Edgar Filing: HASBRO INC

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 March 27, 2016

[ ] 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, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting 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 [ ]

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 April 18, 2016 was 124,702,080.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.


HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of Dollars Except Share Data)
(Unaudited)
				March 27,		March 29,		December 27,
				2016		2015		2015
ASSETS
Current assets
	Cash and cash equivalents			$	1,095,880		1,081,397		976,750
	Accounts receivable, less allowance for doubtful accounts of $31,100,
		$16,400 and $14,900			670,663		563,301		1,217,850
	Inventories				461,734		340,654		384,492
	Prepaid expenses and other current assets				295,806		346,726		286,506
			Total current assets		2,524,083		2,332,078		2,865,598

Property, plant and equipment, less accumulated depreciation of $365,600,
		$510,700 and $363,600			241,253		243,589		237,527

Other assets
	Goodwill				592,793		592,724		592,695
	Other intangibles, net, accumulated amortization of $850,000, $810,500
		and $841,300			272,116		311,576		280,807
	Other				734,450		767,149		744,090
		Total other assets			1,599,359		1,671,449		1,617,592

		Total assets		$	4,364,695		4,247,116		4,720,717

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS
	AND SHAREHOLDERS' EQUITY
Current liabilities
	Short-term borrowings			$	89,000		231,914		164,563
	Accounts payable				176,665		142,946		241,210
	Accrued liabilities				502,708		442,209		658,874
		Total current liabilities			768,373		817,069		1,064,647

Long-term debt					1,547,434		1,546,169		1,547,115
Other liabilities					402,346		396,137		404,883
		Total liabilities			2,718,153		2,759,375		3,016,645

Redeemable noncontrolling interests					39,152		42,234		40,170

Shareholders' equity
	Preference stock of $2.50 par value. Authorized 5,000,000 shares; none
			issued		-		-		-
	Common stock of $.50 par value. Authorized 600,000,000 shares; issued
		209,694,630 at March 27, 2016, March 29, 2015, and December 27, 2015			104,847		104,847		104,847
	Additional paid-in capital				906,211		825,489		893,630
	Retained earnings				3,837,372		3,599,571		3,852,321
	Accumulated other comprehensive loss				(164,353)		(86,996)		(146,001)
	Treasury stock, at cost; 84,829,514 shares at March 27, 2016; 85,120,544
		shares at March 29, 2015; and 84,899,200 shares at December 27, 2015			(3,076,687)		(2,997,404)		(3,040,895)
		Total shareholders' equity			1,607,390		1,445,507		1,663,902

		Total liabilities, redeemable noncontrolling interests and
			shareholders' equity	$	4,364,695		4,247,116		4,720,717

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
			March 27,		March 29,
			2016		2015
Net revenues			$	831,180		713,500
Costs and expenses:
	Cost of sales			290,240		247,735
	Royalties			69,969		59,089
	Product development			57,164		51,897
	Advertising			79,859		67,742
	Amortization of intangibles			8,691		12,951
	Program production cost amortization			6,186		11,096
	Selling, distribution and administration			233,155		208,785
		Total costs and expenses		745,264		659,295
Operating profit				85,916		54,205
Non-operating (income) expense:
	Interest expense			24,044		24,585
	Interest income			(2,213)		(930)
	Other (income) expense, net			4,872		(3,765)
		Total non-operating expense, net		26,703		19,890
Earnings before income taxes				59,213		34,315
Income tax expense				12,242		8,494
Net earnings				46,971		25,821
Net loss attributable to noncontrolling interests				(1,780)		(846)
Net earnings attributable to Hasbro, Inc.			$	48,751		26,667


Net earnings attributable to Hasbro, Inc. per common share:
	Basic		$	0.39		0.21
	Diluted		$	0.38		0.21
Cash dividends declared per common share			$	0.51		0.46

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings
(Thousands of Dollars)
(Unaudited)

			Quarter Ended
			March 27,		March 29,
			2016		2015
Net earnings			$	46,971		25,821
Other comprehensive earnings (loss):
	Foreign currency translation adjustments			12,140		(47,311)
	Net (losses) gains on cash flow hedging activities, net of tax			(15,786)		62,300
	Unrealized holding gains on available-for-sale securities,
		net of tax		1,680		226
	Reclassifications to earnings, net of tax:
		Net gains on cash flow hedging activities		(17,561)		(7,961)
		Unrecognized pension and postretirement amounts		1,175		1,204
Total other comprehensive earnings (loss), net of tax				(18,352)		8,458
Comprehensive earnings				28,619		34,279
Comprehensive loss attributable to noncontrolling interests				(1,780)		(846)
Comprehensive earnings attributable to Hasbro, Inc.			$	30,399		35,125

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Thousands of Dollars)
(Unaudited)

				Three Months Ended
				March 27,		March 29,
				2016		2015
Cash flows from operating activities:
	Net earnings			$	46,971		25,821
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation of plant and equipment			25,126		21,404
		Amortization of intangibles			8,691		12,951
		Program production cost amortization			6,186		11,096
		Deferred income taxes			9,466		(3,406)
		Stock-based compensation			11,973		9,624
Change in operating assets and liabilities:
		Decrease in accounts receivable			547,154		478,330
		Increase in inventories			(73,238)		(20,309)
		Increase in prepaid expenses and other current assets			(32,032)		(6,319)
		Program production costs			(11,619)		(9,252)
		Decrease in accounts payable and accrued liabilities			(238,127)		(206,030)
		Other			(6,928)		1,371
			Net cash provided by operating activities		293,623		315,281
Cash flows from investing activities:
		Additions to property, plant and equipment			(31,218)		(31,151)
		Other			3,626		(1,960)
			Net cash utilized by investing activities		(27,592)		(33,111)
Cash flows from financing activities:
		Net repayments of other short-term borrowings			(75,526)		(20,325)
		Purchases of common stock			(33,710)		(26,507)
		Stock option transactions			8,153		14,023
		Excess tax benefits from stock-based compensation			6,056		3,440
		Dividends paid			(57,406)		(53,470)
		Other			762		350
			Net cash utilized by financing activities		(151,671)		(82,489)
Effect of exchange rate changes on cash					4,770		(11,451)
Increase in cash and cash equivalents					119,130		188,230
Cash and cash equivalents at beginning of year					976,750		893,167
Cash and cash equivalents at end of period				$	1,095,880		1,081,397

Supplemental information
	Cash paid during the period for:
		Interest		$	31,066		30,940
		Income taxes		$	34,332		28,292

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 financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of March 27, 2016 and March 29, 2015, 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 March 27, 2016 and March 29, 2015 are each 13-week periods.

The results of operations for the quarter are not necessarily indicative of results to be expected for the full year, nor were those of the comparable 2015 period representative of those actually experienced for the full year 2015.

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 27, 2015 in its Annual Report on Form 10-K, which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein.

The Company's accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended December 27, 2015.

(2) Earnings Per Share

Net earnings per share data for the quarters ended March 27, 2016 and March 29, 2015 were computed as follows:

	2016				2015
Quarter	Basic		Diluted		Basic		Diluted
Net earnings attributable to Hasbro, Inc.	$	48,751		48,751		26,667		26,667

Average shares outstanding		125,266		125,266		124,853		124,853
Effect of dilutive securities:
Options and other share-based awards		-		1,682		-		1,489
Equivalent Shares		125,266		126,948		124,853		126,342

Net earnings attributable to Hasbro, Inc. per common share	$	0.39		0.38		0.21		0.21

For the quarters ended March 27, 2016 and March 29, 2015, options and restricted stock units totaling 492 and 782, 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 quarters ended March 27, 2016 and March 29, 2015.

		Quarter Ended
		March 27,		March 29,
		2016		2015

Other comprehensive earnings (loss), tax effect:
Tax benefit (expense) on cash flow hedging activities		$	3,256		(4,815)
Tax expense on unrealized holding gains			(953)		(128)
Reclassifications to earnings, tax effect:
	Tax expense (benefit) on cash flow hedging activities		1,749		342
	Tax benefit on unrecognized pension and postretirement
	amounts reclassified to the consolidated statements of operations		(667)		(684)
Total tax effect on other comprehensive earnings (loss)		$	3,385		(5,285)

Changes in the components of accumulated other comprehensive loss for the three months ended March 27, 2016 and March 29, 2015 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		Earnings (Loss)
2016
Balance at December 27, 2015	$	(102,931)		79,317		1,258		(123,645)		(146,001)
Current period other comprehensive earnings (loss)		1,175		(33,347)		1,680		12,140		(18,352)
Balance at March 27, 2016	$	(101,756)		45,970		2,938		(111,505)		(164,353)

2015
Balance at December 27, 2014	$	(113,092)		43,689		1,900		(27,951)		(95,454)
Current period other comprehensive earnings (loss)		1,204		54,339		226		(47,311)		8,458
Balance at March 29, 2015	$	(111,888)		98,028		2,126		(75,262)		(86,996)

At March 27, 2016, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $65,046 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the first quarter of 2016 or forecasted to be purchased during the remainder of 2016 and, to a lesser extent, 2017 through 2020, intercompany expenses expected to be paid or received during 2016 and 2017, cash receipts for sales made at the end of the first quarter of 2016 or forecasted to be made in the remainder of 2016 and, to a lesser extent, 2017 through 2018. 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 March 27, 2016, deferred losses, net of tax of $19,076 related to these instruments remained in AOCE. For the quarters ended March 27, 2016 and March 29, 2015, losses of $450 were reclassified from AOCE to net earnings.

Of the amount included in AOCE at March 27, 2016, the Company expects approximately $44,500 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 March 27, 2016, March 29, 2015 and December 27, 2015, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at March 27, 2016, March 29, 2015 and December 27, 2015 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 March 27, 2016, March 29, 2015 and December 27, 2015 are as follows:

	March 27, 2016				March 29, 2015				December 27, 2015
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Cost		Value		Cost		Value		Cost		Value
6.35% Notes Due 2040	$	500,000		560,900		500,000		597,900		500,000		556,300
6.30% Notes Due 2017		350,000		370,965		350,000		389,305		350,000		374,045
5.10% Notes Due 2044		300,000		287,610		300,000		316,260		300,000		286,710
3.15% Notes Due 2021		300,000		302,880		300,000		308,970		300,000		300,060
6.60% Debentures Due 2028		109,895		122,456		109,895		131,039		109,895		121,269
Total long-term debt	$	1,559,895		1,644,811		1,559,895		1,743,474		1,559,895		1,638,384
Less: Deferred debt expenses		12,461		-		13,726		-		12,780		-
Long-term debt	$	1,547,434		1,644,811		1,546,169		1,743,474		1,547,115		1,638,384

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.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (ASC 835-30), which simplifies the presentation of debt issuance costs. ASU 2015-03 requires debt issuance costs related to long-term debt to be presented in the balance sheet as a reduction to the carrying amount of the related debt liability, consistent with the presentation of discounts. The Company adopted ASU 2015-03 at December 27, 2015 and deferred debt costs are presented as a reduction of long-term debt. Debt issuance costs of $13,726 have been reclassified from other assets in the consolidated balance sheet for March 29, 2015 to reflect this change in accounting principle.

(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 2013. 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. The Company is currently under income tax examination in several U.S., state and local and non-U.S. jurisdictions.

In November 2015, the FASB issued ASU 2015-17, Income Taxes, which simplifies the presentation of deferred income taxes by removing the requirement to bifurcate deferred income tax assets and liabilities between current and non-current. The Company adopted ASU 2015-17 as of December 27, 2015 and deferred income tax assets and liabilities are presented as non-current in the consolidated balance sheets. This adoption was applied retrospectively and $73,230 has been reclassified from prepaid expenses and other current assets to other assets and $3,658 has been reclassified from accrued liabilities to other liabilities in the consolidated balance sheet as of March 29, 2015.

(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 March 27, 2016, March 29, 2015 and December 27, 2015, these investments totaled $22,665, $23,141 and $22,539, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net gains and interest income of $83 and $17 on these investments in other (income) expense, net for the quarters ended March 27, 2016 and March 29, 2015, respectively, related to the change in fair value of such instruments.

At March 27, 2016, March 29, 2015 and December 27, 2015, the Company had the following assets and liabilities measured at fair value (excluding assets for which the fair value is measured using net assets value per share) in its consolidated balance sheets:

	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)
March 27, 2016
Assets:
Available-for-sale securities	$	6,109		6,109		-		-
Derivatives		69,720		-		69,720		-
Total assets	$	75,829		6,109		69,720		-

Liabilities:
Derivatives	$	3,932		-		3,932		-
Option agreement		27,920		-		-		27,920
Total liabilities	$	31,852		-		3,932		27,920

March 29, 2015
Assets:
Available-for-sale securities	$	4,836		4,836		-		-
Derivatives		130,550		-		130,550		-
Total assets	$	135,386		4,836		130,550		-

Liabilities:
Derivatives	$	3,513		-		3,513		-
Option agreement		24,920		-		-		24,920
Total liabilities	$	28,433		-		3,513		24,920

December 27, 2015
Assets:
Available-for-sale securities	$	3,476		3,476		-		-
Derivatives		107,634		-		107,634		-
Total assets	$	111,110		3,476		107,634		-

Liabilities:
Derivatives	$	1,240		-		1,240		-
Option agreement		28,360		-		-		28,360
Total Liabilities	$	29,600		-		1,240		28,360

Available-for-sale securities include equity securities of one company quoted on an active public market.

The Company's derivatives consist primarily 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 option agreement included in other liabilities at March 27, 2016, March 29, 2015 and December 27, 2015, 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 three-month period ended March 27, 2016.

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):

	2016		2015
Balance at beginning of year	$	(28,360)		(25,340)
Gain from change in fair value		440		420
Balance at end of first quarter	$	(27,920)		(24,920)

In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At March 27, 2016, March 29, 2015 and December 27, 2015, these investments had fair values of $22,665, $23,141 and $22,539, 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 quarters ended March 27, 2016 and March 29, 2015 are as follows:

	Quarter Ended
	Pension				Postretirement
	March 27,		March 29,		March 27,		March 29,
	2016		2015		2016		2015
Service cost	$	998		1,011		132		150
Interest cost		4,606		4,605		294		285
Expected return on assets		(5,507)		(5,479)		-		-
Net amortization and deferrals		2,132		2,201		-		(114)
Net periodic benefit cost	$	2,229		2,338		426		321

During the three months ended March 27, 2016, the Company made cash contributions to its defined benefit pension plans of approximately $370 in the aggregate. The Company expects to contribute approximately $3,130 during the remainder of fiscal 2016.

(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 2016 through 2020.

At March 27, 2016, March 29, 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:

	March 27, 2016				March 29, 2015				December 27, 2015
	Notional		Fair		Notional		Fair		Notional		Fair
Hedged transaction	Amount		Value		Amount		Value		Amount		Value
Inventory purchases	$	1,277,977		69,748		912,376		135,512		1,380,488		108,521
Sales		82,072		258		232,643		(6,769)		97,350		803
Royalties and Other		270,207		(4,077)		84,518		(2,766)		54,360		(1,886)
Total	$	1,630,256		65,929		1,229,537		125,977		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 March 27, 2016, March 29, 2015 and December 27, 2015 as follows:

	March 27,		March 29,		December 27,
	2016		2015		2015
Prepaid expenses and other current assets
Unrealized gains	$	53,774		74,219		78,910
Unrealized losses		(6,890)		(10,253)		(5,932)
Net unrealized gain	$	46,884		63,966		72,978

Other assets
Unrealized gains	$	26,454		66,438		35,366
Unrealized losses		(3,618)		(914)		(710)
Net unrealized gains	$	22,836		65,524		34,656

Accrued liabilities
Unrealized gains	$	1,900		3,149		-
Unrealized losses		(3,086)		(6,662)		-
Net unrealized loss	$	(1,186)		(3,513)		-

Other liabilities
Unrealized gains	$	1,349		-		241
Unrealized losses		(3,954)		-		(437)
Net unrealized loss	$	(2,605)		-		(196)

Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters ended March 27, 2016 and March 29, 2015 as follows:

	Quarter Ended
	March 27,		March 29,
	2016		2015
Statements of Operations Classification
Cost of sales	$	15,698		10,063
Sales		98		(1,354)
Royalties and Other		7