Hasbro 2012 Annual Report Download - page 47

As of December 30, 2012 the Company’s cash and cash equivalents totaled $849,701, substantially all of
which is held by international subsidiaries outside of the United States. Deferred income taxes have not been
provided on most of the undistributed earnings of international subsidiaries as most of such earnings are
indefinitely reinvested by the Company. Accordingly, international cash balances are not available to fund cash
requirements in the United States unless the Company changes its reinvestment policy. The Company has
sufficient sources of cash in the United States to fund cash requirements without the need to repatriate any funds.
If the Company changes its policy of permanently reinvesting international earnings, it would be required to
accrue for any additional income taxes representing the difference between the tax rates in the United States and
the applicable tax of the international subsidiaries. If the Company repatriated the funds from its international
subsidiaries, it would then be required to pay the additional U.S. income tax. The majority of the Company’s
cash and cash equivalents held outside of the United States as of December 30, 2012 is denominated in the U.S.
dollar.
At December 30, 2012, cash and cash equivalents, net of short-term borrowings, were $625,336 compared
to $461,258 and $713,228 at December 25, 2011 and December 26, 2010, respectively. Hasbro generated
$534,796, $396,069 and $367,981 of cash from its operating activities in 2012, 2011 and 2010, respectively.
Operating cash flows in 2012, 2011 and 2010 included $59,277, $80,983 and $52,047, respectively, of cash used
for television program production. Cash from operations in 2012, 2011 and 2010 also includes long-term royalty
advance payments of $25,000 made to THE HUB in each of the three years.
Accounts receivable, net decreased to $1,029,959 at December 30, 2012 from $1,034,580 at December 25,
2011. The accounts receivable balance at December 30, 2012 includes an increase of approximately $10,600 as a
result of the translation of foreign currency. Absent the impact of foreign exchange, accounts receivable, net
decreased reflecting lower fourth quarter sales. Days sales outstanding increased to 72 days at December 30,
2012 from 70 days at December 25, 2011, primarily due to higher revenue volume in Latin America, a region
which has longer payment terms. Accounts receivable, net increased to $1,034,580 at December 25, 2011 from
$961,252 at December 26, 2010. The accounts receivable balance at December 25, 2011 included a decrease of
approximately $24,900 as a result of the translation of foreign currency. Absent the impact of foreign exchange,
the increase in accounts receivable reflected increased sales and timing of such sales in the fourth quarter of 2011
compared to the fourth quarter of 2010. Days sales outstanding increased to 70 days at December 25, 2011 from
68 days at December 26, 2010.
Inventories decreased to $316,049 at December 30, 2012 compared to $333,993 at December 25, 2011.
Inventories declined 23% in the U.S. and Canada segment, partially offset by increases in certain International
markets including Russia, China and Korea. Inventories decreased to $333,993 at December 25, 2011 compared
to $364,194 at December 26, 2010. The decreased inventory balance at December 25, 2011 reflects higher sales
in the fourth quarter of 2011 compared to 2010 as well as the Company’s efforts to lower its overall levels from
year-end 2010.
Prepaid expenses and other current assets increased to $312,493 at December 30, 2012 from $243,431 at
December 25, 2011. The balance at December 30, 2012 includes an increase of approximately $5,500 as a result
of translation of foreign currency. Absent the impact of foreign currency translation, increases in prepaid
royalties, primarily related to prepaid royalties previously recorded as long-term which have become current
related to the MARVEL license, as well as deferred income taxes were partially offset by lower non-income
based tax receivables compared to 2011 as a result of collections in 2012. Prepaid expenses and other current
assets increased to $243,431 at December 25, 2011 from $167,807 at December 26, 2010 primarily due to higher
non-income based tax receivables. These tax receivables were primarily related to value added taxes in Europe
that were due to the Company, primarily from France, Spain and Germany. The increase was primarily due to
changes in the legal structure of the Company’s European business, which resulted in larger outstanding balances
at year-end 2011. This increase was partially offset by decreases in foreign exchange contracts and income tax
receivables.
Accounts payable and accrued expenses decreased to $736,070 at December 30, 2012 from $761,914 at
December 25, 2011. The 2012 balance includes an increase of approximately $8,300 as a result of the translation
of foreign currency balances. The decrease was partially the result of lower accrued dividends as the result of a
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