 27, 2009, the Company had remaining deferred gains on hedging instruments, net of tax, of $20,410 in AOCE. These instruments hedge inventory purchased during the fourth quarter of 2009 or forecasted to be purchased during 2010 and 2011 and intercompany expenses and royalty payments...

  • Page 66
    ... annual impairment tests in the fourth quarters of 2009, 2008 and 2007 and had no impairment charges. A portion of the Company's goodwill and other intangible assets reside in the Corporate segment of the business. For purposes of impairment testing, these assets are allocated to the reporting units...

  • Page 67
    ... (159) - 475,931 471,177 8,822 (5,502) 474,497 In January 2008 the Company acquired Cranium, Inc. ("Cranium"), a developer and marketer of children's and adult board games, in order to supplement its existing game portfolio, for a total cost of approximately $68,000. Based on the allocation of the...

  • Page 68
    ...-quality children's and family entertainment and educational programming. The transaction closed in May 2009 with the Company's purchase of a 50% interest in the joint venture, DHJV Company LLC ("DHJV"), which owns the DISCOVERY KIDS network in the United States. The Company purchased its 50% share...

  • Page 69
    ... markets. The Company had no borrowings outstanding under its committed line of credit at December 27, 2009. During 2009, Hasbro's working capital needs were fulfilled by cash generated from operations, borrowings under lines of credit, and the Company's accounts receivable securitization program...

  • Page 70
    ... and discount rates commensurate with the risks involved. Due to the short-term nature of trade receivables, the carrying amount, less allowances, approximates fair value. Variations in the credit and discount assumptions generally do not significantly impact fair value. In 2010, the Company adopted...

  • Page 71
    ... U.S. Treasury bills at the time of repurchase. In the fourth quarter of 2009, the Company entered into a series of interest rate swap agreements to adjust the amount of debt that is subject to fixed interest rates. The interest rate swaps are matched with the 6.125% Notes Due 2014 and accounted for...

  • Page 72
    ... also put the notes back to Hasbro in December 2011 and December 2016. At these 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. At December 27, 2009, as detailed above, the Company's 6.125% Notes mature in 2014. All...

  • Page 73
    ...tax rate to Hasbro's effective income tax rate is as follows: 2009 2008 2007 Statutory income tax rate ...State and local income taxes, net ...Investment of foreign earnings in U.S...Tax on international earnings ...Fair value adjustment of liabilities potentially settleable in common stock ...Exam...

  • Page 74
    ...and liabilities at December 27, 2009 and December 28, 2008 are: 2009 2008 Deferred tax assets: Accounts receivable ...Inventories ...Losses and tax credit carryforwards ...Operating expenses ...Pension ...Other compensation ...Postretirement benefits...Tax sharing agreement ...Other ... ...$ 17,314...

  • Page 75
    ... December 27, 2009, December 28, 2008 and December 30, 2007, the Company had accrued potential interest and penalties of $17,938, $13,660 and $12,020, respectively. The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the...

  • Page 76
    ... $914,000 at December 27, 2009. In the event that all international undistributed earnings were remitted to the United States, the amount of incremental taxes would be approximately $216,000. (10) Capital Stock In February 2008 the Company's Board of Directors authorized the repurchase of...

  • Page 77
    ... of the Company's available-for-sale securities, the Company is able to obtain quoted prices from stock exchanges to measure the fair value of these securities. Certain other available-for-sale securities held by the Company are valued at the net asset value which is quoted on a private market that...

  • Page 78
    ... will be expensed is 16 months. In 2009, the Company issued 20 shares related to restricted stock granted in 2006. In 2009, 2008, and 2007, as part of its annual equity grant to executive officers and certain other employees, the Compensation Committee of the Company's Board of Directors approved...

  • Page 79
    ...compensation expense related to stock options and the Stock Performance Awards for the years ended December 27, 2009, December 28, 2008 and December 30, 2007 was $27,779, $33,300 and $28,229, respectively, and was recorded as follows: 2009 2008 2007 Cost of sales ...Research and product development...

  • Page 80
    ...compensation cost related to stock options was $17,343 and the weighted average period over which this will be expensed is 23 months. In 2009, 2008 and 2007, the Company granted 60, 36 and 31 shares of common stock, respectively, to its non-employee members of its Board of Directors. Of these shares...

  • Page 81
    ... international affiliates. The remainder of the expense relates to defined benefit plans discussed below. United States Plans Prior to 2008, substantially all United States employees were covered under at least one of several noncontributory defined benefit pension plans maintained by the Company...

  • Page 82
    ... recorded a curtailment loss of $908. The pension benefit was replaced by additional employer contributions to the Company's defined contribution plan beginning in 2008. At December 27, 2009, the measurement date, the projected benefit obligations of the funded plans were in excess of the fair value...

  • Page 83
    ... liabilities ...(53,031) Accumulated other comprehensive earnings ...81,323 Net amount recognized ...$ 25,481 In fiscal 2010, the Company expects amortization of unrecognized net losses and unrecognized prior service cost related to its defined benefit pension plans of $4,115 and $198, respectively...

  • Page 84
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) Assumptions used to determine the year-end pension and postretirement benefit obligations are as follows: 2009 2008 Pension Weighted average discount rate ...

  • Page 85
    ... so that the total portfolio risk exposure and risk-adjusted returns best meet the Plans' long-term obligations to employees. The Company's asset allocation includes alternative investment strategies designed to achieve a modest absolute return in addition to the return on an underlying asset class...

  • Page 86
    ... 4%. Hasbro works with external benefit investment specialists to assist in the development of the long-term rate of return assumptions used to model and determine the overall asset allocation. Forecast returns are based on the combination of historical returns, current market conditions and...

  • Page 87
    ... are invested in equity and fixed income securities. The pension expense related to these plans was $4,903, $3,226 and $3,937 in 2009, 2008 and 2007, respectively. In fiscal 2010, the Company expects amortization of $71 of prior service costs, $57 of unrecognized net losses and $(1) of unrecognized...

  • Page 88
    ... the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases and other cross-border transactions in 2010 and 2011. At December 27, 2009, the...

  • Page 89
    ...-term commitment related to promotional and marketing activities at a U.S. based theme park. Under terms of existing agreements as of December 27, 2009, Hasbro may, provided the other party meets their contractual commitment, be required to pay amounts as follows: 2010: $32,761; 2011: $36,804; 2012...

  • Page 90
    ...plush products, preschool toys and infant products, electronic interactive products, toy-related specialty products, traditional board games and puzzles, DVD-based games and trading card and role-playing games within the United States and Canada. Within the International segment, the Company markets...

  • Page 91
    ... multiple operating segments are reflected as Corporate assets for segment reporting purposes. In accordance with accounting standards related to impairment testing, these amounts have been allocated to the reporting unit which benefits from their use. In addition, allocations of certain expenses...

  • Page 92
    ...,369 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 93
    ... increase the cost of the Company's products imported into the United States or Europe. (18) Quarterly Financial Data (Unaudited) First Second Quarter Third Fourth Full Year 2009 Net revenues ...Gross profit ...Earnings before income taxes ...Net earnings ...Per common share Net earnings Basic...

  • Page 94
    ... this assessment, Hasbro's management concluded that, as of December 27, 2009, its internal control over financial reporting is effective based on those criteria. Hasbro's independent registered public accounting firm has issued an audit report on internal control over financial reporting, which is...

  • Page 95
    ... opinion on the effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain...

  • Page 96
    ...'s website under Corporate, Investor Relations, Corporate Governance. The Company's website address is http://www.hasbro.com. Although the Company does not generally intend to provide waivers of or amendments to the Code of Conduct for its Chief Executive Officer, Chief Financial Officer, Controller...

  • Page 97
    ... Information Regarding Independent Registered Public Accounting Firm" in the Company's definitive proxy statement for the 2010 Annual Meeting of Shareholders and is incorporated herein by reference. PART IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements, Financial...

  • Page 98
    ... Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 23, 2006, File No. 1-6682.) Material Contracts (a) Lease between Hasbro Canada Corporation (formerly named Hasbro Industries (Canada) Ltd.)("Hasbro Canada") and Central Toy Manufacturing Co. ("Central Toy"), dated December 23, 1976...

  • Page 99
    ... of the Securities Exchange Act of 1934, as amended.)(Incorporated by reference to Exhibit 10(d) to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 27, 1998, File No. 1-6682.) First Amendment to Toy License Agreement between Lucas Licensing Ltd. and the Company, dated as...

  • Page 100
    ...27, 2009, File No. 1-6682.) Executive Compensation Plans and Arrangements (s) Hasbro, Inc. 1995 Stock Incentive Performance Plan. (Incorporated by reference to Appendix A to the Company's definitive proxy statement for its 1995 Annual Meeting of Shareholders, File No. 1-6682.) (t) First Amendment to...

  • Page 101
    ... Third Amendment to the 1997 Employee Non-Qualified Stock Plan. (Incorporated by reference to Exhibit 10(bb) to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 25, 2005, File No. 1-6682.) Form of Employment Agreement between the Company and three Company executives (Brian...

  • Page 102
    ... Appendix C to the definitive proxy statement for its 2009 Annual Meeting of Shareholders, File No. 1-6682.) Form of Fair Market Value Stock Option Agreement under the 2003 Stock Incentive Performance Plan. (Incorporated by Reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for...

  • Page 103
    ... Company's Quarterly Report on Form 10-Q for the period ended October 1, 2006, File No. 1-6682.) (iii) Hasbro, Inc. 2009 Senior Management Annual Performance Plan. (Incorporated by reference to Appendix D to the Company's definitive proxy statement for its 2009 Annual Meeting of Shareholders, File...

  • Page 104
    ... Public Accounting Firm The Board of Directors and Shareholders Hasbro, Inc.: Under date of February 24, 2010, we reported on the consolidated balance sheets of Hasbro, Inc. and subsidiaries as of December 27, 2009 and December 28, 2008, and the related consolidated statements of operations...

  • Page 105
    ... Dollars) Balance at Beginning of Year Provision Charged to Cost and Expenses Other Additions Write-Offs and Other(a) Balance at End of Year Valuation accounts deducted from assets to which they apply - for doubtful accounts receivable: 2009 ...2008 ...2007 ... $32,400 $30,600 $27,700 3,970 4,680...

  • Page 106
    ... behalf by the undersigned, thereunto duly authorized. HASBRO, INC. (Registrant) By: /s/ Brian Goldner Brian Goldner President and Chief Executive Officer Date: February 24, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

  • Page 107
    ... to contact: Investor Relations 1027 Newport Avenue P.O. Box 1059 Pawtucket, Rhode Island 02862-1059 (401) 431-8447 [email protected] Internet Address: http:/ /investor.hasbro.com Dividend Reinvestment and Cash Stock Purchase Program Under this plan, Hasbro shareholders may...

  • Page 108
    1027 NEWPORT AVENUE PAWTUCKET, RHODE ISLAND 02862-1059 WWW.HASBRO.COM 002CS1B059