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Derivative Financial Instruments | 9 Months Ended
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Sep. 25, 2016
Derivative Financial Instruments (Thousands of Dollars) [Abstract] |
Derivative Financial Instruments | (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 E uros. 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 Com pany. 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 2016 through 2021. At September 25, 2016, September 27, 2015 and December 27, 2015, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:
| September 25, 2016 |  | September 27, 2015 |  | December 27, 2015
| Notional |  | Fair |  | Notional |  | Fair |  | Notional |  | Fair
Hedged transaction | Amount |  | Value |  | Amount |  | Value |  | Amount |  | Value
Inventory purchases | $ | 1,045,400 |  |  | 23,662 |  |  | 1,122,827 |  |  | 124,422 |  |  | 1,380,488 |  |  | 108,521
Sales |  | 318,283 |  |  | (559) |  |  | 213,841 |  |  | (3,352) |  |  | 97,350 |  |  | 803
Royalties and Other |  | 233,367 |  |  | (4,111) |  |  | 57,360 |  |  | (2,512) |  |  | 54,360 |  |  | (1,886)
Total | $ | 1,597,050 |  |  | 18,992 |  |  | 1,394,028 |  |  | 118,558 |  |  | 1,532,198 |  |  | 107,438
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 September 25, 2016, September 27, 2015 and December 27, 2015 as follows:
| September 25, |  | September 27, |  | December 27,
| 2016 |  | 2015 |  | 2015
Prepaid expenses and other current assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 34,179 |  |  | 81,718 |  |  | 78,910
Unrealized losses |  | (9,247) |  |  | (9,717) |  |  | (5,932)
Net unrealized gain | $ | 24,932 |  |  | 72,001 |  |  | 72,978
Other assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 20,974 |  |  | 48,111 |  |  | 35,366
Unrealized losses |  | (7,524) |  |  | (989) |  |  | (710)
Net unrealized gains | $ | 13,450 |  |  | 47,122 |  |  | 34,656
Accrued liabilities |  |  |  |  |  |  |  |
Unrealized gains | $ | 4,352 |  |  | 62 |  |  | -
Unrealized losses |  | (19,420) |  |  | (566) |  |  | -
Net unrealized loss | $ | (15,068) |  |  | (504) |  |  | -
Other liabilities |  |  |  |  |  |  |  |
Unrealized gains | $ | 992 |  |  | - |  |  | 241
Unrealized losses |  | (5,314) |  |  | (61) |  |  | (437)
Net unrealized loss | $ | (4,322) |  |  | (61) |  |  | (196)
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 September 25, 2016 and September 27, 2015 as follows:
| Quarter Ended |  | Nine Months Ended
| September 25, |  | September 27, |  | September 25, |  | September 27,
| 2016 |  | 2015 |  | 2016 |  | 2015
Statements of Operations Classification |  |  |  |  |  |  |  |  |  |  |
Cost of sales | $ | 13,863 |  |  | 19,244 |  |  | 40,999 |  |  | 41,990
Sales |  | 7,125 |  |  | (4,507) |  |  | 7,541 |  |  | (8,506)
Other |  | (1,505) |  |  | (377) |  |  | (2,236) |  |  | (322)
Net realized gains | $ | 19,483 |  |  | 14,360 |  |  | 46,304 |  |  | 33,162
In addition, (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. Net gains of $275 and $842 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and nine-month periods ended September 27, 2015, 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 fluctuations. Due to the nature of the derivative contracts involved, the Company does not use hedge accounting for these contracts. At September 25, 2016, September 27, 2015 and December 27, 2015 the total notional amounts of the Company's undesignated deri vative instruments were $264,029, $263,247 and $341,389, respectively. At September 25, 2016, September 27, 2015 and December 27, 2015, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:
| September 25, |  | September 27, |  | December 27,
| 2016 |  | 2015 |  | 2015
Prepaid expenses and other current assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 812 |  |  | 93 |  |  | -
Unrealized losses |  | (79) |  |  | - |  |  | -
Net unrealized gain |  | 733 |  |  | 93 |  |  | -
Accrued liabilities |  |  |  |  |  |  |  |
Unrealized gains |  | - |  |  | 360 |  |  | 416
Unrealized losses |  | - |  |  | (493) |  |  | (1,460)
Net unrealized loss |  | - |  |  | (133) |  |  | (1,044)
Total unrealized gain (loss), net | $ | 733 |  |  | (40) |  |  | (1,044)
The Comp any recorded net gains of $6,533 and $14,867 on these instruments to other (income) expense, net for the quarter and nine-month periods ended September 25, 2016, respectively, and $21,070 and $40,024 on these instruments to other (income) expe nse, net for the quarter and nine-month periods ended September 27, 2015, respectively, relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value o f intercompany loans to which the contracts relate. F or additional information related to the Company's derivative f inancial instruments see Notes 4 and 6.

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