Hasbro 2015 Annual Report Download - page 104

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
(16) Derivative Financial Instruments
Hasbro uses foreign currency forward contracts to mitigate the impact of currency rate fluctuations on
firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which
hedge future currency requirements related to purchases of inventory, product sales and other cross-border
transactions not denominated in the functional currency of the business unit, are primarily denominated in United
States and Hong Kong dollars, and Euros. All contracts are entered into with a number of counterparties, all of
which are major financial institutions. The Company believes that a default by a single counterparty would not
have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative
financial instruments for speculative purposes.
Cash Flow Hedges
Hasbro uses foreign currency forward contracts to reduce the impact of currency rate fluctuations on firmly
committed and projected future foreign currency transactions. All of the Company’s designated foreign currency
forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company’s
currency requirements associated with anticipated inventory purchases and other cross-border transactions in
years 2016 through 2020.
At December 27, 2015 and December 28, 2014, the notional amounts and fair values of assets (liabilities)
for the Company’s foreign currency forward contracts designated as cash flow hedging instruments were as
follows:
2015 2014
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Hedged transaction
Inventory purchases .......................... $1,380,488 108,521 863,232 69,049
Sales ..................................... 97,350 803 139,946 829
Royalties and Other .......................... 54,360 (1,886) 51,213 (1,008)
Total ..................................... $1,532,198 107,438 1,054,391 68,870
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