Hasbro Inc – ‘10-K405’ for 12/31/00

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     10-K Document                                         41    189K 
 2: EX-4        Exhibit 4 (C)                                        147±   609K 
 3: EX-4        Exhibit 4 (D)                                        162±   671K 
 4: EX-4        Exhibit 4 (F)                                          2±    12K 
 5: EX-10       Exhibit 10 (D)                                         2±    11K 
 6: EX-10       Exhibit 10 (Gg)                                       11±    50K 
 7: EX-10       Exhibit 10 (Hh)                                        7±    33K 
 8: EX-10       Exhibit 10 (Vv)                                        4±    21K 
 9: EX-10       Exhibit 10 (Ww)                                        7±    37K 
10: EX-11       Statement re: Computation of Earnings Per Share        1      7K 
11: EX-12       Statement re: Computation of Ratios                    1      7K 
12: EX-13       Annual or Quarterly Report to Security Holders        44±   190K 
13: EX-21       Subsidiaries of the Registrant                         1      9K 
14: EX-23       Consent of Experts or Counsel                          1      9K 

10-K405   —   10-K Document
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION  

Washington, D. C.  20549  

Form  10-K  

Annual Report Pursuant to Section 13 or 15(d) 
of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2000   Commission file number 1-6682     
                     -----------------                          ------

Hasbro, Inc.  
--------------------  
(Name of Registrant)  
Rhode Island                                          05-0155090    
------------------------                                -------------------     
(State of Incorporation)                                 (I.R.S. Employer       
                                                   Identification No.)

1027 Newport Avenue, Pawtucket, Rhode Island 02861  
--------------------------------------------------  
(Address of Principal Executive Offices)  

(401) 431-8697  
--------------  

Securities registered pursuant to Section 12(b) of the Act:                     

                                               Name of each exchange
Title of each class                             on which registered 
-------------------                            ---------------------

Common Stock                                        New York Stock Exchange     
Preference Share Purchase Rights                    New York Stock Exchange     

Securities registered pursuant to Section 12(g) of the Act:  None               

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months (or for such shorter period that the        
registrant was required to file such reports), and (2) has been subject to      
such filing requirements for the past 90 days. Yes[X] or No[ ].                 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part II of this Form 10-K or any amendment to      
this Form 10-K. [X]                                                             

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The aggregate market value of the voting stock held by non-affiliates of the    
registrant computed by reference to the price at which the stock was sold on    
March 23, 2001 was $1,946,512,990.                                              

The number of shares of Common Stock outstanding as of March 23, 2001 was       
172,456,278.                                                                    

DOCUMENTS INCORPORATED BY REFERENCE                                             

Portions of registrant's definitive proxy statement for its 2001 Annual     
Meeting of Shareholders are incorporated by reference into Part III of this     
Report.                                                                         

Selected information contained in registrant's Annual Report to Shareholders
for the fiscal year ended December 31, 2000, is included as Exhibit 13, and     
incorporated by reference into Parts I and II of this Report.                   

PART I  

ITEM  1.  BUSINESS                                                              
--------                                                    
(a) General Development of Business                                         
-------------------------------                                     
Except as expressly indicated or unless the context otherwise requires, as  
used herein, the "Company" means Hasbro, Inc., a Rhode Island corporation       
organized on January 8, 1926, and its subsidiaries.                             

The Company is a worldwide leader in children's and family leisure time and 
entertainment products and services, including the design, manufacture and      
marketing of games and toys ranging from traditional to high-tech. Both         
internationally and in the U.S., its widely recognized core brands such as      
PLAYSKOOL, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER, and     
WIZARDS OF THE COAST provide what the Company believes to be the highest        
quality play experiences in the world. In its offerings are a broad variety of  
games, including traditional board and card, hand-held electronic, electronic   
interactive products, robotic pets, electronic learning aid, children's         
consumer electronic, trading card, roleplaying and puzzles. Toy offerings       
include boys' action, preschool, creative play and girls' toys, dolls and       
plush products. The Company also licenses to others various trademarks,         
characters and other property rights for use in connection with consumer        
promotions and the sale by others of noncompeting toys and non-toy products.    

(b) Description of Business Segments and Products                           
---------------------------------------------                       
The Company's focus on managing its business covers two major areas, Toys   
and Games. Organizationally, the Company's reportable segments are U.S. Toys,   
Games, International and Global Operations. Financial information with respect  
to the Company's segments is included in the Annual Report to Shareholders for  
the fiscal year ended December 31, 2000.                                        

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In the United States, the U.S. Toy segment includes the design, development,
marketing and selling of boys' action figures, vehicles and playsets, girls'    
toys, preschool toys and infant products and creative play products. The Games  
segment includes the design, development, marketing and selling of traditional  
board and card games and puzzles, handheld electronic games, electronic         
interactive products, children's consumer electronics, electronic learning      
aids, and trading card and roleplaying games.  During 2000, the Games segment   
also included interactive software games based on the Company's owned and       
licensed brands.  The business units carrying these games were sold in January  
2001. Within the International segment, the Company develops, markets and       
sells both toy and certain game products in non-U.S. markets. The marketing     
and sale of WIZARDS OF THE COAST products internationally and TIGER products    
in the United Kingdom are managed through the Company's Games segment.          

Global Operations manufactures and sources product for the majority of the  
Company's segments. The Company also has other segments which license certain   
of the Company's intellectual property to third parties and, which develop and  
market non-traditional toy and game based product and historically have         
realized more than half of their revenues and the majority of their operating   
profit in the first half of the year, which is contra-seasonal to the rest of   
the Company's business. In 2000, these other segments did not meet the          
quantitative thresholds for reportable segments.                                

(i) U.S. Toy                                                            
--------                                                        
In the U.S. Toy segment, the Company's products are marketed as boys' toys, 
girls' toys, preschool and creative play.                                       

Boys' toys are offered across a wide range of core popular properties such  
as G.I. JOE, ACTION MAN, TRANSFORMERS action figures, and the TONKA line of     
trucks and interactive toys. Other products are tied to entertainment           
properties, including STAR WARS, POKEMON and BATMAN toys and accessories. In    
2001, the Company will be reintroducing its TRANSFORMERS - ROBOTS IN DISGUISE   
line accompanied by an all-new kids television series, as well as a kid-        
focused G.I. JOE line. Also in 2001, the Company plans to introduce B.I.O.      
BUGS, robotic bugs that can act autonomously using advanced "nervous network"   
technology. In addition, the TONKA 2001 product line includes DUSTY MY TALKIN'  
TOOL BENCH, an interactive tool bench with personality, and CHOMPER MY TALKIN'  
TRUCKBOT, a follow-up to last year's award-winning TUCKER MY TALKIN' TRUCKBOT.  
The Company will also feature toy lines based on JURASSIC PARK III, scheduled   
for release in July 2001 and Disney/Pixar's MONSTERS, INC., which is due out    
in theaters in November 2001.                                                   

Hasbro's girls' toys include the classic RAGGEDY ANN and RAGGEDY ANDY rag   
dolls. The Company also offers such popular dolls as MAKEUP MINDY. In 2001,     
the Company is introducing SHOEZIES collectible shoe fashions, a kids line of   
collectible miniature shoes.                                                    

The U.S. Toy segment's preschool products include a portfolio of core brands
primarily marketed under the PLAYSKOOL trademark.  The PLAYSKOOL line includes  
such well-known products as MR. POTATO HEAD, SIT 'N SPIN and GLOWORM, as well   
as a successful line of infant toys such as KICK START GYM and the FIRST        
STARTS infant line, and preschool role-play products. New products being        

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introduced during 2001 are the PLAYSKOOL MAGIC SCREEN LEARNING DESK, which      
helps children discover letters, numbers, shapes and colors on a unique,        
animated light-up screen and three fun play and learn keyboards, and the        
PLAYSKOOL BABY EINSTEIN product line, which incorporates music, poetry,         
language and art. New 2001 products also feature a licensed product line based  
on HIT Entertainment's BOB THE BUILDER, which airs on NICKELODEON.              

Creative Play items for both girls and boys include such classic core lines 
as PLAY-DOH, EASY-BAKE OVEN, and LITE-BRITE and SPIROGRAPH design toys. During  
2001, the Company will be offering new PLAY-DOH playsets featuring CHUCK E.     
CHEESE, BOB THE BUILDER, and Disney/Pixar's MONSTERS, INC., and licensed        
refill bake sets for the EASY-BAKE OVEN, including CHIPS AHOY! chocolate chips  
and LIFESAVERS cakes.                                                           

(ii) Games                                                              
-----                                                         
The Company markets its games and puzzles under several well known core     
brands, including MILTON BRADLEY, PARKER BROTHERS, AVALON HILL, TIGER, AND      
WIZARDS OF THE COAST.                                                           

The MILTON BRADLEY, PARKER BROTHERS and AVALON HILL brand portfolios consist
of a broad assortment of games for children, families and adults. The           
Company's staple items include MONOPOLY, BATTLESHIP, THE GAME OF LIFE,          
SCRABBLE, CHUTES AND LADDERS, CANDY LAND, TROUBLE, MOUSETRAP, OPERATION,        
HUNGRY HUNGRY HIPPOS, CONNECT FOUR, TWISTER, YAHTZEE, JENGA, CLUE, SORRY!,      
RISK, BOGGLE, OUIJA, DIPLOMACY, ACQUIRE and TRIVIAL PURSUIT as well as a line   
of jigsaw puzzles for children and adults. The Company has put in place a       
series of marketing initiatives designed to encourage game play among a wide    
variety of audiences, including MY FIRST GAMES, FAMILY GAME NIGHT and GET       
TOGETHER GAMES. New product introductions for 2001 include POX, a portable      
electronic game where players can compete using wireless technology, providing  
numerous challenges as characters are built and collected, and M.A.G.S., the    
Music Activated Games System where a player's personal choice of music          
determines the game experience. In addition, new board games will include       
WHEELS ON THE BUS, a preschool game based on the children's song, HANG IN       
THERE, a jungle themed skill and action game, and MOODS, a party game testing   
verbal and acting skills.                                                       

TIGER ELECTRONICS brand products bring innovation and technology to         
entertainment and lifestyle products for the whole family. Electronic           
interactive products include POO-CHI, MEOW-CHI, SUPER POO-CHI and FURBY.        
Planned for 2001 are I-CYBIE, a fully articulated robo-dog that goes through    
several stages of development from puppy to adult dog, as well as a broadened   
line of ROBO-CHI interactive pet offerings including CHIRPY-CHI, DINO-CHI,      
ROBO-BABY, and PETAL-CHI. Electronic learning aids include licensed product     
featuring WINNIE THE POOH and BOB THE BUILDER. Innovative items in the 2001     
line include the interactive animatronic SHELBY, a special friend of FURBY,     
who has a vocabulary of more than 180 words, as well as OTTOBOT the robotic     
friend and MUTSU the interactive fish.  Consumer electronics include HITCLIPS   
micro music systems and YAHOO! CAM. 2001 consumer electronics offerings         
include i-KARAOKE, a consumer targeted portable karaoke system. Also new for    
2001 is a line of robots based on the television show BATTLEBOTS that children  
can build, customize and put into action.                                       

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WIZARDS OF THE COAST trading card and roleplaying games include the popular 
MAGIC: THE GATHERING, DUNGEONS AND DRAGONS, POKEMON and MAJOR LEAGUE BASEBALL   
SHOWDOWN. MAGIC: THE GATHERING, created in 1993, has worldwide popularity,      
with more than six million players in over fifty countries. In 2001, MAGIC:     
THE GATHERING - SEVENTH EDITION basic card set will be introduced as well as    
the PLANESHIFT, APOCALYPSE and ODYSSEY expansions. WIZARDS OF THE COAST has a   
unique organized play program for its trading card games, sanctioning over      
80,000 game tournaments around the world in 2000. The Company operates          
approximately 100 retail stores under the WIZARDS OF THE COAST and GAME KEEPER  
names, many of which not only sell a wide range of games, but provide           
important locations for tournaments and other organized play activities. New    
for 2001 are the NFL SHOWDOWN and NBA SHOWDOWN trading card games which allow   
players to assemble their own lineups, collect their favorite football and      
basketball players and compete against other players' teams, the NEO GENESIS    
and NEO DISCOVERY expansions for the POKEMON trading card game, and the HARRY   
POTTER trading card game, based on the NEW YORK TIMES best-selling novels.      

During 2000, the Company marketed interactive software games under the      
HASBRO INTERACTIVE, MICROPROSE and EUROPRESS brands, which include ROLLER       
COASTER TYCOON, CIVILIZATION, FALCON and the ATARI properties, such as          
CENTIPEDE, MISSILE COMMAND, and PONG. The Company also completed the soft       
launch of its internet games portal, Games.com.  In December 2000, the Company  
announced it had entered into an agreement with Infogrames Entertainment S.A.   
(Infogrames) to sell the business units which make up Hasbro Interactive, as    
well as its internet portal, Games.com. This sale closed in January 2001. In    
conjunction with this agreement, the Company entered into a licensing           
agreement with Infogrames whereby they will develop interactive games based on  
the Company's properties. The Company will receive annual royalties, including  
a minimum guarantee, from Infogrames based on sales generated under the         
licensing agreement.                                                            

(iii) International                                                     
-------------                                               
In addition to the United States, the Company operates in more than 25      
countries, selling a representative range of the toy and game products          
marketed in the United States, together with some items which are sold only     
internationally. Key international brands for 2000 included POKEMON, ACTION     
MAN and FURBY. New products for 2001 include many of those noted in the U.S.    
Toy and Game segments above, as well as TURBO SNAILS, a new line of boys'       
action figures.                                                                 

(iv) Global Operations                                                  
-----------------                                             
The Company primarily sources production through unrelated manufacturers in 
various Far East countries, principally China, using a Hong Kong subsidiary     
for quality control and order coordination purposes.  The Company also          
manufactures products in the United States, Ireland and Spain. See              
"Manufacturing and Importing" below.                                            

(v) Other Information                                                   
-----------------                                               

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The Company has other segments which generate revenue through the licensing 
of intellectual property for promotional and merchandising uses as well as      
design, develop and market certain traditional and non-traditional toy and      
game based product including the SUPER SOAKER line of water products, the NERF  
line of soft action play equipment, a TINKERTOY classic line, and KOOSH brand   
products.                                                                       

In 2001, the Company has realigned its business segments to consolidate the 
toy-related products into its U.S. Toy segment. As a result, many of the        
brands reflected in other segments including SUPER SOAKER, NERF, TINKERTOYS,    
and KOOSH will be marketed under the boys, girls, preschool and creative play   
lines of the U.S. Toy segment in the future.                                    

To further extend its range of products in its various segments, the Company
has Hong Kong units which market directly to retailers a line of high quality,  
low priced toys, games and related products, primarily on a direct import       
basis. Direct sales to these customers are reflected in the revenue of the      
segment in which the product sold resides.                                      

In addition, various products are licensed to other companies for certain   
countries where the Company does not otherwise have a presence.                 

During the 2000 fiscal year, revenues from the POKEMON trading card line of 
products contributed 15% of consolidated net revenues of the Company. In 1999,  
revenues from the FURBY line of products and the STAR WARS boys toys line of    
products contributed 13% and 12%, respectively, of consolidated net revenues    
for the Company.                                                                

Working Capital Requirements                                                
----------------------------                                                
The Company's production needs have been financed historically by means of  
short-term borrowings which reach peak levels during September through          
November of each year when receivables also generally reach peak levels. The    
revenue pattern of the Company results in the second half of the year being     
more significant to its overall business and, within that half, the fourth      
quarter being the most prominent. The trend of retailers over the past few      
years has been to make a higher percentage of their purchases within or close   
to the fourth quarter holiday consumer selling season, which includes           
Christmas. The Company expects that this trend will continue. The toy business  
is also characterized by customer order patterns which vary from year to year   
largely because of differences each year in the degree of consumer acceptance   
of a product line, product availability, marketing strategies and inventory     
policies of retailers, the dates of theatrical releases of major motion         
pictures for which the Company has licenses for promotional product, and        
differences in overall economic conditions. As a result, comparisons of         
unshipped orders on any date with those at the same date in a prior year are    
not necessarily indicative of sales for that entire given year. Also, quick     
response inventory management practices now being used results in fewer orders  
being placed in advance of shipment and more orders being placed for immediate  
delivery. The Company's unshipped orders at March 4, 2001 and March 5, 2000     
were approximately $166,933,000 and $375,000,000, respectively. Also, it is a   
general industry practice that orders are subject to amendment or cancellation  
by customers prior to shipment. The backlog at any date in a given year can be  

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affected by programs the Company may employ to induce its customers to place    
orders and accept shipments early in the year. This method is a general         
industry practice. The programs the Company is employing to promote sales in    
2001 are not substantially different from those employed in 2000.               

The Company commits to inventory production, advertising and marketing      
expenditures prior to the peak third and fourth quarter retail selling season.  
In addition, accounts receivable generally are at peak levels during the        
fourth quarter and early in the first quarter of the subsequent year, making    
it necessary for the Company to borrow significant amounts pending these        
collections. During 2000, the Company relied on internally generated funds and  
short-term borrowing arrangements, including commercial paper, to finance its   
working capital needs. In February 2001, the Company entered into amended and   
restated secured revolving and line of credit facility agreements with its      
existing lenders.  These committed lines include long-term and short-term       
secured credit agreements of $325,000,000 each. The facilities are secured by   
substantially all domestic accounts receivable and inventory, as well as        
certain investments and intangible assets of the Company.  The Company is not   
required to maintain compensating balances under the agreements.  The           
agreements contain certain restrictive covenants setting forth minimum cash     
flow and coverage requirements, and a number of other limitations, including    
with respect to capital expenditures, investments, acquisitions, share          
repurchases and dividend payments.  During 2001, the Company expects to fund    
its seasonal working capital needs through operations and these lines of        
credit and believes that the funds available to it are adequate to meet its     
needs. Amounts available for borrowing under the committed revolving and line   
of credit facilities are $325,000,000 (long-term) and $325,000,000 (short-      
term) and vary by quarter, with availability at its lowest point of             
$300,000,000 in the first quarter of 2001.  Of this amount available,           
$213,000,000 is unused at March 4, 2001. In addition, the Company has           
$143,000,000 of available uncommitted and unsecured lines of credit at March    
4, 2001.                                                                        

Royalties, Research and Development                                         
-----------------------------------                                         
The continuing development of new products and the redesigning of existing  
items for continuing market acceptance are key determinants of success in the   
toy and game industry. In 2000, 1999 and 1998, approximately $208,485,000,      
$254,599,000 and $184,962,000, respectively, were incurred on activities        
relating to the development, design and engineering of new products and their   
packaging (including items brought to the Company by independent designers)     
and to the improvement or modification of ongoing products. Much of this work   
is performed by the Company's staff of designers, artists, model makers and     
engineers.                                                                      

In addition to its own staff, the Company deals with a number of independent
toy and game designers for whose designs and ideas the Company competes with    
other toy and game manufacturers. Rights to such designs and ideas, when        
acquired by the Company, are usually exclusive under agreements requiring the   
Company to pay the designer a royalty on the Company's net sales of the item.   
These designer royalty agreements in some cases provide for advance royalties   
and minimum guarantees.                                                         

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The Company also produces a number of toys under trademarks and copyrights  
utilizing the names or likenesses of familiar movie, television and comic       
strip characters, for whose rights the Company competes with other toy and      
game manufacturers. Licensing fees are generally paid as a royalty on the       
Company's net sales of the item. Licenses for the use of characters are         
generally exclusive for specific products or product lines in specified         
territories. In many instances, advance royalties and minimum guarantees are    
required by character license agreements. Under terms of agreements existing    
at December 31, 2000, in certain circumstances the Company may be required to   
pay an aggregate of up to $741,000,000 in guaranteed or minimum royalties       
between 2001 and 2007. Of this amount, approximately $238,000,000 has been      
paid. Approximately $58,000,000 is included in the $66,509,000 of prepaid       
royalties which are a component of prepaid expenses and other current assets    
on the balance sheet. Included in other assets is $180,000,000 representing     
the long-term portion of the amount paid. Of the remaining unpaid minimum       
guaranty, Hasbro may be required to pay approximately $44,000,000,              
$193,000,000, $89,000,000, $56,000,000, and $121,000,000 in 2001, 2002, 2003,   
2004 and 2005, respectively. Such payments are related to royalties which are   
expected to be incurred on anticipated revenues in the years 2001 through       
2008.                                                                           

Marketing and Sales                                                         
-------------------                                                         
The Company's products are sold nationally and internationally to a broad   
spectrum of customers including wholesalers, distributors, chain stores,        
discount stores, mail order houses, catalog stores, department stores and       
other traditional retailers, large and small, as well as internet-based "e-     
tailers." The Company and its subsidiaries employ their own sales forces which  
account for the majority of sales of their products. Remaining sales are        
generated by independent distributors who sell the Company's products           
principally in areas of the world where the Company does not otherwise          
maintain a presence. With the acquisition of Wizards of the Coast, Inc. in the  
fourth quarter of 1999, the Company acquired a specialized line of retail       
stores featuring game, hobby and related products and an area for in-store      
game play, as well as an online retail site. The Company maintains showrooms    
in New York and selected other major cities world-wide as well as at most of    
its subsidiary locations. Although the Company had more than 3,500 customers    
in the United States and Canada during 2000 with the inclusion of specialty     
retailers carrying trading card games and toy-related product there has been    
significant consolidation at the retail level over the last several years, and  
the majority of the Company's sales are to large chain stores, distributors     
and wholesalers. In other countries, the Company has in excess of 20,000        
customers, many of which are individual retail stores. During 2000, sales to    
the Company's two largest customers, Wal-Mart Stores, Inc. and Toys `R Us,      
Inc., represented 14% and 13%, respectively, of consolidated net revenues, and  
sales to its top five customers accounted for approximately 41% of              
consolidated net revenues.                                                      

The Company advertises many of its toy and game products extensively on     
television. The Company generally advertises selected items in its product      
groups in a manner designed to promote the sale of other specific items in      
those product groups. Through 2001, the Company introduced its new products in  
New York City at the time of the American International Toy Fair in February.   

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It also introduced some of its products to major customers during the prior     
year.                                                                           

In 2000, the Company spent approximately $452,978,000 in advertising,       
promotion and marketing programs compared to $456,978,000 in 1999 and           
$440,692,000 in 1998.                                                           

Manufacturing and Importing                                                     
---------------------------                                                 
During 2000, the Company's products were manufactured in third party        
facilities in the Far East as well as in the Company's own three principal      
facilities located in East Longmeadow, Massachusetts, Waterford, Ireland, and   
Valencia, Spain. Most of its products are manufactured from basic raw           
materials such as plastic, paper and cardboard, although certain products also  
make use of electronic components. All of these materials are readily           
available but may be subject to significant fluctuations in price. The          
Company's manufacturing processes include injection molding, blow molding,      
spray painting, printing, box making and assembly. The Company purchases        
certain components and accessories used in its toys and games and some          
finished items from United States manufacturers as well as from manufacturers   
in the Far East, which is the largest manufacturing center of toys in the       
world, and other countries. The 1996 implementation of the General Agreement    
on Tariffs and Trade reduced or eliminated customs duties on many products      
imported by the Company. The Company believes that the manufacturing capacity   
of third party manufacturers as well as its own facilities and the supply of    
components, accessories and completed products which it purchases from          
unaffiliated manufacturers are adequate to meet the demand in 2001 for the      
products which it markets. The Company's reliance on external sources of        
manufacturing can be shifted, over a period of time, to alternative sources of  
supply for products it sells, should such changes be necessary.                 

However, if the Company is prevented from obtaining products from a         
substantial number of its current Far East suppliers due to political, labor    
or other factors beyond its control, the Company's operations would be          
disrupted while alternative sources of product were secured. In 2000, the       
United States Congress approved "permanent normal trade relations" status for   
China, which was intended to eliminate the United States' annual review of      
China trade relations status. China has signed similar agreements with the      
European Union and other World Trade Organizations members in order to gain     
support for its entry into the World Trade Organization, although such entry    
is not guaranteed at this time. However, the imposition of trade sanctions by   
the United States or the European Union against a class of products imported    
by the Company from, or the loss of "normal trade relations" status by, the     
People's Republic of China could significantly increase the cost of the         
Company's products imported into the United States or Europe.                   

The Company makes its own tools and fixtures for its manufacturing          
facilities but purchases dies and molds principally from independent United     
States and international sources.                                               

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Competition                                                                 
-----------                                                                 
The Company's business is highly competitive and it competes with several   
large and many small United States and international designers, manufacturers   
and marketers. The Company is a worldwide leader in the design, manufacture     
and marketing of games and toys.                                                

Employees                                                                   
---------                                                                   
At December 31, 2000, the Company employed approximately 8,900 persons      
worldwide, approximately 5,500 of whom are located in the United States.        

Trademarks, Copyrights and Patents                                          
----------------------------------                                          
The Company's products are protected, for the most part and in as many      
countries as practical, by registered trademarks, copyrights and patents to     
the extent that such protection is available and meaningful. The loss of such   
rights concerning any particular product would not have a material adverse      
effect on the Company's business, although the loss of such protection for a    
number of significant items might have such an effect.                          

Government Regulation                                                       
---------------------                                                       
The Company's toy and game products sold in the United States are subject to
the provisions of the Consumer Product Safety Act (the "CPSA"), The Federal     
Hazardous Substances Act (the "FHSA"), the Flammable Fabrics Act (the "FFA"),   
and the regulations promulgated thereunder. The CPSA empowers the Consumer      
Product Safety Commission (the "CPSC") to take action against hazards           
presented by consumer products, including the formulation and implementation    
of regulations and uniform safety standards. The CPSC has the authority to      
seek to declare a product "a banned hazardous substance" under the CPSA and to  
ban it from commerce. The CPSC can file an action to seize and condemn an       
"imminently hazardous consumer product" under the CPSA and may also order       
equitable remedies such as recall, replacement, repair or refund for the        
product. The FHSA provides for the repurchase by the manufacturer of articles   
which are banned. Consumer product safety laws also exist in some states and    
cities within the United States and in Canada, Australia and Europe. The        
Company maintains laboratories which have testing and other procedures          
intended to maintain compliance with the CPSA, the FHSA, the FFA,               
international standards, and the Company's own standards.  Notwithstanding the  
foregoing, there can be no assurance that all of the Company's products are or  
will be hazard free. Any material product recall could have an effect on the    
Company, depending on the product, and could affect sales of other products.    

The Children's Television Act of 1990 and the rules promulgated thereunder  
by the United States Federal Communications Commission as well as the laws of   
certain countries place certain limitations on television commercials during    
children's programming.                                                         

The Company maintains programs to comply with various United States federal,
state, local and international requirements relating to the environment, plant  
safety and other matters.                                                       

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Forward-Looking Information and Risk Factors                                    
------------------------------------------                                  
From time to time, the Company may publish forward-looking statements       
relating to such matters as anticipated financial performance, business         
prospects, technological developments, new products, research and development   
activities and similar matters. Forward-looking statements are inherently       
subject to risks and uncertainties, many of which are known by, or self-        
evident to, the investing public. The Private Securities Litigation Reform Act  
of 1995 provides a safe harbor for forward-looking statements. These            
statements may be identified by the use of forward-looking words or phrases     
such as "anticipate," "believe," "could," "expect," "intend," "looking          
forward," "may," "planned," "potential," "should," "will" and "would." In       
order to comply with the terms of the safe harbor, the Company notes that a     
variety of factors could cause its actual results and experience to differ      
materially from the anticipated results or other expectations expressed in its  
forward-looking statements. The factors listed below are illustrative and       
other risks and uncertainties may arise as are or may be detailed from time to  
time in the Company's public announcements and filings with the Securities and  
Exchange Commission. The risks and uncertainties that may affect the            
operations, performance, development and results of Hasbro's business and       
impact forward looking information are as follows:                              

Volatility of consumer preferences and the high level of competition in 
the                                                                             
  family entertainment industry makes it difficult to maintain the long-term
success of existing product lines and consistently introduce successful 
new                                                                             
products.                                                               

Our business and operating results depend largely upon the appeal of our    
family entertainment products, principally games and toys. A decline in the     
popularity of our existing products and product lines or the failure of new     
products and product lines to achieve and sustain market acceptance could       
result in reduced overall revenues and margins, which could have a material     
adverse effect on our business financial condition and results of operations.   
Our continued success will depend on our ability to redesign, restyle and       
extend our existing family entertainment product lines and to develop,          
introduce and gain customer acceptance of new family entertainment product      
lines. However consumer preferences with respect to family entertainment are    
continuously changing and are difficult to predict. Individual family           
entertainment products typically have short life cycles. The success of         
entertainment properties released theatrically, such as STAR WARS related       
productions, can significantly impact revenues derived by the Company from      
licensed product related to that property. In addition, competition in the      
industry could adversely impact our ability to secure, maintain, and renew      
popular licenses, and to attract and retain the talented employees necessary    
to design, develop and market successful products. There can be no assurances   
that:                                                                           

1) Any of our current products or product lines will continue to be popular 
for any significant period of time;                                             

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2) Any property for which the Company has a significant license will achieve
popularity;                                                                     

3) Any new products and product lines introduced by us will achieve an      
adequate degree of market acceptance; or                                        

4) Any new product's life cycle will be sufficient to permit us to          
profitably recover development, manufacturing, marketing, royalties (including  
royalty advances and guarantees) and other costs of the product; or             

5) We will be able to manufacture, source and ship new or continuing        
products in a timely basis to meet consumer demands.                            

Our business is seasonal and therefore our annual operating results will
depend, in large part, on our sales during the relatively brief holiday 
season. Further, this seasonality is increasing, as large retailers     
become more efficient in their control of inventory levels through quick
response management techniques.                                         

Sales of our family entertainment products at retail are seasonal, with a   
majority of retail sales occurring during the period from September through     
December in anticipation of the holiday season. This seasonality is             
increasing, as large retailers become more efficient in their control of        
inventory levels through quick response management techniques. These customers  
are timing reorders so that they are being filled by suppliers closer to the    
time of purchase by consumers, which to a large extent occur during September   
through December, rather than maintaining large on-hand inventories throughout  
the year to meet consumer demand. While these techniques reduce a retailer's    
investment in inventory, they increase pressure on suppliers like us to fill    
orders promptly and shift a significant portion of inventory risk and carrying  
costs to the supplier. The limited inventory carried by retailers may also      
reduce or delay retail sales. Additionally, the logistics of supplying more     
and more product within shorter time periods will increase the risk that we     
fail to achieve tight and compressed shipping schedules. This seasonal pattern  
requires significant use of working capital mainly to manufacture inventory     
during the year, prior to the holiday season, and requires accurate             
forecasting of demand for products during the holiday season. Our failure to    
accurately predict and respond to consumer demand could result in our           
underproducing popular items and overproducing less popular items.              

The continuing consolidation of our retail customer base means that     
changes in the purchasing policies of our major customers could have a  
significant impact on us.                                               

If one or more of our major customers were to experience difficulties in    
fulfilling their obligations to us, cease doing business with us, or            
significantly reduce the amount of their purchases from us, it could have a     
material adverse effect on our business, financial condition and results of     
operations. For the fiscal year ended December 31, 2000, Wal-Mart Stores, Inc.  
and Toys R Us, Inc. accounted for approximately 14% and 13%, respectively, of   
our consolidated net revenues and our five largest customers, including Wal-    
Mart and Toys R Us, in the aggregate accounted for approximately 41% of our     
consolidated net revenues.                                                      

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 We may not realize anticipated benefits of acquisitions or these benefits
may be delayed or reduced in their realization.                         

Acquisitions have been a significant part of our growth over the years and  
have enabled us to further broaden and diversify our product offerings. While   
we target companies having what we believe to be attractive family              
entertainment product offerings, there can be no assurance that the products    
of companies we acquire will continue to be popular. In addition, in some       
cases, we expect that the integration of the product lines of the companies     
that we acquire into our operations will create production, marketing and       
other operating synergies. We believe that creating these synergies can create  
greater revenue growth and profitability and, where applicable, cost savings,   
operating efficiencies and other synergies. However, we can provide no          
assurances that these synergies, efficiencies and cost savings will be          
realized. Even if achieved, these benefits may be delayed or reduced in their   
realization. In other cases, we acquire companies with what we believe to have  
strong and creative management, in which case we plan to create synergies by    
operating them autonomously rather than integrating them into our operations.   
There can be no assurance, however, that the key talented individuals at these  
companies will continue to work for us after the acquisition or that they will  
continue to develop popular and profitable products or services. Moreover,      
because of limitations in our credit agreements, we are limited in our ability  
to make substantial acquisitions in the near term. Although we plan to focus    
greater attention and resources on our core owned and controlled brands, there  
is no assurance that such efforts will produce revenue growth to replace the    
growth historically provided by acquisitions.                                   

Our sales and manufacturing operations outside the United States subject
us to risks normally associated with international operations.          

Various international risks could negatively impact our international sales 
and manufacturing operations, which could have a material adverse effect on     
our business, financial condition and results of operations. For the year       
ended December 31, 2000, our net revenues from international customers          
comprised approximately 41% of our total consolidated net revenues. We expect   
our sales to international customers to continue to account for a significant   
portion of our revenues. Additionally, we utilize third-party manufacturers     
principally in the Far East and we have manufacturing facilities in Ireland     
and Spain. These sales and manufacturing operations are subject to the risks    
normally associated with international operations, including:                   

1) Currency conversion risks and currency fluctuations;                     

2) Limitations, including taxes, on the repatriation of earnings;           

3) Political instability, civil unrest and economic instability;            

4) Greater difficulty enforcing intellectual property rights and weaker laws
protecting such rights;                                                         

5) Complications in complying with laws in varying jurisdictions and changes
in governmental policies;                                                       

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6) Natural disasters and the greater difficulty and expense in recovering   
therefrom;                                                                      

7) Transportation delays and interruptions; and                             

8) The imposition of tariffs.                                               

Our reliance on external sources of manufacturing can be shifted, over a        
period of time, to alternative sources of supply, should such changes be        
necessary. However, if we were prevented from obtaining products or components  
for a material portion of our product line due to political, labor or other     
factors beyond our control, Hasbro's operations would be disrupted while        
alternative sources of products were secured. Also, the imposition of trade     
sanctions by the United States or the European Union against a class of         
products imported by us from, or the loss of "normal trade relations" status    
by, the Peoples Republic of China could significantly increase our cost of      
products imported into the United States or Europe.                             

The impact of market conditions, government actions and regulations and 
other third party conduct could negatively impact implementation of the 
  Company's consolidation programs, margins, and other business initiatives.

Economic conditions, such as rising fuel prices, may adversely impact our       
margins. Other conditions, such as the unavailability of electrical             
components, may impede our ability to manufacture, source and ship new and      
continuing products on a timely basis. Other conditions outside of our control  
could delay or increase the cost of implementing our consolidation programs or  
alter our actions and reduce actual results.                                    

The impact of our reduced ability to obtain external financing at low   
rates and the restrictions imposed by our amended and restated credit   
facility agreements could alter our business practices.                 

In February 2001, we entered into amended and restated secured revolving and    
line of credit facility agreements with our existing lenders. The facilities    
are secured by substantially all of our domestic accounts receivable and        
inventory, as well as certain of our investments and intangible assets. The     
agreements contain certain restrictive covenants setting forth minimum cash     
flow and coverage requirements, and a number of other limitations, including    
restrictions on capital expenditures, investments, acquisitions, share          
repurchases and dividend payments.  These restrictive covenants may limit our   
future actions, and financial, operating and strategic flexibility.             

We believe that our cash flow from operations, together with our cash and       
access to existing credit facilities, are adequate for current and planned      
needs in 2001. However, our actual experience may differ from these             
expectations.  Factors that may lead to a difference include, but are not       
limited to, the matters discussed herein as well as future events that might    
have the effect of reducing our available cash balance (such as unexpected      
material operating losses or increased capital or other expenditures, as well   
as increases in inventory or accounts receivable) or future events that may     
reduce or eliminate the availability of external financial resources. Our       

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failure to comply with covenants in our credit agreements could result in       
significant negative consequences.                                              

(c) Financial Information About International and United States             
-----------------------------------------------------------         
Operations and Export Sales                                       
---------------------------                                       
The information required by this item is included in note 16 of Notes to    
Consolidated Financial Statements in Exhibit 13 to this Report and is           
incorporated herein by reference.                                               

ITEM  2.  PROPERTIES                                                            
----------                                                  
                                                             Lease
                                          Square   Type of    Expiration
Location              Use                       Feet   Possession    Dates      
--------              ---                      ------  ----------  ----------   

Rhode Island                                                                    
------------                                                                    
Pawtucket (1)(2)(3)  Administrative, Sales                                    
& Marketing Offices &             
                Product Development    343,000     Owned        --
Pawtucket (2)        Executive Office         23,000     Owned        --      
East Providence (2)  Administrative Office   120,000     Leased      2004     
Central                                                                       
Falls (1)(2)(3)     Warehouse               261,500     Owned        --     

California                                                                      
----------                                                                      
Ontario (1)          Warehouse               432,000     Leased      2002     

Illinois                                                                        
--------                                                                        
Vernon Hills (1)     Office & Warehouse       21,000     Leased      2002     

Massachusetts                                                                   
-------------                                                                   
East Longmeadow      Office, Manufacturing                                    
(1)(4)               & Warehouse          1,148,000     Owned        --     

New Jersey                                                                      
----------                                                                      
Mt. Laurel (3)       Office                   11,000     Leased      2001     

New York                                                                        
--------                                                                        
New York(1)(2)(3)(5) Office & Showroom       106,800     Leased      2011     

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Texas                                                                           
-----                                                                           
Arlington (1)        Warehouse                60,200     Leased      2003     
Dallas (1)           Warehouse               127,000     Leased      2003     
Grand Prairie (1)    Warehouse                93,500     Leased      2003     
Grand Prairie (1)    Warehouse                50,400     Leased      2001     

Washington                                                                      
----------                                                                      
Renton (1)           Offices                 158,000     Leased      2005     
Seattle (1)          Warehouse                30,500     Leased      2002     

Argentina                                                                       
---------                                                                       
Buenos Aires (5)      Offices                   6,500     Leased      2003      

Australia                                                                       
---------                                                                       
Lidcombe (5)         Office & Warehouse      161,400     Leased      2007     
Eastwood (5)         Office                   16,900     Leased      2001     

Austria                                                                         
-------                                                                         
Vienna (5)           Office                    4,400     Leased      2001     

Belgium                                                                         
-------                                                                         
Brussels (5)         Office & Showroom        18,800     Leased      2008     

Canada                                                                          
------                                                                          
Montreal (5)         Office, Warehouse                                        
                 & Showroom             133,900     Leased      2004
Mississauga (5)      Sales Office & Showroom  16,300     Leased      2004     
Montreal (5)         Warehouse                88,100     Leased      2004     

Chile                                                                           
-----                                                                           
Santiago (5)         Warehouse                54,000     Leased      2001     
Santiago (5)         Office                    3,500     Leased      2001     

Denmark                                                                         
-------                                                                         
Glostrup (5)         Office                    9,200     Leased      2004     

England                                                                         
-------                                                                         
Uxbridge (5)         Office & Showroom        92,900     Leased      2013     

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France                                                                          
------                                                                          
Le Bourget du Lac(5) Office & Warehouse      107,900     Owned        --      
Savoie Technolac (5) Office                   33,500     Owned        --      
Creutzwald (5)       Warehouse               301,300     Owned        --      

Germany                                                                         
-------                                                                         
Dietzenbach (5)      Office                   43,000     Leased      2006     
Soest (5)            Office & Warehouse      164,200     Owned        --      

Greece                                                                          
------                                                                          
Athens (5)           Office & Warehouse       25,100     Leased      2007     

Hong Kong                                                                       
---------                                                                       
Kowloon (1)(3)(4)(5) Office & Warehouse       10,500     Leased      2000     
Kowloon (1)(3)(4)(5) Office & Warehouse       33,700     Leased      2002     
Kowloon (4)          Offices                  43,400     Leased      2002     
New Territories (4)  Office & Warehouse       17,800     Leased      2001     
New Territories (4)  Warehouse                11,500     Leased      2002     
New Territories (4)  Warehouse                 8,100     Leased      2003     
New Territories (4)  Office                    7,300     Leased      2002     

Hungary                                                                         
-------                                                                         
Budapest (5)         Office                    6,300     Leased      2001     

Ireland                                                                         
-------                                                                         
Waterford (4)        Office, Manufacturing                                    
                & Warehouse            244,000     Owned        --

Italy                                                                           
-----                                                                           
Milan (5)            Office & Showroom        12,100     Leased      2002     

Mexico                                                                          
------                                                                          
Periferico (5)       Office                   16,100     Leased      2001     
Carretera (5)        Warehouse               215,500     Leased      2004     

The Netherlands                                                                 
---------------                                                                 
Ter Apel (5)         Warehouse               106,400     Leased      2001     
Utrecht  (5)         Office                   12,800     Leased      2003     

New Zealand                                                                     
-----------                                                                     
Auckland (5)         Office & Warehouse      110,900     Leased      2005     

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Peru                                                                            
----                                                                            
Lima (5)             Warehouse                32,400     Leased      2001     
Lima (5)             Office                   11,000     Leased      2001     

Poland                                                                          
------                                                                          
Warsaw (5)           Office & Warehouse       21,400     Leased      2001     

Portugal                                                                        
--------                                                                        
Estoril-Lisboa (5)   Office                    2,900     Leased      2003     

Singapore                                                                       
---------                                                                       
Singapore (5)        Office & Warehouse        9,300     Leased      2003     

Spain                                                                           
-----                                                                           
Valencia (4)(5)      Office, Manufacturing                                    
                & Warehouse            322,700     Owned        --
Valencia (4)(5)      Office, Manufacturing                                    
                 & Warehouse            144,800     Leased      2011

Sweden                                                                          
------                                                                          
Vosby (5)            Office                    7,400     Leased      2003     

Switzerland                                                                     
-----------                                                                     
Berikon (5)          Office & Warehouse       25,000     Leased      2001     
Delemont (5)         Office                    9,200     Leased      2004     

Wales                                                                           
-----                                                                           
Newport (5)          Warehouse                75,000     Leased      2003     
Newport (5)          Warehouse               170,000     Owned        --      

(1) Property used in the U.S. Toy or Games segment.                   
(2) Property used in the Corporate area.                              
(3) Property used in Other segments.                                  
(4) Property used in the Global Operations segment.                   
(5) Property used in the International segment.                       

In addition to the above listed facilities, the Company either owns or      
leases various other properties approximating 486,000 square feet which are     
utilized by its various segments and include retail and game play locations     
operated under the WIZARDS OF THE COAST and GAME KEEPER names. The Company      
also either owns or leases an aggregate of approximately 103,000 square feet    
not currently being utilized in its operations.                                 

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The foregoing properties consist, in general, of brick, cinder block or     
concrete block buildings which the Company believes are in good condition and   
well maintained.                                                                

ITEM  3.  LEGAL PROCEEDINGS                                                     
-----------------                                           
The Company is party to certain legal proceedings, substantially involving  
routine litigation incidental to the Company's business, none of which,         
individually or in the aggregate, is deemed to be material to the financial     
condition of the Company.                                                       

ITEM  4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   
---------------------------------------------------         
None.                                                                       

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EXECUTIVE OFFICERS OF THE REGISTRANT                                            
------------------------------------                                            
The following persons are the executive officers of the Company and its     
subsidiaries and divisions. Such executive officers are elected annually. The   
position and office listed below are the principal position(s) and office(s)    
held by such person with the Company, subsidiary or divisions employing such    
person. The persons listed below generally also serve as officers and           
directors of the Company's various subsidiaries at the request and convenience  
of the Company.                                                                 

                                                      Period
                                                          Serving in
                                                       Current
Name                         Age  Position and Office Held      Position        
----                         ---  ------------------------      ----------      
Alan G. Hassenfeld (1)       52  Chairman of the Board and                      
                           Chief Executive Officer        Since 1999

Alfred J. Verrecchia (2)     58  President and Chief                            
                           Operating Officer              Since 2001

Harold P. Gordon             63  Vice Chairman                  Since 1995      

David D. R. Hargreaves (3)   48  Senior Vice President and                      
                           Chief Financial Officer        Since 2001

George B. Volanakis (4)      53  Executive Vice President       Since 2000      

Brian Goldner (5)            37  Senior Vice President and                      
              General Manager, Hasbro U.S.
                           Toy Group                      Since 2000

Richard B. Holt              59  Senior Vice President and                      
                           Controller                     Since 1992

Barry Nagler (6)             44  Senior Vice President and                      
                           General Counsel                Since 2000

Martin R. Trueb (7)          49  Senior Vice President and                      
                           Treasurer                      Since 1997

Phillip H. Waldoks           48  Senior Vice President -                        
         Corporate Legal Affairs
                           and Secretary                  Since 1995

(1)  Prior thereto, Chairman of the Board, President and Chief Executive    
Officer.                                                          

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(2)  Prior thereto, President, Chief Operating Officer and Chief Financial  
    officer from 2000 to 2001; prior thereto, Executive Vice President and
Chief Financial Officer from 1999 to 2000; prior thereto Executive
  Vice President, Global Operations and Development during 1999; prior
thereto, Executive Vice President and President, Global Operations
  from 1996 to 1999; prior thereto,  Chief Operating Officer, Domestic
Toy Operations.                                                   

(3)  Prior thereto, Senior Vice President and Deputy Chief Financial        
Officer from 1999 to 2000; prior thereto, Senior Vice President,  
Finance during 1999; prior thereto, Senior Vice President, Finance
and Planning, Global Marketing from 1997 to 1999; prior thereto,  
 Senior Vice President, Finance and Planning, Global Operations from
1996 to 1997; prior thereto, Senior Vice President, Finance and   
Administration, Domestic Toy Operations.                          

(4)  Prior thereto, General Manager and Sector Head, International          
    Businesses from 1999 to 2000; prior thereto, President, European Sales
 and Marketing from 1998 to 1999; prior thereto, President and Chief
Executive Officer, The Ertl Company, Inc.                         

(5)  Prior thereto, during 2000, Chief Operating Officer of Tiger           
  Electronics, Inc., a subsidiary of the Company; prior thereto, Chief
Operating Officer, Bandai America, Inc., from 1997 to 2000; prior 
thereto, Worldwide Director in Charge, Entertainment Division,    
J. Walter Thompson Advertising.                                   

(6)  Prior thereto, Senior Vice President and General Counsel, Reebok       
 International, Ltd. (Reebok) from 1997 to 2000; prior thereto, Vice
President and General Counsel, Reebok.                            

(7)  Prior thereto, Assistant Treasurer, Amway Corporation.                 

PART II 

ITEM  5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED                 
-----------------------------------------------------       
STOCKHOLDER MATTERS                                       
-------------------                                       
The information required by this item is included in Market for the         
Registrant's Common Equity and Related Stockholder Matters in Exhibit 13 to     
this Report and is incorporated herein by reference.                            

ITEM  6.  SELECTED FINANCIAL DATA                                               
-----------------------                                     
The information required by this item is included in Selected Financial Data
in Exhibit 13 to this Report and is incorporated herein by reference.           

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ITEM  7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION           
----------------------------------------------------------- 
AND RESULTS OF OPERATIONS                                 
-------------------------                                 
The information required by this item is included in Management's Review in 
Exhibit 13 to this Report and is incorporated herein by reference.              

ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           
-------------------------------------------                 
The information required by this item is included in Financial Statements   
and Supplementary Data in Exhibit 13 to this Report and is incorporated herein  
by reference.                                                                   

ITEM  9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING           
----------------------------------------------------------- 
AND FINANCIAL DISCLOSURE                                  
------------------------                                  
None.                                                                       

PART III

ITEMS 10, 11, 12 and 13.                                                        

The information required by these items is included in registrant's         
definitive proxy statement for the 2001 Annual Meeting of Shareholders and is   
incorporated herein by reference, except that the sections under the headings   
(a) "Comparison of Five Year Cumulative Total Shareholder Return Among Hasbro,  
S&P 500 and Russell 1000 Consumer Discretionary Economic Sector" and            
accompanying material, (b) "Report of the Compensation and Stock Option         
Committee of the Board of Directors", and (c) "Report of the Audit Committee    
of the Board of Directors" in the definitive proxy statement shall not be       
deemed "filed" with the Securities and Exchange Commission or subject to        
Section 18 of the Securities Exchange Act of 1934.                              

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PART IV 

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K        
 ---------------------------------------------------------------
(a) Financial Statements, Financial Statement Schedules and Exhibits        
----------------------------------------------------------------    
(1)  Financial Statements                                               
--------------------                                          
Included in PART II of this report:                       
Independent Auditors' Report                          

Consolidated Balance Sheets at December 31, 2000 and  
December 26, 1999                                   

    Consolidated Statements of Operations for the Three Fiscal
Years Ended in December 2000, 1999 and 1998         

 Consolidated Statements of Shareholders' Equity for the
    Three Fiscal Years Ended in December 2000, 1999 and 1998

Consolidated Statements of Cash Flows for the Three   
Fiscal Years Ended in December 2000, 1999 and 1998  

Notes to Consolidated Financial Statements            

(2)  Financial Statement Schedules                                      
-----------------------------                                 
Included in PART IV of this Report:                       
Report of Independent Certified Public Accountants    
on Financial Statement Schedule                     

 For the Three Fiscal Years Ended in December 2000, 1999
and 1998:                                           
 Schedule II - Valuation and Qualifying Accounts and
Reserves            

Schedules other than those listed above are omitted for the reason that they    
are not required or are not applicable, or the required information is shown    
in the financial statements or notes thereto. Columns omitted from schedules    
filed have been omitted because the information is not applicable.              

(3)   Exhibits                                                          
--------                                                    
The Company will furnish to any shareholder, upon written request, any      
exhibit listed below upon payment by such shareholder to the Company of the     
Company's reasonable expenses in furnishing such exhibit.                       

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Exhibit                                                                         
-------                                                                         
3.  Articles of Incorporation and Bylaws                                
(a)  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.)                     

   (b)  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.)                             

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

   (d)  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.)                     

(e)  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.  Instruments defining the rights of security holders, including      
indentures.                                                     
(a)  Indenture, dated as of July 17, 1998, by and between the 
   Company and Citibank, N.A. as Trustee. (Incorporated by
       reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K dated July 14, 1998, File No. 1-6682.)     

(b)  Indenture, dated as of March 15, 2000, by and between the
    Company and the Bank of Nova Scotia Trust Company of New
      York. (Incorporated by reference to Exhibit 4(b)(i) to the
   Company's Annual Report on Form 10-K for the year ended
December 26, 1999, File Number 1-6682.)             

(c)  Amended and Restated Line of Credit Agreement dated as of
       February 16, 2001 by and among the Company, the Banks party
     thereto, and Fleet National Bank, as Agent for the Banks.

  (d)  Amended and Restated Revolving Credit Agreement dated as of
       February 16, 2001 by and among the Company, the Banks party
     thereto, and Fleet National Bank, as Agent for the Banks.

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

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   (f)  First Amendment to Rights Agreement, dated as of December 4,
2000, between the Company and the Rights Agent.     

10.  Material Contracts                                                   
     (a)  Lease between Hasbro Canada Corporation (formerly named Hasbro
      Industries (Canada) Ltd.)("Hasbro Canada") and Central Toy
       Manufacturing Co. ("Central Toy"), dated December 23, 1976.
        (Incorporated by reference to Exhibit 10.15 to the Company's
   Registration Statement on Form S-14, File No. 2-92550.)

(b)  Lease between Hasbro Canada and Central Toy, together    
   with an Addendum thereto, each dated as of May 1, 1987.
        (Incorporated by reference to Exhibit 10(f) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 27, 1987, File No. 1-6682.)                

    (c)  Addendum to lease, dated March 5, 1998, between Hasbro Canada
        and Central Toy. (Incorporated by reference to Exhibit 10(c)
      to the Company's Annual Report on Form 10-K for the Fiscal
Year Ended December 28, 1997, File No. 1-6682.)     

(d)  Letter agreement, dated December 13, 2000, between Hasbro
Canada and Central Toy.                             

 (e)  Toy License Agreement between Lucas Licensing Ltd. and the
    Company, dated as of October 14, 1997. (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.)(Incorporated by reference to
         Exhibit 10(d) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 27, 1998, File No. 1-6682.)

(f)  First Amendment to Toy License Agreement between Lucas   
           Licensing Ltd. and the Company, dated as of September 25, 1998.
        (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.)(Incorporated by
        reference to Exhibit 10(e) to the Company's Annual Report on
           Form 10-K for the Fiscal Year Ended December 27, 1998, File No.
1-6682.)                                            

     (g)  Agreement of Strategic Relationship between Lucasfilm Ltd. and
       the Company dated as of October 14, 1997. (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.) (Incorporated by reference
        to Exhibit 10(f) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 27, 1998, File No. 1-6682.)

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     (h)  First Amendment to Agreement of Strategic Relationship between
           Lucasfilm Ltd. and the Company, dated as of September 25, 1998.
        (Incorporated by reference to Exhibit 10(g) to the Company's
         Annual Report on Form 10-K for the Fiscal Year ended December
27, 1998, File No. 1-6682.)                         

(i)  Warrant, dated October 14, 1997 between the Company and  
      Lucas Licensing Ltd. (Incorporated by reference to Exhibit
     10(h) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(j)  Warrant, dated October 14, 1997 between the Company and  
Lucasfilm Ltd. (Incorporated by reference to Exhibit
     10(i) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(k)  Warrant, dated October 30, 1998 between the Company and  
      Lucas Licensing Ltd. (Incorporated by reference to Exhibit
     10(j) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(l)  Warrant, dated October 30, 1998 between the Company and  
Lucasfilm Ltd. (Incorporated by reference to Exhibit
     10(k) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(m)  Asset Purchase Agreement dated as of February 8, 1998,   
       together with Amendment thereto dated as of March 31, 1998,
      by and among the Company, Tiger Electronics Ltd. (formerly
   named HIAC X Corp. and a wholly-owned subsidiary of the
    Company), Tiger Electronics, Inc. and certain affiliates
        thereof and Owen Randall Rissman and the Rissman Family 1997
    Trust. (Incorporated by reference to Exhibit 2(a) to the
      Company's Current Report on Form 8-K, dated April 1, 1998,
File No. 1-6682.)                                   

Executive Compensation Plans and Arrangements                   
(n)  Employee Incentive Stock Option Plan. (Incorporated by   
   reference to  Exhibit 4.1 to the Company's Registration
Statement on Form S-8, File No. 2-78018.)           

(o)  Amendment No. 1 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(l) to the Company's
 Annual  Report on Form 10-K for the Fiscal Year Ended
December 28, 1986, File No. 1-6682.)                

(p)  Amendment No. 2 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(n) to the Company's
 Annual  Report on Form 10-K for the Fiscal Year Ended
December 27, 1987, File No. 1-6682.)                

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(q)  Amendment No. 3 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(o) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 25, 1988, File No. 1-6682.)                

(r)  Amendment No. 4 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(s) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 1989, File No. 1-6682.)                

(s)  Form of Non Qualified Stock Option Agreement under the   
  Employee Incentive Stock Option Plan. (Incorporated by
     reference to Exhibit 10(q) to the Company's Annual Report
     on Form 10-K for the Fiscal Year Ended December 25, 1988,
File No. 1-6682.)                                   

  (t)  Non Qualified Stock Option Plan. (Incorporated by reference
       to Exhibit 10.10 to the Company's Registration Statement on
Form S-14, File No. 2-92550.)                       

(u)  Amendment No. 1 to Non Qualified Stock Option Plan.      
(Incorporated by reference to Exhibit 10(j) to the  
Company's Annual Report on Form 10-K for the Fiscal 
Year Ended December 28, 1986, File No. 1-6682.)     

(v)  Amendment No. 2 to Non Qualified Stock Option Plan.      
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1987 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(w)  Amendment No. 3 to Non Qualified Stock Option Plan.      
        (Incorporated by reference to Exhibit 10(l) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 1989, File No. 1-6682.)                

   (x)  Form of Stock Option Agreement (For Employees) under the Non
      Qualified Stock Option Plan. (Incorporated by reference to
     Exhibit 10(t) to the Company's Annual Report on Form 10-K
 for the Fiscal Year Ended December 27, 1992, File No.
1-6682.)                                            

(y)  1992 Stock Incentive Plan. (Incorporated by reference to 
      Appendix A to the Company's definitive proxy statement for
      its 1992 Annual Meeting of Shareholders, File No. 1-6682.)

    (z)  Form of Stock Option Agreement under the 1992 Stock Incentive
       Plan, the Stock Incentive Performance Plan and the Employee
   Non-Qualified Stock Plan. (Incorporated by reference to
         Exhibit 10(v) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 27, 1992, File No. 1-6682.)

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  (aa)  Hasbro, Inc. Stock Incentive Performance Plan. (Incorporated
        by reference to Appendix A to the Company's definitive proxy
       statement for its 1995 Annual Meeting of Shareholders, File
No. 1-6682.)                                        

    (bb)  First Amendment to the 1992 Stock Incentive Plan and the Stock
     Incentive Performance Plan. (Incorporated by reference to
           Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
the period ended June 27, 1999, File No. 1-6682.)   

(cc)  Second Amendment to the Stock Incentive Performance Plan. 
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 2000 Annual Meeting of
Shareholders, File No. 1-6682.)                     

   (dd)  Employee Non-Qualified Stock Plan. (Incorporated by reference
         to Exhibit 10(dd) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 29, 1996, File No. 1-6682.)

(ee)  First Amendment to the Employee Non-Qualified Stock Plan. 
     (Incorporated by reference to Exhibit 10 to the Company's
        Quarterly Report on Form 10-Q for the period ended March 28,
1999, File No. 1-6682.)                             

  (ff)  Form of Stock Option Agreement (For Participants in the Long
        Term Incentive Program) under the 1992 Stock Incentive Plan,
       the Stock Incentive Performance Plan, and the Employee Non-
       Qualified Stock Plan. (Incorporated by reference to Exhibit
     10(w) to the Company's Annual Report on Form 10-K for the
  Fiscal Year Ended December 27, 1992, File No. 1-6682.)

(gg)  Form of Restricted Stock Agreement.                       

(hh)  Form of Deferred Restricted Stock Unit Agreement.         

(ii)  Form of Employment Agreement between the Company and ten  
Company executives. (Incorporated by reference to   
         Exhibit 10(v) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 31, 1989, File No. 1-6682.)

(jj)  Form of Amendment, dated as of March 10, 2000, to Form of 
  Employment Agreement included as Exhibit 10(ii) above.
       (Incorporated by reference to Exhibit 10(ff) to the Company's
         Annual Report on Form 10-K for the Fiscal Year Ended December
26, 1999.)                                          

(kk)  Hasbro, Inc. Retirement Plan for Directors. (Incorporated 
  by  reference to Exhibit 10(x) to the Company's Annual
      Report on Form 10-K for the Fiscal Year Ended December 30,
1990, File No. 1-6682.)                             

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 (ll)  Form of Director's Indemnification Agreement. (Incorporated
        by reference to Appendix B to the Company's definitive proxy
       statement for its 1988 Annual Meeting of Shareholders, File
No. 1-6682.)                                        

(mm)  Hasbro, Inc. Deferred Compensation Plan for Non-Employee  
     Directors.(Incorporated by reference to Exhibit 10(cc) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 26, 1993, File No. 1-6682.)          

(nn)  Hasbro, Inc. Stock Option Plan for Non-Employee Directors.
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1994 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(oo)  First Amendment to the Stock Option Plan for Non-Employee 
        Directors. (Incorporated by reference to Exhibit 10.2 to the
        Company's Quarterly Report on Form 10-Q for the period ended
June 27, 1999, File No. 1-6682.)                    

(pp)  Form of Stock Option Agreement for Non-Employee Directors 
     under the Hasbro, Inc. Stock Option Plan for Non-Employee
     Directors. (Incorporated by reference to Exhibit 10(w) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 25, 1994, File No. 1-6682.)          

  (qq)  Hasbro, Inc. 1999 Senior Management Annual Performance Plan.
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1999 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(rr)  Hasbro, Inc. Amended and Restated Nonqualified Deferred   
       Compensation Plan. (Incorporated by reference to Exhibit 10
         to the Company's Quarterly Report on Form 10-Q for the Period
Ended March 29, 1998, File No. 1-6682.)             

(ss)  Employment Agreement, dated as of January 1, 1996, between
        the Company and Harold P. Gordon. (Incorporated by reference
         to Exhibit 10(aa) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 31, 1995, File No. 1-6682.)

 (tt)  Letter dated January 26, 1998 from the Company to George B.
      Volanakis. (Incorporated by reference to Exhibit 10(ii) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 28, 1997, File No. 1-6682.)          

   (uu)  Employment Agreement dated as of January 5, 1999, between the
      Company and Herbert M. Baum. (Incorporated by reference to
          Exhibit 10(rr) to the Company's Annual Report on Form 10-K for
      the Fiscal Year ended December 27, 1998, File No. 1-6682.)

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(vv)  Settlement Agreement, dated January 31, 2001, among the   
Company, Herbert M. Baum and the Dial Corporation.  

(ww)  Employment Agreement, dated as of March 18, 2000, among   
   Tiger Electronics, Ltd., the Company and Brian Goldner.

11.  Statement re computation of per share earnings                       

12.  Statement re computation of ratios                                   

13.  Selected information contained in Annual Report to Shareholders      

21.  Subsidiaries of the registrant                                       

23.  Consents of KPMG LLP                                                 

The Company agrees to furnish the Securities and Exchange Commission, upon  
request, a copy of each agreement with respect to long-term debt of the         
Company, the authorized principal amount of which does not exceed 10% of the    
total assets of the Company and its subsidiaries on a consolidated basis.       

(b) Reports on Form 8-K                                                     
-------------------                                                 
A Current Report on Form 8-K dated February 8, 2001 was filed to
announce the Company's results for the quarter and year ended   
December 31, 2000. Consolidated statements of earnings (without 
notes) for the quarter and year ended December 31, 2000 and     
December 26, 1999 and consolidated condensed balance sheets     
(without notes) as of said dates were also filed.               

(c) Exhibits                                                                
--------                                                            
See (a)(3) above                                                

(d) Financial Statement Schedules                                           
-----------------------------                                       
See (a)(2) above                                                

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INDEPENDENT AUDITORS' REPORT    

The Board of Directors and Shareholders                                         
Hasbro, Inc.:                                                                   

 Under date of February 7, 2001, we reported on the consolidated balance
sheets of Hasbro, Inc. and subsidiaries as of December 31, 2000 and December    
26, 1999 and the related consolidated statements of operations, shareholders'   
equity, and cash flows for each of the fiscal years in the three-year period    
ended December 31, 2000, as contained in the 2000 annual report to              
shareholders.  These consolidated financial statements and our report thereon   
are incorporated by reference in the annual report on Form 10-K for the year    
2000. In connection with our audits of the aforementioned consolidated          
financial statements, we also audited the related financial statement schedule  
listed in Item 14 (a) (2).  This financial statement schedule is the            
responsibility of the Company's management.  Our responsibility is to express   
an opinion on this financial statement schedule based on our audits.            

In our opinion, such financial statement schedule when considered in  
relation to the basic consolidated financial statements taken as a whole,       
presents fairly in all material respects the information set forth therein.     

/s/ KPMG LLP                                                                    

Providence, Rhode Island                                                        
February 7, 2001                                                                

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   HASBRO, INC. AND SUBSIDIARIES

    Valuation and Qualifying Accounts and Reserves

    Fiscal Years Ended in December

    (Thousands of Dollars)

Provision                   
      Balance at   Charged to                Write-Offs    Balance
      Beginning of   Costs and     Other          And      at End of
       Year       Expenses     Additions    Other (a)     Year
      ------------  ----------  ------------  -----------  ---------

Valuation                                                                       
accounts                                                                      
deducted                                                                      
from assets                                                                   
to which                                                                      
they apply -                                                                  
for doubtful                                                                  
accounts                                                                      
receivable:                                                                   

2000        $65,000        4,387           59      (14,446)     $55,000     
        ======       ======       ======       ======       ======
1999        $64,400        9,053        2,329      (10,782)     $65,000     
        ======       ======       ======       ======       ======
1998        $51,700       13,057        2,832       (3,189)     $64,400     
        ======       ======       ======       ======       ======

(a) Includes write-offs, recoveries of previous write-offs, translation 
 adjustments, and an adjustment in 2000 to reflect the transfer of
 balances related to business units held for sale, now included in
   prepaid expenses and other current assets.  Translation adjustments
      and the transfer of balances in 2000 amounted to approximately $6,600.

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SIGNATURES                                                                      

Pursuant to the requirements of Section 13 or 15(d) 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)                                                      

By: /s/ Alan G. Hassenfeld                            Date: March 31, 2001      
-------------------------                               ---------------   
Alan G. Hassenfeld                                                        
Chairman of the Board                                                     

Pursuant to the requirements of the Securities Exchange Act of 1934, this   
report has been signed below by the following persons on behalf of the          
registrant and in the capacities and on the dates indicated.                    

Signature                      Title                        Date                
---------                      -----                        ----                

/s/ Alan G. Hassenfeld                                                          
----------------------------   Chairman of the Board,       March 31, 2001      
Alan G. Hassenfeld             Chief Executive Officer                          
and Director      
           (Principal Executive Officer)

/s/ David D.R. Hargreaves                                                       
----------------------------   Senior Vice President and    March 31, 2001      
David D.R. Hargreaves          Chief Financial Officer                          
    (Principal Financial and
 Accounting Officer)

/s/ Alan R. Batkin                                                              
----------------------------   Director                     March 31, 2001      
Alan R. Batkin                                                                  

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/s/ E. Gordon Gee                                                               
----------------------------   Director                     March 31, 2001      
E. Gordon Gee                                                                   

/s/ Harold P. Gordon                                                            
----------------------------   Director                     March 31, 2001      
Harold P. Gordon                                                                

/s/ Sylvia K. Hassenfeld                                                        
----------------------------   Director                     March 31, 2001      
Sylvia K. Hassenfeld                                                            

----------------------------   Director                     March   , 2001      
Marie-Josee Kravis                                                              

/s/ Claudine B. Malone                                                          
----------------------------   Director                     March 31, 2001      
Claudine B. Malone                                                              

/s/ Norma T. Pace                                                               
----------------------------   Director                     March 31, 2001      
Norma T. Pace                                                                   

/s/ E. John Rosenwald, Jr.                                                      
----------------------------   Director                     March 31, 2001      
E. John Rosenwald, Jr.                                                          

/s/ Eli J. Segal                                                                
----------------------------   Director                     March 31, 2001      
Eli J. Segal                                                                    

----------------------------   Director                     March   , 2001      
Carl Spielvogel                                                                 

/s/ Preston Robert Tisch                                                        
----------------------------   Director                     March 31, 2001      
Preston Robert Tisch                                                            

/s/ Alfred J. Verrecchia                                                        
----------------------------   Director                     March 31, 2001      
Alfred J. Verrecchia                                                            

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HASBRO, INC.

  Annual Report on Form 10-K

  for the Year Ended December 31, 2000

 Exhibit Index
Exhibit                                                                         
-------                                                                         
3.  Articles of Incorporation and Bylaws                                
(a)  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.)                     

   (b)  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.)                             

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

   (d)  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.)                     

(e)  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.  Instruments defining the rights of security holders, including      
indentures.                                                     
(a)  Indenture, dated as of July 17, 1998, by and between the 
   Company and Citibank, N.A. as Trustee. (Incorporated by
       reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K dated July 14, 1998, File No. 1-6682.)     

(b)  Indenture, dated as of March 15, 2000, by and between the
    Company and the Bank of Nova Scotia Trust Company of New
      York. (Incorporated by reference to Exhibit 4(b)(i) to the
   Company's Annual Report on Form 10-K for the year ended
December 26, 1999, File Number 1-6682.)             

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(c)  Amended and Restated Line of Credit Agreement dated as of
       February 16, 2001 by and among the Company, the Banks party
     thereto, and Fleet National Bank, as Agent for the Banks.

  (d)  Amended and Restated Revolving Credit Agreement dated as of
       February 16, 2001 by and among the Company, the Banks party
     thereto, and Fleet National Bank, as Agent for the Banks.

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

   (f)  First Amendment to Rights Agreement, dated as of December 4,
2000, between the Company and the Rights Agent.     

10.  Material Contracts                                                   
     (a)  Lease between Hasbro Canada Corporation (formerly named Hasbro
      Industries (Canada) Ltd.)("Hasbro Canada") and Central Toy
       Manufacturing Co. ("Central Toy"), dated December 23, 1976.
        (Incorporated by reference to Exhibit 10.15 to the Company's
   Registration Statement on Form S-14, File No. 2-92550.)

(b)  Lease between Hasbro Canada and Central Toy, together    
   with an Addendum thereto, each dated as of May 1, 1987.
        (Incorporated by reference to Exhibit 10(f) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 27, 1987, File No. 1-6682.)                

    (c)  Addendum to lease, dated March 5, 1998, between Hasbro Canada
        and Central Toy. (Incorporated by reference to Exhibit 10(c)
      to the Company's Annual Report on Form 10-K for the Fiscal
Year Ended December 28, 1997, File No. 1-6682.)     

(d)  Letter agreement, dated December 13, 2000, between Hasbro
Canada and Central Toy.                             

 (e)  Toy License Agreement between Lucas Licensing Ltd. and the
    Company, dated as of October 14, 1997. (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.)(Incorporated by reference to
         Exhibit 10(d) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 27, 1998, File No. 1-6682.)

(f)  First Amendment to Toy License Agreement between Lucas   
           Licensing Ltd. and the Company, dated as of September 25, 1998.
        (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.)(Incorporated by
        reference to Exhibit 10(e) to the Company's Annual Report on
           Form 10-K for the Fiscal Year Ended December 27, 1998, File No.
1-6682.)                                            

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     (g)  Agreement of Strategic Relationship between Lucasfilm Ltd. and
       the Company dated as of October 14, 1997. (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.) (Incorporated by reference
        to Exhibit 10(f) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 27, 1998, File No. 1-6682.)

     (h)  First Amendment to Agreement of Strategic Relationship between
           Lucasfilm Ltd. and the Company, dated as of September 25, 1998.
        (Incorporated by reference to Exhibit 10(g) to the Company's
         Annual Report on Form 10-K for the Fiscal Year ended December
27, 1998, File No. 1-6682.)                         

(i)  Warrant, dated October 14, 1997 between the Company and  
      Lucas Licensing Ltd. (Incorporated by reference to Exhibit
     10(h) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(j)  Warrant, dated October 14, 1997 between the Company and  
Lucasfilm Ltd. (Incorporated by reference to Exhibit
     10(i) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(k)  Warrant, dated October 30, 1998 between the Company and  
      Lucas Licensing Ltd. (Incorporated by reference to Exhibit
     10(j) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(l)  Warrant, dated October 30, 1998 between the Company and  
Lucasfilm Ltd. (Incorporated by reference to Exhibit
     10(k) to the Company's Annual Report on Form 10-K for the
  Fiscal Year ended December 27, 1998, File No. 1-6682.)

(m)  Asset Purchase Agreement dated as of February 8, 1998,   
       together with Amendment thereto dated as of March 31, 1998,
      by and among the Company, Tiger Electronics Ltd. (formerly
   named HIAC X Corp. and a wholly-owned subsidiary of the
    Company), Tiger Electronics, Inc. and certain affiliates
        thereof and Owen Randall Rissman and the Rissman Family 1997
    Trust. (Incorporated by reference to Exhibit 2(a) to the
      Company's Current Report on Form 8-K, dated April 1, 1998,
File No. 1-6682.)                                   

Executive Compensation Plans and Arrangements                   
(n)  Employee Incentive Stock Option Plan. (Incorporated by   
   reference to  Exhibit 4.1 to the Company's Registration
Statement on Form S-8, File No. 2-78018.)           

(o)  Amendment No. 1 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(l) to the Company's
 Annual  Report on Form 10-K for the Fiscal Year Ended
December 28, 1986, File No. 1-6682.)                

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(p)  Amendment No. 2 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(n) to the Company's
 Annual  Report on Form 10-K for the Fiscal Year Ended
December 27, 1987, File No. 1-6682.)                

(q)  Amendment No. 3 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(o) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 25, 1988, File No. 1-6682.)                

(r)  Amendment No. 4 to Employee Incentive Stock Option Plan. 
        (Incorporated by reference to Exhibit 10(s) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 1989, File No. 1-6682.)                

(s)  Form of Non Qualified Stock Option Agreement under the   
  Employee Incentive Stock Option Plan. (Incorporated by
     reference to Exhibit 10(q) to the Company's Annual Report
     on Form 10-K for the Fiscal Year Ended December 25, 1988,
File No. 1-6682.)                                   

  (t)  Non Qualified Stock Option Plan. (Incorporated by reference
       to Exhibit 10.10 to the Company's Registration Statement on
Form S-14, File No. 2-92550.)                       

(u)  Amendment No. 1 to Non Qualified Stock Option Plan.      
(Incorporated by reference to Exhibit 10(j) to the  
Company's Annual Report on Form 10-K for the Fiscal 
Year Ended December 28, 1986, File No. 1-6682.)     

(v)  Amendment No. 2 to Non Qualified Stock Option Plan.      
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1987 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(w)  Amendment No. 3 to Non Qualified Stock Option Plan.      
        (Incorporated by reference to Exhibit 10(l) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 1989, File No. 1-6682.)                

   (x)  Form of Stock Option Agreement (For Employees) under the Non
      Qualified Stock Option Plan. (Incorporated by reference to
     Exhibit 10(t) to the Company's Annual Report on Form 10-K
 for the Fiscal Year Ended December 27, 1992, File No.
1-6682.)                                            

(y)  1992 Stock Incentive Plan. (Incorporated by reference to 
      Appendix A to the Company's definitive proxy statement for
      its 1992 Annual Meeting of Shareholders, File No. 1-6682.)

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    (z)  Form of Stock Option Agreement under the 1992 Stock Incentive
       Plan, the Stock Incentive Performance Plan and the Employee
   Non-Qualified Stock Plan. (Incorporated by reference to
         Exhibit 10(v) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 27, 1992, File No. 1-6682.)

  (aa)  Hasbro, Inc. Stock Incentive Performance Plan. (Incorporated
        by reference to Appendix A to the Company's definitive proxy
       statement for its 1995 Annual Meeting of Shareholders, File
No. 1-6682.)                                        

    (bb)  First Amendment to the 1992 Stock Incentive Plan and the Stock
     Incentive Performance Plan. (Incorporated by reference to
           Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
the period ended June 27, 1999, File No. 1-6682.)   

(cc)  Second Amendment to the Stock Incentive Performance Plan. 
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 2000 Annual Meeting of
Shareholders, File No. 1-6682.)                     

   (dd)  Employee Non-Qualified Stock Plan. (Incorporated by reference
         to Exhibit 10(dd) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 29, 1996, File No. 1-6682.)

(ee)  First Amendment to the Employee Non-Qualified Stock Plan. 
     (Incorporated by reference to Exhibit 10 to the Company's
        Quarterly Report on Form 10-Q for the period ended March 28,
1999, File No. 1-6682.)                             

  (ff)  Form of Stock Option Agreement (For Participants in the Long
        Term Incentive Program) under the 1992 Stock Incentive Plan,
       the Stock Incentive Performance Plan, and the Employee Non-
       Qualified Stock Plan. (Incorporated by reference to Exhibit
     10(w) to the Company's Annual Report on Form 10-K for the
  Fiscal Year Ended December 27, 1992, File No. 1-6682.)

(gg)  Form of Restricted Stock Agreement.                       

(hh)  Form of Deferred Restricted Stock Unit Agreement.         

(ii)  Form of Employment Agreement between the Company and ten  
Company executives. (Incorporated by reference to   
         Exhibit 10(v) to the Company's Annual Report on Form 10-K for
      the Fiscal Year Ended December 31, 1989, File No. 1-6682.)

(jj)  Form of Amendment, dated as of March 10, 2000, to Form of 
  Employment Agreement included as Exhibit 10(ii) above.
       (Incorporated by reference to Exhibit 10(ff) to the Company's
         Annual Report on Form 10-K for the Fiscal Year Ended December
26, 1999.)                                          

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(kk)  Hasbro, Inc. Retirement Plan for Directors. (Incorporated 
  by  reference to Exhibit 10(x) to the Company's Annual
      Report on Form 10-K for the Fiscal Year Ended December 30,
1990, File No. 1-6682.)                             

 (ll)  Form of Director's Indemnification Agreement. (Incorporated
        by reference to Appendix B to the Company's definitive proxy
       statement for its 1988 Annual Meeting of Shareholders, File
No. 1-6682.)                                        

(mm)  Hasbro, Inc. Deferred Compensation Plan for Non-Employee  
     Directors.(Incorporated by reference to Exhibit 10(cc) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 26, 1993, File No. 1-6682.)          

(nn)  Hasbro, Inc. Stock Option Plan for Non-Employee Directors.
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1994 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(oo)  First Amendment to the Stock Option Plan for Non-Employee 
        Directors. (Incorporated by reference to Exhibit 10.2 to the
        Company's Quarterly Report on Form 10-Q for the period ended
June 27, 1999, File No. 1-6682.)                    

(pp)  Form of Stock Option Agreement for Non-Employee Directors 
     under the Hasbro, Inc. Stock Option Plan for Non-Employee
     Directors. (Incorporated by reference to Exhibit 10(w) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 25, 1994, File No. 1-6682.)          

  (qq)  Hasbro, Inc. 1999 Senior Management Annual Performance Plan.
     (Incorporated by reference to Appendix A to the Company's
     definitive proxy statement for its 1999 Annual Meeting of
Shareholders, File No. 1-6682.)                     

(rr)  Hasbro, Inc. Amended and Restated Nonqualified Deferred   
       Compensation Plan. (Incorporated by reference to Exhibit 10
         to the Company's Quarterly Report on Form 10-Q for the Period
Ended March 29, 1998, File No. 1-6682.)             

(ss)  Employment Agreement, dated as of January 1, 1996, between
        the Company and Harold P. Gordon. (Incorporated by reference
         to Exhibit 10(aa) to the Company's Annual Report on Form 10-K
          for the Fiscal Year Ended December 31, 1995, File No. 1-6682.)

 (tt)  Letter dated January 26, 1998 from the Company to George B.
      Volanakis. (Incorporated by reference to Exhibit 10(ii) to
        the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 28, 1997, File No. 1-6682.)          

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   (uu)  Employment Agreement dated as of January 5, 1999, between the
      Company and Herbert M. Baum. (Incorporated by reference to
          Exhibit 10(rr) to the Company's Annual Report on Form 10-K for
      the Fiscal Year ended December 27, 1998, File No. 1-6682.)

(vv)  Settlement Agreement, dated January 31, 2001, among the   
Company, Herbert M. Baum and the Dial Corporation.  

(ww)  Employment Agreement, dated as of March 18, 2000, among   
   Tiger Electronics, Ltd., the Company and Brian Goldner.

11.  Statement re computation of per share earnings                       

12.  Statement re computation of ratios                                   

13.  Selected information contained in Annual Report to Shareholders      

21.  Subsidiaries of the registrant                                       

23.  Consents of KPMG LLP                                                 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K405’ Filing		Date		First		Last			Other Filings
Filed as of:		4/2/01
		3/31/01		33		34
Filed on:		3/30/01
		3/23/01		2
		3/4/01		6		7
		2/16/01		24		36
		2/8/01		30					8-K
		2/7/01		31					SC 13G
		1/31/01		30		41
For Period End:		12/31/00		1		35			11-K
		12/13/00		25		36
		12/4/00		25		36
		7/2/00		24		35			10-Q
		6/28/00		24		35
		3/18/00		30		41
		3/15/00		24		35
		3/10/00		28		39
		3/5/00		6
		12/26/99		23		39			10-K405
		6/29/99		24		35
		6/27/99		28		40			10-Q
		6/16/99		24		36			8-K
		3/28/99		28		39			10-Q
		1/5/99		29		41
		12/27/98		25		41			10-K405
		10/30/98		26		37			424B2
		9/25/98		25		37
		7/17/98		24		35			8-K
		7/14/98		24		35			8-K
		4/1/98		26		37			8-K
		3/31/98		26		37			S-8,  S-8 POS
		3/29/98		29		40			10-Q
		3/5/98		25		36
		2/8/98		26		37
		1/26/98		29		40
		12/28/97		25		40			10-K405
		10/14/97		25		37
		12/29/96		28		39			10-K405
		2/16/96		24		35			8-K
		1/1/96		29		40
		12/31/95		29		40			10-K405
		12/25/94		29		40			10-K
		12/26/93		29		40			10-K,  DEF 14A
		12/27/92		27		39
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