Hasbro 2011 Annual Report Download - page 88

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
The Company has a master agreement with each of its counterparties that allows for the netting of
outstanding forward contracts. The fair values of the Company’s foreign currency forward contracts designated
as cash flow hedges are recorded in the consolidated balance sheet at December 25, 2011 and December 26, 2010
as follows:
2011 2010
Prepaid expenses and other current assets
Unrealized gains ................................................... $11,965 24,710
Unrealized losses .................................................. (4,187) (9,229)
Net unrealized gain ................................................. 7,778 15,481
Other assets
Unrealized gains ................................................... 2,113 4,403
Unrealized losses .................................................. (92) (2,933)
Net unrealized gain ................................................. 2,021 1,470
Total asset derivatives .............................................. $ 9,799 16,951
Accrued liabilities
Unrealized gains ................................................... $ 12 —
Unrealized losses .................................................. (50) —
Net unrealized loss ................................................. (38) —
Other liabilities
Unrealized gains ................................................... — —
Unrealized losses .................................................. (21) —
Net unrealized loss ................................................. (21) —
Total liability derivatives ............................................ $ (59) —
During the years ended December 25, 2011, December 26, 2010 and December 27, 2009, the Company
reclassified net (losses) gains from AOCE to net earnings of $(2,936), $17,780 and $21,240, respectively. Of the
amount reclassified in 2011, 2010 and 2009, $(6,158), $13,249 and $17,173 were reclassified to cost of sales and
$2,895, $4,663 and $4,785 were reclassified to royalty expense, respectively. In addition, $436 was reclassified
to net revenues in 2011. Net losses of $(109), $(132) and $(718) were reclassified to earnings as a result of hedge
ineffectiveness in 2011, 2010 and 2009, respectively. Other (income) expense for the year ended December 25,
2011 includes a loss of approximately $3,700 related to certain derivatives which no longer qualified for hedge
accounting.
Undesignated Hedges
The Company also enters into foreign currency forward contracts to minimize the impact of changes in the
fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting
for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair
value of the intercompany loans. As of December 25, 2011 and December 26, 2010, the total notional amount of
the Company’s undesignated derivative instruments was $218,122 and $89,191, respectively.
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