SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended April 1, 2001 Commission file number 1-6682 HASBRO, INC. -------------------- (Name of Registrant) Rhode Island 05-0155090 - ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1027 Newport Avenue, Pawtucket, Rhode Island 02861 --------------------------------------------------- (Principal Executive Offices) (401) 431-8697 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X or No --- --- The number of shares of Common Stock, par value $.50 per share, outstanding as of April 29, 2001 was 172,461,389. HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands of Dollars Except Share Data) (Unaudited) Apr. 1, Apr. 2, Dec. 31, Assets 2001 2000 2000 -------- -------- -------- Current assets Cash and cash equivalents $ 180,766 343,643 127,115 Accounts receivable, less allowance for doubtful accounts of $55,300, $67,300 and $55,000 255,450 455,374 685,975 Inventories: Finished products 257,447 381,574 285,884 Work in process 22,508 25,634 19,071 Raw materials 26,669 34,942 30,538 --------- --------- --------- Total inventories 306,624 442,150 335,493 Deferred income taxes 153,583 117,475 155,291 Prepaid expenses 237,013 334,121 276,339 --------- --------- --------- Total current assets 1,133,436 1,692,763 1,580,213 Property, plant and equipment, net 279,184 315,091 296,729 --------- --------- --------- Other assets Cost in excess of acquired net assets, less accumulated amortization of $236,203, $201,844 and $225,770 791,409 811,922 803,189 Other intangibles, less accumulated amortization of $336,696, $287,484 and $347,149 872,809 931,336 902,893 Other 286,120 255,574 245,435 --------- --------- --------- Total other assets 1,950,338 1,998,832 1,951,517 --------- --------- --------- Total assets $3,362,958 4,006,686 3,828,459 ========= ========= ========= HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets, Continued (Thousands of Dollars Except Share Data) (Unaudited) Apr. 1, Apr. 2, Dec. 31, Liabilities and Shareholders' Equity 2001 2000 2000 -------- -------- -------- Current liabilities Short-term borrowings $ 92,229 79,597 228,085 Accounts payable 129,591 156,739 191,749 Accrued liabilities 583,443 981,690 819,978 --------- --------- --------- Total current liabilities 805,263 1,218,026 1,239,812 Long-term debt, excluding current installments 1,167,528 1,169,406 1,167,838 Deferred liabilities 116,784 105,180 93,403 --------- --------- --------- Total liabilities 2,089,575 2,492,612 2,501,053 --------- --------- --------- 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, 209,694,630 and 209,694,630 104,847 104,847 104,847 Additional paid-in capital 463,468 469,708 464,084 Deferred compensation (5,391) (9,884) (6,889) Retained earnings 1,553,199 1,768,990 1,583,394 Accumulated other comprehensive earnings (69,967) (43,011) (44,718) Treasury stock, at cost, 37,229,915, 37,330,934 and 37,253,164 shares (772,773) (776,576) (773,312) --------- --------- --------- Total shareholders' equity 1,273,383 1,514,074 1,327,406 --------- --------- --------- Total liabilities and shareholders' equity $3,362,958 4,006,686 3,828,459 ========= ========= =========

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2001

Commission file number 1-6682

HASBRO, INC.

(Exact Name of Registrant, As Specified in its Charter)

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 Phone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by

Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrant was required to file such reports) and

(2) has been subject to such filing requirements for the past 90 days.

Yes X or No

The number of shares of Common Stock, par value $.50 per share, outstanding as of July 27, 2001 was 172,541,015.

PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of Dollars Except Share Data)

(Unaudited)

		July 1,	July 2,	Dec. 31,
Assets		2001	2000	2000
		---------	---------	---------
Current assets
Cash and cash equivalents	$	56,819	188,545	127,115
Accounts receivable, less allowance
for doubtful accounts of $56,200,
$62,700 and $55,000		399,402	573,869	685,975
Inventories:
Finished products		291,002	414,262	285,884
Work in process		24,007	43,051	19,071
Raw materials		21,629	50,847	30,538
		--------------	--------------	--------------
Total inventories		336,638	508,160	335,493

Deferred income taxes		151,078	127,142	155,291
Prepaid expenses		234,344	329,137	276,339
		--------------	--------------	--------------
Total current assets		1,178,281	1,726,853	1,580,213

Property, plant and equipment, net		268,054	320,176	296,729
		--------------	--------------	--------------

Other assets
Cost in excess of acquired net assets,
less accumulated amortization of
$246,893, $212,804, and $225,770		784,670	808,863	803,189
Other intangibles, less accumulated
amortization of $355,059, $308,393
and $347,149		849,001	917,546	902,893
Other		253,783	241,778	245,435
		--------------	--------------	--------------
Total other assets		1,887,454	1,968,187	1,951,517
		--------------	--------------	--------------

Total assets	$	3,333,789	4,015,216	3,828,459
		========	========	========

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets, continued

(Thousands of Dollars Except Share Data)

(Unaudited)

				July 1,		July 2,		Dec. 31,
Liabilities and Shareholders' Equity				2001		2000		2000
				---------		---------		---------
Current liabilities
Short-term borrowings			$	174,982		363,375		228,085
Accounts payable				148,703		163,733		191,749
Accrued liabilities				468,138		717,471		819,978
				--------------		--------------		--------------
		Total current liabilities		791,823		1,244,579		1,239,812

Long-term debt, excluding current
	installments			1,167,035		1,168,959		1,167,838
Deferred liabilities				117,000		99,857		93,403
				--------------		--------------		--------------
		Total liabilities		2,075,858		2,513,395		2,501,053
				--------------		--------------		--------------
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 at July 1, 2001,
	July 2, 2000 and December 31, 2000			104,847		104,847		104,847
Additional paid-in capital				462,149		473,946		464,084
Deferred compensation				(4,436	)	(14,795	)	(6,889	)
Retained earnings				1,529,689		1,765,166		1,583,394
Accumulated other comprehensive earnings				(63,647	)	(50,140	)	(44,718	)
Treasury stock, at cost; 37,156,990,
	37,414,109 and 37,253,164 shares			(770,671	)	(777,203	)	(773,312	)
				--------------		--------------		--------------
		Total shareholders' equity		1,257,931		1,501,821		1,327,406
				--------------		--------------		--------------

		Total liabilities and shareholders' equity	$	3,333,789		4,015,216		3,828,459
				========		========		========

See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Thousands of Dollars Except Share Data) (Unaudited) Quarter Ended -------------------- Apr. 1, Apr. 2, 2001 2000 -------- -------- Net revenues $463,286 773,481 Cost of sales 189,805 300,301 ------- ------- Gross profit 273,481 473,180 ------- ------- Expenses Amortization 29,421 32,856 Royalties, research and development 56,735 126,039 Advertising 47,613 69,359 Selling, distribution and administration 153,819 204,736 ------- ------- Total expenses 287,588 432,990 ------- ------- Operating profit (loss) (14,107) 40,190 ------- ------- Nonoperating (income) expense Interest expense 25,890 21,443 Other (income) expense, net (4,765) (3,176) ------- ------- Total nonoperating (income) expense 21,125 18,267 ------- ------- Earnings (loss) before income taxes and cumulative effect of accounting change (35,232) 21,923 Income taxes (11,274) 6,796 ------- ------- Earnings (loss) before cumulative effect of accounting change (23,958) 15,127 Cumulative effect of accounting change (1,066) - ------- ------- Net earnings (loss) $(25,024) 15,127 ======= ======= Basic and diluted per common share Earnings (loss) before cumulative effect of accounting change $ (.14) .08 Cumulative effect of accounting change (.01) - ------- ------- Net earnings (loss) $ (.15) .08 ======= ======= Cash dividends declared $ .03 .06 ======= =======

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations

(Thousands of Dollars Except Per Share Data)
(Unaudited)
			Quarter Ended					Six Months Ended
			--------------------					-------------------------
			July 1, 2001 - --------			July 2, 2000 - --------		July 1, 2001 - ---------		July 2, 2000 - ---------
Net revenues			$	510,971		778,373		974,257		1,551,854
Cost of sales				204,008		298,043		393,813		598,344
				------------		-------------		-------------		--------------
Gross profit				306,963		480,330		580,444		953,510
				------------		-------------		-------------		--------------
Expenses
	Amortization			28,862		31,928		58,283		64,784
	Royalties, research and development			69,868		135,150		126,603		261,189
	Advertising			51,065		77,732		98,678		147,091
	Selling, distribution and administration			157,209		198,974		311,028		403,710
				------------		-------------		-------------		--------------
		Total expenses		307,004		443,784		594,592		876,774
				------------		-------------		-------------		--------------
Operating profit (loss)				(41	)	36,546		(14,148	)	76,736
				------------		-------------		-------------		--------------
Nonoperating (income) expense
	Interest expense			25,321		28,198		51,211		49,641
	Other (income) expense, net			1,595		(1,073	)	(3,170	)	(4,249	)
				------------		-------------		-------------		--------------
		Total nonoperating (income) expense		26,916		27,125		48,041		45,392
				------------		-------------		-------------		--------------
Earnings (loss) before income taxes and
	cumulative effect of accounting change			(26,957	)	9,421		(62,189	)	31,344
Income taxes				(8,626	)	2,921		(19,900	)	9,717
				------------		-------------		-------------		--------------
Net earnings (loss) before cumulative
	effect of accounting change			(18,331	)	6,500		(42,289	)	21,627
Cumulative effect of accounting change				-		-		(1,066	)	-
				------------		-------------		-------------		--------------
Net earnings (loss)			$	(18,331	)	6,500		(43,355	)	21,627
				=======		=======		=======		========

Basic and diluted per common share
	Earnings (loss) before cumulative
		effect of accounting change		$	(0.11	)	.04	(0.25	)	.12
					=======		=======	=======		========
	Net earnings (loss)			$	(0.11	)	.04	(0.25	)	.12
					=======		=======	=======		========
	Cash dividends declared		$		.03		.06	.06		.12
					=======		=======	=======		========

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended July 1, 2001 and July 2, 2000

(Thousands of Dollars)
(Unaudited)
						2001		2000
						-------		-------
Cash flows from operating activities
	Net earnings (loss)				$	(43,355	)	21,627
	Adjustments to reconcile net earnings to net cash
	utilized by operating activities:
		Depreciation and amortization of plant and equipment				41,622		49,128
		Other amortization				58,283		64,784
		Deferred income taxes				40,125		7,501
		Compensation earned under restricted stock programs				1,562		1,566
	Change in operating assets and liabilities (other
		than cash and cash equivalents):
		Decrease in accounts receivable				273,985		499,364
		Increase in inventories				(13,807	)	(107,517	)
		Decrease (increase) in prepaid expenses				21,412		(91,923	)
		Decrease in accounts payable and accrued liabilities				(355,556	)	(451,732	)
		Other				(10,341	)	(2,609	)
						------------		------------
				Net cash provided (utilized) by operating activities		13,930		(9,811	)
						------------		------------
Cash flows from investing activities
		Additions to property, plant and equipment				(22,534	)	(59,394	)
		Investments and acquisitions, net of cash acquired				-		(29,472	)
		Other				2,587		(6,141	)
						------------		------------
				Net cash utilized by investing activities		(19,947	)	(95,007	)
						------------		------------
Cash flows from financing activities
		Proceeds from borrowings with original maturities
			of more than three months			-		888,525
		Repayments of borrowings with original maturities
			of more than three months			(25,000	)	(148,324	)
		Net (repayments) proceeds of other short-term borrowings				(24,647	)	(332,654	)
		Purchase of common stock				-		(367,544	)
		Stock option transactions				1,737		1,751
		Dividends paid				(10,347	)	(21,814	)
						------------		------------
				Net cash (utilized) provided by financing activities		(58,257	)	19,940
						------------		------------
Effect of exchange rate changes on cash						(6,022	)	(6,736	)
						------------		------------
				Decrease in cash and cash equivalents		(70,296	)	(91,614	)
Cash and cash equivalents at beginning of year						127,115		280,159
						------------		------------
				Cash and cash equivalents at end of period	$	56,819		188,545
						=======		=======

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
Six Months Ended July 1, 2001 and July 2, 2000

(Thousands of Dollars)
(Unaudited)


	2001		2000
	-------		-------
Supplemental information
Cash paid (received) during the period for:
Interest	$ 50,267		26,996
Income taxes	$(49,909	)	71,570

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings

(Thousands of Dollars)
(Unaudited)


	Quarter Ended						Six Months Ended
	------------------						------------------
	July 1, 2001 - -------			July 2, 2000 - -------			July 1, 2001 - -------		July 2, 2000 - -------
Net earnings (loss)	$	(18,331	)		6,500		(43,355	)	21,627
Cumulative effect of accounting change		-			-		(753	)	-
Other comprehensive earnings (loss)		6,320			(7,129	)	(18,176	)	(17,158	)
		----------			----------		----------		----------
Total comprehensive earnings (loss)	$	(12,011	)		(629	)	(62,284	)	4,469
		======			======		======		======

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Three Months Ended April 1, 2001 and April 2, 2000 (Thousands of Dollars) (Unaudited) 2001 2000 ---- ---- Cash flows from operating activities Net earnings (loss) $(25,024) 15,127 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of plant and equipment 19,113 22,425 Other amortization 29,421 32,856 Deferred income taxes 40,810 19,253 Compensation earned under restricted stock plans 1,088 - Change in operating assets and liabilities (other than cash and cash equivalents): Decrease in accounts receivable 419,897 620,452 Decrease (increase) in inventories 18,671 (39,299) Increase in prepaid expenses (23,422) (93,628) Decrease in accounts payable and accrued liabilities(278,491) (201,215) Other (8,291) (8) ------- ------- Net cash provided by operating activities 193,772 375,963 ------- ------- Cash flows from investing activities Additions to property, plant and equipment (10,424) (25,081) Investments and acquisitions, net of cash acquired - (20,790) Other 13,945 (9,429) ------- ------- Net cash provided (utilized) by investing activities 3,521 (55,300) ------- ------- Cash flows from financing activities Proceeds from borrowings with original maturities of more than three months - 750,000 Repayments of borrowings with original maturities of more than three months (25,000) (148,324) Net repayments of other short-term borrowings (107,688) (478,609) Purchase of common stock - (363,413) Stock option transactions 472 128 Dividends paid (5,173) (11,484) ------- ------- Net cash utilized by financing activities (137,389) (251,702) ------- ------- Effect of exchange rate changes on cash (6,253) (5,477) ------- ------- Increase in cash and cash equivalents 53,651 63,484 Cash and cash equivalents at beginning of year 127,l15 280,159 ------- ------- Cash and cash equivalents at end of period $180,766 343,643 ======= ======= HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (continued) Three Months Ended April 1, 2001 and April 2, 2000 (Thousands of Dollars) (Unaudited) 2001 2000 ------- ------ Supplemental information Cash paid (received) during the period for: Interest $ 42,539 20,025 Income taxes $(58,986) 33,210 See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Earnings (Thousands of Dollars) (Unaudited) Quarter Ended -------------------- Apr. 1, Apr. 2, 2001 2000 -------- -------- Net earnings (loss) $ (25,024) 15,127 Cumulative effect of accounting change (753) - Other comprehensive earnings (loss) (24,496) (10,029) -------- -------- Total comprehensive earnings (loss) $ (50,273) 5,098 ======== ======== See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements ~~(Thousands~~

(Thousands of Dollars)
(Unaudited)

(1) In the opinion of management and subject to year-end audit, the accompanying unaudited interim financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of ~~April~~July 1, 2001 and ~~April~~July 2, 2000, and the results of operations and cash flows for the periods then ended.

The ~~quarter~~year to date period ended ~~April~~July 1, 2001 is a ~~thirteen week period. The quarter~~26-week period while the year to date period ended ~~April~~July 2, 2000 is a ~~fourteen week~~27-week period.

The results of operations for the ~~quarter~~six months ended ~~April~~July 1, 2001 are not necessarily indicative of results to be expected for the full year.

(2) Earnings per share data for the fiscal quarters ended April 1, 2001 and April 2, 2000 were computed as follows: 2001 2000 ----------------- ----------------- Basic Diluted Basic Diluted ------- ------- ------- ------- Earnings (loss) before cumulative effect of accounting change $(23,958) (23,958) 15,127 15,127 ======= ======= ======= ======= Average shares outstanding (in thousands) 171,933 171,933 189,563 189,563 Effect of dilutive securities; Options and warrants - - - 778 ------- ------- ------- ------- Equivalent shares 171,933 171,933 189,563 190,341 ======= ======= ======= ======= Earnings (loss) per share before cumulative effect of accounting change $ (.14) (.14) .08 .08 ======= ======= ======= ======= (3) The Company's other comprehensive earnings (loss) primarily results from foreign currency translation adjustments, changes in value of the Company's available-for-sale investments, and the impact of deferred gains or losses on changes in the fair value of foreign currency contracts. ~~(4)~~

(3) In January 2001, the Company closed on the sale (commenced in 2000) of certain business units comprising Hasbro Interactive, as well as its internet portal, Games.com, to Infogrames Entertainment SA (Infogrames) for Infogrames securities and cash, resulting in a loss of $43,965 that was recognized at December 31, 2000. The sale iswas subject to certain post closing adjustments, which are expected to be finalized in 2001. HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited) under discussion between the Company and Infogrames.

The Infogrames securities received in the sale have been classified as available-for-sale and are included in other assets. Net revenues and operating losses of the business units sold were $22,700 and $(29,100), respectively, for the ~~quarter~~three months ended ~~April~~July 2, 2000 ~~were $24,995~~ and ~~$(34,730)~~$47,700 and $(63,900), ~~respectively. (5)~~respectively for the six months ended July 2, 2000.

(4) The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates primarily as a result of sourcing products in four currencies while marketing those products in more than thirty currencies. Results of operations will be affected primarily by changes in the value of the U.S. dollar, Hong Kong dollar, British pound, Euro, Canadian dollar and Mexican peso versus other currencies, principally in Europe and the United States. To manage this exposure, the Company hedges a portion of its estimated future foreign currency transactions using a combination of forward foreign exchange contracts and purchased foreign currency options.

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by Statement of Accounting Standards No. 138, (collectively "SFAS 133") which require that the Company record all derivatives, such as foreign exchange products, on the balance sheet at fair value. Changes in the derivative fair values that are designated, effective and qualify as cash flow hedges are deferred and recorded as a component of accumulated other comprehensive earnings (AOCE) until the hedged transactions occur and are recognized in the consolidated statements of operations. The Company's foreign currency contracts hedging anticipated cash flows are designated as cash flow hedges.

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

The ineffective portion of a hedging derivative is immediately recognized in the consolidated statements of operations. As a result of adopting SFAS 133 and in accordance with the transition provisions, the Company recorded a one-time after tax charge of $1,066 or $.01 per share during the quarter ended April 1, 2001 representing the cumulative effect of the adoption in its consolidated statements of operations and an after tax unrealized loss of $753 to AOCE, which the Company expects to be reclassified to the consolidated statements of operations during the remainder of fiscal 2001. For the quarter ended April 1, 2000, changes in fair value which the Company excludes from its assessment of hedge effectiveness, which are included in the consolidated statement of operations were $60.

A summary of the after tax activity in AOCE relating to the Company's hedging program is as follows: Balance, December 31, 2000 $ - Cumulative effect of accounting change (753) Change in fair value of cash flow hedges 3,810 Change in fair value transferred to earnings as a result of ineffectiveness 32 ------ Balance, April 1, 2001 $3,089 ====== HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited)

Balance, December 31, 2000	$	-
Cumulative effect of accounting change		(753	)
Change in fair value of cash flow hedges		4,590
Change in fair value transferred to earnings as a
result of ineffectiveness		22
Reclass to earnings as a result of sale of inventory		(695	)
		--------
Balance, July 1, 2001	$	3,164
		=====

The remaining balance in AOCE at ~~April~~July 1, 2001 represents a net unrealized gain on hedges of 2001 inventory purchases either purchased in the first quarter or forecasted to be purchased during the remainder of fiscal 2001. This amount will be transferred to the consolidated ~~statements~~statement of operations upon the sale of the related inventory. The Company expects the entire balance in AOCE to be reclassified to the consolidated ~~statements~~statement of operations within the next 129-12 months.

Changes in fair value which the Company excludes from its assessment of hedge effectiveness, which are included in the consolidated statement of operations were $11 for the quarter ended July 1, 2001 and $71 for the six months ended July 1, 2001. In addition, during the three months ended July 1, 2001, the Company transferred $695, after taxes, to earnings relating to the portion of the net gains in AOCE that relate to inventory sold during the period.

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

Occasionally, the Company enters into derivative instruments to offset changes in the fair value of intercompany loans which are required to be recognized in earnings. The Company recorded a net ~~gain~~loss to other (income) expense of ~~$840~~$86 and $926 for the three and six months ended July 1, 2001, respectively, relating to the change in fair value of ~~foreign currency~~such derivatives, ~~that were not designated as accounting hedges. Changes in~~partially offsetting gains from the ~~fair value of these derivatives offset changes~~change in fair value of ~~the underlying transactions to which they relate, which are also~~intercompany loans from foreign currency fluctuations included in other (income) expense.

The Company formally documents all relationships between hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking various hedge transactions. All hedges designated as cash flow hedges are linked to forecasted transactions and the Company assesses, both at the inception of the hedge and on an on-going basis, the effectiveness of the derivatives used in hedging transactions in offsetting changes in the cash flows of the hedged items. When it is determined that a derivative is not highly effective as a hedge under the requirements of SFAS 133, the Company discontinues hedge accounting prospectively. Any gain or loss deferred through that date remains in AOCE until the forecasted transaction occurs at which time it is reclassified into the consolidated statements of operations. To the extent the transaction is no longer deemed probable of occurring, hedge accounting treatment is discontinued prospectively and amounts deferred would be reclassified to the ~~consolidated~~co nsolidated statements of operations. (6) On October 12, 2000, the Company announced a plan to consolidate its U.S. Toy group into Rhode Island, significantly reduce overhead through reductions in product development, sales and marketing, and administrative functions across the Company and to increase its development of the Company's core brands. Costs associated with this consolidation program, recorded in the fourth quarter of 2000, amounted to $152,270, of which $70,079 was recorded as a restructuring charge and $82,191 in various other operating expense categories. The significant components of the plan included the closing of offices in Cincinnati, Ohio, the Napa, California office and warehouse and a small office in San Francisco, California, thereby essentially consolidating the U.S. Toy group in Rhode Island. These actions were substantially completed at December 31, 2000. HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited) Additionally, the plan included the reduction of overhead, particularly in marketing and sales, product development and administration. This included a curtailment of the expansion of the retail business of Wizards, the further consolidation of certain international operating offices into regional centers and consolidation and streamlining of the Company's marketing activities. The Company is also increasing its focus on developing and marketing its core brands thereby seeking to reduce its reliance on licenses. This focus resulted in product lines which will be discontinued or for which the Company has significantly reduced expectations. The 2000 restructuring charge of $70,079 represented approximately $31,800 of cash charges for severance benefits for termination of approximately 850 employees, which will be disbursed over the employees' entitlement period, $21,400 of cash charges for lease costs to be expended over the contractual lease term of the closed facilities and non-cash charges of $16,900 for fixed asset write-offs, arising primarily in Corporate and the U.S. Toy segment. Non- cash charges relating to fixed asset write-offs were credited to the respective line items on the balance sheet as of December 31, 2000. Details of activity in the restructuring plan for the current period follow: Balance at Balance at Dec. 31, Apr. 1, 2000 Activity 2001 ------- -------- ------- Severance $ 31,800 (12,100) 19,700 Lease costs 21,400 (1,100) 20,300 ------- ------- ------- $ 53,200 (13,200) 40,000 ======= ======= ======= Employee redundancies by area: Manufacturing activities 27 (24) 3 Research, product development, marketing sales and administration 322 (196) 126 ------- ------- ------- 349 (220) 129 ======= ======= ======= The remaining severance liability represents cash charges for severance benefits for employees not yet terminated and amounts for employees made redundant which will be disbursed over the employees' entitlement period. The balance in lease costs will be expended over the contractual lease term of the closed facilities. HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited) (7)

(5) Hasbro is a worldwide marketer and distributor of children's and family entertainment products and services, principally engaged in the design, manufacture and marketing of games and toys ranging from traditional to ~~high- tech.~~high-tech. The Company's reportable segments are U.S. Toys, Games, International and Operations. In 2001, the Company has realigned its business segments to consolidate its toy-related product lines into its U.S. Toy segment. In addition, manufacturing facilities previously included in the Operations segment are now assessed as part of the segments which these facilities support. Prior year amounts have been reclassified to reflect the Company's current focus.

In the United States, the U.S. Toy segment includes the design, marketing and selling of boys action figures, vehicles and playsets, girls toys, preschool toys and infant products, creative play products and ~~toy-related~~toy related specialty products. The Games segment includes the development, manufacturing, marketing and selling of traditional board games and puzzles, handheld electronic games, electronic interactive products, children's consumer electronics, electronic learning aids, trading card and role-playing games. Within the International segment, the Company develops, manufactures, markets and sells both toy and certain game products in non-U.S. markets. Operations sources product for the majority of the Company's segments. The Company also has other segments which license out certain toy and game properties and which operate retail stores. These other segments do not meet the quantitative thresholds for reportable segments and have been combined for reporting purposes.

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

Segment performance is measured at the operating profit level. Included in Corporate and eliminations are general corporate expenses, the elimination of intersegment transactions and assets not identified with a specific segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost.

The accounting policies of the segments are the same as those described in ~~note~~Note 1 to the Company's consolidated financial statements for the fiscal year ended December 31, 2000.

Results shown for the quarter and six months are not necessarily representative of those which may be expected for the full year 2001 nor were those of the comparable 2000 ~~first quarter~~periods representative of those actually experienced for the full year 2000. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise. ~~HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited)~~

Information by segment and a reconciliation to reported amounts for the ~~three~~quarter and six months ended ~~April~~July 1, 2001 and ~~April~~July 2, 2000 are as follows: Quarter Ended Quarter Ended April 1, 2001 April 2, 2000 ------------- ------------- Net revenues External Affiliate External Affiliate -------- --------- -------- --------- U.S. Toys $ 131,028 3,114 188,506 3,173 Games 189,739 16,592 398,643 40,964 International 119,221 16,125 166,179 16,016 Operations (a) 3,486 51,391 1,700 129,234 Other segments 19,812 709 18,453 701 Corporate and eliminations - (87,931) - (190,088) --------- --------- --------- --------- $ 463,286 - 773,481 - ========= ========= ========= ========= Quarter ended Quarter ended April 1, 2001 April 2, 2000 ------------- -------------- Operating profit (loss) U.S. Toys $ (3,769) (28,337) Games 9,517 76,659 International (27,624) (15,273) Operations (3,288) 1,781 Other segments (850) 2,955 Corporate and eliminations 11,907 2,405 --------- --------- $ (14,107) 40,190 ========= ========= April 1, 2001 April 2, 2000 ------------- ------------- Total assets U.S. Toys $ 477,735 625,203 Games 1,927,846 2,072,700 International 957,501 947,101 Operations 316,358 297,993 Other segments 64,495 27,673 Corporate and eliminations (380,977) 36,016 --------- --------- $3,362,958 4,006,686 ========= ========= follows.

	Quarter ended
	------------------
	July 1, 2001					July 2, 2000
	-----------------					-----------------
Net revenues			External	Affiliate		External	Affiliate
			-----------	----------		-----------	---------
U.S. Toys	$		138,756	2,369		138,691	4,793
Games			227,255	7,704		421,722	(1,596	)
International			123,024	21,829		199,607	17,041
Operations (a)			4,889	83,413		1,697	99,127
Other segments			17,047	411		16,656	359
Corporate and eliminations			-	(115,726	)	-	(119,724	)
			------------	------------		------------	------------
	$		510,971	-		778,373	-
			=======	=======		=======	=======

		Six Months ended - -------------------------
		July 1, 2001 - -----------------				July 2, 2000 - -----------------
Net revenues		External - -----------		Affiliate - ----------		External - -----------	Affiliate - ----------
U.S. Toys		$	269,784	5,483		327,197	7,966
Games			416,994	24,296		820,365	39,368
International			242,245	37,954		365,786	33,057
Operations (a)			8,375	134,804		3,397	228,361
Other segments			36,859	1,120		35,109	1,060
Corporate and eliminations			-	(203,657	)	-	(309,812	)
			------------	------------		--------------	------------
		$	974,257	-		1,551,854	-
			=======	=======		========	=======

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

	Quarter ended					Six Months ended
Operating profit (loss)	July 1, 2001 - -------			July 2, 2000 - -------		July 1, 2001 - -------		July 2, 2000 - -------
U.S. Toys	$	5,777		(28,931	)	2,008		(57,268	)
Games		18,509		76,185		28,026		152,844
International		(17,979	)	(811	)	(45,603	)	(16,084	)
Operations (a)		(2,415	)	(4,109	)	(5,703	)	(2,328	)
Other segments		(3,446	)	1,304		(4,296	)	4,259
Corporate and eliminations		(487	)	(7,092	)	11,420		(4,687	)
		-----------		------------		------------		------------
	$	(41	)	36,546		(14,148	)	76,736
		======		=======		======		=======

Total assets	July 1, 2001 - -------------			July 2, 2000 - -------------
U.S. Toys	$	519,466		662,528
Games		1,849,042		2,200,606
International		883,775		1,019,085
Operations		322,336		264,194
Other segments		77,644		29,129
Corporate and eliminations		(318,474	)	(160,326	)
		--------------		--------------
	$	3,333,789		4,015,216
		========		========

(a) The Operations segment derives substantially all of its revenues and operating results from intersegment activities. ~~HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (continued) (Thousands of Dollars) (Unaudited)~~

The following table presents consolidated net revenues by classes of principal products for the quarters and six month periods ended ~~April~~July 1, 2001 and ~~April~~July 2, 2000: 2001 2000 ------- ------- Boys toys $ 80,700 140,900 Games and puzzles 245,700 440,600 Preschool toys 28,300 38,700 Other 108,586 153,281 ------- ------- Net revenues $ 463,286 773,481 ======= ======= 2000.

	Quarter ended			Six Months ended
		July 1, 2001 - ---------	July 2, 2000 - ----------	July 1, 2001 - ---------	July 2, 2000 - ----------
Boys toys	$	112,100	159,700	192,800	300,600
Games and puzzles		283,700	479,100	529,300	919,700
Preschool toys		29,600	35,700	57,800	74,400
Other		85,571	103,873	194,357	257,154
		------------	------------	--------------	--------------
Net revenues	$	510,971	778,373	974,257	1,551,854
		=======	=======	========	========

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

(6) Earnings per share data for the quarters and six months ended July 1, 2001 and July 2, 2000 were computed as follows:

	2001 - -----------------				2000 - -----------------
Quarter - ----------	Basic - -------			Diluted - -------			Basic - -------	Diluted - ----------
Earnings (loss) before cumulative
effect of accounting change	$	(18,331	)	(18,331	)		6,500	6,500
		======		=======			======	======

Average shares outstanding (in thousands)		172,023		172,023			171,621	171,621
Effect of dilutive securities;
options and warrants (in thousands)		-		-			-	1,118
		-----------		------------			-----------	-----------
Equivalent shares		172,023		172,023			171,621	172,739
		======		=======			======	======
Earnings (loss) per share before
cumulative effect of accounting change	$	(.11	)	(.11	)		.04	.04
		======		=======			======	======

	2001 - -----------------					2000 - -----------------
Six Months		Basic		Diluted			Basic	Diluted
----------------		---------		---------			--------	---------
Earnings (loss) before cumulative
effect of accounting change	$	(42,289	)	(42,289	)		21,627	21,627
		======		=======			=======	=======

Average shares outstanding (in thousands)		171,978		171,978			180,925	180,925
Effect of dilutive securities; options and warrants (in thousands)		-		-			-	947
		------------		------------			------------	------------
Equivalent shares		171,978		171,978			180,925	181,872
		======		=======			=======	=======
Earnings (loss) per share before
cumulative effect of accounting change	$	(.25	)	(.25	)		.12	.12
		======		=======			=======	=======

(7) During the second quarter of 2001, The Company continued actions under its plan, begun in the fourth quarter of 2000, to consolidate its U.S. Toy group into Rhode Island, significantly reduce overhead through reductions in product development, sales and marketing, and administrative functions across the Company and to increase its development of the Company's core brands. Costs associated with this consolidation program, recorded in the fourth quarter of 2000, amounted to $152,270, of which $70,079 was recorded as a restructuring charge and $82,191 in various other operating expense categories.

HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements (continued)

(Thousands of Dollars)
(Unaudited)

The significant components of the plan included the closing of offices in Cincinnati, Ohio, the Napa, California office and warehouse and a small office in San Francisco, California, thereby essentially consolidating the U.S. Toy group in Rhode Island. These actions were substantially completed at December 31, 2000.

Additionally, the plan included the reduction of overhead, particularly in marketing and sales, product development and administration. This included a curtailment of the expansion of the retail business of Wizards, the further consolidation of certain international operating offices into regional centers and consolidation and streamlining of the Company's marketing activities. The Company is also increasing its focus on developing and marketing its core brands, thereby seeking to reduce its reliance on licenses. This focus resulted in product lines which will be discontinued or for which the Company has significantly reduced expectations.

The 2000 restructuring charge of $70,079 represented approximately $31,800 of cash charges for severance benefits for termination of approximately 850 employees, which will be disbursed over the employees' entitlement period, $21,400 of cash charges for lease costs to be expended over the contractual lease term of the closed facilities and non-cash charges of $16,900 for fixed asset write-offs, arising primarily in Corporate and the U.S. Toy segment. Non-cash charges relating to fixed asset write-offs were credited to the respective line items on the balance sheet as of December 31, 2000. Details of activity in the restructuring plan for the current period follow:

	Balance at			Balance at
	Dec. 31,			July 1,
	2000		Activity	2001
	-------		--------	-------
Severance	$	31,800	(19,400)	12,400
Lease costs		21,400	(4,500)	16,900
		----------	------------	-----------
	$	53,200	(23,900)	29,300
		======	=======	======
Employee redundancies by area:
Manufacturing activities		27	(27)	-
Research, product development, marketing
sales and administration		322	(266)	56
		-------	--------	-------
		349	(293)	56
		====	=====	====

The remaining severance liability represents cash charges for severance benefits for employees not yet terminated and amounts for employees made redundant which will be disbursed over the employee's entitlement period. The balance in lease costs will be expended over the contractual lease term of the closed facilities.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations ~~(Thousands~~

(Thousands of dollars)

NET EARNINGS (LOSS) AND SEGMENT RESULTS
- ~~--------------------------------~~ ------------------------------------------------------------------------
Net loss for the ~~first~~second quarter of 2001 was ~~$(25,024)~~$(18,331) compared with net income of ~~$15,127~~$6,500 in the ~~first~~second quarter of 2000. For the six month period ended July 1, 2001, net loss was $(43,355) compared with net income of $21,627 for the six months ended July 2, 2000. Diluted earnings (loss) per share for the second quarter was $(.11) and $.04 in 2001 and 2000, respectively, and $(.25) and $.12 for the first six months in 2001 and 2000, respectively. The net loss and diluted loss per share for the ~~quarter was $(.15) in 2001 compared with a diluted earnings per share of $.08 in 2000. The net loss and diluted earnings per share for~~six months ended July 1, 2001 include a cumulative effect of accounting change of $(1,066) or $(.01) per share relating to the adoption of SFAS 133 as discussed in the condensed notes to the consolidated financial statements. Net revenues and operating profits for the quarter and six months decreased in ~~all three~~2001 relative to the comparable periods in 2000 in two of the Company's three major business segments, ~~U.S. Toys,~~ Games and ~~International, from comparable 2000 levels. Operating loss of the~~International. The U.S. Toys segment ~~decreased from 2000 levels while the~~had operating profit in the second quarter and first six months of 2001 , compared to a loss in the ~~other two major business segments decreased~~comparable 2000 periods. U.S. Toys segment revenues for the second quarter increased marginally while decreasing for the six month period from 2000 levels. Games segment revenues were negatively impacted by the sale of Hasbro Interactive and Games.com in January 2001 while operating profit was positively impacted. The ~~first quarter~~six months of 2001 includes 1326 weeks compared to 1427 weeks in the ~~first quarter~~comparable period of 2000. A more detailed discussion of items impacting consolidated net earnings ~~(loss)~~ and segment results follows.

NET REVENUES ~~- ------------ Net~~
------------------------
Worldwide net revenues ~~for~~decreased 34.4% to $510,971 in the ~~first~~second quarter of 2001 ~~decreased approximately 40%~~compared to ~~$463,286~~$778,373 in the second quarter of 2000. 83% of this decline resulted from ~~$773,481~~a decrease in ~~2000. This decrease is primarily due to reduced~~worldwide revenues ~~across all segments,~~ from POKEMON products. InThe greatest impact from this decline was felt in the Games segment. Games segment revenues decreased ~~52% to $189,739~~46% from the comparable ~~period~~quarter of 2000. In addition to decreased sales of POKEMON products, ~~reduced sales of FURBY products and~~decreased revenues from the sale of Hasbro Interactive in January 2001 ~~negatively impacted Games segment revenues. Revenues in~~and reduced shipments of FURBY also contributed to the ~~U.S. Toy segment decreased 30% to $131,028 in 2001~~revenue decline from ~~$188,506 in 2000 as a result of a decrease in sales of POKEMON related products and to a lesser extent, sales of KOOSH and SUPER SOAKER products.~~2000. Revenues in the International segment decreased ~~28% to $119,221 in 2001 from $166,179 in 2000~~38% primarily as athe result of ~~the decrease in~~decreased sales of POKEMON product as well as reduced sales of FURBY products. ~~Worldwide~~The stronger US dollar negatively impacted worldwide net revenues for the 2001 second quarter compared to the same period last year by $11,000. Revenues for the U.S. Toy segment were consistent with revenues in the comparable quarter of 2000 due primarily to sales of product introduced in the quarter which related to the July 2001 theatrical release of JURASSIC PARK III as well as increased sales of GI JOE products, which were offset by decreased sales of POKEMON and KOOSH products. For the first six months, worldwide net revenues were ~~adversely impacted by $9,790 from~~$974,257 and $1,551,854 in 2001 and 2000, respectively. In addition to the ~~stronger~~second quarter factors noted above, the 2001 six month amounts reflect an approximate $20,800 negative impact of the strengthened U.S. dollar. The strong U.S. dollar may continue to have a negative impact on revenues for the remainder of 2001.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations

(Thousands of dollars)

GROSS PROFIT
- ~~------------ Decreased revenues in all three of the~~-----------------------
The Company's ~~major segments primarily from POKEMON products, resulted in an overall decrease in~~ gross profit margin, ~~of the Company to 59.0%~~expressed as a percentage of net revenues, ~~from 61.2%~~was 60.1% and 59.6% for the second quarter and first six months of 2001, respectively, compared to the 2000 levels of 61.7% and 61.4%. The decrease in gross ~~profit is also~~margin was primarily due to ~~a change in product mix~~decreased revenues from higher margin products, such as POKEMON trading cards, which ~~constituted a significant portion of the decrease in revenues,~~ carry higher gross margins.

EXPENSES
- -----------------
Amortization expense for the second quarter of 2001 decreased to $28,862 from $31,928 in 2000 and decreased to $58,283 for the six months from $64,784 during the 2000 comparable period. This ~~decrease was partially offset by the impact of~~primarily reflects the sale of Hasbro Interactive in January 2001, which had lower gross margins in 2000. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) (Thousands of dollars) EXPENSES - -------- Amortization expense of $29,421 in 2001 decreased from $32,856 in 2000, primarily reflecting the sale of Hasbro Interactive in January 2001.

Royalties, research and development expenses for the quarter and year to date decreased ~~to $56,735 or 12.2%~~in both amount and as a percentage of net revenues from comparable 2000 levels. The royalty component decreased in ~~2001 from $126,039 or 16.3%~~both dollars and as a percentage of net revenues ~~in 2000. The decrease was primarily due to a $49,831 decrease in the royalty component as a result of lower~~principally reflecting decreased revenues derived from royalty based ~~items,~~products, primarily POKEMON products. Research and development ~~decreased~~was $29,907 and $60,204 for the quarter and six months of 2001 respectively, compared to ~~$30,297~~$48,807 and $98,577 in ~~2001 from $49,770 in 2000.~~the comparable periods of a year ago. The ~~decrease is primarily the result of the~~ Company's sale of Hasbro Interactive and its internet portal, Games.com, in January ~~2001.~~ 2001 accounted for 86% and 84% of the decrease for the three and six months periods, respectively.

Advertising expense for the 2001 second quarter decreased in dollar amount ~~to $47,613~~while remaining consistent as a percentage of revenue while advertising expense for the six months decreased in ~~2001 from $69,359 in 2000~~dollar amount but increased as a percentage of ~~revenues to 10.3% in 2001 compared with 9.0% in 2000 due to a lower revenue base.~~revenue. The decrease in dollar amount reflects reduced spending due to the anticipated lower sales volume in 2001. ~~The Company's selling,~~

Selling, distribution and administration expenses, which ~~with the exception of distribution costs,~~ are largely fixed, ~~decreased in amount to $153,819 in 2001 from $204,736 in 2000 but~~ increased as a percentage of net revenues ~~to 33.2%~~but decreased in amount in both the second quarter and six months of 2001 from ~~26.5% in 2000.~~comparable 2000 levels. The decrease in dollar amount is due to the sale of Hasbro Interactive and Games.com in January 2001, decreased sales volume, and the Company's 2000 consolidation program to reduce overhead in the sales and marketing and administrative functions as well as other cost reduction efforts of the Company.

NONOPERATING (INCOME) EXPENSE
- ~~-----------------------------~~ -------------------------------------------------------
Interest expense for the ~~first~~2001 second quarter ~~of 2001~~and six months was ~~$25,890~~$25,321 and $51,211, respectively, compared with ~~$21,443~~$28,198 and $49,641 in 2000. The ~~increase is~~decrease in the ~~result of an increase in the~~second quarter reflects decreased average outstanding debt in the ~~first~~second quarter of 2001 ~~compared with the first quarter of 2000.~~ versus comparable periods in 2000 partially offset by increased borrowing rates.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations ~~(continued) (Thousands~~

(Thousands of dollars)

INCOME TAXES
- ~~------------~~ -----------------------
Income tax expense ~~(benefit)~~ as a percentage of pretax earnings (loss) infor the ~~first~~second quarter and six months of 2001 was ~~(32)%~~32.0%, compared ~~to 31%~~with 31.0% in the ~~first quarter~~same periods of 2000.

OTHER INFORMATION
- ~~-----------------~~ ---------------------------------
On January 1, 2001, the Company implemented Statement of Financial Accounting Standards No. 133, as amended by Statement of Financial Accounting Standards No. 138, which require that all derivative instruments, such as foreign exchange contracts be recorded on the balance sheet at fair value. The effect of adopting these standards on earnings, net of taxes, was $(1,066) while the effect on Accumulated Other Comprehensive Earnings was $(753).

In January 2001, the Company closed on the sale (commenced in 2000) of certain business units comprising Hasbro Interactive, as well as its internet portal, ~~Games.com.~~Games.com, to Infogrames Entertainment SA (Infogrames). The sale resulted in a loss of $43,965, which was recognized at December 31, 2000. The sale is subject to certain post closing adjustments, which are ~~expected to be finalized in 2001.~~ under discussion between the Company and Infogrames.

Due to the seasonal nature of the business and in particular the mix of products offered in 2001, the Company continues to expect the second half of the year and within that half, the fourth quarter, to be more significant to its overall business for the full ~~year.~~year in 2001. This concentration increases the risk of (a) underproduction of popular items, (b) overproduction of less popular items and (c) failure to achieve tight and compressed shipping schedules. The business of the Company is characterized by customer order patterns which vary from year to year largely because of differences in the degree of consumer acceptance of a product line, product availability, marketing strategies, inventory levels, policies of retailers and differences in overall economic conditions. The trend of retailers over the past few years has been to purchase product within or close to the fourth quarter holiday consumer selling season, which includes Christmas. Quick response inventory management practices now being used ~~result~~resu lt in fewer orders being placed in advance of shipment and more orders, when placed, for immediate delivery. Consequently, unshipped orders on any date in a given year are not necessarily indicative of sales for the entire year. In addition, it is a general industry practice that orders are subject to amendment or cancellation by customers prior to shipment. At ~~April~~July 29, 2001 and ~~April~~July 30, 2000, the Company's unshipped orders were approximately ~~$287,000~~$630,000 and ~~$434,000,~~$870,000, respectively. ~~On October 12, 2000,~~

During the second quarter of 2001, the Company ~~announced a~~continued actions under its plan, ~~approved by its Board~~begun in the fourth quarter of ~~Directors~~2000, to consolidate its U.S. Toys group into Rhode Island, significantly reduce overhead through reductions in product development, sales and marketing, and administrative functions across the Company and to increase its focus on development of the Company's core brands. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) (Thousands of dollars) The plan ~~began in 2000 and~~ is expected to be completed in 2001. The cost savings achieved as a result of the restructuring plan actions, for which the Company incurred a charge in 2000, were approximately ~~$10,000 in~~$13,000 and $23,000 for the ~~first~~ quarter and six month period ended July 1, 2001.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of ~~2001.~~ Financial
Condition and Results of Operations

(Thousands of dollars)

The components of activity in the plan and the balance remaining at the end of the quarter are as follows: Balance at Balance at Dec. 31, Apr. 1, 2000 Activity 2001 ------- -------- ------- Severance $ 31,800 (12,100) 19,700 Lease costs 21,400 (1,100) 20,300 ------- ------- ------- $ 53,200 (13,200) 40,000 ======= ======= ======= Employee redundancies by area: Manufacturing activities 27 (24) 3 Research, product development, sales marketing and administration 322 (196) 126 ------- ------- ------- 349 (220) 129 ======= ======= =======

	Balance at			Balance at
	Dec. 31,			July 1,
	2000		Activity	2001
	-------		--------	-------
Severance	$	31,800	(19,400)	12,400
Lease costs		21,400	(4,500)	16,900
		---------	------------	-----------
	$	53,200	(23,900)	29,300
		=====	=======	======
Employee redundancies by area:
Manufacturing activities		27	(27)	-
Research, product development, marketing
sales and administration		322	(266)	56
		-------	--------	-------
		349	(293)	56
		====	=====	====

The significant components of the plan included the closing of the Company's offices in Cincinnati, Ohio, the Napa, California office and warehouse and a small office in San Francisco, California, thereby essentially consolidating the U.S. Toys group in Rhode Island. These actions were substantially completed at December 31, 2000. The remaining severance liability represents cash charges for severance benefits for employees not yet terminated and amounts for employees made redundant which will be disbursed over the employee's entitlement period. The balance in lease costs will be expended over the contractual lease terms. The Company expects to generate full year pre-tax savings of approximately $49,000 in 2001 and $53,000 in 2002 from the actions for which the Company incurred a charge in 2000.

LIQUIDITY AND CAPITAL RESOURCES
- ~~-------------------------------~~ --------------------------------------------------------
The seasonality of the Company's business results in the interim cash flow statements not being representative of that which may be expected for the full year. Historically, the majority of the Company's cash collections occur late in the fourth quarter and early in the first quarter of the subsequent year. As receivables are collected, the proceeds are used to repay a significant portion of outstanding short-term debt. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) (Thousands of dollars)

Because of this seasonality in cash flow, management believes that on an interim basis, rather than discussing only its cash flows, a better understanding of its liquidity and capital resources can be obtained through a discussion of the various balance sheet categories as well. Also, as several of the major categories, including cash and cash equivalents, accounts receivable, inventories and short-term borrowings, fluctuate significantly from quarter to quarter, again due to the seasonality of its business, management believes that a comparison to the comparable period in the prior year is generally more meaningful than a comparison to the prior year-end.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued

(Thousands of dollars)

Cash flows provided by operating activities ~~were $193,772 and $375,963~~was $13,930 for the ~~first quarters~~six months ended July 1, 2001 versus cash utilized by operating activities of ~~2001 and 2000, respectively.~~$9,811 for the six months ended July 2, 2000. Receivables were ~~$255,450~~$399,402 at ~~April~~July 1, 2001 compared to ~~$455,374~~$573,869 at ~~April 2, 2000.~~the end of the 2000 comparable period. The decrease in receivables is primarily reflects the ~~result of the 40% decrease in~~reduced second quarter revenues in comparison with the ~~first quarter of 2001 compared to the first~~second quarter of 2000, ~~as well as~~combined with the sale of Hasbro Interactive in January 2001 and improved collections. Inventories decreased ~~approximately 31%~~33.8% from ~~last year's~~2000 levels, primarily reflecting improved inventory management and to a lesser extent, the sale of Hasbro Interactive. Other current assets decreased to ~~$390,596~~$385,422 at ~~April~~July 1, 2001 from ~~$451,596~~$456,279 at ~~April~~July 2, ~~2000. The decrease is~~2000 primarily due to the sale of Hasbro Interactive and to a ~~decrease~~lesser extent decreases in advance royalties as the result of licensed products, primarily POKEMON products, comprising a higher percentage of 2000 ~~sales~~sales. Accounts payable and accrued liabilities decreased to $616,841 from $881,204 in 2000. Of this $264,363 decrease, 14% was the result of the sale of Hasbro Interactive and Games.com. These decreases were partially offset by an increase in deferred income taxes. Accounts payable and accrued liabilities decreased by $425,395 from comparable 2000 levels. Approximately 74% of theThe remaining decrease was ~~due~~primarily attributable to the impact of amounts accrued at April 1, 2000 for shares acquired under the Company's first quarter 2000 Modified Dutch Auction Tender Offer. The remainder of the decrease in accounts payable and accrued liabilities relates to a decrease indecreased accrued income taxes as ~~the~~a result of a decrease in taxable income, ~~as well as decreases in~~decreased accrued royalties ~~and trade payables~~ as the result of decreased sales volume, and a general decrease in accrued expenses as a result of decreased ~~inventory levels, respectively. Collectively, property,~~operating expenses.

Property, plant and equipment and other assets, as a group, decreased ~~$84,401 over the comparable period in the prior year,~~from their 2000 levels, reflecting the sale of Hasbro Interactive, ~~and Games.com as well as~~ assets written off or written down to fair market value in connection with the Company's 2000 consolidation program and twelve additional months of depreciation and amortization expense. These decreases were partially offset ~~in part~~ by securities received from the sale of Hasbro Interactive and Games.com. ~~HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis~~

Net cash utilized by financing activities of ~~Financial Condition and Results~~$58,257 in the six months of ~~Operations (continued) (Thousands~~2001 compares with cash provided in 2000 of ~~dollars)~~$19,940. Net borrowings (short and long-term borrowings less cash and cash equivalents) ~~increased~~decreased to ~~$1,078,991~~$1,285,198 at ~~April~~July 1, 2001 from ~~$905,360~~$1,343,789 at ~~April~~July 2, 2000. ~~This reflects~~During 2001, the ~~use~~Company used its available cash to reduce its outstanding borrowings due to its increased focus on debt reduction. The decrease is also the result of ~~approximately $313,000 of cash~~borrowings in the prior ~~twelve months for~~year to finance the Company's repurchase of its common ~~stock through the Modified Dutch Auction Tender Offer. This was offset in part by cash provided by operations.~~stock. In February 2001, the Company entered into amended and restated secured revolving and line of credit facility agreements with existing lenders. The facilities are secured by substantially all domestic accounts receivable and inventory, as well as certain investments and intangible assets of the Company. Amounts available for borrowing under these committed facilities of $325,000 (long-term) and $325,000 (short-term)was $500,000 at July 1, 2001. The available amounts under these lines were at their lowest point in the first quarter of 2001 and will increase to the maximum amount of $650,000 in the third quarter of 2001. ~~At April 1, 2001, approximately $300,000 was~~In addition to these available ~~under the~~ committed lines, ~~and approximately $161,000 of~~the Company also had available uncommitted lines ~~were available.~~approximating $127,000. The Company ~~expects~~believes that ~~funds provided by operations and~~these amounts ~~available for borrowing from time to time under these lines of credit~~ are adequate ~~to meet~~for its needs. Of these available committed and uncommitted lines, approximately $202,000 was in use at July 1, 2001. Included in short-term borrowings is ~~$1,746~~$1,729 of current installments of long-term debt.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued

(Thousands of dollars)

EURO CONVERSION
- ~~---------------~~ ------------------------------
Certain member countries of the European Union established fixed conversion rates between their existing currencies and the European Economic Monetary Union common currency, or Euro. While the Euro was introduced on January 1, 1999, member countries will continue to use their existing currencies through January 1, 2002, with the transition period for full conversion to the Euro ending June 30, 2002. Transition to the Euro creates certain issues for the Company with respect to upgrading information technology systems for 2002 full use requirements, reassessing currency risk, product pricing, amending business and financial contracts as well as processing tax and accounting records. The Company has and will continue to address these transition issues and does not expect the Euro conversion to have a material effect on the results of operations or financial condition of the Company.

MARKET RISKS
- -----------------------
The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates. The Company's objective is to reduce volatility in results from operations and cash flows associated with foreign currency exchange rate changes. Accordingly, the Company manages this exposure by hedging a portion of its anticipated and committed foreign currency transactions using a combination of forward foreign exchange contracts and purchased foreign currency option contracts. These contracts generally mature within twelve to fifteen months from the date into which they are entered. It is the Company's policy to only enter into foreign currency contracts considered necessary to support its business objective as stated above. The Company does not speculate in foreign currencies.

FORWARD-LOOKING STATEMENTS
- ~~--------------------------~~ ----------------------------------------------------
This ~~discussion~~Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the use of forward-looking words or phrases such as "anticipate," "believe," "could," "expect," "intend," "look forward," "may," "planned," "potential," "should," "will," and "would" or any variations of such words with similar meanings. These forward-looking statements are inherently subject to known and unknown risks and uncertainties. The Company's actual actions or results may differ materially from those expected or anticipated in the forward-looking statements. ~~HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)~~

Specific factors that might cause such a difference include, but are not limited to, the Company's ability to manufacture, source and ship new and continuing products on a timely basis and the acceptance of those products by customers and consumers at prices that will be sufficient to profitably recover development, manufacturing, marketing, royalty and other costs of products; economic conditions, including higher fuel prices, currency fluctuations and government regulations and other actions in the various markets in which the Company

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued

(Thousands of dollars)

operates throughout the world; the inventory policies of retailers, including the concentration of the Company's revenues in the second half and fourth quarter of the year, together with the increased reliance by retailers on quick response inventory management techniques, which increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve tight and compressed shipping schedules; the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees in a competitive environment; the ability of the Company to generate sufficient available cash flow to service its outstanding debt; restrictions on the Company contained in the Company's credit agreements; market conditions, third party actions or approvals and the impact of competition that could delay or increase the cost of ~~implementation~~implement ation of the Company's consolidation programs, prevent the Company from fully amortizing advance royalties paid in connection with licensed products, result in an impairment of the goodwill associated with acquired companies or ~~alter the Company's actions and~~impacted product lines, reduce actual results, and ~~the risk that~~cause anticipated benefits of acquisitions ~~may not occur or~~to be delayed or reduced in their realization; and 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 Forms 8-K, 10-Q, and 10-K. The Company undertakes no obligation to ~~revise~~make any revisions to the ~~forward- looking~~forward-looking statements contained in this ~~discussion or to update the forward- looking statements~~Quarterly Report on Form 10-Q to reflect events or circumstances occurring after the date of the filing of this ~~discussion.~~ report.

RECENT INFORMATION
- -----------------------------------
In July 2001, the FASB issued Statement No. 141, "Business Combinations", and Statement No. 142, "Goodwill and Other Intangible Assets." Statement 141 requires that the purchase method of accounting be used for all business combinations initiated or completed after June 30, 2001. Statement 141 also specifies the criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. Statement No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 will also require that intangible assets with definite useful lives be amortized over their respective estimated useful lives down to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

The Company is required to adopt the provisions of Statement 141 immediately and Statement 142 effective January 1, 2002. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of Statement 142.

HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued

(Thousands of dollars)

Statement 141 will require, upon adoption of Statement 142, that the Company evaluate its existing intangible assets and goodwill that were acquired in prior purchase business combinations, and to make any necessary reclassifications in order to conform with the new criteria in Statement 141 for recognition apart from goodwill. Upon adoption of Statement 142, the Company will also be required to reassess the useful lives and residual values of all intangible assets acquired in purchase business combinations, and make any necessary amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company will be required to test the intangible asset for impairment in accordance with the provisions of Statement 142 within the first interim period. Any impairment loss arising from this assessment will be recognized as the cumulative effect of a change in account ing principle in this period.

Statement 142 will require the Company to also perform an assessment of whether there is an indication that goodwill is impaired as of the date of adoption.

This assessment and analysis of its results is required to be completed as soon as possible, but no later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in the Company's statement of operations.

Amortization expense related to goodwill (presented in the caption "Costs in excess of net assets" in the accompanying consolidated balance sheets) was $47,482 and $20,773 for the year ended December 31, 2000 and the six months ended July 1, 2001, respectively. Because of the extensive effort needed to comply with adopting Statements 141 and 142, it is not practicable to reasonably estimate the impact of adopting these Statements on the Company's financial statements at the date of this report, including whether any transitional impairment losses will be required to be recognized as the cumulative effect of a change in accounting principle.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The information required by this item is included in Part I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

PART II. ~~Other Information~~ OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders. ~~None~~

At the Company's Annual Meeting of Shareholders held on May 16, 2001, the Company's shareholders re-elected the following persons to the Board of Directors of the Company: Alan R. Batkin (156,834,074 votes for, 2,411,070 votes withheld), Claudine B. Malone (156,843,121 votes for, 2,402,023 votes withheld), Carl Spielvogel (156,586,016 votes for, 2,659,128 votes withheld), and Alfred J. Verrecchia (156,813,847 votes for, 2,431,297 votes withheld).

The Company's shareholders also rejected a shareholder proposal entitled "Maximize Value Resolution" which urged the Board of Directors to arrange for a prompt sale of the Company to the highest bidder by a vote of 120,396,309 against, 19,588,010 for, while 1,244,067 abstained and there were 18,016,758 broker non-votes.

Item 5. Other ~~Information.~~ Information

None.

Item 6. Exhibits and Reports on Form 8-K.

(a) 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	Amended and Restated Bylaws of the Company. (Incorporated by reference to Exhibit (3) to the Company's Current Report on Form 8-K, dated February 16, 1996, File No. 1-6682.)

	3.4	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.)

	3.5	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 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 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	Amended and Restated Line of Credit Agreement dated as of February 16, 2001 by and among the Company, the Banks party thereto, and Fleet National Bank, as Agent for the Banks. (Incorporated by reference to Exhibit 4(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

	4.4	Amended and Restated Revolving Credit Agreement dated as of February 16, 2001 by and among the Company, the Banks party thereto, and Fleet National Bank, as Agent for the Banks. (Incorporated by reference to Exhibit 4(d) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

	4.5	Rights Agreement, dated as fo June 16, 1999, between the Company and Fleet National Bank (the Rights Agent). (Incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8-K dated as of June 16, 1999.)

Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11 Computation of Earnings Per Common Share - Quarters Ended April 1, 2001 and April 2, 2000. 12 Computation of Ratio of Earnings to Fixed Charges - Quarter Ended April 1, 2001. (b) Reports on Form 8-K A Current Report on Form 8-K dated April 23, 2001 was filed by the Company and included the Press Release dated April 23, 2001 announcing the Company's results for the current quarter. Consolidated Statements of Earnings (without notes) for the quarters ended April 1, 2001 and April 2, 2000 and Consolidated Condensed Balance Sheets (without notes) as of said dates were also filed. (continued)

	(a) Exhibits. (continued)

		4.6	First Amendment to Rights Agreement, dated as of December 4, 2000, between the Company and the Rights Agent. (Incorporated by reference to Exhibit 4(f) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

		11.1	Computation of Earnings Per Common Share - Six Months
			Ended July 1, 2001 and July 2, 2000.

		11.2	Computation of Earnings Per Common Share - Quarter
			Ended July 1, 2001 and July 2, 2000.

		12	Computation of Ratio of Earnings to Fixed Charges -
			Six Months and Quarter Ended July 1, 2001.

	(b) Reports on Form 8-K

A Current Report on Form 8-K, dated July 25, 2001, was filed by the Company and included the Press Release, dated July 23, 2001, announcing the Company's results for the second quarter. Consolidated Statements of Operations (without notes) for the quarters and six months ended July 1, 2001 and July 2, 2000 and corrected Consolidated Condensed Balance Sheets (without notes) as of said dates were also filed with the Current Report on Form 8-K.

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 thereunto duly authorized. HASBRO, INC. ------------ (Registrant) Date: May 16, 2001 By: /s/ David D. R. Hargreaves --------------------------- David D. R. Hargreaves Senior Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

		HASBRO, INC. - --------------------- (Registrant)



Date: August 14, 2001	By: /s/ David D. R. Hargreaves
		------------------------------------------
		David D. R. Hargreaves
		Senior Vice President and
		Chief Financial Officer
		(Duly Authorized Officer and
		Principal Financial Officer)

HASBRO, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Period Ended ~~April~~July 1, 2001

Exhibit Index Exhibit No. Exhibits - ------- -------- 11 Statement re computation of per share earnings - quarter 12 Statement re computation of ratios

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		Amended and Restated Bylaws of the Company. (Incorporated by reference to Exhibit (3) to the Company's Current Report on Form 8-K, dated February 16, 1996, File No. 1-6682.)

3.4		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.)

3.5		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 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 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		Amended and Restated Line of Credit Agreement dated as of February 16, 2001 by and among the Company, the Banks party thereto, and Fleet National Bank, as Agent for the Banks. (Incorporated by reference to Exhibit 4(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

4.4		Amended and Restated Revolving Credit Agreement dated as of February 16, 2001 by and among the Company, the Banks party thereto, and Fleet National Bank, as Agent for the Banks. (Incorporated by reference to Exhibit 4(d) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

4.5		Rights Agreement, dated as fo June 16, 1999, between the Company and Fleet National Bank (the Rights Agent). (Incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8-K dated as of June 16, 1999.)

4.6		First Amendment to Rights Agreement, dated as of December 4, 2000, between the Company and the Rights Agent. (Incorporated by reference to Exhibit 4(f) to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-6682.)

11.1		Computation of Earnings Per Common Share - Six Months
		Ended July 1, 2001 and July 2, 2000.

11.2		Computation of Earnings Per Common Share - Quarter
		Ended July 1, 2001 and July 2, 2000.

12		Computation of Ratio of Earnings to Fixed Charges -
		Six Months and Quarter Ended July 1, 2001.