Hasbro 2009 Annual Report Download - page 44

December 27, 2009 were approximately $1,400. Amounts available and unused under the committed line at
December 27, 2009 were approximately $298,600. The Company also has other uncommitted lines from
various banks, of which approximately $42,100 was utilized at December 27, 2009. Of the amount utilized
under the uncommitted lines, approximately $13,500 and $28,600 represent outstanding borrowings and letters
of credit, respectively.
Net cash provided by financing activities was $236,779 in 2009. Of this amount, $421,309 reflects net
proceeds from the issuance of long-term notes in May 2009. In addition, cash receipts from the exercise of
employee stock options in 2009 were $9,193. These sources of cash were partially offset by $88,112, which
includes transaction costs, used to repurchase shares of the Company’s common stock. During 2009, the
Company repurchased 3,172 shares at an average price per share of $28.67. At December 27, 2009, $161,434
remained under the February 2008 authorization. Dividends paid were $111,458 in 2009 compared to
$107,065 in 2008.
Net cash utilized by financing activities was $457,391 in 2008. Of this amount, $360,244, which includes
transaction costs, was used to repurchase shares of the Company’s common stock. In February 2008 the
Company’s Board of Directors authorized the repurchase of an additional $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. During 2008, the Company repurchased 11,736 shares at
an average price per share of $30.44. Dividends paid were $107,065 in 2008 compared to $94,097 in 2007,
reflecting the increase in the Company’s quarterly dividend rate to $0.20 per share in 2008 from $0.16 per
share in 2007, and net of the effect of decreased shares outstanding in 2008 as a result of the share
repurchases. In addition, $135,092 was used to repay long-term debt. These uses of cash were partially offset
by cash receipts of $120,895 from the exercise of employee stock options.
Net cash utilized by financing activities was $433,917 in 2007. Of this amount, $584,349, which includes
transaction costs, was used to repurchase shares of the Company’s common stock. During 2007, the Company
repurchased 20,795 shares at an average price per share of $28.20. In addition, the Company purchased certain
warrants in May 2007 for $200,000 in accordance with the terms of the call provision of the amended Lucas
warrant agreement. Dividends paid were $94,097 in 2007. These uses of cash were partially offset by net
proceeds of $346,009 from the issuance of $350,000 of notes that are due in 2017. The proceeds from the
notes were primarily used to repay short-term borrowings. The uses of cash were also partially offset by cash
receipts of $82,661 from the exercise of 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 of the Company’s common stock trade at
or below $9.72 per share for 20 of the 30 trading days preceding the fifth day prior to an interest payment
date. This contingent interest feature represents a derivative instrument that is recorded on the balance sheet at
its fair value, with changes in fair value recognized in the statement of operations. If the closing price of the
Company’s common 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, or upon other specified events, the debentures
will be convertible at an initial conversion price of $21.60 in the next calendar quarter. At December 31, 2008
and each of the calendar quarters in 2009 this conversion feature was met and the debentures were convertible
throughout 2009. There were no debentures converted during 2009. At December 31, 2009, this conversion
feature was met again and the bonds are convertible through March 31, 2010 at which time the requirements
of the conversion feature will be reevaluated. In addition, if the closing price of the Company’s common stock
exceeds $27.00 for at least 20 trading days in any 30 day period, the Company has the right to call the
debentures by giving notice to the holders of the debentures. During a prescribed notice period, the holders of
the debentures have the right to convert their debentures in accordance with the conversion terms described
above. At certain times during 2009, based on the Company’s common stock price, the Company had the right
to call the debentures under this provision. As of December 27, 2009, the Company had the right to call the
debentures. The Company believes a call would result in conversion by the holders of the debentures and
issuance of the shares, thereby increasing the number of shares outstanding. Historically, based on the
Company’s targeted capital structure and the low cost of the debentures, when the debentures have been
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