XML 37 R19.htm IDEA: XBRL DOCUMENT
v3.21.2

Derivative Financial Instruments | 6 Months Ended
--- | ---
Jun. 27, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 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, television and film production cost and production financing loans (see Note 8) as well as 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 All of the Company's designated foreign currency forward contracts and zero-cost collar options 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, certain production financing loans and other cross-border transactions in 2021 through 2022. At June 27, 2021, June 28, 2020 and December 27, 2020, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:
| June 27, 2021 |  | June 28, 2020 |  | December 27, 2020
Hedged transaction | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Inventory purchases | $ | 346.8 |  |  | (2.0) |  |  | $ | 255.5 |  |  | 20.1 |  |  | $ | 31.8 |  |  | (10.0) |
Sales | 189.3 |  |  | 0.7 |  |  | 77.3 |  |  | 4.9 |  |  | 11.6 |  |  | 1.4 |
Production financing and other | 201.7 |  |  | (1.0) |  |  | 110.6 |  |  | 4.0 |  |  | 89.9 |  |  | 0.3 |
Total | $ | 737.8 |  |  | (2.3) |  |  | $ | 443.4 |  |  | 29.0 |  |  | $ | 133.3 |  |  | (8.3) |
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 June 27, 2021, June 28, 2020 and December 27, 2020 as follows:
| June 27, 2021 |  | June 28, 2020 |  | December 27, 2020
Prepaid expenses and other current assets |  |  |  |  |
Unrealized gains | $ | 4.3 |  |  | $ | 23.7 |  |  | $ | 2.3 |
Unrealized losses | (3.1) |  |  | (1.0) |  |  | (1.6) |
Net unrealized gains | $ | 1.2 |  |  | $ | 22.7 |  |  | $ | 0.7 |
Other assets |  |  |  |  |
Unrealized gains | $ | 2.0 |  |  | $ | 6.3 |  |  | $ | 1.1 |
Unrealized losses | (0.3) |  |  | — |  |  | — |
Net unrealized gains | $ | 1.7 |  |  | $ | 6.3 |  |  | $ | 1.1 |
Accrued liabilities |  |  |  |  |
Unrealized gains | $ | 2.7 |  |  | $ | — |  |  | $ | 3.0 |
Unrealized losses | (7.8) |  |  | — |  |  | (12.9) |
Net unrealized losses | $ | (5.1) |  |  | $ | — |  |  | $ | (9.9) |
Other liabilities |  |  |  |  |
Unrealized gains | $ | — |  |  | $ | — |  |  | $ | — |
Unrealized losses | (0.1) |  |  | — |  |  | (0.2) |
Net unrealized losses | $ | (0.1) |  |  | $ | — |  |  | $ | (0.2) |
Net gains on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters ended June 27, 2021 and June 28, 2020 as follows:
| Quarter Ended |  | Six Months Ended
| June 27, 2021 |  | June 28, 2020 |  | June 27, 2021 |  | June 28, 2020
Statements of Operations Classification |  |  |  |  |  |  |
Cost of sales | $ | 2.5 |  |  | $ | 5.6 |  |  | $ | 2.3 |  |  | 9.6 |
Net revenues | (0.6) |  |  | 0.8 |  |  | (1.3) |  |  | 1.2 |
Other | (0.2) |  |  | 0.5 |  |  | (1.2) |  |  | 0.5 |
Net realized gains | $ | 1.7 |  |  | $ | 6.9 |  |  | $ | (0.2) |  |  | 11.3 |
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. Additionally, to manage transactional exposure to fair value movements on certain monetary assets and liabilities denominated in foreign currencies, the Company has implemented a balance sheet hedging program. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are offset by changes in the fair value of the balance sheet items. As of June 27, 2021, June 28, 2020 and December 27, 2020 the total notional amounts of the Company's undesignated derivative instruments were $573.0 million, $436.6 million and $590.6 million, respectively. At June 27, 2021, June 28, 2020 and December 27, 2020, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:
| June 27, 2021 |  | June 28, 2020 |  | December 27, 2020
Prepaid expenses and other current assets |  |  |  |  |
Unrealized gains | $ | 4.6 |  |  | $ | — |  |  | $ | 3.5 |
Unrealized losses | (0.7) |  |  | — |  |  | (0.5) |
Net unrealized gains | $ | 3.9 |  |  | $ | — |  |  | $ | 3.0 |
Accrued liabilities |  |  |  |  |
Unrealized gains | $ | 0.1 |  |  | $ | 4.5 |  |  | $ | — |
Unrealized losses | (0.6) |  |  | (7.4) |  |  | (2.6) |
Net unrealized losses | $ | (0.5) |  |  | $ | (2.9) |  |  | $ | (2.6) |
Total unrealized gains (losses), net | $ | 3.4 |  |  | $ | (2.9) |  |  | $ | 0.4 |
The Company recorded net gains (losses) of $5.4 million and $(0.7) million on these instruments to other (income) expense, net for the quarter and six months ended June 27, 2021, respectively, and net losses of $(15.7) million and $(13.2) million for the quarter and six months ended June 28, 2020, 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 6 and 11).

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration