Hasbro 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 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 106

  • 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

A
A
nnual 2010Report

Table of contents

  • Page 1
    Annual 2010 Report

  • Page 2
    ... 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 the following letter to our shareholders, and in the annual report...

  • Page 3
    To Our Shareholders Approximately 10 years ago, we established a new strategy for Hasbro and began to organize and focus our company around a common vision: Becoming a Branded Play Company. We started by putting our brands at the center of all we do and set out to create innovative toys and games ...

  • Page 4
    ... blueprint is the development of immersive brand experiences for our global consumers not only through Hasbro Toys & Games, but in entertainment with motion pictures, television and online; in digital gaming; and in lifestyle licensing. In 2010, our entertainment initiatives took an important step...

  • Page 5
    ... Dark of the Moon is scheduled to debut in theatres on July 1, 2011. In partnership with global retailers, we have TRANSFORMERS toys and games, licensed consumer products and digital games across all platforms. In television, we have a full year of The HUB and the Global Brand Activation & Emerging...

  • Page 6
    ...E R S best, most innovative brand owners, such as Marvel and Lucasfilm. To that end, in 2011, a great new partner joins us as SESAME STREET comes to our Preschool line, featuring a number of beloved characters, which we are building into a year-round global business. from its product instructions...

  • Page 7
    ... Financial O cer Ryder System, Inc. Edward M. Philip Managing General Partner Highland Consumer Fund cer cer Executive O cers cer John A. Frascotti Global Chief Marketing O cer Brian D. Goldner President and Chief Executive O David D. R. Hargreaves Chief Operating O cer Barbara Finigan Senior...

  • Page 8
    ...Past performance of the Company's Common Stock is not necessarily indicative of future performance. $300 $269 $250 Indexed Stock Price $200 $174 $152 $150 $137 $114 $133 $118 $121 $96 $106 $73 $94 $110 $100 $100 $110 $50 $65 $0 2005 2006 2007 2008 2009 2010 Hasbro S&P 500 Russell 1000...

  • Page 9
    ...26, 2010 Commission file number 1-6682 Hasbro, Inc. (Exact Name of Registrant, As Specified in its Charter) Rhode Island (State of Incorporation) 05-0155090 (I.R.S. Employer Identification No.) 1027 Newport Avenue, Pawtucket, Rhode Island (Address of Principal Executive Offices) 02862 (Zip Code...

  • Page 10
    ... ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accountant Fees and Services ...PART IV Exhibits and Financial Statement Schedules...

  • Page 11
    ... STAR WARS brand. Other key boys' brands include TONKA trucks and playsets, BEYBLADE tops and accessories and SUPERSOAKER water squirting toys. Our games and puzzles category includes several well known lines, including MILTON BRADLEY, PARKER BROTHERS, CRANIUM, AVALON HILL and WIZARDS OF THE COAST...

  • Page 12
    ... & FRIENDS line, and the PLAY-DOH brand. The CHUCK & FRIENDS line was supported by television programming on THE HUB in the fourth quarter of 2010, which will continue in 2011. Segments Organizationally, our three principal segments are U.S. and Canada, International and Entertainment and Licensing...

  • Page 13
    ... 2011. Key international brands for 2010 included LITTLEST PET SHOP, NERF, TRANSFORMERS, MONOPOLY, FURREAL FRIENDS, PLAY-DOH, PLAYSKOOL, STAR WARS, and BEYBLADE. Entertainment and Licensing Our Entertainment and Licensing segment includes our lifestyle licensing, digital licensing, movie, television...

  • Page 14
    ... revenues earned from movies and television programming, is included in the Entertainment and Licensing segment. Global Operations In our Global Operations segment, we manufacture and source production of substantially all of our toy and game products. The Company owns and operates manufacturing...

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

  • Page 16
    ... groups in a manner designed to promote the sale of not only the selected item, but also other items we offer in those product groups as well. Hasbro Studios also produces television entertainment based on our brands which appears on THE HUB in the U.S. and on other major networks internationally...

  • Page 17
    ... United States and international toy and game designers, manufacturers and marketers. We also compete with companies that offer branded entertainment focused on children and their families. Competition is based primarily on meeting consumer entertainment preferences and on the quality and play...

  • Page 18
    ...for the repurchase by the manufacturer of articles that are banned. Consumer product safety laws also exist in some states and cities within the United States and in many foreign markets including Canada, Australia and Europe. We utilize laboratories that employ testing and other procedures intended...

  • Page 19
    ...significantly lower our revenues and 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, games and other entertainment offerings on children's "wish lists...

  • Page 20
    ... entertainment media, primarily based on our brands. The television programming developed by Hasbro Studios is offered in the United States on THE HUB and will be distributed on other networks internationally. THE HUB is competing with a number of other children's television networks in the United...

  • Page 21
    ... in a write-down through net earnings. Economic downturns which negatively impact the retail and credit markets, or which otherwise damage the financial health of our retail customers and consumers, can harm our business and financial performance. The success of our family entertainment products and...

  • Page 22
    ... property or brand will translate into successful toy or game products. We anticipate that the shorter theatrical duration for movie releases may make it increasingly difficult for us to profitably sell licensed products based on entertainment properties and may lead our customers to reduce...

  • Page 23
    ...substantial sales and manufacturing operations outside the United States subject us to risks associated with international operations. Among these risks is the fact that fluctuations in foreign exchange rates can significantly impact our financial performance. We operate facilities and sell products...

  • Page 24
    ...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 25
    ...member of the FURREAL FRIENDS line to date, COOKIE, MY PLAYFUL PUP. These products, if successful, can be an effective way for us to connect with consumers and increase sales. However, children's electronics, in addition to the risks associated with our other family entertainment products, also face...

  • Page 26
    ... the state of our business and financial condition, any ratings issued by major credit rating agencies, market interest rates, and the overall condition of the financial and credit markets at the time of the offering. The condition of the credit markets and prevailing interest rates have fluctuated...

  • Page 27
    ... claims by the users of such products. There can be no assurance that a claim will not be brought against us in the future. Any successful claim could significantly harm our business, financial condition and results of operations. As a large, multinational corporation, we are subject to a host of...

  • Page 28
    ... Reductions in our net earnings caused by the write-down of goodwill or our investment in the joint 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...

  • Page 29
    building in East Providence, Rhode Island consisting of approximately 120,000 square feet that is used in the corporate function as well as by the Global Operations and Entertainment and Licensing segments. In addition to the above facilities, the Company also leases office space consisting of ...

  • Page 30
    ... Financial Officer from 2001 to 2007. (3) Prior thereto, Senior Vice President, Head of Corporate Finance from 2008 to 2009; prior thereto, Senior Vice President and Controller from 2003 to 2008. (4) Prior thereto, Chief Marketing Officer, U.S. Toy Group since 2004; prior thereto, General Manager...

  • Page 31
    ...Stock as of February 7, 2011 was 9,100. 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 32
    ... depend on a number of factors, including the price of the Company's stock. The Company may suspend or discontinue the program at any time and there is no expiration date. Item 6. Selected Financial Data (Thousands of dollars and shares except per share data and ratios) 2010 2009 Fiscal Year 2008...

  • Page 33
    ... 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 all areas important...

  • Page 34
    ...costs in 2010, and expected in the future, related to the production of television programming by Hasbro Studios. The Company believes that its television initiative of developing programming based on its brands for distribution in the United States and in international markets supports its strategy...

  • Page 35
    ...to 14.7% in 2010. The Company reviews its operations on an ongoing basis and seeks to reduce the cost structure of its underlying business and promote efficiency. The Company is committed to returning excess cash to its shareholders through share repurchases and dividends. As part of this initiative...

  • Page 36
    ... lines benefited from the theatrical releases of TRANSFORMERS: REVENGE OF THE FALLEN in June 2009 and G.I. JOE: THE RISE OF COBRA in August 2009. Boys' toys sales were also negatively impacted by decreased sales of STAR WARS products. These decreases were partially offset by increased sales of NERF...

  • Page 37
    ... 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. In addition, operating profit increased as a result of decreased advertising expense. International...

  • Page 38
    ...PLAY-DOH products. Net revenues in the games and puzzles category decreased slightly as a result of decreased sales of board games. Net revenues in 2009 were also negatively impacted by decreased sales of TOOTH TUNES products, which have been discontinued in the Company's product line. International...

  • Page 39
    Expenses The Company's operating expenses, stated as percentages of net revenues, are illustrated below for the three fiscal years ended December 26, 2010: 2010 2009 2008 Cost of sales ...Royalties ...Product development ...Advertising ...Amortization ...Selling, distribution and administration ......

  • Page 40
    ... Company's purchase of a 50% interest in THE HUB television network. The remaining decrease relates to management incentive and other compensation expenses in 2010 partially offset by higher marketing and sales costs related to emerging markets and our television initiatives. Selling, distribution...

  • Page 41
    ... available lines of credit. In addition, in January 2011, the Company entered into an agreement with a group of banks to establish a commercial paper program. Under the program, at the Company's request and subject to market conditions, the group of banks may either purchase or arrange for the sale...

  • Page 42
    ... the 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...

  • Page 43
    ... amounts during the latter part of the year. During 2010, 2009 and 2008, the Company primarily utilized cash from operations, borrowings under its available lines of credit and its accounts receivable securitization program to fund its operations. During 2010, 2009 and 2008, the Company was party to...

  • Page 44
    ... scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase. The $425,000 notes due in 2014 bear interest at a rate of 6.125%, which may be adjusted upward in the event that the Company's credit rating from Moody's Investor Services...

  • Page 45
    ... in 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...

  • Page 46
    ... markets, and success of our program-related toy, game and other merchandise. For the year ended December 26, 2010 we have $35,415 of program production costs included in other assets in the consolidated balance sheet. Program production cost amortization of $22,069 is included in cost of sales...

  • Page 47
    ... applicable discount rates. At the end of 2007 the Company froze benefits under its two largest pension plans in the U.S., with no future benefits accruing to employees. The Company will continue to pay benefits under the plan consistent with the provisions existing at the date of the plan benefit...

  • Page 48
    ... 2010. The discount rate decreased to 5.20% at December 26, 2010 from 5.73% used at December 27, 2009. Pension plan assets are valued on the basis of their fair market value on the measurement date. These changes in the fair market value of plan assets impact the amount of future pension expense due...

  • Page 49
    ... lines of credit 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 the result of sourcing products priced in U.S. dollars, Hong Kong...

  • Page 50
    ... change in interest rates would increase or decrease 2011 pretax earnings by $882 and 2011 cash flows by $764. The Economy and Inflation The principal market for the Company's products is the retail sector. Revenues from the Company's top five customers, all retailers, accounted for approximately 50...

  • Page 51
    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 retailers and differences in overall economic conditions. ...

  • Page 52
    ...issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 23, 2011 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting. /s/ KPMG LLP Providence, Rhode Island February 23, 2011 42

  • Page 53
    ... 600,000,000 shares; issued 209,694,630 shares in 2010 and 2009 ...Additional paid-in capital ...Retained earnings...Accumulated other comprehensive earnings ...Treasury stock, at cost, 72,278,515 shares in 2010 and 72,597,140 shares in 2009 ...Total shareholders' equity ...Total liabilities...

  • Page 54
    HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Operations Fiscal Years Ended in December (Thousands of Dollars Except Per Share Data) 2010 2009 2008 Net revenues ...$4,002,161 Costs and expenses Cost of sales ...Royalties ...Product development ...Advertising ...Amortization ...Selling, ...

  • Page 55
    ...) 2010 2009 2008 Cash flows from operating activities Net earnings ...Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation of plant and equipment ...Amortization ...Program production cost amortization ...Deferred income taxes ...Stock-based compensation...

  • Page 56
    ... ...Balance, December 27, 2009 ...Net earnings ...Other comprehensive loss ...Comprehensive earnings ...Stock-based compensation transactions ...Conversion of debentures ...Purchases of common stock . . Stock-based compensation expense ...Dividends declared ...Balance, December 26, 2010 ... $104,847...

  • Page 57
    ...including letters of credit, credit insurance, factoring with unrelated third parties, and requiring cash in advance of shipping. The Company records an allowance for doubtful accounts based on management's assessment of the business environment, customers' financial condition, historical collection...

  • Page 58
    ... adjusted to reflect current risk assessments. Inventories Inventories are valued at the lower of cost (first-in, first-out) or market. Based upon a consideration of quantities on hand, actual and projected sales volume, anticipated product selling price and product lines planned to be discontinued...

  • Page 59
    ... 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 60
    ... is determined using a discounted cash flow model which is primarily based on management's future revenue and cost estimates. Shipping and Handling Hasbro expenses costs related to the shipment and handling of goods to customers as incurred. For 2010, 2009 and 2008, these costs were $154,604, $155...

  • Page 61
    ... other retirement programs are being accrued currently over the period of active employment and are also included in pension expense. Hasbro has a contributory postretirement health and life insurance plan covering substantially all employees who retire under any of its United States defined benefit...

  • Page 62
    ... 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 compensation plan...

  • Page 63
    ... debt, as well as shares issuable upon exercise of stock options and warrants for which the market price exceeds the exercise price, less shares which could have been purchased by the Company with the related proceeds. Options totaling 94, 5,784 and 3,491 for 2010, 2009 and 2008, respectively, were...

  • Page 64
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) (2) Other Comprehensive Earnings (Loss) The Company's other comprehensive earnings (loss) for the years 2010, 2009 and 2008 consist of the following: 2010 ...

  • Page 65
    ... testing, these assets are allocated to the reporting units within the Company's operating segments. Changes in the carrying amount of goodwill, by operating segment, for the years ended December 26, 2010 and December 27, 2009 are as follows: U.S. and Canada International Entertainment and Licensing...

  • Page 66
    ... to create a television network in the United States dedicated to high-quality children's and family entertainment and educational programming. The Company purchased its 50% share in THE HUB for a payment of $300,000 and certain future payments based on the value of certain tax benefits expected to...

  • Page 67
    ...with the joint venture including the licensing of television programming and the purchase of advertising. During 2010 and 2009, these transactions were not material. (6) Program Production Costs Program production costs consist of the following at December 26, 2010: 2010 Released, less amortization...

  • Page 68
    ... Per Share Data) borrowings outstanding under its committed line of credit at December 26, 2010. During 2010, Hasbro's working capital needs were fulfilled by cash generated from operations and borrowings under lines of credit. The unsecured committed line (the "Agreement") provides the Company with...

  • Page 69
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) (8) Accrued Liabilities Components of accrued liabilities are as follows: 2010 2009 Royalties ...Advertising ...Payroll and management incentives ...Non-...

  • Page 70
    ... period ending on the last trading day of the calendar quarter, the holders had the right to convert the notes to shares of the Company's common stock at the initial conversion price of $21.60 in the next calendar quarter. During the first quarter of 2010, holders of these debentures converted $111...

  • Page 71
    ... AOCE and stock options. In 2010, 2009, and 2008, the deferred tax portion of the total (benefit) expense was $(64,700), $(1,041), and $(26,555), respectively. A reconciliation of the statutory United States federal income tax rate to Hasbro's effective income tax rate is as follows: 2010 2009 2008...

  • Page 72
    ...and liabilities at December 26, 2010 and December 27, 2009 are: 2010 2009 Deferred tax assets: Accounts receivable ...Inventories ...Losses and tax credit carryforwards ...Operating expenses ...Pension ...Other compensation ...Postretirement benefits...Tax sharing agreement ...Other ... ...$ 21,095...

  • Page 73
    ... of operations. At December 26, 2010, December 27, 2009, and December 28, 2008, the Company had accrued potential interest and penalties of $14,466, $17,938, and $13,660, respectively. The Company and its subsidiaries file income tax returns in the United States and various state and international...

  • Page 74
    ... $1,130,000 at December 26, 2010. In the event that all international undistributed earnings were remitted to the United States, the amount of incremental taxes would be approximately $268,000. (11) Capital Stock In April 2010 the Company's Board of Directors authorized the repurchase of...

  • Page 75
    ... Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) At December 26, 2010 and December 27, 2009, the Company had the following assets measured at fair value in its consolidated balance sheets: Fair Value Measurements Using Quoted Prices in Active Markets...

  • Page 76
    ... of 196 shares with a weighted average grant date fair value of $39.77. In 2010, 2009 and 2008, 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 the issuance of contingent stock performance...

  • Page 77
    ... to market through the statement of operations. In 2010, the Company recognized expense of $1,004 related to these awards. Total compensation expense related to stock options, restricted stock units and Stock Performance Awards for the years ended December 26, 2010, December 27, 2009 and December...

  • Page 78
    ...compensation cost related to stock options was $20,012 and the weighted average period over which this will be expensed is 23 months. In 2010, 2009 and 2008, the Company granted 36, 60 and 36 shares of common stock, respectively, to its non-employee members of its Board of Directors. Of these shares...

  • Page 79
    ... 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 80
    ... below. Pension 2010 2009 Postretirement 2010 2009 Change in Projected Benefit Obligation Projected benefit obligation - beginning ...$ 306,220 Service cost ...2,018 Interest cost ...17,014 Actuarial loss (gain)...28,197 Plan amendment ...- Benefits paid ...(18,647) Settlements ...- Expenses paid...

  • Page 81
    ... of Dollars and Shares Except Per Share Data) Assumptions used to determine the year-end pension and postretirement benefit obligations are as follows: 2010 2009 Pension Weighted average discount rate ...Mortality table ...Postretirement Discount rate ...Health care cost trend rate assumed for next...

  • Page 82
    ... the investment manager's own assumptions about the inputs that market participants would use in pricing the asset. The Company believes that the net asset value is the best information available for use in the fair value measurement of this fund. Of the activity in Level 3 assets for 2010 $7,126...

  • Page 83
    ... Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) For 2010, 2009 and 2008, the Company measured the assets and obligations of the Plans as of the fiscal year-end. The following is a detail of the components of the net periodic benefit cost (benefit...

  • Page 84
    ... all of the plan assets are invested in equity and fixed income securities. The pension expense related to these plans was $2,333, $4,903, and $3,226 in 2010, 2009 and 2008, respectively. In fiscal 2011, the Company expects amortization of $65 of prior service costs, $349 of unrecognized...

  • Page 85
    .... These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States and Hong Kong dollars, Euros and British...

  • Page 86
    ...December 27, 2009, the Company reclassified net gains from other comprehensive earnings to net earnings of $17,912 and $21,240, respectively. Of the amount reclassified in 2010 and 2009, $13,249 and $17,173 were reclassified to cost of sales and $4,663 and $4,785 were reclassified to royalty expense...

  • Page 87
    ..., 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 and sells both toy and certain game products in...

  • Page 88
    ... in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses, are allocated to segments based upon foreign exchange rates fixed at the beginning of the year, with adjustments to actual foreign exchange rates included in Corporate and...

  • Page 89
    ...,616 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 90
    ...Company's products imported into the United States or Europe. (19) Quarterly Financial Data (Unaudited) First Second Quarter Third Fourth Full Year 2010 Net revenues ...Operating profit ...Earnings before income taxes ...Net earnings ...Per common share Net earnings Basic ...Diluted ...Market price...

  • Page 91
    ... and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 26, 2010. Based on the evaluation of these...

  • Page 92
    ...operations, shareholders' equity, and cash flows for each of the fiscal years in the three-year period ended December 26, 2010, and our report dated February 23, 2011 expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP Providence, Rhode Island February 23, 2011...

  • Page 93
    ... the Company's Chief Executive Officer, Chief Financial Officer and Controller. A copy of the Code of Conduct is available on the Company's website under Corporate, Investor Relations, Corporate Governance. The Company's website address is http://www.hasbro.com. Although the Company does not...

  • Page 94
    ... Matters The information required by this item is contained under the captions "Voting Securities and Principal Holders Thereof", "Security Ownership of Management" and "Equity Compensation Plans" in the Company's definitive proxy statement for the 2011 Annual Meeting of Shareholders and is...

  • Page 95
    ... 10.1 to the Company's Current Report on Form 8-K dated December 16, 2010, 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 96
    ...(e) to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 28, 2003, File No. 1-6682.) Lease extension and Amending Agreement between Central Toy and Hasbro Canada, dated January 31, 2010. (Incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10...

  • Page 97
    ... 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.) (y) Form of Employment Agreement between the Company and two Company executives (Brian...

  • Page 98
    ... to Appendix A to the Company's definitive proxy statement for its 1994 Annual Meeting of Shareholders, File No. 1-6682.) First Amendment to the 1994 Stock Option Plan for Non-Employee Directors. (Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the...

  • Page 99
    ... the definitive proxy statement for its 2010 Annual Meeting of Shareholders, File No. 1-6682.) Form of Fair Market Value Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Incorporated by Reference to Exhibit 10.2 to the Company's Quarterly Report on Form...

  • Page 100
    ... Billing, John Frascotti, Deborah Thomas, Martin Trueb, and certain other employees of the Company.) (Incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended October 1, 2006, File No. 1-6682.) (ggg) Hasbro, Inc. 2009 Senior Management Annual...

  • Page 101
    ... Accounting Firm The Board of Directors and Shareholders Hasbro, Inc.: Under date of February 23, 2011, we reported on the consolidated balance sheets of Hasbro, Inc. and subsidiaries as of December 26, 2010 and December 27, 2009, and the related consolidated statements of operations, shareholders...

  • Page 102
    ... 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: 2010 ...2009 ...2008 ... $32,800 $32,400 $30,600 3,500 3,970...

  • Page 103
    ... M. Philip Edward M. Philip Chairman of the Board February 23, 2011 President, Chief Executive Officer and Director (Principal Executive Officer) Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Director Director Director Director Director Director...

  • Page 104
    NOTES

  • Page 105
    ...WEB SITE: http://investor.hasbro.com Annual Meeting The annual meeting of shareholders will be held at 11:00 am on Thursday, May 19, 2011 at: Hasbro's Corporate O ce 1027 Newport Avenue Pawtucket, Rhode Island 02862-1059 Dividend Reinvestment and Cash Stock Purchase Program Under this plan, Hasbro...

  • Page 106
    1 0 2 7 N E W P O R T AV E N U E • PAW T U C K E T, R H O D E I S L A N D • 0 2 8 6 2-1 0 5 9 www.hasbro.com 002CSI1569