What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-27 compared with 2021-10-27 · 242 added, 459 removed, 551 unchanged (56% of the section changed)

3 unchanged sentences

(Millions of Dollars Except Share Data)

September 26,

2021 September 27,

2022 March 28,

2021 December 26,

4 unchanged sentences

931.7 810.4 1,500.4

544.1 540.0 395.6

Inventories 644.3 429.2 552.1

Prepaid expenses and other current assets 621.4 566.0 656.4

528.5 648.2 609.6

Total current assets 3,255.3 3,236.0 3,728.1

3,730.4 3,759.0 3,846.6

Property, plant and equipment, less accumulated depreciation of $ 641.5 million, $ 563.5 million and $ 630.0 million

422.6 482.7 421.1

3,420.2 3,644.1 3,691.7

Goodwill 3,419.3 3,691.4 3,419.6

Other intangible assets, net of accumulated amortization of $ 1,075.2 million, $ 999.7 million and $ 1,050.4 million

1,136.6 1,513.0 1,172.0

1,428.4 1,276.1 1,260.2

Other 1,284.9 1,266.0 1,297.0

Total other assets 5,840.8 6,470.4 5,888.6

6,058.1 6,467.0 6,482.7

$ 10,230.4 $ 10,703.2 $ 10,818.3

Total assets $ 9,518.7 $ 10,189.1 $ 10,037.8

LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY

23 unchanged sentences

Authorized 600,000,000 shares;

issued 220,286,736 shares at September 26, 2021, September 27, 2020, and December 27, 2020

issued 220,286,736 shares at March 27, 2022, March 28, 2021, and December 26, 2021

110.1 110.1 110.1

6 unchanged sentences

Treasury stock, at cost;

82,359,425 shares at September 26, 2021;

83,256,622 shares at September 27, 2020;

80,844,603 shares at March 27, 2022;

82,724,111 shares at March 28, 2021;

and 82,066,136 shares at December 26, 2021

10 unchanged sentences

(Millions of Dollars Except Per Share Data)

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

Quarter Ended

2022 March 28,

Net revenues $ 1,163.1 $ 1,114.8

6 unchanged sentences

Amortization of intangibles 27.1 32.9

Loss on disposal of business — — 101.8 —

Selling, distribution and administration 307.1 288.6

Acquisition and related costs — 5.9 — 166.0

Total costs and expenses 1,043.1 967.5

8 unchanged sentences

Net earnings 62.9 117.5

Net earnings (loss) attributable to noncontrolling interests 1.7 ( 0.9 ) 4.0 1.9

Net earnings attributable to noncontrolling interests 1.7 1.3

Net earnings attributable to Hasbro, Inc.

8 unchanged sentences

(Millions of Dollars)

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

Quarter Ended

2022 March 28,

Net earnings $ 62.9 $ 117.5

2 unchanged sentences

( 10.7 ) ( 16.1 )

Unrealized holding (gains) losses on available-for-sale securities, net of tax ( 0.3 ) ( 0.8 ) ( 0.1 ) 1.3

Net gains (losses) on cash flow hedging activities, net of tax 5.2 ( 5.7 ) 7.8 15.7

Unrealized holding gains on available-for-sale securities, net of tax 0.2 —

Net (losses) gains on cash flow hedging activities, net of tax ( 1.2 ) 5.6

Reclassifications to earnings, net of tax:

Net losses (gains) on cash flow hedging activities 1.1 ( 6.8 ) 1.7 ( 15.8 )

Net gains on cash flow hedging activities — ( 1.1 )

Amortization of unrecognized pension and postretirement amounts

0.2 0.3 0.6 0.8

Total other comprehensive (loss) earnings, net of tax $ ( 25.1 ) $ 27.8 $ ( 13.6 ) $ ( 96.1 )

Total comprehensive earnings (loss) attributable to noncontrolling interests 1.7 ( 0.9 ) 4.0 1.9

Total other comprehensive loss, net of tax $ ( 11.6 ) $ ( 11.4 )

Total comprehensive earnings attributable to noncontrolling interests 1.7 1.3

Total comprehensive earnings attributable to Hasbro, Inc.

4 unchanged sentences

(Millions of Dollars)

Nine Months Ended

September 26,

2021 September 27,

Three months ended

2022 March 28,

Cash flows from operating activities:

3 unchanged sentences

Amortization of intangibles 27.1 32.9

Asset impairments — 40.9

Loss on disposal of business 101.8 —

Program cost amortization 138.5 97.5

3 unchanged sentences

Change in operating assets and liabilities net of acquired balances:

(Increase) decrease in accounts receivable ( 83.8 ) 165.6

Decrease in accounts receivable 559.8 592.0

Increase in inventories ( 99.6 ) ( 42.1 )

Decrease (increase) in prepaid expenses and other current assets 56.7 ( 10.0 )

Decrease in prepaid expenses and other current assets 42.1 44.9

Program spend, net ( 169.4 ) ( 147.1 )

Increase in accounts payable and accrued liabilities 310.5 19.0

Change in net deemed repatriation tax ( 18.4 ) ( 18.3 )

Decrease in accounts payable and accrued liabilities ( 464.4 ) ( 382.6 )

Other 24.0 1.2

2 unchanged sentences

Additions to property, plant and equipment ( 29.2 ) ( 23.9 )

Acquisitions, net of cash acquired — ( 4,403.9 )

Proceeds from sale of business, net of cash 379.2 —

Other 5.3 ( 1.6 )

Net cash provided (utilized) by investing activities 277.5 ( 4,471.7 )

Net cash utilized by investing activities ( 23.9 ) ( 25.5 )

Cash flows from financing activities:

1 unchanged sentence

Repayments of borrowings with maturity greater than three months ( 133.9 ) ( 344.9 )

Net repayments of other short-term borrowings ( 6.2 ) ( 0.3 )

Net proceeds from other short-term borrowings 103.3 2.0

Stock-based compensation transactions 70.2 4.7

1 unchanged sentence

Payments related to tax withholding for share-based compensation ( 19.3 ) ( 9.3 )

Debt extinguishment costs ( 9.1 ) —

Redemption of equity instruments — ( 47.4 )

Other ( 4.6 ) ( 2.3 )

Net cash (utilized) provided by financing activities ( 1,223.5 ) 550.5

Net cash utilized by financing activities ( 77.5 ) ( 370.8 )

Effect of exchange rate changes on cash 5.4 ( 0.6 )

Net decrease in cash, cash equivalents and restricted cash ( 268.5 ) ( 3,448.0 )

Net increase (decrease) in cash, cash equivalents and restricted cash 38.7 ( 19.3 )

Cash, cash equivalents and restricted cash at beginning of year 1,019.2 1,449.7

8 unchanged sentences

(Millions of Dollars)

Three Months Ended September 26, 2021

Three Months Ended March 27, 2022

Stock Additional

4 unchanged sentences

Equity Redeemable Noncontrolling Interests

Balance, June 27, 2021 $ 110.1 2,361.2 4,110.3 ( 183.5 ) ( 3,547.6 ) 39.9 $ 2,890.4 $ 24.5

Balance, December 26, 2021 $ 110.1 2,428.0 4,257.8 ( 235.3 ) ( 3,534.7 ) 37.2 $ 3,063.1 $ 23.9

Net earnings attributable to Hasbro, Inc.

1 unchanged sentence

Net earnings attributable to noncontrolling interests — — — — — 1.2 1.2 0.5

Other comprehensive earnings — — — ( 25.1 ) — — ( 25.1 ) —

Stock-based compensation transactions — 7.4 — — 6.6 — 14.0 —

Stock-based compensation expense — 19.1 — — — — 19.1 —

Dividends declared — — ( 93.9 ) — — — ( 93.9 ) —

Distributions paid to noncontrolling owners and other foreign exchange — 1.2 — — — ( 2.1 ) ( 0.9 ) ( 2.9 )

Balance, September 26, 2021 $ 110.1 2,388.9 4,269.6 ( 208.6 ) ( 3,541.0 ) 38.2 $ 3,057.2 $ 22.9

Three Months Ended September 27, 2020

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Treasury

Stock Noncontrolling Interests Total

Shareholders'

Equity Redeemable Noncontrolling Interests

Balance, June 28, 2020 $ 110.1 2,297.3 4,064.7 ( 308.1 ) ( 3,560.0 ) 38.1 $ 2,642.1 $ 24.1

Noncontrolling interests related to acquisition of Entertainment One Ltd.

— — — — — — — —

Net earnings attributable to Hasbro, Inc.

— — 220.9 — — — 220.9 —

Net earnings (loss) attributable to noncontrolling interests — — — — — ( 0.9 ) ( 0.9 ) —

Change in put option value ( 0.4 ) ( 0.4 ) —

Other comprehensive earnings — — — ( 11.6 ) — — ( 11.6 ) —

Stock-based compensation transactions — 30.0 — — 20.9 — 50.9 —

Buyout of noncontrolling interest — 0.6 — — — — 0.6 —

Stock-based compensation expense — 18.1 — — — — 18.1 —

1 unchanged sentence

Distributions paid to noncontrolling owners and other foreign exchange — — — — — ( 3.7 ) ( 3.7 ) ( 0.9 )

Balance, September 27, 2020 $ 110.1 2,311.4 4,192.4 ( 280.3 ) ( 3,559.9 ) 34.7 $ 2,808.4 $ 22.9

AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests

(Millions of Dollars)

Nine Months Ended September 26, 2021

Balance, March 27, 2022 $ 110.1 2,475.7 4,220.9 ( 246.9 ) ( 3,513.8 ) 34.7 $ 3,080.7 $ 23.5

Three Months Ended March 28, 2021

Stock Additional

14 unchanged sentences

Distributions paid to noncontrolling owners and other foreign exchange — ( 0.4 ) — — — ( 0.9 ) ( 1.3 ) ( 0.4 )

Balance, September 26, 2021 $ 110.1 2,388.9 4,269.6 ( 208.6 ) ( 3,541.0 ) 38.2 $ 3,057.2 $ 22.9

Nine Months Ended September 27, 2020

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Treasury

Stock Noncontrolling Interests Total

Shareholders'

Equity Redeemable Noncontrolling Interests

Balance, December 29, 2019 $ 110.1 2,275.7 4,354.6 ( 184.2 ) ( 3,560.7 ) — $ 2,995.5 $ —

Noncontrolling interests related to acquisition of Entertainment One Ltd.

— — — — — 38.6 38.6 26.2

Net earnings attributable to Hasbro, Inc.

— — 117.3 — — — 117.3 —

Net earnings (loss) attributable to noncontrolling interests — — — — — 2.1 2.1 ( 0.1 )

Buyout of noncontrolling interest — 0.6 — — — — 0.6 —

Other comprehensive loss — — — ( 96.1 ) — — ( 96.1 ) —

Stock-based compensation transactions — ( 4.6 ) — — 0.5 — ( 4.1 ) —

Stock-based compensation expense — 39.7 — — 0.3 — 40.0 —

Dividends declared — — ( 279.5 ) — — — ( 279.5 ) —

Distributions paid to noncontrolling owners and other foreign exchange — — — — — ( 5.9 ) ( 5.9 ) ( 3.2 )

Balance, September 27, 2020 $ 110.1 2,311.4 4,192.4 ( 280.3 ) ( 3,559.9 ) 34.7 $ 2,808.4 $ 22.9

See accompanying condensed notes to consolidated financial statements.

Balance, March 28, 2021 $ 110.1 2,339.6 4,226.8 ( 206.4 ) ( 3,550.6 ) 40.4 $ 2,959.9 $ 24.0

AND SUBSIDIARIES

3 unchanged sentences

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc.

and all majority-owned subsidiaries ("Hasbro" or the "Company") as of September 26, 2021 and September 27, 2020, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S.

and all majority-owned subsidiaries ("Hasbro" or the "Company") as of March 27, 2022 and March 28, 2021, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S.

The preparation of consolidated financial statements in conformity with U.S.

1 unchanged sentence

Actual results could differ from those estimates.

The quarters ended September 26, 2021 and September 27, 2020 were each 13-week periods.

The nine-month periods ended September 26, 2021 and September 27, 2020 were each 39-week periods.

The results of operations for the quarter ended September 26, 2021 are not necessarily indicative of results to be expected for the full year 2021, nor were those of the comparable 2020 period representative of those actually experienced for the full year 2020.

Segment Realignment

Beginning with the first quarter of 2021, the Company realigned its financial reporting segments and business units, in order to align its reportable segments more closely with its current business structure.

Reclassifications of certain prior year financial information has been made to conform to the current-year presentation.

None of the changes impact the Company's previously reported consolidated net revenue, operating profits (losses), net earnings (losses) or net earnings (losses) per share.

See Note 14 for more information on the Company’s 2021 segment realignment.

Legal Settlement

During the first quarter of 2021, the Company realized a gain of $ 26.7 million from a legal settlement related to a dispute associated with historical Entertainment One Ltd.

The gain is included in other income, net within the Company's consolidated financial statements, included in Part I of this Form 10-Q.

The quarters ended March 27, 2022 and March 28, 2021 were each 13-week periods.

The results of operations for the quarter ended March 27, 2022 are not necessarily indicative of results to be expected for the full year 2022, nor were those of the comparable 2021 period representative of those actually experienced for the full year 2021.

Significant Accounting Policies

The Company's significant accounting policies are summarized in note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 26, 2021 ("2021 Form 10-K").

eOne Music Sale

On June 29, 2021, the Company completed the sale of eOne Music for net proceeds of $ 397.0 million, including the sales price of $ 385.0 million and $ 12.0 million of closing adjustments related to working capital and net debt calculations.

The final proceeds were subject to further adjustment upon completion of closing working capital, which resulting in a net outflow of $ 0.9 million in the fourth quarter of 2021.

Fiscal year 2021 includes two quarters of financial results for the eOne Music Business.

These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

3 unchanged sentences

Recently Adopted Accounting Standards

In August 2018, the FASB issued Accounting Standards Update No.

2018-14 (ASU 2018-14) Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20)- Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans .

The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted.

The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated financial statements.

In December 2019, the FASB issued Accounting Standards Update No.

2019-12 (ASU 2019-12), Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The amendments in this update remove certain exceptions for performing intra-period tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods.

The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

the effect of enacted changes in tax laws or rates in interim periods.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted.

The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated financial statements.

As of March 27, 2022, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.

Issued Accounting Pronouncements

6 unchanged sentences

An entity may elect to apply the amendments provided by this update beginning March 12, 2020 through December 31, 2022.

The Company does not currently expect the change from LIBOR to an alternate rate to have a material impact on its consolidated financial statements, and is continuing to evaluate the standard's potential impact to its consolidated financial statements.

(2) Revenue Recognition

The change from LIBOR to an alternate rate has not had a material impact on the Company's consolidated financial statements .

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(2) Revenue Recognition

Revenue is recognized when control of the promised goods or content is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or content.

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

Contract Assets and Liabilities

Within our Consumer Products and Entertainment segments the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied.

In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues.

The Company defers revenues on these advanced payments until its performance obligation is satisfied and records the aggregate deferred revenues as contract liabilities.

The current portion of contract liabilities was recorded within Accrued Liabilities and the long-term portion was recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets.

The Company records contract assets in the case of (1) minimum guarantees, which are recognized ratably over the term of the respective license period, being recognized in advance of contractual invoicing, and (2) film and television distribution revenue recorded for content delivered but for which payment will occur over the license term.

The current portion of contract assets was recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion was recorded as Other Long-Term Assets.

At September 26, 2021, September 27, 2020 and December 27, 2020 the Company had the following contract assets and liabilities in its consolidated balance sheets:

September 26, 2021 September 27, 2020 December 27, 2020

In the ordinary course of business, the Company’s Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment segments enter into contracts to license certain of the Company’s intellectual property, providing licensees right-to-use access for use in the production and sale of consumer products and digital game development, and for use within content for distribution over streaming platforms and for television and film.

The Company also licenses owned television and film content for distribution to third parties in formats that include broadcast, digital streaming and theatrical.

Through these arrangements, the Company may receive advanced royalty payments from licensees, either in advance of a licensees’ subsequent sales to customers or, prior to the completion of the Company’s performance obligation.

In addition, the Company’s Wizards of the Coast and Digital Gaming segment may receive advanced payments from end users of its digital games at the time of the initial purchase or through in-application purchases.

These digital gaming revenues are recognized over a period of time, determined based on player usage patterns or the estimated playing life of the user or when additional downloadable content is made available.

The Company defers revenues on all licensee and digital gaming advanced payments until the respective performance obligations are satisfied.

The Company records the aggregate deferred revenues as contract liabilities, with the current portion recorded within Accrued Liabilities and the long-term portion recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets.

The Company records contract assets in the case of (1) minimum guarantees being recognized in advance of contractual invoicing, which are recognized ratably over the terms of the respective license periods, and (2) film and television distribution revenues recorded for content delivered, where payment will occur over the license term.

The current portion of contract assets is recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion is recorded within Other Long-Term Assets.

At March 27, 2022, March 28, 2021 and December 26, 2021 the Company had the following contract assets and liabilities in its consolidated balance sheets:

March 27, 2022 March 28, 2021 December 26, 2021

Contract assets - current $ 299.8 $ 257.9 $ 286.9

4 unchanged sentences

Total $ 103.5 $ 163.5 $ 121.2

For the nine months ended September 26, 2021, the Company collected $ 35.0 million of the contract assets and recognized $ 88.9 million of contract liabilities that were included in the December 27, 2020 balances.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

For the three months ended March 27, 2022, the Company collected $ 58.8 million of the contract assets and recognized $ 38.6 million of contract liabilities that were included in the December 26, 2021 balances.

Unsatisfied performance obligations

Unsatisfied performance obligations relate primarily to in-production television content to be delivered in the future under existing agreements with partnering content providers such as broadcasters, distributors, television networks and subscription video on demand services.

As of September 26, 2021, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future were $ 456.0 million.

As of March 27, 2022, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future were $ 315.2 million.

Of this amount, we expect to recognize $ 208.1 million in the remainder of 2022, $ 91.9 million in 2023, $ 6.6 million in 2024 and $ 8.6 million in 2025.

These amounts include only fixed considerations.

Accounts Receivable and Allowance for Credit Losses

The Company’s balance for accounts receivable on the consolidated balance sheets as of March 27, 2022 and March 28, 2021 are primarily from contracts with customers.

Of the Company’s accounts receivable, less allowance for doubtful accounts, of $ 931.7 million, approximately $ 35.0 million relates to accounts receivable held in Russia.

The Company has insurance coverage for over 90 % of Russia receivables.

The Company had no material expense for credit losses for the quarters ended March 27, 2022 and March 28, 2021.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Disaggregation of revenues

3 unchanged sentences

North America, Europe, Latin America, and Asia Pacific;

and within its Entertainment segment by category:

within its Entertainment segment by category:

Film & TV, Family Brands, and Other;

and within its Wizards of the Coast and Digital Gaming segment by line of business:

Tabletop Gaming and Digital and Licensed Gaming.

Finally, the Company disaggregates its revenues by brand portfolio into five brand categories:

2 unchanged sentences

See note 13 for further information.

(3) Business Combination

On December 30, 2019, the Company completed its acquisition of eOne, a global independent studio that specializes in the development, acquisition, production, financing, distribution and sales of entertainment content.

The aggregate purchase price of $ 4.6 billion was comprised of $ 3.8 billion of cash consideration for shares outstanding and $ 0.8 billion related to the redemption of eOne's outstanding senior secured notes and the payoff of eOne's revolving credit facility.

The Company financed the acquisition with proceeds from the following debt and equity financings:

(1) the issuance of senior unsecured notes in an aggregate principal amount of $ 2.4 billion in November 2019, (2) the issuance of 10.6 million shares of common stock at a public offering price of $ 95.00 per share in November 2019 (resulting in net proceeds of $ 975.2 million) and (3) $ 1.0 billion in term loans provided by a term loan agreement, which were borrowed on the date of closing.

See Note 8 for further discussion of the issuance of the senior unsecured notes and term loan agreement.

The addition of eOne accelerates the Company's brand blueprint strategy by expanding our brand portfolio with eOne's global preschool brands, adding proven TV and film expertise and executive leadership as well as by enhancing brand building capabilities and our storytelling capabilities to strengthen Hasbro brands.

eOne's results of operations and financial position have been included in the Company's consolidated financial statements and accompanying condensed footnotes since the date of the acquisition.

The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”).

Pursuant to Topic 805, the Company allocated the eOne purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 30, 2019.

The excess of the purchase price over those fair values was recorded to goodwill.

The following table summarizes the intangible assets acquired as part of the eOne Acquisition:

Weighted Average

Intangible assets acquired Amortization Period Fair Value

Established brands 10 years $ 615.0

Trade names 15 years 100.0

Artist relationships 14 years 100.0

Music catalogs 12 years 120.0

Other 8 years 121.0

Total intangible assets acquired 11 years $ 1,056.0

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Intangible assets consisted of intellectual property associated with established brands, eOne artist relationships, eOne music catalogs and trademarks and trade names with estimated useful lives ranging from 7 to 15 years, determined based on when the related cash flows are expected to be realized.

The fair value of the intangible assets acquired was determined based on the estimated future cash flows to be generated from the acquired assets, considering assumptions related to contract renewal rates and estimated brand franchise revenue growth.

eOne acquired intangible asset amortization expense for the quarter and nine months ended September 26, 2021 were $ 19.7 million and $ 66.4 million, respectively.

For the quarter and nine months ended September 27, 2020, eOne acquired intangible asset amortization expense was $ 24.7 million and $ 72.3 million, respectively.

Deferred tax liabilities within other liabilities were adjusted to record the deferred tax impact of purchase price accounting adjustments, primarily related to intangible assets.

Investments in productions and content, or IIP and IIC, were valued at $ 564.8 million on the acquisition date, and include the fair value of completed films and television programs which have been produced by eOne or for which eOne has acquired distribution rights, as well as the fair value of films and television programs in production, pre-production and development.

For films and television programs, fair values were estimated based on forecasted cash flows, discounted to present value.

For titles less than 3 years old and titles in development, the content assets will be amortized using the individual film forecast method, wherein the amortization will phase to the revenues incurred.

For titles over 3 years old, the estimated useful life is 10 years, and will be amortized straight-line over that period.

Goodwill of $ 3.2 billion represents the excess of the purchase price over the fair value of the underlying tangible and identifiable intangible assets acquired and liabilities assumed.

The acquisition goodwill represents the value placed on the combined company’s brand building capabilities, our storytelling capabilities and franchise economics in TV, film and other mediums to strengthen Hasbro brands.

In addition, the acquisition goodwill depicts added benefits of long-term profitable growth through in-sourcing toy and game production for the acquired preschool brands and cost-synergies, as well as future revenue growth opportunities.

The goodwill recorded as part of this acquisition was included within the Entertainment and Consumer Products segments for the year ended December 27, 2020.

The goodwill associated with the acquisition will not be amortized for financial reporting purposes and will not be deductible for federal tax purposes.

See Note 5 for information on the Company's goodwill reallocation during the first quarter of 2021 and the goodwill impairment charge recorded in the second quarter of 2021 as a result of the sale of the eOne music business, which was completed during the third quarter of 2021.

For the quarter and nine months ended September 27, 2020 , the Company incurred $ 5.9 million and $ 166.0 million, respectively, of charges related to the eOne Acquisition, which were recorded in acquisition and related costs within the Company’s Consolidated Statement of Operations.

Included within the Entertainment segment results for the nine months ended September 27, 2020 were $ 98.5 million of acquisition and related charges.

The remaining charges were included in Corporate and Other.

The acquisition and related costs for the quarter and nine months ended September 27, 2020 consisted of the following:

• Acquisition and integration costs of $ 4.6 million and $ 104.3 million for the quarter and nine months ended September 27, 2020, respectively, including, for the nine months ended September 27, 2020, $ 47.4 million of expense associated with the acceleration of eOne stock-based compensation and $ 38.2 million of advisor fees settled at the closing of the acquisition, as well as integration costs;

• Restructuring and related costs of $ 1.4 million and $ 61.7 million for the quarter and nine months ended September 27, 2020, respectively, including severance and retention costs for the quarter and nine months ended September 27, 2020 of $ 1.4 million and $ 20.8 million, respectively, as well as $ 40.9 million in impairment charges for certain definite-lived intangible and production assets for the nine months ended September 27, 2020.

The impairment charges of $ 40.9 million were driven by the change in strategy for the combined company’s entertainment assets.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(3) Earnings Per Share

Net earnings per share data for the quarters and nine months ended September 26, 2021 and September 27, 2020 were computed as follows:

Net earnings per share data for the quarters ended March 27, 2022 and March 28, 2021 were computed as follows:

Quarter Basic Diluted Basic Diluted

7 unchanged sentences

per common share $ 0.44 0.44 $ 0.84 0.84

Nine Months Basic Diluted Basic Diluted

Net earnings attributable to Hasbro, Inc.

$ 346.5 346.5 $ 117.3 117.3

Average shares outstanding 137.9 137.9 137.2 137.2

Effect of dilutive securities:

Options and other share-based awards — 0.4 — 0.3

Equivalent Shares 137.9 138.3 137.2 137.5

Net earnings attributable to Hasbro, Inc.

per common share $ 2.51 2.51 $ 0.86 0.85

For the quarter and nine months ended September 26, 2021, options and restricted stock units totaling 2.1 million and 2.2 million respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive.

For the quarter and nine months ended September 27, 2020, options and restricted stock units totaling 2.9 million and 3.0 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive.

( 5 ) Goodwill

For the quarters ended March 27, 2022 and March 28, 2021, options and restricted stock units totaling 2.5 million and 2.2 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive.

During the first quarter of 2021, the Company realigned its financial reporting structure creating the following three principal reportable segments:

1 unchanged sentence

In our realignment, some, but not all, of our reporting units were changed.

As a result of these changes, the Company reallocated its goodwill among the revised reporting units based on the change in relative fair values of the respective reporting units.

As a result of these changes, during 2021, the Company reallocated its goodwill among the revised reporting units based on the change in relative fair values of the respective reporting units.

Changes in the carrying amount of goodwill, by operating segment, for the quarters ended March 27, 2022 and March 28, 2021 are as follows:

Consumer Products Wizards of the Coast and Digital Gaming Entertainment Total

Balance at December 26, 2021 $ 1,584.9 307.3 1,527.4 $ 3,419.6

Goodwill allocation 199.4 254.2 ( 453.6 ) —

Foreign exchange translation ( 0.1 ) 0.2 ( 0.4 ) ( 0.3 )

Impairment during the period — — ( 101.8 ) ( 101.8 )

Goodwill associated with the disposal of business — — ( 169.2 ) ( 169.2 )

Balance at September 26, 2021 $ 1,585.0 307.5 1,527.7 $ 3,420.2

Balance at March 27, 2022 $ 1,584.8 307.5 1,527.0 $ 3,419.3

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

In conjunction with the goodwill reallocation described above, during the first quarter of 2021, the Company performed an impairment test of goodwill balances held by the reporting units impacted by the segment realignment.

The reporting units were tested as of December 28, 2020 and included our Europe, Asia Pacific, Global Consumer Products Licensing, Wizards of the Coast and Family Brands reporting units.

Based on the results of the goodwill assessment, we determined that the fair values of each of these reporting units exceeded their carrying values, and as such, we concluded that there was no indication of goodwill impairment for these reporting units as of December 28, 2020.

During the second quarter of 2021, the Company entered into a definitive agreement to sell the Entertainment One Music business ("eOne Music") for an aggregate sales price of $ 385.0 million, subject to certain closing adjustments related to working capital and net debt.

Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $ 101.8 million, during the second quarter of 2021, within Loss on Disposal of Business in the Consolidated Statements of Operations, and within the Entertainment segment.

On June 29, 2021, during the Company's fiscal third quarter, the eOne Music sale was completed and associated goodwill and intangible assets were removed from the consolidated financial statements.

Consumer Products Wizards of the Coast and Digital Gaming Entertainment Total

Balance at December 27, 2020 $ 1,385.7 53.1 2,252.9 $ 3,691.7

Goodwill allocation 199.4 254.2 ( 453.6 ) —

Foreign exchange translation ( 0.1 ) 0.2 ( 0.4 ) ( 0.3 )

Balance at March 28, 2021 $ 1,585.0 307.5 1,798.9 $ 3,691.4

During the second quarter of 2021, the Company entered into a definitive agreement to sell the Entertainment One Music business ("eOne Music").

Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the acquisition of Entertainment One in December 2019 (the "eOne Acquisition"), the Company recorded a pre-tax non-cash goodwill impairment charge of $ 108.8 million, during the second quarter of 2021, within Loss on Disposal of Business in the Consolidated Statements of Operations, and within the Entertainment segment.

On June 29, 2021, during the Company's fiscal third quarter, the eOne Music sale was completed and associated goodwill and intangible assets of $ 162.2 million were removed from the consolidated financial statements.

(5) Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss).

The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarters and nine months ended September 26, 2021 and September 27, 2020.

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarters ended March 27, 2022 and March 28, 2021.

Quarter Ended

2022 March 28,

Other comprehensive earnings (loss), tax effect:

Tax benefit (expense) on unrealized holding gains (losses) $ 0.1 $ 0.2 $ — ( 0.4 )

Tax (expense) benefit on cash flow hedging activities ( 0.3 ) 0.3 ( 0.7 ) ( 5.5 )

Tax benefit on foreign currency translation adjustments

Tax (expense) on unrealized holding gains $ ( 0.1 ) $ —

Tax benefit (expense) on cash flow hedging activities 0.9 ( 1.0 )

Reclassifications to earnings, tax effect:

1 unchanged sentence

Amortization of unrecognized pension and postretirement amounts

( 0.1 ) ( 0.1 ) ( 0.2 ) ( 0.2 )

Total tax effect on other comprehensive earnings (loss) $ 0.6 $ ( 0.9 )

1 unchanged sentence

(Millions of Dollars and Shares Except Per Share Data)

Changes in the components of accumulated other comprehensive earnings (loss) for the nine months ended September 26, 2021 and September 27, 2020 are as follows:

Changes in the components of accumulated other comprehensive earnings (loss), net of tax for the quarters ended March 27, 2022 and March 28, 2021 are as follows:

Postretirement

6 unchanged sentences

Current period other comprehensive earnings (loss) 0.1 ( 1.2 ) 0.2 ( 10.7 ) ( 11.6 )

Balance at September 26, 2021 $ ( 40.1 ) ( 12.6 ) 0.3 ( 156.2 ) ( 208.6 )

Balance at March 27, 2022 $ ( 35.0 ) ( 7.2 ) 0.4 ( 205.1 ) ( 246.9 )

Balance at December 27, 2020 $ ( 40.7 ) ( 22.1 ) 0.3 ( 132.5 ) ( 195.0 )

Current period other comprehensive earnings (loss) 0.2 4.5 — ( 16.1 ) ( 11.4 )

Balance at September 27, 2020 $ ( 35.3 ) ( 5.3 ) 1.1 ( 240.8 ) ( 280.3 )

Balance at March 28, 2021 $ ( 40.5 ) ( 17.6 ) 0.3 ( 148.6 ) ( 206.4 )

Gains (Losses) on Derivative Instruments

At September 26, 2021, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $ 3.2 million in accumulated other comprehensive earnings (loss) ("AOCE").

These instruments hedge payments related to inventory purchased in the third quarter of 2021 or forecasted to be purchased during the remainder of 2021 through 2022, intercompany expenses expected to be paid or received during 2021, television and movie production costs paid in 2021, and cash receipts for sales made at the end of the third quarter of 2021 or forecasted to be made in the remainder of 2021 and, to a lesser extent, 2022 through 2023.

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.

At March 27, 2022, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $ 8.1 million in accumulated other comprehensive earnings (loss) ("AOCE").

These instruments hedge payments related to inventory purchased in the first quarter of 2022 or forecasted to be purchased during the remainder of 2022 through 2023, intercompany expenses expected to be paid or received during 2022, television and movie production costs paid in 2022 or expected to be paid in 2023 or 2024, and cash receipts for sales made at the end of the first quarter of 2022 or forecasted to be made in the remainder of 2022.

These amounts will be reclassified into the consolidated statements of operations upon the sale of the related inventory, the recognition of the related production costs or the recognition of the related sales or intercompany expenses to be paid or received.

In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 3.15 % Notes, that were repaid in full in the aggregate principal amount of $ 300.0 million during the first quarter of 2021 (See note 7), and the 5.10 % Notes due 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 September 26, 2021, deferred losses, net of tax of $ 15.7 million related to these instruments remained in AOCE.

For the quarters ended September 26, 2021 and September 27, 2020, previously deferred losses of $ 0.2 million and $ 0.5 million, respectively, were reclassified from AOCE to net earnings.

For the nine-month periods ended September 26, 2021 and September 27, 2020, previously deferred losses of $ 1.0 million and $ 1.3 million, respectively, were reclassified from AOCE to net earnings.

Of the amount included in AOCE at September 26, 2021, the Company expects net gains of approximately $ 2.2 million to be reclassified to the consolidated statements of operations within the next 12 months.

At March 27, 2022, deferred losses, net of tax of $ 15.4 million related to these instruments remained in AOCE.

For the quarters ended March 27, 2022 and March 28, 2021, previously deferred losses of $ 0.2 million and $ 0.5 million, respectively, related to these instruments were reclassified from AOCE to net earnings.

Of the net deferred gains included in AOCE at March 27, 2022, the Company expects net gains of approximately $ 8.7 million 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.

See note 11 for additional discussion on reclassifications from AOCE to earnings.

Condensed Notes to Consolidated Financial Statements

1 unchanged sentence

(6) Accrued Liabilities

Components of accrued liabilities for the periods ended September 26, 2021, September 27, 2020 and December 27, 2020 were as follows:

September 26, 2021

September 27, 2020

Components of accrued liabilities for the periods ended March 27, 2022, March 28, 2021 and December 26, 2021 were as follows:

March 27, 2022

March 28, 2021

December 26, 2021

7 unchanged sentences

Severance 27.6 44.0 32.0

Lease liability - Current 43.9 42.8 45.0

Accrued Expenses IIC & IIP 70.7 40.9 74.9

Freight 65.6 26.3 107.5

6 unchanged sentences

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities.

At September 26, 2021, September 27, 2020 and December 27, 2020, the carrying cost of these instruments approximated their fair value.

The Company's financial instruments at September 26, 2021, September 27, 2020 and December 27, 2020 also include certain assets and liabilities measured at fair value (see Notes 11 and 12) 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 September 26, 2021, September 27, 2020 and December 27, 2020 are as follows:

September 26, 2021 September 27, 2020 December 27, 2020

At March 27, 2022, March 28, 2021 and December 26, 2021, the carrying cost of these instruments approximated their fair value.

The Company's financial instruments at March 27, 2022, March 28, 2021 and December 26, 2021 also include certain assets and liabilities measured at fair value (see notes 10 and 11) 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, 2022, March 28, 2021 and December 26, 2021 are as follows:

March 27, 2022 March 28, 2021 December 26, 2021

Value Carrying

14 unchanged sentences

300.0 321.7 300.0 333.8 300.0 374.5

3.15 % Notes Due 2021 (2)

— — 300.0 303.5 300.0 302.3

6.60 % Debentures Due 2028

1 unchanged sentence

Variable % Notes Due December 30, 2022 — — 300.0 300.0 — —

— — 400.0 400.0 300.0 300.0

Variable % Notes Due December 30, 2024 (1)

5 unchanged sentences

Long-term debt $ 3,737.9 4,060.5 $ 4,674.1 5,252.0 $ 3,824.2 4,549.3

(1) During the third quarter of 2021, the Company repaid in full its 2.60 % Notes, in the aggregate principal amount of $ 300.0 million due in November 2022.

(2) During the first quarter of 2021, the Company repaid in full its 3.15 % Notes, in the aggregate principal amount of $ 300.0 million due in May 2021.

(3) During the second quarter of 2021, the Company repaid $ 250.0 million of the Variable % Notes Due December 30, 2022 and during the third quarter of 2021, the Company repaid the remaining balance of $ 50.0 million of the Variable % Notes Due December 30, 2022.

(4) During the third quarter of 2021, the Company repaid $ 50.0 million of the Variable % Notes Due December 30, 2024.

(1) During the first quarter of 2022, the Company repaid $ 50.0 million of the Variable % Notes due December 30, 2024.

In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $ 2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches:

2 unchanged sentences

These costs are being amortized over the life of the Notes outstanding, which range from five years to ten years from the date of issuance.

During the third quarter of 2021, the Company repaid in full the $ 300.0 million of 2022 Notes and recorded $ 9.1 million of debt extinguishment costs within other expense (income) in the Consolidated Statements of Operations.

During 2021, the Company repaid in full the $ 300.0 million of 2022 Notes and recorded $ 9.1 million of debt extinguishment costs within other expense (income) in the Consolidated Statements of Operations.

The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poors.

The adjustment can be from 0.25 % to 2.00 % based on the extent of the ratings decrease.

The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S.

The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S.

Treasury bills at the time of repurchase, plus (1) 25 basis points (in the case of the 2024 Notes);

2 unchanged sentences

In addition, on and after October 19, 2024 for the 2024 Notes, September 19, 2026 for the 2026 Notes and August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

In September 2019, the Company entered into a $ 1.0 billion Term Loan Agreement (the "Term Loan Agreement”) with Bank of America N.A.

1 unchanged sentence

The full amount of the Term Loan Facilities were drawn down on December 30, 2019, the closing date of the eOne Acquisition.

During 2020, the Company made $ 122.5 million in payments towards the $ 1.0 billion term loan notes consisting of $ 100.0 million on the principal balance of the Three-Year Tranche loans in addition to the required quarterly principal amortization payments totaling $ 22.5 million on the Five-Year Tranche loans.

During the first nine months of 2021, the Company paid $ 372.5 million toward the $ 1.0 billion term loan notes consisting of the remaining $ 300.0 million of the principal balance of the Three-Year Tranche loans as well as $ 50.0 million principal balance and principal amortization payments totaling $ 22.5 million on the Five-Year Tranche loans.

As of March 27, 2022, the Company has fully repaid the Three-Year Tranche $ 400.0 million principal term loan, and of the Five-Year Tranche $ 600.0 million principal balance, the Company has repaid a total of $ 260.0 million in the following increments:

$ 22.5 million in 2020;

$ 180.0 million in 2021;

and, $ 57.5 million in the first quarter of 2022 consisting of $ 50.0 million of the principal balance and a principal amortization payment of $ 7.5 million.

Loans under the remaining Five-Year Tranche bear interest at the Company’s option, at either the Eurocurrency Rate or the Base Rate, plus a per annum applicable rate that fluctuates between 100.0 basis points and 187.5 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Base Rate, in each case, based upon the non-credit enhanced, senior unsecured long-term debt ratings of the Company by Fitch Ratings Inc., Moody’s Investor Service, Inc.

3 unchanged sentences

(i) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (ii) restrictions on the incurrence of indebtedness, (iii) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (iv) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00 :1.00 as of the end of any fiscal quarter and (v) the requirement that the Company maintain a Consolidated Total Leverage Ratio of no more than, depending on the gross proceeds of equity securities issued after the effective date of the acquisition of eOne, 5.65 :1.00 or 5.40 :1.00 for each of the first, second and third fiscal quarters ended after the funding of the Term Loan Facilities, with periodic step downs to 3.50 :1.00 for the fiscal quarter ending December 31, 2023 and thereafter.

As of March 27, 2022, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.

The Company may redeem its 5.10 % notes due in 2044 (the "2044 Notes") at its option, at the greater of the principal amount of the notes or the present value of the remaining scheduled payments, discounted using the effective interest rate on applicable U.S.

Treasury bills at the time of repurchase.

Current portion of long-term debt at September 26, 2021 o f $ 187.6 million , as shown on the consolidated balance sheet, represents the current portion of required quarterly principal amortization payments for the Term Loan Facilities and production financing facilities.

All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to the third quarter of 2024.

Current portion of long-term debt at March 27, 2022 o f $ 155.8 million , as shown on the consolidated balance sheet, represents the current portion of required quarterly principal amortization payments for the 5-Year Tranche of the Term Loan Facilities and production financing facilities.

All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2023 with the exception of certain of the Company's production financing facilities and annual principal payments related to the Term Loan Facilities.

The fair values of the Company's long-term debt are considered Level 3 fair values (see note 10 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method.

5 unchanged sentences

Production Financing

In addition to the Company's financial instruments, the Company uses production financing to fund certain of its television and film productions which are typically arranged on an individual production basis by special purpose production subsidiaries.

Production financing facilities are secured by the assets and future revenue of the individual production subsidiaries and are non-recourse to the Company's assets.

In addition to the Company's financial instruments, t he Company uses production financing facilities to fund its film and television productions which are typically arranged on an individual production basis by either special purpose production subsidiaries, each secured by future revenues of such production subsidiaries, which are non-recourse to the Company's assets, or through a senior revolving credit facility dedicated to production financing obtained in November 2021.

The Company's senior revolving film and television production credit facility (the “RPCF”) with MUFG Union Bank, N.A., as administrative agent and lender and certain other financial institutions, as lenders thereto (the “Revolving Production Financing Agreement”) provides the Company with commitments having a maximum aggregate principal amount of $ 250.0 million.

The Revolving Production Financing Agreement also provides the Company with the option to request a commitment increase up to an aggregate additional amount of $ 150.0 million subject to agreement of the lenders.

The Revolving Production Financing Agreement extends through November 22, 2024.

The Company uses the RPCF to fund certain of the Company’s original film and TV production costs.

Borrowings under the RPCF are non-recourse to the Company's assets.

Going forward, the Company expects to utilize the RPCF for the majority of its production financing needs.

Production financing facilities typically have maturities of less than two years , while the titles are in production, and are repaid once delivered and all credits, broadcaster pre-sales and international sales have been received.

The production financing facilities as of September 26, 2021, September 27, 2020 and December 27, 2020 are as follows:

September 26, 2021

September 27, 2020 December 27, 2020

Production financing held by production subsidiaries $ 204.7 $ 121.4 $ 165.5

The production financing facilities as of March 27, 2022, March 28, 2021 and December 26, 2021 are as follows:

March 27, 2022

March 28, 2021 December 26, 2021

Production financing facilities $ 199.1 $ 201.8 $ 170.1

Other loans (1)

6 unchanged sentences

Interest is charged at bank prime rate plus a margin based on the risk of the respective production.

The weighted average interest rate on all production financing as of September 26, 2021 was 2.9 %.

The weighted average interest rate on all production financing as of March 27, 2022 was 3.1 %.

The Company has Canadian dollar and U.S.

dollar production credit facilities with various banks.

dollar production financing loans with various banks.

The carrying amounts are denominated in the following currencies:

1 unchanged sentence

Dollars Total

As of September 26, 2021

As of March 27, 2022

$ 24.2 $ 71.6 $ 95.8

The following table represents the movements in production financing and other related loans during the first nine months of 2021:

Production Financing Other Loans Total

The following table represents the movements in production financing loans during the first quarter of 2022:

Production Financing

December 26, 2021 $ 170.1

2 unchanged sentences

Foreign exchange differences 0.8

Balance at September 26, 2021

$ 204.7 $ — $ 204.7

Balance at March 27, 2022

The Company expects to repay all of its currently outstanding production financing loans by the first quarter of 2023.

(8) Investments in Productions and Investments in Acquired Content Rights

Investments in productions and investments in acquired content rights are predominantly monetized on a title-by-title basis and are recorded within other assets in the Company's consolidated balance sheets, to the extent they are considered recoverable against future revenues.

These amounts are being amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through various channels including broadcast licenses, theatrical release and home entertainment.

Amounts capitalized are reviewed periodically on an individual film basis and any portion of the unamortized amount that appears not to be recoverable from future net revenues is expensed as part of program cost amortization during the period the loss becomes evident.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The Company's unamortized investments in productions and investments in acquired content rights consisted of the following at September 26, 2021, September 27, 2020, and December 27, 2020:

September 26, 2021

September 27, 2020 December 27, 2020

Film and TV Programming

against future revenues.

The Company's unamortized investments in productions and investments in acquired content rights consisted of the following at March 27, 2022, March 28, 2021, and December 26, 2021:

March 27, 2022

March 28, 2021 December 26, 2021

Investment in Films and Television Programs:

Individual Monetization

Released, net of amortization $ 489.1 $ 481.9 $ 481.7

3 unchanged sentences

747.3 737.1 735.8

Other Programming

Film/TV Group Monetization (1)

Released, net of amortization 31.5 — 32.2

In production 15.8 — 13.0

Investment in Other Programming

Released, net of amortization 5.2 14.8 5.3

Completed and not released 0.4 2.8 0.4

3 unchanged sentences

Total Program Investments $ 816.4 $ 767.6 $ 801.0

The Company recorded $ 396.1 million of program cost amortization related to released programming in the nine months ended September 26, 2021, consisting of the following:

(1) Due to a monetization strategy change, as of December 26, 2021 the Company began monetizing certain content assets as a Film/TV group.

The Company recorded $ 138.5 million of program cost amortization related to released programming in the quarter ended March 27, 2022, consisting of the following:

Investment in Production Investment in Content Other Total

4 unchanged sentences

federal, state and local, and international tax authorities in various tax jurisdictions.

Our effective tax rate ("ETR") from continuing operations was 29.0 % for the nine months ended September 26, 2021 and 35.0 % for the nine months ended September 27, 2020.

The following items caused the year-to-date ETR to be significantly different from the prior year ETR:

• during the nine months ended September 26, 2021, the Company recorded a net discrete tax expense of $ 8.8 million.

The expense is primarily associated with (i) the revaluation of net deferred tax liabilities as a result of the United Kingdom's ("UK") enactment of Finance Act 2021 during the second quarter, which increases the UK corporate income tax rate from 19% to 25% as of April 1, 2023;

(ii) a one-time tax charge related to an ongoing tax audit;

(iii) a release of a valuation allowance on net operating losses that offsets income received from a one-time legal settlement;

and (iv) certain tax benefits, including the reversal of uncertain tax positions and operational tax planning;

• the year-to-date ETR also includes a goodwill impairment charge on the sale of the eOne Music business, recorded during the second quarter of 2021 for which there is no corresponding tax benefit;

• during the nine months ended September 27, 2020, the Company recorded a net discrete tax benefit of $ 5.3 million primarily associated with (i) a tax benefit resulting from the eOne acquisition and related costs incurred;

(ii) a tax expense related to the revaluation of net deferred tax liabilities as a result of the UK's enactment during the third quarter of Finance Act 2020 which maintained the corporate income tax rate at 19%;

and (iii) a tax expense related to an increase of uncertain tax positions.

In May 2019, a public referendum held in Switzerland approved the Swiss Federal Act on Tax Reform and AHV Financing ("TRAF") proposals previously approved by the Swiss Parliament.

The Swiss tax reform measures were effective on January 1, 2020.

Changes in tax reform include the abolishment of preferential tax regimes for holding companies, domicile companies

Our effective tax rate ("ETR") from continuing operations was 21.6 % for the quarter ended March 27, 2022 and 9.3 % for the quarter ended March 28, 2021.

The following items caused the first quarter ETR to be significantly different from the prior year ETR:

• during the quarter ended March 27, 2022, the Company recorded a net discrete tax benefit of $ 2.3 million primarily associated with the release of certain valuation allowances during the quarter;

• during the quarter ended March 28, 2021, the Company recorded a net discrete tax benefit of $ 8.9 million primarily associated with the decrease to our liability for uncertain tax positions that resulted from statutes of limitations

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

and mixed companies at the cantonal level.

The enacted changes in Swiss federal tax were not material to the Company’s financial statements.

Swiss cantonal tax was enacted in December 2019.

The Company is still assessing the transitional provision options it may elect;

however, the legislation is not expected to have a material effect on the Company’s financial statements.

expiring in certain jurisdictions.

Pre-tax income was benefited from a legal settlement gain, with no associated tax expense, due to the availability of net operating losses and release of the related valuation allowance on the net operating losses utilized by the settlement gain.

In May 2019, a public referendum held in Switzerland approved the Swiss Federal Act on Tax Reform and AHV Financing ("TRAF") proposals previously approved by the Swiss Parliament.

The Swiss tax reform measures were effective on January 1, 2020.

Changes in tax reform include the abolishment of preferential tax regimes for holding companies, domicile companies and mixed companies at the cantonal level.

The enacted changes in Swiss federal and cantonal tax, including cantonal transitional provisions adopted in 2021, were not material to the Company's financial statements.

The Company is no longer subject to U.S.

12 unchanged sentences

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.

There have been transfers between levels within the fair value hierarchy.

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 elected the fair value option for certain available-for-sale investments using net asset value per share and during 2020, the Company liquidated these investments as part of its global cash management strategy.

At September 27, 2020, prior to their liquidation, these investments totaled $ 13.4 million and were included in prepaid expenses and other current assets within the Company's consolidated balance sheet.

The Company recorded a net gain of $ 1.1 million and a net loss of $ 0.1 million, respectively, on these investments in other (income) expense, net, related to the change in fair value of such instruments net for the quarter and nine months ended September 27, 2020.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

At September 26, 2021, September 27, 2020 and December 27, 2020, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets (excluding assets for which the fair value is measured using net asset value per share):

At March 27, 2022, March 28, 2021 and December 26, 2021, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets (excluding assets for which the fair value is measured using net asset value per share):

Fair Value Measurements Using:

1 unchanged sentence

(Level 2) Significant

September 26, 2021

March 27, 2022

Available-for-sale securities $ 1.6 1.6 — —

4 unchanged sentences

Total liabilities $ 6.3 — 4.6 1.7

September 27, 2020

March 28, 2021

Available-for-sale securities $ 2.2 2.2 — —

17 unchanged sentences

The Company’s option agreement relates to an equity method investment in Discovery Family Channel ("Discovery").

The option agreement is included in other liabilities at September 26, 2021, September 27, 2020 and December 27, 2020, and is valued using an option pricing model based on the fair value of the related investment.

The option agreement is included in other liabilities at March 27, 2022, March 28, 2021 and December 26, 2021, and 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 quarter ended September 26, 2021.

Due to the 2021 revaluation of the Discovery investment and resulting impairment charges, the Company reduced the option's fair value by $ 20.1 million during the fourth quarter of 2021.

There were no changes in these valuation techniques during the quarter ended March 27, 2022.

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):

1 unchanged sentence

Gain from change in fair value 0.1 ( 1.2 )

Balance at end of third quarter $ ( 21.8 ) $ ( 20.6 )

Balance at end of first quarter $ ( 1.6 ) $ ( 21.8 )

(11) Derivative Financial Instruments

5 unchanged sentences

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 September 26, 2021, September 27, 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:

September 26, 2021 September 27, 2020 December 27, 2020

All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges.

At March 27, 2022, March 28, 2021 and December 26, 2021, 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, 2022 March 28, 2021 December 26, 2021

Hedged transaction Notional

8 unchanged sentences

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 26, 2021, September 27, 2020 and December 27, 2020 as follows:

September 26,

2021 September 27,

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, 2022, March 28, 2021 and December 26, 2021 as follows:

2022 March 28,

2021 December 26,

14 unchanged sentences

Net unrealized losses $ ( 0.2 ) $ ( 0.2 ) $ —

Net gains on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters and nine months ended September 26, 2021 and September 27, 2020 as follows:

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

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, 2022 and March 28, 2021 as follows:

Quarter Ended

2022 March 28,

Statements of Operations Classification

8 unchanged sentences

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 September 26, 2021, September 27, 2020 and December 27, 2020 the total notional amounts of the Company's undesignated derivative instruments were $ 663.2 million, $ 538.9 million and $ 590.6 million, respectively.

As of March 27, 2022, March 28, 2021 and December 26, 2021 the total notional amounts of the Company's undesignated derivative instruments were $ 665.0 million, $ 653.4 million and $ 632.0 million, respectively.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

At September 26, 2021, September 27, 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:

September 26,

2021 September 27,

At March 27, 2022, March 28, 2021 and December 26, 2021, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:

2022 March 28,

2021 December 26,

8 unchanged sentences

Total unrealized gains (losses), net $ ( 2.6 ) $ 1.4 $ ( 2.5 )

The Company recorded net gains of $ 3.6 million and $ 2.9 million on these instruments to other (income) expense, net for the quarter and nine months ended September 26, 2021, respectively, and net losses of $( 6.9 ) million and $( 20.1 ) million for the quarter and nine months ended September 27, 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.

The Company recorded net (losses) of $( 2.6 ) million and $( 6.1 ) million on these instruments to other (income) expense, net for the quarters ended March 27, 2022 and March 28, 2021, 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 5 and 10).

The Company occupies offices and uses certain equipment under various operating lease arrangements.

The Company has no finance leases.

The Company has no material finance leases.

These leases have remaining lease terms of 1 to 17 years, some of which include options to extend lease terms or options to terminate current lease terms at certain times, subject to notice requirements set out in the lease agreement.

5 unchanged sentences

The Company capitalizes non-lease components for equipment leases, but expenses non-lease components as incurred for real estate leases.

For the quarter and nine months ended September 26, 2021, the Company's operating lease and other rental expenses were $ 21.8 million and $ 66.0 million, respectively.

For the quarter and nine months ended September 27, 2020, the Company's operating lease and other rental expenses were $ 22.3 million and $ 67.6 million, respectively.

Expense related to short-term leases (expected terms less than 12 months) and variable lease payments was not material in the quarter or nine months ended September 26, 2021 or September 27, 2020.

The rent expense under such arrangements and similar arrangements that do not qualify as leases under ASU 2016-02, net of sublease income amounted to $ 22.3 million and $ 21.8 million for the quarters ended March 27, 2022 and March 28, 2021, respectively, and was not material to the Company's financial statements nor were expenses related to short-term leases (expected terms less than 12 months) or variable lease payments was not material in the quarters ended March 27, 2022 or March 28, 2021.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Information related to the Company’s leases for the quarter and nine months ended September 26, 2021 and September 27, 2020 are as follows:

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

Information related to the Company’s leases for the quarters ended March 27, 2022 and March 28, 2021 are as follows:

Quarter Ended

2022 March 28,

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Weighted Average Remaining Lease Term

Operating leases 5.6 years 6.2 years 5.6 years 6.2 years

Operating leases 5.4 years 5.9 years

Weighted Average Discount Rate

Operating leases 2.9 % 3.1 %

The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right of use assets, included in our Consolidated Balance Sheets as of September 26, 2021:

September 26,

2021 (excluding the nine months ended September 26, 2021) $ 13.2

2022 (excluding the three months ended March 27, 2022) $ 38.5

2027 and thereafter 33.4

12 unchanged sentences

Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment content spanning toys, games, licensed products ranging from traditional to digital, as well as film and television entertainment.

In the first quarter of 2020 the Company completed its acquisition of the global independent studio, eOne.

Throughout 2020, the Company successfully integrated many parts of the eOne business and started to achieve synergies as a combined company.

Effective for the three months ended March 28, 2021, the Company realigned its reportable segment structure to:

5 unchanged sentences

The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games.

Additionally, the Company out-licenses certain brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.

The Entertainment segment engages in the development, acquisition, production, financing, distribution and sale of world-class entertainment content including film, scripted and unscripted television, family programming, digital content and live entertainment.

The significant accounting policies of the Company's segments are the same as those referenced in note 1.

Results shown for the quarter and nine months ended September 26, 2021 are not necessarily representative of those which may be expected for the full year 2021, nor were those of the comparable 2020 periods representative of those actually experienced for the full year 2020.

Results shown for the quarter ended March 27, 2022 are not necessarily representative of those which may be expected for the full year 2022, nor were those of the comparable 2021 periods representative of those actually experienced for the full year 2021.

Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Reclassifications of certain prior year segment results and account balances have been made to conform to the current-year presentation.

None of the segment changes impact the Company's previously reported consolidated net revenue, operating profits, net earnings or net earnings per share.

On June 29, 2021, the Company completed the sale of eOne Music.

The financial results of eOne Music were recorded within the Company's Entertainment segment through the date of the closing of the sale.

The assets and liabilities of eOne Music were de-consolidated as of the closing date and there are no remaining carrying amounts in the Company's Consolidated Balance Sheets as of September 26, 2021.

The sale of eOne Music in 2021 did not impact the Company's previously reported 2020 net revenues, operating profits, earnings, assets or liabilities.

Information by segment and a reconciliation to reported amounts for the quarters and nine months ended September 26, 2021 and September 27, 2020 are as follows:

Information by segment and a reconciliation to reported amounts for the quarters ended March 27, 2022 and March 28, 2021 are as follows:

Quarter Ended

September 26, 2021 September 27, 2020

Net revenues External Affiliate (b)

External Affiliate (b)

Consumer Products $ 1,282.7 $ ( 149.6 ) $ 1,317.8 $ ( 110.1 )

Wizards of the Coast and Digital Gaming 360.2 ( 38.0 ) 273.4 ( 23.4 )

Entertainment 327.1 ( 13.7 ) 185.4 ( 2.2 )

Corporate and Other (b)

— 201.3 — 135.7

$ 1,970.0 $ — $ 1,776.6 $ —

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Nine Months Ended

September 26, 2021 September 27, 2020

Net revenues External Affiliate (b)

External Affiliate (b)

March 27, 2022 March 28, 2021

Net revenues External Affiliate (c)

External Affiliate (c)

Consumer Products $ 672.8 $ 91.9 $ 653.9 $ 70.3

1 unchanged sentence

Entertainment 227.5 13.9 218.7 14.1

Corporate and Other (b)

Corporate and Other (a)

— ( 135.6 ) — ( 109.8 )

$ 1,163.1 $ — $ 1,114.8 $ —

Quarter Ended Nine Months Ended

Operating profit (loss) September 26,

2021 September 27,

2020 September 26,

2021 September 27,

Consumer Products $ 210.4 $ 226.2 $ 260.5 $ 171.2

Quarter Ended

Operating profit (loss) March 27,

2022 March 28,

Consumer Products (a)

Wizards of the Coast and Digital Gaming 106.4 110.0

Entertainment 22.4 ( 28.3 ) ( 74.3 ) ( 106.1 )

Corporate and Other (b)

Entertainment (a)

Corporate and Other (a)

( 7.2 ) ( 12.0 )

$ 120.0 $ 147.3

Total assets September 26,

2021 September 27,

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Total assets March 27,

2022 March 28,

2021 December 26,

Consumer Products (a)

Consumer Products (b)

$ 4,817.9 $ 5,567.7 $ 4,925.5

Wizards of the Coast and Digital Gaming 1,877.7 616.9 1,585.1

Entertainment (b)

Entertainment (a)

6,214.4 6,106.8 6,052.8

Corporate and Other (b)

Corporate and Other (a)

( 3,391.3 ) ( 2,102.3 ) ( 2,525.6 )

$ 9,518.7 $ 10,189.1 $ 10,037.8

(a) During the second quarter of 2021, the Company adjusted certain inter-segment balance sheet amounts which impacted the Consumer Products and Corporate and Other total asset values.

These adjustments did not impact the Company's total assets.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in both Entertainment and Corporate and Other.

(a) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in both Entertainment and Corporate and Other.

Allocations of certain Corporate and Other expenses, related to these assets are made to the individual operating segments at the beginning of the year based on budgeted amounts.

1 unchanged sentence

Dollar to local currency at budgeted rates when recorded.

Beginning in 2022, the Company has allocated certain of the intangible amortization costs related to the assets acquired in the eOne acquisition, between the Consumer Products and Entertainment segments.

Corporate and Other also includes the elimination of inter-company balance sheet amounts.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The following table represents consolidated Consumer Products segment net revenues by major geographic region for the quarters and nine months ended September 26, 2021 and September 27, 2020:

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

(b) During the second quarter of 2021, the Company adjusted certain inter-segment balance sheet amounts which impacted the Consumer Products and Corporate and Other total asset values.

These adjustments did not impact the Company's total assets.

(c) Amounts represent revenues from transactions with other operating segments that are included in the operating profit (loss) of the segment.

The following table represents consolidated Consumer Products segment net revenues by major geographic region for the quarters ended March 27, 2022 and March 28, 2021:

Quarter Ended

2022 March 28,

North America $ 405.2 $ 362.7

3 unchanged sentences

Net revenues $ 672.8 $ 653.9

The following table represents consolidated Entertainment segment net revenues by category for the quarters and nine months ended September 26, 2021 and September 27, 2020:

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category for the quarters ended March 27, 2022 and March 28, 2021:

Quarter Ended

2022 March 28,

Tabletop Gaming $ 192.2 $ 175.3

Digital and Licensed Gaming 70.6 66.9

Net revenues $ 262.8 $ 242.2

The following table represents consolidated Entertainment segment net revenues by category for the quarters ended March 27, 2022 and March 28, 2021:

Quarter Ended

2022 March 28,

Film and TV $ 190.2 $ 166.4

2 unchanged sentences

Net revenues $ 227.5 $ 218.7

The following table presents consolidated net revenues by brand and entertainment portfolio for the quarters and nine months ended September 26, 2021 and September 27, 2020:

Quarter Ended Nine Months Ended

September 26,

2021 September 27,

2020 September 26,

2021 September 27,

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The following table presents consolidated net revenues by brand and entertainment portfolio for the quarters ended March 27, 2022 and March 28, 2021:

Quarter Ended

2022 March 28,

Franchise Brands (1)

$ 543.1 $ 523.1

Partner Brands 206.5 188.0

Hasbro Gaming (2)

281.9 239.2 565.3 516.3

Emerging Brands (1)

1 unchanged sentence

Total $ 1,163.1 $ 1,114.8

(1) Effective in the first quarter of 2022, the Company moved PEPPA PIG into Franchise Brands from Emerging Brands.

For comparability, net revenues for the quarter ended March 28, 2021 have been restated to reflect the elevation of PEPPA PIG from Emerging Brands to Franchise Brands, which amounted to a change of $ 31.6 million.

(2) Hasbro's total gaming category, which includes all gaming net revenues, both those reported in Hasbro Gaming and those reported elsewhere, most notably MAGIC:

THE GATHERING and MONOPOLY which are reported within Franchise Brands, totaled $ 658.6 million and $ 1,543.3 million for the quarter and nine months ended September 26, 2021, respectively.

For the quarter and nine months ended September 27, 2020, total gaming revenues were $ 543.1 million and $ 1,202.6 million, respectively.

(15) eOne Music Sale

On April 25, 2021, the Company entered into a definitive agreement to sell eOne Music for an aggregate sales price of $ 385.0 million, subject to certain closing adjustments related to working capital and net debt.

The final proceeds are subject to further adjustments upon completion of closing working capital, which will be recognized in the fourth quarter of 2021.

The Company acquired eOne Music through its acquisition of eOne in December 2019 ("eOne Acquisition").

Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne Acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $ 101.8 million within Loss on Disposal of Business on the Consolidated Statements of Operations for the nine months ended September 26, 2021.

The Company also recorded pre-tax cash transaction expenses of $ 9.5 million within Selling, Distribution and Administration expenses on the Consolidated Statements of Operations during the second quarter of 2021.

The impairment

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

charge was recorded within the Entertainment segment and the transaction costs were recorded within the Corporate and Other segment.

The operations of eOne Music did not meet the criteria to be presented as discontinued operations in accordance with Accounting Standards Update No.

2014-08 (ASU 2014-08) Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity and eOne Music did not represent an individually significant component of the Company’s business.

Income from operations before income taxes, attributable to eOne Music, was recorded to the Company's Consolidated Statements of Operations, within the Entertainment segment through the sale transaction closing date.

Assets of $ 479.5 million and liabilities of $ 76.3 million, attributable to eOne Music, were de-consolidated as of the closing date and, as of September 26, 2021, there are no remaining carrying amounts in the Company's Consolidated Balance Sheets.

The following table presents the carrying amounts of the major classes of eOne Music assets and liabilities sold on June 29, 2021:

Cash and Cash Equivalents $ 18.2

Goodwill and Other Intangible Assets 410.3

Prepaid Expenses 31.0

Other Assets 20.0

Total Assets 479.5

Accrued Liabilities 24.4

Deferred Taxes 36.9

Other Liabilities 15.0

Total Liabilities $ 76.3

THE GATHERING and MONOPOLY which are reported within Franchise Brands, totaled $ 378.8 million and $ 365.3 million for the quarters ended March 27, 2022 and March 28, 2021, respectively.

(14) Restructuring Actions

During 2018, the Company announced a comprehensive restructuring plan which consisted of re-designing its go-to market strategy and re-shaping its organization to become a more responsive, innovative and digitally-driven play and entertainment company.

As part of this process the Company took certain restructuring actions which continued through 2019.

The actions primarily included headcount reduction aimed at right-sizing the Company’s cost-structure and giving it the ability to add required new talent in the future.

In the first nine months of 2020, the Company continued to streamline its commercial organization, and recorded severance of $ 11.5 million associated with these cost-savings initiatives.

During 2020, in connection with the eOne Acquisition, the Company recorded $ 32.5 million of severance and other employee charges related to the integration of eOne.

For the quarter and nine months ended September 27, 2020, the related charge was $ 1.4 million and $ 20.8 million, respectively, which was recorded within acquisition and related costs on the Consolidated Statements of Operations, and reported within Corporate and Eliminations.

The detail of activity related to the programs for the nine months ended September 26, 2021 is as follows:

2018 Restructuring & 2020 Commercial Program eOne Integration Program Other Total

Remaining amounts to be paid as of December 27, 2020 $ 17.3 16.9 0.8 $ 35.0

Payments made in the first nine months of 2021 ( 6.3 ) ( 8.8 ) — ( 15.1 )

Remaining amounts as of September 26, 2021 $ 11.0 8.1 0.8 $ 19.9

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

During 2018 and 2020, the Company took certain restructuring actions including headcount reduction aimed at right-sizing the Company’s cost-structure and integration actions related to the acquisition of eOne.

As of March 27, 2022, the Company had a remaining balance of $ 13.3 million in termination payments related to these programs.

(15) Subsequent Event

Leadership Matters

On October 12, 2021, we announced the passing of our leader and longtime Chairman and Chief Executive Officer, Brian D.

The Company’s Board of Directors (the "Board") has appointed Richard S.

Stoddart to serve as Hasbro’s interim CEO while the Board completes its process for appointing a permanent CEO.

Stoddart has served as a member of the Board since 2014, most recently as the Board’s Lead Independent Director and is the former President and Chief Executive Officer of global marketing execution firm InnerWorkings, Inc., serving in that role from 2017 until 2020 when InnerWorkings, Inc.

was acquired.

In addition to the appointment of Mr.

Stoddart, Tracy A.

Leinbach has been appointed to serve as Chair of the Board.

Leinbach has been a member of the Board since 2008.

Goldner’s employment agreement, we expect to incur additional compensation expense in the fourth quarter of 2021 due to the accelerated vesting of certain equity awards as a result of Mr.

Goldner's passing.

A description of Mr.

Goldner’s employment agreement can be found in the Company’s proxy statement filed with the SEC on April 1, 2021 and filed as an exhibit to our 2020 Form 10-K.

In future periods, we may incur additional compensation related expenses in connection with our succession plans and the appointment of a permanent CEO.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

On April 13, 2022, the Company announced that it entered into a definitive agreement with Fandom, Inc.

to purchase D&D Beyond for $ 146.3 million to be paid in cash.

D&D Beyond is the premier digital content platform for DUNGEONS & DRAGONS.

It is a rapidly growing role-playing game digital toolset that will become the hub for DUNGEONS & DRAGONS digital gaming.

The strategic acquisition of D&D Beyond is expected to deliver a direct relationship with fans, providing valuable, data-driven insights to unlock opportunities for growth in new product development, live services and tools, and regional expansions.

The transaction is subject to customary closing conditions, including obtaining required regulatory approvals, and is expected to close late in the second quarter or early in the third quarter of 2022.

The transaction will be funded out of cash on hand and is not expected to have a material impact on Hasbro's 2022 results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements