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 ~~September~~June 27, ~~2020~~2021


☐			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) 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 ~~October~~July 26, ~~2020~~2021 was ~~137,030,619.~~137,683,075.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(~~Thousands~~Millions of Dollars Except Share Data)

(Unaudited)


		September 27, 2020		September 29, 2019	December 29, 2019		June 27, 2021		June 28, 2020		December 27, 2020
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
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		1,438,360		1,416,879	1,410,597
Cash and cash equivalents including restricted cash of $83.1 million, $71.9 million and $73.2 million						Cash and cash equivalents including restricted cash of $83.1 million, $71.9 million and $73.2 million	$	1,228.2	$	1,038.0	$	1,449.7
Accounts receivable, less allowance for doubtful accounts of $30.5 million, $28.0 million and $28.1 million						Accounts receivable, less allowance for doubtful accounts of $30.5 million, $28.0 million and $28.1 million	865.9		911.3		1,391.7
Inventories	Inventories	540,039		589,132	446,105	Inventories	499.6		564.2		395.6
Prepaid expenses and other current assets	Prepaid expenses and other current assets	648,158		346,687	310,450	Prepaid expenses and other current assets	543.2		672.2		609.6
Assets held for sale						Assets held for sale	479.5		0		0
Total current assets	Total current assets	3,758,962		3,413,130	6,747,521	Total current assets	3,616.4		3,185.7		3,846.6
Property, plant and equipment, less accumulated depreciation of $546,800 $496,700 and $505,900		477,154		371,881	382,248
Property, plant and equipment, less accumulated depreciation of $589.1 million, $528.2 million and $553.0 million						Property, plant and equipment, less accumulated depreciation of $589.1 million, $528.2 million and $553.0 million	466.2		482.2		489.0
Other assets	Other assets					Other assets
Goodwill	Goodwill	3,644,118		485,042	494,584	Goodwill	3,420.8		3,666.0		3,691.7
Other intangible assets, net of accumulated amortization of $885,800 $771,700 and $783,500		1,546,810		658,350	646,305
Other intangible assets, net of accumulated amortization of $1,002.5 million, $855.0 million and $964.6 million						Other intangible assets, net of accumulated amortization of $1,002.5 million, $855.0 million and $964.6 million	1,248.3		1,559.1		1,530.8
Other	Other	1,276,133		626,221	584,970	Other	1,350.5		1,329.1		1,260.2
Total other assets	Total other assets	6,467,061		1,769,613	1,725,859	Total other assets	6,019.6		6,554.2		6,482.7
Total assets	Total assets	$	10,703,177	5,554,624	8,855,628	Total assets	$	10,102.2	$	10,222.1	$	10,818.3
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY	LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY					LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities	Current liabilities					Current liabilities
Short-term borrowings	Short-term borrowings	$	10,032	7,903	503	Short-term borrowings	$	0.8	$	6.4	$	6.6
Current portion of long-term debt	Current portion of long-term debt	369,269		0	0	Current portion of long-term debt	189.6		378.6		432.6
Accounts payable	Accounts payable	466,172		501,136	343,927	Accounts payable	382.4		335.2		425.5
Accrued liabilities	Accrued liabilities	1,470,076		957,696	912,652	Accrued liabilities	1,396.5		1,261.4		1,538.6
Liabilities held for sale						Liabilities held for sale	76.3		0		0
Total current liabilities	Total current liabilities	2,315,549		1,466,735	1,257,082	Total current liabilities	2,045.6		1,981.6		2,403.3
Long-term debt	Long-term debt	4,777,807		1,696,204	4,046,457	Long-term debt	4,388.7		4,802.5		4,660.0
Other liabilities	Other liabilities	778,514		550,778	556,559	Other liabilities	753.0		771.7		793.9
Total liabilities	Total liabilities	7,871,870		3,713,717	5,860,098	Total liabilities	$	7,187.3	$	7,555.8	$	7,857.2
Redeemable noncontrolling interests	Redeemable noncontrolling interests	22,876		0	0	Redeemable noncontrolling interests	24.5		24.1		24.4
Shareholders' equity	Shareholders' equity					Shareholders' equity
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	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		110,143		104,847	110,143
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at June 27, 2021, June 28, 2020, and December 27, 2020						Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at June 27, 2021, June 28, 2020, and December 27, 2020	110.1		110.1		110.1
Additional paid-in capital	Additional paid-in capital	2,311,433		1,301,366	2,275,726	Additional paid-in capital	2,361.2		2,297.3		2,329.1
Retained earnings	Retained earnings	4,192,434		4,180,331	4,354,619	Retained earnings	4,110.3		4,064.8		4,204.2
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(280,330)		(185,376)	(184,220)	Accumulated other comprehensive loss	(183.5)		(308.1)		(195.0)
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)
Treasury stock, at cost; 82,617,426 shares at June 27, 2021; 83,264,365 shares at June 28, 2020; and 82,979,403 shares at December 27, 2020						Treasury stock, at cost; 82,617,426 shares at June 27, 2021; 83,264,365 shares at June 28, 2020; and 82,979,403 shares at December 27, 2020	(3,547.6)		(3,560.0)		(3,551.7)
Noncontrolling interests	Noncontrolling interests	34,680		0	0	Noncontrolling interests	39.9		38.1		40.0
Total shareholders' equity	Total shareholders' equity	2,808,431		1,840,907	2,995,530	Total shareholders' equity	2,890.4		2,642.2		2,936.7
Total liabilities, noncontrolling interests and shareholders' equity	Total liabilities, noncontrolling interests and shareholders' equity	$	10,703,177	5,554,624	8,855,628	Total liabilities, noncontrolling interests and shareholders' equity	$	10,102.2	$	10,222.1	$	10,818.3

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(~~Thousands~~Millions of Dollars Except Per Share Data)

(Unaudited)


		Quarter Ended			Nine Months Ended				Quarter Ended				Six Months Ended
		September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Net revenues	Net revenues	$	1,776,623	1,575,173	$	3,742,472	3,292,220	Net revenues	$	1,322.2	$	860.3	$	2,437.0	$	1,965.9
Costs and expenses:	Costs and expenses:							Costs and expenses:
Cost of sales	Cost of sales	610,105		627,119	1,126,044		1,230,800	Cost of sales	345.0		253.2		634.9		515.9
Program cost amortization	Program cost amortization	85,424		28,028	268,245		58,105	Program cost amortization	110.7		50.6		208.2		182.8
Royalties	Royalties	176,938		128,008	387,097		258,957	Royalties	111.5		97.4		220.4		210.2
Product development	Product development	62,709		67,354	174,863		189,246	Product development	87.2		58.4		149.0		112.2
Advertising	Advertising	137,408		140,256	311,415		309,659	Advertising	105.4		72.3		193.3		174.0
Amortization of intangibles	Amortization of intangibles	36,172		11,814	107,685		35,445	Amortization of intangibles	29.7		34.7		62.6		71.5
Loss on assets held for sale								Loss on assets held for sale	101.8		0		101.8		0
Selling, distribution and administration	Selling, distribution and administration	325,360		275,384	885,680		748,338	Selling, distribution and administration	354.3		281.2		642.9		560.3
Acquisition and related costs	Acquisition and related costs	5,949		0	165,993		0	Acquisition and related costs	0		10.3		0		160.1
Total costs and expenses	Total costs and expenses	1,440,065		1,277,963	3,427,022		2,830,550	Total costs and expenses	1,245.6		858.1		2,213.1		1,987.0
Operating profit		336,558		297,210	315,450		461,670
Operating profit (loss)								Operating profit (loss)	76.6		2.2		223.9		(21.1)
Non-operating expense (income):	Non-operating expense (income):							Non-operating expense (income):
Interest expense	Interest expense	49,400		22,764	153,702		67,096	Interest expense	46.1		49.6		94.0		104.3
Interest income	Interest income	(713)		(5,486)	(6,411)		(19,164)	Interest income	(1.2)		(0.9)		(2.4)		(5.6)
Other (income) expense, net		(11,327)		20,186	(15,429)		118,289
Other income, net								Other income, net	(9.4)		(2.8)		(38.3)		(4.1)
Total non-operating expense, net	Total non-operating expense, net	37,360		37,464	131,862		166,221	Total non-operating expense, net	35.5		45.9		53.3		94.6
Earnings before income taxes		299,198		259,746	183,588		295,449
Income tax expense		79,215		46,797	64,313		42,340
Net earnings		219,983		212,949	119,275		253,109
Net earnings (loss) attributable to noncontrolling interests		(915)		0	1,929		0
Net earnings attributable to Hasbro, Inc.		$	220,898	212,949	$	117,346	253,109
Earnings (loss) before income taxes								Earnings (loss) before income taxes	41.1		(43.7)		170.6		(115.7)
Income tax expense (benefit)								Income tax expense (benefit)	63.0		(10.8)		75.0		(14.9)
Net earnings (loss)								Net earnings (loss)	(21.9)		(32.9)		95.6		(100.8)
Net earnings attributable to noncontrolling interests								Net earnings attributable to noncontrolling interests	1.0		1.0		2.3		2.8
Net earnings (loss) attributable to Hasbro, Inc.								Net earnings (loss) attributable to Hasbro, Inc.	$	(22.9)	$	(33.9)	$	93.3	$	(103.6)

Net earnings per common share:
Net earnings (loss) per common share:								Net earnings (loss) per common share:
Basic	Basic	$	1.61	1.68	$	0.86	2.00	Basic	$	(0.17)	$	(0.25)	$	0.68	$	(0.75)
Diluted	Diluted	$	1.61	1.67	$	0.85	1.99	Diluted	$	(0.17)	$	(0.25)	$	0.68	$	(0.75)
Cash dividends declared per common share	Cash dividends declared per common share	$	0.68	0.68	$	2.04	2.04	Cash dividends declared per common share	$	0.68	$	0.68	$	1.36	$	1.36

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings (Loss)

(~~Thousands~~Millions of Dollars)

(Unaudited)

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


	Quarter Ended				Six Months Ended
	June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Net earnings (loss)	$	(21.9)	$	(32.9)	$	95.6	$	(100.8)
Other comprehensive earnings (losses):
Foreign currency translation adjustments, net of tax	24.0		(7.1)		7.9		(139.0)
Unrealized holding gains on available-for-sale securities, net of tax	0.1		2.5		0.2		2.1
Net (losses) gains on cash flow hedging activities, net of tax	(3.2)		(3.7)		2.4		21.3

Reclassifications to earnings, net of tax:
Net gains (losses) on cash flow hedging activities	1.8		(5.3)		0.6		(8.9)
Amortization of unrecognized pension and postretirement amounts	0.2		0.3		0.4		0.6

Total other comprehensive earnings (loss), net of tax	$	22.9	$	(13.3)	$	11.5	$	(123.9)
Total comprehensive earnings attributable to noncontrolling interests	1.0		1.0		2.3		2.8
Total comprehensive earnings (loss) attributable to Hasbro, Inc.	$	0	$	(47.2)	$	104.8	$	(227.5)

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(~~Thousands~~Millions of Dollars)

(Unaudited)


		Nine Months Ended				Six Months Ended
		September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020
Cash flows from operating activities:	Cash flows from operating activities:				Cash flows from operating activities:
Net earnings		$	119,275	253,109
Net earnings (loss)					Net earnings (loss)	$	95.6	$	(100.8)
Adjustments to reconcile net earnings to net cash provided by operating activities:	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	Depreciation of plant and equipment	94,100		101,016	Depreciation of plant and equipment	67.6		56.6
Amortization of intangibles	Amortization of intangibles	107,685		35,445	Amortization of intangibles	62.6		71.5
Asset impairments	Asset impairments	40,878		0	Asset impairments	0		40.9
Loss on assets held for sale					Loss on assets held for sale	101.8		0
Program cost amortization	Program cost amortization	268,245		58,105	Program cost amortization	208.2		182.8
Deferred income taxes	Deferred income taxes	12,549		(27,974)	Deferred income taxes	43.6		(11.1)
Stock-based compensation	Stock-based compensation	40,015		24,787	Stock-based compensation	37.1		26.1
Non-cash pension settlement		0		110,777

Other non-cash items	Other non-cash items	(1,646)		13,347	Other non-cash items	0.2		0
Change in operating assets and liabilities net of acquired balances:	Change in operating assets and liabilities net of acquired balances:				Change in operating assets and liabilities net of acquired balances:
Decrease (increase) in accounts receivable		165,593		(236,010)
Decrease in accounts receivable					Decrease in accounts receivable	533.9		722.0
Increase in inventories	Increase in inventories	(96,907)		(154,476)	Increase in inventories	(109.5)		(125.4)
(Increase) decrease in prepaid expenses and other current assets		(10,007)		2,440
Decrease (increase) in prepaid expenses and other current assets					Decrease (increase) in prepaid expenses and other current assets	38.8		(40.2)
Program spend, net	Program spend, net	(294,597)		(43,857)	Program spend, net	(308.3)		(220.4)
Increase in accounts payable and accrued liabilities		18,980		236,777
Decrease in accounts payable and accrued liabilities					Decrease in accounts payable and accrued liabilities	(169.3)		(344.4)
Change in net deemed repatriation tax	Change in net deemed repatriation tax	(18,364)		(14,550)	Change in net deemed repatriation tax	(18.4)		0
Other	Other	48,511		30,632	Other	(6.8)		0.6
Net cash provided by operating activities	Net cash provided by operating activities	494,310		389,568	Net cash provided by operating activities	577.1		258.2
Cash flows from investing activities:	Cash flows from investing activities:				Cash flows from investing activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(92,059)		(90,800)	Additions to property, plant and equipment	(63.1)		(64.0)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(4,403,929)		0	Acquisitions, net of cash acquired	0		(4,403.9)
Other	Other	24,297		4,340	Other	(3.2)		13.1
Net cash utilized by investing activities	Net cash utilized by investing activities	(4,471,691)		(86,460)	Net cash utilized by investing activities	(66.3)		(4,454.8)
Cash flows from financing activities:	Cash flows from financing activities:				Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months	Proceeds from borrowings with maturity greater than three months	1,036,037		0	Proceeds from borrowings with maturity greater than three months	114.7		1,023.5
Repayments of borrowings with maturity greater than three months	Repayments of borrowings with maturity greater than three months	(147,324)		0	Repayments of borrowings with maturity greater than three months	(635.0)		(98.2)
Net proceeds from other short-term borrowings		(319)		(1,425)
Purchases of common stock		0		(60,137)
Net repayments of other short-term borrowings					Net repayments of other short-term borrowings	(6.3)		(4.5)

Stock-based compensation transactions	Stock-based compensation transactions	1,830		29,737	Stock-based compensation transactions	9.4		1.8
Dividends paid	Dividends paid	(279,423)		(250,760)	Dividends paid	(187.5)		(186.2)
Payments related to tax withholding for share-based compensation	Payments related to tax withholding for share-based compensation	(5,935)		(13,061)	Payments related to tax withholding for share-based compensation	(9.5)		(5.7)
Redemption of equity instruments	Redemption of equity instruments	(47,399)		0	Redemption of equity instruments	0		(47.4)
Deferred acquisition payments		0		(100,000)
Debt acquisition costs		0		(21,534)

Other	Other	(6,949)		0	Other	(4.2)		(4.8)
Net cash provided (utilized) by financing activities		550,518		(417,180)
Net cash (utilized) provided by financing activities					Net cash (utilized) provided by financing activities	(718.4)		678.5
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(21,101)		(7,867)	Effect of exchange rate changes on cash	4.3		(24.4)
Decrease in cash, cash equivalents and restricted cash		(3,447,964)		(121,939)
Net decrease in cash, cash equivalents and restricted cash					Net decrease in cash, cash equivalents and restricted cash	(203.3)		(3,542.5)
Net change due to cash classified as held for sale					Net change due to cash classified as held for sale	(18.2)		0
Net decrease in cash, cash equivalents and restricted cash					Net decrease in cash, cash equivalents and restricted cash	(221.5)		(3,542.5)
Cash, cash equivalents and restricted cash at beginning of year	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	1,449.7		4,580.4
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	1,132,405	1,060,432	Cash, cash equivalents and restricted cash at end of period	$	1,228.2	$	1,037.9

Supplemental information	Supplemental information				Supplemental information
Cash paid during the period for:	Cash paid during the period for:				Cash paid during the period for:
Interest	Interest	$	123,595	69,601	Interest	$	90.2	$	81.5
Income taxes	Income taxes	$	66,008	64,917	Income taxes	$	70.8	$	30.4

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests

(~~Thousands~~Millions of Dollars)

(Unaudited)

Quarter 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, June 28, 2020 $ 110,143 2,297,267 4,064,715 (308,128) (3,559,990) 38,144 $ 2,642,151 $ 24,133
Net earnings attributable to Hasbro, Inc. — — 220,898 — — — 220,898 —
Net loss attributable to noncontrolling interests — — — — — (901) (901) (14)
Buyout of noncontrolling interest — 606 — — — — 606 —
Other comprehensive earnings — — — 27,798 — — 27,798 —
Stock-based compensation transactions — (325) — — 61 — (264) —
Stock-based compensation expense — 13,885 0 — 0 — 13,885 —
Dividends declared — — (93,179) — — 0 (93,179) —
Distributions paid to noncontrolling owners and other foreign exchange — — — — — (2,563) (2,563) (1,243)
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 $ 104,847 1,290,540 4,053,266 (173,175) (3,559,609) 0 $ 1,715,869 $ 0
Net earnings — — 212,949 — — — 212,949 —
Other comprehensive loss — — — (12,201) — — (12,201) —
Stock-based compensation transactions — 1,933 — — 852 — 2,785 —
Purchases of common stock — — — — (1,504) — (1,504) —
Stock-based compensation expense — 8,893 — — 0 — 8,893 —
Dividends declared — — (85,884) — — — (85,884) —
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.~~


	Three Months Ended June 27, 2021
	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, March 28, 2021	$	110.1	2,339.6	4,226.8	(206.4)	(3,550.6)	40.4	$	2,959.9	$	24.0

Net earnings (loss) attributable to Hasbro, Inc.	—		—	(22.9)	—	—	—	(22.9)		—
Net earnings attributable to noncontrolling interests	—		—	—	—	—	0.7	0.7		0.3

Other comprehensive earnings	—		—	—	22.9	—	—	22.9		—
Stock-based compensation transactions	—		2.6	—	—	1.9	—	4.5		—

Stock-based compensation expense	—		19.3	—	—	1.1	—	20.4		—
Dividends declared	—		—	(93.6)	—	—	—	(93.6)		—
Distributions paid to noncontrolling owners and other foreign exchange	—		(0.3)	—	—	—	(1.2)	(1.5)		0.2
Balance, June 27, 2021	$	110.1	2,361.2	4,110.3	(183.5)	(3,547.6)	39.9	$	2,890.4	$	24.5

	Three Months Ended June 28, 2020
	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, March 29, 2020	$	110.1	2,282.4	4,191.8	(294.8)	(3,560.3)	35.3	$	2,764.5	$	26.0
Noncontrolling interests related to acquisition of Entertainment One Ltd.	—		—	—	—	—	(1.4)	(1.4)		2.6
Net loss attributable to Hasbro, Inc.	—		—	(33.9)	—	—	—	(33.9)		—
Net earnings (loss) attributable to noncontrolling interests	—		—	—	—	—	1.0	1.0		—
Other comprehensive loss	—		—	—	(13.3)	—	—	(13.3)		—
Stock-based compensation transactions	—		(0.3)	—	—	—	—	(0.3)		—

Stock-based compensation expense	—		15.2	—	—	0.3	—	15.5		—
Dividends declared	—		—	(93.1)	—	—	—	(93.1)		—
Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	3.2	3.2		(4.5)
Balance, June 28, 2020	$	110.1	2,297.3	4,064.8	(308.1)	(3,560.0)	38.1	$	2,642.2	$	24.1

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests

(~~Thousands~~Millions of Dollars)

(Unaudited)


														Six Months Ended June 27, 2021
														Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests
Balance, December 27, 2020													Balance, December 27, 2020	$	110.1	2,329.1	4,204.2	(195.0)	(3,551.7)	40.0	$	2,936.7	$	24.4

Net earnings attributable to Hasbro, Inc.													Net earnings attributable to Hasbro, Inc.	—		—	93.3	—	—	—	93.3
Net earnings attributable to noncontrolling interests													Net earnings attributable to noncontrolling interests	—		—	—	—	—	2.0	2.0		0.3

Other comprehensive earnings													Other comprehensive earnings	—		—	—	11.5	—	—	11.5		—
Stock-based compensation transactions													Stock-based compensation transactions	—		(3.2)	—	—	3.0	—	(0.2)		—

Stock-based compensation expense													Stock-based compensation expense	—		36.0	—	—	1.1	—	37.1		—
Dividends declared													Dividends declared	—		—	(187.2)	—	—	—	(187.2)		—
Distributions paid to noncontrolling owners and other foreign exchange													Distributions paid to noncontrolling owners and other foreign exchange	—		(0.7)	—	—	—	(2.1)	(2.8)		(0.2)
Balance, June 27, 2021													Balance, June 27, 2021	$	110.1	2,361.2	4,110.3	(183.5)	(3,547.6)	39.9	$	2,890.4	$	24.5

		Nine Months Ended September 27, 2020												Six Months Ended June 28, 2020
		Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests	Total Shareholders' Equity		Redeemable Noncontrolling Interests			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	Balance, December 29, 2019	$	110,143	2,275,726	4,354,619	(184,220)	(3,560,738)	0	$	2,995,530	$	0	Balance, December 29, 2019	$	110.1	2,275.7	4,354.6	(184.2)	(3,560.7)	0	$	2,995.5	$	0
Noncontrolling interests related to acquisition of Entertainment One Ltd.	Noncontrolling interests related to acquisition of Entertainment One Ltd.	—		—	—	—	—	38,561	38,561		26,241		Noncontrolling interests related to acquisition of Entertainment One Ltd.	—		—	—	—	—	38.6	38.6		26.2
Net earnings attributable to Hasbro, Inc.		—		—	117,346	—	—	—	117,346
Net earnings (loss) attributable to Hasbro, Inc.													Net earnings (loss) attributable to Hasbro, Inc.	—		—	(103.6)	—	—	—	(103.6)		—
Net earnings (loss) attributable to noncontrolling interests	Net earnings (loss) attributable to noncontrolling interests	—		—	—	—	—	2,067	2,067		(138)		Net earnings (loss) attributable to noncontrolling interests	—		—	—	—	—	3.0	3.0		(0.1)
Buyout of noncontrolling interest		—		606	—	—	—	—	606		—
Other comprehensive loss	Other comprehensive loss	—		—	—	(96,110)	—	—	(96,110)		—		Other comprehensive loss	—		—	—	(123.9)	—	—	(123.9)		—
Stock-based compensation transactions	Stock-based compensation transactions	—		(4,613)	—	—	508	—	(4,105)		—		Stock-based compensation transactions	—		(4.2)	—	—	0.4	—	(3.8)		—

Stock-based compensation expense	Stock-based compensation expense	—		39,714	—	—	301	—	40,015		—		Stock-based compensation expense	—		25.8	—	—	0.3	—	26.1		—
Dividends declared	Dividends declared	—		—	(279,531)	—	—	—	(279,531)		—		Dividends declared	—		—	(186.2)	—	—	—	(186.2)		—
Distributions paid to noncontrolling owners and other foreign exchange	Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	(5,948)	(5,948)		(3,227)		Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	(3.5)	(3.5)		(2.0)
Balance, September 27, 2020		$	110,143	2,311,433	4,192,434	(280,330)	(3,559,929)	34,680	$	2,808,431	$	22,876
Balance, June 28, 2020													Balance, June 28, 2020	$	110.1	2,297.3	4,064.8	(308.1)	(3,560.0)	38.1	$	2,642.2	$	24.1

		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~~Millions 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 ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019,~~June 28, 2020, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. 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 ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 were each 13-week periods. The ~~nine-month~~six-month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 were each ~~39-week~~26-week periods.

The results of operations for the quarter ended ~~September~~June 27, ~~2020~~2021 are not necessarily indicative of results to be expected for the full year ~~2020,~~2021, nor were those of the comparable ~~2019~~2020 period representative of those actually experienced for the full year ~~2019.~~2020.

~~Following the Company's acquisition of Entertainment One Ltd. ("eOne" or "eOne Acquisition") (see Note 3), beginning~~Segment Realignment

Beginning with the first quarter of ~~2020,~~2021, the ~~eOne operating segment was added~~Company realigned its financial reporting segments and business units, in order to align its reportable segments more closely with its current business structure. Reclassifications of certain prior year financial information has been made to conform to the current-year presentation. None of the changes impact the Company's ~~reporting structure and is comprised~~previously reported consolidated net revenue, operating profits (losses), net earnings (losses) or net earnings (losses) per share. See Note 14 for more information on the Company’s 2021 segment realignment.

Legal Settlement

During the first quarter of ~~all legacy eOne operations. Over time,~~2021, the Company ~~plans to transition towards reflecting all~~realized a gain 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~~$25.6 million from a legal settlement related to ~~the eOne preschool brands to legacy Hasbro segments, including related toy and game operations into the Company's geographic commercial segments~~a dispute associated with historical Entertainment One Ltd. ("eOne") foreign exchange hedging activities. The gain is included 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~~other income, net within the Company's consolidated financial statements, ~~and accompanying condensed footnotes since the date~~included in Part I of ~~acquisition. For more information on the eOne Acquisition see Note 3.~~

this Form 10-Q.

Significant Accounting Policies

The Company's significant accounting policies are summarized in Note 1 to the consolidated financial statements included in ~~our~~the Company's 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.~~27, 2020.

~~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~~

~~Principal Activity~~

~~Astley Baker Davies Limited~~

~~England and Wales~~

~~Nonredeemable~~

~~Ownership of intellectual property~~

~~Whizz Kid Entertainment Limited~~ ~~(1)~~

~~England and Wales~~

~~Redeemable~~

~~100~~

~~Production of television programs~~

~~MR Productions Holdings, LLC~~

~~United States~~

~~Redeemable~~

~~Film development~~

~~Renegade Entertainment, LLC~~

~~United States~~

~~Redeemable~~

~~Production of television programs~~

~~Round Room Live, LLC~~

~~United States~~

~~Nonredeemable~~

~~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 September 27, 2020, $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~~27, 2020 in its Annual Report on Form 10-K ("~~2019~~2020 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

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.~~Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company adopted the standard ~~relates to financial statement disclosure only~~in the first quarter of 2021 and ~~will~~the adoption of the standard did not have ana material impact on its consolidated financial statements.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

December 15, 2020 and early adoption is permitted. The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated ~~statement of~~ financial ~~position, statements of operations and comprehensive earnings (loss) or statement of cash flows.~~statements.

Issued Accounting Pronouncements

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 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 does not currently expect the change from LIBOR to an alternate rate to have a material impact on its consolidated financial statements, and is ~~currently evaluating this option as it relates~~continuing to evaluate the standard's potential impact 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 Consumer Products and Entertainment ~~Licensing and Digital segment and our eOne segment~~segments the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied. In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues. The Company defers revenues on these advanced payments until its performance obligation is satisfied and records the aggregate deferred revenues as contract liabilities. The current portion of contract liabilities ~~were~~was recorded within Accrued Liabilities and the long-term portion ~~were~~was recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets. The Company records contract assets in the case of (1) minimum guarantees, ~~that~~which are ~~being~~ recognized ratably over the term of the respective license ~~periods~~period, being recognized in advance of contractual invoicing, and (2) film and television distribution revenue recorded for content delivered but for which ~~varies based on sales~~payment will occur over ~~and above~~ the ~~contracts’ minimum guarantee.~~license term. The current portion of contract assets ~~were~~was recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion ~~were~~was recorded as Other Long-Term Assets.

At ~~September~~June 27, 2021, June 28, 2020 and December 27, 2020 ~~and September 29, 2019,~~ the Company had the following contract assets and liabilities in its consolidated balance sheets:


		September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		December 27, 2020
Assets	Assets				Assets
Contract assets - current	Contract assets - current	$	271,786	32,199	Contract assets - current	$	257.9	$	252.9	$	284.4
Contract assets - long term	Contract assets - long term	84,892		12,802	Contract assets - long term	72.6		108.5		77.0
Total(1)	Total(1)	$	356,678	45,001	Total(1)	$	330.5	$	361.4	$	361.4

Liabilities	Liabilities				Liabilities
Contract liabilities - current	Contract liabilities - current	$	147,554	48,465	Contract liabilities - current	$	174.7	$	141.7	$	161.0
Contract liabilities - long term	Contract liabilities - long term	17,872		8,423	Contract liabilities - long term	21.3		23.5		18.2
Total(1)	Total(1)	$	165,426	56,888	Total(1)	$	196.0	$	165.2	$	179.2

(1)

~~In connection with~~ For the ~~Company’s acquisition of eOne, the Company acquired $283,329 of~~six-month period ended June 27, 2021, contract assets of the eOne Music business in the amount of $29.0 million, which ~~$232,184~~ were ~~recorded in~~previously classified under Prepaid Expenses and Other Current Assets and ~~$51,145 were recorded in~~ Other ~~Long-term~~Long-Term Assets, ~~within~~have been transferred to Assets Held for Sale. Contract liabilities of the ~~Company’s consolidated balances sheets. In addition, the Company acquired deferred revenues from~~ eOne Music business in the amount of ~~$152,266, of~~$4.0 million, which ~~$144,094~~ were ~~recorded in~~previously classified under Accrued Liabilities and ~~$8,172 were recorded in~~ Other Non-current Liabilities, ~~within the Company's consolidated balance sheets.~~ have been transferred to Liabilities Held for Sale. For additional information, see Note 15.

For the ~~nine~~six months ended ~~September~~June 27, 2021, the Company collected $80.8 million of the contract assets and recognized $77.6 million of contract liabilities that were included in the December 27, 2020 ~~the Company recognized all revenues related to the acquired current contract liabilities.~~balances.

~~Contract assets~~

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and ~~liabilities~~Shares Except Per Share Data)

Unsatisfied performance obligations relate primarily to in-production television content to be delivered in the future under existing agreements with partnering content providers such as broadcasters, distributors, television networks and subscription video on demand services. As of June 27, 2021, unrecognized revenue attributable to ~~eOne represent~~unsatisfied performance obligations expected to be recognized in the future was $512.2 million. Of this amount, we expect to recognize approximately ~~80%~~$363.5 million in the remainder of 2021, $122.9 million in 2022, and ~~56% of total contract asset balances and total contract liability balances, respectively, as of September 27, 2020.~~$19.8 million in 2023. These amounts include only fixed consideration.

Disaggregation of revenues

The Company disaggregates its revenues from contracts with customers by reportable segment: ~~U.S.~~Consumer Products, Entertainment, and ~~Canada, International, Entertainment, Licensing and~~Wizards of the Coast & Digital ~~and eOne.~~Gaming. The Company further disaggregates revenues within its ~~International~~Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia ~~Pacific.~~Pacific; and within its Entertainment segment by category: Film & TV, Family Brands, and Music. Finally, the Company disaggregates its revenues by brand portfolio into 5 brand categories: Franchise ~~brands,~~Brands, Partner ~~brands,~~Brands, Hasbro ~~gaming,~~Gaming, Emerging ~~brands,~~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 1314 for further information.

(3) Business Combination

On December 30, 2019, the Company completed its acquisition of ~~eOne,~~Entertainment One Ltd. ("eOne"), a global independent studio that specializes in the development, acquisition, production, financing, distribution and sales of entertainment content. The aggregate purchase price of $4.6 billion was comprised of $3.8 billion of cash consideration for shares outstanding and $0.8 billion related to the redemption of eOne's outstanding senior secured notes and the payoff of eOne's revolving credit facility. The Company financed the acquisition with proceeds from the following debt and equity financings: (1) the issuance of senior unsecured notes in an aggregate principal ~~brand, PEPPA PIG,~~amount of $2.4 billion in November 2019, (2) the issuance of 10.6 million shares of common stock at a public offering price of $95.00 per share in November 2019 (resulting in net proceeds of $975.2 million) and (3) $1.0 billion in term loans provided by a term loan agreement, which ~~was launched in~~were borrowed on the ~~United Kingdom in May 2004, entertains preschool children worldwide with much~~date of ~~its historical revenue generated through licensing~~closing. See Note 8 for further discussion of the issuance of the senior unsecured notes and ~~merchandising programs across multiple retail categories. eOne’s portfolio of preschool brands also includes PJ MASKS and RICKY ZOOM.~~

term loan agreement.

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

~~Condensed Notes to Consolidated Financial Statements~~

~~(Thousands~~eOne's results of ~~Dollars~~operations and ~~Shares Except Per Share Data)~~

~~The all-cash transaction was valued at approximately £2,900,000 based on~~financial position have been included in 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 notesCompany's consolidated financial statements and paid off the debt outstanding under eOne's revolving credit facility, which together 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~~

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 onaccompanying condensed footnotes since the date of ~~closing. See Note 7 for further discussion of~~ the ~~issuance of the senior unsecured notes and term loan agreement.~~

acquisition.

The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”). Pursuant to Topic 805, the Company allocated the eOne purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 30, 2019. The excess of the purchase price over those fair values was recorded to goodwill.

The ~~Company's evaluations~~following table summarizes the intangible assets acquired as part 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 impacting the assets acquired, 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.eOne Acquisition:

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.


	Weighted Average
Intangible assets acquired	Amortization Period	Fair Value
Established brands	10 years	$	615.0
Trade names	15 years	100.0
Artist relationships	14 years	100.0
Music catalogs	12 years	120.0
Other	8 years	121.0
Total intangible assets acquired	11 years	$	1,056.0

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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:~~

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. eOne acquired intangible asset amortization expense for the quarter and six months ended June 27, 2021 were $21.8 million and $46.7 million, respectively. For the quarter and six months ended June 28, 2020, eOne acquired intangible asset amortization expense was $22.6 million and $47.6 million, respectively.

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

Investments in productions and content, or IIP and IIC, ~~includes~~were valued at $564.8 million on the acquisition date, and include the fair value of completed films and television programs which have been produced by eOne or for which eOne has acquired distribution rights, as well as the fair value of films and television programs in production, pre-production and development. For films and television programs, fair values were estimated based on forecasted cash flows, discounted to present value. For titles less than 3 years old and titles in development, the content assets will be amortized using the individual film forecast method, wherein the amortization will phase to the revenues incurred. For titles over 3 years old, the estimated useful life is 10 years, and will be amortized straight-line over that period.

~~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 ~~$3,149,337~~$3.2 billion represents the excess of the purchase price over the fair value of the underlying tangible and identifiable intangible assets acquired and liabilities assumed. The acquisition goodwill represents the value placed on the combined company’s brand building capabilities, our storytelling capabilities and franchise economics in TV, film and other mediums to strengthen Hasbro brands. In addition, the acquisition goodwill depicts added benefits of long-term profitable growth through in-sourcing toy and game production for the acquired preschool brands and cost-synergies, as well as future revenue growth opportunities. The goodwill recorded as part of this acquisition iswas included inwithin the ~~newly created eOne segment.~~Entertainment and Consumer Products segments for the year ended December 27, 2020. The goodwill associated with the acquisition will not be amortized for financial reporting purposes and will not be deductible for federal tax purposes.

~~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,~~ See Note 5 for ~~the quarter and nine months ended September 27, 2020 is as follows:~~

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~~information on the Company's ~~Consolidated Statement~~goodwill reallocation during the first quarter of ~~Operations since~~2021 and the ~~date~~goodwill impairment charge due to the assets held for sale relating to the eOne music business during the second quarter of ~~acquisition for the quarter and nine months ended 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)

~~Condensed Notes to Consolidated Financial Statements~~

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

2021.

For the quarter and ~~nine~~six months ended ~~September 27,~~June 28, 2020, the Company incurred ~~$5,949~~$10.3 million and ~~$165,993,~~$160.1 million, respectively, of charges related to the eOne Acquisition, which ~~are~~were recorded in acquisition and related costs within the Company’s Consolidated Statement of Operations. Included within the Entertainment segment results for the six months ended June 28, 2020 were $98.5 million of acquisition and related charges. The remaining charges were included in Corporate and Other.

The acquisition and related costs for the quarter and ~~nine~~six months ended ~~September 27,~~June 28, 2020 consisted of the following:

•Acquisition and integration costs of ~~$4,599~~$4.0 million and ~~$104,283~~ $99.7 million for the quarter and ~~nine~~six months ended ~~September 27,~~June 28, 2020, respectively, including, for the ~~nine~~six months ended ~~September 27,~~June 28, 2020, ~~$47,399~~$47.4 million of expense associated with the acceleration of eOne stock-based compensation and ~~$38,168~~$38.2 million of advisor fees settled at the closing of the acquisition, as well as integration costs; and

•Restructuring and related costs of ~~$1,350~~$6.3 million and ~~$61,710~~ $60.4 million for the quarter and ~~nine~~six months ended ~~September 27,~~June 28, 2020, respectively, including severance and retention costs for the quarter and ~~nine~~six months ended ~~September 27,~~June 28, 2020 of ~~$1,350~~$6.3 million and ~~$20,832,~~$19.5 million, respectively, as well as ~~$40,878~~$40.9 million in impairment charges for certain definite-lived intangible and production assets for the ~~nine~~six months ended ~~September 27,~~June 28, 2020. The impairment charges of ~~$40,878~~$40.9 million 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 quarter and nine months ended 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

~~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 $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~~Millions 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 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.

(4) Earnings Per Share

Net earnings (loss) per share data for the quarters and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 were computed as follows:


		2020			2019				2021			2020
Quarter	Quarter	Basic		Diluted	Basic		Diluted	Quarter	Basic		Diluted	Basic		Diluted
Net earnings attributable to Hasbro, Inc.		$	220,898	220,898	$	212,949	212,949
Net loss attributable to Hasbro, Inc.								Net loss attributable to Hasbro, Inc.	$	(22.9)	(22.9)	$	(33.9)	(33.9)

Average shares outstanding	Average shares outstanding	137,258		137,258	126,453		126,453	Average shares outstanding	137.8		137.8	137.2		137.2
Effect of dilutive securities:	Effect of dilutive securities:							Effect of dilutive securities:
Options and other share-based awards	Options and other share-based awards	—		232	—		751	Options and other share-based awards	—		0	—		0
Equivalent Shares	Equivalent Shares	137,258		137,490	126,453		127,204	Equivalent Shares	137.8		137.8	137.2		137.2

Net earnings attributable to Hasbro, Inc. per common share		$	1.61	1.61	$	1.68	1.67
Net earnings loss attributable to Hasbro, Inc. per common share								Net earnings loss attributable to Hasbro, Inc. per common share	$	(0.17)	(0.17)	$	(0.25)	(0.25)

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


	2021			2020
Six Months	Basic		Diluted	Basic		Diluted
Net earnings (loss) attributable to Hasbro, Inc.	$	93.3	93.3	$	(103.6)	(103.6)

Average shares outstanding	137.8		137.8	137.2		137.2
Effect of dilutive securities:
Options and other share-based awards	—		0.4	—		0
Equivalent Shares	137.8		138.2	137.2		137.2

Net earnings (loss) attributable to Hasbro, Inc. per common share	$	0.68	0.68	$	(0.75)	(0.75)

For the quarter and ~~nine~~six months ended ~~September~~June 27, ~~2020,~~2021, options and restricted stock units totaling ~~2,852~~4.6 million and ~~3,046,~~2.2 million respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. For the quarter ~~ended September 29, 2019, no options or restricted stock units were anti-dilutive. For the nine~~and six months ended ~~September 29, 2019,~~June 28, 2020, options and restricted stock units totaling ~~1,088~~4.0 million and 4.0 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. Of the fiscal 2021 amount, 2.5 million shares would have been included in the calculation of diluted shares had the Company not had a loss for the quarter ended June 27, 2021. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 0.4 million shares being included in the diluted earnings per share calculation for the quarter ended June 27, 2021. Of the fiscal 2020 amount, 0.6 million and 0.9 million shares, respectively, would have been included in the calculation of diluted shares had the Company not had a net loss for the quarter and six months ended June 28, 2020. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 0.1 million and 0.3 million shares, respectively, being included in the diluted earnings per share calculation for the quarter and six months ended June 28, 2020.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~(5)~~(5) Goodwill

During the first quarter of 2021, the Company realigned its financial reporting structure creating the following 3 principal reportable segments: Consumer Products, Wizards of the Coast & Digital Gaming and Entertainment. In our realignment, some, but not all, of our reporting units were changed. As a result of these changes, the Company reallocated its goodwill among the revised reporting units based on the change in relative fair values of the respective reporting units.


	Consumer Products		Wizards of the Coast & Digital Gaming	Entertainment	Total
2021
Balance at December 27, 2020	$	1,385.7	53.1	2,252.9	$	3,691.7
Goodwill allocation	199.4		254.2	(453.6)	0
Foreign exchange translation	0		0.4	(0.3)	0.1
Impairment during the period	0		0	(101.8)	(101.8)
Reclass to assets held-for-sale	0		0	(169.2)	(169.2)
Balance at June 27, 2021	$	1,585.1	307.7	1,528.0	$	3,420.8

In conjunction with the goodwill reallocation described above, during the first quarter of 2021, the Company performed an impairment test of goodwill balances held by the reporting units impacted by the segment realignment. The reporting units were tested as of December 28, 2020 and included our Europe, Asia Pacific, Global Consumer Products Licensing, Wizards of the Coast and Family Brands reporting units. Based on the results of the goodwill assessment, we determined that the fair values of each of these reporting units exceeded their carrying values, and as such, we concluded that there was no indication of goodwill impairment for these reporting units as of December 28, 2020.

During the second quarter of 2021, the Company entered into a definitive agreement to sell the Entertainment One Music business ("eOne Music") for an aggregate sales price of $385.0 million, subject to certain closing adjustments related to working capital and net debt. Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $101.8 million within Loss on Assets Held for Sale in the Consolidated Statements of Operations, and within the Entertainment segment for the quarter ended June 27, 2021. See also Note 15.

(6) Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss). The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarters and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.


		Quarter Ended			Nine Months Ended				Quarter Ended				Six Months Ended
		September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020

Other comprehensive earnings (loss), tax effect:	Other comprehensive earnings (loss), tax effect:							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 unrealized holding gains								Tax benefit on unrealized holding gains	$	0	$	(0.7)	$	0	(0.6)
Tax expense (benefit) on cash flow hedging activities								Tax expense (benefit) on cash flow hedging activities	0.6		1.4		(0.4)		(5.8)
Tax benefit on foreign currency translation adjustments	Tax benefit on foreign currency translation adjustments	0		0	8,406		0	Tax benefit on foreign currency translation adjustments	0		8.4		0		8.4
Tax expense on changes in unrecognized pension amounts		0		0	0		(5,687)

Reclassifications to earnings, tax effect:	Reclassifications to earnings, tax effect:							Reclassifications to earnings, tax effect:
Tax expense on cash flow hedging activities		1,928		703	3,379		1,237
Tax (expense) benefit on cash flow hedging activities								Tax (expense) benefit on cash flow hedging activities	(0.2)		1.2		0		1.5

Amortization of unrecognized pension and postretirement amounts	Amortization of unrecognized pension and postretirement amounts	(80)		(80)	(239)		(1,619)	Amortization of unrecognized pension and postretirement amounts	(0.1)		(0.1)		(0.1)		(0.2)
Tax benefit on settlement of U.S defined benefit plan		0		0	0		(24,925)

Total tax effect on other comprehensive earnings (loss)	Total tax effect on other comprehensive earnings (loss)	$	2,368	99	$	5,691	(31,634)	Total tax effect on other comprehensive earnings (loss)	$	0.3	$	10.2	$	(0.5)	3.3

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Changes in the components of accumulated other comprehensive earnings (loss) for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 are as follows:


									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
2021								2021
Balance at December 27, 2020								Balance at December 27, 2020	$	(40.7)	(22.1)	0.4	(132.6)	(195.0)
Current period other comprehensive earnings (loss)								Current period other comprehensive earnings (loss)	0.4		3.0	0.2	7.9	11.5
Balance at June 27, 2021								Balance at June 27, 2021	$	(40.3)	(19.1)	0.6	(124.7)	(183.5)
		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	2020							2020
Balance at December 29, 2019	Balance at December 29, 2019	$	(36,129)	(5,232)	(230)	(142,629)	(184,220)	Balance at December 29, 2019	$	(36.2)	(5.2)	(0.2)	(142.6)	(184.2)
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)	Current period other comprehensive earnings (loss)	111,019		3,839	400	(6,120)	109,138	Current period other comprehensive earnings (loss)	0.6		12.4	2.1	(139.0)	(123.9)
Balance at September 29, 2019		$	(32,115)	5,388	(344)	(158,305)	(185,376)
Balance at June 28, 2020								Balance at June 28, 2020	$	(35.6)	7.2	1.9	(281.6)	(308.1)

Gains (Losses) on Derivative Instruments

At ~~September~~June 27, ~~2020,~~2021, the Company had remaining net deferred ~~gains~~losses on foreign currency forward contracts, net of tax, of ~~$11,534~~$3.2 million in accumulated other comprehensive ~~loss~~earnings (loss) ("AOCE"). These instruments hedge payments related to inventory purchased in the ~~third~~second quarter of ~~2020~~2021 or forecasted to be purchased during the remainder of ~~2020~~2021 through 2022, intercompany expenses expected to be paid or received during ~~2020,~~2021, television and movie production costs paid in ~~2020,~~2021, and cash receipts for sales made at the end of the ~~third~~first quarter of ~~2020~~2021 or forecasted to be made in the remainder of ~~2020~~2021 and, to a lesser extent, ~~2021 through~~ 2022. These amounts will be reclassified into the consolidated statements of operations upon the sale of the related inventory or recognition of the related sales or expenses.

~~Condensed Notes to Consolidated Financial Statements~~

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

In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the ~~long-term notes~~3.15% Notes, that were repaid in full in the aggregate principal amount of $300.0 million during the first quarter of 2021 (See Note 8) and, the 5.10% Notes due ~~in 2021 and~~ 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related notes using the effective interest rate method. At ~~September~~June 27, ~~2020,~~2021, deferred losses, net of tax of ~~$16,871~~$15.9 million related to these instruments remained in AOCE. For the quarters ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019,~~June 28, 2020, previously deferred losses of ~~$450,~~$0.3 million and $0.5 million, respectively, were reclassified from AOCE to net earnings. For the ~~nine-month~~six-month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019,~~June 28, 2020, previously deferred losses of ~~$1,349~~$0.8 million and $0.9 million, respectively, were reclassified from AOCE to net earnings.

Of the amount included in AOCE at ~~September~~June 27, ~~2020,~~2021, the Company expects net ~~gains~~losses of approximately ~~$8,143~~$4.6 million to be reclassified to the consolidated statements of operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

~~(6)~~(7) Accrued Liabilities

Components of accrued liabilities for the periods ended ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019~~27, 2020 were as follows:


	June 27, 2021		June 28, 2020		December 27, 2020
Participations and residuals	$	278.6	$	335.6	$	295.6
Royalties	139.4		135.6		229.2
Deferred revenue	174.7		141.7		161.0
Payroll and management incentives	86.9		48.9		132.4
Dividends	93.6		93.2		93.4
Other taxes	57.9		51.7		81.9
Advertising	83.0		53.2		58.6
Severance	37.5		47.2		49.7
Lease liability - Current	44.9		42.4		45.0
Accrued income taxes	42.9		36.7		29.7

Other	357.1		275.2		362.1
Total accrued liabilities(1)	$	1,396.5	$	1,261.4	$	1,538.6

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
(1) For the six-month period ended June 27, 2021, liabilities of $24.4 million attributable to the eOne Music business, which were previously classified within Accrued Liabilities, have been transferred to Liabilities Held for Sale. For additional information, see Note 15.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~(7)~~(8) Financial Instruments

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019,~~27, 2020, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019~~27, 2020 also include certain assets and liabilities measured at fair value (see Notes 1011 and ~~11)~~12) as well as long-term borrowings. The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019~~27, 2020 are as follows:


		September 27, 2020			September 29, 2019			December 29, 2019				June 27, 2021			June 28, 2020			December 27, 2020
		Carrying Cost		Fair Value	Carrying Cost		Fair Value	Carrying Cost		Fair Value		Carrying Cost		Fair Value	Carrying Cost		Fair Value	Carrying Cost		Fair Value
3.90% Notes Due 2029	3.90% Notes Due 2029	$	900,000	947,520	$	0	0	$	900,000	893,430	3.90% Notes Due 2029	$	900.0	982.1	$	900.0	938.1	$	900.0	1,011.2
3.55% Notes Due 2026	3.55% Notes Due 2026	675,000		716,108	0		0	675,000		680,670	3.55% Notes Due 2026	675.0		731.9	675.0		712.2	675.0		752.7
3.00% Notes Due 2024	3.00% Notes Due 2024	500,000		531,850	0		0	500,000		502,150	3.00% Notes Due 2024	500.0		530.2	500.0		523.4	500.0		540.6
6.35% Notes Due 2040	6.35% Notes Due 2040	500,000		587,400	500,000		587,850	500,000		581,600	6.35% Notes Due 2040	500.0		675.2	500.0		579.7	500.0		636.5
3.50% Notes Due 2027	3.50% Notes Due 2027	500,000		518,750	500,000		511,200	500,000		500,550	3.50% Notes Due 2027	500.0		538.1	500.0		516.0	500.0		544.5
2.60% Notes Due 2022	2.60% Notes Due 2022	300,000		310,680	0		0	300,000		300,960	2.60% Notes Due 2022	300.0		308.0	300.0		309.7	300.0		311.5
5.10% Notes Due 2044	5.10% Notes Due 2044	300,000		313,350	300,000		310,080	300,000		301,980	5.10% Notes Due 2044	300.0		353.0	300.0		304.0	300.0		338.1
3.15% Notes Due 2021(1)	3.15% Notes Due 2021(1)	300,000		303,540	300,000		303,300	300,000		303,900	3.15% Notes Due 2021(1)	0		0	300.0		318.6	300.0		302.3
6.60% Debentures Due 2028	6.60% Debentures Due 2028	109,895		130,324	109,895		133,555	109,895		130,610	6.60% Debentures Due 2028	109.9		136.0	109.9		124.5	109.9		137.4
Variable % Notes Due December 30, 2022(2)	Variable % Notes Due December 30, 2022(2)	400,000		400,000	0		0	0		0	Variable % Notes Due December 30, 2022(2)	50.0		50.0	400.0		400.0	300.0		300.0
Variable % Notes Due December 30, 2024	Variable % Notes Due December 30, 2024	577,500		577,500	0		0	0		0	Variable % Notes Due December 30, 2024	562.5		562.5	592.5		592.5	577.5		577.5
Production Financing Facilities	Production Financing Facilities	121,444		121,444	0		0	0		0	Production Financing Facilities	212.6		212.6	142.0		142.0	165.5		165.5
Total long-term debt	Total long-term debt	5,183,839		5,458,466	1,709,895		1,845,985	4,084,895		4,195,850	Total long-term debt	$	4,610.0	5,079.6	$	5,219.4	5,460.7	$	5,127.9	5,617.8
Less: Deferred debt expenses	Less: Deferred debt expenses	36,763		—	13,691		—	38,438		—	Less: Deferred debt expenses	31.7		—	38.3		—	35.3		—
Less: Current portion	Less: Current portion	369,269		—	0		—	0		—	Less: Current portion	189.6		—	378.6		—	432.6		—
Long-term debt	Long-term debt	$	4,777,807	5,458,466	$	1,696,204	1,845,985	$	4,046,457	4,195,850	Long-term debt	$	4,388.7	5,079.6	$	4,802.5	5,460.7	$	4,660.0	5,617.8

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

(2) During the second quarter of 2021, the Company repaid $250.0 million of the Variable % Notes Due December 30, 2022.

In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of ~~$2,375,000~~$2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches: ~~$300,000~~$300.0 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, ~~$500,000~~$500.0 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, ~~$675,000~~$675.0 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55% and ~~$900,000~~$900.0 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. Net proceeds from the issuance of the Notes, after deduction of ~~$20,043~~$20.0 million of underwriting discount and fees, totaled ~~$2,354,957.~~$2.4 billion. These costs are being amortized over the life of the Notes, which range from three to ten years. The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poors. The adjustment can be from 0.25% to 2.00% based on the extent of the ratings decrease. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present 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 October 19, 2024 for the 2024 Notes, September 19, 2026 for the 2026 Notes and August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

In September 2019, the Company entered into a $1.0 billion Term Loan Agreement (the "Term Loan Agreement”) with Bank of America N.A. (“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 ~~$400,000~~$400.0 million (the “Three-Year Tranche”) and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of ~~$600,000~~$600.0 million (the “Five-Year Tranche” and together with the Three-Year Tranche, 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

~~Condensed Notes to Consolidated Financial Statements~~

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

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 toby the relevant rating agencies or a lack of ratings issued by such rating agencies. Loans under the Five-Year Tranche require principal amortization payments that are payable in equal quarterly installments of 5.0% per annum of the original principal amount thereof for each of the first two years after funding, increasing to 10.0% per annum of the original principal amount thereof for each subsequent year. The Term Loan Agreement contains affirmative and negative covenants typical of this type of facility, including: (i) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (ii) restrictions on the incurrence of indebtedness, (iii) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (iv) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (v) the requirement that the Company maintain a Consolidated Total Leverage Ratio of no more than, depending on the gross proceeds of equity securities issued after the effective date of the acquisition of eOne, 5.65:1.00 or 5.40:1.00 for each of the first, second and third fiscal quarters ended after the funding of the Term Loan Facilities, with periodic step downs to 3.50:1.00 for the fiscal quarter ending December 31, 2023 and thereafter. The notes were drawn down on December 30, 2019, the closing date of the eOne Acquisition. During the first ~~nine~~six months of ~~2020,~~2021, the Company ~~made its~~paid $265.0 million toward the $1.0 billion term loan notes consisting of $250.0 million on the principal balance of the Three-Year Tranche loans in addition to the required quarterly principal amortization payments totaling ~~$22,500~~$15.0 million on the Five-Year Tranche loans. As of ~~September~~June 27, ~~2020,~~2021, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.

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

Current portion of long-term debt at ~~September~~June 27, ~~2020~~2021 of ~~$369,269~~$189.6 million, as shown on the consolidated balance sheet, represents ~~the $300,000~~ ~~of 3.15% Notes that mature during the second quarter of 2021, as well as~~ the current portion of required quarterly principal amortization payments for the Term Loan Facilities and ~~other~~ production financing facilities. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to ~~2021 with~~ the ~~exception~~second quarter of ~~certain of the Company’s production financing facilities.~~2022.

The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 1011 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement.

Production Financing

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

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

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Production financing facilities typically have maturities of less than two years, while the titles are in production, and are repaid once delivered and all credits, broadcaster pre-sales and international sales have been received. The production financing facilities as of June 27, 2021, June 28, 2020 and December 27, 2020 are as follows:

~~Quarter Ended~~


	June 27, 2021		June 28, 2020		December 27, 2020
Production financing held by production subsidiaries	$	212.6	$	142.0	$	165.5
Other loans (1)	0		6.4		5.4



Total	$	212.6	$	148.4	$	170.9

Production financing included in the consolidated balance sheet as:
Non-current	$	53.0	$	93.4	$	62.9
Current	159.6		48.6		102.6
Total	$	212.6	$	142.0	$	165.5

(1)

~~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~~

~~Other loans of $8,998,~~ consist of production related demand loans, and are recorded within Short-term Borrowings in the Company's consolidated balance sheets.

~~Condensed Notes to Consolidated Financial Statements~~

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

Interest is charged at bank prime rate plus a margin based on the risk of the respective production. The weighted average interest rate on all production financing as of ~~September~~June 27, ~~2020~~2021 was ~~5.1%~~3.0%.

The Company has Canadian dollar and U.S. dollar production credit facilities with various banks. The carrying amounts are denominated in the following currencies:

Canadian Dollars U.S. Dollars Total
As of September 27, 2020 $ 57,317 73,125 130,442


	Canadian Dollars		U.S. Dollars		Total
As of June 27, 2021	$	49.0	$	163.6	$	212.6

The following table represents the movements in production financing and other related loans ~~acquired as a result of the eOne Acquisition~~ during the first ~~nine~~six months of ~~2020:~~2021:


		Production Financing		Other Loans	Total		Production Financing		Other Loans		Total
December 30, 2019		$	209,651	9,102	218,753
December 27, 2020						December 27, 2020	$	165.5	$	5.4	$	170.9
Drawdowns	Drawdowns	38,871		22,853	61,724	Drawdowns	114.7		16.7		131.4
Repayments	Repayments	(124,824)		(22,668)	(147,492)	Repayments	(70.0)		(23.0)		(93.0)
Foreign exchange differences	Foreign exchange differences	(2,254)		(289)	(2,543)	Foreign exchange differences	2.4		0.9		3.3
Balance at September 27, 2020		$	121,444	8,998	130,442
Balance at June 27, 2021						Balance at June 27, 2021	$	212.6	$	0	$	212.6

~~(8)~~(9) ~~eOne~~ Investments in Productions and Investments in Acquired Content Rights

In connection with the Company's acquisition of eOne, the Company acquired eOne's library of television and film and music content rights, which amounted to $619,545 as of September 27, 2020 and was recorded in other assets within the Company's consolidated balance sheets.

Investments in productions and investments in acquired content rights are predominantly monetized on a title-by-title basis and are recorded within other assets in the Company's consolidated balance sheets, to the extent they are considered recoverable against future revenues. These amounts are being amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through various channels including broadcast licenses, theatrical release and home entertainment. Amounts capitalized are ~~to be~~ reviewed periodically on an individual film basis and any portion of the unamortized amount that appears not to be recoverable from future net revenues ~~will be~~is expensed as part of program cost amortization during the period the loss becomes evident.

~~Costs associated with the Company's investments in eOne productions and investments in acquired content rights consisted of the following at September 27, 2020:~~

~~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~~

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

The Company's unamortized investments in productions and investments in acquired content rights consisted of the following at June 27, 2021, June 28, 2020, and December 27, 2020:


	June 27, 2021		June 28, 2020		December 27, 2020
Film and TV Programming
Released, net of amortization	$	499.4	$	346.8	$	428.0
Completed and not released	17.7		128.1		17.3
In production	220.5		41.4		185.5
Pre-production	73.8		70.4		67.6
	811.4		586.7		698.4






Other Programming
Released, net of amortization	3.4		12.7		13.7
Completed and not released	0.4		2.9		2.1
In production	6.3		7.0		5.4
Pre-production	1.7		5.5		7.6
	11.8		28.1		28.8

Total Program Investments (1)	$	823.2	$	614.8	$	727.2

(1) For the six-month period ended June 27, 2021, $8.0 million of investments in productions and investments in acquired content rights of the eOne Music business, which were previously classified within Other Assets, have been transferred to Assets Held for Sale. For additional information, see Note 15.

The Company recorded ~~$244,194~~$208.2 million of program cost amortization related to ~~the above~~released programming in the ~~nine~~six months ended ~~September~~June 27, ~~2020,~~2021, consisting of the following:

Investment in Production Investment in Content Total
Program cost amortization $ 172,630 71,564 244,194


	Investment in Production		Investment in Content	Total
Program cost amortization	$	180.7	27.5	$	208.2

~~(9)~~(10) Income Taxes

The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local, and international tax authorities in various tax jurisdictions.

Our effective tax rate ("ETR") from continuing operations was ~~35.0%~~43.9% for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~14.3%~~12.9% for the ~~nine~~six months ended ~~September 29, 2019.~~

June 28, 2020.

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

•during the six months ended June 27, 2021, the Company recorded a net discrete tax expense of $17.4 million primarily associated with the revaluation of net deferred tax liabilities as a result of the United Kingdom's ("UK") enactment of Finance Act 2021 during the second quarter, which increases the UK corporate income tax rate from 19% to 25% as of April 1, 2023. This is reduced by the release of a valuation allowance on net operating losses that offsets income received from a one-time legal settlement and certain benefits associated with normal business activities, including the reversal of uncertain tax positions that resulted from statutes of limitations expiring in certain jurisdictions and operational tax planning; and

•The year-to-date ETR also includes a one-time impairment expense on assets held for sale from which there is no corresponding tax benefit;

•during the ~~nine~~six months ended ~~September 27,~~June 28, 2020, the Company recorded a discrete net tax benefit of ~~$5,290 consisting~~$24.0 million, of ~~the following:~~

◦~~a tax benefit of $25,302 resulting from the eOne Acquisition and related costs incurred;~~

◦~~tax expense of $13,680 related to revaluation of tax attributes as a result of the United Kingdom’s ("UK") enactment during the quarter of the Finance Act of 2020~~ which ~~maintains the corporate income tax rate at 19%; and~~

◦~~tax expense of $6,332 primarily related to an increase of uncertain tax positions based on changes in management judgment.~~

•~~our estimated annual ETR increased to 19.9% from 18.2% as~~$24.1 million is a result of the eOne ~~Acquisition during the first nine months of 2020,~~acquisition and ~~a change in the mix of forecasted income by jurisdiction.~~related costs incurred.

•

~~during the nine months ended September 29, 2019, the Company recorded a discrete net tax benefit~~Condensed Notes to Consolidated Financial Statements

(Millions of ~~$31,674, of which $24,925 was associated with the settlement of the U.S. defined benefit pension plan liability~~Dollars and ~~$6,749 primarily related to excess tax benefits on share-based payments and expiration of statutes of limitation of uncertain tax positions.~~Shares Except Per Share Data)

In May 2019, a public referendum held in Switzerland approved the Swiss Federal Act on Tax Reform and AHV Financing ("TRAF") proposals previously approved by the Swiss Parliament. The Swiss tax reform measures were effective on January 1, 2020. Changes in tax reform include the abolishment of preferential tax regimes for holding companies, domicile companies and mixed companies at the cantonal level. The enacted changes in Swiss federal tax were not material to the ~~Company's consolidated~~Company’s financial statements. Swiss cantonal tax was enacted in December 2019. The Company is still assessing the transitional provision options it may elect; however, the legislation is not expected to have a material effect on the Company’s ~~consolidated~~ financial statements.

The Company is no longer subject to U.S. federal income tax examinations for years before ~~2016.~~2012. With few exceptions, the Company is no longer subject to U.S. state or local and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before ~~2014.~~2015. The Company is currently under income tax examination by the Internal Revenue Service and in several U.S. state and local and non-U.S. jurisdictions.

~~(10)~~(11) Fair Value of Financial Instruments

The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels: Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Accounting standards permit entities to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar assets and liabilities. The Company ~~has~~ elected the fair value option for certain available-for-sale ~~investments.~~investments using net asset value per share and during 2020, the Company liquidated these investments as part of its global cash management strategy. At ~~September 27,~~June 28, 2020, ~~September 29, 2019 and December 29, 2019,~~prior to their liquidation, these investments totaled ~~$13,384, $24,916~~$12.8 million and ~~$25,518, respectively, and are~~were included in prepaid expenses and other current assets inwithin the Company's consolidated balance ~~sheets. In~~sheet. The Company recorded a net loss of $0.8 million and $1.2 million, respectively, on these investments in other (income) expense, net, related to the change in fair value of such instruments net for the quarter and six months ended June 28, 2020.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~the second quarter of~~At June 27, 2021, June 28, 2020 the Company liquidated $11,470 of these investments, which are included in Other Investing Activities in the consolidated statement of cash flows. The Company recorded net gains (losses) of 1,067 and $(144) on these investments in other (income) expense, net for the quarter and nine months ended September 27, 2020, respectively, related to the change in fair value of such instruments. For the quarter and nine month periods ended September 29, 2019, the Company recorded net gains of $566 and 1,293, respectively, in other (income) expense related to the change in fair value of such instruments.

~~At September 27, 2020, September 29, 2019~~ and December ~~29, 2019,~~27, 2020, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets (excluding assets for which the fair value is measured using net asset value per share):


		Fair Value Measurements Using:						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)		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
September 27, 2020
June 27, 2021							June 27, 2021
Assets:	Assets:						Assets:
Available-for-sale securities	Available-for-sale securities	$	3,682	3,682	0	0	Available-for-sale securities	$	2.3	2.3	0	0
Derivatives	Derivatives	15,736		0	15,736	0	Derivatives	6.8		0	6.8	0
Total assets	Total assets	$	19,418	3,682	15,736	0	Total assets	$	9.1	2.3	6.8	0

Liabilities:	Liabilities:						Liabilities:
Derivatives	Derivatives	$	372	0	372	0	Derivatives	$	5.7	0	5.7	0
Option agreement	Option agreement	20,615		0	0	20,615	Option agreement	21.8		0	0	21.8
Total liabilities	Total liabilities	$	20,987	0	372	20,615	Total liabilities	$	27.5	0	5.7	21.8

September 29, 2019
June 28, 2020							June 28, 2020
Assets:	Assets:						Assets:
Available-for-sale securities	Available-for-sale securities	$	1,148	1,148	0	0	Available-for-sale securities	$	2.7	2.7	0	0
Derivatives	Derivatives	54,030		0	54,030	0	Derivatives	28.9		0	28.9	0
Total assets	Total assets	$	55,178	1,148	54,030	0	Total assets	$	31.6	2.7	28.9	0

Liabilities:	Liabilities:						Liabilities:
Derivatives	Derivatives	$	11,508	0	11,508	0	Derivatives	$	2.9	0	2.9	0
Option agreement	Option agreement	22,196		0	0	22,196	Option agreement	20.7		0	0	20.7
Total liabilities	Total liabilities	$	33,704	0	11,508	22,196	Total liabilities	$	23.6	0	2.9	20.7

December 29, 2019
December 27, 2020							December 27, 2020
Assets:	Assets:						Assets:
Available-for-sale securities	Available-for-sale securities	$	1,296	1,296	0	0	Available-for-sale securities	$	2.1	2.1	0	0
Derivatives	Derivatives	48,973		0	48,973	0	Derivatives	4.8		0	4.8	0
Total assets	Total assets	$	50,269	1,296	48,973	0	Total assets	$	6.9	2.1	4.8	0

Liabilities:	Liabilities:						Liabilities:
Derivatives	Derivatives	$	5,733	0	5,733	0	Derivatives	$	12.7	0	12.7	0
Option agreement	Option agreement	22,145		0	0	22,145	Option agreement	20.6		0	0	20.6
Total Liabilities	Total Liabilities	$	27,878	0	5,733	22,145	Total Liabilities	$	33.3	0	12.7	20.6

Available-for-sale securities include equity securities of 1 company quoted on an active public market.

~~Condensed Notes to Consolidated Financial Statements~~

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

The Company's derivatives consist of foreign currency forward and option ~~contracts and zero-cost collar options.~~contracts. The Company ~~used~~uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. The Company’s option agreement relates to an equity method investment in Discovery Family Channel ("Discovery"). The option agreement is included in other liabilities at ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019, and~~27, 2020, is valued using an option pricing model based on the fair value of the related investment. Inputs used in the option pricing model include the volatility and fair value of the underlying company which are considered unobservable inputs as they reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. There were no changes in these valuation techniques during the ~~nine-month period~~quarter ended ~~September~~June 27, ~~2020.~~2021.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The following is a reconciliation of the beginning and ending balances of the fair value measurements of the Company's financial instruments which use significant unobservable inputs (Level 3):

2020 2019
Balance at beginning of year $ (22,145) (23,440)
Gain from change in fair value 1,530 1,244
Balance at end of third quarter $ (20,615) (22,196)

In addition to the above, the Company has three investments for which the fair value is measured using net asset value per share. At September 27, 2020, September 29, 2019 and December 29, 2019, these investments had fair values of $13,384, $24,916 and $25,518, respectively. Two of the investments have net asset values that are predominantly based on underlying investments which are traded on an active market and are redeemable within 45 days. The third investment invests in hedge funds which are generally redeemable on a quarterly basis with 30 days – 90 days’ notice.


	2021		2020
Balance at beginning of year	$	(20.6)	$	(22.1)
Gain from change in fair value	(1.2)		1.5
Balance at end of second quarter	$	(21.8)	$	(20.6)

~~(11)~~(12) Derivative Financial Instruments

Hasbro uses foreign currency forward contracts ~~and zero-cost collar options~~ to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales, television and film production cost and production financing loans (see Note 7)8) as well as other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States and Hong Kong dollars, and Euros. All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative financial instruments for speculative purposes.

Cash Flow Hedges

The Company uses foreign currency forward contracts and zero-cost collar options to reduce the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. All of the Company's designated foreign currency forward contracts and zero-cost collar options are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales, certain production financing loans and other cross-border transactions in ~~2020~~2021 through 2022.

At ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019,~~27, 2020, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:


		September 27, 2020			September 29, 2019			December 29, 2019				June 27, 2021			June 28, 2020			December 27, 2020
Hedged transaction	Hedged transaction	Notional Amount		Fair Value	Notional Amount		Fair Value	Notional Amount		Fair Value	Hedged transaction	Notional Amount		Fair Value	Notional Amount		Fair Value	Notional Amount		Fair Value
Inventory purchases	Inventory purchases	$	315,924	9,148	$	420,839	24,462	$	398,800	8,727	Inventory purchases	$	346.8	(2.0)	$	255.5	20.1	$	31.8	(10.0)
Sales	Sales	111,760		3,940	212,062		7,231	124,920		4,037	Sales	189.3		0.7	77.3		4.9	11.6		1.4
Production financing and other	Production financing and other	115,228		2,199	16,935		(137)	19,499		140	Production financing and other	201.7		(1.0)	110.6		4.0	89.9		0.3
Total	Total	$	542,912	15,287	$	649,836	31,556	$	543,219	12,904	Total	$	737.8	(2.3)	$	443.4	29.0	$	133.3	(8.3)

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the consolidated balance sheets at ~~September~~June 27, 2021, June 28, 2020 and December 27, 2020 ~~September 29, 2019 and December 29, 2019~~ as follows:


		September 27, 2020		September 29, 2019	December 29, 2019		June 27, 2021		June 28, 2020		December 27, 2020
Prepaid expenses and other current assets	Prepaid expenses and other current assets					Prepaid expenses and other current assets
Unrealized gains	Unrealized gains	$	13,357	22,529	12,133	Unrealized gains	$	4.3	$	23.7	$	2.3
Unrealized losses	Unrealized losses	(1,737)		(1,333)	(3,955)	Unrealized losses	(3.1)		(1.0)		(1.6)
Net unrealized gains	Net unrealized gains	$	11,620	21,196	8,178	Net unrealized gains	$	1.2	$	22.7	$	0.7

Other assets	Other assets					Other assets
Unrealized gains	Unrealized gains	$	4,218	10,609	6,652	Unrealized gains	$	2.0	$	6.3	$	1.1
Unrealized losses	Unrealized losses	(179)		(249)	0	Unrealized losses	(0.3)		0		0
Net unrealized gains	Net unrealized gains	$	4,039	10,360	6,652	Net unrealized gains	$	1.7	$	6.3	$	1.1

Accrued liabilities	Accrued liabilities					Accrued liabilities
Unrealized gains	Unrealized gains	$	680	0	293	Unrealized gains	$	2.7	$	0	$	3.0
Unrealized losses	Unrealized losses	(992)		0	(2,219)	Unrealized losses	(7.8)		0		(12.9)
Net unrealized losses	Net unrealized losses	$	(312)	0	(1,926)	Net unrealized losses	$	(5.1)	$	0	$	(9.9)

Other liabilities	Other liabilities					Other liabilities
Unrealized gains	Unrealized gains	$	13	0	0	Unrealized gains	$	0	$	0	$	0
Unrealized losses	Unrealized losses	(73)		0	0	Unrealized losses	(0.1)		0		(0.2)
Net unrealized losses	Net unrealized losses	$	(60)	0	0	Net unrealized losses	$	(0.1)	$	0	$	(0.2)

Net gains ~~(losses)~~ on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters ended June 27, 2021 and ~~nine months ended September 27,~~June 28, 2020 ~~and September 29, 2019~~ as follows:


		Quarter Ended			Nine Months Ended				Quarter Ended				Six Months Ended
		September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Statements of Operations Classification	Statements of Operations Classification							Statements of Operations Classification
Cost of sales	Cost of sales	$	7,116	4,678	$	16,680	9,278	Cost of sales	$	2.5	$	5.6	$	2.3	9.6
Net revenues	Net revenues	1,237		1,889	2,413		3,366	Net revenues	(0.6)		0.8		(1.3)		1.2
Other	Other	859		(23)	1,410		129	Other	(0.2)		0.5		(1.2)		0.5
Net realized gains	Net realized gains	$	9,212	6,544	$	20,503	12,773	Net realized gains	$	1.7	$	6.9	$	(0.2)	11.3

Undesignated Hedges

The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. Additionally, ~~with the acquisition of eOne during the first quarter of 2020, the Company continued eOne's balance sheet hedging program designed~~ to manage transactional exposure to fair value movements on certain ~~of eOne's foreign currency denominated~~ monetary assets and ~~liabilities.~~liabilities denominated in foreign currencies, the Company has implemented a balance sheet hedging program. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are offset by changes in the fair value of the balance sheet ~~item.~~items. As of ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019~~27, 2020 the total notional amounts of the Company's undesignated derivative instruments were ~~$538,892, $308,867~~$573.0 million, $436.6 million and ~~$307,351,~~$590.6 million, respectively.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

At ~~September~~June 27, 2021, June 28, 2020 ~~September 29, 2019~~ and December ~~29, 2019,~~27, 2020, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:


		September 27, 2020		September 29, 2019	December 29, 2019		June 27, 2021		June 28, 2020		December 27, 2020
Prepaid expenses and other current assets	Prepaid expenses and other current assets					Prepaid expenses and other current assets
Unrealized gains	Unrealized gains	$	3,294	2,630	0	Unrealized gains	$	4.6	$	0	$	3.5
Unrealized losses	Unrealized losses	(3,217)		(301)	0	Unrealized losses	(0.7)		0		(0.5)
Net unrealized gains	Net unrealized gains	$	77	2,329	0	Net unrealized gains	$	3.9	$	0	$	3.0

Accrued liabilities	Accrued liabilities					Accrued liabilities
Unrealized gains	Unrealized gains	$	0	164	13	Unrealized gains	$	0.1	$	4.5	$	0
Unrealized losses	Unrealized losses	0		(203)	(3,820)	Unrealized losses	(0.6)		(7.4)		(2.6)
Net unrealized losses	Net unrealized losses	$	0	(39)	(3,807)	Net unrealized losses	$	(0.5)	$	(2.9)	$	(2.6)

Total unrealized gains (losses), net	Total unrealized gains (losses), net	$	77	2,290	(3,807)	Total unrealized gains (losses), net	$	3.4	$	(2.9)	$	0.4

The Company recorded net ~~losses~~gains (losses) of ~~$(6,914)~~$5.4 million and ~~$(20,142)~~$(0.7) million on these instruments to other (income) expense, net for the quarter and ~~nine~~six months ended ~~September~~June 27, ~~2020,~~2021, respectively, and net ~~gains~~losses of ~~$10,121~~$(15.7) million and ~~$16,705 on these instruments to other (income) expense, net~~$(13.2) million for the quarter and ~~nine~~six months ended ~~September 29, 2019,~~June 28, 2020, respectively, relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate.

~~eOne Purchase Price Hedge~~

During the third quarter of 2019 the Company hedged a portion of its exposure to fluctuations in the British pound sterling in relation to the eOne Acquisition using a series of both foreign exchange forward and option contracts. These contracts did not qualify for hedge accounting and, as such, were marked to market through the Company's Consolidated Statement of Operations. For tax purposes these contracts qualified as nontaxable integrated tax hedges. These contracts matured on December 30, 2019 (the closing date of the transaction) and net gains or losses recognized on these contracts in the Company's 2020 results were immaterial.

For additional information related to the Company's derivative financial instruments ~~see~~(see Notes 56 and ~~10.~~11).

~~(12)~~(13) Leases

The Company occupies offices and uses certain equipment under various operating lease arrangements. The Company has no finance leases. These leases have remaining lease terms of 1 to 18 years, some of which include options to extend lease terms or options to terminate current lease terms at certain times, subject to notice requirements set out in the lease agreement. Payments under certain of the lease agreements may be subject to adjustment based on a consumer price index or other inflationary indices. The lease liability for such lease agreements as of the adoption date, was based on fixed payments as of the adoption date. Any adjustments to these payments based on the related indices will be recorded to expense as incurred. Leases with an expected term of 12 months or less are not capitalized. Lease expense under such leases is recorded straight line over the life of the lease. The Company capitalizes non-lease components for equipment leases, but expenses non-lease components as incurred for real estate leases.

For the quarter and ~~nine~~six months ended ~~September~~June 27, 2021, the Company's operating lease and other rental expenses were $22.5 million and $44.3 million, respectively. For the quarter and six months ended June 28, 2020, the Company's operating lease and other rental expenses were ~~$22,281~~$22.4 million and ~~$67,564, respectively. For the quarter and nine months ended September 29, 2019, operating lease and other rental expenses were $8,907 and $26,982,~~$45.3 million, respectively. Expense related to short-term leases (expected terms less than 12 months) and variable lease payments was not material in the quarter or ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 or ~~September 29, 2019.~~June 28, 2020.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

Information related to the Company’s leases for the quarter and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 are as follows:


		Quarter Ended					Nine Months Ended						Quarter Ended						Six Months Ended
		September 27, 2020			September 29, 2019		September 27, 2020			September 29, 2019			June 27, 2021			June 28, 2020			June 27, 2021			June 28, 2020
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:											Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	$	13,158		9,003		$	38,774		27,817		Operating cash flows from operating leases	$	13.0		$	14.0		$	26.2		25.6
Right-of-use assets obtained in exchange for lease obligations:	Right-of-use assets obtained in exchange for lease obligations:											Right-of-use assets obtained in exchange for lease obligations:
Operating leases	Operating leases	$	2,097		1,363		$	102,521		25,622		Operating leases	$	4.1		$	36.2		$	11.5		100.4

Weighted Average Remaining Lease Term	Weighted Average Remaining Lease Term											Weighted Average Remaining Lease Term
Operating leases	Operating leases	6.2 years			6.4 years		6.2 years			6.4 years		Operating leases	5.8 years			6.4 years			5.8 years			6.4 years
Weighted Average Discount Rate	Weighted Average Discount Rate											Weighted Average Discount Rate
Operating leases	Operating leases	3.1		%	4.5	%	3.1		%	4.5	%	Operating leases	3.1		%	3.1		%	3.1		%	3.1	%

The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right of use assets, included in our Consolidated Balance Sheets as of ~~September~~June 27, ~~2020:~~2021:


		September 27, 2020			June 27, 2021
2020 (excluding the nine months ended September 27, 2020)		$	12,576
2021		47,794
2021 (excluding the six months ended June 27, 2021)				2021 (excluding the six months ended June 27, 2021)	$	25.5
2022	2022	43,660		2022	47.3
2023	2023	35,763		2023	39.1
2024	2024	24,513		2024	28.6
2025 and thereafter		66,276
2025				2025	23.3
2026 and thereafter				2026 and thereafter	49.2
Total future lease payments	Total future lease payments	230,582		Total future lease payments	213.0
Less imputed interest	Less imputed interest	24,976		Less imputed interest	21.8
Present value of future operating lease payments	Present value of future operating lease payments	205,606		Present value of future operating lease payments	191.2
Less current portion of operating lease liabilities (1)	Less current portion of operating lease liabilities (1)	42,814		Less current portion of operating lease liabilities (1)	44.9
Non-current operating lease liability (2)	Non-current operating lease liability (2)	162,792		Non-current operating lease liability (2)	146.3
Operating lease right-of-use assets, net (3)	Operating lease right-of-use assets, net (3)	$	189,211	Operating lease right-of-use assets, net (3)	$	174.5

(1) Included in Accrued liabilities on the consolidated balance sheets.

(2) Included in Other liabilities on the consolidated balance sheets.

(3) Included in Property, plant, and equipment on the consolidated balance sheets.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

~~(13)~~

(14) Segment Reporting

Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment content spanning toys, games, licensed products ranging from traditional to ~~high-tech and~~ digital, and film, television and music entertainment. In the first quarter of 2020 the Company completed its acquisition of the global independent studio, eOne. Throughout 2020, the Company successfully integrated many parts of the eOne business and started to achieve synergies as a combined company. Effective for the three months ended March 28, 2021, the Company realigned its reportable segment structure to achieve the following; (1) to align with changes to its business structure subsequent to the integration of eOne, and (2) to reflect changes to its reporting structure and provide transparency into how operating performance is measured. The Company's 3 principal reportable segments are (i) ~~U.S.~~Consumer Products, (ii) Wizards of the Coast & Digital Gaming, and ~~Canada, (ii) International,~~ (iii) Entertainment, Licensing and Digital, (iv) eOne, and (v) Global Operations. Following the eOne Acquisition on December 30, 2019, the eOne operating segment was added to the Company's existing reporting structure.Entertainment.

The ~~U.S. and Canada~~Consumer Products segment ~~includes~~engages in the sourcing, marketing and ~~selling~~sales of action figures, arts and crafts and creative play products, electronic toys and related electronic interactive products, fashion and other dolls, infant products, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, as well as traditional board games, and trading card and role-playing games primarily within the United States and Canada. Within the International segment, the Company markets and sells both toy and game products ~~in markets outside~~around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the ~~U.S.~~sale of branded consumer products such as toys and ~~Canada, primarily in~~

~~Condensed Notes to Consolidated Financial Statements~~

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

~~the European, Asia Pacific, and Latin American regions.~~apparel. The ~~Company's Entertainment, Licensing and Digital segment includes the Company's~~ Wizards of the Coast ~~digital gaming~~& Digital Gaming business ~~consumer products licensing, owned and licensed digital gaming, and~~engages in the promotion of the Company's ~~legacy television~~brands through the development of trading card, role-playing and ~~film entertainment operations.~~digital game experiences based on Hasbro and Wizards of the Coast games. The ~~eOne~~Entertainment segment engages in the development, acquisition, production, financing, distribution and ~~sales~~sale of world-class entertainment content including film, scripted and ~~is comprised of all legacy eOne operations. These diversified offerings span across film,~~unscripted television, ~~and~~family programming, digital content, 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, including related toy and game operations into the Company's geographic commercial segments in late 2021 and 2022.live entertainment.

~~The Global Operations segment is responsible for sourcing finished products for the Company's U.S. and Canada and International segments.~~

Segment performance is measured at the operating profit level. Included in Corporate and Eliminations are certain corporate expenses, including the elimination of intersegment transactions and certain assets benefiting more than one segment. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Eliminations. The significant accounting policies of the Company's segments are the same as those referenced in Note 1.

Results shown for the quarter and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 are not necessarily representative of those which may be expected for the full year ~~2020,~~2021, nor were those of the comparable ~~2019~~2020 periods representative of those actually experienced for the full year ~~2019.~~2020. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Reclassifications of certain prior year segment results and account balances have been made to conform to the current-year presentation. None of the segment changes impact the Company's previously reported consolidated net revenue, operating profits, net earnings or net earnings per share.

Information by segment and a reconciliation to reported amounts for the quarters and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 are as follows:

Quarter Ended
September 27, 2020 September 29, 2019
Net revenues External Affiliate External Affiliate
U.S. and Canada $ 977,115 5,938 $ 898,269 2,535
International 517,007 133 561,137 0
Entertainment, Licensing and Digital 89,027 2,110 115,766 3,849
eOne 193,474 0 0 0
Global Operations (a) 0 431,738 1 538,817
Corporate and Eliminations (b) 0 (439,919) 0 (545,201)
$ 1,776,623 0 $ 1,575,173 0


	Quarter Ended
	June 27, 2021				June 28, 2020
Net revenues	External		Affiliate (b)		External		Affiliate (b)
Consumer Products	$	689.2	$	(96.9)	$	519.5	$	(103.1)
Wizards of the Coast & Digital Gaming	406.3		(29.7)		186.7		(17.9)
Entertainment	226.7		(12.6)		154.1		(0.8)
Corporate and Other (b)	—		139.2		—		121.8
	$	1,322.2	$	—	$	860.3	$	—

Nine Months Ended
September 27, 2020 September 29, 2019
Net revenues External Affiliate External Affiliate
U.S. and Canada $ 1,765,482 12,990 $ 1,766,649 7,379
International 1,017,222 133 1,221,224 186
Entertainment, Licensing and Digital 262,879 3,918 304,266 7,989
eOne 696,889 0 0 0
Global Operations (a) 0 898,808 81 1,088,860
Corporate and Eliminations (b) 0 (915,849) 0 (1,104,414)
$ 3,742,472 0 $ 3,292,220 0


	Six Months Ended
	June 27, 2021				June 28, 2020
Net revenues	External		Affiliate (b)		External		Affiliate (b)
Consumer Products	$	1,343.1	$	(167.2)	$	1,092.0	$	(158.7)
Wizards of the Coast & Digital Gaming	648.5		(55.1)		397.3		(33.0)
Entertainment	445.4		(26.7)		476.6		(1.7)
Corporate and Other (b)	—		249.0		—		193.4
	$	2,437.0	$	—	$	1,965.9	$	—

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

Quarter Ended Nine Months Ended
Operating profit (loss) September 27,
2020 September 29,
2019 September 27,
2020 September 29,
2019
U.S. and Canada $ 262,977 193,686 $ 359,028 313,795
International 63,924 67,238 12,333 51,410
Entertainment, Licensing and Digital 32,791 24,594 65,758 62,550
eOne (25,914) 0 (64,962) 0
Global Operations (a) 5,681 11,074 4,385 6,342
Corporate and Eliminations (b) (2,901) 618 (61,092) 27,573
$ 336,558 297,210 $ 315,450 461,670


	Quarter Ended				Six Months Ended
Operating profit (loss)	June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Consumer Products	$	17.8	$	(45.3)	$	50.1	$	(55.0)
Wizards of the Coast & Digital Gaming	192.9		74.1		302.9		169.9
Entertainment	(113.7)		(13.5)		(96.7)		(77.8)
Corporate and Other (b)	(20.4)		(13.1)		(32.4)		(58.2)
	$	76.6	$	2.2	$	223.9	$	(21.1)

Total assets September 27,
2020 September 29,
2019 December 29,
2019
U.S. and Canada $ 3,835,054 3,331,125 3,244,950
International 2,234,562 2,394,488 2,482,170
Entertainment, Licensing and Digital 1,162,684 1,031,906 695,898
eOne 5,686,389 0 0
Global Operations (a) 3,465,018 3,255,286 3,334,190
Corporate and Eliminations (b) (5,680,530) (4,458,181) (901,580)
$ 10,703,177 5,554,624 8,855,628


Total assets	June 27, 2021		June 28, 2020		December 27, 2020
Consumer Products (a)	$	3,508.7	$	5,432.1	$	5,552.5
Wizards of the Coast & Digital Gaming	745.8		790.9		585.7
Entertainment	6,124.4		6,167.9		6,003.0
Corporate and Other (b)	(276.7)		(2,168.8)		(1,322.9)
	$	10,102.2	$	10,222.1	$	10,818.3

(a) ~~The Global Operations segment derives substantially all~~During the second quarter of ~~its revenues,~~2021, the Company adjusted certain inter-segment balance sheet amounts which impacted the Consumer Products and ~~thus its operating results, from intersegment activities.~~Corporate and Other total asset values. These adjustments did not impact the Company's total assets.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in both Entertainment and Corporate and ~~Eliminations.~~Other. Allocations of certain expenses related to these assets are made to the individual operating segments ~~are done~~ at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and ~~Eliminations~~Other because allocations are translated from the U.S. Dollar to local currency at budgeted rates when recorded. Corporate and ~~Eliminations~~Other also includes the elimination of inter-company balance sheet amounts.

The following table represents consolidated ~~International~~Consumer Products segment net revenues by major geographic region for the quarters and ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019:~~June 28, 2020:


		Quarter Ended			Nine Months Ended				Quarter Ended				Six Months Ended
		September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
North America								North America	$	391.4	$	283.0	$	754.1	$	604.8
Europe	Europe	$	343,179	319,277	$	663,100	673,728	Europe	176.5		141.9		365.0		298.6
Asia Pacific								Asia Pacific	68.4		60.7		133.2		118.9
Latin America	Latin America	91,619		151,987	158,028		305,106	Latin America	52.9		33.9		90.8		69.7
Asia Pacific		82,209		89,873	196,094		242,390
Net revenues	Net revenues	$	517,007	561,137	$	1,017,222	1,221,224	Net revenues	$	689.2	$	519.5	$	1,343.1	$	1,092.0

~~As a result of~~

The following table represents consolidated Entertainment segment net revenues by category for the ~~Company's acquisition of eOne, beginning in 2020, the Company's brand architecture reflects the addition of the eOne Entertainment portfolio which consists of legacy eOne film~~quarters and ~~TV revenues. Revenues related to eOne brands, including PEPPA PIG, PJ MASKS~~six months ended June 27, 2021 and ~~RICKY ZOOM, are reported in the Emerging Brands portfolio.~~June 28, 2020:


	Quarter Ended				Six Months Ended
	June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Film and TV	$	164.3	$	108.9	$	330.7	$	372.9
Family Brands	26.1		18.8		44.9		44.7
Music and Other	36.3		26.4		69.8		59.0
Net revenues	$	226.7	$	154.1	$	445.4	$	476.6

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

The following table presents consolidated net revenues by brand and entertainment portfolio for the quarters ended June 27, 2021 and ~~nine months ended September 27, 2020 and September 29, 2019:~~June 28, 2020:


		Quarter Ended			Nine Months Ended				Quarter Ended				Six Months Ended
		September 27, 2020		September 29, 2019	September 27, 2020		September 29, 2019		June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Franchise Brands	Franchise Brands	$	807,555	779,659	$	1,580,878	1,749,948	Franchise Brands	$	649.9	$	376.9	$	1,141.4	$	773.4
Partner Brands	Partner Brands	409,214		427,029	729,772		812,466	Partner Brands	212.0		138.3		400.0		320.6
Hasbro Gaming (1)	Hasbro Gaming (1)	239,222		232,287	516,337		463,272	Hasbro Gaming (1)	147.1		137.0		283.4		277.1
Emerging Brands ~~(2)~~	Emerging Brands ~~(2)~~	154,965		136,198	325,101		266,534	Emerging Brands ~~(2)~~	117.0		75.9		221.7		170.1
TV/Film/Entertainment (3)		165,667		0	590,384		0
Entertainment								Entertainment	196.2		132.2		390.5		424.7
Total	Total	$	1,776,623	1,575,173	$	3,742,472	3,292,220	Total	$	1,322.2	$	860.3	$	2,437.0	$	1,965.9

(1) Hasbro's total gaming category, which includes all gaming net revenues, both those reported in Hasbro Gaming and those reported elsewhere, most notably MAGIC: THE GATHERING and MONOPOLY which are reported within Franchise Brands, totaled ~~$543,107~~$519.4 million and ~~$1,202,604~~$884.7 million for the quarter and ~~nine~~six months ended ~~September~~June 27, ~~2020,~~2021, respectively. For the quarter and ~~nine~~six months ended ~~September 29, 2019,~~June 28, 2020, total gaming revenues were ~~$449,393~~$319.0 million and ~~$1,086,151,~~$659.5 million, respectively.

~~(2)~~(15) ~~Emerging Brands portfolio balances~~Assets and Liabilities Held for Sale and Subsequent Closing of Music Sale

On April 25, 2021, the Company entered into a definitive agreement to sell eOne Music for an aggregate sales price of $385.0 million, subject to certain closing adjustments related to working capital and net debt. The Company acquired eOne Music through its acquisition of Entertainment One Ltd. in December 2019 ("eOne Acquisition"). Upon signing the agreement to sell eOne Music, the Company reclassified all eOne Music assets and liabilities within Assets Held for Sale and Liabilities Held for Sale, respectively, on the Consolidated Balance Sheet as of June 27, 2021. Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne Acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $101.8 million within Loss on Assets Held for Sale on the Consolidated Statements of Operations for the quarter ended June 27, 2021. The Company also recorded pre-tax cash transaction expenses of $9.5 million within Selling, Distribution and Administration expenses on the Consolidated Statements of Operations for the quarter ended June 27, 2021. The impairment charge was recorded within the Entertainment segment and the transaction costs were recorded within the Corporate and Other segment.

The operations of eOne Music did not meet the criteria to be presented as discontinued operations in accordance with Accounting Standards Update No. 2014-08 (ASU 2014-08) Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Therefore, eOne Music operating results are reported within the Company's Entertainment segment for the quarter and ~~nine-month period~~six months ended ~~September~~June 27, ~~2020 include eOne brands PEPPA PIG, PJ MASKS and RICKY ZOOM.~~2021.

~~(3)~~

~~TV/Film/Entertainment represents~~Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The following table presents the carrying amounts of the major classes of eOne ~~revenues~~Music assets and liabilities as of June 27, 2021.



	June 27, 2021
Cash and Cash Equivalents	$	18.2
Goodwill and Other Intangible Assets	410.3
Prepaid Expenses	31.0
Other Assets	20.0
Total Assets	479.5

Accrued Liabilities	24.4
Deferred Taxes	36.9
Other Liabilities	15.0
Total Liabilities	$	76.3

eOne Music does not ~~allocated~~represent an individually significant component of the Company’s business and income from operations before income taxes attributable to eOne Music was immaterial to the ~~Emerging Brands portfolio.~~Company's Consolidated Statements of Operations for the six month periods ended June 27, 2021 and June 28, 2020.

Subsequent Sale in Fiscal Third Quarter of 2021

On June 29, 2021, the Company completed the sale of eOne Music for net proceeds of approximately $397.0 million, subject to certain closing adjustments related to working capital and net debt. The net proceeds will be subject to further adjustments upon completion of closing working capital and net debt calculations. In anticipation of the closing proceeds, the Company repaid $250.0 million of variable rate notes at the end of the second quarter of 2021. Subsequent to the end of the second quarter of 2021, in July 2021, the Company repaid an additional $100.0 million of variable rate notes with proceeds from the sale.

~~(14)~~(16) Restructuring Actions

During 2018, the Company announced a comprehensive restructuring plan which consisted of re-designing its go-to market strategy and re-shaping its organization to become a more responsive, innovative and digitally-driven play and entertainment company. As part of this process the Company took certain restructuring actions which continued through 2019. The actions primarily included headcount reduction aimed at right-sizing the Company’s cost-structure and giving it the ability to add required new talent in the future. In the second quarter of 2020, the Company continued to streamline its commercial organization, and recorded severance of $11.5 million associated with these cost-savings initiatives.

InDuring 2020, in connection with the eOne Acquisition, ~~in the first nine months of 2020,~~ the Company recorded $32.5 million of severance and other employee charges related to the integration of eOne. ~~Charges~~For the quarter and six months ended June 28, 2020, the related ~~to the eOne restructuring costs were~~charge was $6.3 million and $19.5 million, which was recorded within acquisition and related ~~charges~~costs on the Consolidated Statements of Operations, ~~for the quarter and nine months ended June 28, 2020,~~ and reported within Corporate and Eliminations.

In the first nine months of 2020, the Company recorded severance charges of $11,554 associated with cost-savings initiatives within the Company's commercial and Film and TV businesses. These charges were included within selling, distribution and administrative costs on the Consolidated Statement of Operations for the nine months ended September 27, 2020, and reported within Corporate and Eliminations.

The detail of activity related to the programs for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 is as follows:

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


	2018 Restructuring & 2020 Commercial Program		eOne Integration Program	Other	Total
Remaining amounts to be paid as of December 27, 2020	$	17.3	16.9	0.8	$	35.0
Payments made in the first six months of 2021	(4.8)		(7.6)	0	(12.4)
Remaining amounts as of June 27, 2021	$	12.5	9.3	0.8	$	22.6

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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; 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~~the timing of planned product and entertainment ~~performance;~~releases; changes in the methods of content distribution, including increased reliance on streaming outlets; the adequacy and delivery of product supply; the operation of our third party manufacturing facilities; marketing and promotional efforts; anticipated expenses; ~~and~~ working capital and ~~liquidity.~~liquidity; and anticipated impact of acquisitions and dispositions. 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~~27, 2020 (“~~2019~~2020 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.

EXECUTIVE SUMMARY

~~Completion of Acquisition~~

~~On December 30, 2019,~~ Hasbro, Inc. ~~("Hasbro" or the "Company"~~(“Hasbro”) 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~~World’s Best Play and Entertainment Experiences. From toys, games and consumer products to television, movies, digital gaming, ~~live-action, music,~~ and ~~virtual reality~~other entertainment experiences, ~~Hasbro connects~~we connect 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~~Our iconic brands include NERF, 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 preschool brands including~~ PEPPA PIG and PJ MASKS, ~~and RICKY ZOOM. In addition, Hasbro leverages its portfolio of~~as well as premier partner brands. Through our ~~global~~ entertainment studio, Entertainment One (“eOne”), we are building our brands ~~worldwide~~globally 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 scripted and unscripted entertainment content geared toward all audiences. At Hasbro, iswe are committed to making the world a better place for all children, fans and families. We believe that doing well includes doing good in the world and for all ~~families~~our constituents. This is demonstrated in all we do, including through our corporate social responsibility and ~~philanthropy.~~philanthropy initiatives.

~~Hasbro's strategic plan is centered~~2021 Developments

Segment Realignment

In the first quarter of 2020, we completed our acquisition of eOne, our global independent studio. Throughout 2020, we successfully integrated parts of our business and began recognizing synergies as a combined company. Effective for the first quarter of 2021, we realigned our reportable segment structure to correspond with the evolution of our company, including the integration of eOne, to reflect changes in our reporting structure and allocation of decision-making responsibility and for assessing the Company’s performance. Our new reportable segments are: Consumer Products, Wizards of the Coast & Digital Gaming, Entertainment and Corporate and Other.

•Consumer Products Our Consumer Products business engages in the sourcing, marketing and sales of toy and game products 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~~world. Our Consumer Products business also promotes our brands through ~~product innovation, immersive~~the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party partner brands.

Our toy and game products are supported by cross-functional teams including members of our global development and marketing groups. Our global development teams develop, design and engineer new products alongside the redesign of existing products, driven by our understanding of consumers and using marketplace insights while leveraging opportunistic toy and game lines and licenses. Our global marketing function establishes a cohesive brand direction and assists our selling entities in establishing local marketing programs. This strategy leverages efforts to increase consumer awareness of our brands through the Company's entertainment ~~offerings,~~experiences, including ~~television,~~ film and ~~music,~~television programming and digital ~~gaming~~gaming.

•Wizards of the Coast and ~~a broad range~~Digital Gaming Our Wizards of ~~consumer products. As~~ the ~~global consumer landscape, shopping behaviors~~Coast and Digital Gaming business engages in 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, includingpromotion of our brands through the development of ~~an omni-channel retail presence~~trading card, role-playing and ~~adding new capabilities through the on-boarding of new skill sets and talent.~~

~~Hasbro generates revenue and earns cash by developing, marketing and selling products~~digital game experiences based on ~~global brands in a broad variety~~Hasbro and Wizards of ~~consumer goods categories, in~~the Coast properties.

Wizards of the Coast offerings include popular games such as the collectable card game MAGIC: THE GATHERING and the fantasy tabletop role-playing game DUNGEONS & DRAGONS, as well as other digital ~~gaming applications and through distribution of television programming and~~games developed for

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

mobile devices, personal computers and video gaming consoles including MAGIC: THE GATHERING ARENA. Additionally, we out-license certain of our brands to 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~~third-party digital ~~media and games~~game developers who transform Hasbro brand-based characters 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. Additionally, Hasbro's eOne business generates revenue and earnings from the production and distribution of a broad spectrum of television and film entertainment that is not based on our children’s and family entertainment brands, as well as from music production and distribution geared towards all audiences.

~~The Company's business is separated~~intellectual properties, 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 experiences.

•Entertainment Our Entertainment business ~~consumer products licensing, owned and licensed digital gaming, movie and television entertainment operations. The eOne segment~~ engages in in the development, acquisition, production, financing, distribution and ~~sales~~sale of world-class entertainment content including film, scripted and ~~is comprised of all legacy eOne operations. These diversified offerings span film,~~unscripted television, family programming, digital content, live entertainment and music production and sales.

Film and TV operations produce film and television content which is sold worldwide to distributors, broadcasters, television networks and streaming platforms. While maintaining ownership of the content rights, we sell content for specific time periods to generate broadcast license fees from television content and to collect minimum guarantees and overage participations from films. The Entertainment business also actively acquires third-party film and television content. In television, the Entertainment segment engages in the sale of acquired third-party content internationally. For acquired films, the Entertainment segment obtains territorial rights from independent producers to distribute in those territories and acquires global rights which are sold internationally. Feature length film and television programming based on our owned and controlled brands provide both immersive storytelling and the ability for our consumers to enjoy these properties in different formats, which also drives product sales, ~~family programming, merchandising~~results in increased licensing revenues, and ~~licensing,~~expands overall brand awareness.

•Corporate and ~~digital content. Over time,~~OtherOur Corporate and Other segment provides management and administrative services to the Company's principal reporting segments described above. The segment consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance such as the Company's legal, human resources, finance, facilities and information technology departments as well as certain assets benefiting more than one segment. In addition, intersegment transactions are eliminated within the Corporate and Other segment.

eOne Music Business

On June 29, 2021, the Company ~~plans to transition towards reflecting all~~completed the sale of its ~~entertainment operations~~Entertainment One Music business (“eOne Music”) for an aggregate sales price of $385.0 million, subject to certain closing adjustments related to working capital and net debt. Based on the value allocated to the music assets as part of the eOne Acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $101.8 million within Loss on Assets Held for Sale, as well as transaction expenses of $9.5 million ($7.3 million after-tax) within Selling, Distribution and Administration costs, within the Consolidated Statements of Operations for the quarter ended June 27, 2021. The impairment charge was recorded with the Entertainment segment and the transaction costs were recorded with in the ~~eOne~~Corporate and Other segment. The financial results of eOne Music are included in the consolidated financial statements included in this Form 10-Q, as the sale of eOne Music was completed in the Company's fiscal third quarter. In anticipation of the closing proceeds, the Company ~~also expects to shift~~repaid $250 million of variable rate notes at the ~~consumer product and digital licensing business and toy and game sales related~~end of the second quarter of 2021. Subsequent to the ~~eOne preschool brands, to legacy Hasbro segments, including related toy and game operations into~~end of the ~~Company's geographic commercial segments~~second quarter of 2021, in ~~late~~July 2021, ~~and 2022.~~the Company repaid an additional $100 million of variable rate notes with proceeds from the sale.

Coronavirus ~~Outbreak~~Pandemic

InThroughout 2020 and continuing through the first ~~quarter~~half of ~~2020,~~2021, the ~~outbreak~~world has been significantly impacted by the novel coronavirus (COVID-19) pandemic. During this period, we experienced accelerated ecommerce growth and increased interest in offerings from our Wizards of the ~~coronavirus disease (COVID-19) was recognized~~Coast, Gaming and Entertainment businesses, as consumers have been seeking recreational and entertainment options during the pandemic. In 2020, and continuing into 2021, the pandemic did, however, have a ~~pandemic by the World Health Organization. The~~substantial adverse impact on our business, ~~of the global outbreak of COVID-19 currently being experienced in markets in which Hasbro,~~as well as our employees, consumers, customers, partners, licensees, suppliers and manufacturers, ~~operate, has been significant and is reflected~~due in ~~our revenues, profitability and business operations overall. As a result~~part to the preventative measures taken to reduce the spread of the ~~preventative actions taken worldwide, such as restrictions on travel~~virus worldwide.

We experienced and ~~business operations, temporary closures or limited reopenings of non-essential businesses, shelter-in-place and stay-at-home orders, reductions~~ in ~~consumers going~~some cases, continue 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.experience:

~~We have experienced~~ •disruptions in supply of products, due to closures or reductions in operations at third-party manufacturing facilities across several geographies including, but not limited to, China, India, the United States and ~~production~~Ireland, as well as difficulties in shipping and distributing products as a result of ~~entertainment content, negative~~port capacity shortages, higher rates for ocean freight and higher costs due to air freight increases. These and other disruptions may continue through the remainder of 2021;

•adverse sales impact ~~on sales~~ due to changes in consumer purchasing behavior and availability of products to consumers, ~~including; due to~~resulting from retail store closures, limited ~~reopenings~~reopening of retail stores and limitations on the capacity of ~~e-comm~~ecommerce channels to supply additional products;

•fluctuations in our performance based on the progress of different countries in controlling the coronavirus and the maturity of e-commerce platforms in those markets.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

•limited production of live-action scripted and unscripted entertainment content due to the shutdown and gradual reopening of production studios;

•delays or postponements of entertainment productions and releases of entertainment content both internally and by our partners; and

•challenges of working remotely.~~While~~

In response to these challenges, we ~~have~~ developed and continue to develop and execute plans to ~~help~~ mitigate the negative impact of COVID-19 to ~~our business,~~ the ~~efforts will not prevent~~business. Our responses included:

•utilizing 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 nine months of 2020, the Company's supply chain experienced lower than planned production levels in certain of its third-party manufacturing facilities 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, facilities in China began to reopen during the second quarter and have since returned to planned operating 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, ~~which has remained strong. Headed into the fourth quarter of 2020, the Company continues to make up for lost production in areas of the business where demand has been strongest, such~~while managing freight cost increases across all markets, as ~~gaming, and believes it is well positioned for holiday demand, as nearly all of Hasbro's partner factories and warehouses are currently open and operating. However, if~~our manufacturing facilities ~~are impacted by a resurgence in COVID-19, we may experience further disruptions in the Company's supply chain in the near term.~~

~~Condensed Notes~~returned to ~~Consolidated Financial Statements~~varying levels of operation;

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

~~During the first nine months of 2020, as more of our consumers remained at home, we creatively found ways to accelerate~~•accelerating our business online ~~expand~~and expanding omni-channel ~~and skip the shopping cart~~ to get ~~our~~ products ~~into cars~~to customers and ~~homes. For example, we launched~~ consumers;

•~~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 kids remain occupied and engaged during extended time at home and indoors. Another example is the initiative our Wizards of the Coast team undertookdeveloping innovative ways to enable players to continue to play MAGIC: THE GATHERING and DUNGEONS & DRAGONS games ~~while in-person play events are not happening.~~remotely; and

Markets with more developed e-comm and omni-channel business operations performed better during the first nine months of 2020, than those markets that rely more heavily on physical stores for reaching consumers. Markets in Latin America, which have less advanced e-comm business and where retail store closures remain high, have been and are expected to continue to be challenged during the remainder of 2020. The negative impact to future periods from store closures 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 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~~entertainment, including working on animation ~~production,~~productions and post-production work, which ~~is being done remotely. The team expects a delay in certain finished episodes~~were able to be worked on remotely as live TV and film ~~projects as compared to initial expectations. Additionally, several film release dates~~productions have ~~moved into 2021~~returned gradually, with health and safety protocols 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 remain at home, content viewership remains high, which we believe bodes well for long-term brand engagement and the Company expects a robust 2021 entertainment slate for eOne productions and from our Partner Brands.place.

We ~~believe we~~ have maintained sufficient liquidity and access to 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.~~resources. We ~~are in compliance with our covenants under our revolving credit facility and, while we do not currently foresee a need~~also continue 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~~closely manage expenses to further preserve ~~our~~ liquidity and ~~while our collections in the third quarter were strong,~~ we ~~continue to closely~~continually monitor ~~our customers’~~customer 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.

receivables. 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 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 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 and COVID-19 conditions.

~~The coronavirus~~ outbreak continues to be fluid and ~~uncertain, making~~ it is difficult to forecast the impact it could have on our future operations.Please see Part ~~II,~~I, Item ~~1A,~~1A. Risk Factors, in the Company's Form 10-K for the fiscal year ended December 27, 2020 for further information.

Brand Blueprint Strategy

Hasbro's strategic plan is centered around the Hasbro Brand Blueprint, a framework for bringing compelling and expansive brand experiences to consumers and audiences around the world. Our brands are story-led consumer franchises brought to life through a wide array of consumer products, compelling content offered across a multitude of platforms and media. Hasbro's purpose of making the world a better place for all children, fans and families sits at the center of the Hasbro Brand Blueprint and is a key driver of Hasbro brands and content. The ~~Company’s 2020 results presented~~development and execution of our brands and content are informed by our proprietary consumer insights, which help us understand the behavior of our consumers, from a consumption of content and play standpoint. We have learned that consumers will travel with a brand that they love across multiple forms and formats, including our core historical strength of toys and games and licensed consumer products, as well as digital gaming and story-led entertainment, including short-form content online and long-form content in ~~this Form 10-Q include eOne's results of operations~~television and ~~financial position beginning on December 30, 2019,~~film. As the ~~date of acquisition. The Company’s 2019 results are presented as reported~~global consumer landscape, shopping behaviors and ~~do not include 2019 eOne results.~~the retail and entertainment environments continue to evolve, we continue to adapt and refine our business strategy. This process includes reexamining the ways we organize across the Hasbro Brand Blueprint, re-shaping our business into a more adaptive and digitally-driven organization, expanding our ecommerce capabilities and attracting and developing a high-performing and diverse workforce through human capital investments.

~~Third~~Second quarter ~~2020~~2021 highlights:

•~~Third~~Second quarter net revenues ~~of $1,776.6~~were $1,322.2 million ~~increased 13%~~ compared to ~~$1,575.2~~$860.3 million in the ~~third~~second quarter of ~~2019. The increase in net revenues~~2020 and included ~~an unfavorable~~a favorable foreign currency translation of ~~$3.4 million attributable to~~$35.1 million. Absent the ~~Company’s legacy Hasbro business.~~favorable impact of foreign currency exchange, second quarter net revenues increased 50%.

•Net revenues in the ~~U.S. and Canada~~Consumer Products segment increased 9%33% to ~~$977.1~~$689.2 million; ~~International~~Wizards of the Coast and Digital Gaming segment net revenues ~~decreased 8%~~increased 118% to ~~$517.0 million, including an unfavorable foreign currency translation impact of $3.3~~$406.3 million; ~~Entertainment, Licensing~~ and ~~Digital~~Entertainment segment net revenues ~~decreased 23%~~increased 47% to ~~$89.0 million; and eOne segment net revenues were $193.5~~$226.7 million.

•Net revenues from ~~Emerging~~Franchise Brands increased ~~14%~~72%; ~~Franchise~~Partner Brands net revenues increased 4%53%; ~~Hasbro Gaming~~Emerging Brands net revenues increased 3%54%; Entertainment portfolio net revenues increased 48%; and net revenues from ~~Partner Brands decreased 4%; TV, Film~~Hasbro Gaming increased 7% in the second quarter of 2021.

•Operating profit was $76.6 million, or 6% of net revenue, in the second quarter of 2021 compared to operating profit of $2.2 million, or 0.3% of net revenue, in the second quarter of 2020.

•Second quarter 2021 operating profit was negatively impacted by a pre-tax non-cash impairment charge of $101.8 million and pre-tax cash transaction expenses of $9.5 million ($7.3 million after-tax) associated with the sale of eOne Music; $21.8 million ($18.2 million after-tax) of eOne acquired intangible asset amortization; and $1.9 million ($1.6 million after-tax) of expense associated with retention awards granted in connection with the eOne acquisition.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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 third quarter of 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~~Second quarter 2020 operating profit was negatively impacted by acquisition and related expenses of ~~$5.9~~$10.3 million ($~~4.7~~8.5 million after-tax) ~~and $24.7~~; $22.6 million ($~~19.6~~17.9 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.

•~~Net earnings~~The net loss attributable to Hasbro, Inc. of ~~$220.9~~$22.9 million, or ~~$1.61~~$0.17 per diluted share, in the ~~third~~second quarter of ~~2020~~2021 compared to a net ~~earnings~~loss of ~~$212.9~~$33.9 million, or ~~$1.67~~$0.25 per diluted share, in the ~~third~~second quarter of ~~2019.~~2020.

•~~Third quarter 2020~~In addition to the negative impacts to operating profit described above, net earnings ~~included~~in the second quarter of 2021 were impacted by incremental income tax expense of ~~$13.7~~$39.4 million ~~or $0.10 per diluted share,~~ related to a change in the ~~United Kingdom ("UK")~~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~~six months ~~2020~~2021 highlights:

•Net revenues increased ~~14%~~24% to ~~$3,742.5~~$2,437.0 million in first ~~nine~~six months of ~~2020~~2021 compared to ~~$3,292.2~~$1,965.9 million in the first ~~nine~~six months of ~~2019.~~2020. The increase in net revenues included ~~$25.7~~$53.4 million of ~~unfavorable~~favorable foreign currency ~~translation attributable to~~translation. Absent the ~~Company's legacy Hasbro business.~~impact of foreign currency exchange, net revenues increased 21%.

•Net revenues in the ~~U.S.~~Consumer Products segment increased 23% to $1,343.1 million; Wizards of the Coast and ~~Canada~~Digital Gaming segment ~~remained flat at $1,765.5~~net revenues increased 63% to $648.5 million; ~~International~~and Entertainment segment net revenues decreased ~~17%~~7% to $1,017.2 million; Entertainment, Licensing and Digital segment net revenues decreased 14% to $262.9 million; while eOne 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.$445.4 million.

•Net revenues from ~~Emerging~~Franchise Brands increased ~~22%~~48%; Emerging brands net revenues increased 30%; Partner Brands net revenues increased 25%; Hasbro Gaming net revenues increased ~~11%~~2%; ~~Partner Brands~~ and ~~Franchise Brands~~Entertainment segment net revenues ~~each~~ decreased ~~10%; and TV, Film and Entertainment portfolio net revenues were $590.4~~8% during the first six months of 2021.

•Operating profit was $223.9 million, ~~representing 16%~~or 9% of ~~total~~ net revenues, in the first ~~nine~~six months of 2021 compared to operating losses of $21.1 million, or 1% of net revenues, in the first six months of 2020.

•Operating profit ~~was $315.5 million, or 8% of net revenues,~~ in the first ~~nine months~~half of ~~2020 compared to operating profit~~2021 was negatively impacted by a pre-tax non-cash impairment charge of ~~$461.7~~$101.8 million ~~or 14.0%~~and pre-tax cash transaction expenses of ~~net revenues,~~$9.5 million ($7.3 million after-tax) associated with the sale of eOne Music; $46.7 million ($38.7 million after-tax) of eOne acquired intangible asset amortization; and $3.8 million ($3.3 million after-tax) of expense associated with retention awards granted in connection with the ~~first nine months of 2019.~~eOne acquisition.

•Operating profit in the first ~~nine months~~half of 2020 was negatively impacted by acquisition and related expenses of ~~$166.0~~$160.1 million ($~~140.7~~136.0 million after-tax); ~~$72.3~~$47.6 million ($~~57.5~~37.8 million after-tax) of eOne acquired intangible asset amortization; and $11.6 million ($10.1 million after-tax) of restructuring charges associated with cost savings initiatives.

•Net earnings attributable to Hasbro, Inc. was ~~$117.3~~$93.3 million, or ~~$0.85~~$0.68 per diluted share, in the first ~~nine~~six months of ~~2020~~2021 compared to a net ~~earnings~~loss attributable to Hasbro, Inc. of ~~$253.1~~$103.6 million, or ~~$1.99~~$0.75 per diluted share, in the first ~~nine~~six months of ~~2019.~~2020.

•~~Net~~In addition to the negative impacts to operating profit described above, net earnings in the first ~~nine~~six months of ~~2020 included~~2021 were impacted by incremental income tax expense of ~~$13.7~~$39.4 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~~Millions 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 paid in 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 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 deleveraging.

SUMMARY OF FINANCIAL PERFORMANCE

A summary of the results of operations is illustrated below for the ~~quarter~~quarters and ~~nine month~~six-month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.

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				Six Months Ended
	June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Net revenues	$	1,322.2	$	860.3	$	2,437.0	$	1,965.9
Operating profit (loss)	76.6		2.2		223.9		(21.1)
Earnings (loss) before income taxes	41.1		(43.7)		170.6		(115.7)
Net earnings (loss)	(21.9)		(32.9)		95.6		(100.8)
Net earnings attributable to noncontrolling interests	1.0		1.0		2.3		2.8
Net earnings (loss) attributable to Hasbro, Inc.	(22.9)		(33.9)		93.3		(103.6)
Diluted earnings (loss) per share	(0.17)		(0.25)		0.68		(0.75)

RESULTS OF OPERATIONS – CONSOLIDATED

~~Third~~Second Quarter ~~of 2020~~2021

The quarters ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 were each 13-week periods.

Consolidated net revenues for the ~~third~~second quarter of ~~2020~~2021 increased ~~$201.4~~$461.9 million, or ~~13%~~54%, compared to the ~~third~~second quarter of ~~2019 and reflect the inclusion of eOne revenues of $193.5~~2020, including a favorable $35.1 million ~~which represent 11% of consolidated net revenues for the quarter. Third quarter 2020 net revenues include a $3.4 million unfavorable~~ impact from foreign currency translation as a result of ~~weakening~~strengthening currencies, primarily in the Company's European and to a lesser extent, Asia Pacific and Latin American ~~markets, partially offset by favorable foreign currency translation from European markets in~~regions, during the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019.~~2020.

Operating profit for the ~~third~~second quarter of ~~2020~~2021 was ~~$336.6~~$76.6 million, or ~~19%~~6% of net revenues, compared to operating profit of ~~$297.2~~$2.2 million, or ~~19%~~0.3% of net revenues, for the ~~third~~second quarter of ~~2019.~~2020. The operating profit increase was driven primarily by higher revenues and a favorable product mix, partially offset by higher product development costs, higher royalty expenses and higher advertising costs.In addition to these expense increases were higher freight costs due to shipping cost increases and the use of air freight to manage supply chain disruptions. Operating profit during the ~~third~~second quarter of ~~2020~~2021 reflects a pre-tax non-cash impairment charge of $101.8 million included within Loss on Assets Held for Sale and transaction costs of $9.5 million ($7.3 million after-tax) included within Selling, Distribution and Administration, associated with the ~~consolidation~~sale of eOne ~~results~~Music, $21.8 million ($18.2 million after-tax) of ~~operations~~eOne acquired intangible asset amortization and $1.9 million ($1.6 million after-tax) of expense associated with retention awards granted in connection with the eOne acquisition. Operating profit during the second quarter of 2020 was negatively impacted by acquisition and related costs of ~~$5.9~~$10.3 million ($~~4.7~~8.5 million after-tax) ~~and $24.7~~; $22.6 million ($~~19.6~~17.9 million after-tax) of expenses related to eOne acquired intangible asset ~~amortization.~~amortization; and restructuring charges associated with cost savings initiatives of $11.6 million ($10.1 million after-tax).

Net ~~earnings~~losses attributable to Hasbro, Inc. were ~~$220.9~~$22.9 million for the ~~third~~second quarter of ~~2020~~2021 compared to net ~~earnings~~losses of ~~$212.9~~$33.9 million for the ~~third~~second quarter of ~~2019. Diluted earnings~~2020. In addition to the negative impacts to operating profit described above, net losses attributable to Hasbro, Inc. included the impact of incremental income tax expense of $39.4 million, related to a change in the UK tax code. The diluted loss per share attributable to Hasbro, Inc. for the ~~third~~second quarter of ~~2020~~2021 was ~~$1.61,~~$0.17, compared to a diluted ~~earnings~~loss per share of ~~$1.67~~$0.25 in the ~~third~~second quarter of ~~2019 and~~2020. The loss in the second quarter of 2021 reflects the negative impact of ~~eOne acquired intangible asset amortization of $0.14~~a non-cash impairment loss related to assets held for sale and transaction expenses, totaling $0.79 per diluted share associated with the disposition of eOne Music and incremental income tax expense related to a change in the UK tax code of ~~$0.10~~$0.29 per diluted share. In addition, the diluted earnings per share in the second quarter of 2021 reflects the negative impact of $0.13 per diluted share and $0.01 per diluted share from eOne acquired intangible asset amortization and costs associated with retention awards, respectively. The diluted loss per share in 2020 reflects the negative impact of eOne acquired intangible asset amortization, acquisition and related costs and restructuring charges associated with cost savings initiatives of ~~$0.03 per diluted share. Third quarter 2019 net earnings included an unrealized foreign currency loss of $0.16~~$0.13 per diluted share, ~~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~~$0.06 per diluted share 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.$0.07 per diluted share, respectively.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

The following table presents net revenues by brand and entertainment portfolio for the quarters ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.


		Quarter Ended						Quarter Ended
		September 27, 2020		September 29, 2019	% Change			June 27, 2021		June 28, 2020		% Change
Franchise Brands	Franchise Brands	$	807.6	779.7	4	%	Franchise Brands	$	649.9	$	376.9	72	%
Partner Brands	Partner Brands	409.2		427.0	-4	%	Partner Brands	212.0		138.3		53
Hasbro Gaming	Hasbro Gaming	239.2		232.3	3	%	Hasbro Gaming	147.1		137.0		7
Emerging Brands	Emerging Brands	155.0		136.2	14	%	Emerging Brands	117.0		75.9		54
TV, Film and Entertainment		165.7		—	100	%
Entertainment							Entertainment	196.2		132.2		48
Total	Total	$	1,776.6	1,575.2	13	%	Total	$	1,322.2	$	860.3	54	%

FRANCHISE BRANDS: Net revenues in the Franchise Brands portfolio increased 4%72% in the ~~third~~second quarter of ~~2020~~2021 compared to the ~~third~~second quarter of ~~2019. Net revenue increases~~2020. Higher net revenues from MAGIC: THE GATHERING products as a result of the record set releases, Strixhaven and ~~MONOPOLY~~Modern Horizons 2, and higher net revenues from NERF products, most notably in the US, drove the majority of the increase, ~~in the third quarter of 2020,~~ and ~~were partially offset by net revenue declines from TRANSFORMERS, NERF and MY LITTLE PONY products. During the third quarter of 2020, MAGIC: THE GATHERING products benefited from~~to a ~~favorable card set release cadence while 2019~~lesser extent, higher net revenues from PLAY-DOH and TRANSFORMERS products ~~were supported by~~contributed to the ~~theatrical release of~~ ~~TRANSFORMERS: BUMBLEBEE.~~increase.

PARTNER BRANDS: Net revenues from the Partner Brands portfolio ~~decreased 4%~~increased 53% in the ~~third~~second quarter of ~~2020~~2021 compared to the ~~third~~second quarter of ~~2019.~~2020. Within the Partner Brands ~~net revenues~~portfolio, there are a number of brands which are reliant on related entertainment, including television and movie releases. As such, net revenues by partner brand, fluctuate depending on entertainment popularity, release dates and related product line offerings and success. Historically these entertainment-based brands experience higher revenues during years in which new content is released in theaters, for broadcast, and on streaming platforms. During the ~~third~~second quarter of ~~2020,~~2021, the ~~Company’s Partner Brands portfolio was~~drivers of the net revenue increase included Hasbro products for MARVEL and STAR WARS and to a lesser extent, DISNEY PRINCESS and BEYBLADE products. The Company's STAR WARS and DISNEY PRINCESS products were supported by recent entertainment releases including the ~~highly anticipated~~ Disney+ streaming series, STAR WARS: THE MANDALORIAN, season two, ~~expected to be~~ released during the fourth quarter of 2020 and ~~TROLLS WORLD TOUR,~~ RAYAandTHE LAST DRAGONwhich ~~was released~~premiered in theaters and on Disney+ with Premier Access in March 2021. The Company's MARVEL products benefited from fan support across multiple properties, primarily in the ~~premium video-on-demand format~~U.S., as well as from shipments ahead of the release of SHANG-CHI and the LEGEND of the TEN RINGS, a feature-length film expected in ~~April. During~~theaters in September 2021. These increases were partially offset by net revenue declines from DISNEY FROZEN products as a result of the ~~third quarter of 2019,~~entertainment support in the ~~Company’s Partner Brands portfolio was supported by MARVEL’S April 2019 theatrical release,~~ ~~AVENGERS: END GAME~~ ~~and product sales in anticipation of~~prior year from the November 2019 theatrical release of DISNEY’S FROZEN 2. Due to the 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 during the first half of 2021, subject to COVID-19 impacts at that time.~~

HASBRO GAMING: Net revenues in the Hasbro Gaming portfolio increased 3%7% in the ~~third~~second quarter of 2021 compared to the second quarter of 2020, ~~compared to~~which benefited from growth during the ~~third quarter~~onset of ~~2019.~~the COVID-19 pandemic as people looked for entertainment alternatives at home. Higher net revenues from DUNGEONS & DRAGONS products and to a lesser extent, higher net revenues from DUEL MASTERS products, were partially offset by net revenue decreases from classic games, including JENGA and ~~CLUE products were partially offset by lower net revenues from DON'T STEP IN IT and certain other Hasbro Gaming products in~~CONNECT 4 during the ~~third~~second quarter of ~~2020.~~2021.

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 ~~$543.1~~$519.4 million for the ~~third~~second quarter of ~~2020,~~2021, an increase of ~~21%~~63%, as compared to ~~$449.4~~$319.0 million in the ~~third~~second 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.~~2020.

EMERGING BRANDS: Net revenues from the Emerging Brands portfolio increased ~~14%~~54% during the ~~third~~second quarter of ~~2020~~2021 compared to the ~~third~~second quarter of ~~2019. Contributing to the net~~2020. Net revenue increases were driven by PJ MASKS, GI JOE and FURREAL FRIENDS products, and to a lesser extent, PEPPA PIG products. During the ~~inclusion~~second half of ~~brands acquired through~~2021, the ~~eOne Acquisition including~~Company expects to launch its first PEPPA PIG and PJ MASKS ~~and~~products.

ENTERTAINMENT: During the ~~addition~~second quarter of 2021, net revenues from ~~GI JOE products, due~~the Entertainment portfolio increased 48% compared to the second quarter of 2020. In the second quarter of 2021, results from the Company's ~~product-line relaunch~~Entertainment portfolio improved compared to the same period in 2020, as the entertainment industry continued its gradual recovery from the impact of COVID-19 pandemic. Net revenue increases during the second quarter of 2021 were driven by scripted deliveries that include CRUEL SUMMER and THE ROOKIE as well as ~~net revenue increases~~ from ~~PLAYSKOOL products during the third quarter of 2020.~~certain other scripted and unscripted programs. These increases were partially offset by ~~declines in POWER RANGERS and LITTLEST PET SHOP products during the third quarter of 2020.~~

~~TV, FILM and ENTERTAINMENT:~~ ~~The TV, Film and Entertainment portfolio includes eOne~~lower transactional revenues ~~not allocated~~due to the ~~Emerging Brands portfolio. Operations contributing to~~lack of theatrical releases in the ~~TV, Film and Entertainment portfolio focus on high quality, premium film, television and music~~first half of 2021 as a result of the production ~~and content rights around the world and selling this content globally.~~shutdowns experienced during 2020.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

During the third quarter of 2020, net revenues from the TV, Film and Entertainment portfolio were approximately 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~~Six Months ~~of 2020~~2021

The ~~nine month~~six-month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019~~June 28, 2020 were each ~~39-week~~26-week periods.

For the first ~~nine~~six months of ~~2020,~~2021, consolidated net revenues increased ~~14% compared~~24% to ~~the first nine months of 2019 and reflect the inclusion of eOne revenues of $696.9~~$2,437.0 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~~including a favorable variance of ~~$25.7~~$53.4 million as a result of foreign currency translation due to ~~weaker~~strengthening currencies primarily across the Company's ~~Latin American~~European and to a lesser extent, Asia Pacific markets, when compared to the first ~~nine~~six months of ~~2019.~~2020.

Operating profit for the first ~~nine~~six months of ~~2020~~2021 was ~~$315.5~~$223.9 million, or ~~8.4%~~9% of net revenues, compared to an operating ~~profit~~loss of ~~$461.7~~$21.1 million, or ~~14.0%~~1% of net revenues, for the first ~~nine~~six months of ~~2019.~~2020. The increase in operating profit was driven by higher revenues, partially offset by higher costs to drive the business including, higher product development costs, higher marketing and advertising costs and higher freight costs due to shipping cost increases. Operating profit during the first ~~nine~~six months of ~~2020~~2021 reflects a pre-tax non-cash impairment charge of $101.8 million included within Loss on Assets Held for Sale and transaction costs of $9.5 million ($7.3 million after-tax) included within Selling, Distribution and Administration, associated with the ~~consolidation~~sale of eOne ~~results~~Music, as well as $46.7 million ($38.7 million after-tax) of ~~operations~~expenses related to eOne acquired intangible asset amortization and $3.8 million ($3.3 million after-tax) of expense for retention awards granted in connection with the eOne acquisition. The operating loss during the first six months of 2020 was negatively impacted by acquisition and related costs of ~~$166.0~~$160.1 million ($~~140.7~~136.0 million after-tax); ~~$72.3~~$47.6 million ($~~57.5~~37.8 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~~$93.3 million for the first ~~nine~~six months of ~~2020~~2021 compared to a net ~~earnings~~loss of ~~$253.1~~$103.6 million for the first ~~nine~~six months of ~~2019.~~2020. In addition to the negative impacts to operating profit described above, net earnings in the first six months of 2021 were impacted by incremental income tax expense of $39.4 million related to a change in the UK tax code. Diluted earnings per share attributable to Hasbro, Inc. were ~~$0.85~~$0.68 in the first ~~nine~~six months of ~~2020,~~2021, compared to a diluted ~~earnings~~net loss per share of ~~$1.99~~$0.75 in the first ~~nine~~six months of ~~2019.~~2020. Net earnings attributable to Hasbro, Inc. for the first ~~nine~~six months of 2021 reflect the negative impact of a non-cash impairment loss related to assets held for sale and transaction expenses, totaling $0.79 per diluted share, associated with the disposition of eOne Music, incremental income tax expense related to a change in the UK tax code of $0.29 per diluted share, as well as the impact of eOne acquired intangible asset amortization of $0.28 per diluted share and costs associated with retention awards of $0.02 per diluted share. Net earnings for the first six 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~~six months of ~~2020~~2021 and ~~2019.~~2020.


		Nine Months Ended						Six Months Ended
		September 27, 2020		September 29, 2019	% Change			June 27, 2021		June 28, 2020		% Change
Franchise Brands	Franchise Brands	$	1,580.9	1,749.9	-10	%	Franchise Brands	$	1,141.4	$	773.4	48	%
Partner Brands	Partner Brands	729.8		812.5	-10	%	Partner Brands	400.0		320.6		25
Hasbro Gaming	Hasbro Gaming	516.3		463.3	11	%	Hasbro Gaming	283.4		277.1		2
Emerging Brands	Emerging Brands	325.1		266.5	22	%	Emerging Brands	221.7		170.1		30
TV, Film and Entertainment		590.4		—	100	%
Entertainment							Entertainment	390.5		424.7		-8
Total	Total	$	3,742.5	3,292.2	14	%	Total	$	2,437.0	$	1,965.9	24	%

FRANCHISE BRANDS: Net revenues in the Franchise Brands portfolio ~~decreased 10%~~increased 48% in the first ~~nine~~six months of ~~2020~~2021 compared to ~~2019. Declines in~~2020. Higher net revenues from ~~TRANSFORMERS and~~MAGIC: THE GATHERING products, as a result of successful card set releases, drove the majority of the increase during the first six months of 2021. To a lesser extent, higher net revenues from NERF products, ~~drove~~most notably in the ~~overall decline in Franchise Brands~~US, as well as higher net revenues ~~while,~~from PLAY-DOH and TRANSFORMERS products contributed to the increase.

PARTNER BRANDS: Net revenues from the Partner Brands portfolio increased 25% during the first six months of 2021 compared to 2020. During the first six months of 2021, net revenue increases from Hasbro products for STAR WARS and MARVEL drove growth in the Partner Brands portfolio and to a lesser extent, ~~MY LITTLE PONY and PLAY-DOH~~DISNEY PRINCESS products ~~also~~ contributed to segment net revenue ~~declines. Much of the segment net revenue decline was due to reduced customer ordering, supply chain delays~~growth. The Company's STAR WARS and ~~other disruptions to the business as a result of the impact of the COVID-19 pandemic. Additionally, TRANSFORMERS~~DISNEY PRINCESS products benefited from recent entertainment releases including the ~~December 2018 theatrical release of~~Disney+ streaming series, ~~TRANSFORMERS: BUMBLEBEE~~ STAR WARS: THE MANDALORIAN~~in 2019, driving lower revenues in 2020 compared to 2019~~. ~~These declines were partially offset by net revenue increases from MAGIC: THE GATHERING products~~, season two, released during the ~~first nine months~~fourth quarter of 2020 ~~due to a favorable card set release cadence.~~and RAYAandTHE LAST DRAGON which premiered in theaters and on Disney+ with Premier Access in March 2021. The Company's MARVEL products benefited from fan support, primarily in the U.S., as well

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~PARTNER BRANDS:~~ ~~Net revenues~~as 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~~shipments ahead of the ~~impact~~release of ~~COVID-19, which negatively impacted sales~~SHANG-CHI and the LEGEND 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~~TEN RINGS ~~DISNEY’S FROZEN 2~~a feature-length film expected in ~~November and~~ ~~STAR WARS: THE RISE OF SKYWALKER~~ theaters 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~~September 2021. These increases were partially offset by net revenue ~~increases~~declines from ~~STAR WARS~~TROLLS and ~~DREAMWORKS' TROLLS products. The majority of Partner Brand net revenue declines were attributable to MARVEL~~DISNEY FROZEN products ~~which are dependent on entertainment releases~~ as ~~described above. Due to the impact~~a result of the ~~COVID-19 pandemic on~~entertainment support in the ~~entertainment industry during~~prior year from the TROLLS WORLD TOUR film, released in April 2020 ~~including~~and 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 ofNovember 2019 ~~which benefited from a successful entertainment slate including~~ theatrical release of ~~AVENGERS: END GAME~~DISNEY’S FROZEN 2 ~~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%~~2% in the first ~~nine~~six months of ~~2020~~2021 compared to the first ~~nine~~six months of ~~2019 led~~2020 driven by increased net revenues from DUNGEONS & DRAGONS ~~and~~products, partially offset by net revenue decreases from JENGA, ~~products~~CONNECT 4 and ~~to a lesser extent, from~~ certain other Hasbro Gaming ~~brands.~~products. In the first half of 2020, the Hasbro Gaming portfolio benefited overall from growth during the onset of the COVID-19 pandemic as people looked for entertainment alternatives at home.

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~~$884.7 million, an increase of ~~11%~~34%, in the first ~~nine~~six months of ~~2020~~2021 versus ~~$1,086.2~~$659.5 million in the first ~~nine~~six months of ~~2019.~~2020.

EMERGING BRANDS: Net revenues from the Emerging Brands portfolio grew ~~22%~~30% for the first ~~nine~~six months of ~~2020~~2021 compared to the first ~~nine~~six months of ~~2019.~~2020. ~~Contributing to the net~~Net revenue increases inwere driven by GI JOE products, ahead of the ~~first nine months~~July 2021 theatrical release of ~~2020 were~~SNAKE EYES: G.I. JOE ORIGINS, and higher net revenues from FURREAL FRIENDS products and to a lesser extent, PJ MASKS and PEPPA PIG products. During the ~~inclusion~~second half of ~~brands acquired through~~2021, the ~~eOne Acquisition including~~Company expects to launch its first 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~~During the ~~TV, Film and Entertainment portfolio were approximately 16%~~first six months of ~~total Company net revenues and included theatrical contributions from the Amblin Partners film~~ ~~1917,~~ ~~released in December 2019, television production and distribution~~2021 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 included the Company's lineup of unscripted television 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~~portfolio decreased 8% compared to the ~~Company's reporting structure~~first six months of 2020. In 2020, the shutdown of live action TV and film productions and theatrical releases beginning late in the first quarter of 2020 ~~and is comprised~~as a result of the ~~legacy eOne business.~~COVID-19 pandemic, had a significant impact on entertainment deliveries during the first half of 2021. The driver of the net revenue decrease during the first half of 2021 relates primarily to the gap in available entertainment deliveries, due to the conditions described above, resulting in lower theatrical, transactional and licensing revenues during the first six months of 2021. These decreases were partially offset by television production deliveries in the second quarter of 2021, most notably from CRUEL SUMMER and THE ROOKIE scripted television productions.

SEGMENT RESULTS

Effective for the first quarter of fiscal 2021, we realigned our reportable segments to reflect how the Company manages its businesses, evaluates performance and allocates resources. Consistent with these changes, the Company's three principal reportable segments are: Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment.

Reclassifications of certain prior year segment results have been made to conform to the current-year presentation. None of ~~these operations are discussed in detail below.~~the segment changes impact the Company's previously reported consolidated net revenue, operating profits, net earnings or net earnings per share.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~Third~~Second Quarter ~~of 2020~~2021

The following table presents net external revenues and operating profit data for the Company's principal segments for the quarters ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019:~~June 28, 2020:

Quarter Ended
September 27, 2020 September 29, 2019 %
Change
Net Revenues
U.S. and Canada segment $ 977.1 $ 898.3 9 %
International segment 517.0 561.1 -8 %
Entertainment, Licensing and Digital segment 89.0 115.8 -23 %
eOne segment 193.5 — 100 %
Operating Profit (Loss)
U.S. and Canada segment $ 263.0 $ 193.7 36 %
International segment 63.9 67.2 -5 %
Entertainment, Licensing and Digital segment 32.8 24.6 33 %
eOne segment (25.9) — -100 %


	Quarter Ended
	June 27, 2021		June 28, 2020		% Change
Net Revenues
Consumer Products segment	$	689.2	$	519.5	33	%
Wizards of the Coast and Digital Gaming segment	406.3		186.7		>100%
Entertainment segment	226.7		154.1		47	%

Operating Profit (Loss)
Consumer Products segment	$	17.8	$	(45.3)	>100%
Wizards of the Coast and Digital Gaming segment	192.9		74.1		>100%
Entertainment segment	(113.7)		(13.5)		>100%

~~U.S. and Canada~~Consumer Products Segment

The ~~U.S. and Canada~~Consumer Products segment net revenues increased 9%33% to $689.2 million for the ~~third~~second quarter of 2021 compared to $519.5 million for the second quarter of 2020 and included the impact of a favorable $19.1 million currency translation. The drivers of the net revenue increase include higher sales of MARVEL, NERF and STAR WARS products as well as higher sales of TRANSFORMERS and PLAY-DOH products. Revenue grew across all geographic regions, most notably in the U.S. and Europe. In addition, licensing revenues from arrangements related to the Company's PEPPA PIG brand grew during the second quarter of 2021. Partially offsetting these net revenue increases were lower sales of Hasbro Gaming products in the US during the second quarter of 2021, compared to the ~~third~~second quarter of 2019. Net revenue increases from the Company's Franchise Brands and Emerging Brands portfolio and to a lesser extent, the Hasbro Gaming portfolio, were partially offset by lower net revenues from the Partner Brands portfolio during the third quarter of 2020.

~~Net revenue increases in the Company's Franchise Brands portfolio were driven by MAGIC: THE GATHERING products~~2020, which benefited from ~~a favorable card set release cadence in 2020, and to a lesser extent, PLAY-DOH and MONOPOLY products. In~~sales growth during the ~~Partner Brands portfolio, entertainment releases including~~early stages of the ~~highly anticipated Disney+ streaming series,~~ ~~STAR WARS: THE MANDALORIAN,~~ ~~season two, expected~~COVID-19 pandemic in the ~~fourth quarter 2020 and~~ ~~TROLLS WORLD TOUR,~~ ~~released in the premium video-on-demand formatin April~~, resulted in higher net revenues from STAR WARS and DREAMWORKS' TROLLS products. These increases were more than offset by net revenue decreases from DISNEY FROZEN and MARVEL products, which were not supported by entertainment releases during the third quarter of 2020. In addition, net revenues from MARVEL products were negatively impacted during the third quarter of 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 of the Company's games brands, most notably from JENGA and DUNGEON & DRAGONS products. In the Emerging Brands portfolio, higher net revenues from PLAYSKOOL products and net revenues from the 2020 relaunch of the Company's GI JOE product line drove growth.US.

~~U.S. and Canada~~Consumer Products segment operating profit for the ~~third~~second quarter of ~~2020~~2021 was ~~$263.0~~$17.8 million or ~~27%~~3% of segment net revenues, compared to segment operating ~~profit~~losses of ~~$193.7~~$45.3 million or ~~22%~~9% of segment net revenues, for the ~~third~~second quarter of ~~2019.~~2020. The operating profit increase in the ~~third~~second quarter of ~~2020~~2021 was driven by higher segment net revenues as described above, ~~and favorable brand mix,~~ partially offset by ~~increased administrative and product development~~higher royalty expenses ~~associated with~~as a result of higher sales of the Company's ~~Wizards of the Coast business,~~Partner Brand products, higher inventory costs due primarily to higher ocean freight rates and increases in air freight costs as well as higher ~~freight costs from increased domestic shipments and higher direct-to-customer shipments which carry elevated fulfillment~~advertising costs.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~International Segment~~

~~International~~The following table presents the Consumer Products segment net revenues ~~declined 8%~~by major geographic region for the quarters ended June 27, 2021 and June 28, 2020.


	Quarter Ended
	June 27, 2021		June 28, 2020
North America	$	391.4	$	283.0
Europe	176.5		141.9
Asia Pacific	68.4		60.7
Latin America	52.9		33.9
Net Revenues	$	689.2	$	519.5

Wizards of the Coast & Digital Gaming Segment

Wizards of the Coast & Digital Gaming segment net revenues increased 118% in the ~~third~~second quarter of ~~2020~~2021 to ~~$517.0~~$406.3 million from ~~$561.1~~$186.7 million in the ~~third~~second quarter of ~~2019~~2020 and included the impact of ~~an unfavorable $3.3~~a favorable $7.2 million foreign currency translation. ~~The following table presents net revenues by geographic region for the Company's International segment for the quarters ended September 27, 2020 and September 29, 2019.~~

Quarter Ended
September 27, 2020 September 29, 2019 %
Change
Europe $ 343.2 319.3 7 %
Latin America 91.6 152.0 -40 %
Asia Pacific 82.2 89.9 -9 %
Net revenues $ 517.0 561.1 -8 %

The ~~decline~~net revenue increase in ~~International~~the Wizards of the Coast & Digital Gaming segment ~~net revenues~~ during the ~~third~~second quarter of ~~2020~~2021 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 offset by a favorable foreign currency translation impact of $9.9 million and $1.4 million in the Company's European and Asia Pacific regions, respectively. International segment net revenues declined in the Company's Franchise Brands, Emerging Brands and Partner Brands portfolios while net revenues from the Hasbro Gaming portfolio increased during the third quarter of 2020 compared to the 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:~~Wizards of the Coast table-top and digital gaming products, most notably, MAGIC THE GATHERING, ~~products, due to~~driven by the ~~timing of card~~Strixhaven and Modern Horizons 2 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~~net revenue contributions associated with the ~~third quarter~~launch of ~~2020 due to delays in theatrical releases as a result~~DUNGEONS & DRAGONS: DARK ALLIANCE, and higher sales from Magic: The GatheringArena mobile.

Wizards 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~~Coast & Digital 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~~$192.9 million, or ~~12%~~47% of segment net revenues for the ~~third~~second quarter of ~~2020,~~2021, compared to operating profit of ~~$67.2~~$74.1 million, or ~~12%~~40% of segment net revenues, for the ~~third~~second quarter of ~~2019. International segment~~2020. The operating profit ~~declines~~increase during the ~~third~~second quarter of 2021 was the result of increased sales and product launches described above, partially offset by higher development costs, advertising costs and administrative costs, primarily related to costs to support the Company's digital gaming initiatives.

Entertainment Segment

Entertainment segment net revenues increased 47% to $226.7 million for the second quarter of 2021, compared to $154.1 million for the second quarter of 2020 ~~were~~and included the ~~result~~impact of ~~lower sales described above, most notably~~a favorable $8.8 million foreign currency translation. The net revenue increase during the second quarter was driven by higher deliveries of scripted and unscripted programming following the return of live-action entertainment content production in late 2020 through 2021 and higher net revenues from streaming content deals related to programs featuring 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.~~brands. These ~~declines~~increases were partially offset by ~~higher licensed digital gaming revenue~~lower transactional and ~~increased~~film licensing revenues ~~related to~~ ~~MAGIC: THE GATHERING ARENA~~.in 2021, as a result of the limited production of live-action feature length films in 2020.

The Entertainment ~~Licensing and Digital~~ segment operating ~~profit increased to $32.8~~losses were $113.7 million, or ~~37%~~50% of segment net revenues for the ~~third~~second quarter of ~~2020, from $24.6~~2021 compared to operating losses of $13.5 million, or ~~21.2%~~9% of segment net revenues for the ~~third~~second quarter of ~~2019.~~ 2020.

The operating loss in the second quarter of 2021 included a non-cash impairment charge of $101.8 million associated with the sale of eOne Music. Absent the impact of the 2021 impairment charge, second quarter 2021 operating losses decreased $1.6 million as a result of the net revenue increase ~~in Entertainment, Licensing~~described above, partially offset by higher program cost amortization, administrative costs and ~~Digital segment~~higher royalty expenses. The operating ~~profit was driven primarily by favorable mix from growth in licensed digital gaming, reduction~~loss for the second quarter of ~~expenses due~~2021 and 2020 included $21.8 million and $22.6 million, respectively, of incremental intangible amortization costs related to the ~~closure of~~intangible assets acquired in the ~~Backflip business and lower advertising costs associated with~~ ~~MAGIC: THE GATHERING ARENA~~.eOne Acquisition.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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~~Entertainment segment net revenues by ~~channel~~category for the ~~quarter~~quarters ended ~~September~~June 27, 2021 and June 28, 2020.

~~Three Months Ended~~

~~September 27, 2020~~

~~eOne~~


	Quarter Ended
	June 27, 2021		June 28, 2020
Film and TV	$	164.3	$	108.9
Family Brands	26.1		18.8
Music and Other	36.3		26.4
Net revenues	$	226.7	$	154.1

Corporate and Other 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~~Corporate 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~~Other segment operating losses were ~~$25.9~~$20.4 million ~~or 13.4% of segment net revenues~~ for the ~~third~~second quarter of 2021 compared to operating losses of $13.1 million for the second quarter of 2020. ~~This loss was~~Operating losses in 2021 were driven by ~~$24.7~~higher administrative expenses including $9.5 million of ~~incremental intangible amortization~~transaction costs associated with the sale of eOne Music and higher compensation expense including retention 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~~

acquisition. 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 $11.6 million of charges associated with cost-savings initiatives as well as charges related to the eOne Acquisition; including acquisition and integration costs of ~~$4.6~~$4.0 million and ~~certain~~ restructuring and related costs of ~~$1.3~~$6.3 million, ~~associated with the acquisition~~comprised of ~~eOne.~~

~~Condensed Notes to Consolidated Financial Statements~~

~~(Thousands of Dollars~~severance and ~~Shares Except Per Share Data)~~

retention costs.

First ~~Nine~~Six Months ~~of 2020~~2021

The following table presents net revenues and operating profit (loss) for the Company's principal segments for each of the ~~nine month~~six-month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.

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 %


	Six Months Ended
	June 27, 2021		June 28, 2020		% Change
Net Revenues
Consumer Products segment	$	1,343.1	$	1,092.0	23	%
Wizards of the Coast and Digital Gaming segment	648.5		397.3		63	%
Entertainment segment	445.4		476.6		-7	%

Operating Profit (Loss)
Consumer Products segment	$	50.1	$	(55.0)	>100%
Wizards of the Coast and Digital Gaming segment	302.9		169.9		78	%
Entertainment segment	(96.7)		(77.8)		-24	%

~~U.S. and Canada~~Consumer Products Segment

The ~~U.S. and Canada~~Consumer Products segment net revenues ~~remained flat~~increased 23% to $1,343.1 million for the ~~nine~~first six months ~~ended September 27, 2020~~of 2021 compared to $1,092.0 million for the ~~same period in 2019, which reflects recovery~~first six months of 2020 and included the impact of a favorable $28.1 million currency translation. The drivers of the net revenue increase include higher sales of NERF, PLAY-DOH and TRANSFORMERS products as well as higher sales of STAR WARS, MARVEL and DISNEY PRINCESS products. Revenue grew across all geographic regions, most notably in the ~~third quarter~~U.S. and Europe, and to a lesser extent, in the Company's Latin American and Asia Pacific markets. In addition, licensing revenues from ~~negative impacts realized in~~arrangements related to the Company's NERF and PEPPA PIG brands, grew during the first half of 2021. Partially offsetting these net revenue increases were lower sales of Hasbro Gaming products, primarily within the US, during the first half of 2021, compared to the first half of 2020, ~~driven in part by disruptions to~~which benefited from sales growth during 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 products, due in part to disruptions to the business, as a result of the impact~~early stages of the COVID-19 pandemic. These declines were partially offset by higher net revenues from MAGIC: THE GATHERING 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 revenues from MARVEL and DISNEY FROZEN products which did not have the benefit of 2020 entertainment releases. These decreases were partially offset by net revenue increases from STAR WARS and 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 format~~in 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~~Consumer Products segment operating profit for the ~~nine~~first six months ~~ended September 27, 2020 increased to $359.0~~of 2021 was $50.1 million or ~~20%~~4% of segment net revenues, compared to ~~$313.8~~segment operating losses of $55.0 million or ~~18%~~5% of segment net revenues, for the ~~nine months ended September 29, 2019.~~first half of 2020. The ~~increase in~~ operating profit increase in the first ~~nine months~~half of ~~2020~~2021 was driven by higher segment net revenues as described above, partially offset by higher royalty expenses from ~~MAGIC: THE GATHERING~~higher sales of the Company's Partner Brand products, ~~lower marketing and~~higher advertising ~~costs and reduced administrative~~ costs as a result of ~~cost-savings initiatives, partially offset by~~the overall sales increases within the segment as well as higher rates for ocean freight and increases in air freight costs ~~as a result~~during the first six months of ~~higher domestic shipments and increased direct-to-customer shipments which carry higher fulfillment costs.~~2021.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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 the Consumer Products segment net revenues by major geographic region for the ~~Company's International segment for the nine~~six month periods ended ~~September~~June 27, 2021 and June 28, 2020.


	Six Months Ended
	June 27, 2021		June 28, 2020
North America	$	754.1	$	604.8
Europe	365.0		298.6
Asia Pacific	133.2		118.9
Latin America	90.8		69.7
Net Revenues	$	1,343.1	$	1,092.0

Wizards of the Coast and Digital Gaming Segment

Wizards of the Coast and Digital Gaming segment net revenues increased 63% in the first six months of 2021 to $648.5 million from $397.3 million in the first six months of 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~~included the ~~Latin American and Asia Pacific regions by $25.0 million and $2.6 million respectively, partially offset by~~impact of a favorable $11.6 million foreign currency ~~translation impact~~translation.

The net revenue increase in the Wizards of ~~$2.5 million in Europe~~the Coast & Digital Gaming segment during the first ~~nine~~six 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 compared2021 was attributable 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:~~Wizards of the Coast table-top and digital gaming products, most notably, MAGIC THE GATHERING, ~~products. The overall~~driven by the number of strong performing card set releases, and from DUNGEONS & DRAGONS table-top games. In addition to these increases were net revenue ~~declines were in part, due~~contributions associated with the launch of DUNGEONS & DRAGONS: DARK ALLIANCE, and higher sales from Magic: The Gathering Arena. In addition 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~~the Company's Wizards of the Coast business, the segment benefited from growth in certain of the Company's licensed digital games.

Wizards of the Coast & ~~DRAGONS products, were offset by lower net revenues from PIE FACE and certain other Hasbro~~Digital Gaming ~~products. In the Emerging Brands portfolio, the net revenue declines were driven by LITTLEST PET SHOP and PLAYSKOOL products during the first nine months of 2020.~~

~~International~~ segment operating profit was ~~$12.3~~$302.9 million, or 1%47% of segment net revenues for the first ~~nine~~six months of ~~2020,~~2021, compared to operating profit of ~~$51.4~~$169.9 million, or 4%43% of segment net revenues for the first ~~nine~~six months of ~~2019.~~2020. The ~~decrease in International segment~~ operating profit ~~for~~increase during the first ~~nine months~~half of ~~2020~~2021 was the result of ~~lower net revenues as discussed~~increased sales described above, partially offset by ~~reduced~~higher product development costs, administrative costs and advertising ~~sales and marketing~~ costs, ~~as well as lower administrative expenses due~~primarily related to support of the ~~implementation of cost savings~~Company's digital gaming initiatives.

Entertainment ~~Licensing and Digital~~ Segment

Entertainment ~~Licensing and Digital~~ segment net revenues for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 decreased ~~14%~~7% to ~~$262.9~~$445.4 million from ~~$304.3~~$476.6 million for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020 and included the impact of a favorable $13.8 million foreign currency translation. The segment net revenue declines ~~during the first nine months of 2020~~ were primarily driven by lower revenues from theatrical film releases and lower unscripted television production revenues in 2021 as compared to 2020, partially offset by new scripted programming delivered in 2021. During the first six months of 2020, the Entertainment segment benefited from film releases and television programming produced and released prior to the onset of the COVID-19 pandemic whereas the limited production of live-action entertainment content during 2020, due to ~~revenue recognized~~the shutdown and gradual reopening of production studios, resulted in ~~2019 related to the~~ ~~TRANSFORMER: BUMBLEBEE~~fewer deliveries and fewer theatrical film ~~combined with lower net revenues associated with the closure of the Backflip business in the fourth quarter of 2019, and to a lesser extent, lower consumer product licensing revenues~~releases during the first ~~nine~~six months of ~~2020. These declines were partially offset by an increase in digital gaming for the nine months ended September 27, 2020.~~2021.

The Entertainment ~~Licensing and Digital~~ segment operating ~~profit was $65.8~~losses were $96.7 million, or ~~25.0%~~22% of net revenues, for the ~~nine~~six months ended ~~September~~June 27, ~~2020 up from $62.6~~2021, compared to $77.8 million, or ~~21%~~16% of segment net revenues, for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020. The ~~increase in~~ operating ~~profit~~loss in the ~~Entertainment, Licensing and Digital segment was driven by lower program costs and amortization costs, reduced operating expenses~~first six months of 2021 includes a non-cash impairment charge of $101.8 million associated with the ~~closure~~sale of eOne Music. The operating loss in the first six months of 2020 included $98.5 million of acquisition and integration costs consisting of $47.4 million of expense associated with the acceleration of eOne stock-based compensation, $24.5 million of advisor fees settled at the closing of the ~~Backflip business~~acquisition and $20.9 million in impairment charges for certain production assets. Also contributing to the loss is $47.6 million of incremental intangible amortization costs related to the intangible assets acquired in the ~~fourth quarter of 2019, favorable mix from growth~~eOne Acquisition.

Absent these charges 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~~both periods, operating profit ~~were~~for the segment declined due to lower segment net revenues ~~as well as asset impairment charges of $20.8 million in production assets driven~~and higher program cost amortization due to certain television programming deliveries that carry higher programming costs. These decreases were partially offset by ~~the change in entertainment strategy~~lower advertising expenses as a result of ~~the eOne Acquisition~~fewer theatrical releases during the first ~~quarter~~six months of 2021 compared to 2020.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~eOne Segment~~

~~During the first nine months of 2020, eOne segment net revenues were $696.9 million.~~ The following table presents ~~eOne~~Entertainment segment net revenues by ~~channel~~category for the ~~nine months~~six-month periods ended ~~September~~June 27, 2021 and June 28, 2020.

~~Nine Months Ended~~

~~September 27, 2020~~

~~eOne~~


	Six Months Ended
	June 27, 2021		June 28, 2020
Film and TV	$	330.7	$	372.9
Family Brands	44.9		44.7
Music and Other	69.8		59.0
Net revenues	$	445.4	$	476.6

Corporate and Other Segment

Operating losses in the Corporate and Other Segment ~~Net Revenues~~

~~Film and TV~~

~~504.1~~

~~Family Brands~~

~~106.1~~

~~Music and Other~~

~~86.7~~

~~Segment Total~~

~~696.9~~

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 nine months of 2020, drivers of the eOne segment net revenues included: (i) broadcast and licensing revenues associated with internationally recognized brands, PEPPA PIG and PJ MASKS; (ii) theatrical and film distribution contributions from the Amblin Partners film ~~1917,~~ ~~released in December 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;~~ ~~and~~(iv) the Company's strong lineup of unscripted television 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 nine months of 2020.

~~eOne segment operating losses were $65.0 million, or -9.3% of segment net revenues~~ for the first ~~nine~~six months of ~~2020. This loss was driven by $77.7~~2021 were $32.4 million, compared to operating losses 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 $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 $4.4~~$58.2 million for the first ~~nine~~six months of 2020. Operating losses in 2021 were driven by higher administrative expenses including $9.5 million of transaction costs associated with the sale of eOne Music and higher compensation expense, including retention costs of $3.8 million in relation to the eOne acquisition. Operating losses in the first six months of 2020 ~~compares to an operating profit of $6.3 million for the first nine months of 2019.~~

~~Corporate and Eliminations~~

~~Operating losses in Corporate and Eliminations for the first nine months of 2020~~ were ~~$61.1 million, compared to operating profit of $27.6 million for the first nine months of 2019. The Corporate and Eliminations operating loss in the first nine months of 2020 was~~ driven primarily by charges related to the eOne Acquisition; including acquisition and integration costs of ~~$26.6~~$22.0 million and restructuring and related costs of $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.$39.5 million. 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.~~initiatives.

~~Condensed Notes to Consolidated Financial Statements~~

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

OPERATING COSTS AND EXPENSES

~~Third~~Second Quarter ~~2020~~ 2021

~~Overall, the~~The Company's costs ~~and expenses in the third quarter of 2020 increased compared to the 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 ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.


		Quarter Ended					Quarter Ended
		September 27, 2020		September 29, 2019			June 27, 2021		June 28, 2020
Cost of sales	Cost of sales	34.3	%	39.8	%	Cost of sales	26.1	%	29.4	%
Program cost amortization	Program cost amortization	4.8		1.8		Program cost amortization	8.4		5.9
Royalties	Royalties	10.0		8.1		Royalties	8.4		11.3
Product development	Product development	3.5		4.3		Product development	6.6		6.8
Advertising	Advertising	7.7		8.9		Advertising	8.0		8.4
Amortization of intangibles	Amortization of intangibles	2.0		0.8		Amortization of intangibles	2.2		4.0��
Selling, distribution and administration	Selling, distribution and administration	18.3		17.5		Selling, distribution and administration	26.8		32.7
Loss on assets held for sale						Loss on assets held for sale	7.7		—
Acquisition and related costs	Acquisition and related costs	0.3		0.0		Acquisition and related costs	—		1.2

Cost of sales for the ~~third~~second quarter of ~~2020~~2021 was ~~$610.1~~$345.0 million, or ~~34.3%~~26.1% of net revenues, compared to ~~$627.1~~$253.2 million, or ~~39.8%~~29.4% of net revenues, for the ~~third~~second quarter of ~~2019.~~2020. The ~~decrease of~~ cost of sales asincrease in dollars was primarily due to higher sales volumes and higher inventory costs driven by increased freight costs and, to a lesser extent, from the impact of $9.3 million of foreign currency exchange. As a percentage of net revenues, ~~is primarily related to the inclusion of net revenues 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 percentage of net revenues~~ was driven by product mix, primarily from Wizards of the ~~impact of $3.6 million of foreign exchange~~Coast table-top games and ~~positive brand mix driven by the increase in net sales of MAGIC: THE GATHERING~~lower allowances, combined with ~~improved inventory costing~~more profitable closeout ~~rates and lower in-freight costs~~sales in the ~~third~~second quarter of ~~2020 due to expedited shipping during the third quarter of 2019.~~2021.

Program cost amortization increased to ~~$85.4~~$110.7 million, or ~~4.8%~~8.4% of net revenues, for the ~~third~~second quarter of ~~2020~~2021 from ~~$28.0~~$50.6 million, or ~~1.8%~~5.9% of net revenues, for the ~~third~~second quarter of ~~2019.~~2020. 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~~during the second quarter of ~~net~~2021 was driven by higher programming revenues ~~is related~~from scripted television deliveries compared to the ~~addition~~second quarter of ~~eOne's business, which experiences higher~~2020. Lower program cost amortization as a percentage of net ~~sales. Program cost amortization attributable to eOne was 4.3% of net revenues for~~sales in 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 third~~second quarter of 2020, ~~increased~~reflects purchase accounting adjustments made to $176.9 million, or 10.0% of net revenues, compared to $128.0 million, or 8.1% of net revenues, for the 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 lower advertising levels across substantially all of the Company's regions, most notably in Latin America, reflecting the current environment due to COVID-19 impacts. The savings in the third quarter, in dollars, of 2020 were partially offset by the inclusion ofprogramming assets acquired through 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,acquisition.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~distribution~~Royalty expense for the second quarter of 2021 increased to $111.5 million, or 8.4% of net revenues, compared to $97.4 million, or 11.3% of net revenues, for the second quarter of 2020. Fluctuations in royalty expense are generally related to the volume of content releases and ~~administration expenses~~deliveries and entertainment-driven products sold. The increase in royalty expense in dollars was driven primarily by higher sales of Partner Brand products in the ~~inclusion~~second quarter of 2021 as compared to the second quarter of 2020. The decrease in royalty expense as a percent of net revenues during the second quarter of 2021 was the result of a higher percentage of product sales that don't carry significant royalty expenses.

Product development expense for the second quarter of 2021 was $87.2 million, or 6.6% of net revenues, compared to $58.4 million, or 6.8% of net revenues, for the second quarter of 2020. The increase was primarily related to increased investments in the Wizards of the Coast game development, most notably development costs related to the Company's digital gaming initiatives.

Advertising expense for the second quarter of 2021 was $105.4 million, or 8.0% of net revenues, compared to $72.3 million, or 8.4% of net revenues, for the second quarter of 2020. The advertising expense increase was driven by net revenue increases, most notably in the Consumer Products segment, during the second quarter of 2021 compared to the second quarter of 2020, as advertising spend is generally impacted by revenue mix and ~~consolidation~~the number and type of ~~eOne's operations during 2020.~~entertainment releases. In addition, the advertising expense increase was impacted by costs associated with the launch of the Company’s digital gaming initiatives, primarily DUNGEONS & DRAGONS: DARK ALLIANCE in 2021.

Amortization of intangible assets decreased to $29.7 million, or 2.2% of net revenues, for the second quarter of 2021, compared to $34.7 million, or 4.0% of net revenues, for the second quarter of 2020. The decrease is related to the discontinuation of amortization related to the eOne Music intangible assets, upon being classified as held for sale assets, as well as certain licensed property rights which became fully amortized in the fourth quarter of 2020.

For the second quarter of 2021, the Company's selling, distribution and administration expenses increased to $354.3 million, or 26.8% of net revenues, from $281.2 million, or 32.7% of net revenues, for the second quarter of 2020. The increase in selling, distribution and administration expenses reflects higher bonus and stock compensation expense, higher marketing and sales costs consistent with the increase in net revenues, higher freight ~~expenses as a result~~and warehousing costs and higher depreciation expense associated with capitalized games in the Wizards of ~~increased shipments.~~the Coast business. These increases were partially offset by lower expense for credit losses during the ~~impact of cost savings initiatives in the third~~second quarter of ~~2020 as compared to the third quarter~~2021.

The loss on assets held for sale of ~~2019. Selling, distribution and administration expenses attributable to eOne were 3.3%~~$101.8 million, or 7.7% of net revenues, ~~during~~represents a non-cash impairment charge associated with the ~~third quarter~~disposition of ~~2020.~~eOne Music.

During the ~~three months ended September 27,~~second quarter of 2020, the Company incurred ~~$5.9~~$10.3 million of acquisition and related costs in connection with the eOne Acquisition. These expenses ~~were~~ comprised of ~~$4.6~~$4.0 million of acquisition and integration costs, and ~~$1.3~~$6.3 million of severance and retention costs.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

First ~~Nine~~Six Months of ~~2020~~2021

The Company's costs and expenses, stated as percentages of net revenues, are illustrated below for the ~~nine~~six month periods ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.


		Nine Months Ended					Six Months Ended
		September 27, 2020		September 29, 2019			June 27, 2021		June 28, 2020
Cost of sales	Cost of sales	30.1	%	37.4	%	Cost of sales	26.1	%	26.2	%
Program cost amortization	Program cost amortization	7.2		1.8		Program cost amortization	8.5		9.3
Royalties	Royalties	10.3		7.9		Royalties	9.0		10.7
Product development	Product development	4.7		5.7		Product development	6.1		5.7
Advertising	Advertising	8.3		9.4		Advertising	7.9		8.9
Amortization of intangibles	Amortization of intangibles	2.9		1.1		Amortization of intangibles	2.6		3.6
Selling, distribution and administration	Selling, distribution and administration	23.7		22.7		Selling, distribution and administration	26.4		28.5
Loss on assets held for sale						Loss on assets held for sale	4.2		—
Acquisition and related costs	Acquisition and related costs	4.4		—		Acquisition and related costs	—		8.1

Cost of sales for the ~~nine~~six months ended ~~September~~June 27, ~~2020 decreased~~2021 increased to ~~$1,126.0,~~$634.9 million, or ~~30.1%~~26.1% of net revenues, from ~~$1,230.8~~$515.9 million, or ~~37.4%~~26.2% of net revenues for the ~~nine~~six 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.~~June 28, 2020. The cost of sales ~~decrease~~increase in dollars was primarily due to higher sales volumes and higher inventory costs as a result of increased freight costs and, to a lesser extent, from the impact of $13.4 million of foreign currency exchange. These increases were partially offset by more profitable closeout sales during the first ~~nine months~~half 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.~~2021.

Program cost amortization increased in the first ~~nine~~six months of ~~2020~~2021 to ~~$268.2~~$208.2 million, or ~~7.2%~~8.5% of net revenues, from ~~$58.1~~$182.8 million, or ~~1.8%~~9.3% of net revenues, in the first ~~nine~~six months of ~~2019.~~2020. 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~~six months of 2021 was the result of higher television programming revenues, primarily from deliveries that carry higher programming costs, as well as certain purchase accounting adjustments in 2020.

Royalty expense for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 was ~~$387.1~~$220.4 million, or ~~10.3%~~9.0% of net revenues, compared to ~~$259.0~~$210.2 million, or ~~7.9%~~10.7% of net revenues, for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020. Fluctuations in royalty expense are generally related to the volume of content releases and deliveries and entertainment-driven products sold. 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~~six months of ~~2020 and~~2021 was ~~3.5% of net revenues, partially offset~~driven primarily by ~~lower~~higher sales of Partner Brand ~~product during the first nine months of 2020~~products as compared to the first ~~nine~~six months of ~~2019.~~2020.

Product development expense for the ~~nine~~six months ended ~~September~~June 27, ~~2020 decreased~~2021 increased to ~~$174.9~~$149.0 million, or ~~4.7%~~6.1% of net revenues, from ~~$189.2~~$112.2 million, or 5.7% of net revenues, for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020. The ~~decrease as a percentage of net revenues~~increase was primarily related to ~~eOne, which experiences lower product development expense as a percentage of net sales.The decrease~~investments 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~~Wizards 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, primarily~~Coast and Digital Gaming segment, most notably development costs related to the Company's ~~Wizards of the Coast business.~~digital gaming initiatives such as MAGIC SPELLSLINGERS and DUNGEONS & DRAGONS: DARK ALLIANCE and certain mobile gaming apps.

Advertising expense for the ~~nine~~six months ended ~~September~~June 27, ~~2020~~2021 was ~~$311.4~~$193.3 million, or ~~8.3%~~7.9% of net revenues, compared to ~~$309.7~~$174.0 million, or ~~9.4%~~8.9% of net revenues, for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020. The advertising expense increase reflects growth in ~~dollars was driven by~~revenues during the ~~acquisition~~first half of ~~eOne,~~2021 compared to the first half of 2020 and higher costs associated with the launch of the Company’s digital initiatives, most notably, DUNGEONS & DRAGONS: DARK ALLIANCE. These increases were partially offset by ~~lower advertising costs~~reduced promotional spend in the Entertainment segment due to fewer theatrical releases during the first six months of 2021 compared to 2020.

Amortization of intangible assets was $62.6 million, or 2.6% of net revenues, for the six months ended June 27, 2021 compared to $71.5 million, or 3.6% of net revenues, in the first six months of 2020. The decrease is primarily related to certain licensed property rights which became fully amortized in the fourth quarter of 2020 combined with the discontinuation of amortization related to the ~~Company’s digital gaming initiatives and reduced advertising levels globally, reflecting~~eOne Music intangible assets in the ~~current environment due to the impact~~second quarter of ~~COVID-19.~~2021, upon being classified as held for sale assets.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~Amortization of intangible assets was $107.7 million, or 2.9% of net revenues, for~~For the ~~nine~~six months ended ~~September~~June 27, 2020 compared to $35.4 million, or 1.1% of net revenues, in the first nine months 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 $72.3 million, or 1.9% of net revenues, in the first nine months of 2020.

~~For the nine months ended September 27, 2020,~~2021, the Company's selling, distribution and administration expenses increased to ~~$885.7~~$642.9 million, or ~~23.7%~~26.4% of net revenues, from ~~$748.3~~$560.3 million, or ~~22.7%~~28.5% of net revenues, for the ~~nine~~six months ended ~~September 29, 2019.~~June 28, 2020. The increase in selling, distribution and administration expenses ~~was driven primarily by~~reflects higher marketing and sales costs consistent with the ~~inclusion~~increase in net revenues, higher bonus and ~~consolidation of eOne's operations during the first nine months of 2020, combined with $11.6 million of severance charges associated with cost-savings initiatives within the Company’s commercial~~stock compensation expense and ~~Film~~increased freight and ~~TV businesses.This increase was~~warehousing costs. These increases were partially offset by lower ~~marketing, sales and warehousing expenses across the regions~~expense for credit losses during the first ~~nine months. Selling, distribution and administration expenses attributable to eOne were~~six months of 2021.

The loss on assets held for sale of $101.8 million, or 4.2% of net revenues, ~~during~~represents a non-cash impairment charge associated with the ~~first nine months~~disposition of ~~2020.~~eOne Music.

During the first ~~nine~~six months of 2020, the Company incurred ~~$166.0~~$160.0 million of acquisition and related costs in connection with the eOne Acquisition. These expenses ~~were~~ comprised ~~of $104.3~~$99.7 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~~$39.0 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 ~~$61.7~~$60.4 million of restructuring and related costs including severance and retention costs of ~~$20.8~~$19.5 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~~second quarter and first ~~nine~~six months of ~~2020~~2021 totaled ~~$49.4~~$46.1 million and ~~$153.7~~$94.0 million, respectively, compared to ~~$22.8~~$49.6 million and ~~$67.1~~$104.3 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, respectively. 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 the first quarter of 2020, on the date of the closing, borrowed $1.0 billion in term loans provided by a term loan agreement. The ~~increase~~decrease in interest expense for the ~~third~~second quarter and first ~~nine~~six months of 2021 primarily reflects 2020 ~~reflects interest~~and 2021 debt paydown activities related to ~~these notes and other~~ borrowings ~~associated with~~utilized for the eOne ~~Acquisition,~~acquisition and lower interest rates, partially offset by ~~lower average short-term~~higher production financing borrowings during the second quarter and first ~~nine~~six months of ~~2020.~~2021.

Interest income was ~~$0.7~~$1.2 million and ~~$6.4~~$2.4 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2020,~~2021, respectively, compared to ~~$5.5~~$0.9 million and ~~$19.2~~$5.6 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, respectively. Lower average interest rates in ~~2020~~2021 compared to ~~2019~~2020 contributed to the ~~decrease.~~decrease for the six-month period.

Other income, net was ~~$11.3~~$9.4 million and ~~$15.4~~$38.3 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2020,~~2021, respectively, compared to other ~~expense,~~income, net of ~~$20.2~~$2.8 million and ~~$118.3~~$4.1 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, respectively. The increase ~~for the 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 fluctuations associated with the proposed eOne Acquisition price.~~Also contributing to the third quarter 2020 increase is a $6.1~~$26.7 million gain ~~related to~~realized in the ~~sale~~first six months of ~~the Dragonvale software and brand.The increase for the nine month period~~2021, of which $1.1 million was ~~driven by lower pension expense~~recognized in ~~2020 due to the $110.8 million non-cash pension charge as a result of the settlement of the Company's U.S. pension plan liability during~~ the second quarter of ~~2019 combined with the previously discussed lower foreign currency losses in 2020 and gain on the sale of the Dragonvale software and brand.~~2021, from a legal settlement.

INCOME TAXES

Income tax expense totaled ~~$79.2~~$63.0 million on pre-tax earnings of ~~$299.2~~$41.1 million in the ~~third~~second quarter of ~~2020~~2021 compared to income tax benefit of $10.8 million on pre-tax loss of $43.7 million in the second quarter of 2020. For the six-month period, the income tax expense ~~of $46.8~~totaled $75.0 million on pre-tax earnings of ~~$259.7~~$170.6 million compared to an income tax benefit of $14.9 million on a pre-tax loss of $115.7 million in ~~the third quarter of 2019.~~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 month2020. Both 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 ~~nine~~six months of ~~2020, favorable~~2021, unfavorable discrete tax adjustments were a net ~~benefit~~expense of ~~$5.3~~$17.4 million compared to a net discrete tax benefit of ~~$31.7~~$24.0 million in the first ~~nine~~six months of ~~2019.~~2020. The unfavorable discrete tax adjustments for the first six months of 2021 are primarily associated with the revaluation of net deferred tax liabilities as a result of the United Kingdom's ("UK") enactment of Finance Act 2021 during the second quarter, which increases the corporate income tax rate from 19% to 25% as of April 1, 2023. This is reduced by the release of a valuation allowance on net operating losses that offsets income received from a one-time legal settlement and certain benefits associated with normal business activities, including the reversal of uncertain tax positions that resulted from statues of limitations expiring in certain jurisdictions and operational tax planning during the second quarter. In addition, included in the second quarter of 2021 is an impairment expense on assets held for sale for which there is no corresponding tax benefit. The favorable discrete tax adjustments for the first ~~nine~~six months of 2020 primarily relate to the costs related to the acquisition of ~~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 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.~~eOne. Absent discrete items, the ~~adjusted~~ tax rates for the first ~~nine~~six months of 2021 and 2020 were 22.6% and ~~2019 were 19.9% and 18.2%,~~20.5% respectively. The increase in the ~~adjusted tax~~base rate of ~~19.9%~~22.6% for the first ~~nine~~six months of ~~2020~~2021 is primarily due to the mix of jurisdictions where the Company earned its ~~profits and the impact of the eOne Acquisition.~~profits.

~~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~~Changes in 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~~could materially impact our recorded deferred tax assets and liabilities and our effective tax rate. We monitor such rules and adjust our deferred tax assets and liabilities in the quarter in which such laws become enacted. Accordingly, we recorded the impact of the United Kingdom’s Finance Act 2021 upon receiving royal assent on June 10, 2021. The primary impact from this legislation resulted ~~from~~in the revaluation of ~~Hasbro’s UK~~deferred net tax ~~attributes, which resulted in an increased~~liabilities from eOne, increasing the tax provision ~~of $13.7~~by $39.4 million in the ~~third~~second quarter of ~~2020.~~2021.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

OTHER INFORMATION

~~Brexit Referendum~~

On June 23, 2016, the 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~~consumer products 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~~consumer products customer order patterns ~~which~~ vary from year to year largely ~~because of differences each year~~due to fluctuations 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~~we offer products, and changes in overall economic conditions. A disproportionate volume of our net revenues has historically been earned during the third and fourth quarters leading up to the retail industry’s holiday selling season, including Christmas. As a result, comparisons of ~~the Company's~~ unshipped orders on any date with those at the same date in athe prior year are not necessarily indicative of ~~the Company's expected~~our sales for ~~the~~that year. Moreover, quick response, or just-in-time, inventory management practices result in ~~fewer orders being placed significantly in advance~~a significant proportion 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 necessarily indicative of future sales. ~~Additionally, the impact of the COVID-19 outbreak~~We expect retailers will continue to the Company's business seasonality and shipments 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 forfollow 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 continuing into the second quarter, these locations were operating at varying levels of productivity depending on local government and safety considerations however, as of the end of the third quarter, the majority of the Company's third-party manufacturing facilities were up and running. The COVID-19 situation continues to be fluid, but we currently expect all manufacturing facilities to remain operational through the end of 2020, unless a resurgence of COVID-19 cases were to cause further manufacturing shutdowns or restrictions. Additionally, the Company experienced significant growth in its ecommerce business during 2020, as more consumers have turned to online 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 near term.

~~Condensed Notes to Consolidated Financial Statements~~

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

strategy.

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.

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.~~Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company adopted the standard ~~relates to financial statement disclosure only~~in the first quarter of 2021 and ~~will~~the adoption of the standard did not have ana material impact on its consolidated financial statements.

In December 2019, the ~~Company's~~FASB issued Accounting Standards Update No. 2019-12 (ASU 2019-12), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update remove certain exceptions for performing intra-period tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated ~~statement of~~ financial ~~position, statement of operations or statement of cash flows.~~statements.

Recently Issued Accounting Pronouncements

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")~~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 does not currently expect the change from LIBOR to an alternate rate to have a material impact on its consolidated financial statements, and the Company is ~~currently evaluating this option as it relates~~continuing to evaluate the standard's potential impact 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 ~~nine~~six months of ~~2020~~2021 and ~~2019~~2020 the Company ~~has~~ primarily funded its operations and liquidity needs through cash on hand and cash flows from ~~operations, and when needed, used borrowings under its available lines of credit.~~operations. In ~~2020,~~addition, the Company’s ~~eOne~~Entertainment operating segment ~~has~~ used production financing to fund certain of its television and film productions which are typically arranged on an individual production basis by special purpose production subsidiaries.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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. With the acquisition of eOne, the Company 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 commercial paper program or its available lines of credit and ~~commercial paper program~~production financing are adequate to meet its working capital needs ~~over~~for the ~~next twelve months.~~remainder of 2021. The Company may also issue debt or equity securities from time to time, to provide additional sources of liquidity when pursuing opportunities to enhance our long-term competitive position, while maintaining a strong balance sheet. 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~~the Company believes the risk of nonperformance by the counterparties to ~~the Company's~~its 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 ~~September~~June 27, ~~2020,~~2021, the Company's cash and cash equivalents totaled ~~$1,132.4~~$1,228.2 million, of which ~~$71.2~~$83.1 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")~~of 2017 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 ~~September~~June 27, ~~2020,~~2021, the Company has a total liability of ~~$174.5~~$156.1 million related to this tax, $18.4 million is reflected in current liabilities while the remaining long-term payable related to the Tax Cuts and Jobs Act of ~~$156.1~~2017 of $137.7 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 ~~September~~June 27, ~~2020~~2021 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.~~categories. 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
Cash and cash equivalents (including restricted cash of $71.2 and $0) $ 1,132.4 1,060.4 7 %
Accounts receivable, net 1,438.4 1,416.9 2 %
Inventories 540.0 589.1 -8 %
Prepaid expenses and other current assets 648.2 346.7 87 %
Other assets 1,276.1 626.2 104 %
Accounts payable and accrued liabilities 1,936.2 1,458.8 33 %
Other liabilities 778.5 550.8 41 %


	June 27, 2021		June 28, 2020		% Change
Cash and cash equivalents (including restricted cash of $83.1 and $71.9)	$	1,228.2	$	1,038.0	18	%
Accounts receivable, net	865.9		911.3		-5
Inventories	499.6		564.2		-11
Prepaid expenses and other current assets	543.2		672.2		-19
Other assets	1,350.5		1,329.1		2
Accounts payable and accrued liabilities	1,778.9		1,596.6		11
Other liabilities	753.0		771.7		-2

Accounts receivable ~~increased~~decreased to ~~$1,438.4~~$865.9 million at ~~September~~June 27, ~~2020,~~2021, compared to ~~$1,416.9~~$911.3 million at ~~September 29, 2019.~~June 28, 2020. Absent the ~~unfavorable~~favorable foreign currency impact of ~~$21.5~~$22.1 million, accounts receivable ~~increased 3%~~decreased 7%, or ~~$43.1~~$67.5 million. The ~~increase~~decrease in accounts receivable ~~during the first nine months of 2020~~ was driven primarily by improved collections during the ~~inclusion~~first half of ~~eOne balances~~2021 and by lower sales during the fourth quarter of ~~$177.9 million. Absent eOne, accounts receivable balances decreased across~~2020, primarily in the Company's Latin American ~~U.S.~~ and ~~Canada and European regions due to improved collections during the nine months ended September 27, 2020 compared to the same period in 2019.~~Asia Pacific markets. Days sales outstanding decreased from 8296 days at ~~September 29, 2019~~June 28, 2020 to 7460 days at ~~September~~June 27, ~~2020~~2021 primarily due to the increase in revenues and mix of sales during the first half of 2021 as well as from improved collections ~~and higher shipments earlier in~~across all geographies during the ~~quarter.~~year.

Inventories decreased to ~~$540.0~~$499.6 million as of ~~September~~June 27, ~~2020~~2021, compared to ~~$589.1~~$564.2 million at ~~September 29, 2019.~~June 28, 2020. Absent the ~~unfavorable~~favorable foreign currency impact of ~~$8.2~~$15.9 million, inventories decreased 7%14% reflecting lower levels, primarily in the ~~U.S. and Canada and Asia Pacific markets primarily due to improved inventory management, offset by higher inventories in~~ Latin ~~America due to higher than normal inventory levels remaining from the fourth quarter of 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 $648.2 million at September 27, 2020 from $346.7 million at September 29, 2019. The increase was due to higher accrued royalty and licensing income, primarily attributable to accrued revenue balances of $228.6 million associated with eOne's properties and content, higher accrued tax credits related to film and television production costs, the majority of which are attributable to eOne productions, higher prepaid royalty amounts due to payments made in the first quarter of 2020 for the extension of the Company’s Marvel and Lucas agreements and higher prepaid tax balances as a result of lower earnings relative to 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 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 in the legacy Hasbro business.

Accounts payable and accrued liabilities increased to $1,936.2 million at September 27, 2020 from $1,458.8 million at September 29, 2019. The increase was primarily attributable to eOne accrued participation and deferred revenue balances. In addition, increases included higher accrued royalty balances 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 as payments made in relation to the Company’s 2018 restructuring actions more than offset the increase from the restructuring actions taken in the second quarter of 2020 as a result of the integration of eOne.American,

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

~~Other liabilities increased~~Europe and Asia Pacific markets due to ~~$778.5 million at September 27,~~improved inventory management and higher obsolescence charges taken during 2020, ~~from $550.8 million at September 29, 2019. The increase was primarily driven by deferred tax liabilities recorded~~ as a result of the impact of COVID-19.

Prepaid expenses and other current assets decreased to $543.2 million at June 27, 2021 from $672.2 million at June 28, 2020. The decrease was driven primarily by the reclassification of eOne ~~Acquisition,~~Music assets as assets held for sale during the second quarter of 2021. Absent the impact of this reclassification, prepaid expenses and other current assets decreased as a result of lower prepaid royalty balances in relation to the Company’s Marvel and Lucasfilm royalty agreements, lower prepaid tax balances, lower short-term investment balances as a result of the Company's global cash management strategy and lower unrealized gains on foreign exchange contracts.

Other assets increased to approximately $1,350.5 million at June 27, 2021 from $1,329.1 million at June 28, 2020. The increase was driven by higher capitalized film and television content and production balances due to increased investments in productions and acquired content, partially offset by lower non-current receivable balances within the Entertainment segment during the first six months of 2021.

Accounts payable and accrued liabilities increased to $1,778.9 million at June 27, 2021 from $1,596.6 million at June 28, 2020 driven by higher deferred revenue balances in the first half of 2021 due to 2020 purchase accounting fair value adjustments related to the eOne acquisition, higher incentive compensation accruals and higher accrued advertising balances.

Other liabilities decreased to $753.0 million at June 27, 2021 from $771.7 million at June 28, 2020. The decrease was driven by lower 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 of eOne and higher long-term international pension balances due to 2019 year-end actuarial valuations. These increases were offset by a lower transition tax liability balance reflecting the reclassification of the 2021 installment ~~payment.~~payment, partially offset by higher deferred compensation and tax reserves.

Cash Flow

The following table summarizes the changes in the Consolidated Statement of Cash Flows, expressed in millions of dollars, for the quarters ended ~~September~~June 27, ~~2020~~2021 and ~~September 29, 2019.~~June 28, 2020.


		September 27, 2020		September 29, 2019			June 27, 2021		June 28, 2020
Net cash provided by (used in)
Net cash provided by (used in):						Net cash provided by (used in):
Operating activities	Operating activities	$	494.3	$	389.6	Operating activities	$	577.1	$	258.2
Investing activities	Investing activities	(4,471.7)		(86.5)		Investing activities	(66.3)		(4,454.8)
Financing activities	Financing activities	550.5		(417.2)		Financing activities	(718.4)		678.5

Net cash provided by operating activities in the first ~~nine~~six months of ~~2020~~2021 was ~~$494.3~~$577.1 million compared to ~~$389.6~~$258.2 million in the first ~~nine~~six months of ~~2019.~~2020. The ~~$104.7~~$318.9 million increase in net cash provided by operating activities was primarily attributable to higher ~~collections of accounts receivable balances during the first nine months of 2020 and higher~~ earnings ~~excluding non-cash charges. These increases were~~in 2021, combined with improved working capital, partially offset by higher film and television production spend as a result of ~~the inclusion of eOne operations~~increased production activities during the first ~~nine~~six months of ~~2020 as well as royalty advances paid in the first quarter of 2020 related to the extension of the Company’s Marvel and Lucas license agreements that were due to expire in 2020.~~2021.

Net cash utilized inby investing activities was ~~$4,471.7~~$66.3 million in the first ~~nine~~six months of ~~2020~~2021 compared to ~~$86.5~~$4,454.8 million in the first ~~nine~~six months of ~~2019. The increase~~2020. Investing activities in 2020 ~~reflects~~included $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~~acquired funded by 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 ~~$92.1~~$63.1 million in the first ~~nine~~six months of ~~2020~~2021 compared to ~~$90.8~~$64.0 million in the first ~~nine~~six months of ~~2019.~~2020.

Net cash utilized by financing activities was $718.4 million in the first six months of 2021 compared to net cash provided by financing activities of $678.5 million in the first six months of 2020. Financing activities in the first six months of 2021 include the repayment of $300.0 million aggregate principal amount of 3.15% Notes and payments totaling $265.0 million related to the $1.0 billion in term loans described above consisting of $250.0 million towards the principal balance of the Three-Year Tranche loans and quarterly principal payments totaling $15.0 million. In addition, the Company had drawdowns of $114.7 million and repayments of $70.2 million related to production financing loans. In the first six months of 2020, cash provided by financing activities was ~~$550.5 million in the first nine months of 2020 compared to net cash utilized of $417.2 million in the first 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 ~~loans. Also, in the first nine months of 2020, the Company had drawdowns of $38.9 million and~~loans, partially offset by repayments of ~~$124.8~~$90.7 million related to ~~eOne~~ production financing loans, ~~and paid~~payments totaling $47.4 million associated with the redemption of ~~eOne~~ stock awards that were accelerated as a result of the ~~acquisition. In addition,~~eOne acquisition and $7.5 million for the ~~Company made quarterly principal payments totaling $22.5 million related~~Company's first installment towards the term loan repayment.

Condensed Notes to ~~the $1.0 billion in term loans described above.~~Consolidated Financial Statements

~~During the first nine months~~(Millions of ~~2019, the Company~~Dollars and Shares Except Per Share Data)

Dividends paid $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 $25.0 million released from escrow. Cash payments related to the purchases of the Company’s common stock were $60.1 million in the first ~~nine months~~half of ~~2019.~~2021 totaled $187.5 million, consistent with dividends paid in the first half of 2020 of $186.2 million. There were no repurchases of the Company’s common stock in the first ~~nine~~six months of ~~2020~~2021 as the Company suspended ~~the~~its share repurchase program while it prioritizes deleveraging. Dividends paid in the first nine months of 2020 totaled $279.4 million compared to $250.8 million in the first 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.~~$1.0 billion. 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 ~~September~~June 27, ~~2020,~~2021, 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.~~$1.5 billion. The Amended Revolving Credit Agreement also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders. 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 September~~June 27, ~~2020.~~2021. The Company had no borrowings outstanding under its committed revolving credit facility as of ~~September~~June 27, ~~2020.~~2021. However, letters of credit outstanding under this facility as of ~~September~~June 27, ~~2020~~2021 were approximately $2.7 million. Amounts available and unused under the committed line, at ~~September~~June 27, ~~2020~~2021 were approximately ~~$1,497.3 million,~~$1.5 billion, inclusive of borrowings under the Company’s commercial paper program. The Company also has other uncommitted lines from various banks, of which approximately ~~$23.2~~$12.4 million was utilized at ~~September~~June 27, ~~2020.~~2021. Of the amount utilized under, or supported by, the uncommitted lines, approximately ~~$10.0~~$0.8 million and ~~$13.2~~$11.6 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~~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~~$400 million principal balance, the Company ~~by Fitch Ratings Inc., Moody’s Investor Service, Inc.~~repaid $100 million during the fourth quarter 2020 and ~~S&P Global Rankings,~~$250 million during the second quarter 2021. The Company is subject to certain ~~provisions taking into account potential differences~~financial covenants contained in ~~ratings issued to the relevant rating agencies or a lack~~this agreement and as 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 thatJune 27, 2021, 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 fundingwas in compliance with these covenants. The terms of the Term Loan Facilities are described in Note 8 to the consolidated financial statements included in Part I of this Form 10-Q.

During November 2019, in conjunction with ~~periodic step downs to 3.50:1.00 for~~ the ~~fiscal quarter ending December 31, 2023 and thereafter.~~

~~The Company has principal amounts~~Company's acquisition of ~~long-term debt at September 27, 2020 of $5.2 billion, due at varying times from 2021 through 2044. As described above,~~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 terms of the Notes are described in Note 8 to the consolidated financial statements in Part I of this Form 10-Q.

The Company has principal amounts of long-term debt ~~securities in November 2019 and borrowed $1.0~~as of June 27, 2021 of $4.4 billion, ~~under its term loan facilities on December 30, 2019 in connection with the financing of the eOne Acquisition.~~due at varying times from 2022 through 2044. Of the total principal amount of long-term debt, ~~$369.3~~$189.6 million is current at ~~September~~June 27, ~~2020~~2021 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. During the first quarter of 2021, the Company repaid in full, its 3.15% Notes in the aggregate principal amount of $300.0 million due in May 2021, including accrued interest. Additionally, the Company has outstanding production financing facilities at ~~September~~June 27, ~~2020~~2021 of ~~$121.4~~$212.6 million of which ~~$82.2~~$53.0 million is included in long-term debt and ~~$39.2~~$159.6 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~~Millions of Dollars and Shares Except Per Share Data)

Company's consolidated financial statements, included in Part I of this Form 10-Q. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to the first quarter of 2022 with the exception of certain of the Company’s production financing facilities discussed above.

In November of 2019, the Company completed an underwritten public offering of 10.6 million 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.

The Company also had letters of credit and other similar instruments of approximately ~~$15.9~~$14.3 million and purchase commitments of approximately ~~$605.9~~$428.3 million outstanding at ~~September~~June 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 September 27, 2020, are as follows:

Remainder 2020 2021 2022 2023 2024 Thereafter Total
Future film and television obligations $ 24.7 52.4 1.9 — — — $ 79.0
First-look commitments 6.3 20.7 8.4 — — — 35.4
Operating lease commitments 23.6 36.0 11.2 10.1 8.8 22.8 112.5
$ 54.6 109.1 21.5 10.1 8.8 22.8 $ 226.9
2021.

Other contractual obligations and commercial commitments, as detailed in the Company's ~~2019~~2020 Form 10-K, did not materially change outside of ~~commitments assumed as part of the eOne Acquisition and~~ certain payments made in the normal course of business and as otherwise set forth in this report. The table of contractual obligations and commercial commitments, as detailed in the Company's ~~2019~~2020 Form 10-K does not include certain tax liabilities related to uncertain tax ~~positions. See Note 3, "Business Combinations"~~positions and certain unsatisfied performance obligations primarily related to ~~our consolidated financial statements, which is included~~in-production television content to be delivered in ~~Part I~~the future, under existing agreements.

The Company has a long history of returning cash to its shareholders through quarterly dividends and share repurchases. In 2021 Hasbro maintained its quarterly dividend rate of $0.68 per share for the dividends paid in February and May and has declared a third cash dividend of $0.68 per share scheduled for August 2021. In addition to the dividend, the Company periodically returns cash to shareholders through its share repurchase program. As part of this ~~Form 10-Q~~initiative, since 2005, the Company's Board of Directors (the "Board") adopted numerous share repurchase authorizations with a cumulative authorized repurchase amount of $4.3 billion. The most recent authorization was approved in May 2018 for ~~contractual commitments assumed through~~$500 million. Since 2005, Hasbro has repurchased 108.6 million shares at a total cost of $4.0 billion and an average price of $36.44 per share. At June 27, 2021, the Company had $366.6 million remaining under these share repurchase 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.~~Acquisition, the Company has suspended its current share repurchase program while it prioritizes deleveraging.

The Company believes that cash from operations, and, if necessary, its committed line of credit and other borrowing facilities, will allow the Company to meet its obligations over the next twelve months.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. As such, management is required to make certain estimates, judgments and assumptions that it believes are reasonable based on the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. The significant accounting policies which management believes are the most critical to aid in fully understanding and evaluating the Company's reported financial results include film and television production costs, recoverability of goodwill and intangible assets, income taxes and business combinations. Additionally, the Company identified the valuation of the Company’s equity method investment in Discovery Family ~~Channel.~~Channel as a significant accounting estimate. These critical accounting policies are the same as those detailed in the ~~2019~~2020 Form ~~10-K with the exception of the use of estimates for business combinations in relation to the Company’s 2020 acquisition of eOne, which is detailed below.~~10-K.

~~Business Combinations.~~ The Company accounts for business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”). Identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recognized and measured as of the acquisition date at fair value. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interests in the acquiree exceed the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items.

The Company's evaluation 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 further analysis of assets including program rights, investment in films and television content, intangible assets, as well as deferred revenue, noncontrolling interests, tax and certain other liabilities is completed, additional information on the assets acquired and liabilities assumed may become available. A change in the 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 disclosed 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. For more information on the eOne Acquisition see Note 3, "Business Combinations" to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

~~Condensed Notes to Consolidated Financial Statements~~

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

FINANCIAL RISK MANAGEMENT

The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates, primarily as the result of sourcing products priced in U.S. dollars, Hong Kong dollars and Euros while marketing those products in more than twenty currencies. Results of operations may be affected primarily by changes in the value of the U.S. dollar, Hong Kong dollar, Euro, British pound sterling, Canadian dollar, Brazilian real, Russian ruble and Mexican peso and, to a lesser extent, other currencies in Latin American and Asia Pacific countries.

To manage this exposure, the Company has hedged a portion of its forecasted foreign currency transactions for fiscal years ~~2020 through~~2021 and 2022 using foreign exchange forward contracts. In addition, during the third quarter of 2019 the Company hedged a portion of its exposure to fluctuations in the British pound sterling in relation to the eOne Acquisition purchase price and other transaction related costs using a series of both foreign exchange forward and option contracts. These contracts did not qualify for hedge accounting and as such, were marked to market through the Company's Consolidated Statement of Operations. For tax purposes these contracts qualified as nontaxable integrated tax hedges. These contracts matured on December 30, 2019 (the closing date of the transaction) and net gains or losses recognized on these contracts in the first nine months of 2020 were immaterial.

The Company is also exposed to foreign currency risk with respect to its net cash and cash equivalents or short-term borrowing positions in currencies other than the U.S. dollar. The Company believes, however, that the on-going risk on the net exposure should not be material to its financial condition. In addition, the Company's revenues and costs have been, and will likely continue to be, affected by changes in foreign currency rates. A significant change in foreign exchange rates can materially impact the Company's revenues and earnings due to translation of foreign-denominated revenues and expenses. The Company does not hedge against translation impacts of foreign exchange. From time to time, affiliates of the Company may make or receive intercompany loans in currencies other than their functional currency. The Company manages this exposure at the time the loan is made by using foreign exchange contracts. ~~Other than as set forth above, the Company does not hedge foreign currency exposures.~~

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The Company reflects all forward and option contracts at their fair value as an asset or liability on the consolidated balance sheets. The Company does not speculate in foreign currency exchange contracts. At ~~September~~June 27, ~~2020,~~2021, these contracts had net unrealized gains of ~~$15.3~~$1.1 million, of which ~~$11.7~~$5.1 million of unrealized gains are recorded in prepaid expenses and other current assets, ~~$4.0~~$1.7 million of unrealized gains are recorded in other assets, ~~$0.3~~$5.6 million of unrealized losses are recorded in accrued liabilities and $0.1 million of unrealized losses are recorded in other liabilities. Included in accumulated other comprehensive loss at ~~September~~June 27, ~~2020~~2021 are deferred ~~gains,~~losses, net of tax, of ~~$11.5~~$3.2 million, related to these derivatives.

At ~~September~~June 27, ~~2020,~~2021, the Company had principal amounts of ~~fixed rate~~ long-term debt of ~~$5.2~~$4.4 billion. ~~Of this long-term debt, $600~~In May 2014, the Company issued an aggregate amount of $600.0 million ~~represents the aggregate issuance~~ of long-term debt ~~in May 2014 which consists~~consisting of ~~$300~~$300.0 million of 3.15% Notes, ~~Due~~which were repaid in full during the first quarter of 2021, and ~~$300~~$300.0 million of 5.10% Notes ~~Due~~due 2044. Prior to the debt issuance, the Company entered into forward-starting interest rate swap agreements with a total notional value of $500 million to hedge the anticipated underlying U.S. Treasury interest rate. These interest rate swaps were matched with this debt issuance and were designated and effective as hedges of the change in future interest payments. At the date of debt issuance, the Company terminated these interest rate swap agreements and their fair value at the date of issuance was recorded in accumulated other comprehensive loss and is being amortized through the consolidated statements of operations using an effective interest rate method over the life of the related debt. Included in accumulated other comprehensive loss at ~~September~~June 27, ~~2020~~2021 are deferred losses, net of tax, of ~~$16.9~~$15.9 million, ~~related~~all of which relates to ~~these derivatives.~~the remaining $300.0 million of 5.10% Notes due 2044.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The information required by this item is included in Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated herein by reference.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under

~~Condensed Notes to Consolidated Financial Statements~~

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

the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of ~~September~~June 27, ~~2020.~~2021. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.

Changes in internal control over financial reporting

~~Except for the acquisition of eOne described below, there~~There were no changes in the Company's internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended ~~September~~June 27, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

~~On December 30, 2019,~~ In the ~~Company~~first quarter of fiscal 2020, we completed the acquisition of ~~eOne.~~eOne as described in Note 3 to the consolidated financial statements in Part I of this Form 10-Q. We are currently integrating eOne into our ~~operations and~~ internal control processes and, pursuant to the Securities and Exchange Commission’s guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment in the year of acquisition, the scope of our assessment of the effectiveness of our internal controls over financial reporting ~~at December 27, 2020~~processes. This integration will ~~not include eOne.~~be completed in 2021.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

PART II. OTHER INFORMATION

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.

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~~2020 Form 10-K ~~and in our 2020 Form 10-Qs,~~ should be ~~considered, together with the discussion below, which includes a supplement to our risk factors relating to the impact of the coronavirus on our business.~~considered. The risks set forth in our ~~2019~~2020 Form 10-K ~~as supplemented by our 2020 Form 10-Qs,~~ could materially and adversely affect our business, financial condition, and results of operations.

~~Risks Related to Business Operations~~

~~The global coronavirus outbreak~~ There are no material changes from the risk factors as previously disclosed in our 2020 10-K 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;~~

•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 of 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 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, 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.

~~Certain aspects of our entertainment business 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. 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. During this time, we have seen increased interest in our content library as consumers increase watching content at home and we continue to identify other innovative ways of making our content accessible to consumers.In the near term, this interest and these efforts are unlikely to offset the impact to our entertainment business's results due to the shutdown of productions and closure and limited reopening of studios and theaters.

The negative impact to demand can be caused by delays in or reduced purchases from customers and consumers who may be 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 $1.1 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.During this time of uncertainty, however, we are managing our expenses to further preserve our 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 havesubsequently 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.reports.

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 goals and ~~objectives;~~objectives, including continued profitable growth and successful integration of eOne; the expected adequacy and delivery of ~~supply and~~product supply; operation of our third-party manufacturing facilities; the Company's product and entertainment plans, including ~~anticipated entertainment production; anticipated~~the timing of product and ~~entertainment performance;~~content releases; changes in the methods of content distribution, including increased reliance on streaming outlets; marketing and promotional efforts; anticipated expenses; ~~and~~ working capital and ~~liquidity.~~liquidity; and anticipated impact of acquisitions and dispositions. 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. Factors 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;~~awareness including our ability to successfully develop and distribute content based on our brands through the capabilities of eOne;

•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 and digital gaming initiatives;

•our ability to successfully develop and ~~esports initiatives;~~execute plans to mitigate the negative impact of the coronavirus on our business, including, without limitation, negative impacts to our supply chain and costs that have occurred and could continue to occur in the future as the pandemic remains and potentially worsens or reemerges in countries where we source significant amounts of product;

•risks associated with international operations, such as currency conversion, currency fluctuations, the imposition of tariffs, quotas, shipping delays or difficulties, 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;

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

•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 or more of our significant retailers, ~~such as the bankruptcy of Toys“R”Us in the United States and Canada;~~

•~~the bankruptcy~~licensees 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;

•risks related to sourcing of products from countries outside of China, such as India and Vietnam, where the COVID-19 pandemic has negatively impacted our vendors and the ability to transport products to our markets;

•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, acquisitions 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;dispositions;

•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.

There were no share repurchases made in the first nine months of 2020. Following the Company’s acquisition of eOne, the Company suspended its share repurchase program while it prioritizes 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)

(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.

There were no share repurchases made in the second quarter of 2021. Following the Company’s acquisition of eOne, the Company suspended its share repurchase program while it prioritizes deleveraging. For further discussion related to the eOne Acquisition, see Note 3 to our consolidated financial statements, which are included in Part I, Item 1 of this Form 10-Q.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)

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*			~~Transitional Advisory Services~~Form of 2021 Stock Option Agreement ~~for John Frascotti.~~under the Hasbro, Inc. Restated 2003 Stock In centive Performance Plan.

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions of Dollars and Shares Except Per Share Data)


10.2*			Form of 2021 Stock Option Agreement under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for Brian Goldner.

10.3*			Form of 2021 Restricted Stock Unit Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan .

10.4*			Form of 2021 Restricted Stock Unit Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for Brian Goldner .

10.5*			Form of 2021 Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan.

10.6*			Form of 2021 Contingent Stock Performance Award under the Hasbro, Inc. Restated 2003 Stock Incentive Performance Plan for Brian Goldner.

10.7*			Form of 2021 Hasbro, Inc. Performance Rewards Program.

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 or compensatory plan, contract or arrangement

** Furnished herewith

Condensed Notes to Consolidated Financial Statements

(~~Thousands~~Millions 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.
			(Registrant)

Date: ~~November 4, 2020~~July 28, 2021			By: /s/ Deborah Thomas
			Deborah Thomas
			Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)


	Quarter 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, June 28, 2020	$	110,143	2,297,267	4,064,715	(308,128)	(3,559,990)	38,144	$	2,642,151	$	24,133

Net earnings attributable to Hasbro, Inc.	—		—	220,898	—	—	—	220,898		—
Net loss attributable to noncontrolling interests	—		—	—	—	—	(901)	(901)		(14)
Buyout of noncontrolling interest	—		606	—	—	—	—	606		—
Other comprehensive earnings	—		—	—	27,798	—	—	27,798		—
Stock-based compensation transactions	—		(325)	—	—	61	—	(264)		—

Stock-based compensation expense	—		13,885	0	—	0	—	13,885		—
Dividends declared	—		—	(93,179)	—	—	0	(93,179)		—
Distributions paid to noncontrolling owners and other foreign exchange	—		—	—	—	—	(2,563)	(2,563)		(1,243)
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	$	104,847	1,290,540	4,053,266	(173,175)	(3,559,609)	0	$	1,715,869	$	0
Net earnings	—		—	212,949	—	—	—	212,949		—


Other comprehensive loss	—		—	—	(12,201)	—	—	(12,201)		—
Stock-based compensation transactions	—		1,933	—	—	852	—	2,785		—
Purchases of common stock	—		—	—	—	(1,504)	—	(1,504)		—
Stock-based compensation expense	—		8,893	—	—	0	—	8,893		—
Dividends declared	—		—	(85,884)	—	—	—	(85,884)		—
Balance, September 29, 2019	$	104,847	1,301,366	4,180,331	(185,376)	(3,560,261)	0	$	1,840,907	$	0


	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


	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


	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


	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


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

First-look commitments	6.3		20.7	8.4	—	—	—	35.4
Operating lease commitments	23.6		36.0	11.2	10.1	8.8	22.8	112.5
	$	54.6	109.1	21.5	10.1	8.8	22.8	$	226.9