Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2019shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | HASBRO INC |
Entity Central Index Key | 0000046080 |
Current Fiscal Year End Date | --12-29 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 125,854,116 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q1 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2019 |
Trading Symbol | HAS |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 |
Current assets | |||
Cash and cash equivalents | $ 1,196,634 | $ 1,182,371 | $ 1,598,944 |
Accounts receivable, less allowance for doubtful accounts of $12,100, $9,100 and $94,300 as of March 31, 2019, December 30, 2018 and April 1, 2018, respectively | 638,417 | 1,188,052 | 612,698 |
Inventories | 491,751 | 443,383 | 517,439 |
Prepaid expenses and other current assets | 305,056 | 268,698 | 292,756 |
Total current assets | 2,631,858 | 3,082,504 | 3,021,837 |
Property, plant and equipment, less accumulated depreciation of $484,200, $462, 700 and $436,600 as of March 31, 2019, December 30, 2018 and April 1, 2018, respectively | 395,624 | 256,473 | 262,418 |
Other assets | |||
Goodwill | 485,528 | 485,881 | 573,574 |
Other intangible assets, net of accumulated amortization of $747,800, $721,700 and $911,300 as of March 31, 2019, December 30, 2018 and April 1, 2018, respectively | 682,063 | 693,842 | 210,904 |
Other | 739,700 | 744,288 | 660,339 |
Total other assets | 1,907,291 | 1,924,011 | 1,444,817 |
Total assets | 4,934,773 | 5,262,988 | 4,729,072 |
Current liabilities | |||
Short-term borrowings | 13,409 | 9,740 | 21,611 |
Accounts payable | 234,262 | 333,521 | 256,433 |
Accrued liabilities | 701,054 | 931,063 | 574,482 |
Total current liabilities | 948,725 | 1,274,324 | 852,526 |
Long-term debt | 1,695,462 | 1,695,092 | 1,693,977 |
Other liabilities | 636,055 | 539,086 | 611,210 |
Total liabilities | 3,280,242 | 3,508,502 | 3,157,713 |
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 March 31, 2019, April 1, 2018, and December 31, 2018 | 104,847 | 104,847 | 104,847 |
Additional paid-in capital | 1,269,230 | 1,275,059 | 1,053,368 |
Retained earnings | 4,125,686 | 4,184,374 | 4,090,637 |
Accumulated other comprehensive loss | (282,339) | (294,514) | (292,395) |
Treasury stock, at cost; 83,830,809 shares at March 31, 2019; 83,565,598 shares at December 30, 2018; and 84,706,373 shares at April 1, 2018 | (3,562,893) | (3,515,280) | (3,385,098) |
Total shareholders' equity | 1,654,531 | 1,754,486 | 1,571,359 |
Total liabilities and shareholders' equity | $ 4,934,773 | $ 5,262,988 | $ 4,729,072 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) Parenthetical - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 |
Current assets | |||
Accounts receivable, allowance for doubtful accounts | $ 12,100 | $ 9,100 | $ 94,300 |
Property, plant and equipment, accumulated depreciation | 484,200 | 422,100 | 436,600 |
Other assets | |||
Other intangibles, accumulated amortization | $ 747,800 | $ 721,700 | $ 911,300 |
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) | 83,830,809 | 83,565,598 | 84,706,373 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Consolidated Statements of Operations (Unaudited) [Abstract] | ||
Net revenues, external | $ 732,510 | $ 716,341 |
Costs and expenses | ||
Cost of sales | 259,987 | 255,187 |
Royalties | 59,888 | 69,652 |
Product development | 56,260 | 57,384 |
Advertising | 76,604 | 68,016 |
Amortization of intangibles | 11,816 | 6,478 |
Program production cost amortization | 6,575 | 12,034 |
Selling, distribution and administration | 225,253 | 328,009 |
Total costs and expenses | 696,383 | 796,760 |
Operating Profit (loss) | 36,127 | (80,419) |
Non-operating (income) expense | ||
Interest Expense | 22,314 | 22,809 |
Interest income | (7,682) | (6,248) |
Other income, net | (8,100) | (8,592) |
Total non-operating expense, net | 6,532 | 7,969 |
Earnings (loss) before income taxes | 29,595 | (88,388) |
Income tax expense | 2,868 | 24,104 |
Net earnings (loss) | $ 26,727 | $ (112,492) |
Net earnings (loss) per common share: | ||
Basic (in dollars per share) | $ 0.21 | $ (0.9) |
Diluted (in dollars per share) | 0.21 | (0.9) |
Cash dividends declared per common share (in dollars per share) | $ 0.68 | $ 0.63 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Consolidated Statements of Comprehensive Earnings (Loss) [Abstract] | ||
Net earnings (loss) | $ 26,727 | $ (112,492) |
Other comprehensive earnings (loss): | ||
Foreign currency translation adjustments | 6,993 | 12,829 |
Net gains (losses) on cash flow hedging activities, net of tax | 6,592 | (25,270) |
Unrealized holding gains (losses) on available-for-sale securities, net of tax | 265 | (143) |
Changes in unrecognized pension and postretirement amounts, net of tax | 0 | (26,058) |
Reclassifications to earnings (loss), net of tax: | ||
Net (gains) losses on cash flow hedging activities | (2,814) | 5,355 |
Amortization of unrecognized pension and postretirement amounts | 1,139 | 1,820 |
Total other comprehensive loss, net of tax | 12,175 | (31,467) |
Comprehensive earnings | $ 38,902 | $ (143,959) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Cash flows from operating activities | ||
Net earnings (loss) | $ 26,727 | $ (112,492) |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation of plant and equipment | 27,028 | 26,221 |
Amortization of intangibles | 11,816 | 6,478 |
Program production cost amortization | 6,575 | 12,034 |
Deferred income taxes | 11,795 | (16,437) |
Stock-based compensation | 5,285 | 10,291 |
Other non-cash items | (3,503) | (4,971) |
Change in operating assets and liabilities net of acquired balances: | ||
Decrease in accounts receivable | 558,888 | 808,367 |
Increase in inventories | (50,109) | (76,516) |
Increase in prepaid expenses and other current assets | (33,934) | (78,540) |
Program production costs | (17,728) | (11,398) |
Decrease in accounts payable and accrued liabilities | (273,955) | (297,669) |
Net deemed repatriation tax | 0 | 75,805 |
Other | (4,391) | (23,434) |
Net cash provided by operating activities | 264,494 | 317,739 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (25,201) | (28,235) |
Other | (1,800) | 2,007 |
Net cash utilized by investing activities | (27,001) | (26,228) |
Cash flows from financing activities | ||
Net proceeds from (repayments of) other short-term borrowings | 3,419 | (133,698) |
Purchases of common stock | (47,479) | (38,126) |
Stock-based compensation transactions | 2,335 | 19,518 |
Dividends paid | (79,274) | (70,781) |
Payments related to tax withholding for share-based compensation | (11,880) | (52,637) |
Deferred acquisition payments | (87,500) | 0 |
Net cash utilized by financing activities | (220,379) | (275,724) |
Effect of exchange rate changes on cash | (2,851) | 1,923 |
Increase in cash and cash equivalents | 14,263 | 17,710 |
Cash and cash equivalents at beginning of year | 1,182,371 | 1,581,234 |
Cash and cash equivalents at end of period | 1,196,634 | 1,598,944 |
Supplemental information | ||
Interest | 28,576 | 28,699 |
Income taxes | $ 13,019 | $ 42,481 |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Equity - USD ($) $ in Thousands | Total | Common stock [Member] | Additional paid-in capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Earnings [Member] | Treasury stock [Member] | Total Shareholders' Equity Attributable to Hasbro, Inc. [Member] |
Cumulative effect of new accounting principle in period of adoption | Impact of adoption of ASU 2018-02 [Member] | $ 0 | $ 0 | $ 0 | $ 21,503 | $ (21,503) | $ 0 | $ 0 |
Balance at Dec. 31, 2017 | 104,847 | 1,050,605 | 4,260,222 | (239,425) | (3,346,292) | 1,829,957 | |
Net earnings (loss) | (112,492) | 0 | 0 | (112,492) | 0 | 0 | (112,492) |
Other comprehensive earnings (loss), net of tax, total | (31,467) | 0 | 0 | 0 | (31,467) | 0 | (31,467) |
Stock-based compensation activity | (7,543) | 0 | (7,528) | 0 | 0 | (15) | (7,543) |
Purchases of common stock | (38,791) | 0 | 0 | 0 | 0 | (38,791) | (38,791) |
Stock-based compensation expense | 0 | 10,291 | 0 | 0 | 0 | 10,291 | |
Dividends declared | 0 | 0 | (78,596) | 0 | 0 | (78,596) | |
Balance at Apr. 01, 2018 | 1,571,359 | 104,847 | 1,053,368 | 4,090,637 | (292,395) | (3,385,098) | 1,571,359 |
Balance at Dec. 30, 2018 | 1,754,486 | 104,847 | 1,275,059 | 4,184,374 | (294,514) | (3,515,280) | 1,754,486 |
Net earnings (loss) | 26,727 | 0 | 0 | 26,727 | 0 | 0 | 26,727 |
Other comprehensive earnings (loss), net of tax, total | 12,175 | 0 | 0 | 0 | 12,175 | 0 | 12,175 |
Stock-based compensation activity | (9,545) | 0 | (11,114) | 0 | 0 | 1,569 | (9,545) |
Purchases of common stock | (49,182) | 0 | 0 | 0 | 0 | (49,182) | (49,182) |
Stock-based compensation expense | 5,285 | 0 | 5,285 | 0 | 0 | 0 | 5,285 |
Dividends declared | (85,415) | 0 | 0 | (85,415) | 0 | 0 | (85,415) |
Balance at Mar. 31, 2019 | $ 1,654,531 | $ 104,847 | $ 1,269,230 | $ 4,125,686 | $ (282,339) | $ (3,562,893) | $ 1,654,531 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and April 1, 2018 , and the results of its operations and cash flows and shareholder’s equity for the periods then ended in accordance with accounting principles generally acce pted in the United States of America ("U.S. GAAP"). The preparation of financi al 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 quarters ended March 31, 2019 and April 1, 2018 were each 13-week periods. T h e 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 2018 period representative of those actually experienced for the full year 2018 . These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) . 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 with the SEC audited consolida ted financial statements for the fiscal year ended December 30, 2018 in its Annual Report on Form 10-K (“2018 Form 10-K”), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial info rmation included herein. Recently Adopted Accounting Standards The Company's accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its 2018 Form 10-K with the exception of t he accounting polici es related to leases and derivatives and hedging. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842) , which requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The liability is based on the present value of lease payments and the asset is based on the liability. For income statement purposes, a dual model wa s retained requiring leases to be either classified as operating or finance. Operating leases result in straight-line expense while finance leases result in a front-loaded expense pattern. Certain other quantitative and qualitative disclosures are also req uired. ASU 2016-02 is required for public companies for fiscal years beginning after December 15, 2018. ASU 2016-02 as originally issued required modified retrospective adoption. In July 2018, the FASB issued ASU 2018-11, which provides an alternative tran sition method in addition to the existing method by allowing entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASU-2 016-02 on December 31, 2018 using the retrospective basis as provided in ASU 2018-11. No cumulative effect was recorded to retained earnings. The Company also elected certain practical expedients as provided under the standard. These included (i) the elect ion not to reassess whether contracts existing at the adoption date contain a lease under the new definition of a lease under the standard; (ii) the election not to reassess the lease classification for existing leases as of the adoption date; (iii) the el ection not to reassess whether previously capitalized initial direct costs would qualify for capitalization under the standard; (iv) the election to use hindsight in determining the relevant lease terms for use in the capitalization of the lease liability; and (v) the election to use hindsight in reviewing the right-of-use assets for impairment. For all leases, the terms were evaluated, including extension and renewal options as well as the lease payments associated with the leases. As a result of the adopt ion of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $ 121,230 and lease liabilities of $ 1 39,520 . The Company’s results of operations were not impacted by this standard. The adoption of this standard did not have an impact on the Company’s cash flows. For further details, see Note 10. In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12), Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . T he amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the underlying hedged item in the financial statements. The impact of the standard includes elimination of the requirement to separately measure and recognize hedge ineffectiveness and requires the presentation of fair value adjustments to hedging instruments to be included in the same income statement line as the hedged item. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted ASU 2017-12 in the first quarter of 2019 and the adoption of this standard did not have a material impact on the Company’s results or consolidated financial statements. Recently Issued Accounting Pronouncements In March 2019, the FASB issued Accounting Standards Update No. 2019-02 (ASU 2019-02) Entertainment—Films—Other Assets—Film Cos ts (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350) - Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The amendments in this update align cost capitalization of e pisodic television series production costs with that of film production cost capitalization. In addition, this update addresses impairment testing procedures with regard to film groups, when a film or license agreement is expected to be monetized with othe r films and/or license agreements. The intention of this update is to align accounting treatment with changes in production and distribution models within the entertainment industry and to provide increased transparency of information provided to users of financial statements about produced and licensed content. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the standard a nd the impact, if any, to its consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
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 probable. Contract Assets and Liabilities Within our Entertainment , Licensing and Digital segment, the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied. In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues. The Company defers revenues on these advanced payments until its performance obligation is satisfied. The aggregate deferred revenues are rec orded as liabilities and were $ 47,678 , $ 7,940 , and $ 50,759 as of March 31 , 201 9, April 1, 201 8 , and December 30, 2018, respectively , and the changes in deferred revenues are not material to the Company’s consolidated statement of operations for the quarter s ended March 31, 2019 and April 1, 2018, respectively . The Company records contract assets in the case of minimum guarantees that are being recognized ratably over the term of the respective license periods. At March 31, 2019 and April 1, 2018, these con tract assets were not material to the Company’s consolidated balance sheets. Disaggregation of revenues The Company disaggregates its revenues from contracts with customers by segment: US and Canada, International, Entertainment, Licensing and Digital, an d 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 four brand categ ories: 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 12, Segment Reporting, fo r further information. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and April 1, 2018 were computed as follows: 2019 2018 Quarter Basic Diluted Basic Diluted Net earnings (loss) $ 26,727 26,727 (112,492) (112,492) Average shares outstanding 126,287 126,287 125,073 125,073 Effect of dilutive securities: Options and other share-based awards - 529 - - Equivalent Shares 126,287 126,816 125,073 125,073 Net earnings (loss) per common share $ 0.21 0.21 (0.90) (0.90) For the quarters ended March 31, 2019 and April 1, 2018 , options and restricted stock units totaling 1,693 and 3,191, respectively, were excluded from the calculation of diluted earnings per share because to include the m would have been anti- dilutive. Of the 2018 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 would 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 |
Mar. 31, 2019 | |
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 March 31, 2019 and April 1, 2018 . Quarter Ended March 31, April 1, 2019 2018 Other comprehensive earnings (loss), tax effect: Tax (expense) benefit on unrealized holding (gains) losses $ (77) 41 Tax (expense) benefit on cash flow hedging activities (3) 5,980 Tax benefit on changes in unrecognized pension amounts - 7,565 Reclassifications to earnings, tax effect: Tax expense (benefit) on cash flow hedging activities 346 (794) Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations (331) (528) Total tax effect on other comprehensive earnings (loss) $ (65) 12,264 Changes in the components of accumulated other comprehensive earnings ( loss ) for the three months ended March 31, 2019 and April 1, 2018 are as follows: Unrealized Holding Gains Total Gains (Losses) on Foreign Accumulated Pension and (Losses) on Available- Currency Other Postretirement Derivative for-Sale Translation Comprehensive Amounts Instruments Securities Adjustments Loss 2019 Balance at December 30, 2018 $ (143,134) 1,549 (744) (152,185) (294,514) Current period other comprehensive earnings (loss) 1,139 3,778 265 6,993 12,175 Balance at March 31, 2019 $ (141,995) 5,327 (479) (145,192) (282,339) 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) Gains (Losses) on Derivative Instruments At March 31, 2019 , the Company had remaining net deferred gains on foreign currency forward c ontracts, net of tax, of $24,290 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the first quarter of 2019 or forecasted to be purchased during the remainder of 2019 through 2022, intercompany expenses ex pected to be paid or received during 2019 , television and movie production costs paid in 201 9, and cash receipts for sales made at the end of the first quarter of 2019 or forecasted to be made in the remainder of 2019 and, to a lesser ext ent, 2020 through 202 1 . 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, the Compa ny 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 March 31, 2019 , deferred losses, net of tax of $18,96 3 related to these instruments remained in AOCE. For the quarters ended March 31, 2019 and April 1, 2018 , losses of $450 , were reclassified from AOCE to net earnings. Of the amount included in AOCE at March 31, 2019 , the Company expects net gains of approximately $ 16,761 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 |
Mar. 31, 2019 | |
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 March 31, 2019 , April 1, 2018 and December 30, 2018 , the carrying cost of these in struments approximated their fair value. The Company's financial instruments at March 31, 2019 , April 1, 2018 and December 30, 2018 also include certain assets and liabilities mea sured at fair value (see Notes 7 and 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 March 31, 2019 , April 1, 2018 and December 30, 2018 are as follows: March 31, 2019 April 1, 2018 December 30, 2018 Carrying Fair Carrying Fair Carrying Fair Cost Value Cost Value Cost Value 6.35% Notes Due 2040 $ 500,000 548,200 500,000 585,400 500,000 535,000 3.50% Notes Due 2027 500,000 479,450 500,000 468,000 500,000 457,350 5.10% Notes Due 2044 300,000 285,990 300,000 299,460 300,000 272,640 3.15% Notes Due 2021 300,000 301,440 300,000 300,480 300,000 297,600 6.60% Debentures Due 2028 109,895 129,445 109,895 128,006 109,895 123,346 Total long-term debt $ 1,709,895 1,744,525 1,709,895 1,781,346 1,709,895 1,685,936 Less: Deferred debt expenses 14,433 - 15,918 - 14,803 - Long-term debt $ 1,695,462 1,744,525 1,693,977 1,781,346 1,695,092 1,685,936 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 discount 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 liability. The Company believes that this is the best information available for use in the fair value measurement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
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 the U.S. tax code 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. 118 (“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 completed, 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. As a result, the Company recorded a one-time tax expense of $ 47,800 in the first quarter of 2018 which reversed certain discrete benefits recorded 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 local 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 |
Mar. 31, 2019 | |
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 March 31, 2019 , April 1, 2018 and December 30, 2018 , t hese investments totaled $24,188, $24,584 and $23,913 , respectively , and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net gains of $550 and $448 on these investments in other income, net for the quarter s ended March 31, 2019 and April 1, 2018 , respectively, related to the change in fair value of such instruments. At March 31, 2019 , April 1, 2018 and December 30, 2018 , the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets (excluding assets 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) March 31, 2019 Assets: Available-for-sale securities $ 975 975 - - Derivatives 32,296 - 32,296 - Total assets $ 33,271 975 32,296 - Liabilities: Derivatives $ 45 - 45 - Option agreement 23,144 - - 23,144 Total liabilities $ 23,189 - 45 23,144 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 December 30, 2018 Assets: Available-for-sale securities $ 914 914 - - Derivatives 26,076 - 26,076 - Total assets $ 26,990 914 26,076 - Liabilities: Derivatives $ 1,610 - 1,610 - Option agreement 23,440 - - 23,440 Total Liabilities $ 25,050 - 1,610 23,440 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 and zero-cost collar options . 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 investment in Discovery Family Channel (“Discovery”). The option agreement is included in other liabilities at March 31, 2019 , April 1, 2018 and December 30, 2018 , and is valued using an option pricing model based on the fair value of the related investment. Inputs used in the option pricing model include the volatility and fair value of the underlying company which are considered unobs ervable inputs as they reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. Ther e were no changes in these valua tion techniques during the three -month period ended March 31, 2019 . 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): 2019 2018 Balance at beginning of year $ (23,440) (23,980) Gain from change in fair value 296 315 Balance at end of first quarter $ (23,144) (23,665) In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At March 31, 2019 , April 1, 2018 and December 30, 2018 , these investments had fair value s of $24,188 , $ 2 4 , 584 and $2 3,913 , respectively. Two of the investments have net asset values that are predominantly based on underlying inves tments which are traded on an active market and are redeemable within 45 days. The third investment invests in hedge funds which are ge nerally redeemable on a quarterly basis with 30 – 90 days’ notice. |
Pension and Postretirement Bene
Pension and Postretirement Benefits | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and April 1, 2018 are as follows: Quarter Ended Pension Postretirement March 31, April 1, March 31, April 1, 2019 2018 2019 2018 Service cost $ 1,037 685 178 188 Interest cost 2,205 4,016 316 292 Expected return on assets (2,038) (5,205) - - Net amortization and deferrals 1,698 2,977 5 42 Net periodic benefit cost $ 2,902 2,473 499 522 During the three months ended March 31, 2019 , the Company made cash contributions of $ 230 to its defined benefit pe nsion plans . During fiscal 2019, t he Company expects to make cash contribut ions to its defined benefit pension plans of approximately $ 1, 600 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 Com pany commenced the plan termination process and expects to complete the transfer of the Plan’s assets to a third-party administrator in the third quarter of 2019. The decision to terminate the Plan follows the 2015 decision to freeze benefits being accrue d covering 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 . Upon settlement of the pension liability, which is expected to occur in the second quarter of 2019, the Company will reclassify the related pension losses currently recorded to accumulated other comprehensive loss , to the consolidated statements of operations . As of March 31, 2019 , the Company had unrecognized losses related to the Plan of $ 141,578 . The Company will recognize this loss upon termination of the Plan, adjusted for the total required payout to plan participants which will be determined based on employee elections and market conditions present at the time of termination. In connection with the decision to terminate the Plan, the Company remeasured the projected benefit obligation in the first quarter of 2018 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 comprehensive losses and deferred taxes. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
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 cons idered 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 2019 thr ough 2022 . A t March 31, 2019 , April 1, 2018 and December 30, 2018 , the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows: March 31, 2019 April 1, 2018 December 30, 2018 Notional Fair Notional Fair Notional Fair Hedged transaction Amount Value Amount Value Amount Value Inventory purchases $ 486,999 21,649 718,925 (31,453) 468,305 15,089 Sales 263,221 8,358 375,441 7,323 298,194 11,232 Royalties and Other 26,422 190 178,896 (11,602) 26,341 (304) Total $ 776,642 30,197 1,273,262 (35,732) 792,840 26,017 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 March 31, 2019 , April 1, 2018 and December 30, 2018 as follows: March 31, April 1, December 30, 2019 2018 2018 Prepaid expenses and other current assets Unrealized gains $ 22,737 458 21,718 Unrealized losses (2,008) (405) (972) Net unrealized gains $ 20,729 53 20,746 Other assets Unrealized gains $ 9,752 5,996 6,173 Unrealized losses (239) (3,089) (843) Net unrealized gains $ 9,513 2,907 5,330 Accrued liabilities Unrealized gains $ - 8,218 77 Unrealized losses (45) (30,826) (136) Net unrealized losses $ (45) (22,608) (59) Other liabilities Unrealized gains $ - 2,846 - Unrealized losses - (18,930) - Net unrealized losses $ - (16,084) - Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarter s ended March 31, 2019 and April 1, 2018 as follows: Quarter Ended March 31, April 1, 2019 2018 Statements of Operations Classification Cost of sales $ 2,614 (3,891) Net revenues 878 332 Other 118 (1,423) Net realized gains (losses) $ 3,610 (4,982) 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 March 31, 2019 , April 1, 2018 and December 30, 2018 the total notional amounts of the Company's undesignated deri vative instruments were $293,326 , $132,945 and $452,773 , respectively. At March 31, 2019 , April 1, 2018 and December 30, 2018 , the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows: March 31, April 1, December 30, 2019 2018 2018 Prepaid expenses and other current assets Unrealized gains $ 2,391 - - Unrealized losses (337) - - Net unrealized gains $ 2,054 - - Accrued liabilities Unrealized gains $ - 383 1,269 Unrealized losses - (1,119) (2,820) Net unrealized losses - (736) (1,551) Total unrealized gains (losses), net $ 2,054 (736) (1,551) The Comp any recorded net gains (losses) of $ 4,809 and $ (6,700) on these instruments to other income, net for the quarters ended March 31, 2019 and April 1, 2018 , 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 deriva tive f inancial instruments see Notes 5 and 7 . |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | (10 ) Leases The Company occupies offices and uses certain equipment under various operating lease arrangements. The Company has no finance leases. These leases have remaining lease terms of 1 year to 19 years, some of which include either, options to extend lease terms while others include options to terminate current lease terms at certain times, subject to notice requirements set out in the lease agreement. Payments under certain of the lease agreement s may be subject to adjustment based on a consumer price index or other inflationary indices. The lease liability for such lease agreements as of the adoption date was based on fixed payments as of the adoption date. Any adjustments to these payments based on the related indices will be recorded to expense as incurred. Leases with an expected term of 12 months or less are not capitalized. Payments under such leases are expensed as incurred. The Company capitalizes non-lease components for equipment leases, but expenses non-lease components as incurred for real estate leases. For the quarter ended March 31, 2019, operating lease expense was $ 8,942 . Expense related to short-term leases (expected terms less than 12 months) and variable lease payments were not material in the first quarter of 2019. Supplemental information related to the Company’s leases for the quarter ended March 31, 2019 is as follows: Quarter Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,574 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 23,680 Weighted Average Remaining Lease Term Operating leases 6.7 years Weighted Average Discount Rate Operating leases 4.5% The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right of use assets, included in our Consolidated Balance Sheets as of March 31, 2019: March 31, 2019 2019 (excluding the three months ended March 31, 2019) $ 26,972 2020 33,756 2021 29,487 2022 27,260 2023 22,093 2024 and thereafter 46,277 Total future lease payments 185,845 Less imputed interest 26,968 Present value of future operating lease payments 158,877 Less current portion of operating lease liabilities (1) 29,534 Non-current operating lease liability (2) 129,343 Operating lease right-of-use assets, net (3) $ 141,075 (1) Included in Accrued liabilities on the consolidated balance sheets. (2) Included in Other liabilities on the consolidated balance sheets. (3) Included in Property, plant, and equipment on the consolidated balance sheets. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting (Thousands of Dollars) [Abstract] | |
Segment Reporting | (11 ) 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) Internatio nal, (iii) Entertainment , Licensing and Digital 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 pr oducts, 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 pr imarily 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 Pacific, and Latin and South American regions . The Company's Entertainment, Licensing and Digital segment includes the Company's consumer products licensing, digital gaming, movie and television entertainment operations. The Global Operations segment is responsible for sourcing finished products for the Company's U.S. and Canada and International segments. During the first quarter of 2019, the Company realigned its financial reporting segments to include all digital gaming businesses within the re-named Entertainment, Licensing and Digital reporting s egment. As a result of the realignment, U.S. and Canada and the former Entertainment and Licensing segment results for the first quarter of 2018 have been restated to reflect the change. Segment performance is measured at the operating profit level. In cluded in Corporate and E liminations are certain corporate expenses, including the elimination of intersegment 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 ac tual expenses and foreign exchange rates included in Corporate and E liminations. The accounting policies 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 2019 , nor were those of the comparable 2018 period representative of those actually experienced for the full year 2018 . Similarly, such results are not necessarily those which would be achieved were each segment an unaf filiated business enterprise. Information by segment and a reconciliation to repo rted amounts for the quarters ended March 31, 2019 and April 1, 2018 are as follow s: Quarter Ended March 31, 2019 April 1, 2018 Net revenues External Affiliate External Affiliate U.S. and Canada $ 357,851 1,849 353,913 2,133 International 282,649 41 287,945 62 Entertainment, Licensing and Digital 91,994 1,974 74,405 3,576 Global Operations (a) 16 229,425 78 253,320 Corporate and Eliminations (b) - (233,289) - (259,091) $ 732,510 - 716,341 - As a result of the realignment of the Company’s financial reporting segments, revenues of $ 10,384 from the first quarter of 2018, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation . Quarter Ended March 31, April 1, Operating profit (loss) 2019 2018 U.S. and Canada $ 13,532 (26,620) International (30,411) (56,088) Entertainment, Licensing and Digital 30,020 17,143 Global Operations (a) 1,254 2,176 Corporate and Eliminations (b) 21,732 (17,030) $ 36,127 (80,419) As a result of the realignment of the Company’s financial reporting segments, operating profit of $ 3,237 for the first quarter of 2018 was reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation. March 31, April 1, December 30, Total assets 2019 2018 2018 U.S. and Canada $ 2,600,873 2,735,206 2,898,816 International 2,019,800 2,033,928 2,229,053 Entertainment, Licensing and Digital 804,288 683,251 621,595 Global Operations (a) 706,701 3,293,265 3,197,847 Corporate and Eliminations (b) (1,196,889) (4,016,578) (3,684,323) $ 4,934,773 4,729,072 5,262,988 (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 individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted 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 March 31, 2019 and April 1, 2018 . Quarter Ended March 31, April 1, 2019 2018 Europe $ 153,379 155,562 Latin America 62,777 65,961 Asia Pacific 66,493 66,422 Net revenues $ 282,649 287,945 The following table presents consolidated net revenues by brand portfolio for the quarter s ended March 31, 2019 and April 1, 2018 . Quarter Ended March 31, April 1, 2019 2018 Franchise Brands $ 393,574 361,706 Partner Brands 171,989 200,592 Hasbro Gaming 107,565 105,227 Emerging Brands 59,382 48,816 Total $ 732,510 716,341 Hasbro's total gaming category, including all gaming net revenue s , most notably MAGIC: THE GATHERING and MONOPOLY, totaled $ 243,390 and $ 203,542 for the quarters ended March 31, 2019, and April 1, 2018, respectively. |
Restructuring Actions
Restructuring Actions | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring and related activities disclosure [TextBlock] | (12 ) Restructuring Actions During 2018, the Company announced a comprehensive restructuring plan which consists of re-designing its go-to market strategy and re-shaping its organization to become a more responsive, innovative and digitally-driven play and entertainment company. As the global consumer landscape, shopping behaviors and the retail environment continue to evolve, the Company continues to transform and reimagine its business to make sure it has the right talent and capa bilities to stay competitive. This includes adding new capabilities based on our understanding of the consumer and how our retailers are going to market, while also changing many of the ways we organize across our Brand Blueprint. As part of this process t he Company took certain actions, which will continue through 2019. The actions primarily include d headcount reduction aimed at right-sizing the Company’s cost-structure and giving it the ability to add required new talent in the future. In the first quarte r of 2018, the Company recorded a pre-tax severance expense of $ 17, 3 49 , primarily outside of the U.S., related to this 2018 restructuring program. During the fourth quarter of 2018, the Company recorded an additional $ 72,000 of pre-tax severance charges re lated to the program. These charges were included within selling, distribution and administration costs on the Consolidated Statements of Operations for the year ended December 30, 2018 and reported within Corporate and Eliminations. No additional charges were taken in the first quarter of 2019. The detail of activity related to the program is as follows: Remaining amounts to be paid as of December 30, 2018 $ 69,192 Payments made in first quarter of 2019 (7,620) Remaining amounts as of March 31, 2019 $ 61,572 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and April 1, 2018 , and the results of its operations and cash flows and shareholder’s equity for the periods then ended in accordance with accounting principles generally acce pted in the United States of America ("U.S. GAAP"). The preparation of financi al 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 U.S. Securities and Exchange Commission (“SEC”) . 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 with the SEC audited consolida ted financial statements for the fiscal year ended December 30, 2018 in its Annual Report on Form 10-K (“2018 Form 10-K”), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial info rmation included herein. Recently Adopted Accounting Standards The Company's accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its 2018 Form 10-K with the exception of t he accounting polici es related to leases and derivatives and hedging. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842) , which requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The liability is based on the present value of lease payments and the asset is based on the liability. For income statement purposes, a dual model wa s retained requiring leases to be either classified as operating or finance. Operating leases result in straight-line expense while finance leases result in a front-loaded expense pattern. Certain other quantitative and qualitative disclosures are also req uired. ASU 2016-02 is required for public companies for fiscal years beginning after December 15, 2018. ASU 2016-02 as originally issued required modified retrospective adoption. In July 2018, the FASB issued ASU 2018-11, which provides an alternative tran sition method in addition to the existing method by allowing entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASU-2 016-02 on December 31, 2018 using the retrospective basis as provided in ASU 2018-11. No cumulative effect was recorded to retained earnings. The Company also elected certain practical expedients as provided under the standard. These included (i) the elect ion not to reassess whether contracts existing at the adoption date contain a lease under the new definition of a lease under the standard; (ii) the election not to reassess the lease classification for existing leases as of the adoption date; (iii) the el ection not to reassess whether previously capitalized initial direct costs would qualify for capitalization under the standard; (iv) the election to use hindsight in determining the relevant lease terms for use in the capitalization of the lease liability; and (v) the election to use hindsight in reviewing the right-of-use assets for impairment. For all leases, the terms were evaluated, including extension and renewal options as well as the lease payments associated with the leases. As a result of the adopt ion of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $ 121,230 and lease liabilities of $ 1 39,520 . The Company’s results of operations were not impacted by this standard. The adoption of this standard did not have an impact on the Company’s cash flows. For further details, see Note 10. In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12), Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . T he amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the underlying hedged item in the financial statements. The impact of the standard includes elimination of the requirement to separately measure and recognize hedge ineffectiveness and requires the presentation of fair value adjustments to hedging instruments to be included in the same income statement line as the hedged item. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted ASU 2017-12 in the first quarter of 2019 and the adoption of this standard did not have a material impact on the Company’s results or consolidated financial statements. Recently Issued Accounting Pronouncements In March 2019, the FASB issued Accounting Standards Update No. 2019-02 (ASU 2019-02) Entertainment—Films—Other Assets—Film Cos ts (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350) - Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The amendments in this update align cost capitalization of e pisodic television series production costs with that of film production cost capitalization. In addition, this update addresses impairment testing procedures with regard to film groups, when a film or license agreement is expected to be monetized with othe r films and/or license agreements. The intention of this update is to align accounting treatment with changes in production and distribution models within the entertainment industry and to provide increased transparency of information provided to users of financial statements about produced and licensed content. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the standard a nd the impact, if any, to its consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings (Loss) Per Share (Thousands of Dollars and Shares Except Per Share Data) [Abstract] | |
Earnings (Loss) Per Share | 2019 2018 Quarter Basic Diluted Basic Diluted Net earnings (loss) $ 26,727 26,727 (112,492) (112,492) Average shares outstanding 126,287 126,287 125,073 125,073 Effect of dilutive securities: Options and other share-based awards - 529 - - Equivalent Shares 126,287 126,816 125,073 125,073 Net earnings (loss) per common share $ 0.21 0.21 (0.90) (0.90) |
Other Comprehensive Earnings _2
Other Comprehensive Earnings (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Comprehensive Earnings (Loss) [Abstract] | |
Schedule of Other Comprehensive Income (Loss), Tax Effect [Text Block] | Quarter Ended March 31, April 1, 2019 2018 Other comprehensive earnings (loss), tax effect: Tax (expense) benefit on unrealized holding (gains) losses $ (77) 41 Tax (expense) benefit on cash flow hedging activities (3) 5,980 Tax benefit on changes in unrecognized pension amounts - 7,565 Reclassifications to earnings, tax effect: Tax expense (benefit) on cash flow hedging activities 346 (794) Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations (331) (528) Total tax effect on other comprehensive earnings (loss) $ (65) 12,264 |
Schedule of Accumulated Other Comprehensive Earnings (Loss) | Unrealized Holding Gains Total Gains (Losses) on Foreign Accumulated Pension and (Losses) on Available- Currency Other Postretirement Derivative for-Sale Translation Comprehensive Amounts Instruments Securities Adjustments Loss 2019 Balance at December 30, 2018 $ (143,134) 1,549 (744) (152,185) (294,514) Current period other comprehensive earnings (loss) 1,139 3,778 265 6,993 12,175 Balance at March 31, 2019 $ (141,995) 5,327 (479) (145,192) (282,339) 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) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Financial Instruments (Thousands of Dollars) [Abstract] | |
Schedule of Long-term Debt Instruments | March 31, 2019 April 1, 2018 December 30, 2018 Carrying Fair Carrying Fair Carrying Fair Cost Value Cost Value Cost Value 6.35% Notes Due 2040 $ 500,000 548,200 500,000 585,400 500,000 535,000 3.50% Notes Due 2027 500,000 479,450 500,000 468,000 500,000 457,350 5.10% Notes Due 2044 300,000 285,990 300,000 299,460 300,000 272,640 3.15% Notes Due 2021 300,000 301,440 300,000 300,480 300,000 297,600 6.60% Debentures Due 2028 109,895 129,445 109,895 128,006 109,895 123,346 Total long-term debt $ 1,709,895 1,744,525 1,709,895 1,781,346 1,709,895 1,685,936 Less: Deferred debt expenses 14,433 - 15,918 - 14,803 - Long-term debt $ 1,695,462 1,744,525 1,693,977 1,781,346 1,695,092 1,685,936 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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) March 31, 2019 Assets: Available-for-sale securities $ 975 975 - - Derivatives 32,296 - 32,296 - Total assets $ 33,271 975 32,296 - Liabilities: Derivatives $ 45 - 45 - Option agreement 23,144 - - 23,144 Total liabilities $ 23,189 - 45 23,144 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 December 30, 2018 Assets: Available-for-sale securities $ 914 914 - - Derivatives 26,076 - 26,076 - Total assets $ 26,990 914 26,076 - Liabilities: Derivatives $ 1,610 - 1,610 - Option agreement 23,440 - - 23,440 Total Liabilities $ 25,050 - 1,610 23,440 |
Reconciliation of Level 3 Fair Value | 2019 2018 Balance at beginning of year $ (23,440) (23,980) Gain from change in fair value 296 315 Balance at end of first quarter $ (23,144) (23,665) |
Pension and Postretirement Be_2
Pension and Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Pension and Postretirement Benefits (Thousands of Dollars) [Abstract] | |
Components of net periodic cost | Quarter Ended Pension Postretirement March 31, April 1, March 31, April 1, 2019 2018 2019 2018 Service cost $ 1,037 685 178 188 Interest cost 2,205 4,016 316 292 Expected return on assets (2,038) (5,205) - - Net amortization and deferrals 1,698 2,977 5 42 Net periodic benefit cost $ 2,902 2,473 499 522 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Financial Instruments (Thousands of Dollars) [Abstract] | |
Summary of Cash Flow Hedging Instruments | March 31, 2019 April 1, 2018 December 30, 2018 Notional Fair Notional Fair Notional Fair Hedged transaction Amount Value Amount Value Amount Value Inventory purchases $ 486,999 21,649 718,925 (31,453) 468,305 15,089 Sales 263,221 8,358 375,441 7,323 298,194 11,232 Royalties and Other 26,422 190 178,896 (11,602) 26,341 (304) Total $ 776,642 30,197 1,273,262 (35,732) 792,840 26,017 |
Derivatives Fair Value by Balance Sheet Location | March 31, April 1, December 30, 2019 2018 2018 Prepaid expenses and other current assets Unrealized gains $ 22,737 458 21,718 Unrealized losses (2,008) (405) (972) Net unrealized gains $ 20,729 53 20,746 Other assets Unrealized gains $ 9,752 5,996 6,173 Unrealized losses (239) (3,089) (843) Net unrealized gains $ 9,513 2,907 5,330 Accrued liabilities Unrealized gains $ - 8,218 77 Unrealized losses (45) (30,826) (136) Net unrealized losses $ (45) (22,608) (59) Other liabilities Unrealized gains $ - 2,846 - Unrealized losses - (18,930) - Net unrealized losses $ - (16,084) - |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Operations | Quarter Ended March 31, April 1, 2019 2018 Statements of Operations Classification Cost of sales $ 2,614 (3,891) Net revenues 878 332 Other 118 (1,423) Net realized gains (losses) $ 3,610 (4,982) |
Fair values of undesignated derivative financial instruments | March 31, April 1, December 30, 2019 2018 2018 Prepaid expenses and other current assets Unrealized gains $ 2,391 - - Unrealized losses (337) - - Net unrealized gains $ 2,054 - - Accrued liabilities Unrealized gains $ - 383 1,269 Unrealized losses - (1,119) (2,820) Net unrealized losses - (736) (1,551) Total unrealized gains (losses), net $ 2,054 (736) (1,551) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Supplemental information related to leases | Quarter Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,574 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 23,680 Weighted Average Remaining Lease Term Operating leases 6.7 years Weighted Average Discount Rate Operating leases 4.5% |
Maturities of operating lease liabilities | March 31, 2019 2019 (excluding the three months ended March 31, 2019) $ 26,972 2020 33,756 2021 29,487 2022 27,260 2023 22,093 2024 and thereafter 46,277 Total future lease payments 185,845 Less imputed interest 26,968 Present value of future operating lease payments 158,877 Less current portion of operating lease liabilities (1) 29,534 Non-current operating lease liability (2) 129,343 Operating lease right-of-use assets, net (3) $ 141,075 (1) Included in Accrued liabilities on the consolidated balance sheets. (2) Included in Other liabilities on the consolidated balance sheets. (3) Included in Property, plant, and equipment on the consolidated balance sheets. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting (Thousands of Dollars) [Abstract] | |
Net revenues by segment | Quarter Ended March 31, 2019 April 1, 2018 Net revenues External Affiliate External Affiliate U.S. and Canada $ 357,851 1,849 353,913 2,133 International 282,649 41 287,945 62 Entertainment, Licensing and Digital 91,994 1,974 74,405 3,576 Global Operations (a) 16 229,425 78 253,320 Corporate and Eliminations (b) - (233,289) - (259,091) $ 732,510 - 716,341 - (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 individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. |
Operating profit (loss) by segments | Quarter Ended March 31, April 1, Operating profit (loss) 2019 2018 U.S. and Canada $ 13,532 (26,620) International (30,411) (56,088) Entertainment, Licensing and Digital 30,020 17,143 Global Operations (a) 1,254 2,176 Corporate and Eliminations (b) 21,732 (17,030) $ 36,127 (80,419) (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 individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. |
Total assets by segments | March 31, April 1, December 30, Total assets 2019 2018 2018 U.S. and Canada $ 2,600,873 2,735,206 2,898,816 International 2,019,800 2,033,928 2,229,053 Entertainment, Licensing and Digital 804,288 683,251 621,595 Global Operations (a) 706,701 3,293,265 3,197,847 Corporate and Eliminations (b) (1,196,889) (4,016,578) (3,684,323) $ 4,934,773 4,729,072 5,262,988 (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 individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. |
Schedule of net revenues by international region | Quarter Ended March 31, April 1, 2019 2018 Europe $ 153,379 155,562 Latin America 62,777 65,961 Asia Pacific 66,493 66,422 Net revenues $ 282,649 287,945 |
Net revenues by product category | Quarter Ended March 31, April 1, 2019 2018 Franchise Brands $ 393,574 361,706 Partner Brands 171,989 200,592 Hasbro Gaming 107,565 105,227 Emerging Brands 59,382 48,816 Total $ 732,510 716,341 |
Restructuring Actions (Tables)
Restructuring Actions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring Charges [Abstract] | |
Schedule of restructuring and related costs (Tables) | Remaining amounts to be paid as of December 30, 2018 $ 69,192 Payments made in first quarter of 2019 (7,620) Remaining amounts as of March 31, 2019 $ 61,572 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | Mar. 31, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease right-of-use asset, net | $ 141,075 |
Total operating lease liabilities | 158,877 |
Accounting Standards Update 2016-02, Implementation [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease right-of-use asset, net | 121,230 |
Total operating lease liabilities | $ 139,520 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 |
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred revenues recorded as liabilities | $ 47,678 | $ 50,759 | $ 7,940 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Earnings (Loss) Per Share (Thousands of Dollars and Shares Except Per Share Data) [Abstract] | ||
Net earnings (loss) | $ 26,727 | $ (112,492) |
Basic [Abstract] | ||
Average shares outstanding (in shares) | 126,287 | 125,073 |
Equivalent shares (basic) (in shares) | 126,287 | 125,073 |
Net earnings (loss) per common share-basic (in dollars per share) | $ 0.21 | $ (0.9) |
Diluted [Abstract] | ||
Average shares outstanding (in shares) | 126,287 | 125,073 |
Effect of dilutive securities: | ||
Options and other share-based awards (in shares) | 529 | 0 |
Equivalent shares (diluted) (in shares) | 126,816 | 125,073 |
Net earnings (loss) per common share-diluted (in dollars per share) | $ 0.21 | $ (0.9) |
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 | 1,693 | 3,191 |
Dilutive securities excluded because of net loss | 1,993 | |
Impact of dilutive securities excluded because of net loss | 1,022 |
Other Comprehensive Earnings _3
Other Comprehensive Earnings (Loss), Tax Effects on Changes in Other Comprehensive Earnings (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Other Comprehensive Earnings (Loss) [Abstract] | ||
Tax (expense) benefit on unrealized holding (gains) losses | $ (77) | $ 41 |
Tax (expense) benefit on cash flow hedging activities | (3) | 5,980 |
Tax benefit on changes in unrecognized pension and postretirement amounts | 0 | 7,565 |
Reclassification Adjustment from AOCE, Tax expense (benefit) on cash flow hedging activities | 346 | (794) |
Reclassification Adjustment from AOCE, Tax benefit on amortization of unrecognized pension and postretirement amounts | (331) | (528) |
Other Comprehensive Income (Loss), Tax, Total | (65) | $ 12,264 |
Cash Flow Hedge losses to be Reclassified within Twelve Months | $ 16,761 |
Other Comprehensive Earnings _4
Other Comprehensive Earnings (Loss), Changes in the components of accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | $ (294,514) | $ (239,425) |
Adoption of ASU 2018-02 | (21,503) | |
Other comprehensive earnings (loss), net of tax, total | 12,175 | (31,467) |
Total accumulated other comprehensive earnings (loss), End of Period | (282,339) | (292,395) |
Pension and Postretirement Amounts [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (143,134) | (110,971) |
Adoption of ASU 2018-02 | (18,065) | |
Other comprehensive earnings (loss), net of tax, total | 1,139 | (24,238) |
Total accumulated other comprehensive earnings (loss), End of Period | (141,995) | (153,274) |
Gains (Losses) On Derivative Instruments [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | 1,549 | (32,827) |
Adoption of ASU 2018-02 | (3,660) | |
Other comprehensive earnings (loss), net of tax, total | 3,778 | (19,915) |
Total accumulated other comprehensive earnings (loss), End of Period | 5,327 | (56,402) |
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 | (18,963) | |
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 | (24,290) | |
Unrealized Holding Gains (Losses) on Available-for-Sale Securities [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (744) | 1,034 |
Adoption of ASU 2018-02 | 222 | |
Other comprehensive earnings (loss), net of tax, total | 265 | (143) |
Total accumulated other comprehensive earnings (loss), End of Period | (479) | 1,113 |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive (Loss) [Line Items] | ||
Total accumulated other comprehensive earnings (loss), Beginning of Year | (152,185) | (96,661) |
Adoption of ASU 2018-02 | 0 | |
Other comprehensive earnings (loss), net of tax, total | 6,993 | 12,829 |
Total accumulated other comprehensive earnings (loss), End of Period | $ (145,192) | $ (83,832) |
Other Comprehensive Earnings _5
Other Comprehensive Earnings (Loss), Reclassification From Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest Expense | $ 22,314 | $ 22,809 |
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 | ||
Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 | |
Debt Instrument [Line Items] | |||
Carrying Cost | $ 1,709,895 | $ 1,709,895 | $ 1,709,895 |
Less: Deferred debt expenses | 14,433 | 14,803 | 15,918 |
Long-term debt | 1,695,462 | 1,695,092 | 1,693,977 |
Fair Value | 1,744,525 | 1,685,936 | 1,781,346 |
Long-term Debt Fair Value, Excluding Current Maturities | 1,744,525 | 1,685,936 | 1,781,346 |
Notes 6.35% Due 2040 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | 500,000 | 500,000 | 500,000 |
Fair Value | $ 548,200 | 535,000 | 585,400 |
Maturity Date | Mar. 15, 2040 | ||
Interest Rate | 6.35% | ||
Notes 5.10% Due 2044 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying Cost | $ 300,000 | 300,000 | 300,000 |
Fair Value | $ 285,990 | 272,640 | 299,460 |
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 | 500,000 |
Fair Value | $ 479,450 | 457,350 | 468,000 |
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 | $ 301,440 | 297,600 | 300,480 |
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 | $ 129,445 | $ 123,346 | $ 128,006 |
Maturity Date | Jan. 18, 2028 | ||
Interest Rate | 6.60% |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Income Taxes Tax Cuts And Jobs Act [Abstract] | |
Increase (decrease) to provisional tax expense, net | $ 47,800 |
Tax cuts and jobs act, Date enacted | Dec. 22, 2017 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments, Assests and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, assets | $ 975 | $ 914 | $ 2,941 |
Derivatives, assets | 32,296 | 26,076 | 2,960 |
Total assets, fair value hierarchy | 33,271 | 26,990 | 5,901 |
Derivatives, liabilities | 45 | 1,610 | 39,428 |
Option Agreement | 23,144 | 23,440 | 23,665 |
Total Liabilities | $ 23,189 | 25,050 | 63,093 |
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 | $ 975 | 914 | 2,941 |
Derivatives, assets | 0 | 0 | 0 |
Total assets, fair value hierarchy | 975 | 914 | 2,941 |
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 | 32,296 | 26,076 | 2,960 |
Total assets, fair value hierarchy | 32,296 | 26,076 | 2,960 |
Derivatives, liabilities | 45 | 1,610 | 39,428 |
Option Agreement | 0 | 0 | 0 |
Total Liabilities | 45 | 1,610 | 39,428 |
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 | 23,144 | 23,440 | 23,665 |
Total Liabilities | $ 23,144 | $ 23,440 | $ 23,665 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments, Significant Unobservable Inputs Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | Dec. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of year | $ (23,440) | $ (23,980) | |
Gain from change in fair value | 296 | 315 | |
Balance at end of period | (23,144) | (23,665) | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other income, net | 8,100 | 8,592 | |
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair Value of Available for Sale Investments, Fair Value Option | 24,188 | 24,584 | $ 23,913 |
Other income, net | $ 550 | $ 448 |
Pension and Postretirement Be_3
Pension and Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | 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 2018 | ||
U.S. pension plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Weighted average discount rate | 3.20% | 3.70% | |
Unrecognized losses, U.S. pension plan, remaining in accumulated other comprehensive loss | $ (141,578) | ||
Pension [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 1,037 | $ 685 | |
Interest cost | 2,205 | 4,016 | |
Expected return on assets | (2,038) | (5,205) | |
Net amortization and deferrals | 1,698 | 2,977 | |
Net periodic benefit cost | 2,902 | 2,473 | |
Contributions to defined benefit pension plans | 230 | ||
Expected fiscal year defined benefit pension plan contributions | 1,600 | ||
Postretirement [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 178 | 188 | |
Interest cost | 316 | 292 | |
Expected return on assets | 0 | 0 | |
Net amortization and deferrals | 5 | 42 | |
Net periodic benefit cost | $ 499 | $ 522 |
Derivative Financial Instrume_3
Derivative Financial Instruments, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | Dec. 30, 2018 | |
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 | $ 4,809 | $ (6,700) | |
Not Designated as Hedging Instrument [Member] | Intercompany Loans [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 293,326 | 132,945 | $ 452,773 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | $ 776,642 | $ 1,273,262 | $ 792,840 |
Derivative Financial Instrume_4
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 | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 |
Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | $ 776,642 | $ 792,840 | $ 1,273,262 |
Fair value of hedged item | 30,197 | 26,017 | (35,732) |
Inventory Purchases [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 486,999 | 468,305 | 718,925 |
Fair value of hedged item | 21,649 | 15,089 | (31,453) |
Sales [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 263,221 | 298,194 | 375,441 |
Fair value of hedged item | 8,358 | 11,232 | 7,323 |
Royalties and Other [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative | 26,422 | 26,341 | 178,896 |
Fair value of hedged item | $ 190 | $ (304) | $ (11,602) |
Derivative Financial Instrume_5
Derivative Financial Instruments, Fair Values Derivatives, Balance Sheet Location, by Derivative Contract Type (Details) - Foreign Exchange Forward [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 |
Not Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Net unrealized gain | $ 2,054 | $ (1,551) | $ (736) |
Not Designated as Hedging Instrument [Member] | Prepaid expenses and other current assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 2,391 | 0 | 0 |
Unrealized losses | (337) | 0 | 0 |
Net unrealized gain | 2,054 | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Accrued liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 0 | 1,269 | 383 |
Unrealized losses | 0 | (2,820) | (1,119) |
Net unrealized gain | 0 | (1,551) | (736) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Net unrealized gain | 30,197 | 26,017 | (35,732) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other current assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 22,737 | 21,718 | 458 |
Unrealized losses | (2,008) | (972) | (405) |
Net unrealized gain | 20,729 | 20,746 | 53 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 9,752 | 6,173 | 5,996 |
Unrealized losses | (239) | (843) | (3,089) |
Net unrealized gain | 9,513 | 5,330 | 2,907 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Accrued liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 0 | 77 | 8,218 |
Unrealized losses | (45) | (136) | (30,826) |
Net unrealized gain | (45) | (59) | (22,608) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Other liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gains | 0 | 0 | 2,846 |
Unrealized losses | 0 | 0 | (18,930) |
Net unrealized gain | $ 0 | $ 0 | $ (16,084) |
Derivative Financial Instrume_6
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 | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | $ 3,610 | $ (4,982) |
Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | 2,614 | (3,891) |
Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | 878 | 332 |
Royalties and Other [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | $ 118 | $ (1,423) |
Leases, Components of Lease Exp
Leases, Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost [Abstract] | |
Operating lease expense | $ 8,942 |
Leases, Supplemental Informatio
Leases, Supplemental Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease Description, [Line Items] | |
Weighted average remaining lease term, Operating lease | 6 years 8 months 12 days |
Weighted average discount rate, Operating lease | 4.50% |
Operating cash flows from operating leases | $ 9,574 |
Right of use asset obtained in exchange for operating lease liability | $ 23,680 |
Minimum [Member] | |
Lessee, Lease Description, [Line Items] | |
Remaining lease terms, Operating Lease | 1 year |
Maximum [Member] | |
Lessee, Lease Description, [Line Items] | |
Remaining lease terms, Operating Lease | 19 years |
Leases, Schedule of Maturities
Leases, Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Lease Liabilities Payments Due [Abstract] | |
2019, Remainder of fiscal year | $ 26,972 |
2020 | 33,756 |
2021 | 29,487 |
2022 | 27,260 |
2023 | 22,093 |
2024 and thereafter | 46,277 |
Total future lease payments | 185,845 |
Less imputed interest | 26,968 |
Present value of future operating lease payments | 158,877 |
Less current operating lease liabilities | 29,534 |
Non-current operating lease liabilities | 129,343 |
Operating lease right-of-use asset, net | $ 141,075 |
Segment Reporting, Net revenues
Segment Reporting, Net revenues by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | $ 732,510 | $ 716,341 | |
Net revenues, affiliates | 0 | 0 | |
Operating Profit (loss) | 36,127 | (80,419) | |
Corporate and Eliminations [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 0 | 0 | |
Net revenues, affiliates | (233,289) | (259,091) | |
Operating Profit (loss) | [1] | 21,732 | (17,030) |
U.S. and Canada [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 357,851 | 353,913 | |
Net revenues, affiliates | 1,849 | 2,133 | |
Operating Profit (loss) | 13,532 | (26,620) | |
International [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 282,649 | 287,945 | |
Net revenues, affiliates | 41 | 62 | |
Operating Profit (loss) | (30,411) | (56,088) | |
Entertainment, Licensing and Digital [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | 91,994 | 74,405 | |
Net revenues, affiliates | 1,974 | 3,576 | |
Operating Profit (loss) | 30,020 | 17,143 | |
Global Operations [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | [2] | 16 | 78 |
Net revenues, affiliates | [2] | 229,425 | 253,320 |
Operating Profit (loss) | [2] | 1,254 | $ 2,176 |
Wizards Of The Coast Digital Revenue [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues, external | $ 10,384 | ||
Segment Reporting, Additional Information about Entity's Reportable Segments | As a result of the realignment of the Company’s financial reporting segments, revenues of $10,384 from the first quarter of 2018, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation. | ||
Wizards of the Coast Digital Operating Profit [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Operating Profit (loss) | $ 3,237 | ||
Segment Reporting, Additional Information about Entity's Reportable Segments | As a result of the realignment of the Company’s financial reporting segments, operating profit of $3,237 for the first quarter of 2018 was reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation. | ||
[1] | Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts. | ||
[2] | The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities. |
Segment Reporting, Total assets
Segment Reporting, Total assets by segments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 | Apr. 01, 2018 | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 4,934,773 | $ 5,262,988 | $ 4,729,072 | |
Corporate and Eliminations [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | [1] | (1,196,889) | (3,684,323) | (4,016,578) |
U.S. and Canada [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 2,600,873 | 2,898,816 | 2,735,206 | |
International [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 2,019,800 | 2,229,053 | 2,033,928 | |
Entertainment, Licensing and Digital [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 804,288 | 621,595 | 683,251 | |
Global Operations [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 706,701 | $ 3,197,847 | $ 3,293,265 | |
[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 individ ual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U . S . Dollar to local currenc y at budgeted 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 | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 732,510 | $ 716,341 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 282,649 | 287,945 |
Europe [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 153,379 | 155,562 |
Latin America [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 62,777 | 65,961 |
Asia Pacific [Member] | International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 66,493 | $ 66,422 |
Segment Reporting, Revenue by B
Segment Reporting, Revenue by Brand Portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenue from External Customer [Line Items] | ||
Net revenue | $ 732,510 | $ 716,341 |
Franchise Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 393,574 | 361,706 |
Partner Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 171,989 | 200,592 |
Hasbro Gaming [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 107,565 | 105,227 |
Gaming including Magic the Gathering and Monopoly [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 243,390 | 203,542 |
Segment Reporting, Additional Information about Entity's Reportable Segments | Hasbro's total gaming category, including all gaming net revenues, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $243,390 and $203,542 for the quarters ended March 31, 2019, and April 1, 2018, respectively. | |
Emerging Brands [Member] | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 59,382 | $ 48,816 |
Restructuring Actions (Details)
Restructuring Actions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2018 | Mar. 31, 2019 | Dec. 30, 2018 | |
Restructuring Charges [Abstract] | |||
Pre-tax restructuring charges relating to severance and other employee costs | $ 17,349 | ||
Cost of commercial reorganization liability remaining on the consolidated balance sheet | $ 61,572 | $ 69,192 | |
Severance payments, total | $ (7,620) | ||
Severance expense recorded, fourth quarter | $ 72,000 |