Fair Value of Financial Instruments

9 Months Ended

Sep. 29, 2013

Fair Value of Financial Instruments (Thousands of Dollars) [Abstract]

(6) Fair Value of Financial Instruments

The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels: Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Accounting standards permit entities to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar assets and liabilities. The Company has elected the fair value option for certain available-for-sale investments. At September 29, 2013, September 30, 2012 and December 30, 2012, these investments totaled $23,452, $23,403 and $24,091, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net losses of $176 and $166 on these investments in other (income) expense, net for the quarter and nine-month periods ended September 29, 2013, respectively, related to the change in fair value of such instruments. For the quarter and nine-month periods ended September 30, 2012 the Company recorded net gains of $1,082 and $1,847, respectively, on these investments in other (income) expense, net, related to the change in fair value of such investments.

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

At September 29, 2013, September 30, 2012 and December 30, 2012, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets:

			Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 29, 2013
Assets:
Available-for-sale securities	$	23,460		8		18,050		5,402
Derivatives		3,311		-		2,321		990
Total assets	$	26,771		8		20,371		6,392

Liabilities:
Derivatives	$	8,324		-		8,324		-

September 30, 2012
Assets:
Available-for-sale securities	$	23,415		12		18,403		5,000
Derivatives		22,088		-		19,699		2,389
Total assets	$	45,503		12		38,102		7,389

Liabilities:
Derivatives	$	2,312		-		2,312		-

December 30, 2012
Assets:
Available-for-sale securities	$	24,099		8		18,986		5,105
Derivatives		4,254		-		1,741		2,513
Total assets	$	28,353		8		20,727		7,618

Liabilities:
Derivatives	$	3,461		-		3,461		-

The following is a reconciliation of the beginning and ending balances of the fair value measurements of the Company's financial instruments which use significant unobservable inputs (Level 3):

	2013			2012
Balance at beginning of year	$	7,618			3,724
Purchases		-			5,000
Loss from change in fair value		(1,226	)		(1,335	)
Balance at end of third quarter	$	6,392			7,389

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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