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HASBRO, INC. - Quarter Report: 2017 October (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.   20549

_________________

 

FORM 10-Q

______________

(Mark One)

 

[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 1, 2017

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6682

_______________

 

HASBRO, INC.

(Exact name of registrant as specified in its charter)

 

Rhode Island

05-0155090

(State of Incorporation)

(I.R.S. Employer Identification No.)

 

1027 Newport Avenue, Pawtucket, Rhode Island  02861

(Address of Principal Executive Offices, Including Zip Code)

 

(401) 431-8697

(Registrant's Telephone Number, Including Area Code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x]  No  [ ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x]  No  [ ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  [x]

Accelerated filer  [ ]

Non-accelerated filer (Do not check if a smaller reporting company)  [  ]

Smaller reporting Company  [  ]

Emerging growth Company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [ ]

 

 


 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes [ ]  No  [x]

 

The number of shares of Common Stock, par value $.50 per share, outstanding as of October 23, 2017 was 124,555,586.

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of Dollars Except Share Data)

(Unaudited)

 

 

 

 

October 1,

 

September 25,

 

December 25,

 

 

 

 

2017

 

2016

 

2016

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

  

Cash and cash equivalents

$

1,244,778

 

 

830,372

 

 

1,282,285

 

Accounts receivable, less allowance for doubtful accounts of $33,900

 

 

 

 

 

 

 

 

 

 

$36,500 and $16,800

 

1,655,752

 

 

1,452,931

 

 

1,319,963

  

Inventories

 

629,120

 

 

607,701

 

 

387,675

  

Prepaid expenses and other current assets

 

232,590

 

 

255,983

 

 

237,684

  

  

  

Total current assets

 

3,762,240

 

 

3,146,987

 

 

3,227,607

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, less accumulated depreciation of $417,000,

 

 

 

 

 

 

 

 

 

 

$358,100 and $383,700

 

263,862

 

 

247,231

 

 

267,398

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

  

Goodwill

 

572,762

 

 

604,700

 

 

570,555

  

Other intangibles, net, accumulated amortization of $898,300, $867,300

 

 

 

 

 

 

 

 

 

 

and $876,000

 

223,695

 

 

254,637

 

 

245,949

  

Other

 

722,089

 

 

701,592

 

 

779,857

  

 

Total other assets

 

1,518,546

 

 

1,560,929

 

 

1,596,361

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Total assets

$

5,544,648

 

 

4,955,147

 

 

5,091,366

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

  

Short-term borrowings

$

189,012

 

 

178,666

 

 

172,582

 

Current portion of long-term debt

 

-

 

 

349,611

 

 

349,713

  

Accounts payable

 

525,852

 

 

344,874

 

 

319,525

  

Accrued liabilities

 

769,893

 

 

742,568

 

 

776,039

  

 

Total current liabilities

 

1,484,757

 

 

1,615,719

 

 

1,617,859

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

1,693,261

 

 

1,198,461

 

 

1,198,679

Other liabilities

 

410,378

 

 

364,378

 

 

389,388

  

 

Total liabilities

 

3,588,396

 

 

3,178,558

 

 

3,205,926

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

-

 

 

34,829

 

 

22,704

 

 

 

 

 

 

 

 

 

 

 

 

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 October 1, 2017, September 25, 2016,

 

 

 

 

 

 

 

 

 

 

and December 25, 2016

 

104,847

 

 

104,847

 

 

104,847

  

Additional paid-in capital

 

1,043,981

 

 

959,859

 

 

985,418

  

Retained earnings

 

4,336,420

 

 

4,019,370

 

 

4,148,722

  

Accumulated other comprehensive loss

 

(234,792)

 

 

(203,989)

 

 

(194,570)

  

Treasury stock, at cost; 85,139,302 shares at October 1, 2017; 84,751,773

 

 

 

 

 

 

 

 

 

 

shares at September 25, 2016; and 85,207,677 shares at December 25, 2016

 

(3,294,204)

 

 

(3,138,327)

 

 

(3,181,681)

  

 

Total shareholders' equity

 

1,956,252

 

 

1,741,760

 

 

1,862,736

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Total liabilities, redeemable noncontrolling interests and

 

 

 

 

 

 

 

 

 

 

 

shareholders' equity

$

5,544,648

 

 

4,955,147

 

 

5,091,366

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying condensed notes to consolidated financial statements.

 


 

 


 

 

 

HASBRO, INC. AND SUBSIDIARIES

 

 

Consolidated Statements of Operations

 

 

(Thousands of Dollars Except Per Share Data)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

 

 

 

2017

 

2016

 

2017

 

2016

Net revenues

 

$

1,791,502

 

 

1,679,757

 

 

3,613,671

 

 

3,389,882

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

730,656

 

 

658,986

 

 

1,404,971

 

 

1,270,902

 

Royalties

 

 

139,222

 

 

134,294

 

 

282,754

 

 

273,671

 

Product development

 

 

67,386

 

 

70,083

 

 

192,765

 

 

190,918

 

Advertising

 

 

168,926

 

 

154,132

 

 

342,236

 

 

320,948

 

Amortization of intangibles

 

 

6,492

 

 

8,691

 

 

22,254

 

 

26,073

 

Program production cost amortization

 

 

5,394

 

 

6,282

 

 

16,152

 

 

17,501

 

Selling, distribution and administration

 

 

312,482

 

 

285,188

 

 

813,268

 

 

756,978

 

 

Total costs and expenses

 

 

1,430,558

 

 

1,317,656

 

 

3,074,400

 

 

2,856,991

Operating profit

 

 

360,944

 

 

362,101

 

 

539,271

 

 

532,891

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

25,072

 

 

24,305

 

 

73,752

 

 

72,263

 

Interest income

 

 

(5,362)

 

 

(1,944)

 

 

(16,042)

 

 

(6,469)

 

Other income, net

 

 

(8,607)

 

 

(6,584)

 

 

(26,003)

 

 

(5,460)

 

 

Total non-operating expense, net

 

 

11,103

 

 

15,777

 

 

31,707

 

 

60,334

Earnings before income taxes

 

 

349,841

 

 

346,324

 

 

507,564

 

 

472,557

Income tax expense

 

 

84,258

 

 

90,162

 

 

105,659

 

 

120,005

Net earnings

 

 

265,583

 

 

256,162

 

 

401,905

 

 

352,552

Net loss attributable to noncontrolling interests

 

 

-

 

 

(1,636)

 

 

-

 

 

(6,103)

Net earnings attributable to Hasbro, Inc.

 

$

265,583

 

 

257,798

 

 

401,905

 

 

358,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Hasbro, Inc. per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.12

 

 

2.05

 

 

3.21

 

 

2.86

 

Diluted

 

$

2.09

 

 

2.03

 

 

3.16

 

 

2.82

Cash dividends declared per common share

 

$

0.57

 

 

0.51

 

 

1.71

 

 

1.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying condensed notes to consolidated financial statements.

 

 


 

 

 

HASBRO, INC. AND SUBSIDIARIES

 

 

Consolidated Statements of Comprehensive Earnings

 

 

(Thousands of Dollars)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

 

 

 

2017

 

2016

 

2017

 

2016

Net earnings

 

$

265,583

 

 

256,162

 

 

401,905

 

 

352,552

Other comprehensive earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

13,142

 

 

(1,483)

 

 

41,954

 

 

18,482

 

Net losses on cash flow hedging activities,

 

 

 

 

 

 

 

 

 

 

 

 

 

  

net of tax

 

 

(26,532)

 

 

(12,960)

 

 

(83,729)

 

 

(37,004)

 

Unrealized holding (losses) gains on available

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-for-sale securities, net of tax

 

 

(784)

 

 

(390)

 

 

(555)

 

 

963

 

Reclassifications to earnings, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net losses (gains) on cash flow hedging activities

 

 

4,547

 

 

(16,028)

 

 

(2,237)

 

 

(43,952)

 

 

Unrecognized pension and postretirement amounts

 

 

1,448

 

 

1,173

 

 

4,345

 

 

3,523

Total other comprehensive loss, net of tax

 

 

(8,179)

 

 

(29,688)

 

 

(40,222)

 

 

(57,988)

Comprehensive earnings

 

 

257,404

 

 

226,474

 

 

361,683

 

 

294,564

Comprehensive loss attributable to noncontrolling interests

 

 

-

 

 

(1,636)

 

 

-

 

 

(6,103)

Comprehensive earnings attributable to Hasbro, Inc.

 

$

257,404

 

 

228,110

 

 

361,683

 

 

300,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying condensed notes to consolidated financial statements.

 


 

   

HASBRO, INC. AND SUBSIDIARIES

  

Consolidated Statements of Cash Flows

  

(Thousands of Dollars)

  

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

October 1,

 

September 25,

 

 

 

 

 

2017

 

2016

Cash flows from operating activities:

 

 

 

 

 

 

  

Net earnings

 

$

401,905

 

 

352,552

  

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

  

 

Depreciation of plant and equipment

 

 

107,853

 

 

89,327

 

 

Amortization of intangibles

 

 

22,254

 

 

26,073

  

 

Program production cost amortization

 

 

16,152

 

 

17,501

  

 

Deferred income taxes

 

 

17,797

 

 

25,091

  

 

Stock-based compensation

 

 

37,390

 

 

39,673

 

 

Other non-cash items

 

 

(16,033)

 

 

(15,523)

Change in operating assets and liabilities net of acquired and disposed balances:

 

 

 

 

 

 

  

 

Increase in accounts receivable

 

 

(300,693)

 

 

(224,172)

  

 

Increase in inventories

 

 

(222,546)

 

 

(214,734)

  

 

Increase in prepaid expenses and other current assets

 

 

(4,437)

 

 

(4,063)

  

 

Program production costs

 

 

(25,309)

 

 

(36,010)

  

 

Increase in accounts payable and accrued liabilities

 

 

137,518

 

 

171,287

  

 

Other

 

 

29,945

 

 

(31,595)

  

 

 

Net cash provided by operating activities

 

 

201,796

 

 

195,407

Cash flows from investing activities:

 

 

 

 

 

 

  

 

Additions to property, plant and equipment

 

 

(102,512)

 

 

(103,639)

  

 

Investments and acquisitions, net of cash acquired

 

 

-

 

 

(12,436)

  

 

Other

 

 

5,516

 

 

25,576

  

 

 

Net cash utilized by investing activities

 

 

(96,996)

 

 

(90,499)

Cash flows from financing activities:

 

 

 

 

 

 

  

 

Net proceeds from borrowings with maturity greater than three months

 

 

493,878

 

 

-

  

 

Repayments of borrowings with maturity greater than three months

 

 

(350,000)

 

 

-

  

 

Net proceeds from other short-term borrowings

 

 

15,663

 

 

14,160

  

 

Purchases of common stock

 

 

(112,241)

 

 

(104,273)

  

 

Stock-based compensation transactions

 

 

29,432

 

 

37,515

  

 

Dividends paid

 

 

(206,012)

 

 

(185,265)

 

 

Payments related to tax withholding for share-based compensation

 

 

(31,973)

 

 

(21,914)

  

 

Other

 

 

-

 

 

762

  

 

 

Net cash utilized by financing activities

 

 

(161,253)

 

 

(259,015)

Effect of exchange rate changes on cash

 

 

18,946

 

 

7,729

Decrease in cash and cash equivalents

 

 

(37,507)

 

 

(146,378)

Cash and cash equivalents at beginning of year

 

 

1,282,285

 

 

976,750

Cash and cash equivalents at end of period

 

$

1,244,778

 

 

830,372

 

 

 

 

 

 

 

 

 

 

Supplemental information

 

 

 

 

 

 

  

Cash paid during the period for:

 

 

 

 

 

 

  

 

Interest

 

$

75,567

 

 

74,700

  

 

Income taxes

 

$

86,441

 

 

64,854

 

 

 

 

 

 

 

 

 

  

See accompanying condensed notes to consolidated financial statements.

 

 

 

 

 

 

 


 

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

 

 

(1) 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 October 1, 2017 and September 25, 2016, and the results of its operations and cash flows for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Actual results could differ from those estimates.

 

The quarters ended October 1, 2017 and September 25, 2016 were each 13-week periods. The nine-month period ended October 1, 2017 was a 40-week period while the nine-month period ended September 25, 2016 was a 39-week period.

 

The results of operations for the quarter and nine-month periods ended October 1, 2017 are not necessarily indicative of results to be expected for the full year, nor were those of the comparable 2016 periods representative of those actually experienced for the full year 2016. 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 Securities and Exchange Commission.  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 audited consolidated financial statements for the fiscal year ended December 25, 2016 in its Annual Report on Form 10-K (“2016 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 2016 Form 10-K with the exception of the accounting policy related to stock compensation.  During the first quarter of 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting. The ASU includes provisions intended to simplify how share-based payments are accounted for and presented in the financial statements including:

·          Prospectively, the requirement to record all of the tax effects related to share-based payments at settlement through the income statement.  For the quarter and nine months ended October 1, 2017, excess tax benefits of $5,014 and $20,478, respectively, were recorded to income tax expense.  

·          A requirement that all tax-related cash flows resulting from share-based payments be reported as operating activities, included with other income tax cash flows on the statement of cash flows.  Previously, these amounts were reported as a cash inflow from financing activities.  The Company elected to apply this requirement of the standard retrospectively.  Accordingly, the cash flow statement for the nine months ended September 25, 2016 has been restated to include $19,712 of cash flows from excess tax benefits, previously included as financing activities, in operating activities within the increase in accounts payable and other accrued liabilities.  For the nine months ended October 1, 2017 excess tax benefits of $20,478 were reported as operating activities.

·          A requirement that all cash payments made to taxing authorities on the employees’ behalf for withheld shares shall be presented as financing activities in the statements of cash flows.  Prior to adoption of ASU 2016-09, these cash flows were included as operating activities. This change was required to be applied on a retrospective basis and as a result, the Company has restated the consolidated statement of cash flows for the nine months ended September 25, 2016. This change resulted in payments of $21,914 for the nine months ended September 25, 2016 being included in financing activities.  For the nine months ended October 1, 2017, such payments amounted to $31,973.

 


 

·          Entities are permitted to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards choosing either to estimate forfeitures as previously required or recognize forfeitures as they occur. The Company elected to change its method of accounting for forfeitures from estimating the number of stock-based awards expected to vest, to accounting for forfeitures as they occur which resulted in a one-time charge, net of tax, of $700 to retained earnings recorded during the first quarter of 2017. Based upon the Company’s history of forfeitures, it is not expected that this election will have a material impact on its financial statements going forward however, as any impact will be based on future forfeitures, the actual impact could differ from the Company’s expectation.

 

Recent Transactions

Through 2016, the Company had one investment with a redeemable noncontrolling interest which was the Company’s 70% majority interest in Backflip Studios, LLC (“Backflip”). During the first quarter of 2017, the Company acquired the remaining 30% of Backflip for no additional consideration, making it a wholly-owned subsidiary of the Company. 

 

(2) Earnings Per Share

 

Net earnings per share data for the quarters and nine-month periods ended October 1, 2017 and September 25, 2016 were computed as follows:

 

 

2017

 

2016

Quarter

Basic

 

Diluted

 

Basic

 

Diluted

Net earnings attributable to Hasbro, Inc.

$

265,583

 

 

265,583

 

 

257,798

 

 

257,798

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

125,170

 

 

125,170

 

 

125,500

 

 

125,500

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

   Options and other share-based awards

 

-

 

 

1,980

 

 

-

 

 

1,678

Equivalent Shares

 

125,170

 

 

127,150

 

 

125,500

 

 

127,178

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Hasbro, Inc. per common share

$

2.12

 

 

2.09

 

 

2.05

 

 

2.03

 

 

2017

 

2016

Nine Months

Basic

 

Diluted

 

Basic

 

Diluted

Net earnings attributable to Hasbro, Inc.

$

401,905

 

 

401,905

 

 

358,655

 

 

358,655

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

125,204

 

 

125,204

 

 

125,414

 

 

125,414

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

     Options and other share-based awards

 

-

 

 

2,044

 

 

-

 

 

1,642

Equivalent Shares

 

125,204

 

 

127,248

 

 

125,414

 

 

127,056

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Hasbro, Inc. per common share

$

3.21

 

 

3.16

 

 

2.86

 

 

2.82

 

For the quarters ended October 1, 2017 and September 25, 2016, options and restricted stock units totaling 450 and 492, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive. For the nine-month periods ended October 1, 2017 and September 25, 2016, options and restricted stock units totaling 514 and 492, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive.

 

(3) Other Comprehensive Earnings (Loss)

  

 

 


 

Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings. The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarter and nine-month periods ended October 1, 2017 and September 25, 2016.

 

  

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive earnings (loss), tax effect:

 

 

 

 

 

 

 

 

 

 

 

Tax benefit on cash flow hedging activities

$

1,700

 

 

1,420

 

 

5,936

 

 

9,423

Tax benefit (expense) on unrealized holding losses and gains

 

445

 

 

221

 

 

315

 

 

(547)

Reclassifications to earnings, tax effect:

 

 

 

 

 

 

 

 

 

 

 

 

Tax (benefit) expense on cash flow hedging activities

 

(1,875)

 

 

2,456

 

 

(2,884)

 

 

5,274

 

Tax benefit on unrecognized pension and

 

 

 

 

 

 

 

 

 

 

 

 

postretirement amounts reclassified to the

 

 

 

 

 

 

 

 

 

 

 

  

consolidated statements of operations

 

(822)

 

 

(666)

 

 

(2,466)

 

 

(1,999)

Total tax effect on other comprehensive earnings (loss)

$

(552)

 

 

3,431

 

 

901

 

 

12,151

 

Changes in the components of accumulated other comprehensive loss for the nine months ended October 1, 2017 and September 25, 2016 are as follows:

  

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

 

 

 

 

 

 

 

 

Holding

 

 

 

 

Total

 

 

 

 

Gains

 

Gains on

 

Foreign

 

Accumulated

 

Pension and

 

(Losses) on

 

Available-

 

Currency

 

Other

 

Postretirement

 

Derivative

 

for-Sale

 

Translation

 

Comprehensive

 

Amounts

 

Instruments

 

Securities

 

Adjustments

 

Loss

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 25, 2016

$

(118,401)

 

 

51,085

 

 

1,424

 

 

(128,678)

 

 

(194,570)

Current period other comprehensive earnings (loss)

 

4,345

 

 

(85,966)

 

 

(555)

 

 

41,954

 

 

(40,222)

Balance at October 1, 2017

$

(114,056)

 

 

(34,881)

 

 

869

 

 

(86,724)

 

 

(234,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 27, 2015

$

(102,931)

 

 

79,317

 

 

1,258

 

 

(123,645)

 

 

(146,001)

Current period other comprehensive earnings (loss)

 

3,523

 

 

(80,956)

 

 

963

 

 

18,482

 

 

(57,988)

Balance at September 25, 2016

$

(99,408)

 

 

(1,639)

 

 

2,221

 

 

(105,163)

 

 

(203,989)

 

At October 1, 2017, the Company had remaining net deferred losses on foreign currency forward contracts, net of tax, of $17,547 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the third quarter of 2017 or forecasted to be purchased during the remainder of 2017 and, to a lesser extent, 2018 through 2022, intercompany expenses expected to be paid or received during 2017 and 2018, and cash receipts for sales forecasted to be made in the remainder of 2017 and, to a lesser extent, 2018 through 2019. 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 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 October 1, 2017, deferred losses, net of tax, of $17,332 related to these instruments remained in AOCE. For the quarters ended October 1, 2017 and September 25, 2016, previously deferred losses of $450 were reclassified from AOCE to net earnings. For the nine-month periods ended October 1, 2017 and September 25, 2016, previously deferred losses of $1,384 and $1,349 were reclassified from AOCE to net earnings, respectively.

 

Of the amount included in AOCE at October 1, 2017, the Company expects net losses of approximately $18,932 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.

 

(4) Financial Instruments

 

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At October 1, 2017, September 25, 2016 and December 25, 2016, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at October 1, 2017, September 25, 2016 and December 25, 2016 also include certain assets and liabilities measured at fair value (see Notes 6 and 8) 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 October 1, 2017, September 25, 2016 and December 25, 2016 are as follows:

 

 

October 1, 2017

 

September 25, 2016

 

December 25, 2016

 

Carrying

 

Fair

 

Carrying

 

Fair

 

Carrying

 

Fair

 

Cost

 

Value

 

Cost

 

Value

 

Cost

 

Value

6.35% Notes Due 2040

$

500,000

 

 

613,750

 

 

500,000

 

 

611,200

 

 

500,000

 

 

584,850

3.50% Notes Due 2027

 

500,000

 

 

496,850

 

 

-

 

 

-

 

 

-

 

 

-

6.30% Notes Due 2017

 

-

 

 

-

 

 

350,000

 

 

366,205

 

 

350,000

 

 

361,900

5.10% Notes Due 2044

 

300,000

 

 

324,300

 

 

300,000

 

 

324,450

 

 

300,000

 

 

297,600

3.15% Notes Due 2021

 

300,000

 

 

306,840

 

 

300,000

 

 

310,620

 

 

300,000

 

 

300,450

6.60% Debentures Due 2028

 

109,895

 

 

132,830

 

 

109,895

 

 

132,786

 

 

109,895

 

 

123,984

Total long-term debt

$

1,709,895

 

 

1,874,570

 

 

1,559,895

 

 

1,745,261

 

 

1,559,895

 

 

1,668,784

Less: Current portion

 

-

 

 

-

 

 

350,000

 

 

366,205

 

 

350,000

 

  

361,900

Less: Deferred debt expenses

 

16,634

 

 

-

 

 

11,434

 

 

-

 

 

11,216

 

 

-

Long-term debt

$

1,693,261

 

 

1,874,570

 

 

1,198,461

 

 

1,379,056

 

 

1,198,679

 

 

1,306,884

 

In September 2017 the Company issued $500,000 of Notes due in 2027 that bear interest at a fixed rate of 3.50% (the "3.50% Notes"). Net proceeds from the issuance of the 3.50% Notes, after deduction of $6,122 of underwriting discount and debt issuance expenses, totaled $493,878. These costs are being amortized over the life of the 3.50% Notes, or 10 years. The Company may redeem the 3.50% Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus 25 basis points. In addition, three months prior to their maturity date, the Company may redeem at its option the 3.50% Notes, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the 3.50% Notes to be redeemed. 

 

The proceeds from this debt issuance were used to repay the $350,000 aggregate principal amount of its 6.30% Notes that matured during the third quarter 2017. The Company used the remaining net proceeds for general corporate purposes.

 

Current portion of long-term debt at September 25, 2016 and December 25, 2016 of $349,611 and $349,713, respectively, as shown on the consolidated balance sheet represents the $350,000 principal of 6.30% notes less $389 and $287, respectively, of deferred debt expenses.

 

 


 

The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 6 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.

  

 

(5) 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.

  

The Company is no longer subject to U.S. federal income tax examinations for years before 2012.   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 2009. In the third quarter of 2016, the U.S. Internal Revenue Service commenced an examination related to the 2012 and 2013 amended U.S. federal income tax returns.  The Company is currently under income tax examination in several U.S. state and local and non-U.S. jurisdictions.                  

 

(6) 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 October 1, 2017, September 25, 2016 and December 25, 2016, these investments totaled $24,405, $23,490 and $23,571, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net gains of $446 and $1,461 on these investments in other income, net for the quarter and nine months ended October 1, 2017, respectively, related to the change in fair value of such instruments.  For the quarter and nine-month periods ended September 25, 2016, the Company recorded net gains of $440 and $922, respectively, in other income, net, related to the change in fair value of such instruments.

 

 


 

At October 1, 2017, September 25, 2016 and December 25, 2016, 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):

 

Fair Value Measurements Using:

 

 

 

 

Quoted

 

 

 

 

 

 

 

 

 

 

Prices in

 

 

 

 

 

 

 

 

 

 

Active

 

 

 

 

 

 

 

 

 

 

Markets

 

Significant

 

 

 

 

 

 

 

for

 

Other

 

Significant

 

 

 

 

Identical

 

Observable

 

Unobservable

 

Fair

 

Assets

 

Inputs

 

Inputs

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

October 1, 2017

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

$

2,866

 

 

2,866

 

 

-

 

 

-

Derivatives

 

11,975

 

 

-

 

 

11,975

 

 

-

Total assets

$

14,841

 

 

2,866

 

 

11,975

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Derivatives

$

22,671

 

 

-

 

 

22,671

 

 

-

Option agreement

 

28,510

 

 

-

 

 

-

 

 

28,510

Total liabilities

$

51,181

 

 

-

 

 

22,671

 

 

28,510

 

 

 

 

 

 

 

 

 

 

 

 

September 25, 2016

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

$

4,986

 

 

4,986

 

 

-

 

 

-

Derivatives

 

39,115

 

 

-

 

 

39,115

 

 

-

Total assets

$

44,101

 

 

4,986

 

 

39,115

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Derivatives

$

19,390

 

 

-

 

 

19,390

 

 

-

Option agreement

 

27,460

 

 

-

 

 

-

 

 

27,460

Total liabilities

$

46,850

 

 

-

 

 

19,390

 

 

27,460

 

 

 

 

 

 

 

 

 

 

 

 

December 25, 2016

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

$

3,736

 

 

3,736

 

 

-

 

 

-

Derivatives

 

87,894

 

 

-

 

 

87,894

 

 

-

Total assets

$

91,630

 

 

3,736

 

 

87,894

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Derivatives

$

11,309

 

 

-

 

 

11,309

 

 

-

Option agreement

 

28,770

 

 

-

 

 

-

 

 

28,770

Total Liabilities

$

40,079

 

 

-

 

 

11,309

 

 

28,770

 

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. 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 October 1, 2017, September 25, 2016 and December 25, 2016, 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 nine-month period ended October 1, 2017.

 

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):

 

 

2017

 

2016

Balance at beginning of year

$

(28,770)

 

 

(28,360)

Gain from change in fair value

 

260

 

 

900

Balance at end of third quarter

$

(28,510)

 

 

(27,460)

 

In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At October 1, 2017, September 25, 2016 and December 25, 2016, these investments had fair values of $24,405, $23,490 and $23,571, 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 – 90 days’ notice.

 

(7) Pension and Postretirement Benefits

 

The components of the net periodic cost of the Company's defined benefit pension and other postretirement plans for the quarter and nine-month periods ended October 1, 2017 and September 25, 2016 are as follows:

 

 

Quarter Ended

 

Pension

 

Postretirement

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

2017

 

2016

 

2017

 

2016

Service cost

$

925

 

 

1,002

 

 

172

 

 

132

Interest cost

 

4,443

 

 

4,611

 

 

295

 

 

294

Expected return on assets

 

(5,896)

 

 

(5,512)

 

 

-

 

 

-

Net amortization and deferrals

 

2,525

 

 

2,134

 

 

-

 

 

-

Net periodic benefit cost

$

1,997

 

 

2,235

 

 

467

 

 

426

 

 

Nine Months Ended

 

Pension

 

Postretirement

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

2017

 

2016

 

2017

 

2016

Service cost

$

2,798

 

 

2,995

 

 

517

 

 

397

Interest cost

 

13,598

 

 

13,821

 

 

885

 

 

881

Expected return on assets

 

(18,057)

 

 

(16,523)

 

 

-

 

 

-

Net amortization and deferrals

 

7,738

 

 

6,398

 

 

-

 

 

-

Net periodic benefit cost

$

6,077

 

 

6,691

 

 

1,402

 

 

1,278

 

 


 

During the nine months ended October 1, 2017, the Company made cash contributions of $26,600 to its defined benefit pension plans. During fiscal 2017, the Company expects to make cash contributions to its defined benefit pension plans of approximately $29,000 in the aggregate.

 

(8) 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 2017 through 2022.

 

At October 1, 2017, September 25, 2016 and December 25, 2016, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:

  

 

October 1, 2017

 

September 25, 2016

 

December 25, 2016

 

Notional

 

Fair

 

Notional

 

Fair

 

Notional

 

Fair

Hedged transaction

Amount

 

Value

 

Amount

 

Value

 

Amount

 

Value

Inventory purchases

$

894,529

 

 

(16,597)

 

 

1,045,400

 

 

23,662

 

 

945,728

 

 

60,520

Sales

 

579,421

 

 

17,215

 

 

318,283

 

 

(559)

 

 

290,181

 

 

9,775

Royalties and Other

 

266,670

 

 

(12,567)

 

 

233,367

 

 

(4,111)

 

 

198,849

 

 

1,633

Total

$

1,740,620

 

 

(11,949)

 

 

1,597,050

 

 

18,992

 

 

1,434,758

 

 

71,928

 

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 October 1, 2017, September 25, 2016 and December 25, 2016 as follows:

 

 


 

 

October 1,

 

September 25,

 

December 25,

 

2017

 

2016

 

2016

Prepaid expenses and other current assets

 

 

 

 

 

 

 

 

Unrealized gains

$

10,207

 

 

34,179

 

 

34,265

Unrealized losses

 

(7,977)

 

 

(9,247)

 

 

(2,075)

Net unrealized gains

$

2,230

 

 

24,932

 

 

32,190

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Unrealized gains

$

11,631

 

 

20,974

 

 

51,839

Unrealized losses

 

(3,139)

 

 

(7,524)

 

 

(792)

Net unrealized gains

$

8,492

 

 

13,450

 

 

51,047

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

 

 

 

 

 

 

 

Unrealized gains

$

5,354

 

 

4,352

 

 

8,481

Unrealized losses

 

(20,999)

 

 

(19,420)

 

 

(19,790)

Net unrealized losses

$

(15,645)

 

 

(15,068)

 

 

(11,309)

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

 

 

 

 

 

 

Unrealized gains

$

8,325

 

 

992

 

 

-

Unrealized losses

 

(15,351)

 

 

(5,314)

 

 

-

Net unrealized losses

$

(7,026)

 

 

(4,322)

 

 

-

 

Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarter and nine-month periods ended October 1, 2017 and September 25, 2016 as follows:

 

 

Quarter Ended

 

Nine Months Ended

 

October 1,

 

September 25,

 

October 1,

 

September 25,

 

2017

 

2016

 

2017

 

2016

Statements of Operations Classification

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

$

(5,971)

 

 

13,863

 

 

6,614

 

 

40,999

Net Revenues

 

2,316

 

 

7,125

 

 

3,332

 

 

7,541

Other

 

(2,311)

 

 

(1,505)

 

 

(2,716)

 

 

(2,236)

Net realized (losses) gains

$

(5,966)

 

 

19,483

 

 

7,230

 

 

46,304

 

In addition, losses of $9 and $6,495 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and nine-month periods ended October 1, 2017, respectively. Net (losses) gains of $(549) and $4,271 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and nine-month periods ended September 25, 2016, respectively.

 

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 October 1, 2017, September 25, 2016 and December 25, 2016 the total notional amounts of the Company's undesignated derivative instruments were $339,227, $264,029 and $268,308, respectively.

 

At October 1, 2017, September 25, 2016 and December 25, 2016, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:

 

 


 

 

October 1,

 

September 25,

 

December 25,

 

2017

 

2016

 

2016

Prepaid expenses and other current assets

 

 

 

 

 

 

 

 

Unrealized gains

$

2,606

 

 

812

 

 

5,854

Unrealized losses

 

(1,353)

 

 

(79)

 

 

(1,197)

Net unrealized gain

$

1,253

 

 

733

 

 

4,657

 

 

  

 

  

  

 

 

  

Total unrealized gain, net

$

1,253

 

 

733

 

 

4,657

 

The Company recorded net losses of $2,976 and $2,251 on these instruments to other income, net for the quarter and nine-month periods ended October 1, 2017, respectively, and net gains of $6,533 and $14,867 on these instruments to other income, net for the quarter and nine-month periods ended September 25, 2016, 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 6.

 

(9) Segment Reporting

 

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

 

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

 

Segment performance is measured at the operating profit level. Included in Corporate and Eliminations are certain corporate expenses, including the elimination of intersegment transactions and certain assets benefiting more than one segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Eliminations. The accounting policies of the segments are the same as those referenced in note 1.

 

Results shown for the quarter and nine months are not necessarily representative of those which may be expected for the full year 2017, nor were those of the comparable 2016 period representative of those actually experienced for the full year 2016. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

 

Information by segment and a reconciliation to reported amounts for the quarter and nine-month periods ended October 1, 2017 and September 25, 2016 are as follows.

 

 


 

 

Quarter Ended

 

October 1, 2017

 

September 25, 2016

Net revenues

External

 

Affiliate

 

External

 

Affiliate

U.S. and Canada

$

993,833

 

 

2,201

 

 

932,844

 

 

2,392

International

 

739,229

 

 

198

 

 

690,745

 

 

417

Entertainment and Licensing

 

58,440

 

 

7,714

 

 

56,130

 

 

7,806

Global Operations (a)

 

-

 

 

665,746

 

 

38

 

 

629,090

Corporate and Eliminations

 

-

 

 

(675,859)

 

 

-

 

 

(639,705)

 

$

1,791,502

 

 

-

 

 

1,679,757

 

 

-

 

 

Nine Months Ended

 

October 1, 2017

 

September 25, 2016

Net revenues

External

 

Affiliate

 

External

 

Affiliate

U.S. and Canada

$

1,939,837

 

 

7,047

 

 

1,802,391

 

 

5,388

International

 

1,511,074

 

 

213

 

 

1,436,911

 

 

678

Entertainment and Licensing

 

162,663

 

 

14,727

 

 

150,521

 

 

16,607

Global Operations (a)

 

97

 

 

1,329,516

 

 

59

 

 

1,298,337

Corporate and Eliminations

 

-

 

 

(1,351,503)

 

 

-

 

 

(1,321,010)

 

$

3,613,671

 

 

-

 

 

3,389,882

 

 

-

 

 

Quarter Ended

 

Nine Months Ended

 

October 1,

 

September 25,

 

October 1,

 

September 25,

Operating profit (loss)

2017

 

2016

 

2017

 

2016

U.S. and Canada

$

217,278

 

 

228,034

 

 

363,589

 

 

364,322

International

 

132,007

 

 

133,075

 

 

149,435

 

 

165,582

Entertainment and Licensing

 

16,910

 

 

14,095

 

 

39,580

 

 

33,367

Global Operations (a)

 

11,497

 

 

24,852

 

 

4,723

 

 

25,428

Corporate and Eliminations (b)

 

(16,748)

 

 

(37,955)

 

 

(18,056)

 

 

(55,808)

 

$

360,944

 

 

362,101

 

 

539,271

 

 

532,891

 

 

October 1,

 

September 25,

 

December 25,

Total assets

2017

 

2016

 

2016

U.S. and Canada

$

3,423,213

 

 

2,316,624

 

 

2,559,792

International

 

2,524,821

 

 

2,261,742

 

 

2,368,761

Entertainment and Licensing

 

884,014

 

 

632,933

 

 

692,898

Global Operations

 

3,080,573

 

 

2,038,736

 

 

2,326,566

Corporate and Eliminations (b)