Hasbro 2012 Annual Report Download

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•••••••••••••••••••••••
2012
ANNUAL
REPORT

Table of contents

  • Page 1
    AN N UA L ••••••••••••••••••••••• R E P O R T 2012

  • Page 2
    ... and competitive position to achieve this potential. Through the global execution of our branded-play strategy, the Hasbro team is working to deliver longterm, profitable growth and enhanced total shareholder return. innovation and immersive experiences across the FURBY and MY LITTLE PONY brands...

  • Page 3
    ... with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Part III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and...

  • Page 4
    ... franchise brands, MY LITTLE PONY continued on its growth trajectory last year. With the support of global television, product innovation, inventive licensing, a new digital app game, online experiences and a strong retail execution, MY LITTLE PONY posted very robust, double-digit growth year-over...

  • Page 5
    ...our new Gaming Center of Excellence, which brought to Rhode Island our gaming design, development and marketing talent. In 2012, we are already seeing results generated by the new ideas and gaming reinvention from the team. Understanding that gaming is changing, but remains very relevant to kids and...

  • Page 6
    ...of Play product donation program to more than three million children worldwide from Beijing, China to Pawtucket, RI. Additionally, our Team Hasbro employees volunteered more than 20,000 hours of talent and expertise during the year, reaffirming that, at Hasbro, every day, we strive to use our global...

  • Page 7
    ...Health Special Partner Highland Consumer Fund Executive Officers Brian D. Goldner President and Chief Executive Officer David D. R. Hargreaves Executive Vice President and Chief Strategy Officer Deborah M. Thomas Executive Vice President and Chief Financial Officer Duncan J. Billing Executive Vice...

  • Page 8
    ... performance of the Company's Common Stock is not necessarily indicative of future performance. $250 $203 $200 $159 Indexed Stock Price $150 $131 $115 $100 $139 $144 $118 $111 $93 $100 $88 $91 $61 $60 $80 $106 $50 $0 2007 Hasbro, Inc. 2008 2009 S&P 500 2010 2011 2012 Russell 1000...

  • Page 9
    ...30, 2012 Commission file number 1-6682 Hasbro, Inc. (Exact Name of Registrant, As Specified in its Charter) Rhode Island (State of Incorporation) 05-0155090 (I.R.S. Employer Identification No.) 1027 Newport Avenue, Pawtucket, Rhode Island (Address of Principal Executive Offices) 02862 (Zip Code...

  • Page 10
    ..., Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accountant Fees and Services ...Part IV...

  • Page 11
    ... play for children and families through creative expression of the Company's world class brand portfolio. From toys and games to television programming, motion pictures, digital gaming and a comprehensive licensing program, Hasbro executes its brand blueprint in all of its operations. At the center...

  • Page 12
    ... operates a television network in the United States dedicated to high-quality children's and family entertainment and educational programming. Internationally, Hasbro Studios distributes television programming to broadcasters throughout the world. Product Categories A key part of our brand blueprint...

  • Page 13
    ... wholesome play experience. Girls' toy brands include FURREAL FRIENDS, LITTLEST PET SHOP, MY LITTLE PONY, BABY ALIVE, EASY BAKE and FURBY. The LITTLEST PET SHOP and MY LITTLE PONY brands were supported and will continue to be supported by television programming produced by Hasbro Studios in 2012 and...

  • Page 14
    ... entertainment experiences such as motion pictures, television, publishing and digital gaming. Major 2012 brands and products included MAGIC: THE GATHERING, MARVEL products, NERF, BEYBLADE products, STAR WARS products, TRANSFORMERS, PLAY-DOH, FURBY, FURREAL FRIENDS and PLAYSKOOL. International...

  • Page 15
    ..., respectively. The toy and game business is also characterized by customer order patterns which vary from year to year largely because of differences each year in the degree of consumer acceptance of product lines, product availability, marketing strategies and inventory policies of retailers, the...

  • Page 16
    ... to drive consumer interest and market acceptance. Our toy and game products are developed by a global development group and the costs of this group are allocated to the selling entities which comprise our principal operating segments. In 2012, 2011 and 2010, we incurred expenses of $201,197, $197...

  • Page 17
    ..., as well as at other international toy shows. In 2012, 2011 and 2010, we incurred $422,239, $413,951 and $420,651, respectively, in expense related to advertising and promotion programs. Certain entertainment-based products, such as products based on major motion pictures, generally do not require...

  • Page 18
    ... technologies continually creates new opportunities for existing competitors and start-ups to develop products that compete with our entertainment and toy and game offerings. Employees At December 30, 2012, we employed approximately 5,500 persons worldwide, approximately 2,800 of whom were located...

  • Page 19
    ... repurchase by the manufacturer of articles that are banned. Consumer product safety laws also exist in some states and cities within the United States and in many international markets including Canada, Australia and Europe. We utilize laboratories that employ testing and other procedures intended...

  • Page 20
    ... North America since 2012; prior thereto; President, Latin America, Asia Pacific and Emerging Markets from 2006 to 2012. Availability of Information Our internet address is http://www.hasbro.com. We make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and...

  • Page 21
    ... increasing technology, seek to combine digital and analog play, and capitalize on new play patterns and increased consumption of digital and social media. With the increasing array of competitive entertainment offerings, there is no guarantee that: • Any of our brands, products or product lines...

  • Page 22
    ... credit markets, or that otherwise damage the financial health of our retail customers and consumers, can harm our business and financial performance. We design, manufacture and market a wide variety of entertainment and consumer products worldwide through sales to our retail customers and directly...

  • Page 23
    ... are owned by The Walt Disney Company. Delays or increased costs associated with the development and offering of entertainment media based upon or related to our brands, can harm our business and profitability. Entertainment media, in forms such as television, motion pictures, DVD releases and other...

  • Page 24
    ... through net earnings. Part of our strategy to remain relevant to children and families is to offer innovative products incorporating greater technology and which marry digital and analog play. The margins on many of these products are lower than more traditional toys and games and such products may...

  • Page 25
    ...factors could result in product delays, increased costs and/or lost sales for our products. Our substantial sales and manufacturing operations outside the United States subject us to risks associated with international operations. We operate facilities and sell products in numerous countries outside...

  • Page 26
    ... importance of our international sales and international sourcing of manufacturing to our business, our financial condition and results of operations could be significantly harmed if any of the risks described above were to occur or if we are otherwise unsuccessful in managing our increasing global...

  • Page 27
    ... our annual operating results will depend, in large part, on our sales during the relatively brief holiday shopping season. This seasonality is exacerbated by retailers' quick response inventory management techniques. Sales of our toys, games and other family entertainment products at retail...

  • Page 28
    ... business, change their purchasing patterns, alter the manner in which they promote our products or the resources they devote to promoting and selling our products, or return substantial amounts of our products, it could significantly harm our sales, profitability and financial condition. Customers...

  • Page 29
    ...increased innovation and a change in the way we go to market with gaming products in order to remain successful in the gaming business in the future, we began implementing a strategy in 2011 to reinvent our gaming business. The objective of this plan was to stabilize our gaming business in 2012, and...

  • Page 30
    ... rates in order to sell new debt securities. The failure to receive financing on desirable terms, or at all, could damage our ability to support our future operations or capital needs or engage in other business activities. As of December 30, 2012, we had $1,384,895 of total principal amount of long...

  • Page 31
    ...certain that the key talented individuals at these companies would continue to work for us after the acquisition or that they would develop popular and profitable products or services in the future. Failure to operate our information systems and implement new technology effectively could disrupt our...

  • Page 32
    ... None. Item 2. Properties. Hasbro owns its corporate headquarters in Pawtucket, Rhode Island consisting of approximately 343,000 square feet, which is used by the U.S. and Canada, Global Operations and Entertainment and Licensing segments as well as for corporate functions. The Company also owns an...

  • Page 33
    ... used by the U.S. and Canada segment. The Company also leases approximately 51,000 square feet in Burbank, California that is used by the Entertainment and Licensing segment. The Company owns manufacturing plants in East Longmeadow, Massachusetts and Waterford, Ireland used in our Global Operations...

  • Page 34
    ... 6,000. See Part III, Item 12 of this report for the information concerning the Company's "Equity Compensation Plans". Dividends Declaration of dividends is at the discretion of the Company's Board of Directors and will depend upon the earnings and financial condition of the Company and such other...

  • Page 35
    ...at the market prices on the dates of the exercises of the stock options. Item 6. Selected Financial Data. (Thousands of dollars and shares except per share data and ratios) 2012 2011 Fiscal Year 2010 2009 2008 Statement of Operations Data: Net revenues ...Net earnings ...Per Common Share Data: Net...

  • Page 36
    ... its branded play through innovative toys and games, digital media, lifestyle licensing and publishing and entertainment, including television programming and motion pictures. The Company's focus remains on growing owned and controlled brands, developing new and innovative products and brands which...

  • Page 37
    ... children's networks internationally and on various digital platforms, such as Netflix and iTunes. The Company's television initiatives support its strategy of growing its brands well beyond traditional toys and games and providing entertainment experiences for consumers of all ages in any form...

  • Page 38
    ... 2011, the Company established Hasbro's Gaming Center of Excellence in Rhode Island to centralize games marketing and development while building on Hasbro's strategy of re-imagining, re-inventing and reigniting core brands as well as inventing new brands. During the first quarter of 2012 the Company...

  • Page 39
    ...30, 2012. 2012 2011 2010 Net revenues ...Costs and expenses: Cost of sales ...Royalties ...Product development ...Advertising ...Amortization of intangibles ...Program production cost amortization ...Selling, distribution and administration ...Operating profit ...Interest expense ...Interest income...

  • Page 40
    ...net revenues from BABY ALIVE and MY LITTLE PONY products. PRESCHOOL: Net revenues in the preschool category decreased 5% in 2012 compared to 2011. Increased net revenues from PLAY-DOH and PLAYSKOOL HEROES products, which includes MARVEL products, STAR WARS products and TRANSFORMERS RESCUE BOTS, were...

  • Page 41
    ...MY LITTLE PONY and BABY ALIVE products compared to 2010 were more than offset by lower net revenues from FURREAL FRIENDS and LITTLEST PET SHOP products. In the games category, higher net revenues from MAGIC: THE GATHERING, TWISTER, BATTLESHIP and boys' action gaming products, primarily STAR WARS and...

  • Page 42
    ... inventory management, which resulted in lower inventory obsolescence costs in 2012 compared to 2011. Changes in product mix included less impact from closeout sales in 2012 compared to 2011. U.S. and Canada operating profit decreased by 20% in 2011 compared to 2010. The operating profit margin...

  • Page 43
    ... royalty expense as a result of the mix of entertainment-based and non-entertainment based product sales. Further, the decline in operating profit margin in 2012 compared to 2011 reflects the change in geographical mix of net revenues, with a higher percentage coming from emerging markets, which...

  • Page 44
    ... to employee severance charges. The Company expects additional charges in 2013 and beyond as it implements additional phases of this program. These expenses were recorded to the consolidated statements of operations as follows: 2012 2011 Cost of sales ...Product development ...Selling, distribution...

  • Page 45
    .... In 2011, increased shipping costs related to higher revenues as well as increased expenses from the Company's investments in emerging markets, on-line operations, licensing, entertainment and its internal systems contributed to higher selling, distribution and administration costs compared to 2010...

  • Page 46
    ... tax rate from 2010 to 2011 and from 2011 to 2012 primarily reflect the change in the geographic mix of where the company earned its profits. Liquidity and Capital Resources The Company has historically generated a significant amount of cash from operations. In 2012 the Company funded its operations...

  • Page 47
    .... Hasbro generated $534,796, $396,069 and $367,981 of cash from its operating activities in 2012, 2011 and 2010, respectively. Operating cash flows in 2012, 2011 and 2010 included $59,277, $80,983 and $52,047, respectively, of cash used for television program production. Cash from operations in 2012...

  • Page 48
    ...on accounts receivable makes it necessary for the Company to borrow higher amounts during the latter part of the year. During 2012 and 2011, the Company primarily used cash from operations and borrowings under its commercial paper program and available lines of credit. In 2010, the Company primarily...

  • Page 49
    ... shares at an average price of $37.11. At December 30, 2012, $127,282 remained under the May 2011 Board authorization. Dividends paid were $225,464 in 2012 compared to $154,028 in 2011 reflecting not only the increase in the Company's dividend rate in 2012 to $0.36 per quarter from $0.30 per quarter...

  • Page 50
    .... Program Production Costs The Company incurs certain costs in connection with the production of television programs based primarily on the Company's toy and game brands, including animated and live-action programs and game shows. These costs are capitalized as they are incurred and amortized using...

  • Page 51
    ..., our ability to achieve broad distribution and viewer acceptance in international markets, and success of our program-related toy, game and other merchandise. For the year ended December 30, 2012 we have $91,975 of program production costs included in other assets in the consolidated balance sheet...

  • Page 52
    ... 30, 2012 from 4.96% used at December 25, 2011. A decrease of 0.25% in the Company's discount rate would have increased the 2012 projected benefit obligation by approximately $12,026. Pension plan assets are valued on the basis of their fair market value on the measurement date. These changes in the...

  • Page 53
    .... Changes in the Company's estimated effective income tax rate during 2012 were primarily due to changes in its estimate of earnings by tax jurisdiction. In addition, changes in judgment regarding likely outcomes related to tax positions taken in a prior fiscal year, or tax costs or benefits from...

  • Page 54
    ... from operations and funds available through its commercial paper program or lines of credit will allow the Company to meet these and other obligations described above. Financial Risk Management The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates...

  • Page 55
    ... items, and (c) failure to achieve tight and compressed shipping schedules. The business of the Company is characterized by customer order patterns which vary from year to year largely because of differences in the degree of consumer acceptance of a product line, product availability, marketing 45

  • Page 56
    ... percentage of product within or close to the fourth quarter holiday consumer buying season, which includes Christmas. Quick response inventory management practices being used by retailers result in more orders being placed for immediate delivery and fewer orders being placed well in advance of...

  • Page 57
    ... statements of operations, comprehensive earnings, cash flows and shareholders' equity for each of the fiscal years in the three-year period ended December 30, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express...

  • Page 58
    ...Share Data) 2012 2011 ASSETS Current assets Cash and cash equivalents ...Accounts receivable, less allowance for doubtful accounts of $19,600 in 2012 and $23,700 in 2011 ...Inventories ...Prepaid expenses and other current assets ...Total current assets ...Property, plant... financial statements. 48

  • Page 59
    ... Share Data) 2012 2011 2010 Net revenues ...Costs and expenses Cost of sales ...Royalties ...Product development ...Advertising ...Amortization of intangibles ...Program production cost amortization ...Selling, distribution and administration ...Total expenses ...Operating profit ...Non-operating...

  • Page 60
    HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Earnings Fiscal Years Ended in December (Thousands of Dollars) 2012 2011 2010 Net earnings ...Other comprehensive earnings (loss): Foreign currency translation adjustments ...Net (losses) gains on cash flow hedging activities, ...

  • Page 61
    ... ...50,569 46,647 50,405 Program production cost amortization ...41,800 35,798 22,069 Deferred income taxes ...(16,086) (2,921) 25,172 Stock-based compensation ...19,434 12,463 33,392 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable ...28,690 (108,845) 71...

  • Page 62
    ... 26, 2010 ...$104,847 625,961 2,978,317 Net earnings ...- - 385,367 Other comprehensive loss ...- - - Stock-based compensation transactions ...- (8,266) - Purchases of common stock ...- - - Stock-based compensation expense ...- 12,349 - Dividends declared ...- - (158,264) Balance, December 25, 2011...

  • Page 63
    ... at least annually; more frequent reviews are performed based on the customer's financial condition and the level of credit being extended. For customers on credit who are experiencing financial difficulties, management performs additional financial analyses before shipping orders. The Company uses...

  • Page 64
    ... Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) Inventories Inventories are valued at the lower of cost (first-in, first-out) or market. Based upon a consideration of quantities on hand, actual and projected sales volume, anticipated product selling price...

  • Page 65
    ... product sales less related provisions for discounts, rebates and returns, as well as royalty revenues and television programming revenues comprise net revenues in the consolidated statements of operations. Costs of Sales Cost of sales primarily consists of purchased materials, labor, manufacturing...

  • Page 66
    ... value is determined using a discounted cash flow model which is primarily based on management's future revenue and cost estimates. Shipping and Handling Hasbro expenses costs related to the shipment and handling of goods to customers as incurred. For 2012, 2011 and 2010, these costs were $157,035...

  • Page 67
    ... other retirement programs are being accrued currently over the period of active employment and are also included in pension expense. Hasbro has a contributory postretirement health and life insurance plan covering substantially all employees who retire under any of its United States defined benefit...

  • Page 68
    .... The Company does not use hedge accounting for these contracts as changes in the fair value of these contracts are substantially offset by changes in the fair value of the intercompany loans. The Company also used interest rate swap agreements to adjust the amount of long-term debt subject to fixed...

  • Page 69
    ... Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) A reconciliation of net earnings and average number of shares for each of the three fiscal years ended December 30, 2012 is as follows: 2012 Basic Diluted Basic 2011 Diluted Basic 2010 Diluted Net earnings...

  • Page 70
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) deferred losses included in AOCE at December 30, 2012, the Company expects approximately $659 to be reclassified to the consolidated statement of operations ...

  • Page 71
    ...impairment testing, these assets are allocated to the reporting units within the Company's operating segments. Changes in the carrying amount of goodwill, by operating segment, for the years ended December 30, 2012 and December 25, 2011 are as follows: U.S. and Canada International Entertainment and...

  • Page 72
    ... to create a television network in the United States dedicated to high-quality children's and family entertainment and educational programming. The Company purchased its 50% share in THE HUB for a payment of $300,000 and certain future payments based on the value of certain tax benefits expected to...

  • Page 73
    ... 2012, 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, as amended on October 25, 2012 (the "Agreement"), provides the Company...

  • Page 74
    ... Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) (8) Accrued Liabilities Components of accrued liabilities are as follows: 2012 2011 Royalties ...Advertising ...Payroll and management incentives ...Non-income based taxes ...Other...

  • Page 75
    ... fixed interest rates. In November 2012, these interest rate swap agreements were terminated. The fair value was recorded as an adjustment to long-term debt and is being amortized through the statement of operations over the life of the related debt using a straight-line method. At December 30, 2012...

  • Page 76
    ... Dollars and Shares Except Per Share Data) A reconciliation of the statutory United States federal income tax rate to Hasbro's effective income tax rate is as follows: 2012 2011 2010 Statutory income tax rate ...State and local income taxes, net ...Tax on international earnings ...Exam settlements...

  • Page 77
    ... in the accompanying consolidated statements of operations. At December 30, 2012, December 25, 2011 and December 26, 2010, the Company had accrued potential interest and penalties of $20,377, $13,847 and $14,466, respectively. The Company and its subsidiaries file income tax returns in the United...

  • Page 78
    ... to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) During 2011, as the result of the completion of an examination related to the 2006 and 2007 U.S. federal income tax returns by the U.S. Internal Revenue Service, the Company recognized $22...

  • Page 79
    ..., relating to the change in fair value of such investments. At December 30, 2012 and December 25, 2011, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets: Fair Value Measurements Using Quoted Prices in Active Markets Significant for Other...

  • Page 80
    ... about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. There were no changes in these valuation techniques during 2012. The following is a reconciliation...

  • Page 81
    ....98 34.61 41.06 70 138 - (12) 196 41.93 - 27.96 39.77 In 2012, 2011 and 2010, as part of its annual equity grant to executive officers and certain other employees, the Company issued contingent stock performance awards (the "Stock Performance Awards"). These awards provide the recipients with the...

  • Page 82
    ... was $17,875, $10,903 and $31,952, respectively, and was recorded as follows: 2012 2011 2010 Cost of sales ...Product development ...Selling, distribution and administration ...Income tax benefit ... $ 146 1,854 15,874 17,874 5,827 51 556 10,296 10,903 3,637 7,266 349 2,576 29,027 31,952 10,658...

  • Page 83
    ...of those units based on Hasbro's stock price will be paid in cash to the recipient. The Company accounts for these awards as a liability and marks the vested portion of the award to market through the statement of operations. In 2012, 2011 and 2010, the Company recognized expense of $1,348, $804 and...

  • Page 84
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) United States Plans Prior to 2008, substantially all United States employees were covered under at least one of several noncontributory defined benefit ...

  • Page 85
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) Reconciliations of the beginning and ending balances for the projected benefit obligation, the fair value of plan assets and the funded status are included ...

  • Page 86
    HASBRO, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - (Continued) (Thousands of Dollars and Shares Except Per Share Data) Assumptions used to determine the year-end pension and postretirement benefit obligations are as follows: 2012 2011 Pension Weighted average discount rate ...

  • Page 87
    ... are not used to leverage the portfolio beyond the market value of the underlying assets. These alternative investment strategies are included in other equity and fixed income asset categories at December 30, 2012 and December 25, 2011. Plan asset allocations are reviewed at least quarterly and...

  • Page 88
    ... 30, 2012 and the aggregate of the benefits earned during the period and the interest cost would have both increased by approximately 3%. Hasbro works with external benefit investment specialists to assist in the development of the long-term rate of return assumptions used to model and determine...

  • Page 89
    ...for employees who have left Hasbro's employ under terms of its long-term disability plan. (15) Leases Hasbro occupies offices and uses certain equipment under various operating lease arrangements. The rent expense under such arrangements, net of sublease income which is not material, for 2012, 2011...

  • Page 90
    ... addition, the Company was also party to several interest rate swap agreements to adjust the amount of long-term debt subject to fixed interest rates. For additional information related to these interest rate swaps see note 9. Cash Flow Hedges Hasbro uses foreign currency forward contracts to reduce...

  • Page 91
    ... to earnings as a result of hedge ineffectiveness in 2012, 2011 and 2010, 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...

  • Page 92
    ...amounts for 2012 and 2011 were $174,870 and $150,840, respectively, of bonds related to tax assessments in Mexico. See note 10 for additional discussion. The Company enters into license agreements with inventors, designers and others for the use of intellectual properties in its products. Certain of...

  • Page 93
    ... licensing, digital gaming, movie, television and online entertainment operations. The Global Operations segment is responsible for manufacturing and sourcing finished products for the Company's U.S. and Canada and International segments. Segment performance is measured at the operating profit level...

  • Page 94
    ... segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the...

  • Page 95
    ... international markets include Europe, Canada, Mexico and Latin America, Australia, and Hong Kong. Other Information Hasbro markets its products primarily to customers in the retail sector. Although the Company closely monitors the creditworthiness of its customers, adjusting credit policies...

  • Page 96
    ..."). These licenses have multi-year terms and provide the Company with the right to market and sell designated classes of products based on Marvel's portfolio of brands, including SPIDER-MAN and THE AVENGERS, and Lucas's STAR WARS brand. Hasbro's net revenues from these licenses can be significant in...

  • Page 97
    ... 1,329,338 4,285,589 Operating profit ...48,923 80,407 248,072 216,579 593,981 Earnings before income taxes ...22,838 52,954 221,457 189,144 486,393 Net earnings ...17,196 58,051 170,990 139,130 385,367 Per common share Net earnings Basic ...$ Diluted ...Market price High ...$ Low ...Cash dividends...

  • Page 98
    ... Management's Report on Internal Control over Financial Reporting The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act. Hasbro's internal control system is designed...

  • Page 99
    ... the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Hasbro, Inc. and subsidiaries as of December 30, 2012 and December 25, 2011, and the related consolidated statements of operations, comprehensive earnings, cash flows and shareholders...

  • Page 100
    ..., Corporate Governance. The Company's website address is http://www.hasbro.com. Although the Company does not generally intend to provide waivers of or amendments to the Code of Conduct for its Chief Executive Officer, Chief Financial Officer, Controller, or other officers or employees, information...

  • Page 101
    ... Financial Statements Included in PART II of this report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets at December 30, 2012 and December 25, 2011 Consolidated Statements of Operations for the Three Fiscal Years Ended in December 2012, 2011 and 2010 Consolidated...

  • Page 102
    ... of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 11, 2010, File No. 1-6682.) Material Contracts (a) Amended and Restated Revolving Credit Agreement, dated as of October 25, 2012, by and among Hasbro, Inc., Hasbro SA, Bank of America...

  • Page 103
    ...'s Quarterly Report on Form 10-Q for the period ended September 27, 2009, File No. 1-6682.) Executive Compensation Plans and Arrangements (k) Hasbro, Inc. 1995 Stock Incentive Performance Plan. (Incorporated by reference to Appendix A to the Company's definitive proxy statement for its 1995 Annual...

  • Page 104
    ... Program) under the 1995 Stock Incentive Performance Plan, and the 1997 Employee Non-Qualified Stock Plan. (Incorporated by reference to Exhibit 10(w) to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 27, 1992, File No. 1-6682.) Form of Employment Agreement between...

  • Page 105
    ...Appendix C to the definitive proxy statement for its 2010 Annual Meeting of Shareholders, File No. 1-6682.) Form of Fair Market Value Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable to Duncan Billing, David D.R. Hargreaves, John Frascotti and...

  • Page 106
    ...-Competition and Non-Solicitation Agreement. (Signed by the following executive officers: David Hargreaves, Duncan Billing, John Frascotti, Deborah Thomas, Martin Trueb, and certain other employees of the Company.) (Incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form...

  • Page 107
    ...audited the related consolidated financial statement schedule of Valuation and Qualifying Accounts included in the Form 10-K. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on...

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    ... (Thousands of Dollars) Balance at Beginning of Year Expense (Benefit) Other Additions Write-Offs and Other(a) Balance at End of Year Valuation accounts deducted from assets to which they apply - for doubtful accounts receivable: 2012 ...2011 ...2010 ... $23,700 $31,200 $32,800 (1,200) (200...

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    ... by the undersigned, thereunto duly authorized. HASBRO, INC. (Registrant) By: /s/ Brian D. Goldner Brian D. Goldner President and Chief Executive Officer Date: February 27, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

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    Signature Title Date /s/ Tracy A. Leinbach Director February 27, 2013 Tracy A. Leinbach /s/ Edward M. Philip Director February 27, 2013 Edward M. Philip 100

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    ...documents electronically, register your account by clicking on the "Create Login" button on "Investor Centre" at www.computershare.com/investor. At Hasbro, corporate social responsibility (CSR) unites the company's desire to play a part in building a safe and sustainable world for future generations...

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    1027 Newport Avenue Pawtucket, RI 02862-1059 www.hasbro.com 002CSN9166