Hasbro (HAS)

NORTH AMERICAN SEGMENT

The North American segment's net revenues for the quarter ended April 1, 2007 increased 36% to $421,084 as compared to the same period in 2006. This increase primarily reflects shipments of MARVEL products and increased sales of core brands. The Company had a large number of MARVEL shipments during the first quarter partially due to shipment of products related to SPIDER-MAN 3, which is planned to be released in May of 2007. The increase in revenues from core brand products primarily related to increased sales of LITTLEST PET SHOP, NERF, PLAYSKOOL and DUNGEONS & DRAGONS products. Sales in the first quarter of 2007 were also positively impacted by sales of TOOTH TUNES products and BABY ALIVE dolls. The Company expects sales of MARVEL products to continue to be strong in the second quarter due to the planned theatrical release of SPIDER-MAN 3 in May.

The North American segment operating profit of $45,325 for the quarter ended April 1, 2007 compares to an operating profit of $4,770 for the quarter ended April 2, 2006. The increased operating profit in 2007 was primarily related to increased gross profit as a result of the increased sales in the first quarter of 2007. The increase in gross profit was partly offset by an increase in royalty expenses, principally due to the increased sales of MARVEL products in the first quarter of 2007. In addition, operating profit was negatively impacted by increased advertising expense in the first quarter of 2007.

HASBRO, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of Financial

Condition and Results of Operations (continued)

(Thousands of Dollars and Shares Except Per Share Data)

NORTH AMERICAN SEGMENT

The North American segment's net revenues for the quarter ended April 2, 2006 increased 7% to $310,304 from the same period in 2005. The increase is primarily due to increased shipments of LITTLEST PET SHOP products, as well as increased sales of certain core brands, including PLAYSKOOL, MAGIC: THE GATHERING, TRANSFORMERS, SUPER SOAKER and NERF and increased sales of traditional board games. These increases were partially offset by the anticipated decline in shipments of STAR WARS products as well as decreased sales of DUEL MASTERS products. The Company had significant sales of STAR WARS products in 2005 related to the May 2005 theatrical release of STAR WARS EPISODE III: REVENGE OF THE SITH and the subsequent DVD release in the fourth quarter of 2005. The Company expects significant declines in revenues from the sales of STAR WARS products for the fiscal year 2006 versus 2005.

HASBRO, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of Financial

Condition and Results of Operations (continued)

(Thousands of Dollars Except Per Share Data)

The North American segment operating profit of $4,770 for the quarter ended April 2, 2006 compares to an operating profit of $4,637 for the quarter ended March 27, 2005. Decreases in royalty and amortization expenses as a result of the decrease in sales of STAR WARS products were largely offset by increased product development and marketing expenses as well as slightly higher advertising expense. Gross profit remained consistent in 2006, despite the increase in sales, due to the product mix, primarily the result of lower sales of STAR WARS products. Sales of products related to entertainment-based properties, such as STAR WARS, typically carry a higher gross margin.  These products also carry a higher rate of royalties, and the resulting operating profit is generally not as high as it is for revenues derived from the sale of Company owned or Company-controlled brands. In addition, expenses for the segment were negatively impacted by one extra week in the first quarter of 2006 versus 2005.