Hasbro 2010 Annual Report Download - page 42

Accounts receivable decreased to $961,252 at December 26, 2010 from $1,038,802 at December 27,
2009. The accounts receivable balance at December 26, 2010 includes a decrease of approximately $11,500 as
a result of the translation of foreign currency balances due to the stronger U.S. dollar at December 26, 2010
compared to December 27, 2009. Absent the effect of foreign exchange, the decrease in accounts receivable
reflects decreased sales in the fourth quarter of 2010 compared to the fourth quarter of 2009. There was no
utilization of the Company’s securitization program at December 26, 2010 or December 27, 2009. Accounts
receivable increased to $1,038,802 at December 27, 2009 from $611,766 at December 28, 2008. The accounts
receivable balance at December 27, 2009 includes an increase of approximately $33,200 as a result of a
weaker U.S. dollar at December 27, 2009 as compared to December 28, 2008. Absent the effect of foreign
exchange, the increase in accounts receivable primarily reflects the utilization of the Company’s securitization
program at December 28, 2008 of $250,000. The increase in accounts receivable also reflects higher sales, and
the timing of those sales, in the fourth quarter of 2009 as compared to 2008. Fourth quarter days sales
outstanding were 68 days in 2010 and 2009 and 45 days in 2008. Absent the impact of securitization, days
sales outstanding would have been 63 days in 2008.
Inventories increased to $364,194 at December 26, 2010 compared to $207,895 at December 27, 2009.
The increased inventory balance at December 26, 2010 reflects the lower sales in the fourth quarter of 2010
compared to 2009. Inventories decreased to $207,895 at December 27, 2009 compared to $300,463 at
December 28, 2008. The decrease primarily reflects higher inventory levels at December 28, 2008 due to
decreased sales in the fourth quarter of 2008 as well as increased sales in the fourth quarter of 2009.
Prepaid expenses and other current assets increased slightly to $167,807 at December 26, 2010 from
$162,290 at December 27, 2009. Increases in income tax receivables, current deferred income taxes and the
values of the Company’s forward currency contracts were partially offset by decreased prepaid royalties as the
result of utilization of advance royalty payments. Generally, when the Company enters into a licensing
agreement for entertainment-based properties, an advance royalty payment is required at the inception of the
agreement. This payment is then recognized in the consolidated statement of operations as the related sales are
made. Each reporting period, the Company reflects as current prepaid expense the amount of royalties it
expects to reflect in the statement of operations in the upcoming twelve months. Prepaid expenses and other
current assets decreased to $162,290 at December 27, 2009 from $171,387 at December 28, 2008. The
decrease was primarily due to a decrease in the value of the Company’s foreign currency contracts as a result
of the stronger U.S. dollar, partially offset by purchases of short-term investments of $18,000 in 2009, which
are reflected as an investing activity in the accompanying consolidated statement of cash flows.
Accounts payable and accrued expenses decreased to $704,233 at December 26, 2010 compared to
$801,775 at December 27, 2009. This decrease primarily related to lower accrued payroll and management
incentives, lower accrued royalties as a result of the decrease in entertainment-driven products, and lower
accounts payable balances due to the timing of payments in the current year. Accounts payable and accrued
expenses increased to $801,775 at December 27, 2009 from $792,306 at December 28, 2008. The accounts
payable and accrued expenses balance at December 27, 2009 includes an increase of approximately $17,700 as
a result of a weaker U.S. dollar at December 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. These decreases were partially offset by higher accrued payroll and management
incentives at December 27, 2009.
Cash flows from investing activities were a net utilization of $104,188, $497,509, and $271,920 in 2010,
2009 and 2008, respectively. The 2009 utilization includes the Company’s $300,000 payment to Discovery for
its 50% interest in THE HUB, a payment of $45,000 to Lucas to extend 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 as well as $65,153 in cash, net of cash acquired,
used to acquire Cranium in January 2008. There were no investments or acquisitions in 2010. During 2010,
the Company expended approximately $113,000 on additions to its property, plant and equipment compared to
$104,000 during 2009 and $117,000 during 2008. Of these amounts, 57% in 2010, 58% in 2009 and 56% in
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