Hasbro 2011 Annual Report Download - page 89

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
At December 25, 2011 and December 26, 2010, the fair value of the Company’s undesignated derivative
financial instruments are recorded in the consolidated balance sheets as follows:
2011 2010
Prepaid expenses and other current assets
Unrealized gains ............................................................... $ — 27
Unrealized losses ............................................................... — (827)
Net unrealized loss .............................................................. $ — (800)
Accrued liabilities
Unrealized gains ............................................................... $ 41 —
Unrealized losses ............................................................... (786) —
Net unrealized loss .............................................................. (745) —
Other liabilities
Unrealized gains ............................................................... — —
Unrealized losses ............................................................... (1,104) —
Net unrealized loss .............................................................. (1,104) —
Total unrealized loss, net ......................................................... $(1,849) (800)
The Company recorded net gains of $9,098, $4,827, and $6,580 on these instruments to other (income)
expense, net for 2011, 2010 and 2009, 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 $174,082 and $179,592 at
December 25, 2011 and December 26, 2010, respectively. Included in the amounts for 2011 and 2010 were
$150,840 and $114,890, 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 25, 2011, Hasbro may, provided
the other party meets their contractual commitment, be required to pay amounts as follows: 2012: $40,314; 2013:
$93,173; 2014: $14,775; 2015: $14,775; 2016: $14,375; and thereafter: $57,500. At December 25, 2011, the
Company had $134,730 of prepaid royalties, $16,788 of which are included in prepaid expenses and other current
assets and $117,942 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 $140,000
that are not included in the amounts above that may be payable during the next seven years contingent upon the
quantity and types of theatrical movie releases by the licensor.
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