Debbie Hancock - Vice President, Investor Relations Brian Goldner - President and CEO Deb Thomas - Chief Financial Officer

Sean McGowan - Needham & Company Steph Wissink - Piper Jaffray Felicia Hendrix - Barclays Eric Handler - MKM Partners Jaime Katz - Morningstar Tim Conder - Wells Fargo Drew Crum - Stifel Gerrick Johnson - BMO Capital Markets Mike Swartz - SunTrust

Thank you, and good morning, everyone. Joining me this morning are Brian Goldner, Hasbro's President and Chief Executive Officer; and Deb Thomas, Hasbro's Chief Financial Officer.

Today we will begin with Brian and Deb providing commentary on the company’s quarterly performance and then we will take your questions. Our second quarter earnings release was issued this morning and is available on our website.

Additionally, presentation slides containing information covered in today’s earnings release and call are also available on our site. The press release and presentation include information regarding non-GAAP financial measures.

Please note that whenever we discuss earnings per share, or EPS, we are referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question-and-answer session that follows, members of Hasbro management may make forward-looking statements concerning management’s expectations, goals, objectives and similar matters.

These forward-looking statements may include comments concerning our product and entertainment plans; anticipated product performance; business opportunities, plans and strategies; costs and cost savings initiatives; financial goals and expectations for our future financial performance. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements.

Some of those factors are set forth in our annual report on Form 10-K, our most recent 10-Q, in today’s press release and in our other public disclosures. You should review such factors together with any forward-looking statements made on today’s call.

We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I would now like to introduce Brian Goldner.

Brian?

Thank you, Debbie. Good morning, everyone, and thank you for joining us today.

Our second quarter performance reflects the ongoing global execution of our strategic brand blueprint as we transform Hasbro into the leading branded play company across consumers and geographies. Every brand we develop, whether it’s a Hasbro franchise brand, a new or existing Hasbro brand or one of our steam partners brand, is being re-imagined across the blueprint to enable us to tell compelling stories globally.

Our commitment to deliver the right content with the right innovation for the right audience in the right market is unwavering. In the second quarter, Hasbro's revenues grew 8%.

This growth was fueled by a 36% gain in franchise brands, 17% growth in international markets with emerging markets up 30% and 35% growth in entertainment and licensing, led by lifestyle licensing and digital gaming increases. Each one of these is a core element of our brand blueprint today and going forward.

Entertainment is supporting many of these brands. For example, TRANSFORMERS, MY LITTLE PONY and franchises under the MARVEL brand, yet not all growing brands are entertainment backed in the traditional sense, but they are leveraging tremendous stories to enthrall consumers around the world.

Brands like PLAY-DOH and NERF, both up double digits in the quarter are examples of this strategy coming to life across the blueprint. Just this week storytelling and innovation are converging at Comic-Con International in San Diego.

Fan driven Hasbro brands including MY LITTLE PONY, MAGIC: THE GATHERING, TRANSFORMERS and JEM AND THE HOLOGRAMS are brand we are re-imagining through entertainment and licensing are engaging with some of our most avid fans. We are unveiling exciting new initiatives which tap into creativity and engagement, including SuperFanArt.com, where we will leverage the creativity of fans with the technology of 3D printing and you'll hear more about this in the near future.

As we look more closely at the quarter, it's clear that the revolution and geography that we have recently outlined for you is upon us. We grew our business double digits in all major international regions, Europe up 16%, Latin America up 17% and Asia-Pacific also up 17%.

Emerging markets including Russia, Brazil and China continue to contribute to the strong revenue gains in the segment up 30% in the quarter. I'd like to take a minute and congratulate the Latin American team on its fourth consecutive quarter of double-digit year-over-year growth.

The team is doing a tremendous job executing our brand blueprint to grow in a competitive market and a challenging retail environment. In the U.S.

and Canada segment, second quarter revenues were down 2%, but U.S. POS was up double-digit for toys across the girls, boys and preschool toy categories and was up double digits for games.

Our franchise brands POS at our top five retailers in the U.S. was up significantly in the quarter, led by NERF, MY LITTLE PONY, PLAY-DOH and TRANSFORMERS.

In Canada POS also increased across categories in toys and games. Clearly, there's momentum in our brands with U.S.

and Canadian consumers. Looking across the business, this momentum is evident globally.

Five of our seven franchise brands grew revenue this past quarter, TRANSFORMERS, NERF, MY LITTLE PONY, MONOPOLY and PLAY-DOH. Of the remaining franchise brands, MAGIC THE GATHERING declined low single digits and its flat year-to-date, while LITTLEST PET SHOP has been re-imagined and in all new line hit shelves during the third quarter in markets around the world.

Franchise brand TRANSFORMERS along with gains and franchises under the MARVEL brand helped deliver 32% revenue growth in the boy’s category. TRANSFORMERS age of extinction has been incredibly well-received worldwide since its opening in late June.

It has earned over $775 million globally, breaking records in many countries, including China, where the film is now the highest grossing film ever. Many international markets only recently launched following the conclusion of the FIFA World Cup and as of this weekend has opened in most major international territories.

Growth in MARVEL in the quarter was driven by the AVENGERS franchise supported by the 2014 film Marvel's Captain America, The Winter Soldier and two animated series and the Spider-Man franchise supported by the amazing Spider-Man 2 and the Ultimate Spider-Man animated series combined with innovative new products such as Marvel Super Hero Mashers. Marvel's Guardians of the Galaxy will be in theaters on August 1st and the product is hitting retail in many markets at this time.

NERF revenues in the boys category were down in the quarter based on the timing of shipments, but are up year-to-date and POS is growing in several markets we track including very strong growth in the U.S. MY LITTLE PONY, MY LITTLE PONY EQUESTRIA GIRLS and NERF Rebelle contributed to growing the girl’s category 10% in the quarter, more than offsetting the decline in FURBY.

We have identified FURBY as a difficult comparison in 2014 and looking ahead that comparison does not get easier as the second half of last year represented more than 70% of 2013 FURBY revenues. We have innovative new initiatives in the second half of this year, including the launch of the re-imagined LITTLEST PET SHOP, MY LITTLE PONY POP and all-new MY LITTLE PONY EQUESTRIA GIRLS product and entertainment building on the equestria girl’s position as a number five fashion-themed doll property year-to-date in the U.S.

according to NPD. In addition, PLAY-DOH DohVinci is just now on shelves and contributed slightly to the girl’s category in the second quarter.

Moving to the games business, despite positive POS in several markets including the U.S., U.K., Germany and Canada, our games revenues in the quarter declined 12%. There are several new games and market initiatives plan for the second half of this year, and we remain focused on growing the games business for the long-term across all platforms.

For the second quarter, franchise brand MONOPOLY continue to post positive growth with an all-new MONOPOLY JUNIOR in the market now and MY MONOPOLY coming for the fall. The category also benefited from the addition of Backflip Studios revenues and growth in the game of life, as well as initial shipments of Simon Swipe.

This growth, however, was offset by declines in TWISTER, which had strong growth last year, DUEL MASTERS, a Japanese trading card game and MAGIC: THE GATHERING, which decline in the U.S. and Canada segment, but grew in the international segment.

As we discussed before, magic is release driven and over the longer term poised for growth, as we continue to invest in the brand and technology development to enable global magic players and new recruits to enjoy playing across digital and analog format. Last month we released Magic: The Gathering-Conspiracy and that has led to increase casual play activity in stores.

In addition, fans are eagerly anticipating the released this month of the Magic 2015 core set, which position us well for the year. Strategically, the second half of the year is extremely important for the games category, given the high consumer purchases over the holiday period.

We have compelling new innovative games across consumer goods, including MY MONOPOLY, Simon Swipe and Battle Masters featuring TRANSFORMERS which is in market now and will feature MARVEL properties this fall. Finally, the preschool category revenues declined 4%.

PLAY-DOH continued to grow as did TRANSFORMERS RESCUE BOTS. This growth was more than offset by other declines in the category, including core Playskool and Sesame Street initiatives.

In closing, through the execution of our brand blueprint, we are creating compelling and engaging experiences for consumer globally. Building on this, we are leveraging the financial strength of our business, which Deb will speak to to invest in the transformation of Hasbro and execution of our blueprint to profitably grow Hasbrouck for the long-term in an environment of accelerating change.

Our second quarter performance positions us well to successfully execute over the remainder of 2014 and in the coming years. Now, I’d like to turn the call over to Deb.

Deb?

Thank you, Brian, and Good morning, everyone. Our second quarter results reflect growth key initiative, including our franchise brands and emerging markets, while continuing to strategically invest in our brands, our systems and our capital structure.

During the quarter we successfully repaid $425 million of debt and raised a total of $600 million at the lowest coupon in our history. Heading into our peak working capital period, our cash position is strong and our inventories are well-positioned for the holiday season.

Before we review our results, please note that in the second quarter 2014, we had an unfavorable tax adjustment of $13.8 million or $0.10 per share diluted share related to a proposed resolution of outstanding tax matters. For the six months, nearly all of this adjustment will be offset by the favorable tax adjustments in the first quarter 2014.

Absent any additional adjustments we do not anticipate calling these items out in the full-year 2014 results. Additionally, in 2013, we had pretax pension charges in SG&A of $2.5 million or $0.01 per diluted share, related to partial pension settlement charges associated with restructuring action.

We've included a reconciliation to reported amounts in today's release. During the rest of my discussion of our business, I’ll exclude these items as they do not speak to the underlying performance of Hasbro.

Looking at our segments, second quarter revenues in the U.S. and Canada segment declined 2%.

Both boys and girls category revenue grew in the quarter, but were offset by declines in the games and preschool categories. As Brian mentioned, U.S.

POS trends were strong increasing double digits at our top five retailers across all product categories. POS in Canada increased as well.

We ended the quarter with inventory of good quality at retail and at Hasbro and we are well-positioned for the second half of the year. Segment operating profit in the U.S.

and Canada declined 20% in the quarter, primarily due to lower revenues and the impact of product mix. Games category revenues declined including high-margin trading card games DUEL MASTERS and MAGIC: THE GATHERING, which has Brian discussed was the impacted by the timing of releases year-over-year.

Additionally, we are making incremental investments to support the long-term growth opportunity for MAGIC: THE GATHERING. In the international segment, second quarter revenues increased 17% and all major regions grew double-digit.

Additionally, the boys, girls in preschool categories all grew and more than offset a decline in the games category. The 17% revenue growth drove a 98% increase in operating profit as the international segment posted an operating profit of $29.2 million, compared to $14.8 million last year.

Entertainment and licensing segment revenues also delivered strong double-digit growth, increasing 35% in the second quarter. This growth was the result of higher lifestyle licensing revenues for Hasbro franchise brands, including MY LITTLE PONY, MONOPOLY and TRANSFORMERS, as well as growth in digital gaming and the addition of Backflip Studios.

Entertainment and licensing segment operating profit increased nearly fourfold to $14.6 million, compared to $3.7 million a year ago, driven by the impact of higher revenues and lower program production amortization. Looking at our overall expenses, our business reflects the long-term investments we are making in re-imagining our brand and executing across the brand blueprint globally.

At the same time, we’re lowering our overall cost basis to achieve our goal of $100 million in underlying cost savings by 2015. Cost to sales as a percentage of revenue in the quarter declined.

This decline reflects growth in entertainment properties, including TRANSFORMERS and MARVEL property, as well as higher entertainment and licensing revenues. The higher entertainment-backed revenues also resulted in higher royalty expense in the quarter, which increased to 8.5% of quarterly revenues.

As we outlined in February, over the past five years, our average royalty rate has been around 7.3%, we expect full year 2014 royalties to be at or slightly above that five-year average. Product development as a percent of revenues was flat year-over-year, even with the addition of Backflip Studios, which we acquired in the third quarter of 2013 and continued incremental investments in MAGIC: THE GATHERING.

Absent these items, product development dollars would have been consistent with the year ago, reflecting our expected cost savings. Intangible amortization declined slightly as some of our assets have become fully amortized.

This was partially offset by incremental expense associated with Backflip Studios. Program production cost amortization declined year-over-year and advertising increased slightly as we invest in building awareness and demand for our brand.

SG&A decline as a percent of quarterly revenues, reflecting the impact of higher revenue in addition to lower underlying cost in the business and the positive results of our ongoing cost savings initiative. These declines were impacted by the factors we spoke to you in February, including higher compensation and investments into long-term growth opportunity, including Backflip and MAGIC: THE GATHERING.

Turning to our results below operating profit for the quarter, other income was $4.8 million versus other expense of $800,000 in 2013. Our 50% share in the Hub Network improved to a profit of $2.3 million versus $131,000 last year.

Additionally, we benefited from lower foreign exchange losses and improved investment returns in 2014. The second quarter underlying tax rate declined to 26.8% versus 27.3% in the second quarter 2013, and we continue to expect our full-year underlying tax rate to be in the range of 26% to 27%.

For the quarter, average diluted shares were 130.9 million shares, compared to 132 million in 2013, reflecting our active stock repurchase program. The actual amount of shares outstanding at the end of the second quarter 2014 was 127.9 million.

Diluted earnings per share absent charges in the second quarter 2014 were $0.36 versus $0.29 in 2013.At quarter end, cash totaled $586.2 million. Our cash position is strong and we continue to prioritize investing back into Hasbro for the long-term profitable growth of the business.

We're returning cash to our shareholders in the form of dividends and share repurchases, and as we’ve stated earlier this year, this level of activity is higher than last year. Finally, we remain committed to executing against these priorities in a manner consistent with maintaining our solid investment grade rating.

In the second quarter, we returned $192 million to shareholders, $55.7 million in cash dividend and $136.3 million in share repurchases. At quarter end, $308.1 million remained available in our current share repurchases authorization.

In the first six months of the year, we repurchased 4 million shares returning $216.8 million to shareholders. During the second quarter, we closed $600 million notes offering and paid down $425 million of long-term debt which came due in May.

The deal was very well received by the market and enabled us to achieve the lowest coupon in Hasbro’s history. Receivables at quarter end increased 15% versus 2013.

DSOs were 80 days compared to 75 days in 2013. The revolution in geography which Brian spoke of, also means a higher percentage of our sales are in international and emerging markets with DSO payment terms are generally longer.

This revenue mix is resulting in higher DSOs for Hasbro overall. Additionally, in the second quarter, the timing of collections and shipments also contributed to the growth in DSOs.

Inventories increased $132.8 million versus last year with approximately two thirds of the increase coming from international markets. Our inventory at U.S.

retail was down again this quarter and of good quality and internationally, our inventory at retail is healthy. Overall, retail and Hasbro-owned inventory is of good quality and we believe we are well positioned for the important second half of the year with the right inventory in the right market.

In closing, while the all-important second half of the year is still ahead of us, we’re pleased with our second quarter results. They reflect the investments we’ve been making in our brand blueprint, the innovation in our story-telling, product lines and licensing programs and savings we expected at this stage of our cost-savings initiatives.

They also reflect our commitment to our strategy and the investments we continue to make for the long-term success of Hasbro and our shareholders. Brian and I are now happy to take your questions.

Good morning everyone. Thanks.

I’ll focus the questions on the gaming area. So MAGIC, can you remind us what is coming up in terms of major releases and how you would characterize those releases versus a year ago in terms of magnitude and expectations?

I mean, do you expect this category to be up for the year?

Good morning, Sean. Yeah, if we look at MAGIC business, it is clearly driven by releases.

And as we were looking at 2013 year-to-date versus ‘14, last year we had our large and a small release in the first half of the year. And this year we had two small set.

And yet MAGIC year-to-date is basically flat. As we go into the fall, the MAGIC team will talk this week at Comic-Con and begin their talk about the size of each of the releases and what's coming up.

So we haven’t really talked yet about what that is. But overall again looking at MAGIC, the growth internationally, where we are so far year-to-date, the size of the sets that we put out.

We feel good about the MAGIC business and we are investing to continue to build the business, focused on the MAGIC online business so that we can run more concurrent gaming sessions more broadly and more online tournaments. And so we’re building our capabilities there and that is some of the investment Deb had spoken to.

So we feel very good about MAGIC. So far this year, we feel we're in a solid -- solid place and a strong position as we go into the second half of the year.

And how much over the year would be overall impact on games. Can you explain by just looking at MAGIC, the decline in the quarter?

Actually MAGIC was down very little, very small percentages in the quarter. More of the decline would be related to example, a brand like TWISTER in terms of the dollar impact.

And if we look at the overall games business, actually in games, very focused on particularly the impact was more in the U.S. on the games.

Games declined in the quarter and our POS on games in the U.S. and around the world in several places but in the U.S., it was up sharply.

It was up double digits in POS and our inventory on games in the U.S. was down double digits in the quarter.

Does that surprise you that POS would be up double digit and yet your shipments would be down double digits?

It really speaks to the strategy we've talked about how we’re executing this strategy, focusing our product lines, categories and brands where they sell the most recognizing retailers focus on just-in-time inventory. So this is consistent with the plan as we’ve executed them.

And to us, the most important element in our games business is the innovation that's on the way and coming for the third and fourth quarter, whether you're talking about the new ANGRY BIRDS STELLA lineup for the pink bird or Scrabble showdown, MY MONOPOLY or our action gaming in Battle Masters and a raft of great Disney games that have come in the third and fourth quarter, including Disney Princess, Frozen games, even one of my personal favorites, Olaf’s in Trouble. You’ve got a lot of major games initiatives coming for the third and fourth quarters, which as you know, historically has always been a more pronounced part of our business.

And so I think this is reflective of a strategy that we were executing in line with the insights and retail insights that we saw coming from retailers. And it’s just being born out as we execute this year as planned.

So we feel very comfortable with our games business. We’ve never seen such a good lineup of innovation coming for the third and fourth quarter.

And if I look at the POS, it wasn't just up for couple of games categories. Across different categories and consumer groups and games in the second quarter in the U.S., we saw a great growth, double-digit growth.

So whether it's team gaming, whether it's preschool gaming, whatever it might be, we’re seeing some great growth across those different segment…

Thank you.

…in POS.

Thank you very much.

Hi. Good morning everyone.

Good morning.

Brian, a really quick question for you and I think a follow-up to Sean’s question. Looking at double-digit increases in POS, for you are shipping down low single digits in the U.S.

Can you talk a little bit about the balance of maintaining that tight inventory control and maximizing the selling windows particularly around some of those entertainment properties? And then Deb, a question for you just on the inventory.

I know you don’t want to give guidance for the second half. But can you give us some sense of how we should think about that inventory balance at quarter end and to give us some sense of the complexion of that inventory relative to some of your second-half initiatives?

Thank you.

Yeah. Thanks Steph.

So if you look at inventory at retail and let’s use the U.S. data, inventory at retail in the U.S.

in toy was down single digits but in games was down double digits, significant double digit. And if you pair that with our POS, our POS in toy was up double digits and in games was up double digits.

So as we are executing our plan, we feel comfortable that the growth in inventory that you're seeing in our numbers, is all related to high-quality inventory, a lots of these new initiatives that are shipping for the third and fourth quarters but obviously this inventory particularly focused on the third quarter. And across different gaming segments, we have a number of major new innovations coming whether you're talking about our past and party games, the action gaming category like Battle Masters, MY MONOPOLY that’s coming in the family gaming arena, Scrabble Showdown with them, an exciting marketing plan in Scrabble Showdown coming.

So all those elements for us make us feel very comfortable that we're in a good position and it’s very consistent with the insights, the retail insights that we've seen and we talk to you guys about over the last year or two, as we re-imagine the way the U.S. business would execute its strategy and as we’ve executed the plan this year and going into the third and fourth quarter.

And our inventory that we’re holding as well, Steph, it’s of good quality. And it's geographically more importantly where we needed to be to meet consumer demand.

So two thirds of our inventory is actually held outside of the U.S. And in addition to that, we also took in slightly more inventory in the U.S.

during the quarter as part of our contingency plan related to the potential West Coast port labor strike that we’re all facing. So our inventory is of good quality and it's positioning us well for the holiday season.

Hi. Good morning.

Brian, on TRANSFORMERS, if you can adjust your -- I mean I know that your performance this quarter to where toy sales were at equivalent points with other movie releases and I know this one was more global. So it’s a little bit -- might be a little bit more hard, difficult to do that.

And we had the World Cup kind of in the way but if you were kind of trying to do an apples-to-apples comparison, would you say that toy sales are better, worse or even with prior releases at this point in time?

We feel really good about not only the box office, which as you note is giant and certainly growing in all those places we’ve talked about over many quarters where we've seen the growth in multiplexes and the consumer that wants to go out to the movies, the movie theaters that are being built particularly in emerging markets and internationally besides the box office. And I would say that our results overall in the quarter for TRANSFORMERS were very good.

And we feel very good about the new innovation across both the toy and game category where we put out a very different kind of product line, a more expansive line, brought back in a lot of those innovations for the younger kids and we've seen that reflected in our takeaway. And then looking out over the remainder of the year, remember all three of the prior TRANSFORMERS movies, we did far more business in the third and fourth quarter than in the first half of the year.

And we would imagine that to be true here as well. And so as we get into the third and fourth quarter, into the entertainment windows and home entertainment, we would continue to believe that we’ll do more business in the second half of the year than the first.

That's been the case for this brand and for boys’ action. But we’re very pleased thus far with the results.

Great. Thanks.

That’s helpful. And can we just switch gears for a second to the Hub, there has been some news over the -- since the summer with Margaret Loesch stepping down and potential changes for the network.

Just -- if you could just update us on your view on the Hub and how it all would relate to Hasbro and your participation in the JV. And then also one of those, I guess, you could use the word rumors out there would be the headquarter changes as well?

If you look at the Hub, the performance of the Hub over the last several quarters has been quite good. It’s continued to grow over the last several quarters.

And we’ve had a very good recent performance and are seeing our highest levels of girls coming to the network and continue to be the most highly viewed, co-viewed network in percentage terms with parents and kids. So we think that that’s one of the sweet spots of the Hub is that family viewing and family entertainment.

We really give Margaret and her team a lot of credit for what they've developed. It's a network that has far better ratings today than when we first started.

It's distributed more broadly today than we first started. Our affiliate fees are higher as are our ad sales, and we’re profitable in the quarter.

Margaret’s taken the decision that at the end of the year she would like to go do something else. It would have been five years with her at the helm.

Obviously, four of those years since launch because we hired her about a year before we launched. And it does give us an opportunity, both parents of the network an opportunity to look at where we take the network, how do we play to the strengths of both parents and continue to drive the momentum in the Hub.

We are very committed to our TV strategy to the Hub, to our partnership with Discovery, and to building a great kids television presence both here in the U.S. and around the world.

Okay. So it sounds like other than -- you will have to obviously find a new CEO there, but it seems like otherwise its business as usual?

We have an opportunity to take all that Margaret and the team have built and continue to accelerate that growth. We think that’s family entertaining and entertainment space, where we look at our brands that resonates so well across generations, the growth of the Hub itself and the fact that our brands will lead the way in terms of ratings, what we’ve been able to do between the Hub and then distributing and streaming platforms outside the Hub, the over-the-top providers both here in the U.S.

and around the world. We see a real opportunity as does Discovery.

They are great partners. David Zaslav and his team are tremendous partners and have been, and we want to continue to build this business and we’re very committed to the Hub and some of the initial successes we’ve had.

Remember when we first got together back in fall 2010, we talked about that three to five-year time horizon to really find the footing for the Hub, and where it will go and what will it be as a network and by this October, we will be four years into our effort. And so it’s a good time to continue to up our game and to look at how to build the Hub.

Okay. Very helpful.

Final question, just back to Magic, you gave very good color earlier to Sean's questions, so appreciate that. Just one thing, just kind of getting back to things you said last quarter because when you talked about Magic as well and about that it’s release driven and there was I think some impact last quarter to the shift in Easter, but you said early days, that it was off to a good start early in the quarter.

So just wondering from then till now, did anything change regarding Magic or did everything go as you anticipated it back when you reported the first quarter?

Yes, no, it’s very consistent with what we’ve talked about. I think Magic is the most challenging sometimes for people to look at, because it isn’t really seasonally driven.

It is really a story that’s told through the card releases. I think a good perspective for you is the fact that Magic is basically flat year-to-date, it was up in the quarter internationally and down in the U.S.

only slightly. So, again it wasn’t a giant decline, it was just a slight decline.

And the fact is a year ago we had both a large set and a small set, and this year we only had two small sets. So, that speaks to what’s going on with the consumer base and the user base, the game players, the most recent launches of things like Conspiracy that just happened in June, the core set that’s coming up, the 2015 core set, and the amount of casual game playing that’s going on, the Duels of the Planeswalkers which is our casual entry level point doing well.

So all those elements say to us it’s a building blocks on the year, it hasn’t really changed versus what we said last time, but we’re just giving you more color as the year unfolds.

Great, okay. Thanks so much.

Yes. Good morning.

Thanks for taking my questions. First, on TRANSFORMERS, given that the film had a delayed release date in Latin America and Europe because of the World Cup, did you also delay shipments of the toys into those markets so that we should see an uptick in the 3Q as a result of that?

And also wondered given how strong the film has performed in China, do you guys see a corresponding uplift in toy sales in that market as well? And then secondly, just quickly on MAGIC: THE GATHERING, we are starting to see some competition from Activision's Hearthstone game and wondered just what type of overlap there is among the customer base and is that having any impact as well?

Yes. So, Eric, first question on Latin America, we made our early shipments about the same time but recognize that the takeaway starts to accelerate after the World Cup, after all the marketing kicks in around the launch of the movie.

And then remember that as we go into the third quarter, we do expect third and fourth quarter business to be far bigger than the first and second quarter, that’s very consistent with the prior films. So yes, Latin America and some of the other markets that were delayed relative to the World Cup will have a slightly bigger impact to what are already larger numbers coming for the third and fourth quarter that would be our expectation.

So I don’t think that it would have a significant impact other than altering the otherwise planned out trajectory, which does have us a bigger numbers in the third and fourth quarter. In terms of China, the result both this year as well the impact that we’re seeing in China for us portends incredibly good things over the next several years.

Remember that TRANSFORMERS was a brand that had its history in the 1980s in animation in China, so you have this great bimodal appeal of the brand with adults, fans as well as young people coming into the brand. The brand has performed very, very well.

So it again will have meaning for us in China this year, but also sees this brand, it’s why TRANSFORMERS is such a powerful franchise brand for us, and as a franchise brand the potential to grow over many years, of course many categories and geography. And also we’ve worked on building our distribution in China.

We have a strategic alliance with all the domestic Chinese company that would enable us to get to more points of distribution over time. So again, this is a multiyear plan and this year’s movie results and the tremendous job that Paramount did to us really just sets the table for several years into the future of what we’re seeing there for TRANSFORMERS.

In terms of Magic and competitors, the brand you note is a very casual brand, that’s more focused on action. It would be more analogous to our Duels of the Planeswalkers product which is for entry level and it’s played on the iPad in a casual way.

Magic has a very deep strategic root 20-year history. The analog card game is still the most important element of that business, the fact that people are playing face-to-face, the fact that we are executing so many face-to-face tournaments in so many geographies on a regular basis, tournaments going on literally all the time around the world, and that differentiates Magic versus a lot of competitors, that organized gameplay organization that Magic team has in place, the ability to go out and execute that.

Then Magic online gives us the opportunity to allow players to play at great distances and also to reignite players who may be dormant because they don’t have a lot of friends around who used to play Magic with them. So it’s a very different, much more deeply seated strategic gameplay in Magic.

We take all competition seriously, but I would tell you that they are different games.

Very helpful. Thank you.

Good morning. Thanks for taking my question.

You guys broke down what drove operating profit for the U.S. and Canada segment and International operating profit was significantly stronger.

Could you talk about whether that was mostly mix driven or entertainment or what was behind that and maybe where do we expect the ultimate sustainable level to be there?

Certainly, Jaime. Good morning.

Internationally, I think you’re seeing a lot of kind of what we talked about for the company overall. It really is mix driven.

And also, you are seeing the benefits of our cost savings initiatives. So in International, some of our costs have come and given the mix of heavily entertainment driven products, which tend to carry higher gross margins, a little bit higher royalties, the higher gross margins, you’re really seeing that mix plays real combined with our cost savings initiatives.

You also have the fact as we grow revenues off of a relatively fixed cost base, it’s what we talked about that international markets over time should begin to -- operating margins should begin to look more like company average operating margins.

It’s perfect. Thanks.

Thank you. Brian, a little bit more color if you could by the geographic POS and the product lines.

And I guess then the other part is just to stay on the trading card line of questioning. I know you normally don't give forward guidance, but given what you have coming, do you anticipate that business being up on a year-over-year basis in the second half?

Yes. We really look at -- if you really look at what’s going on with Wizards of the Coast year-to-date, it’s more about Duel Masters, the Japanese trading card game being down.

As we said, Magic’s performance is flat year-to-date. I don’t want to steal the team’s thunder.

They are going to tease one of the new releases at Comic-Con this week coming into the week and the plans are very robust for Magic for the remainder of the year. But again, the team would like to reveal those in the right time, in the right way, and we’re really focused on our game players and fans and we don’t want to ruin any of the great surprises and fun they have in stores as they play the game.

And so I don’t want to guide you there, but I will tell you that they built a great business, that business has grown and more than doubled over the last number of years. And so I had great confidence in that team as they built the plans for this year and into ’15 and beyond.

If we look at the POS across categories, POS was up and I will use U.S. and then go to International.

POS and toy was up double digits and game was up double digits in the U.S. In Boys, it was up double digits; in Girls, it was up double digits; in Games, it was up double digits as I said; and in Preschool, POS was up double digits.

So across all our segment categories, POS was up double digits. As we go to international markets where we have specific syndicated POS data, POS was up double digits in Canada and double digits in Mexico, double digits in the U.K., high single digits in Germany, was down a little bit in Australia, down a bit in France and down a bit more in Spain.

Okay. And anything on Latin America?

Well, we have results in Latin America. We don't get syndicated data in the same way.

Obviously, we have seen great results in the market in Brazil. We have seen our results obviously are very strong in Brazil.

The market is growing and we’re growing faster. Our market share is growing.

And around South America, Latin America, we feel good at several of the markets, actually all of our markets down there really looking good and the results there are very strong. We even had a brand like Furby, which is challenged in the rest of the world.

They grew in Latin America in the second quarter and that’s what we’re talking about as we roll out to non-English speaking markets. Playskool grew in Latin America as it did in Asia-Pacific.

In fact, Playskool grew internationally in the quarter, just not in the U.S. and not overall.

So we’re seeing again the strength in our portfolio and the strength in growth across several of our initiatives in these regions.

Okay, great. Thank you.

And then Tim, the other pieces is -- and then, we’re also seeing growth in market share so the last two. So, growth in market share in the dolls business and in Girls, growth in markets share in outdoor and sports and growth in market share in games.

One quick question then on follow-up, any impact yet from a new competitor in the outdoor sports area?

Well, our NERF business, our NERF brand and business were up in the quarter and our POS was up and our market share was up. So I would say, we’re focused on executing our plan for the year and we feel very good about the results in N-Strike and as well as in our Zombie Strike product and we have several new initiatives lined up for the third and fourth quarter in NERF.

So we just continue with the innovation and great marketing and the team has done a great job.

Thank you.

Hey, great, thanks. Good morning, everyone.

So you guys have had very good momentum with the Girls business. And Brain, I think you mentioned that 70% of Furby’s revenue came in the second half last year.

As you look at the second half of this year, do you feel like you have enough initiatives to grow the Girls business notwithstanding that headwind from Furby?

Yeah. Drew, thanks for the question.

The Furby business, I should give you a kind of little color on it, because I think we’re seeing some impact in the second quarter on challenging comparisons to Furby and we’ll see that through the remainder of the year. As I mentioned, Furby in the second quarter was up in Latin America, so you have some mitigating elements.

But overall, Furby is clearly one of the two big headwinds we cited early in the year, the other one being Beyblade. In the second quarter, Furby’s decline overall and Beyblade’s decline were similar.

And we actually saw that Furby had a bigger impact than Beyblade in Europe and in Asia-Pacific, where Furby was very big a year ago. So Beyblade’s impact starts to diminish, Furby’s impact gets bigger in the third and fourth quarter.

Having said that, we feel very good about the momentum in our Girls business and in the third and fourth quarter, you will see the Rainbow Rocks movie coming for Equestria Girls, Rainbow Power coming for MY LITTLE PONY. So we are as the team would say very Rainbowfied for the third and fourth quarter this year in that brand.

Littlest Pet Shop’s, new product comes into the market related to the TV series. It's been out on the air in 130 plus geographies over several quarters and so that comes in for the third and fourth quarter.

And we have a raft of really fun play in lots of other categories in Rebelle coming. And then even in other elements of our kind of Girls games business, we have really fun Disney Princess product lined up for the third and fourth quarter.

And again, we feel very good about the plans for our Girls business going into the holiday season.

Got it. Very helpful.

Okay. And then, Deb, let's see, the royalties were up in the quarter, which would be expected, but also advertising was up.

And I think in years you have big entertainment slates, you typically see royalties up and advertising down. Is that still your expectation for 2014?

Thanks.

I think overall Drew that would still be our expectation for 2014. I think what you have is just really the mix of products in the market, that’s driving both at the same time.

Okay. Thanks, guys.

Hi. Good morning.

Good morning.

Hi. Can you let us know how much did Backflip contribute to the games segment in revenue?

I don’t think we give those specific numbers, but Backflip did contribute to games and would be noted inside of digital gaming.

Okay. And then in China, did the Alpha Animation joint venture contribute to results or was the growth there all organic?

It was all organic thus far, but the plan over time is in the next year or two will start to really activate that across some new IP as well as some of our other brands.

Okay. And lastly, you may touch on this in the future, but maybe if you could give us some idea now how you plan on monetizing your 3D printing venture with Shapeways?

Thank you.

It’s exciting. It's just launching this week.

We’ve always said and we talk to you guys about the modern boy and the modern girl and what we’re seeing in play. We want to revolutionize play and one of the big areas there is the creative makers, people who want to have their hand in making their own playthings with the brands and the play places they want to go.

And we’re going to give them the opportunity, the enabling technology, Shapeways is a great partner. We wanted to start with Superfanart.com, which, as you know, launches an artist because there there's been a lot of interest among our fans for new art and art that has been created by both artists as well as fans.

But you will see us continue to build product that allows people to customize and to contribute and to curate to that brand and that's like MY LITTLE PONY POP, that Hero Mashers already on the mass customization level. And then on the far end will be those folks who really want to create their own play things as well as their own engagement, the way they want in our brands.

And so, we’re going to satisfy the desires of all of our fans and kids and adults alike.

Okay. Thank you.

Yeah. Hey, good morning everyone.

Good morning.

Just clarification that the POS numbers that you pointed out earlier, are they normalized for the Easter holiday?

Not sure how we normalize them. These are the results of the quarter.

So just as in first quarter, we didn’t normalize, we didn’t pick, put it back in Easter. So now these are the results that we got.

We think it’s pretty reflective of what we’re seeing over-the-counter. And I would say, in the U.S.

remember, Easter is really most impacted in U.S. Easter to Easter, we didn't see much variation year-on-year.

So I would say that obviously just as in the calendar. Yeah.

That's perfect. Thank you.

And then just maybe on advertising and just product support dollars for the remainder of the year, I mean how do you look at that? I mean, are you changing the way that you are investing in terms of digital versus in-store support?

We have focused on engaging the consumers and our fans and audiences digitally that comes in a lot of forms including content that's available ubiquitously and allows for young people and families and adults in some cases to view our content anytime and anywhere they want. It has a lot to do with the game play and gaming, whether it's from Backflip or whether it's from EA or Activision or DNA or Gameloft providing game playing experiences that feed back into the brand and the brand experience.

In the marketing area, we have significantly increased our digital engagement, as well as social engagement with our brands. Look at the MONOPOLY site as people vote and millions and millions of people are getting involved in the House Rules MONOPOLY or Scrabble Showdown.

So there's all kinds of digital and digital marketing that we’re doing and we will continue to increase those percentages. And that will have -- we think a change because obviously, the out-of-pocket costs for those initiatives are different.

Although the CPMs might be viewed as higher the out-of-pocket costs are probably different. But then combine that with the acceleration in growth in some of our emerging markets where we do want to invest in advertising in the early quarters because we are seeing momentum there and we want to continue to grow those businesses.

But again, I’d echo what Deb said earlier, which is for the full year, we would expect the numbers in advertising to normalize and obviously, royalties to be a bit higher in a strong entertainment year.

Okay. Great.

Thank you.

Thank you to everyone for joining the call today. The replay will be available on our website in approximately two hours.

Additionally, management's prepared remarks will be posted on our website following this call. Our next earnings call is tentatively scheduled for Monday, October 20th.

Thank you.