Rhode Island
|
05-0155090
|
(State of Incorporation)
|
(I.R.S. Employer Identification No.)
|
1027 Newport Avenue, Pawtucket, Rhode Island 02861
|
(Address of Principal Executive Offices, Including Zip Code)
|
(401) 431-8697
|
(Registrant's Telephone Number, Including Area Code)
|
Large accelerated filer R
|
Accelerated filer ☐
|
Non-accelerated filer (Do not check if a smaller reporting company) ☐
|
Smaller reporting Company ☐
|
Item 1. | Financial Statements. |
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
||||||||||
ASSETS
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
$
|
1,081,397
|
792,249
|
893,167
|
||||||||
Accounts receivable, less allowance for doubtful accounts of $16,400 $20,800 and $15,900
|
563,301
|
552,471
|
1,094,673
|
|||||||||
Inventories
|
340,654
|
390,824
|
339,572
|
|||||||||
Prepaid expenses and other current assets
|
419,956
|
406,561
|
391,688
|
|||||||||
Total current assets
|
2,405,308
|
2,142,105
|
2,719,100
|
|||||||||
Property, plant and equipment, less accumulated depreciation of $510,700, $509,900 and $508,600
|
243,589
|
236,898
|
237,489
|
|||||||||
Other assets
|
||||||||||||
Goodwill
|
592,724
|
594,365
|
593,438
|
|||||||||
Other intangibles, net, accumulated amortization of $810,500, $679,200 and $797,500
|
311,576
|
362,598
|
324,528
|
|||||||||
Other
|
707,645
|
693,471
|
657,587
|
|||||||||
Total other assets
|
1,611,945
|
1,650,434
|
1,575,553
|
|||||||||
Total assets
|
$
|
4,260,842
|
4,029,437
|
4,532,142
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
|||||||||
Current liabilities
|
||||||||||||
Short-term borrowings
|
$
|
231,914
|
12,858
|
252,481
|
||||||||
Current portion of long-term debt
|
-
|
426,356
|
-
|
|||||||||
Accounts payable
|
142,946
|
169,173
|
212,549
|
|||||||||
Accrued liabilities
|
445,867
|
485,334
|
609,904
|
|||||||||
Total current liabilities
|
820,727
|
1,093,721
|
1,074,934
|
|||||||||
Long-term debt
|
1,559,895
|
959,895
|
1,559,895
|
|||||||||
Other liabilities
|
392,479
|
337,219
|
388,919
|
|||||||||
Total liabilities
|
2,773,101
|
2,390,835
|
3,023,748
|
|||||||||
Redeemable noncontrolling interests
|
42,234
|
44,180
|
42,730
|
|||||||||
Shareholders' equity
|
||||||||||||
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued
|
-
|
-
|
-
|
|||||||||
Common stock of $.50 par value. Authorized 600,000,000 shares; issued 209,694,630
|
104,847
|
104,847
|
104,847
|
|||||||||
Additional paid-in capital
|
825,489
|
753,143
|
806,265
|
|||||||||
Retained earnings
|
3,599,571
|
3,408,259
|
3,630,072
|
|||||||||
Accumulated other comprehensive loss
|
(86,996
|
)
|
(48,565
|
)
|
(95,454
|
)
|
||||||
Treasury stock, at cost; 85,120,544 shares at March 29, 2015; 79,465,697 shares at March 30, 2014; and 85,168,478 shares at December 28, 2014
|
(2,997,404
|
)
|
(2,623,262
|
)
|
(2,980,066
|
)
|
||||||
Total shareholders' equity
|
1,445,507
|
1,594,422
|
1,465,664
|
|||||||||
Total liabilities, redeemable noncontrolling interests and shareholders' equity
|
$
|
4,260,842
|
4,029,437
|
4,532,142
|
Quarter Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Net revenues
|
$
|
713,500
|
679,453
|
|||||
Costs and expenses:
|
||||||||
Cost of sales
|
247,735
|
258,545
|
||||||
Royalties
|
59,089
|
49,581
|
||||||
Product development
|
51,897
|
47,257
|
||||||
Advertising
|
67,742
|
67,259
|
||||||
Amortization of intangibles
|
12,951
|
13,402
|
||||||
Program production cost amortization
|
11,096
|
4,658
|
||||||
Selling, distribution and administration
|
208,785
|
195,303
|
||||||
Total costs and expenses
|
659,295
|
636,005
|
||||||
Operating profit
|
54,205
|
43,448
|
||||||
Non-operating (income) expense:
|
||||||||
Interest expense
|
24,585
|
22,428
|
||||||
Interest income
|
(930
|
)
|
(1,326
|
)
|
||||
Other income, net
|
(3,765
|
)
|
(3,649
|
)
|
||||
Total non-operating expense, net
|
19,890
|
17,453
|
||||||
Earnings before income taxes
|
34,315
|
25,995
|
||||||
Income tax expense (benefit)
|
8,494
|
(5,519
|
)
|
|||||
Net earnings
|
25,821
|
31,514
|
||||||
Net loss attributable to noncontrolling interests
|
(846
|
)
|
(573
|
)
|
||||
Net earnings attributable to Hasbro, Inc.
|
$
|
26,667
|
32,087
|
|||||
Net earnings attributable to Hasbro, Inc. per common share:
|
||||||||
Basic
|
$
|
0.21
|
0.24
|
|||||
Diluted
|
$
|
0.21
|
0.24
|
|||||
Cash dividends declared per common share
|
$
|
0.46
|
0.43
|
Quarter Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Net earnings
|
$
|
25,821
|
31,514
|
|||||
Other comprehensive earnings (loss):
|
||||||||
Foreign currency translation adjustments
|
(47,311
|
)
|
(2,294
|
)
|
||||
Net gains (losses) on cash flow hedging activities, net of tax
|
62,300
|
(16,151
|
)
|
|||||
Unrealized holding gains on available-for-sale securities, net of tax
|
226
|
2,243
|
||||||
Reclassifications to earnings, net of tax:
|
||||||||
Net (gains) losses on cash flow hedging activities
|
(7,961
|
)
|
1,238
|
|||||
Unrecognized pension and postretirement amounts
|
1,204
|
534
|
||||||
Total other comprehensive earnings (loss), net of tax
|
8,458
|
(14,430
|
)
|
|||||
Total comprehensive earnings
|
34,279
|
17,084
|
||||||
Total comprehensive loss attributable to noncontrolling interests
|
(846
|
)
|
(573
|
)
|
||||
Total comprehensive earnings attributable to Hasbro, Inc.
|
$
|
35,125
|
17,657
|
Three Months Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
25,821
|
31,514
|
|||||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||
Depreciation of plant and equipment
|
21,404
|
21,505
|
||||||
Amortization of intangibles
|
12,951
|
13,402
|
||||||
Program production cost amortization
|
11,096
|
4,658
|
||||||
Deferred income taxes
|
(3,406
|
)
|
4,286
|
|||||
Stock-based compensation
|
9,624
|
7,059
|
||||||
Change in operating assets and liabilities:
|
||||||||
Decrease in accounts receivable
|
478,330
|
530,411
|
||||||
Increase in inventories
|
(20,309
|
)
|
(41,992
|
)
|
||||
Increase in prepaid expenses and other current assets
|
(6,319
|
)
|
(27,328
|
)
|
||||
Program production costs
|
(9,252
|
)
|
(5,051
|
)
|
||||
Decrease in accounts payable and accrued liabilities
|
(206,030
|
)
|
(289,064
|
)
|
||||
Other
|
1,371
|
(7,359
|
)
|
|||||
Net cash provided by operating activities
|
315,281
|
242,041
|
||||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant and equipment
|
(31,151
|
)
|
(22,239
|
)
|
||||
Investments and acquisitions, net of cash acquired
|
(3,000
|
)
|
-
|
|||||
Other
|
1,040
|
(4,839
|
)
|
|||||
Net cash utilized by investing activities
|
(33,111
|
)
|
(27,078
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net (repayments of) proceeds from other short-term borrowings
|
(20,325
|
)
|
5,035
|
|||||
Purchases of common stock
|
(26,507
|
)
|
(79,913
|
)
|
||||
Stock option transactions
|
14,023
|
20,124
|
||||||
Excess tax benefits from stock-based compensation
|
3,440
|
3,755
|
||||||
Dividends paid
|
(53,470
|
)
|
(52,388
|
)
|
||||
Other
|
350
|
-
|
||||||
Net cash utilized by financing activities
|
(82,489
|
)
|
(103,387
|
)
|
||||
Effect of exchange rate changes on cash
|
(11,451
|
)
|
(1,776
|
)
|
||||
Increase in cash and cash equivalents
|
188,230
|
109,800
|
||||||
Cash and cash equivalents at beginning of year
|
893,167
|
682,449
|
||||||
Cash and cash equivalents at end of period
|
$
|
1,081,397
|
792,249
|
|||||
Supplemental information
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
30,940
|
31,388
|
|||||
Income taxes
|
$
|
28,292
|
36,967
|
2015
|
2014
|
|||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||
Net earnings attributable to Hasbro, Inc.
|
$
|
26,667
|
26,667
|
32,087
|
32,087
|
|||||||||||
Average shares outstanding
|
124,853
|
124,853
|
131,232
|
131,232
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Options and other share-based awards
|
-
|
1,489
|
-
|
1,501
|
||||||||||||
Equivalent Shares
|
124,853
|
126,342
|
131,232
|
132,733
|
||||||||||||
Net earnings attributable to Hasbro, Inc. per common share
|
$
|
0.21
|
0.21
|
0.24
|
0.24
|
March 29, 2015
|
March 30, 2014
|
|||||||
Other comprehensive (loss) earnings, tax effect:
|
||||||||
Tax (expense) benefit on cash flow hedging activities
|
$
|
(4,815
|
)
|
9,474
|
||||
Tax expense on unrealized holding gains
|
(128
|
)
|
(1,272
|
)
|
||||
Reclassifications to earnings, tax effect:
|
||||||||
Tax expense (benefit) on cash flow hedging activities
|
342
|
(223
|
)
|
|||||
Tax benefit on unrecognized pension and postretirement
amounts reclassified to the consolidated statements of
operations
|
(684
|
)
|
(303
|
)
|
||||
Total tax effect on other comprehensive earnings (loss)
|
$
|
(5,285
|
)
|
7,676
|
Pension and Postretirement Amounts
|
Gains (Losses) on Derivative Instruments
|
Unrealized Holding Gains on Available-for-Sale Securities
|
Foreign Currency Translation Adjustments
|
Total Accumulated Other Comprehensive Loss
|
||||||||||||||||
2015
|
||||||||||||||||||||
Balance at Dec. 28, 2014
|
$
|
(113,092
|
)
|
43,689
|
1,900
|
(27,951
|
)
|
(95,454
|
)
|
|||||||||||
Current period other comprehensive earnings (loss)
|
1,204
|
54,339
|
226
|
(47,311
|
)
|
8,458
|
||||||||||||||
Balance at March 29, 2015
|
$
|
(111,888
|
)
|
98,028
|
2,126
|
(75,262
|
)
|
(86,996
|
)
|
|||||||||||
2014
|
||||||||||||||||||||
Balance at Dec. 29, 2013
|
$
|
(64,841
|
)
|
(7,313
|
)
|
-
|
38,019
|
(34,135
|
)
|
|||||||||||
Current period other comprehensive earnings (loss)
|
534
|
(14,913
|
)
|
2,243
|
(2,294
|
)
|
(14,430
|
)
|
||||||||||||
Balance at March 30, 2014
|
$
|
(64,307
|
)
|
(22,226
|
)
|
2,243
|
35,725
|
(48,565
|
)
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
||||||||||||||||||||||
Carrying
Cost
|
Fair
Value
|
Carrying
Cost
|
Fair
Value
|
Carrying
Cost
|
Fair
Value
|
|||||||||||||||||||
6.35% Notes Due 2040
|
$
|
500,000
|
597,900
|
500,000
|
567,700
|
500,000
|
617,700
|
|||||||||||||||||
6.30% Notes Due 2017
|
350,000
|
389,305
|
350,000
|
399,785
|
350,000
|
387,660
|
||||||||||||||||||
5.10% Notes Due 2044
|
300,000
|
316,260
|
-
|
-
|
300,000
|
316,980
|
||||||||||||||||||
3.15% Notes Due 2021
|
300,000
|
308,970
|
-
|
-
|
300,000
|
302,700
|
||||||||||||||||||
6.60% Debentures Due 2028
|
109,895
|
131,039
|
109,895
|
120,643
|
109,895
|
128,698
|
||||||||||||||||||
6.125% Notes Due 2014
|
-
|
-
|
426,356
|
427,678
|
-
|
-
|
||||||||||||||||||
Total long-term debt
|
1,559,895
|
1,743,474
|
1,386,251
|
1,515,806
|
1,559,895
|
1,753,738
|
||||||||||||||||||
Less: Current portion
|
-
|
-
|
426,356
|
427,678
|
-
|
-
|
||||||||||||||||||
Long-term debt excluding current portion
|
$
|
1,559,895
|
1,743,474
|
959,895
|
1,088,128
|
1,559,895
|
1,753,738
|
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)
|
|||||||||||||
March 29, 2015
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities
|
$
|
27,977
|
4,836
|
17,206
|
5,935
|
|||||||||||
Derivatives
|
130,550
|
-
|
130,550
|
-
|
||||||||||||
Total assets
|
$
|
158,527
|
4,836
|
147,756
|
5,935
|
|||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
|
$
|
3,513
|
-
|
3,513
|
-
|
|||||||||||
Option agreement
|
24,920
|
-
|
-
|
24,920
|
||||||||||||
Total liabilities
|
$
|
28,433
|
-
|
3,513
|
24,920
|
|||||||||||
March 30, 2014
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities
|
$
|
40,984
|
3,783
|
31,538
|
5,663
|
|||||||||||
Derivatives
|
1,311
|
-
|
1,311
|
-
|
||||||||||||
Total assets
|
$
|
42,295
|
3,783
|
32,849
|
5,663
|
|||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
|
$
|
33,053
|
-
|
33,053
|
-
|
|||||||||||
Total Liabilities
|
$
|
33,053
|
-
|
33,053
|
-
|
|||||||||||
December 28, 2014
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities
|
$
|
28,042
|
4,482
|
17,773
|
5,787
|
|||||||||||
Derivatives
|
69,148
|
-
|
69,148
|
-
|
||||||||||||
Total assets
|
$
|
97,190
|
4,482
|
86,921
|
5,787
|
|||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
|
$
|
2,591
|
-
|
2,591
|
-
|
|||||||||||
Option agreement
|
25,340
|
-
|
-
|
25,340
|
||||||||||||
Total Liabilities
|
$
|
27,931
|
-
|
2,591
|
25,340
|
2015
|
2014
|
|||||||
Balance at beginning of year
|
$
|
(19,553
|
)
|
5,484
|
||||
Gain from change in fair value
|
568
|
179
|
||||||
Balance at end of first quarter
|
$
|
(18,985
|
)
|
5,663
|
Quarter Ended
|
||||||||||||||||
Pension
|
Postretirement
|
|||||||||||||||
March 29, 2015
|
March 30, 2014
|
March 29, 2015
|
March 30, 2014
|
|||||||||||||
Service cost
|
$
|
1,011
|
971
|
150
|
137
|
|||||||||||
Interest cost
|
4,605
|
5,058
|
285
|
332
|
||||||||||||
Expected return on assets
|
(5,479
|
)
|
(5,560
|
)
|
-
|
-
|
||||||||||
Net amortization and deferrals
|
2,201
|
1,252
|
(114
|
)
|
(113
|
)
|
||||||||||
Net periodic benefit cost
|
$
|
2,338
|
1,721
|
321
|
356
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
||||||||||||||||||||||
Hedged transaction
|
Notional Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
||||||||||||||||||
Inventory purchases
|
$
|
912,376
|
135,512
|
609,689
|
(6,966
|
)
|
863,232
|
69,049
|
||||||||||||||||
Sales
|
232,643
|
(6,769
|
)
|
161,760
|
(1,155
|
)
|
139,946
|
829
|
||||||||||||||||
Intercompany royalty transaction
|
-
|
-
|
2,812
|
(2,403
|
)
|
-
|
-
|
|||||||||||||||||
Other
|
84,518
|
(2,766
|
)
|
51,243
|
(637
|
)
|
51,213
|
(1,008
|
)
|
|||||||||||||||
Total
|
$
|
1,229,537
|
125,977
|
825,504
|
(11,161
|
)
|
1,054,391
|
68,870
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
||||||||||
Prepaid expenses and other current assets
|
||||||||||||
Unrealized gains
|
$
|
74,219
|
999
|
46,594
|
||||||||
Unrealized losses
|
(10,253
|
)
|
(647
|
)
|
(11,508
|
)
|
||||||
Net unrealized gain
|
$
|
63,966
|
352
|
35,086
|
||||||||
Other assets
|
||||||||||||
Unrealized gains
|
$
|
66,438
|
-
|
34,234
|
||||||||
Unrealized losses
|
(914
|
)
|
-
|
(172
|
)
|
|||||||
Net unrealized gains
|
$
|
65,524
|
-
|
34,062
|
||||||||
Accrued liabilities
|
||||||||||||
Unrealized gains
|
$
|
3,149
|
4,597
|
447
|
||||||||
Unrealized losses
|
(6,662
|
)
|
(13,946
|
)
|
(725
|
)
|
||||||
Net unrealized loss
|
$
|
(3,513
|
)
|
(9,349
|
)
|
(278
|
)
|
|||||
Other liabilities
|
||||||||||||
Unrealized gains
|
$
|
-
|
256
|
-
|
||||||||
Unrealized losses
|
-
|
(2,420
|
)
|
-
|
||||||||
Net unrealized loss
|
$
|
-
|
(2,164
|
)
|
-
|
|||||||
Quarter Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Statements of Operations Classification
|
||||||||
Cost of sales
|
$
|
10,063
|
(1,019
|
)
|
||||
Royalties
|
43
|
(350
|
)
|
|||||
Net revenues
|
(1,354
|
)
|
(159
|
)
|
||||
Net realized gains (losses)
|
$
|
8,752
|
(1,528
|
)
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
||||||||||
Prepaid expenses and other current assets
|
||||||||||||
Unrealized gains
|
$
|
1,088
|
1,218
|
-
|
||||||||
Unrealized losses
|
(28
|
)
|
(421
|
)
|
-
|
|||||||
Net unrealized gain
|
1,060
|
797
|
-
|
|||||||||
Other assets
|
||||||||||||
Unrealized gains
|
-
|
163
|
-
|
|||||||||
Unrealized losses
|
-
|
(1
|
)
|
-
|
||||||||
Net unrealized gain
|
-
|
162
|
-
|
|||||||||
Accrued liabilities
|
||||||||||||
Unrealized gains
|
-
|
-
|
1,733
|
|||||||||
Unrealized losses
|
-
|
-
|
(4,046
|
)
|
||||||||
Net unrealized loss
|
-
|
-
|
(2,313
|
)
|
||||||||
Total unrealized gain, net
|
$
|
1,060
|
959
|
(2,313
|
)
|
March 29, 2015
|
March 30,2014
|
|||||||||||||||
Net revenues
|
External
|
Affiliate
|
External
|
Affiliate
|
||||||||||||
U.S. and Canada
|
$
|
345,690
|
1,050
|
337,699
|
1,210
|
|||||||||||
International
|
305,713
|
96
|
305,475
|
71
|
||||||||||||
Entertainment and Licensing
|
60,631
|
3,409
|
34,874
|
3,242
|
||||||||||||
Global Operations (a)
|
1,466
|
236,843
|
1,405
|
251,540
|
||||||||||||
Corporate and Eliminations
|
-
|
(241,398
|
)
|
-
|
(256,063
|
)
|
||||||||||
$
|
713,500
|
-
|
679,453
|
-
|
Quarter Ended
|
||||||||
Operating profit (loss)
|
March 29, 2015
|
March 30, 2014
|
||||||
U.S. and Canada
|
$
|
41,423
|
35,763
|
|||||
International
|
1,903
|
2,414
|
||||||
Entertainment and Licensing
|
16,402
|
5,982
|
||||||
Global Operations (a)
|
(3,782
|
)
|
(1,744
|
)
|
||||
Corporate and Eliminations (b)
|
(1,741
|
)
|
1,033
|
|||||
$
|
54,205
|
43,448
|
Total assets
|
March 29, 2015
|
March 30, 2014
|
December 28, 2014
|
|||||||||
U.S. and Canada
|
$
|
3,430,196
|
3,080,602
|
3,663,497
|
||||||||
International
|
2,088,096
|
1,900,304
|
2,422,046
|
|||||||||
Entertainment and Licensing
|
800,337
|
705,895
|
783,878
|
|||||||||
Global Operations
|
2,330,734
|
2,185,436
|
2,433,888
|
|||||||||
Corporate and Eliminations (b)
|
(4,388,521
|
)
|
(3,842,800
|
)
|
(4,771,167
|
)
|
||||||
$
|
4,260,842
|
4,029,437
|
4,532,142
|
Quarter Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Europe
|
$
|
195,871
|
207,542
|
|||||
Latin America
|
57,608
|
53,284
|
||||||
Asia Pacific
|
52,234
|
44,649
|
||||||
Net revenues
|
$
|
305,713
|
305,475
|
Quarter Ended
|
||||||||
March 29, 2015
|
March 30, 2014
|
|||||||
Boys
|
$
|
272,598
|
247,775
|
|||||
Games
|
235,649
|
220,526
|
||||||
Girls
|
117,127
|
138,700
|
||||||
Preschool
|
88,126
|
72,452
|
||||||
Net revenues
|
$
|
713,500
|
679,453
|
·
|
Net revenues increased 5% compared to the first quarter of 2014 and, absent unfavorable foreign currency translation of approximately $62,600, 2015 net revenues grew 14% compared to the first quarter of 2014.
|
·
|
2015 net revenues from franchise brands increased 20%; the Boys, Games and Preschool categories increased and the Girls category decreased in the first quarter 2015 compared to the first quarter of 2014.
|
·
|
2015 net revenues from the U.S. and Canada and Entertainment and Licensing segments were up 2% and 74%, respectively, compared to the first quarter of 2014 and net revenues from the International segment were flat compared to the first quarter of 2014. Absent unfavorable foreign currency translation of approximately $61,000, primarily in Europe, 2015 International segment net revenues grew 20%.
|
·
|
Operating profit grew 25% in the first quarter of 2015 compared to the first quarter of 2014 and was up 57% absent foreign currency translation.
|
·
|
In line with our commitment to return excess cash to shareholders, Hasbro increased the quarterly dividend rate from $0.43 per share to $0.46 per share effective for the dividend scheduled for May 15, 2015 in addition to repurchasing approximately 436 shares at a total and average cost of $25,200 and $57.80 per share, respectively.
|
Mar. 29, 2015
|
Mar. 30, 2014
|
|||||||
Net revenues
|
100.0
|
%
|
100.0
|
%
|
||||
Costs and expenses:
|
||||||||
Cost of sales
|
34.7
|
38.1
|
||||||
Royalties
|
8.3
|
7.3
|
||||||
Product development
|
7.3
|
7.0
|
||||||
Advertising
|
9.5
|
9.9
|
||||||
Amortization of intangibles
|
1.8
|
2.0
|
||||||
Program production cost amortization
|
1.6
|
0.7
|
||||||
Selling, distribution and administration
|
29.3
|
28.7
|
||||||
Operating profit
|
7.6
|
6.4
|
||||||
Interest expense
|
3.4
|
3.3
|
||||||
Interest income
|
(0.2
|
)
|
(0.2
|
)
|
||||
Other income, net
|
(0.5
|
)
|
(0.5
|
)
|
||||
Earnings before income taxes
|
4.8
|
3.8
|
||||||
Income tax expense (benefit)
|
1.2
|
(0.8
|
)
|
|||||
Net earnings
|
3.6
|
4.6
|
||||||
Net loss attributable to noncontrolling interests
|
(0.1
|
)
|
(0.1
|
)
|
||||
Net earnings attributable to Hasbro, Inc.
|
3.7
|
%
|
4.7
|
%
|
Quarter Ended
|
||||||||||||
March 29, 2015
|
March 30, 2014
|
%
Change
|
||||||||||
Boys
|
$
|
272,598
|
247,775
|
10
|
%
|
|||||||
Games
|
235,649
|
220,526
|
7
|
%
|
||||||||
Girls
|
117,127
|
138,700
|
-16
|
%
|
||||||||
Preschool
|
88,126
|
72,452
|
22
|
%
|
||||||||
Net revenues
|
$
|
713,500
|
679,453
|
Quarter Ended
|
||||||||||||
March 29, 2015
|
March 30, 2014
|
% Change
|
||||||||||
Net Revenues
|
||||||||||||
U.S. and Canada segment
|
$
|
345,690
|
337,699
|
2
|
%
|
|||||||
International segment
|
305,713
|
305,475
|
0
|
%
|
||||||||
Entertainment and Licensing segment
|
60,631
|
34,874
|
74
|
%
|
||||||||
Operating Profit
|
||||||||||||
U.S. and Canada segment
|
$
|
41,423
|
35,763
|
16
|
%
|
|||||||
International segment
|
1,903
|
2,414
|
-21
|
%
|
||||||||
Entertainment and Licensing segment
|
16,402
|
5,982
|
174
|
%
|
Quarter Ended
|
||||||||||||
March 29, 2015
|
March 30, 2014
|
%
Change
|
||||||||||
Europe
|
$
|
195,871
|
207,542
|
-6
|
%
|
|||||||
Latin America
|
57,608
|
53,284
|
8
|
%
|
||||||||
Asia Pacific
|
52,234
|
44,649
|
17
|
%
|
||||||||
Net revenues
|
$
|
305,713
|
305,475
|
March 29, 2015
|
March 30, 2014
|
|||||||
Cost of sales
|
34.7
|
%
|
38.1
|
%
|
||||
Royalties
|
8.3
|
7.3
|
||||||
Product development
|
7.3
|
7.0
|
||||||
Advertising
|
9.5
|
9.9
|
||||||
Amortization of intangibles
|
1.8
|
2.0
|
||||||
Program production cost amortization
|
1.6
|
0.7
|
||||||
Selling, distribution and administration
|
29.3
|
28.7
|
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
·
|
the Company's ability to successfully re-imagine, re-invent and re-ignite its existing products and product lines, including through the use of immersive entertainment experiences, to maintain and further their success;
|
·
|
the Company's ability to successfully design, develop, produce, introduce, market and sell innovative new brands, products and product lines which achieve and sustain interest from retailers and consumers and keep pace with changes in consumer preferences and lifestyles;
|
·
|
the Company's ability to offer products that (i) expand consumer demand for its product offerings and do not significantly compete with the Company's other existing product offerings and (ii) consumers want to purchase and, select over competitors' products;
|
·
|
the Company's ability to manufacture, source and ship products in a timely and cost-effective manner and customers' and consumers' acceptance and purchase of those products in quantities and at prices that will be sufficient to profitably recover the Company's costs;
|
·
|
recessions, other economic downturns or challenging economic conditions affecting the Company's markets which can negatively impact the financial health of the Company's retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income and spending, including lower spending on purchases of the Company's products;
|
·
|
potential difficulties or delays the Company may experience in implementing its cost savings and efficiency enhancing initiatives or the realization of fewer benefits than are expected from such initiatives;
|
·
|
currency fluctuations, including movements in foreign exchange rates, which can lower the Company's net revenues and earnings, and significantly impact the Company's costs;
|
·
|
other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate, which could create delays or increase the Company's costs, such as higher commodity prices, labor costs or higher transportation costs or outbreaks of diseases;
|
·
|
delays, increased costs or difficulties associated with the development and offering of our or our partners' planned digital applications or media initiatives based on the Company's brands;
|
·
|
the concentration of the Company's retail customers, potentially increasing the negative impact to the Company of difficulties experienced by any of the Company's retail customers or changes in their purchasing or selling patterns;
|
·
|
the Company's ability to generate sales during the fourth quarter, particularly during the relatively brief holiday shopping season, which is the period in which the Company derives a substantial portion of its revenues and earnings;
|
·
|
the inventory policies of the Company's retail customers, including the retailers' potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half and fourth quarter of the year, which coupled with reliance by retailers on quick response inventory management techniques, increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules;
|
·
|
work stoppages or disruptions which may impact the Company's ability to manufacture or deliver products in a timely and cost-effective manner;
|
·
|
concentration of manufacturing of the substantial majority of the Company's products by third party vendors in the People's Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of people and products into and out of China, the cost of producing products in China and the cost of exporting them to the Company's other markets or affecting the exchange rates for the Chinese Renminbi, including, without limitation, the impact of tariffs or other trade restrictions being imposed upon goods manufactured in China;
|
·
|
consumer interest in and acceptance of Discovery Family, the Company's cable television joint venture with Discovery Communications, the programming appearing on Discovery Family, products related to Discovery Family's programming, and other factors impacting the financial performance of Discovery Family;
|
·
|
consumer interest in and acceptance of programming and entertainment created by Hasbro Studios, as well as products related to Hasbro Studios' programming and entertainment;
|
·
|
the ability of the Company to hire and retain key officers and employees who are critical to the Company's success;
|
·
|
the costs of complying with product safety and consumer protection requirements worldwide, including the risk that greater regulation in the future may increase such costs, may require changes in the Company's products and/or may impact the Company's ability to sell some products in particular markets in the absence of making changes to such products;
|
·
|
the risk that one of the Company's third-party manufacturers will not comply with applicable labor, consumer protection, product safety or other laws or regulations, or with aspects of the Company's Global Business Ethics Principles, and that such noncompliance will not be promptly detected, either of which could cause damage to the Company's reputation, harm sales of its products and potentially create liability for the Company;
|
·
|
an adverse change in purchasing policies or promotional programs or the bankruptcy or other economic difficulties or lack of success of one or more of the Company's significant retailers comprising its relatively concentrated retail customer base, which could negatively impact the Company's revenues or bad debt exposure;
|
·
|
the risk that the market appeal of the Company's licensed products will be less than expected or that sales revenue generated by these products will be insufficient to cover the minimum guaranteed royalties;
|
·
|
the risk the Company will lose rights to significant licensed property or properties, which will harm the Company's revenues and earnings;
|
·
|
the risk that the Company may face product recalls or product liability suits relating to products it manufactures or distributes which may have significant direct costs to the Company and which may also harm the reputation of the Company and its products, potentially harming future product sales;
|
·
|
the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitor products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain employees;
|
·
|
the risk that anticipated benefits of acquisitions may not occur or be delayed or reduced in their realization;
|
·
|
the Company's ability to obtain and enforce intellectual property rights both in the United States and other worldwide territories;
|
·
|
the risk that any litigation or arbitration disputes or government and regulatory investigations could entail significant resources and expense and result in significant fines or other harm to the Company's business or reputation;
|
·
|
the Company's ability to maintain or obtain external financing on terms acceptable to it in order to meet working capital needs;
|
·
|
the risk that one or more of the counterparties to the Company's financing arrangements may experience financial difficulties or otherwise be unable or unwilling to allow the Company to access financing under such arrangements;
|
·
|
the Company's ability to generate sufficient available cash flow to service its outstanding debt;
|
·
|
restrictions that the Company is subject to under its credit agreement;
|
·
|
unforeseen circumstances, such as severe softness in or collapse of the retail environment that may result in a significant decline in revenues and operating results of the Company, thereby causing the Company to be in non-compliance with its debt covenants and the Company being unable to utilize borrowings under its revolving credit facility, a circumstance likely to occur when operating shortfalls would result in the Company being in the greatest need of such supplementary borrowings;
|
·
|
market conditions, third party actions or approvals, the impact of competition and other factors that could delay or increase the cost of implementation of the Company's programs, or alter the Company's actions and reduce actual results;
|
·
|
the risk that the Company may be subject to governmental penalties, fines, sanctions or additional taxes for failure to comply with applicable laws or regulations in any of the markets in which it operates, or that governmental regulations or requirements will require changes in the manner in which the company does business and/or increase the costs of doing business;
|
·
|
failure to operate our information systems and implement new technology effectively, as well as maintain the systems and processes designed to protect our electronic data;
|
·
|
the risk that the Company's reported goodwill may become impaired, requiring the Company to take a charge against its income; or
|
·
|
other risks and uncertainties as are or may be detailed from time to time in the Company's public announcements and filings with the SEC, such as filings on Forms 8-K, 10-Q and 10-K.
|
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Period
|
(a) Total Number of Shares (or Units) Purchased
|
(b) Average Price Paid per Share (or Unit)
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
January 2015
12/29/15 – 1/25/15
|
147,000
|
$53.73
|
147,000
|
$56,252,864
|
February 2015
1/26/15 – 3/1/2015
|
122,600
|
$57.62
|
122,600
|
$549,188,374
|
March 2015
3/2/2015 – 3/29/2015
|
166,247
|
$61.53
|
166,247
|
$538,959,294
|
Total
|
435,847
|
$57.80
|
435,847
|
$538,959,294
|
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
3.1 | Restated Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.) |
3.2 | Amendment to Articles of Incorporation, dated June 28, 2000. (Incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.) |
3.3 | Amendment to Articles of Incorporation, dated May 19, 2003. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended June 29, 2003, File No. 1-6682.) |
3.4 | Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 1-6682.) |
3.5 | Amendment to Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated August 6, 2014, File No. 1-6682.) |
3.6 | Certificate of Designations of Series C Junior Participating Preference Stock of Hasbro, Inc. dated June 29, 1999. (Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.) |
3.7 | Certificate of Vote(s) authorizing a decrease of class or series of any class of shares. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No 1-6682.) |
4.1 | Indenture, dated as of July 17, 1998, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to Citibank, N.A. as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated July 14, 1998, File No. 1-6682.) |
4.2 | Indenture, dated as of March 15, 2000, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4(b)(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1999, File No. 1-6682.) |
4.3 | First Supplemental Indenture, dated as of September 17, 2007, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed September 17, 2007, File No. 1-6682.) |
4.4 | Second Supplemental Indenture, dated as of May 13, 2009, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2009, File No. 1-6682.) |
4.5 | Third Supplemental Indenture, dated as of March 11, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 11, 2010, File No. 1-6682.) |
4.6 | Fourth Supplemental Indenture, dated May 13, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014, file No. 1-6682.) |
10.1 | Hasbro, Inc. 2015 Performance Rewards Program. |
10.2 | Form of Fair Market Value Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable for Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.) |
10.3 | Form of Fair Market Value Stock Option Agreement for Brian Goldner under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. |
10.4 | Form of Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.) |
10.5 | Form of Contingent Stock Performance Award for Brian Goldner under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. |
10.6 | Form of Restricted Stock Unit Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.) |
10.7 | Form of Non-Competition, Non-Solicitation and Confidentiality Agreement. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.) |
31.1 | Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
31.2 | Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
32.1* | Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934. |
32.2* | Certification of the Chief Financial Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934. |
101.INS | XBRL Instance Document |
101.SCH | Taxonomy Extension Schema Document |
101.SCH | Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
* Furnished herewith.
|
HASBRO, INC.
|
|
(Registrant)
|
|
Date: May 6, 2015
|
By: /s/ Deborah Thomas
|
Deborah Thomas
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Duly Authorized Officer and
|
|
Principal Financial Officer)
|
Exhibit
|
|
No.
|
Exhibits
|
3.1
|
Restated Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)
|
3.2
|
Amendment to Articles of Incorporation, dated June 28, 2000. (Incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)
|
3.3
|
Amendment to Articles of Incorporation, dated May 19, 2003. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended June 29, 2003, File No. 1-6682.)
|
3.4
|
Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 1-6682.)
|
3.5
|
Amendment to Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated August 6, 2014, File No. 1-6682.)
|
3.6
|
Certificate of Designations of Series C Junior Participating Preference Stock of Hasbro, Inc. dated June 29, 1999. (Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)
|
3.7
|
Certificate of Vote(s) authorizing a decrease of class or series of any class of shares. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No 1-6682.)
|
4.1
|
Indenture, dated as of July 17, 1998, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to Citibank, N.A. as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated July 14, 1998, File No. 1-6682.)
|
4.2
|
Indenture, dated as of March 15, 2000, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4(b)(i) to the Company's Annual Report on Form 10-K for the year ended December 26, 1999, File No. 1-6682.)
|
4.3
|
First Supplemental Indenture, dated as of September 17, 2007, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed September 17, 2007, File No. 1-6682.)
|
4.4
|
Second Supplemental Indenture, dated as of May 13, 2009, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2009, File No. 1-6682.)
|
4.5
|
Third Supplemental Indenture, dated as of March 11, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 11, 2010, File No. 1-6682.)
|
4.6
|
Fourth Supplemental Indenture, dated May 13, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014, file No. 1-6682.)
|
10.1
|
Hasbro, Inc. 2015 Performance Rewards Program.
|
10.2
|
Form of Fair Market Value Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable for Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.)
|
10.3
|
Form of Fair Market Value Stock Option Agreement for Brian Goldner under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan.
|
10.4
|
Form of Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.)
|
10.5
|
Form of Contingent Stock Performance Award for Brian Goldner under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan.
|
10.6
|
Form of Restricted Stock Unit Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.)
|
10.7
|
Form of Non-Competition, Non-Solicitation and Confidentiality Agreement. (Applicable to Duncan Billing, John Frascotti, Wiebe Tinga, Deborah Thomas and certain other employees of the Company.)
|
31.1
|
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
31.2
|
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
32.1*
|
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.
|
32.2*
|
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
* Furnished herewith.
|
I, Brian Goldner, certify that:
|
|||
1. I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.;
|
|||
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|||
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|||
Date: May 6, 2015
|
|||
/s/ Brian Goldner
|
|||
Brian Goldner
|
|||
President and Chief
|
|||
Executive Officer
|
I, Deborah Thomas, certify that:
|
|||
1. I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.;
|
|||
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|||
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|||
Date: May 6, 2015
|
|||
/s/ Deborah Thomas
|
|||
Deborah Thomas
|
|||
Executive Vice President and
|
|||
Chief Financial Officer
|
1)
|
the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 as filed with the Securities and Exchange Commission (the "10-Q Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1)
|
the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2015, as filed with the Securities and Exchange Commission (the "10-Q Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1.0
|
Background
|
§Establishes standard criteria to determine plan eligibility, and overall company, business area or region, and individual performance objectives.
|
|
§Provides the guidelines for the establishment of target awards as a percent of annual earned salary based on worldwide band level.
|
|
§Plan pay-out is based on a combination of company, business area or region, and individual performance.
|
|
§Performance objectives and goals are established to measure performance achievement and may be based on one or a combination of the following: sales (net revenues), operating margin and returns (free cash flow) for company and business area or region performance, as well as an individual component.
|
1.3.2 | Exclusion of Senior Management Performance Plan Participants Notwithstanding any of the above, those executive officers of Hasbro, Inc. who are identified as participants under the Company's 2009 Senior Management Annual Performance Plan (or any successor shareholder approved bonus plan) are not eligible to participate in the PRP. However, executive officers who are not identified as participants in the 2009 Senior Management Annual Performance Plan (or a successor plan) are eligible to participate in the Plan. |
3.1 | Establishing Company and Business Area or Region Performance Targets |
Measure
|
Definition
|
% of Company Measure
|
Sales (net revenues)
|
Third Party Gross Sales (after returns) less Sales Allowances plus Third Party Royalty Income
|
40%
|
Operating Margin
|
Operating Profit divided by Net Revenues
|
40%
|
Returns (Free Cash Flow)
|
Net cash provided by operating activities – Capital Expenditures
|
20%
|
Measure
|
Definition
|
% of Company Measure
|
Sales (net revenues) Growth
|
Third Party Gross Sales (after returns) less Sales Allowances plus Third Party Royalty income
|
50%
|
Operating Margin
|
Operating Profit divided by Net Revenues
|
50%
|
3.4.1 | Bonus formula metrics for employees in bands WW70 and below are used to assess performance at the overall Company level, business area or region level (where applicable), and individual level. |
3.4.2 | Bonus formula metrics for WW80 employees are based on the employee's role and will be comprised of either 100% overall company performance with a personal performance modifier (see note below) or be based on 40% overall company performance and 60% business area or region performance with a personal performance modifier (see note below). |
4.0
|
Development of Formula Incentive Award
|
|
Performance %
|
|
|
Payout Scale %
|
|
|
|
|
|
< 80%
|
|
|
0%
|
|
|
Minimum Performance 80%
|
|
|
80%
|
|
|
60%
|
|
|
For ever 1% below target, 2% decrease in award
|
|
|
100%
|
|
|
100%
|
|
|
Target performance = 100% payout
|
|
|
105%
|
|
|
115%
|
|
|
For every 1% above 100%, 2% increase in award
|
|
|
111%
|
|
|
134%
|
|
|
For every 1% above 110%, 4% increase in award
|
|
|
127%
|
|
|
200%
|
|
|
Maximum Payout
|
|
4.2 | Formula Pool |
4.3 | Additional Individual Performance Awards in Excess of the Formula Award |
§
|
For purposes of the PRP, management has the ability to review the proposed payout of any award under the PRP to an eligible plan participant and to determine whether such proposed payout should be adjusted. In completing this review, management has the option of providing a zero value payout to the employee regardless of Company, business area, regional or individual performance. For participants that do not receive an award or that receive a reduced award, the portion of such person's potential award that might have been reflected in the Formula Pool will remain in the Formula Pool and be allocated to other plan participants in the manner determined by management.
|
5.1 | Participants whose employment with the Company is terminated because of retirement or disability: |
§After the close of the plan year, but prior to the actual distribution of awards for such year, may be awarded an incentive award for the plan year at the discretion of the Chief Human Resource Officer. For any such participant who is not given an incentive award, the portion of such person's potential award that might have been reflected in the Formula Pool will remain in the Formula Pool and be allocated to other plan participants in the manner determined by management.
|
|
§After the beginning, but prior to the close of the plan year, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer.
|
§After the close of the plan year, but prior to the actual distribution of awards for such year, shall be awarded an incentive award for the plan year. Such payment will be made to the deceased employee's estate or designated beneficiary.
|
|
§After the beginning, but prior to the close of the plan year, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. Any such payments will be made to the deceased employee's estate or designated beneficiary.
|
5.3 | Participants who resign for any reason after the close of the plan year but prior to the distribution of awards for such year will not receive an incentive award. For any such participant, the portion of such person's potential award that might have been reflected in the Formula Pool will remain in the Formula Pool and be allocated to other plan participants in the manner determined by management if the planning budgets have already been established. |
5.5 | Participants who are discharged from the employ of the Company or any of its subsidiaries due to any reason other than the ones enumerated above, including, without limitation, participants who are discharged due to job elimination: |
§After the close of the plan year, but prior to the actual distribution of awards for such year, may be awarded an incentive award for the plan year. No award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. For any such participant who is not given an incentive award, the portion of such person's potential award that might have been reflected in the Formula Pool will remain in the Formula Pool and be allocated to other plan participants in the manner determined by management.
|
|
§After the beginning, but prior to the close of the plan year, the participant is no longer eligible for that year. However, a discretionary award may be granted by the Chief Human Resource Officer.
|
|
5.6 | Participants under statutory or contractual notices as may be required by applicable law: |
§On December 31st of the plan year, may be awarded an incentive award for the plan year. Except as may be required by applicable laws, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. For any such participant who is not given an incentive award, the portion of such person's potential award that might have been reflected in the Formula Pool will remain in the Formula Pool and be allocated to other plan participants in the manner determined by management.
|
|
§Which ends prior to the close of the plan year shall not be eligible for an incentive award for that plan year. However, a discretionary award may be granted by the Chief Human Resource Officer.
|
5.7 | Participants transferred during the plan year from one division of the Company to another will be eligible to receive an award (subject to achievement of the requisite organizational and individual performance) through the division in which he or she is employed at the end of the plan year, but the award amount may be based on the performance made in each division in which the individual was employed during the year. |
5.8 | Employees hired during the plan year must be actively employed on or before October 1st of the plan year to participate in the bonus for that plan year. Awards will be made based upon the employee's earned salary during the period of their employment with the Company during the plan year. |
5.9 | The eligibility for an award and plan status of employees who remain employed with the Company during the plan year but whose change in employment status through promotion or reclassification affects their level of participation: |
§Prior to October 1st of the plan year, will participate at the level consistent with the promotion or reclassification.
|
|
§After October 1st but prior to the close of the plan year, will participate at the level consistent with their classification prior to the promotion or reclassification.
|
5.10 | The eligibility for an award and plan status of employees who remain employed with the Company during the plan year but whose change in employment status through demotion affects their level of participation will be determined by the Chief Human Resource Officer. |
6.6 | Stock Ownership |
Period
|
|
Cumulative Percent of Option Exercisable
|
|
|
|
[ ] to [ ]
|
|
0%
|
[ ] to [ ]
|
|
33 1/3%
|
[ ] to [ ]
|
|
66 2/3%
|
[ ] to [ ]
|
|
100%
|
|
|
|
Period
|
|
Cumulative Percent of Option Exercisable
|
|
|
|
[ ] to [ ]
|
|
0%
|
[ ] to [ ]
|
|
33 1/3%
|
[ ] to [ ]
|
|
66 2/3%
|
[ ] to [ ]
|
|
100%
|
|
|
|
|
EPS
|
|
|
$[ ]
|
|
|
Revenues
|
|
|
$[ ]
|
|
|
Average ROIC
|
|
|
[ ]%
|
|
EPS
|
Achievement
|
Payout
|
Revenue in Millions
|
Achievement
|
Payout
|
Average ROIC
|
Achievement
|
Payout
|
|
||
|
||
|
||
|
||
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||
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||
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||
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||
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||
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||
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||
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|
|
EPS
|
|
|
$[ ]
|
|
|
Revenues
|
|
|
$[ ]
|
|
|
Average ROIC
|
|
|
[ ]%
|
|
EPS
|
Achievement
|
Payout
|
|
||
|
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Revenue in Millions
|
Achievement
|
Payout
|
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(a)
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You will always preserve as confidential all Confidential Information, and will never use it for your own benefit or for the benefit of others.
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(b)
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You will not disclose, divulge, or communicate Confidential Information to any unauthorized person, business or corporation during or after the termination of your employment with the Company. You will use your best efforts and exercise due diligence to protect, to not disclose and to keep as confidential all Confidential Information.
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(c)
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You will abide by all applicable Company written policies and procedures regarding data or information security.
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(d)
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Upon the earlier of request or termination of employment, you agree to return to the Company, or if so directed by the Company, destroy any and all copies of materials in your possession containing Confidential Information.
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(a)
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In consideration of the Award, you agree that while employed by Hasbro (including any of its affiliates) and for a period of one (1) year after your Date of Termination (as defined below) (including any of its affiliates), you will not, in the geographical area in which Hasbro or any of its affiliates does business or has done business, engage in any business or enterprise that would be competitive with any business of Hasbro in existence as of the Date of Termination. This obligation shall preclude any such involvement, whether on a direct or indirect basis, and whether as an owner, partner, officer, director, employee, consultant, investor, lender or otherwise, except as the holder of not more than 1% of the outstanding stock of a publicly held company.
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(b)
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The geographic area to which the restrictions of Section 2 (a) shall apply shall be limited to the geographic area in which the Company does business, has done business, or plans to do business as of your Date of Termination.
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(c)
|
You agree that while employed by the Company and for a period of one (1) year after your Date of Termination, you shall not directly or indirectly solicit, induce or attempt to induce (other than a general solicitation not directed at the employees of the Company) either alone or in association with others, any employee or independent contractor of the Company to terminate his or her employment or his, her or its relationship with the Company or in any way assist or enable another person or entity, directly or indirectly, to solicit, induce or attempt to induce any individual, employee or independent contractor of the Company to terminate his/her employment or his, her or its relationship with the Company.
|
(d)
|
You agree that while employed by the Company and for a period of one (1) year after your Date of Termination, you shall not, directly or indirectly, acting alone or in association with others, solicit, divert or take away or attempt to solicit, divert or take away, the business of any current or prospective customers, accounts or business partners that were contacted, solicited or served by the Company while you were employed by the Company.
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(e)
|
You acknowledge that the restrictions set forth in this Section 2 are necessary for the protection of the business and goodwill of the Company and its Subsidiaries and are material and integral to the Award. You further acknowledge that the restrictions contained herein are reasonable for the protection of the business and good will of the Company and its Subsidiaries. You agree that any breach, or threatened breach, of this Agreement is likely to cause the Company substantial and irrevocable harm. In the event of any breach or threatened breach, you agree that the Company, in addition to such other remedies which may be available, shall be entitled to specific performance and other injunctive relief without posting a bond or other security. You also waive the adequacy of a remedy at law as a defense to such relief.
|
(f)
|
You agree that if you violate any of the provisions of this Section 2, you shall continue to be bound by the restrictions set forth herein until a period of one (1) year has expired without any violation of this Section 2. You further agree that in the event you violate any of the provisions of this Section 2, and you are receiving any severance pay or benefits from the Company, the Company shall have no obligation to continue paying or providing to you any such severance pay or benefits and may recover from you the severance pay and benefits you previously received.
|
(g)
|
If any restriction set forth in this Section 2 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.
|
HASBRO, INC.
|
|
Date: ______________________
|
By:____________________________
|
EMPLOYEE
|
|
Date:_______________________
|
_______________________________
Print Name
_______________________________
|
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