What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-28 compared with 2023-02-22 · 487 added, 443 removed, 1269 unchanged (42% of the section changed)

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We have audited the accompanying consolidated balance sheets of Hasbro, Inc.

and subsidiaries (the Company) as of December 25, 2022 and December 26, 2021, the related consolidated statements of operations, comprehensive earnings, cash flows, and shareholders’ equity and redeemable noncontrolling interests for each of the years in the three-year period ended December 25, 2022, and the related notes and financial statement schedule II - valuation and qualifying accounts (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2023 and December 25, 2022, the related consolidated statements of operations, comprehensive earnings, shareholders’ equity and redeemable noncontrolling interests, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule II - valuation and qualifying accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 25, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair value of the Power Rangers definite-lived intangible asset

As discussed in Note 1 and 6 to the consolidated financial statements, the Company reviews intangible assets with definite lives for impairment whenever events or changes in circumstances occur that indicate that the carrying value may not be recoverable.

The carrying value of definite-lived intangible assets as of December 25, 2022 was $738.9 million, a portion of which related to the Company’s Power Rangers definite-lived intangible asset.

During the fourth quarter of 2022, the Company recognized an impairment charge of $281.0 million related to its Power Rangers definite-lived intangible asset.

We identified the evaluation of the fair value of the Power Rangers definite-lived intangible asset as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the forecasted revenue and

discount rate assumptions used to estimate fair value.

The estimate of fair value was sensitive to changes in the discount rate.

In addition, valuation professionals with specialized skills and knowledge were required to assess the discount rate.

Fair value of the Family Brands reporting unit

As discussed in Note 6 to the consolidated financial statements, the goodwill balance at December 31, 2023 was $2,279.2 million, a portion of which related to the Family Brands reporting unit.

The Company performs an annual goodwill impairment assessment and, if an event occurs or circumstances change that indicate that the carrying value of a reporting unit may not be recoverable, the Company will perform an interim impairment test.

During the fourth quarter of 2023, the Company determined that a triggering event occurred following declines in the Company's financial forecast for the Family Brands reporting unit.

As such, the Company recognized an impairment charge of $960.0 million for the Family Brands reporting unit.

We identified the evaluation of the fair value of the Family Brands reporting unit as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the forecasted revenue, including the terminal

growth rate, and the discount rate used in the income approach, and the EBITDA market multiple assumption used in the market approach used to estimate fair value for the reporting unit.

The assessment of the forecasted revenue assumption was subjective as it is based largely on the outcome of uncertain future events.

Additionally, the estimate of fair value was sensitive to changes in the discount rate and EBITDA market multiple assumptions.

In addition, specialized skills and knowledge were required to assess the terminal growth rate, discount rate, and EBITDA market multiple assumptions.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the definite-lived intangible asset impairment process.

This included controls related to the development of the forecasted revenue and discount rate assumptions used to estimate fair value.

We assessed the Company’s ability to accurately estimate forecasted revenue by comparing historical forecasts to actual results.

We evaluated the reasonableness of forecasted revenue by comparing it to available external industry data and other internal information.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process.

This included controls related to the development of the forecasted revenue, discount rate, and EBITDA market multiple assumptions used to estimate fair value for the Family Brands reporting unit.

We evaluated the reasonableness of forecasted revenue for the reporting unit by comparing it to available external industry data and other internal information.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available data for comparable entities

• developing an estimate of the fair value of the intangible asset using the Company’s assumption of forecasted cash flows and an independently developed discount rate, which was then compared to the Company’s fair value estimate.

• evaluating the terminal growth rate by comparing it to publicly available market data

• evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available market data

• evaluating the appropriateness of the selected guideline public companies by researching the selected guideline public companies and reviewing the business description

• evaluating the EBITDA market multiple assumption by comparing to EBITDA market multiple ranges developed using publicly available market data for the selected guideline public companies

• developing an independent estimate of the fair value of the reporting unit using the income and market approaches, which was then compared to the Company’s fair value estimate.

We have not been able to determine the specific year that we began serving as the Company’s auditor, however, we are aware that we have served as the Company’s auditor since at least 1968.

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Total liabilities 5,453.9 6,434.0

Redeemable noncontrolling interests — 23.9

Shareholders’ equity

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Selling, distribution and administration 1,480.4 1,666.1 1,432.7

Impairment of goodwill

Loss on disposal of business

Acquisition and related costs — — 218.6

539.0 22.1 108.8

Total costs and expenses 6,542.1 5,449.0 5,657.1

Operating profit 407.7 763.3 501.8

Operating profit (loss)

( 1,538.8 ) 407.7 763.3

Non-operating expense (income):

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170.3 146.2 181.4

Earnings before income taxes 261.5 581.9 322.1

Income taxes 58.5 146.6 96.7

Net earnings 203.0 435.3 225.4

Net earnings attributable to noncontrolling interests ( 0.5 ) 6.6 2.9

Net earnings attributable to Hasbro, Inc.

Earnings (loss) before income taxes

( 1,709.1 ) 261.5 581.9

Income tax (benefit) expense

( 221.3 ) 58.5 146.6

Net earnings (loss)

( 1,487.8 ) 203.0 435.3

Net earnings (loss) attributable to noncontrolling interests

1.5 ( 0.5 ) 6.6

Net earnings (loss) attributable to Hasbro, Inc.

$ ( 1,489.3 ) 203.5 428.7

Per common share

Net earnings attributable to Hasbro, Inc.

Net earnings (loss) attributable to Hasbro, Inc.

Basic $ ( 10.73 ) 1.47 3.11

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2023 2022 2021

Net earnings $ 203.0 435.3 225.4

Net earnings (loss)

$ ( 1,487.8 ) 203.0 435.3

Other comprehensive earnings (loss):

Foreign currency translation adjustments, net of tax 59.4 ( 45.4 ) ( 61.9 )

Unrealized holding (losses) gains on available-for-sale securities, net of tax ( 0.3 ) ( 0.1 ) 0.6

Net gains on cash flow hedging activities, net of tax 10.2 13.5 2.4

Unrealized holding losses on available-for-sale securities, net of tax

— ( 0.3 ) ( 0.1 )

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

( 8.6 ) 10.2 13.5

Changes in unrecognized pension amounts, net of tax ( 0.9 ) 30.8 3.4

Reclassifications to earnings, net of tax:

Net (gains) losses on cash flow hedging activities ( 16.2 ) 2.6 ( 19.3 )

Net losses (gains) on cash flow hedging activities

3.8 ( 16.2 ) 2.6

Amortization of unrecognized pension and postretirement amounts ( 0.3 ) 1.3 2.2

Other comprehensive loss, net of tax ( 19.6 ) ( 40.3 ) ( 10.8 )

Total comprehensive earnings, net of tax 183.4 395.0 214.6

Total comprehensive (loss) earnings attributable to noncontrolling Interests ( 0.5 ) 6.6 2.9

Total comprehensive earnings attributable to Hasbro, Inc.

Other comprehensive earnings (loss), net of tax

53.4 ( 19.6 ) ( 40.3 )

Total comprehensive earnings (loss), net of tax

( 1,434.4 ) 183.4 395.0

Total comprehensive earnings (loss) attributable to noncontrolling interests

1.5 ( 0.5 ) 6.6

Total comprehensive earnings (loss) attributable to Hasbro, Inc.

$ ( 1,435.9 ) 183.9 388.4

See accompanying notes to consolidated financial statements.

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Cash flows from operating activities

Net earnings $ 203.0 435.3 225.4

Net earnings (loss)

$ ( 1,487.8 ) 203.0 435.3

Adjustments to reconcile net earnings to net cash provided by operating activities:

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Loss on disposal of business 539.0 22.1 108.8

Impairment of goodwill

Impairment of intangibles and production assets 116.0 281.0 —

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Fair value adjustment on Discovery Option — — ( 20.1 )

Inventory obsolescence

91.2 45.2 8.4

Amortization of intangible assets 83.0 105.3 116.8

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Decrease (increase) in accounts receivable 15.5 339.6 ( 159.5 )

(Increase) decrease in inventories ( 139.5 ) ( 173.9 ) 62.8

Decrease (increase) in inventories

257.1 ( 184.7 ) ( 182.3 )

Decrease (increase) in prepaid expenses and other current assets 34.7 17.0 ( 30.6 )

Program spend, net ( 408.0 ) ( 767.7 ) ( 697.3 )

Increase (decrease) in accounts payable and accrued liabilities ( 278.7 ) 313.2 49.3

(Decrease) increase in accounts payable and accrued liabilities

( 109.7 ) ( 278.7 ) 313.2

Change in net deemed repatriation tax ( 34.4 ) ( 18.4 ) ( 18.4 )

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Investments and acquisitions, net of cash acquired — ( 146.3 ) —

Proceeds from sale of business, net of cash — 378.5 —

Proceeds from sale of business, net of cash transferred

329.6 — 378.5

Other ( 2.7 ) 7.5 ( 3.8 )

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Cash flows from financing activities

Net proceeds from borrowings 3.8 144.0 1,112.6

Proceeds from borrowings

2.6 3.8 144.0

Repayments of borrowings ( 359.6 ) ( 206.0 ) ( 1,220.1 )

Net proceeds (repayments) of other short-term borrowings 141.7 ( 5.6 ) ( 8.6 )

Net (repayments) proceeds of other short-term borrowings

( 41.6 ) 141.7 ( 5.6 )

Purchases of common stock — ( 125.0 ) —

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Payments related to tax withholding for share-based compensation ( 16.8 ) ( 24.0 ) ( 13.7 )

Redemption of equity instruments — — ( 47.4 )

Debt extinguishment costs — — ( 9.1 )

Other ( 14.7 ) ( 32.7 ) ( 11.4 )

Net cash (utilized) provided by financing activities ( 553.3 ) ( 1,459.8 ) 405.9

Net cash utilized by financing activities

( 818.1 ) ( 553.3 ) ( 1,459.8 )

Effect of exchange rate changes on cash 7.2 ( 12.7 ) ( 30.6 )

Decrease in cash, cash equivalents and restricted cash ( 506.1 ) ( 430.5 ) ( 3,130.7 )

Increase (decrease) in cash, cash equivalents and restricted cash

32.3 ( 506.1 ) ( 430.5 )

Cash, cash equivalents and restricted cash at beginning of year 513.1 1,019.2 1,449.7

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Balance, December 27, 2020 $ 110.1 2,329.1 4,204.2 ( 195.0 ) ( 3,551.7 ) 40.0 $ 2,936.7 $ 24.4

Noncontrolling interests related to acquisition of eOne — — — — — 43.3 43.3 26.2

Net earnings attributable to Hasbro, Inc.

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Net earnings attributable to noncontrolling interests — — — — — 3.3 3.3 3.3

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

Change in put option value

— ( 1.3 ) — — — — ( 1.3 ) —

Other comprehensive loss — — — ( 40.3 ) — — ( 40.3 ) —

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— — 203.5 — — — 203.5 —

Net earnings attributable to noncontrolling interests — — — — — 3.3 3.3 3.3

Net earnings (loss) attributable to noncontrolling interests

— — — — — ( 1.1 ) ( 1.1 ) 0.6

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

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Distributions paid to noncontrolling owners and other foreign exchange — — — — — ( 2.5 ) ( 2.5 ) ( 1.9 )

Purchase of common stock

— — — — ( 125.0 ) — ( 125.0 ) —

Buyout of redeemable noncontrolling interest

— 4.5 — — — ( 4.5 ) — ( 22.6 )

Balance, December 25, 2022 $ 110.1 2,540.6 4,071.4 ( 254.9 ) ( 3,634.4 ) 29.1 $ 2,861.9 $ —

Net earnings attributable to Hasbro, Inc.

Net loss attributable to Hasbro, Inc.

— — ( 1,489.3 ) — — — ( 1,489.3 ) —

Net earnings (loss) attributable to noncontrolling interests — — — — — ( 1.1 ) ( 1.1 ) 0.6

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

Other comprehensive loss — — — ( 19.6 ) — — ( 19.6 ) —

Net earnings attributable to noncontrolling interests

— — — — — 1.5 1.5 —

Other comprehensive earnings

— — — 53.4 — — 53.4 —

Stock-based compensation transactions — ( 23.1 ) — — 6.2 — ( 16.9 ) —

Purchase of common stock — — — — ( 125.0 ) — ( 125.0 ) —

Stock-based compensation expense — 69.9 — — 2.5 — 72.4

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Actual results could differ from those estimates.

Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation.

These reclassifications did not impact any prior amounts of net earnings (loss) or cash flows.

Principles of Consolidation

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Hasbro’s fiscal year ends on the last Sunday in December.

The fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 were all fifty-two week periods.

Blueprint 2.0 and Operational Excellence Charges

On October 4, 2022, the Company announced the results of its strategic review, Blueprint 2.0, a new customer-centric approach focusing on fewer, bigger brands, expanded licensing, branded entertainment, and high-margin growth in games, digital and direct.

As the Company began implementing this new strategy, charges of $ 322.4 million were recorded for the year ended December 25, 2022, consisting of:

a loss associated with the disposal of non-core businesses within the Entertainment segment of $ 21.1 million included within Loss on Disposal of Business;

asset impairments and charges within the Corporate and Other segment of $ 281.3 million, of which $ 281.0 million relates to a partial impairment of the Company's definite-lived Power Rangers intangible asset, in Selling, Distribution and Administration;

incurred incremental asset charges related to inventory reserve and asset write offs of $ 14.9 million in Cost of Sales within the Consumer Products segment;

and, strategy related asset impairments within the Entertainment segment of $ 4.1 million related to the discontinuation of certain projects.

The businesses exited do not constitute a material part of the Company's operations.

See note 6 for further information.

In support of Blueprint 2.0, the Company also announced an Operational Excellence program.

Charges of $ 106.4 million were recorded for the year ended December 25, 2022 related to this program, consisting of severance and other employee charges of $ 94.1 million and program related transformation office and consulting fees of $ 12.3 million included within Selling, Distribution, and Administration within the Corporate and Other segment.

D&D Beyond Acquisition

On May 19, 2022, the Company acquired D&D Beyond, a strategic, complementary acquisition of the premier digital content platform for DUNGEONS & DRAGONS, which has accelerated our direct-to-fans capability for DUNGEONS & DRAGONS in physical and digital play.

The all-cash transaction in the amount of $ 146.3 million was funded with cash on hand.

The allocation of assets acquired includes $ 81.4 million to intangible assets, $ 64.7 million to goodwill, with the remainder allocated to property, plant, and equipment.

The fiscal year ended December 31, 2023 was a fifty-three week period.

The fiscal years ended December 25, 2022, and December 26, 2021 were each fifty-two week periods.

Strategy Review and Operational Excellence

In October 2022, following a several months long review of our business, the Company announced a new strategic plan, a consumer-centric framework for bringing compelling and expansive brand experiences to audiences around the world.

During the review, with the assistance of a third-party consultant, the Company identified opportunities to focus and scale its business, enhance operational excellence, including through specialized organizational programs and supply chain transformation, to drive growth and profit and enhance shareholder value.

The Company is increasing strategic investment in its most valuable and profitable franchises across toys, games, licensing and entertainment, and exiting certain non-core aspects of the business.

Sale of Non-core Entertainment One Film and TV Business

On December 27, 2023, the Company completed the sale of its Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc.

and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate"), pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate.

Lionsgate acquired eOne Film and TV for a purchase price of $ 375.0 million in cash, subject to certain purchase price adjustments plus the assumption by Lionsgate of production financing loans.

See note 3 for additional information.

Brand Portfolio Realignment

Effective for the first quarter 2023, we realigned our brand portfolios to correspond with the evolution of our strategy.

We are focusing on fewer, bigger, more profitable brands that showcase our leadership in preschool toys, action figures and accessories, games, arts & crafts, and outdoor action brands.

Our new product categories beginning in the first quarter of 2023 are as follows:

Franchise Brands - A refreshed group of our most financially significant brands which we consider to have the greatest long-term potential including MAGIC:

THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS and PEPPA PIG.

Partner Brands - The Partner Brands category includes those brands we license from other parties such as Disney's STAR WARS and MARVEL brands as well as other partners, for which we develop toy and game products, with a focus on those key Partner Brands that give us the largest growth potential and where we can lead and innovate in the category.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Portfolio Brands - Our Portfolio Brands category includes those brands we own or control which we feel have upside in revenue and profitability that have not yet grown to the significance of a franchise brand .

Non-Hasbro Branded Film & TV - The Non-Hasbro Branded Film & TV category includes non-Hasbro-branded film, TV and other entertainment related revenues, the majority of which are associated with the Company's non-core eOne Film and TV business sold to Lionsgate.

All Hasbro-branded content is included in the portfolios noted above.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include all cash balances and highly liquid investments purchased with an initial maturity to the Company of three months or less.

Under the Company's production financing facilities, certain of the Company's cash is restricted while the financing is outstanding.

At December 25, 2022, $ 14.5 million of the Company's cash was restricted by such facilities.

See Production Financing below and notes 9 and 11 for further details.

Marketable Securities

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This type of investment is also included in Prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Accounts Receivable and Allowance for Credit Losses

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Management's estimate of expected credit losses is based on its assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging and customer disputes.

Accounts receivable, net on the consolidated balance sheet represents amounts due from customers less the allowance for credit losses as well as allowances for discounts, rebates and returns.

Accounts receivable, net on the Consolidated Balance Sheets represents amounts due from customers less the allowance for credit losses as well as allowances for discounts, rebates and returns.

Inventories are valued at the lower of cost (first-in, first-out) or net realizable value.

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The Company has determined that it does not meet the control requirements to consolidate the Network and accounts for the investment using the equity method of accounting.

During the fourth quarter of 2021, the Company reviewed its investment in the Network for impairment and concluded that the fair value of the Company's interest in the joint venture was less than its carrying value, and as such, recorded an impairment loss of $ 74.1 million, which is included in other expense (income), net in the consolidated statements of operations for the year ended December 26, 2021.

This impairment was caused by the impact of accelerating changes in the cable distribution industry.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company and Discovery are also party to an option agreement with respect to the Network.

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Unrealized gains and losses on this option are recognized in Other expense (income), net in the Consolidated Statements of Operations as they occur.

In 2021, as a result of the impairment loss recognized on the investment in the Network, the Company adjusted the option's fair value resulting in a $ 20.1 million gain.

See notes 7 and 14 for additional information.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Noncontrolling Interests

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During 2022, the Company redeemed all outstanding redeemable noncontrolling interest in Renegade Entertainment, LLC, the only entity for which the Company previously held redeemable noncontrolling interest.

During 2022, the Company's outstanding non-redeemable noncontrolling interest in Round Room Live, LLC was included with the disposition of certain non-core businesses associated with the Company's Blueprint 2.0 strategy shift.

The value of the non-redeemable noncontrolling interests is presented in the Consolidated Balance Sheets within Total shareholders' equity.

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The annual goodwill test begins with a qualitative assessment, where qualitative factors and their impact on critical inputs are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If the Company determines that a reporting unit has an indication of impairment based on the qualitative assessment, it is required to perform a quantitative assessment.

During the third quarter of 2022, the Company determined to exit certain non-core businesses within the Entertainment segment.

A revaluation of the effected businesses resulted in a pre-tax non-cash goodwill impairment charge of $ 11.8 million, recorded within Loss on Disposal of Business in the Consolidated Statement of Operations, and within the Entertainment segment for the year ended December 25, 2022.

During the fourth quarter of 2022 the Company performed a qualitative goodwill assessment with respect to each of its reporting units and determined that the fair values of the Company’s reporting units exceeded their

If the Company determines that a reporting unit has an indication of impairment based on the qualitative assessment, a quantitative impairment assessment is performed.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

carrying values.

As a result of this assessment, the Company concluded that, other than the Loss on Disposal goodwill impairment noted above, there was no other impairment to any of its reporting units.

Accordingly, no goodwill impairment was recorded as a result of the qualitative test for the year ended December 25, 2022.

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

Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment.

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.

(See note 6 for details on the allocation of goodwill across the Company's reporting structure.)

In the third of quarter 2021, the Company sold eOne Music for net proceeds of $ 397.0 million.

The Company acquired eOne Music through its acquisition of eOne in 2020.

Based on the value of the net assets held by eOne Music, which included certain goodwill and intangible assets allocated to the eOne reportable segment and attributable to eOne Music, the Company recorded a pre-tax non-cash goodwill impairment charge of $ 108.8 million within Loss on Disposal of Business on the Consolidated Statements of Operations for the year ended December 26, 2021.

See note 6 for details on the eOne Music goodwill impairment.

Prior to its 2021 annual impairment test, the Company had not performed a quantitative assessment of goodwill since 2013.

Given the length of time since the last quantitative analysis, as well as the changes that have occurred within its goodwill balances since that time, the Company elected to perform a quantitative assessment of goodwill for each reporting unit in the fourth quarter of 2021.

Based on the quantitative assessment with respect to each of its reporting units, the Company determined that the fair values of its reporting units exceeded their carrying values.

As a result of this assessment, the Company concluded that there was no impairment to any of its reporting units.

Accordingly, other than the Music goodwill impairment loss noted above, there was no goodwill impairment recorded for the year ended December 26, 2021.

The Company's intangible assets having definite lives are being amortized over periods ranging from two to nineteen years , primarily using the straight-line method.

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If such assets were considered to be impaired, the impairment to be recognized would be measured by the amount by which the carrying value of the assets exceeds their fair value wherein that fair value is determined based on discounted cash flows.

During the fourth quarter of 2022, following the decision to cancel certain projects in conjunction with the Company's Blueprint 2.0 strategy shift, it was determined that there was a partial impairment of the Company's definite-lived Power Rangers intangible asset.

As a result, a charge of $ 281.0 million was recorded during the fourth quarter of 2022 within Selling, Distribution and Administration in the Corporate and Other segment.

There were no other triggering events in 2022 or 2021 which would indicate the Company's intangible assets were impaired.

During 2020, the Company determined that certain of its definite-lived intangible entertainment and production assets related to properties, from both the legacy Hasbro business as well as properties acquired through the eOne acquisition, were impaired.

It was determined that the carrying values of these intangible assets exceeded their related future cash flows.

As a result, charges of $ 20.0 million and $ 30.7 million were recorded in the first and fourth quarters, respectively, within Acquisition and Related Costs in the Company's Consolidated Statement of Operations.

The Company's reporting units are determined in accordance with the provisions of Accounting Standards Codification (“ASC”) 350, “Intangibles - Goodwill and Other (Topic 350).” The Company performs its annual impairment testing of goodwill and definite-lived intangible assets during the fourth quarter of each year.

See note 6 for additional information on the results of the Company’s impairment tests.

Financial Instruments

Hasbro’s financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities.

At December 25, 2022, the carrying cost of these instruments approximated their fair value.

The Company’s financial instruments at December 25, 2022 also include long-term borrowings (see note 11 for carrying cost and related fair values) as well as certain assets and liabilities measured at fair value (see notes 14 and 18).

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2023, the carrying cost of these instruments approximated their fair value.

The Company’s financial instruments as of December 31, 2023 also include long-term borrowings (see note 11 for carrying cost and related fair values) as well as certain assets and liabilities measured at fair value (see notes 14 and 18).

Production Financing

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Under these facilities, certain of the Company's cash is restricted while the financing is outstanding.

At December 25, 2022, $ 14.5 million of the Company's cash was restricted by such facilities.

For further details, see note 11.

All of the Company's individual production loan and the senior revolving credit facility dedicated to production financing were assumed by Lionsgate effective upon the closing of the sale of the eOne Film and TV business in the fourth quarter of 2023.

For further details, see notes 3 and 11.

Revenue Recognition

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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.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The majority of the Company’s revenues are derived from sales of finished products to customers.

Revenues from sales of finished products to customers accounted for 76 % , 74 % and 77 % of the Company’s revenues for the years ended December 25, 2022 , December 26, 2021 and December 27, 2020, respectively.

Revenues from sales of finished products to customers accounted for 75 % , 76 % and 74 % of the Company’s revenues for the fiscal years ended 2023 , 2022 and 2021, respectively.

When determining whether control of the finished products has transferred to the customer, the Company considers any future performance obligations.

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When the arrangement includes a minimum guarantee, the Company records the minimum guarantee on a ratable basis over the term of the license period and does not record the sales-based or usage-based royalty revenues until they exceed the minimum guarantee.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

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

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The end users make in-application purchases of virtual currencies, with such purchased virtual currencies to be used in the games.

In addition, the Company offers a subscription service for D&D Beyond that provides access to a variety of added benefits, typically for a recurring monthly, semi-annual, or annual fee.

The Company records revenues from in-application purchases based on either the usage patterns of the players or the player’s estimated life, depending on the nature of the game item purchased in exchange for virtual currency.

For items recognized over the player's estimated life, the Company currently recognizes digital game's revenues ratably within six months of purchase.

For items recognized over the player's estimated life, the Company currently recognizes digital game's revenues ratably within six months of purchase, while revenue received from subscription services is

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

recognized ratably over the subscription term.

The Company controls all aspects of the digital goods delivered to the consumer.

The Company also develops certain digital games available for online and offline play, such as Dungeons & Dragons:

Dark Alliance, which are delivered to customers through digital downloads or as physical discs compatible for play through various gaming platforms.

Initially these game purchases may come with future software updates to be delivered as needed, or additional downloadable content, delivered when made available by the Company.

For these games, the Company allocates the revenue to the identified performance obligations.

For the software license performance obligation, the Company recognizes revenue when control of the gaming license has been transferred to the customer, typically at the time of purchase.

If applicable, revenue related to future downloadable content or software updates is recognized ratably over the estimated service period.

Costs of Sales

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The current portion of MGs are recorded as Payables and accrued liabilities and the long-term portion are recorded as Other liabilities.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Substantially all of the Company’s non-Hasbro branded productions, and all of the Company's acquired content rights, were included with the eOne Film and TV business sold to Lionsgate in the fourth quarter of 2023.

The Company retained all Hasbro-branded content and will continue to develop and produce animation, digital shorts, scripted TV and theatrical films for audiences related to core Hasbro IP.

The Company enters into license agreements with strategic partners, inventors, designers and others for the use of intellectual properties in its products.

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Operating lease assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent an obligation to make lease payments according to the terms of the lease.

Operating lease assets and liabilities are recognized at the inception of the lease agreement based on the estimated present value of lease payments over the lease term, using our incremental borrowing rate based on information available on the lease commencement date.

Operating lease assets and liabilities are recognized at the inception of the lease agreement based on the estimated present value

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Notes to Consolidated Financial Statements — (Continued)

of lease payments over the lease term, using our incremental borrowing rate based on information available on the lease commencement date.

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

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A valuation allowance is recorded to reduce deferred tax assets to the net amount believed to be more likely than not to be realized.

As of December 25, 2022, the valuation allowance of $ 189.8 million was primarily related to net operating losses acquired as part of the eOne acquisition.

As of December 31, 2023, the Company recorded a valuation allowance of $ 432.0 million primarily related to the U.S.

capital loss resulting from the sale of the Company’s eOne Film and TV business during the year.

If it is determined that our deferred tax assets will be realizable in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company uses a two-step process for the measurement of uncertain tax positions that have been taken or are expected to be taken in a tax return.

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Other gains and losses resulting from translation of financial statements are a component of Other comprehensive earnings (loss).

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Notes to Consolidated Financial Statements — (Continued)

Pension Plans, Postretirement and Postemployment Benefits

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The dividend equivalent value of forfeitable DEUs is treated as a reduction of retained earnings or, if the Company is in a retained deficit position, as a reduction of additional paid-in capital.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Risk Management Contracts

Hasbro uses foreign currency forward and option 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 purchases of inventory, product sales, television and film production costs and production financing as well as other cross-border currency requirements not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling.

These over-the-counter contracts, which hedge future purchases of inventory, product sales, as well as other cross-border currency requirements not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling.

All contracts are entered into with a number of counterparties, all of which are major financial institutions.

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The Company formally documents all relationships between hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking various hedge transactions.

All hedges designated as cash flow hedges are linked to forecasted transactions and the Company assesses, both at the inception of the hedge and on an on-going basis, the effectiveness of the derivatives used in hedging transactions in offsetting changes in the cash flows of the forecasted transaction.

All hedges designated as cash flow hedges are linked to forecasted transactions and the Company assesses, both at the inception of the

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Notes to Consolidated Financial Statements — (Continued)

hedge and on an on-going basis, the effectiveness of the derivatives used in hedging transactions in offsetting changes in the cash flows of the forecasted transaction.

The Company records all derivatives, such as foreign currency exchange contracts, on the Consolidated Balance Sheets at fair value.

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Options and restricted stock unit awards totaling 2.5 million, 2.7 million and 2.2 million for 2023, 2022, and 2021, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Of the fiscal 2023 amount, 1.6 million shares would have been included in the calculation of diluted shares had the Company not had a net loss for the year ended December 31, 2023.

Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 0.2 million shares being included in the diluted earnings per share calculation for the year ended December 31, 2023 .

A reconciliation of net earnings and average number of shares for each of the three fiscal years ended December 31, 2023 is as follows:

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(In millions, except per share data) Basic Diluted Basic Diluted Basic Diluted

Net earnings attributable to Hasbro, Inc.

Net earnings (loss) attributable to Hasbro, Inc.

$ ( 1,489.3 ) ( 1,489.3 ) 203.5 203.5 428.7 428.7

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Equivalent shares 138.8 138.8 138.7 138.9 138.0 138.4

Net earnings per share attributable to Hasbro, Inc.

Net earnings (loss) per share attributable to Hasbro, Inc.

$ ( 10.73 ) ( 10.73 ) 1.47 1.46 3.11 3.10

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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.

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, through in-application purchases or through subscription services.

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

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

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Recognized in current year 478.6

Amounts reclassified to accounts receivable ( 855.1 )

Amounts reclassified (1)

Assets disposed (2)

Foreign currency impact 16.8

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Current year amounts reclassified to revenue ( 224.3 )

Dispositions ( 4.0 )

Liabilities disposed (1)

Foreign currency impact ( 2.3 )

Ending Balance $ 230.8

(1) These amounts are primarily related to balances reclassified to Accounts receivable.

(2) See note 3 for additional information on the sale of the eOne film and TV business.

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Notes to Consolidated Financial Statements — (Continued)

Unsatisfied Performance Obligations

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As of December 31, 2023, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future was $ 11.7 million.

Of this amount, we expect to recognize approximately $ 225.8 million in 2023, $ 44.3 million in 2024, and $ 4.0 million in 2025.

Of this amount, we expect to recognize approximately $ 6.6 million in 2024 and $ 5.1 million in 2025.

These amounts include only fixed consideration.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Accounts Receivable and Allowance for Credit Losses

The Company’s balance for accounts receivable on the Consolidated Balance Sheets as of December 31, 2023 and December 25, 2022 are primarily from contracts with customers.

The Company had no material expense for credit losses in the years ended December 25, 2022, December 26, 2021, or December 27, 2020.

The Company had no material expense for credit losses in the fiscal years ended 2023, 2022, or 2021.

Disaggregation of revenues

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

Tabletop Gaming and Digital and Licensing Gaming;

Tabletop Gaming and Digital and Licensed Gaming;

and within its Entertainment segment by category:

Film & TV, Family Brands, and Music and Other.

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

Franchise Brands, Partner Brands, Hasbro Gaming, Emerging Brands and TV/Film/Entertainment.

Film & TV, Family Brands, and Other.

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

Franchise Brands, Partner Brands, Portfolio Brands, and Non-Hasbro Branded Film & TV.

We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

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In addition to the required disclosures below, see further discussion of the Company's revenue recognition policy in note 1.

(3) Business Combination

On December 30, 2019, the Company completed its acquisition of Entertainment One ("eOne"), a global independent studio that specializes in the development, acquisition, production, 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 11 for further discussion of the issuance of the senior unsecured notes and term loan agreement.

eOne's results of operations and financial position have been included in the Company's consolidated financial statements and accompanying footnotes beginning on December 30, 2019, the date of the acquisition, and the start of the Company's fiscal year 2020.

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.

Goodwill in the amount of $ 3.2 billion was recorded as a result of the acquisition, which is the excess of the purchase price over those fair values and represents the value placed on the combined company’s brand building capabilities, 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 6 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.

In 2020, the Company incurred charges of $ 218.6 million related to the eOne acquisition recorded in acquisition and related costs within the Company’s Consolidated Statement of Operations, of which $ 133.2 million.

were recorded within the Entertainment segment and the remaining charges were recorded within the Corporate and Other segment.

(3) Sale of Non-core Entertainment One Film and TV Business

In connection with Blueprint 2.0, and after evaluating its portfolio of businesses, the Company determined that the eOne Film and TV business, which was included within the Entertainment segment, was no longer aligned with its current long-term strategy and during the third quarter of 2023, the Company entered into a definitive agreement to sell the business to Lionsgate, subject to the satisfaction of customary net working capital closing conditions and holdbacks for certain retained liabilities.

On December 27, 2023, the Company completed the sale of eOne Film and TV to Lionsgate, pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate.

Lionsgate acquired eOne Film and TV for a purchase price of $ 375.0 million in cash, subject to certain purchase price adjustments plus the assumption by Lionsgate of production financing loans.

See note 11 for additional information.

The Company acquired eOne Film and TV through its acquisition of eOne in December 2019.

Based on the value of the net assets held by the film and television business, which included goodwill and intangible assets allocated as part of the eOne acquisition, the Company recorded a pre-tax non-cash charge of $ 539.0 million within Loss on disposal of business on the Consolidated Statements of Operations for the year ended December 31, 2023.

The Company also recorded pre-tax cash transaction expenses of $ 35.1 million within Selling, distribution and administration expense on the Consolidated Statements of Operations for the year ended December 31, 2023.

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

The operations of eOne Film and TV 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 Film and TV did not represent an individually significant component of the Company’s business.

As a result, income from operations before income taxes, attributable to eOne Film and TV, was recorded to the Company's Consolidated Statements of Operations, within the Entertainment segment, through the sale transaction closing date.

Assets of $ 1.5 billion and liabilities of $ 542.0 million, attributable to eOne Film and TV, were de-consolidated as of the closing date and, as of December 31, 2023, there are no remaining carrying amounts within the Company's Consolidated Balance Sheets.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

See note 3 to the consolidated financial statements included in Part ll, Item 8.

Financial Statements , of the Company's Form 10-K for the year ended December 27, 2020 for further information on the Company's acquisition of eOne.

The following table presents the carrying amounts of the major classes of eOne Film and TV assets and liabilities sold on December 27, 2023:

(In millions) December 27, 2023

Cash and cash equivalents

Accounts receivable

Other current assets

Property, plant and equipment

Total assets sold

Liabilities sold:

Short-term borrowings

Current portion of long-term debt

Accounts payable and accrued liabilities

Long-term debt

Other liabilities

Total liabilities sold

The following table summarizes loss before income taxes attributable to eOne Film and TV through the date of the transaction:

(In millions) 2023 (1)

eOne Film and TV loss before income taxes

$ ( 371.6 ) $ ( 7.3 ) $ ( 10.3 )

(1) Income before taxes includes operating results prior to the close of the sale of the Film and TV Business on December 27, 2023.

(4) Other Comprehensive Earnings (Loss)

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Other comprehensive earnings (loss), tax effect:

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

Tax expense on cash flow hedging activities ( 1.3 ) ( 1.0 ) ( 3.4 )

Tax (expense) benefit on foreign currency translation amounts

Tax benefit on unrealized holding gains

Tax benefit (expense) on cash flow hedging activities

2.8 ( 1.3 ) ( 1.0 )

Tax (expense) benefit on changes in unrecognized pension amounts ( 5.9 ) ( 1.5 ) 2.6

Tax expense on foreign currency translation amounts

Tax expense on changes in unrecognized pension amounts

— ( 5.9 ) ( 1.5 )

Reclassifications to earnings, tax effect:

Tax expense (benefit) on cash flow hedging activities 1.6 ( 0.5 ) 4.3

Tax benefit on amortization of unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations ( 0.3 ) ( 0.6 ) ( 0.8 )

Tax (benefit) expense on cash flow hedging activities

( 1.9 ) 1.6 ( 0.5 )

Tax expense (benefit) on amortization of unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations

0.1 ( 0.3 ) ( 0.6 )

Total tax effect on other comprehensive earnings (loss) $ 1.0 ( 5.8 ) ( 10.8 )

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Gains (Losses) on Derivative Instruments

At December 25, 2022, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $ 3.0 million in AOCE.

These instruments hedge payments related to inventory purchased in the fourth quarter of 2022 or forecasted to be purchased in 2023, intercompany expenses expected to be paid or received during 2023, 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 fourth quarter of 2022 or forecasted to be made in 2023.

As of December 31, 2023, the Company had remaining net deferred losses on foreign currency forward contracts, net of tax, of $ 2.5 million in AOCE.

These instruments hedge payments related to inventory purchased in the fourth quarter of 2023 or forecasted to be purchased in 2024, intercompany expenses expected to be paid or received during 2024 and cash receipts for sales made at the end of the fourth quarter of 2023 or forecasted to be made in 2024.

These amounts will be reclassified into the Consolidated Statements of Operations upon the sale of the related inventory or recognition of the related sales expenses.

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 11), 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 December 25, 2022, deferred losses, net of tax, of $ 14.9 million related to these instruments remained in AOCE.

For the year ended December 25, 2022, losses, net of tax of $ 0.7 million related to these hedging instruments were reclassified from AOCE to net earnings.

For the years ended December 26, 2021 and December 27, 2020, losses, net of tax of $ 1.0 million and $ 1.4 million, respectively, related to these hedging instruments were reclassified from AOCE to net earnings.

Of the net deferred gains included in AOCE at December 25, 2022, the Company expects net gains of approximately $ 1.3 million to be reclassified to the consolidated statements of operations within the next 12 months.

As of December 31, 2023, deferred losses, net of tax, of $ 14.2 million related to these instruments remained in AOCE.

For the years ended December 31, 2023 and December 25, 2022, losses, net of tax of $ 0.7 million related to these hedging instruments were reclassified from AOCE to net earnings.

For the year ended December 26, 2021, losses, net of tax of $ 1.0 million, respectively, related to these hedging instruments were reclassified from AOCE to net earnings.

Of the net deferred losses included in AOCE as of December 31, 2023, the Company expects net losses of approximately $ 2.0 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 notes 16 and 18 for additional discussion on reclassifications from AOCE to earnings.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

See notes 16 and 18 for additional discussion on reclassifications from AOCE to earnings.

(5) Property, Plant and Equipment

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(6) Goodwill and Intangible Assets

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

Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment.

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 changes in relative fair values of the respective reporting units.

Changes in the carrying amount of goodwill, by operating segment, for the years ended December 31, 2023 and December 25, 2022 are as follows:

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Balance at December 25, 2022 $ 1,584.7 371.5 1,513.9 3,470.1

Acquired during the period — 64.7 — 64.7

Impairment during the period

— — ( 1,191.2 ) ( 1,191.2 )

Foreign exchange translation ( 2.4 ) 0.2 2.5 0.3

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

Goodwill allocation 199.4 254.2 ( 453.6 ) —

Goodwill associated with disposal of business — — ( 162.2 ) ( 162.2 )

Acquired during the period

— 64.7 — 64.7

Impairment during the period — — ( 11.8 ) ( 11.8 )

1 unchanged sentence

Balance at December 25, 2022 $ 1,584.7 371.5 1,513.9 3,470.1

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

A portion of the Company’s goodwill and other intangible assets reside in the Corporate segment of the business.

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In addition, if an event occurs or circumstances change that indicate that the carrying value may not be recoverable, the Company will perform an interim impairment test at that time.

On May 19, 2022, the Company completed its acquisition of D&D Beyond for $ 146.3 million, which was funded with cash on hand.

Based on the valuation of these assets, $ 64.7 million was allocated to goodwill within the Wizards of the Coast and Digital Gaming segment during the second quarter of 2022.

During the second quarter of 2023, the Company determined that a triggering event occurred following a downward revision of the Company's financial forecast for its Film and TV business.

As a result, the Company performed a quantitative impairment test and determined that the Film and TV reporting unit within the Company's Entertainment segment was impaired.

During the second quarter of 2023, the Company recorded a pre-tax non-

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

cash impairment charge of $ 231.2 million as the carrying value of the Film and TV reporting unit exceeded its expected fair value, as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates.

This impairment charge was recorded within Impairment of goodwill, within the Consolidated Statement of Operations, and within the Entertainment segment for the year ended December 31, 2023.

During the fourth quarter of 2023, the Company determined that a triggering event occurred following declines in the Company's financial forecast for the Family Brands reporting unit.

The downward forecast revision reflects a lower profitability forecast for the PJ MASKS franchise as described below, and a change in outlook for the Company's owned and operated production efforts that shifted the Entertainment strategy to an asset lite and partner led model.

As a result, the Company performed a quantitative goodwill impairment test of the Family Brands reporting unit and determined it was impaired as its carrying value exceeded its fair value.

As such, during the fourth quarter of 2023, the Company recorded a pre-tax non-cash impairment charge of $ 960.0 million in Impairment of goodwill, within the Consolidated Statement of Operations, and within the Entertainment segment for the year ended December 31, 2023.

During the fourth quarter of 2023, the Company performed a qualitative goodwill assessment with respect to each of its reporting units.

Based on its qualitative assessments, the Company determined, other than the goodwill impairments of the Film and TV and Family Brands reporting units described above, it is not more likely than not that the carrying values exceed the fair values for any of its reporting units.

As a result, during 2023 the Company concluded it was not necessary to perform a quantitative test for impairment of goodwill for any reporting unit, other than Film and TV and Family Brands as described above.

During the third quarter of 2022, the Company determined to exit certain non-core businesses within the Entertainment segment.

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Accordingly, no goodwill impairment was recorded as a result of the qualitative test for the year ended December 25, 2022.

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 $ 108.8 million, during 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.

There were no underlying business conditions that provided an indication of the existence of impairment.

During the fourth quarter of 2021 the Company performed a quantitative goodwill assessment with respect to each of its reporting units and determined that the fair values of the Company’s reporting units exceeded their carrying values.

As a result of this assessment, the Company concluded that, other than the Music goodwill impairment loss noted above, there was no other impairment to any of its reporting units.

Accordingly, no goodwill impairment was recorded as a result of the quantitative test for the year ended December 26, 2021.

In the third of quarter 2021, the Company sold eOne Music for net proceeds of $ 397.0 million.

The Company acquired eOne Music through its acquisition of eOne in 2020.

Based on the value of the net assets held by eOne Music, which included certain goodwill and intangible assets allocated to the eOne reportable segment and attributable to eOne Music, the Company recorded a pre-tax non-cash goodwill impairment charge of $ 108.8 million within Loss on disposal of business on the Consolidated Statements of Operations for the year ended December 26, 2021.

See note 6 for details on the eOne Music goodwill impairment.

During the fourth quarter of 2021 the Company performed a quantitative goodwill assessment with respect to each of its reporting units and determined that the fair values of its reporting units exceeded their carrying values.

As a result of this assessment, the Company concluded that there was no impairment to any of its reporting units.

Accordingly, other than the Music goodwill impairment loss noted above, there was no goodwill impairment recorded for the year ended December 26, 2021.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Other Intangible Assets, Net

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The Company tests these assets for impairment on an annual basis in the fourth quarter of each year or when an event occurs or circumstances change that indicate that the carrying value may not be recoverable.

The Company completed its annual impairment tests of definite-lived

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

intangible assets in the fourth quarter of 2022 and 2021, concluding that there was no impairment of these assets.

The Company completed its annual impairment tests of definite-lived intangible assets in the fourth quarter of 2023 and 2022, concluding that there was no impairment of these assets.

The Company’s other intangible assets are amortized over their remaining useful lives, and accumulated amortization of these other intangibles is reflected in Other intangible assets, net in the accompanying Consolidated Balance Sheets.

Intangible assets are reviewed for indications of impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

During the fourth quarter of 2022, following the Company's Blueprint 2.0 strategy shift with a focus on fewer, bigger, better brands, it was determined that there was a partial impairment of the Company's definite-lived Power Rangers intangible asset as the approach to prioritize other brands in film development resulted in lower than expected cash flow related to the brand.

Using the discounted cash flow method under the income approach to determine fair value, changes to anticipated revenues and related cash flows led to the determination that the carrying value of this intangible asset exceeded its fair value, thus resulting in an impairment.

Charges of $ 281.0 million were recorded in the fourth quarter of 2022 within Selling, Distribution and Administration within the Corporate and Other segment.

During the second quarter of 2023, in connection with the Company's quantitative goodwill impairment test of its Film and TV reporting unit described above, it was determined that there was an impairment of the Company's definite-lived intangible eOne Trademark as the Film and TV reporting unit produces content under, and is synonymous with the eOne name.

As a result, a non-cash intangible asset impairment charge of $ 65.0 million was recorded in Selling, distribution and administration expense, within the Entertainment segment, within the Consolidated Statements of Operations for the year ended December 31, 2023.

During the fourth quarter of 2023, due to challenging retail conditions and competitive market conditions leading to a reduction in brand profitability, the Company lowered its future revenue and costs estimates associated with its PJ MASKS brand as determined using a discounted cash flow model.

As a result, the Company performed a quantitative goodwill impairment test of the PJ MASKS definite-lived intangible asset and determined it was impaired as its carrying value exceeded its fair value.

As such, the Company recorded a $ 51.0 million impairment charge, recorded in Selling, distribution and administration within the Entertainment segment for the year ended December 31, 2023.

During the fourth quarter of 2022, following the decision to cancel certain projects in conjunction with the Company's strategy shift, it was determined that there was a partial impairment of the Company's definite-lived Power Rangers intangible asset.

As a result, a charge of $ 281.0 million was recorded during the fourth quarter of 2022 within Selling, distribution and administration in the Corporate and Other segment.

There were no other triggering events in 2023 or 2022 that would indicate the Company's intangible assets were impaired.

The Company will continue to incur amortization expense related to the use of acquired and licensed rights to produce various products.

A portion of the amortization of these product rights will fluctuate depending on brand activation, related revenues during an annual period and future expectations, as well as rights reaching the end of their useful lives.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

their useful lives.

The Company currently estimates amortization expense related to the above intangible assets for the next five years to be approximately:

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As of December 31, 2023 and December 25, 2022, the Company’s investment in the Network totaled $ 102.0 million and $ 120.8 million, respectively.

During the fourth quarter of 2021, the Company reviewed its investment with Discovery for impairment and concluded that the fair value of the Company's interest in the joint venture was less than its carrying value, and as such, recorded an impairment loss of $ 74.1 million, which is included in other (income) expense, net in the consolidated statements of operations for the year ended December 26, 2021.

During the Fourth quarter of 2023, the Company reviewed its investment in the Network for impairment.

Due to decreases in forecasted revenues, the Company concluded that the fair value of the Company's interest in the joint venture was less than its carrying value.

As a result, the Company recorded an impairment loss of $ 1.3 million in Other expense (income), net in the Consolidated Statements of Operations for the year ended December 31, 2023.

The Company utilized the discounted cash flow method under the income approach to estimate the fair value of the Network, which requires assumptions and estimates that include:

future annual cash flows, income tax rates, discount rates, estimated growth rates, and other market factors.

A ccelerating changes in the cable distribution industry, including technological changes and expanding options for digital content offerings, has resulted in the fragmentation of viewership, declines in subscribers to the traditional cable bundle, and pricing pressure.

Accelerating changes in the cable distribution industry, including technological changes and expanding options for digital content offerings, has resulted in the fragmentation of viewership, declines in subscribers to the traditional cable bundle, and pricing pressure.

These factors led to the lower valuation of the Network as compared to its carrying value.

During the fourth quarter of 2022, the Company reviewed its investment with Discovery for impairment and determined that the fair value of the

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Company's interest in the joint venture exceeded its carrying value, and as such, concluded that there was no impairment in its investment in the Network.

During the fourth quarter of 2022 the Company reviewed its investment with Discovery for impairment and determined that the fair value of the Company's interest in the joint venture exceeded its carrying value, and as such, concluded that there was no impairment in its investment in the Network at that time.

The Company’s share in the earnings of the Network for the years ended December 31, 2023, December 25, 2022 and December 26, 2021 totaled $ 10.9 million, $ 8.1 million and $ 20.8 million, respectively, and is included as a component of Other expense (income), net in the Consolidated Statements of Operations.

6 unchanged sentences

At December 31, 2023 and December 25, 2022, the fair market value of this option was $ 1.7 million and was included as a component of Other liabilities.

During 2021, the Company recorded a gain of $ 20.1 million in other (income) expense, net relating to the change in fair value of this option, which was driven by an impairment loss recorded on the Company's investment in the Network during 2021.

There were no material changes to the option's value in 2023 or 2022.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company also has a related liability due to Discovery under the existing tax sharing agreement.

The balance of the associated liability, including imputed interest, was $ 9.0 million and $ 14.4 million at December 31, 2023 and December 25, 2022, respectively, and is included as a component of Other liabilities in the accompanying Consolidated Balance Sheets.

During 2022 and 2021, the Company recognized income of $ 0.7 million and a loss of $ 2.1 million, respectively, related to this liability due to changes in the Company's 2021 and 2020 income tax rates that resulted in adjustments to future payments owed to the Network.

During 2022 the Company recognized income of $ 0.7 million related to this liability due to changes in the Company's 2021 income tax rate that resulted in adjustments to future payments owed to the Network.

There were no such adjustments made during 2023.

During 2023, 2022 and 2021, the Company made payments to Discovery under this tax sharing agreement in the amount of $ 5.7 million, $ 5.4 million and $ 5.3 million, respectively.

See note 20 for more information on estimated future payments in relation to the Company's Discovery tax sharing agreement.

The Company had a license agreement with the Network that required the payment of royalties by the Company to the Network based on a percentage of revenue derived from products related to television shows broadcast by the joint venture.

The license included a minimum royalty guarantee of $ 125.0 million, which was paid in five annual installments of $ 25.0 million per year, commencing in 2009, which was earned out over approximately a 12 -year period.

As of December 25, 2022 the Company did not have a prepaid royalty balance related to this agreement as the licensing agreement ended in 2021.

Beginning in 2021, the Company and the Network agreed that Hasbro would no longer provide the Network with new content.

Previous to this amendment, the parties were subject to an agreement under which the Company would provide the Network with an exclusive first look in the U.S.

to license certain types of programming developed by the Company based on its intellectual property.

In the event the Network licenses the programming from the Company to air, it is required to pay the Company a license fee.

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

2 unchanged sentences

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.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Programming costs are included in Other assets and consist of the following at December 31, 2023 and December 25, 2022:

11 unchanged sentences

Released, net of amortization 16.1 9.8

Completed and not released — 0.4

In production 0.8 11.8

1 unchanged sentence

Total program investments $ 184.6 921.4

(1) Investments in productions and investments in acquired content totaling $ 734.8 million have been removed from the Company's balance sheet as of December 31, 2023, in connection with the sale of the eOne Film and TV business completed on December 27, 2023.

See note 3 for additional information.

The Company recorded $ 448.9 million of program cost amortization related to released programming during 2023, consisting of the following:

1 unchanged sentence

Program cost amortization $ 400.7 48.2 448.9

Based on management’s total revenue estimates at December 25, 2022, the Company's expected future amortization expenses for capitalized programming costs over the next three years are as follows:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Based on management’s total revenue estimates as of December 31, 2023, the Company's expected future amortization expenses for capitalized programming costs over the next three years are as follows:

(In millions) 2024 2025 2026

2 unchanged sentences

Released $ 10.1 11.6 6.4

Completed and not released 42.3 n/a n/a

Film/TV group monetization

1 unchanged sentence

Total $ 25.5 28.3 31.6

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

In the normal course of its business, the Company also enters into contracts related to obtaining right of first refusal ("first look deals") to purchase, distribute, or license certain entertainment projects or content.

1 unchanged sentence

(9) Financing Arrangements

At December 25, 2022, Hasbro had available an unsecured revolving credit agreement (see Amended Revolving Credit Agreement below) in the amount of $ 1.5 billion and unsecured uncommitted lines of credit from various banks approximating $ 101.5 million.

Substantially all of the short term borrowings outstanding at the end of 2022 and 2021 represent borrowings made under, or supported by, these lines of credit.

Borrowings under the lines of credit as of December 25, 2022 and December 26, 2021 were made in the form of production demand loans at various interest rates.

The weighted average interest rates of the outstanding borrowings under the uncommitted lines of credit as of December 25, 2022 and December 26, 2021 were 3.3 % and 3.9 %, respectively.

The Company had no borrowings outstanding under its committed line of credit at December 25, 2022 and December 26, 2021.

During 2022 and 2021, Hasbro’s working capital needs were fulfilled by cash available and cash generated from operations.

As of December 31, 2023, Hasbro had available an unsecured revolving credit agreement (see Amended Revolving Credit Agreement below) in the amount of $ 1.25 billion and unsecured uncommitted lines of credit from various banks approximating $ 95.6 million.

The Company had no outstanding short-term borrowings under, or supported by, these lines of credit as of December 31, 2023.

Substantially all of the Company's short-term borrowings held at the end of 2022 represented borrowings made under, or supported by, these lines of credit.

The weighted average interest rate of the outstanding borrowings under the uncommitted lines of credit as of December 25, 2022 was 3.3 %.

The Company had no borrowings outstanding under its committed line of credit as of December 31, 2023 and December 25, 2022.

During 2023 and 2022, Hasbro’s working capital needs were primarily fulfilled by cash available and cash generated from operations, and to a lesser extent, in 2023, the Company issued commercial paper as described below.

During the second half of 2019, in preparation for the Company's acquisition of eOne, the Company completed the following debt and equity financings:

1 unchanged sentence

On December 30, 2019, the Company completed the acquisition of eOne and on that date, borrowed the full amount of $ 1.0 billion under the Term Loan facilities.

As of December 25, 2022, the Company has repaid the full aggregate principal amount of $ 400.0 million on the three-year term loan facility and $ 290.0 million of the aggregate principal amount on the five-year term loan facility.

As of December 31, 2023, the Company has repaid the full aggregate principal amount of $ 400.0 million on the three-year term loan facility and the full aggregate principal amount of $ 600.0 million on the five-year term loan facility.

See note 11 for further discussion on the Term Loan Agreement.

The Company has a second amended and restated revolving credit agreement with Bank of America, as administrative agent, swing line lender and a letter of credit issuer and lender and certain other financial institutions, as lenders thereto (the "Amended Revolving Credit Agreement"), which provides the Company with commitments having a maximum aggregate principal amount of $ 1.5 billion.

The Amended Revolving Credit Agreement also provides for a potential additional incremental commitment increase of up to $ 500.0 million subject to agreement of the lenders.

In September 2023, the Company entered into a third amended and restated revolving credit agreement with Bank of America, as administrative agent, swing line lender, a letter of credit issuer and a lender and certain other financial institutions, as lenders thereto (the "Amended Revolving Credit Agreement"), which provides the Company with commitments having a maximum aggregate principal amount of $ 1.25 billion.

The Amended Revolving Credit Agreement contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness.

It also provides for a potential additional incremental commitment increase of up to $ 500.0 million subject to agreement of the lenders.

Loans under the revolving credit facility bear interest, at the Company’s option, at either the Adjusted Term Benchmark Rate (determined in accordance with the Amended Revolving Credit Agreement), the Base Rate

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

(determined in accordance with the Amended Revolving Credit Agreement) or the Daily Benchmark Rate (determined in accordance with the Amended Revolving Credit Agreement).

In each case there is also a spread added to the rate, which fluctuates based upon the more favorable of the Company’s long-term debt ratings and the Company’s leverage.

The Company is also required to pay a commitment fee in respect to the unused commitments under the facility, the rate for which is also determined based upon the more favorable of the Company's long-term debt ratings and leverage.

The Amended Revolving Credit Agreement extends through September 20, 2028.

The Amended Revolving Credit Agreement contains affirmative and negative covenants typical of this type of facility, including:

(a) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (b) restrictions on the incurrence of indebtedness, (c) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (d) 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 (e) the requirement that the Company maintain:

a Consolidated Total Leverage Ratio of no more than (1) 3.50 :1.00 for the quarter ended December 31, 2023 and thereafter and on and after the sale of eOne Film and TV to Lionsgate, a Consolidated Net Total Leverage Ratio of no more than (i) 4.00 :1.00 for each of the quarters ended September 30, 2023 and December 31, 2023, (ii) 3.75 :1.00 for each of the first, second and fourth fiscal quarters of each year (other than 2023) and (iii) 4.00 :1:00 for the third fiscal quarter of each year (other than 2023).

The Company was in compliance with all covenants as of and for the year ended December 31, 2023.

The Company had no borrowings outstanding under its committed revolving credit facility as of December 31, 2023.

The Company pays a commitment fee ( 0.125 % as of December 25, 2022) based on the unused portion of the revolving credit facility and interest equal to a Base Rate or Eurocurrency Rate plus a spread on borrowings under the facility.

The Base Rate is determined based on either the Federal Funds Rate plus a spread, or Prime Rate plus a spread.

The commitment fee and the amount of the spread to the Base Rate or Eurocurrency Rate both vary based on the Company’s long-term debt ratings and the Company’s leverage.

At December 25, 2022, the interest rate under the revolving credit facility was equal to Eurocurrency Rate plus 1.250 %.

The Company also has an agreement with a group of banks providing a commercial paper program (the “Program”).

2 unchanged sentences

The maturities of the notes may vary but may not exceed 397 days.

Subject to market conditions, the notes will be sold under customary terms in the commercial paper market and will be issued at a discount to par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis.

The interest rates will vary based on market conditions and the ratings assigned to the notes by the credit rating

The notes are sold under customary terms in the commercial paper market and will be issued at a discount to par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis.

The interest rates will vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time of issuance.

Subject to market conditions, the Company intends to utilize the Program as its primary short-term borrowing facility and does not intend to sell unsecured commercial paper notes in excess of the available amount under the revolving credit agreement discussed below.

If, for any reason, the Company is unable to access the commercial paper market, the Company intends to use the revolving credit agreement to meet the Company's short-term liquidity needs.

During the second quarter and third quarter of 2023, the Company issued and repaid intra-quarter commercial paper notes under the Program, to meet certain of its short-term liquidity needs.

As of December 31, 2023 and December 25, 2022, the Company did not have any notes outstanding under the Program.

During November 2021, the Company secured a 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”) which provided the Company with commitments having a maximum aggregate principal amount of $ 250.0 million.

The Revolving Production Financing Agreement also provided 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 Company used the RPCF to fund certain of the Company’s original film and TV production costs, however, the RPCF was assumed by Lionsgate effective upon the closing of the sale of the eOne Film and TV business in the fourth quarter of 2023.

The Company also has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved.

The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date.

The Company’s suppliers are not required to participate in the supplier finance program.

The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks.

The Company has not pledged any assets to the administering bank under the supplier financing program.

The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

agencies at the time of issuance.

At December 25, 2022 and December 26, 2021, the Company did not have any notes outstanding under the Program.

During November 2021, the Company secured a 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”) which 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.

The amount of obligations confirmed under the program that remain unpaid by the Company were $ 43.3 million, and $ 76.1 million as of December 31, 2023 and December 25, 2022, respectively.

These obligations are presented within Accounts payable in our condensed Consolidated Balance Sheets.

The activity related to this program is reflected within the operating activities section of the condensed Consolidated Statements of Cash Flows.

(10) Accrued Liabilities

1 unchanged sentence

(In millions) 2023 2022

Participations and residuals $ 300.2 $ 299.1

Royalties $ 286.8 195.4

Cancellation charges 118.9 89.2

Deferred revenue 101.6 111.3

Severance 100.3 32.0

Dividends 97.2 96.7

Cancellation charges 89.2 74.1

Other Taxes 82.1 95.0

Accrued expenses IIC & IIP 80.8 74.9

Payroll and management incentives 85.6 66.7

Advertising 53.2 60.4

Severance 83.7 100.3

Other taxes 68.7 82.1

Accrued income taxes 61.6 44.8

General vendor accruals 51.9 44.3

Advertising 45.0 53.2

Participations and residuals 34.0 300.2

Current lease liability 30.5 39.6

Interest 29.9 31.0

Defined contribution plans 29.7 30.0

Freight 22.9 28.5

Insurance 13.3 11.0

Professional fees 12.4 13.6

Accrued expenses IIC & IIP 0.7 80.8

Other 41.4 88.1

24 unchanged sentences

Production Financing Facilities (2)

— — 53.2 53.2

Total long-term debt 3,484.9 3,349.1 3,848.1 3,626.3

2 unchanged sentences

Long-term debt $ 2,965.8 3,349.1 3,711.2 3,626.3

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

(1) During the fourth quarter of 2023, the Company paid the remaining principal balance of $ 250.0 million of the Variable % Notes Due December 30, 2024.

(2) The Company's production financing facilities were assumed by Lionsgate effective upon the closing the sale of the eOne Film and TV business in the fourth quarter of 2023.

See note 3 for additional information.

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.

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.

7 unchanged sentences

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

During 2021, the Company paid $ 480.0 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 $ 150.0 million principal balance and principal amortization payments totaling $ 30.0 million on the Five-Year Tranche loans.

During 2022, the

The Three-Year Tranche loan notes were fully repaid as of the Company’s fiscal year ended December 26, 2021.

During 2022, the Company made $ 50.0 million principal balance and principal amortization payments totaling $ 37.5 million on the Five-Year Tranche loan notes.

During 2023, the Company made principal amortization

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Company made $ 50.0 million principal balance and principal amortization payments totaling $ 37.5 million on the Five-Year Tranche loans.

Loans under the 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.

and S&P Global Rankings, subject to certain provisions taking into account potential differences in ratings issued by the relevant rating agencies or a lack of ratings issued by such rating agencies.

Loans under the Five-Year Tranche require principal amortization payments that are payable in equal quarterly installments of 5.0 % per annum of the original principal amount thereof for each of the first two years after funding, increasing to 10.0 % per annum of the original principal amount thereof for each subsequent year.

The Term Loan Agreement contains affirmative and negative covenants typical of this type of facility, including:

(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 December 25, 2022, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.

payments totaling $ 60.0 million on the Five-year Tranche loan notes, and repaid the remaining $ 250.0 million principal balance of the Five-Year Tranche loans using the proceeds received from the sale of eOne Film and TV.

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 December 25, 2022 o f $ 113.2 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 other 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.

Current portion of long-term debt at December 31, 2023 o f $ 500.0 million , as shown on the Consolidated Balance Sheet, represents the principal balance of the 3.00 % Notes due 2024.

All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2025.

The Company's long-term borrowings have the following future contractual maturities:

1 unchanged sentence

2029 and thereafter

Production financing facilities 53.2

* Represents the Company's required quarterly principal amortization payments for term loan facilities in 2023.

The fair values of the Company’s long-term debt are considered Level 3 fair values (see note 14 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method.

2 unchanged sentences

The Company believes that this is the best information available for use in the fair value measurement.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

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 arranged on an individual production basis by either special purpose production subsidiaries, each secured by the assets and future revenues of such production subsidiaries, which are non-recourse to the Company's assets, or through a senior revolving credit facility obtained in November 2021, dedicated to production financing.

Prior to the sale of the eOne Film and TV business to Lionsgate, the Company used production financing to fund certain of its television and film productions which were arranged on an individual production basis by either special purpose production subsidiaries, each secured by the assets and future revenues of such production subsidiaries, which were non-recourse to the Company's assets, or through a senior revolving credit facility dedicated to production financing.

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 December 25, 2022 are as follows:

(In millions) 2022 2021

Production financing included in the consolidated balance sheet as:

Current liabilities $ 195.6 170.1

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 December 25, 2022 was 3.3 %.

The Company has Canadian dollar and U.S.

dollar production credit facilities with various banks.

The carrying amounts are denominated in the following currencies:

(In millions) Canadian Facilities U.S.

Facilities Total

As of December 25, 2022

$ 53.2 142.4 195.6

As of December 25, 2022, $ 195.6 million of production financing facilities was included within Current liabilities in the Company's Consolidated Balance Sheets.

Effective upon the closing of the sale of the eOne Film and TV business in the fourth quarter of 2023, the Company's senior revolving credit facility dedicated to production financing and all outstanding individual production loans were assumed by Lionsgate.

As such, the Company had no production financing outstanding as of December 31, 2023.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The following table represents the movements in production financing loans during 2023:

3 unchanged sentences

Repayments ( 206.7 )

Removed with sale of eOne film and TV (1)

Foreign exchange differences ( 0.5 )

Balance at December 31, 2023

The Company expects to repay all of its outstanding production financing loans in 2023.

(1) See note 3 for additional information on the sale of the eOne Film and TV business.

(12) Income Taxes

The components of earnings before income taxes, determined by tax jurisdiction, are as follows:

The components of Earnings (loss) before income taxes, determined by tax jurisdiction, are as follows:

(In millions) 2023 2022 2021

1 unchanged sentence

International ( 1,352.2 ) 244.5 345.1

Total earnings before income taxes $ 261.5 581.9 322.1

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Income taxes attributable to earnings before income taxes are:

Total earnings (loss) before income taxes

$ ( 1,709.1 ) 261.5 581.9

Income taxes attributable to Earnings (loss) before income taxes are:

(In millions) 2023 2022 2021

7 unchanged sentences

( 243.5 ) ( 130.1 ) 28.8

Total income taxes $ 58.5 146.6 96.7

Total income (benefit) taxes $ ( 221.3 ) 58.5 146.6

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

A reconciliation of the statutory United States federal income tax rate to Hasbro’s effective income tax rate is as follows:

5 unchanged sentences

Change in unrecognized tax benefits ( 0.3 ) 3.1 ( 3.4 )

capital loss 22.0 — —

Change in valuation allowance ( 23.3 ) 9.7 ( 1.6 )

3 unchanged sentences

Officers' compensation ( 0.3 ) 1.9 1.9

Loss on disposition of business 1.5 3.9 —

Loss on disposal of business

( 3.4 ) 1.5 3.9

Goodwill impairments

Other, net 0.5 ( 3.4 ) ( 0.1 )

12.9 % 22.4 % 25.2 %

Certain reclassifications have been made to prior year presentation to conform to current year presentation.

Tax impact on reconciling items is opposite of the expected result due to the pretax loss in 2023.

AND SUBSIDIARIES

1 unchanged sentence

The components of deferred income tax expense (benefit) arise from various temporary differences and relate to items included in the Consolidated Statements of Operations as well as items recognized in other comprehensive earnings.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 25, 2022 and December 26, 2021 are:

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2023 and December 25, 2022 are as follows:

(In millions) 2023 2022

12 unchanged sentences

Capitalized research and experimentation 100.6 81.2

Depreciation and amortization of long-lived assets

Interest expense limitation

Other 3.7 11.7

4 unchanged sentences

Operating leases 1.1 9.3

Foreign exchange — 13.7

Prepaid expenses 4.0 4.4

3 unchanged sentences

Net deferred income taxes $ 352.3 139.8

Certain reclassifications have been made to prior year presentation to conform to current year presentation.

The most significant amount of the loss and credit carryforwards relate to tax attributes of the acquired eOne entities that historically operated at losses in certain jurisdictions.

At December 25, 2022, the Company has loss and credit carryforwards of $ 175.3 million, which is a decrease of $ 3.8 million from $ 179.1 million at December 26, 2021.

Loss and credit carryforwards as of December 25, 2022 relate primarily to the U.S.

The Canadian loss carryforwards expire at various dates from 2031 to 2042.

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.

During 2023, the Company concluded its discussions with the tax authorities in Switzerland as to the application of the grandfathering rules related to TRAF.

This has resulted in the recording of a deferred tax asset of $ 135.6 million related to tax intangibles that will be amortized over time.

This treatment applies starting in 2021.

As of December 31, 2023, the Company has loss and credit carryforwards of $ 461.9 million, which is an increase of $ 286.6 million from $ 175.3 million at December 25, 2022.

The most significant amount of the loss and credit carryforwards as of December 31, 2023 relates to U.S.

capital losses of $ 375.6 million resulting from the sale of the eOne Film and TV business during 2023.

Other significant loss and credit carryforwards relate to tax attributes of entities that have historically operated at losses in certain jurisdictions, as well as certain state tax attributes.

capital loss has a carryforward period of five years and will expire if not utilized before 2029.

federal, state and international loss and credit carryforwards expire at various dates throughout 2024 while others have an indefinite carryforward period.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The recoverability of these future tax deductions and credits is evaluated by assessing the adequacy of future expected taxable income from all sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies.

To the extent the Company does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is generally established.

To the extent that a valuation allowance was established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the change in the valuation allowance is recognized in the consolidated statements of income.

The Company has a valuation allowance for certain net deferred tax assets at December 31, 2023 of $ 432.0 million, which is an increase of $ 242.2 million from $ 189.8 million at December 25, 2022.

The valuation allowance

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

pertains to certain U.S.

state and international loss and credit carryforwards, some of which have no expiration and others that expire beginning in 2023, and other net deferred tax assets.

The increase in the valuation allowance is primarily due a valuation allowance recorded in 2022 against net deferred tax assets in Russia, due to the on-going conflict in Ukraine, as well as increases in certain net deferred tax assets with no corresponding tax benefit.

At December 25, 2022 and December 26, 2021, the Company’s net deferred income taxes are recorded in the consolidated balance sheets as follows:

The increase primarily pertains to a U.S.

capital loss resulting from the sale of the Company's eOne Film and TV business, for which the Company recorded a valuation allowance of $ 364.8 million in 2023.

The increase was offset by a decrease to the valuation allowance related to entities in certain jurisdictions which were sold as part of the sale of the eOne Film and TV business.

As of December 31, 2023 and December 25, 2022, the Company’s net deferred income taxes are recorded in the Consolidated Balance Sheets as follows:

(In millions) 2023 2022

7 unchanged sentences

However, we intend to repatriate substantially all of our accumulated foreign earnings when appropriate.

As of 2022, we have recorded $ 3.6 million of foreign withholding and U.S.

As of December 31, 2023, we have recorded $ 3.2 million of foreign withholding and U.S.

state income tax liability.

The Company has not finalized the timing of any actual cash distributions or the specific amounts and therefore we could still be subject to some additional foreign withholding taxes and U.S.

state income taxes.

We will record these additional tax effects, if any, in the period that we complete our analysis and are able to make a reasonable estimate.

A reconciliation of unrecognized tax benefits, excluding potential interest and penalties, for the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 is as follows:

A reconciliation of unrecognized tax benefits, excluding potential interest and penalties, for the fiscal years ended 2023, 2022, and 2021 is as follows:

(In millions) 2023 2022 2021

1 unchanged sentence

Gross increases in prior period tax positions 11.9 0.9 0.6

Gross increase from acquisition — — 13.7

Gross decrease from disposition

Gross decreases in prior period tax positions ( 23.4 ) ( 0.2 ) ( 12.0 )

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Unrecognized tax benefits as of December 31, 2023, December 25, 2022 and December 26, 2021 were $ 39.9 million, $ 77.8 million, and $ 50.6 million, respectively, and are recorded within Other liabilities, Prepaid expenses and other current assets, and Other assets in the Company's Consolidated Balance Sheets.

If recognized, these tax benefits would have affected our income tax provision for fiscal years 2022, 2021, and 2020, by approximately $ 53.0 million, $ 46.0 million, and $ 57.0 million, respectively.

During 2022, 2021, and 2020, the Company recognized $ 2.2 million, $ 2.6 million, and $ 3.7 million, respectively, of potential interest and penalties, which are included as a component of income taxes in the accompanying consolidated statements of operations.

At December 25, 2022, December 26, 2021, and December 27, 2020, the Company had accrued potential interest and penalties of $ 8.8 million, $ 7.3 million, and $ 11.6 million, respectively.

If recognized, these tax benefits may have affected our income tax provision for fiscal years 2023, 2022, and 2021 by approximately $ 46.0 million, $ 53.0 million, and $ 46.0 million, respectively.

During 2023, 2022, and 2021, the Company recognized $ 5.8 million, $ 2.2 million, and $ 2.6 million, respectively, of potential interest and penalties, which are included as a component of Income taxes in the

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

accompanying Consolidated Statements of Operations.

As of December 31, 2023, December 25, 2022, and December 26, 2021, the Company had accrued potential interest and penalties of $ 6.2 million, $ 8.8 million, and $ 7.3 million, respectively.

The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions.

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income tax examinations by tax authorities in its major jurisdictions for years before 2017.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company is currently under income tax examination by the Internal Revenue Service and in several U.S.

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The Company believes it is reasonably possible that a decrease of approximately $ 0.0 million - $ 4.0 million in gross unrecognized tax benefits may be necessary within the coming year as a result of expected tax return settlements and lapse of statute of limitations.

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.

(13) Capital Stock

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The most recent authorization for the repurchase of up to $ 500.0 million in common stock was approved in May 2018.

As a result of the financing activities related to the eOne acquisition, the Company suspended its share repurchase program to prioritize deleveraging, and did not repurchase any shares during 2021 and 2020.

In April 2022, given the Company's progress towards reducing debt, the Company resumed its share repurchase activity and has since repurchased approximately 1.4 million shares at a total cost of $ 125.0 million and at an average price of $ 87.46 per share.

At December 25, 2022, $ 241.6 million remained under the current authorization.

As a result of the financing activities related to the eOne acquisition, the Company suspended its share repurchase program to prioritize deleveraging, and did not repurchase any shares during 2021.

In April 2022, given the Company's progress towards reducing debt, the Company resumed its share repurchase activity and repurchased approximately 1.4 million shares at a total cost of $ 125.0 million and at an average price of $ 87.46 per share.

In 2023, the Company has been focused on increasing strategic investment in its most valuable and profitable franchises, while exiting certain non-core businesses, and as such, no shares were repurchased.

As of December 31, 2023, $ 241.6 million remained under the current authorization.

(14) Fair Value of Financial Instruments

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There have been no 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.

The Company recorded a net loss of $ 0.3 million on these investments in other (income) expense , net for the year ended December 27, 2020 relating to the change in fair value of such investments.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

At December 25, 2022 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):

As of December 31, 2023 and December 25, 2022, 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

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The Company's option agreement relates to an equity method investment in Discovery Family Channel.

The option agreement is included in other liabilities at December 25, 2022 and December 26, 2021, 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 as of December 31, 2023 and December 25, 2022, 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 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.

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

See note 7 for more information on the Company's investment in the Discovery Family Channel.

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Balance at beginning of year $ ( 1.7 ) ( 1.7 )

Gain from change in fair value — 18.9

Balance at end of year $ ( 1.7 ) ( 1.7 )

(15) Stock Options, Other Stock Awards and Warrants

The Company has reserved 8.7 million shares of its common stock for issuance upon exercise of options and other awards granted or to be granted under stock incentive plans for employees and for non-employee members of

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

(15) Stock Options, Other Stock Awards and Warrants

The Company has reserved 10.5 million shares of its common stock for issuance upon exercise of options and other awards granted or to be granted under stock incentive plans for employees and for non-employee members of the Board of Directors (collectively, the “plans”).

the Board of Directors (collectively, the “plans”).

These awards generally vest and are expensed in equal annual amounts over three to five years .

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Product development $ 7.0 4.8 3.7

Selling, distribution and administration (a)

Selling, distribution and administration

64.9 76.5 94.1

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Total stock compensation expense after income taxes $ 62.7 72.3 87.6

(a) The 2021 increase in compensation expense compared to 2020 reflects $ 20.9 million of additional expense associated with the contractual accelerated vesting of certain equity awards as a result of the passing of the Company's former CEO.

The following table represents total stock compensation expense, net of performance adjustments, by award type related to stock performance awards, restricted stock units, stock options and awards made to non-employee members of the Company’s Board of Directors, for the years ended December 31, 2023, December 25, 2022 and December 26, 2021:

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Total compensation expense after income taxes $ 62.7 72.3 87.6

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Stock Performance Awards

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These awards provide the recipients with the ability to earn shares of the Company’s common stock based on the Company’s achievement of stated cumulative operating performance targets over the three fiscal years ended December 2025, December 2024, and December 2023 for the 2023, 2022 and 2021 awards, respectively.

Each Stock Performance Award granted in 2020 has a target number of shares of common stock associated with such award which may be earned by the recipient if the Company achieves the stated diluted earnings per share and revenue targets and for certain employees participating in the 2020 awards, the Stock Performance Awards include an additional target for the Company's return on invested capital.

For the 2021 and 2022 awards, all employee awards will be measured on achieving diluted earnings per share, revenue and return on invested capital targets.

The 2021 and 2022 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share, revenue and return on invested capital ("ROIC").

The 2023 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share and ROIC, in addition to a relative Total Shareholder Return ("TSR") modifier ranking as compared to the S&P 500, to determine the number of shares earned at the end of the performance period.

The ultimate amount of the award may vary from 0 % to 200 % of the target number of shares, depending on the cumulative results achieved.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Information with respect to Stock Performance Awards for 2023, 2022 and 2021 is as follows:

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The expense recognized in 2021 included $ 7.6 million of additional stock expense associated with the contractual acceleration of outstanding performance share awards upon the passing of the Company's former CEO.

At December 25, 2022, the amount of total unrecognized compensation cost related to these awards is approximately $ 26.5 million and the weighted average period over which this will be expensed is 22 months.

As of December 31, 2023, the amount of total unrecognized compensation cost related to these awards is approximately $ 34.0 million and the weighted average period over which this will be expensed is 23 months.

AND SUBSIDIARIES

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The expense recognized in 2021 included $ 6.0 million of additional stock expense associated with the contractual acceleration of outstanding restricted stock awards upon the passing of the Company's former CEO.

At December 25, 2022, the amount of total unrecognized compensation cost related to restricted stock units is $ 61.8 million and the weighted average period over which this will be expensed is 23 months.

As of December 31, 2023, the amount of total unrecognized compensation cost related to restricted stock units is $ 67.1 million and the weighted average period over which this will be expensed is 23 months.

Information with respect to the remaining Restricted Stock Awards and Restricted Stock Units for 2023, 2022 and 2021 is as follows:

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Expected option life 3 years 4 years 4 years

The intrinsic values, which represent the difference between the fair market value on the date of exercise and the exercise price of the option, for the options exercised in fiscal 2022, 2021 and 2020 were $ 13.6 million, $ 16.0 million and $ 9.7 million, respectively.

At December 25, 2022, the amount of total unrecognized compensation cost related to stock options was $ 10.6 million and the weighted average period over which this will be expensed is 23 months.

The intrinsic values, which represent the difference between the fair market value on the date of exercise and the exercise price of the option, for the options exercised in fiscal 2022 and 2021 were $ 13.6 million and $ 16.0 million, respectively.

No options were exercised during fiscal 2023.

As of December 31, 2023, the amount of total unrecognized compensation cost related to stock options was $ 14.1 million and the weighted average period over which this will be expensed is 23 months.

Non-Employee Awards

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These awards were valued at the market value of the underlying common stock at the date of grant and vested upon grant.

In connection with these grants, compensation cost of $ 2.1 million was recorded in selling, distribution and administration expense in the year ended December 25, 2022, $ 1.6 million in the year ended December 26, 2021 and $ 1.8 million in the year December 27, 2020.

In connection with these grants, compensation cost of $ 1.3 million, $ 2.1 million and $ 1.6 million was recorded in Selling, distribution and administration expense for the fiscal years ended 2023, 2022 and 2021, respectively.

(16) Pension, Postretirement and Postemployment Benefits

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Actuarial gains and losses and prior service costs that have not yet been included in income are recognized in the Consolidated Balance Sheets in AOCE.

Reclassifications to earnings from AOCE related to pension and postretirement plans are recorded to other (income) expense.

Reclassifications to earnings from AOCE related to pension and postretirement plans are recorded to Other expense (income).

Expenses related to the Company’s defined benefit pension and defined contribution plans for 2023, 2022 and 2021 were approximately $ 44.9 million, $ 45.5 million and $ 49.3 million, respectively.

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Pension Plan, and ceased to exist as a separate plan on that date.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

In February 2018, the Compensation Committee of the Company’s Board of Directors approved a resolution to terminate the Company’s U.S.

1 unchanged sentence

Pension Plan”).

During the first quarter of 2018

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

the Company commenced the U.S.

During the first quarter of 2018 the Company commenced the U.S.

Pension Plan termination process and received regulatory approval during the fourth quarter of 2018.

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During 2020, the Company merged its employee retirement agreements, which had beginning benefit liabilities of $ 14.8 million, with its remaining US pension plans.

At December 25, 2022, the measurement date, the Company's remaining plans were unfunded with an aggregate accumulated and projected benefit obligation of $ 30.3 million.

As of December 31, 2023, the measurement date, the Company's remaining plans were unfunded with an aggregate accumulated and projected benefit obligation of $ 30.1 million.

The Company also provides certain postretirement health care and life insurance benefits to eligible employees who retired prior to January 1, 2020 and have either attained age 65 with 5 years of service or age 55 with 10 years of service.

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As of December 31, 2023, the Company had unrecognized gains related to its remaining U.S.

pension and post retirement plans of $ 1.6 million.

pension and postretirement plans of $ 1.4 million.

AND SUBSIDIARIES

6 unchanged sentences

Interest cost 1.6 1.1 1.1 0.8

Transfer in — — — —

Actuarial (gain) loss ( 9.3 ) ( 1.1 ) ( 7.6 ) 0.4

Actuarial loss (gain)

1.5 ( 9.3 ) 1.1 ( 7.6 )

Benefits paid ( 3.3 ) ( 3.1 ) ( 1.6 ) ( 1.7 )

Plan amendments — — — —

Settlements paid — ( 1.3 ) — —

Projected benefit obligation — ending $ 30.1 30.3 20.2 19.6

8 unchanged sentences

Unrecognized prior service cost (credit) — — ( 0.6 ) ( 0.9 )

Unrecognized net loss 3.2 13.2 ( 3.8 ) 3.9

Unrecognized net loss (earnings)

4.6 3.2 ( 2.6 ) ( 3.8 )

Net amount $ ( 25.5 ) ( 27.1 ) ( 23.4 ) ( 24.3 )

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2024 $ 3.1 $ 1.6

2028-2032 12.3 6.8

International Plans

Pension coverage for employees of Hasbro’s international subsidiaries is provided, to the extent deemed appropriate, through separate defined benefit and defined contribution plans.

At December 25, 2022 and December 26, 2021, the defined benefit plans had total projected benefit obligations of $ 77.8 million and $ 121.6 million, respectively, and fair values of plan assets of $ 71.0 million and $ 94.8 million, respectively.

As of December 31, 2023 and December 25, 2022, the defined benefit plans had total projected benefit obligations of $ 83.4 million and $ 77.8 million, respectively, and fair values of plan assets of $ 78.8 million and $ 71.0 million, respectively.

Substantially all of the plan assets are invested in equity and fixed income securities.

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

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 $ 93.9 million, $ 88.2 million and $ 90.6 million, respectively, for each of the years ended December 27, 2020, December 26, 2021 and December 25, 2022, and was not material to the Company’s financial statements nor were expenses related to short term leases (expected term less than twelve months) or variable lease payments during those same periods.

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 $ 89.5 million, $ 93.9 million and $ 88.2 million, respectively, for each of the years ended 2023, 2022 and 2021, and was not material to the Company’s financial statements nor were expenses related to short term leases (expected term less than twelve months) or variable lease payments during those same periods.

All leases expire prior to 2039.

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Information related to the Company's leases for the years ended December 31, 2023 and December 25, 2022 is as follows:

Year Ended Year Ended

(In millions) December 25, 2022 December 26, 2021

Year Ended Year Ended Year Ended

(In millions) December 31, 2023 December 25, 2022 December 26, 2021

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

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Weighted Average Remaining Lease Term:

Operating leases 4.4 years 5.6 years

Operating leases 7.1 years 4.4 years 5.6 years

Weighted Average Discount Rate:

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(3) Included in Property, plant and equipment on the Consolidated Balance Sheets

At December 25, 2022, the Company was party to certain operating lease agreements commencing during 2023 and as such, are not included in the Company's consolidated balance sheets as of December 25, 2022.

These lease agreements have terms extending into 2029 and the total future expected undiscounted payments for these leases are $ 65.2 million.

(18) Derivative Financial Instruments

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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, certain production financing loans and other cross-border transactions, primarily in years 2023 and to a lesser extent, 2024.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

At December 25, 2022 and December 26, 2021, the notional amounts and fair values of the Company’s foreign currency forward and option contracts designated as cash flow hedging instruments were as follows:

These instruments hedge a portion of the Company’s currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions in 2024.

As of December 31, 2023 and December 25, 2022, the notional amounts and fair values of the Company’s foreign currency forward and option contracts designated as cash flow hedging instruments were as follows:

(In millions) Notional

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Total $ 251.3 ( 2.4 ) 382.3 —

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts.

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The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans.

Additionally, to manage transactional exposure to fair value movements on certain monetary assets and liabilities denominated in foreign currencies, the Company has implemented a balance sheet hedging program.

The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are offset by changes in the fair value of the balance sheet items.

As of December 25, 2022 and

As of December 31, 2023 and December 25, 2022, the total notional amounts of the Company’s undesignated derivative instruments were $ 340.5 million and $ 765.6 million, respectively.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

December 26, 2021, the total notional amounts of the Company’s undesignated derivative instruments were $ 765.6 million and $ 632.0 million, respectively.

At December 25, 2022 and December 26, 2021, the fair value of the Company’s undesignated derivative financial instruments are recorded in the consolidated balance sheets as follows:

As of December 31, 2023 and December 25, 2022, the fair value of the Company’s undesignated derivative financial instruments are recorded in the Consolidated Balance Sheets as follows:

(In millions) 2023 2022

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Total unrealized (losses) gains, net $ ( 0.8 ) 5.0

The Company recorded net gains (losses) of $ 42.1 million, $ 4.6 million and $( 27.7 ) million on these instruments to other (income) expense, net for 2022, 2021 and 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 instruments relate.

The Company recorded net gains of $ 23.4 million, $ 42.1 million and $ 4.6 million on these instruments to Other expense (income), net for 2023, 2022 and 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 instruments relate.

For additional information related to the Company’s derivative financial instruments see notes 4 and 14.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

(19) Restructuring Actions

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 December 25, 2022, the Company had a remaining balance of $ 9.0 million in severance and other employee expenses related to these programs, after reflecting payments of $ 5.8 million during the year.

During 2022, in support of Blueprint 2.0, Hasbro announced an Operational Excellence program under which the Company took certain restructuring actions, including global workforce reductions, resulting in severance and other employee charges of $ 94.1 million recorded in Selling, Distribution and Administration within the Corporate and Other segment.

The detail of activity related to the Company's Operational Excellence program as of December 25, 2022 is as follows:

As of December 31, 2023, the Company had a remaining balance of $ 2.5 million in severance and other employee expenses related to these programs included within other accrued liabilities in the Consolidated Balance Sheets, after making payments of $ 2.6 million in fiscal 2023.

Substantially all of the remaining cash payments related to these programs are expected to be made by the end of 2024.

During 2022, in support of Blueprint 2.0, Hasbro announced an Operational Excellence program ("the Program"), an ongoing enterprise-wide initiative intended to improve our business through specialized organizational programs that include targeted cost-savings, supply chain transformation and certain other restructuring actions designed to drive growth and enhance shareholder value.

In January 2023, in connection the Program we announced the elimination of approximately 1,000 positions from our global workforce, or approximately 15 % of global full-time employees.

In December 2023, following a further review of the Company’s cost structure and organizational design, the Company announced additional strategic steps to position the business for future growth, including a revised organizational structure as well as additional headcount reductions.

The Company’s organizational structure changes will result in the reallocation of people and resources, which will include voluntary early retirement for certain groups of employees and additional involuntary reductions in employees (“Additional Actions”).

The Company currently anticipates that approximately 900 incremental positions will be eliminated as part of the Additional Actions, which are expected to be substantially completed over the next 18 to 24 months.

Charges related to the Program were recorded in Selling, distribution and administration expense within Corporate and Other.

These actions are expected to be substantially complete by the end of 2024.

Going forward, the Company may implement further cost-saving initiatives under the Program that could result in additional restructuring charges including severance and other employee charges.

As of December 31, 2023, the liability balance associated with Program related restructuring actions consisted of severance payments recorded within Other accrued liabilities in the Consolidated Balance Sheets as follows:

(In millions) Total

2022 Operational Excellence charges $ 94.1

Payments made in 2022 ( 9.2 )

Remaining amounts to be paid as of December 25, 2022 $ 84.9

Operational Excellence:

Balance at December 25, 2022

2023 payments

Balance at December 31, 2023

The following table presents the restructuring charges incurred to date under the Program, along with the estimated charges expected to be incurred on approved initiatives under the plan as of December 31, 2023:

(In millions) Total

Operational Excellence:

Charges incurred to date

Estimated charges to be incurred on approved initiatives

Total expected charges on approved initiatives

(20) Commitments and Contingencies

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Certain of these agreements contain provisions for the payment of guaranteed or minimum royalty amounts.

In addition, the Company enters into contractual commitments to obtain film and television content distribution rights and minimum guarantee commitments related to the purchase of film and television rights for content to be delivered in the future.

Under terms of existing agreements as of December 31, 2023, Hasbro may, provided the other party meets their contractual commitment, be required to pay amounts as follows:

6 unchanged sentences

$ 5.0 million.

At December 25, 2022, the Company had $ 12.9 million of prepaid royalties, all of which are included in prepaid expenses and other current assets

As of December 31, 2023, the Company had $ 19.0 million of prepaid royalties, all of which are included in prepaid expenses and other current assets.

Interest payment obligations on the Company's fixed-rate long-term debt are as follows:

8 unchanged sentences

The Company enters into contracts with certain partners which among other things, provide the Company with the right of first refusal to purchase, distribute, or license certain entertainment projects or content.

At December 25, 2022, the Company estimates that it may be obligated to pay $ 18.9 million and $ 4.5 million, in 2023 and 2024, respectively, related to such agreements.

As of December 31, 2023, the Company estimates that it may be obligated to pay $ 3.9 million and $ 1.5 million in 2024 and 2025, respectively, related to such agreements.

In connection with the Company’s agreement to form a joint venture with Discovery, the Company is obligated to make future payments to Discovery under a tax sharing agreement.

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These payments are contingent upon the Company having sufficient taxable income to realize the expected tax deductions of certain amounts related to the joint venture.

At December 25, 2022, the Company estimates payments related to inventory and tooling purchase commitments may total approximately $ 452.7 million, including the remaining contractual commitment of $ 85.0 million in 2023 under the manufacturing agreement with Cartamundi.

As of December 31, 2023, the Company estimates payments related to inventory and tooling purchase commitments may total approximately $ 157.3 million.

Hasbro is party to certain legal proceedings, as well as certain asserted and unasserted claims.

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Segment and Geographic Information

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 and throughout 2020, the Company successfully integrated the acquired eOne business and started to achieve synergies as a combined company.

During the first quarter of 2021, the Company realigned its reportable segment structure to:

(1) align with changes to its business structure subsequent to the integration of eOne;

and (2) reflect changes to its reporting structure and provide transparency into how operating performance is measured.

The Company's three principal reportable segments are (i) Consumer Products, (ii) Wizards of the Coast and Digital Gaming, and (iii) Entertainment.

Hasbro is a toy and game 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.

The Company's reportable segments are Consumer Products, Wizards of the Coast and Digital Gaming, Entertainment, and Corporate and Other.

The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world.

The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel.

Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands.

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.

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

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Additionally, we out-license certain of our 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 and production of Hasbro-branded entertainment content including film, television, children’s programming, digital content and live entertainment focused on Hasbro-owned properties.

Segment performance is measured at the operating profit level.

Included in Corporate and eliminations are certain corporate expenses, including the elimination of intersegment transactions and certain assets benefiting more than one segment.

Included in Corporate and Other are certain corporate expenses, including the elimination of intersegment transactions and certain assets benefiting more than one segment.

Intersegment sales and transfers are reflected in management reports at amounts approximating cost.

Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and eliminations.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

adjustments to actual expenses and foreign exchange rates included in Corporate and Other.

The accounting policies of the segments are the same as those referenced in note 1.

Results shown for fiscal years 2023, 2022 and 2021 are not necessarily those which would be achieved if each segment was 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 December 26, 2021.

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

Information by segment and a reconciliation to reported amounts are as follows:

1 unchanged sentence

Customers Affiliate

Revenue Operating

(Loss) Depreciation

Revenue Depreciation

Amortization Capital

3 unchanged sentences

Wizards of the Coast and Digital Gaming 1,457.6 183.6 27.8 122.5 4,340.5

Entertainment (a)

Entertainment (a)(b)

659.3 51.8 28.5 0.4 3,507.7

2 unchanged sentences

Consolidated Total $ 5,003.3 — 210.7 209.3 6,540.9

Consumer Products $ 3,981.6 465.4 401.4 112.4 73.1 4,925.5

Consumer Products (a)

$ 3,572.5 396.7 152.5 87.0 5,757.7

Wizards of the Coast and Digital Gaming 1,325.1 172.5 14.6 52.5 2,968.7

Entertainment 1,152.2 61.5 ( 91.8 ) 96.6 6.2 6,052.8

Entertainment (a)(b)

959.1 57.5 43.8 6.9 6,273.3

Corporate and Other (b)

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Wizards of the Coast and Digital Gaming 1,286.6 121.6 48.5 35.1 1,585.1

Entertainment 909.1 5.9 ( 141.1 ) 138.0 6.6 6,003.0

Entertainment (b)

1,152.2 61.5 96.6 6.2 6,052.8

Corporate and Other (b)

1 unchanged sentence

Consolidated Total $ 6,420.4 — 280.1 132.7 10,037.8

(In millions) 2023

Operating profit (loss)

Consumer Products

$ ( 64.7 ) 217.3 401.4

Wizards of the Coast and Digital Gaming 525.7 538.3 547.0

Entertainment (b)

( 1,911.5 ) 22.7 ( 91.8 )

Corporate and Other (b)(c)

( 88.3 ) ( 370.6 ) ( 93.3 )

Operating profit (loss)

( 1,538.8 ) 407.7 763.3

Interest expense

186.3 171.0 179.7

Interest income

( 23.0 ) ( 11.8 ) ( 5.4 )

Other non-operating expense (income)

7.0 ( 13.0 ) 7.1

Earnings (loss) before income taxes

$ ( 1,709.1 ) 261.5 581.9

(a) 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.

(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.

Allocations of certain expenses, related assets within the individual operating segments, are done at the beginning of the

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.

Any differences between actual and budgeted amounts are reflected in Corporate and Other because allocations are translated from the U.S.

Dollar to local currency at budgeted rates when recorded.

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

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

year based on budgeted amounts.

Any differences between actual and budgeted amounts are reflected in Corporate and Other.

Furthermore, Corporate and Other includes elimination of inter-company income statement transactions.

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

(c) Corporate and Other Operating profit (loss) includes Operational Excellence related transformation office and consulting fees of $ 35.3 million for the year ended December 31, 2023, which are recorded within Selling, distribution and administration costs within the Consolidated Statements of Operations.

Third party consultants were engaged to assist the Company in performing a comprehensive review of operations and developing a transformation plan designed to support the organization in identifying, realizing, and capturing savings through the identification of organizational initiatives intended to create efficiencies and improve business processes and operations.

The consultants assisted in providing benchmark data and are currently assisting with the design of an improved operating model and supply chain function.

The Company expects this consulting assistance to conclude in 2024 in line with the planning stages of the final components of the transformation plan.

Corporate and Other Operating Profit (loss) includes other consulting expense of $ 24.7 million for the year ended December 25, 2022, as well as incentive compensation for all periods presented .

The following table represents consolidated Consumer Products segment net revenues by major geographic region for the three fiscal years ended December 31, 2023.

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Partner Brands 687.8 1,052.0 1,161.0

Hasbro Gaming (2)

Portfolio Brands

521.3 625.2 719.8

Emerging Brands (1)

Non-Hasbro Branded Film & TV

537.7 828.7 997.7

TV/Film/Entertainment 828.7 997.7 804.7

Net revenues $ 5,003.3 5,856.7 6,420.4

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

For comparability, the year ended December 26, 2021 net revenues have been restated to reflect the elevation of PEPPA PIG from Emerging Brands into Franchise Brands resulting in a change of $ 162.9 million.

(2) Hasbro’s total gaming category, including all gaming net revenues, most notably MAGIC:

THE GATHERING and MONOPOLY, totaled $ 1,997.5 million, $ 2,098.9 million and $ 1,763.8 million for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively.

Net revenue from Hasbro’s Total Gaming category, including all gaming revenues, most notably DUNGEONS

& DRAGONS, MAGIC:

THE GATHERING and Hasbro Gaming, totaled $ 2,074.4 million, $ 1,997.5 million and $ 2,098.9 million for the years ended December 31, 2023, December 25, 2022 and December 26, 2021, respectively, of which MAGIC:

THE GATHERING contributed $ 1,085.8 million, $ 1,065.2 million and $ 992.1 million.

AND SUBSIDIARIES

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and Amazon.com, Inc.

Sales to each of these customers amounted to 11 % and 10 %, respectively, of consolidated net revenues in 2022 and 13 % and 11 %, respectively, of consolidated net revenues during 2021.

with sales to each of these customers amounting to 11 % of consolidated net revenues in 2023 and 11 % and 10 %, respectively, of consolidated net revenues during 2022.

In 2021 sales to these customers amounted to 13 % and 11 %, respectively, of consolidated net revenues.

10 unchanged sentences

Both Marvel and Lucas are owned by The Walt Disney Company.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

(22) 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.

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 resulted in a net outflow of $ 0.9 million.

The Company acquired eOne Music through its acquisition of eOne in December 2019.

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 $ 108.8 million within Loss on Disposal of Business on the Consolidated Statements of Operations for the year ended December 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 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 $ 473.5 million and liabilities of $ 77.3 million, attributable to eOne Music, were de-consolidated as of the closing date and, as of December 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 and reflects final working capital adjustments.

(In millions) December 26, 2021

Cash and Cash Equivalents $ 18.2

Goodwill and Other Intangible Assets 410.3

Prepaid Expenses 31.0

Other Assets 14.0

Total Assets $ 473.5

Accrued Liabilities $ 24.4

Deferred Taxes 36.9

Other Liabilities 16.0

Total Liabilities $ 77.3

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data