QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
(Address of Principal Executive Offices) | (Zip Code) | |||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
x | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company | |||
June 30, 2019 | July 1, 2018 | December 30, 2018 | |||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | ||||||||
Accounts receivable, less allowance for doubtful accounts of $17,000 $95,900 and $9,100 | |||||||||
Inventories | |||||||||
Prepaid expenses and other current assets | |||||||||
Total current assets | |||||||||
Property, plant and equipment, less accumulated depreciation of $490,000 $444,500 and $462,700 | |||||||||
Other assets | |||||||||
Goodwill | |||||||||
Other intangible assets, net of accumulated amortization of $759,900 $915,900 and $721,700 | |||||||||
Other | |||||||||
Total other assets | |||||||||
Total assets | $ | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities | |||||||||
Short-term borrowings | $ | ||||||||
Accounts payable | |||||||||
Accrued liabilities | |||||||||
Total current liabilities | |||||||||
Long-term debt | |||||||||
Other liabilities | |||||||||
Total liabilities | |||||||||
Shareholders' equity | |||||||||
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued | |||||||||
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 209,694,630 at June 30, 2019, July 1, 2018, and December 30, 2018 | |||||||||
Additional paid-in capital | |||||||||
Retained earnings | |||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | |||
Treasury stock, at cost; 83,488,022 shares at June 30, 2019; 82,370,078 shares at July 1, 2018; and 83,565,598 shares at December 30, 2018 | ( | ) | ( | ) | ( | ) | |||
Total shareholders' equity | |||||||||
Total liabilities and shareholders' equity | $ | ||||||||
Quarter Ended | Six Months Ended | ||||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | ||||||||||
Net revenues | $ | $ | |||||||||||
Costs and expenses: | |||||||||||||
Cost of sales | |||||||||||||
Royalties | |||||||||||||
Product development | |||||||||||||
Advertising | |||||||||||||
Amortization of intangibles | |||||||||||||
Program production cost amortization | |||||||||||||
Selling, distribution and administration | |||||||||||||
Total costs and expenses | |||||||||||||
Operating profit | |||||||||||||
Non-operating (income) expense: | |||||||||||||
Interest expense | |||||||||||||
Interest income | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Other expense (income), net | ( | ) | |||||||||||
Total non-operating expense, net | |||||||||||||
Earnings (loss) before income taxes | ( | ) | |||||||||||
Income tax expense (benefit) | ( | ) | ( | ) | |||||||||
Net earnings (loss) | $ | $ | ( | ) | |||||||||
Net earnings (loss) per common share: | |||||||||||||
Basic | $ | $ | ( | ) | |||||||||
Diluted | $ | $ | ( | ) | |||||||||
Cash dividends declared per common share | $ | $ | |||||||||||
Quarter Ended | Six Months Ended | |||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | |||||||||
Net earnings (loss) | $ | ( | ) | |||||||||
Other comprehensive earnings (loss): | ||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ||||||||
Unrealized holding gains (losses) on available-for-sale securities, net of tax | ( | ) | ||||||||||
Net (losses) gains on cash flow hedging activities, net of tax | ( | ) | ||||||||||
Changes in unrecognized pension amounts, net of tax | ( | ) | ||||||||||
Reclassifications to earnings (loss), net of tax: | ||||||||||||
Net (gains) losses on cash flow hedging activities | ( | ) | ( | ) | ||||||||
Amortization of unrecognized pension and postretirement amounts | ||||||||||||
Settlement of U.S. defined benefit plan | ||||||||||||
Total other comprehensive earnings (loss), net of tax | ( | ) | ( | ) | ||||||||
Comprehensive earnings (loss) | $ | ( | ) | |||||||||
Six Months Ended | ||||||
June 30, 2019 | July 1, 2018 | |||||
Cash flows from operating activities: | ||||||
Net earnings (loss) | $ | ( | ) | |||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||
Depreciation of plant and equipment | ||||||
Amortization of intangibles | ||||||
Program production cost amortization | ||||||
Deferred income taxes | ( | ) | ( | ) | ||
Stock-based compensation | ||||||
Non-cash pension settlement | ||||||
Other non-cash items | ( | ) | ( | ) | ||
Change in operating assets and liabilities net of acquired balances: | ||||||
Decrease in accounts receivable | ||||||
Increase in inventories | ( | ) | ( | ) | ||
Increase in prepaid expenses and other current assets | ( | ) | ( | ) | ||
Program production costs | ( | ) | ( | ) | ||
Decrease in accounts payable and accrued liabilities | ( | ) | ( | ) | ||
Change in net deemed repatriation tax | ( | ) | ||||
Other | ( | ) | ||||
Net cash provided by operating activities | ||||||
Cash flows from investing activities: | ||||||
Additions to property, plant and equipment | ( | ) | ( | ) | ||
Acquisitions | ( | ) | ||||
Other | ( | ) | ||||
Net cash utilized by investing activities | ( | ) | ( | ) | ||
Cash flows from financing activities: | ||||||
Net proceeds from (repayments of) other short-term borrowings | ( | ) | ||||
Purchases of common stock | ( | ) | ( | ) | ||
Stock-based compensation transactions | ||||||
Dividends paid | ( | ) | ( | ) | ||
Payments related to tax withholding for share-based compensation | ( | ) | ( | ) | ||
Deferred acquisition payments | ( | ) | ||||
Net cash utilized by financing activities | ( | ) | ( | ) | ||
Effect of exchange rate changes on cash | ( | ) | ( | ) | ||
Decrease in cash and cash equivalents | ( | ) | ( | ) | ||
Cash and cash equivalents at beginning of year | ||||||
Cash and cash equivalents at end of period | $ | |||||
Supplemental information | ||||||
Cash paid during the period for: | ||||||
Interest | $ | |||||
Income taxes | $ | |||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||
Balance, March 31, 2019 | $ | ( | ) | ( | ) | $ | |||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Other comprehensive earnings | — | — | — | — | |||||||||||||||||||
Stock-based compensation transactions | — | — | — | ||||||||||||||||||||
Purchases of common stock | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||
Dividends declared | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Balance, June 30, 2019 | $ | ( | ) | ( | ) | $ | |||||||||||||||||
Three Months Ended July 1, 2018 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||
Balance, April 1, 2018 | ( | ) | ( | ) | |||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Issuance of shares for Saban purchase | — | — | — | ||||||||||||||||||||
Other comprehensive earnings | — | — | — | ( | ) | — | ( | ) | |||||||||||||||
Stock-based compensation transactions | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Purchases of common stock | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||
Dividends declared | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Balance, July 1, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||
Balance, December 30, 2018 | $ | ( | ) | ( | ) | $ | |||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | |||||||||||||||||||
Stock-based compensation transactions | — | ( | ) | — | — | ||||||||||||||||||
Purchases of common stock | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||
Dividends declared | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Balance, June 30, 2019 | $ | ( | ) | ( | ) | $ | |||||||||||||||||
Six Months Ended July 1, 2018 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||
Balance, December 31, 2017 | ( | ) | ( | ) | |||||||||||||||||||
Net earnings (loss) | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Impact of adoption of ASU 2018-02 | — | — | ( | ) | — | — | |||||||||||||||||
Issuance of shares for Saban purchase | — | — | — | ||||||||||||||||||||
Other comprehensive earnings | — | — | — | ( | ) | — | ( | ) | |||||||||||||||
Stock-based compensation transactions | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Purchases of common stock | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||
Dividends declared | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Balance, July 1, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
2019 | 2018 | |||||||||||
Quarter | Basic | Diluted | Basic | Diluted | ||||||||
Net earnings | $ | |||||||||||
Average shares outstanding | ||||||||||||
Effect of dilutive securities: | ||||||||||||
Options and other share-based awards | — | — | ||||||||||
Equivalent Shares | ||||||||||||
Net earnings per common share | $ | |||||||||||
2019 | 2018 | |||||||||||
Six Months | Basic | Diluted | Basic | Diluted | ||||||||
Net earnings (loss) | $ | ( | ) | ( | ) | |||||||
Average shares outstanding | ||||||||||||
Effect of dilutive securities: | ||||||||||||
Options and other share-based awards | — | — | ||||||||||
Equivalent Shares | ||||||||||||
Net earnings (loss) per common share | $ | ( | ) | ( | ) | |||||||
Quarter Ended | Six Months Ended | |||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | |||||||||
Other comprehensive earnings (loss), tax effect: | ||||||||||||
Tax (expense) benefit on unrealized holding gains (losses) | $ | ( | ) | ( | ) | ( | ) | |||||
Tax benefit (expense) on cash flow hedging activities | ( | ) | ||||||||||
Tax (expense) benefit on changes in unrecognized pension amounts | ( | ) | ( | ) | ||||||||
Reclassifications to earnings, tax effect: | ||||||||||||
Tax expense (benefit) on cash flow hedging activities | ( | ) | ( | ) | ||||||||
Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Tax benefit on settlement of U.S defined benefit plan | ( | ) | ( | ) | ||||||||
Total tax effect on other comprehensive earnings (loss) | $ | ( | ) | ( | ) | ( | ) | |||||
Pension and Postretirement Amounts | Gains (Losses) on Derivative Instruments | Unrealized Holding Gains (Losses) on Available- for-Sale Securities | Foreign Currency Translation Adjustments | Total Accumulated Other Comprehensive Loss | |||||||||||
2019 | |||||||||||||||
Balance at December 30, 2018 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
Current period other comprehensive earnings (loss) | ( | ) | |||||||||||||
Balance at June 30, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
2018 | |||||||||||||||
Balance at December 31, 2017 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
Adoption of ASU 2018-02 | ( | ) | ( | ) | ( | ) | |||||||||
Current period other comprehensive earnings (loss) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance at July 1, 2018 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
June 30, 2019 | July 1, 2018 | December 30, 2018 | ||||||||||||||||
Carrying Cost | Fair Value | Carrying Cost | Fair Value | Carrying Cost | Fair Value | |||||||||||||
6.35% Notes Due 2040 | $ | |||||||||||||||||
3.50% Notes Due 2027 | ||||||||||||||||||
5.10% Notes Due 2044 | ||||||||||||||||||
3.15% Notes Due 2021 | ||||||||||||||||||
6.60% Debentures Due 2028 | ||||||||||||||||||
Total long-term debt | $ | |||||||||||||||||
Less: Deferred debt expenses | — | — | — | |||||||||||||||
Long-term debt | $ | |||||||||||||||||
Fair Value Measurements Using: | ||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
June 30, 2019 | ||||||||||||
Assets: | ||||||||||||
Available-for-sale securities | $ | |||||||||||
Derivatives | ||||||||||||
Total assets | $ | |||||||||||
Liabilities: | ||||||||||||
Derivatives | $ | |||||||||||
Option agreement | ||||||||||||
Total liabilities | $ | |||||||||||
July 1, 2018 | ||||||||||||
Assets: | ||||||||||||
Available-for-sale securities | $ | |||||||||||
Derivatives | ||||||||||||
Total assets | $ | |||||||||||
Liabilities: | ||||||||||||
Derivatives | $ | |||||||||||
Option agreement | ||||||||||||
Total liabilities | $ | |||||||||||
December 30, 2018 | ||||||||||||
Assets: | ||||||||||||
Available-for-sale securities | $ | |||||||||||
Derivatives | ||||||||||||
Total assets | $ | |||||||||||
Liabilities: | ||||||||||||
Derivatives | $ | |||||||||||
Option agreement | ||||||||||||
Total Liabilities | $ | |||||||||||
2019 | 2018 | |||||
Balance at beginning of year | $ | ( | ) | ( | ) | |
Gain from change in fair value | ||||||
Balance at end of second quarter | $ | ( | ) | ( | ) | |
Quarter Ended | ||||||||||||
Pension | Postretirement | |||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | |||||||||
Service cost | $ | |||||||||||
Interest cost | ||||||||||||
Expected return on assets | ( | ) | ( | ) | ||||||||
Settlement | ||||||||||||
Net amortization and deferrals | ||||||||||||
Net periodic benefit cost | $ | |||||||||||
Six Months Ended | |||||||||||
Pension | Postretirement | ||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | ||||||||
Service cost | |||||||||||
Interest cost | |||||||||||
Expected return on assets | ( | ) | ( | ) | |||||||
Settlement | |||||||||||
Net amortization and deferrals | |||||||||||
Net periodic benefit cost | |||||||||||
June 30, 2019 | July 1, 2018 | December 30, 2018 | ||||||||||||||||
Hedged transaction | Notional Amount | Fair Value | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||
Inventory purchases | $ | |||||||||||||||||
Sales | ||||||||||||||||||
Royalties and Other | ( | ) | ( | ) | ||||||||||||||
Total | $ | |||||||||||||||||
June 30, 2019 | July 1, 2018 | December 30, 2018 | |||||||
Prepaid expenses and other current assets | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | ( | ) | ( | ) | |||
Net unrealized gains | $ | ||||||||
Other assets | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | ( | ) | ( | ) | |||
Net unrealized gains | $ | ||||||||
Accrued liabilities | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | ( | ) | ( | ) | |||
Net unrealized losses | $ | ( | ) | ( | ) | ( | ) | ||
Other liabilities | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | ( | ) | |||||
Net unrealized losses | $ | ( | ) | ( | ) | ||||
Quarter Ended | Six Months Ended | |||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | |||||||||
Statements of Operations Classification | ||||||||||||
Cost of sales | $ | ( | ) | ( | ) | |||||||
Net revenues | ||||||||||||
Other | ( | ) | ||||||||||
Net realized gains (losses) | $ | ( | ) | |||||||||
June 30, 2019 | July 1, 2018 | December 30, 2018 | |||||||
Prepaid expenses and other current assets | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | |||||||
Net unrealized gains | $ | ||||||||
Accrued liabilities | |||||||||
Unrealized gains | $ | ||||||||
Unrealized losses | ( | ) | ( | ) | |||||
Net unrealized losses | $ | ( | ) | ( | ) | ||||
Total unrealized (losses) gains, net | $ | ( | ) | ( | ) | ||||
Quarter Ended | Six Months Ended | ||||||
June 30, 2019 | June 30, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | $ | $ | |||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||
Operating leases | $ | $ | |||||
Weighted Average Remaining Lease Term | |||||||
Operating leases | |||||||
Weighted Average Discount Rate | |||||||
Operating leases | % | % | |||||
June 30, 2019 | |||
2019 (excluding the six months ended June 30, 2019) | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
2024 and thereafter | |||
Total future lease payments | |||
Less imputed interest | |||
Present value of future operating lease payments | |||
Less current portion of operating lease liabilities (1) | |||
Non-current operating lease liability (2) | |||
Operating lease right-of-use assets, net (3) | $ | ||
Quarter Ended | ||||||||||||
June 30, 2019 | July 1, 2018 | |||||||||||
Net revenues | External | Affiliate | External | Affiliate | ||||||||
U.S. and Canada | $ | |||||||||||
International | ||||||||||||
Entertainment, Licensing and Digital | ||||||||||||
Global Operations (a) | ||||||||||||
Corporate and Eliminations (b) | ( | ) | ( | ) | ||||||||
$ | ||||||||||||
Six Months Ended | ||||||||||||
June 30, 2019 | July 1, 2018 | |||||||||||
Net revenues | External | Affiliate | External | Affiliate | ||||||||
U.S. and Canada | $ | |||||||||||
International | ||||||||||||
Entertainment, Licensing and Digital | ||||||||||||
Global Operations (a) | ||||||||||||
Corporate and Eliminations (b) | ( | ) | ( | ) | ||||||||
$ | ||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
Operating profit (loss) | June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | ||||||||||
U.S. and Canada | $ | $ | $ | |||||||||||
International | ( | ) | ( | ) | ||||||||||
Entertainment, Licensing and Digital | ||||||||||||||
Global Operations (a) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
Corporate and Eliminations (b) | ( | ) | ||||||||||||
$ | $ | $ | ||||||||||||
Total assets | June 30, 2019 | July 1, 2018 | December 30, 2018 | ||||||
U.S. and Canada | $ | ||||||||
International | |||||||||
Entertainment, Licensing and Digital | |||||||||
Global Operations (a) | |||||||||
Corporate and Eliminations (b) | ( | ) | ( | ) | ( | ) | |||
$ | |||||||||
Quarter Ended | Six Months Ended | ||||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | ||||||||||
Europe | $ | $ | |||||||||||
Latin America | |||||||||||||
Asia Pacific | |||||||||||||
Net revenues | $ | $ | |||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | |||||||||||
Franchise Brands | $ | $ | $ | |||||||||||
Partner Brands | ||||||||||||||
Hasbro Gaming | ||||||||||||||
Emerging Brands | ||||||||||||||
Total | $ | $ | $ | |||||||||||
Remaining amounts to be paid as of December 30, 2018 | $ | ||
Payments made in first quarter of 2019 | ( | ) | |
Payments made in the second quarter of 2019 | ( | ) | |
Remaining amounts as of June 30, 2019 | $ | ||
• | Second quarter net revenues increased 9% to $984.5 million from $904.5 million in the second quarter of 2018. |
• | Net revenues in the U.S. and Canada and Entertainment, Licensing and Digital segments increased 14% and 28%, respectively, while the International segment net revenues decreased 1% during the second quarter of 2019 compared to the second quarter of 2018. International segment net revenues were unfavorably impacted by $20.1 million in foreign currency translation. |
• | Net revenues from Franchise Brands increased 14%, Emerging Brands net revenues increased 28%, Partner Brands increased 3%, while Hasbro Gaming net revenues declined 8% during the second quarter of 2019 compared to the second quarter of 2018. |
• | Operating profit increased to $128.3 million, or 13.0% of net revenue, in the second quarter of 2019 compared to operating profit of $87.6 million, or 9.7% of net revenue, in the second quarter of 2018. |
• | Net earnings of $13.4 million, or $0.11 per diluted share, in the second quarter of 2019 compared to net earnings of $60.3 million, or $0.48 per diluted share, in the second quarter of 2018. |
• | Second quarter 2019 net earnings included a non-cash charge of $110.8 million ($85.9 million after-tax), or $0.68 per diluted share, related to the Company's settlement of its U.S. defined benefit pension plan liability. |
• | Net revenues increased 6% to $1,717.0 million in first six months of 2019 compared to $1,620.8 million in the first six months of 2018. |
• | Net revenues in the U.S. and Canada and Entertainment, Licensing and Digital segments increased 8% and 26%, respectively, while International segment net revenues declined 1%. International segment net revenues were unfavorably impacted by $43.5 million in foreign currency translation. |
• | Net revenues from Franchise Brands increased 12%, Emerging Brands net revenues increased 25%, while Partner Brands and Hasbro Gaming net revenues declined by 6% and 4%, respectively, during the first half of 2019 compared to the first half of 2018. |
• | Operating profit was $164.5 million, or 9.6% of net revenues, in the first six months of 2019 compared to operating profit of $7.2 million, or 0.4% of net revenues, in the first six months of 2018. |
• | Operating profit for the first six months of 2018 was negatively impacted by pre-tax expenses of $70.4 million related to the Toys“R”Us bankruptcy and severance costs of $17.3 million associated with the Company's 2018 restructuring program. |
• | Net earnings of $40.2 million, or $0.32 per diluted share, in the first half of 2019 compared to a net loss of $52.2 million, or $0.42 per diluted share, in the first six months of 2018. |
• | Net earnings for the first six months of 2019 included a non-cash charge of $110.8 million ($85.9 million after-tax), or $0.68 per diluted share, related to the Company's settlement of its U.S. defined benefit pension plan liability. The net loss for the first six months of 2018 included the pre-tax expenses of $87.7 million relating to the Toys"R"Us bankruptcy and severance costs described above ($77.1 million after-tax), as well as income tax expense of $47.8 million related to guidance issued on U.S. tax reform in the first quarter of 2018. |
Quarter Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | July 1, 2018 | June 30, 2019 | July 1, 2018 | ||||||||||||
Net revenues | $ | 984.5 | $ | 904.5 | $ | 1,717.0 | $ | 1,620.8 | |||||||
Operating profit | 128.3 | 87.6 | 164.5 | 7.2 | |||||||||||
Earnings (loss) before income taxes | 6.1 | 68.1 | 35.7 | (20.3 | ) | ||||||||||
Income tax expense (benefit) | (7.3 | ) | 7.8 | (4.5 | ) | 31.9 | |||||||||
Net earnings (loss) | 13.4 | 60.3 | 40.2 | (52.2 | ) | ||||||||||
Diluted earnings (loss) per share | 0.11 | 0.48 | 0.32 | (0.42 | ) | ||||||||||
Quarter Ended | |||||||||
June 30, 2019 | July 1, 2018 | % Change | |||||||
Franchise Brands | $ | 576,715 | 506,535 | 14 | % | ||||
Partner Brands | 213,448 | 208,005 | 3 | % | |||||
Hasbro Gaming | 123,420 | 134,275 | (8 | )% | |||||
Emerging Brands | 70,954 | 55,643 | 28 | % | |||||
Total | $ | 984,537 | 904,458 | 9 | % | ||||
Six Months Ended | |||||||||
June 30, 2019 | July 1, 2018 | % Change | |||||||
Franchise Brands | $ | 970,289 | 868,241 | 12 | % | ||||
Partner Brands | 385,437 | 408,597 | (6 | )% | |||||
Hasbro Gaming | 230,985 | 239,502 | (4 | )% | |||||
Emerging Brands | 130,336 | 104,459 | 25 | % | |||||
Total | $ | 1,717,047 | 1,620,799 | 6 | % | ||||
Quarter Ended | Fiscal Year Ended | ||||||||||||||||||
April 1, 2018 | July 1, 2018 | Sept. 30, 2018 | Dec. 30, 2018 | Dec. 30, 2018 | |||||||||||||||
Net Revenues * | |||||||||||||||||||
U.S. and Canada segment | $ | 353.9 | $ | 448.4 | $ | 912.2 | $ | 661.1 | $ | 2,375.7 | |||||||||
Entertainment, Licensing and Digital segment | 74.4 | 75.5 | 96.8 | 109.6 | 356.3 | ||||||||||||||
Operating Profit (Loss) * | |||||||||||||||||||
U.S. and Canada segment | $ | (26.6 | ) | $ | 73.1 | $ | 223.1 | $ | 100.7 | $ | 370.2 | ||||||||
Entertainment, Licensing and Digital segment | 17.1 | 21.8 | 37.1 | (46.9 | ) | 29.1 | |||||||||||||
Quarter Ended | ||||||||||
June 30, 2019 | July 1, 2018 | % Change | ||||||||
Net Revenues * | ||||||||||
U.S. and Canada segment | $ | 510.5 | $ | 448.4 | 14 | % | ||||
International segment | 377.4 | 380.4 | -1 | % | ||||||
Entertainment, Licensing and Digital segment | 96.5 | 75.5 | 28 | % | ||||||
Operating Profit * | ||||||||||
U.S. and Canada segment | $ | 106.6 | $ | 73.1 | 46 | % | ||||
International segment | 14.6 | 0.2 | >100% | |||||||
Entertainment, Licensing and Digital segment | 7.9 | 21.8 | -64 | % | ||||||
Quarter Ended | |||||||||
June 30, 2019 | July 1, 2018 | % Change | |||||||
Europe | $ | 201.1 | 199.5 | 1 | % | ||||
Latin America | 90.3 | 96.4 | -6 | % | |||||
Asia Pacific | 86.0 | 84.5 | 2 | % | |||||
Net revenues | $ | 377.4 | 380.4 | -1 | % | ||||
Six Months Ended | ||||||||||
June 30, 2019 | July 1, 2018 | % Change | ||||||||
Net Revenues* | ||||||||||
U.S. and Canada segment | $ | 868.4 | $ | 802.4 | 8 | % | ||||
International segment | 660.1 | 668.4 | -1 | % | ||||||
Entertainment, Licensing and Digital segment | 188.5 | 149.9 | 26 | % | ||||||
Operating Profit * | ||||||||||
U.S. and Canada segment | $ | 120.1 | $ | 46.5 | >100% | |||||
International segment | (15.8 | ) | (55.9 | ) | 72 | % | ||||
Entertainment, Licensing and Digital segment | 38.0 | 38.9 | -2 | % | ||||||
Six Months Ended | |||||||||
June 30, 2019 | July 1, 2018 | % Change | |||||||
Europe | $ | 354.5 | 355.1 | — | % | ||||
Latin America | 153.1 | 162.4 | -6 | % | |||||
Asia Pacific | 152.5 | 150.9 | 1 | % | |||||
Net revenues | $ | 660.1 | 668.4 | -1 | % | ||||
Quarter Ended | |||||
June 30, 2019 | July 1, 2018 | ||||
Cost of sales | 34.9 | % | 37.4 | % | |
Royalties | 7.2 | 7.3 | |||
Product development | 6.7 | 6.6 | |||
Advertising | 9.4 | 9.7 | |||
Amortization of intangibles | 1.2 | 0.5 | |||
Program production cost amortization | 2.4 | 0.8 | |||
Selling, distribution and administration | 25.2 | 28.0 | |||
Six Months Ended | |||||
June 30, 2019 | July 1, 2018 | ||||
Cost of sales | 35.2 | % | 36.6 | % | |
Royalties | 7.6 | 8.4 | |||
Product development | 7.1 | 7.2 | |||
Advertising | 9.9 | 9.6 | |||
Amortization of intangibles | 1.4 | 0.7 | |||
Program production cost amortization | 1.8 | 1.2 | |||
Selling, distribution and administration | 27.5 | 35.9 | |||
June 30, 2019 | July 1, 2018 | % Change | |||||||
Cash and cash equivalents | $ | 1,151.0 | 1,159.1 | -1 | % | ||||
Accounts receivable, net | 805.3 | 739.3 | 9 | % | |||||
Inventories | 564.8 | 610.2 | -7 | % | |||||
Prepaid expenses and other current assets | 309.0 | 319.0 | -3 | % | |||||
Other assets | 665.2 | 706.8 | -6 | % | |||||
Accounts payable and accrued liabilities | 1,059.9 | 1,032.3 | 3 | % | |||||
Other liabilities | 554.2 | 600.3 | -8 | % | |||||
• | Repayments of short-term borrowings of $133.6 million in the first six months of 2018, compared to net proceeds of $3.1 million in 2019, due to lower short-term borrowings in the first half of 2019 compared to the first half of 2018. |
• | Lower cash payments related to purchases of the Company's common stock of $58.6 million in the first six months of 2019 compared to $103.5 million in the first six months of 2018. At June 30, 2019, the Company had $369.3 million remaining available under its current share repurchase authorization approved by the Board of Directors. |
• | Lower tax payments made to tax authorities for which shares were withheld from employees’ share-based payment awards, of $11.9 million in the first six months of 2019, compared to $54.7 million in 2018. |
• | Higher dividends paid in the first six months of 2019 of $164.9 million compared to $149.5 million in the first six months of 2018 reflecting a higher dividend rate commencing with the May 2019 dividend payments. |
• | During the first half of 2019, related to the 2018 Power Rangers brand acquisition, the Company paid $100.0 million to Saban Properties which consisted of a $75.0 million deferred purchase price payment and $25.0 million release from escrow. There are no remaining payments due to Saban Properties related to the Power Rangers brand acquisition. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
• | the Company’s ability to successfully develop and grow its franchise and key partner brands, which constitute a substantial majority of the Company’s total revenues; |
• | the Company's ability to successfully re-imagine, re-invent and re-ignite its existing brands, products and product lines, including through the use of immersive entertainment experiences and progressive technology integrating digital and analog play, to keep them fresh and relevant and to maintain and further their success; |
• | the Company's ability to successfully design, develop, produce, introduce, market and sell innovative new brands, products, product lines and entertainment offerings in a timely and cost-effective manner, which achieve and sustain interest from retailers and consumers and keep pace with changes in consumer preferences and technology and the increasing sophistication of today’s children; |
• | the Company's ability to offer products that (i) expand consumer demand for its product offerings and do not significantly compete with the Company's other existing product offerings and (ii) consumers want to purchase and select over competitors' products; |
• | the success of the Company’s key partner brands, and the Company’s ability to maintain and extend solid relationships with its key partners; |
• | successful brand and/or product introductions from competitors that capture market share and sales from the Company; |
• | the Company's ability to source and ship products in a timely and cost-effective manner and customers' and consumers' acceptance and purchase of those products in quantities and at prices that will be sufficient to profitably recover the Company's costs for developing, marketing and selling those products; |
• | the Company’s ability to successfully evolve and transform its business to address a changing global consumer landscape and retail environment, one in which online shopping and digital first marketing are becoming more and more critical and traditional retailers face challenges from disintermediation, and difficulties or delays the Company may experience in successfully implementing and developing new capabilities and making the changes to its business that are required to be successful under these changing marketplace conditions; |
• | recessions, other economic downturns, challenging economic conditions, unfavorable changes in exchange rates or economic uncertainty affecting one or more of the Company's significant markets including, without limitation, the U.K., Brazil and Russia, which can negatively impact the financial health of the Company's customers and consumers, and which can result in lower employment levels, consumer disposable income and consumer spending, including lower retailer inventories and spending on purchases of the Company's products; |
• | currency fluctuations, including movements in foreign exchange rates, which can lower the Company's net revenues and earnings, and significantly impact the Company's costs; |
• | other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate, which could create delays or increase the Company's costs, such as higher commodity prices, labor costs or higher transportation costs, or outbreaks of diseases; |
• | other risks associated with international operations, including in emerging markets which have unique consumer preferences and business climates; |
• | delays, increased costs, lack of consumer acceptance or other difficulties associated with the development and offering of our or our partners' entertainment, digital or media initiatives; |
• | the risk that the market appeal of the Company's licensed products will be less than expected or that sales revenue generated by these products will be insufficient to cover the minimum guaranteed royalties or other commitments; |
• | the concentration of the Company's customers, potentially increasing the negative impact to the Company of difficulties, including bankruptcies, experienced by any of the Company's customers or changes in their purchasing or selling patterns; |
• | an adverse change in purchasing policies or promotional programs, or the bankruptcy or other economic difficulties or lack of success, of one or more of the Company's significant retailers comprising its relatively concentrated retail customer base, which could negatively impact the Company's revenues or bad debt exposure; |
• | the impact of the bankruptcy of Toys“R”Us in the U.S., Canada and the U.K., and the subsequent liquidation of the Toys“R”Us business in the U.S. and the U.K., as well as the economic difficulty of Toys“R”Us in other markets, or the bankruptcy or lack of success of a smaller retail customer of the Company, such as Sears Holdings Corporation, any of which could negatively impact the Company’s revenues, result in lost sales to customers, create bad debt expense and create other challenges for the Company and its financial performance as the Company attempts to recapture this lost business through other customers or channels, and any inability or delay of the Company in recapturing all of the lost business; |
• | uncertainty as to the future of the Toys“R”Us business elsewhere in the world, and associated reductions in sales to Toys“R”Us; |
• | the Company's ability to generate sales during the second half of the year, particularly during the relatively brief holiday shopping season, which is the period in which the Company derives a substantial portion of its revenues and earnings; |
• | the inventory policies of the Company's retail and e-commerce customers, including potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half of the year, which coupled with reliance by retailers on quick response inventory management techniques, increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; |
• | the impact of retail inventory overhang in one or more of our key markets, which can reduce purchases of our products from our customers and lower our revenues and profitability; |
• | our ability to evolve our business quickly and efficiently to respond to the challenges of today’s converged retail environment; |
• | work stoppages or disruptions which may impact the Company's ability to manufacture or deliver products in a timely and cost-effective manner; |
• | concentration of manufacturing of the substantial majority of the Company's products by third party vendors in the People's Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of people and products into and out of China, the cost of producing products in China and the cost of exporting them to the Company's other markets or affecting the exchange rates for the Chinese Renminbi, including, without limitation, the potential application of tariffs or other trade restrictions to some or all of the goods manufactured for the Company in China and exported to other markets, which could significantly increase the price of the Company’s products and substantially harm sales if applied to any significant amount of the Company’s products; |
• | the ability of the Company to successfully diversify sourcing of its products to reduce reliance on sources of supply in China; |
• | the application of tariffs and other trade restrictions impacting the cost of producing our products and importing them into markets around the world for sale, which could significantly increase the price of the Company’s products and substantially harm sales; |
• | the ability of the Company to successfully implement actions to lessen the impact of tariffs imposed on our products, including any changes to our supply chain, sales policies or pricing of our products; |
• | the ability of the Company to successfully develop, produce and distribute movies under its relationship with Paramount Pictures Corporation, and consumer interest in those movies and related merchandise; |
• | consumer interest in and acceptance of programming and entertainment created by Hasbro Studios and/or Allspark Pictures, as well as products related to such programming and entertainment, and other factors impacting the financial performance of Hasbro Studios, Allspark Pictures and the Discovery Family Channel; |
• | the ability to develop and distribute compelling entertainment, including television, movies and digital content, based on our brands, in a timely and financially profitable manner, and the success of that entertainment in driving consumer interest in and engagement with our brands; |
• | the ability of the Company to hire and retain key officers and employees who are critical to the Company's success; |
• | the ability of the Company to successfully protect its intellectual property rights; |
• | the costs of complying with product safety and consumer protection requirements worldwide, including the risk that greater regulation in the future may increase such costs, may require changes in the Company's products and/or may impact the Company's ability to sell some products in particular markets in the absence of making changes to such products; |
• | the risk that one of the Company's third-party manufacturers will not comply with applicable labor, consumer protection, product safety or other laws or regulations, or with aspects of the Company's Global Business Ethics Principles, and that such noncompliance will not be promptly detected, either of which could cause damage to the Company's reputation, harm sales of its products, result in product recalls and potentially create other liabilities for the Company; |
• | the risk the Company will lose rights to a significant licensed property or properties, which will harm the Company's revenues and earnings; |
• | the risk that the Company may face product recalls or product liability suits relating to products it manufactures or distributes which may have significant direct costs to the Company and which may also harm the reputation of the Company and its products, potentially harming future product sales; |
• | the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitor’s products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain employees; |
• | the risk that anticipated benefits of acquisitions or investments may not occur or be delayed or reduced in their realization; |
• | the risk that any litigation or arbitration disputes or government and regulatory investigations could entail significant resources and expense and result in significant fines or other harm to the Company's business or reputation; |
• | the Company's ability to maintain or obtain external financing on terms acceptable to it in order to meet working capital needs; |
• | the risk that one or more of the counterparties to the Company's financing arrangements may experience financial difficulties or otherwise be unable or unwilling to allow the Company to access financing under such arrangements; |
• | unforeseen circumstances, such as severe softness in or collapse of the retail and/or banking environment that may result in a significant decline in revenues and operating results of the Company, thereby causing the Company to be in non-compliance with its debt covenants and the Company being unable to utilize borrowings under its revolving credit facility, a circumstance likely to occur when operating shortfalls would result in the Company being in the greatest need of such supplementary borrowings; |
• | market conditions, third party actions or approvals, the impact of competition and other factors that could delay or increase the cost of implementation of the Company's programs, or alter the Company's actions and reduce actual results; |
• | the risk that the Company may be subject to governmental penalties, fines, sanctions or additional taxes for failure to comply with applicable laws or regulations in any of the markets in which it operates, or that governmental regulations or requirements will require changes in the manner in which the Company does business and/or increase the costs of doing business; |
• | failure to operate our information systems and implement new technology effectively, as well as maintain the systems and processes designed to protect our electronic data and the data of our customers, consumers and employees, including the damage that could result from a breach of any of that data; |
• | changes in, or different interpretations of, income tax laws and rules, and changes in our geographic operating results, may impact our effective tax rate; |
• | the risk that the Company's reported goodwill may become impaired, requiring the Company to take a charge against its income; |
• | changes in foreign exchange rates and other potential regulations, increased costs and/or economic uncertainty associated with the U.K. vote to leave the European Union (“EU”), commonly referred to as Brexit, may harm our sales and the profitability of our business in the U.K. and the EU; or |
• | other risks and uncertainties as are or may be detailed from time to time in the Company's public announcements and filings with the SEC, such as filings on Forms 8-K, 10-Q and 10-K. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | |||||||||
April 2019 | |||||||||||||
4/1/19 – 4/28/19 | 9,705 | $ | 85.47 | 9,705 | $ | 377,965,985 | |||||||
May 2019 | |||||||||||||
4/29/19 – 6/2/19 | 40,900 | $ | 97.43 | 40,900 | $ | 373,980,915 | |||||||
June 2019 | |||||||||||||
6/3/19 – 6/30/19 | 45,517 | $ | 101.82 | 45,517 | $ | 369,346,163 | |||||||
Total | 96,122 | $ | 98.31 | 96,122 | $ | 369,346,163 | |||||||
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
3.7 | ||
3.8 | ||
3.9 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
HASBRO, INC. | |
(Registrant) | |
Date: July 31, 2019 | By: /s/ Deborah Thomas |
Deborah Thomas | |
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | |
1. | I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Brian Goldner | |
Brian Goldner Chairman and Chief Executive Officer | |
1. | I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Deborah Thomas | |
Deborah Thomas Executive Vice President and Chief Financial Officer | |
1) | the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Brian Goldner Brian Goldner Chairman and Chief Executive Officer of Hasbro, Inc. | |
1) | the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Deborah Thomas Deborah Thomas Executive Vice President and Chief Financial Officer of Hasbro, Inc. | |
Consolidated Balance Sheets (Unaudited) Parenthetical - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
Jul. 01, 2018 |
|---|---|---|---|
| Current assets | |||
| Accounts receivable, allowance for doubtful accounts | $ 17,000 | $ 9,100 | $ 95,900 |
| Property, plant and equipment, accumulated depreciation | 490,000 | 462,700 | 444,500 |
| Other assets | |||
| Other intangibles, accumulated amortization | $ 759,900 | $ 721,700 | $ 915,900 |
| Shareholders' equity | |||
| Preference stock, par value (in dollars per share) | $ 2.5 | $ 2.5 | $ 2.5 |
| Preference stock, authorized shares (in shares) | 5,000,000 | 5,000,000 | 5,000,000 |
| Preference stock, issued (in shares) | 0 | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.5 | $ 0.5 | $ 0.5 |
| Common stock, authorized shares (in shares) | 600,000,000 | 600,000,000 | 600,000,000 |
| Common stock, issued (in shares) | 209,694,630 | 209,694,630 | 209,694,630 |
| Treasury stock, at cost; shares (in shares) | 83,488,022 | 83,565,598 | 82,370,078 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Income Statement [Abstract] | ||||
| Net revenues | $ 984,537 | $ 904,458 | $ 1,717,047 | $ 1,620,799 |
| Costs and expenses: | ||||
| Cost of sales | 343,694 | 338,306 | 603,681 | 593,493 |
| Royalties | 71,061 | 66,045 | 130,949 | 135,697 |
| Product development | 65,632 | 59,859 | 121,892 | 117,243 |
| Advertising | 92,799 | 87,601 | 169,403 | 155,617 |
| Amortization of intangibles | 11,815 | 4,554 | 23,631 | 11,032 |
| Program production cost amortization | 23,502 | 7,297 | 30,077 | 19,331 |
| Selling, distribution and administration | 247,701 | 253,208 | 472,954 | 581,217 |
| Total costs and expenses | 856,204 | 816,870 | 1,552,587 | 1,613,630 |
| Operating profit | 128,333 | 87,588 | 164,460 | 7,169 |
| Non-operating (income) expense: | ||||
| Interest expense | 22,018 | 22,803 | 44,332 | 45,612 |
| Interest income | (5,996) | (6,308) | (13,678) | (12,556) |
| Other expense (income), net | 106,203 | 2,969 | 98,103 | (5,623) |
| Total non-operating expense, net | 122,225 | 19,464 | 128,757 | 27,433 |
| Earnings (loss) before income taxes | 6,108 | 68,124 | 35,703 | (20,264) |
| Income tax expense (benefit) | (7,325) | 7,825 | (4,457) | 31,929 |
| Net earnings (loss) | $ 13,433 | $ 60,299 | $ 40,160 | $ (52,193) |
| Net earnings (loss) per common share: | ||||
| Basic (in dollars per share) | $ 0.11 | $ 0.48 | $ 0.32 | $ (0.42) |
| Diluted (in dollars per share) | 0.11 | 0.48 | 0.32 | (0.42) |
| Cash dividends declared per common share (in dollars per share) | $ 0.68 | $ 0.63 | $ 1.36 | $ 1.26 |
Consolidated Statements of Shareholder's Equity - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total Shareholders' Equity |
|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2017 | $ 1,829,957 | $ 104,847 | $ 1,050,605 | $ 4,260,222 | $ (239,425) | $ (3,346,292) | |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
| Net earnings (loss) | (52,193) | (52,193) | $ (52,193) | ||||
| Issuance of shares for Saban purchase | 198,853 | 81,544 | 280,397 | ||||
| Other comprehensive earnings (loss) | (34,148) | (34,148) | (34,148) | ||||
| Stock-based compensation transactions | (9,130) | 86 | (9,044) | ||||
| Purchases of common stock | (112,893) | (112,893) | |||||
| Stock-based compensation expense | 23,329 | 216 | 23,545 | ||||
| Dividends declared | (158,871) | (158,871) | |||||
| Balance at Jul. 01, 2018 | 1,766,750 | 104,847 | 1,263,657 | 4,070,661 | (295,076) | (3,377,339) | 1,766,750 |
| Balance at Apr. 01, 2018 | 1,571,359 | 104,847 | 1,053,368 | 4,090,637 | (292,395) | (3,385,098) | |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
| Net earnings (loss) | 60,299 | 60,299 | |||||
| Issuance of shares for Saban purchase | 280,397 | 198,853 | 81,544 | ||||
| Other comprehensive earnings (loss) | (2,681) | (2,681) | |||||
| Stock-based compensation transactions | (1,501) | (1,602) | 101 | ||||
| Purchases of common stock | (74,102) | (74,102) | |||||
| Stock-based compensation expense | 13,254 | 13,038 | 216 | ||||
| Dividends declared | (80,275) | (80,275) | |||||
| Balance at Jul. 01, 2018 | 1,766,750 | 104,847 | 1,263,657 | 4,070,661 | (295,076) | (3,377,339) | 1,766,750 |
| Balance at Dec. 30, 2018 | 1,754,486 | 104,847 | 1,275,059 | 4,184,374 | (294,514) | (3,515,280) | 1,754,486 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
| Net earnings (loss) | 40,160 | 40,160 | 40,160 | ||||
| Other comprehensive earnings (loss) | 121,339 | 121,339 | 121,339 | ||||
| Stock-based compensation transactions | (177) | 14,068 | 13,891 | ||||
| Purchases of common stock | (58,633) | (58,633) | |||||
| Stock-based compensation expense | 15,658 | 236 | 15,894 | ||||
| Dividends declared | (171,268) | (171,268) | |||||
| Balance at Jun. 30, 2019 | 1,715,869 | 104,847 | 1,290,540 | 4,053,266 | (173,175) | (3,559,609) | 1,715,869 |
| Balance at Mar. 31, 2019 | 1,654,531 | 104,847 | 1,269,230 | 4,125,686 | (282,339) | (3,562,893) | |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
| Net earnings (loss) | 13,433 | 13,433 | |||||
| Other comprehensive earnings (loss) | 109,164 | 109,164 | |||||
| Stock-based compensation transactions | 23,436 | 10,937 | 12,499 | ||||
| Purchases of common stock | (9,451) | (9,451) | |||||
| Stock-based compensation expense | 10,609 | 10,373 | 236 | ||||
| Dividends declared | (85,853) | (85,853) | |||||
| Balance at Jun. 30, 2019 | $ 1,715,869 | $ 104,847 | $ 1,290,540 | $ 4,053,266 | $ (173,175) | $ (3,559,609) | $ 1,715,869 |
Basis of Presentation |
6 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | 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 June 30, 2019 and July 1, 2018, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates. The quarters ended June 30, 2019 and July 1, 2018 were each 13-week periods. The six -month periods ended June 30, 2019 and July 1, 2018 were each 26-week periods. The results of operations for the quarter and six month periods ended June 30, 2019 are not necessarily indicative of results 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. Certain reclassifications have been made to prior year amounts to conform to the current period presentation. 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 consolidated 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 information 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 the accounting policies 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 was 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 required. ASU 2016-02 was 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 transition 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-2016-02 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 election 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 election 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 adoption of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $121,230 and lease liabilities of $139,520. 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. The 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 Costs (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 episodic 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 other 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 and the impact, if any, to its consolidated financial statements.
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Revenue Recognition |
6 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Revenue from Contract with Customer [Abstract] | |
| Revenue from Contract with Customer | 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 recorded as liabilities and were $51,182, $41,380, and $50,759 as of June 30, 2019, July 1, 2018, and December 30, 2018, respectively, and the changes in deferred revenues are not material to the Company’s consolidated statements of operations for the six months ended June 30, 2019 and July 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 June 30, 2019, July 1, 2018 and December 30, 2018, these contract assets were $41,414, $22,105 and $18,166, respectively, of which $32,199, $18,356 and $12,895, respectively, were recorded in Prepaid Expenses and Other Current Assets and $9,215, $3,749 and $5,271, respectively, were recorded as Other Long-Term Assets. Disaggregation of revenues The Company disaggregates its revenues from contracts with customers by segment: U.S. and Canada, International, Entertainment, Licensing and Digital, and Global Operations. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into four brand categories: Franchise brands, Partner brands, Hasbro gaming, and Emerging brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 11, Segment Reporting, for further information.
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Earnings (Loss) Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (Loss) Per Share | Earnings (Loss) Per Share Net earnings (loss) per share data for the quarters and six months ended June 30, 2019 and July 1, 2018 were computed as follows:
For the quarters ended June 30, 2019 and July 1, 2018, options and restricted stock units totaling 1,570 and 1,214 shares, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. For the six month periods ended June 30, 2019 and July 1, 2018, options and restricted stock units totaling 1,631 and 3,127 shares, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive. Of the 2018 amount, 1,921 shares would have been included in the calculation of diluted shares had the Company not had a net loss in the six month period ended July 1, 2018. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 823 shares being included in the diluted earnings per share calculation for the six month period ended July 1, 2018.
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Other Comprehensive Earnings (Loss) |
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| Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive Earnings (Loss) | 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 earnings (loss) for the quarter and six month periods ended June 30, 2019 and July 1, 2018.
Changes in the components of accumulated other comprehensive earnings (loss) for the six months ended June 30, 2019 and July 1, 2018 are as follows:
Gains (Losses) on Derivative Instruments At June 30, 2019, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $19,881 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the second quarter of 2019 or forecasted to be purchased during the remainder of 2019 through 2022, intercompany expenses expected to be paid or received during 2019, television and movie production costs paid in 2019, and cash receipts for sales made at the end of the second quarter of 2019 or forecasted to be made in the remainder of 2019 and, to a lesser extent, 2020 through 2021. 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 Company entered into hedging contracts on future interest payments related to the long-term notes due in 2021 and 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related notes using the effective interest rate method. At June 30, 2019, deferred losses, net of tax of $18,615 related to these instruments remained in AOCE. For the quarters ended June 30, 2019 and July 1, 2018, previously deferred losses of $449, were reclassified from AOCE to net earnings. For the six month periods ended June 30, 2019 and July 1, 2018, previously deferred losses of $899 were reclassified from AOCE to net earnings. Of the amount included in AOCE at June 30, 2019, the Company expects net gains of approximately $14,296 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.
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Financial Instruments |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | Financial Instruments The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At June 30, 2019, July 1, 2018 and December 30, 2018, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at June 30, 2019, July 1, 2018 and December 30, 2018 also include certain assets and liabilities measured 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 June 30, 2019, July 1, 2018 and December 30, 2018 are as follows:
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.
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Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 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. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company has completed its analysis based on legislative updates relating to the Tax Act. As a result, the Company recorded a discrete 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. No adjustments were made to provisional amounts during the second quarter of 2018. For the six months ended June 30, 2019, the Company recorded a discrete tax benefit of $24,925 as a result of the charge incurred from the settlement of its U.S. Pension Plan during the second quarter of 2019. 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.
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Fair Value of Financial Instruments |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Financial Instruments | 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 observable 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 for similar assets and liabilities. The Company has elected the fair value option for certain available-for-sale investments. At June 30, 2019, July 1, 2018 and December 30, 2018, these investments totaled $24,358, $24,219 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 $177 and $727 on these investments in other (income) expense, net for the quarter and six months ended June 30, 2019, respectively, related to the change in fair value of such instruments. For the quarter and six month periods ended July 1, 2018, the Company recorded net (losses) gains of $(342) and $106, respectively, in other (income) expense, net, related to the change in fair value of such instruments. At June 30, 2019, July 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):
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 June 30, 2019, July 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 unobservable 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. There were no changes in these valuation techniques during the six month period ended June 30, 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):
In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At June 30, 2019, July 1, 2018 and December 30, 2018, these investments had fair values of $24,358, $24,219 and $23,913, respectively. Two of the investments have net asset values that are predominantly based on underlying investments which are traded on an active market and are redeemable within 45 days. The third investment invests in hedge funds which are generally redeemable on a quarterly basis with 30 days – 90 days’ notice.
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Pension and Postretirement Benefits |
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| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension and Postretirement Benefits | Pension and Postretirement Benefits 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 (“U.S. Pension Plan”). During the first quarter of 2018 the Company commenced the U.S. Pension Plan termination process and received regulatory approval during the fourth quarter of 2018. During the second quarter of 2019, the Company settled all remaining benefits directly with vested participants electing a lump sum payout, and purchased a group annuity contract from Massachusetts Mutual Life Insurance Company to administer all future payments to remaining U.S. Pension Plan participants. The U.S. Pension Plan's net funded asset position was sufficient to cover the lump sum payments and the purchase of the group annuity contract and settle all other remaining benefit obligations with no additional cost to the Company. After the settlement of the benefit obligations and payment of expenses, the Company had excess assets in the U.S. Pension Plan of approximately $19,000. The Company elected to utilize the remaining surplus after payment of administrative expenses for the Company's future matching contributions under the Company's 401(k) plan. Upon settlement of the pension liability, which occurred in May, 2019, the Company recognized a non-operating settlement charge of $110,777 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's consolidated statements of operations, adjusted for market conditions and settlement costs at benefit distribution. As of June 30, 2019, the Company had unrecognized losses related to its remaining pension and postretirement plans of $32,394. The components of the net periodic cost of the Company's terminated defined benefit pension plan, remaining defined benefit pension plan and other postretirement plans for the quarters and six months ended June 30, 2019 and July 1, 2018 are as follows:
During the six months ended June 30, 2019, the Company made cash contributions of $520 to its remaining defined benefit pension plans. During fiscal 2019, the Company expects to make cash contributions to its remaining defined benefit pension plans of approximately $1,600 in the aggregate.
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Derivative Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments | 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 Euros. 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 Company. Hasbro does not enter into derivative financial instruments for speculative purposes. Cash Flow Hedges The Company uses foreign currency forward contracts to reduce the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions in 2019 through 2022. At June 30, 2019, July 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:
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 June 30, 2019, July 1, 2018 and December 30, 2018 as follows:
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters and six months ended June 30, 2019 and July 1, 2018 as follows:
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. The 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 June 30, 2019, July 1, 2018 and December 30, 2018 the total notional amounts of the Company's undesignated derivative instruments were $247,295, $140,151 and $452,773, respectively. At June 30, 2019, July 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:
The Company recorded net gains of $1,776 and $6,584 on these instruments to other (income) expense, net for the quarter and six month periods ended June 30, 2019, respectively, and net gains of $10,451 and $3,751 on these instruments to other (income) expense, net for the quarter and six month periods ended July 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 derivative financial instruments see Notes 4 and 7.
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Leases |
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| Leases | 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, or 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 agreements 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 and six months ended June 30, 2019, operating lease expense was $9,133 and $18,075, respectively. Expense related to short-term leases (expected terms less than 12 months) and variable lease payments were not material in the quarter or six months ended June 30, 2019. Information related to the Company’s leases for the quarter and six months ended June 30, 2019 is as follows:
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 June 30, 2019:
(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.
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Segment Reporting |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting | 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, 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 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, 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 segment. As a result of the realignment, U.S. and Canada and the former Entertainment and Licensing segment results for the quarter and six months ended July 1, 2018 have been restated to reflect the change. 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 six month periods ended June 30, 2019 are not necessarily representative of those which may be expected for the full year 2019, nor were those of the comparable 2018 periods 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 unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the quarter and six month periods ended June 30, 2019 and July 1, 2018 are as follows:
As a result of the realignment of the Company’s financial reporting segments, revenues of $10,888 and $21,272 for the quarter and six months ended July 1, 2018, respectively, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation.
As a result of the realignment of the Company’s financial reporting segments, operating profit of $3,134 and $6,370 for the quarter and six months ended July 1, 2018, respectively, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation.
(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 six month periods ended June 30, 2019 and July 1, 2018:
The following table presents consolidated net revenues by brand portfolio for the quarters and six month periods ended June 30, 2019 and July 1, 2018:
Hasbro's total gaming category, which includes all gaming net revenues, both those reported in Hasbro Gaming and those reported elsewhere, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $393,367 and $636,758 for the quarter and six months ended June 30, 2019, respectively. For the quarter and six months ended July 1, 2018, total gaming revenues were $312,773 and $516,315, respectively.
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| Restructuring Charges [Abstract] | |||||||||||||||||||||||||
| Restructuring Actions | 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 re-imagine its business to make sure it has the right talent and capabilities 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 the Company took certain actions, which will continue through 2019. The actions primarily included 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 quarter of 2018, the Company recorded a pre-tax severance expense of $17,349, 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 related 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 six months of 2019. The detail of activity related to the program is as follows:
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Basis of Presentation (Policies) |
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Jun. 30, 2019 | |
| Accounting Policies [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 June 30, 2019 and July 1, 2018, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates. The quarters ended June 30, 2019 and July 1, 2018 were each 13-week periods. The six -month periods ended June 30, 2019 and July 1, 2018 were each 26-week periods. The results of operations for the quarter and six month periods ended June 30, 2019 are not necessarily indicative of results 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. Certain reclassifications have been made to prior year amounts to conform to the current period presentation. 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 consolidated 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 information included herein.
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| Revenue from contract with customer | 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 recorded as liabilities and were $51,182, $41,380, and $50,759 as of June 30, 2019, July 1, 2018, and December 30, 2018, respectively, and the changes in deferred revenues are not material to the Company’s consolidated statements of operations for the six months ended June 30, 2019 and July 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 June 30, 2019, July 1, 2018 and December 30, 2018, these contract assets were $41,414, $22,105 and $18,166, respectively, of which $32,199, $18,356 and $12,895, respectively, were recorded in Prepaid Expenses and Other Current Assets and $9,215, $3,749 and $5,271, respectively, were recorded as Other Long-Term Assets. Disaggregation of revenues The Company disaggregates its revenues from contracts with customers by segment: U.S. and Canada, International, Entertainment, Licensing and Digital, and Global Operations. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into four brand categories: Franchise brands, Partner brands, Hasbro gaming, and Emerging brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 11, Segment Reporting, for further information.
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| Recently Adopted and Issued Accounting Standards | 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 the accounting policies 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 was 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 required. ASU 2016-02 was 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 transition 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-2016-02 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 election 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 election 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 adoption of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $121,230 and lease liabilities of $139,520. 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. The 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 Costs (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 episodic 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 other 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 and the impact, if any, to its consolidated financial statements.
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| 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, or 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 agreements 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.
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Earnings (Loss) Per Share (Tables) |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings (Loss) Per Share | Net earnings (loss) per share data for the quarters and six months ended June 30, 2019 and July 1, 2018 were computed as follows:
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Other Comprehensive Earnings (Loss) (Tables) |
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| Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Comprehensive Income (Loss), Tax Effect | The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarter and six month periods ended June 30, 2019 and July 1, 2018.
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| Schedule of Accumulated Other Comprehensive Earnings (Loss) | Changes in the components of accumulated other comprehensive earnings (loss) for the six months ended June 30, 2019 and July 1, 2018 are as follows:
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Financial Instruments (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments | The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of June 30, 2019, July 1, 2018 and December 30, 2018 are as follows:
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Hierarchy | At June 30, 2019, July 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):
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| Reconciliation of Level 3 Fair Value | 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):
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Pension and Postretirement Benefits (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of net periodic cost | The components of the net periodic cost of the Company's terminated defined benefit pension plan, remaining defined benefit pension plan and other postretirement plans for the quarters and six months ended June 30, 2019 and July 1, 2018 are as follows:
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Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Cash Flow Hedging Instruments | At June 30, 2019, July 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:
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| Schedule of Foreign Currency Forward Contracts Designated as Cash Flow Hedges | The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the consolidated balance sheets at June 30, 2019, July 1, 2018 and December 30, 2018 as follows:
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| Schedule of Net Gains (Losses) on Cash Flow Hedges Activities | Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters and six months ended June 30, 2019 and July 1, 2018 as follows:
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| Fair Values of Undesignated Derivative Financial Instruments | At June 30, 2019, July 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:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease cost | nformation related to the Company’s leases for the quarter and six months ended June 30, 2019 is as follows:
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| Maturities of operating lease liabilities | 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 June 30, 2019:
(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.
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Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues by segment | Information by segment and a reconciliation to reported amounts for the quarter and six month periods ended June 30, 2019 and July 1, 2018 are as follows:
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| Operating profit (loss) by segments |
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| Total assets by segments |
(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.
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| Schedule of international net revenues by major geographic region | The following table represents consolidated International segment net revenues by major geographic region for the quarters and six month periods ended June 30, 2019 and July 1, 2018:
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| Net revenues by product category | The following table presents consolidated net revenues by brand portfolio for the quarters and six month periods ended June 30, 2019 and July 1, 2018:
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Restructuring Actions (Tables) |
6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||
| Restructuring Charges [Abstract] | |||||||||||||||||||||||||
| Schedule of restructuring and related costs | The detail of activity related to the program is as follows:
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Basis of Presentation (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
|---|---|---|
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
| Operating lease right-of-use asset, net | $ 135,189 | |
| Total operating lease liabilities | $ 152,486 | |
| Accounting Standards Update 2016-02 | ||
| 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 - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
Jul. 01, 2018 |
|---|---|---|---|
| Revenue from Contract with Customer [Abstract] | |||
| Contract with customer liability | $ 51,182 | $ 50,759 | $ 41,380 |
| Contract with customer asset | 41,414 | 18,166 | 22,105 |
| Prepaid expenses and other current assets | 32,199 | 12,895 | 18,356 |
| Other long-term assets | $ 9,215 | $ 5,271 | $ 3,749 |
Revenue Recognition - Disaggregation of Revenue (Details) |
6 Months Ended |
|---|---|
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Jun. 30, 2019
brand_category
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| Revenue from Contract with Customer [Abstract] | |
| Number of brand categories | 4 |
Earnings (Loss) Per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
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| Earnings Per Share [Abstract] | ||||
| Net earnings (loss) | $ 13,433 | $ 60,299 | $ 40,160 | $ (52,193) |
| Average number of shares outstanding, basic and diluted (in shares) | 126,329 | 125,711 | 126,308 | 125,392 |
| Earnings Per Share, Basic [Abstract] | ||||
| Equivalent shares outstanding, basic (in shares) | 126,329 | 125,711 | 126,308 | 125,392 |
| Earnings per share, basic (in dollars per shares) | $ 0.11 | $ 0.48 | $ 0.32 | $ (0.42) |
| Effect of dilutive securities: | ||||
| Options and other share-based awards (in shares) | 518 | 624 | 523 | 0 |
| Equivalent shares outstanding, diluted (in shares) | 126,847 | 126,335 | 126,831 | 125,392 |
| Earnings per share, diluted (in dollars per shares) | $ 0.11 | $ 0.48 | $ 0.32 | $ (0.42) |
Earnings (Loss) Per Share - Narrative (Details) - Employee stock option and restricted stock units (in shares) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Antidilutive securities excluded from computation of earnings per share (in shares) | 1,570 | 1,214 | 1,631 | 3,127 |
| Dilutive securities excluded because of net loss | 1,921 | |||
| Impact of dilutive securities excluded because of net loss | 823 | |||
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Income Tax Disclosure [Abstract] | |||||
| Increase (decrease) to provisional tax expense, net | $ 47,800 | ||||
| Tax benefit on settlement of U.S defined benefit plan | $ 24,925 | $ 0 | $ 24,925 | $ 0 | |
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
Dec. 30, 2018 |
|
| Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
| Other income, net | $ (106,203) | $ (2,969) | $ (98,103) | $ 5,623 | |
| Fair Value investments notice period | 45 days | ||||
| Minimum | |||||
| Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
| Fair Value investments notice period | 30 days | ||||
| Maximum | |||||
| Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
| Fair Value investments notice period | 90 days | ||||
| Fair Value, Recurring | |||||
| Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
| Available for sale investments, fair value option | 24,358 | 24,219 | $ 24,358 | 24,219 | $ 23,913 |
| Other income, net | $ 177 | $ (342) | $ 727 | $ 106 | |
Fair Value of Financial Instruments - Reconciliation of Level 3 Fair value (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Jul. 01, 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 | 969 | 434 |
| Balance at end of second quarter | $ (22,471) | $ (23,546) |
Pension and Postretirement Benefits - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
| Benefit obligation, excess in plan assets | $ 19,000 | $ 19,000 | ||
| Pension | ||||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
| Non-operating settlement charge | 110,777 | $ 0 | 110,777 | $ 0 |
| Contributions to defined benefit pension plans | 520 | |||
| Expected fiscal year defined benefit pension plan contributions | 1,600 | |||
| UNITED STATES | ||||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
| Unrecognized losses, U.S. pension plan, remaining in accumulated other comprehensive loss | $ (32,394) | $ (32,394) | ||
Pension and Postretirement Benefits - Components of Net Periodic Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Pension | ||||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
| Service cost | $ 808 | $ 667 | $ 1,845 | $ 1,352 |
| Interest cost | 4,913 | 3,980 | 7,118 | 7,996 |
| Expected return on assets | (5,128) | (5,174) | (7,166) | (10,379) |
| Settlement | 110,777 | 0 | 110,777 | 0 |
| Net amortization and deferrals | 5,610 | 2,965 | 7,308 | 5,942 |
| Net periodic benefit cost | 116,980 | 2,438 | 119,882 | 4,911 |
| Postretirement | ||||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
| Service cost | 178 | 189 | 356 | 377 |
| Interest cost | 316 | 293 | 632 | 585 |
| Expected return on assets | 0 | 0 | 0 | 0 |
| Settlement | 0 | 0 | 0 | 0 |
| Net amortization and deferrals | 5 | 43 | 10 | 85 |
| Net periodic benefit cost | $ 499 | $ 525 | $ 998 | $ 1,047 |
Derivative Financial Instruments - Summary of Cash Flow Hedging Instruments (Details) - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
Jul. 01, 2018 |
|---|---|---|---|
| Derivative [Line Items] | |||
| Notional Amount | $ 728,346 | $ 792,840 | $ 1,141,067 |
| Fair Value | 24,529 | 26,017 | 16,964 |
| Inventory purchases | |||
| Derivative [Line Items] | |||
| Notional Amount | 480,244 | 468,305 | 647,255 |
| Fair Value | 16,062 | 15,089 | 10,248 |
| Sales | |||
| Derivative [Line Items] | |||
| Notional Amount | 235,874 | 298,194 | 342,123 |
| Fair Value | 8,452 | 11,232 | 11,291 |
| Royalties and Other | |||
| Derivative [Line Items] | |||
| Notional Amount | 12,228 | 26,341 | 151,689 |
| Fair Value | $ 15 | $ (304) | $ (4,575) |
Derivative Financial Instruments - Schedule of Net Gains (Losses) on Cash Flow Hedges Activities (Details) - Cash Flow Hedging - Foreign Exchange Forward - Designated as Hedging Instrument - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Derivative Instruments, Gain (Loss) [Line Items] | ||||
| Net realized gains (losses) | $ 2,619 | $ 819 | $ 6,229 | $ (4,163) |
| Cost of sales | ||||
| Derivative Instruments, Gain (Loss) [Line Items] | ||||
| Net realized gains (losses) | 1,986 | (950) | 4,600 | (4,841) |
| Net revenues | ||||
| Derivative Instruments, Gain (Loss) [Line Items] | ||||
| Net realized gains (losses) | 599 | 430 | 1,477 | 762 |
| Other | ||||
| Derivative Instruments, Gain (Loss) [Line Items] | ||||
| Net realized gains (losses) | $ 34 | $ 1,339 | $ 152 | $ (84) |
Derivative Financial Instruments - Narrative (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
Dec. 30, 2018 |
|
| Intercompany Loans | |||||
| Derivative [Line Items] | |||||
| Notional amount of derivative | $ 247,295 | $ 140,151 | $ 247,295 | $ 140,151 | $ 452,773 |
| Foreign Exchange Forward | Other Operating Income (Expense) | |||||
| Derivative [Line Items] | |||||
| Gain (loss) recognized in income for derivative instruments | $ 1,776 | $ 10,451 | $ 6,584 | $ 3,751 | |
Derivative Financial Instruments - Fair Values of Undesignated Derivative Financial Instruments (Details) - Foreign Exchange Forward - Not Designated as Hedging Instrument - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
Jul. 01, 2018 |
|---|---|---|---|
| Derivatives, Fair Value [Line Items] | |||
| Total unrealized (losses) gains, net | $ (1,801) | $ (1,551) | $ 396 |
| Prepaid expenses and other current assets | |||
| Derivatives, Fair Value [Line Items] | |||
| Unrealized gains | 0 | 0 | 1,120 |
| Unrealized losses | 0 | 0 | 724 |
| Total unrealized (losses) gains, net | 0 | 0 | 396 |
| Accrued liabilities | |||
| Derivatives, Fair Value [Line Items] | |||
| Unrealized gains | 164 | 1,269 | 0 |
| Unrealized losses | 1,965 | 2,820 | 0 |
| Total unrealized (losses) gains, net | $ (1,801) | $ (1,551) | $ 0 |
Leases - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
| Lessee, Lease, Description [Line Items] | ||
| Operating lease expense | $ 9,133 | $ 18,075 |
| Minimum | ||
| Lessee, Lease, Description [Line Items] | ||
| Remaining lease terms | 1 year | 1 year |
| Maximum | ||
| Lessee, Lease, Description [Line Items] | ||
| Remaining lease terms | 19 years | 19 years |
Leases - Lease Cost (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
| Leases [Abstract] | ||
| Operating cash flows from operating leases | $ 9,240 | $ 18,814 |
| Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 579 | $ 24,259 |
| Weighted average remaining lease term, operating leases | 6 years 6 months | 6 years 6 months |
| Weighted average discount rate, operating lease | 4.40% | 4.40% |
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2019 (excluding the six months ended June 30, 2019) | $ 17,696 |
| 2020 | 33,907 |
| 2021 | 29,460 |
| 2022 | 27,161 |
| 2023 | 22,038 |
| 2024 and thereafter | 46,185 |
| Total future lease payments | 176,447 |
| Less imputed interest | 23,961 |
| Present value of future operating lease payments | 152,486 |
| Less current portion of operating lease liabilities | 29,298 |
| Non-current operating lease liability | 123,188 |
| Operating lease right-of-use asset, net | $ 135,189 |
Segment Reporting - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Net revenues | $ 984,537 | $ 904,458 | $ 1,717,047 | $ 1,620,799 |
| Operating Income (Loss) | 128,333 | 87,588 | 164,460 | 7,169 |
| Gaming including Magic the Gathering and Monopoly | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Net revenues | $ 393,367 | 312,773 | $ 636,758 | 516,315 |
| Wizards Of The Coast Digital Revenue | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Net revenues | 10,888 | 21,272 | ||
| Wizards of the Coast Digital Operating Profit | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating Income (Loss) | $ 3,134 | $ 6,370 | ||
Segment Reporting - Operating Profit (Loss) by Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | $ 128,333 | $ 87,588 | $ 164,460 | $ 7,169 |
| Corporate and Eliminations | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | 5,223 | 2,535 | 26,955 | (14,495) |
| U.S. and Canada | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | 106,577 | 73,098 | 120,109 | 46,478 |
| International | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | 14,583 | 173 | (15,828) | (55,915) |
| Entertainment, Licensing and Digital | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | 7,936 | 21,760 | 37,956 | 38,903 |
| Global Operations | ||||
| Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
| Operating profit (loss) | $ (5,986) | $ (9,978) | $ (4,732) | $ (7,802) |
Segment Reporting - Total Assets by Segments (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 30, 2018 |
Jul. 01, 2018 |
|---|---|---|---|
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | $ 5,038,610 | $ 5,262,988 | $ 5,113,856 |
| Corporate and Eliminations | |||
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | (1,883,036) | (3,684,323) | (4,331,611) |
| U.S. and Canada | |||
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | 2,845,806 | 2,898,816 | 2,894,867 |
| International | |||
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | 2,093,725 | 2,229,053 | 2,048,122 |
| Entertainment, Licensing and Digital | |||
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | 945,196 | 621,595 | 812,757 |
| Global Operations | |||
| Segment Reporting, Asset Reconciling Item [Line Items] | |||
| Total assets | $ 1,036,919 | $ 3,197,847 | $ 3,689,721 |
Segment Reporting - Schedule of International Segment Net Revenues by Major Geographic Region (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
| Net revenues | $ 984,537 | $ 904,458 | $ 1,717,047 | $ 1,620,799 |
| International | ||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
| Net revenues | 377,438 | 380,444 | 660,087 | 668,389 |
| International | Europe | ||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
| Net revenues | 201,072 | 199,575 | 354,451 | 355,137 |
| International | Latin America | ||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
| Net revenues | 90,342 | 96,401 | 153,119 | 162,362 |
| International | Asia Pacific | ||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
| Net revenues | $ 86,024 | $ 84,468 | $ 152,517 | $ 150,890 |
Segment Reporting - Net Revenues by Product Category (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jul. 01, 2018 |
Jun. 30, 2019 |
Jul. 01, 2018 |
|
| Revenue from External Customer [Line Items] | ||||
| Net revenues | $ 984,537 | $ 904,458 | $ 1,717,047 | $ 1,620,799 |
| Franchise Brands | ||||
| Revenue from External Customer [Line Items] | ||||
| Net revenues | 576,715 | 506,535 | 970,289 | 868,241 |
| Partner Brands | ||||
| Revenue from External Customer [Line Items] | ||||
| Net revenues | 213,448 | 208,005 | 385,437 | 408,597 |
| Hasbro Gaming | ||||
| Revenue from External Customer [Line Items] | ||||
| Net revenues | 123,420 | 134,275 | 230,985 | 239,502 |
| Emerging Brands | ||||
| Revenue from External Customer [Line Items] | ||||
| Net revenues | $ 70,954 | $ 55,643 | $ 130,336 | $ 104,459 |
Restructuring Actions - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
Dec. 30, 2018 |
|
| Restructuring Charges [Abstract] | |||
| Pre-tax restructuring charges relating to severance and other employee costs | $ 0 | $ 17,349 | |
| Severance expense recorded, fourth quarter | $ 72,000 | ||
Restructuring Actions - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
|
| Restructuring Reserve [Roll Forward] | ||
| Remaining amounts to be paid as of December 30, 2018 | $ 69,192 | |
| Payments for restructuring | $ (7,932) | $ (7,620) |
| Remaining amounts as of June 30, 2019 | $ 53,640 | |
| Label | Element | Value |
|---|---|---|
| Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,503,000 |
| Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (21,503,000) |