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Derivative Financial Instruments | 6 Months Ended
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Jul. 01, 2018
Derivative Financial Instruments (Thousands of Dollars) [Abstract] |
Derivative Financial Instruments | (10) 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 2018 through 2022. At July 1, 2018, July 2, 2017 and December 31, 2017, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:
| July 1, 2018 |  | July 2, 2017 |  | December 31, 2017
| Notional |  | Fair |  | Notional |  | Fair |  | Notional |  | Fair
Hedged transaction | Amount |  | Value |  | Amount |  | Value |  | Amount |  | Value
Inventory purchases | $ | 647,255 |  |  | 10,248 |  |  | 942,896 |  |  | 259 |  |  | 756,673 |  |  | (13,695)
Sales |  | 342,123 |  |  | 11,291 |  |  | 618,755 |  |  | 15,229 |  |  | 423,315 |  |  | 16,144
Royalties and Other |  | 151,689 |  |  | (4,575) |  |  | 308,407 |  |  | (9,545) |  |  | 196,889 |  |  | (10,383)
Total | $ | 1,141,067 |  |  | 16,964 |  |  | 1,870,058 |  |  | 5,943 |  |  | 1,376,877 |  |  | (7,934)
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 July 1, 2018, July 2, 2017 and December 31, 2017 as follows:
| July 1, |  | July 2, |  | December 31,
| 2018 |  | 2017 |  | 2017
Prepaid expenses and other current assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 17,388 |  |  | 12,220 |  |  | 13,666
Unrealized losses |  | (5,307) |  |  | (4,059) |  |  | (10,319)
Net unrealized gains | $ | 12,081 |  |  | 8,161 |  |  | 3,347
Other assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 12,774 |  |  | 22,468 |  |  | 11,255
Unrealized losses |  | (2,700) |  |  | (5,257) |  |  | (2,376)
Net unrealized gains | $ | 10,074 |  |  | 17,211 |  |  | 8,879
Accrued liabilities |  |  |  |  |  |  |  |
Unrealized gains | $ | 911 |  |  | 6,403 |  |  | 4,215
Unrealized losses |  | (3,118) |  |  | (23,421) |  |  | (15,484)
Net unrealized losses | $ | (2,207) |  |  | (17,018) |  |  | (11,269)
Other liabilities |  |  |  |  |  |  |  |
Unrealized gains | $ | 807 |  |  | 2,079 |  |  | 4,546
Unrealized losses |  | (3,791) |  |  | (4,490) |  |  | (13,437)
Net unrealized losses | $ | (2,984) |  |  | (2,411) |  |  | (8,891)
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarter and six-month periods ended July 1, 2018 and July 2, 2017 as follows:
| Quarter Ended |  | Six Months Ended
| July 1, |  | July 2, |  | July 1, |  | July 2,
| 2018 |  | 2017 |  | 2018 |  | 2017
Statements of Operations Classification |  |  |  |  |  |  |  |  |  |  |
Cost of sales | $ | (950) |  |  | 2,711 |  |  | (4,841) |  |  | 12,585
Net revenues |  | 430 |  |  | 475 |  |  | 762 |  |  | 1,016
Other |  | 1,339 |  |  | (436) |  |  | (84) |  |  | (405)
Net realized (losses) gains | $ | 819 |  |  | 2,750 |  |  | (4,163) |  |  | 13,196
In addition, losses of $2,118 and $2,836 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and six-month periods ended July 1, 2018, respectively. Net losses of $1,528 and $6,486 were reclassified to earnings as a result of hedge ineffectiveness for the quarter and six-month periods ended July 2, 2017, 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. T he 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 July 1, 2018, July 2, 2017 and December 31, 2017 the total notional amounts of the Company's undesignated der i vative instruments were $140,151, $163,969 and $418,471, respectively. At July 1, 2018, July 2, 2017 and December 31, 2017, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:
| July 1, |  | July 2, |  | December 31,
| 2018 |  | 2017 |  | 2017
Prepaid expenses and other current assets |  |  |  |  |  |  |  |
Unrealized gains | $ | 1,120 |  |  | - |  |  | -
Unrealized losses |  | (724) |  |  | - |  |  | -
Net unrealized gains | $ | 396 |  |  | - |  |  | -
Accrued liabilities |  |  |  |  |  |  |  |
Unrealized gains | $ | - |  |  | 55 |  |  | 1,793
Unrealized losses |  | - |  |  | (2,870) |  |  | (4,684)
Net unrealized losses |  | - |  |  | (2,815) |  |  | (2,891)
Total unrealized gains (losses), net | $ | 396 |  |  | (2,815) |  |  | (2,891)
The Comp any recorded net gains of $10,451 and $3,751 on these instruments to other (income) expense, net for the quarter and six-month periods ended July 1, 2018, respectively, and net (losses) gains of $(2,856) and $725 on these instruments to other (income) expense, net for the quarter and six-month periods ended July 2, 2017, 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. For additional information related to the Company's derivative f inancial instruments see Notes 6 and 8.

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- References No definition available. + Details
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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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