Hasbro 2011 Annual Report Download - page 69

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
Based on management’s total revenue estimates at December 25, 2011, all of the unamortized television
programming costs relating to released productions are expected to be amortized during the next three years. The
Company expects to amortize, based on current estimates, approximately $31,000 of the $44,091 of released
programs during fiscal 2012 based on current estimates.
At December 25, 2011, acquired program libraries are being amortized based on estimates of future
expected revenues over a remaining period of approximately one year.
(7) Financing Arrangements
At December 25, 2011, Hasbro had available an unsecured committed line and unsecured uncommitted lines
of credit from various banks approximating $500,000 and $133,200, respectively. A portion of the short-term
borrowings outstanding at the end of 2011 and 2010 represent borrowings made under, or supported by, these
lines of credit. 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 weighted average interest rates of the outstanding borrowings under the uncommitted lines of credit as of
December 25, 2011 and December 26, 2010 were 4.84% and 5.79%, respectively. The Company had no
borrowings outstanding under its committed line of credit at December 25, 2011; however, it did have notes
outstanding under its commercial paper program which are supported by its unsecured committed line of credit.
During 2011, Hasbro’s working capital needs were fulfilled by cash generated from operations, borrowings under
lines of credit and utilization of its commercial paper program discussed below.
The unsecured committed line of credit (the “Agreement”) provides the Company with a $500,000
committed borrowing facility through December 2014. The Agreement was entered into on December 16, 2010
replacing the previous Revolving Credit Agreement. 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 25, 2011.
The Company pays a commitment fee (0.225% as of December 25, 2011) based on the unused portion of
the facility and interest equal to a Base Rate or Eurocurrency Rate plus a spread on borrowings under the facility.
The Base Rate is determined based on either the Federal Funds Rate plus a spread, Prime Rate or Eurocurrency
Rate plus a spread. The commitment fee and the amount of the spread to the Base Rate or Eurocurrency rate both
vary based on the Company’s long-term debt ratings and the Company’s leverage. At December 25, 2011, the
interest rate under the facility was equal to Eurocurrency Rate plus 1.50%.
In January 2011, the Company entered into an agreement with a group of banks to establish a commercial
paper program (the “Program”). Under the Program, at the Company’s request the banks may either purchase
from the Company, or arrange for the sale by the Company of, unsecured commercial paper notes. Under the
Program, the Company may issue notes from time to time up to an aggregate principal amount outstanding at any
given time of $500,000. The maturities of the notes may vary but may not exceed 397 days. Subject to market
conditions, the notes will be sold under customary terms in the commercial paper market and will be issued at a
discount to par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or
floating rate basis. The interest rates will vary based on market conditions and the ratings assigned to the notes by
the credit rating agencies at the time of issuance. At December 25, 2011, the Company had notes outstanding
under the Program of $166,459 with a weighted average interest rate of 1.79%.
During 2009, the Company utilized an accounts receivable securitization program. Under the program, the
Company recorded a loss on the sale of receivables which totaled $2,514 which was recorded in selling,
distribution and administration expenses. The program was terminated on January 28, 2011 and was not utilized
in 2011 or 2010.
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