Hasbro 2014 Annual Report Download - page 92

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
In order to defend its position in court, the Company was required to guarantee the amount of the
assessments for the years 2000 to 2004, as is usual and customary in Mexico with respect to these matters. Bonds
had been provided to the Mexican government related to the 2000 through 2004 assessments, allowing the
Company to defend its positions. Due to the timing of the settlement, these bonds were still outstanding at
December 28, 2014 and totaled $146,410 (at year end 2014 exchange rates).
The Company believes it is reasonably possible that certain tax examinations and statutes of limitations may
be concluded and will expire within the next 12 months, and that unrecognized tax benefits, excluding potential
interest and penalties, may decrease by up to approximately $3,000, substantially all of which would be recorded
as a tax benefit if not paid in the consolidated statements of operations. In addition, approximately $600 of
potential interest and penalties related to these amounts would also be recorded as a tax benefit in the
consolidated statements of operations.
The cumulative amount of undistributed earnings of Hasbro’s international subsidiaries held for indefinite
reinvestment is approximately $2,023,000 at December 28, 2014. In the event that all international undistributed
earnings were remitted to the United States, the amount of incremental taxes would be approximately $513,000.
(11) Capital Stock
In August 2013 the Company’s Board of Directors authorized the repurchases of up to $500,000 in common
stock after six previous authorizations dated May 2005, July 2006, August 2007, February 2008, April 2010 and
May 2011 with a cumulative authorized repurchase amount of $2,825,000 were fully utilized. Purchases of the
Company’s common stock may be made from time to time, subject to market conditions, and may be made in the
open market or through privately negotiated transactions. The Company has no obligation to repurchase shares
under the authorization and the time, actual number, and the value of the shares which are repurchased will
depend on a number of factors, including the price of the Company’s common stock. In 2014, the Company
repurchased 8,490 shares at an average price of $54.26. The total cost of these repurchases, including transaction
costs, was $460,840. At December 28, 2014, $64,151 remained under the current authorizations. In February
2015, the Company’s Board of Directors authorized the repurchase of an additional $500,000 of common stock.
(12) Fair Value of Financial Instruments
The Company measures certain assets at fair value in accordance with current accounting standards. The fair
value hierarchy consists of three levels: Level 1 fair values are valuations based on quoted market prices in active
markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values are those
valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or
other inputs that are observable or can be corroborated by observable data for substantially the full term of the
assets or liabilities; and Level 3 fair values are valuations based on inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or liabilities. There have been no transfers between
levels within the fair value hierarchy.
Current accounting standards permit entities to choose to measure many financial instruments and certain
other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar assets and liabilities. The Company has
elected the fair value option for certain investments. At December 28, 2014 and December 29, 2013, these
investments totaled $23,560 and $28,048, respectively, and are included in prepaid expenses and other current
assets in the consolidated balance sheets. The Company recorded net gains of $889, $152 and $2,504 on these
investments in other (income) expense, net for the years ended December 28, 2014, December 29, 2013 and
December 30, 2012, respectively, relating to the change in fair value of such investments.
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