Hasbro 2013 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2013 Hasbro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
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 29, 2013 and December 30, 2012, the total notional amount of
the Company’s undesignated derivative instruments was $294,888 and $189,217, respectively.
At December 29, 2013 and December 30, 2012, the fair value of the Company’s undesignated derivative
financial instruments are recorded in the consolidated balance sheets as follows:
2013 2012
Other assets
Unrealized gains ................................................................ $1,069 —
Unrealized losses ............................................................... — —
Net unrealized gain .............................................................. $1,069 —
Accrued liabilities
Unrealized gains ................................................................ $ 478 469
Unrealized losses ............................................................... (492) (796)
Net unrealized loss .............................................................. (14) (327)
Total unrealized gain (loss) ........................................................ $1,055 (327)
The Company recorded net losses (gains) of $8,791, $2,067 and $(9,098) on these instruments to other
(income) expense, net for 2013, 2012 and 2011, respectively, relating to the change in fair value of such
derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which
the instruments relate.
For additional information related to the Company’s derivative financial instruments see notes 2, 9 and 12.
(17) Commitments and Contingencies
Hasbro had unused open letters of credit and related instruments of approximately $209,398 and $194,221 at
December 29, 2013 and December 30, 2012, respectively. Included in the amounts for 2013 and 2012 were
$187,130 and $174,870, 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 these agreements contain provisions for the payment of guaranteed or
minimum royalty amounts. Under terms of existing agreements as of December 29, 2013, Hasbro may, provided
the other party meets their contractual commitment, be required to pay amounts as follows: 2014: $17,560; 2015:
$67,366; 2016: $13,556; 2017: $12,706; 2018: $12,706; and thereafter: $38,117. At December 29, 2013, the
Company had $294,991 of prepaid royalties, $152,459 of which are included in prepaid expenses and other
current assets and $142,532 of which are included in other assets.
In addition to the above commitments, certain of the above contracts impose minimum marketing
commitments on the Company. The Company may be subject to additional royalty guarantees totaling $170,000
that are not included in the amounts above that may be payable during the next six years contingent upon the
quantity and types of theatrical movie releases by the licensor.
86