UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

_________________

FORM 10-Q

______________

(Mark One)

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

For the quarterly period ended ~~September~~June 28, ~~2014~~2015

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

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 Telephone 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 R No ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes R No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer R	Accelerated filer ¨☐
Non-accelerated filer (Do not check if a smaller reporting company) ¨☐	Smaller reporting Company ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No R

The number of shares of Common Stock, par value $.50 per share, outstanding as of ~~October~~July 20, ~~2014~~2015 was ~~125,682,285.~~

124,902,730.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of Dollars Except Share Data)

(Unaudited)

	September 28, 2014		September 29, 2013		December 29, 2013		June 28, 2015		June 29, 2014		December 28, 2014
ASSETS
Current assets
Cash and cash equivalents	$	452,184		588,668		682,449	$	858,458		586,151		893,167
Accounts receivable, less allowance for doubtful accounts of $21,100, $22,200 and $19,000		1,314,022		1,215,289		1,093,620
Accounts receivable, less allowance for doubtful accounts of $16,300 $20,700 and $15,900								709,437		738,899		1,094,673
Inventories		499,150		447,113		348,794		403,789		492,822		339,572
Prepaid expenses and other current assets		380,833		346,215		355,594		434,145		386,333		391,688
Total current assets		2,646,189		2,597,285		2,480,457		2,405,829		2,204,205		2,719,100

Property, plant and equipment, less accumulated depreciation of $513,700, $497,100 and $500,500		228,019		231,199		236,263
Property, plant and equipment, less accumulated depreciation of $359,300, $512,200 and $508,600								225,911		236,881		237,489

Other assets
Goodwill		593,719		594,208		594,321		592,802		594,320		593,438
Other intangibles, net, accumulated amortization of $782,900, $704,300 and $744,800		337,894		414,033		375,999
Other intangibles, net, accumulated amortization of $823,800, $770,100 and $797,500								298,231		350,705		324,528
Other		702,981		753,420		715,227		708,334		752,484		657,587
Total other assets		1,634,594		1,761,661		1,685,547		1,599,367		1,697,509		1,575,553

Total assets	$	4,508,802		4,590,145		4,402,267	$	4,231,107		4,138,595		4,532,142

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (continued)

(Thousands of Dollars Except Share Data)

(Unaudited)

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY	September 28, 2014			September 29, 2013			December 29, 2013			June 28, 2015			June 29, 2014			December 28, 2014
Current liabilities
Short-term borrowings	$	78,023			212,926			8,332		$	167,877			9,188			252,481
Current portion of long-term debt		-			430,424			428,390
Accounts payable		284,023			263,086			198,799			185,631			207,526			212,549
Accrued liabilities		651,982			742,443			727,759			452,395			507,978			609,904
Total current liabilities		1,014,028			1,648,879			1,363,280			805,903			724,692			1,074,934

Long-term debt		1,559,895			959,895			959,895			1,559,895			1,559,895			1,559,895
Other liabilities		392,366			410,672			351,304			395,417			357,766			388,919
Total liabilities		2,966,289			3,019,446			2,674,479			2,761,215			2,642,353			3,023,748

Redeemable noncontrolling interests		43,949			47,269			45,445			41,387			44,194			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			104,847			104,847			104,847
Additional paid-in capital		786,329			709,005			734,181			850,582			767,595			806,265
Retained earnings		3,513,546			3,354,820			3,432,176			3,583,803			3,387,006			3,630,072
Accumulated other comprehensive loss		(36,805	)		(78,723	)		(34,135	)		(103,476	)		(51,784	)		(95,454	)
Treasury stock, at cost; 83,535,298 shares at September 28, 2014; 79,855,578 shares at September 29, 2013; and 78,640,228 shares at December 29, 2013		(2,869,353	)		(2,566,519	)		(2,554,726	)
Treasury stock, at cost; 84,781,723 shares at June 28, 2015; 81,767,695 shares at June 29, 2014; and 85,168,478 shares at December 28, 2014											(3,007,251	)		(2,755,616	)		(2,980,066	)
Total shareholders' equity		1,498,564			1,523,430			1,682,343			1,428,505			1,452,048			1,465,664

Total liabilities, redeemable noncontrolling interests and shareholders' equity	$	4,508,802			4,590,145			4,402,267		$	4,231,107			4,138,595			4,532,142

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Thousands of Dollars Except Per Share Data)

(Unaudited)

	Quarter Ended						Nine Months Ended						Quarter Ended						Six Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Net revenues	$	1,469,899			1,370,348			2,978,614			2,800,384		$	797,658			829,262			1,511,158			1,508,715
Costs and expenses:
Cost of sales		602,766			568,582			1,181,647			1,136,724			295,399			320,336			543,134			578,881
Royalties		94,352			143,947			214,466			243,568			57,069			70,533			116,158			120,114
Product development		58,220			59,366			157,184			154,455			57,609			51,707			109,506			98,964
Advertising		147,492			136,487			296,444			277,278			78,365			81,693			146,107			148,952
Amortization of intangibles		12,809			14,224			38,103			37,677			13,348			11,892			26,299			25,294
Program production cost amortization		24,374			17,991			35,742			34,023			7,220			6,710			18,316			11,368
Selling, distribution and administration		244,072			231,045			643,202			633,238			213,148			203,827			421,933			399,130
Total costs and expenses		1,184,085			1,171,642			2,566,788			2,516,963			722,158			746,698			1,381,453			1,382,703
Operating profit		285,814			198,706			411,826			283,421			75,500			82,564			129,705			126,012
Non-operating (income) expense:
Interest expense		24,710			41,194			69,940			86,398			24,186			22,802			48,771			45,230
Interest income		(745	)		(1,326	)		(3,236	)		(4,239	)		(690	)		(1,165	)		(1,620	)		(2,491	)
Other expense, net		17,795			2,925			10,556			10,766
Other income, net														(1,642	)		(3,590	)		(5,407	)		(7,239	)
Total non-operating expense, net		41,760			42,793			77,260			92,925			21,854			18,047			41,744			35,500
Earnings before income taxes		244,054			155,913			334,566			190,496			53,646			64,517			87,961			90,512
Income tax expense		63,899			30,070			90,077			34,844			13,364			31,697			21,858			26,178
Net earnings		180,155			125,843			244,489			155,652			40,282			32,820			66,103			64,334
Net loss attributable to noncontrolling interests		(302	)		(731	)		(1,530	)		(731	)		(1,527	)		(655	)		(2,373	)		(1,228	)
Net earnings attributable to Hasbro, Inc.	$	180,457			126,574			246,019			156,383		$	41,809			33,475			68,476			65,562


Net earnings attributable to Hasbro, Inc. per common share:
Basic	$	1.42			0.97			1.90			1.20		$	0.33			0.26			0.55			0.50
Diluted	$	1.40			0.96			1.88			1.19		$	0.33			0.26			0.54			0.50
Cash dividends declared per common share	$	0.43			0.40			1.29			1.20		$	0.46			0.43			0.92			0.86

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings

(Thousands of Dollars)

(Unaudited)

	Quarter Ended						Nine Months Ended						Quarter Ended						Six Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Net earnings	$	180,155			125,843			244,489			155,652		$	40,282			32,820			66,103			64,334
Other comprehensive earnings (loss):
Foreign currency translation adjustments		(35,682	)		12,993			(31,640	)		(8,880	)		642			6,336			(46,669	)		4,042
Net gains (losses) on cash flow hedging activities, net of tax		44,368			(12,580	)		16,528			(198	)
Unrealized holding (losses) gains on available-for-sale securities, net of tax		(143	)		-			3,382			-
Net (losses) gains on cash flow hedging activities, net of tax														(9,672	)		(11,689	)		52,628			(27,840	)
Unrealized holding gains on available-for-sale securities, net of tax														715			1,282			941			3,525
Reclassifications to earnings, net of tax:
Net losses (gains) on cash flow hedging activities		5,886			(3,589	)		7,410			(4,629	)
Net (gains) losses on cash flow hedging activities														(9,458	)		286			(17,419	)		1,524
Unrecognized pension and postretirement amounts		550			2,319			1,650			7,291			1,293			566			2,497			1,100
Total other comprehensive earnings (loss), net of tax		14,979			(857	)		(2,670	)		(6,416	)
Total other comprehensive loss, net of tax														(16,480	)		(3,219	)		(8,022	)		(17,649	)
Comprehensive earnings		195,134			124,986			241,819			149,236			23,802			29,601			58,081			46,685
Comprehensive loss attributable to noncontrolling interests		(302	)		(731	)		(1,530	)		(731	)		(1,527	)		(655	)		(2,373	)		(1,228	)
Comprehensive earnings attributable to Hasbro, Inc.	$	195,436			125,717			243,349			149,967		$	25,329			30,256			60,454			47,913

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Thousands of Dollars)

(Unaudited)

	Nine Months Ended						Six Months Ended
	September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014
Cash flows from operating activities:
Net earnings	$	244,489			155,652		$	66,103			64,334
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of plant and equipment		82,536			75,526			50,749			50,078
Amortization of intangibles		38,103			37,677			26,299			25,294
Program production cost amortization		35,742			34,023			18,316			11,368
Deferred income taxes		(38,930	)		604			(5,234	)		(2,613	)
Stock-based compensation		26,869			20,599			21,714			17,850
Change in operating assets and liabilities:
Increase in accounts receivable		(274,182	)		(203,159	)
Decrease in accounts receivable								333,467			342,413
Increase in inventories		(172,496	)		(133,738	)		(100,563	)		(143,102	)
Decrease (increase) in prepaid expenses and other current assets		37,037			(20,672	)		435			(1,019	)
Program production costs		(26,393	)		(31,520	)		(21,557	)		(15,818	)
Increase in accounts payable and accrued liabilities		51,305			222,695
Other, including long-term royalty advances		22,746			(110,370	)
Decrease in accounts payable and accrued liabilities								(162,483	)		(217,617	)
Other								8,858			(21,898	)
Net cash provided by operating activities		26,826			47,317			236,104			109,270
Cash flows from investing activities:
Additions to property, plant and equipment		(78,255	)		(78,246	)		(67,709	)		(51,636	)
Investments and acquisitions, net of cash acquired		-			(109,955	)		(3,000	)		-
Proceeds from partial sale of equity interest in joint venture		64,400			-
Other		4,009			3,121			11,706			(1,028	)
Net cash utilized by investing activities		(9,846	)		(185,080	)		(59,003	)		(52,664	)
Cash flows from financing activities:
Net proceeds from borrowings with maturity greater than three months		559,986			-			-			559,986
Repayments of borrowings with maturity greater than three months		(425,000	)		-			-			(425,000	)
Net proceeds from (repayments of) other short-term borrowings		71,172			(11,235	)
Net (repayments of) proceeds from other short-term borrowings								(84,420	)		1,430
Purchases of common stock		(338,184	)		(86,972	)		(49,156	)		(213,935	)
Stock option transactions		43,447			74,400			34,297			26,776
Excess tax benefits from stock-based compensation		8,507			12,772			7,947			4,693
Dividends paid		(162,789	)		(104,164	)		(110,902	)		(108,097	)
Other								(81	)		-
Net cash utilized by financing activities		(242,861	)		(115,199	)		(202,315	)		(154,147	)
Effect of exchange rate changes on cash		(4,384	)		(8,071	)		(9,495	)		1,243
Decrease in cash and cash equivalents		(230,265	)		(261,033	)		(34,709	)		(96,298	)
Cash and cash equivalents at beginning of year		682,449			849,701			893,167			682,449
Cash and cash equivalents at end of period	$	452,184			588,668		$	858,458			586,151

Supplemental information
Cash paid during the period for:
Interest	$	80,384			76,700		$	43,977			51,023
Income taxes	$	65,286			50,548		$	36,727			41,905

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited interim financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013,~~2014, and the results of its operations and cash flows for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Actual results could differ from those estimates.

The quarters ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 are each 13-week periods. The ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 are each ~~39-week~~26-week periods.

The results of operations for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 are not necessarily indicative of results to be expected for the full year, nor were those of the comparable ~~2013~~2014 periods representative of those actually experienced for the full year ~~2013.~~2014.

These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed audited consolidated financial statements for the fiscal year ended December ~~29, 2013~~28, 2014 in its Annual Report on Form 10-K, which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein.

The Company's accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended December ~~29, 2013.~~28, 2014.

~~Substantially all of the Company's inventories consist of finished goods.~~

(2) Earnings Per Share

Net earnings per share data for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 were computed as follows:

	2014				2013				2015				2014
Quarter	Basic		Diluted		Basic		Diluted		Basic		Diluted		Basic		Diluted
Net earnings attributable to Hasbro, Inc.	$	180,457		180,457		126,574		126,574	$	41,809		41,809		33,475		33,475

Average shares outstanding		127,293		127,293		130,253		130,253		125,093		125,093		129,381		129,381
Effect of dilutive securities:
Options and other share-based awards		-		1,410		-		1,592		-		1,713		-		1,549
Equivalent Shares		127,293		128,703		130,253		131,845		125,093		126,806		129,381		130,930

Net earnings attributable to Hasbro, Inc. per common share	$	1.42		1.40		0.97		0.96	$	0.33		0.33		0.26		0.26

	2014				2013				2015				2014
Nine Months	Basic		Diluted		Basic		Diluted
Six Months									Basic		Diluted		Basic		Diluted
Net earnings attributable to Hasbro, Inc.	$	246,019		246,019		156,383		156,383	$	68,476		68,476		65,562		65,562

Average shares outstanding		129,302		129,302		129,972		129,972		124,973		124,973		130,306		130,306
Effect of dilutive securities:
Options and other share-based awards		-		1,487		-		1,601		-		1,601		-		1,525
Equivalent Shares		129,302		130,789		129,972		131,573		124,973		126,574		130,306		131,831

Net earnings attributable to Hasbro, Inc. per common share	$	1.90		1.88		1.20		1.19	$	0.55		0.54		0.50		0.50

For the ~~quarters~~quarter ended ~~September~~June 28, ~~2014 and September~~2015, no options or restricted stock units were excluded from the calculation of diluted earnings per share as none were antidilutive. For the quarter ended June 29, ~~2013,~~2014, options and restricted stock units totaling ~~675 and 775, respectively,~~674, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive. For the ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013,~~2014, options and restricted stock units totaling ~~675~~391 and ~~1,266,~~675, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive.

(3) Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings. The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013.~~2014.

Quarter Ended Nine Months Ended

September 28, 2014 September 29, 2013 September 28, 2014 September 29, 2013

Other comprehensive earnings (loss), tax effect:

Tax (expense) benefit on cash flow hedging activities $ (2,924 ) 2,548 11,987 (424 )
Tax benefit (expense) on unrealized holding gains 80 - (1,919 ) -
Reclassifications to earnings, tax effect:
Tax (benefit) expense on cash flow hedging activities (2,129 ) 861 (2,471 ) 1,280
Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations (312 ) (712 ) (936 ) (2,136 )

Total tax effect on other comprehensive (loss) earnings $ (5,285 ) 2,697 6,661 (1,280 )

	Quarter Ended						Six Months Ended
	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014

Other comprehensive earnings (loss), tax effect:
Tax benefit (expense) on cash flow hedging activities	$	853			5,437			(3,962	)		14,911
Tax expense on unrealized holding gains		(408	)		(727	)		(536	)		(1,999	)
Reclassifications to earnings, tax effect:
Tax expense (benefit) on cash flow hedging activities		708			(119	)		1,050			(342	)
Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations		(596	)		(321	)		(1,280	)		(624	)

Total tax effect on other comprehensive earnings (loss)	$	557			4,270			(4,728	)		11,946

Changes in the components of accumulated other comprehensive loss for the ~~nine~~six months ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 are as follows:

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
2014

Balance at December 29, 2013 $ (64,841 ) (7,313 ) - 38,019 (34,135 )
Current period other comprehensive earnings (loss) 1,650 23,938 3,382 (31,640 ) (2,670 )
Balance at September 28, 2014 $ (63,191 ) 16,625 3,382 6,379 (36,805 )

2013
Balance at December 30, 2012 $ (120,422 ) (1,008 ) - 49,123 (72,307 )
Current period other comprehensive earnings (loss) 7,291 (4,827 ) - (8,880 ) (6,416 )
Balance at September 29, 2013 $ (113,131 ) (5,835 ) - 40,243 (78,723 )

	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)		2,497			35,209			941		(46,669	)		(8,022	)
Balance at June 28, 2015	$	(110,595	)		78,898			2,841		(74,620	)		(103,476	)

2014
Balance at Dec. 29, 2013	$	(64,841	)		(7,313	)		-		38,019			(34,135	)
Current period other comprehensive earnings (loss)		1,100			(26,316	)		3,525		4,042			(17,649	)
Balance at June 29, 2014	$	(63,741	)		(33,629	)		3,525		42,061			(51,784	)

At ~~September~~June 28, ~~2014,~~2015, the Company had remaining net deferred gains on ~~hedging instruments,~~foreign currency forward contracts, net of tax, of ~~$16,625~~$98,835 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the ~~third~~second quarter of ~~2014~~2015 or forecasted to be purchased during ~~2014,~~the remainder of 2015 and, to a lesser extent, 2016 through 2020, intercompany expenses expected to be paid or received during ~~2014~~2015 and ~~2015,~~2016, cash receipts for sales made at the end of the ~~third~~second quarter of ~~2014~~2015 or forecasted to be made in the remainder of ~~2014~~2015 and, ~~interest payments related~~ to ~~long-term notes due 2021 and 2044.~~a lesser extent, 2016 through 2017. These amounts will be reclassified into the consolidated statements of operations upon the sale of the related inventory or recognition of the related sales or expenses.

In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the long-term notes due 2021 and 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related notes using the effective interest rate method. At June 28, 2015, deferred losses, net of tax of $19,937 related to these instruments remained in AOCE. For the quarter and six months ended June 28, 2015, losses of $449 and $889, respectively, were reclassified from AOCE to net earnings. For both the quarter and six months ended June 29, 2014, losses of $257 were reclassified from AOCE to net earnings.

Of the amount included in AOCE at ~~September~~June 28, ~~2014,~~2015, the Company expects approximately ~~$13,453~~$46,129 to be reclassified to the consolidated statements of operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.

(4) Financial Instruments

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013,~~28, 2014, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013~~28, 2014 also include certain assets and liabilities measured at fair value (see Notes 6 and 8) as well as long-term borrowings. The carrying costs which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013~~28, 2014 are as follows:

	September 28, 2014				September 29, 2013				December 29, 2013				June 28, 2015				June 29, 2014				December 28, 2014
	Carrying Cost		Fair Value		Carrying Cost		Fair Value		Carrying Cost		Fair Value		Carrying Cost		Fair Value		Carrying Cost		Fair Value		Carrying Cost		Fair Value
6.35% Notes Due 2040	$	500,000		602,050		500,000		535,000		500,000		532,750	$	500,000		557,450		500,000		587,350		500,000		617,700
6.30% Notes Due 2017		350,000		392,595		350,000		402,500		350,000		400,050		350,000		382,235		350,000		396,725		350,000		387,660
5.10% Notes Due 2044		300,000		310,500		-		-		-		-		300,000		287,010		300,000		307,950		300,000		316,980
3.15% Notes Due 2021		300,000		302,130		-		-		-		-		300,000		301,800		300,000		300,330		300,000		302,700
6.60% Debentures Due 2028		109,895		125,764		109,895		121,983		109,895		118,566		109,895		121,115		109,895		124,687		109,895		128,698
6.125% Notes Due 2014		-		-		430,424		437,750		428,390		435,838
Total long-term debt		1,559,895		1,733,039		1,390,319		1,497,233		1,388,285		1,487,204	$	1,559,895		1,649,610		1,559,895		1,717,042		1,559,895		1,753,738
Less: Current portion		-		-		430,424		437,750		428,390		435,838
Long-term debt excluding current portion	$	1,559,895		1,733,039		959,895		1,059,483		959,895		1,051,366

In May 2014, the Company issued $600,000 in long-term debt which consists of $300,000 of 3.15% Notes Due in 2021 and $300,000 of 5.10% Notes Due in 2044 (collectively, the "Notes"). The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase. Prior to the issuance of the Notes, the Company held forward-starting interest rate swap contracts to hedge the variability in the anticipated underlying U.S. Treasury interest rate associated with the expected issuance of the Notes. At the date of issuance, these contracts were terminated and the Company paid $33,306, the fair value of the contracts on that date, to settle. Of this amount, $6,373 relates to 3.15% Notes Due 2021 and $26,933 relates to 5.10% Notes Due 2044, which has been deferred in AOCE and will be amortized to interest expense over the life of the respective Notes using the effective interest rate method. The proceeds from the Notes have been presented net of the payment for these contracts in the consolidated statements of cash flows.

The carrying cost of the 6.125% Notes Due 2014 included principal amounts of $425,000 as well as fair value adjustments of $5,424, and $3,390 at September 29, 2013 and December 29, 2013, respectively, related to interest rate swaps. The interest rate swaps were terminated in November 2012 and the fair value adjustments at September 29, 2013 and December 29, 2013 represented the unamortized portions of the fair value of the interest rate swaps at the date of termination. At September 29, 2013 and December 29, 2013, the principal amount and fair value adjustment associated with the 6.125% Notes Due 2014 totaling $425,000 were included in the current portion of long-term debt. All other carrying costs represent principal amounts and were included in long-term debt excluding the current portion at September 28, 2014, September 29, 2013 and December 29, 2013. The total principal amount of long-term debt, including the current portion, was $1,559,895 at September 28, 2014 and $1,384,895 at both September 29, 2013 and December 29, 2013.

The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 6 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement.

(5) Income Taxes

The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local and international tax authorities in various tax jurisdictions.

The U.S. Internal Revenue Service completed an examination related to the 2008 and 2009 U.S. federal income tax returns in 2013. During the first quarter of 2014, as a result of amending tax years 2010 through 2012 and making similar adjustments identified in the completion of the 2008 and 2009 examinations, the Company recognized $12,159 of previously accrued unrecognized tax benefits including the reversal of related accrued interest, primarily related to the deductibility of certain expenses, as well as the tax treatment of certain subsidiary and other transactions. Of this amount, $324 was recorded as a reduction of deferred tax assets and the remainder as a reduction to income tax expense. The total income tax benefit resulting from the amended returns, including other adjustments, totaled $13,480 during the first quarter of 2014.

~~The~~ Company is no longer subject to U.S. federal income tax examinations for years before 2013. With few exceptions, the Company is no longer subject to U.S., state or local and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before ~~2006.~~2009. The Company is currently under income tax examination in several U.S., state and local and non-U.S. jurisdictions.

In connection with the Mexican tax examinations for the years 2000 to 2007 and 2009, the Company has received tax assessments totaling approximately $295,530 (at September 28, 2014 exchange rates), which include interest, penalties and inflation updates, related to transfer pricing which the Company is vigorously defending. In order to continue the process of defending its position, the Company was required to guarantee the amount of the assessments for the years 2000 to 2004, as is usual and customary in Mexico with respect to these matters. Accordingly, as of September 28, 2014, bonds totaling approximately $173,120 (at September 28, 2014 exchange rates) have been provided to the Mexican government related to the 2000 to 2004 assessments, allowing the Company to defend its positions. The Company is not currently required to guarantee the amounts of the 2005 through 2007 and 2009 assessments as they are in, or plan to be challenged in, administrative proceedings. The Company expects to be successful in sustaining its position with respect to these assessments as well as similar positions that may be taken by the Mexican tax authorities for 2008 and periods subsequent to 2009 if these disputes continue through litigation and/or administrative processes. However, in the interest of resolving these open disputes and to provide for a mutually agreeable framework in future years, the Company is party to discussions with the Mexican tax authorities to determine if the two parties can reach an agreed settlement of these issues. The Company expects that any such settlement would require some payment by the Company with respect to the prior years' under assessment as well as include a mutually agreed methodology for dealing with these transfer pricing issues in future years. As of September 28, 2014, the Company's liabilities for unrecognized tax benefits reflects the settlement offer the Company most recently made to the Mexican tax authorities related to the outstanding assessments and potential claims with respect to 2008 and completed periods subsequent to 2009 that are still subject to audit.

At September 28, 2014, the Company has liabilities for unrecognized tax benefits of $105,945 which are included as a component of other liabilities in the consolidated balance sheet. During 2014, the Company increased these liabilities by $33,295 to reflect the impact of a proposed resolution of certain tax matters. The Company believes it is reasonably possible that it may make approximately $66,400 of tax payments and reduce its liability for uncertain tax benefits within the next 12 months related to the resolution of an uncertain tax position.

(6) Fair Value of Financial Instruments

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

Accounting standards permit entities to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar assets and liabilities. The Company has elected the fair value option for certain available-for-sale investments. At ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013,~~28, 2014, these investments totaled ~~$24,292, $23,452~~$32,766, $33,528 and ~~$28,048,~~$23,560, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net ~~gains~~losses of $87 and ~~interest income of $247 and $2,487~~$70 on these investments in other (income) expense, net for the quarter and ~~nine-months~~six-months ended ~~September~~June 28, ~~2014,~~2015, respectively, related to the change in fair value of such instruments. For the quarter and ~~nine-month~~six-month periods ended ~~September~~June 29, ~~2013~~2014 the Company recorded net ~~losses~~gains of ~~$176~~$1,063 and ~~$166,~~$2,240, respectively, in other (income) expense, net, related to the change in fair value of such instruments.

At ~~December~~June 28, 2015, June 29, 2013 the Company also held forward-starting interest rate swap agreements to hedge the variability of the anticipated underlying U.S. Treasury interest rate associated with the expected issuance of May 2014 ~~long-term debt. See Notes 4~~ and ~~8 for further discussion. At September~~December 28, 2014, ~~the Company had an option agreement related to its investment in a joint venture. See Note 10 for further discussion.~~

~~At September 28, 2014, September 29, 2013 and December 29, 2013,~~ the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets:

Fair Value Measurements Using:

Fair
Value

Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

September 28, 2014

Assets:

Available-for-sale securities $ 31,097 6,805 18,632 5,660
Derivatives 41,475 - 41,475 -
Total assets $ 72,572 6,805 60,107 5,660

Liabilities:
Derivatives $ 3,426 - 3,426 -
Option agreement 25,590 - - 25,590
Total liabilities $ 29,016 - 3,426 25,590

September 29, 2013
Assets:
Available-for-sale securities $ 23,460 8 18,050 5,402
Derivatives 3,311 - 2,321 990
Total assets $ 26,771 8 20,371 6,392

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

December 29, 2013
Assets:
Available-for-sale securities $ 28,048 - 22,564 5,484
Derivatives 4,627 - 4,627 -
Total assets $ 32,675 - 27,191 5,484

Liabilities:
Derivatives $ 12,330 - 12,330 -

			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)
June 28, 2015
Assets:
Available-for-sale securities	$	38,725		5,959		21,777		10,989
Derivatives		105,906		-		105,906		-
Total assets	$	144,631		5,959		127,683		10,989

Liabilities:
Derivatives	$	2,748		-		2,748		-
Option agreement		25,190		-		-		25,190
Total liabilities	$	27,938		-		2,748		25,190

June 29, 2014
Assets:
Available-for-sale securities	$	40,712		7,183		27,912		5,617
Derivatives		533		-		533		-
Total assets	$	41,245		7,183		28,445		5,617

Liabilities:
Derivatives	$	16,131		-		16,131		-



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

Available-for-sale securities include equity securities of one company quoted on an active public market as well as certain investments valued at net asset values quoted on private markets that are not active. These net asset values are predominantly based on underlying investments which are traded on an active market; investments are redeemable within 45 days. ~~At December 29, 2013 the~~The Company also ~~held~~holds an available-for-sale ~~investment~~investment in Brazil similar to a repurchase agreement; this investment ~~was~~is valued at the principal plus any interest accrued on the instrument. Lastly, the Company holds an available-for-sale investment which invests in hedge funds ~~which contain~~and contains financial instruments that are valued using certain estimates which are considered unobservable in that they reflect the investment manager's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that these estimates are the best information ~~availabl~~eavailable for use in the fair value of this investment.

The Company's derivatives consist primarily of foreign currency forward contracts. ~~At December 29, 2013, the Company also had forward-starting interest rate swap contracts related to the anticipated issuance of the Notes Due 2021 and 2044.~~ The Company ~~uses~~used current forward rates of the respective foreign currencies ~~and U.S. treasury interest rates~~ to measure the fair value of these contracts. The option agreement included in other liabilities at ~~September~~June 28, 2015, June 29, 2014 and December 28, 2014, is valued using an option pricing model based on the fair value of the related investment. ~~At September 29, 2013, the Company also had derivative instruments consisting of warrants to purchase common stock of an unrelated company. The Company~~ Inputs used ~~the Black-Scholes model to value these warrants. One of the inputs used~~ in ~~both~~ the option pricing model include the volatility and ~~Black-Scholes models, volatility, is~~fair value of the underlying company which are considered an unobservable ~~input in that it reflected~~inputs as they reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company ~~believed~~believes that this is the best information available for use in the fair value measurement. There were no changes in these valuation techniques during ~~2014.~~

the first half of 2015.

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

2014 2013
Balance at beginning of year $ 5,484 7,618
Gain (loss) from change in fair value 176 (1,226 )
Issuance of option agreement (25,590 ) -
Balance at end of third quarter $ (19,930 ) 6,392

	2015			2014
Balance at beginning of year	$	(19,553	)		5,484
Purchases		5,000			-
Gain from change in fair value		352			133
Balance at end of second quarter	$	(14,201	)		5,617

(7) Pension and Postretirement Benefits

The components of the net periodic cost of the Company's defined benefit pension and other postretirement plans for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 are as follows:

	Quarter Ended												Quarter Ended
	Pension						Postretirement						Pension						Postretirement
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Service cost	$	921			1,549			137			188		$	1,021			969			150			138
Interest cost		4,953			4,849			332			345			4,619			5,053			285			333
Expected return on assets		(5,469	)		(5,600	)		-			-			(5,497	)		(5,558	)		-			-
Net amortization and deferrals		1,210			2,418			(114	)		(65	)		2,207			1,251			(114	)		(114	)
Curtailment/settlement losses		-			1,064			-			-
Curtailment														138			-			-			-
Net periodic benefit cost	$	1,615			4,280			355			468		$	2,488			1,715			321			357

	Nine Months Ended												Six Months Ended
	Pension						Postretirement						Pension						Postretirement
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Service cost	$	2,861			4,559			412			563		$	2,032			1,940			300			275
Interest cost		15,064			14,447			997			1,035			9,224			10,111			570			665
Expected return on assets		(16,587	)		(16,691	)		-			-			(10,976	)		(11,118	)		-			-
Net amortization and deferrals		3,713			7,206			(341	)		(195	)		4,408			2,503			(228	)		(227	)
Curtailment/settlement losses		-			6,485			-			-
Curtailment														138			-			-			-
Net periodic benefit cost	$	5,051			16,006			1,068			1,403		$	4,826			3,436			642			713

During the first ~~three quarters~~half of fiscal ~~2014,~~2015, the Company made cash contributions to its defined benefit pension plans of approximately ~~$5,900~~$430 in the aggregate. The Company expects to contribute approximately ~~$1,000~~$3,570 during the remainder of fiscal ~~2014.~~2015.

(8) Derivative Financial Instruments

Hasbro uses foreign currency forward contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States and Hong Kong dollars, and Euros. Further, at December 29, 2013, and through the debt issuance date in May 2014, Hasbro used forward-starting interest rate swap agreements to hedge anticipated interest payments related to the May 2014 debt issuance. All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative financial instruments for speculative purposes.

In 2013, the Company also had warrants to purchase common stock of an unrelated company that constituted and were accounted for as derivatives. For additional information related to these warrants see Note 6.

Cash Flow Hedges

The Company uses foreign currency forward contracts to reduce the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions in ~~2014,~~ 2015 ~~and 2016.~~through 2020.

At ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013,~~28, 2014, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:

September 28, 2014 September 29, 2013 December 29, 2013

Hedged transaction
Notional Amount
Fair
Value

Notional
Amount

Fair
Value

Notional
Amount

Fair
Value

Inventory purchases $ 716,028 45,501 525,911 (6,114 ) 577,138 (7,493 )
Intercompany royalty transactions 1,693 (1,493 ) 174,974 (2,258 ) 4,948 (2,774 )
Sales 195,364 (6,484 ) 232,709 497 171,393 (1,965 )
Other 27,549 (499 ) 27,148 1,000 46,563 302
Total $ 940,634 37,025 960,742 (6,875 ) 800,042 (11,930 )

	June 28, 2015					June 29, 2014					December 28, 2014
Hedged transaction	Notional Amount		Fair Value			Notional Amount		Fair Value			Notional Amount		Fair Value
Inventory purchases	$	1,081,451		111,252			747,516		(8,500	)		863,232		69,049
Sales		239,415		(7,659	)		189,357		(4,613	)		139,946		829
Other		74,433		(971	)		43,042		(1,949	)		51,213		(1,008	)
Total	$	1,395,299		102,622			979,915		(15,062	)		1,054,391		68,870

The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the consolidated balance sheets at ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013~~28, 2014 as follows:

	September 28, 2014			September 29, 2013			December 29, 2013			June 28, 2015			June 29, 2014			December 28, 2014
Prepaid expenses and other current assets
Unrealized gains	$	24,242			2,923			1,088		$	63,740			422			46,594
Unrealized losses		(6,356	)		(1,572	)		(702	)		(12,302	)		(248	)		(11,508	)
Net unrealized gain	$	17,886			1,351			386		$	51,438			174			35,086

Other assets
Unrealized gains	$	23,127			109			-		$	54,664			315			34,234
Unrealized losses		(964	)		(11	)		-			(732	)		(22	)		(172	)
Net unrealized gains	$	22,163			98			-		$	53,932			293			34,062

Accrued liabilities
Unrealized gains	$	2,519			3,023			3,425		$	4,349			2,563			447
Unrealized losses		(5,539	)		(8,652	)		(13,671	)		(7,026	)		(16,475	)		(725	)
Net unrealized loss	$	(3,020	)		(5,629	)		(10,246	)	$	(2,677	)		(13,912	)		(278	)

Other liabilities
Unrealized gains	$	22			191			-		$	-			1,118			-
Unrealized losses		(26	)		(2,886	)		(2,070	)		(71	)		(2,735	)		-
Net unrealized loss	$	(4	)		(2,695	)		(2,070	)	$	(71	)		(1,617	)		-

Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 as follows:

	Quarter Ended						Nine Months Ended						Quarter Ended						Six Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Statements of Operations Classification
Cost of sales	$	(3,165	)		1,614			(3,363	)		1,650		$	12,683			821			22,746			(198	)
Royalties		(923	)		(303	)		(1,533	)		(347	)
Sales		(3,477	)		2,906			(4,340	)		4,441			(2,645	)		(704	)		(3,999	)		(863	)
Net realized (losses) gains	$	(7,565	)		4,217			(9,236	)		5,744
Other														12			(260	)		55			(610	)
Net realized gains (losses)													$	10,050			(143	)		18,802			(1,671	)

In addition, ~~net~~ gains of ~~$62 were reclassified to earnings as a result of hedge ineffectiveness for the nine-month period ended September 28, 2014, and net gains of $233 and $165~~$567 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and ~~nine-month~~six-month periods ended ~~September 29, 2013, respectively.~~

During the fourth quarter of 2013, the Company entered into forward-starting interest rate swap agreements to hedge the variability of the anticipated underlying U.S. Treasury interest rate associated with the expected issuance of long-term debt to repay the 6.125% Notes Due 20~~14 with a principal amount of $425,000. These derivative instruments were designated~~June 28, 2015, and ~~effective as cash flow hedges. At December 29, 2013, the total notional amounts of the Company's forward-starting interest rate swap agreements was $300,000. Unrealized~~net (losses) gains of ~~$3,172~~$(3) and $62 were ~~recorded~~reclassified to ~~the consolidated balance sheets~~earnings as a result of December 29, 2013. During the first quarter of 2014, the notional amounts of the Company's forward-starting interest rate swap agreements were increased to $500,000. The instruments were settled on the date of the issuance of the related debt and the deferred loss of $33,306 is being amortized to interest expense over the life of the debt using the effective interest rate method. Forhedge ineffectiveness for the quarter and ~~nine months~~six-month periods ended ~~September 28,~~June 29, 2014, ~~the Company amortized $450 and $707, respectively, related to these contracts which is included in interest expense.~~respectively.

Undesignated Hedges

The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency ~~changes.~~fluctuations. Due to the nature of the derivative contracts involved, the Company does not use hedge accounting for these contracts. At ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013~~28, 2014 the total notional amounts of the Company's undesignated derivative instruments were ~~$413,065, $257,325~~$124,171, $248,908 and ~~$294,888,~~$294,571, respectively.

At ~~September~~June 28, ~~2014, September~~2015, June 29, ~~2013~~2014 and December ~~29, 2013,~~28, 2014, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:

	September 28, 2014			September 29, 2013			December 29, 2013			June 28, 2015			June 29, 2014			December 28, 2014
Prepaid expenses and other current assets
Unrealized gains	$	4,876			1,761			-		$	563			-			-
Unrealized losses		(3,450	)		(1,107	)		-			(27	)		-			-
Net unrealized gain		1,426			654			-			536			-			-

Other assets
Unrealized gains		-			298			1,069			-			66			-
Unrealized losses		-			(80	)		-			-			-			-
Net unrealized gain		-			218			1,069			-			66			-

Accrued liabilities
Unrealized gains		-			-			478			-			663			1,733
Unrealized losses		-			-			(492	)		-			(1,265	)		(4,046	)
Net unrealized loss		-			-			(14	)		-			(602	)		(2,313	)

Other liabilities
Unrealized gains		303			-			-
Unrealized losses		(705	)		-			-
Unrealized loss		(402	)		-			-

Total unrealized gain, net	$	1,024			872			1,055
Total unrealized gain (loss), net										$	536			(536	)		(2,313	)

The Company recorded net ~~losses (gains)~~gains of ~~$20,050~~$8,883 and ~~$19,988~~$18,954 on these instruments to other (income) expense, net for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014,~~2015, respectively, and ~~$(2,467)~~$4,179 and ~~$(2,557)~~$62 on these instruments to other (income) expense, net for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 29, ~~2013,~~2014, respectively, relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate.

For additional information related to the Company's derivative financial instruments see Notes 4 and 6.

(9) ~~Acquisitions~~Assets Held for Sale

On July ~~8, 2013,~~14, 2015, the Company ~~acquired a majority interest~~announced its intent to sell its manufacturing operations in ~~Backflip Studios, LLC ("Backflip"), a mobile game developer based in Boulder, Colorado.~~East Longmeadow, Massachusetts and Waterford, Ireland to the Cartamundi Group. The Company ~~paid $112,000 in cash~~anticipates that this transaction, which is subject to ~~acquire a 70% interest in Backflip. The Company is consolidating~~ the ~~financial statements~~signing of ~~Backflip~~definitive agreements and ~~reporting~~ the ~~30% redeemable noncontrolling interests as a separate line~~satisfaction of specified closing conditions, will close in the ~~consolidated balance sheets and statements~~third quarter of ~~operations.~~

~~Based on a valuation~~2015. As of ~~approximately $160,000,~~June 28, 2015, the Company ~~allocated approximately $6,000~~met the criteria to ~~net tangible~~classify the assets ~~$35,000 to identifiable intangible assets, $119,000 to goodwill,~~ and $48,000 to redeemable noncontrolling interests. The valuation was based on an income approach which utilizes discounted future cash flows expected to be generated from the acquired business. Identifiable intangible assets include property rights which are being amortized over the projected revenue curve over a period of four years. The carrying value and amortization curve of these intangible assets are based on cash flows associated with game titles released and planned to be released asliabilities of the ~~date~~manufacturing operations, primarily comprised of acquisition. Actual results achieved from these acquired game titles may impact the carrying value of these intangibles or the timing of amortization expense. Goodwill reflects the value to the Company from leveraging Backflip's expertise in developinginventory and ~~marketing mobile digital games, including the continued expansion of its own brands in this arena. Goodwill will be tested~~property, plant and equipment, as assets and liabilities held for ~~impairment at least annually during the fourth quarter of the Company's fiscal year, unless an event occurs or circumstances change that indicate that the carrying value may not be recoverable.~~

~~The 30% redeemable noncontrolling interests has~~sale which have been ~~presented~~classified in the ~~consolidated~~accompanying balance ~~sheets~~sheet as ~~temporary equity between liabilities~~follows: prepaid expenses and shareholders' equity. This presentation is required because the Company has the obligation to purchase the remaining 30% of Backflip in the future contingent on the achievement by Backflip of certain predetermined financial performance metrics.other current assets - $19,683; other assets - $26,374; accounts payable and accrued expenses - $2,471. The Company does not ~~know the ultimate timing that these predetermined financial metrics may be met and, thereby, cannot currently estimate the purchase price of the remaining 30%.~~

~~Actual and pro forma results have not been disclosed because they are not material~~expect to ~~the consolidated financial statements. The balance of the redeemable noncontrolling interests was $43,949 at September 28, 2014, $47,269 at September 29, 2013 and $45,445 at December 29, 2013. Net~~record a loss attributable to noncontrolling interests for the quarter and nine-months ended September 28, 2014 was $302 and $1,530, respectively compared to a net loss of $731 for both the quarter and nine months ended September 29, 2013.

~~(10)~~ ~~Equity Method Investment~~

The Company owns an interest in a joint venture, Hub Television Networks, LLC (the "Network"), with Discovery Communications, Inc. ("Discovery"). The Network was established to create a cable television network in the United States dedicated to high-quality children's and family entertainment. On September 23, 2014, the Company and Discovery amended their relationship with respect to the Network. Prior to the amendments each of the Company and Discovery owned a 50% equity interest in the Network. Pursuant to these amendments Discovery has increased its equity interest in the Network to 60%, and the Company retains a 40% equity interest in the Network. The change in equity interests was accomplished partly through a redemption of interests owned by the Company and partly through the purchase of interests by Discovery from the Company. In connection with this reduction in its equity ownership the Company was paid a cash purchase price of $64,400 by Discovery. In connection with amendments, the Company and Discovery also entered into an option agreement related to the ~~Company's remaining 40% ownership in the Network and also modified the terms~~sale of a license agreement between the Company and the Network. As a result of the reduction in the Company's ownership in the Network, the Company also received a benefit from a reduction in amounts due to Discovery under an existing tax sharing agreement. In connection with the restructuring of the Company's investment in the Network, the quarter and nine-month periods ended September 28, 2014 include a net expense of $11,566, primarily related to a charge resulting from an option agreement and the Company's share of severance charges recognized by the Network, partially offset by a gain from the reduction of amounts due to Discovery under a tax sharing agreement.

The Company and Discovery entered into an option agreement that allows either Discovery to call or Hasbro to put the Company's remaining 40%, exercisable during the one-year period following December 31, 2021. The exercise price of the option agreement is 80% of the then fair market value of the Network, subject to a fair market value floor. The Company recorded a charge in other expense, net for the third quarter and nine months of 2014, related to the fair market value of the option agreement totaling $25,590. This amount is included as a component of other liabilities as of September 28, 2014.

During the quarter and nine months ended September 28, 2014, the Company's share in the earnings of the Network, excluding the amounts included in the charge described above, were $1,892 and $5,491, respectively, compared to losses of $91 and $1,024 for the quarter and nine months ended September 29, 2013. As of September 28, 2014, September 29, 2013 and December 29, 2013, the Company's investment in the Network totaled $258,295, $329,722 and $321,876, respectively. The Company monitors the valuation of its investment in the Network primarily based on a discounted cash flow model. The underlying cash flows are based on long-term financial plans for the Network, which include projections for growth in revenues and profitability. Should the Network not achieve its profitability and growth targets, the carrying value of the Company's investment may become impaired.these operations.

~~(11)~~(10) Segment Reporting

Hasbro is a worldwide leader in children's and family leisure time products and services with a broad portfolio of brands and entertainment properties ~~across~~spanning toys, games, licensed products ranging from traditional to high-tech and digital, and film and television entertainment. The Company's segments are (i) U.S. and Canada, (ii) International, (iii) Entertainment and Licensing, and (iv) Global Operations.

The U.S. and Canada segment includes the marketing and selling of ~~boys'~~ action figures, ~~vehicles~~arts and crafts and creative play ~~sets, girls' toys,~~products, electronic toys and ~~games, plush products, preschool toys and infant products,~~related electronic interactive products, fashion and other dolls, infant products, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, as well as traditional board games and puzzles, and trading card and role-playing games primarily within the United States and Canada. Within the International segment, the Company markets and sells both toy and game products in markets outside of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. The Company's Entertainment and Licensing segment includes the Company's lifestyle licensing, digital gaming, movie and television entertainment operations. The Global Operations segment is responsible for manufacturing and sourcing finished products for the Company's U.S. and Canada and International segments.

Segment performance is measured at the operating profit level. Included in Corporate and ~~eliminations~~Eliminations are certain corporate expenses, including ~~substantially all costs incurred related to the 2013 business restructurings,~~ the elimination of intersegment transactions and certain assets benefiting more than one segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and ~~eliminations.~~Eliminations. The accounting policies of the segments are the same as those referenced in note 1.

Results shown for the quarter and ~~nine~~six months are not necessarily representative of those which may be expected for the full year ~~2014,~~2015, nor were those of the comparable ~~2013 periods~~2014 period representative of those actually experienced for the full year ~~2013.~~2014. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Information by segment and a reconciliation to reported amounts for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013~~2014 are as follows.

	Quarter Ended										Quarter Ended
	September 28, 2014					September 29, 2013					June 28, 2015					June 29, 2014
Net revenues	External		Affiliate			External		Affiliate			External		Affiliate			External		Affiliate
U.S. and Canada	$	764,268		2,388			735,619		1,290		$	385,183		1,718			383,001		1,467
International		649,284		78			582,676		55			362,760		(96	)		396,849		21
Entertainment and Licensing		53,378		7,362			48,637		6,806			47,640		4,025			47,663		3,496
Global Operations (a)		2,969		593,435			3,416		591,867			2,075		350,864			1,749		355,328
Corporate and Eliminations		-		(603,263	)		-		(600,018	)		-		(356,511	)		-		(360,312	)
	$	1,469,899		-			1,370,348		-		$	797,658		-			829,262		-

	Nine Months Ended										Six Months Ended
	September 28, 2014					September 29, 2013					June 28, 2015					June 29, 2014
Net revenues	External		Affiliate			External		Affiliate			External		Affiliate			External		Affiliate
U.S. and Canada	$	1,484,968		5,065			1,466,921		3,384		$	730,873		2,768			720,700		2,677
International		1,351,608		170			1,212,665		280			668,473		-			702,324		92
Entertainment and Licensing		135,915		14,100			114,747		12,328			108,271		7,434			82,537		6,738
Global Operations (a)		6,123		1,200,303			6,051		1,097,852			3,541		587,707			3,154		606,868
Corporate and Eliminations		-		(1,219,638	)		-		(1,113,844	)		-		(597,909	)		-		(616,375	)
	$	2,978,614		-			2,800,384		-		$	1,511,158		-			1,508,715		-

	Quarter Ended						Nine Months Ended						Quarter Ended						Six Months Ended
Operating profit (loss)	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
U.S. and Canada	$	169,850			146,991			252,541			243,738		$	47,147			46,928			88,570			82,691
International		116,451			105,663			148,097			115,951			25,361			29,232			27,264			31,646
Entertainment and Licensing		493			7,625			21,120			16,622			7,443			14,645			23,845			20,627
Global Operations (a)		15,704			17,578			15,770			3,638			2,019			1,810			(1,763	)		66
Corporate and Eliminations (b)		(16,684	)		(79,151	)		(25,702	)		(96,528	)		(6,470	)		(10,051	)		(8,211	)		(9,018	)
	$	285,814			198,706			411,826			283,421		$	75,500			82,564			129,705			126,012

Total assets	September 28, 2014			September 29, 2013			December 29, 2013			June 28, 2015			June 29, 2014			December 28, 2014
U.S. and Canada	$	3,380,207			6,564,121			3,066,301		$	3,095,862			3,050,072			3,663,497
International		2,394,325			2,290,130			2,233,115			2,164,440			2,007,777			2,422,046
Entertainment and Licensing		754,575			1,383,554			691,795			675,082			741,718			783,878
Global Operations		2,293,319			2,755,595			2,172,816			2,334,761			2,134,524			2,433,888
Corporate and Eliminations (b)		(4,313,624	)		(8,403,255	)		(3,761,760	)		(4,039,038	)		(3,795,496	)		(4,771,167	)
	$	4,508,802			4,590,145			4,402,267		$	4,231,107			4,138,595			4,532,142

(a) The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and ~~eliminations.~~Eliminations. Allocations of certain expenses related to these assets to the individual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and ~~eliminations.~~Eliminations because allocations are translated from the US Dollar to local currency at budget rates when recorded, and Corporate and ~~eliminations~~Eliminations also includes the elimination of inter-company balance sheet amounts. During 2013, certain inter-company balances were settled between each of the U.S. and Canada segment, Entertainment and Licensing segment and Corporate and eliminations. This reduced the amount of reported total assets of the U.S. and Canada and Entertainment and Licensing segments and increased the amount reported in Corporate and eliminations at September 28, 2014 and December 29, 2013 compared to September 29, 2013.

The following table represents consolidated International segment net revenues by major geographic region for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013.~~2014.

	Quarter Ended				Nine Months Ended				Quarter Ended				Six Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013		June 28, 2015		June 29, 2014		June 28, 2015		June 29, 2014
Europe	$	403,602		376,648		827,412		755,097	$	185,660		216,268		381,531		423,810
Latin America		163,163		131,914		313,466		260,443		98,368		97,019		155,976		150,303
Asia Pacific		82,519		74,114		210,730		197,125		78,732		83,562		130,966		128,211
Net revenues	$	649,284		582,676		1,351,608		1,212,665	$	362,760		396,849		668,473		702,324

The following table presents consolidated net revenues by class of principal products for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013.~~2014.

	Quarter Ended				Nine Months Ended				Quarter Ended				Six Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013		June 28, 2015		June 29, 2014		June 28, 2015		June 29, 2014
Boys	$	478,509		392,014		1,062,082		888,494	$	340,426		335,798		613,024		583,573
Games		395,221		387,450		841,449		873,774		211,629		225,702		447,278		446,228
Girls		407,718		388,696		710,235		652,889		127,489		163,817		244,616		302,517
Preschool		188,451		202,188		364,848		385,227		118,114		103,945		206,240		176,397
Net revenues	$	1,469,899		1,370,348		2,978,614		2,800,384	$	797,658		829,262		1,511,158		1,508,715

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This Quarterly Report on Form 10-Q, including the following section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements expressing management's current expectations, goals, objectives and similar matters. These forward-looking statements may include statements concerning the Company's product and entertainment plans, anticipated product and entertainment performance, business opportunities, plans and strategies, financial goals, cost savings and efficiency enhancing initiatives and expectations for achieving the Company's financial goals and other objectives. See Item 1A, in Part II of this report and Item 1A, in Part I of the Annual Report on Form 10-K for the year ended December ~~29, 2013,~~28, 2014, for a discussion of factors which may cause the Company's actual results or experience to differ materially from that anticipated in these forward-looking statements. The Company undertakes no obligation to revise the forward-looking statements in this report after the date of the filing. Unless otherwise specifically indicated, all dollar or share amounts herein are expressed in thousands of dollars or shares, except for per share amounts.

EXECUTIVE SUMMARY

Hasbro, Inc. ("Hasbro" or the "Company") is a ~~branded-play~~global company dedicated to ~~fulfilling~~Creating the ~~fundamental need for play for children~~World's Best Play Experiences. The Company strives to do this through deep consumer engagement and ~~families through creative expression~~the application of consumer insights, the ~~Company's world class brand portfolio.~~use of immersive storytelling to build brands, product innovation and development of global business reach. Hasbro applies these principles to leverage its beloved owned and controlled brands, including LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH and TRANSFORMERS, as well as partner brands. From toys and games, to television programming, motion pictures, digital gaming and a comprehensive licensing program, Hasbro ~~executes~~fulfills the fundamental need for play and connection for children and families around the world. The Company's wholly-owned Hasbro Studios creates entertainment brand-driven storytelling across mediums, including television, film and more.

Each of these elements is executed globally in alignment with Hasbro's strategic game plan, its brand ~~blueprint in all of its operations.~~blueprint. At the center of this blueprint, Hasbro re-imagines, re-invents and re-ignites its owned and controlled brands and imagines, invents and ignites new brands, through toy and game innovation, immersive entertainment offerings, including television programming and motion pictures, and a broad range of licensed ~~products, ranging from traditional to high-tech~~products. Utilizing consumer engagement and ~~digital, under well-known brand names structured within the Company's brand architecture~~insights coupled with immersive storytelling and ~~offering consumers the ability to experience these~~product innovation, Hasbro generates revenue and earns cash by developing, marketing and selling global brands in ~~all areas of their lives.~~

To accomplish these objectives, Hasbro offers consumers the ability to experience its branded play through innovative toys and games, digital media, lifestyle licensing, publishing and entertainment, including television programming and motion pictures. The Company's focus remains on growing its owned and controlled brands, developing new and innovative products which respond to market insights, offering entertainment experiences which allow consumers to experience the Company's brands across multiple forms and formats and optimizing efficiencies within the Company to increase operating margins and maintain a strong balance sheet.

~~Hasbro earns revenues and generates cash primarily through the sale of~~ a broad variety of consumer goods categories including toy and game products and distribution of television programming based on the Company's properties, as well as through the out-licensing of rights for third parties to use of its properties in connection with ~~complementary~~ products, including digital media and games and lifestyle ~~products, offered by third parties, or in certain situations, toy products where~~products. Hasbro ~~considers the out-licensing of brands~~also leverages its competencies to ~~be more effective. The Company's brand architecture includes franchise brands, key partner brands, challenger brands, gaming mega brands~~develop and new brands. The Company's franchise and challenger brands represent Company-owned brands or brands, which if not entirely owned, are broadly controlled by the Company, and have been successful over the long term. Franchise brands are the Company's most significant owned or controlled brands which it believes have the ability to deliver significant revenue over the long-term. Challenger brands are brands which have not yet achieved franchise brand status, but have the potential to do so with investment and time. The Company's franchise brands are LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH and TRANSFORMERS, while challenger brands include BABY ALIVE, FURBY, FURREAL FRIENDS and PLAYSKOOL. Hasbro has a large portfolio of owned and controlled brands, which can be introduced in new forms and formats over time. These brands may also be further extended by pairing a licensed concept with an owned or controlled brand. By focusing on these brands, Hasbro is working to build a more consistent revenue stream and basis for future growth, and to leverage profitability. During 2013, net revenues from the Company's franchise brands increased by 15% and totaled 44% of total consolidated net revenues. This trend continued in the third quarter and first nine months of 2014 as the Company's franchise brands grew approximately 36% and 31%, respectively, compared to the third quarter and first nine months of 2013.

The Company's innovative product offerings encompass a broad variety of toys including boys' action figures, vehicles and play sets, girls' toys, electronic toys, plush products, preschool toys and infant products, electronic interactive products, creative play and toy-related specialty products. Games offerings include action battling, board, off-the-board, digital, card, electronic, trading card and role-playing games.

While Hasbro believes it has built a more sustainable revenue base by developing and maintaining its owned or controlled brands and avoiding reliance on licensed entertainment properties, it continues to opportunistically enter into or leverage existing strategic licenses which complement its brands and key strengths and allow the Company to offer innovativemarket products based on movie, television, music and other entertainment properties owned by third parties. The Company's primary licenses include agreements with Marvel Characters B.V. ("Marvel") for characters in the Marvel Universe,well-known licensed brands, including, ~~SPIDER-MAN and the AVENGERS; Lucas Licensing Ltd. ("Lucas"), related~~but not limited to, ~~the STAR WARS brand; Sesame Workshop, related to the~~DISNEY DESCENDENTS, JURASSIC WORLD, MARVEL, SESAME STREET ~~characters;~~ and ~~Rovio Entertainment Ltd. related to the ANGRY BIRDS brand. Both Marvel~~STAR WARS. MARVEL and ~~Lucas~~STAR WARS are owned by The Walt Disney ~~Company ("Disney").~~

In September 2014, the Company's strategic partnership with Disney expanded to include product offerings, specifically small and fashion dolls, based on the DISNEY PRINCESS and FROZEN brands, commencing in 2016. In 2013, Hasbro and Disney amended both the Marvel and Lucas agreements which extended the term of the license for Marvel characters through 2020 and provides additional guaranteed royalty payments with respect to both MARVEL and STAR WARS products in anticipation of expected future motion pictures and other related entertainment through 2020. Sales of MARVEL and STAR WARS products can vary based on the popularity of theatrical and television entertainment in any given year. In 2013, the Company's offerings included products related to several MARVEL properties backed by entertainment, including products based on the theatrical motion picture releases of ~~IRON MAN 3~~ ~~in May 2013 and~~ ~~THOR: THE DARK WORLD~~ ~~in November 2013~~. ~~During the first three quarters of 2014, the Company released products related to three theatrical releases based on MARVEL properties,~~ ~~CAPTAIN AMERICA: THE WINTER SOLDIER~~ ~~in April 2014, THE AMAZING SPIDER-MAN 2~~ ~~in May 2014 and~~ ~~GUARDIANS OF THE GALAXY~~ ~~in August 2014~~. ~~Hasbro also commenced shipments of product related to the fourth quarter 2014 introduction of all new television entertainment based on the STAR WARS brand,~~ ~~STAR WARS REBELS.~~ ~~In addition to offering products based on licensed entertainment properties, the Company offers products which are licensed from outside inventors.~~

The Company seeks to build all-encompassing brand experiences and drive product-related revenues by increasing the visibility of its brands through entertainment such as motion pictures and television programming. Since 2007, the Company has had a number of motion pictures based on its brands released by major motion picture studios, including four motion pictures based on its TRANSFORMERS brand, one of which, ~~TRANSFORMERS: AGE OF EXTINCTION, was released in June 2014 by Paramount Pictures, two motion pictures based on its G.I. JOE brand, including~~ ~~G.I. JOE: RETALIATION~~ released in March 2013, and a major motion picture based on its gaming mega brand, BATTLESHIP. In October 2014, Universal Pictures released a motion picture based on the OUIJA brand. The Company has motion picture projects based on other brands in development for potential release in future years.

In addition to using motion pictures to provide entertainment experiences for its brands, the Company has an internal wholly-owned production studio, Hasbro Studios, which is responsible for the creation and development of television programming based on Hasbro's brands. This programming is currently aired in markets throughout the world. Hasbro Studios programming is distributed primarily to Hub Television Network, LLC, formally known as Hub Network and, as of October 13, 2014, is now the Discovery Family Channel (the "Network"), in the United States. Internationally, Hasbro Studios also distributes to various broadcasters and cable networks. Lastly Hasbro Studios programming is distributed on various digital platforms globally, including Netflix and iTunes. Beginning in 2015, Hasbro Studios will begin distributing certain programming domestically to other outlets, including Cartoon Network. The Company's television initiatives support its strategy of growing its brands well beyond traditional toys and games and providing entertainment experiences for consumers of all ages in many forms or formats.

The Network is the Company's joint venture with Discovery Communications, Inc. ("Discovery") and is a cable television network in the United States dedicated to high-quality children's and family entertainment and educational programming. Programming on the Network includes content based on Hasbro's brands as well as programming developed by third parties. Prior to September 2014, the Company and Discovery each owned a 50% equity interest in the Network. In September 2014, Hasbro and Discovery amended their relationship with respect to the Network, reducing Hasbro's equity interest from 50% to 40%.

Hasbro's strategic blueprint and brand architecture also focus on extending its brands further into digital media and gaming, including through the licensing of the Company's properties to a number of partners who develop and offer digital games and other gaming experiences based on those brands. One example of these digital gaming relationships is the Company's agreement with Electronic Arts Inc. ("EA") under which EA has the rights to develop eight of Hasbro's best-selling gaming brands for mobile platforms globally. Similarly, Hasbro has an agreement with Activision under which Activision offers digital games based on the TRANSFORMERS brand, as well as agreements with other third-party digital gaming companies, including DeNA and GameLoft.

In 2013, Hasbro acquired a 70% majority stake in Backflip Studios, LLC ("Backflip"), a mobile game developer based in Boulder, Colorado. Backflip's product offerings include games for tablets and mobile devices including DRAGONVALE, NINJUMP and PAPER TOSS. In 2014 and beyond, Backflip intends to focus on its existing product lines and launch new games, including those based on Hasbro brands. New game brands released during 2014 include DWARVEN DEN, PLUNDERNAUTS and SPELLFALL. Backflip also introduced two games under Hasbro brands, including NERFHOOPS and TWISTER TAP.

The Company also seeks to express its brands through its lifestyle licensing business. Under its lifestyle licensing programs, Hasbro enters into relationships with a broad spectrum of apparel, food, bedding, publishing and other lifestyle products companies for the global marketing and distribution of licensed products based on the Company's brands. These relationships further broaden and amplify the consumer's ability to experience the Company's brands.

As Hasbro seeks to grow its business in entertainment, licensing and digital gaming, the Company will continue to evaluate strategic alliances, acquisitions, and investments like Backflip, which may complement its current product offerings, allow it entry into an area which is adjacent or complementary to the toy and game business, or allow it to further develop awareness of its brands and expand the ability of consumers to experience its brands in different forms and formats.

During the fourth quarter of 2012 the Company announced a multi-year cost savings initiative in which it targeted achieving aggregate annual cost reductions in its underlying business of $100,000 by 2015. This plan included an approximate 10% workforce reduction, facility consolidations and process improvements which reduce redundancy and increase efficiencies. During 2012 and 2013, the Company incurred aggregate restructuring and related pension charges of $79,748 as well as product-related charges of $19,736 associated with this plan. For the full year 2013, the Company recognized gross cost savings, before restructuring charges, from these actions of approximately $50,000. These savings are prior to other costs which have or are anticipated to increase in 2014 and future years, such as compensation costs and other investments in certain components of the business.

The Company's business is highly seasonal with a significant amount of revenues occurring in the second half of the year. In 2013, 2012 and 2011, the second half of the year accounted for 65%, 64% and 63% of the Company's annual net revenues, respectively. The Company expects this trend to continue with variation depending on the number, timing and popularity of theatrical movie releases in any given year.

Hasbro sells its products both within the United States and throughout international markets. In recent years, the Company's International segment net revenues have experienced growth as the Company has sought to increase its global presence. Net revenues from the Company's International segment represented 46%, 44% and 43% of total net revenues in 2013, 2012 and 2011, respectively. The Company has driven international growth by opportunistically opening offices in certain markets, primarily emerging markets, to develop this greater global presence. The Company believes emerging markets offer greater opportunity for revenue growth than developed economies which have faced challenging economic environments in recent years. In 2013 and 2012, net revenues from emerging markets increased by 25% and 16%, respectively, representing more than 10% of consolidated net revenues in these years. During the third quarter and first nine months of 2014, net revenues from emerging markets increased approximately 29% and 26%, respectively, compared to the same periods in 2013.Company.

The Company's business is separated into three principal business segments: U.S. and Canada, International and Entertainment and Licensing. The U.S. and Canada segment markets and sells both toy and game products primarily in the United States and Canada. The International segment consists of the Company's European, Asia Pacific and Latin and South American toy and game marketing and sales operations. The Company's Entertainment and Licensing segment includes the Company's lifestyle licensing, digital licensing and gaming, and movie and television entertainment operations. In addition to these three primary segments, the Company's ~~world-wide~~global development, marketing, manufacturing and product sourcing operations are managed through its Global Operations segment.

Second quarter 2015 highlights:

·	Net revenues decreased approximately 4% compared to the second quarter of 2014, but absent unfavorable foreign currency translation of approximately $71,500, net revenues in the second quarter of 2015 grew 5% compared to the second quarter of 2014.

2015 second quarter net revenues from franchise brands decreased 10%; growth from LITTLEST PET SHOP, MONOPOLY, NERF and PLAY-DOH was more than offset by expected declines from MAGIC: THE GATHERING and TRANSFORMERS. Excluding unfavorable foreign currency translations, franchise brands declined 2.3% for the quarter.

·	Growth from the Boys and Preschool categories in the second quarter of 2015 was more than offset by declines in the Games and Girls categories.

Second quarter 2015 net revenues from the U.S. and Canada segment were up 1% compared to the second quarter of 2014 while net revenues from the Entertainment and Licensing segment were flat and net revenues from the International segment declined 9% compared to the second quarter of 2014. Absent unfavorable foreign currency translation of approximately $69,500, 2015 International segment net revenues grew 9%.

·	Operating profit declined 9% in the second quarter of 2015 compared to the second quarter of 2014 but was up 10% absent unfavorable foreign currency translation of approximately $15,000.

~~The Company is committed~~First half 2015 highlights:

·	Net revenues were flat in first half of 2015 compared to the first half of 2014 and, absent unfavorable foreign currency translation of approximately $134,100, 2015 net revenues grew 9% compared to the first half of 2014.

First half 2015 net revenues from franchise brands increased 3%; growth from LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, NERF and PLAY-DOH was only partially offset by expected declines from TRANSFORMERS following last year's motion picture release. Excluding unfavorable foreign currency translation, franchise brands increased 11% during the first half of 2015.

·	Growth in the Boys and Preschool categories was partially offset by declines in the Girls category. The Games category was flat in the first half of 2015 compared to 2014.

First half 2015 net revenues from the U.S. and Canada and Entertainment and Licensing segments were up 1% and 31%, respectively, compared to the first half of 2014 whereas net revenues from the International segment declined 5% compared to the first half of 2014. Absent unfavorable foreign currency translation of approximately $130,500, first half 2015 International segment net revenues grew 14%.

·	Operating profit grew 3% in the first half of 2015 compared to the first half of 2014 and was up 26% absent unfavorable foreign currency translation of approximately $28,900.

In line with our commitment to ~~returning~~return excess cash to ~~its~~ shareholders, through share repurchases and dividends. As part of this initiative, from 2005 to 2013, the Company's Board of Directors (the "Board") adopted seven successive share repurchase authorizations with a cumulative authorized repurchase amount of $3,325,000. The seventh authorization was approved in August 2013 for $500,000. At September 28, 2014, the Company had $183,649 remaining under this authorization. During the quarter and nine-month periods ended September 28, 2014, the Company spent $124,506 and $341,300 to repurchase approximately 2,368 and 6,369 shares of common stock in the open market, respectively. During the three years ended 2013, the Company spent $625,554 to repurchase 15,424 shares in the open market. The Company has no obligation to repurchase shares under the authorization, and the timing, actual number, and value of the shares that are repurchased will depend on a number of factors, including the price of the Company's stock. The Company may suspend or discontinue the program at any time. The Company intends to, at its discretion, opportunistically repurchase shares in the future subject to market conditions, the Company's other potential uses of cash and the Company's levels of cash generation. In addition to the share repurchase program, the Company also seeks to return cash to its shareholders through the payment of quarterly dividends. In February 2014 the BoardHasbro increased the ~~Company's~~ quarterly dividend rate from $0.43 per share to $0.46 per share which was effective for the dividend paid in May ~~2014, to $0.43~~2015 and going forward. During the first half of 2015, Hasbro repurchased approximately 747 shares at a total cost of $46,826 and an average price of $62.64 per share, an 8% increase from the prior quarterly dividend rate of $0.40 per share. This was the tenth dividend increase in the previous eleven years. During that period, the Company has increased its quarterly cash dividend from $0.03 to $0.43 per share.respectively.

SUMMARY OF FINANCIAL PERFORMANCE

The components of the results of operations, stated as a percent of net revenues, are illustrated below for the quarter and ~~nine-month~~six-month periods ended ~~September~~June 28, ~~2014~~2015 and ~~September~~June 29, ~~2013.~~2014.

Quarter Ended Nine Months Ended

Sept. 28, 2014 Sept. 29, 2013 Sept. 28, 2014 Sept. 29, 2013
Net revenues 100.0 % 100.0 % 100.0 % 100.0 %
Costs and expenses:
Cost of sales 41.0 41.5 39.7 40.6
Royalties 6.4 10.5 7.2 8.8
Product development 4.0 4.3 5.3 5.5
Advertising 10.0 10.0 10.0 9.9
Amortization of intangibles 0.9 1.0 1.3 1.3
Program production cost amortization 1.7 1.3 1.2 1.2
Selling, distribution and administration 16.6 16.9 21.6 22.6
Operating profit 19.4 14.5 13.8 10.1
Interest expense 1.7 3.0 2.3 3.0
Interest income (0.0 ) (0.1 ) (0.1 ) (0.1 )
Other (income) expense, net 1.2 0.2 0.3 0.4
Earnings before income taxes 16.6 11.4 11.2 6.8
Income tax expense 4.3 2.2 3.0 1.2
Net earnings 12.3 9.2 8.2 5.6
Net loss attributable to noncontrolling interests (0.0 ) (0.0 ) (0.1 ) (0.0 )
Net earnings attributable to Hasbro, Inc. 12.3 % 9.2 % 8.3 % 5.6 %

	Quarter Ended						Six Months Ended
	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Net revenues		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Cost of sales		37.0			38.6			35.9			38.4
Royalties		7.2			8.5			7.7			8.0
Product development		7.2			6.2			7.2			6.6
Advertising		9.8			9.9			9.7			9.9
Amortization of intangibles		1.7			1.4			1.7			1.7
Program production cost amortization		0.9			0.8			1.2			0.8
Selling, distribution and administration		26.7			24.6			27.9			26.5
Operating profit		9.5			10.0			8.6			8.4
Interest expense		3.0			2.7			3.2			3.0
Interest income		(0.1	)		(0.2	)		(0.1	)		(0.2	)
Other (income) expense, net		(0.2	)		(0.4	)		(0.4	)		(0.4	)
Earnings before income taxes		6.7			7.8			5.8			6.0
Income tax expense		1.7			3.8			1.4			1.7
Net earnings		5.1			4.0			4.4			4.3
Net loss attributable to noncontrolling interests		(0.2	)		(0.1	)		(0.2	)		(0.1	)
Net earnings attributable to Hasbro, Inc.		5.2	%		4.0	%		4.5	%		4.3	%

RESULTS OF OPERATIONS – CONSOLIDATED

Second Quarter of 2015

The ~~quarter~~quarters ended June 28, 2015 and ~~nine-month periods ended September 28,~~June 29, 2014 ~~and September 29, 2013~~ were each 13-week ~~and 39-week periods, respectively.~~periods. Net earnings ~~including the impact of noncontrolling interests in Backflip, were $180,155~~ and ~~$244,489 in the quarter and nine months ended September 28, 2014, respectively, compared to $125,843 and $155,652 for the respective periods in 2013. Net~~net earnings attributable to Hasbro, Inc. increased to $40,282 and $41,809, respectively, for the quarter ended June 28, 2015, from $32,820 and ~~nine months ended September 28, 2014 were $180,457 and $246,019,~~$33,475, respectively, ~~compared to $126,574 and $156,383~~ for the ~~respective periods~~comparable period of ~~2013.~~2014. Diluted earnings per share attributable to Hasbro, Inc. ~~for~~increased to $0.33 in the second quarter ~~and nine months ended September 28,~~of 2015 from $0.26 in the second quarter of 2014. Second quarter 2014 ~~were $1.40 and $1.88, respectively, compared to $0.96 and $1.19 for the respective periods of 2013.~~

~~Net~~net earnings for the third quarter and first nine months of 2014 include adjustments, net of tax, of $7,379, or $0.06 per diluted share, for each period related to the restructuring of the Company's equity interest in Hub Network. Net earnings for the quarter and nine months ended September 29, 2013 includesincluded an unfavorable ~~impacts, net of tax, of $66,447, or $0.50 per diluted share, for each period resulting from an adverse arbitration award related to a license agreement with an inventor as well as a favorable~~ tax adjustment of ~~$23,637,~~$13,846, or ~~$0.18~~$0.10 per diluted share. The third quarter and first nine months of 2013 also include adjustments, net of tax, of $3,126, or $0.03 per share, and $23,693, or $0.18 per share, respectively, related to the multi-year cost savings initiative announced during the fourth quarter of 2012.

During the third quarter of 2013, the Company acquired a 70% majority interest in Backflip Studios, LLC ("Backflip"). The Company is consolidating the financial results of Backflip in its consolidated financial statements and, accordingly, reported revenues, costs and expenses, assets and liabilities, and cash flows include 100% of Backflip, with the 30% noncontrolling interests share reported as net loss attributable to noncontrolling interests in the consolidated statements of operations and redeemable noncontrolling interests on the consolidated balance sheets. The results of operations for the quarter and nine-month periods ended September 28, 2014 include the operations of Backflip. The quarter and nine months ended September 29, 2013 only include the operations of Backflip from the date of acquisition. The operations of Backflip are reported in the Entertainment and Licensing segment.

Consolidated net revenues for the quarter ended ~~September~~June 28, ~~2014 increased~~2015 decreased approximately 7%4% compared to ~~$1,469,899 from $1,370,348 for~~ the quarter ended ~~September~~June 29, ~~2013~~2014 and were negatively impacted by foreign currency translation of approximately ~~$10,800 for the quarter ended September 28, 2014~~$71,500 as a result of the stronger U.S. dollar in ~~2014~~2015 compared to ~~2013. For~~2014. Absent the ~~nine months ended September 28, 2014,~~impact of foreign currency, consolidated net revenues ~~increased 6%~~grew 5% in the second quarter of 2015 compared to ~~$2,978,614~~2014. Higher net revenues from ~~$2,800,384~~NERF and PLAY-DOH were more than offset by lower net revenues from TRANSFORMERS, which faced challenging comparisons to the second quarter of 2014 which benefited from the June 2014 theatrical release of TRANSFORMERS: AGE OF EXTINCTION, and, to a lesser extent, lower net revenues from MAGIC: THE GATHERING and MY LITTLE PONY. As a result, franchise brands decreased 10% during the second quarter of 2015 compared to 2014. Absent an unfavorable foreign currency translation, MY LITTLE PONY revenues grew during the second quarter of 2015.

The follow table presents net revenues by product category for the ~~nine~~quarters ended June 28, 2015 and June 29, 2014.

	Quarter Ended
	June 28, 2015		June 29, 2014		% Change
Boys	$	340,426		335,798		1	%
Games		211,629		225,702		-6	%
Girls		127,489		163,817		-22	%
Preschool		118,114		103,945		14	%
Net revenues	$	797,658		829,262

BOYS: Net revenues in the boys' category increased 1% in 2015 compared to 2014. The boys' category continues to benefit from a strong entertainment line-up. Higher net revenues from partner brands, specifically JURASSIC WORLD, MARVEL and STAR WARS, more than offset lower net revenues from the TRANSFORMERS brand, which benefited from the June 2014 theatrical release. The MARVEL and JURASSIC WORLD brands were each supported by a second quarter 2015 theatrical releases, AVENGERS: AGE OF ULTRON in May 2015 and JURASSIC WORLD in June 2015. Furthermore, STAR WARS is supported by animated television programming, STAR WARS REBELS, and will be supported by the highly anticipated theatrical release of STAR WARS: THE FORCE AWAKENS in December 2015. Lastly, the franchise brand NERF also contributed to boys' category growth.

GAMES: Net revenues from the games category decreased approximately 6% in the second quarter of 2015 compared to the second quarter of 2014. Higher net revenues from franchise brand MONOPOLY as well as other games brands, particularly CLUE, CONNECT 4, DUNGEONS & DRAGONS, TROUBLE and TWISTER, were more than offset by lower net revenues from franchise brand MAGIC: THE GATHERING. Net revenues from MAGIC: THE GATHERING products are significantly driven by the timing of new releases. During 2015 the major set release for the first half of the year occurred during the first quarter compared to the second quarter in 2014.

GIRLS: Net revenues in the girls' category decreased 22% in 2015 compared to 2014 primarily due to expected declines from FURBY products. Lower net revenues from MY LITTLE PONY, NERF and FURREAL FRIENDS brands also contributed to the decline. These lower net revenues were slightly offset by increases from PLAY-DOH DOHVINCI products and initial shipments of DISNEY DESCENDANTS products.

PRESCHOOL: Net revenues in the preschool category increased 14% in 2015 compared to 2014. Higher net revenues from PLAY-DOH products as well as sales of product related to the June 2015 theatrical release of JURASSIC WORLD were slightly offset by lower net revenues from core PLAYSKOOL products. In 2014, net revenues from the TRANSFORMERS brand benefited from the June 2014 theatrical release of TRANSFORMERS: AGE OF EXTINCTION.

Operating profit for the quarter ended June 28, 2015 decreased 9% to $75,500, or 9.5% of net revenues, from $82,564, or 10.0% of net revenues, for the quarter ended June 29, 2014, primarily due to the negative foreign currency translation of approximately $15,000. Absent foreign currency, operating profit grew 10% in the second quarter of 2015 compared to 2014. Higher net revenues combined with more favorable cost of sales and royalty expense contributed to growth in operating profit, absent foreign currency translation.

First Six Months of 2015

The six-month periods ended June 28, 2015 and June 29, 2014 were each 26-week periods. Net earnings and net earnings attributable to Hasbro, Inc. for the first six months of 2015 were $66,103 and $68,476, respectively, compared to $64,334 and $65,562, respectively, for the first six months of 2014. Diluted earnings per share attributable to Hasbro, Inc. increased to $0.54 in 2015 from $0.50 in 2014. In the first six months of 2014 an unfavorable tax adjustment related to a proposed resolution of outstanding tax matters during the second quarter of 2014 was substantially offset by a favorable settlement of certain open tax years during the first quarter of 2014.

For the six months ended ~~September~~June 28, 2015, consolidated net revenues was $1,511,158 compared to $1,508,715 for the six months ended June 29, ~~2013~~2014 and were negatively impacted by foreign currency translation of approximately ~~$18,000~~$134,100 as a result of the stronger U.S. dollar in ~~2014~~2015 compared to ~~2013.~~2014. Absent the impact of foreign currency, ~~translation,~~consolidated net revenues grew ~~8% and 7%~~9% in 2015 compared to 2014. During the ~~third quarter and~~ first ~~nine~~six months of ~~2014, respectively, compared to 2013. The Company's focus on~~2015, franchise ~~brands contributed to the overall growth of consolidated net~~brand revenues ~~with franchise brands growing approximately 36% and 31% in the third quarter and first nine months of 2014, respectively, compared to 2013. All seven franchise brands~~ grew ~~during the third quarter of 2014, while six~~nearly 3%. Specifically, five of the seven franchise brands ~~experienced growth in the year-to-date period,~~grew, including LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, NERF and PLAY-DOH. Excluding unfavorable foreign currency translation, MY LITTLE PONY ~~NERF, PLAY-DOH and TRANSFORMERS.~~net revenues grew during the first six months of 2015.

The following table presents net revenues by product category for the ~~quarter~~first six months of 2015 and ~~nine-month periods ended September 28, 2014 and September 29, 2013.~~2014.

	Quarter Ended							Nine Months Ended							Six Months Ended
	Sept. 28, 2014		Sept. 29, 2013		% Change			Sept. 28, 2014		Sept. 29, 2013		% Change			June 28, 2015		June 29, 2014		% Change
Boys	$	478,509		392,014		22	%		1,062,082		888,494		20	%	$	613,024		583,573		5	%
Games		395,221		387,450		2	%		841,449		873,774		-4	%		447,278		446,228		0	%
Girls		407,718		388,696		5	%		710,235		652,889		9	%		244,616		302,517		-19	%
Preschool		188,451		202,188		-7	%		364,848		385,227		-5	%		206,240		176,397		17	%
Net revenues	$	1,469,899		1,370,348					2,978,614		2,800,384				$	1,511,158		1,508,715

BOYS: Net revenues in ~~the~~ boys' category increased ~~22% and 20%~~5% in the ~~third quarter and~~ first ~~nine~~six months of ~~2014, respectively,~~2015 compared to ~~2013. Both the third quarter and first nine months of 2014 benefited~~2014. The boys' category continues to benefit from shipments related to four theatrical releases whereas the third quarter and first nine months of 2013 only benefited from shipments related to one theatrical release. Growth in 2014 resulted from highera strong entertainment line-up. Higher net revenues from partner brands, specifically JURASSIC WORLD, MARVEL and STAR WARS, more than offset lower net revenues from the TRANSFORMERS ~~products related to~~brand, which benefited from the June 2014 theatrical release. The MARVEL and JURASSIC WORLD brands were each supported by a second quarter 2015 theatrical releases, AVENGERS: AGE OF ULTRON in May 2015 and JURASSIC WORLD in June 2015. Furthermore, STAR WARS is supported by animated television programming, STAR WARS REBELS, and will be supported by the highly anticipated theatrical release of ~~TRANSFORMERS: AGE OF EXTINCTION~~ ~~as well as higher net revenues from MARVEL products related to three theatrical releases,~~ ~~CAPTAIN AMERICA:~~STAR WARS: THE ~~WINTER SOLIDER~~FORCE AWAKENS in ~~April 2014,~~ December 2015~~THE AMAZING SPIDER-MAN 2~~. ~~in May 2014 and~~ ~~GUARDIANS OF THE GALAXY~~ ~~in August 2014. The third quarter and first nine months of 2013 included shipments of MARVEL products related to one theatrical release,~~ ~~IRON MAN 3,~~ ~~in May 2013. Higher net revenues from NERF products in~~Lastly, the ~~quarter and year-to-date periods,~~franchise brand NERF also contributed to ~~the category's~~boys' category growth. ~~These higher net revenues were slightly offset by expected lower net revenues from BEYBLADE and G.I. JOE products in the third quarter and first nine months of 2014.~~

GAMES: Net revenues from the games category ~~grew 2% in the third quarter of 2014, but decreased 4%~~were flat in the first ~~nine~~six months of ~~2014~~2015 compared to ~~2013. In the quarter, higher~~2014. Higher net revenues from ~~MONOPOLY,~~franchise brands MAGIC: THE GATHERING ~~SIMON,~~and MONOPOLY as well as CLUE, DUNGEONS ~~AND~~& DRAGONS, LIFE, and ~~OPERATION products were only partially~~TROUBLE where wholly offset by other games brands, including DUEL MASTERS, ELEFUN & FRIENDS, JENGA, OPERATION and ANGRY BIRDS STAR WARS.

GIRLS: Net revenues in the girls' category decreased 19% in the six months ended June 28, 2015 compared to the six months ended June 29, 2014, primarily related to lower net revenues from ~~other games brands, particularly BOP IT!, DUEL MASTERS and JENGA. In the first nine months of 2014, higher~~FURBY products. Higher net revenues from ~~MONOPOLY, MAGIC: THE GATHERING, SIMON, DUNGEONS AND DRAGONS, ELEFUN & FRIENDS~~PLAY-DOH DOHVINCI and ~~OPERATION~~LITTLEST PET SHOP products were more than offset by lower net revenues from other games brands, particularly BOP IT!, DUEL MASTERS, JENGA and TWISTER. Games category net revenues in the third quarter and first nine months of 2014 also includes mobile gaming revenue from Backflip digital gaming properties as a result of its third quarter 2013 acquisition.

~~GIRLS:~~ ~~Net revenues in the girls' category increased 5% and 9% in the third quarter and first nine months of 2014, respectively, compared to 2013. Higher net revenues from franchise brands, specifically~~ MY LITTLE PONY, NERF and PLAY-DOH, contributed to the category's growth in both the quarter and nine months. Net revenues from MY LITTLE PONY products have continued momentum with support from the successful television program, ~~MY LITTLE PONY: FRIENDSHIP IS MAGIC,~~ as well as the third quarter 2013 introduction of MY LITTLE PONY EQUESTRIA GIRLS products. The Company also successfully launched NERF REBELLE, a line of action performance products, during the second half of 2013 and the product line's success continued into the third quarter and first nine months of 2014. The girls' category also benefited from the launch of PLAY-DOH DOHVINCI products, a line of arts and crafts toys, late in the second quarter of 2014. These higher net revenues were partially offset by lower net revenues from FURBY products in both the quarter and nine months ended September 28, 2014. Lastly, growth from the franchise brand LITTLEST PET SHOP, which was re-imagined and re-launched during the third quarter of 2014, as well as the challenger brand FURREAL FRIENDS ~~reflecting the shipment of feature items ahead of the holiday season, in 2014 compared to 2013, also contributed to overall category growth during these periods.~~and NERF products.

PRESCHOOL: Net revenues from the preschool category ~~declined 7% and 5%~~grew 17% in the ~~quarter and nine~~first six months ~~ended September 28, 2014, respectively,~~of 2015 compared to ~~the quarter and nine months ended September 29, 2013. Growth in~~2014. Higher net revenues from PLAY-DOH and PLAYSKOOL HEROES products, primarily TRANSFORMERS ~~products was more than~~RESCUE BOTS, as well as sales of product related to the June 2015 theatrical release of JURASSIC WORLD were slightly offset by lower net revenues from ~~various other preschool brands, particularly PLAYSKOOL and SESAME STREET.~~core PLAYSKOOL.

Operating profit for the ~~quarter~~six months ended ~~September~~June 28, ~~2014~~2015 increased ~~44%~~3% to ~~$285,814,~~$129,705, or ~~19.4%~~8.6% of net revenues, from ~~$198,706,~~$126,012, or ~~14.5%~~8.4% of net revenues, for the ~~quarter~~six months ended ~~September~~June 29, ~~2013. Operating profit in the third quarter of 2014 includes a benefit of $1,328 related to the restructuring of the Company's investment in Hub Network while~~2014. 2015 operating profit ~~in the third quarter~~includes negative foreign currency translation of ~~2013 included a charge of $57,164 reflecting an adverse arbitration award related to a license agreement as well as restructuring and related partial pension settlement charges of $4,093.~~approximately $28,900. Absent the impact of ~~these items,~~foreign currency, operating profit ~~grew 9%~~increased approximately 26% in the first six months of 2015 compared to ~~$284,486, or 19.4% of~~2014. Higher net revenues ~~in third quarter~~combined with favorable cost of 2014 from $259,963, or 19.0% of net revenues, in 2013. Foreign currency translation negatively impacted operating profit by approximately $2,900 in the third quarter of 2014. Excluding the items described above, higher net revenues, partially offset by higher costssales and ~~expenses,~~royalty expense contributed to growth in operating profit, ~~in the third quarter of 2014. These higher net revenues allowed better leverage of operating expenses leading to improved operating margin in 2014 compared to 2013.~~absent foreign currency translation.

Operating profit for the nine months ended September 28, 2014 increased 45% to $411,826, or 13.8% of net revenues, compared to $283,421, or 10.1% of net revenues, for the nine months ended September 29, 2013. Operating profit in 2014 includes a benefit of $1,328 related to the restructuring of the Company's investment in Hub Network while operating profit in 2013 included an adverse arbitration award related to a license agreement and restructuring and related pension charges of $57,164 and $35,481, respectively. Absent these items, operating profit increased 9% to $410,498, or 13.8% of net revenues, in 2014 from $376,066, or 13.4% of net revenues, for the nine months ended September 29, 2013. Foreign currency translation negatively impacted operating profit by approximately $3,800 in the first nine months of 2014. Excluding the items described above, improved operating profit and operating profit margin in the first nine months of 2014 compared to 2013 reflect higher net revenues which resulted in better leverage of operating expenses.SEGMENT RESULTS

Most of the Company's revenues and operating profit are derived from its three principal business segments: the U.S. and Canada segment, the International segment and the Entertainment and Licensing ~~segment, which~~segment. The results of these operations are discussed in detail below.

Second Quarter of 2015

The following table presents net external revenues and operating profit data for the Company's three principal segments for the ~~quarter~~quarters ended June 28, 2015 and ~~nine-month periods ended September 28, 2014 and September~~June 29, ~~2013.~~2014.

	Quarter Ended							Nine Months Ended							Quarter Ended
	Sept. 28, 2014		Sept. 29, 2013		% Change			Sept. 28, 2014		Sept. 29, 2013		% Change			June 28, 2015		June 29, 2014		% Change
Net Revenues
U.S. and Canada segment	$	764,268		735,619		4	%		1,484,968		1,466,921		1	%	$	385,183		383,001		1	%
International segment		649,284		582,676		11	%		1,351,608		1,212,665		11	%		362,760		396,849		-9	%
Entertainment and Licensing segment		53,378		48,637		10	%		135,915		114,747		18	%		47,640		47,663		0	%

Operating Profit
U.S. and Canada segment	$	169,850		146,991		16	%		252,541		243,738		4	%	$	47,147		46,928		0	%
International segment		116,451		105,663		10	%		148,097		115,951		28	%		25,361		29,232		-13	%
Entertainment and Licensing segment		493		7,625		-94	%		21,120		16,622		27	%		7,443		14,645		-49	%

U.S. ~~AND CANADA SEGMENT~~

and Canada Segment

The U.S. and Canada segment net revenues for the quarter ended ~~September~~June 28, ~~2014~~2015 increased 4%1% compared to ~~$764,268 from $735,619 for~~2014. Foreign currency translation did not have a significant impact on this segment's net revenues. In the second quarter ~~ended September 29, 2013. Net revenues for the first nine months~~ of ~~2014 grew 1% to $1,484,968 from $1,466,921 for the first nine months of 2013. Currency translation negatively impacted~~2015, higher net revenues from the boys and preschool categories were offset by ~~approximately $1,100~~lower net revenues from the games and ~~$3,000 in the quarter~~girls categories.

The boys category benefited from higher net revenues from JURASSIC WORLD, NERF and ~~nine-month periods ended September 28, 2014, respectively. In the third quarter of 2014, growth in the boys' and games categories~~STAR WARS products which were partially offset by lower net revenues from ~~the girls' and preschool categories. In the first nine months of 2014,~~TRANSFORMERS products. Games category net revenues declined primarily related to lower net revenues from MAGIC: THE GATHERING products, attributable to the change in release timing described above. The girls'~~, games~~ category declined primarily due to lower net revenues from FURBY, NERF REBELLE and ~~preschool categories~~FURREAL FRIENDS products. Partially offsetting the declines were ~~more than offset by growth in the boys' category.~~

~~In the boys' category,~~ higher net revenues from ~~NERF, TRANSFORMERS, MARVEL~~LITTLEST PET SHOP and ~~STAR WARS products for~~MY LITTLE PONY products. Net revenues from the ~~third quarter and first nine months of 2014 were partially offset by lower net sales of BEYBLADE products. The games~~preschool category benefited from ~~higher net revenues from MONOPOLY, MAGIC: THE GATHERING, DUNGEONS AND DRAGONS, SIMON, CONNECT 4~~ the June 2015 theatrical release of JURASSIC WORLD and ~~OPERATION products in both~~continued strength of the quarter and nine-month periods ended September 28, 2014. Although these higher net revenues more than offset lower net revenues from other games brands, including BOB IT!, JENGA, STAR WARS, and DUEL MASTERS, in the quarter ending September 28, 2014, they could not overcome declines from these other game brands in the first nine months of 2014. Lower net revenues from TWISTER products also contributed to the category's decline in the nine-month period. In the girls' category, higher net revenues fromCompany's franchise ~~brands, specifically LITTLEST PET SHOP, MY LITTLE PONY, NERF and PLAY-DOH, in the third quarter and first nine months of 2014~~brand, PLAY-DOH. These increases were ~~more than~~only partially offset by lower net revenues from ~~FURBY~~ and BABY ALIVE products. Net revenues from FURREAL FRIENDS also grew during the third quarter and first nine months of 2014 compared to 2013. In the preschool category, higher net revenues from PLAY-DOH and TRANSFORMERS products in the quarter and nine months ended September 28, 2014 compared to 2013 were more than offset by lower net revenues fromcore PLAYSKOOL ~~SESAME STREET, MARVEL and STAR WARS~~ products.

U.S. and Canada segment operating profit for the quarter ended ~~September~~June 28, ~~2014 increased 16% to $169,850,~~2015 was $47,147, or ~~22.2%~~12.2% of ~~segment~~ net revenues, ~~from $146,991,~~compared to $46,928, or ~~20.0%~~12.3% of segment net revenues, for the quarter ended ~~September~~June 29, 2013. U.S. and Canada segment operating profit for the nine months ended September 28, 2014 increased 4% to $252,541, or 17.0% of segment net revenues, from $243,738, or 16.6% of segment net revenues, for the nine months ended September 29, 2013. Operating profit growth in the third quarter and first nine months of 2014 reflects higher net revenues and favorable product mix partially offset by increased expenses. Increased operating profit margin in the third quarter and first nine months of 2014 reflects improved expense leverage resulting from those higher net revenues as well as benefits from the Company's cost savings initiative.2014.

~~INTERNATIONAL SEGMENT~~International Segment

International segment net revenues ~~increased 11% in the third quarter and first nine months of 2014~~decreased 9% to ~~$649,284 and $1,351,608, respectively, from $582,676 and $1,212,665~~$362,760 for the ~~comparable periods of 2013.~~quarter ended June 28, 2015 from $396,849 for the quarter ended June 29, 2014. International segment net revenues for the ~~third~~second quarter ~~and first nine months~~ of ~~2014 were negatively impacted by~~2015 included unfavorable foreign currency translation of approximately ~~$9,700 and $15,100~~$69,500 as a result of the stronger U.S. dollar in ~~2014~~2015 compared to ~~2013.~~2014. Absent the impact of foreign currency translation, International segment net revenues ~~grew~~increased approximately ~~13%~~9% in ~~both~~ the ~~third~~second quarter ~~and first nine months of 2014~~2015 compared to ~~2013.~~the second quarter of 2014. The following table presents net revenues by geographic region for the Company's International segment for the ~~quarter~~quarters ended June 28, 2015 and ~~nine-month periods ended September 28, 2014 and September~~June 29, ~~2013.~~2014.

	Quarter Ended							Nine Months Ended							Quarter Ended
	Sept. 28, 2014		Sept. 29, 2013		% Change			Sept. 28, 2014		Sept. 29, 2013		% Change			June 28, 2015		June 29, 2014		% Change
Europe	$	403,602		376,648		7	%		827,412		755,097		10	%	$	185,660		216,268		-14	%
Latin America		163,163		131,914		24	%		313,466		260,443		20	%		98,368		97,019		1	%
Asia Pacific		82,519		74,114		11	%		210,730		197,125		7	%		78,732		83,562		-6	%
Net revenues	$	649,284		582,676					1,351,608		1,212,665				$	362,760		396,849

~~International segment net revenues~~Foreign currency translation negatively impacted the major geographic regions as follows: Europe - $43,300, Latin America - $20,800 and Asia Pacific - $5,400. Absent foreign currency translation, the underlying business grew across all major geographic regions, up 6% in ~~both the quarter~~Europe, 23% in Latin America and ~~nine months ended September 28, 2014. Absent the impact of currency translation, net revenues from the European region grew 10%~~1% in ~~both the quarter and nine months ended September 28, 2014. Currency translation did not have a material impact on net revenues from the Latin American and~~ Asia ~~Pacific regions in the third quarter of 2014; however, in the first nine months of 2014, net revenues from these regions grew approximately 24% and 8%, respectively, absent currency translation.~~Pacific. Net revenues in emerging markets ~~which includes but is not limited to Russia, Brazil and China, increased 29% and 26%~~decreased 11% in the ~~third~~second quarter ~~and first nine months~~ of ~~2014, respectively,~~2015 compared to ~~2013.~~2014; however, excluding the impact of unfavorable foreign exchange, these net revenues increased 9%.

In ~~both~~ the second quarter ~~and nine month periods~~ of ~~2014, growth in the boys, girls and preschool categories were partially offset by declines in the games category.~~

Higher net revenues from NERF, TRANSFORMERS, MARVEL and, to a lesser extent, ANGRY BIRDS products in the third quarter and first nine months of 2014 contributed to growth in the boys category which was slightly offset by lower sales of BEYBLADE products. In the girls category,2015, higher net revenues from ~~MY LITTLE PONY, NERF and PLAY-DOH products in~~ the ~~third quarter and first nine months of 2014 compared to 2013~~preschool category were ~~partially~~more than offset by lower net revenues from ~~LITTLEST PET SHOP~~the boys, games and ~~FURBY~~girls categories.

In the boys' category higher net revenues from partner brands JURASSIC WORLD, MARVEL and STAR WARS as well as higher net revenues from franchise brand NERF were more than offset by lower net revenues from TRANSFORMERS products. In the games category, higher net revenues from ~~the~~ franchise ~~brands, MAGIC: THE GATHERING and~~brand MONOPOLY were more than offset by lower net revenues from ~~various~~ other ~~games brands.~~game brands, including MAGIC: THE GATHERING. Lower girls category net revenues from FURBY products in the second quarter of 2015 compared to 2014 as well as lower net revenues from MY LITTLE PONY and NERF were only partially offset by higher net revenues from PLAY-DOH DOHVINCI. In the preschool category higher net revenues from ~~franchise brands, specifically~~ PLAY-DOH and ~~TRANSFORMERS, in the quarter and nine months ended September 28, 2014~~JURASSIC WORLD products were ~~only~~ partially offset by lower net revenues from core PLAYSKOOL and TONKA products.

International segment operating profit ~~increased 10%~~decreased 13% to ~~$116,451~~$25,361, or 7.0% of net revenues, for the quarter ended ~~September~~June 28, ~~2014~~2015 from $105,663 for the quarter ended September 29, 2013; however, operating profit margin decreased from 18.1% of segment net revenues in the third quarter of 2013 to 17.9% of segment net revenues in the third quarter of 2014. International segment operating profit increased 28% to $148,097,$29,232, or ~~11.0%~~7.4% of segment net revenues, for the ~~nine months~~quarter ended ~~September 28, 2014, from $115,951, or 9.6% of segment~~June 29, 2014. Foreign exchange had a significant impact on net revenues ~~for~~from the ~~nine months ended September 29, 2013. Foreign currency~~International segment which also impacted operating profit; absent the impact of foreign exchange translation, ~~negatively impacted segment~~ operating profit ~~by approximately $3,900~~would have increased in ~~each~~ the ~~third~~second quarter ~~and first nine months~~ of 2014. In the quarter and nine months, higher net revenues, partially offset by higher operating expenses, contributed to improved operating profit. Less favorable product mix during the quarter resulted in a lower operating profit margin2015 compared to ~~the third quarter of 2013.~~2014.

~~ENTERTAINMENT AND LICENSING SEGMENT~~Entertainment and Licensing Segment

Entertainment and Licensing segment net revenues for the quarter ended ~~September~~June 28, ~~2014 increased 10%~~2015 were $47,640 compared to ~~$53,378 from $48,637~~$47,663 for the quarter ended ~~September~~June 29, ~~2013. Entertainment and Licensing segment net revenues for the nine months ended September 28, 2014 increased 18% to $135,915 from $114,747 for the nine months ended September 29, 2013.~~2014. Higher net revenues from lifestyle licensing ~~as well as revenue contribution~~were wholly offset by lower net revenues from ~~Backflip, drove growth in both the quarter~~distribution of television programming and ~~nine months of 2014 compared to 2013.~~digital gaming.

Entertainment and Licensing segment operating profit decreased to ~~$493~~$7,443, or 15.6% of net revenues, for the quarter ended ~~September~~June 28, ~~2014~~2015 from ~~$7,625~~$14,645, or 30.7% of segment net revenues, for the quarter ended ~~September~~June 29, ~~2013. The reduction in~~2014. Overall, Entertainment and Licensing segment operating profit and operating profit margin declined due to a less favorable revenue mix and higher operating expenses, including increased amortization of intangibles related to digital gaming rights reacquired in 2005 and 2007.

Global Operations

Global Operations segment operating profit was consistent compared with 2014, increasing marginally to $2,019 for the quarter ended June 28, 2015 from $1,810 for the quarter ended June 29, 2014.

Corporate and Eliminations

The operating loss in Corporate and eliminations totaled $6,470 for the second quarter of 2015 compared to ~~2013~~$10,051 for the second quarter of 2014.

First Six Months of 2015

The following table presents net external revenues and operating profit data for the Company's three principal segments for each of the six months ended June 28, 2015 and June 29, 2014.

	Six Months Ended
	June 28, 2015		June 29, 2014		% Change
Net Revenues
U.S. and Canada segment	$	730,873		720,700		1	%
International segment		668,473		702,324		-5	%
Entertainment and Licensing segment		108,271		82,537		31	%

Operating Profit
U.S. and Canada segment	$	88,570		82,691		7	%
International segment		27,264		31,646		-14	%
Entertainment and Licensing segment		23,845		20,627		16	%

U.S. and Canada Segment

The U.S. and Canada segment net revenues for the six months ended June 28, 2015 increased 1% compared to 2014. Foreign currency translation did not have a significant impact on segment net revenues. In the first six months of 2015, higher net revenues from the boys, games and preschool categories were partially offset by lower net revenues from the girls category.

The boys category grew in the first six months of 2015 compared to 2014. Higher net revenues from JURASSIC WORLD, MARVEL, NERF and STAR WARS products were partially offset by lower net revenues from TRANSFORMERS products. Higher net revenues from the games category reflect higher net revenues from franchise brands MAGIC: THE GATHERING and MONOPOLY as well as higher net revenues from CLUE, DUNGEONS & DRAGONS, LIFE, TROUBLE and TWISTER products. These increases were only partially offset by lower net revenues from DUELMASTERS and ELEFUN & FRIENDS products. In the girls' category, lower net revenues from FURBY, EASY BAKE, MY LITTLE PONY, NERF REBELLE and FURREAL FRIENDS products were partially offset by higher net revenues from LITTLEST PET SHOP and PLAY-DOH DOHVINCI products. Segment net revenues from the preschool category increased in the first six months of 2015 compared to 2014, benefiting from continued strength of the Company's franchise brand, PLAY-DOH as well as the June 2015 theatrical release of JURASSIC WORLD. These higher net revenues were partially offset by lower never revenues from core PLAYSKOOL and TONKA products.

U.S. and Canada segment operating profit for the six months ended June 28, 2015 increased to $88,570, or 12.1% of net revenues, from $82,691, or 11.5% of segment net revenues, for the six months ended June 29, 2014. Higher operating profit and operating profit margin reflects ~~accelerated amortization~~higher net revenues combined with more favorable cost of sales and royalty expenses, partially offset by higher expenses, primarily advertising and selling, distribution and administration expenses, in both dollars and as a percent of net revenues. Increased selling, distribution and administration expenses include expected increases as well as continued investment in digital offerings under the MAGIC: THE GATHERING brand.

International Segment

International segment net revenues decreased 5% to $668,473 for ~~certain programming,~~the six months ended June 28, 2015 from $702,324 for the six months ended June 29, 2014. 2015 International segment net revenues include unfavorable foreign currency translation of approximately $130,500. Absent the impact of foreign currency translation, International segment net revenues grew 14% for the first six months of 2015. The following table presents net revenues by geographic region for the Company's International segment for the six-month periods ended June 28, 2015 and June 29, 2014.

	Six Months Ended
	June 28, 2015		June 29, 2014		% Change
Europe	$	381,531		423,810		-10	%
Latin America		155,976		150,303		4	%
Asia Pacific		130,966		128,211		2	%
Net revenues	$	668,473		702,324

Foreign currency translation negatively impacted the major geographic regions as follows: Europe - $93,500, Latin America - $28,800 and Asia Pacific - $8,200. Absent foreign currency translation, the underlying business grew across all major geographic regions, up 12% in Europe, 23% in Latin America and 9% in Asia Pacific. Net revenues in emerging markets, decreased 5% in the first six months of 2015 compared to 2014; however, excluding the impact of unfavorable foreign exchange, these net revenues increased 15%.

In the first six months of 2015, higher net revenues from the boys and preschool categories were more than offset by lower net revenues from the games and girls categories. In the boys' category, higher net revenues from partner brands JURASSIC WORLD, MARVEL and STAR WARS as well as higher net revenues from franchise brand NERF were partially offset by lower net revenues from TRANSFORMERS products. In the games category, higher net revenues from franchise brand MONOPOLY were more than offset by lower net revenues from other game brands, including MAGIC: THE GATHERING. Net revenues from the girls' category declined from 2014 to 2015, primarily ~~related to KAIJUDO,~~ reflecting ~~revised estimates of future~~lower net revenues from FURBY products as well as lower ~~revenue~~net revenues from MY LITTLE PONY and NERF which were partially offset by higher net revenues from PLAY-DOH DOHVINCI. In the preschool category, higher net revenues from PLAY-DOH and JURASSIC WORLD products in the first six months of 2015 compared to 2014 were only partially offset by lower net revenues from core PLAYSKOOL and TONKA products.

International segment operating profit decreased to $27,646, or 4.1% of net revenues, for the six months ended June 28, 2015 from $31,646, or 4.5% of segment net revenues, for the six months ended June 29, 2014. The decrease in operating profit and margin is primarily due to the impact of unfavorable foreign currency translation.

Entertainment and Licensing Segment

Entertainment and Licensing segment net revenues for the six months June 28, 2015 increased 31% to $108,271 from $82,537 for the six months ended June 29, 2014. Higher entertainment revenues related to ~~television programing distribution. Partially offsetting this was~~a multi-year digital distribution agreement for Hasbro Studios programming along with higher ~~operating profit from~~lifestyle licensing revenues were the primary drivers of the segment's increased ~~revenues from lifestyle licensing.~~ net revenues.

Entertainment and Licensing segment operating profit increased to ~~$21,120~~$23,845, or 22.0% of net revenues, for the ~~nine~~six months ended ~~September~~June 28, ~~2014~~2015 from ~~$16,622~~$20,627, or 25.0% of segment net revenues, for the ~~nine~~six months ended ~~September~~June 29, ~~2013. Operating profit in the first nine months of 2013 included restructuring charges of $1,729. The increase in~~2014. Improved Entertainment and Licensing segment operating profit in the first ~~nine months~~quarter of ~~2014 compared to 2013~~2015 reflects the higher profit impact ~~from higher net revenues from~~of increased lifestyle licensing and programming revenues, partially offset by ~~the impact of Backflip, which was acquired in the third quarter of 2013.~~higher expense levels.

~~OTHER SEGMENTS AND CORPORATE AND ELIMINATIONS~~Global Operations

Global Operations segment operating ~~profit~~loss of ~~$15,704~~$1,763 for the ~~quarter ended September 28, 2014 compared~~first six months of 2015 compares to an operating profit of $17,578 for the quarter ended September 29, 2013. Segment operating profit of $15,770 in the first nine months of 2014 compared to an operating profit of $3,638 for the nine months ended September 29, 2013.

~~The operating loss in Corporate and eliminations for the third quarter of 2014 totaled $16,684 compared to operating loss of $79,151 for the third quarter of 2013. Operating loss~~$66 for the first ~~nine~~six months of ~~2014 of $25,702 compared to an operating loss of $96,528 for the first nine months of 2013. Operating loss for each the third quarter~~2014.

Corporate and first nine months of 2013 included charges of $57,164 related to an adverse arbitration award related to a license agreement as well as restructuring and related pension charges of $4,093 and $33,752, respectively. Absent these charges, operatingEliminations

Operating loss in Corporate and Eliminations for the ~~third quarter and~~ first ~~nine~~six months of ~~2013~~2015 was ~~$17,894 and $5,612, respectively. Lastly,~~$8,211, which is consistent with the operating loss infor the ~~quarter and nine~~first six months of ~~2013 include a third quarter charge related to the write-off~~2014 of ~~early film development costs associated with films that had not yet been moved to production.~~$9,018.

OPERATING COSTS AND EXPENSES

Second Quarter of 2015

The Company's costs and expenses, stated as percentages of net revenues, are illustrated below for the ~~quarter~~quarters ended June 28, 2015 and ~~nine-month periods ended September 28, 2014 and September~~June 29, ~~2013.~~2014.

	Quarter Ended						Nine Months Ended						Quarter Ended
	Sept. 28, 2014			Sept. 29, 2013			Sept. 28, 2014			Sept. 29, 2013			June 28, 2015			June 29, 2014
Cost of sales		41.0	%		41.5	%		39.7	%		40.6	%		37.0	%		38.6	%
Royalties		6.4			10.5			7.2			8.8			7.2			8.5
Product development		4.0			4.3			5.3			5.5			7.2			6.2
Advertising		10.0			10.0			10.0			9.9			9.8			9.9
Amortization of intangibles		0.9			1.0			1.3			1.3			1.7			1.4
Program production cost amortization		1.7			1.3			1.2			1.2			0.9			0.8
Selling, distribution and administration		16.6			16.9			21.6			22.6			26.7			24.6

Operating expenses for the quarter and nine-month periods ended September 29, 2013 include charges of $57,164 related to an adverse arbitration award relating to a license agreement which was recorded to royalties. In addition, operating expenses for the quarter and nine months ended September 29, 2013 include charges associated with a multi-year cost savings initiative announced during the fourth quarter of 2012, which targeted achieving an aggregate $100,000 in underlying annual savings by the end of 2015, prior to the other costs which have, or are anticipated to, increase in 2014 as well as in future years. These expenses were included in the consolidated statement of operations as follows:

Quarter Ended Nine Months Ended

Sept. 29,
2013
Sept. 29, 2013
Cost of sales $ - 8,493
Product development - 3,515
Selling, distribution and administration 4,093 23,473
Total $ 4,093 35,481

~~In the third quarter of 2014, cost~~Cost of sales ~~increased in dollars but~~ decreased ~~as a percent of net revenues to $602,766,~~8% from $320,336, or ~~41.0% of net revenues, from $568,582, or 41.5%~~38.6% of net revenues, for the quarter ended ~~September~~June 29, ~~2013. For the nine months ended September 28,~~ 2014 ~~cost of sales was $1,181,647,~~to $295,399, or ~~39.7% of net revenues, compared to $1,136,724, or 40.6%~~37.0% of net revenues for the ~~nine months~~quarter ended ~~September 29, 2013. Absent restructuring charges above, cost~~June 28, 2015. In dollars, the reduction in costs of sales asreflects a ~~percentage~~combination of lower net revenues and the impact of foreign exchange. As a percent of net revenues, ~~was 40.3% for~~ the ~~first nine months of 2013. While higher cost~~reduction in costs of sales ~~for the third quarter~~reflects a combination of a more favorable product mix and ~~first nine months of 2014 primarily reflect higher net revenues compared~~foreign exchange hedges related to ~~2013, the decrease as a percentage of net revenues, absent restructuring charges,~~product purchases. This more favorable product mix reflects higher net revenues from ~~entertainment properties in 2014 compared~~royalty-bearing products, specifically those related to ~~2013. Royalty-bearing products~~the JURASSIC WORLD and MARVEL brands, which generally carry higher pricing and, therefore, have a lower cost of sales as a percentage of net revenues. ~~The third quarter and first nine months of 2014 also included a benefit from realized costs savings.~~

Royalty expense for the quarter ended ~~September~~June 28, ~~2014 decreased to $94,352,~~2015 was $57,069, or ~~6.4%~~7.2% of net revenues, compared to ~~$143,947,~~$70,533, or ~~10.5%~~8.5% of net revenues, for the quarter ended ~~September~~June 29, ~~2013. Royalty~~2014. Lower royalty expense in the second quarter of 2015 compared to 2014 reflects a favorable royalty-bearing product mix, including lower net sales of royalty-bearing TRANSFORMERS products, supported by the June 2014 release of TRANSFORMERS: AGE OF EXTINCTION, partially offset by royalties related to higher net sales of MARVEL, JURASSIC WORLD and STAR WARS products in the second quarter of 2015.

Product development expense for the ~~nine months~~quarter ended ~~September~~June 28, ~~2014 decreased to $214,466,~~2015 was $57,609, or 7.2% of net revenues, ~~from $243,568,~~compared to $51,707, or 8.8% of net revenues. Royalty expense for the quarter and nine months ended September 28, 2014 includes a benefit of $2,328 related to the restructuring of the Company's investment in Hub Network while royalty expense for the quarter and nine months ended September 29, 2013 included charges of $57,164 resulting from an adverse arbitration award related to a license agreement. Absent these charges, royalty expense increased to $96,680, or 6.6% of net revenues, and $216,794, or 7.3% of net revenues, in the quarter and nine-month periods of 2014, respectively, from $86,783, or 6.3% of net revenues, and $186,404, or 6.7%6.2% of net revenues, for the quarter ended June 29, 2014. Higher product development expense, in dollars and ~~nine~~as a percentage of net revenues, primarily reflects costs associated with development of the DISNEY PRINCESS and FROZEN product lines under the license agreement with The Walt Disney Company. The Company will continue to incur these development costs in 2015 in advance of commencement of the licensing period and product shipments in 2016.

Advertising expense for the quarter ended June 28, 2015 was $78,365, or 9.8% of net revenues, compared to $81,693, or 9.9% of net revenues, for the quarter ended June 29, 2014. Lower net revenues resulted in lower advertising expense in the second quarter of 2015 compared to 2014, which was consistent as a percentage of net revenues.

Amortization of intangibles was $13,348, or 1.7% of net revenues, compared to $11,892, or 1.4% of net revenues, for the quarter ended June 29, 2014. The increase is primarily due to higher amortization of digital gaming rights reacquired in 2005 and 2007. The second quarter of 2015 was the last quarter of amortization of these assets.

Program production cost amortization was consistent year-over-year, increasing marginally to $7,220, or 0.9% of net revenues, for the quarter ended June 28, 2015 from $6,710, or 0.8% of net revenues, for the quarter ended June 29, 2015. Program production costs are capitalized as incurred and amortized using the individual-film-forecast method.

For the quarter ended June 28, 2015, the Company's selling, distribution and administration expenses increased to $213,148, or 26.7% of net revenues, from $203,827, or 24.6% of net revenues, for the quarter ended June 29, 2014. Higher administration expenses were partially offset by shipping and warehousing expenses. Marketing and sales expenses were flat compared to the second quarter of 2014. Foreign exchange resulted in a decrease of $15,700. Excluding the impact of foreign exchange, increased 2015 expenses are primarily the result of higher performance-based stock compensation, investments in MAGIC: THE GATHERING, depreciation expense and other general cost increases, such as salaries and wages.

First Six Months of 2015

The Company's costs and expenses, stated as percentages of net revenues, are illustrated below for the six-month periods ended June 28, 2015 and June 29, 2014.

	Six Months Ended
	June 28, 2015			June 29, 2014
Cost of sales		35.9	%		38.4	%
Royalties		7.7			8.0
Product development		7.2			6.6
Advertising		9.7			9.9
Amortization of intangibles		1.7			1.7
Program production cost amortization		1.2			0.8
Selling, distribution and administration		27.9			26.5

Cost of sales for the six months ended ~~September~~June 28, 2015 decreased to $543,134, or 35.9% of net revenues, from $578,881, or 38.4% of net revenues, for the six months ended June 29, ~~2013, respectively.~~2014. Lower cost of sales on higher net revenues reflects more favorable product and revenue mix in the first half of 2015 compared to the first half of 2014. This more favorable product mix reflects higher net revenues from royalty-bearing products, specifically those related to the JURASSIC WORLD and MARVEL brands, which generally carry higher pricing and, therefore, have a lower cost of sales as a percentage of net revenues. Furthermore, Entertainment and Licensing segment net revenues, which also have lower cost of sales, were 7.2% of net revenues in the first half of 2015 compared to 5.5% of net revenues in the first half of 2014. Lastly, the first half of 2015 benefited from a more favorable impact from foreign exchange hedges related to product purchases.

Royalty expense for the six months ended June 28, 2015 was $116,158, or 7.7% of net revenues, compared to $120,114, or 8.0% of net revenues, for the six months ended June 29, 2014. Fluctuations in royalty expense are generally related to the volume of entertainment-driven products sold in a given period, especially if there is a major motion picture release. ~~During~~Lower royalty expense in the ~~third quarter and~~ first ~~nine months~~half of 2015 compared to 2014 ~~the Company benefited from shipments~~reflects a favorable royalty-bearing product mix, including lower net sales of royalty-bearing TRANSFORMERS products, ~~related to~~supported by the ~~major motion picture~~June 2014 release of TRANSFORMERS: AGE OF EXTINCTION,~~as well as shipments~~ partially offset by royalties related to higher net sales of MARVEL, JURASSIC WORLD and STAR WARS products ~~related to three major motion picture releases,~~ ~~CAPTAIN AMERICA: THE WINTER SOLDIER, THE AMAZING SPIDER-MAN 2~~ ~~and~~ ~~GUARDIANS OF THE GALAXY. In 2013, sales only benefited from shipments~~in the first half of ~~MARVEL products related to one major motion picture release,~~ ~~IRON MAN 3.~~2015.

Product development expense for the ~~quarter and nine-month period~~six months ended ~~September~~June 28, ~~2014 was $58,220,~~2015 increased to $109,506, or ~~4.0%~~7.2% of net revenues, ~~and $157,184,~~from $98,964, or ~~5.3% of net revenues, respectively, compared to $59,366, or 4.3% of net revenues, and $154,455, or 5.5%~~6.6% of net revenues for the ~~respective periods in 2013. Absent restructuring charges,~~six months ended June 29, 2014. Higher product development expense, ~~for the first nine months of 2013 was $150,940, or 5.4%~~in dollars and as a percentage of net ~~revenues. Product development expense for the quarter and nine-month periods ended September 29, 2013 included the write-off of early film development~~revenues, primarily reflects costs associated with ~~motion pictures which have not yet been moved into production. Absent~~development of the DISNEY PRINCESS and FROZEN product lines under the license agreement with The Walt Disney Company. The Company will continue to incur these ~~charges, higher~~development costs in 2015 in advance of commencement of the licensing period and product ~~development expenses~~shipments in ~~2014 compared to 2013 reflects increased investments in development, including the MAGIC: THE GATHERING brand.~~2016.

Advertising expense for the ~~quarter~~six months ended ~~September~~June 28, ~~2014~~2015 was ~~$147,492,~~$146,107, or ~~10.0%~~9.7% of net revenues, compared to $136,487, or 10.0% of net revenues, for the quarter ended September 29, 2013. Advertising expense for the nine months ended September 28, 2014 increased to $296,444, or 10.0% of net revenues, from $277,278,$148,952, or 9.9% of net revenues, for the ~~comparable period~~six months ended June 29, 2014. The reduction in ~~2013. Higher~~advertising expense as a percent of net revenues primarily resulted from the mix of revenues, including the increase in ~~higher~~the Entertainment and Licensing segment, as well as the royalty-bearing product mix discussed above. Entertainment-backed product lines generally require less in advertising ~~expense for~~by the ~~third quarter and first nine months of 2014 compared to 2013. Advertising expense for the third quarter and first nine months of 2014 and 2013 were consistent as a percentage of net revenues.~~Company.

Amortization of intangibles ~~decreased to $12,809,~~was $26,299, or ~~0.9%~~1.7% of net revenues, for the ~~quarter~~six months ended ~~September~~June 28, ~~2014~~2015 compared to ~~$14,224,~~$25,294, or ~~1.0% of net revenues, for the quarter ended September 29, 2013. Amortization of intangibles increased to $38,103, or 1.3%~~1.7% of net revenues, in the first ~~nine~~six months of ~~2014 from $37,677, or 1.3% of net revenues, in the first nine months of 2013. Increases in~~2014. The marginal increase reflects higher amortization related to ~~Backflip were more than~~digital gaming rights which became fully amortized during the second quarter of 2015, partially offset by ~~lower amortization of the Company's other intangibles reflecting the impact of intangible~~certain assets which were fully amortized during ~~2013.~~2014.

Program production cost amortization increased in the ~~third quarter and~~ first ~~nine~~six months of ~~2014~~2015 to ~~$24,374, or 1.7% of net revenues, and $35,742,~~$18,316, or 1.2% of net revenues, ~~respectively,~~ from ~~$17,991,~~$11,368, or ~~1.3% of net revenues, and $34,023, or 1.2%~~0.8% of net revenues, in the ~~respective periods~~first six months of ~~2013.~~2014. Program production costs are capitalized as incurred and amortized using the individual-film-forecast method. ~~The increase~~Higher program production cost amortization in the ~~third~~first half of 2015 reflects higher net revenues during the first quarter of ~~2014 compared to 2013 reflects accelerated amortization~~2015 from a multi-year digital distribution agreement for certain programming resulting from revised estimates of future revenues, primarily related to KAIJUDO, and, to a lesser extent, the programming mix being amortized and the related actual and projected net revenues.Hasbro Studios programming.

For the ~~quarter~~six months ended ~~September~~June 28, ~~2014,~~2015, the Company's selling, distribution and administration expenses increased ~~in dollars but decreased as a percent of net revenues~~ to ~~$244,072,~~$421,933, or ~~16.6%~~27.9% of net revenues, from ~~$231,045,~~$399,130, or ~~16.9%~~26.5% of net revenues, for the ~~quarter~~six months ended ~~September~~June 29, ~~2013. Selling, distribution and administration expenses for the third quarters of~~ 2014, ~~and 2013 include $1,000 in charges~~primarily related to ~~the restructuring of the Company's investment in Hub Network~~higher administration expenses. Shipping and ~~restructuring~~warehousing and ~~related pension charges of $4,093, respectively. Absent these charges, selling, distribution~~marketing and ~~administration~~sales expenses ~~increased 7% in 2014~~were flat compared to $243,072, or 16.5% of net revenues, from $226,952, or 16.6% of net revenues, for the quarter ended September 29, 2013. For the nine months ended September 28, 2014, the Company's selling, distribution and administration expenses increased in dollars but decreased as a percent of net revenues to $643,202, or 21.6% of net revenues from $633,238, or 22.6% of net revenues, for the nine months ended September 29, 2013. Selling, distribution and administration expense for the first ~~nine months~~half of ~~2014 and 2013 include $1,000~~2014. Foreign exchange resulted in ~~charges related to~~a decrease of $28,900. Excluding the ~~restructuring~~impact of foreign exchange, increased 2015 expenses are primarily the ~~Company's investment~~result of higher performance-based stock compensation, investments in Hub Network and restructuring and related pension charges of $23,473, respectively. Absent these charges, selling, distribution and administration expenses increased 5% to $642,202, or 21.6% of net revenues, in 2014 from $609,765, or 21.8% of net revenues. The increase in both the ~~quarter and nine-month periods, excluding restructuring charges, reflects higher compensation, depreciation and investments, including in~~ MAGIC: THE GATHERING ~~emerging markets~~brand, depreciation expense and ~~Backflip, partially offset by~~other general cost ~~savings.~~increases, such as salaries and wages.

NON-OPERATING (INCOME) EXPENSE

Interest expense for the ~~third~~second quarter and first ~~nine~~six months of ~~2014 was $24,710~~2015 totaled $24,186 and ~~$69,940,~~$48,771, respectively, compared to ~~$41,194~~$22,802 and ~~$86,398~~$45,230 for the comparable and respective periods of ~~2013. Charges of $18,382 related to interest on unpaid royalties resulting from an adverse arbitration award related to a license agreement were included in~~2014. Increased interest expense ~~for~~in the ~~third~~ quarter and year-to-date periods reflects favorable interest rate swap agreements that were in place during the first ~~nine months~~half of ~~2013. Absent these charges, interest expense for the third quarter and first nine months of 2013 was $22,812 and $68,016, respectively.~~2014.

Interest income ~~for~~of $690 and $1,620 in the ~~third~~second quarter and first ~~nine~~six months of ~~2014 decreased as a result~~2015, respectively, compared to $1,165 and $2,491 in the second quarter and first six months of ~~lower~~2014. Higher average cash balances ~~and totaled $745 and $3,236~~in 2015 compared to ~~$1,326~~2014 were more than offset by lower average interest rates, particularly in international jurisdictions.

Other income, net of $1,642 and ~~$4,239~~$5,407 for the quarter and ~~nine-month periods~~six months ended ~~September 29, 2013.~~

~~Other expense,~~June 28, 2015, respectively, compared to other income, net of ~~$17,795~~$3,590 and $7,239 for the quarter and six months ended ~~September 28, 2014 compared to $2,925 for~~June 29, 2014. Improved earnings from Discovery Family Channel in the ~~quarter ended September 29, 2013. Other expense, net of $10,556 for the first nine months of 2014 compared to $10,766 for the first nine months of 2013. Both the third~~second quarter and first ~~nine months~~half of 2015 compared to 2014 includes a net loss of $12,894 related to the restructuring of the Company's investment in Hub Network. This net loss was primarily comprised of costs associated with an option agreement entered into between Hasbro and Discovery and Hasbro's share of severance costs recorded by the Network, partiallywere more than offset by ~~a gain resulting from the reduction of amounts due~~foreign exchange losses in 2015 compared to ~~Discovery under a tax sharing agreement. The Company expects that the Network may incur additional restructuring charges~~foreign exchange gains in the ~~fourth~~second quarter and first six months of 2014. Other ~~(income) expense, net also includes the Company's share in the~~ income, (losses) of Hub Network. Excluding the impact of the restructuring of the Company's investment described above, income from Hub Network of $1,892 and $5,491 in the third quarter and first nine months of 2014, respectively, compared to losses of $91 and $1,024 in the comparable periods in 2013. Foreign exchange losses of approximately $6,200 in the third quarter of 2014 compared to gains of approximately $500 in the third quarter of 2013. Foreign exchange losses of approximately $6,100 in the first nine months of 2014 compared to approximately $5,400 in the respective period of 2013. Other expense, net in the first ~~nine~~six months of 2015 and 2014 ~~also includes~~each include gains ~~of $3,400~~ on the sale of ~~an internet domain name.~~certain assets of $2,800 and $3,400, respectively.

INCOME TAXES

Income taxes totaled ~~$63,899~~$13,364 on pre-tax earnings of ~~$244,054~~$53,646 in the ~~third~~second quarter of ~~2014~~2015 compared to income taxes of ~~$30,070~~$31,697 on pre-tax earnings of ~~$155,913~~$64,517 in the ~~third~~second quarter of ~~2013.~~2014. For the ~~nine~~six month period, income taxes totaled ~~$90,077~~$21,858 on pre-tax earnings of ~~$334,566~~$87,961 in ~~2014~~2015 compared to income taxes of ~~$34,844~~$26,178 on pre-tax earnings of ~~$190,496~~$90,512 in ~~2013.~~2014. Both periods, as well as the full year ~~2013, are~~2014, were impacted by certain discrete tax events including the accrual of potential interest and penalties on certain tax positions. During the first ~~nine~~six months of ~~2014,~~2015, favorable discrete tax adjustments were a net benefit of ~~$2,532~~$1,979 compared to a net ~~benefit~~expense of ~~$26,752~~$1,921 in the first ~~nine~~six months of ~~2013.~~2014. The favorable discrete tax adjustment for the first ~~nine~~six months of ~~2014~~2015 includes ~~an expense~~benefits related to ~~additional reserves~~expiration of statutes for certain tax positions ~~offset by a benefit in~~and the ~~first quarter related to the effective settlement~~filing of ~~certain open~~2012 and 2013 amended tax ~~years in the United States.~~returns. Absent discrete items, the adjusted tax rate for the first ~~nine~~six months of 2015 and 2014 were 27.1% and ~~2013 were 27.8% and 26.5%~~26.8%, respectively. The ~~increase in the~~ adjusted rate ~~to 27.8%~~of 27.1% for the ~~nine~~six months ended ~~September~~June 28, ~~2014 from~~2015 is comparable to the full year ~~2013~~2014 adjusted rate ~~25.8% is primarily due to the tax impact of higher expected operating profits in jurisdictions with higher statutory tax rates, primarily the United States.~~26.5%.

OTHER INFORMATION

Historically, the Company's revenue pattern has shown the second half of the year to be more significant to its overall business than the first half. The Company expects that this concentration will continue, particularly as more of its business has shifted to larger customers with order patterns concentrated in the second half of the year. The concentration of sales in the second half of the year increases the risk of (a) underproduction of popular items, (b) overproduction of less popular items, and (c) failure to achieve compressed shipping schedules.

The toy and game business is characterized by customer order patterns which vary from year to year largely because of differences each year in the degree of consumer acceptance of product lines, product availability, marketing strategies and inventory policies of retailers, the dates of theatrical releases of major motion pictures for which the Company has product licenses, and changes in overall economic conditions. As a result, comparisons of the Company's unshipped orders on any date with those at the same date in a prior year are not necessarily indicative of the Company's expected sales for that year. Moreover, quick response inventory management practices result in fewer orders being placed significantly in advance of shipment and more orders being placed for immediate delivery. Although the Company may receive orders from customers in advance, it is a general industry practice that these orders are subject to amendment or cancellation by customers prior to shipment and, as such, the Company does not believe that these unshipped orders, at any given date, are indicative of future sales.

On July 14, 2015, the Company announced its intent to sell its manufacturing operations in East Longmeadow, Massachusetts and Waterford, Ireland to the Cartamundi Group. The Company anticipates that this transaction, which is subject to the signing of definitive agreements and the satisfaction of specified closing conditions, will close in the third quarter of 2015.

In May 2014, the Financial Accounting Standards Board ("FASB"), in cooperation with the International Accounting Standards Board ("IASB"), issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606). This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605 – Revenue Recognition and most industry-specific guidance throughout the Codification. This new guidance provides a five-step model for analyzing contracts and transactions to determine when, how and if revenue is recognized. Revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is now effective for fiscal years beginning after December 15, ~~2016,~~2017, and for interim periods within those fiscal ~~years.~~years, and may be adopted early but not before December 15, 2016. The Company is evaluating the requirements of ASU 2014-09 and its potential impact on the Company's financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (ASC 835-30), which simplifies the presentation of debt issuance costs. ASU 2015-03 requires debt issuance costs related to long-term debt to be presented in the balance sheet as a reduction to the carrying amount of the related debt liability, consistent with the presentation of discounts. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, and is eligible for early adoption. The Company presently records deferred debt costs in other assets in the consolidated balance sheet. At June 28, 2015, deferred debt costs related to long-term debt totaled $14,018. Upon adoption, these deferred debt costs will be presented as a reduction of long-term debt.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically generated a significant amount of cash from operations. In ~~2013~~2014 the Company funded its operations and liquidity needs primarily through cash flows from operations, and, when needed, using borrowings under its available lines of credit and commercial paper program.

During the first ~~nine months~~half of ~~2014,~~2015, the Company continued to fund its working capital needs primarily through cash flows from operations and, when needed, lines of credit and ~~the Company's~~ commercial ~~paper program.~~paper. The Company believes that the funds available to it, including cash expected to be generated from operations and funds available through its available lines of credit and commercial paper program, are adequate to meet its working capital needs for the remainder of ~~2014.~~2015. However, unexpected events or circumstances such as material operating losses or increased capital or other expenditures may reduce or eliminate the availability of external financial resources. In addition, significant disruptions to credit markets may also reduce or eliminate the availability of external financial resources. Although management believes the risk of nonperformance by the counterparties to the Company's financial facilities is not significant, in times of severe economic downturn in the credit markets it is possible that one or more sources of external financing may be unable or unwilling to provide funding to the Company.

In May 2014, the Company issued $600,000 in long-term debt which consists of $300,000 in Notes Due in 2021 which bear interest at a rate of 3.15% and $300,000 in Notes Due in 2044 which bear interest at a rate of 5.10% (collectively, the "Notes"). The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase. The proceeds from the issuance of the Notes were used, primarily, to repay $425,000 in aggregate principal amount of the 6.125% Notes Due 2014 upon maturity, including accrued and unpaid interest. The remaining net proceeds are being utilized for general corporate and working capital purposes.

As of ~~September~~June 28, ~~2014~~2015 the Company's cash and cash equivalents totaled ~~$452,184, a substantial portion~~$858,458, substantially all of which is held outside of the United States. Deferred income taxes have not been provided on the majority of undistributed earnings of international subsidiaries as such earnings are indefinitely reinvested by the Company. Accordingly, such international cash balances are not available to fund cash requirements in the United States unless the Company changes its reinvestment policy. The Company currently has sufficient sources of cash in the United States to fund cash requirements without the need to repatriate any funds. If the Company changes its policy of permanently reinvesting international earnings, it would be required to accrue for any additional income taxes representing the difference between the tax rates in the United States and the applicable tax jurisdiction of the international subsidiaries. If the Company repatriated the funds from its international subsidiaries, it would then be required to pay the additional U.S. income tax. ~~Substantially all~~The majority of the Company's cash and cash equivalents held outside of the United States as of ~~September~~June 28, ~~2014~~2015 is denominated in the U.S. dollar.

Because of the seasonality in the Company's 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 quarter or prior year-end.

At ~~September~~June 28, ~~2014,~~2015, cash and cash equivalents, net of short-term borrowings, ~~decreased slightly~~increased to ~~$374,161~~$690,581 from ~~$375,742~~$576,963 at ~~September~~June 29, ~~2013.~~2014. Net cash provided by operating activities in the first ~~nine months~~half of ~~2014~~2015 was ~~$26,826~~$236,104 compared to ~~$47,317~~$109,270 in the first ~~nine months~~half of ~~2013.~~2014. Lower net cash provided by operating activities in 2014 reflects a payment of $58,040 resulting from the settlement of an arbitration award, higher royalty advances, and increased working capital. On a trailing twelve month basis, the Company generated $581,245 in operating cash flows as of the end of the first half of 2015 compared to $212,266 as of the end of the first half of 2014 and $454,411 for the fiscal year ended December 28, 2014.

Accounts receivable ~~increased approximately 8%~~decreased 4% to ~~$1,314,022~~$709,437 at ~~September~~June 28, 2015 from $738,899 at June 29, 2014 ~~from $1,215,289 at September 29, 2013. The accounts receivable balance at September 28, 2014~~and includes a decrease of approximately ~~$48,200 resulting from~~$100,800 due to a stronger U.S. dollar at ~~September~~June 28, ~~2014~~2015 compared to ~~September~~June 29, ~~2013.~~2014. Absent the impact of foreign currency translation, accounts receivable ~~grew~~increased approximately ~~12%~~10% reflecting ~~higher net revenues for~~ the aforementioned 5% revenue growth, absent foreign exchange translation, in the second quarter ~~ended September 28, 2014~~of 2015 compared to ~~the quarter ended September 29, 2013.~~2014. Days sales outstanding was ~~consistent~~flat from June 29, 2014 to June 28, 2015 at 80 ~~days at September 28, 2014 and September 29, 2013.~~days.

Inventories ~~increased approximately 12%~~decreased 18% to ~~$499,150~~$403,789 at ~~September~~June 28, ~~2014~~2015 from ~~$447,113~~$492,822 at ~~September~~June 29, ~~2013.~~2014. The inventory balance at ~~September~~June 28, ~~2014~~2015 includes a decrease of approximately ~~$26,200~~$70,900 resulting from a stronger U.S. ~~dollar~~dollar. Furthermore, approximately $19,700 of inventories were reclassified as assets held for sale related to the anticipated sale of the Company's manufacturing operations and are included in prepaid expenses and other current assets. Excluding these items, inventories at ~~September~~June 28, ~~2014~~2015 were flat compared to ~~September~~inventories at June 29, 2013. The increase is primarily in international markets, including emerging markets in support of continued expectations for growth in these markets as well as mature markets to support higher revenues. Inventory grew approximately 1% from the second quarter of 2014 whereas inventory at September 29, 2013 grew 24% from June 30, 2013. This reflects the Company's decision to accelerate inventory shipping during the second quarter of 2014 resulting from potential labor disputes and related delays at the shipping port the Company utilizes in California.2014.

Prepaid expenses and other current assets increased ~~10%~~12% to ~~$380,833~~$434,145 at ~~September~~June 28, ~~2014~~2015 from ~~$346,215~~$386,333 at ~~September~~June 29, ~~2013.~~2014. The prepaid and other current assets balance at ~~September~~June 28, ~~2014~~2015 included a decrease of approximately ~~$5,000~~$23,800 resulting from a stronger U.S. dollar at ~~September~~June 28, ~~2014~~2015 compared to ~~September~~June 29, ~~2013. Higher~~2014. Absent the impact of foreign currency translation, prepaid expenses and other current assets ~~primarily relate~~increased approximately 19% compared to June 29, 2014. The majority of increase is due to the higher ~~outstanding~~value of foreign exchange contracts ~~reflecting the~~due to a stronger U.S. dollar ~~at the end of the third quarter of 2014~~in 2015 compared to ~~2013. Prepaid~~2014. In addition to these contracts, prepaid expenses and other current assets includes approximately $19,700 in assets held for sale, primarily inventory, related to the anticipated sale of the Company's manufacturing operations as well as higher income tax receivables related to a December 2014 ~~also reflect~~tax settlement in Mexico. These higher ~~short-term and other investments.~~balances were partially offset by lower royalty advances.

Accounts payable and accrued liabilities decreased 7%11% to ~~$936,005~~$638,026 at ~~September~~June 28, ~~2014~~2015 from ~~$1,005,529~~$715,504 at ~~September~~June 29, ~~2013. Accounts payable and accrued liabilities at September 28, 2014 includes a~~2014. The decrease ~~of approximately $48,900 resulting from a stronger U.S. dollar at September 28, 2014 compared to September 29, 2013. Lower~~reflects lower accrued royalties, ~~and interest, specifically related to 2013 accruals for an adverse arbitration award, as well as lower~~ accrued severance, ~~were partially offset by higher~~foreign exchange contracts and accounts ~~payable and accrued income and other taxes.~~payable.

Goodwill and other intangible assets, net decreased to ~~$931,613~~$891,033 at ~~September~~June 28, ~~2014~~2015 from ~~$1,008,241~~$945,025 at ~~September~~June 29, ~~2013. Other intangible assets decreased from $414,033 at September 29, 2013 to $337,894 at September 28, 2014, primarily~~2014. The decrease was due to amortization ~~expense, including write-offs~~ of ~~certain intangibles during~~intangible assets over the ~~fourth quarter of 2013.~~last twelve months.

Other assets ~~in 2014~~ decreased approximately 7%6% to ~~$702,981~~$708,334 at ~~September~~June 28, ~~2014~~2015 from ~~$753,420~~$752,484 at ~~September~~June 29, ~~2013. Lower other assets~~2014. This decrease primarily ~~reflect a reduction~~reflects the partial sale of the Company's television joint venture in the ~~Company's investment in Hub Network resulting from the sale~~third quarter of ~~10% equity interest to Discovery which included cash proceeds of $64,400, lower television programming and~~2014 as well as lower long-term royalty ~~advances relating to the STAR WARS and MARVEL licenses and the Network. These reductions were partially offset by higher deferred taxes and higher outstanding long-term foreign exchange contracts.~~

Other liabilities decreased 4% to $392,366 at September 28, 2014 from $410,672 at September 29, 2013. The decrease is primarily the result of lower liabilities related to defined benefit pension and post-retirement medical plans as well as a reduction in the Company's tax sharing agreement with Discovery.advances. These decreases were partially offset by more favorable foreign exchange contracts as well as higher deferred tax assets reflecting increased pension liabilities in December 2014. Other assets at June 28, 2015 also includes approximately $26,400 in assets held for sale, primarily property, plant and equipment, net of accumulated depreciation, related to the anticipated sale of the Company's manufacturing operations.

Other liabilities increased 11% to $395,417 at June 28, 2015 from $357,766 at June 29, 2014. The increase in 2015 compared to 2014 reflects higher pension liabilities, primarily due to changes in actuarial assumptions, including a lower discount rate and updated mortality tables. The increase in 2015 compared to 2014 reflects the September 2014 amendment to the Company's relationship with Discovery Communications, Inc. which resulted in a net increase to other liabilities of approximately $10,000 reflecting the fair value of the option agreement offset by a reduction in the related tax sharing agreement. These increases were partially offset by lower accruals for uncertain income tax positions ~~as well as~~at June 28, 2015 compared to June 29, 2014, reflecting the ~~recognition~~settlement of ~~the fair market value of an option agreement with Discovery resulting from the Company's restructuring of its investment in Hub Network.~~tax exams primarily related to Mexico.

Net cash utilized by investing activities was ~~$9,846~~$59,003 in the first ~~nine months~~half of ~~2014~~2015 compared to ~~$185,080~~$52,664 in ~~2013.~~the first half of 2014. Additions to property, plant and equipment were ~~$78,255~~$67,709 in ~~2014~~2015 compared to ~~$78,246~~$51,636 in ~~2013. The net utilization~~2014. Increased capital expenditures reflect the Company's investment in ~~2014~~tooling and information systems. 2015 investing activity also includes ~~$64,400 of cash proceeds~~approximately $20,700 in capital and tax distributions from ~~the partial sale of equity interest in Hub Network. The 2013 utilization includes $109,955 in cash paid for~~Discovery Family Channel partially offset by a ~~70% majority interest in Backflip.~~$3,000 capital contribution to a 50% joint venture with Guangdong Alpha Animation and Culture Co., Ltd.

Net cash utilized by financing activities was ~~$242,861~~$202,315 in the first ~~nine months~~half of ~~2014~~2015 compared to ~~$115,199~~$154,147 in the first ~~nine months~~half of ~~2013.~~2014. Cash payments related to purchases of the Company's common stock were $49,156 in the first half of 2015 compared to $213,935 in the first half of 2014. At June 28, 2015, the Company had $517,340 remaining available under its current share repurchase authorization approved by the Board of Directors. Dividends paid in the first half of 2015 totaled $110,902 compared to $108,097 in the first half of 2014. Repayments of short-term borrowings totaling $84,420 in the first half of 2015 compared to proceeds from short-term borrowings of $1,430 in the first half of 2014. The 2014 cash provided also reflects net proceeds of $559,986 from the issuance of $600,000 in long-term notes in May 2014; these net proceeds include a payment of $33,306 for the termination of forward-starting interest rate swap contracts associated with this expected issuance of debt as well as $6,708 in debt issuance costs. The majority of the proceeds from this issuance were used to repay $425,000 of long-term notes due May 2014. Cash payments related to purchases of the Company's common stock were $338,184 in the first nine months of 2014 compared to $86,972 in 2013. At September 28, 2014, the Company had $183,649 remaining available under its current share repurchase authorization approved by the Board of Directors. Dividends paid in the first nine months of 2014 totaled $162,789 compared to $104,164 in the first nine months of 2013. There were no dividends paid in the first quarter of 2013 as the payment historically made in February was accelerated and paid in December 2012. The remaining increase in dividends reflects the higher dividend rate paid on the May and August 2014 dividends, partially offset by lower shares outstanding. Proceeds from short-term borrowings of $71,172 in the first nine months of 2014 compared to repayments of short-term borrowings of $11,235 in the first nine months of 2013.

The Company has an agreement with a group of banks for a commercial paper program (the "Program"). Under the Program, at the request of the Company and subject to market conditions, the banks may either purchase from the Company, or arrange for the sale by the Company, of unsecured commercial paper notes. Under the Program the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $700,000. The maturities of these notes will vary but may not exceed 397 days. The notes will be sold under customary terms in the commercial paper market and will be issued at a discount or par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis. The interest rates will vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time of issuance. Subject to market conditions, the Company intends to utilize the Program as its primary short-term borrowing facility and does not intend to sell unsecured commercial paper notes in excess of the available amount under the revolving credit agreement, discussed below. If, for any reason, the Company is unable to access the commercial paper market, the Company intends to use the revolving credit agreement to meet the Company's short-term liquidity needs. At ~~September~~June 28, ~~2014~~2015 the Company had approximately ~~$65,000~~$166,000 in borrowings outstanding related to the Program.

The Company has a revolving credit agreement (the "Agreement"), which provides it with a $700,000 committed borrowing facility. The Agreement contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. The Company was in compliance with all covenants as of and for the quarter ended ~~September~~June 28, ~~2014.~~2015. The Company had no borrowings outstanding under its committed revolving credit facility at ~~September~~June 28, ~~2014.~~2015. However, the Company had letters of credit outstanding under this facility as of ~~September~~June 28, ~~2014~~2015 of approximately ~~$1,000, and borrowings under the Company's commercial paper program of approximately $65,000.~~$900. Amounts available and unused under the committed line ~~less outstanding balances under the commercial paper program,~~ as of ~~September~~June 28, ~~2014~~2015 were approximately ~~$634,000.~~$533,100. The Company also has other uncommitted lines from various banks, of which approximately ~~$32,100~~$21,600 was utilized at ~~September~~June 28, ~~2014.~~2015. Of the amount utilized under the uncommitted lines, approximately ~~$11,400~~$1,400 and ~~$20,700~~$20,200 represent outstanding borrowings and letters of credit, respectively.

The Company has principal amounts of long-term debt at ~~September~~June 28, ~~2014~~2015 of $1,559,895 due at varying times from 2017 through ~~2044. Of this long-term debt, $600,000 represents the aggregate issuance of long-term debt in May 2014 which consists of $300,000 of 3.15% Notes Due 2021 and $300,000 of 5.10% Notes Due~~ 2044. The Company also had letters of credit and other similar instruments of approximately ~~$193,500~~$22,500 and purchase commitments of ~~$292,146~~approximately $416,600 outstanding at ~~September~~June 28, 2014. Letters of credit and similar instruments include approximately $173,100 related to the defense of tax assessments in Mexico. These assessments relate to transfer pricing that the Company is defending. In the interest of resolving these open disputes and to provide for a mutually agreeable framework in future years, the Company is party to discussions with the Mexican tax authorities to determine if a settlement related to these assessments may be reached.2015.

Other contractual obligations and commercial commitments, as detailed in the Company's Annual Report on Form 10-K for the year ended December ~~29, 2013,~~28, 2014, did not materially change outside of payments made in the normal course of business and as otherwise set forth in this report. The table of contractual obligations and commercial commitments, as detailed in the Company's Annual Report on Form 10-K for the year ended December ~~29, 2013,~~28, 2014, does not include certain tax liabilities recorded related to uncertain tax positions. These liabilities were ~~$105,945~~$41,485 at ~~September~~June 28, ~~2014,~~2015, and are included as a component of other liabilities in the accompanying consolidated balance sheets. Further, the Company believes it is reasonably possible that it may make approximately $66,400 of gross tax payments and reduce its liability for uncertain benefits within the next twelve months related to the resolution of an uncertain tax position.

The Company believes that cash from operations, and, if necessary, its committed line of credit and other borrowing facilities, will allow the Company to meet these and other obligations listed.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. As such, management is required to make certain estimates, judgments and assumptions that it believes are reasonable based on the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. The significant accounting policies which management believes are the most critical to aid in fully understanding and evaluating the Company's reported financial results include sales allowances, program production costs, recoverability of goodwill and intangible assets, recoverability of royalty advances and commitments, pension costs and obligations and income taxes. These critical accounting policies are the same as those detailed in the Annual Report on Form 10-K for the year ended December ~~29, 2013.~~28, 2014.

FINANCIAL RISK MANAGEMENT

The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates, primarily as the result of sourcing products priced in U.S. dollars, Hong Kong dollars and Euros while marketing those products in more than twenty currencies. Results of operations may be affected primarily by changes in the value of the U.S. dollar, Hong Kong dollar, Euro, British pound sterling, Swiss franc, Canadian dollar, Brazilian real, Russian ruble and Mexican peso and, to a lesser extent, other currencies in European, Latin American and Asia Pacific countries.

To manage this exposure, the Company has hedged a portion of its forecasted foreign currency transactions for fiscal years ~~2014~~2015 through ~~2016~~2019 using foreign exchange forward contracts. The Company is also exposed to foreign currency risk with respect to its net cash and cash equivalents or short-term borrowing positions in currencies other than the U.S. dollar. The Company believes, however, that the on-going risk on the net exposure should not be material to its financial condition. In addition, the Company's revenues and costs have been, and will likely continue to be, affected by changes in foreign currency rates. A significant change in foreign exchange rates can materially impact the Company's revenues and earnings due to translation of foreign-denominated revenues and expenses. The Company does not hedge against translation impacts of foreign exchange. From time to time, affiliates of the Company may make or receive intercompany loans in currencies other than their functional currency. The Company manages this exposure at the time the loan is made by using foreign exchange contracts. Other than as set forth above, the Company does not hedge foreign currency exposures.

The Company reflects all forward contracts at their fair value as an asset or liability on the consolidated balance sheets. The Company does not speculate in foreign currency exchange contracts. At ~~September~~June 28, ~~2014,~~2015, these contracts had net unrealized gains of ~~$38,049,~~$103,158, of which ~~$19,312~~$51,974 are recorded in prepaid expenses and other current assets, ~~$22,163~~$53,932 are recorded in other assets, ~~$3,020~~$2,677 are recorded in accrued liabilities and ~~$406~~$71 are recorded in other liabilities. Included in accumulated other comprehensive loss at ~~September~~June 28, ~~2014~~2015 are deferred gains, net of tax, of ~~$37,423,~~$98,835, related to these derivatives.

At ~~September~~June 28, ~~2014,~~2015, the Company had fixed rate long-term debt of $1,559,895. Of this long-term debt, $600,000 represents the aggregate issuance of long-term debt in May 2014 which ~~consists~~consisted of $300,000 of 3.15% Notes Due 2021 and $300,000 of 5.10% Notes Due 2044. ~~During the fourth quarter of 2013 and first quarter of 2014, the~~The Company ~~entered into~~had forward-starting interest rate swap agreements with a total notional value of $500,000 related to ~~hedge~~the May 2014 issuance which hedged the anticipated underlying U.S. Treasury interest ~~rate associated with the May 2014 debt issuance.~~rate. These interest rate swaps were matched with this debt issuance and were designated and effective as hedges of the change in future interest payments. At the date of debt issuance, the Company terminated these interest rate swap agreements and their fair value ~~$33,306 at the date of issuance,~~ was recorded in accumulated other comprehensive loss and is being amortized through the consolidated statements of operations using an effective interest rate method over the life of the related debt. Included in accumulated other comprehensive loss at ~~September~~June 28, ~~2014~~2015 are deferred losses, net of tax, of ~~$20,798~~$19,937 related to these derivatives.

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.

Item 4.

Controls and Procedures.

The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of ~~September~~June 28, ~~2014.~~2015. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.

There were no changes in the Company's internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended ~~September~~June 28, ~~2014~~2015 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings.

The Company has outstanding tax assessments in Mexico relating to the years 2000 through 2007 and 2009. These tax assessments, which total approximately $296 million in aggregate (at September 28, 2014 exchange rates including interest, penalties, and inflation updates), are based on transfer pricing issues between the Company's subsidiaries with respect to the Company's operations in Mexico. The Company has filed suit in the Federal Tribunal of Fiscal and Administrative Justice in Mexico challenging the 2000 through 2004 assessments. The Company filed the suit related to the 2000 and 2001 assessments in May 2009; the 2002 assessment in June 2008; the 2003 assessment in March 2009; and the 2004 assessment in July 2011. The Company is challenging assessments for 2005 through 2007 through administrative appeals. The Company expects to challenge the 2009 assessment through administrative appeals. The Company expects to be successful in sustaining its positions, as well as similar positions that may be taken by Mexican tax authorities for the unaudited periods of 2008 and subsequent to 2009, if these disputes continue through litigation and/or administrative processes. However, in order to challenge the outstanding tax assessments related to the years 2000 through 2004 in court, as is usual and customary in Mexico in these matters, the Company was required to either make a deposit or post a bond in the full amount of the assessments. The Company elected to post bonds and accordingly, as of September 28, 2014, bonds totaling approximately $173 million (at September 28, 2014 exchange rates) have been posted related to the assessments for the years 2000 through 2004. These bonds guarantee the full amounts of the outstanding related tax assessments in the event the Company is not successful in its challenge to them. The Company does not currently expect that it will be required to make a deposit or post bonds related to the 2005 through 2007 or 2009 assessments as the Company is challenging or expects to challenge these through administrative appeals. In the interest of resolving these open disputes and to provide for a mutually agreeable framework in future years, the Company is party to discussions with the Mexican tax authorities to determine if the two parties can reach an agreed settlement of these issues. The Company expects that any such settlement would require some payment by the Company with respect to the prior years' under assessment as well as include a mutually agreed methodology for dealing with these transfer pricing issues in future years. As of September 28, 2014, the Company's liabilities for unrecognized tax benefits reflects the settlement offer the Company has made to the Mexican tax authorities related to the outstanding assessments and potential claims with respect to completed tax periods still subject to audit.

~~The Company~~ is currently party to certain ~~other~~ legal proceedings, none of which it believes to be material to its business or financial condition.

Item 1A.

Risk Factors.

This Quarterly Report on Form 10-Q contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, concerning management's expectations, goals, objectives, and similar matters. These forward-looking statements may include statements concerning the Company's product and entertainment plans, anticipated product and entertainment performance, business opportunities and strategies, financial and business goals, expectations for achieving the Company's financial and business goals, cost savings and efficiency enhancing initiatives and other objectives and anticipated uses of cash and may be identified by 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 words with similar meanings. These forward-looking statements are inherently subject to known and unknown risks and uncertainties.

The Company's actual results or experience may differ materially from those expected or anticipated in the forward-looking statements. The Company has included, under Item 1A. of its Annual Report on Form 10-K, for the year ended December ~~29, 2013~~28, 2014 (the "Annual Report"), a discussion of factors which may impact these forward-looking statements. In furtherance, and not in limitation, of the more detailed discussion set forth in the Annual Report, specific factors that might cause such a difference include, but are not limited to:

·	the Company's ability to successfully re-imagine, re-invent and re-ignite its existing brands, 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;~~costs for developing, marketing and selling those products;

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 the Discovery ~~Family;~~Family channel;

·	consumer interest in and acceptance of programming and entertainment created by Hasbro Studios and/or our other entertainment partners, as well as products related to ~~Hasbro Studios'~~such programming and entertainment;

·	the ability to develop and distribute compelling entertainment, including television, motion pictures and digital content, based on our brands, in a timely and financially profitable manner, and the success of that entertainment in driving consumer interest in and engagement with our brands;

·	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 a 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~~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.

The Company undertakes no obligation to revise the forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect events or circumstances occurring after the date of the filing of this report.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Repurchases Made in the Quarter (in whole dollars and number of shares)

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
July 2014
6/30/14 – 7/27/14
698,000 $ 53.09 698,000 $ 271,050,785
August 2014
7/28/14 – 8/31/14
931,000 $ 51.15 931,000 $ 223,432,024
September 2014
9/1/14 – 9/28/14
739,000 $ 53.83 739,000 $ 183,648,686
Total 2,368,000 $ 52.56 2,368,000 $ 183,648,686

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
April 2015 3/30/15 – 4/26/15		100,365	$	63.83		100,365	$	532,552,527
May 2015 4/27/15 – 5/31/15		120,000	$	71.52		120,000	$	523,970,018
June 2015 6/1/15 – 6/28/15		91,100	$	72.77		91,100	$	517,340,236
Total		311,465	$	69.41		311,465	$	517,340,236

On August 1, 2013, the Company announced that its Board of Directors authorized the repurchase of a $500 million in common stock. On February 9, 2015, the Company announced that its Board of Directors authorized the repurchase of an additional $500 million in common stock. Purchases of the Company's common stock may be made from time to time, subject to market conditions. These shares may be repurchased in the open market or through privately negotiated transactions. The Company has no obligation to repurchase shares under this authorization, and the timing, actual number, and value of the shares that are repurchased will depend on a number of factors, including the price of the Company's stock. The Company may suspend or discontinue the program at any time and there is no expiration date.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.

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.)


	~~3.6~~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 andand 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~~	Amended and Restated Hub Television Networks LLC Limited Liability Company Agreement, as amended September 23, 2014, between the Company, Discovery Communications, LLC, Hub Television Networks LLC and Discovery Communications, Inc. (Portions of this agreement have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.)

	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.


	32.131.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.


	32.231.2	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.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.

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: ~~November 5, 2014~~July 29, 2015	By: /s/ Deborah Thomas
	Deborah Thomas

	Executive Vice President and
	Chief Financial Officer
	(Duly Authorized Officer and
	Principal Financial Officer)

Exhibit Index

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	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).
~~3.5~~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.)

~~3.6~~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 ~~Compa~~nyCompany and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to Citibank, ~~N.A~~.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~~	Amended and Restated Hub Television Networks LLC Limited Liability Company Agreement, as amended September 23, 2014, between the Company, Discovery Communications, LLC, Hub Television Networks LLC and Discovery Communications, Inc. (Portions of this agreement have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.)

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.

	Quarter Ended		Nine Months Ended
	Sept. 29, 2013		Sept. 29, 2013
Cost of sales	$	-		8,493
Product development		-		3,515
Selling, distribution and administration		4,093		23,473
Total	$	4,093		35,481