Hasbro 2008 Annual Report Download - page 66

(7) Long-Term Debt
Components of long-term debt are as follows:
2008 2007
6.15% Notes Due 2008 ......................................... $ — 135,092
6.30% Notes Due 2017 ......................................... 350,000 350,000
2.75% Convertible Debentures Due 2021 ............................ 249,828 249,828
6.60% Debentures Due 2028 ..................................... 109,895 109,895
Total principal amount of long-term debt ............................ 709,723 844,815
Fair value adjustment related to interest rate swaps .................... — 256
Total long-term debt ........................................... 709,723 845,071
Less current portion ........................................... — 135,348
Long-term debt excluding current portion ........................... $709,723 709,723
At December 28, 2008, as detailed above, all contractual maturities of long-term debt occur subsequent to
2013.
At December 28, 2008, the fair values of the 6.30% Notes, the 6.60% Notes and the 2.75% Debentures
were approximately $335,000, $100,300 and $334,200, respectively.
In 2008 and 2006 the Company repaid $135,092 of 6.15% notes due in July 2008 and $32,743 of
8.5% notes due in March 2006, respectively.
In September 2007 the Company issued $350,000 of notes that are due in 2017 (the “Notes”). The Notes
bear interest at a rate of 6.30%, which may be adjusted upward in the event that the Company’s credit rating
from Moody’s Investor Services, Inc., Standard & Poor’s Ratings Services or Fitch Ratings is decreased two
levels below the Company’s credit ratings on the date of issuance of the Notes. From the date of issuance
through December 28, 2008, the Company’s ratings from Moody’s Investor Services, Inc., Standard & Poor’s
Ratings Services and Fitch Ratings were BBB, Baa2 and BBB, respectively. The interest rate adjustment is
dependent on the degree of decrease of the Company’s ratings and could range from 0.25% to a maximum of
2%. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or
the present value of the remaining scheduled payments discounted using the effective interest rate on
applicable U.S. Treasury bills at the time of repurchase.
The Company currently has $249,828 outstanding in principal amount of contingent convertible
debentures due 2021. These debentures bear interest at 2.75%, which could be subject to an upward
adjustment depending on the price of the Company’s common stock. If the closing price of the Company’s
common stock exceeds $23.76 for at least 20 trading days, within the 30 consecutive trading day period
ending on the last trading day of the calendar quarter, the holders have the right to convert the notes to shares
of the Company’s common stock at the initial conversion price of $21.60 in the next calendar quarter. At
December 28, 2008, this contingent conversion feature was met and the debentures are convertible through
March 31, 2009, at which time the requirements of the contingent conversion feature will be reevaluated. In
addition, if the closing price of the Company’s common stock exceeds $27.00 for at least 20 trading days in
any thirty day period, the Company has the right to call the debentures by giving notice to the holders of the
debentures. During a prescribed notice period, the holders of the debentures have the right to convert their
debentures in accordance with the conversion terms described above. At certain times during the year, based
on the Company’s common stock price, the Company had the right to call the debentures under this provision.
As of December 28, 2008, the Company did not have the right to call the debentures. The holders of these
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)