• Net revenues of $691.4 million for the quarter, an increase of $163.6 million or 31% from a year ago;
• Operating profit improved 171% to $55.8 million or 8.1% of revenue;
• Net earnings of $4.8 million, or $0.03 per diluted share (net earnings of $41.3 million or $0.24 per diluted share excluding a $0.21 impact from the final Lucas mark to market expense) for the quarter, compared to $27.1 million, or $0.07 per diluted share last year;
• North American segment net revenues were up 24% and International segment net revenues were up 49% in the second quarter;
• Growth driven by shipments of TRANSFORMERS and MARVEL movie-related products, as well as strong performances from LITTLEST PET SHOP, NERF, FURREAL FRIENDS, PLAYSKOOL and board games.

PAWTUCKET, R.I. -- Jul. 23, 2007 -- Hasbro, Inc. today reported second quarter net revenues of $691.4 million, an increase of $163.6 million or 31% compared to $527.8 million a year ago. The Company reported net earnings for the quarter of $4.8 million or $0.03 per diluted share, compared to $27.1 million or $0.07 per diluted share in 2006. The results for the quarter include a final mark to market expense of $36.5 million or $0.21 per diluted share related to the repurchase of the Lucas warrants. Excluding the final Lucas mark to market expense, earnings for the quarter would have been $41.3 million or $0.24 per diluted share.

"We are very pleased with our second quarter and first half performance," said Alfred J. Verrecchia, President and Chief Executive Officer. "Our core brands, especially TRANSFORMERS and LITTLEST PET SHOP; and new product initiatives have performed very well both domestically and internationally, contributing to second quarter revenue growth of 31% and first half revenue growth of 32%."

"In addition, our second quarter operating margin improved to 8.1% compared to 3.9% in the prior year and our first half operating margin improved to 8.3% from 1.9% a year earlier," Verrecchia added.

North American segment net revenues for the quarter were $449.4 million, an increase of $87.4 million or 24% compared to $362.0 million in 2006. The growth in revenue is attributable to shipments of the TRANSFORMERS and MARVEL product lines, as well as growth in other Hasbro brands including FURREAL FRIENDS, LITTLEST PET SHOP, PLAYSKOOL, NERF, OPERATION, SORRY! and PLAY-DOH. The North American segment reported an operating profit of $41.8 million, which includes a $10.4 million provision related to the EASY-BAKE OVEN product recall announced last week. This compares to $30.4 million in operating profit in 2006.

International segment net revenues for the quarter were $227.6 million, an increase of $74.4 million or 49% compared to $153.2 million in 2006. The revenues include a positive foreign exchange impact of approximately $11.7 million or 8%. The results reflect shipments of the TRANSFORMERS and MARVEL product lines, as well as growth in core brands including LITTLEST PET SHOP, MY LITTLE PONY, PLAYSKOOL and board games. The International segment reported an operating profit of $11.3 million compared to an operating loss of ($8.1) million in 2006.

"Having delivered a very successful first half, we are focused on delivering a strong second half, laying the foundation for future revenue growth and maintaining the financial discipline that has allowed us to significantly improve profitability and create value for our shareholders," said David Hargreaves, Executive Vice President and Chief Financial Officer.

On May 9, 2007 Hasbro exercised its call option to repurchase all of the outstanding warrants for Hasbro's common stock held by Lucasfilm Ltd. and Lucas Licensing Ltd. (together "Lucas"). At the time of the call Lucas held exercisable warrants (the "Warrants") to purchase an aggregate of 15,750,000 shares of Hasbro's common stock. On May 24, 2007 Hasbro paid Lucas $200 million in cash and closed the repurchase of all of the Warrants. In connection with the repurchase, Hasbro recognized a final mark to market charge of $36.5 million in the second quarter of 2007 related to these warrants.

Hasbro is a worldwide leader in children's and family leisure time 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 PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER, and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.