Good morning and welcome to the Hasbro First Quarter 2015 Earnings Conference Call. At this time, all parties will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Today's conference is being recorded. If you have any objections, you may disconnect at this time. At this time, I'd like to turn the call over to Ms. Debbie Hancock, Vice President of Investor Relations. Please go ahead.

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 performance and then we will take your questions. Our first 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. Today's discussion of net earnings and EPS will exclude from last year's first quarter results a favorable tax adjustment of $13.5 million or $0.10 per share as it does not speak to the underlying performance of Hasbro. We have included a reconciliation to reported amounts in the earnings release and presentation accompanying this call. 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, the potential impact of foreign exchange translation, costs, our 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, and today's press release and in our other public disclosures. You should review such factors together with any forward-looking…

Our first question comes from the line of Steph Wissink with Piper Jaffray. Please proceed with your questions. Stephanie Schiller Wissink - Piper Jaffray & Co (Broker): Thank you. Good morning, everyone, and congrats to you guys on a great quarter. Brian D. Goldner - President, Chief Executive Officer & Director: Thanks, Steph. Deborah M. Thomas - Chief Financial Officer & Executive Vice President: Thanks, Steph. Stephanie Schiller Wissink - Piper Jaffray & Co (Broker): Wanted to just ask one question with respect to your global positioning as we head into the back part of this year. Can you talk a little bit about your distribution in some of the emerging markets and some of, maybe, the mature markets that have been a little bit more sluggish? Is it your anticipation as some of the content-backed properties come through that you'll start to see those markets accelerate into the back part of the year? Brian D. Goldner - President, Chief Executive Officer & Director: Well, we've seen year-to-date that our POS is quite strong in many of our markets around the world, including where we have our own data for emerging markets. So good performance thus far for our brands. Around the world, in the first quarter, double-digit POS growth for every market that we track with only one exception where France was up mid-single-digit. But across the world, we're seeing very strong double-digit growth in POS. Similarly, in emerging markets, we continue to see good progress, obviously affected by forex in terms of absolute top line revenue growth. Absent forex, 25% revenue growth in emerging markets in the first quarter. We've seen both in our brands growth as well as Entertainment and Licensing that the storytelling within our brands and television, in particular, has helped to power brands like…

Our next question is from the line of Taposh Bari with Goldman Sachs. Please proceed with your questions. Taposh Bari - Goldman Sachs & Co.: Hi. Good morning. Deb, a question for you on cost of sales and the outlook that you're providing. It seems like a repeat of what you said at Toy Fair. Yet it looks like what's changed is your signing of this streaming deal. So I guess, the question is was that already embedded in your commentary that you provided back in January? Deborah M. Thomas - Chief Financial Officer & Executive Vice President: Yes. Taposh Bari - Goldman Sachs & Co.: Okay. Great. And then as we think about... Deborah M. Thomas - Chief Financial Officer & Executive Vice President: (22:44) Taposh. Taposh Bari - Goldman Sachs & Co.: Yes. Deborah M. Thomas - Chief Financial Officer & Executive Vice President: I would just point that we really did benefit from our product mix in the quarter. So it was a larger mix of our Franchise Brands helped us including MAGIC: THE GATHERING as well as the digital streaming deal that we signed. And our Entertainment and Licensing segment overall is up particularly the licensing part of the business. Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. So, Taposh, our highest margin business is Entertainment and Licensing. Within that, obviously, the licensing part of our business is the strongest operating margin. And it goes back to the idea that in our strategy, there's tremendous power. As we drive our brands with story, we're able to sign licensees who are benefiting from that storytelling globally, and we certainly benefit from having their consumer products out in the market. And we get paid for that. Certainly for holiday sales in the first quarter, but…

Our next question is from the line of Mike Swartz with SunTrust Robinson. Please proceed with your question.

Hey. Good morning, everyone. Brian D. Goldner - President, Chief Executive Officer & Director: Good morning.

Just a point of clarification. Brian, I think you said that global – was that global POS was up double-digits, or in every market that you track it was up double-digits? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. We track it by market. So we have the syndicated data, NPD data we have for a number of markets. And the markets we have syndicated data for – U.S. was up double-digits; Canada double-digits; Mexico, Australia, UK, Germany and Spain all double-digit growth; France was mid-single-digits. Our Franchise Brand POS in the first quarter were up – it was very strong growth. And again, indicative of the sales that we had. But our POS is ahead of our sell-in in Franchise Brands as it is in sales in many markets around the world. That's why we have syndicated data. We also have our own data in emerging markets. Our teams track that pretty carefully and we're seeing good growth there as well.

And would that have been up double-digits excluding, I guess, the Easter shift on a normalized basis? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. We believe it probably would although we do think Easter had a very good impact. Easter this year occurred in, what we call, week 14. Last year it was week 16, which fell into the second quarter. Easter to Easter, if you took the three weeks around Easter, Easter to Easter was up a bit year-on-year. But we've seen very strong POS growth throughout the quarter and continuing into the second quarter. So we feel very good about the early initiatives we have for the year. Again, these are early days.

Right. Thanks. And just thinking about the competitive environment as we move through the year, one of your big competitors was talking about putting more money into trade spending as we get to the holidays and I think they're really targeting some share losses in the dolls category. So how do you think about that playing out throughout the year? Brian D. Goldner - President, Chief Executive Officer & Director: We have a very key levers in our business that we've established around where our spending goes. Increasingly in our marketing, we're using digital marketing and lots of very contemporary forms of marketing to our audience. We work with our trade very effectively. We've seen obviously growth in our business at the trade. We have plans in place as well. It doesn't involve just increases, but certainly, where we are gaining share, which is in many different categories and certainly around the world. We are getting gains in linear footage, and therefore, opportunities for both in-aisle as well as out-of-aisle placement. And that just comes along with the growth in sales.

Great. Thanks a lot for the color. Brian D. Goldner - President, Chief Executive Officer & Director: Thanks.

Our next question is from the line of Eric Handler with MKM. Please proceed with your question.

Yes. Thanks for taking my question. Couple questions on the entertainment side. The upside that you saw in the quarter was that from the Netflix deal that was announced back in April? And I'm just trying to true up what – that was – that's eight months since that time, so was this sort of the payment for that deal that was upcoming? Or was there some other SVOD deal that got signed? And secondly, are there future deliveries of product that is part of this deal, or was this purely a library type of contract? And then last, when you look at the incremental margins on your entertainment business and understanding that this is a relatively small part of the business, but it looks like the incremental margin for the incremental revenue got to about 44%. When you think about licensing is typically 70%, 80% type of margin business, the SVOD deals are again very high similar type margin because a lot of the costs have already been amortized. What were some of the costs that went against that that I may not be thinking about? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. If you look at Entertainment and Licensing segment, there are several elements within our Entertainment and Licensing business. Certainly, lifestyle licensing was up in the quarter. And that has to do with the fact that we get paid typically in arrears by a single quarter. So we account for the sales of our consumer products licensees and then we are able to take in those revenues as we get paid and recognize those revenues. So that was up in the quarter. That was obviously – contributes to the mix and contributes to the operating margin in that segment. Certainly, we have a number of streaming deals that are happening. We have our content on any number of platforms, SVOD platforms, including Netflix, but not exclusively to Netflix. And, yes, there are payments that happen within the quarter. What happens is as we deliver the episodes, we get paid for the episodes that we're delivering. And we also have other deals in place. So some of this is library programming. And then as we go on time, we talked about the development of and launching of new brands and new brands would be launched both in linear television and over time on different SVOD platforms. Deborah M. Thomas - Chief Financial Officer & Executive Vice President: We also mentioned, Eric, that we had – we referred back to our full-year estimates on amortization. A lot of this revenue was included in our estimates when we set up our alternates for amortizing the products. So what you continue to see is the amortization that had already been built into our revenue estimates for the full year.

Great. Thank you very much.

Thank you. Our next question is from the line of Derrick Johnson (sic) [Gerrick Johnson] with BMO Capital Markets. Please proceed with your question.

Hey. Good morning. I was hoping you could discuss the net EPS impact on results from foreign exchange and also if you could quantify the impact in basis points on gross margin from FX, and finally the absolute dollar amount that you benefited from hedging on FX. Thank you. Brian D. Goldner - President, Chief Executive Officer & Director: So the answer to the first question is the FX impact on EPS in the quarter was $0.10. So otherwise, we would have been at $0.30 – $0.31 in the quarter. Deb, you want to talk about the other piece? Deborah M. Thomas - Chief Financial Officer & Executive Vice President: Sure. Well, we continue to have – we had a slightly larger impact from foreign exchange obviously because of the magnitude in the quarter. You've got a fairly small revenue quarter compared to the rest of the year. So a bit higher foreign exchange impact than we would normally expect to see. And as we said, we've hedged a fair amount of our product purchases, probably about the same level as we'd hedged last year, obviously, at declining rates through this year. So what you're seeing is the benefit of favorable foreign exchange product cost hedges in the first quarter and larger than average impact. As a matter of fact, the impact on our revenue from foreign exchange was about 9% of our total reported revenues. And if you recall, we said at Toy Fair that at rates existing at that point in time, had those rates continued through the year, our 2014 full-year revenue would have been about $250 million less. Well, in fact, the dollar's continued to strengthen. So if you looked at that impact at current rates, our revenues would have been about $310 million less. And as the euro continues to move toward parity, if the euro actually hits parity that would probably put another $60 million to $65 million negative impact on those revenues. So for the full year, we continue to see the impact of foreign exchange will be a headwind. Because of the size of the quarter, it was slightly larger than it would typically be, but we do continue to think it would still be around that 10% to 15% impact to revenue will impact earnings per share. Brian D. Goldner - President, Chief Executive Officer & Director: And, Gerrick, we're obviously taking a number of steps to mitigate that impact. We've taken mid-single-digit price increases both in the U.S. and around the world and in markets where we've seen particularly high forex impact, we've gone back to take additional price increases where necessary to try to again mitigate in the short term those FX impacts.

Okay. Thank you. And shifting gears a little bit, not much mention of LITTLE PONY in the quarter. I guess, it was up because it's a franchise brand, but can you discuss how it performed geographically between North America and international? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. MY LITTLE PONY continues to perform quite well for us globally. It certainly benefits from revenues in several different categories. It goes back to the idea of being a franchise brand, and having licensed product as well as our own toy and game product. We are gearing up for the fifth season of MY LITTLE PONY is just breaking now and will break throughout the year. So brand-new product lineup around the fifth season that comes in second, third, and fourth quarters. But MY LITTLE PONY performed well, its POS was in the PONY business, the core PONY business was quite good for the quarter, double-digit POS increase there. And again, it's a small first quarter. And we're gearing up for the rest of the year, but MY LITTLE PONY continued to grow in the quarter.

Okay. Great. Thank you very much, Brian.

Thank you. Our next question comes from the line of Jaime Katz with Morningstar. Please proceed with your question.

Good morning. I guess my question is about Preschool. It seems like both you and your closest peer have turned the segment around in the last quarter or there's been something else that has been driving demand there. Can you talk a little bit about where you guys have seen strength and maybe how you think about continuing to connect with consumers in this segment for the rest of the year? Brian D. Goldner - President, Chief Executive Officer & Director: Sure. In our Preschool segment, one of our biggest brands there is PLAY-DOH. It continues to perform incredibly well. It's one of our most global brands and a number one brand in a couple countries around the world for us. The brand was up double-digits in the quarter. The POS was up double-digits throughout the world. We continue to have all new innovations, and again, that team has done a great job of continuing to innovate that brand. This is absent even DOHVINCI, we're just talking about the core PLAY-DOH business. The other part of the business that's performing quite well is a character-based business. That storytelling-led business is very strong. We saw good strength in TRANSFORMERS RESCUE BOTS. We got in both placement of the TV show as well as the toy sales in the quarter were quite good. We add to that initiatives around Jurassic World, which just begin to take hold now. So again, character-led business has been particularly strong and we've seen that for our business. We have a number of new initiatives in our core PLAYSKOOL business. You saw at Toy Fair Play, Stow and Go. Early indications there good POS, albeit, early days, but POS growth there for some of the new initiatives in core Playskool. So I think it's about creating those innovations based on great consumer insights, about character-led business, and great creativity and enabling kids and moms to agree on developmental milestones and all the fun of our PLAY-DOH business, that great creativity that parents really love and kids enjoy as well.

Okay. And then your advertising ratio for the year appears that it's going to be down. Are you guys finding more efficient channels to advertise in? Or is it just that the tilt to more digital is less expensive? Brian D. Goldner - President, Chief Executive Officer & Director: Advertising we've said ratably should be right around 10%. So very consistent with the year-ago numbers. But over a trend line, longer-term trend line, that's down a bit, but it won't be the same number as it was in the first quarter. It was down more than that in the first quarter. And that just has to do with the size of the quarter and revenues. But if you look at our strategies, clearly, we're employing every one of the digital strategies that are available to us. That does add a level of efficiency and effectiveness to our messaging, engaging consumers, enthusiasts and fans, and enabling them to curate our brands and get involved in their own content creation and involvement in our polling, whether it's in our Games business, or in our Preschool business is quite a enabling technology that does enable us to – allow us to more effectively advertise over time.

Thank you.

Thank you. Our next question comes from the line of Tim Conder with Wells Fargo. Please proceed with your question.

Thank you. Congratulations, Brian, again. I know it's a small quarter. But a little additional color just to clarify, the streaming, this is more of a one-time payment, or will there be going forward a little bit starting to come in each quarter from that perspective? And I guess, in relation to that, obviously, we've got FX everybody's dealing with. But you talked about the comparables going across the year, the timing of the entertainment releases. Can you just, sort of, plot through the quarter (39:41) given FX and the timing of releases, will you have more difficult versus easy comparisons in the latter three quarters here? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. I think that as we look at the entertainment initiatives, what we were trying to point out is just simply that we have a very robust slate. We've said we've entered this unprecedented era of new entertainment. The company's certainly benefiting from our own entertainment as much as our partners' entertainment. In the first quarter, in percentage terms, the fastest-growing – the percentage growth was fastest for TRANSFORMERS. We have a new show that's on Cartoon Network. This just broke in the carryover sales of our movie-related products from 2014 are quite strong in the quarter. So the combination of storytelling and movies and television benefited our own brands. As we go out through the second, third and fourth quarter, what we're trying to point out is that all of the big movie titles don't come just in the second quarter as they did a year ago that they're more spread out throughout the year. And I think that's something to think about as you map out the remainder of the year. We're really not giving you kind of, if you will, overall annual guidance, but trying to say where those revenues may fall just to help be thoughtful around where the entertainment will really continue to drive our business. And, Tim, remind me the first part of your question?

Yeah. I guess, on the expense side of the comparables, given the timing and where you have hedges in your revenue and where that revenue comes from, just the comparability, how we should think about the FX? We kind of can see where the different currencies are, but there are other components we can't of FX. So that comparability, and then the first part was the digital streaming. Should we... Brian D. Goldner - President, Chief Executive Officer & Director: Oh, okay.

So these – yeah. Should we think these more of just one-time payments or is there going to be a start component of where that's going to start to flow each quarter, Brian? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. The digital streaming, we mentioned that in 2012, we had done a similar digital streaming deal, that was a few years ago. We mentioned how that revenue comes in. Obviously, in Entertainment and Licensing, we also took in significantly more licensing royalty income. So it's not just digital streaming in that category. And, Deb, you want to... Deborah M. Thomas - Chief Financial Officer & Executive Vice President: The digital streaming revenue does primarily come in one big chunk. So that's why, if you recall, Tim, I said it made things a little bit lumpy at the time. We'd say it's just a bit lumpy. But again, it's been built into our models. And that's why we've continued to say that our amortization for the full year will be consistent with last year, because obviously that number is impacted significantly. As far as foreign exchange, you're right. I mean, the way numbers have moved and rates have moved and the dollar has strengthened, even from Toy Fair, has had an additional impact to us. If we looked at last year's revenue, it'd be about a $60 million additional negative impact to the year. And you can add another $60 million on that if the euro goes to parity. So as we watch how rates go throughout the year, it will have an impact on revenue.

But no color – I remember you'd mentioned that earlier in the call, but no color given where your hedges are and then sort of the mix of your revenues throughout the year, would there be any quarters that were more challenging than the others other than just looking at where the FX is year-over-year? Deborah M. Thomas - Chief Financial Officer & Executive Vice President: We've hedged about the same level as we did a year ago. And each month is a little bit different. Think about we have this rolling hedging program, as a matter of fact, after year-end, we'd had even put in more hedges to go out through 2019. So, you think about as you layer those hedges on at different times, they're at different rates, and you get different flow-through of positive impact to the gross margin. For us, we've always said we don't speculate, we do it really to protect our product pricing. So we know what we have to price our products at in the various markets over time. Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. And, Tim, as we go out beyond 2015 into 2016 and beyond, you know we go out and price product based on the prevailing elements of the marketplace. And given so much of our line is new every year, it gives us a chance to look at what the cost inputs can and should be, what the pricing should look like. And therefore, this year it's about the fact that FX changes were so significant across countries and so fast in terms of the change back in the fourth quarter of last year. So this year we have to mitigate those changes, taking steps wherever we can on pricing and looking at our costs. But as we go out in the future years, we've taken that into account and begun to address that so that we can look at that in our cost of goods and into our product development as well as product pricing.

Okay. And final question. You've done a great job starting several years ago of seeding your content and brands into many international markets and now with the expanded Disney relationship and going direct also from a distribution standpoint, where do you see other markets where you need to go direct and the plans to do that there? Any additional opportunities over the next – through this year or into next year? Brian D. Goldner - President, Chief Executive Officer & Director: We're continuing to develop our product along a number of different lines. We've said our first objective was to create the right balance of our Franchise Brands, Franchise Brand effort and Franchise Brand growth. We've then developed adjacencies that you've seen enter the market quite successfully around those Franchise Brands. And the next phase of our development you'll see over the next number of years some new brands that we will now take this blueprint and the model we've created and begin to introduce some of the new brands. Some of those are from our vault like Jem and the Holograms. Some will be absolutely new to us. A few are based on some historical acquisitions we made, like Micronauts, but that becomes part of the mix as we go out over the next several years. Then in addition to that, we've talked about how in partnering with The Walt Disney Company, we have the opportunity to take advantage of their amazing slate of entertainment that's upcoming, as well as in future years the Princess business that we're very excited about. And it continues to allow us to balance our revenues where our partner brands revenues should be plus or minus 20% of our revenues, a couple points higher or lower in some individual years. But that balance enables us to continue to generate the kind of operating returns we're looking for as a company. Deborah M. Thomas - Chief Financial Officer & Executive Vice President: And we still see opportunity in the various emerging markets that we're in now to continue to expand our market share and for growth as those markets grow as well. And outside of that, I mean, we talked about some other markets, we specifically spoke at Toy Fair about some growth in Indonesia and some Asia markets as we go forward. But nothing certainly of the size in investment that we've had in places like Russia or Brazil where they're just very large countries.

Great. Thank you both.

Our next question comes from the line of Drew Crum with Stifel. Please proceed with our question. Drew E. Crum - Stifel, Nicolaus & Co., Inc.: Okay. Thanks. Good morning, everyone. Brian D. Goldner - President, Chief Executive Officer & Director: Good morning. Drew E. Crum - Stifel, Nicolaus & Co., Inc.: So on the Girls business, Brian, you mentioned FURBY as being a headwind. When does that stop becoming a headwind? And then does that prohibit you guys from growing the Girls business in 2015? Brian D. Goldner - President, Chief Executive Officer & Director: For the full year, we have some amazing initiatives and new innovations across our Girls business. And if you look at MY LITTLE PONY, there's a brand-new product lineup as well as a whole new TV series we're hitting. This is season number five and a brand-new series that we've developed for MY LITTLE PONY. LITTLEST PET SHOP is seeing great growth in the quarter and really just beginning to build on the momentum that we said we would create based on all-new TV series and getting that entertainment out around the world. For the second half of the year, of course, we add Disney Descendants and very excited about the new entertainment initiative from Disney and our lineup there. So I'm not going to really guide you on overall Girls growth. The last two years we've grown the Girls business and both years have been north of $1 billion. FURBY was a big brand for us. And last year, it continued to be a big brand as it moved through non-English speaking market. And it will continue to be a headwind throughout the year. But having said that, the teams are lining up some great product and storytelling initiatives for our own Franchise…

Our next question is from the line of Sean McGowan of Needham & Company. Please proceed with your question. Sean P. McGowan - Needham & Co. LLC: Hi. Thanks. Also I have a couple, if I can. When you look at the royalties and entertainment revenue that comes in and then you allocate them around the brands, can you talk a little bit about what that says about the growth of – would TRANSFORMERS have been up without such payments? And I'm not trying to say that's not legitimate revenue. It is. I'm just trying to get a sense of whether it's the payments that are driving that growth or is that actual sales of toys? And similarly, what does it say for Girls if – you had a lot of things going right on the entertainment licensing in the quarter for Girls and it's still down? Brian D. Goldner - President, Chief Executive Officer & Director: Yeah. I think we noted why Girls was down. We're up against a very big FURBY comp, and, of course, in the first quarter, Easy Bake was down because, again, it's very holiday-sales oriented. And there's a bit of impact with some inventories based on the West Coast port strike and some delays around a little bit of product. TRANSFORMERS would have been up without the entertainment payment. So I think that I would turn it around a little bit. I would say that our objective is to continue to grow our Franchise Brands across a number of dimensions. We're going to continue to be the preeminent creator of toys and games through great innovations and consumer insight. But through storytelling, we are going to bring the power of our brands to other consumer product categories. That is the nature of the way…

Thank you. At this time, I'll turn the floor back to Ms. Debbie Hancock for closing remarks.

Thank you, Rob, and thank you, 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. In addition, our second quarter earnings call is tentatively scheduled for Monday, July 20. Thank you.