Segment Reporting

9 Months Ended

Sep. 30, 2018

Segment Reporting (Thousands of Dollars) [Abstract]

(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) International, (iii) Entertainment and Licensing, and (iv) Global Operations.

The U.S. and Canada segment includes the marketing and selling of action figures, arts and crafts and creative play products, electronic toys and related electronic interactive products, fashion and other dolls, infant products, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, as well as traditional board games, and trading card and role-playing games primarily within the United States and Canada. Within the International segment, the Company markets and sells both toy and game products in markets outside of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. The Company's Entertainment and Licensing segment includes the Company's consumer products licensing, digital licensing and gaming, and 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.

Segment performance is measured at the operating profit level. Included in Corporate and Eliminations 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 actual expenses and foreign exchange rates included in Corporate and Eliminations. The accounting policies of the segments are the same as those referenced in note 1.

Results shown for the quarter and nine months are not necessarily representative of those which may be expected for the full year 2018, nor were those of the comparable 2017 period representative of those actually experienced for the full year 2017. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Information by segment and a reconciliation to reported amounts for the quarter and nine-month periods ended September 30, 2018 and October 1, 2017 are as follows:

	Quarter Ended
	September 30, 2018				October 1, 2017
Net revenues	External		Affiliate		External		Affiliate
U.S. and Canada	$	924,178		2,364		993,833		2,201
International		560,704		2		739,229		198
Entertainment and Licensing		84,804		4,712		58,440		7,714
Global Operations (a)		-		557,049		-		665,746
Corporate and Eliminations(b)		-		(564,127)		-		(675,859)
	$	1,569,686		-		1,791,502		-

	Nine Months Ended
	September 30, 2018				October 1, 2017
Net revenues	External		Affiliate		External		Affiliate
U.S. and Canada	$	1,747,807		7,093		1,939,837		7,047
International		1,229,093		290		1,511,074		213
Entertainment and Licensing		213,476		11,378		162,663		14,727
Global Operations (a)		109		1,152,851		97		1,329,516
Corporate and Eliminations(b)		-		(1,171,612)		-		(1,351,503)
	$	3,190,485		-		3,613,671		-

	Quarter Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
Operating profit (loss)	2018		2017		2018		2017
U.S. and Canada	$	226,516		217,278		279,364		363,589
International		66,274		132,007		10,359		149,435
Entertainment and Licensing		33,658		16,910		66,191		39,580
Global Operations (a)		3,179		11,497		(4,623)		4,723
Corporate and Eliminations (b)		(16,291)		(16,748)		(30,786)		(18,056)
	$	313,336		360,944		320,505		539,271

	September 30,		October 1,		December 31,
Total assets	2018		2017		2017
U.S. and Canada	$	3,053,179		3,423,213		2,749,384
International		2,323,866		2,524,821		2,499,985
Entertainment and Licensing		865,638		884,014		626,193
Global Operations		4,306,291		3,080,573		2,819,768
Corporate and Eliminations (b)		(5,053,645)		(4,367,973)		(3,405,347)
	$	5,495,329		5,544,648		5,289,983

(a) The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the individual operating segments are done at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Eliminations because allocations are translated from the U.S. Dollar to local currency 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 quarters and nine-month periods ended September 30, 2018 and October 1, 2017.

	Quarter Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2018		2017		2018		2017
Europe	$	331,353		467,740		686,490		921,467
Latin America		145,703		174,446		308,065		339,071
Asia Pacific		83,648		97,043		234,538		250,536
Net revenues	$	560,704		739,229		1,229,093		1,511,074

The following table presents consolidated net revenues by brand portfolio for the quarters and nine-month periods ended September 30, 2018 and October 1, 2017.

	Quarter Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2018		2017		2018		2017
Franchise brands	$	847,745		892,546		1,715,986		1,894,140
Partner brands		305,827		485,747		714,424		928,724
Hasbro gaming		280,832		280,097		520,334		549,736
Emerging brands		135,282		133,112		239,741		241,071
Net revenues	$	1,569,686		1,791,502		3,190,485		3,613,671

For the quarter and nine-months ended October 1, 2017, revenues of $65,264 and $90,396, respectively, were reclassified from Emerging Brands to Franchise Brands to conform to the presentation for the quarter and nine-months ended September 30, 2018.

Hasbro's total gaming category, including all gaming net revenues, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $447,844 and $964,159 for the quarter and nine-months ended September 30, 2018, respectively. For the quarter and nine-months ended October 1, 2017, total gaming net revenues were $424,847 and $951,397, respectively.