Segment Reporting

12 Months Ended

Dec. 25, 2016

Segment Reporting [Abstract]

Segment Reporting

(20)Segment Reporting

Segment and Geographic Information

Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment properties spanning toys, games, licensed products ranging from traditional to high-tech and digital, and film and television entertainment. The Company's segments are (i) U.S. and Canada, (ii) International, (iii) Entertainment and Licensing, and (iv) Global Operations.

The U.S. and Canada segment includes the marketing and selling of action figures, arts and crafts and creative play products, electronic toys and related electronic interactive products, fashion and other dolls, infant products, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, as well as traditional board games, and trading card and role-playing games primarily within the United States and Canada. Within the International segment, the Company markets and sells both toy and game products in markets outside of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. The Company's Entertainment and Licensing segment includes the Company's consumer products licensing, digital 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 third quarter of 2015, the Company sold its remaining manufacturing operations in East Longmeadow, Massachusetts and Waterford, Ireland.

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 fiscal years 2016, 2015 and 2014 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise.

Information by segment and a reconciliation to reported amounts are as follows:
		Revenues
		from				Operating		Depreciation
		External		Affiliate		Profit		and		Capital		Total
		Customers		Revenue		(Loss)		Amortization		Additions		Assets
2016
U.S. and Canada		$	2,559,907		7,091		522,287		12,764		8,107		2,559,792
International			2,194,651		1,908		294,497		20,768		7,258		2,368,761
Entertainment and
	Licensing		265,205		23,220		49,876		9,869		13,072		692,898
Global Operations (a)			59		1,617,370		19,440		78,249		89,051		2,326,566
Corporate and
	eliminations (b)		—		(1,649,589)		(98,052)		32,820		37,412		(2,856,651)
Consolidated Total		$	5,019,822		—		788,048		154,470		154,900		5,091,366
2015
U.S. and Canada		$	2,225,518		5,339		430,707		14,946		3,508		2,654,270
International			1,971,875		15		255,365		20,434		7,029		2,345,847
Entertainment and
	Licensing		244,685		23,144		76,868		16,251		387		567,753
Global Operations (a)			5,431		1,583,665		12,022		70,794		83,304		2,410,142
Corporate and
	eliminations (b)		—		(1,612,163)		(83,029)		32,902		47,794		(3,257,295)
Consolidated Total		$	4,447,509		—		691,933		155,327		142,022		4,720,717
2014
U.S. and Canada		$	2,022,443		5,957		334,702		20,689		1,131		3,663,497
International			2,022,997		170		270,505		23,086		3,063		2,422,046
Entertainment and
	Licensing		219,465		22,401		60,550		21,827		807		783,878
Global Operations (a)			12,302		1,564,654		15,767		69,442		71,763		2,433,888
Corporate and
	eliminations (b)		—		(1,593,182)		(46,149)		22,922		36,624		(4,785,209)
Consolidated Total		$	4,277,207		—		635,375		157,966		113,388		4,518,100

(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. Furthermore, Corporate and eliminations includes elimination of inter-company income statement transactions. One such example includes licensing and service arrangements with affiliates. Payments received in advance from affiliates are recognized as revenue and eliminated in consolidation as earned and payment becomes assured over the life of the contract. During 2016 and 2015, affiliate licensing and service fees of $283,078 and $265,595, respectively, that were received in 2015 and 2014, respectively, were recognized as revenue and eliminated in consolidation. 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 three fiscal years ended December 25, 2016.

	2016		2015		2014
Europe	$	1,404,478		1,236,846		1,258,078
Latin America		463,638		426,109		463,512
Asia Pacific		326,535		308,920		301,407
Net revenues	$	2,194,651		1,971,875		2,022,997

The following table presents consolidated net revenues by classes of principal products for the three fiscal years ended December 25, 2016.

	2016		2015		2014
Boys	$	1,849,645		1,775,917		1,483,952
Games		1,387,077		1,276,532		1,259,782
Girls		1,193,877		798,240		1,022,633
Preschool		589,223		596,820		510,840
Net revenues	$	5,019,822		4,447,509		4,277,207

Given the evolution of the Company’s business, with a focus on brands rather than individual products within a brand, as well as the development of the Company’s brands and its partners’ brands across the brand blueprint into products and entertainment that are enjoyed by girls and boys, beginning in 2017 the Company will report its revenues by brand portfolio: Franchise Brands, Partner Brands, Hasbro Gaming and Emerging Brands. At that time the Company will cease providing a revenue breakdown by the historical categories, Boys, Games, Girls and Preschool. The following table presents consolidated net revenues by brand portfolio for the three fiscal years ended December 25, 2016.

	2016		2015		2014
Franchise brands	$	2,327,668		2,285,414		2,345,128
Partner brands		1,412,770		1,101,305		654,057
Hasbro gaming		813,433		662,319		643,615
Emerging brands		465,951		398,471		634,407
Net revenues	$	5,019,822		4,447,509		4,277,207

Information as to Hasbro’s operations in different geographical areas is presented below on the basis the Company uses to manage its business. Net revenues are categorized based on location of the customer, while long-lived assets (property, plant and equipment, goodwill and other intangibles) are categorized based on their location.

		2016		2015		2014
Net revenues
	United States	$	2,575,696		2,278,613		2,040,476
	International		2,444,126		2,168,896		2,236,731
			5,019,822		4,447,509		4,277,207
Long-lived assets
	United States		933,848		932,790		977,035
	International		150,054		178,239		178,420
		$	1,083,902		1,111,029		1,155,455

Principal international markets include Europe, Canada, Mexico and Latin America, Australia, and Hong Kong. Long-lived assets include property, plant and equipment, goodwill and other intangibles.

Other Information

Hasbro markets its products primarily to customers in the retail sector. Although the Company closely monitors the creditworthiness of its customers, adjusting credit policies and limits as deemed appropriate, a substantial portion of its customers' ability to discharge amounts owed is generally dependent upon the overall retail economic environment.

Sales to the Company's three largest customers, Wal-Mart Stores, Inc., Toys “R” Us, Inc. and Target Corporation, amounted to 18%, 9% and 9%, respectively, of consolidated net revenues during 2016, 16%, 9% and 9%, respectively, of consolidated net revenues during 2015 and 16%, 9% and 8%, respectively, of consolidated net revenues during 2014. These sales were primarily within the U.S. and Canada segment.

Hasbro purchases certain components used in its manufacturing process and certain finished products from manufacturers in the Far East. The Company's reliance on external sources of manufacturing can be shifted, over a period of time, to alternative sources of supply for products it sells, should such changes be necessary. However, if the Company were prevented from obtaining products from a substantial number of its current Far East suppliers due to political, labor or other factors beyond its control, the Company's operations would be disrupted, potentially for a significant period of time, while alternative sources of product were secured. The imposition of trade sanctions, quotas or other protectionist measures by the United States or the European Union against a class of products imported by Hasbro from, or the loss of “normal trade relations" status with, China could significantly increase the cost of the Company’s products imported into the United States or Europe.

The Company has agreements which allow it to develop and market products based on properties owned by third parties including its license with Marvel Entertainment, LLC and Marvel Characters B.V. (together “Marvel”) and its license with Lucas Licensing Ltd. and Lucasfilm Ltd. (together “Lucas”). These licenses have multi-year terms and provide the Company with the right to market and sell designated classes of products based on Marvel’s portfolio of brands, including SPIDER-MAN and THE AVENGERS, and Lucas’s STAR WARS brand. Hasbro’s net revenues from these licenses can be significant in any given year based on the level of third party entertainment. Both Marvel and Lucas are owned by The Walt Disney Company.