Hasbro, Inc.
HASBRO INC (Form: 8-K, Received: 11/05/2013 16:39:01)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): November 5, 2013
 
Hasbro, Inc.
(Exact name of registrant as specified in its charter)
Rhode Island
 
1-6682
 
05-0155090
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
1027 Newport Ave., Pawtucket, Rhode Island
 
02862
(Address of principal executive offices)
 
(Zip Code)
 
Registrant's telephone number, including area code:   (401) 431-8697
 ____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.                            Results of Operations and Financial Condition.

On November 5, 2013, Hasbro, Inc. (the "Company") filed its Quarterly Report on Form 10-Q for the quarter ended September 29, 2013 (the "10-Q").  As disclosed in the 10-Q, the Company reported certain adjustments made since its third quarter earnings announcement on October 21, 2013 relating to an arbitration award received by the Company on October 29, 2013, which affect its third quarter financial statements.  The Company recognized a total charge during the third quarter related to this arbitration award of $75.5 million, of which $57.2 million was included in royalty expense and $18.3 million in interest expense.  These adjustments decreased reported GAAP diluted earnings per share by $0.50 for the third quarter to $0.96 per share.

A copy of the financial information attached to the Company's October 21, 2013 earnings press release, updated to reflect the arbitration award charges, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  The Company has also revised certain slides in the slide presentation that accompanied its earnings call to reflect the arbitration award, which are attached hereto as Exhibit 99.2 and incorporated herein by reference.

The accompanying financial schedules include a financial measure, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), that is considered a non-GAAP financial measure as defined under Securities and Exchange Commission ("SEC") rules. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Management believes that EBITDA is one of the appropriate measures for evaluating our operating performance, because it reflects the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. However, this measure should be considered in addition to, and not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in our financial statements and filings with the SEC. The EBITDA measures included in the financial schedules have been reconciled to the most directly comparable GAAP measures as is required under SEC rules regarding the use of non-GAAP financial measures.

The accompanying financial schedules and revised presentation slides also include the Company's 2013 and 2012 costs and expenses and operating profit excluding the impact of restructuring, pension settlement and the arbitration award charges, and 2013 and 2012 net earnings and diluted earnings per share excluding the above charges as well as a benefit from a tax settlement. Management believes that presenting this data excluding these charges and tax benefit assists investors understanding of the underlying performance of the results of operations.

As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.

The information furnished in this Item 2.02, including the Exhibits attached hereto, shall not be deemed "filed" for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.



Item 9.01                            Financial Statements and Exhibits.

(d)  Exhibits

99.1 Hasbro, Inc. Revised Earnings Release Financial Schedules for the Quarter Ended September 29, 2013.

99.2 Hasbro, Inc. Revised Conference Call Presentation Slides for the Quarter Ended September 29, 2013.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
HASBRO, INC.
 
 
 
 
 
 
By:
/s/ Deborah Thomas
 
Name:
Deborah Thomas
 
Title:
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date:  November 5, 2013
 
 


EXHIBIT INDEX
Exhibit No.
 
Description
 
 
99.1
 
99.2
 
Hasbro, Inc. Revised Earnings Release Financial Schedules for the Quarter Ended September 29, 2013.
 
Hasbro, Inc. Revised Conference Call Presentation Slides for the Quarter Ended September 29, 2013.
 

Exhibit 99.1
 
HASBRO, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
 
(Thousands of Dollars)
 
Sept. 29, 2013
   
Sept. 30, 2012
 
ASSETS
 
   
 
Cash and Cash Equivalents
 
$
588,668
   
$
696,733
 
Accounts Receivable, Net
   
1,215,289
     
1,195,517
 
Inventories
   
447,113
     
463,433
 
Other Current Assets
   
346,215
     
263,297
 
  Total Current Assets
   
2,597,285
     
2,618,980
 
Property, Plant and Equipment, Net
   
231,199
     
217,636
 
Other Assets
   
1,761,661
     
1,609,671
 
  Total Assets
 
$
4,590,145
   
$
4,446,287
 
 
               
 
               
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
               
Short-term Borrowings
 
$
212,926
   
$
264,745
 
Current Portion of Long-term Debt
   
430,424
     
-
 
Payables and Accrued Liabilities
   
1,005,529
     
861,874
 
  Total Current Liabilities
   
1,648,879
     
1,126,619
 
Long-term Debt
   
959,895
     
1,398,906
 
Other Liabilities
   
410,672
     
393,873
 
  Total Liabilities
   
3,019,446
     
2,919,398
 
Redeemable Noncontrolling Interests
   
47,269
     
-
 
Total Shareholders' Equity
   
1,523,430
     
1,526,889
 
  Total Liabilities, Redeemable Noncontrolling Interests and   Shareholders' Equity
 
$
4,590,145
   
$
4,446,287
 




HASBRO, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
 
 
Quarter Ended
   
Nine Months Ended
 
(Thousands of Dollars and Shares Except Per Share Data)
 
Sept. 29, 2013
   
% Net Revenues
   
Sept. 30, 2012
   
% Net Revenues
   
Sept. 29, 2013
   
% Net Revenues
   
Sept. 30, 2012
   
% Net Revenues
 
Net Revenues
 
$
1,370,348
     
100.0
%
 
$
1,345,137
     
100.0
%
 
$
2,800,384
     
100.0
%
 
$
2,805,454
     
100.0
%
Costs and Expenses:
                                                               
  Cost of Sales
   
568,582
     
41.5
%
   
586,516
     
43.6
%
   
1,136,724
     
40.6
%
   
1,155,536
     
41.2
%
  Royalties
   
143,947
     
10.5
%
   
89,224
     
6.6
%
   
243,568
     
8.8
%
   
212,551
     
7.6
%
  Product Development
   
59,366
     
4.3
%
   
48,472
     
3.6
%
   
154,455
     
5.5
%
   
143,511
     
5.1
%
  Advertising
   
136,487
     
10.0
%
   
134,997
     
10.0
%
   
277,278
     
9.9
%
   
279,339
     
10.0
%
  Amortization of Intangibles
   
14,224
     
1.0
%
   
12,636
     
0.9
%
   
37,677
     
1.3
%
   
34,792
     
1.2
%
  Program Product Cost Amortization
   
17,991
     
1.3
%
   
12,794
     
1.0
%
   
34,023
     
1.2
%
   
25,950
     
0.9
%
  Selling, Distribution and Administration
   
231,045
     
16.9
%
   
210,876
     
15.7
%
   
633,238
     
22.6
%
   
602,145
     
21.5
%
    Operating Profit
   
198,706
     
14.5
%
   
249,622
     
18.6
%
   
283,421
     
10.1
%
   
351,630
     
12.5
%
Interest Expense
   
41,194
     
3.0
%
   
23,043
     
1.7
%
   
86,398
     
3.0
%
   
68,568
     
2.4
%
Other (Income) Expense, Net
   
1,599
     
0.1
%
   
1,630
     
0.1
%
   
6,527
     
0.3
%
   
3,320
     
0.1
%
    Earnings before Income Taxes
   
155,913
     
11.4
%
   
224,949
     
16.8
%
   
190,496
     
6.8
%
   
279,742
     
10.0
%
Income Taxes
   
30,070
     
2.2
%
   
60,097
     
4.5
%
   
34,844
     
1.2
%
   
74,042
     
2.7
%
    Net Earnings
   
125,843
     
9.2
%
   
164,852
     
12.3
%
   
155,652
     
5.6
%
   
205,700
     
7.3
%
Net Loss Attributable to Noncontrolling Interests
   
(731
)
   
0.0
%
   
-
     
0.0
%
   
(731
)
   
0.0
%
   
-
     
0.0
%
    Net Earnings Attributable to Hasbro, Inc.
 
$
126,574
     
9.2
%
 
$
164,852
     
12.3
%
 
$
156,383
     
5.6
%
 
$
205,700
     
7.3
%
 
Per Common Share
 
             Net Earnings Attributable to Hasbro, Inc.
                                                               
                       Basic
 
$
0.97
           
$
1.26
           
$
1.20
           
$
1.58
         
                       Diluted
 
$
0.96
           
$
1.24
           
$
1.19
           
$
1.56
         
 
                                                               
             Cash Dividends Declared
 
$
0.40
           
$
0.36
           
$
1.20
           
$
1.08
         
 
                                                               
Weighted Average Number of Shares
                                                               
             Basic
   
130,253
             
130,619
             
129,972
             
130,146
         
             Diluted
   
131,845
             
132,483
             
131,573
             
132,039
         


HASBRO, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
 
 
Nine Months Ended
 
(Thousands of Dollars)
 
Sept. 29, 2013
   
Sept. 30, 2012
 
Cash Flows from Operating Activities:
 
   
 
   Net Earnings
 
$
155,652
   
$
205,700
 
   Non-cash Adjustments
   
168,429
     
152,201
 
   Changes in Operating Assets and Liabilities
   
(276,764
)
   
(214,285
)
    Net Cash Provided by Operating Activities
   
47,317
     
143,616
 
 
               
Cash Flows from Investing Activities:
               
   Additions to Property, Plant and Equipment
   
(78,246
)
   
(74,896
)
   Investments and Acquisitions, Net of Cash Acquired
   
(109,955
)
   
-
 
   Other
   
3,121
     
2,558
 
    Net Cash Utilized by Investing Activities
   
(185,080
)
   
(72,338
)
 
               
Cash Flows from Financing Activities:
               
   Net (Repayments of) Proceeds from Short-term Borrowings
   
(11,235
)
   
83,380
 
   Purchases of Common Stock
   
(86,972
)
   
(15,079
)
   Stock-based Compensation Transactions
   
87,172
     
49,182
 
   Dividends Paid
   
(104,164
)
   
(132,231
)
    Net Cash Utilized by Financing Activities
   
(115,199
)
   
(14,748
)
 
               
Effect of Exchange Rate Changes on Cash
   
(8,071
)
   
(1,485
)
 
               
Cash and Cash Equivalents at Beginning of Year
   
849,701
     
641,688
 
Cash and Cash Equivalents at End of Period
 
$
588,668
   
$
696,733
 



HASBRO, INC.
 
SUPPLEMENTAL FINANCIAL DATA
 
(Unaudited)
 
(Thousands of Dollars)
 
 
 
 
Quarter Ended
   
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Sept. 30, 2012
   
% Change
   
Sept. 29, 2013
   
Sept. 30, 2012
   
% Change
 
Major Segment Results
 
   
   
   
   
   
 
U.S. and Canada Segment:
 
   
   
   
   
   
 
  External Net Revenues
 
$
735,619
   
$
774,539
     
-5
%
 
$
1,466,921
   
$
1,510,112
     
-3
%
  Operating Profit
   
146,991
     
154,239
     
-5
%
   
243,738
     
229,578
     
6
%
  Operating Margin
   
20.0
%
   
19.9
%
           
16.6
%
   
15.2
%
       
 
                                               
International Segment:
                                               
  External Net Revenues
   
582,676
     
524,144
     
11
%
   
1,212,665
     
1,174,366
     
3
%
  Operating Profit
   
105,663
     
85,498
     
24
%
   
115,951
     
110,265
     
5
%
  Operating Margin
   
18.1
%
   
16.3
%
           
9.6
%
   
9.4
%
       
 
                                               
Entertainment and Licensing Segment:
                                         
  External Net Revenues
   
48,637
     
43,066
     
13
%
   
114,747
     
115,618
     
-1
%
  Operating Profit
   
7,625
     
10,722
     
-29
%
   
16,622
     
26,652
     
-38
%
  Operating Margin
   
15.7
%
   
24.9
%
           
14.5
%
   
23.1
%
       
 
                                               
Net Revenues by Product Category
                                         
  Boys
 
$
392,014
   
$
471,125
     
-17
%
 
$
888,494
   
$
1,162,958
     
-24
%
  Games
   
387,450
     
365,714
     
6
%
   
873,774
     
763,460
     
14
%
  Girls
   
388,696
     
302,304
     
29
%
   
652,889
     
499,731
     
31
%
  Preschool
   
202,188
     
205,994
     
-2
%
   
385,227
     
379,305
     
2
%
    Total Net Revenues
 
$
1,370,348
   
$
1,345,137
           
$
2,800,384
   
$
2,805,454
         
 
                                               
 
International Segment Net Revenues by Major Geographic Region
                         
  Europe
 
$
376,648
   
$
345,281
     
9
%
 
$
755,097
   
$
751,547
   
<1
  Latin America
   
131,914
     
115,342
     
14
%
   
260,443
     
237,090
     
10
%
  Asia Pacific
   
74,114
     
63,521
     
17
%
   
197,125
     
185,729
     
6
%
    Total
 
$
582,676
   
$
524,144
           
$
1,212,665
   
$
1,174,366
         
 
                                               
Reconciliation of EBITDA
                                               
 Net Earnings Attributable to Hasbro,   Inc.
 
$
126,574
   
$
164,852
           
$
156,383
   
$
205,700
         
 Net Loss Attributable to   Noncontrolling Interests
   
(731
)
   
-
             
(731
)
   
-
         
 Interest Expense
   
41,194
     
23,043
             
86,398
     
68,568
         
 Income Taxes
   
30,070
     
60,097
             
34,844
     
74,042
         
 Depreciation
   
32,345
     
31,374
             
75,526
     
75,113
         
 Amortization of Intangibles
   
14,224
     
12,636
             
37,677
     
34,792
         
     EBITDA
 
$
243,676
   
$
292,002
           
$
390,097
   
$
458,215
         


HASBRO, INC.
 
SUPPLEMENTAL FINANCIAL DATA
 
RESTRUCTURING AND PENSION SETTLEMENT CHARGES
 
(Unaudited)
 
(Thousands of Dollars)
 
 
Operating Profit, Excluding Restructuring, Pension Settlement and Arbitration Award Charges
 
Quarter Ended September 29, 2013
 
As Reported
   
Less
Restructuring, Pension Settlement and Arbitration Award Charges
   
Excluding Restructuring, Pension Settlement and Arbitration Award Charges
   
% Net Revenues
 
Net Revenues
 
$
1,370,348
   
$
-
   
$
1,370,348
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
568,582
     
-
     
568,582
     
41.5
%
  Royalties
   
143,947
     
(57,164
)
   
86,783
     
6.3
%
  Product Development
   
59,366
     
-
     
59,366
     
4.3
%
  Advertising
   
136,487
     
-
     
136,487
     
10.0
%
  Amortization of Intangibles
   
14,224
     
-
     
14,224
     
1.0
%
  Program Production Cost Amortization
   
17,991
     
-
     
17,991
     
1.3
%
  Selling, Distribution and Administration
   
231,045
     
(4,093
)
   
226,952
     
16.6
%
    Operating Profit
 
$
198,706
   
$
(61,257
)
 
$
259,963
     
19.0
%
 
                               
Nine Months Ended September 29, 2013
 
As Reported
   
Less
Restructuring, Pension Settlement and Arbitration Award Charges
   
Excluding Restructuring, Pension Settlement and Arbitration Award Charges
   
% Net Revenues
 
Net Revenues
 
$
2,800,384
   
$
-
   
$
2,800,384
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
1,136,724
     
(8,493
)
   
1,128,231
     
40.3
%
  Royalties
   
243,568
     
(57,164
)
   
186,404
     
6.7
%
  Product Development
   
154,455
     
(3,515
)
   
150,940
     
5.4
%
  Advertising
   
277,278
     
-
     
277,278
     
9.9
%
  Amortization of Intangibles
   
37,677
     
-
     
37,677
     
1.3
%
  Program Production Cost Amortization
   
34,023
     
-
     
34,023
     
1.2
%
  Selling, Distribution and Administration
   
633,238
     
(23,473
)
   
609,765
     
21.8
%
    Operating Profit
 
$
283,421
   
$
(92,645
)
 
$
376,066
     
13.4
%
 
                               
Nine Months Ended September 30, 2012
 
As Reported
   
Less
Restructuring Charges
   
Excluding Restructuring Charges
   
% Net Revenues
 
Net Revenues
 
$
2,805,454
   
$
-
   
$
2,805,454
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
1,155,536
     
(2,764
)
   
1,152,772
     
41.1
%
  Royalties
   
212,551
     
-
     
212,551
     
7.6
%
  Product Development
   
143,511
     
(2,479
)
   
141,032
     
5.0
%
  Advertising
   
279,339
     
-
     
279,339
     
10.0
%
  Amortization of Intangibles
   
34,792
     
-
     
34,792
     
1.2
%
  Program Production Cost Amortization
   
25,950
     
-
     
25,950
     
0.9
%
  Selling, Distribution and Administration
   
602,145
     
(5,887
)
   
596,258
     
21.3
%
    Operating Profit
 
$
351,630
   
$
(11,130
)
 
$
362,760
     
12.9
%
 
                               
NOTE: There were no restructuring charges included in the reported amounts for the quarter ended September 30, 2012.
 


Net Earnings and Earnings per Share Excluding Restructuring Charges, Pension Settlement Charges, Arbitration Award Charges and Benefit from Settlement of Tax Exams
 
 
 
 
 
 
Quarter Ended
 
 
 
Sept. 29, 2013
   
Diluted Per Share Amount
   
Sept. 30, 2012
   
Diluted Per Share Amount
 
Net Earnings Attributable to Hasbro, Inc., as Reported
 
$
126,574
   
$
0.96
   
$
164,852
   
$
1.24
 
Restructuring Charges, Net of Tax
   
2,447
     
0.02
     
-
     
-
 
Pension Settlement Charges, Net of Tax
   
679
     
0.01
     
-
     
-
 
Arbitration Award Charges, Net of Tax
   
66,447
     
0.50
     
-
     
-
 
2013 Benefit from Tax Exam Settlement
   
(23,637
)
   
(0.18
)
   
-
     
-
 
Net Earnings Attributable to Hasbro, Inc. as Adjusted
 
$
172,510
   
$
1.31
   
$
164,852
   
$
1.24
 
 
                               
 
 
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Diluted Per Share Amount
   
Sept. 30, 2012
   
Diluted Per Share Amount
 
Net Earnings Attributable to Hasbro, Inc., as Reported
 
$
156,383
   
$
1.19
   
$
205,700
   
$
1.56
 
Restructuring Charges, Net of Tax
   
21,224
     
0.16
     
7,675
     
0.06
 
Pension Settlement Charges, Net of Tax
   
2,469
     
0.02
     
-
     
-
 
Arbitration Award Charges, Net of Tax
   
66,447
     
0.50
     
-
     
-
 
2013 Benefit from Tax Exam Settlement
   
(23,637
)
   
(0.18
)
   
-
     
-
 
Net Earnings Attributable to Hasbro, Inc. as Adjusted
 
$
222,886
   
$
1.69
   
$
213,375
   
$
1.62
 


Restructuring, Pension Settlement and Arbitration Award Charges – by Segment
 
 
 
   
 
 
 
Quarter Ended
   
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Sept. 30, 2012
   
Sept. 29, 2013
   
Sept. 30, 2012
 
U.S. and Canada Segment
 
$
-
   
$
-
   
$
-
   
$
2,444
 
International Segment
   
-
     
-
     
-
     
1,628
 
Entertainment and Licensing Segment
   
-
     
-
     
1,729
     
555
 
Global Operations Segment
   
-
     
-
     
-
     
4,307
 
Corporate and Eliminations
   
61,257
     
-
     
90,916
     
2,196
 
  Total Restructuring and Pension Settlement Charges
 
$
61,257
   
$
-
   
$
92,645
   
$
11,130
 

Exhibit 99.2
 
 Third Quarter 2013 Snapshot  Revenues, Operating Profit and Earnings Per Share Increasein the Third Quarter 2013   Q3 Net revenues $1.37 billion, up 2% year-over-year International Segment up 11% Emerging markets continue to post strong growth: Up 22% year-over-year Entertainment and Licensing up 13%   Games and Girls categories increased revenues year-over-year Difficult comparisons remain in Boys category; Preschool down 2% Franchise Brand revenues up 19%   Q3 Operating profit up 4% (absent charges)*Operating profit year-to-date, ex. charges, up 4% year-over-year despite flat revenues in same period  Q3 2013 adjusted EPS of $1.31 per diluted share** As reported EPS $0.96 per diluted share  *Q3 2013 reported operating profit includes $61.3 million pre-tax restructuring, partial pension settlement charges and arbitration award charges or $0.53 per diluted share**Q3 2013 reported EPS includes above charges and a favorable tax adjustment of $23.6 million, or $0.18 per diluted shareRefer to slides 23-27 for a reconciliation of “As Reported” to “As Adjusted” financials  4 
 

 Third Quarter 2013 Major Expense Items (as adjusted*)  ($ millions, unaudited)  2013  2012  %Change YOY  % of Q3 2013 Revenue   Notes  Cost of Sales  $569  $586  -3.1%  41.5%  Product mix; lower manufacturing costs  Royalties  $87  $89  -2.7%  6.3%  Lower revenues from licensed properties  Product Development  $59  $48  22.5%  4.3%  Film Development Write-Off; Addition of Backflip; Magic: The Gathering investments  Advertising  $136  $135  1.1%  10.0%    Amortization of Intangibles  $14  $13  12.6%  1.0%  Addition of Backflip  Program Production Cost Amortization  $18  $13  40.6%  1.3%  Mix of programming delivered in Q3  Selling, Distribution & Administration*  $227  $211  7.6%  16.6%  Compensation; Depreciation; Magic: The Gathering investments  * Q3 2013 as adjusted financials excludes $61.3 million pre-tax restructuring, partial pension settlement charge and arbitration award charges. Refer to slide 23 for a reconciliation of “As Reported” to “As Adjusted” financials.  9 
 

 Third Quarter 2013 Operating Profit  -20%  +4%  Operating profit adversely impacted by arbitration award.Underlying operating profitability improved.   Adjusted operating profit margin increased to 19.0% in Q3 2013 compared to 18.6% in Q3 2012  * Q3 2013 excludes $61.3 million pre-tax restructuring, partial pension settlement charge and arbitration award charges. Refer to slide 23 for a reconciliation of “As Reported” to “As Adjusted” financials.  10  ($ Millions, Unaudited) 
 

 Adjusted 2013 net earnings of $173M or $1.31 per diluted share Excludes pre-tax arbitration award charges of $75.5M, or $0.50 per diluted share Excludes pre-tax restructuring and partial pension settlement charges of $4.1M, or $0.03 per diluted share Excludes favorable tax adjustment of $23.6 million, or $0.18 per diluted share  Non-operating expense essentially flat year-over-year  Underlying tax rate of 26.5%  Average diluted shares 131.8M 2013 vs. 132.5M 2012  Third Quarter 2013 Net Earnings Attributable to Hasbro, Inc.  $0.96per diluted share  $1.24per diluted share  $1.31per diluted share  $1.24 per diluted share  12  ($ millions, except per share, unaudited) 
 

 Third Quarter Income Statement  ($ millions, unaudited)  Sept. 29, 2013  Sept. 30, 2012   Net Revenues  $ 1,370  $1,345  Cost of Sales  569  586  Royalties  144  89  Product Development  59  48  Advertising  136  135  Amortization of Intangibles  14  13  Program Production Cost Amortization  18  13  Selling, Distribution & Administration  231  211  Operating Profit   $ 199  $250  Interest Expense  41  23  Other (Income) Expense, Net  2  2  Earnings Before Income Taxes  $156  $225  Income Taxes  30  60  Net Earnings  $126  $165  Net Loss Attributable to Noncontrolling Interests  (1)  ---  Net Earnings Attributable to Hasbro, Inc.  $ 127  $165  Diluted EPS  $0.96  $1.24  20 
 

 September Balance Sheets  ($ millions, unaudited)  Sept. 29, 2013  Sept. 30, 2012   Cash and Cash Equivalents  $ 589  $ 697  Accounts Receivable  1,215  1,196  Inventories  447  463  Other Current Assets  346  263   Total Current Assets  $ 2,597  $ 2,619  Property, Plant & Equipment, Net  231  217  Other Assets  1,762  1,610  Total Assets  $ 4,590  $ 4,446  Short-term Borrowings  213  264  Current Portion of Long-term Debt  430  ---  Payables & Accrued Liabilities  1,006  862  Total Current Liabilities  $ 1,649  $ 1,126  Long-term Debt  960  1,399  Other Liabilities  411  394  Total Liabilities  $ 3,020  $ 2,919  Redeemable Noncontrolling Interests  47  ---  Total Shareholders’ Equity   1,523   1,527  Total Liabilities, Redeemable Noncontrolling Interests & Shareholders’ Equity  $ 4,590  $ 4,446  21 
 

 Supplemental Financial Data   Third Quarter Operating Profit, Excluding Restructuring, Pension Settlement and Arbitration Award Charges  ($ thousands, unaudited)Quarter Ended September 29, 2013  As Reported    Less Restructuring, Pension Settlement and Arbitration Award Charges    Excluding Restructuring, Pension Settlement and Arbitration Award Charges    % Net Revenues  Net Revenues   $ 1,370,348      $ -      $ 1,370,348     100.0%  Costs and Expenses:                 Cost of Sales   568,582      -      568,582     41.5%   Royalties   143,947     (57,164)     86,783    6.3%   Product Development   59,366      -      59,366     4.3%   Advertising   136,487      -      136,487     10.0%   Amortization of Intangibles   14,224      -      14,224     1.0%   Program Production Cost Amortization   17,991      -      17,991     1.3%   Selling, Distribution and Administration   231,045      (4,093)     226,952     16.6%   Operating Profit   $ 198,706      $ (61,257)     $ 259,963     19.0%                  Note: There were no restructuring, pension settlement or arbitration award charges included in the reported amounts for the quarter ended September 30, 2012.   23 
 

 Supplemental Financial Data   ($ thousands, unaudited)Nine Months Ended September 29, 2013  As Reported    Less Restructuring, Pension Settlement and Arbitration Award Charges    Excluding Restructuring, Pension Settlement and Arbitration Award Charges    % Net Revenues  Net Revenues   $ 2,800,384     $ -      $ 2,800,384     100.0%  Costs and Expenses:                 Cost of Sales   1,136,724      (8,493)     1,128,231     40.3%   Royalties   243,568     (57,164)     186,404     6.7%   Product Development   154,455      (3,515)     150,940     5.4%   Advertising   277,278      -      277,278     9.9%   Amortization of Intangibles   37,677      -      37,677     1.3%   Program Production Cost Amortization   34,023      -      34,023     1.2%   Selling, Distribution and Administration   633,238      (23,473)     609,765     21.8%   Operating Profit   $ 283,421     $ (92,645)     $ 376,066     13.4%                  Nine Months Ended September 30, 2012  As Reported    Less RestructuringCharges    Excluding Restructuring Charges    % Net Revenues  Net Revenues   $ 2,805,454      $ -     $ 2,805,454     100.0%  Costs and Expenses:                 Cost of Sales   1,155,536      (2,764)     1,152,772     41.1%   Royalties   212,551      -      212,551     7.6%   Product Development   143,511      (2,479)     141,032     5.0%   Advertising   279,339      -      279,339     10.0%   Amortization of Intangibles   34,792      -      34,792     1.2%   Program Production Cost Amortization   25,950      -      25,950     0.9%   Selling, Distribution and Administration   602,145      (5,887)     596,258     21.3%   Operating Profit   $ 351,630      $ (11,130)      $ 362,760     12.9%  24  Nine Month Operating Profit, Excluding Restructuring, Pension Settlement and Arbitration Award Charges 
 

 Supplemental Financial Data     Quarter Ended  Quarter Ended  Nine Months Ended  Nine Months Ended  ($ thousands, unaudited)  Sept. 29, 2013  Sept. 30, 2012  Sept. 29, 2013  Sept. 30, 2012  U.S. and Canada Segment   $ -    $ -    $ -    $ 2,444   International Segment   -    -    -    1,628   Entertainment and Licensing Segment    -    -    1,729    555   Global Operations Segment   -    -    -    4,307   Corporate and Eliminations    61,257    -    90,916   2,196    Total Restructuring, Pension Settlement and Arbitration Award Charges   $ 61,257    $ -    $ 92,645   $ 11,130   Restructuring, Pension Settlement and Arbitration Award Charges by Segment  25 
 

 Supplemental Financial Data   Net Earnings and EPS Excluding Restructuring Charges, Pension Settlement Charges, Arbitration Award Charges and Benefit from Settlement of Tax Exams    Quarter Ended  Quarter Ended  Quarter Ended  Quarter Ended  ($ thousands, except per share amounts, unaudited)   Sept. 29, 2013  Diluted Per Share Amount  Sept. 30, 2012  Diluted Per Share Amount   Net Earnings Attributable to Hasbro, Inc., as Reported   $ 126,574   $ 0.96    $ 164,852    $ 1.24    Restructuring Charges, Net of Tax  2,447    0.02    -    -    Pension Settlement Charges, Net of Tax  679    0.01    -    -   Arbitration Award Charges, Net of Tax   66,447  0.50   -   -   2013 Benefit from Tax Exam Settlement  (23,637)   (0.18)   -    -    Net Earnings Attributable to Hasbro, Inc., as Adjusted   $ 172,510    $ 1.31    $ 164,852    $ 1.24   27    Nine Months Ended  Nine Months Ended  Nine Months Ended  Nine Months Ended  ($ thousands, except per share amounts, unaudited)   Sept. 29, 2013  Diluted Per Share Amount  Sept. 30, 2012  Diluted Per Share Amount   Net Earnings Attributable to Hasbro, Inc., as Reported   $ 156,383   $ 1.19    $ 205,700   $ 1.56    Restructuring Charges, Net of Tax  21,224   0.16    7,675    0.06    Pension Settlement Charges, Net of Tax  2,469   0.02    -    -   Arbitration Award Charges, Net of Tax   66,447  0.50   -   -   2013 Benefit from Tax Exam Settlement  (23,637)   (0.18)   -    -    Net Earnings Attributable to Hasbro, Inc., as Adjusted   $ 222,886    $ 1.69    $ 213,375   $ 1.62