Hasbro 2009 Annual Report Download - page 69

provide the joint venture with an exclusive first look in the U.S. to license certain types of programming
developed by the Company based on its intellectual property. In the event the joint venture licenses the
programming from the Company to air on the network, the joint venture is required to pay the Company a
license fee.
The assets of the joint venture at inception consisted of goodwill and intangibles which were measured at
fair value at inception. Intangible assets are primarily comprised of cable affiliate relationships, which are
being amortized on a straight line basis over 30 years, and programming costs, which are being amortized
primarily over 4 years on an accelerated basis. Hasbro’s share of the assets underlying its investment at
inception totaled $142,577 of goodwill, $211,850 of cable affiliate relationships, $12,400 of programming
costs, and $1,100 of other intangibles. Amortization of the intangible assets is recorded in the results of the
joint venture and, accordingly, the Company’s share is included in its share of the joint venture earnings which
is a component of other (income) expense. As of December 27, 2009, the Company’s interest in the joint
venture totaled $371,783 and is a component of other assets.
As of December 27, 2009, DHJV had current assets of $51,674, non-current assets of $696,842 and
current liabilities of $27,209. Net income of the joint venture for the period from inception to December 27,
2009 was $7,711.
(6) Financing Arrangements
Short-Term Borrowings
At December 27, 2009, Hasbro had available an unsecured committed line and unsecured uncommitted
lines of credit from various banks approximating $300,000 and $184,300, respectively. A significant portion of
the short-term borrowings outstanding at the end of 2009 and 2008 represent borrowings made under, or
supported by, these lines of credit. The weighted average interest rates of the outstanding borrowings as of
December 27, 2009 and December 28, 2008 were 1.23% and 10.7%, respectively. Borrowings under the lines
of credit were made by certain international affiliates of the Company on terms and at interest rates generally
extended to companies of comparable creditworthiness in those 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.
The unsecured committed line (the “Agreement”) provides the Company with a $300,000 committed
borrowing facility through June 2011. The Company has the ability to request increases in the committed
facility in additional increments of at least $50,000, subject to lender agreement, up to a total committed
facility of $500,000. The Agreement contains certain financial covenants setting forth leverage and coverage
requirements, and certain other limitations typical of an investment grade facility, including with respect to
liens, mergers and incurrence of indebtedness. The Company was in compliance with all covenants as of and
for the year ended December 27, 2009.
The Company pays a commitment fee (0.09% as of December 27, 2009) based on the unused portion of
the facility and interest equal to LIBOR or Prime plus a spread on borrowings under the facility. The
commitment fee and the amount of the spread to LIBOR or Prime both vary based on the Company’s long-
term debt ratings and the Company’s leverage. At December 27, 2009, the interest rate under the facility was
equal to LIBOR plus 0.40% or Prime.
Securitization
The Company is party to an accounts receivable securitization program whereby the Company sells, on
an ongoing basis, substantially all of its U.S. trade accounts receivable to a bankruptcy-remote, special
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)