Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 01, 2018 | Apr. 23, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HASBRO INC | |
Entity Central Index Key | 46,080 | |
Current Fiscal Year End Date | --12-30 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 124,937,746 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 1, 2018 | |
Trading Symbol | HAS |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 |
Current assets | |||
Cash and cash equivalents | $ 1,598,944 | $ 1,581,234 | $ 1,463,081 |
Accounts receivable, less allowance for doubtful accounts of $94,300, $31,400 and $13,200 as of April 1, 2018, December 31, 2017 and April 2, 2017, respectively | 612,698 | 1,405,399 | 676,945 |
Inventories | 517,439 | 433,293 | 416,232 |
Prepaid expenses and other current assets | 292,756 | 214,000 | 243,475 |
Total current assets | 3,021,837 | 3,633,926 | 2,799,733 |
Property, plant and equipment, less accumulated depreciation of $436,600, $422,100 and $392,900 as of April 1, 2018, December 31, 2017 and April 2, 2017, respectively | 262,418 | 259,710 | 270,023 |
Other assets | |||
Goodwill | 573,574 | 573,063 | 570,937 |
Other intangibles, net, accumulated amortization of $911,300, $904,900 and $883,900 as of April 1, 2018, December 31, 2017 and April 2, 2017, respectively | 210,904 | 217,382 | 238,069 |
Other | 660,339 | 605,902 | 767,108 |
Total other assets | 1,444,817 | 1,396,347 | 1,576,114 |
Total assets | 4,729,072 | 5,289,983 | 4,645,870 |
Current liabilities | |||
Short-term borrowings | 21,611 | 154,957 | 65,294 |
Current portion of long-term debt | 0 | 0 | 349,814 |
Accounts payable | 256,433 | 348,476 | 241,214 |
Accrued liabilities | 574,482 | 748,264 | 545,492 |
Total current liabilities | 852,526 | 1,251,697 | 1,201,814 |
Long-term debt | 1,693,977 | 1,693,609 | 1,198,896 |
Other liabilities | 611,210 | 514,720 | 393,516 |
Total liabilities | 3,157,713 | 3,460,026 | 2,794,226 |
Shareholders' equity | |||
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued | 0 | 0 | 0 |
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 209,694,630 at April 1, 2018, December 31, 2017, and April 2, 2017 | 104,847 | 104,847 | 104,847 |
Additional paid-in capital | 1,053,368 | 1,050,605 | 1,008,737 |
Retained earnings | 4,090,637 | 4,260,222 | 4,145,469 |
Accumulated other comprehensive loss | (292,395) | (239,425) | (197,171) |
Treasury stock, at cost; 84,706,373 shares at April 1, 2018; 85,244,923 shares at December 31, 2017; and 84,685,145 shares at April 2, 2017 | (3,385,098) | (3,346,292) | (3,210,238) |
Total shareholders' equity | 1,571,359 | 1,829,957 | 1,851,644 |
Total liabilities and shareholders' equity | $ 4,729,072 | $ 5,289,983 | $ 4,645,870 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) Parenthetical - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 |
Current assets | |||
Accounts receivable, allowance for doubtful accounts | $ 94,300 | $ 31,400 | $ 13,200 |
Property, plant and equipment, accumulated depreciation | 436,600 | 422,100 | 392,900 |
Other assets | |||
Other intangibles, accumulated amortization | $ 911,300 | $ 904,900 | $ 883,900 |
Shareholders' equity | |||
Preference stock, par value (in dollars per share) | $ 2.5 | $ 2.5 | $ 2.5 |
Preference stock, authorized shares (in shares) | 5,000,000 | 5,000,000 | 5,000,000 |
Preference stock, issued (in shares) | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.5 | $ 0.5 | $ 0.5 |
Common stock, authorized shares (in shares) | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 209,694,630 | 209,694,630 | 209,694,630 |
Treasury stock, at cost; shares (in shares) | 84,706,373 | 85,244,923 | 84,685,145 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Consolidated Statements of Operations (Unaudited) [Abstract] | ||
Net revenues | $ 716,341 | $ 849,663 |
Costs and expenses | ||
Cost of sales | 255,187 | 306,082 |
Royalties | 69,652 | 64,380 |
Product development | 57,384 | 62,586 |
Advertising | 68,016 | 80,936 |
Amortization of intangibles | 6,478 | 7,881 |
Program production cost amortization | 12,034 | 5,570 |
Selling, distribution and administration | 328,009 | 243,885 |
Total costs and expenses | 796,760 | 771,320 |
Operating Profit (Loss) | (80,419) | 78,343 |
Non-operating (income) expense | ||
Interest Expense | 22,809 | 24,456 |
Interest income | (6,248) | (5,564) |
Other income, net | (8,592) | (11,386) |
Total non-operating expense, net | 7,969 | 7,506 |
Earnings (loss) before income taxes | (88,388) | 70,837 |
Income tax expense | 24,104 | 2,238 |
Net earnings (loss) | $ (112,492) | $ 68,599 |
Net earnings (loss) per common share: | ||
Basic (in dollars per share) | $ (0.9) | $ 0.55 |
Diluted (in dollars per share) | (0.9) | 0.54 |
Cash dividends declared per common share (in dollars per share) | $ 0.63 | $ 0.57 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Consolidated Statements of Comprehensive Earnings (Loss) [Abstract] | ||
Net earnings (loss) | $ (112,492) | $ 68,599 |
Other comprehensive earnings (loss): | ||
Foreign currency translation adjustments | 12,829 | 24,673 |
Net losses on cash flow hedging activities, net of tax | (25,270) | (23,317) |
Unrealized holding losses on available-for-sale securities, net of tax | (143) | (31) |
Changes in unrecognized pension and postretirement amounts, net of tax | (26,058) | 0 |
Reclassifications to earnings (loss), net of tax: | ||
Net losses (gains) on cash flow hedging activities | 5,355 | (5,374) |
Unrecognized pension and postretirement amounts | 1,820 | 1,448 |
Total other comprehensive loss, net of tax | (31,467) | (2,601) |
Comprehensive earnings (loss) | $ (143,959) | $ 65,998 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Cash flows from operating activities | ||
Net earnings (loss) | $ (112,492) | $ 68,599 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation of plant and equipment | 26,221 | 27,702 |
Amortization of intangibles | 6,478 | 7,881 |
Program production cost amortization | 12,034 | 5,570 |
Deferred income taxes | (16,437) | 13,428 |
Stock-based compensation | 10,291 | 10,844 |
Other non-cash items | (4,971) | (5,498) |
Change in operating assets and liabilities net of acquired and disposed balances: | ||
Decrease in accounts receivable | 808,367 | 660,253 |
Increase in inventories | (76,516) | (21,377) |
Increase in prepaid expenses and other current assets | (78,540) | (7,200) |
Program production costs | (11,398) | (11,738) |
Decrease in accounts payable and accrued liabilities | (297,669) | (342,533) |
Changes in net deemed repatriation tax | 75,805 | 0 |
Other | (23,434) | 5,997 |
Net cash provided by operating activities | 317,739 | 411,928 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (28,235) | (30,243) |
Other | 2,007 | (781) |
Net cash utilized by investing activities | (26,228) | (31,024) |
Cash flows from financing activities | ||
Net repayments of other short-term borrowings | (133,698) | (107,336) |
Purchases of common stock | (38,126) | (19,312) |
Stock-based compensation transactions | 19,518 | 9,743 |
Dividends paid | (70,781) | (63,404) |
Payments related to tax withholding for share-based compensation | (52,637) | (31,391) |
Net cash utilized by financing activities | (275,724) | (211,700) |
Effect of exchange rate changes on cash | 1,923 | 11,592 |
Increase in cash and cash equivalents | 17,710 | 180,796 |
Cash and cash equivalents at beginning of year | 1,581,234 | 1,282,285 |
Cash and cash equivalents at end of period | 1,598,944 | 1,463,081 |
Supplemental information | ||
Interest | 28,699 | 31,446 |
Income taxes | $ 42,481 | $ 31,571 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 01, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | ( 1 ) Basis of Presentation In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of April 1, 2018 and April 2, 2017 , and the results of its operations and cash flows for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Actual results could differ from those estimates. The quarter ended April 1, 2018 was a 13-week period. The quarter ended April 2, 2017 was a 14-week period. The results of operations for the quarter are not necessarily indicative of re sults to be expected for the full year, nor were those of the comparable 2017 period representative of those actually experienced for the full year 2017 . These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed audited consolidated financial statements for the fiscal year ended December 31, 2017 in its Annual Report on Form 10-K (“2017 Form 10-K”), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein. Recently Adopted Accounting Standards The Company's accounting policies ar e the same as those described in Note 1 to the Company's consolidated financial statements in its 2017 Form 10-K with the exception of the accounting policies related to revenue recognition, reclassification of disproportionate tax effects from accumula ted other comprehensive income (“AOCI”) caused by the Tax Cuts and Jobs Act of 2017 and the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. On January 1, 2018, the Company adopted Financial Accounting Standards Boa rd (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606 or the New Revenue Standard) using the modified retrospective method. ASC 606 supersedes the revenue recognition requirements in ASC 605 – Revenue Recognition and most industry-specific guidance in U.S. GAAP. The New Revenue Standard provides a five-step model for analyzing contracts and transactions to determine when, how, and if revenue is recognized. Revenue should be recognized to depict the tran sfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The cumulative impact of the adoption of the New Revenue Standard was not mater ial to the Company therefore the Company did not record any adjustments to retained earnings. This was determined by analyzing contracts not completed as of January 1, 2018. The Comparative information has not been restated and continues to be reported u nder the accounting standards in effect for those periods. For further details, see Note 2. Revenue recognition from the sale of finished product to customers, which is the majority of the Company’s revenues, did not change under the new standard and the Company does not expect material changes in the future as a result of the New Revenue Standard related to the sale of finished product to its customers. Within the Company’s Entertainment and Licensing segment, the timing of revenue recognition for minimu m guarantees that the Company receives from licensees is impacted by the New Revenue Standard. Prior to the adoption of ASC 606, for licenses of the Company’s brands that are subject to minimum guaranteed license fees, the Company recognized the differenc e between the minimum guaranteed amount and the actual royalties earned from licensee merchandise sales (“shortfalls”) at the end of the contract period, which was in the fourth quarter for most of the Company’s licensee arrangements. In periods following January 1, 2018, minimum guaranteed amounts will be recognized on a straight-line basis over the license period. While the impact of this change will not be material to the year, it will impact the timing of revenue recognition within the Company’s Enterta inment and Licensing segment such that under ASC 606, less revenues will be recorded in the fourth quarter and more revenues will be recorded within the first, second, and third quarters. No other areas of the Company’s business were materially impacted by the New Revenue Standard. In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (ASU 2018-02), Income Statement -Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard provides for a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings, of disproportionate income tax effects arising from the impact of the Tax Cuts and Jobs Act of 2017 . For public companies, this standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2018-02 in the first quarter of 2018. The impact of the adoption resulted in a one-time reclassification in the amo unt of $ 21,503 from AOCI with a corresponding credit to retained earnings. In March 2017, the FASB issued Accounting Standards Update No. 2017-07 (ASU 2017-07), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Bene fit Cost. The standard requires companies to present the service cost component of net benefit cost in the income statement line items where they report compensation cost. Companies will present all other components of net benefit cost outside operating i ncome, if this subtotal is presented. For public companies, this standard was effective for annual reporting periods beginning after December 15, 2017, and early adoption was permitted. The Company adopted this standard in the first quarter of 2018 and the adoption of this standard did not have a material impact on the Company’s results or consolidated financial statements in the first quarter of 2018. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (ASC 230) – Classification of Certain Cash Receipts and Cash Payments . The new guidance is intended to reduce diversity in practice across all industries, in how certain transactions are classified in the statement of cash flows. ASU 2016-15 was effective for public companies for fisca l years beginning after December 15, 2017. The Company adopted this standard in 2018 and the adoption of this standard did not have an impact on the Company’s statement of cash flows for the quarters ended April 1, 2018 and April 2, 2017. In October 2016 , the FASB issued Accounting Standards Update No. 2016-16 (ASU 2016-16), Accounting for Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory . For public companies, this standard was effective for annual reporting periods beginning after Dece mber 15, 2017, and early adoption is permitted. The standard requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs requiring any deferred taxes not yet recognized o n intra-entity transfers to be recorded to retained earnings. The Company adopted this standard in the first quarter of 2018 and the adoption did not have an impact on the Company’s results or consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 01, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition Policy | ( 2 ) Revenue Recognition Revenue Recognition Revenue is recognized when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probab le. Toy and Games The majority of the Company’s revenues are derived from sales of finished products to customers. Revenues from sales of finished products to customers accounted for 90 % and 92 % of the Company’s revenues for the quarters ended April 1, 20 18 and April 2, 2017, respectively. When determining whether control of the finished products has transferred to the customer, the Company considers any future performance obligations. Generally, the Company has no post-shipment obligation on sales of fi nished products to customers and revenues from product sales are recognized upon passing of title to the customer, which is generally at the time of shipment. Any shipping and handling activities that are performed by the Company, whether before or after a customer has obtained control of the products, are considered activities to fulfill our obligation to transfer the products, and are recorded as incurred within selling, distribution, and administration expenses. For the quarters ended April 1, 2018 and A pril 2, 2017, these costs were $ 41,486 and $ 36,609 , respectively. The Company offers various discounts, rebates, allowances, returns, and markdowns to its customers, (collectively, “allowances”), all of which are considered when determining the transactio n price. Certain allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenues. Other allowances can vary depending on future outcomes such as customer sales volume (“variable consideration”). The Company estimates the amount of variable consideration using the expected value method. In estimating the amount of variable consideration using the expected value method, the Company considers various factors including but not limited to: customer te rms, historical experience, any expected deviations from historical experience, and existing or expected market conditions. The Company then records an estimate of variable consideration as a reduction to revenues at the time of sale. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. Historically, adjustments to estimated variable consideration have not been material. Entertainment and Licensing Revenue s within the Company’s Entertainment and Licensing segment, which accounted for 9 % and 6 % of the Company’s revenues for the quarters ended April 1, 2018 and April 2, 2017, respectively, are recorded either over a period of time or at a point in time. The Company enters into contracts to license its intellectual property, which consists of its brands, in various channels including but not limited to: consumer products such as apparel or home goods, within formats such as on-line games, within venues such as theme parks, or within formats such as motion picture films. The licensees pay the Company either a sales-based or usage-based royalty, or a combination of both, for use of the brands, in some cases subject to minimum guaranteed amounts or fixed fees. T he license of the Company’s brands provide access to the intellectual property over the term of the license, generally without any other performance obligation of the Company other than keeping the intellectual property active, and is therefore considered a right-to-access license of symbolic intellectual property. The Company records sales-based or usage-based royalty revenues for right-to-access licenses at the occurrence of the licensees’ subsequent sale or usage. When the arrangement includes a minimum guarantee, the Company records the minimum guarantee on a ratable basis over the term of the license period and does not record the sales-based or usage-based royalty revenues until they exceed the minimum guarantee. The Company also produces television or streaming programming for licensing to third parties. The licensees typically pay a fixed fee for the license of the produced content. The content that the Company delivers to its licensees has stand-alone functionality, generally without any other pe rformance obligation of the Company, and is therefore considered a right-to-use license of functional intellectual property. The Company records revenues for right-to-use licenses once the license period has commenced and the licensee has the ability to u se the delivered content. In arrangements where the licensee pays the Company a fixed fee for multiple seasons or multiple series of programming, arrangement fees are recorded as revenues based upon their relative fair values. As of April 1, 2018, the Co mpany did not have any material future performance commitments for film streaming or television orders that have not yet been delivered. The Company also develops application based digital games featuring its brands within the games. These games are hoste d by third-party platform providers. The Company does not charge a fee to the end users for the download of the games or the ability to play the games. The end users make in-application purchases of digital currencies, via the Company’s platform provider s, with such purchased digital currencies to be used in the games. The Company records revenues from in-application purchases based on the spending patterns of the players. For the majority of the Company’s digital games, players spend their currencies i n the month of purchase, and therefore revenues are recorded at the time of sale. The Company has no additional performance obligations other than delivery of the currency via its platform providers. The Company controls all aspects of the goods delivere d to the consumer. The third-party platform providers are providing only the service of hosting and administering receipt from the end users. The Company is the principal in the arrangement and revenues are recorded in net revenues inclusive of the fees charged by the third-party platform providers. The fee charged by the third-party platform providers to the Company are recorded within cost of sales. Contract Assets and Liabilities A contract asset is defined as an entity's right to consideration for go ods or services that the entity has transferred to a customer. A contract liability is defined to occur if the customer's payment of consideration precedes the entity's performance and represents the entity's obligation to transfer goods or services to a customer for which the entity has received consideration. The Company occasionally will require payment from customers for finished product in advance of the customer receiving control of the finished product. In these situations, the Company defers reve nue on the advanced payment until the customer has control of the finished product, generally within the next month. Within our Entertainment and Licensing segment, the Company may receive royalty payments from licensees in advance of the licensees’ subse quent sales to their customers, or in advance of the Company’s performance obligation being satisfied. The Company defers revenues on these advanced payments until its performance obligation is satisfied. The aggregate deferred revenues are recorded as l iabilities and are not material to the Company’s consolidated balance sheets as of April 1, 2018 and December 31, 2017, and the changes in deferred revenues are not material to the Company’s consolidated statement of operations for the quarter ended April 1, 2018. The Company historically has not recorded contract assets and does not currently expect to record any material contract assets in the future. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable on the conso lidated balance sheets as of April 1, 2018, April 2, 2017 and Dec ember 31, 2017 are materially from contracts with customers. In the quarter ended April 1, 2018, the Company recorded a bad debt charge of $ 59,115 related to a significant customer. The Comp any had no other material bad debt expense in the quarters ended April 1, 2018 and April 2, 2017 . Disaggregation of revenues The Company disaggregates its revenues from contracts with customers by segment: US and Canada, International, Entertainment and Licensing, and Global Operations. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into fou r brand categories: Franchise brands, Partner brands, Hasbro gaming, and Emerging brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 10, Segment Reporting, for further information. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 01, 2018 | |
Earnings (Loss) Per Share (Thousands of Dollars and Shares Except Per Share Data) [Abstract] | |
Earnings (Loss) Per Share | (3 ) Earnings (Loss) Per Share Net earnings (loss) per share data for the quarter s ended April 1, 2018 and April 2, 2017 were computed as follows: 2018 2017 Quarter Basic Diluted Basic Diluted Net earnings (loss) $ (112,492) (112,492) 68,599 68,599 Average shares outstanding 125,073 125,073 125,182 125,182 Effect of dilutive securities: Options and other share-based awards - - - 2,047 Equivalent Shares 125,073 125,073 125,182 127,229 Net earnings (loss) per common share $ (0.90) (0.90) 0.55 0.54 For the quarter s ended April 1, 2018 and April 2, 2017 , options and restricted stock units totaling 3,191 and 638, respectively, were excluded from the calculation of diluted earnings per share because to include the m would have been antidilutive. Of this amount 1,993 would have been included in the calculation of diluted shares had the Company not had a net loss in the first quarter of 2018. Assuming that these awards and options were included, under the treasury stock method, they w ould have resulted in an additional 1,022 shares being included in the diluted earnings per share calculation for the quarter ended April 1, 2018. |
Other Comprehensive Earnings (L
Other Comprehensive Earnings (Loss) | 3 Months Ended |
Apr. 01, 2018 | |
Other Comprehensive Earnings (Loss) [Abstract] | |
Other Comprehensive Earnings (Loss) | (4 ) Other Comprehensive Earnings (Loss) Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss) . The following table presents the related tax effects on changes in other comprehensive earn ings (loss) for the quarters ended April 1, 2018 and April 2, 2017 . Quarter Ended April 1, April 2, 2018 2017 Other comprehensive earnings (loss), tax effect: Tax benefit on unrealized holding losses $ 41 18 Tax benefit on cash flow hedging activities 5,980 5,310 Tax benefit on changes in unrecognized pension amounts 7,565 - Reclassifications to earnings, tax effect: Tax benefit on cash flow hedging activities (794) (369) Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations (528) (822) Total tax effect on other comprehensive earnings (loss) $ 12,264 4,137 Changes in the components of accumulated other comprehensive loss for the three months ended April 1, 2018 and April 2, 2017 are as follows: Unrealized Holding Total Gains Gains on Foreign Accumulated Pension and (Losses) on Available- Currency Other Postretirement Derivative for-Sale Translation Comprehensive Amounts Instruments Securities Adjustments Loss 2018 Balance at December 31, 2017 $ (110,971) (32,827) 1,034 (96,661) (239,425) Adoption of ASU 2018-02 (18,065) (3,660) 222 - (21,503) Current period other comprehensive earnings (loss) (24,238) (19,915) (143) 12,829 (31,467) Balance at April 1, 2018 $ (153,274) (56,402) 1,113 (83,832) (292,395) 2017 Balance at December 25, 2016 $ (118,401) 51,085 1,424 (128,678) (194,570) Current period other comprehensive earnings (loss) 1,448 (28,691) (31) 24,673 (2,601) Balance at April 2, 2017 $ (116,953) 22,394 1,393 (104,005) (197,171) Gains (Losses) on Derivative Instruments At April 1, 2018 , the Company had remaining net deferred losses on foreign currency forward c ontracts, net of tax, of $ 36,046 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the first quarter of 2018 or forecasted to be purchased during the remainder of 2018 and, to a lesser extent, 2019 through 2022 , intercompany expenses expected to be paid or received during 2018 and 2019 , cash receipts for sales made at the end of the first quarter of 2018 or forecasted to be made in the remainder of 2018 and, to a lesser exte nt, 2019 through 2020 . These amounts will be reclassified into the consolidated statements of operations upon the sale of the related inventory or recognition of the related sales or expenses. In addition to foreign currency forward contracts, t he Company entered into hedging contracts on future interest payments related to the long-term notes due in 2021 and 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related notes using the effective interest rate method. At April 1, 2018 , deferred losses, net of tax of $ 20,356 related to these instruments remained in AOCE. For the quarters ended April 1, 2018 and April 2, 2017 , losses of $ 450 and $ 484 , respectively , were reclassified from AOCE to net earnings. Of the amount included in AOCE at April 1, 2018 , the Company expects net losses of approximately $ 21,415 to be reclassified to the consolidated statements of operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Apr. 01, 2018 | |
Financial Instruments (Thousands of Dollars) [Abstract] | |
Financial Instruments | (5 ) Financial Instruments The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At April 1, 2018 , April 2, 2017 and December 31, 2017 , the carrying cost of these instruments approximated their fair value. The Company's financial instruments at April 1, 2018 , April 2, 2017 and December 31, 2017 also include certain assets and liabilities mea sured at fair value (see Notes 7 an d 9 ) as well as long-term borrowings. The carrying costs , which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of April 1, 2018 , April 2, 2017 and December 31, 2017 are as follows: April 1, 2018 April 2, 2017 December 31, 2017 Carrying Fair Carrying Fair Carrying Fair Cost Value Cost Value Cost Value 6.35% Notes Due 2040 $ 500,000 585,400 500,000 597,150 500,000 601,800 3.50% Notes Due 2027 500,000 468,000 - - 500,000 488,300 6.30% Notes Due 2017 - - 350,000 357,385 - - 5.10% Notes Due 2044 300,000 299,460 300,000 306,570 300,000 313,320 3.15% Notes Due 2021 300,000 300,480 300,000 305,490 300,000 302,640 6.60% Debentures Due 2028 109,895 128,006 109,895 125,390 109,895 131,390 Total long-term debt $ 1,709,895 1,781,346 1,559,895 1,691,985 1,709,895 1,837,450 Less: Current portion - - 350,000 357,385 - - Less: Deferred debt expenses 15,918 - 10,999 - 16,286 - Long-term debt $ 1,693,977 1,781,346 1,198,896 1,334,600 1,693,609 1,837,450 Current portion of long-term debt at April 2 , 201 7 of $ 3 49,814 , as shown on the consolidated balance sheet represents the $350,000 principal of 6.30% notes less $ 186 of deferred debt expenses. The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 7 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a di scount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company's own assumptions about the inputs that market participants would use in pricing the asset or li ability. The Company believes that this is the best information available for use in the fair value measurement. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2018 | |
Income Taxes (Thousands of Dollars) [Abstract] | |
Income Taxes | (6 ) Income Taxes The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local and international tax authorities in various tax jurisdictions. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to t he U.S. tax code which impacted 2017 including, but not limited to, reducing the U.S. federal corporate tax rate and requiring a one-time tax on certain unrepatriated earnings of foreign subsidiaries. On December 22, 2017, Staff Accounting Bulletin No. 1 18 (“SAB 118”) established a one-year measurement period to complete the accounting for the ASC 740 income tax effects of the Tax Act. An entity recognizes the impact of those amounts for which the accounting is complete. For matters that have not been c ompleted, provisional amounts are recorded to the extent they can be reasonably estimated. For amounts for which a reasonable estimate cannot be determined, no adjustment is made until such estimate can be completed. For the quarter ended April 1, 2018, the Company obtained additional information affecting the provisional amount initially recorded for the quarter ended December 31, 2017. As a result, the Company recorded a one-time tax expense of $ 47,800 which reversed certain discrete benefits rec orded in 2017 as well as increased our provisional deemed repatriation tax liability. The Company is no longer subject to U.S. federal income tax examinations for years before 2013. With few exceptions, the Company is no longer subject to U.S. state or lo cal and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before 2012. The Company is currently under income tax examination in several U.S. state and local and non-U.S. jurisdictions. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Apr. 01, 2018 | |
Fair Value of Financial Instruments (Thousands of Dollars) [Abstract] | |
Fair Value of Financial Instruments | (7 ) Fair Value of Financial Instruments The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels: Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by o bservable data for substantially the full term of the assets or liabilities; and Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Accounting standards permit entities to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes f or similar assets and liabilities. The Company has elected the fair value option for certain available-for-sale investments. At April 1, 2018 , April 2, 2017 and December 31, 2017 , t hese investments totaled $24,584, $23,603 and $24,436 , respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net gains of $448 and $631 on these investments in other income , net for the quarter s ended April 1, 2018 and April 2, 2017 , resp ectively, related to the change in fair value of such instruments. At April 1, 2018 , April 2, 2017 and December 31, 2017 , the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets (excluding as sets for which the fair value is measured using net asset value per share) : Fair Value Measurements Using: Quoted Prices in Active Markets Significant for Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) April 1, 2018 Assets: Available-for-sale securities $ 2,941 2,941 - - Derivatives 2,960 - 2,960 - Total assets $ 5,901 2,941 2,960 - Liabilities: Derivatives $ 39,428 - 39,428 - Option agreement 23,665 - - 23,665 Total liabilities $ 63,093 - 39,428 23,665 April 2, 2017 Assets: Available-for-sale securities $ 3,687 3,687 - - Derivatives 56,017 - 56,017 - Total assets $ 59,704 3,687 56,017 - Liabilities: Derivatives $ 20,595 - 20,595 - Option agreement 28,710 - - 28,710 Total liabilities $ 49,305 - 20,595 28,710 December 31, 2017 Assets: Available-for-sale securities $ 3,126 3,126 - - Derivatives 12,226 - 12,226 - Total assets $ 15,352 3,126 12,226 - Liabilities: Derivatives $ 23,051 - 23,051 - Option agreement 23,980 - - 23,980 Total Liabilities $ 47,031 - 23,051 23,980 Available-for-sale securities include equity securities of one company quoted on an active public market . The Company's derivatives consist of foreign currency forward contracts. The Company used current forward rates of the respective foreign currencies to measure the fair value of these contracts. The Company’s option agreement relates to an equity method in vestment in Discovery Family Channel (“Discovery”). The option agreement is included in other liabilities at April 1, 2018 , April 2, 2017 and December 31, 2017 , and is valued using an option pricing model based on the fair value of the related investmen t. Inputs used in the option pricing model include the volatility and fair value of the underlying company which are considered unobservable inputs as they reflect the Company's own assumptions about the inputs that market participants would use in pricin g the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. There were no changes in these valua tion techniques during the three -month period ended April 1, 2018 . The following is a reconciliation of the beginning and ending balances of the fair value measurements of the Company's financial instruments which use significant unobservable inputs (Level 3): 2018 2017 Balance at beginning of year $ (23,980) (28,770) Gain from change in fair value 315 60 Balance at end of first quarter $ (23,665) (28,710) In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At April 1, 2018 , April 2, 2017 and December 31, 2017 , these investments had fair values of $ 24,584 , $23,603 and $ 24,436 , respectively. Two of the investments have net asset values that are predominantly based on underlying investments which are traded on an active market and are redeemable within 45 days. The third investment invests in hedge funds which are generall y redeemable on a quarterly basis with 30 – 90 days’ notice. |
Pension and Postretirement Bene
Pension and Postretirement Benefits | 3 Months Ended |
Apr. 01, 2018 | |
Pension and Postretirement Benefits (Thousands of Dollars) [Abstract] | |
Pension and Postretirement Benefits | (8 ) Pension and Postretirement Benefits The components of the net periodic cost of the Company's defined benefit pension and other postretirement plans for th e quarters ended April 1, 2018 and April 2, 2017 are as follows: Quarter Ended Pension Postretirement April 1, April 2, April 1, April 2, 2018 2017 2018 2017 Service cost $ 685 952 188 172 Interest cost 4,016 4,725 292 295 Expected return on assets (5,205) (6,281) - - Net amortization and deferrals 2,977 2,694 42 - Net periodic benefit cost $ 2,473 2,090 522 467 During the three months ended April 1, 2018 , the Company made cash contributions of $280 to its defined benefit pe nsion plans . During fiscal 2018, t he Company expects to make cash contribut ions to its defined benefit pension plans of approximately $ 1,300 in the aggregate. In February 2018 , the Compensation Committee of the Company’s Board of Directors approved a resolution to terminate the Company’s U.S. defined benefit pension plan (“Plan”). During the first quarter of 2018 the Company commenced t he plan termination process and expects to complete the transfer of the Plan’s assets to a third-party administrator over a period of eighteen months. The decision to terminate the Plan follows the 2015 decision to freeze benefits being accrued covering n on-union employees after the sale of the Company’s manufacturing facility in East Longmeadow, MA. Benefits covering non-union employees were frozen in December 2007 . In connection with the decision to terminate the Plan, the Company remeasured the project ed benefit obligation based on the expected Plan termination costs. This remeasurement utilized a discount rate of 3.2 % compared to the discount rate of 3.7 % utilized in the December 31, 2017 measurement and resulted in an increase in the projected benefit obligation of $ 35,192 with offsetting amounts recorded to accumulated other comprehensi ve losses and deferred taxes. Upon settlement of the pension liability, the Company will reclassify the related pension losses currently recorded to accumulated other comprehensive loss , to the consolidated statements of operations . |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Apr. 01, 2018 | |
Derivative Financial Instruments (Thousands of Dollars) [Abstract] | |
Derivative Financial Instruments | (9 ) Derivative Financial Instruments Hasbro uses foreign currency forward contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States and Hong Kong dollars, and E uros. All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Com pany. Hasbro does not enter into derivative financial instruments for speculative purposes. Cash Flow Hedges The Company uses foreign currency forward contracts to reduce the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions in 2018 through 2022 . At April 1, 2018 , April 2, 2017 and December 31, 2017 , the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows: April 1, 2018 April 2, 2017 December 31, 2017 Notional Fair Notional Fair Notional Fair Hedged transaction Amount Value Amount Value Amount Value Inventory purchases $ 718,925 (31,453) 974,235 35,711 756,673 (13,695) Sales 375,441 7,323 423,828 1,083 423,315 16,144 Royalties and Other 178,896 (11,602) 324,008 (1,345) 196,889 (10,383) Total $ 1,273,262 (35,732) 1,722,071 35,449 1,376,877 (7,934) The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the consolidated balance sheets at April 1, 2018 , April 2, 2017 and December 31, 2017 as follows: April 1, April 2, December 31, 2018 2017 2017 Prepaid expenses and other current assets Unrealized gains $ 458 23,241 13,666 Unrealized losses (405) (3,204) (10,319) Net unrealized gains $ 53 20,037 3,347 Other assets Unrealized gains $ 5,996 39,032 11,255 Unrealized losses (3,089) (3,052) (2,376) Net unrealized gains $ 2,907 35,980 8,879 Accrued liabilities Unrealized gains $ 8,218 9,041 4,215 Unrealized losses (30,826) (28,591) (15,484) Net unrealized losses $ (22,608) (19,550) (11,269) Other liabilities Unrealized gains $ 2,846 149 4,546 Unrealized losses (18,930) (1,167) (13,437) Net unrealized losses $ (16,084) (1,018) (8,891) Net gains on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarter s ended April 1, 2018 and April 2, 2017 as follows: Quarter Ended April 1, April 2, 2018 2017 Statements of Operations Classification Cost of sales $ (3,891) 9,874 Sales 332 541 Other (1,423) 31 Net realized gains $ (4,982) 10,446 In addition, losses of $ 718 and $4,958 were reclassified to earnings as a result of hedge inef fectiveness for the quarters ended April 1, 2018 and April 2, 2017 , respectively. Undesignated Hedges The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes . T he Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans . As of April 1, 2018 , April 2, 2017 and December 31, 2017 the total notional amounts of the Company's undesignated der i vative instruments were $132,945 , $62,806 and $418,471 , respectively. At April 1, 2018 , April 2, 2017 and December 31, 2017 , the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance s heets as follows: April 1, April 2, December 31, 2018 2017 2017 Accrued liabilities Unrealized gains $ 383 289 1,793 Unrealized losses (1,119) (316) (4,684) Net unrealized loss (736) (27) (2,891) Total unrealized gain, net $ (736) (27) (2,891) The Comp any recorded net (losses) gains of $ ( 6,7 00 ) and $3, 581 on these instruments to other income , net for the quarters ended April 1, 2018 and April 2, 2017 , respectively, relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate. For additional information related to the Company's derivative f inancial instruments see Notes 5 and 7 . |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 01, 2018 | |
Segment Reporting (Thousands of Dollars) [Abstract] | |
Segment Reporting | (10 ) Segment Reporting Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment properties spanning toys, games, licensed products ranging from traditional to high-tech and digital, and film and television entertainment. The Company's segments are (i) U.S. and Canada, (ii) International, (iii) Entertainment and Licensing, and (iv) Global Operations. The U.S. and Canada segment includes the marketing and selling of action figures, arts and crafts and creative play products, electronic toys and related electronic interactive products, fashion and other dolls, infant products, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, as well as trad itional board games, and trading card and role-playing games primarily within the United States and Canada. Within the International segment, the Company markets and sells both toy and game products in markets outside of the U.S. and Canada, primarily in the European, Asia Pac ific, and Latin and South American regions. The Company's Entertainment and Licensing segment includes the Company's consumer products licensing, digital gaming, movie and television entertainment operations. The Global Operations segment is responsible fo r sourcing finished products for the Company's U.S. and Canada and International segments. Segment performance is measured at the operating profit level. Included in Corporate and E liminations are certain corporate expenses, including the elimination of i ntersegment transactions and certain assets benefiting more than one segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and e liminations. The accounting pol icies of the segments are the sa me as those referenced in note 1 . Results shown for the quarter are not necessarily representative of those which may be expected for the full year 2018 , nor were those of the comparable 2017 period representative of those actually experienced for the full year 2017 . Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to repo rted amounts for the quarters ended April 1, 2018 and April 2, 2017 are as follow s: Quarter Ended April 1, 2018 April 2, 2017 Net revenues External Affiliate External Affiliate U.S. and Canada $ 364,297 2,133 451,577 2,391 International 287,945 62 345,281 - Entertainment and Licensing 64,021 3,576 52,729 3,502 Global Operations (a) 78 253,320 76 260,229 Corporate and Eliminations (b) - (259,091) - (266,122) $ 716,341 - 849,663 - Quarter Ended April 1, April 2, Operating profit (loss) 2018 2017 U.S. and Canada $ (23,383) 64,754 International (56,088) 544 Entertainment and Licensing 13,906 11,346 Global Operations (a) 2,176 833 Corporate and Eliminations (b) (17,030) 866 $ (80,419) 78,343 April 1, April 2, December 31, Total assets 2018 2017 2017 U.S. and Canada $ 2,745,209 2,618,808 2,749,384 International 2,033,928 1,964,343 2,499,985 Entertainment and Licensing 673,248 763,988 626,193 Global Operations 3,293,265 2,218,817 2,819,768 Corporate and Eliminations (b) (4,016,578) (2,920,086) (3,405,347) $ 4,729,072 4,645,870 5,289,983 (a) The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities. (b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the individual operating segments are done at the beginning of the year based on budgeted amounts. Any differences b etween actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budget rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. The following table represents consolidated International segment net revenues by major geographic region for the quarter s ended April 1, 2018 and April 2, 2017 . Quarter Ended April 1, April 2, 2018 2017 Europe $ 155,562 216,120 Latin America 65,961 64,756 Asia Pacific 66,422 64,405 Net revenues $ 287,945 345,281 The following table presents consolidated net revenues by brand portfolio for the quarter s ended April 1, 2018 and April 2, 2017 . Quarter Ended April 1, April 2, 2018 2017 Franchise Brands $ 361,706 449,160 Partner Brands 200,592 212,962 Hasbro Gaming 105,227 135,766 Emerging Brands 48,816 51,775 Total $ 716,341 849,663 Franchise and Emerging Brands net revenues for the first quarter of 2017 have been restated to reflect the move of BABY ALIVE from Emerging Brands to Franchise Brands and the move of LITTLEST PET SHOP from Franchise Brands to Emerging Brands. Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $ 203,542 for the first quarter of 201 8, compared to revenues of $ 253,289 for the first quarter of 2017. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Apr. 01, 2018 | |
Subsequent Event [Abstract] | |
Subsequent Event [TextBlock] | (11) Subsequent Event Power Rangers Agreement On May 1 , 2018 , the Company announced that it has entered into a definitive agreement with Saban Properties LLC to purchase Saban’s Power Rangers and several other entertainment brands for $ 52 2,000 to be paid in a combination of cash and stock. Hasbro has previously paid Saban Brands $ 22, 2 50 pursuant to the Power Rangers master toy license agreement, announced by the parties in February of 2018, that was scheduled to begin in 2019. Under the terms of the purchase agreement, Hasbro will pay an additional $ 229, 7 50 in cash and will issue $ 27 0,000 worth of Hasbro common stock for the Power Rangers brand and several other entertainment brands. The agreement includes all related intellectual property, category rights and content libraries owned by Saban Properties and its affiliates. The transaction is subject to a number of closing conditions, including obtaining required regulatory approvals, and is expected to close during the second quarter of 2018. The transaction, including intangible amortization expense, is not expected to have a material impact on Hasbro’s 2018 results of operations. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Apr. 01, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of April 1, 2018 and April 2, 2017 , and the results of its operations and cash flows for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Actual results could differ from those estimates. These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed audited consolidated financial statements for the fiscal year ended December 31, 2017 in its Annual Report on Form 10-K (“2017 Form 10-K”), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein. Recently Adopted Accounting Standards The Company's accounting policies ar e the same as those described in Note 1 to the Company's consolidated financial statements in its 2017 Form 10-K with the exception of the accounting policies related to revenue recognition, reclassification of disproportionate tax effects from accumula ted other comprehensive income (“AOCI”) caused by the Tax Cuts and Jobs Act of 2017 and the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. On January 1, 2018, the Company adopted Financial Accounting Standards Boa rd (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606 or the New Revenue Standard) using the modified retrospective method. ASC 606 supersedes the revenue recognition requirements in ASC 605 – Revenue Recognition and most industry-specific guidance in U.S. GAAP. The New Revenue Standard provides a five-step model for analyzing contracts and transactions to determine when, how, and if revenue is recognized. Revenue should be recognized to depict the tran sfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The cumulative impact of the adoption of the New Revenue Standard was not mater ial to the Company therefore the Company did not record any adjustments to retained earnings. This was determined by analyzing contracts not completed as of January 1, 2018. The Comparative information has not been restated and continues to be reported u nder the accounting standards in effect for those periods. For further details, see Note 2. Revenue recognition from the sale of finished product to customers, which is the majority of the Company’s revenues, did not change under the new standard and the Company does not expect material changes in the future as a result of the New Revenue Standard related to the sale of finished product to its customers. Within the Company’s Entertainment and Licensing segment, the timing of revenue recognition for minimu m guarantees that the Company receives from licensees is impacted by the New Revenue Standard. Prior to the adoption of ASC 606, for licenses of the Company’s brands that are subject to minimum guaranteed license fees, the Company recognized the differenc e between the minimum guaranteed amount and the actual royalties earned from licensee merchandise sales (“shortfalls”) at the end of the contract period, which was in the fourth quarter for most of the Company’s licensee arrangements. In periods following January 1, 2018, minimum guaranteed amounts will be recognized on a straight-line basis over the license period. While the impact of this change will not be material to the year, it will impact the timing of revenue recognition within the Company’s Enterta inment and Licensing segment such that under ASC 606, less revenues will be recorded in the fourth quarter and more revenues will be recorded within the first, second, and third quarters. No other areas of the Company’s business were materially impacted by the New Revenue Standard. In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (ASU 2018-02), Income Statement -Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard provides for a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings, of disproportionate income tax effects arising from the impact of the Tax Cuts and Jobs Act of 2017 . For public companies, this standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2018-02 in the first quarter of 2018. The impact of the adoption resulted in a one-time reclassification in the amo unt of $ 21,503 from AOCI with a corresponding credit to retained earnings. In March 2017, the FASB issued Accounting Standards Update No. 2017-07 (ASU 2017-07), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Bene fit Cost. The standard requires companies to present the service cost component of net benefit cost in the income statement line items where they report compensation cost. Companies will present all other components of net benefit cost outside operating i ncome, if this subtotal is presented. For public companies, this standard was effective for annual reporting periods beginning after December 15, 2017, and early adoption was permitted. The Company adopted this standard in the first quarter of 2018 and the adoption of this standard did not have a material impact on the Company’s results or consolidated financial statements in the first quarter of 2018. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (ASC 230) – Classification of Certain Cash Receipts and Cash Payments . The new guidance is intended to reduce diversity in practice across all industries, in how certain transactions are classified in the statement of cash flows. ASU 2016-15 was effective for public companies for fisca l years beginning after December 15, 2017. The Company adopted this standard in 2018 and the adoption of this standard did not have an impact on the Company’s statement of cash flows for the quarters ended April 1, 2018 and April 2, 2017. In October 2016 , the FASB issued Accounting Standards Update No. 2016-16 (ASU 2016-16), Accounting for Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory . For public companies, this standard was effective for annual reporting periods beginning after Dece mber 15, 2017, and early adoption is permitted. The standard requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs requiring any deferred taxes not yet recognized o n intra-entity transfers to be recorded to retained earnings. The Company adopted this standard in the first quarter of 2018 and the adoption did not have an impact on the Company’s results or consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Earnings (Loss) Per Share (Thousands of Dollars and Shares Except Per Share Data) [Abstract] | |
Earnings (Loss) Per Share | 2018 2017 Quarter Basic Diluted Basic Diluted Net earnings (loss) $ (112,492) (112,492) 68,599 68,599 Average shares outstanding 125,073 125,073 125,182 125,182 Effect of dilutive securities: Options and other share-based awards - - - 2,047 Equivalent Shares 125,073 125,073 125,182 127,229 Net earnings (loss) per common share $ (0.90) (0.90) 0.55 0.54 |
Other Comprehensive Earnings 20
Other Comprehensive Earnings (Loss) (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Other Comprehensive Earnings (Loss) [Abstract] | |
Schedule of Other Comprehensive Income (Loss), Tax Effect [Text Block] | Quarter Ended April 1, April 2, 2018 2017 Other comprehensive earnings (loss), tax effect: Tax benefit on unrealized holding losses $ 41 18 Tax benefit on cash flow hedging activities 5,980 5,310 Tax benefit on changes in unrecognized pension amounts 7,565 - Reclassifications to earnings, tax effect: Tax benefit on cash flow hedging activities (794) (369) Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations (528) (822) Total tax effect on other comprehensive earnings (loss) $ 12,264 4,137 |
Schedule of Accumulated Other Comprehensive Earnings (Loss) | Unrealized Holding Total Gains Gains on Foreign Accumulated Pension and (Losses) on Available- Currency Other Postretirement Derivative for-Sale Translation Comprehensive Amounts Instruments Securities Adjustments Loss 2018 Balance at December 31, 2017 $ (110,971) (32,827) 1,034 (96,661) (239,425) Adoption of ASU 2018-02 (18,065) (3,660) 222 - (21,503) Current period other comprehensive earnings (loss) (24,238) (19,915) (143) 12,829 (31,467) Balance at April 1, 2018 $ (153,274) (56,402) 1,113 (83,832) (292,395) 2017 Balance at December 25, 2016 $ (118,401) 51,085 1,424 (128,678) (194,570) Current period other comprehensive earnings (loss) 1,448 (28,691) (31) 24,673 (2,601) Balance at April 2, 2017 $ (116,953) 22,394 1,393 (104,005) (197,171) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Financial Instruments (Thousands of Dollars) [Abstract] | |
Schedule of Long-term Debt Instruments | April 1, 2018 April 2, 2017 December 31, 2017 Carrying Fair Carrying Fair Carrying Fair Cost Value Cost Value Cost Value 6.35% Notes Due 2040 $ 500,000 585,400 500,000 597,150 500,000 601,800 3.50% Notes Due 2027 500,000 468,000 - - 500,000 488,300 6.30% Notes Due 2017 - - 350,000 357,385 - - 5.10% Notes Due 2044 300,000 299,460 300,000 306,570 300,000 313,320 3.15% Notes Due 2021 300,000 300,480 300,000 305,490 300,000 302,640 6.60% Debentures Due 2028 109,895 128,006 109,895 125,390 109,895 131,390 Total long-term debt $ 1,709,895 1,781,346 1,559,895 1,691,985 1,709,895 1,837,450 Less: Current portion - - 350,000 357,385 - - Less: Deferred debt expenses 15,918 - 10,999 - 16,286 - Long-term debt $ 1,693,977 1,781,346 1,198,896 1,334,600 1,693,609 1,837,450 |
Fair Value of Financial Instr22
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Fair Value of Financial Instruments (Thousands of Dollars) [Abstract] | |
Fair Value Hierarchy | Fair Value Measurements Using: Quoted Prices in Active Markets Significant for Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) April 1, 2018 Assets: Available-for-sale securities $ 2,941 2,941 - - Derivatives 2,960 - 2,960 - Total assets $ 5,901 2,941 2,960 - Liabilities: Derivatives $ 39,428 - 39,428 - Option agreement 23,665 - - 23,665 Total liabilities $ 63,093 - 39,428 23,665 April 2, 2017 Assets: Available-for-sale securities $ 3,687 3,687 - - Derivatives 56,017 - 56,017 - Total assets $ 59,704 3,687 56,017 - Liabilities: Derivatives $ 20,595 - 20,595 - Option agreement 28,710 - - 28,710 Total liabilities $ 49,305 - 20,595 28,710 December 31, 2017 Assets: Available-for-sale securities $ 3,126 3,126 - - Derivatives 12,226 - 12,226 - Total assets $ 15,352 3,126 12,226 - Liabilities: Derivatives $ 23,051 - 23,051 - Option agreement 23,980 - - 23,980 Total Liabilities $ 47,031 - 23,051 23,980 |
Reconciliation of Level 3 Fair Value | 2018 2017 Balance at beginning of year $ (23,980) (28,770) Gain from change in fair value 315 60 Balance at end of first quarter $ (23,665) (28,710) |
Pension and Postretirement Be23
Pension and Postretirement Benefits (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Pension and Postretirement Benefits (Thousands of Dollars) [Abstract] | |
Components of net periodic cost | Quarter Ended Pension Postretirement April 1, April 2, April 1, April 2, 2018 2017 2018 2017 Service cost $ 685 952 188 172 Interest cost 4,016 4,725 292 295 Expected return on assets (5,205) (6,281) - - Net amortization and deferrals 2,977 2,694 42 - Net periodic benefit cost $ 2,473 2,090 522 467 |
Derivative Financial Instrume24
Derivative Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Derivative Financial Instruments (Thousands of Dollars) [Abstract] | |
Summary of Cash Flow Hedging Instruments | April 1, 2018 April 2, 2017 December 31, 2017 Notional Fair Notional Fair Notional Fair Hedged transaction Amount Value Amount Value Amount Value Inventory purchases $ 718,925 (31,453) 974,235 35,711 756,673 (13,695) Sales 375,441 7,323 423,828 1,083 423,315 16,144 Royalties and Other 178,896 (11,602) 324,008 (1,345) 196,889 (10,383) Total $ 1,273,262 (35,732) 1,722,071 35,449 1,376,877 (7,934) |
Derivatives Fair Value by Balance Sheet Location | April 1, April 2, December 31, 2018 2017 2017 Prepaid expenses and other current assets Unrealized gains $ 458 23,241 13,666 Unrealized losses (405) (3,204) (10,319) Net unrealized gains $ 53 20,037 3,347 Other assets Unrealized gains $ 5,996 39,032 11,255 Unrealized losses (3,089) (3,052) (2,376) Net unrealized gains $ 2,907 35,980 8,879 Accrued liabilities Unrealized gains $ 8,218 9,041 4,215 Unrealized losses (30,826) (28,591) (15,484) Net unrealized losses $ (22,608) (19,550) (11,269) Other liabilities Unrealized gains $ 2,846 149 4,546 Unrealized losses (18,930) (1,167) (13,437) Net unrealized losses $ (16,084) (1,018) (8,891) |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Operations | Quarter Ended April 1, April 2, 2018 2017 Statements of Operations Classification Cost of sales $ (3,891) 9,874 Sales 332 541 Other (1,423) 31 Net realized gains $ (4,982) 10,446 |
Fair values of undesignated derivative financial instruments | April 1, April 2, December 31, 2018 2017 2017 Accrued liabilities Unrealized gains $ 383 289 1,793 Unrealized losses (1,119) (316) (4,684) Net unrealized loss (736) (27) (2,891) Total unrealized gain, net $ (736) (27) (2,891) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 01, 2018 | |
Segment Reporting (Thousands of Dollars) [Abstract] | |
Net revenues by segment | Quarter Ended April 1, 2018 April 2, 2017 Net revenues External Affiliate External Affiliate U.S. and Canada $ 364,297 2,133 451,577 2,391 International 287,945 62 345,281 - Entertainment and Licensing 64,021 3,576 52,729 3,502 Global Operations (a) 78 253,320 76 260,229 Corporate and Eliminations (b) - (259,091) - (266,122) $ 716,341 - 849,663 - |
Operating profit (loss) by segments | Quarter Ended April 1, April 2, Operating profit (loss) 2018 2017 U.S. and Canada $ (23,383) 64,754 International (56,088) 544 Entertainment and Licensing 13,906 11,346 Global Operations (a) 2,176 833 Corporate and Eliminations (b) (17,030) 866 $ (80,419) 78,343 |
Total assets by segments | April 1, April 2, December 31, Total assets 2018 2017 2017 U.S. and Canada $ 2,745,209 2,618,808 2,749,384 International 2,033,928 1,964,343 2,499,985 Entertainment and Licensing 673,248 763,988 626,193 Global Operations 3,293,265 2,218,817 2,819,768 Corporate and Eliminations (b) (4,016,578) (2,920,086) (3,405,347) $ 4,729,072 4,645,870 5,289,983 |
Schedule of net revenues by international region | Quarter Ended April 1, April 2, 2018 2017 Europe $ 155,562 216,120 Latin America 65,961 64,756 Asia Pacific 66,422 64,405 Net revenues $ 287,945 345,281 |
Net revenues by product category | Quarter Ended April 1, April 2, 2018 2017 Franchise Brands $ 361,706 449,160 Partner Brands 200,592 212,962 Hasbro Gaming 105,227 135,766 Emerging Brands 48,816 51,775 Total $ 716,341 849,663 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | Apr. 01, 2018USD ($) |
Accounting Standards Update 2018-02 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement Or Change In Accounting Principle Cumulative Effect Of Change On Equity Or Net Assets | $ (21,503) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Bad Debt Expense Related To Toys R Us | $ 59,115 | |
Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Percentage of Revenues from Sales of Finished Products | 90.00% | 92.00% |
Activities necessary to fulfill obligation to transfer products to customers included in selling, distribution and administration expense | $ 41,486 | $ 36,609 |
Accounting Standards Update 2014-09 [Member] | Entertainment and Licensing [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Percentage of Revenues from Segment | 9.00% | 6.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Earnings (Loss) Per Share (Thousands of Dollars and Shares Except Per Share Data) [Abstract] | ||
Net earnings (loss) | $ (112,492) | $ 68,599 |
Basic [Abstract] | ||
Average shares outstanding (in shares) | 125,073 | 125,182 |
Equivalent shares (basic) (in shares) | 125,073 | 125,182 |
Net earnings (loss) per common share-basic (in dollars per share) | $ (0.9) | $ 0.55 |
Diluted [Abstract] | ||
Average shares outstanding (in shares) | 125,073 | 125,182 |
Effect of dilutive securities: | ||
Options and other share-based awards (in shares) | 0 | 2,047 |
Equivalent shares (diluted) (in shares) | 125,073 | 127,229 |
Net earnings (loss) per common share-diluted (in dollars per share) | $ (0.9) | $ 0.54 |
Employee Stock Option and Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to acquire shares totaling excluded as antidilutive | 3,191 | 638 |
Dilutive securities excluded because of net loss | 1,993 | |
Impact of dilutive securities excluded because of net loss | 1,022 |
Other Comprehensive Earnings 29
Other Comprehensive Earnings (Loss), Tax Effects on Changes in Other Comprehensive Earnings (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Other Comprehensive Earnings (Loss) [Abstract] | ||
Tax benefit on cash flow hedging activities | $ 5,980 | $ 5,310 |
Tax benefit on unrealized holding losses and gains | 41 | 18 |
Tax benefit on changes in unrecognized pension and postretirement amounts | 7,565 | |
Reclassification Adjustment from AOCE, Tax benefit on cash flow hedging activities | (794) | (369) |
Reclassification Adjustment from AOCE, Tax benefit on amortization of unrecognized pension and postretirement amounts | (528) | (822) |
Other Comprehensive Income, Tax, Total | 12,264 | $ 4,137 |
Cash Flow Hedge losses to be Reclassified within Twelve Months | $ 21,415 |
Other Comprehensive Earnings 30
Other Comprehensive Earnings (Loss), Changes in the components of accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | $ (239,425) | $ (194,570) |
Adoption of ASU 2018-02 | (21,503) | |
Other Comprehensive Earnings (Loss), Net of Tax, Total | (31,467) | (2,601) |
Total accumulated other comprehensive earnings (loss), End of Period | (292,395) | (197,171) |
Pension and Postretirement Amounts [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (110,971) | (118,401) |
Adoption of ASU 2018-02 | (18,065) | |
Other Comprehensive Earnings (Loss), Net of Tax, Total | (24,238) | 1,448 |
Total accumulated other comprehensive earnings (loss), End of Period | (153,274) | (116,953) |
Gains (Losses) On Derivative Instruments [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (32,827) | 51,085 |
Adoption of ASU 2018-02 | (3,660) | |
Other Comprehensive Earnings (Loss), Net of Tax, Total | (19,915) | (28,691) |
Total accumulated other comprehensive earnings (loss), End of Period | (56,402) | 22,394 |
Gains (Losses) On Derivative Instruments [Member] | Interest Rate Contract [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), End of Period | (20,356) | |
Gains (Losses) On Derivative Instruments [Member] | Foreign Exchange Forward [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), End of Period | (36,046) | |
Unrealized Holding Gains on Available-for-Sale Securities [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | 1,034 | 1,424 |
Adoption of ASU 2018-02 | 222 | |
Other Comprehensive Earnings (Loss), Net of Tax, Total | (143) | (31) |
Total accumulated other comprehensive earnings (loss), End of Period | 1,113 | 1,393 |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (96,661) | (128,678) |
Adoption of ASU 2018-02 | 0 | |
Other Comprehensive Earnings (Loss), Net of Tax, Total | 12,829 | 24,673 |
Total accumulated other comprehensive earnings (loss), End of Period | $ (83,832) | $ (104,005) |
Other Comprehensive Earnings 31
Other Comprehensive Earnings (Loss), Reclassification From Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest Expense | $ 22,809 | $ 24,456 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Gains (Losses) On Derivative Instruments [Member] | Interest Rate Contract [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest Expense | $ 450 | $ 450 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 | |
Debt Instrument [Line Items] | |||
Carrying Cost | $ 1,709,895 | $ 1,709,895 | $ 1,559,895 |
Current portion of long-term debt | 0 | 0 | 350,000 |
Less: Deferred debt expenses | 15,918 | 16,286 | 10,999 |
Long-term debt | 1,693,977 | 1,693,609 | 1,198,896 |
Fair Value | 1,781,346 | 1,837,450 | 1,691,985 |
Long-Term Debt Fair Value, Current Maturities | 0 | 0 | 357,385 |
Long-term Debt Fair Value, Excluding Current Maturities | 1,781,346 | 1,837,450 | 1,334,600 |
Current portion of long-term debt | 0 | 0 | 349,814 |
Notes 6.35% Due 2040 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | 500,000 | 500,000 | 500,000 |
Fair Value | $ 585,400 | 601,800 | 597,150 |
Maturity Date | Mar. 15, 2040 | ||
Interest Rate | 6.35% | ||
Notes 6.30% Due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 0 | 0 | 350,000 |
Fair Value | $ 0 | 0 | 357,385 |
Maturity Date | Sep. 15, 2017 | ||
Interest Rate | 6.30% | ||
Current portion of long-term debt | 349,814 | ||
Deferred debt expenses, current portion | 186 | ||
Notes 5.10% Due 2044 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 300,000 | 300,000 | 300,000 |
Fair Value | $ 299,460 | 313,320 | 306,570 |
Maturity Date | May 16, 2044 | ||
Interest Rate | 5.10% | ||
Notes 3.50% Due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 500,000 | 500,000 | 0 |
Fair Value | $ 468,000 | 488,300 | 0 |
Maturity Date | Sep. 15, 2027 | ||
Interest Rate | 3.50% | ||
Notes 3.15% Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 300,000 | 300,000 | 300,000 |
Fair Value | $ 300,480 | 302,640 | 305,490 |
Maturity Date | May 17, 2021 | ||
Interest Rate | 3.15% | ||
Debentures 6.60% Due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 109,895 | 109,895 | 109,895 |
Fair Value | $ 128,006 | $ 131,390 | $ 125,390 |
Maturity Date | Jan. 18, 2028 | ||
Interest Rate | 6.60% |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended |
Apr. 01, 2018USD ($) | |
Income Taxes Tax Cuts And Jobs Act [Abstract] | |
Increase to Provisional tax expense, net | $ 47,800 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments, Assests and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, assets | $ 2,941 | $ 3,126 | $ 3,687 |
Derivatives, assets | 2,960 | 12,226 | 56,017 |
Total assets, fair value hierarchy | 5,901 | 15,352 | 59,704 |
Derivatives, liabilities | 39,428 | 23,051 | 20,595 |
Option Agreement | 23,665 | 23,980 | 28,710 |
Total Liabilities | $ 63,093 | 47,031 | 49,305 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 45 days | ||
Minimum [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 30 days | ||
Maximum [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 90 days | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, assets | $ 2,941 | 3,126 | 3,687 |
Derivatives, assets | 0 | 0 | 0 |
Total assets, fair value hierarchy | 2,941 | 3,126 | 3,687 |
Derivatives, liabilities | 0 | 0 | 0 |
Option Agreement | 0 | 0 | 0 |
Total Liabilities | 0 | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, assets | 0 | 0 | 0 |
Derivatives, assets | 2,960 | 12,226 | 56,017 |
Total assets, fair value hierarchy | 2,960 | 12,226 | 56,017 |
Derivatives, liabilities | 39,428 | 23,051 | 20,595 |
Option Agreement | 0 | 0 | 0 |
Total Liabilities | 39,428 | 23,051 | 20,595 |
Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, assets | 0 | 0 | 0 |
Derivatives, assets | 0 | 0 | 0 |
Total assets, fair value hierarchy | 0 | 0 | 0 |
Derivatives, liabilities | 0 | 0 | 0 |
Option Agreement | 23,665 | 23,980 | 28,710 |
Total Liabilities | $ 23,665 | $ 23,980 | $ 28,710 |
Fair Value of Financial Instr35
Fair Value of Financial Instruments, Significant Unobservable Inputs Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of year | $ (23,980) | $ (28,770) | |
Gain from change in fair value | 315 | 60 | |
Balance at end of period | (23,665) | (28,710) | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other income, net | 8,592 | 11,386 | |
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Alternative Investments, Fair Value Disclosure | 24,584 | 23,603 | $ 24,436 |
Other income, net | $ 448 | $ 631 |
Pension and Postretirement Be36
Pension and Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Dec. 31, 2017 | |
Defined Benefit Plan Plan Amendment [Abstract] | |||
Defined Benefit Plan Accumulated Benefit Obligation Increase For Plan Amendment | $ 35,192 | ||
Date of resolution approval plan termination | February 2,018 | ||
Pension [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 685 | $ 952 | |
Interest cost | 4,016 | 4,725 | |
Expected return on assets | (5,205) | (6,281) | |
Net amortization and deferrals | 2,977 | 2,694 | |
Net periodic benefit cost | 2,473 | 2,090 | |
Contributions to defined benefit pension plans | 280 | ||
Expected fiscal year defined benefit pension plan contributions | $ 1,300 | ||
Weighted average discount rate | 3.20% | 3.70% | |
Postretirement [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 188 | 172 | |
Interest cost | 292 | 295 | |
Expected return on assets | 0 | 0 | |
Net amortization and deferrals | 42 | 0 | |
Net periodic benefit cost | $ 522 | $ 467 |
Derivative Financial Instrume37
Derivative Financial Instruments, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Dec. 31, 2017 | |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Other Income (Expense) [Member] | |||
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $ (6,700) | $ 3,581 | |
Not Designated as Hedging Instrument [Member] | Intercompany Loans [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 132,945 | 62,806 | $ 418,471 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Ineffective portion, amount of gains (losses) reclassified from other comprehensive earnings into earnings | (718) | (4,958) | |
Notional amount of derivative | $ 1,273,262 | $ 1,722,071 | $ 1,376,877 |
Derivative Financial Instrume38
Derivative Financial Instruments, Notional Amounts and Fair Values of Foreign Currency Forward Contracts Designated as Cash Flow Hedging Instruments (Details) - Cash Flow Hedging [Member] - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 |
Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | $ 1,273,262 | $ 1,376,877 | $ 1,722,071 |
Fair value of hedged item | (35,732) | (7,934) | 35,449 |
Inventory Purchases [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 718,925 | 756,673 | 974,235 |
Fair value of hedged item | (31,453) | (13,695) | 35,711 |
Sales [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 375,441 | 423,315 | 423,828 |
Fair value of hedged item | 7,323 | 16,144 | 1,083 |
Royalties and Other [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 178,896 | 196,889 | 324,008 |
Fair value of hedged item | $ (11,602) | $ (10,383) | $ (1,345) |
Derivative Financial Instrume39
Derivative Financial Instruments, Fair Values Derivatives, Balance Sheet Location, by Derivative Contract Type (Details) - Foreign Exchange Forward [Member] - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 |
Not Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Net unrealized gain | $ (736) | $ (2,891) | $ (27) |
Not Designated as Hedging Instrument [Member] | Accrued liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 383 | 1,793 | 289 |
Unrealized losses | (1,119) | (4,684) | (316) |
Net unrealized gain | (736) | (2,891) | (27) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Net unrealized gain | (35,732) | (7,934) | 35,449 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other current assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 458 | 13,666 | 23,241 |
Unrealized losses | (405) | (10,319) | (3,204) |
Net unrealized gain | 53 | 3,347 | 20,037 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 5,996 | 11,255 | 39,032 |
Unrealized losses | (3,089) | (2,376) | (3,052) |
Net unrealized gain | 2,907 | 8,879 | 35,980 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Accrued liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 8,218 | 4,215 | 9,041 |
Unrealized losses | (30,826) | (15,484) | (28,591) |
Net unrealized gain | (22,608) | (11,269) | (19,550) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Other liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 2,846 | 4,546 | 149 |
Unrealized losses | (18,930) | (13,437) | (1,167) |
Net unrealized gain | $ (16,084) | $ (8,891) | $ (1,018) |
Derivative Financial Instrume40
Derivative Financial Instruments, Gain (Loss) by Hedging Relationship, by Income Statement Location (Details) - Foreign Exchange Forward [Member] - Cash Flow Hedging [Member] - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | $ (4,982) | $ 10,446 |
Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | (3,891) | 9,874 |
Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | 332 | 541 |
Royalties and Other [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | $ (1,423) | $ 31 |
Segment Reporting, Net revenues
Segment Reporting, Net revenues by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | $ 716,341 | $ 849,663 | |
Net revenues, affiliates | 0 | 0 | |
Operating Profit (Loss) | (80,419) | 78,343 | |
Corporate and Eliminations [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 0 | 0 | |
Net revenues, affiliates | (259,091) | (266,122) | |
Operating Profit (Loss) | [1] | (17,030) | 866 |
U.S. and Canada [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 364,297 | 451,577 | |
Net revenues, affiliates | 2,133 | 2,391 | |
Operating Profit (Loss) | (23,383) | 64,754 | |
International [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 287,945 | 345,281 | |
Net revenues, affiliates | 62 | 0 | |
Operating Profit (Loss) | (56,088) | 544 | |
Entertainment and Licensing [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 64,021 | 52,729 | |
Net revenues, affiliates | 3,576 | 3,502 | |
Operating Profit (Loss) | 13,906 | 11,346 | |
Global Operations [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | [2] | 78 | 76 |
Net revenues, affiliates | [2] | 253,320 | 260,229 |
Operating Profit (Loss) | [2] | $ 2,176 | $ 833 |
[1] | Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the individual operating segments are done at the beginning of the year based on budgeted amounts. Any differences b etween actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budget rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. | ||
[2] | The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities. |
Segment Reporting, Total assets
Segment Reporting, Total assets by segments (Details) - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 4,729,072 | $ 5,289,983 | $ 4,645,870 | |
Corporate and Eliminations [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | [1] | (4,016,578) | (3,405,347) | (2,920,086) |
U.S. and Canada [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 2,745,209 | 2,749,384 | 2,618,808 | |
International [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 2,033,928 | 2,499,985 | 1,964,343 | |
Entertainment and Licensing [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 673,248 | 626,193 | 763,988 | |
Global Operations [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 3,293,265 | $ 2,819,768 | $ 2,218,817 | |
[1] | Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the individual operating segments are done at the beginning of the year based on budgeted amounts. Any differences b etween actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budget rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. |
Segment Reporting, Internationa
Segment Reporting, International Segment Net Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 716,341 | $ 849,663 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 287,945 | 345,281 |
Europe [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 155,562 | 216,120 |
Latin America [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 65,961 | 64,756 |
Asia Pacific [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 66,422 | $ 64,405 |
Segment Reporting, Revenue by P
Segment Reporting, Revenue by Products (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Revenue from External Customer [Line Items] | ||
Net revenue | $ 716,341 | $ 849,663 |
Franchise Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 361,706 | 449,160 |
Partner Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 200,592 | 212,962 |
Hasbro Gaming [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 105,227 | 135,766 |
Gaming including Magic the Gathering and Monopoly [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 203,542 | 253,289 |
Segment Reporting, Additional Information about Entity's Reportable Segments | Franchise and Emerging Brands net revenues for the first quarter of 2017 have been restated to reflect the move of BABY ALIVE from Emerging Brands to Franchise Brands and the move of LITTLEST PET SHOP from Franchise Brands to Emerging Brands. Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $203,542 for the first quarter of 2018, compared to revenues of $253,289 for the first quarter of 2017. | |
Emerging Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 48,816 | $ 51,775 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Thousands | 3 Months Ended |
Apr. 01, 2018USD ($) | |
Subsequent Event [LineItems] | |
Subsequent event date | May 1, 2018 |
Subsequent event description | On May 1, 2018, the Company announced that it has entered into a definitive agreement with Saban Properties LLC to purchase Saban’s Power Rangers and several other entertainment brands for $522,000 to be paid in a combination of cash and stock. |
Total amount of consideration to purchase entertainment brands | $ 522,000 |
Other payments to acquire business | 22,250 |
Cash portion of agreement to purchase entertainment brands | 229,750 |
Equity interest issued by the acquirer | $ 270,000 |