Hasbro 2010 Annual Report Download - page 64

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(2) Other Comprehensive Earnings (Loss)
The Company’s other comprehensive earnings (loss) for the years 2010, 2009 and 2008 consist of the
following:
2010 2009 2008
Foreign currency translation adjustments .................... $(32,457) 23,782 (33,555)
Changes in value of available-for-sale securities, net of tax ....... — 504 (3,037)
Gain (loss) on cash flow hedging activities, net of tax........... 10,444 (24,446) 73,184
Changes in unrecognized pension and postretirement amounts, net
oftax ............................................ (1,812) 8,356 (52,582)
Reclassifications to earnings, net of tax:
Net (gains) losses on cash flow hedging activities ............ (15,422) (18,657) 1,409
Loss on available-for-sale securities ...................... — 147 897
Amortization of unrecognized pension and postretirement
amounts ......................................... (11,235) 6,689 1,002
Other comprehensive loss . . . ............................ $(50,482) (3,625) (12,682)
In 2010, 2009 and 2008, net gains (losses) on cash flow hedging activities reclassified to earnings, net of
tax, included gains (losses) of $(109), $(679), and $1,292, respectively, as a result of hedge ineffectiveness.
The related tax benefit (expense) of other comprehensive earnings items was $5,327, $1,322 and $16,022
for the years 2010, 2009 and 2008, respectively. Income tax expense (benefit) related to reclassification
adjustments from other comprehensive earnings of $8,767, $(331) and $763 in 2010, 2009 and 2008,
respectively, were included in these amounts.
At December 26, 2010, the Company had remaining deferred gains on hedging instruments, net of tax, of
$15,432 in AOCE. These instruments hedge inventory purchased during the fourth quarter of 2010 or
forecasted to be purchased during 2011 and 2012 and intercompany expenses and royalty payments expected
to be paid or received during 2011 and 2012. 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 26, 2010, the Company expects approximately
$11,822 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.
Components of accumulated other comprehensive earnings at December 26, 2010 and December 27, 2009
are as follows:
2010 2009
Foreign currency translation adjustments ............................. $62,642 95,099
Gain on cash flow hedging activities, net of tax ....................... 15,432 20,410
Unrecognized pension and postretirement amounts, net of tax ............. (69,925) (56,878)
$ 8,149 58,631
54
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)