Hasbro 2013 Annual Report Download - page 97

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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 29, 2013 and December 30, 2012
as follows:
2013 2012
Prepaid expenses and other current assets
Unrealized gains ................................................... $ 1,088 2,802
Unrealized losses .................................................. (702) (1,073)
Net unrealized gain ................................................. $ 386 1,729
Other assets
Unrealized gains ................................................... $ — 12
Unrealized losses .................................................. — —
Net unrealized gain ................................................. $ — 12
Accrued liabilities
Unrealized gains ................................................... $ 3,425 1,466
Unrealized losses .................................................. (13,671) (4,245)
Net unrealized loss ................................................. $(10,246) (2,779)
Other liabilities
Unrealized gains ................................................... $ — 20
Unrealized losses .................................................. (2,070) (375)
Net unrealized loss ................................................. $ (2,070) (355)
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings
to net earnings for the years ended December 29, 2013, December 30, 2012 and December 25, 2011 as follows:
2013 2012 2011
Consolidated Statements of Operations Classification
Cost of sales ............................................... $1,523 9,644 (6,158)
Royalties .................................................. (1,096) 1,845 2,895
Sales ..................................................... 3,585 (2,633) 436
Net realized gains ........................................... $4,012 8,856 (2,827)
In addition, net losses of $(164), $(94) and $(109) were reclassified to earnings as a result of hedge
ineffectiveness in 2013, 2012 and 2011, respectively. Other (income) expense for the year ended December 25,
2011 also included a loss of approximately $3,700 related to certain derivatives which no longer qualified for
hedge accounting.
During the fourth quarter of 2013, the Company entered into forward-starting interest rate swap agreements
with total notional value of $300,000 to hedge the variability of the anticipated underlying U.S. Treasury interest
rate associated with the expected issuance of long-term debt to refinance the 6.125% Notes Due 2014 with a
principal of $425,000. These derivative instruments are designated and effective as cash flow hedges. An
unrealized gain of $3,172 related to these instruments was recorded to prepaid expenses and other current assets
at December 29, 2013.
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