Hasbro 2009 Annual Report Download - page 65

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(2) Other Comprehensive Earnings
The Company’s other comprehensive earnings (loss) for the years 2009, 2008 and 2007 consist of the
following:
2009 2008 2007
Foreign currency translation adjustments .................... $23,782 (33,555) 35,888
Changes in value of available-for-sale securities, net of tax ....... 504 (3,037) 221
Gain (loss) on cash flow hedging activities, net of tax........... (24,446) 73,184 (15,851)
Changes in unrecognized pension and postretirement amounts, net
oftax ............................................ 8,356 (52,582) 27,393
Reclassifications to earnings, net of tax:
Net (gains) losses on cash flow hedging activities ............ (18,657) 1,409 6,887
(Gain) loss on available-for-sale securities ................. 147 897 (664)
Amortization of unrecognized pension and postretirement
amounts ......................................... 6,689 1,002 2,099
Other comprehensive earnings (loss) ....................... $ (3,625) (12,682) 55,973
In 2009, 2008 and 2007, net gains (losses) on cash flow hedging activities reclassified to earnings, net of
tax, included gains (losses) of $(679), $1,292 and $(37), respectively, as a result of hedge ineffectiveness.
The related tax benefit (expense) of other comprehensive earnings items was $1,322, $16,022, and
$(16,064) for the years 2009, 2008 and 2007, respectively. Income tax expense (benefit) related to reclassifi-
cation adjustments from other comprehensive earnings of $(331), $763 and $1,412 in 2009, 2008 and 2007,
respectively, were included in these amounts.
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 expected
to be paid or received during 2010 and 2011. These amounts will be reclassified into the consolidated
statement of operations upon the sale of the related inventory or receipt or payment of the related royalties and
expenses. Of the amount included in AOCE at December 27, 2009, the Company expects approximately
$7,600 to be reclassified to the consolidated statement of operations within the next 12 months. However, the
amount ultimately realized in earnings is dependent on the fair value of the contracts on the settlement dates.
In the first quarter of 2007, the Company changed its measurement date for certain of its defined benefit
pension plans and its postretirement plan from September 30 to the Company’s fiscal year-end date. As a
result of this change, the assets and liabilities of these plans were remeasured as of December 31, 2006, the
2006 fiscal year-end date of the Company. This remeasurement resulted in an adjustment to accumulated other
comprehensive earnings of $7,779, net of taxes of $4,765, during the first quarter of 2007.
55
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)