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Business Segments, Geographic Data, Sales by Product Group and Major Customers | 12 Months Ended
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Dec. 31, 2017
Business Segments, Geographic Data, Sales by Product Group and Major Customers | Note 3—Business Segments, Geographic Data, Sales by Product Group and Major Customers The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio of products. The Company has aligned its operating segments into three segments that reflect the management and operation of the business. The Company’s segments are (i) U.S. and Canada, (ii) International and (iii) Halloween. The U.S. and Canada segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, role play and everyday costume play, foot to floor ride-on vehicles, wagons, novelty toys, seasonal and outdoor products, and kids’ indoor and outdoor furniture, primarily within the United States and Canada. Within the International segment, the Company markets and sells its toy products in markets outside of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. Within the Halloween segment, the Company markets and sells Halloween costumes and accessories and everyday costume play products, primarily in the U.S. and Canada. Segment performance is measured at the operating income level. All sales are made to external customers and general corporate expenses have been attributed to the various segments based upon relative sales volumes. Segment assets are primarily comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill and other assets. Certain assets which are not tracked by operating segment and/or that benefit multiple operating segments have been allocated on the same basis. Results 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 as of December 31, 2016 and 2017 and for the three years in the period ended December 31, 2017 are as follows (in thousands):
|  | Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Net Sales |  |  |  |  |  |  |  |  |
U.S. and Canada |  | $ | 478,728 |  |  | $ | 478,595 |  |  | $ | 406,411 |
International |  |  | 169,826 |  |  |  | 131,229 |  |  |  | 107,231 |
Halloween |  |  | 97,187 |  |  |  | 96,779 |  |  |  | 99,469 |
|  | $ | 745,741 |  |  | $ | 706,603 |  |  | $ | 613,111 |
|  | Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Income (Loss) from Operations |  |  |  |  |  |  |  |  |
U.S. and Canada |  | $ | 17,562 |  |  | $ | 17,434 |  |  | $ | (35,720 | )
International |  |  | 16,249 |  |  |  | 4,360 |  |  |  | (13,184 | )
Halloween |  |  | (3,281 | ) |  |  | (4,688 | ) |  |  | (15,254 | )
|  | $ | 30,530 |  |  | $ | 17,106 |  |  | $ | (64,158 | )
|  | Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Depreciation and Amortization Expense |  |  |  |  |  |  |  |  |
U.S. and Canada |  | $ | 13,023 |  |  | $ | 16,817 |  |  | $ | 15,286 |
International |  |  | 4,439 |  |  |  | 4,549 |  |  |  | 4,079 |
Halloween |  |  | 1,398 |  |  |  | 1,578 |  |  |  | 1,638 |
|  | $ | 18,860 |  |  | $ | 22,944 |  |  | $ | 21,003 |
|  | December 31,
|  | 2016 |  | 2017
Assets |  |  |  |  |  |
U.S. and Canada |  | $ | 306,895 |  |  | $ | 229,505 |
International |  |  | 119,560 |  |  |  | 106,255 |
Halloween |  |  | 37,848 |  |  |  | 34,589 |
|  | $ | 464,303 |  |  | $ | 370,349 |
Information regarding the Company’s operations in different geographical areas is presented below on the basis the Company uses to manage its business. Net revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the Company’s assets. Tools, dies and molds represent a substantial portion of the long-lived assets included in the United States with a net book value of $15.7 million in 2016 and $17.0 million in 2017 and substantially all of these assets are located in China. The following tables present information about the Company by geographic area as of December 31, 2016 and 2017 and for each of the three years in the period ended December 31, 2017 (in thousands):
|  | December 31,
|  | 2016 |  | 2017
Long-lived Assets |  |  |  |  |  |
China |  | $ | 15,710 |  |  | $ | 17,194 |
United States |  |  | 6,587 |  |  |  | 5,755 |
Hong Kong |  |  | 544 |  |  |  | 278 |
|  | $ | 22,841 |  |  | $ | 23,227 |
|  | Years Ended December 31, |
|  | 2015 |  |  | 2016 |  |  | 2017 |
Net Sales by Customer Area |  |  |  |  |  |  |  |  |
United States |  | $ | 542,101 |  |  | $ | 544,096 |  |  | $ | 479,133 |
Europe |  |  | 117,313 |  |  |  | 92,811 |  |  |  | 71,094 |
Canada |  |  | 32,587 |  |  |  | 26,947 |  |  |  | 21,882 |
Hong Kong |  |  | 1,675 |  |  |  | 2,012 |  |  |  | 1,064 |
Other |  |  | 52,065 |  |  |  | 40,737 |  |  |  | 39,938 |
|  | $ | 745,741 |  |  | $ | 706,603 |  |  | $ | 613,111 |
Major Customers Net sales to major customers were as follows (in thousands, except for percentages):
|  | 2015 |  | 2016 |  | 2017
|  |  |  |  | Percentage of |  |  |  |  | Percentage of |  |  |  |  | Percentage of
|  | Amount |  | Net Sales |  | Amount |  | Net Sales |  | Amount |  | Net Sales
Wal-Mart |  | $ | 180,758 |  |  |  | 24.3 | % |  | $ | 186,894 |  |  |  | 26.5 | % |  | $ | 156,436 |  |  |  | 25.5 | %
Target |  |  | 96,850 |  |  |  | 13.0 |  |  |  | 110,233 |  |  |  | 15.6 |  |  |  | 108,799 |  |  |  | 17.8 |
Toys 'R' Us |  |  | 96,446 |  |  |  | 12.9 |  |  |  | 90,568 |  |  |  | 12.8 |  |  |  | 69,508 |  |  |  | 11.3 |
|  | $ | 374,054 |  |  |  | 50.2 | % |  | $ | 387,695 |  |  |  | 54.9 | % |  | $ | 334,743 |  |  |  | 54.6 | %
No other customer accounted for more than 10% of the Company’s total net sales. As of December 31, 2016 and 2017, the Toys “R” Us, Inc. (“TRU”) consolidated accounts receivable balance represented 23.5% and 26.4%, respectively, of the Company’s gross accounts receivable. When combined with Wal-Mart and Target, the Company’s other two most significant customers, these customers represent 59.6% and 60.6%, respectively, of gross accounts receivable at December 31, 2016 and 2017. On September 18, 2017, TRU and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. The Canadian subsidiary also began parallel proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada. As a result, the Company has reserved $8.9 million of the TRU pre-petition consolidated accounts receivable balance of $22.8 million resulting in a net pre-petition consolidated accounts receivable balance of $13.9 million as of December 31, 2017. The unreserved amount includes $2.9 million and the Company can assert a priority claim under section 503(b)(9) of the Bankruptcy Code for this amount. The balance of the unreserved amount has been submitted to the Company’s insurance carrier and is expected to be recovered. On September 20, 2017, TRU received interim approval to access up to $2.2 billion in debtor-in-possession financing and on September 22, 2017 TRU closed on $3.1 billion of debtor-in-possession financing to support its ongoing liquidity needs. Accordingly, the Company resumed shipping to TRU for the 2017 holiday season resulting in post-petition consolidated accounts receivable balance with TRU at December 31, 2017 of $18.6 million, with no related amount reserved. Subsequent to the year ended December 31, 2017, the Company has collected $14.1 million (unaudited) of the TRU post-petition consolidated accounts receivable balance outstanding as of December 31, 2017 resulting in a remaining balance of $4.5 million (unaudited) as of March 15, 2018. The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses (see Note 22).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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