Segment Reporting

6 Months Ended

Jun. 30, 2019

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:



	Quarter Ended
	June 30, 2019				July 1, 2018
Net revenues	External		Affiliate		External	Affiliate
U.S. and Canada	$	510,529	2,996		448,444	2,596
International	377,438		145		380,444	226
Entertainment, Licensing and Digital	96,506		2,165		75,539	3,090
Global Operations (a)	64		320,618		31	342,482
Corporate and Eliminations (b)	—		(325,924	)	—	(348,394	)
	$	984,537	—		904,458	—



	Six Months Ended
	June 30, 2019				July 1, 2018
Net revenues	External		Affiliate		External	Affiliate
U.S. and Canada	$	868,380	4,845		802,357	4,729
International	660,087		186		668,389	288
Entertainment, Licensing and Digital	188,500		4,140		149,944	6,666
Global Operations (a)	80		550,043		109	595,802
Corporate and Eliminations (b)	—		(559,214	)	—	(607,485	)
	$	1,717,047	—		1,620,799	—

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.



	Quarter Ended					Six Months Ended
Operating profit (loss)	June 30, 2019			July 1, 2018		June 30, 2019			July 1, 2018
U.S. and Canada	$	106,577		73,098		$	120,109		$	46,478
International	14,583			173		(15,828		)	(55,915		)
Entertainment, Licensing and Digital	7,936			21,760		37,956			38,903
Global Operations (a)	(5,986		)	(9,978	)	(4,732		)	(7,802		)
Corporate and Eliminations (b)	5,223			2,535		26,955			(14,495		)
	$	128,333		87,588		$	164,460		$	7,169

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.



Total assets	June 30, 2019			July 1, 2018		December 30, 2018
U.S. and Canada	$	2,845,806		2,894,867		2,898,816
International	2,093,725			2,048,122		2,229,053
Entertainment, Licensing and Digital	945,196			812,757		621,595
Global Operations (a)	1,036,919			3,689,721		3,197,847
Corporate and Eliminations (b)	(1,883,036		)	(4,331,611	)	(3,684,323	)
	$	5,038,610		5,113,856		5,262,988

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

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets to the 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:



	Quarter Ended			Six Months Ended
	June 30, 2019		July 1, 2018	June 30, 2019		July 1, 2018
Europe	$	201,072	199,575	$	354,451	355,137
Latin America	90,342		96,401	153,119		162,362
Asia Pacific	86,024		84,468	152,517		150,890
Net revenues	$	377,438	380,444	$	660,087	668,389

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:



	Quarter Ended			Six Months Ended
	June 30, 2019		July 1, 2018	June 30, 2019		July 1, 2018
Franchise Brands	$	576,715	506,535	$	970,289	$	868,241
Partner Brands	213,448		208,005	385,437		408,597
Hasbro Gaming	123,420		134,275	230,985		239,502
Emerging Brands	70,954		55,643	130,336		104,459
Total	$	984,537	904,458	$	1,717,047	$	1,620,799

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.