Segment Reporting

9 Months Ended

Sep. 26, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment content spanning toys, games, licensed products ranging from traditional to digital, as well as film and television entertainment. In the first quarter of 2020 the Company completed its acquisition of the global independent studio, eOne. Throughout 2020, the Company successfully integrated many parts of the eOne business and started to achieve synergies as a combined company. Effective for the three months ended March 28, 2021, the Company realigned its reportable segment structure to: (1) align with changes to its business structure subsequent to the integration of eOne; and (2) reflect changes to its reporting structure and provide transparency into how operating performance is measured. The Company's three principal reportable segments are (i) Consumer Products, (ii) Wizards of the Coast and Digital Gaming, and (iii) Entertainment.

The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games. The Entertainment segment engages in the development, acquisition, production, financing, distribution and sale of world-class entertainment content including film, scripted and unscripted television, family programming, digital content and live entertainment.

The significant accounting policies of the Company's segments are the same as those referenced in Note 1.

Results shown for the quarter and nine months ended September 26, 2021 are not necessarily representative of those which may be expected for the full year 2021, nor were those of the comparable 2020 periods representative of those actually experienced for the full year 2020. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Reclassifications of certain prior year segment results and account balances have been made to conform to the current-year presentation. None of the segment changes impact the Company's previously reported consolidated net revenue, operating profits, net earnings or net earnings per share.

On June 29, 2021, the Company completed the sale of eOne Music. The financial results of eOne Music were recorded within the Company's Entertainment segment through the date of the closing of the sale. The assets and liabilities of eOne Music were de-consolidated as of the closing date and there are no remaining carrying amounts in the Company's Consolidated Balance Sheets as of September 26, 2021. The sale of eOne Music in 2021 did not impact the Company's previously reported 2020 net revenues, operating profits, earnings, assets or liabilities.

Information by segment and a reconciliation to reported amounts for the quarters and nine months ended September 26, 2021 and September 27, 2020 are as follows:

	Quarter Ended
	September 26, 2021				September 27, 2020
Net revenues	External		Affiliate (b)		External		Affiliate (b)
Consumer Products	$	1,282.7	$	(149.6)	$	1,317.8	$	(110.1)
Wizards of the Coast and Digital Gaming	360.2		(38.0)		273.4		(23.4)
Entertainment	327.1		(13.7)		185.4		(2.2)
Corporate and Other (b)	—		201.3		—		135.7
	$	1,970.0	$	—	$	1,776.6	$	—

	Nine Months Ended
	September 26, 2021				September 27, 2020
Net revenues	External		Affiliate (b)		External		Affiliate (b)
Consumer Products	$	2,625.8	$	(316.8)	$	2,409.8	$	(268.8)
Wizards of the Coast and Digital Gaming	1,008.7		(93.1)		670.7		(56.4)
Entertainment	772.5		(40.4)		662.0		(3.9)
Corporate and Other (b)	—		450.3		—		329.1
	$	4,407.0	$	—	$	3,742.5	$	—

	Quarter Ended				Nine Months Ended
Operating profit (loss)	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Consumer Products	$	210.4	$	226.2	$	260.5	$	171.2
Wizards of the Coast and Digital Gaming	159.4		141.6		462.3		311.5
Entertainment	22.4		(28.3)		(74.3)		(106.1)
Corporate and Other (b)	(24.3)		(2.9)		(56.7)		(61.1)
	$	367.9	$	336.6	$	591.8	$	315.5

Total assets	September 26, 2021		September 27, 2020		December 27, 2020
Consumer Products (a)	$	4,754.0	$	6,323.4	$	5,552.5
Wizards of the Coast and Digital Gaming	915.1		926.9		585.7
Entertainment (b)	5,570.0		6,199.7		6,003.0
Corporate and Other (b)	(1,008.7)		(2,746.8)		(1,322.9)
	$	10,230.4	$	10,703.2	$	10,818.3

(a) During the second quarter of 2021, the Company adjusted certain inter-segment balance sheet amounts which impacted the Consumer Products and Corporate and Other total asset values. These adjustments did not impact the Company's total assets.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in both Entertainment and Corporate and Other. Allocations of certain Corporate and Other expenses, related to these assets are made to the individual operating segments at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Other because allocations are translated from the U.S. Dollar to local currency at budgeted rates when recorded. Corporate and Other also includes the elimination of inter-company balance sheet amounts.

The following table represents consolidated Consumer Products segment net revenues by major geographic region for the quarters and nine months ended September 26, 2021 and September 27, 2020:

	Quarter Ended				Nine Months Ended
	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
North America	$	805.0	$	830.1	$	1,559.1	$	1,434.9
Europe	304.2		316.8		669.2		615.4
Asia Pacific	75.5		78.2		208.7		197.1
Latin America	98.0		92.7		188.8		162.4
Net revenues	$	1,282.7	$	1,317.8	$	2,625.8	$	2,409.8

The following table represents consolidated Entertainment segment net revenues by category for the quarters and nine months ended September 26, 2021 and September 27, 2020:

	Quarter Ended				Nine Months Ended
	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Film and TV	$	255.4	$	141.6	$	586.1	$	514.5
Family Brands	60.5		14.2		105.4		58.9
Music and Other	11.2		29.6		81.0		88.6
Net revenues	$	327.1	$	185.4	$	772.5	$	662.0

The following table presents consolidated net revenues by brand and entertainment portfolio for the quarters and nine months ended September 26, 2021 and September 27, 2020:

	Quarter Ended				Nine Months Ended
	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Franchise Brands	$	882.0	$	807.5	$	2,023.4	$	1,580.9
Partner Brands	366.7		409.2		766.7		729.8
Hasbro Gaming (1)	281.9		239.2		565.3		516.3
Emerging Brands	177.5		155.0		399.2		325.1
TV/Film/Entertainment	261.9		165.7		652.4		590.4
Total	$	1,970.0	$	1,776.6	$	4,407.0	$	3,742.5

(1) 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 which are reported within Franchise Brands, totaled $658.6 million and $1,543.3 million for the quarter and nine months ended September 26, 2021, respectively. For the quarter and nine months ended September 27, 2020, total gaming revenues were $543.1 million and $1,202.6 million, respectively.