UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

__________________

FORM 10-Q

__________________

(Mark One)



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 29,~~September 27, 2020



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6682

__________________

HASBRO, INC.

(Exact name of registrant as specified in its charter)



Rhode Island		05-0155090
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1027 Newport Avenue
Pawtucket,	Rhode Island	02861
(Address of Principal Executive Offices)		(Zip Code)

(~~401~~) (401) 431-8697

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value per share	HAS	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [x]

The number of shares of Common Stock, par value $.50 per share, outstanding as of ~~April 29,2020~~October 26, 2020 was ~~137,011,347.~~

137,030,619.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of Dollars Except Share Data)

(Unaudited)


	March 29, 2020			March 31, 2019		December 29, 2019			September 27, 2020		September 29, 2019	December 29, 2019
ASSETS								ASSETS
Current assets								Current assets
Cash and cash equivalents including restricted cash of $86,177, $0 and $0	$	1,237,884		1,196,634		4,580,369
Accounts receivable, less allowance for doubtful accounts of $16,900 $12,100 and $17,200	963,823			638,417		1,410,597
Cash and cash equivalents including restricted cash of $71,200, $0 and $0								Cash and cash equivalents including restricted cash of $71,200, $0 and $0	$	1,132,405	1,060,432	4,580,369
Accounts receivable, less allowance for doubtful accounts of $23,700 $18,200 and $17,200								Accounts receivable, less allowance for doubtful accounts of $23,700 $18,200 and $17,200	1,438,360		1,416,879	1,410,597
Inventories	444,406			491,751		446,105		Inventories	540,039		589,132	446,105
Prepaid expenses and other current assets	672,390			305,056		310,450		Prepaid expenses and other current assets	648,158		346,687	310,450
Total current assets	3,318,503			2,631,858		6,747,521		Total current assets	3,758,962		3,413,130	6,747,521
Property, plant and equipment, less accumulated depreciation of $513,200 $484,200 and $505,900	455,945			395,624		382,248
Property, plant and equipment, less accumulated depreciation of $546,800 $496,700 and $505,900								Property, plant and equipment, less accumulated depreciation of $546,800 $496,700 and $505,900	477,154		371,881	382,248
Other assets								Other assets
Goodwill	3,572,650			485,528		494,584		Goodwill	3,644,118		485,042	494,584
Other intangible assets, net of accumulated amortization of $608,500 $747,800 and $895,200	1,615,778			682,063		646,305
Other intangible assets, net of accumulated amortization of $885,800 $771,700 and $783,500								Other intangible assets, net of accumulated amortization of $885,800 $771,700 and $783,500	1,546,810		658,350	646,305
Other	1,461,483			739,700		584,970		Other	1,276,133		626,221	584,970
Total other assets	6,649,911			1,907,291		1,725,859		Total other assets	6,467,061		1,769,613	1,725,859
Total assets	$	10,424,359		4,934,773		8,855,628		Total assets	$	10,703,177	5,554,624	8,855,628
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY								LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities								Current liabilities
Short-term borrowings	$	9,405		13,409		503		Short-term borrowings	$	10,032	7,903	503
Current portion of long-term debt	64,441			—		—		Current portion of long-term debt	369,269		0	0
Accounts payable	308,496			234,262		343,927		Accounts payable	466,172		501,136	343,927
Accrued liabilities	1,356,214			701,054		912,652		Accrued liabilities	1,470,076		957,696	912,652
Total current liabilities	1,738,556			948,725		1,257,082		Total current liabilities	2,315,549		1,466,735	1,257,082
Long-term debt	5,156,290			1,695,462		4,046,457		Long-term debt	4,777,807		1,696,204	4,046,457
Other liabilities	738,965			636,055		556,559		Other liabilities	778,514		550,778	556,559
Total liabilities	7,633,811			3,280,242		5,860,098		Total liabilities	7,871,870		3,713,717	5,860,098
Redeemable noncontrolling interests	26,041			—		—		Redeemable noncontrolling interests	22,876		0	0
Shareholders' equity								Shareholders' equity
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued	—			—		—
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 at March 29, 2020, 209,694,630 at March 31, 2019, and 220,286,736 at December 29, 2019	110,143			104,847		110,143
Preference stock of $2.50 par value. Authorized 5,000,000 shares; NaN issued								Preference stock of $2.50 par value. Authorized 5,000,000 shares; NaN issued	0		0	0
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at September 27, 2020, 209,694,630 shares at September 29, 2019, and 220,286,736 shares at December 29, 2019								Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at September 27, 2020, 209,694,630 shares at September 29, 2019, and 220,286,736 shares at December 29, 2019	110,143		104,847	110,143
Additional paid-in capital	2,282,379			1,269,230		2,275,726		Additional paid-in capital	2,311,433		1,301,366	2,275,726
Retained earnings	4,191,810			4,125,686		4,354,619		Retained earnings	4,192,434		4,180,331	4,354,619
Accumulated other comprehensive loss	(294,772		)	(282,339	)	(184,220	)	Accumulated other comprehensive loss	(280,330)		(185,376)	(184,220)
Treasury stock, at cost; 83,279,734 shares at March 29, 2020; 83,830,809 shares at March 31, 2019; and 83,424,129 shares at December 29, 2019	(3,560,336		)	(3,562,893	)	(3,560,738	)
Treasury stock, at cost; 83,256,622 shares at September 27, 2020; 83,442,005 shares at September 29, 2019; and 83,424,129 shares at December 29, 2019								Treasury stock, at cost; 83,256,622 shares at September 27, 2020; 83,442,005 shares at September 29, 2019; and 83,424,129 shares at December 29, 2019	(3,559,929)		(3,560,261)	(3,560,738)
Noncontrolling interests	35,283			—		—		Noncontrolling interests	34,680		0	0
Total shareholders' equity	2,764,507			1,654,531		2,995,530		Total shareholders' equity	2,808,431		1,840,907	2,995,530
Total liabilities, noncontrolling interests and shareholders' equity	$	10,424,359		4,934,773		8,855,628		Total liabilities, noncontrolling interests and shareholders' equity	$	10,703,177	5,554,624	8,855,628

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Thousands of Dollars Except Per Share Data)

(Unaudited)


	Quarter Ended						Quarter Ended			Nine Months Ended
	March 29, 2020			March 31, 2019			September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019
Net revenues	$	1,105,570		732,510		Net revenues	$	1,776,623	1,575,173	$	3,742,472	3,292,220
Costs and expenses:						Costs and expenses:
Cost of sales	262,694			259,987		Cost of sales	610,105		627,119	1,126,044		1,230,800
Program cost amortization	132,146			6,575		Program cost amortization	85,424		28,028	268,245		58,105
Royalties	112,822			59,888		Royalties	176,938		128,008	387,097		258,957
Product development	53,829			56,260		Product development	62,709		67,354	174,863		189,246
Advertising	101,641			76,604		Advertising	137,408		140,256	311,415		309,659
Amortization of intangibles	36,811			11,816		Amortization of intangibles	36,172		11,814	107,685		35,445
Selling, distribution and administration	279,128			225,253		Selling, distribution and administration	325,360		275,384	885,680		748,338
Acquisition and related costs	149,782			—		Acquisition and related costs	5,949		0	165,993		0
Total costs and expenses	1,128,853			696,383		Total costs and expenses	1,440,065		1,277,963	3,427,022		2,830,550
Operating profit (loss)	(23,283		)	36,127
Non-operating (income) expense:
Operating profit						Operating profit	336,558		297,210	315,450		461,670
Non-operating expense (income):						Non-operating expense (income):
Interest expense	54,725			22,314		Interest expense	49,400		22,764	153,702		67,096
Interest income	(4,667		)	(7,682	)	Interest income	(713)		(5,486)	(6,411)		(19,164)
Other expense (income), net	(1,459		)	(8,100	)
Other (income) expense, net						Other (income) expense, net	(11,327)		20,186	(15,429)		118,289
Total non-operating expense, net	48,599			6,532		Total non-operating expense, net	37,360		37,464	131,862		166,221
Earnings (loss) before income taxes	(71,882		)	29,595
Income tax (benefit) expense	(4,072		)	2,868
Net earnings (loss)	(67,810		)	26,727
Net earnings attributable to noncontrolling interests	1,827			—
Net earnings (loss) attributable to Hasbro, Inc.	(69,637		)	26,727
Earnings before income taxes						Earnings before income taxes	299,198		259,746	183,588		295,449
Income tax expense						Income tax expense	79,215		46,797	64,313		42,340
Net earnings						Net earnings	219,983		212,949	119,275		253,109
Net earnings (loss) attributable to noncontrolling interests						Net earnings (loss) attributable to noncontrolling interests	(915)		0	1,929		0
Net earnings attributable to Hasbro, Inc.						Net earnings attributable to Hasbro, Inc.	$	220,898	212,949	$	117,346	253,109

Net earnings (loss) per common share:
Net earnings per common share:						Net earnings per common share:
Basic	$	(0.51	)	0.21		Basic	$	1.61	1.68	$	0.86	2.00
Diluted	$	(0.51	)	0.21		Diluted	$	1.61	1.67	$	0.85	1.99
Cash dividends declared per common share	$	0.68		0.68		Cash dividends declared per common share	$	0.68	0.68	$	2.04	2.04

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings ~~(Loss)~~

(Thousands of Dollars)

(Unaudited)

Quarter Ended
March 29,
2020 March 31,
2019
Net earnings (loss) $ (67,810 ) 26,727
Other comprehensive earnings (loss):
Foreign currency translation adjustments (131,767 ) 6,993
Unrealized holding (losses) gains on available-for-sale securities, net of tax (410 ) 265
Net gains on cash flow hedging activities, net of tax 25,015
6,592
Reclassifications to earnings (loss), net of tax:
Net gains on cash flow hedging activities (3,664 ) (2,814 )
Amortization of unrecognized pension and postretirement amounts 274
1,139
Total other comprehensive earnings (loss), net of tax (110,552 ) 12,175
Total comprehensive earnings attributable to noncontrolling interests 1,827
—
Total comprehensive earnings (loss) attributable to Hasbro, Inc. $ (180,189 ) 38,902


	Quarter Ended			Nine Months Ended
	September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019
Net earnings	$	219,983	212,949	$	119,275	253,109
Other comprehensive earnings (losses):
Foreign currency translation adjustments, net of tax	40,821		(16,447)	(98,144)		(6,120)
Unrealized holding (losses) gains on available-for-sale securities, net of tax	(809)		(155)	1,315		400
Net (losses) gains on cash flow hedging activities, net of tax	(5,655)		9,514	15,670		14,027
Changes in unrecognized pension amounts, net of tax	0		0	0		19,589
Reclassifications to earnings, net of tax:
Net gains on cash flow hedging activities	(6,833)		(5,392)	(15,775)		(10,188)
Amortization of unrecognized pension and postretirement amounts	274		279	824		5,578
Settlement of U.S. defined benefit plan	0		0	0		85,852
Total other comprehensive earnings (loss), net of tax	27,798		(12,201)	(96,110)		109,138
Total comprehensive earnings (loss) attributable to noncontrolling interests	(915)		0	1,929		0
Total comprehensive earnings attributable to Hasbro, Inc.	$	248,696	200,748	$	21,236	362,247

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Thousands of Dollars)

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			September 27, 2020		September 29, 2019
Cash flows from operating activities:						Cash flows from operating activities:
Net earnings (loss)	$	(67,810	)	26,727
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Net earnings						Net earnings	$	119,275	253,109
Adjustments to reconcile net earnings to net cash provided by operating activities:						Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of plant and equipment	23,666			27,028		Depreciation of plant and equipment	94,100		101,016
Amortization of intangibles	36,811			11,816		Amortization of intangibles	107,685		35,445
Asset impairments	40,878			—		Asset impairments	40,878		0
Program cost amortization	132,146			6,575		Program cost amortization	268,245		58,105
Deferred income taxes	(3,127		)	11,795		Deferred income taxes	12,549		(27,974)
Stock-based compensation	10,651			5,285		Stock-based compensation	40,015		24,787
Non-cash pension settlement						Non-cash pension settlement	0		110,777
Other non-cash items	8,418			(3,503	)	Other non-cash items	(1,646)		13,347
Change in operating assets and liabilities net of acquired balances:						Change in operating assets and liabilities net of acquired balances:
Decrease in accounts receivable	653,687			558,888
Decrease (increase) in accounts receivable						Decrease (increase) in accounts receivable	165,593		(236,010)
Increase in inventories	(13,933		)	(50,109	)	Increase in inventories	(96,907)		(154,476)
Increase in prepaid expenses and other current assets	(22,965		)	(33,934	)
Program production costs, net	(168,043		)	(17,728	)
Decrease in accounts payable and accrued liabilities	(315,781		)	(273,955	)
(Increase) decrease in prepaid expenses and other current assets						(Increase) decrease in prepaid expenses and other current assets	(10,007)		2,440
Program spend, net						Program spend, net	(294,597)		(43,857)
Increase in accounts payable and accrued liabilities						Increase in accounts payable and accrued liabilities	18,980		236,777
Change in net deemed repatriation tax						Change in net deemed repatriation tax	(18,364)		(14,550)
Other	(22,971		)	(4,391	)	Other	48,511		30,632
Net cash provided by operating activities	291,627			264,494		Net cash provided by operating activities	494,310		389,568
Cash flows from investing activities:						Cash flows from investing activities:
Additions to property, plant and equipment	(30,833		)	(25,201	)	Additions to property, plant and equipment	(92,059)		(90,800)
Acquisitions, net of cash acquired	(4,403,929		)	—		Acquisitions, net of cash acquired	(4,403,929)		0
Other	4,271			(1,800	)	Other	24,297		4,340
Net cash utilized by investing activities	(4,430,491		)	(27,001	)	Net cash utilized by investing activities	(4,471,691)		(86,460)
Cash flows from financing activities:						Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months	1,017,689			—		Proceeds from borrowings with maturity greater than three months	1,036,037		0
Repayments of borrowings with maturity greater than three months	(50,186		)	—		Repayments of borrowings with maturity greater than three months	(147,324)		0
Net repayments of other short-term borrowings	(1,424		)	3,419
Net proceeds from other short-term borrowings						Net proceeds from other short-term borrowings	(319)		(1,425)
Purchases of common stock	—			(47,479	)	Purchases of common stock	0		(60,137)
Stock-based compensation transactions	1,830			2,335		Stock-based compensation transactions	1,830		29,737
Dividends paid	(93,162		)	(79,274	)	Dividends paid	(279,423)		(250,760)
Payments related to tax withholding for share-based compensation	(5,307		)	(11,880	)	Payments related to tax withholding for share-based compensation	(5,935)		(13,061)
Redemption of equity instruments	(47,399		)	—		Redemption of equity instruments	(47,399)		0
Deferred acquisition payments	—			(87,500	)	Deferred acquisition payments	0		(100,000)
Debt acquisition costs						Debt acquisition costs	0		(21,534)
Other	(2,572		)	—		Other	(6,949)		0
Net cash provided (utilized) by financing activities	819,469			(220,379	)	Net cash provided (utilized) by financing activities	550,518		(417,180)
Effect of exchange rate changes on cash	(23,090		)	(2,851	)	Effect of exchange rate changes on cash	(21,101)		(7,867)
(Decrease) increase in cash, cash equivalents and restricted cash	(3,342,485		)	14,263
Decrease in cash, cash equivalents and restricted cash						Decrease in cash, cash equivalents and restricted cash	(3,447,964)		(121,939)
Cash, cash equivalents and restricted cash at beginning of year	4,580,369			1,182,371		Cash, cash equivalents and restricted cash at beginning of year	4,580,369		1,182,371
Cash, cash equivalents and restricted cash at end of period	$	1,237,884		1,196,634		Cash, cash equivalents and restricted cash at end of period	$	1,132,405	1,060,432

Supplemental information						Supplemental information
Cash paid during the period for:						Cash paid during the period for:
Interest	$	13,479		28,576		Interest	$	123,595	69,601
Income taxes	$	19,915		13,019		Income taxes	$	66,008	64,917

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests

(Thousands of Dollars)

(Unaudited)


																								Quarter Ended September 27, 2020
	Quarter Ended March 29, 2020																							Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, June 28, 2020																							Balance, June 28, 2020	$	110,143	2,297,267	4,064,715	(308,128)	(3,559,990)	38,144	$	2,642,151	$	24,133
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Shareholders' Equity			Redeemable Noncontrolling Interests
Balance, December 29, 2019	$	110,143	2,275,726			4,354,619			(184,220		)	(3,560,738		)	—			$	2,995,530		$	—
Noncontrolling interests related to acquisition of Entertainment One Ltd.	—		—			—			—			—			39,925			39,925			23,596
Net loss attributable to Hasbro, Inc.	—		—			(69,637		)	—			—			—			(69,637		)	—
Net earnings (loss) attributable to noncontrolling interests	—		—			—			—			—			(1,864		)	(1,864		)	37
Other comprehensive loss	—		—			—			(110,552		)	—			—			(110,552		)	—
Net earnings attributable to Hasbro, Inc.																							Net earnings attributable to Hasbro, Inc.	—		—	220,898	—	—	—	220,898		—
Net loss attributable to noncontrolling interests																							Net loss attributable to noncontrolling interests	—		—	—	—	—	(901)	(901)		(14)
Buyout of noncontrolling interest																							Buyout of noncontrolling interest	—		606	—	—	—	—	606		—
Other comprehensive earnings																							Other comprehensive earnings	—		—	—	27,798	—	—	27,798		—
Stock-based compensation transactions	—		(3,998		)	—			—			402			—			(3,596		)	—		Stock-based compensation transactions	—		(325)	—	—	61	—	(264)		—

Stock-based compensation expense	—		10,651			—			—			—			—			10,651			—		Stock-based compensation expense	—		13,885	0	—	0	—	13,885		—
Dividends declared	—		—			(93,172		)	—			—			—			(93,172		)	—		Dividends declared	—		—	(93,179)	—	—	0	(93,179)		—
Distributions paid to noncontrolling owners	—		—			—			—			—			(2,778		)	(2,778		)	2,408
Balance, March 29, 2020	$	110,143	$	2,282,379		$	4,191,810		$	(294,772	)	$	(3,560,336	)	$	35,283		$	2,764,507		$	26,041
Distributions paid to noncontrolling owners and other foreign exchange																							Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	(2,563)	(2,563)		(1,243)
Balance, September 27, 2020																							Balance, September 27, 2020	$	110,143	2,311,433	4,192,434	(280,330)	(3,559,929)	34,680	$	2,808,431	$	22,876

																								Quarter Ended September 29, 2019
																								Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, June 30, 2019																							Balance, June 30, 2019	$	104,847	1,290,540	4,053,266	(173,175)	(3,559,609)	0	$	1,715,869	$	0
Net earnings																							Net earnings	—		—	212,949	—	—	—	212,949		—
	Quarter Ended March 31, 2019
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Shareholders' Equity			Redeemable Noncontrolling Interests
Balance, December 30, 2018	$	104,847	1,275,059			4,184,374			(294,514		)	(3,515,280		)	—			$	1,754,486		$	—
Net earnings	—		—			26,727			—			—			—			26,727			—
Other comprehensive earnings	—		—			—			12,175			—			—			12,175			—
Other comprehensive loss																							Other comprehensive loss	—		—	—	(12,201)	—	—	(12,201)		—
Stock-based compensation transactions	—		(11,114		)	—			—			1,569			—			(9,545		)	—		Stock-based compensation transactions	—		1,933	—	—	852	—	2,785		—
Purchases of common stock	—		—			—			—			(49,182		)	—			(49,182		)	—		Purchases of common stock	—		—	—	—	(1,504)	—	(1,504)		—
Stock-based compensation expense	—		5,285			—			—			—			—			5,285			—		Stock-based compensation expense	—		8,893	—	—	0	—	8,893		—
Dividends declared	—		—			(85,415		)	—			—			—			(85,415		)	—		Dividends declared	—		—	(85,884)	—	—	—	(85,884)		—
Balance, March 31, 2019	$	104,847	$	1,269,230		$	4,125,686		$	(282,339	)	$	(3,562,893	)	$	—		$	1,654,531		$	—

Balance, September 29, 2019																							Balance, September 29, 2019	$	104,847	1,301,366	4,180,331	(185,376)	(3,560,261)	0	$	1,840,907	$	0

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests

(Thousands of Dollars)

(Unaudited)


	Nine Months Ended September 27, 2020
	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, December 29, 2019	$	110,143	2,275,726	4,354,619	(184,220)	(3,560,738)	0	$	2,995,530	$	0
Noncontrolling interests related to acquisition of Entertainment One Ltd.	—		—	—	—	—	38,561	38,561		26,241
Net earnings attributable to Hasbro, Inc.	—		—	117,346	—	—	—	117,346
Net earnings (loss) attributable to noncontrolling interests	—		—	—	—	—	2,067	2,067		(138)
Buyout of noncontrolling interest	—		606	—	—	—	—	606		—
Other comprehensive loss	—		—	—	(96,110)	—	—	(96,110)		—
Stock-based compensation transactions	—		(4,613)	—	—	508	—	(4,105)		—

Stock-based compensation expense	—		39,714	—	—	301	—	40,015		—
Dividends declared	—		—	(279,531)	—	—	—	(279,531)		—
Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	(5,948)	(5,948)		(3,227)
Balance, September 27, 2020	$	110,143	2,311,433	4,192,434	(280,330)	(3,559,929)	34,680	$	2,808,431	$	22,876

	Nine Months Ended September 29, 2019
	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, December 30, 2018	$	104,847	1,275,059	4,184,374	(294,514)	(3,515,280)	0	$	1,754,486	$	0
Net earnings	—		—	253,109	—	—	—	253,109		—

Other comprehensive earnings	—		—	—	109,138	—	—	109,138		—
Stock-based compensation transactions	—		1,756	—	—	14,920	—	16,676		—
Purchases of common stock	—		—	—	—	(60,137)	—	(60,137)		—
Stock-based compensation expense	—		24,551	—	—	236	—	24,787		—
Dividends declared	—		—	(257,152)	—	—	—	(257,152)		—
Balance, September 29, 2019	$	104,847	1,301,366	4,180,331	(185,376)	(3,560,261)	0	$	1,840,907	$	0

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates.

The quarters ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019 were each 13-week periods. The nine-month periods ended September 27, 2020 and September 29, 2019 were each 39-week periods.

The results of operations for the quarter ended ~~March 29,~~September 27, 2020 are not necessarily indicative of results to be expected for the full year 2020, nor were those of the comparable 2019 period representative of those actually experienced for the full year 2019.

Following the Company's acquisition of Entertainment One Ltd. ("eOne" or "eOne Acquisition") (see Note 3), beginning with the first quarter of 2020, the eOne operating segment was added to the Company's reporting structure and is comprised of all legacy eOne operations. Over time, the Company plans to transition towards reflecting all of its entertainment operations within the eOne segment. The Company also expects to shift the consumer product and digital licensing business and toy and game sales related to the eOne preschool brands to legacy Hasbro ~~segments;~~segments, including related toy and game operations into the Company's geographic commercial segments in late 2021 and 2022. In addition to the eOne segment, the Company's brand architecture now reflects the addition of the TV, Film and Entertainment brand portfolio which consists of legacy eOne film and TV revenues. Operations related to eOne brands, including PEPPA PIG, PJ MASKS and RICKY ZOOM, are reported in the Emerging Brands portfolio.

eOne's results of operations and financial position are included in the Company's consolidated financial statements and accompanying condensed footnotes since the date of acquisition. For more information on the eOne Acquisition see Note ~~3, Business Combination.~~3.

Significant Accounting Policies

The Company's significant accounting policies are summarized in Note 1 to the consolidated financial statements included in our Form 10-K for the year ended December 29, 2019. An update and supplement to these accounting policies associated with our acquisition of eOne is below.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Noncontrolling Interests

The financial results and position of the noncontrolling interests acquired through the acquisition of eOne are included in their entirety in the Company’s consolidated statements of operations and consolidated balance sheets beginning with the first quarter of 2020. The value of the redeemable noncontrolling interests is presented in the consolidated balance sheets as temporary equity between liabilities and shareholders' equity. The value of the non-redeemable noncontrolling interests is presented in the consolidated balance sheets within total shareholders' equity. Earnings (losses) attributable to the redeemable noncontrolling interests and non-redeemable noncontrolling interests are presented as a separate line on the consolidated statements of operations which is necessary to identify those earnings (losses) specifically attributable to Hasbro. A breakout of the redeemable noncontrolling interests and non-redeemable noncontrolling interests acquired is listed below.

Name

Country of Incorporation

Ownership Interest

Proportion ~~held~~Held

Principal ~~activity~~Activity

Astley Baker Davies Limited

England and Wales

70Nonredeemable

Ownership of intellectual property

Whizz Kid Entertainment Limited(1)

England and Wales

70Redeemable

100

Production of television programs

MR Productions Holdings, LLC

United States

77Redeemable

Film development

Renegade Entertainment, LLC

United States

65Redeemable

Production of television programs

Round Room Live, LLC

United States

60Nonredeemable

Production of live events

(1) During the third quarter of 2020, Entertainment One U.K. Holdings Ltd., a subsidiary of the Company, acquired the remaining 30% of Whizz Kid Entertainment Limited, making it a wholly owned affiliate of the Company.

Production Financing

Production financing relates to financing facilities for certain of the Company's television and film productions. Beginning in the first quarter of 2020 with the acquisition of eOne, the Company funded certain of its television and film productions using production financing facilities. Production financing facilities are secured by the assets and future revenues of the individual production subsidiaries, typically have maturities of less than two years while the titles are in production, and are repaid once the production is delivered and all tax credits, broadcaster pre-sales and international sales have been received. In connection with the production of a television or film program, the Company records initial cash outflows within cash flows from operating activities due to its investment in the production and concurrently records cash inflows within cash flows from financing activities from the production financing it normally obtains. Under these facilities, certain of the Company's cash is restricted while the financing is outstanding. At ~~March 29,~~September 27, 2020, ~~$86,177~~$71,194 of the Company's cash was restricted by such facilities.

Investment in Productions and Acquired Content Rights

The cost of investments in programming ("IIP") and investments in content rights ("IIC") for eOne's television and film libraries are recorded in the consolidated balance sheets at amounts considered recoverable against future revenues. These amounts are amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through different exploitation windows (e.g., broadcast licenses, theatrical release and home entertainment) and the expected revenue earned in each of those stages of release over a period not exceeding 10 years. Amounts capitalized are reviewed regularly and any portion of the unamortized amount that appears not to be recoverable from future net revenues will be written off to program cost amortization during the period in which the loss becomes evident. Certain of these agreements require the Company to pay minimum guaranteed advances ("MGs") for participations and residuals. MGs are recognized in the consolidated balance sheets when a liability arises, usually on delivery of the television or film program to the Company. The current portion of MGs are recorded as Payables and Accrued Liabilities and the long-term portion are recorded as Other Liabilities.

These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed with the SEC audited consolidated financial statements for the fiscal year ended December 29, 2019 in its Annual Report on Form 10-K ("2019 Form 10-K"), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Recently Adopted Accounting Standards

The Company's significant accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its 2019 Form 10-K with the exception of the accounting policies disclosed above.

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-13 (ASU 2016-13) Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The standard update replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption was permitted. The Company adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (ASU 2018-13), Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, specifically related to disclosures surrounding Level 3 asset balances, fair value measurement methods, related gains and losses and fair value hierarchy transfers. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption was permitted. The Company adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

In March 2019, the FASB issued Accounting Standards Update No. 2019-02 (ASU 2019-02) Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The amendments in this update align cost capitalization of episodic television series production costs with that of film production cost capitalization. In addition, this update addresses impairment testing procedures with regard to film groups, when a film or license agreement is expected to be monetized with other films and/or license agreements. The intention of this update is to align accounting treatment with changes in production and distribution models within the entertainment industry and to provide increased transparency of information provided to users of financial statements about produced and licensed content. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption was permitted. The Company adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14) Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The standard relates to financial statement disclosure only and will not have an impact on the Company's consolidated statement of financial position, statements of operations and comprehensive earnings (loss) or statement of cash flows.

In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04) Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in this update apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. An entity may elect to apply the amendments provided by this update beginning March 12, 2020 through December 31, 2022. The Company is currently evaluating this option as it relates to its contracts that reference LIBOR, as well as the impact of the standard to the Company's consolidated financial statements.

(2) Revenue Recognition

Revenue Recognition

Revenue is recognized when control of the promised goods or content is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or content. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Contract Assets and Liabilities

Within our Entertainment, Licensing and Digital segment and our eOne segment the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied. In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues. The Company defers revenues on these advanced payments until its performance obligation is satisfied and records the aggregate deferred revenues as contract liabilities. The current portion of contract liabilities were recorded within Accrued Liabilities and the long-term portion were recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets. The Company records contract assets in the case of minimum guarantees that are being recognized ratably over the term of the respective license periods which varies based on sales over and above the contracts’ minimum guarantee. The current portion of contract assets were recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion were recorded as Other Long-Term Assets.

At ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019, the Company had the following contract assets and liabilities in its consolidated balance sheets:


	March 29, 2020		March 31, 2019		September 27, 2020		September 29, 2019
Assets				Assets
Contract assets - current	$	271,120	23,857	Contract assets - current	$	271,786	32,199
Contract assets - long term	87,496		3,434	Contract assets - long term	84,892		12,802
Total	$	358,616	27,291	Total	$	356,678	45,001

Liabilities				Liabilities
Contract liabilities	184,064		47,678
Contract liabilities - current				Contract liabilities - current	$	147,554	48,465
Contract liabilities - long term				Contract liabilities - long term	17,872		8,423
Total	$	184,064	47,678	Total	$	165,426	56,888

In connection with the Company’s acquisition of eOne, the Company acquired ~~$291,427~~$283,329 of contract assets, of which ~~$234,532~~$232,184 were recorded in Prepaid Expenses and Other Current Assets and ~~$56,895~~$51,145 were recorded in Other Long-term Assets, within the Company’s consolidated balances sheets. In addition, the Company acquired deferred revenues from eOne in the amount of ~~$189,654~~$152,266, of which $144,094 were recorded in Accrued Liabilities and $8,172 were recorded in Other Non-current Liabilities within the Company's consolidated balance sheets. InFor the ~~first quarter of~~nine months ended September 27, 2020, the Company recognized all revenues ~~of $80,652~~ related to ~~these~~the acquired current contract liabilities.

Contract assets and liabilities ~~acquired from~~attributable to eOne represent approximately ~~87%~~80% and ~~79%~~56% of total contract asset balances and total contract liability balances, respectively, as of ~~March 29,~~September 27, 2020.

Disaggregation of revenues

The Company disaggregates its revenues from contracts with customers by segment: U.S. and Canada, International, Entertainment, Licensing and Digital, and eOne. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into 5 brand categories: Franchise brands, Partner brands, Hasbro gaming, Emerging brands, and TV/Film/Entertainment. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note ~~12, Segment Reporting,~~13 for further information.

(3) Business Combination

On December 30, 2019, the Company completed its acquisition of eOne, a global independent studio that specializes in the development, acquisition, production, financing, distribution and sales of entertainment content. eOne's principal brand, PEPPA PIG, which was launched in the United Kingdom in May 2004, entertains ~~pre-school~~preschool children worldwide with much of its historical revenue generated through licensing and merchandising programs across multiple retail categories. eOne’s portfolio of ~~pre-school~~preschool brands also includes PJ MASKS and RICKY ZOOM.

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

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

The all-cash transaction was valued at approximately £2,900,000 based on the consideration of £5.60 per common share of eOne. Converted at the rate of $1.31 USD/GBP on December 30, 2019, the cash consideration for shares outstanding was approximately $3,658,000. The Company also redeemed eOne's outstanding senior secured notes and paid off the debt

outstanding under eOne's revolving credit facility, which together ~~represent~~represented approximately $831,000 of eOne's indebtedness. The total cash consideration transferred by the Company was approximately $4,635,000.

The total consideration transferred, in thousands of dollars except per share data, was as follows:


Acquisition Consideration
eOne common shares outstanding as of December 30, 2019	498,040
Cash consideration per share	$	7.35
Total consideration for shares outstanding	3,658,345
Cash consideration for employee share based payment awards outstanding	145,566
Cash consideration for extinguishment of debt	831,130
Total cash consideration	4,635,041
Less: Employee awards to be recorded as future stock compensation expense	47,399
Total consideration transferred	$	4,587,642

Acquisition Consideration
eOne common shares outstanding as of December 30, 2019 498,040
Cash consideration per share $ 7.35
   Total consideration for shares outstanding 3,658,345
Cash consideration for employee share based payment awards outstanding 145,566
Cash consideration for extinguishment of debt 831,130
   Total cash consideration 4,635,041
Less: Employee awards to be recorded as future stock compensation expense 47,399
   Total consideration transferred $ 4,587,642

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 $2,375,000 in November 2019, (2) the issuance of 10,592 shares of common stock at a public offering price of $95.00 per share in November 2019 (resulting in net proceeds of $975,185) and (3) $1,000,000 in term loans provided by a term loan agreement, which were borrowed on the date of closing. See Note 67 for further discussion of the issuance of the senior unsecured notes and term loan agreement.

The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”). Pursuant to Topic 805, the Company allocated the eOne purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 30, 2019. The excess of the purchase price over those fair values was recorded to goodwill. The Company's evaluations of the facts and circumstances available as of December 30, 2019, to assign fair values to assets acquired and liabilities assumed, including income tax related amounts, are ongoing. As we complete further analysis of assets including program rights, investment in films and television content, intangible assets, as well as deferred revenue, noncontrolling interest, tax and certain other liabilities, additional information onimpacting the assets acquired, ~~and~~ liabilities assumed and the related allocation thereof, may become available. A change in information related to the net assets acquired may change the amount of the purchase price assigned to goodwill, and as a result, the preliminary fair values set forth below are subject to adjustment as additional information is obtained and valuations are completed. Provisional adjustments, if any, will be recognized during the reporting period in which the adjustments are determined. We expect to finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

During the first nine months of 2020 the Company made adjustments to the preliminary allocation based on more detailed information obtained about the specific assets acquired and liabilities assumed. The adjustments made to the fair value of acquired investments in productions and content and intangible assets did not result in material changes to the amortization expense recorded in the previous quarter.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

The following table summarizes our preliminary allocation of the December 30, 2019 eOne purchase price (in thousands of dollars):, as adjusted during the first nine months of 2020:

Estimated Fair Value
Cash, cash equivalents and restricted cash $ 183,713
Accounts receivable, net 259,061
Inventories 7,029
Other current assets 286,270
Property, plant and equipment (including right of use assets) 90,339
Intangible assets 1,055,249
Content assets - IIC and IIP 751,524
Other assets 183,209
Short-term borrowings (60,533 )
Accounts payable, and accrued liabilities (772,097 )
Long-term debt (including current portion) (149,118 )
Other liabilities (262,644 )
Noncontrolling interests (63,541 )
Estimated fair value of net assets acquired 1,508,461
Goodwill 3,079,181
Total purchase price $ 4,587,642


	Initial Estimated Fair Value		Measurement Period Adjustments		Updated Estimated Fair Value
Cash, cash equivalents and restricted cash	$	183,713	$	0	$	183,713
Accounts receivable, net	259,061		36,093		295,154
Inventories	7,029		0		7,029
Other current assets	286,270		(570)		285,700
Property, plant and equipment (including right of use assets)	90,339		35,333		125,672
Intangible assets	1,055,249		751		1,056,000
Content assets - IIC and IIP	751,524		(140,234)		611,290
Other assets	183,209		(93,490)		89,719
Short-term borrowings	(11,011)		0		(11,011)
Current portion of long-term debt	(60,533)		(55,267)		(115,800)
Accounts payable, and accrued liabilities	(761,086)		58,344		(702,742)
Long-term debt	(149,118)		55,267		(93,851)
Other liabilities	(262,644)		34,878		(227,766)
Noncontrolling interests	(63,541)		(1,261)		(64,802)
Estimated fair value of net assets acquired	1,508,461		(70,156)		1,438,305
Goodwill	3,079,181		70,156		3,149,337
Total purchase price	$	4,587,642	$	0	$	4,587,642

Intangible assets consist of intellectual property associated with established brands, eOne artist relationships, eOne music catalogs and trademarks and tradenames with estimated useful lives ranging from 7 to 15 years, determined based on when the related cash flows are expected to be realized. The fair value of the intangible assets acquired was determined based on the estimated future cash flows to be generated from the acquired assets, considering assumptions related to contract renewal rates and estimated brand franchise revenue growth.

Investments in productions and content, or IIP and IIC, includes the fair value of completed films and television programs which have been produced by eOne or for which eOne has acquired distribution rights, as well as the fair value of films and television programs in production, pre-production and development. For films and television programs, fair values were estimated based on forecasted cash flows, discounted to present value. For titles less than 3 years old and titles in development, the content assets will be amortized using the individual film forecast method, wherein the amortization will phase to the revenues incurred. For titles over 3 years old, the estimated useful life is 10 years, and will be amortized straight-line over that period.

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

Other fair value adjustments were made to accounts receivable, net and other assets to reflect the fair value of certain assets upon acquisition.

The former eOne senior notes were adjusted to fair value prior to extinguishment using quoted market values, and the fair value of the outstanding amounts under eOne's credit facility were estimated to approximate their carrying values.

Goodwill of ~~$3,079,181~~$3,149,337 represents the excess of the purchase price over the fair value of the underlying tangible and identifiable intangible assets acquired and liabilities assumed. The acquisition goodwill represents the value placed on the combined company’s brand building capabilities, our storytelling capabilities and franchise economics in TV, film and other mediums to strengthen Hasbro brands. In addition, the acquisition goodwill depicts added benefits of long-term profitable growth through in-sourcing toy and game production for the acquired ~~pre-school~~preschool brands and cost-synergies, as well as future revenue growth opportunities. The goodwill recorded as part of this acquisition is included in the newly created eOne segment. The goodwill associated with the ~~fair value step-up of the~~ acquisition will not be amortized for financial reporting purposes and will not be deductible for federal tax purposes.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Changes in the carrying amount of goodwill, by operating segment, for the ~~three~~quarter and nine months ended ~~March 29,~~September 27, 2020 is as follows:

(in thousands of dollars) U.S and Canada International Entertainment, Licensing and Digital eOne Total

Balance at December 29,2019 $ 291,577
170,218
32,789
—
$ 494,584
Acquired during the period —
—
—
3,079,181
3,079,181
Foreign exchange translation —
(321 ) (794 ) —
(1,115 )
Balance at March 29, 2020 $ 291,577
169,897
31,995
3,079,181
$ 3,572,650


	Nine Months Ended September 27, 2020
(in thousands of dollars)	U.S and Canada		International	Entertainment, Licensing and Digital	eOne	Total

Balance at December 29, 2019	$	291,577	170,218	32,789	0	$	494,584
Acquired during the period	0		0	0	3,079,181	3,079,181
Measurement period adjustments	0		0	0	70,156	70,156
Foreign exchange translation	0		188	9	0	197
Balance at September 27, 2020	$	291,577	170,406	32,798	3,149,337	$	3,644,118

The following table summarizes net revenues and loss before income taxes of eOne included in the Company's Consolidated Statement of Operations since the date of acquisition for the quarter and nine months ended ~~March 29,~~September 27, 2020 (in thousands of dollars).


	Quarter Ended		Nine Months Ended
	September 27, 2020		September 27, 2020
eOne:
Net revenues	$	193,474	$	696,889
Loss before income taxes	(30,793)		(75,441)

Quarter Ended
March 29, 2020
eOne:
Net revenues $ 342,493
Loss before income taxes (33,620 )

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

For the ~~first~~ quarter ofand nine months ended September 27, 2020 the Company incurred ~~$149,782~~$5,949 and $165,993, respectively, of charges related to the eOne Acquisition, which are recorded in acquisition and related ~~charges~~costs within the Company’s Consolidated Statement of Operations. ~~Included within the eOne results above were $77,729 of acquisition and related charges. The remaining charges were included in Corporate and Eliminations.~~

The acquisition and related costs ~~of $149,782 consist~~for the quarter and nine months ended September 27, 2020 consisted of the following:

•Acquisition and integration costs of ~~$95,718,~~$4,599 and $104,283 for the quarter and nine months ended September 27, 2020, respectively, including, ~~$47,339~~for the nine months ended September 27, 2020, $47,399 of expense associated with the acceleration of eOne stock-based compensation and $38,168 of advisor fees settled at the closing of the acquisition, as well as integration costs; and

•Restructuring and related costs of ~~$54,064,~~$1,350 and $61,710 for the quarter and nine months ended September 27, 2020, respectively, including severance and retention costs for the quarter and nine months ended September 27, 2020 of ~~$13,186,~~$1,350 and $20,832, respectively, as well as $40,878 in impairment charges for certain definite-lived intangible and production ~~assets.~~assets for the nine months ended September 27, 2020. The impairment charges of $40,878 were driven by the change in strategy for the combined company’s entertainment assets.

For the quarter ended September 27, 2020, all acquisition and related costs were included in Corporate and Eliminations. For the nine months ended September 27, 2020, $77,729 and $20,831 of acquisition and related charges were included within the eOne and Entertainment, Licensing and Digital results, respectively. The remaining charges were included in Corporate and Eliminations.

Pursuant to Topic 805, unaudited supplemental pro forma results of operations for the ~~three~~quarter and nine months ended ~~March 31,~~September 29, 2019, as if the acquisition of eOne had occurred on December 31, 2018, the first day of the Company’s 2019 fiscal year are presented below (in thousands, except per share amounts):


	Quarter Ended		Nine Months Ended
	September 29, 2019		September 29, 2019
Revenues	$	1,858,483	$	4,272,833
Net earnings	218,858		255,357
Net earnings attributable to Hasbro, Inc.	216,536		250,443

Net earnings per common share:
Diluted	$	1.57	$	1.82
Basic	$	1.57	$	1.82

Unaudited
March 31, 2019
Revenues $ 1,198,722
Net earnings 79,134
Net earnings attributable to Hasbro, Inc. 76,405

Net earnings per common share:
Diluted $ 0.56
Basic $ 0.56

The Company acquired eOne on the first day of fiscal year 2020, as such our actual results reflect the acquisition occurring on the first day of the current period.

These pro forma results do not represent financial results that would have been realized had the acquisition occurred on December 31, 2018, nor are they intended to be a projection of future results.

The unaudited pro forma results include certain pro forma adjustments to net earnings (loss) that were directly attributable to the acquisition, as if the acquisition had occurred on December 31, 2018, including the following:

•transaction costs of $3,244 for the quarter and nine months ended September 29, 2019 incurred by eOne related to the eOne Acquisition, included in Selling, Distribution and Administration;

•additional amortization expense of ~~$12,480~~$9,726 and $30,778 for the quarter and nine months ended September 29, 2019, respectively, that would have been recognized as a result of the allocation of purchase consideration to definite-lived intangible assets subject to amortization;

•estimated differences in interest expense of $19,105 and $57,316 for the quarter and nine months ended September 29, 2019, respectively, as a result of incurring new debt and extinguishing historical eOne debt;

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

•total reduction in Other Expense of $25,533 and $45,345 for the quarter and nine months ended September 29, 2019, respectively, consisting of:

◦$25,533 for the quarter and nine months ended September 29, 2019 related to the mark to market of foreign exchange forward and option contracts, which the Company entered into in order to hedge a portion of the British pound sterling purchase price for the eOne Acquisition; and

◦$19,812 for the nine months ended September 29, 2019 related to premiums paid by eOne in connection with the 2019 early redemption and refinancing of its senior secured notes and the related write-off of unamortized deferred finance charges associated with the senior secured notes;

•the income tax effect of the pro forma adjustments resulted in income tax benefits of $683 and $8,707 for the ~~amount of $6,570,~~quarter and nine months ended September 29, 2019, respectively, calculated using a blended statutory income tax rate of 22.5% for the eOne amortization and elimination of historical interest adjustments, and a blended statutory tax rate of 21% for the interest on the new ~~debt interest.~~debt.

(4) Earnings ~~(Loss)~~ Per Share

Net earnings per share data for the quarters and nine months ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019 were computed as follows:


	2020					2019			2020			2019
Quarter	Basic			Diluted		Basic	Diluted	Quarter	Basic		Diluted	Basic		Diluted
Net earnings (loss) attributable to Hasbro, Inc.	$	(69,637	)	(69,637	)	26,727	26,727
Net earnings attributable to Hasbro, Inc.								Net earnings attributable to Hasbro, Inc.	$	220,898	220,898	$	212,949	212,949

Average shares outstanding	137,147			137,147		126,287	126,287	Average shares outstanding	137,258		137,258	126,453		126,453
Effect of dilutive securities:								Effect of dilutive securities:
Options and other share-based awards	—			—		—	529	Options and other share-based awards	—		232	—		751
Equivalent Shares	137,147			137,147		126,287	126,816	Equivalent Shares	137,258		137,490	126,453		127,204

Net earnings (loss) attributable to Hasbro, Inc. per common share	$	(0.51	)	(0.51	)	0.21	0.21
Net earnings attributable to Hasbro, Inc. per common share								Net earnings attributable to Hasbro, Inc. per common share	$	1.61	1.61	$	1.68	1.67

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This Quarterly Report on Form 10-Q, including the following section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements expressing management's current expectations, goals, objectives and similar matters. These forward-looking statements may include statements concerning: the impact of, and actions and initiatives taken and planned to be taken to try and manage the negative impact of, the global coronavirus outbreak on our ~~business, including the negative impact on supply of products and production of entertainment content, demand for our products and entertainment, our liquidity and our community;~~business; the expected adequacy of supply and operation of our manufacturing facilities; the ability to achieve our financial and business goals and objectives; the Company's product and entertainment ~~plans;~~plans, including anticipated entertainment production; anticipated product and entertainment performance; anticipated expenses; and working capital and liquidity. See Item 1A, in Part II of this report and Item 1A, in Part I of the Annual Report on Form 10-K for the year ended December 29, 2019 (“2019 Form 10-K”), for a discussion of factors which may cause the Company's actual results or experience to differ materially from that anticipated in these forward-looking statements. The Company undertakes no obligation to revise the forward-looking statements in this report after the date of the filing. ~~Unless otherwise specifically indicated, all dollar or share amounts herein are expressed in millions of dollars or shares, except for per share amounts.~~

EXECUTIVE SUMMARY

Completion of Acquisition

On December 30, 2019, Hasbro, Inc. ("Hasbro" or the "Company") completed the acquisition of Entertainment One Ltd. ("eOne") for an aggregate purchase price of approximately $4.6 billion, 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. We financed the acquisition through a combination of debt and equity financings, including (i) the issuance of senior unsecured notes in an aggregate principal amount of $2.4 billion, (ii) the issuance of 10,592,106 shares of common stock at a public offering price of $95.00 per share and (iii) $1.0 billion in term loans. eOne's results of operations and financial position are included in the Company's consolidated financial statements and accompanying condensed footnotes since the date of acquisition. The addition of eOne accelerates the Company's brand blueprint strategy by expanding our brand portfolio with eOne's global preschool brands, adding proven TV and film expertise and executive leadership as well as by enhancing brand building capabilities and our storytelling capabilities to strengthen Hasbro brands.

For more information on the eOne Acquisition see Note 3, "Business Combination" to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

For purposes of identifying Hasbro activities that existed before the eOne Acquisition, in some instances, Hasbro may be referred to herein as legacy Hasbro. For purposes of identifying certain activities derived from eOne's historical business, in some instances these activities may be referred to herein as legacy eOne.

Hasbro, Inc. is a global play and entertainment company committed to Creating the World's Best Play and Entertainment Experiences. From toys, games and consumer products to television, movies, digital gaming, ~~live action,~~live-action, music, and virtual reality experiences, Hasbro connects to global audiences by bringing to life great innovations, stories and brands and developing and delivering the very best content across established and inventive platforms. Hasbro’s iconic brands include MAGIC: THE GATHERING, MY LITTLE PONY, NERF, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, POWER RANGERS, and through the acquisition of eOne, Hasbro expanded its portfolio with popular ~~pre-school~~preschool brands including PEPPA PIG, PJ MASKS and RICKY ZOOM. In addition, Hasbro leverages its portfolio of premier partner brands. Through our global entertainment studio, we are building our brands worldwide through great storytelling and content on all screens, including content based on our children’s and family entertainment brands as well as offering the production and distribution of a broad spectrum of ~~live action~~live-action scripted and unscripted entertainment content ~~that is not based on our children’s and family entertainment brands.~~geared toward all audiences. Hasbro is committed to making the world a better place for all children and ~~their~~all families through corporate social responsibility and philanthropy.

Hasbro's strategic plan is centered around its brand blueprint. Under the brand blueprint strategy, Hasbro re-imagines, re-invents and re-ignites its owned and controlled brands and imagines, invents and ignites new brands, through product innovation, immersive entertainment offerings, including television, film and music, digital gaming and a broad range of consumer products. As the global consumer landscape, shopping behaviors and the retail and entertainment environments continue to evolve, the Company continues to transform and reimagine its business strategy. This transformation includes reexamining the ways Hasbro organizes across its brand blueprint and re-shaping the Company to become a better equipped and adaptive, digitally-driven organization, including the development of an omni-channel retail presence and adding new capabilities through the on-boarding of new skill sets and talent. More recently, to enhance its long-term competitive position the Company has identified and pursued key growth opportunities through strategic acquisitions, to excel in today’s converged retail environment as a leading global play and entertainment company across all platforms.

Hasbro generates revenue and earns cash by developing, marketing and selling products based on global brands in a broad variety of consumer goods categories, in digital gaming applications and through distribution of television programming and

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

other content based on the Company's properties, as well as through the out-licensing of rights for third parties to use its properties in connection with products, including digital media and games and other consumer products. Hasbro also leverages its competencies to develop and market products based on well-known licensed brands including, but not limited to, BEYBLADE, DISNEY PRINCESS and DISNEY FROZEN, DISNEY’S DESCENDANTS, MARVEL, SESAME STREET, STAR WARS, and DREAMWORKS’ TROLLS. MARVEL, STAR WARS, DISNEY PRINCESS, DISNEY FROZEN and DISNEY’S DESCENDANTS are owned by The Walt Disney Company. ~~The~~Additionally, Hasbro's eOne business ~~also~~ generates revenue and earnings from the production and distribution of a broad spectrum of television and film entertainment ~~as well as music production and distribution,~~ that is not based on our children’s and family entertainment ~~brands.~~brands, as well as from music production and distribution geared towards all audiences.

The Company's business is separated into four principal business segments: U.S. and Canada, International, Entertainment, Licensing and Digital and, following the eOne Acquisition, the eOne operating segment was added to the Company's reporting structure. The U.S. and Canada segment markets and sells both toy and game products primarily in the United States and Canada. The International segment consists of the Company's European, Asia Pacific and Latin and South American toy and game marketing and sales operations. The Company's Entertainment, Licensing and Digital segment includes the Company's Wizards of the Coast digital gaming business, consumer products licensing, owned and licensed digital gaming, movie and television entertainment operations. The eOne segment engages in the development, acquisition, production, financing, distribution and sales of entertainment content and is comprised of all legacy eOne operations. These diversified offerings span ~~across~~ film, television and music production and sales, family programming, merchandising and licensing, and digital content. Over time, the Company plans to transition towards reflecting all of its entertainment operations in the eOne segment. The Company also expects to shift the consumer product and digital licensing business and toy and game sales related to the eOne preschool brands, to legacy Hasbro ~~segments;~~segments, including related toy and game operations into the Company's geographic commercial segments in late 2021 and 2022.

Coronavirus Outbreak

In the first quarter of 2020, the outbreak of the coronavirus disease (COVID-19) was recognized as a pandemic by the World Health Organization. The adverse impact on our business of the global outbreak of COVID-19 currently being experienced in markets in which Hasbro, our employees, consumers, customers, partners, licensees, suppliers and manufacturers operate, ~~could have a~~has been significant ~~negative impact on~~and is reflected in our revenues, profitability and ~~business.~~business operations overall. As a result of the preventative actions taken worldwide, such as restrictions on travel and business operations, temporary closures or limited reopenings of non-essential businesses, shelter-in-place and stay-at-home orders, reductions in consumers going to retail stores and buying products, and other voluntary and government imposed restrictions, the outbreak has had a negative impact on economic conditions in all of our markets. These preventative actions although necessary, have led to market uncertainty and some economic disruption.

We have experienced ~~and expect to continue to experience,~~ disruptions in supply of products and production of entertainment content, negative impact on sales due to changes in consumer purchasing behavior and availability of ~~product~~products to consumers, ~~including~~including; due to retail store closures, limited reopenings of retail stores and limitations on the capacity of e-comm channels to supply additional products; delays or postponements of entertainment productions and releases of entertainment content both internally and by our partners; and challenges of working remotely. While we have developed and continue to develop plans to help mitigate the negative impact of ~~the coronavirus~~COVID-19 to our business, the efforts will not prevent our business from being adversely affected, and the longer the outbreak continues, or if the virus continues to reemerge or surge in areas in which we do business, the more negative the impact on our business, revenues and earnings, and the more limited our ability will be to try and make up for delayed or lost product development, production and sales in future periods.

During the first ~~quarter~~nine months of 2020, the Company's supply chain experienced lower than planned production levels in certain of its third-party manufacturing facilities ~~located in~~across several geographies including, but not limited to, China, India and the United States, due to the impact of COVID-19. After operating at lower than planned production levels during the first quarter due to COVID-19, ~~these~~ facilities ~~are currently~~in China began to reopen during the second quarter and have since returned to planned operating ~~at planned~~ capacity and production output for this time of year. Outside of China, manufacturing operated at varying levels during the first nine months of 2020 depending on local government action, the prevalence of COVID-19 infection, and overall safety considerations. In response, the Company utilized its global supply chain and existing inventory to work to meet demand, ~~and~~which has remained strong. Headed into the fourth quarter of 2020, the Company ~~currently expects~~continues to make up for ~~any~~ lost production in areas of the ~~second~~business where demand has been strongest, such as gaming, and ~~third quarters, to be~~believes it is well positioned for holiday demand, ~~later in the year.~~as nearly all of Hasbro's partner factories and warehouses are currently open and operating. However, if ~~significant~~ manufacturing facilities ~~remained closed or limited in operation for longer than expected, or~~ are impacted by a resurgence in COVID-19, we may ~~not be able to make up for the disruption in supply~~experience further disruptions in the ~~nearer~~Company's supply chain in the near term.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

During the first ~~quarter,~~nine months of 2020, as more of our consumers remained at home, we creatively found ways to accelerate our business online, expand omni-channel and skip the shopping cart to get our products into cars and homes. For example, we launched Bring Home the Fun, a global initiative created to further the Company’s purpose to make the world a better place for children and their families. The initiative provides parents and caregivers resources to help ~~keep~~ kids remain occupied and engaged during

extended time at home and indoors. Another example is the initiative our Wizards of the Coast team undertook to enable players to play MAGIC: THE GATHERING games while ~~in person~~in-person play events are not happening.

Markets with more developed e-comm and omni-channel business operations performed ~~relatively well~~better during the ~~quarter whereas~~first nine months of 2020, than those markets that rely more heavily on physical stores for reaching ~~consumers~~consumers. Markets in Latin America, which have less advanced e-comm business and where retail store closures remain high, have been and are ~~being negatively impacted~~expected to ~~a greater degree. Our top three customers~~continue to be challenged during the ~~first quarter were Walmart, Target and Amazon.~~remainder of 2020. The negative impact to future periods from store closures is unknown: however, we expect a greater impact to the second quarter of 2020. As of the close of the first quarter, we remain focused on managing credit risk and are taking steps to manage expenses, bad debt exposures and preserve cash in the near term.or limited reopenings remains unknown.

Beginning late in the first quarter and continuing throughout the first nine months of 2020, production and delivery of live-action television and film projects for Hasbro's eOne TV and Film business ~~were~~have been delayed, negatively impacting the level and timing of revenues. For several months following the initial COVID-19 outbreak, live-action productions were shut down; however, the industry has been working to resume live-action production operations. As of the end of the third quarter, live-action productions have restarted in the United Kingdom and Canada and in certain other European countries. In the U.S., the expectation is for live-action productions to resume during the fourth quarter of 2020, subject to the negative impact on such resumption that could result from further COVID-19 outbreaks. The eOne team continues to develop new projects and work on animation production, which ~~can be~~is being done remotely. The team ~~now~~ expects ~~to deliver~~a delay in certain finished episodes and film projects ~~later in the year than planned.~~as compared to initial expectations. Additionally, several film release dates have moved ~~to later in 2020,~~ into 2021 and in some instances, releases are going straight to video on demand/electronic sell-through windows impacting the timing and level of anticipated revenues. As more people ~~are~~remain at home, content viewership isremains high, which we believe bodes well for long-term brand ~~engagement.~~engagement and the Company expects a robust 2021 entertainment slate for eOne productions and from our Partner Brands.

We believe we have sufficient liquidity and capital resources available at this time, including approximately $1.1 billion of cash on hand and $1.5 billion available under our revolving credit facility. We are in compliance with our covenants under our revolving credit facility and, while we do not currently foresee a need to borrow under the facility, we believe we would be able to access the facility for the foreseeable future.Our top three customers during the first nine months of 2020 were Walmart, Amazon and Target. During this time of uncertainty, however, we are managing our expenses to further preserve our liquidity and while our collections in the third quarter were strong, we continue to closely monitor our customers’ health and collectability of receivables, with some customers having difficulty making payments or requesting extended payment terms at a time when retailers are experiencing challenges such as store closures and in some cases, bankruptcy filings.

The health and safety of Hasbro employees, stakeholders and communities is a top priority. In China, Hasbro's offices reopened in late March when the COVID-19 outbreak there improved, following shutdowns earlier in the first quarter. Hasbro's global offices, outside of China, were closed in March due to the COVID-19 outbreak and ~~remain closed today. Hasbro employees have~~began re-opening on a limited, as needed basis as we continue to actively work on plans to safely bring workers back to our offices. The majority of our workforce has been ~~working virtually~~able to work remotely in an effective manner since the closure and the timing of re-opening offices will be based on need as well as local governmental, health and safety ~~guidelines.~~guidelines and COVID-19 conditions.

The coronavirus outbreak continues to be fluid and uncertain, making it difficult to forecast the ~~final~~ impact it could have on our future operations. Please see Part II, Item 1A, Risk Factors, for further information.

~~First~~The Company’s 2020 results presented in this Form 10-Q include eOne's results of operations and financial position beginning on December 30, 2019, the date of acquisition. The Company’s 2019 results are presented as reported and do not include 2019 eOne results.

Third quarter 2020 highlights:

~~First~~•Third quarter net revenues of ~~$1,105.6~~$1,776.6 million increased ~~51%~~13% compared to ~~$732.5~~$1,575.2 million in the ~~first~~third quarter of ~~2019 and reflects the 2020 acquisition of eOne.~~2019. The increase in net revenues included an unfavorable foreign currency translation of ~~$11.7 million.~~$3.4 million attributable to the Company’s legacy Hasbro business.

•Net revenues in the U.S. and Canada segment increased ~~20%~~9% to ~~$428.6~~$977.1 million; International segment net revenues decreased ~~11%~~8% to ~~$250.4~~$517.0 million, including an unfavorable foreign currency translation impact of ~~$9.3~~$3.3 million; Entertainment, Licensing and Digital segment net revenues decreased 9%23% to ~~$84.0~~$89.0 million; and eOne segment net revenues were ~~$342.5~~$193.5 million.

•Net revenues from ~~Hasbro Gaming increased 30%; Partner~~Emerging Brands increased 6%14%; Franchise ~~Brands increased 1%; Emerging~~ Brands net revenues increased ~~58%~~4%; Hasbro Gaming net revenues increased 3%; and ~~include~~net revenues from Partner Brands decreased 4%; TV, Film and

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Entertainment portfolio net revenues were $165.7 million and represented 9% of total net revenues in the ~~addition~~third quarter of ~~preschool brands, PEPPA PIG, PJ MASKS~~2020.

•Operating profit was $336.6 million, or 19% of net revenue, in the third quarter of 2020 compared to operating profit of $297.2 million, or 18.9% of net revenue, in the third quarter of 2019.

•Third quarter 2020 operating profit was negatively impacted by acquisition and ~~RICKY ZOOM,~~related expenses of $5.9 million ($4.7 million after-tax) and $24.7 million ($19.6 million after-tax) of eOne acquired ~~as part~~intangible asset amortization.

•Net earnings attributable to Hasbro, Inc. of $220.9 million, or $1.61 per diluted share, in the third quarter of 2020 compared to net earnings of $212.9 million, or $1.67 per diluted share, in the third quarter of 2019.

•Third quarter 2020 net earnings included incremental income tax expense of $13.7 million, or $0.10 per diluted share, related to a change in the United Kingdom ("UK") tax code.

•Third quarter 2019 net earnings included an unrealized foreign currency loss of $25.5 million ($20.9 million after-tax), or $0.16 per diluted share, related to hedging the British Pound sterling purchase price of eOne.

First nine months 2020 highlights:

•Net revenues increased 14% to $3,742.5 million in first nine months of 2020 compared to $3,292.2 million in the first nine months of 2019. The increase in net revenues included $25.7 million of unfavorable foreign currency translation attributable to the Company's legacy Hasbro business.

•Net revenues in the U.S. and Canada segment remained flat at $1,765.5 million; International segment net revenues decreased 17% to $1,017.2 million; Entertainment, Licensing and Digital segment net revenues decreased 14% to $262.9 million; while eOne ~~Acquisition;~~segment net revenues were $696.9 million in the first nine months of 2020. International segment net revenues were unfavorably impacted by $25.1 million in foreign currency translation.

•Net revenues from Emerging Brands increased 22%; Hasbro Gaming net revenues increased 11%; Partner Brands and ~~eOne~~Franchise Brands net revenues each decreased 10%; and TV, Film and Entertainment portfolio net revenues were ~~$292.5 and represented 26%~~$590.4 million representing 16% of total net revenues in the first ~~quarter~~nine months of 2020.

•Operating ~~losses were $23.3~~profit was $315.5 million, or ~~2.1%~~8% of net ~~revenue,~~revenues, in the first ~~quarter~~nine months of 2020 compared to operating profit of ~~$36.1~~$461.7 million, or ~~4.9%~~14.0% of net ~~revenue,~~revenues, in the first ~~quarter~~nine months of 2019.

~~First quarter~~•Operating profit in the first nine months of 2020 ~~operating losses were~~was negatively impacted by acquisition and related expenses of ~~$149.8~~$166.0 million ($~~127.5~~140.7 million after-tax) ~~and $25.0~~; $72.3 million ($~~19.9~~57.5 million after-tax) of eOne acquired intangible asset ~~amortization.~~amortization; and $11.6 million ($10.1 million after-tax) of restructuring charges associated with cost savings initiatives.

~~The net loss~~•Net earnings attributable to Hasbro, Inc. ~~of $69.6~~was $117.3 million, or ~~$0.51~~$0.85 per diluted share, in the first ~~quarter~~nine months of 2020 compared to net earnings attributable to Hasbro, Inc. of ~~$26.7~~$253.1 million, or ~~$0.21~~$1.99 per diluted share, in the first ~~quarter~~nine months of 2019.

•Net earnings in the first nine months of 2020 included incremental income tax expense of $13.7 million, or $0.10 per diluted share, related to a change in the UK tax code.

•Net earnings for the first nine months of 2019 included non-cash charges of $110.8 million ($85.9 million after-tax), or $0.68 per diluted share, related to the Company's settlement of its U.S. defined benefit pension plan liability, as well as an unrealized foreign currency loss of $25.5 million ($20.9 million after-tax), or 0.16 per diluted share, related to a partial hedge of the British Pound purchase price of Entertainment One.

The impact of changes in foreign currency exchange rates used to translate the consolidated statements of operations is quantified by translating the current period revenues at the prior period exchange rates and comparing this amount to the prior period reported revenues. Since the Company’s 2019 results are presented as reported and do not include 2019 eOne results, references to the impact of foreign currency exchange on 2020 results exclude the impact to revenues attributable to the Company’s eOne business. The Company believes that the presentation of the impact of changes in exchange rates, which are beyond the Company’s control, is helpful to an investor’s understanding of the performance of the underlying business.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Amounts Returned to Shareholders

The Company has a long history of returning cash to its shareholders through quarterly dividends and share repurchases. Hasbro maintained its quarterly dividend rate of $0.68 per share for the dividend ~~scheduled to be~~ paid in ~~May~~August 2020and has maintained this rate for the dividend payment planned for November 2020. In addition to the dividend, the Company historically has returned cash through its share repurchase program. As part of this initiative, since 2005, the Company's Board of Directors (the "Board") adopted nine share repurchase authorizations with a cumulative authorized repurchase amount of $4,325.0 million. The ninth authorization was approved in May 2018 for $500 million. As of ~~March 29,~~September 27, 2020, the Company had $366.6 million remaining under these authorizations. Share repurchases are subject to market conditions, the availability of funds and other uses of funds. As a result of the financing activities related to the eOne Acquisition, the Company has suspended its current share repurchase program while it prioritizes ~~reducing its long-term debt and achieving its gross debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") targets.~~deleveraging.

SUMMARY OF FINANCIAL PERFORMANCE

A summary of the results of operations is illustrated below for the ~~quarters~~quarter and nine month periods ended ~~March~~September 27, 2020 and September 29, ~~2020~~ ~~and~~ ~~March 31, 2019~~.2019.


	Quarter Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019
Net revenues	$	1,776.6	$	1,575.2	$	3,742.5	$	3,292.2
Operating profit	336.6		297.2		315.5		461.7
Earnings before income taxes	299.2		259.7		183.6		295.4
Income tax expense	79.2		46.8		64.3		42.3
Net earnings	220.0		212.9		119.3		253.1
Net (loss) earnings attributable to noncontrolling interests	(0.9)		—		1.9		—
Net earnings attributable to Hasbro, Inc.	220.9		212.9		117.3		253.1
Diluted earnings per share	1.61		1.67		0.85		1.99

Quarter Ended
March 29, 2020 March 31, 2019
Net revenues $ 1,105.6
$ 732.5
Operating profit (loss) (23.3 ) 36.1
Earnings (loss) before income taxes (71.9 ) 29.6
Income tax expense (benefit) (4.1 ) 2.9
Net earnings (loss) (67.8 ) 26.7
Net earnings attributable to noncontrolling interests 1.8
—
Net earnings (loss) attributable to Hasbro, Inc. (69.6 ) 26.7
Diluted earnings (loss) per share (0.51 ) 0.21

RESULTS OF OPERATIONS – CONSOLIDATED

Third Quarter of 2020

The quarters ended ~~March~~September 27, 2020 and September 29, ~~2020~~ ~~and~~ ~~March 31,~~ 2019 were each 13-week periods.

Consolidated net revenues for the ~~first~~third quarter of 2020 increased ~~$373.1~~$201.4 million, or ~~51%~~13%, compared to the ~~first~~third quarter of 2019 and reflect the inclusion of eOne revenues of $193.5 million which represent ~~31.0%~~11% of consolidated net revenues for the quarter. ~~First~~Third quarter 2020 net revenues include ~~an $11.7~~a $3.4 million unfavorable impact from foreign currency translation as a result of weakening currencies, ~~compared to the U.S. dollar,~~ primarily in the ~~European,~~Company's Latin American ~~and Asia Pacific~~markets, partially offset by favorable foreign currency translation from European markets in the third quarter of 2020 compared to 2019.

Operating ~~losses~~profit for the ~~first~~third quarter of 2020 ~~were $23.3~~was $336.6 million, or ~~2.1%~~19% of net revenues, compared to operating profit of ~~$36.1~~$297.2 million, or ~~4.9%~~19% of net revenues, for the ~~first~~third quarter of 2019. Operating ~~losses~~profit during the ~~first~~third quarter of 2020 ~~reflect~~reflects the consolidation of eOne results of operations and ~~were~~was negatively impacted by acquisition and related costs of ~~$149.8~~$5.9 million ($~~127.5~~4.7 million after-tax) and ~~$25.0~~$24.7 million ($~~19.9~~19.6 million after-tax) of expenses related to eOne acquired intangible asset amortization.

Net ~~losses, including the impact of noncontrolling interests~~earnings attributable to Hasbro, Inc. were ~~$67.8~~$220.9 million for the ~~first~~third quarter of 2020 compared to net earnings of ~~$26.7~~$212.9 million for the ~~first~~third quarter of 2019. ~~The diluted loss~~Diluted earnings per share attributable to Hasbro, Inc. for the ~~first~~third quarter of 2020 was ~~$0.51, down from $0.21~~$1.61, compared to diluted earnings per share of $1.67 in the ~~first~~third quarter of 2019 and reflects the negative impact of ~~acquisition related costs and~~ eOne acquired intangible asset amortization of ~~$0.93~~$0.14 per diluted share, incremental income tax expense related to a change in the UK tax code of $0.10 per diluted share and ~~$0.14~~acquisition and related costs of $0.03 per diluted share. Third quarter 2019 net earnings included an unrealized foreign currency loss of $0.16 per diluted share, ~~respectively.~~related to hedging the British Pound sterling purchase price of eOne.

As a result of the 2020 acquisition of eOne, the Company's brand architecture reflects the addition of the TV, Film and Entertainment brand portfolio which consists of legacy eOne film and TV revenues. Revenues related to eOne brands, including PEPPA PIG, PJ MASKS and RICKY ZOOM, are reported in the Emerging Brands portfolio.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

The following table presents net revenues by brand and entertainment portfolio for the quarters ended ~~March~~September 27, 2020 and September 29, ~~2020~~ ~~and~~ ~~March 31, 2019~~.

2019.


	Quarter Ended						Quarter Ended
	March 29, 2020		March 31, 2019	% Change			September 27, 2020		September 29, 2019	% Change
Franchise Brands	$	396.5	393.6	1	%	Franchise Brands	$	807.6	779.7	4	%
Partner Brands	182.3		172.0	6	%	Partner Brands	409.2		427.0	-4	%
Hasbro Gaming	140.1		107.6	30	%	Hasbro Gaming	239.2		232.3	3	%
Emerging Brands	94.1		59.4	58	%	Emerging Brands	155.0		136.2	14	%
TV, Film and Entertainment	292.5		—	100	%	TV, Film and Entertainment	165.7		—	100	%
Total	$	1,105.6	732.5	51	%	Total	$	1,776.6	1,575.2	13	%

FRANCHISE BRANDS: Net revenues in the Franchise Brands portfolio increased 1%4% in the ~~first~~third quarter of 2020 compared to the ~~first~~third quarter of 2019. ~~Higher net revenues~~Net revenue increases from MAGIC: THE GATHERING and MONOPOLY products, drove the majority of the increase in the third quarter of 2020, and were partially offset by ~~lower~~net revenue declines from TRANSFORMERS, NERF and MY LITTLE PONY products. During the third quarter of 2020, MAGIC: THE GATHERING products benefited from a favorable card set release cadence while 2019 net revenues from ~~PLAY-DOH,~~ TRANSFORMERS ~~MY LITTLE PONY and to a lesser extent, NERF and Baby Alive~~ products ~~during~~were supported by the ~~first quarter~~theatrical release of ~~2020.~~TRANSFORMERS: BUMBLEBEE.

PARTNER BRANDS: Net revenues from the Partner Brands portfolio ~~increased 6%~~decreased 4% in the ~~first~~third quarter of 2020 compared to the ~~first~~third quarter of 2019. Partner Brands net revenues are reliant on related entertainment, including television and movie releases. During the ~~first~~third quarter of 2020, the Company’s Partner Brands portfolio was supported by ~~fourth quarter 2019 theatrical releases~~ ~~DISNEY’S FROZEN 2~~ ~~in November and~~the highly anticipated Disney+ streaming series, STAR WARS: THE ~~RISE OF SKYWALKER~~MANDALORIAN, ~~in December. In addition~~season two, expected to ~~these 2019 films,~~be released during the ~~Company’s~~fourth quarter of 2020 ~~Partner Brand entertainment releases include~~and TROLLS WORLD TOUR, which was released in the premium video-on-demand format in April. During the third quarter of 2019, the Company’s Partner Brands portfolio was supported by MARVEL’S April 2019 theatrical release, , asAVENGERS: END GAME and product sales in anticipation of the November 2019 theatrical release of ~~a sequel~~DISNEY’S FROZEN 2. Due to the ~~2016 film,~~ ~~TROLLS~~ ~~from DREAMWORKS and~~uncertainty surrounding the ongoing COVID-19 pandemic, heading into the fourth quarter of 2020, a significant number of movie theaters have remained closed worldwide. As a result, certain theatrical releases in support of the Company's Partner Brand products, including BLACK WIDOW from DISNEY'S MARVEL franchise and GHOSTBUSTERS: AFTERLIFE, previously planned as 2020 releases, have been postponed and are expected to be in theaters ~~in November~~, ~~as well as continuous entertainment provided by the subscription video on-demand streaming service, Disney+.~~

Net revenue increases from DISNEY FROZEN and DREAMWORKS' TROLLS products as well as increases from STAR WARS products, were partially offset by net revenue declines from MARVEL and DISNEY PRINCESS products during the first ~~quarter~~half of ~~2020.~~2021, subject to COVID-19 impacts at that time.

HASBRO GAMING: Net revenues in the Hasbro Gaming portfolio increased ~~30%~~3% in the ~~first~~third quarter of 2020 compared to the ~~first~~third quarter of 2019. Higher net revenues from DUNGEONS & DRAGONS ~~as well as~~products and higher net revenues from classic games including, ~~THE GAME OF LIFE,~~ JENGA and ~~OPERATION~~CLUE products were partially offset by lower net revenues from ~~PIE FACE~~DON'T STEP IN IT and certain other Hasbro Gaming products in the ~~first~~third quarter of 2020.

Net revenues for Hasbro’s total gaming category, including the Hasbro Gaming portfolio as reported above and all other gaming revenue, most notably revenues from MAGIC: THE GATHERING and MONOPOLY products, which are included in the Franchise Brands portfolio, totaled ~~$340.5~~$543.1 million for the ~~first~~third quarter of 2020, an increase of ~~40%~~21%, as compared to ~~$243.4~~$449.4 million in the ~~first~~third quarter of 2019. The increase relates primarily to the timing of MAGIC: THE GATHERING product releases during the third quarter of 2020 compared to the same period in 2019.

EMERGING BRANDS: Net revenues from the Emerging Brands portfolio increased ~~58%~~14% during the ~~first~~third quarter of 2020 compared to the ~~first~~third quarter of 2019. Contributing to the net revenue increases were the inclusion of brands acquired through the eOne Acquisition including PEPPA PIG and PJ MASKS and the addition of net revenues from GI JOE products, due to the Company's product-line relaunch in 2020, as well as net revenue increases from ~~POWER RANGERS products.~~PLAYSKOOL products during the third quarter of 2020. These increases were partially offset by declines in POWER RANGERS and LITTLEST PET SHOP ~~and LOST KITTIES~~ products during the ~~first~~third quarter of 2020.

TV, FILM and ENTERTAINMENT: The TV, Film and Entertainment portfolio includes eOne revenues not allocated to the Emerging Brands portfolio. Operations contributing to the TV, Film and Entertainment portfolio focus on high quality, premium film, television and music production and content rights around the world and selling this content globally.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

During the ~~first~~third quarter of 2020, net revenues from the TV, Film and Entertainment portfolio were approximately ~~26%~~9% of total Company net revenues. The drivers of net revenues from the TV, Film and Entertainment portfolio included television production and distribution net revenues from the fifth season of FEAR THE WALKING DEAD, airing on the AMC television network, and film distribution revenues from the Amblin Partners film 1917, released in December 2019, as well as broadcast and licensing net revenues from key scripted deliveries including season two of THE ROOKIE, a television drama series currently airing on ABC. In addition to these offerings, TV, Film and Entertainment net revenues benefited from the Company's lineup of unscripted television programming including the American reality series, NAKED AND AFRAID airing on the Discovery Channel and from its library of subscription video on demand ("SVOD") content.

First Nine Months of 2020

The nine month periods ended September 27, 2020 and September 29, 2019 were each 39-week periods.

For the first nine months of 2020, consolidated net revenues increased 14% compared to the first nine months of 2019 and reflect the inclusion of eOne revenues of $696.9 million which represents 19% of consolidated net revenues for the period. The net revenue increase in the first nine months of 2020 included an unfavorable variance of $25.7 million as a result of foreign currency translation due to weaker currencies across the Company's Latin American and to a lesser extent, Asia Pacific markets, when compared to the first nine months of 2019.

Operating profit for the first nine months of 2020 was $315.5 million, or 8.4% of net revenues, compared to an operating profit of $461.7 million, or 14.0% of net revenues, for the first nine months of 2019. Operating profit during the first nine months of 2020 reflects the consolidation of eOne results of operations and was negatively impacted by acquisition and related costs of $166.0 million ($140.7 million after-tax); $72.3 million ($57.5 million after-tax) of expenses related to eOne acquired intangible asset amortization; and restructuring charges associated with cost savings initiatives of $11.6 million ($10.1 million after-tax).

Net earnings attributable to Hasbro, Inc. were $117.3 million for the first nine months of 2020 compared to net earnings of $253.1 million for the first nine months of 2019. Diluted earnings per share attributable to Hasbro, Inc. were $0.85 in the first nine months of 2020, compared to diluted earnings per share of $1.99 in the first nine months of 2019. Net earnings attributable to Hasbro, Inc. for the first nine months of 2020 reflect the negative impact of acquisition related costs and eOne acquired intangible asset amortization of $1.02 per diluted share and $0.42 per diluted share, respectively, as well as incremental income tax expense related to a change in the UK tax code of $0.10 per diluted share and restructuring charges associated with cost savings initiatives of $0.07 per diluted share. Net earnings for the first nine months of 2019 included a non-cash, net of tax charge of $85.9 million, or $0.68 per diluted share, related to the settlement of the Company's U.S. defined benefit pension plan liability and a $20.9 million loss, net of tax, or $0.16 per diluted share related to unrealized losses on foreign exchange forward contracts and option contracts purchased to hedge the foreign exposure associated with the purchase price of eOne.

The following table presents net revenues by product category for the first nine months of 2020 and 2019.


	Nine Months Ended
	September 27, 2020		September 29, 2019	% Change
Franchise Brands	$	1,580.9	1,749.9	-10	%
Partner Brands	729.8		812.5	-10	%
Hasbro Gaming	516.3		463.3	11	%
Emerging Brands	325.1		266.5	22	%
TV, Film and Entertainment	590.4		—	100	%
Total	$	3,742.5	3,292.2	14	%

FRANCHISE BRANDS: Net revenues in the Franchise Brands portfolio decreased 10% in the first nine months of 2020 compared to 2019. Declines in net revenues from TRANSFORMERS and NERF products drove the overall decline in Franchise Brands net revenues, while, to a lesser extent, MY LITTLE PONY and PLAY-DOH products also contributed to segment net revenue declines. Much of the segment net revenue decline was due to reduced customer ordering, supply chain delays and other disruptions to the business as a result of the impact of the COVID-19 pandemic. Additionally, TRANSFORMERS products benefited from the December 2018 theatrical release of TRANSFORMERS: BUMBLEBEE in 2019, driving lower revenues in 2020 compared to 2019. These declines were partially offset by net revenue increases from MAGIC: THE GATHERING products during the first nine months of 2020, due to a favorable card set release cadence.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

PARTNER BRANDS: Net revenues from the Partner Brands portfolio decreased 10% during the first nine months of 2020 compared to 2019. Partner Brands net revenues are reliant on related entertainment, including television and movie releases.

During the first nine months of 2020, certain scheduled theatrical releases were delayed or postponed due to the closure or limited reopening of theaters as a result of the impact of COVID-19, which negatively impacted sales of the Company’s Partner Brands products. During the first nine months of 2020, the Company’s Partner Brands portfolio was supported by fourth quarter 2019 theatrical releases DISNEY’S FROZEN 2 in November and STAR WARS: THE RISE OF SKYWALKER in December, as well as through various distribution channels including home entertainment and streaming video. The Company’s 2020 Partner Brand entertainment releases include TROLLS WORLD TOUR, which was released in the premium video-on-demand formatin April and the highly anticipated Disney+ streaming series, STAR WARS: THE MANDALORIAN, season two, expected to be released during the fourth quarter of 2020. During the first nine months of 2019, the Company’s Partner Brands portfolio was supported by theatrical releases from MARVEL’S AVENGERS: END GAME in April and DISNEY’S ALADDIN in May.

During the first nine months of 2020, net revenue declines from MARVEL and BEYBLADE products were partially offset by net revenue increases from STAR WARS and DREAMWORKS' TROLLS products. The majority of Partner Brand net revenue declines were attributable to MARVEL products which are dependent on entertainment releases as described above. Due to the impact of the COVID-19 pandemic on the entertainment industry during 2020, including the postponement of certain theatrical releases such as BLACK WIDOW, previously planned as a 2020 MARVEL release, the Company's MARVEL products associated with related entertainment experienced a decline during the nine months ended 2020 as compared to the first nine months of 2019 which benefited from a successful entertainment slate including theatrical release, AVENGERS: END GAME in April 2019. Net revenue increases from STAR WARS and DREAMWORKS' TROLLS products during the first nine months of 2020 were attributable to the entertainment release support described above.

HASBRO GAMING: Net revenues in the Hasbro Gaming portfolio increased 11% in the first nine months of 2020 compared to the first nine months of 2019 led by increased net revenues from DUNGEONS & DRAGONS and JENGA products and to a lesser extent, from certain other Hasbro Gaming brands.

Net revenues for Hasbro’s total gaming category, including the Hasbro Gaming portfolio as reported above and all other gaming revenue, most notably from MAGIC: THE GATHERING and MONOPOLY products, which are included in the Franchise Brands portfolio, were $1,202.6 million, an increase of 11%, in the first nine months of 2020 versus $1,086.2 million in the first nine months of 2019.

EMERGING BRANDS: Net revenues from theEmerging Brands portfolio grew 22% for the first nine months of 2020 compared to the first nine months of 2019.Contributing to the net revenue increases in the first nine months of 2020 were the inclusion of brands acquired through the eOne Acquisition including PEPPA PIG and PJ MASKS and the addition of net revenues from GI JOE products in 2020, due to the Company's product-line relaunch. These net revenue increases were partially offset by net revenue declines from LITTLEST PET SHOP and FURREAL FRIENDS products.

TV, FILM and ENTERTAINMENT: Net revenues from the TV, Film and Entertainment portfolio were approximately 16% of total Company net revenues and included theatrical contributions from the Amblin Partners film 1917, released in December 2019, television production and distribution net revenues from the fifth season of FEAR THE WALKING DEAD, airing on the AMC television network and broadcast and licensing net revenues from key scripted deliveries including season two of THE ROOKIE, a television drama series currently airing on ABC. In addition to these offerings, net revenues ~~benefited from~~included the Company's lineup of unscripted television ~~programming.~~programming and its library of SVOD content.

SEGMENT RESULTS

The Company's net revenues and operating profits are primarily derived from its four principal business segments: the U.S. and Canada segment, the International segment, the Entertainment, Licensing and Digital segment and, as a result of the 2020 eOne Acquisition, the eOne operating segment. The eOne segment was added to the Company's reporting structure in the first quarter of 2020 and is comprised of the legacy eOne business. The results of these operations are discussed in detail below.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Third Quarter of 2020

The following table presents net external revenues and operating profit data for the Company's principal segments for the quarters ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019:


	Quarter Ended									Quarter Ended
	March 29, 2020			March 31, 2019			% Change			September 27, 2020		September 29, 2019		% Change
Net Revenues									Net Revenues
U.S. and Canada segment	$	428.6		$	357.9		20	%	U.S. and Canada segment	$	977.1	$	898.3	9	%
International segment	250.4			282.6			-11	%	International segment	517.0		561.1		-8	%
Entertainment, Licensing and Digital segment	84.0			92.0			-9	%	Entertainment, Licensing and Digital segment	89.0		115.8		-23	%
eOne segment	342.5			—			100	%	eOne segment	193.5		—		100	%

Operating Profit
Operating Profit (Loss)									Operating Profit (Loss)
U.S. and Canada segment	$	71.8		$	13.5		>100%		U.S. and Canada segment	$	263.0	$	193.7	36	%
International segment	(26.7		)	(30.4		)	12	%	International segment	63.9		67.2		-5	%
Entertainment, Licensing and Digital segment	5.2			30.0			-83	%	Entertainment, Licensing and Digital segment	32.8		24.6		33	%
eOne segment	(33.1		)	—			-100	%	eOne segment	(25.9)		—		-100	%

U.S. and Canada Segment

The U.S. and Canada segment net revenues increased 9% for the ~~first~~third quarter of 2020 ~~increased 20%~~ compared to the ~~first~~third quarter of 2019. Net revenue increases from the Company's Franchise Brands ~~Hasbro Gaming~~and Emerging Brands portfolio and to a lesser extent, the ~~Company's Partner Brands~~Hasbro Gaming portfolio, were partially offset by lower net revenues from the ~~Emerging~~Partner Brands portfolio during the ~~first~~third quarter of 2020.

InNet revenue increases in the Company's Franchise Brands portfolio were driven by MAGIC: THE GATHERING products which benefited from a favorable card set release cadence in 2020, and to a lesser extent, PLAY-DOH and MONOPOLY products. In the Partner Brands portfolio, entertainment releases including the highly anticipated Disney+ streaming series, STAR WARS: THE MANDALORIAN, season two, expected in the fourth quarter 2020 and TROLLS WORLD TOUR, released in the premium video-on-demand formatin April, resulted in higher net revenues from ~~MAGIC: THE GATHERING~~STAR WARS and ~~MONOPOLY products~~DREAMWORKS' TROLLS products. These increases were ~~partially~~more than offset by net revenue decreases from ~~PLAY-DOH, TRANSFORMERS~~DISNEY FROZEN and ~~MY LITTLE PONY products.~~MARVEL products, which were not supported by entertainment releases during the third quarter of 2020. In ~~the Partner Brands portfolio, higher~~addition, net revenues from ~~DISNEY FROZEN, DREAMWORKS' TROLLS and BEYBLADE~~MARVEL products were ~~partially offset by net revenue decreases from MARVEL and DISNEY PRINCESS products~~negatively impacted during the ~~first~~third quarter of ~~2020.~~2020 due to delays in theatrical releases as a result of the impact of COVID-19. In the Hasbro Gaming portfolio, higher net revenues were delivered across many ~~brands in~~of the ~~portfolio,~~Company's games brands, most notably from ~~DUNGEONS~~JENGA and DUNGEON & DRAGONS ~~THE GAME OF LIFE, OPERATION and JENGA~~ products. In the Emerging Brands portfolio, ~~lower net revenues from FURREAL FRIENDS and PLAYSKOOL products, were partially offset by~~ higher net revenues from ~~POWER RANGERS~~PLAYSKOOL products ~~during~~and net revenues from the ~~first quarter~~2020 relaunch of ~~2020.~~the Company's GI JOE product line drove growth.

U.S. and Canada segment operating profit for the ~~first~~third quarter of 2020 was ~~$71.8~~$263.0 million or ~~16.7%~~27% of segment net revenues, compared to segment operating profit of ~~$13.5~~$193.7 million or ~~3.8%~~22% of segment net revenues, for the ~~first~~third quarter of 2019. The operating profit increase in the ~~first~~third quarter of 2020 was driven by higher segment net revenues as described above and ~~lower~~favorable brand mix, partially offset by increased administrative and ~~warehousing expenses offset by higher royalty~~product development expenses associated with ~~increases in Partner Brand sales~~the Company's Wizards of the Coast business, as well as higher freight costs from increased domestic shipments and higher ~~freight~~direct-to-customer shipments which carry elevated fulfillment costs.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

International Segment

International segment net revenues declined ~~11%~~8% in the ~~first~~third quarter of 2020 to ~~$250.4~~$517.0 million from ~~$282.6~~$561.1 million in the ~~first~~third quarter of ~~2019. Absent~~2019 and included the impact of ~~foreign exchange, International segment net revenues decreased $22.9~~an unfavorable $3.3 million ~~or 8% during the first quarter of 2020.~~currency translation. The following table presents net revenues by geographic region for the Company's International segment for the quarters ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019.


	Quarter Ended						Quarter Ended
	March 29, 2020		March 31, 2019	% Change			September 27, 2020		September 29, 2019	% Change
Europe	$	162.2	153.4	6	%	Europe	$	343.2	319.3	7	%
Latin America	33.9		62.8	-46	%	Latin America	91.6		152.0	-40	%
Asia Pacific	54.2		66.5	-18	%	Asia Pacific	82.2		89.9	-9	%
Net revenues	$	250.4	282.6	-11	%	Net revenues	$	517.0	561.1	-8	%

The decline in International segment net revenues during the ~~first~~third quarter of 2020 was attributable to ongoing disruptions to the business related to the COVID-19 pandemic, most notably in the Latin American and Asia Pacific regions, where large numbers of retail stores remain closed. The Latin American region was also unfavorably impacted by $14.6 million in foreign exchange translation, partially ~~driven~~offset by ~~unfavorable~~a favorable foreign currency translation impact of ~~$9.3 million. Unfavorable foreign currency translation impacted~~$9.9 million and $1.4 million in the Company's major geographic regions as follows: Europe - $3.8 million, Latin America - $3.8 million and Asia Pacific - $1.7 million. Absent the impact of foreign exchange, net revenues for the first quarter of 2020 increased 8% in Europe and decreased 40% and 16% in the Company’s Latin AmericanEuropean and Asia Pacific regions, respectively. International segment net revenues ~~from~~declined in the Company's Franchise Brands, Emerging Brands and Partner Brands ~~grew~~portfolios while net revenues from ~~Franchise Brands,~~the Hasbro Gaming ~~and Emerging Brands declined~~portfolio increased during the ~~first~~third quarter of 2020 compared to the ~~first~~third quarter of 2019. In the Franchise Brands portfolio, International segment net revenue declines were noted in NERF and TRANSFORMERS products and to a lesser extent, from BABY ALIVE and MY LITTLE PONY products. These decreases were partially offset by net revenue increases from MAGIC: THE GATHERING products, due to the timing of card set releases and strong brand engagement during the third quarter of 2020. In the Partner Brands portfolio, the drivers of the decreases include BEYBLADE products as well as MARVEL products, which were negatively impacted during the third quarter of 2020 due to delays in theatrical releases as a result of the impact of COVID-19. These decreases were partially offset by net revenue increases from STAR WARS and to a lesser extent, DREAMWORKS' TROLLS products which were supported by entertainment releases including STAR WARS: THE MANDALORIAN, season two, expected during the fourth quarter 2020 and TROLLS WORLD TOUR, which was released in the premium video-on-demand formatin April from DREAMWORKS. In the Hasbro Gaming portfolio, higher net revenues from CLUE, JENGA and OPERATION products were partially offset by lower net revenues from certain other Hasbro Gaming products, including PIE FACE. In the Emerging Brands portfolio, net revenues declined from POWER RANGERS, LITTLEST PET SHOP and PLAYSKOOL products in the third quarter of 2020.

International segment operating profit was $63.9 million, or 12% of segment net revenues for the third quarter of 2020, compared to operating profit of $67.2 million, or 12% of segment net revenues, for the third quarter of 2019. International segment operating profit declines during the third quarter of 2020 were the result of lower sales described above, most notably in the Company's Latin American region, partially offset by a favorable product mix and lower advertising and marketing costs.

Entertainment, Licensing and Digital Segment

Entertainment, Licensing and Digital segment net revenues declined 23% to $89.0 million for the third quarter of 2020, compared to $115.8 million for the third quarter of 2019. Net revenue declines were primarily driven by lower film revenues in 2020 compared to 2019, related to the TRANSFORMERS: BUMBLEBEE film and, lower revenues during the third quarter of 2020 due to the closure of the Backflip business in the fourth quarter of 2019. These declines were partially offset by higher licensed digital gaming revenue and increased revenues related to MAGIC: THE GATHERING ARENA.

Entertainment, Licensing and Digital segment operating profit increased to $32.8 million, or 37% of segment net revenues for the third quarter of 2020, from $24.6 million, or 21.2% of segment net revenues for the third quarter of 2019. The increase in Entertainment, Licensing and Digital segment operating profit was driven primarily by favorable mix from growth in licensed digital gaming, reduction of expenses due to the closure of the Backflip business and lower advertising costs associated with MAGIC: THE GATHERING ARENA.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

eOne Segment

During the third quarter of 2020, eOne segment net revenues were $193.5 million. The following table presents eOne segment net revenues by channel for the quarter ended September 27, 2020.


	Three Months Ended
	September 27, 2020
eOne Segment Net Revenues
Film and TV	$	138.5
Family Brands	26.3
Music and Other	28.7
Segment Total	$	193.5

The COVID-19 outbreak continued to impact the Company's eOne segment during the third quarter of 2020. Specifically, certain scheduled productions have been delayed due to the shutdown of production work and the closure or limited reopening of studios. Additionally, certain theatrical releases have been delayed due to the closure or limited reopening of theaters, and in some cases, global film releases have moved from theaters to alternative media platforms such as streaming services.

During the third quarter of 2020, drivers of eOne segment net revenues included: (i) broadcast and licensing revenues associated with internationally recognized brands, PEPPA PIG and PJ MASKS: (ii) broadcast and licensing contributions from key scripted deliveries including the fifth season of FEAR THE WALKING DEAD and season two of THE ROOKIE; (iii) film distribution revenues from the Amblin Partners film 1917, released in December 2019; and (iv) the Company's strong lineup of unscripted television programming as well as demand for the Company's vast SVOD library. In addition to these entertainment driven revenues, the Company's music business benefited from both streaming and publishing revenues during the third quarter of 2020.

eOne segment operating losses were $25.9 million, or 13.4% of segment net revenues for the third quarter of 2020. This loss was driven by $24.7 million of incremental intangible amortization costs related to the intangible assets acquired in the eOne Acquisition.

Global Operations

The Global Operations segment operating profit of $5.7 million for the third quarter of 2020 compared to an operating profit of $11.1 million for the third quarter of 2019.

Corporate and Eliminations

Operating losses in Corporate and Eliminations totaled $2.9 million for the third quarter of 2020 compared to operating profit of $0.6 million for the third quarter of 2019. Operating losses in the third quarter of 2020 were driven primarily by acquisition and integration costs of $4.6 million and certain restructuring and related costs of $1.3 million associated with the acquisition of eOne.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

First Nine Months of 2020

The following table presents net revenues and operating profit (loss) for the Company's principal segments for each of the nine month periods ended September 27, 2020 and September 29, 2019.


	Nine Months Ended
	September 27, 2020		September 29, 2019		% Change
Net Revenues
U.S. and Canada segment	$	1,765.5	$	1,766.6	—	%
International segment	1,017.2		1,221.2		-17	%
Entertainment, Licensing and Digital segment	262.9		304.3		-14	%
eOne segment	696.9		—		100	%

Operating Profit (Loss)
U.S. and Canada segment	$	359.0	$	313.8	14	%
International segment	12.3		51.4		-76	%
Entertainment, Licensing and Digital segment	65.8		62.6		5	%
eOne segment	(65.0)		—		-100	%

U.S. and Canada Segment

The U.S. and Canada segment net revenues remained flat for the nine months ended September 27, 2020 compared to the same period in 2019, which reflects recovery in the third quarter from negative impacts realized in the first half of 2020, driven in part by disruptions to the Company's business operations as a result of COVID-19. In the first nine months of 2020, higher net revenues in the Hasbro Gaming portfolio were wholly offset by lower net revenues in the Franchise Brands, Partner Brands and Emerging Brands portfolios.

In the Franchise Brands portfolio, net revenues declined from NERF, PLAY-DOH and TRANSFORMERS ~~PLAY-DOH, MY LITTLE PONY and NERF~~ products, due in part to disruptions to the business, as a result of the impact of the COVID-19 pandemic. These declines were partially offset by higher net revenues from MAGIC: THE GATHERING ~~products.~~products which benefited from a favorable card set release cadence and strong brand engagement in 2020. In the Partner Brands portfolio, the decrease was driven by lower net ~~revenue increases~~revenues from MARVEL and DISNEY FROZEN ~~and DREAMWORKS' TROLLS~~ products which did not have the benefit of 2020 entertainment releases. These decreases were partially offset by net revenue ~~declines~~increases from ~~MARVEL~~STAR WARS and ~~BEY BLADE products.~~TROLLS products as a result of entertainment support from the anticipated Disney+ streaming series, STAR WARS: THE MANDALORIAN, season two, expected to be released during the fourth quarter 2020 and TROLLS WORLD TOUR, which was released in the premium video-on-demand formatin April. In the Hasbro Gaming portfolio, higher net revenues were delivered across multiple brands, most notably DUNGEONS & DRAGONS and JENGA products. In the Emerging Brands portfolio, net revenue declines from FURREAL FRIENDS and POWER RANGERS products, were partially offset by net revenues contributions from the 2020 relaunch of the Company's GI JOE product line and higher net revenues from PLAYSKOOL products during the first nine months of 2020.

U.S. and Canada segment operating profit for the nine months ended September 27, 2020 increased to $359.0 million, or 20% of segment net revenues, compared to $313.8 million, or 18% of segment net revenues, for the nine months ended September 29, 2019. The increase in operating profit in the first nine months of 2020 was driven by higher net revenues from MAGIC: THE GATHERING products, lower marketing and advertising costs and reduced administrative costs as a result of cost-savings initiatives, partially offset by higher freight costs as a result of higher domestic shipments and increased direct-to-customer shipments which carry higher fulfillment costs.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

International Segment

International segment net revenues decreased 17% to $1,017.2 million for the nine months ended September 27, 2020 from $1,221.2 million for the nine months ended September 29, 2019 and included an unfavorable $25.1 million impact from foreign currency exchange. The following table presents net revenues by geographic region for the Company's International segment for the nine month periods ended September 27, 2020 and September 29, 2019.


	Nine Months Ended
	September 27, 2020		September 29, 2019	% Change
Europe	$	663.1	673.7	-2	%
Latin America	158.0		305.1	-48	%
Asia Pacific	196.1		242.4	-19	%
Net revenues	$	1,017.2	1,221.2	-17	%

Foreign currency translation negatively impacted the Latin American and Asia Pacific regions by $25.0 million and $2.6 million respectively, partially offset by a favorable foreign currency translation impact of $2.5 million in Europe during the first nine months of 2020. International segment net revenues declined from Franchise Brands, Partner Brands, and Emerging Brands while the Hasbro Gaming portfolio remained flat during the first nine months of 2020 compared to 2019. The declines in Franchise Brands were the result of lower net revenues from NERF products, followed by net revenue declines from TRANSFORMERS and PLAY-DOH products and to a lesser extent, MY LITTLE PONY products. These declines were partially offset by net revenue increases from MAGIC: THE GATHERING products. The overall net revenue declines were in part, due to disruptions to the business, and to consumer purchasing patterns, as a result of the COVID-19 pandemic, most notably in the Company's Latin American region and, to a lesser extent, certain areas within its Asia Pacific region. During the first nine months of 2020, MAGIC: THE GATHERING products benefited from a favorable card set release cadence and increased demand compared to 2019. In the Partner Brands portfolio, the decrease was primarily driven by lower net revenues from MARVEL products which did not have the benefit of 2020 entertainment releases, as well as lower net revenues from the Company's BEYBLADE products. These decreases were partially offset by higher net revenues from DREAMWORKS’ TROLLS and STAR WARS products, which were supported by 2020 entertainment, as well as higher net revenues from DISNEY FROZEN products. In the Hasbro Gaming portfolio, net revenue increases from CLUE, JENGA and DUNGEONS & DRAGONS products, ~~and certain other Hasbro Gaming products~~ were ~~more than~~ offset by lower net revenues from PIE FACE and certain other Hasbro Gaming products. In the Emerging Brands portfolio, ~~lower~~the net ~~revenues from~~revenue declines were driven by LITTLEST PET SHOP and ~~LOST KITTIES~~PLAYSKOOL products ~~were partially offset by higher net revenues from POWER RANGERS and FURREAL FRIENDS products in~~during the first ~~quarter~~nine months of 2020.

International segment operating ~~losses were $26.7~~profit was $12.3 million, or ~~10.7%~~1% of segment net revenues, for the first ~~quarter~~nine months of 2020, compared to operating ~~losses~~profit of ~~$30.4~~$51.4 million, or ~~10.8%~~4% of segment net revenues, for the first ~~quarter~~nine months of 2019. The decrease in International segment operating ~~losses during~~profit for the first ~~quarter~~nine months of 2020 was the result of lower ~~cost of~~net revenues as discussed above, partially offset by reduced advertising, sales ~~due to improved inventory management, lower advertising~~ and marketing costs, as well as lower administrative ~~costs. These decreases were partially offset by increased royalty~~ expenses ~~associated with higher sales~~due to the implementation of ~~partner brand products.~~cost savings initiatives.

Entertainment, Licensing and Digital Segment

Entertainment, Licensing and Digital segment net revenues ~~declined 9%~~for the nine months ended September 27, 2020 decreased 14% to ~~$84.0~~$262.9 million from $304.3 million for the nine months ended September 29, 2019. The net revenue declines during the first ~~quarter~~nine months of 2020 ~~compared to $92.0 million for the first quarter of 2019. Net revenue declines~~ were primarily driven by lower ~~digital gaming~~film revenues ~~during the first quarter of~~in 2020 due to revenue recognized in 2019 related to the ~~timing of game releases~~TRANSFORMER: BUMBLEBEE film combined with lower net revenues associated with the closure of the Backflip business in the fourth quarter of ~~2019.~~2019, and to a lesser extent, lower consumer product licensing revenues during the first nine months of 2020. These declines were partially offset by an increase in digital gaming for the nine months ended September 27, 2020.

Entertainment, Licensing and Digital segment operating profit ~~decreased to $5.2~~was $65.8 million, or ~~6.2%~~25.0% of net revenues, for the nine months ended September 27, 2020 up from $62.6 million, or 21% of segment net revenues, for the ~~first quarter of 2020, from $30.0 million, or 32.6% of segment net revenues for the first quarter of~~nine months ended September 29, 2019. The ~~decrease~~increase in operating profit in the Entertainment, Licensing and Digital segment was driven by lower program costs and amortization costs, reduced operating expenses associated with the closure of the Backflip business in the fourth quarter of 2019, favorable mix from growth in licensed digital gaming, as well as lower digital gaming advertising and development costs during the first nine months of 2020. Partially offsetting these favorable impacts to operating profit ~~was primarily driven by~~were lower net revenues as well as asset impairment charges of $20.8 million in production assets driven by the change in entertainment strategy as a result of the eOne ~~Acquisition.~~Acquisition during the first quarter of 2020.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

eOne Segment

During the first ~~quarter~~nine months of 2020, eOne segment net revenues were ~~$342.5~~$696.9 million. The following table presents eOne segment net revenues by channel for the ~~quarter~~nine months ended ~~March 29,~~September 27, 2020.


	Nine Months Ended
	September 27, 2020
eOne Segment Net Revenues
Film and TV	$	504.1
Family Brands	106.1
Music and Other	86.7
Segment Total	$	696.9

Three Months Ended
March 29, 2020
eOne Segment Net Revenues
          Film and TV $ 259.5
          Family Brands 50.8
          Music and Other 32.2
Segment Total $ 342.5
The impact of the COVID-19 outbreak on the eOne segment during the first nine months of 2020 was felt most significantly during the second and third quarters of the year. Specifically, scheduled productions were and continue to be delayed or postponed due to the shutdown of live-action production work and the closure or limited reopening of studios. In addition, theatrical releases have been delayed due to the closure or limited reopening of theaters, and in some cases, global film releases were moved from theaters to alternative media platforms such as streaming services.

In the first ~~quarter~~nine months of 2020, drivers of the eOne segment net revenues ~~include;~~included: (i) broadcast and licensing revenues associated with internationally recognized brands, PEPPA PIG and PJ ~~MASKS,~~MASKS; (ii) theatrical and film distribution contributions from the Amblin Partners film 1917, released in December ~~2019,~~2019; (iii) broadcast and licensing contributions from key scripted deliveries including the fifth season of FEAR THE WALKING DEAD and season two of THE ~~ROOKIE,~~ROOKIE; ~~a television drama series currently airing on ABC as well as~~and(iv) the Company's strong lineup of unscripted television ~~programming.~~programming as well as the Company's SVOD library. In addition to these entertainment driven revenues, the Company's music business benefited from both strong streaming and publishing revenues during the first ~~quarter~~nine months of 2020.

eOne segment operating losses were ~~$33.1~~$65.0 million, or ~~9.7%~~-9.3% of segment net revenues for the first ~~quarter~~nine months of 2020. This loss was driven by $77.7 million of acquisition and integration costs, including $47.4 million of expense associated with the acceleration of eOne stock-based compensation and $24.5 million of advisor fees settled at the closing of the acquisition. Also contributing to the loss is ~~$25.0~~$72.3 million of incremental intangible amortization costs related to the intangible assets acquired in the eOne Acquisition.

Global Operations

The Global Operations segment operating profit of ~~$4.6~~$4.4 million for the first ~~quarter~~nine months of 2020 ~~compared~~compares to an operating profit of ~~$1.3~~$6.3 million for the first ~~quarter~~nine months of 2019.

Corporate and Eliminations

Operating losses in Corporate and Eliminations ~~totaled $45.1 million~~ for the first ~~quarter~~nine months of 2020 were $61.1 million, compared to operating profit of ~~$21.7~~$27.6 million for the first ~~quarter~~nine months of 2019. ~~Operating losses~~The Corporate and Eliminations operating loss in the first nine months of 2020 ~~were~~was driven primarily by charges related to the eOne Acquisition; including acquisition and integration costs of ~~$17.1~~$26.6 million and restructuring and related costs of ~~$34.1~~$40.8 million, comprised of severance and retention costs, as well as impairment charges for certain definite-lived intangible assets driven by the change in strategy for the combined company’s entertainment assets. In addition to the charges associated with the eOne Acquisition, the Company incurred $11.6 million of severance charges associated with cost-savings initiatives within the Company’s commercial and Film and TV businesses.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

OPERATING COSTS AND EXPENSES

Third Quarter 2020

Overall, the Company's costs and expenses in the ~~first~~third quarter of 2020 increased compared to the ~~first~~third quarter of 2019 driven by the inclusion of eOne’s operations in the Company’s consolidated financial statements. Costs and expenses stated as percentages of net revenues, are illustrated below for the quarters ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019.


	Quarter Ended
	September 27, 2020		September 29, 2019
Cost of sales	34.3	%	39.8	%
Program cost amortization	4.8		1.8
Royalties	10.0		8.1
Product development	3.5		4.3
Advertising	7.7		8.9
Amortization of intangibles	2.0		0.8
Selling, distribution and administration	18.3		17.5
Acquisition and related costs	0.3		0.0

Quarter Ended
March 29, 2020 March 31, 2019
Cost of sales 23.8 % 35.5 %
Program cost amortization 12.0
0.9
Royalties 10.2
8.2
Product development 4.9
7.7
Advertising 9.2
10.5
Amortization of intangibles 3.3
1.6
Selling, distribution and administration 25.2
30.8
Acquisition and related costs 13.5
0.0

Cost of sales for the ~~first~~third quarter of 2020 was ~~$262.7~~$610.1 million, or ~~23.8%~~34.3% of net revenues, compared to $~~260.0~~$627.1 million, or ~~35.5%~~39.8% of net revenues, for the ~~first~~third quarter of 2019. The decrease of cost of sales as a percentage of net revenues is primarily related to ~~higher~~the inclusion of net revenues ~~as a result of the acquisition of~~from eOne, which experiences lower costs of sales sold as a percentage of net sales. To a lesser extent, the cost of sales decrease as a ~~percent~~percentage of net revenues was driven by ~~favorable product~~the impact of $3.6 million of foreign exchange and positive brand mix ~~from strong~~driven by the increase in net sales of MAGIC:THE GATHERING ~~revenues~~ combined with ~~higher Partner Brand products, partially offset by higher~~improved inventory costing closeout rates and lower in-freight costs ~~to bring inventory into~~in the ~~U.S. during the first~~third quarter of 2020 ~~as compared~~due to expedited shipping during the third quarter of 2019.

Program cost amortization increased to ~~$132.1~~$85.4 million, or ~~12.0%~~4.8% of net revenues, for the ~~first~~third quarter of 2020 from ~~$6.6~~$28.0 million, or ~~0.9%~~1.8% of net revenues, for the ~~first~~third quarter of 2019. ~~The increase in this expense both in dollars and as a percentage of net revenues is primarily related to eOne, which experiences higher program cost amortization as a percentage of net sales.~~ Program costs are capitalized as incurred and amortized using the individual-film-forecast method which matches costs to the related recognized revenue. The increase in this expense both in dollars and as a percentage of net revenues is related to the addition of eOne's business, which experiences higher program cost amortization as a percentage of net sales. Program cost amortization attributable to eOne was 4.3% of net revenues for the third quarter of 2020. This increase was partially offset by lower program cost amortization in 2020 related to the BUMBLEBEE theatrical release which the Company began to amortize during the third quarter of 2019.

Royalty expense for the ~~first~~third quarter of 2020 increased to $~~112.8~~$176.9 million, or ~~10.2%~~10.0% of net revenues, compared to $~~59.9~~$128.0 million, or ~~8.2%~~8.1% of net revenues, for the ~~first~~third quarter of 2019. The increase in royalty expense in dollars and as a percentage of net revenues was driven by the inclusion of royalty expense related to eOne operations and was 2.3% of net revenues in the third quarter. This increase was partially offset by lower sales of Partner Brand products in the third quarter of 2020 as compared to the third quarter of 2019.

Product development expense for the third quarter of 2020 was $62.7 million, or 3.5% of net revenues, compared to $67.4 million, or 4.3% of net revenues, for the third quarter of 2019. The decrease in dollars was primarily related to lower spending as a result of global cost savings initiatives combined with savings related to the closure of the Backflip business in the fourth quarter of 2019, partially offset by increased investments in MAGIC: THE GATHERING digital and tabletop gaming.

Advertising expense for the third quarter of 2020 was $137.4 million, or 7.7% of net revenues, compared to $140.3 million, or 8.9% of net revenues, for the third quarter of 2019. The advertising expense decrease in dollars and as a percent of net revenues was driven by ~~eOne combined with higher sales~~lower advertising levels across substantially all of ~~Partner Brand products~~the Company's regions, most notably in Latin America, reflecting the current environment due to COVID-19 impacts. The savings in the ~~first~~third quarter, in dollars, of 2020 were partially offset by the inclusion of the eOne operations during 2020.

Amortization of intangible assets increased to $36.2 million, or 2.0% of net revenues, for the third quarter of 2020, compared to $11.8 million, or 0.8% of net revenues, for the third quarter of 2019. The increase in dollars and as a percentage of net revenues is primarily related to the acquisition of eOne, which contributed intangible asset amortization of $24.7 million, or 1.4% of net revenues, in the third quarter of 2020.

For the third quarter of 2020, the Company's selling, distribution and administration expenses increased to $325.4 million, or 18.3% of net revenues, from $275.4 million, or 17.5% of net revenues, for the third quarter of 2019. The increase in selling,

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

distribution and administration expenses in dollars was driven primarily by the inclusion and consolidation of eOne's operations during 2020. In addition, the increase in selling, distribution and administration expenses reflects higher freight expenses as a result of increased shipments. These increases were partially offset by the impact of cost savings initiatives in the third quarter of 2020 as compared to the ~~first~~third quarter of 2019. Selling, distribution and administration expenses attributable to eOne were 3.3% of net revenues during the third quarter of 2020.

During the three months ended September 27, 2020, the Company incurred $5.9 million of acquisition and related costs in connection with the eOne Acquisition. These expenses were comprised of $4.6 million of acquisition and integration costs, and $1.3 million of severance and retention costs.

First Nine Months of 2020

The Company's costs and expenses, stated as percentages of net revenues, are illustrated below for the nine month periods ended September 27, 2020 and September 29, 2019.


	Nine Months Ended
	September 27, 2020		September 29, 2019
Cost of sales	30.1	%	37.4	%
Program cost amortization	7.2		1.8
Royalties	10.3		7.9
Product development	4.7		5.7
Advertising	8.3		9.4
Amortization of intangibles	2.9		1.1
Selling, distribution and administration	23.7		22.7
Acquisition and related costs	4.4		—

Cost of sales for the nine months ended September 27, 2020 decreased to $1,126.0, million or 30.1% of net revenues, from $1,230.8 million, or 37.4% of net revenues for the nine months ended September 29, 2019. The decrease as a percentage ofnet revenues is primarily related to the acquisition of eOne, which experiences lower cost of sales as a percentage of net sales as well as the impact of $13.8 million of foreign exchange. The cost of sales decrease in dollars during the first nine months of 2020 was driven by positive brand mix due to an increase in net sales of MAGIC: THE GATHERING, and improved inventory costing, partially offset by lower sales of Partner Brand products.

Program cost amortization increased in the first nine months of 2020 to $268.2 million, or 7.2% of net revenues, from $58.1 million, or 1.8% of net revenues, in the first nine months of 2019. Programming costs are capitalized as incurred and amortized using the individual-film-forecast method which matches costs to the related recognized revenue. The increase in dollars, and as a percentage of net revenues, is primarily related to the addition of eOne's business, which experiences higher program cost amortization as a percentage of net sales. Program cost amortization attributable to eOne was 6.5% of net revenues during the first nine months of 2020.

Royalty expense for the nine months ended September 27, 2020 was $387.1 million, or 10.3% of net revenues, compared to $259.0 million, or 7.9% of net revenues, for the nine months ended September 29, 2019. The increase in royalty expense in dollars, and as a percentage of net revenues, was driven by the inclusion of eOne operations during the first nine months of 2020 and was 3.5% of net revenues, partially offset by lower sales of Partner Brand product during the first nine months of 2020 as compared to the first nine months of 2019.

Product development expense for the ~~first quarter of~~nine months ended September 27, 2020 ~~was $53.8~~decreased to $174.9 million, or ~~4.9%~~4.7% of net revenues, ~~compared to $56.3~~from $189.2 million, or ~~7.7%~~5.7% of net revenues, for the ~~first quarter of~~nine months ended September 29, 2019. The decrease as a ~~percent~~percentage of net revenues was primarily related to eOne, which experiences lower product development expense as a percentage of net ~~sales combined with~~sales.The decrease in dollars during the first nine months of 2020 was driven by lower spending as a result of global cost savings initiatives combined with the impact of the closure of the Company's Backflip business during the fourth quarter of 2019. These decreases were partially offset by increased investments in digital ~~gaming.~~gaming, primarily related to the Company's Wizards of the Coast business.

Advertising expense for the ~~first quarter of~~nine months ended September 27, 2020 was $~~101.6~~$311.4 million, or ~~9.2%~~8.3% of net revenues, compared to $~~76.6~~$309.7 million, or ~~10.5%~~9.4% of net revenues, for the ~~first quarter of~~nine months ended September 29, 2019. The advertising expense increase in dollars was driven by ~~eOne advertising expenses and higher costs in support~~the acquisition of ~~the first quarter~~ ~~MAGIC: THE GATHERING~~ ~~tabletop set release,~~eOne, partially offset by lower advertising costs related to the Company’s digital gaming initiatives and reduced advertising levels ~~across the regions~~globally, reflecting the current environment due to ~~COVID-19 impacts.~~the impact of COVID-19.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Amortization of intangible assets ~~increased to $36.8~~was $107.7 million, or ~~3.3%~~2.9% of net revenues, for the ~~first quarter of~~nine months ended September 27, 2020 compared to $~~11.8~~$35.4 million, or ~~1.6%~~1.1% of net revenues, ~~for~~in the first ~~quarter~~nine months of 2019. The increase in dollars and as a ~~percent~~percentage of net revenues is primarily related to the acquisition of eOne, which contributed ~~$25.0 million to amortization. Excluding the~~ intangible asset amortization ~~associated with eOne, amortization~~ of ~~intangible assets was consistent with 2019.~~$72.3 million, or 1.9% of net revenues, in the first nine months of 2020.

For the ~~first quarter of~~nine months ended September 27, 2020, the Company's selling, distribution and administration expenses increased to $~~279.1~~$885.7 million, or ~~25.2%~~23.7% of net revenues, from $~~225.3~~$748.3 million, or ~~30.8%~~22.7% of net revenues, for the ~~first quarter of~~nine months ended September 29, 2019. The increase in selling, distribution and administration expenses ~~in dollars~~ was driven primarily by the inclusion and consolidation of eOne's operations during the first ~~quarter. In addition,~~nine months of 2020, combined with $11.6 million of severance charges associated with cost-savings initiatives within the Company’s commercial and Film and TV businesses.This increase ~~in selling,~~was partially offset by lower marketing, sales and warehousing expenses across the regions during the first nine months. Selling, distribution and administration expenses ~~reflects higher shipping costs in~~attributable to eOne were 4.2% of net revenues during the first ~~quarter~~nine months of 2020 due to an increase in domestic sales of Hasbro Gaming products and higher stock compensation expense. These increases were partially offset by lower warehousing expenses and decreased general and administrative spending due to the Company’s ongoing cost-reduction efforts in the first quarter of 2020 as compared to the first quarter of 2019.2020.

During the ~~three~~first nine months ~~ended March 29,~~ 2020, the Company incurred ~~$149.8~~$166.0 million of acquisition and related costs in connection with the eOne Acquisition. These expenses were comprised of ~~$95.7~~$104.3 million of acquisition and integration costs, primarily related to $47.4 million of expense associated with the acceleration of eOne stock-based compensation and $38.2 million of advisor fees substantially all of which were settled at the closing of the acquisition. Also included in the acquisition and related costs were ~~$54.1~~$61.7 million of restructuring and related costs including severance and retention costs of ~~$13.2~~$20.8 million as well as $40.9 million in impairment charges for certain definite-lived intangible and production assets. The impairment charges of $40.9 million were driven by the change in strategy for the combined company’s entertainment assets.

NON-OPERATING (INCOME) EXPENSE

Interest expense for the third quarter and first ~~quarter~~nine months of 2020 totaled ~~$54.7~~$49.4 million and $153.7 million, respectively, compared to ~~$22.3~~$22.8 million and $67.1 million in the third quarter and first ~~quarter~~nine months of 2019, respectively. ~~During November 2019,~~In connection with the financing of the eOne Acquisition, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities during November 2019 and in ~~connection with~~ the ~~financing~~first quarter of 2020, on the date of the ~~acquisition of eOne.~~closing, borrowed $1.0 billion in term loans provided by a term loan agreement. The increase in interest expense for the third quarter and first ~~quarter~~nine months of 2020 reflects interest related to these notes and other borrowings associated with the eOne ~~business,~~Acquisition, partially offset by lower average short-term borrowings during the ~~quarter.~~first nine months of 2020.

Interest income was ~~$4.7~~$0.7 million and $6.4 million for the third quarter and first ~~quarter~~nine months of 2020, respectively, compared to ~~$7.7~~$5.5 million and $19.2 million in the third quarter and first ~~quarter~~nine months of ~~2019.~~2019, respectively. Lower average interest rates in 2020 compared to 2019 contributed to the decrease.

Other income, net was ~~$1.5~~$11.3 million and $15.4 million for the third quarter and first ~~quarter~~nine months of 2020, respectively, compared to other ~~income,~~expense, net of ~~$8.1~~$20.2 million and $118.3 million in the third quarter and first ~~quarter~~nine months of ~~2019.~~2019, respectively. The ~~decrease in other income, net in~~increase for the ~~first~~third quarter was driven by lower foreign currency losses in 2020 compared to 2019, which included a $25.5 million charge related to unrealized losses on foreign exchange forward and option contracts entered into by the Company to limit exposure to foreign currency ~~gains in 2019, partially offset~~fluctuations associated with the proposed eOne Acquisition price.Also contributing to the third quarter 2020 increase is a $6.1 million gain related to the sale of the Dragonvale software and brand.The increase for the nine month period was driven by lower pension expense in 2020 due to the $110.8 million non-cash pension charge as a result of the ~~termination~~settlement of the Company's U.S. pension ~~plans in~~plan liability during the second quarter of ~~2019.~~2019 combined with the previously discussed lower foreign currency losses in 2020 and gain on the sale of the Dragonvale software and brand.

INCOME TAXES

Income tax ~~benefit~~expense totaled ~~$4.1~~$79.2 million on pre-tax ~~loss~~earnings of ~~$71.9~~$299.2 million in the ~~first~~third quarter of 2020 compared to income tax expense of ~~$2.9~~$46.8 million on pre-tax earnings of ~~$29.6~~$259.7 million in the ~~first~~third quarter of 2019. ~~Both~~For the nine-month period, income tax expense totaled $64.3 million on pre-tax earnings of $183.6 million in 2020 compared to income tax expense of $42.3 million on pre-tax earnings of $295.4 million in 2019. The quarter and nine month periods in both 2020 and 2019, as well as the full year 2019, were impacted by discrete tax events including the accrual of potential interest and penalties on uncertain tax positions. During the first ~~quarter~~nine months of 2020, favorable discrete tax adjustments were a net benefit of ~~$20.1~~$5.3 million compared to a net benefit of ~~$2.6~~$31.7 million in the first ~~quarter~~nine months of 2019. The favorable discrete tax adjustments for the first ~~quarter~~nine months of 2020 primarily relate to the costs related to the acquisition of ~~eOne.~~ eOne offset by the revaluation of UK tax attributes as a result of the United Kingdom’s enactment during the quarter ofthe Finance Act of 2020 which maintains the corporate income tax rate at 19% and an increase of uncertain tax positions based on changes in management judgement.The favorable discrete tax adjustments for the first ~~quarter~~nine months of 2019 primarily related to the settlement of the U.S. defined benefit pension plan liability, excess tax benefits on share-based payments and the expiration of statutes of limitations for uncertain tax

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

positions. Absent discrete items, the adjusted tax rates for the first ~~quarters~~nine months of 2020 and 2019 were ~~20.6%~~19.9% and ~~18.5%~~18.2%, respectively. The increase in the adjusted tax rate of ~~20.6%~~19.9% for the first ~~quarter~~nine months of 2020 is primarily due to the mix of jurisdictions where the Company earned its profits and the impact of the eOne Acquisition.

The UK enacted the Finance Act of 2020 upon receiving royal assent on July 22, 2020.Effective April 1, 2020, the new law maintains the corporate income tax rate at 19% instead of the planned reduction to 17% that was previously enacted in the Finance Act of 2016. Changes in tax laws and rates impact recorded deferred tax assets and liabilities and our effective tax rate.The primary impact resulted from the revaluation of Hasbro’s UK tax attributes, which resulted in an increased tax provision of $13.7 million in the third quarter of 2020.

OTHER INFORMATION

Brexit Referendum

On June 23, 2016, the ~~United Kingdom (“UK”)~~UK voted in a referendum to leave the European Union (“EU”), commonly referred to as Brexit. The UK government triggered the formal two-year period to negotiate the terms of the UK’s exit on March 29, 2017. These events resulted in an immediate weakening of British pound sterling against the US dollar, and increased volatility in the foreign currency markets which continued into 2020. These fluctuations initially affected Hasbro’s financial results, although the impact was partially mitigated by the Company’s hedging strategy. On January 31, 2020, the UK formally withdrew from the EU, entering a transitional period which is currently expected to end on December 31, 2020. During this transitional period, EU law will continue to apply in the UK while providing time for the UK and EU to negotiate the details of their future relationship. Financial, trade and legal implications of the UK leaving the EU remain uncertain. The Company continues to closely monitor the negotiations and the impact to foreign currency markets, taking appropriate actions to support the Company’s long-term strategy and to mitigate risks in its operational and financial activities. However, the Company cannot predict the direction of Brexit-related developments nor the impact of those developments on our European operations and the economies of the markets in which they operate.

Business Seasonality and Shipments

Historically, the revenue pattern of Hasbro’s legacy business has shown the second half of the year to be more significant to its overall business than the first half. The Company expects that this concentration will continue, particularly as more of its business has shifted to larger customers with order patterns concentrated in the second half of the year around the holiday season. The concentration of sales in the second half of the year increases the risk of (a) underproduction of popular items, (b) overproduction of less popular items, and (c) failure to achieve tight and compressed shipping schedules.

The Company’s business is characterized by customer order patterns which vary from year to year largely because of differences each year in the degree of consumer acceptance of product lines, product availability, marketing strategies and inventory policies of retailers, the dates of theatrical releases of major motion pictures for which the Company sells products, and changes in overall economic conditions. As a result, comparisons of the Company's unshipped orders on any date with those at the same date in a prior year are not necessarily indicative of the Company's expected sales for the year. Moreover, quick response inventory management practices result in fewer orders being placed significantly in advance of shipment and more orders being placed for immediate delivery. Although the Company may receive orders from customers in advance, it is a general industry practice that these orders are subject to amendment or cancellation by customers prior to shipment and, as such, the Company does not believe that these unshipped orders, at any given date, are indicative of future sales. Additionally, the impact of the COVID-19 outbreak to the Company's business seasonality and shipments ~~remains uncertain.~~was significant during the first nine months of 2020. After operating at lower than planned production levels during most of the first quarter due to COVID-19, the Company's third-party manufacturing facilities in China are currently operating at planned capacity for this time of year. Manufacturing and warehouse partners outside of China operated at close to normal levels during much of the first quarter. Beginning in mid-March and ~~through~~continuing into the ~~remainder of the first~~second quarter, ~~of 2020~~ these locations were operating at varying levels of productivity depending on local government and safety considerations ~~with some markets operating at lower than normal production levels while other~~however, as of the end of the third quarter, the majority of the Company's third-party manufacturing facilities ~~have been closed entirely.~~were up and running. The COVID-19 situation continues to be fluid, but we currently expect all manufacturing facilities to ~~reopen in~~remain operational through the ~~second quarter, based upon our understanding of local governments directions at this~~

~~time. As production typically builds to peak levels during the summer months, the Company anticipates making up lost production during the second quarter~~end of 2020, unless a resurgence of COVID-19 cases were to cause further manufacturing shutdowns or ~~restrictions,~~restrictions. Additionally, the Company experienced significant growth in its ecommerce business during 2020, as more consumers have turned to beonline shopping as a result of the COVID-19 outbreak, which provides the Company with less lead-time to ship product as compared to product being shipped to brick and mortar retailers. We believe we are currently well positioned to meet our expected shipping schedule demands however, if manufacturing facilities are impacted by a resurgence in COVID-19, we may not be able to make up for the disruption in supply in the ~~second half~~near term.

Condensed Notes to Consolidated Financial Statements

(Thousands of ~~the year.~~Dollars and Shares Except Per Share Data)

Accounting Pronouncement Updates

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-13 (ASU 2016-13) Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The standard update replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption was permitted. The Company adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (ASU 2018-13), Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, specifically related to disclosures surrounding Level 3 asset balances, fair value measurement methods, related gains and losses and fair value hierarchy transfers. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and early adoption was permitted. The Company adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14) Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The standard relates to financial statement disclosure only and will not have an impact on the Company's consolidated statement of financial position, statement of operations or statement of cash flows.

In March of 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04) Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles ("GAAP") to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in this update apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. An entity may elect to apply the amendments provided by this update beginning March 12, 2020 through December 31, 2022. The Company is currently evaluating this option as it relates to its contracts that reference LIBOR, as well as the impact of the standard to the Company's consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically generated a significant amount of cash from operations. In the first ~~three~~nine months of 2020 and 2019 the Company has primarily funded its operations and liquidity needs ~~primarily~~ through cash flows from operations, and when needed, used borrowings under its available lines of credit. In 2020, the Company’s eOne operating segment has used production financing to fund certain of its television and film productions which are arranged on an individual production basis by special purpose production subsidiaries.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

The Company expects to continue to fund its working capital needs primarily through available cash and cash flows from operations as well as production financing facilities and, when needed, by issuing commercial paper or borrowing under its revolving credit agreement. In the event that the Company is not able to issue commercial paper, the Company intends to utilize its available lines of credit. ~~In addition, beginning in 2020 with~~With the acquisition of eOne, the Company ~~commenced funding~~funds certain of its television and film productions using production financing facilities which are secured by the assets and future revenues of the individual production subsidiaries. Under these facilities, the cash generated by the production may be restricted until the production financing is paid. The Company believes that the funds available to it, including cash expected to be generated from operations and funds available through its available lines of credit and commercial paper program are adequate to meet its working capital needs

over the next twelve months. However, unexpected events or circumstances such as material operating losses or increased capital or other expenditures or inability to otherwise access the commercial paper market, may reduce or eliminate the availability of external financial resources. In addition, significant disruptions to credit markets may also reduce or eliminate the availability of external financial resources. Although management believes the risk of nonperformance by the counterparties to the Company's financial facilities is not significant, in times of severe economic downturn in the credit markets it is possible that one or more sources of external financing may be unable or unwilling to provide funding to the Company.

During November of 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities (collectively, the "Notes") consisting of the following tranches: $300 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%; $500 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%; $675 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55%; and $900 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. The interest rate payable on each series of the Notes will be subject to adjustment from time to time if either Moody’s or S&P (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Notes. Underwriting discount and fees of $20.0 million were deducted from the gross proceeds of the Notes. These costs are being amortized over the life of the Notes, which range from three to ten years. Prior to October 19, 2024 (in the case of the 2024 Notes), September 19, 2026 (in the case of the 2026 Notes), August 19, 2029 (in the case of the 2029 Notes) and at any time (in the case of the 2022 Notes), the Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus (1) 15 basis points (in the case of the 2022 Notes); (2) 25 basis points (in the case of the 2024 Notes); (3) 30 basis points (in the case of the 2026 Notes); and (4) 35 basis points (in the case of the 2029 Notes). In addition, on and after (1) October 19, 2024 for the 2024 Notes; (2) September 19, 2026 for the 2026 Notes; and (3) August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest.

Of the Company’s long-term borrowings, the $300.0 million of 3.15% Notes mature in 2021. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2021 with the exception of certain of the Company’s production financing facilities.

In November of 2019, the Company completed an underwritten public offering of 10,592,106 shares of common stock, par value $0.50 per share, at a public offering price of $95.00 per share. Net proceeds from this public offering were approximately $975.2 million, after deducting underwriting discounts and commissions and offering expenses of approximately $31.1 million. The net proceeds were used to finance, in part, the acquisition of eOne and to pay related costs and expenses.

As of ~~March 29,~~September 27, 2020, the Company's cash and cash equivalents totaled ~~$1,237.9~~$1,132.4 million, of which ~~$86.2~~$71.2 million is restricted under the Company’s production financing facilities. Prior to 2017, deferred income taxes had not been provided on the majority of undistributed earnings of international subsidiaries as such earnings were considered indefinitely reinvested by the Company. ~~The~~ Tax Cuts and Jobs Act (the "Tax Act") provided significant changes to the U.S. tax system including the elimination of the ability to defer U.S. income tax on unrepatriated earnings by imposing a one-time mandatory deemed repatriation tax on undistributed foreign earnings. As of ~~March 29,~~September 27, 2020, the Company has a total liability of ~~$192.9~~$174.5 million related to this tax, $18.4 million is reflected in current liabilities while the remaining long-term payable related to the Tax Act of ~~$174.5~~$156.1 million is presented within other liabilities, non-current on the Consolidated Balance Sheets. As permitted by the Tax Act, the Company will pay the transition tax in annual interest-free installments through 2025. As a result, the related earnings in foreign jurisdictions are available with greater investment flexibility. The majority of the Company’s cash and cash equivalents held outside of the United States as of ~~March 29,~~September 27, 2020 is denominated in the U.S. dollar.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Because of the seasonality in the Company's cash flow, management believes that on an interim basis, rather than discussing only its cash flows, a better understanding of its liquidity and capital resources can be obtained through a discussion of the various balance sheet categories as well. Also, as several of the major categories, including cash and cash equivalents, accounts receivable, inventories and short-term borrowings, fluctuate significantly from quarter to quarter, due to the seasonality of its business, management believes that a comparison to the comparable period in the prior year is generally more meaningful than a comparison to the prior year-end.

The table below outlines key financial information (in millions of dollars) pertaining to our consolidated balance sheets including the period-over-period changes.


							September 27, 2020		September 29, 2019	% Change
	March 29, 2020		March 31, 2019	% Change
Cash and cash equivalents (including restricted cash of $86.2 and $0)	$	1,237.9	1,196.6	3	%
Cash and cash equivalents (including restricted cash of $71.2 and $0)						Cash and cash equivalents (including restricted cash of $71.2 and $0)	$	1,132.4	1,060.4	7	%
Accounts receivable, net	963.8		638.4	51	%	Accounts receivable, net	1,438.4		1,416.9	2	%
Inventories	444.4		491.8	-10	%	Inventories	540.0		589.1	-8	%
Prepaid expenses and other current assets	672.4		305.1	>100%		Prepaid expenses and other current assets	648.2		346.7	87	%
Other assets	1,461.5		739.7	98	%	Other assets	1,276.1		626.2	104	%
Accounts payable and accrued liabilities	1,664.7		935.3	78	%	Accounts payable and accrued liabilities	1,936.2		1,458.8	33	%
Other liabilities	739.0		636.1	16	%	Other liabilities	778.5		550.8	41	%

Accounts receivable increased to ~~$963.8~~$1,438.4 million at ~~March 29,~~September 27, 2020, compared to ~~$638.4~~$1,416.9 million at ~~March 31,~~September 29, 2019. Absent the unfavorable foreign currency impact of ~~$36.7~~$21.5 million, accounts receivable increased ~~57%~~3%, or ~~$362.1~~$43.1 million. The increase in accounts receivable during the first nine months of 2020 was driven primarily ~~driven~~ by the inclusion of eOne balances inof $177.9 million. Absent eOne, accounts receivable balances decreased across the ~~first quarter of 2020 of $224.2 million combined with higher~~Company's Latin American, U.S. and Canada ~~segment accounts receivable balances driven by~~and European regions due to improved collections during the ~~increase in domestic revenues in the quarter~~nine months ended ~~March 29,~~September 27, 2020 compared to the ~~quarter ended March 31,~~same period in 2019. Days sales outstanding ~~remained flat~~decreased from 82 days at 79September 29, 2019 to 74 days at September 27, 2020 primarily due to the mix of sales, improved collections and higher shipments earlier in the ~~first quarter of 2020 compared to the first quarter of 2019.~~quarter.

Inventories decreased to ~~$444.4~~$540.0 million as of September 27, 2020 compared to $589.1 million at ~~March~~September 29, ~~2020 from $491.8 million at March 31,~~ 2019. Absent the unfavorable foreign currency impact of ~~$22.5~~$8.2 million, inventories decreased ~~5%, or $24.8 million. The decrease at March 29, 2020 reflects~~7% reflecting lower levels in the U.S. and Canada and Asia Pacific markets primarily due to improved inventory management, ~~initiatives and lower shipments from China due to the impact of COVID-19 in the first quarter, partially~~ offset by higher ~~inventory levels~~inventories in ~~the Company's~~ Latin ~~American markets as the Company works through~~America due to higher than normal inventory levels remaining from the fourth quarter of ~~2019.~~2019 and lower sales and lower shipments in the first nine months of 2020 due to the impact of COVID-19.

Prepaid expenses and other current assets increased to ~~$672.4~~$648.2 million at ~~March 29,~~September 27, 2020 from ~~$305.1~~$346.7 million at ~~March 31,~~September 29, 2019. The increase was due to higher accrued royalty and licensing ~~balances,~~income, primarily attributable to accrued revenue balances of $228.6 million associated with eOne's ~~intellectual property of $245.0,~~properties and content, higher accrued ~~foreign~~ tax credits related to film and television production costs, the majority of which are attributable to eOne productions, ~~and~~ higher unrealized gains on foreign exchange contracts. As a result of the settlement of the Company's U.S. defined benefit pension plan liability, the Company has remaining excess assets of approximately $12.5 million of which $8.0 million is recorded as a current asset and will be used to fund future Company contributions to the Company's 401(k) plan in the U.S. These increases were partially offset by lower prepaid ~~value-added taxes in the first quarter of 2020.~~

Other assets increased to approximately $1,461.5 million at March 29, 2020 from $739.7 million at March 31, 2019. The increase was primarily due to the inclusion of assets obtained through the eOne Acquisition including investments in acquired content of $471.3 million, investments in film and television productions of $209.3 million and investment in development of $42.2 million. Also contributing to the increase are higher accrued royalty ~~income balances primarily driven by eOne balances, increased non-current royalty advances~~amounts due to payments made in the first quarter of 2020 ~~relating to~~for the extension of the Company’s Marvel and Lucas agreements ~~related~~and higher prepaid tax balances as a result of lower earnings relative to ~~certain~~estimated tax payments. These increases were partially offset by lower unrealized gains on foreign exchange contracts, deferred financing cost balances recorded at September 29, 2019 to secure funding for the purchase of eOne and lower short-term investment balances at September 27, 2020 compared to September 29, 2019.

Other assets increased to approximately $1,276.1 million at September 27, 2020 from $626.2 million at September 29, 2019. The increase was primarily due to eOne's investments in acquired content and production for music, film and television content of $619.5 million. Also contributing to the ~~Company’s partner brands.~~increase are higher long-term accrued income balances primarily driven by eOne and higher deferred tax balances. These increases were partially offset by lower capitalized television production costs ~~net of related production rebates~~ in the legacy Hasbro business, primarily related to impairment charges recorded on certain production assets during the first quarter of 2020, lower capitalized film production costs in the legacy Hasbro business, net of related production rebates, as a result of higher amortization of film production assets in 2020 and lower long-term receivable balances related to third-party production studio rebates.business.

Accounts payable and accrued liabilities increased to ~~$1,664.7~~$1,936.2 million at ~~March 29,~~September 27, 2020 from ~~$935.3~~$1,458.8 million at ~~March 31,~~September 29, 2019. The increase was primarily attributable to ~~the acquisition of~~ eOne ~~and inclusion of significant~~ accrued participation ~~balances,~~and deferred revenue ~~balances primarily related to broadcast licensing obligations and the addition of eOne's current lease liability and account payable~~ balances. In addition, increases included higher accrued royalty balances ~~and~~as well as higher accrued interest as a result of higher debt levels in 2020 from the issuance of notes in November 2019 and January 2020. These increases were partially offset by lower accounts payable balances and lower severance accruals ~~from~~as payments made in relation to the Company’s 2018 restructuring actions ~~accrued in 2018, lower accrued advertising balances due to COVID-19 related shutdowns late~~more than offset the increase from the restructuring actions taken in the ~~first~~second quarter of 2020 ~~lower accrued liabilities due~~as a result of the integration of eOne.

Condensed Notes to ~~payments made in 2019 for remaining amounts due to Saban Properties for the POWER RANGERS brand acquisition~~Consolidated Financial Statements

(Thousands of Dollars and ~~lower accrued income tax balances in the first quarter of 2020.~~Shares Except Per Share Data)

Other liabilities increased to ~~$739.0~~$778.5 million at ~~March 29,~~September 27, 2020 from ~~$636.1~~$550.8 million at ~~March 31,~~September 29, 2019. The increase was primarily driven by deferred tax liabilities recorded as a result of the eOne Acquisition, ~~accounting adjustments during the first quarter of 2020 as well as~~ higher long-term lease liability balances resulting from the eOne Acquisition and higher reserves for uncertain tax positions. In addition, the balance at September 27, 2020 includes long-term deferred revenue balances ~~as a result of the inclusion~~ of eOne ~~operations in the Company's consolidated financial statements beginning in the first quarter of 2020. In addition to these increases, there were~~and higher long-term international pension balances due to ~~the~~ 2019 year-end actuarial ~~valuations and higher reserves for uncertain tax positions.~~valuations. These increases were offset by a lower transition tax liability balance reflecting the reclassification of ~~certain deferred tax assets in 2019, to reduce~~ the ~~transition tax liability as well as the reclassification of the 2020~~2021 installment payment.

Cash Flow

The following table summarizes the changes in the Consolidated Statement of Cash Flows, expressed in millions of dollars, for the quarters ended ~~March 29,~~September 27, 2020 and ~~March 31,~~September 29, 2019.


	March 29, 2020			March 31, 2019				September 27, 2020		September 29, 2019
Net cash provided by (used in)							Net cash provided by (used in)
Operating activities	$	291.6		$	264.5		Operating activities	$	494.3	$	389.6
Investing activities	(4,430.5		)	(27.0		)	Investing activities	(4,471.7)		(86.5)
Financing activities	819.5			(220.4		)	Financing activities	550.5		(417.2)

Net cash provided by operating activities in the first ~~three~~nine months of 2020 was ~~$291.6~~$494.3 million compared to ~~$264.5~~$389.6 million in the first ~~three~~nine months of 2019. The ~~$27.1~~$104.7 million increase in net cash provided by operating activities was primarily attributable to ~~an increase in~~higher collections of accounts receivable balances during the first nine months of 2020 and higher earnings ~~before depreciation, intangible amortization and program cost amortization,~~excluding non-cash charges. These increases were partially offset by higher film and television production spend as a result of the inclusion of eOne operations during the first ~~quarter~~nine months of 2020 as well as ~~long-term~~ royalty advances paid in the first quarter of 2020 related to the extension of ~~certain~~the Company’s Marvel and Lucas license agreements that were due to expire in 2020.

Net cash utilized byin investing activities was ~~$4,430.5~~$4,471.7 million in the first ~~three~~nine months of 2020 compared to ~~$27.0~~$86.5 million in the first ~~three~~nine months of 2019. The increase in 2020 reflects $4.4 billion of cash utilized to acquire eOne, net of cash acquired. As discussed in the Executive Summary, the cash used for the purchase of eOne consisted of the net proceeds from the issuance of an aggregate principal amount of $2.4 billion in senior secured notes in November 2019, net proceeds $975.2 million from of the issuance of approximately 10.6 million shares of common stock in November 2019 and $1.0 billion in term loans drawn in the first quarter of 2020.

Additions to property, plant and equipment were ~~$30.8~~$92.1 million in the first ~~three~~nine months of 2020 compared to ~~$25.2~~$90.8 million in the first ~~three~~nine months of 2019.

Net cash provided by financing activities was ~~$819.5~~$550.5 million in the first ~~three~~nine months of 2020 compared to net cash utilized of ~~$220.4~~$417.2 million in the first ~~three~~nine months of 2019. The increase in cash provided by financing activities was primarily driven by the proceeds from the drawdown of the Company's $1.0 billion in term ~~loan.~~loans. Also, in the first ~~quarter~~nine months of 2020, the Company had drawdowns of $38.9 million and repayments of ~~$50.2~~$124.8 million related to eOne production financing loans and paid $47.4 million associated with the redemption of eOne stock awards that were accelerated as a result of the acquisition. In addition, the Company made quarterly principal payments totaling $22.5 million related to the $1.0 billion in term loans described above.

During the first ~~quarter~~nine months of 2019, the Company paid ~~$87.5~~$100.0 million to Saban Properties related to the 2018 POWER RANGERS acquisition which consisted of a $75.0 million deferred purchase price payment and ~~$12.5~~$25.0 million released from escrow. Cash payments related to the purchases of the Company’s common stock were ~~$47.5~~$60.1 million in the first ~~quarter~~nine months of ~~2019 compared to $0~~2019. There were no repurchases of the Company’s common stock in the first ~~quarter~~nine months of 2020 as the Company suspended the program ~~to prioritize the reduction in long-term debt and achieving its gross debt to EBITDA targets.~~while it prioritizes deleveraging. Dividends paid in the first ~~quarter~~nine months of 2020 totaled ~~$93.2~~$279.4 million compared to ~~$79.3~~$250.8 million in the first ~~quarter~~nine months of 2019 primarily reflecting the additional shares issued in the fourth quarter of 2019.

Sources and Uses of Cash

The Company has an agreement with a group of banks which provides for a commercial paper program (the "Program"). Under the Program, at the request of the Company and subject to market conditions, the banks may either purchase from the Company, or arrange for the sale by the Company, of unsecured commercial paper notes. The Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1,000.0 million. The maturities of the notes may vary but may not exceed 397 days. The notes are sold under customary terms in the commercial paper market and are issued at a discount to par, or alternatively, sold at par and bear varying interest rates based on a fixed or floating rate basis. The interest rates vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

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. At ~~March 29,~~September 27, 2020, the Company had no outstanding borrowings related to the Program.

The Company has a second amended and restated revolving credit agreement with Bank of America, N.A., 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 $1,500.0 million. 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. 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. The Amended Revolving Credit Agreement extends through September 20, 2024. The Company was in compliance with all covenants as of and for the quarter ended ~~March 29,~~September 27, 2020. The Company had no borrowings outstanding under its committed revolving credit facility as of ~~March 29,~~September 27, 2020. However, letters of credit outstanding under this facility as of ~~March 29,~~September 27, 2020 were approximately $2.7 million. Amounts available and unused under the committed line, at ~~March 29,~~September 27, 2020 were approximately $1,497.3 million, inclusive of borrowings under the Company’s commercial paper program. The Company also has other uncommitted lines from various banks, of which approximately ~~$22.2~~$23.2 million was utilized at ~~March 29,~~September 27, 2020. Of the amount utilized under, or supported by, the uncommitted lines, approximately ~~$9.4~~$10.0 million and ~~$12.8~~$13.2 million represent outstanding short-term borrowings and letters of credit, respectively.

In September of 2019, the Company entered into a $1.0 billion Term Loan Agreement (the "Term Loan Agreement") with Bank of America N.A. (“Bank of America”), as administrative agent, and certain financial institutions as lenders, pursuant to which such lenders committed to provide, contingent upon the completion of the eOne Acquisition and certain other customary conditions to funding, (1) a three-year senior unsecured term loan facility in an aggregate principal amount of $400.0 million (the “Three-Year Tranche”) and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of $600.0 million (the “Five-Year Tranche” and together with the Three-Year Tranche, the “Term Loan Facilities”). 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. Loans under the Term Loan Facilities bear interest, at the Company’s option, at either the Eurocurrency Rate or the Base Rate, in each case plus a per annum applicable rate that fluctuates (1) in the case of the Three-Year Tranche, between 87.5 basis points and 175.0 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 75.0 basis points, in the case of loans priced at the Base Rate, and (2) in the case of the Five-Year Tranche, 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 to the relevant rating agencies or a lack of ratings issued by such ratings agencies. Loans under the Five-Year Tranche require principal amortization payments, 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 eOne Acquisition, 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. ~~The loans were drawn down on December 30, 2019 to fund the acquisition of eOne.~~

The Company has principal amounts of long-term debt at ~~March 29,~~September 27, 2020 of ~~$5.3~~$5.2 billion, due at varying times from 2021 through 2044. As described above, the Company issued an aggregate of $2.4 billion of senior unsecured long-term debt securities in November 2019 and borrowed $1.0 billion under its term loan facilities on December 30, 2019 in connection with the financing of the eOne Acquisition. Of the total principal amount ~~$30~~of long-term debt, $369.3 million is current at ~~March 29,~~September 27, 2020 of which $300.0 million is related to the 3.15% 2021 Notes and $30.0 million is related to principal amortization of the 5-year term loans due December 2024. Additionally, the Company has outstanding production financing facilities at ~~March 29,~~September 27, 2020 of ~~$175.5~~$121.4 million of which ~~$141.1~~$82.2 million is included in long-term debt and ~~$34.4~~$39.2 million is reported as the current portion of long-term debt within the Company's consolidated financial statements, included in Item 1 of this Form10-Q.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

The Company also had letters of credit and other similar instruments of approximately ~~$15.5~~$15.9 million and purchase commitments of approximately ~~$763.1~~$605.9 million outstanding at ~~March 29,~~September 27, 2020.

Through the eOne Acquisition, the Company assumed eOne's existing future obligations for film and television content, future minimum contractual royalty payment obligations and operating lease commitments. Future payments required under these obligations, expressed in millions of dollars as of ~~March 29,~~September 27, 2020, are as follows:


	Remainder 2020		2021	2022	2023	2024	Thereafter	Total		Remainder 2020		2021	2022	2023	2024	Thereafter	Total
Future film and television obligations	$	75.7	17.1	1.7	—	—	—	94.5	Future film and television obligations	$	24.7	52.4	1.9	—	—	—	$	79.0

First-look commitments	18.7		15.9	7.7	—	—	—	42.3	First-look commitments	6.3		20.7	8.4	—	—	—	35.4
Operating lease commitments	15.8		13.2	8.9	7.5	6.2	21.7	73.3	Operating lease commitments	23.6		36.0	11.2	10.1	8.8	22.8	112.5
	$	110.2	46.2	18.3	7.5	6.2	21.7	210.1		$	54.6	109.1	21.5	10.1	8.8	22.8	$	226.9

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

PART II. OTHER INFORMATION


~~Item 1.~~	~~Legal Proceedings.~~

Item 1. Legal Proceedings.

The Company is currently party to certain legal proceedings, none of which it believes to be material to its business or financial condition.


~~Item 1A.~~	~~Risk Factors.~~

Item 1A. Risk Factors.

In connection with information set forth in this Quarterly Report on Form 10-Q, the risk factors discussed under Item 1A. Risk Factors, in Part I of our 2019 Form 10-K and in our 2020 Form 10-Qs, should be considered, together with the discussion below, which includes a supplement to ~~the~~our risk factors ~~in our 2019 Form 10-K~~ relating to the impact of the coronavirus on our business. The risks set forth in our 2019 Form 10-K, as supplemented ~~in this~~by our 2020 Form ~~10-Q,~~10-Qs, could materially and adversely affect our business, financial condition, and results of operations.

Risks Related to Business Operations

The global coronavirus outbreak or other similar outbreaks of communicable infections, diseases, or public health pandemics in the markets in which we and our employees, consumers, customers, partners, licensees, suppliers and manufacturers operate, could substantially harm our business.

The global outbreak of the coronavirus currently being experienced, and any other outbreaks of communicable infections, diseases or other adverse public health conditions in markets in which we, our employees, consumers, customers, partners, licensees, licensors, suppliers and manufacturers operate, could have a significant negative impact on our business, revenues and profitability. The occurrence of these types of events can result, and in the case of the coronavirus has resulted in, disruptions and damage to our business, caused by a number of factors:

•the negative impact to our ability to design, develop, manufacture and ship product as well as produce and distribute entertainment content;

•

•delays in entertainment content releases from our partners and licensors, or changes in release plans, that can adversely impact our product sales; examples of releases that have been delayed include Disney’s MULAN, MARVEL’S BLACK WIDOW and SONY PICTURES GHOSTBUSTERS AFTERLIFE;

•~~ales; examples of releases that have been delayed include Disney’s~~ ~~MULAN, MARVEL’S~~ ~~BLACK WIDOW~~ ~~and SONY PICTURES~~ ~~GHOSTBUSTERS AFTERLIFE;~~

the negative impact on consumer purchasing behavior and availability of product to consumers, including due to retail store closures, limited reopenings, shelter at home instructions and limitations on the capacity of e-commerce;

•disruptions or restrictions on the ability of some of our employees, suppliers and manufacturers to work effectively, including due to illness, quarantines, government actions, and facility closures or other similar restrictions;

•temporary or permanent closures of, limited reopenings, or other restrictions on businesses, such as retail stores, in which our products and/or the products orof our licensees are sold, as well as studios and theaters in which or for which we produce and distribute entertainment content; and

•

•other negative effects of the coronavirus on our business, including increased risks of accounts receivable collection, bankruptcies of retailers, delays in payment and negotiations with customers or licensees over payment terms or the ability to perform under contracts or licenses.

Although our principal manufacturers across the world are currently operating, during 2020 we have experienced and could experience further disruptions in ~~payment and negotiations with customers or licensees over payment terms or the ability to perform under contracts or licenses.~~

~~The negative impact to~~ supply of product, which has been and can be driven by: manufacturing and other work stoppages, factory and other business closings, slowdowns or delays, including in China, India and other places where a substantial portion of our manufacturing occurs; restrictions and limitations placed on workers and factories, including quarantines and other limitations on the ability to travel and return to work; and shortages or delays in production or shipment of products or raw materials. Even as facilities reopen or workers return to work, ~~we expect that~~ such reopenings and returns have been and we expect will continue to be measured and gradual so as to minimize the risk of further outbreaks of the virus, and that despite precautions further outbreaks may occur and result in future negative impacts.

~~Our~~Certain aspects of our entertainment business ~~has~~continue without significant disruption, such as development and pre-production work and our animation business.Other aspects of our entertainment business have been gradually reopening, but on a limited basis and may and continue to be adversely affected by the coronavirus. ~~For example,~~Specifically, scheduled live-action productions have been delayed or postponed in 2020 due to the shutdown of production work and the closure or limited reopening of studios,

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

theatrical releases have been delayed due to the closure or limited reopening of theaters, and in some cases, global releases have moved to different media platforms, such as streaming services. ~~While~~During this time, we have seen increased interest in our content library as consumers increase watching content at home ~~such~~and we continue to identify other innovative ways of making our content accessible to consumers.In the near term, this interest isand these efforts are unlikely to offset ~~declines in~~the impact to our entertainment ~~business~~business's results due to the shutdown of ~~production~~productions and closure and limited reopening of studios and ~~theaters.~~theaters.

The negative impact to demand can be caused by delays in or reduced purchases from customers and consumers who may ~~not~~ be ~~able~~reluctant or unable to leave home or otherwise shop in a normal manner due to restrictions on or closure, either temporarily or permanently, of many retail stores and hobby stores in which our products are sold. Demand has been and may be further

impacted due to consumers’ lower discretionary income due to reduced or limited work or unemployment, which has increased dramatically due to the coronavirus.

It is also a possibility that one or more countries may, in reaction to the coronavirus outbreak, place tariffs or other restrictions on products coming from China. As we discuss elsewhere in our risk factors, any tariffs or other restrictions, placed on products we source from China or another significant location for our global supply chain, and imported into significant markets for our products could harm our revenues and earnings.

Due the nature of our global business, we have experienced and expect to continue to experience fluctuations in our performance based on the progress of the country in controlling the coronavirus and the maturity of e-commerce in that jurisdiction.For example, we are continuing to experience difficulties in certain countries in Latin America, which have continued to be adversely affected by the number of coronavirus cases and do not have robust e-commerce businesses.Further, countries that may currently be controlling the virus may suffer setbacks as markets, businesses, schools and communities reopen, thereby causing further restrictions or closures of retail stores, studios and production work, all of which could adversely impact our business.

Since mid-March, most of our workforce has been working remotely.Reopening of our offices has begun on a limited basis, and we continue to actively work on a plan to safely bring additional workers back to the office. While most of our workforce has been able to work remotely in an effective manner, certain employees whose job responsibilities require in person work, such as those whose job it is to go into retail stores or are involved in design or production work, have seen reduced productivity and, in some cases, have been furloughed or terminated.We regularly communicate and engage with our employees to minimize the disruption and stress of working remotely, provide flexibility and ensure that our employees are getting access to information and accommodations as we continue to plan for a successful and safe reentry to the workplace.

We believe we have sufficient liquidity and capital resources available at this time, including approximately ~~$1.2~~$1.1 billion of cash on hand and ~~availability~~$1.5 billion available under our ~~$1.5 billion~~ revolving credit facility. We are in compliance with our covenants under our revolving credit facility and, while we do not currently foresee a need to borrow under the facility, we believe we would be able to access the facility for the foreseeable future.During this time of uncertainty, however, we are ~~carefully monitoring~~managing our expenses to further preserve our ~~liquidity.~~liquidity and we are closely monitoring our customers’ health and collectability of receivables, with some customers having difficulty making payments or requesting extended payment terms at a time when retailers are experiencing challenges and some have filed for bankruptcy.

While we have developed and continue to develop plans to help mitigate the negative impact of the coronavirus to our business, such as our Bring Home the Fun campaign, these efforts will not completely prevent our business from being adversely affected, and the longer the outbreak continues, the more negative the impact it will have on our business, revenues and earnings, and the more limited our ability will be to try and make up for delayed or lost product development, production and sales.

The impact of coronavirus outbreak continues to be fluid and uncertain, making it difficult to forecast the final impact it could have on our future operations. If our business experiences prolonged occurrence of adverse public health conditions due to the coronavirus or other similar outbreaks, we believe our business could be substantially harmed.

Forward Looking Statement Safe Harbor

Certain statements in this Form 10-Q contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: the impact of, and actions and initiatives taken and planned to be taken, to try and manage the negative impact of the global coronavirus outbreak on our business; the ability to achieve our financial and business ~~including the negative impact on supply of products~~goals and ~~production of entertainment content, demand for our products and entertainment, our liquidity and our community;~~objectives; the expected adequacy of supply and operation of our manufacturing facilities; ~~the ability to achieve our financial and business goals and objectives;~~ the Company's product and entertainment plans, including anticipated entertainment production; anticipated product and entertainment performance; anticipated expenses; and working capital and liquidity. Our actual actions or results may differ materially from those expected

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. For example, the global coronavirus outbreak has resulted, and may continue to result, in significant disruptions in the markets in which we and our employees, consumers, customers, partners, licensees, suppliers and manufacturers operate. We have experienced, and expect to continue to experience, disruptions in supply of products and production of entertainment content, negative impact on sales due to changes in consumer purchasing behavior and availability of product to consumers, including due to retail store closures and limitations on the capacity of e-commerce; delays or postponements of productions and releases of entertainment content both internally and by our partners; and challenges of working remotely. Our efforts to develop and execute plans to help mitigate the negative impact of the coronavirus to our business will not prevent our business from being adversely affected, and the longer the outbreak continues the more negative the impact will be on our business, revenues, earnings and liquidity, and the more limited our ability will be to try and make up for delayed or lost product development, production and sales. Other factorsFactors that might cause such a difference include, but are not limited to:

•our ability to successfully develop and execute plans to mitigate the negative impact of the coronavirus to our business;

•our ability to design, develop, produce, manufacture, source and ship products on a timely, cost-effective and profitable basis;

•rapidly changing consumer interests in the types of products and entertainment we offer;

•the challenge of developing and offering products and storytelling experiences that are sought after by children, families and audiences given increasing technology and entertainment offerings available;

•our ability to develop and distribute engaging storytelling across media to drive brand awareness;

•our dependence on third party relationships, including with third party manufacturers, licensors of brands, studios, content producers and entertainment distribution channels;

•our ability to successfully compete in the global play and entertainment industry, including with manufacturers, marketers, and sellers of toys and games, digital gaming products and digital media, as well as with film studios, television production companies and independent distributors and content producers;

•our ability to successfully evolve and transform our business and capabilities to address a changing global consumer landscape and retail environment, including changing inventory policies and practices of our customers;

•our ability to develop new and expanded areas of our business, such as through eOne, Wizards of the Coast, and our other entertainment, digital gaming and esports initiatives;

•risks associated with international operations, such as currency conversion, currency fluctuations, the imposition of tariffs, quotas, border adjustment taxes or other protectionist measures, and other challenges in the territories in which we operate;

•our ability to successfully implement actions to lessen the impact of potential and enacted tariffs imposed on our products, including any changes to our supply chain, inventory management, sales policies or pricing of our products;

•downturns in global and regional economic conditions impacting one or more of the markets in which we sell products, which can negatively impact our retail customers and consumers, result in lower employment levels, consumer disposable income, retailer inventories and spending, including lower spending on purchases of our products;

•other economic and public health conditions or regulatory changes in the markets in which we and our customers, partners, licensees, suppliers and manufacturers operate, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease, such as the coronavirus, the occurrence of which could create work slowdowns, delays or shortages in production or shipment of products, increases in costs or delays in revenue;

•the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives;

•fluctuations in our business due to seasonality;

•the concentration of our customers, potentially increasing the negative impact to our business of difficulties experienced by any of our customers or changes in their purchasing or selling patterns;

•the bankruptcy or other lack of success of one of our significant retailers, such as the bankruptcy of Toys“R”Us in the United States and Canada;

•the bankruptcy or other lack of success of one or more of our licensees and other business partners;

•risks relating to the use of third party manufacturers for the manufacturing of our products, including the concentration of manufacturing for many of our products in the People’s Republic of China and our ability to successfully diversify sourcing of our products to reduce reliance on sources of supply in China;

•our ability to attract and retain talented employees;

•our ability to realize the benefits of cost-savings and efficiency and/or revenue enhancing initiatives, including initiatives to integrate eOne into our business;

•our ability to protect our assets and intellectual property, including as a result of infringement, theft, misappropriation, cyber-attacks or other acts compromising the integrity of our assets or intellectual property;

•risks relating to the impairment and/or write-offs of products and films and television programs we acquire and produce;

•risks relating to investments and acquisitions, such as our acquisition of eOne, which risks include: integration difficulties; inability to retain key personnel; diversion of management time and resources; failure to achieve anticipated benefits or synergies of acquisitions or investments; and risks relating to the additional indebtedness incurred in connection with a transaction;

•the risk of product recalls or product liability suits and costs associated with product safety regulations;

•changes in tax laws or regulations, or the interpretation and application of such laws and regulations, which may cause us to alter tax reserves or make other changes which would significantly impact our reported financial results;

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

•the impact of litigation or arbitration decisions or settlement actions; and

•other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings.

The statements contained herein are based on our current beliefs and expectations. We undertake no obligation to make any revisions to the forward-looking statements contained in this Form 10-Q or to update them to reflect events or circumstances occurring after the date of this Form 10-Q.


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no share repurchases made in the first ~~quarter~~nine months of 2020. Following the Company’s acquisition of eOne, the Company suspended its share repurchase program while it prioritizes ~~achieving its target debt to EBITDA levels.~~deleveraging. For further discussion related to the eOne Acquisition, see Note 3, "Business Combinations" to our consolidated financial statements, which are included in Part I, Item 1 of this Form 10-Q.

Period
(a) Total
Number of
Shares (or
Units)
Purchased

(b)
Average
Price Paid
per Share
(or Unit)

(c) Total
Number of
Shares (or
Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs

(d)
Maximum
Number (or
Approximate
Dollar
Value) of
Shares (or
Units) that
May Yet Be
Purchased
Under the
Plans or
Programs
January 2020
12/30/19 – 1/26/20 —
$ —
—
$ 366,592,558
February 2020
1/27/20 – 3/1/20 —
$ —
—
$ 366,592,558
March 2020
3/2/20 – 3/29/20 —
$ —
—
$ 366,592,558
Total —
$ —
—
$ 366,592,558


Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 2020
6/29/20 – 7/26/20	—	$	—	—	$	366,592,558
August 2020
7/27/20 – 8/30/20	—	$	—	—	$	366,592,558
September 2020
8/31/20 – 9/27/20	—	$	—	—	$	366,592,558
Total	—	$	—	—	$	366,592,558

In May 2018, the Company announced that its Board of Directors authorized the repurchase of an additional $500 million of common stock. Purchases of the Company's common stock may be made from time to time, subject to market conditions. These shares may be repurchased in the open market or through privately negotiated transactions. The Company has no obligation to repurchase shares under this authorization and there is no expiration date. The timing, actual number, and value of shares that are repurchased will depend on a number of factors, including the price of the Company's stock and the Company’s generation of, and uses for, cash.


~~Item 3.~~	~~Defaults Upon Senior Securities.~~

Item 3. Defaults Upon Senior Securities.

None.


~~Item 4.~~	~~Mine Safety Disclosures.~~

Item 4. Mine Safety Disclosures.

Not applicable.


~~Item 5.~~	~~Other Information.~~

Item 5. Other Information.

None.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

Item 6. Exhibits


~~Item 6.~~	~~Exhibits~~




3.1	Restated Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)

3.2	Amendment to Articles of Incorporation, dated June 28, 2000. (Incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)

3.3	Amendment to Articles of Incorporation, dated May 19, 2003. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended June 29, 2003, File No. 1-6682.)

3.4	Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 1-6682.)

3.5	Amendment to Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated August 6, 2014, File No. 1-6682.)

3.6	Amendment to Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 5, 2015, File No. 1-6682.)

3.7	Amendment to Amended and Restated Bylaws of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 10, 2015, File No. 1-6682.)

3.8	Certificate of Designations of Series C Junior Participating Preference Stock of Hasbro, Inc. dated June 29, 1999. (Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No. 1-6682.)

3.9	Certificate of Vote(s) authorizing a decrease of class or series of any class of shares. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the period ended July 2, 2000, File No 1-6682.)

4.1	Indenture, dated as of July 17, 1998, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to Citibank, N.A. as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated July 14, 1998, File No. 1-6682.)

4.2	Indenture, dated as of March 15, 2000, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4(b)(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1999, File No. 1-6682.)

4.3	First Supplemental Indenture, dated as of September 17, 2007, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed September 17, 2007, File No. 1-6682.)

4.4	Second Supplemental Indenture, dated as of May 13, 2009, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2009, File No. 1-6682.)

4.5	Third Supplemental Indenture, dated as of March 11, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 11, 2010, File No. 1-6682.)

4.6	Fourth Supplemental Indenture, dated May 13, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014, file No. 1-6682.)

4.7	Fifth Supplemental Indenture, dated September 13, 2017, between the Company and The Bank of New York Mellon Trust Company, N.A. as successor Trustee to the Bank of Nova Scotia Trust Company of New York. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed September 13, 2017, file No. 1-6682.)

4.8	Sixth Supplemental Indenture dated as of November 19, 2019, among the Company and The Bank of New York Mellon Trust Company, N.A. and U.S. Bank, National Association, supplementing the Indenture dated as of March 15, 2000. (Incorporated by reference to Exhibit 1.2 to the Company’s Current Report on Form 8-K filed November 19, 2019, File No. 1-6682.)

10.1*		~~Form of 2020 Stock Option~~Transitional Advisory Services Agreement ~~under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan~~ for ~~Deborah Thomas.~~John Frascotti.

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)



10.2*		31.1**	~~Form of 2020 Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for Brian Goldner.~~

10.3*	~~Form of 2020 Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for John Frascotti.~~

10.4*	~~Form of 2020 Restricted Stock Unit Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan.~~

10.5*	~~Form of 2020 Restricted Stock Unit Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for John Frascotti.~~

10.6*	~~Form of 2020 Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for Brian Goldner.~~

10.7*	~~Form of 2020 Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for John Frascotti.~~

10.8*	~~Form of 2020 Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan.~~

10.9*	~~Agreement dated January 21, 2020 with Wiebe Tinga.~~

10.10*	~~Agreement dated March 5, 2020 with Stephen Davis.~~

31.1**	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2**			Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1**			Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.

32.2**			Certification of the Chief Financial Officer Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.

101.INS				XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH				XBRL Taxonomy Extension Schema Document

101.CAL				XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB				XBRL Taxonomy Extension Labels Linkbase Document

101.PRE				XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF				XBRL Taxonomy Extension Definition Linkbase Document

*Indicates ~~Management Contract~~management contract or ~~Compensatory Plan, Contract~~compensatory plan, contract or ~~Arrangement~~arrangement

** Furnished herewith

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		HASBRO, INC.
		~~HASBRO, INC.~~(Registrant)
			~~(Registrant)~~

Date: ~~May 7,~~November 4, 2020	By: /s/ Deborah Thomas
		Deborah Thomas
		Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)


	Quarter Ended			Nine Months Ended
	September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019

Other comprehensive earnings (loss), tax effect:
Tax benefit (expense) on unrealized holding gains (losses)	$	235	46	$	(381)	(116)
Tax benefit (expense) on cash flow hedging activities	285		(570)	(5,474)		(524)
Tax benefit on foreign currency translation adjustments	0		0	8,406		0
Tax expense on changes in unrecognized pension amounts	0		0	0		(5,687)
Reclassifications to earnings, tax effect:
Tax expense on cash flow hedging activities	1,928		703	3,379		1,237

Amortization of unrecognized pension and postretirement amounts	(80)		(80)	(239)		(1,619)
Tax benefit on settlement of U.S defined benefit plan	0		0	0		(24,925)
Total tax effect on other comprehensive earnings (loss)	$	2,368	99	$	5,691	(31,634)



	Pension and Postretirement Amounts			Gains (Losses) on Derivative Instruments		Unrealized Holding Gains (Losses) on Available- for-Sale Securities		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Loss
2020
Balance at December 29, 2019	$	(36,129	)	(5,232	)	(230	)	(142,629	)	(184,220	)
Current period other comprehensive earnings (loss)	274			21,351		(410	)	(131,767	)	(110,552	)
Balance at March 29, 2020	$	(35,855	)	16,119		(640	)	(274,396	)	(294,772	)

2019
Balance at December 30, 2018	$	(143,134	)	1,549		(744	)	(152,185	)	(294,514	)
Current period other comprehensive earnings (loss)	1,139			3,778		265		6,993		12,175
Balance at March 31, 2019	$	(141,995	)	5,327		(479	)	(145,192	)	(282,339	)


	Pension and Postretirement Amounts		Gains (Losses) on Derivative Instruments	Unrealized Holding Gains (Losses) on Available- for-Sale Securities	Foreign Currency Translation Adjustments	Total Accumulated Other Comprehensive Loss
2020
Balance at December 29, 2019	$	(36,129)	(5,232)	(230)	(142,629)	(184,220)
Current period other comprehensive earnings (loss)	824		(105)	1,315	(98,144)	(96,110)
Balance at September 27, 2020	$	(35,305)	(5,337)	1,085	(240,773)	(280,330)

2019
Balance at December 30, 2018	$	(143,134)	1,549	(744)	(152,185)	(294,514)

Current period other comprehensive earnings (loss)	111,019		3,839	400	(6,120)	109,138
Balance at September 29, 2019	$	(32,115)	5,388	(344)	(158,305)	(185,376)


	September 27, 2020		September 29, 2019		December 29, 2019
Royalties	$	206,645	$	178,100	$	196,558
Advertising	131,481		130,434		59,440
Payroll and management services	89,197		72,032		85,635
Dividends	93,180		85,852		93,067
Severance	41,707		55,066		35,039
Participations and Residuals	309,156		9,742		10,432
Other Taxes	70,553		52,457		66,715
Lease liability -Current	42,814		29,489		30,673
Accrued income taxes	18,364		26,366		14,276
Deferred revenue	147,554		49,381		48,465
Other	319,425		268,777		272,352
Total accrued liabilities	$	1,470,076	$	957,696	$	912,652



	March 29, 2020			March 31, 2019		December 29, 2019
	Carrying Cost		Fair Value	Carrying Cost	Fair Value	Carrying Cost	Fair Value
3.90% Notes Due 2029	$	900,000	774,540	—	—	900,000	893,430
3.55% Notes Due 2026	675,000		641,588	—	—	675,000	680,670
3.00% Notes Due 2024	500,000		480,600	—	—	500,000	502,150
6.35% Notes Due 2040	500,000		498,200	500,000	548,200	500,000	581,600
3.50% Notes Due 2027	500,000		465,400	500,000	479,450	500,000	500,550
2.60% Notes Due 2022	300,000		295,320	—	—	300,000	300,960
5.10% Notes Due 2044	300,000		251,670	300,000	285,990	300,000	301,980
3.15% Notes Due 2021	300,000		299,880	300,000	301,440	300,000	303,900
6.60% Debentures Due 2028	109,895		122,643	109,895	129,445	109,895	130,610
Variable % Notes Due December 30, 2022	400,000		400,000	—	—	—	—
Variable % Notes Due December 30, 2024	600,000		600,000	—	—	—	—
Production Financing Facilities	175,572		175,572	—	—	—	—
Total long-term debt	$	5,260,467	5,005,413	1,709,895	1,744,525	4,084,895	4,195,850
Less: Deferred debt expenses	39,736		—	14,433	—	38,438	—
Less: Current portion	64,441		—	—	—	—	—
Long-term debt	$	5,156,290	5,005,413	1,695,462	1,744,525	4,046,457	4,195,850



	Estimated Fair Value
Cash, cash equivalents and restricted cash	$	183,713
Accounts receivable, net	259,061
Inventories	7,029
Other current assets	286,270
Property, plant and equipment (including right of use assets)	90,339
Intangible assets	1,055,249
Content assets - IIC and IIP	751,524
Other assets	183,209
Short-term borrowings	(60,533		)
Accounts payable, and accrued liabilities	(772,097		)
Long-term debt (including current portion)	(149,118		)
Other liabilities	(262,644		)
Noncontrolling interests	(63,541		)
Estimated fair value of net assets acquired	1,508,461
Goodwill	3,079,181
Total purchase price	$	4,587,642



	Unaudited
	March 31, 2019
Revenues	$	1,198,722
Net earnings	79,134
Net earnings attributable to Hasbro, Inc.	76,405

Net earnings per common share:
Diluted	$	0.56
Basic	$	0.56


	2020			2019
Nine Months	Basic		Diluted	Basic		Diluted
Net earnings attributable to Hasbro, Inc.	$	117,346	117,346	$	253,109	253,109

Average shares outstanding	137,214		137,214	126,356		126,356
Effect of dilutive securities:
Options and other share-based awards	—		251	—		600
Equivalent Shares	137,214		137,465	126,356		126,956

Net earnings attributable to Hasbro, Inc. per common share	$	0.86	0.85	$	2.00	1.99


	Quarter Ended
	September 27, 2020
Production financing held by production subsidiaries	$	121,444
Other loans	8,998



Total	$	130,442

Production financing shown in the consolidated balance sheet as:
Non-current	$	82,175
Current	39,269
Total	$	121,444



	Canadian Dollars		U.S. Dollars	Total
As of March 29, 2020	$	73,485	111,492	184,977


	September 27, 2020
Film and TV Programming
Released, less amortization	$	477,329
Completed and not released	18,070
In production	51,001
Pre-production	41,144
	587,544






Other Programming
Released, less amortization	11,511
Completed and not released	3,421
In production	9,057
Pre-production	8,012
	32,001

Total program costs	$	619,545



	Quarter Ended
	March 29, 2020
Film Programming
Released, less amortization	$	300,619
Completed and not released	63,100
In production	25,702
Pre-production	20,248
	409,669
TV Programming
Released, less amortization	101,925
Completed and not released	74,900
In production	64,188
Pre-production	59,863
	300,876
Other Programming
Released, less amortization	10,112
In production	2,177
	12,289

Total program costs	$	722,834



	Investment in Production		Investment in Content	Total
Program cost amortization	$	83,404	39,979	123,383



	Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
March 29, 2020
Assets:
Available-for-sale securities	$	768	768	—	—
Derivatives	46,781		—	46,781	—
Total assets	$	47,549	768	46,781	—

Liabilities:
Derivatives	$	13,131	—	13,131	—
Option agreement	20,836		—	—	20,836
Total liabilities	$	33,967	—	13,131	20,836

March 31, 2019
Assets:
Available-for-sale securities	$	975	975	—	—
Derivatives	32,296		—	32,296	—
Total assets	$	33,271	975	32,296	—

Liabilities:
Derivatives	$	45	—	45	—
Option agreement	23,144		—	—	23,144
Total liabilities	$	23,189	—	45	23,144

December 29, 2019
Assets:
Available-for-sale securities	$	1,296	1,296	—	—
Derivatives	48,973		—	48,973	—
Total assets	$	50,269	1,296	48,973	—

Liabilities:
Derivatives	$	5,733	—	5,733	—
Option agreement	22,145		—	—	22,145
Total Liabilities	$	27,878	—	5,733	22,145



	2020			2019
Balance at beginning of year	$	(22,145	)	(23,440	)
Gain from change in fair value	1,309			296
Balance at end of first quarter	$	(20,836	)	(23,144	)


				September 27, 2020
	March 29, 2020
2020 (excluding the three months ended March 29, 2020)	$	35,280
2020 (excluding the nine months ended September 27, 2020)			2020 (excluding the nine months ended September 27, 2020)	$	12,576
2021	45,207		2021	47,794
2022	41,609		2022	43,660
2023	33,842		2023	35,763
2024	22,266		2024	24,513
2025 and thereafter	66,743		2025 and thereafter	66,276
Total future lease payments	244,947		Total future lease payments	230,582
Less imputed interest	49,151		Less imputed interest	24,976
Present value of future operating lease payments	195,796		Present value of future operating lease payments	205,606
Less current portion of operating lease liabilities ⁽¹⁾	43,263		Less current portion of operating lease liabilities (1)	42,814
Non-current operating lease liability ⁽²⁾	152,533		Non-current operating lease liability (2)	162,792
Operating lease right-of-use assets, net ⁽³⁾	$	168,805	Operating lease right-of-use assets, net (3)	$	189,211



Remaining amounts to be paid as of December 29, 2019	$	31,113
eOne restructuring charges	13,186
Payments made in the first quarter of 2020	(9,876		)
Remaining amounts as of March 29, 2020	$	34,423


	2018 Restructuring Program		eOne Integration Program	Other	Total
Remaining amounts to be paid as of December 29, 2019	$	31,113	0	0	$	31,113
2020 restructuring charges	0		20,832	11,554	32,386

Payments made in the first nine months of 2020	(17,510)		(8,223)	(1,096)	(26,829)

Remaining amounts as of September 27, 2020	$	13,603	12,609	10,458	$	36,670