Hasbro 2010 Annual Report Download - page 74

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totaling approximately $114,890 (at year-end 2010 exchange rates) have been provided to the Mexican
government related to the 2000 to 2003 assessments, allowing the Company to defend its positions. The
Company currently does not expect to be required to guarantee the amount of the 2004 or 2005 assessments.
The Company expects to be successful in sustaining its position with respect to these assessments as well as
similar positions that may be taken by the Mexican tax authorities for periods subsequent to 2005.
The Company believes it is reasonably possible that certain tax examinations and statutes of limitations
may be concluded and will expire within the next 12 months, and that unrecognized tax benefits, excluding
potential interest and penalties, may decrease by up to approximately $2,200, substantially all of which would
be recorded as a tax benefit in the statement of operations. In addition, approximately $300 of potential
interest and penalties related to these amounts would also be recorded as a tax benefit in the statement of
operations. These unrecognized tax benefits primarily relate to both the timing and the nature of the
deductibility of certain expenses, as well as the tax treatment of certain subsidiary and other transactions.
The cumulative amount of undistributed earnings of Hasbro’s international subsidiaries held for indefinite
reinvestment is approximately $1,130,000 at December 26, 2010. In the event that all international undistrib-
uted 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 up to $625,000 in common
stock after four previous authorizations dated May 2005, July 2006, August 2007 and February 2008 with a
cumulative authorized repurchase amount of $1,700,000 were fully utilized. Purchases of the Company’s
common stock may be made from time to time, subject to market conditions, and may be made in the open
market or through privately negotiated transactions. The Company has no obligation to repurchase shares
under the authorization and the timing, actual number, and the value of the shares which are repurchased will
depend on a number of factors, including the price of the Company’s common stock. In 2010, the Company
repurchased 15,763 shares at an average price of $40.37. The total cost of these repurchases, including
transaction costs, was $636,681. At December 26, 2010, $150,068 remained under this authorization.
(12) Fair Value of Financial Instruments
The Company measures certain assets at fair value in accordance with current accounting standards. The
fair value hierarchy consists of three levels: Level 1 fair values are valuations based on quoted market prices
in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values
are those valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are
not active, or other inputs that are observable or can be corroborated by observable data for substantially the
full term of the assets or liabilities; and Level 3 fair values are valuations based on inputs that are supported
by little or no market activity and that are significant to the fair value of the assets or liabilities.
Current accounting standards permit entities to choose to measure many financial instruments and certain
other items at fair value and establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for similar assets and liabilities. The
Company has elected the fair value option for certain investments. At December 26, 2010 and December 27,
2009, these investments totaled $21,767 and $21,108, respectively, and are included in prepaid expenses and
other current assets in the consolidated balance sheet. The Company recorded net gains of $1,218 and $1,019
on these investments in other (income) expense, net for the years ended December 26, 2010 and December 27,
2009, respectively, relating to the change in fair value of such investments.
64
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)