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~~March 29, ~~2019~~2020



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

Commission File Number 1-6682

__________________

HASBRO, INC.

(Exact name of registrant as specified in its charter)



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

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

(401) 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 18, 2019~~April 29,2020 was ~~126,253,142.~~137,011,347.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of Dollars Except Share Data)

(Unaudited)


	September 29, 2019			September 30, 2018		December 30, 2018		March 29, 2020			March 31, 2019		December 29, 2019
ASSETS
Current assets
Cash and cash equivalents	$	1,060,432		907,107		1,182,371
Accounts receivable, less allowance for doubtful accounts of $18,200 $96,000 and $9,100	1,416,879			1,391,242		1,188,052
Cash and cash equivalents including restricted cash of $86,177, $0 and $0								$	1,237,884		1,196,634		4,580,369
Accounts receivable, less allowance for doubtful accounts of $16,900 $12,100 and $17,200								963,823			638,417		1,410,597
Inventories	589,132			610,918		443,383		444,406			491,751		446,105
Prepaid expenses and other current assets	346,687			283,183		268,698		672,390			305,056		310,450
Total current assets	3,413,130			3,192,450		3,082,504		3,318,503			2,631,858		6,747,521
Property, plant and equipment, less accumulated depreciation of $496,700 $452,000 and $462,700	371,881			255,150		256,473
Property, plant and equipment, less accumulated depreciation of $513,200 $484,200 and $505,900								455,945			395,624		382,248
Other assets
Goodwill	485,042			572,387		485,881		3,572,650			485,528		494,584
Other intangible assets, net of accumulated amortization of $771,700 $924,700 and $721,700	658,350			732,235		693,842
Other intangible assets, net of accumulated amortization of $608,500 $747,800 and $895,200								1,615,778			682,063		646,305
Other	626,221			743,107		744,288		1,461,483			739,700		584,970
Total other assets	1,769,613			2,047,729		1,924,011		6,649,911			1,907,291		1,725,859
Total assets	$	5,554,624		5,495,329		5,262,988		$	10,424,359		4,934,773		8,855,628
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings	$	7,903		20,307		9,740		$	9,405		13,409		503
Current portion of long-term debt								64,441			—		—
Accounts payable	501,136			458,808		333,521		308,496			234,262		343,927
Accrued liabilities	957,696			842,808		931,063		1,356,214			701,054		912,652
Total current liabilities	1,466,735			1,321,923		1,274,324		1,738,556			948,725		1,257,082
Long-term debt	1,696,204			1,694,721		1,695,092		5,156,290			1,695,462		4,046,457
Other liabilities	550,778			591,404		539,086		738,965			636,055		556,559
Total liabilities	3,713,717			3,608,048		3,508,502		7,633,811			3,280,242		5,860,098
Redeemable noncontrolling interests								26,041			—		—
Shareholders' equity
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued	—			—		—		—			—		—
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 209,694,630 at September 29, 2019, September 30, 2018, and December 30, 2018	104,847			104,847		104,847
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 at March 29, 2020, 209,694,630 at March 31, 2019, and 220,286,736 at December 29, 2019								110,143			104,847		110,143
Additional paid-in capital	1,301,366			1,282,405		1,275,059		2,282,379			1,269,230		2,275,726
Retained earnings	4,180,331			4,254,919		4,184,374		4,191,810			4,125,686		4,354,619
Accumulated other comprehensive loss	(185,376		)	(296,738	)	(294,514	)	(294,772		)	(282,339	)	(184,220	)
Treasury stock, at cost; 83,442,005 shares at September 29, 2019; 82,979,119 shares at September 30, 2018; and 83,565,598 shares at December 30, 2018	(3,560,261		)	(3,458,152	)	(3,515,280	)
Treasury stock, at cost; 83,279,734 shares at March 29, 2020; 83,830,809 shares at March 31, 2019; and 83,424,129 shares at December 29, 2019								(3,560,336		)	(3,562,893	)	(3,560,738	)
Noncontrolling interests								35,283			—		—
Total shareholders' equity	1,840,907			1,887,281		1,754,486		2,764,507			1,654,531		2,995,530
Total liabilities and shareholders' equity	$	5,554,624		5,495,329		5,262,988
Total liabilities, noncontrolling interests and shareholders' equity								$	10,424,359		4,934,773		8,855,628

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Thousands of Dollars Except Per Share Data)

(Unaudited)


	Quarter Ended					Nine Months Ended					Quarter Ended
	September 29, 2019			September 30, 2018		September 29, 2019			September 30, 2018		March 29, 2020			March 31, 2019
Net revenues	$	1,575,173		1,569,686		$	3,292,220		3,190,485		$	1,105,570		732,510
Costs and expenses:
Cost of sales	627,119			655,597		1,230,800			1,249,090		262,694			259,987
Program cost amortization											132,146			6,575
Royalties	128,008			105,265		258,957			240,962		112,822			59,888
Product development	67,354			65,807		189,246			183,050		53,829			56,260
Advertising	140,256			134,384		309,659			290,001		101,641			76,604
Amortization of intangibles	11,814			8,841		35,445			19,873		36,811			11,816
Program production cost amortization	28,028			14,088		58,105			33,419
Selling, distribution and administration	275,384			272,368		748,338			853,585		279,128			225,253
Acquisition and related costs											149,782			—
Total costs and expenses	1,277,963			1,256,350		2,830,550			2,869,980		1,128,853			696,383
Operating profit	297,210			313,336		461,670			320,505
Operating profit (loss)											(23,283		)	36,127
Non-operating (income) expense:
Interest expense	22,764			22,779		67,096			68,391		54,725			22,314
Interest income	(5,485		)	(4,671	)	(19,164		)	(17,227	)	(4,667		)	(7,682	)
Other expense (income), net	20,185			(566	)	118,289			(6,189	)	(1,459		)	(8,100	)
Total non-operating expense, net	37,464			17,542		166,221			44,975		48,599			6,532
Earnings before income taxes	259,746			295,794		295,449			275,530
Income tax expense	46,797			31,933		42,340			63,862
Net earnings	$	212,949		263,861		$	253,109		211,668
Earnings (loss) before income taxes											(71,882		)	29,595
Income tax (benefit) expense											(4,072		)	2,868
Net earnings (loss)											(67,810		)	26,727
Net earnings attributable to noncontrolling interests											1,827			—
Net earnings (loss) attributable to Hasbro, Inc.											(69,637		)	26,727

Net earnings per common share:
Net earnings (loss) per common share:
Basic	$	1.68		2.08		$	2.00		1.68		$	(0.51	)	0.21
Diluted	$	1.67		2.06		$	1.99		1.67		$	(0.51	)	0.21
Cash dividends declared per common share	$	0.68		0.63		$	2.04		1.89		$	0.68		0.68

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings (Loss)

(Thousands of Dollars)

(Unaudited)

Quarter Ended Nine Months Ended
September 29,
2019 September 30,
2018 September 29,
2019 September 30,
2018
Net earnings $ 212,949
263,861
$ 253,109
211,668
Other comprehensive earnings:
Foreign currency translation adjustments (16,447 ) (6,762 ) (6,120 ) (44,560 )
Unrealized holding (losses) gains on available-for-sale securities, net of tax (155 ) (617 ) 400
(673 )
Net gains on cash flow hedging activities, net of tax 9,514
5,323
14,027
23,765
Changes in unrecognized pension amounts, net of tax —
—
19,589
(26,058 )
Reclassifications to earnings, net of tax:
Net (gains) losses on cash flow hedging activities (5,392 ) (1,672 ) (10,188 ) 5,318
Amortization of unrecognized pension and postretirement amounts 279
2,066
5,578
6,398
Settlement of U.S. defined benefit plan —
—
85,852
—
Total other comprehensive earnings (loss), net of tax (12,201 ) (1,662 ) 109,138
(35,810 )
Comprehensive earnings $ 200,748
262,199
$ 362,247
175,858



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

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Thousands of Dollars)

(Unaudited)


	Nine Months Ended					Three Months Ended
	September 29, 2019			September 30, 2018		March 29, 2020			March 31, 2019
Cash flows from operating activities:
Net earnings	$	253,109		211,668
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net earnings (loss)						$	(67,810	)	26,727
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation of plant and equipment	101,016			104,915		23,666			27,028
Amortization of intangibles	35,445			19,873		36,811			11,816
Program production cost amortization	58,105			33,419
Asset impairments						40,878			—
Program cost amortization						132,146			6,575
Deferred income taxes	(27,974		)	(7,189	)	(3,127		)	11,795
Stock-based compensation	24,787			35,823		10,651			5,285
Non-cash pension settlement	110,777			—
Other non-cash items	13,347			(12,124	)	8,418			(3,503	)
Change in operating assets and liabilities net of acquired balances:
Increase in accounts receivable	(236,010		)	(9,252	)
Decrease in accounts receivable						653,687			558,888
Increase in inventories	(154,476		)	(197,253	)	(13,933		)	(50,109	)
Decrease (increase) in prepaid expenses and other current assets	2,440			(52,005	)
Program production costs, net of tax rebates received	(43,857		)	(95,724	)
Increase in accounts payable and accrued liabilities	236,777			124,755
Change in net deemed repatriation tax	(14,550		)	18,074
Increase in prepaid expenses and other current assets						(22,965		)	(33,934	)
Program production costs, net						(168,043		)	(17,728	)
Decrease in accounts payable and accrued liabilities						(315,781		)	(273,955	)
Other	30,632			(234	)	(22,971		)	(4,391	)
Net cash provided by operating activities	389,568			174,746		291,627			264,494
Cash flows from investing activities:
Additions to property, plant and equipment	(90,800		)	(104,015	)	(30,833		)	(25,201	)
Acquisitions	—			(155,451	)
Acquisitions, net of cash acquired						(4,403,929		)	—
Other	4,340			8,587		4,271			(1,800	)
Net cash utilized by investing activities	(86,460		)	(250,879	)	(4,430,491		)	(27,001	)
Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months						1,017,689			—
Repayments of borrowings with maturity greater than three months						(50,186		)	—
Net repayments of other short-term borrowings	(1,425		)	(131,629	)	(1,424		)	3,419
Purchases of common stock	(60,137		)	(187,850	)	—			(47,479	)
Stock-based compensation transactions	29,737			28,827		1,830			2,335
Dividends paid	(250,760		)	(229,562	)	(93,162		)	(79,274	)
Payments related to tax withholding for share-based compensation	(13,061		)	(58,336	)	(5,307		)	(11,880	)
Redemption of equity instruments						(47,399		)	—
Deferred acquisition payments	(100,000		)	—		—			(87,500	)
Debt acquisition costs	(21,534		)	—
Net cash utilized by financing activities	(417,180		)	(578,550	)
Other						(2,572		)	—
Net cash provided (utilized) by financing activities						819,469			(220,379	)
Effect of exchange rate changes on cash	(7,867		)	(19,444	)	(23,090		)	(2,851	)
Decrease in cash and cash equivalents	(121,939		)	(674,127	)
Cash and cash equivalents at beginning of year	1,182,371			1,581,234
Cash and cash equivalents at end of period	$	1,060,432		907,107
(Decrease) increase in cash, cash equivalents and restricted cash						(3,342,485		)	14,263
Cash, cash equivalents and restricted cash at beginning of year						4,580,369			1,182,371
Cash, cash equivalents and restricted cash at end of period						$	1,237,884		1,196,634

Supplemental information
Cash paid during the period for:
Interest	$	69,601		69,603		$	13,479		28,576
Income taxes	$	64,917		87,704		$	19,915		13,019

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Noncontrolling Interests

(Thousands of Dollars)


Quarter Ended September 29, 2019
	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Shareholders' Equity			Quarter Ended March 29, 2020
Balance, June 30, 2019	$	104,847	1,290,540		4,053,266			(173,175		)	(3,559,609		)	$	1,715,869
																	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Shareholders' Equity			Redeemable Noncontrolling Interests
Balance, December 29, 2019																	$	110,143	2,275,726			4,354,619			(184,220		)	(3,560,738		)	—			$	2,995,530		$	—
Noncontrolling interests related to acquisition of Entertainment One Ltd.																	—		—			—			—			—			39,925			39,925			23,596
Net loss attributable to Hasbro, Inc.																	—		—			(69,637		)	—			—			—			(69,637		)	—
Net earnings (loss) attributable to noncontrolling interests																	—		—			—			—			—			(1,864		)	(1,864		)	37
Other comprehensive loss																	—		—			—			(110,552		)	—			—			(110,552		)	—
Stock-based compensation transactions																	—		(3,998		)	—			—			402			—			(3,596		)	—
Stock-based compensation expense																	—		10,651			—			—			—			—			10,651			—
Dividends declared																	—		—			(93,172		)	—			—			—			(93,172		)	—
Distributions paid to noncontrolling owners																	—		—			—			—			—			(2,778		)	(2,778		)	2,408
Balance, March 29, 2020																	$	110,143	$	2,282,379		$	4,191,810		$	(294,772	)	$	(3,560,336	)	$	35,283		$	2,764,507		$	26,041



																	Quarter Ended March 31, 2019
																	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Shareholders' Equity			Redeemable Noncontrolling Interests
Balance, December 30, 2018																	$	104,847	1,275,059			4,184,374			(294,514		)	(3,515,280		)	—			$	1,754,486		$	—
Net earnings	—		—		212,949			—			—			212,949			—		—			26,727			—			—			—			26,727			—
Other comprehensive loss	—		—		—			(12,201		)	—			(12,201		)
Other comprehensive earnings																	—		—			—			12,175			—			—			12,175			—
Stock-based compensation transactions	—		1,933		—			—			852			2,785			—		(11,114		)	—			—			1,569			—			(9,545		)	—
Purchases of common stock	—		—		—			—			(1,504		)	(1,504		)	—		—			—			—			(49,182		)	—			(49,182		)	—
Stock-based compensation expense	—		8,893		—			—			—			8,893			—		5,285			—			—			—			—			5,285			—
Dividends declared	—		—		(85,884		)	—			—			(85,884		)	—		—			(85,415		)	—			—			—			(85,415		)	—
Balance, September 29, 2019	$	104,847	1,301,366		4,180,331			(185,376		)	(3,560,261		)	$	1,840,907
Balance, March 31, 2019																	$	104,847	$	1,269,230		$	4,125,686		$	(282,339	)	$	(3,562,893	)	$	—		$	1,654,531		$	—

Quarter Ended September 30, 2018
	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Shareholders' Equity
Balance, July 1, 2018	104,847		1,263,657		4,070,661			(295,076		)	(3,377,339		)	1,766,750
Net earnings	—		—		263,861			—			—			263,861
Issuance of shares for Saban purchase	—		—		—			—			—			—
Other comprehensive loss	—		—		—			(1,662		)	—			(1,662		)
Stock-based compensation transactions	—		6,470		—			—			(1,358		)	5,112
Purchases of common stock	—		—		—			—			(79,455		)	(79,455		)
Stock-based compensation expense	—		12,278		—			—			—			12,278
Dividends declared	—		—		(79,603		)	—			—			(79,603		)
Balance, September 30, 2018	$	104,847	$	1,282,405	$	4,254,919		$	(296,738	)	$	(3,458,152	)	$	1,887,281

See accompanying condensed notes to consolidated financial statements.

~~HASBRO, INC. AND SUBSIDIARIES~~

~~Consolidated Statements of Shareholders' Equity~~

~~(Thousands of Dollars)~~

Nine Months Ended September 29, 2019

Common
Stock

Additional
Paid-in Capital

Retained
Earnings

Accumulated Other
Comprehensive
Loss

Treasury
Stock

Total
Shareholders'
Equity
Balance, December 30, 2018 $ 104,847
1,275,059
4,184,374
(294,514 ) (3,515,280 ) $ 1,754,486
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 ) $ 1,840,907

Nine Months Ended September 30, 2018

Common
Stock

Additional
Paid-in Capital

Retained
Earnings

Accumulated Other
Comprehensive
Loss

Treasury
Stock

Total
Shareholders'
Equity
Balance, December 31, 2017 104,847
1,050,605
4,260,222
(239,425 ) (3,346,292 ) 1,829,957
Net earnings —
—
211,668
—
—
211,668
Impact of adoption of ASU 2018-02 —
—
21,503
(21,503 ) —
—
Issuance of shares for Saban purchase —
198,853
—
—
81,544
280,397
Other comprehensive loss —
—
—
(35,810 ) —
(35,810 )
Stock-based compensation transactions —
(2,660 ) —
—
(1,272 ) (3,932 )
Purchases of common stock —
—
—
—
(192,348 ) (192,348 )
Stock-based compensation expense —
35,607
—
—
216
35,823
Dividends declared —
—
(238,474 ) —
—
(238,474 )
Balance, September 30, 2018 $ 104,847
$ 1,282,405
$ 4,254,919
$ (296,738 ) $ (3,458,152 ) $ 1,887,281

~~See accompanying condensed notes to consolidated financial statements.~~

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Thousands of Dollars and Shares Except Per Share Data)

(Unaudited)

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018,~~March 31, 2019, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates.

The quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018~~March 31, 2019 were each 13-week ~~periods. The nine month periods ended September 29, 2019 and September 30, 2018 were each 39-week~~ periods.

The results of operations for the quarter ~~and nine month periods~~ ended ~~September~~March 29, ~~2019~~2020 are not necessarily indicative of results to be expected for the full year, nor were those of the comparable ~~2018~~2019 period representative of those actually experienced for the full year ~~2018. Certain reclassifications~~2019.

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

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

Significant Accounting Policies

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

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 noncontrolling interests is presented in the consolidated balance sheets within total shareholders' equity. Earnings (losses) attributable to the redeemable noncontrolling interests and 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 noncontrolling interests acquired is listed below.



Name	Country of Incorporation	Proportion held		Principal activity
Astley Baker Davies Limited	England and Wales	70	%	Ownership of intellectual property
Whizz Kid Entertainment Limited	England and Wales	70	%	Production of television programs
MR Productions Holdings, LLC	United States	77	%	Film development
Renegade Entertainment, LLC	United States	65	%	Production of television programs
Round Room Live, LLC	United States	60	%	Production of live events

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 ~~made~~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 ~~prior year~~its investment in the production and concurrently records cash inflows within cash flows from financing activities from the production financing it normally obtains. Under these facilities, certain of the Company's cash is restricted while the financing is outstanding. At March 29, 2020, $86,177 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 ~~conform~~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 ~~period presentation.~~portion of MGs are recorded as Payables and Accrued Liabilities and the long-term portion are recorded as Other Liabilities.

These ~~condensed~~ 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 ~~30, 2018~~29, 2019 in its Annual Report on Form 10-K ("~~2018~~2019 Form 10-K"), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein.

Recently Adopted Accounting Standards

The Company's significant accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its ~~2018~~2019 Form 10-K with the exception of the accounting policies ~~related to leases and derivatives and hedging.~~disclosed above.

In ~~February~~June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ~~2016-02~~No. 2016-13 (ASU ~~2016-02),~~ ~~Leases~~2016-13) Financial Instruments - Credit Losses (Topic ~~842), which~~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 lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The liability is based on the present value of lease payments and the asset is based on the liability. For income statement purposes, a dual model was retained requiring leases to be either classified as operating or finance. Operating leases result in straight-line expense while finance leases result in a front-loaded expense pattern. Certain other quantitative and qualitative disclosures are also required. ASU 2016-02 was required for public companies for fiscal years beginning after December 15, 2018. ASU 2016-02 as originally issued required modified retrospective adoption. In July 2018, the FASB issued ASU 2018-11, which provides an alternative transition method in addition to the existing method by allowing entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASU-2016-02 on December 31, 2018 using the retrospective basis as provided in ASU 2018-11. No cumulative effect was recorded to retained earnings. The Company also elected certain practical expedients as provided under the standard. These included (i) the election not to reassess whether contracts existing at the adoption date contain a lease under the new definitionconsideration of a ~~lease under the standard; (ii) the election not~~broader range of reasonable and supportable information to reassess the lease classification for existing leases as of the adoption date; (iii) the election not to reassess whether previously capitalized initial direct costs would qualify for capitalization under the standard; (iv) the election to use hindsight in determining the relevant lease terms for use in the capitalization of the lease liability; and (v) the election to use hindsight in reviewing the right-of-use assets for impairment. For all leases, the terms were evaluated, including extension and renewal options as well as the lease payments associated with the leases. As a result of the adoption of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $121,230 and lease liabilities of $139,520. The Company’s results of operations were not impacted by this standard. The adoption of this standard did not have an impact on the Company’s cash flows. For further details, see Note 10.

~~In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12),~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the underlying hedged item in the financial statements. The impact of the standard includes elimination of the requirement to separately measure and recognize hedge ineffectiveness and requires the presentation of fair value adjustments to hedging instruments to be included in the same income statement line as the hedged item.inform credit loss estimates. For public companies, this standard is effective for annual reporting periods beginning after December 15, ~~2018,~~2019, and early adoption iswas permitted. The Company adopted ~~ASU 2017-12~~the standard in the first quarter of ~~2019~~2020 and the adoption of ~~this~~the standard did not have a material impact on ~~the Company’s results or~~its consolidated financial statements.

~~Recently Issued~~In August 2018, the FASB issued Accounting ~~Pronouncements~~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~~Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and ~~Entertainment—Broadcasters—Intangibles—Goodwill~~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 iswas permitted. The Company ~~expects to adopt~~adopted the standard atin the ~~start~~first quarter of ~~fiscal year~~ 2020 and ~~is currently evaluating~~the adoption of the standard ~~and the~~did not have a material impact ~~if any, to~~on its consolidated financial statements.

~~Recent Events~~Recently Issued Accounting Pronouncements

OnIn August ~~22, 2019,~~2018, the Company and Entertainment One Ltd. ("eOne") entered into a definitive agreement under which the Company will acquire all of the outstanding shares of stock of eOne in an all-cash transaction valued at approximately ~~£3,300,000~~, or $4,000,000 based on exchange rates on the agreement date. Under the terms of the agreement, eOne shareholders will receive £5.60 in cash for each common share of eOne. The Company hedged a portion of its exposure to fluctuations in the British pound sterling in relationFASB 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 ~~acquisition purchase price using a series of both foreign exchange forward~~Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and ~~option contracts. These contracts do~~early adoption is permitted. The standard relates to financial statement disclosure only and will not ~~qualify for hedge accounting and as such, were marked to market through the Company's Consolidated Statement of Operations. The Company recorded after-tax losses of $25,533~~have an impact on ~~these instruments to other (income) expense, net for the quarter and nine month periods ended September 29, 2019. See Note 9, Derivative Financial Instruments for further details.~~

The Company expects to finance the transaction with a combination of debt and equity financing. On August 22, 2019, the Company entered into a debt commitment letter with Bank of America, N.A. ("BofA") and BofA Securities Inc., pursuant to which BofA (and certain of its affiliates) committed to provide a 364-day senior unsecured bridge loan facility in an aggregate principal amount of up to ~~£3,600,000~~ ~~to provide funding of the purchase price. Costs associated with the Bridge Facility in the amount of approximately~~ ~~$19,000~~ ~~are being capitalized and are included in prepaid expenses and other current assets in~~ the Company's consolidated ~~balance sheets. In addition, on September 20, 2019, the Company entered into a Term Loan Agreement (the "Term Loan Agreement") with Bank~~statement of ~~America, N.A., as administrative agent~~financial position, statements of operations and ~~certain financial institutions, as lenders, pursuant to which such lenders committed to provide, contingent upon the completion~~comprehensive earnings (loss) or statement of the 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 (the "Three-Year Tranche") and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of $600,000 (the "Five-Year Tranche" and, together with the Three-Year Tranche, the "Term Loan Facilities"). Borrowings under the Term Loan Facilities will be used to pay a portion of the cash ~~consideration and other amounts payable in connection with the Company’s acquisition of eOne.~~

The transaction, which is structured as a statutory plan of arrangement under the Canada Business Corporations Act, remains subject to receipt of certain regulatory approvals and other customary closing conditions. The transaction has received approval by eOne’s shareholders as well early termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act in the U.S. and antitrust approval in Germany. On October 17, 2019 the shareholders of eOne approved the transaction. The transaction is expected to close during the fourth quarter of 2019.

During the third quarter of 2019, the Company also entered into a second amended and restated revolving credit agreement with BofA, as administrative agent, swing line lender and a letter of credit issuer and certain other financial institutions, as lenders thereto (the "Revolving Credit Agreement"), which provides the Company with commitments having a maximum aggregate principal amount of ~~$1,500,000, comprised of (1)~~ ~~$1,100,000~~ ~~of commitments effective as of September 20, 2019,~~

~~and (2)~~ ~~$400,000~~ of commitments that may become effective upon completion of the acquisition of eOne. The 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 Revolving Credit Agreement also provides for a potential additional incremental commitment increase of up to ~~$500,000~~ ~~subject to agreement of the lenders. Prior to the September 2019 amendment, the Revolving Credit Agreement provided for a~~ ~~$1,100,000~~ revolving credit facility. The Company was in compliance with all covenants as of and for the quarter ended September 29, 2019. The Company had 0 borrowings outstanding under its committed revolving credit facility as of September 29, 2019.flows.

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

Contract Assets and Liabilities

Within our Entertainment, Licensing and Digital segment and our eOne segment the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied. In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues. The Company defers revenues on these advanced payments until its performance obligation is ~~satisfied. The~~satisfied and records the aggregate deferred revenues ~~are recorded~~ as liabilities and were $46,768, $43,653, and $50,759 as of September 29, 2019, September 30, 2018, and December 30, 2018, respectively, and the changes in deferred revenues are not material to the Company’s consolidated statements of operations for the nine months ended September 29, 2019 and September 30, 2018, respectively.liabilities. The Company records contract assets in the case of minimum guarantees that are being recognized ratably over the term of the respective license ~~periods. At September 29, 2019, September 30, 2018~~periods which varies based on sales over and ~~December 30, 2018, these~~above the contracts’ minimum guarantee. The current portion of contract assets were ~~$48,357, $33,167~~recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion were recorded as Other Long-Term Assets.

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



	March 29, 2020		March 31, 2019
Assets
Contract assets - current	$	271,120	23,857
Contract assets - long term	87,496		3,434
Total	$	358,616	27,291
Liabilities
Contract liabilities	184,064		47,678
Total	$	184,064	47,678

~~$18,166~~
~~, respectively,~~

In connection with the Company’s acquisition of eOne, the Company acquired $291,427 of contract assets, of which ~~$34,033~~, ~~$28,477~~ ~~and~~ ~~$12,895, respectively,~~$234,532 were recorded in Prepaid Expenses and Other Current Assets and ~~$14,324~~, ~~$4,690~~ ~~and~~ ~~$5,271, respectively,~~$56,895 were recorded in Other Long-term Assets, within the Company’s consolidated balances sheets. In addition, the Company acquired deferred revenues from eOne in the amount of $189,654 which were recorded in Accrued Liabilities within the Company's consolidated balance sheets. In the first quarter of 2020, the Company recognized revenues of $80,652 related to these liabilities.

Contract assets and liabilities acquired from eOne represent approximately 87% and 79% of total contract asset balances and total contract liability balances, respectively, as ~~Other Long-Term Assets.~~of March 29, 2020.

Disaggregation of revenues

The Company disaggregates its revenues from contracts with customers by segment: U.S. and Canada, International, Entertainment, Licensing and Digital, and ~~Global Operations.~~eOne. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into 45 brand categories: Franchise brands, Partner brands, Hasbro gaming, Emerging brands, and ~~Emerging brands.~~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 ~~11,~~12, Segment Reporting, for further information.

(3) Business Combination

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

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

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

outstanding under eOne's revolving credit facility, which together represent 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 on the date of closing. See Note 6 for further discussion of the issuance of the senior unsecured notes and term loan agreement.

The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”). Pursuant to Topic 805, the Company allocated the eOne purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 30, 2019. The excess of the purchase price over those fair values was recorded to goodwill. The Company's evaluations of the facts and circumstances available as of December 30, 2019, to assign fair values to assets acquired and liabilities assumed, including income tax related amounts, are ongoing. As we complete further analysis of assets including program rights, investment in films and television content, intangible assets, as well as deferred revenue, noncontrolling interest, tax and certain other liabilities, additional information on the assets acquired and liabilities assumed 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.

The following table summarizes our preliminary allocation of the December 30, 2019 eOne purchase price (in thousands of dollars):



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

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 acquiredwas determined based on the estimated future cash flows to be generated from the acquired assets, considering assumptions related to contract renewal rates and estimated brand franchise revenue growth.

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

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

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

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

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

Changes in the carrying amount of goodwill, by operating segment, for the three months ended March 29, 2020 is as follows:



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

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

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



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

In the first quarter of 2020, the Company incurred $149,782 of charges related to the eOne Acquisition, which are recorded in acquisition and related charges within the Company’s Consolidated Statement of Operations. Included within the eOne results above were $77,729 of acquisition and related charges. The remaining charges were included in Corporate and Eliminations.

The acquisition and related costs of $149,782 consist of the following:

Acquisition and integration costs of $95,718, including $47,339 of expense associated with the acceleration of eOne stock-based compensation and $38,168 of advisor fees settled at the closing of the acquisition, as well as integration costs; and

Restructuring and related costs of $54,064, including severance and retention costs of $13,186, as well as $40,878 in impairment charges for certain definite-lived intangible and production assets. The impairment charges of $40,878 were driven by the change in strategy for the combined company’s entertainment assets.

Pursuant to Topic 805, unaudited supplemental pro forma results of operations for the three months ended March 31, 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):



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

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

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

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

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

additional amortization expense of $12,480 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 as a result of incurring new debt and extinguishing historical eOne debt; and

the income tax effect of the pro forma adjustments in the amount of $6,570, 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 new debt interest.

(4) Earnings (Loss) Per Share

Net earnings per share data for the quarters ended March 29, 2020 and ~~nine months ended September 29,~~March 31, 2019 ~~and September 30, 2018~~ were computed as follows:


	2019			2018		2020					2019
Quarter	Basic		Diluted	Basic	Diluted	Basic			Diluted		Basic	Diluted
Net earnings	$	212,949	212,949	263,861	263,861
Net earnings (loss) attributable to Hasbro, Inc.						$	(69,637	)	(69,637	)	26,727	26,727

Average shares outstanding	126,453		126,453	127,161	127,161	137,147			137,147		126,287	126,287
Effect of dilutive securities:
Options and other share-based awards	—		751	—	731	—			—		—	529
Equivalent Shares	126,453		127,204	127,161	127,892	137,147			137,147		126,287	126,816

Net earnings per common share	$	1.68	1.67	2.08	2.06
Net earnings (loss) attributable to Hasbro, Inc. per common share						$	(0.51	)	(0.51	)	0.21	0.21

2019 2018
Nine Months Basic Diluted Basic Diluted
Net earnings $ 253,109
253,109
211,668
211,668

Average shares outstanding 126,356
126,356
125,982
125,982
Effect of dilutive securities:
Options and other share-based awards —
600
—
792
Equivalent Shares 126,356
126,956
125,982
126,774

Net earnings per common share $ 2.00
1.99
1.68
1.67

For the ~~quarter~~quarters ended ~~September 30, 2018,~~March 29, 2020 and March 31, 2019, options and restricted stock units totaling ~~949 shares~~4,055 and 1,693, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. ~~For~~Of the quarter ended September 29, 2019, 0 options or restricted stock units were anti-dilutive. For the nine month periods ended September 29, 2019 and September 30, 2018, options and restricted stock units totaling 1,088 and 1,1242020 amount, 1,151 shares ~~respectively, were excluded from~~would have been included in the calculation of diluted shares had the Company not had a net loss in the first quarter of 2020. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 372 shares being included in the diluted earnings per share ~~because to include them would have been antidilutive.~~calculation for the quarter ended March 29, 2020.

~~(4)~~(5) Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss). The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the ~~quarter~~quarters ended March 29, 2020 and ~~nine month periods ended September 29, 2019 and September 30, 2018.~~March 31, 2019.


	Quarter Ended					Nine Months Ended				Quarter Ended
	September 29, 2019			September 30, 2018		September 29, 2019		September 30, 2018		March 29, 2020			March 31, 2019

Other comprehensive earnings (loss), tax effect:
Tax benefit (expense) on unrealized holding gains (losses)	$	46		179		(116	)	195		$	118		(77	)
Tax (expense) benefit on cash flow hedging activities	(570		)	(73	)	(524	)	238
Tax (expense) benefit on changes in unrecognized pension amounts	—			—		(5,687	)	7,565
Tax expense on cash flow hedging activities										(7,203		)	(3	)
Reclassifications to earnings, tax effect:
Tax expense on cash flow hedging activities	703			1,015		1,237		107		267			346
Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations	(80		)	(600	)	(1,619	)	(1,857	)	(80		)	(331	)
Tax benefit on settlement of U.S defined benefit plan	—			—		(24,925	)	—
Total tax effect on other comprehensive earnings (loss)	$	99		521		(31,634	)	6,248		$	(6,898	)	(65	)

Changes in the components of accumulated other comprehensive earnings (loss) for the ~~nine~~three months ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018~~March 31, 2019 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
2019
Balance at December 30, 2018 $ (143,134 ) 1,549
(744 ) (152,185 ) (294,514 )
Current period other comprehensive earnings (loss) 111,019
3,839
400
(6,120 ) 109,138
Balance at September 29, 2019 $ (32,115 ) 5,388
(344 ) (158,305 ) (185,376 )

2018
Balance at December 31, 2017 $ (110,971 ) (32,827 ) 1,034
(96,661 ) (239,425 )
Adoption of ASU 2018-02 (18,065 ) (3,660 ) 222
—
(21,503 )
Current period other comprehensive earnings (loss) (19,660 ) 29,083
(673 ) (44,560 ) (35,810 )
Balance at September 30, 2018 $ (148,696 ) (7,404 ) 583
(141,221 ) (296,738 )



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

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

Gains (Losses) on Derivative Instruments

At ~~September~~March 29, ~~2019,~~2020, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of ~~$23,654~~$33,687 in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the ~~third~~first quarter of ~~2019~~2020 or forecasted to be purchased during the remainder of ~~2019~~2020 through 2022, intercompany expenses expected to be paid or received during ~~2019,~~2020, television and movie production costs paid in ~~2019,~~2020, and cash receipts for sales made at the end of the ~~third~~first quarter of ~~2019~~2020 or forecasted to be made in the remainder of ~~2019~~2020 and, to a lesser extent, ~~2020~~2021 through ~~2021.~~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.

In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the long-term 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~~March 29, ~~2019,~~2020, deferred losses, net of tax of ~~$18,266~~$17,568 related to these instruments remained in AOCE. For the quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018,~~March 31, 2019, previously deferred losses of $450, ~~were reclassified from AOCE to net earnings. For the nine month periods ended September 29, 2019 and September 30, 2018, previously deferred losses of $1,349~~ were reclassified from AOCE to net earnings.

Of the amount included in AOCE at ~~September~~March 29, ~~2019,~~2020, the Company expects net gains of approximately ~~$18,471~~$24,085 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.

~~(5)~~(6) 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~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018~~29, 2019 also include certain assets and liabilities measured at fair value (see Notes 79 and 9)10) 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~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018~~29, 2019 are as follows:


	September 29, 2019			September 30, 2018		December 30, 2018		March 29, 2020			March 31, 2019		December 29, 2019
	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								$	900,000	774,540	—	—	900,000	893,430
3.55% Notes Due 2026								675,000		641,588	—	—	675,000	680,670
3.00% Notes Due 2024								500,000		480,600	—	—	500,000	502,150
6.35% Notes Due 2040	$	500,000	587,850	500,000	546,450	500,000	535,000	500,000		498,200	500,000	548,200	500,000	581,600
3.50% Notes Due 2027	500,000		511,200	500,000	466,350	500,000	457,350	500,000		465,400	500,000	479,450	500,000	500,550
2.60% Notes Due 2022								300,000		295,320	—	—	300,000	300,960
5.10% Notes Due 2044	300,000		310,080	300,000	285,390	300,000	272,640	300,000		251,670	300,000	285,990	300,000	301,980
3.15% Notes Due 2021	300,000		303,300	300,000	297,720	300,000	297,600	300,000		299,880	300,000	301,440	300,000	303,900
6.60% Debentures Due 2028	109,895		133,555	109,895	124,698	109,895	123,346	109,895		122,643	109,895	129,445	109,895	130,610
Variable % Notes Due December 30, 2022								400,000		400,000	—	—	—	—
Variable % Notes Due December 30, 2024								600,000		600,000	—	—	—	—
Production Financing Facilities								175,572		175,572	—	—	—	—
Total long-term debt	$	1,709,895	1,845,985	1,709,895	1,720,608	1,709,895	1,685,936	$	5,260,467	5,005,413	1,709,895	1,744,525	4,084,895	4,195,850
Less: Deferred debt expenses	13,691		—	15,174	—	14,803	—	39,736		—	14,433	—	38,438	—
Less: Current portion								64,441		—	—	—	—	—
Long-term debt	$	1,696,204	1,845,985	1,694,721	1,720,608	1,695,092	1,685,936	$	5,156,290	5,005,413	1,695,462	1,744,525	4,046,457	4,195,850

In November of 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2,375,000 of senior unsecured debt securities (the "Notes") consisting of the following tranches: $300,000 of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, $500,000 of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, $675,000 of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55% and $900,000 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 of underwriting discount and fees, totaled $2,354,957. 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 an accrued and unpaid interest.

Of the Company’s long-term borrowings, the $300,000 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 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 $400,000 (the

“Three-Year Tranche”) and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of $600,000 (the “Five-Year Tranche” and together with the Three-Year Tranche, the “Term Loan Facilities”). Loans under the Term Loan Facilities will bear interest at the Company’s option, at either the Eurocurrency Rate or the Base Rate, in each case plus a per annum applicable rate that fluctuates (1) in the case of the Three-Year Tranche, between 87.5 basis points and 175.0 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 75.0 basis points, in the case of loans priced at the Base Rate, and (2) in the case of the Five-Year Tranche, between 100.0 basis points and 187.5 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Base Rate, in each case, based upon the non-credit enhanced, senior unsecured long-term debt ratings of the Company by Fitch Ratings Inc., Moody’s Investor Service, Inc. and S&P Global Rankings, subject to certain provisions taking into account potential differences in ratings issued to the relevant rating agencies or a lack of ratings issued by such rating agencies. Loans under the Five-Year Tranche will require principal amortization payments that will be 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. As of March 29, 2020, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.

The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 79 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 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.

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.



	Quarter Ended
	March 29, 2020
Production financing held by production subsidiaries	$	175,572
Other loans	9,405
Total	$	184,977

Production financing shown in the consolidated balance sheet as:
Non-current	$	141,131
Current	34,441
Total	$	175,572

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 March 29, 2020 was 4.1%.

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 March 29, 2020	$	73,485	111,492	184,977

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



	Production Financing			Other Loans		Total
December 30, 2019	$	209,651		9,102		$	218,753
Drawdowns	20,511			7,996		28,507
Repayments	(50,186		)	(8,916	)	(59,102		)
Foreign exchange differences	(4,404		)	1,223		(3,181		)
Balance at March 29, 2020	$	175,572		9,405		184,977

~~(6)~~(7)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 valued at $722,834 as of March 29, 2020 which was recorded in other assets within the Company's consolidated balance sheets.

Investments in productions and investments in acquired content rights are recorded in the 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 and any portion of the unamortized amount that appears not to be recoverable from future net revenues will be 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 March 29, 2020:



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

Total program costs	$	722,834

The Company recorded $123,383 of program cost amortization related to the above programming in the quarter ended March 29, 2020, consisting of the following:



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

(8) 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.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act made broad and complex changes to the U.S. tax code including, but not limited to, reducing the U.S. federal corporateOur effective tax rate ~~and requiring a one-time tax on certain unrepatriated earnings of foreign subsidiaries.~~

~~On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") established a one-year measurement period to complete the accounting~~(ETR) from continuing operations was 5.7% for the ~~ASC 740 income tax effects of~~quarter ended March 29, 2020 and 9.7% for the ~~Tax Act. An entity recognizes~~quarter ended March 31, 2019.

The following items caused the ~~impact of those amounts for which~~quarterly ETR to be significantly different from our historical annual ETR:

during the accounting is complete. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company has completed its analysis based on legislative updates relating to the Tax Act.

~~As a result,~~quarter ended March 29, 2020, the Company recorded a discrete tax expense of $47,800 in the first quarter of 2018 which reversed certain discrete benefits recorded in 2017 as well as increased our provisional deemed repatriation tax liability. In the third quarter of 2018, the estimate was further revised based on additional guidance and a one-timenet tax benefit of ~~$17,336~~ ~~was recorded.~~

~~For~~$20,081, of which $22,332 is a result of the ~~nine months ended September 29, 2019, the Company recorded a discrete tax benefit of $24,925~~eOne acquisition and related costs incurred. Additionally, our estimated annual ETR increased to 20.6% from 18.5% as a result of the ~~charge incurred from the settlement of its U.S. defined benefit pension plan liability~~eOne acquisition during the ~~second~~first quarter of 2020, and a change in the mix of forecasted income by jurisdiction.

during the quarter ended March 31, 2019, we recorded a discrete net tax benefit of $2,607 primarily associated with the decrease to our liability for uncertain tax positions that resulted from statute of limitations expiring in certain jurisdictions.

In May 2019, a public referendum held in Switzerland approved Swiss Federal Act on Tax Reform and AHV Financing (TRAF) proposals previously approved by 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 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. We will continue to review TRAF as the Swiss authorities provide additional interpretive guidance on the new law and related transitional methodology.

The Company is no longer subject to U.S. federal income tax examinations for years before 2013. With few exceptions, the Company is no longer subject to U.S. state or local and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before 2012. The Company is currently under income tax examination in several U.S. state and local and non-U.S. jurisdictions.

~~(7)~~(9) Fair Value of Financial Instruments

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

Accounting standards permit entities to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar assets and liabilities. The Company has elected the fair value option for certain available-for-sale investments. At ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, these investments totaled ~~$24,916, $24,201~~$24,804, $24,188 and ~~$23,913,~~$25,518, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net (losses) gains of ~~$566~~$(431) and ~~$1,293~~$550 on these investments in other (income) expense, net for the ~~quarter~~quarters ended March 29, 2020 and ~~nine months ended September 29,~~March 31, 2019, respectively, related to the change in fair value of such instruments. For the quarter and nine month periods ended September 30, 2018, the Company recorded net (losses) gains of $(10) and $96, respectively, in other (income) expense, net, related to the change in fair value of such instruments.

At ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, 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 29, 2019
March 29, 2020
Assets:
Available-for-sale securities	$	1,148	1,148	—	—	$	768	768	—	—
Derivatives	54,030		—	54,030	—	46,781		—	46,781	—
Total assets	$	55,178	1,148	54,030	—	$	47,549	768	46,781	—

Liabilities:
Derivatives	$	11,508	—	11,508	—	$	13,131	—	13,131	—
Option agreement	22,196		—	—	22,196	20,836		—	—	20,836
Total liabilities	$	33,704	—	11,508	22,196	$	33,967	—	13,131	20,836

September 30, 2018
March 31, 2019
Assets:
Available-for-sale securities	$	2,346	2,346	—	—	$	975	975	—	—
Derivatives	20,079		—	20,079	—	32,296		—	32,296	—
Total assets	$	22,425	2,346	20,079	—	$	33,271	975	32,296	—

Liabilities:
Derivatives	$	2,113	—	2,113	—	$	45	—	45	—
Option agreement	23,460		—	—	23,460	23,144		—	—	23,144
Total liabilities	$	25,573	—	2,113	23,460	$	23,189	—	45	23,144

December 30, 2018
December 29, 2019
Assets:
Available-for-sale securities	$	914	914	—	—	$	1,296	1,296	—	—
Derivatives	26,076		—	26,076	—	48,973		—	48,973	—
Total assets	$	26,990	914	26,076	—	$	50,269	1,296	48,973	—

Liabilities:
Derivatives	$	1,610	—	1,610	—	$	5,733	—	5,733	—
Option agreement	23,440		—	—	23,440	22,145		—	—	22,145
Total Liabilities	$	25,050	—	1,610	23,440	$	27,878	—	5,733	22,145

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

The Company's derivatives consist of foreign currency forward and option contracts and zero-cost collar options. The Company used 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~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, and is valued using an option pricing model based on the fair value of the related investment. Inputs used in the option pricing model include the volatility and fair value of the underlying company which are considered unobservable inputs as they reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best

~~is the best~~ information available for use in the fair value measurement. There were no changes in these valuation techniques during the ~~nine~~three month period ended ~~September~~March 29, ~~2019.~~2020.

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):


	2019			2018		2020			2019
Balance at beginning of year	$	(23,440	)	(23,980	)	$	(22,145	)	(23,440	)
Gain from change in fair value	1,244			520		1,309			296
Balance at end of third quarter	$	(22,196	)	(23,460	)
Balance at end of first quarter						$	(20,836	)	(23,144	)

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~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, these investments had fair values of ~~$24,916, $24,201~~$24,804, $24,188 and ~~$23,913,~~$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.

~~(8)Pension and Postretirement Benefits~~

In February 2018, the Compensation Committee of the Company's Board of Directors approved a resolution to terminate the Company's U.S. defined benefit pension plan ("U.S. Pension Plan"). During the first quarter of 2018 the Company commenced the U.S. Pension Plan termination process and received regulatory approval during the fourth quarter of 2018. During the second quarter of 2019, the Company settled all remaining benefits directly with vested participants electing a lump sum payout, and purchased a group annuity contract from Massachusetts Mutual Life Insurance Company to administer all future payments to remaining U.S. Pension Plan participants. The U.S. Pension Plan's net funded asset position was sufficient to cover the lump sum payments and the purchase of the group annuity contract and settle all other remaining benefit obligations with no additional cost to the Company. After the settlement of the benefit obligations and payment of expenses, the Company had excess assets in the U.S. Pension Plan of approximately $19,000. The Company elected to utilize the remaining surplus after payment of administrative expenses for the Company's future matching contributions under the Company's 401(k) plan. Upon settlement of the pension liability, which occurred in May 2019, the Company recognized a non-operating settlement charge of $110,777 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's consolidated statements of operations, adjusted for market conditions and settlement costs at benefit distribution.

~~As of September 29, 2019, the Company had unrecognized losses related to its remaining pension and postretirement plans of $32,115.~~

The components of the net periodic cost of the Company's terminated U.S. Pension Plan, remaining defined benefit pension plan and other postretirement plans for the quarters and nine months ended September 29, 2019 and September 30, 2018 are as follows:

Quarter Ended
Pension Postretirement
September 29,
2019 September 30,
2018 September 29,
2019 September 30,
2018
Service cost $ 325
678
311
189
Interest cost 821
3,997
316
292
Expected return on assets (476 ) (5,190 ) —
—
Settlement —
—
—
—
Net amortization and deferrals 598
2,971
5
42
Net periodic benefit cost $ 1,268
2,456
632
523

Nine Months Ended
Pension Postretirement
September 29,
2019 September 30,
2018 September 29,
2019 September 30,
2018
Service cost 2,170
2,030
667
566
Interest cost 7,939
11,993
948
877
Expected return on assets (7,642 ) (15,569 ) —
—
Settlement 110,777
—
—
—
Net amortization and deferrals 7,906
8,913
15
127
Net periodic benefit cost 121,150
7,367
1,630
1,570

During the nine months ended September 29, 2019, the Company made cash contributions of $1,880 to its remaining defined benefit pension plans. During fiscal 2019, the Company expects to make cash contributions to its remaining defined benefit pension plans of approximately $2,100 in the aggregate.

~~(9)~~(10) 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 6) 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 ~~2019~~2020 through 2022.

At ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, the notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:


	September 29, 2019				September 30, 2018			December 30, 2018			March 29, 2020			March 31, 2019		December 29, 2019
Hedged transaction	Notional Amount		Fair Value		Notional Amount	Fair Value		Notional Amount	Fair Value		Notional Amount		Fair Value	Notional Amount	Fair Value	Notional Amount	Fair Value
Inventory purchases	$	420,839	24,462		555,661	6,827		468,305	15,089		$	343,227	32,186	486,999	21,649	398,800	8,727
Sales	212,062		7,231		319,421	13,027		298,194	11,232		101,120		4,761	263,221	8,358	124,920	4,037
Royalties and Other	16,935		(137	)	117,534	(2,420	)	26,341	(304	)
Production financing and other											161,303		6,687	26,422	190	19,499	140
Total	$	649,836	31,556		992,616	17,434		792,840	26,017		$	605,650	43,634	776,642	30,197	543,219	12,904

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~~March 29, 2020, March 31, 2019 and December 29, 2019 ~~September 30, 2018 and December 30, 2018~~ as follows:


	September 29, 2019			September 30, 2018		December 30, 2018		March 29, 2020			March 31, 2019		December 29, 2019
Prepaid expenses and other current assets
Unrealized gains	$	22,529		15,414		21,718		$	40,376		22,737		12,133
Unrealized losses	(1,333		)	(4,079	)	(972	)	(1,893		)	(2,008	)	(3,955	)
Net unrealized gains	$	21,196		11,335		20,746		$	38,483		20,729		8,178

Other assets
Unrealized gains	$	10,609		9,591		6,173		$	7,128		9,752		6,652
Unrealized losses	(249		)	(1,455	)	(843	)	—			(239	)	—
Net unrealized gains	$	10,360		8,136		5,330		$	7,128		9,513		6,652

Accrued liabilities
Unrealized gains	$	—		596		77		$	—		—		293
Unrealized losses	—			(1,182	)	(136	)	(1,974		)	(45	)	(2,219	)
Net unrealized losses	$	—		(586	)	(59	)	$	(1,974	)	(45	)	(1,926	)

Other liabilities
Unrealized gains	$	—		1,035		—		$	—		—		—
Unrealized losses	—			(2,486	)	—		(3		)	—		—
Net unrealized losses	$	—		(1,451	)	—		$	(3	)	—		—

Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings for the quarters ended March 29, 2020 and ~~nine months ended September 29,~~March 31, 2019 ~~and September 30, 2018~~ as follows:


	Quarter Ended					Nine Months Ended			Quarter Ended
	September 29, 2019			September 30, 2018		September 29, 2019	September 30, 2018		March 29, 2020		March 31, 2019
Statements of Operations Classification
Cost of sales	$	4,678		3,358		9,278	(1,483	)	$	3,957	2,614
Net revenues	1,889			1,328		3,366	2,090		343		878
Other	(23		)	(17	)	129	(101	)	81		118
Net realized gains	$	6,544		4,669		12,773	506		$	4,381	3,610

Undesignated Hedges

~~Intercompany Loans~~

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. 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. As of ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018~~29, 2019 the total notional amounts of the Company's undesignated derivative instruments were ~~$308,867, $311,331~~$238,187, $293,326 and ~~$452,773,~~$307,351, respectively.

At ~~September~~March 29, 2020, March 31, 2019 ~~September 30, 2018~~ and December ~~30, 2018,~~29, 2019, the fair values of the Company's undesignated derivative financial instruments were recorded in the consolidated balance sheets as follows:


	September 29, 2019			September 30, 2018		December 30, 2018		March 29, 2020			March 31, 2019		December 29, 2019
Prepaid expenses and other current assets
Unrealized gains	$	2,630		2,060		—		$	1,170		2,391		—
Unrealized losses	(301		)	(1,452	)	—		—			(337	)	—
Net unrealized gains	$	2,329		608		—		$	1,170		2,054		—

Accrued liabilities
Unrealized gains	$	164		12		1,269		$	1,252		—		13
Unrealized losses	(203		)	(33	)	(2,820	)	(12,406		)	—		(3,820	)
Net unrealized losses	$	(39	)	(21	)	(1,551	)	$	(11,154	)	—		(3,807	)

Other liabilities
Unrealized gains	—			30		—
Unrealized losses	—			(85	)	—
Net unrealized losses	—			(55	)	—

Total unrealized (losses) gains, net	$	2,290		532		(1,551	)	$	(9,984	)	2,054		(3,807	)

The Company recorded net gains of ~~$10,121~~$2,499 and ~~$16,705~~$4,809 on these instruments to other (income) expense, net for the ~~quarter~~quarters ended March 29, 2020 and ~~nine month periods ended September 29,~~March 31, 2019, ~~respectively, and net gains of $5,030 and $8,781 on these instruments to other (income) expense, net for the quarter and nine month periods ended September 30, 2018,~~ 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

~~As described in Note 1, during~~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~~Acquisition purchase using a series of both foreign exchange forward and option contracts. These contracts dodid not qualify for hedge accounting and as such, were marked to market through the Company's Consolidated Statement of Operations. AsFor tax purposes these contracts qualified as nontaxable integrated tax hedges. These contracts matured on December 30, 2019 (the closing date of ~~September 29, 2019, these derivative instruments had a total notional value of $2,867,500~~the transaction) and a net ~~fair value of $8,676 of which~~ ~~$20,145~~ ~~is recorded to prepaid expenses and other current assets and~~ ~~$11,469~~ ~~is recorded to accounts payable and accrued liabilities within the Company’s consolidated financial statements. In addition, the Company recorded pretax net~~gains or losses ~~of $25,533~~recognized on these ~~instruments to other (income) expense, net for~~contracts in the first quarter ~~and nine month periods ended September 29, 2019.~~of 2020 were immaterial.

For additional information related to the Company's derivative financial instruments see ~~Notes 4 and 7.~~Note 5.

~~(10)~~(11) 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 ~~either,~~ 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. ~~Payments~~Lease expense under such leases ~~are expensed as incurred.~~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~~quarters ended March 29, 2020 and ~~nine months ended September 29,~~March 31, 2019, operating lease expense was ~~$8,907~~$22,897 and $~~26,982~~16,561, respectively. Expense related to short-term leases (expected terms less than 12 months) and variable lease payments was not material in the ~~quarter~~quarters ended March 29, 2020 or ~~nine months ended September 29,~~March 31, 2019.

Information related to the Company’s leases for the ~~quarter~~quarters ended March 29, 2020 and ~~nine months ended September 29,~~March 31, 2019 isare as follows:


	Quarter Ended		Nine Months Ended			Quarter Ended
	September 29, 2019		September 29, 2019			March 29, 2020			March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,003	$	27,817		$	11,602		$	9,574
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,363	$	25,622		$	64,214		$	23,680

Weighted Average Remaining Lease Term
Operating leases			6.4 years			6.0 years			6.7 years
Weighted Average Discount Rate
Operating leases			4.5		%	4.2		%	4.5		%

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~~March 29, ~~2019:~~2020:


	September 29, 2019		March 29, 2020
2019 (excluding the nine months ended September 29, 2019)	$	8,969
2020	33,876
2020 (excluding the three months ended March 29, 2020)			$	35,280
2021	29,248		45,207
2022	27,012		41,609
2023	21,918		33,842
2024 and thereafter	45,288
2024			22,266
2025 and thereafter			66,743
Total future lease payments	166,311		244,947
Less imputed interest	21,856		49,151
Present value of future operating lease payments	144,455		195,796
Less current portion of operating lease liabilities ⁽¹⁾	29,489		43,263
Non-current operating lease liability ⁽²⁾	114,966		152,533
Operating lease right-of-use assets, net ⁽³⁾	$	127,005	$	168,805

⁽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.

~~(11)~~(12) Segment Reporting

Hasbro is a global play and entertainment company with a broad portfolio of brands and entertainment properties spanning toys, games, licensed products ranging from traditional to high-tech and digital, and film and television entertainment. The Company's segments are (i) U.S. and Canada, (ii) International, (iii) Entertainment, Licensing and Digital, (iv) eOne, and ~~(iv)~~(v) Global Operations.

Following the eOne Acquisition on December 30, 2019, the eOne operating segment was added to the Company's existing reporting structure.

The U.S. and Canada segment includes the marketing and selling 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 of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. The Company's Entertainment, Licensing and Digital segment includes the Company's Wizards of the Coast digital gaming business, consumer products licensing, owned and

licensed digital gaming, movie and television entertainment operations. The eOne segment engages in the development, acquisition, production, financing, distribution and sales of entertainment content and is comprised of all legacy eOne operations. These diversified offerings span across film, television and music production and sales, family programming, merchandising and licensing, and digital content. Over time, the Company plans to transition towards reflecting all of its entertainment operations in the eOne segment. The Company also expects to shift the consumer product and digital licensing business and toy and game sales related to the eOne preschool brands to legacy Hasbro segments; including related toy and game operations into the Company's geographic commercial segments in late 2021 and 2022.

The Global Operations segment is responsible for sourcing finished products for the Company's U.S. and Canada and International segments. During the first quarter of 2019, the Company realigned its financial reporting segments to include all digital gaming businesses within the re-named Entertainment, Licensing and Digital reporting segment. As a result of the realignment, U.S. and Canada and the former Entertainment and Licensing segment results for the quarter and nine months ended September 30, 2018 have been restated to reflect the change.

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 segments are the same as those referenced in Note 1.

Results shown for the quarter ~~and nine month periods~~ ended ~~September~~March 29, ~~2019~~2020 are not necessarily representative of those which may be expected for the full year ~~2019,~~2020, nor were those of the comparable ~~2018~~2019 periods representative of those actually experienced for the full year ~~2018.~~2019. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise.

Information by segment and a reconciliation to reported amounts for the ~~quarter~~quarters ended March 29, 2020 and ~~nine month periods ended September 29,~~March 31, 2019 ~~and September 30, 2018~~ are as follows:


	Quarter Ended							Quarter Ended
	September 29, 2019				September 30, 2018			March 29, 2020				March 31, 2019
Net revenues	External		Affiliate		External	Affiliate		External		Affiliate		External		Affiliate
U.S. and Canada	$	898,269	2,535		912,179	2,364		$	428,647	3,328		$	357,851	1,849
International	561,137		—		560,704	2		250,403		—		282,649		41
Entertainment, Licensing and Digital	115,766		3,849		96,803	4,712		84,027		971		91,994		1,974
eOne								342,493		—		—		—
Global Operations (a)	1		538,817		—	557,049		—		194,856		16		229,425
Corporate and Eliminations (b)	—		(545,201	)	—	(564,127	)	—		(199,155	)	—		(233,289	)
	$	1,575,173	—		1,569,686	—		$	1,105,570	—		$	732,510	—


	Nine Months Ended							Quarter Ended
	September 29, 2019				September 30, 2018
Net revenues	External		Affiliate		External	Affiliate
Operating profit (loss)								March 29, 2020			March 31, 2019
U.S. and Canada	$	1,766,649	7,379		1,714,536	7,093		$	71,780		$	13,532
International	1,221,224		186		1,229,093	290		(26,691		)	(30,411		)
Entertainment, Licensing and Digital	304,266		7,989		246,747	11,378		5,174			30,020
eOne								(33,081		)	—
Global Operations (a)	81		1,088,860		109	1,152,851		4,649			1,254
Corporate and Eliminations (b)	—		(1,104,414	)	—	(1,171,612	)	(45,114		)	21,732
	$	3,292,220	—		3,190,485	—		$	(23,283	)	$	36,127

~~As a result of the realignment of the Company's financial reporting segments, revenues of $11,999 and~~ ~~$33,271~~ for the quarter and nine months ended September 30, 2018, respectively, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation.

Quarter Ended Nine Months Ended
Operating profit (loss) September 29,
2019 September 30,
2018 September 29,
2019 September 30,
2018
U.S. and Canada $ 193,686
$ 223,061
$ 313,795
$ 269,539
International 67,238
66,274
51,410
10,359
Entertainment, Licensing and Digital 24,594
37,113
62,550
76,016
Global Operations (a) 11,074
3,179
6,342
(4,623 )
Corporate and Eliminations (b) 618
(16,291 ) 27,573
(30,786 )
$ 297,210
$ 313,336
$ 461,670
$ 320,505

As a result of the realignment of the Company's financial reporting segments, operating profit of $3,455 and $9,825 for the quarter and nine months ended September 30, 2018, respectively, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation.


Total assets	September 29, 2019			September 30, 2018		December 30, 2018		March 29, 2020			March 31, 2019		December 29, 2019
U.S. and Canada	$	3,331,125		3,028,291		2,898,816		$	3,335,131		2,600,873		3,244,950
International	2,394,488			2,323,866		2,229,053		2,016,267			2,019,800		2,482,170
Entertainment, Licensing and Digital	1,031,906			890,526		621,595		869,645			804,288		695,898
eOne								5,850,529			—		—
Global Operations (a)	3,255,286			4,306,291		3,197,847		3,658,540			706,701		3,334,190
Corporate and Eliminations (b)	(4,458,181		)	(5,053,645	)	(3,684,323	)	(5,305,753		)	(1,196,889	)	(901,580	)
	$	5,554,624		5,495,329		5,262,988		$	10,424,359		4,934,773		8,855,628

(a) The Global Operations segment derives substantially all of its revenues, and thus its operating results, from intersegment activities.

(b) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in Corporate and Eliminations. Allocations of certain expenses related to these assets 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 because allocations are translated from the U.S. Dollar to local currency at budgeted rates when recorded. Corporate and Eliminations also includes the elimination of inter-company balance sheet amounts.

The following table represents consolidated International segment net revenues by major geographic region for the quarters ended March 29, 2020 and ~~nine month periods ended September 29, 2019 and September 30, 2018:~~March 31, 2019:


	Quarter Ended			Nine Months Ended			Quarter Ended
	September 29, 2019		September 30, 2018	September 29, 2019		September 30, 2018	March 29, 2020		March 31, 2019
Europe	$	319,277	331,353	$	673,728	686,490	$	162,249	153,379
Latin America	151,987		145,703	305,106		308,065	33,921		62,777
Asia Pacific	89,873		83,648	242,390		234,538	54,233		66,493
Net revenues	$	561,137	560,704	$	1,221,224	1,229,093	$	250,403	282,649

As a result of 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 and TV revenues. Revenues related to eOne brands, including PEPPA PIG, PJ MASKS and RICKY ZOOM, are reported in the Emerging Brands portfolio.

The following table presents consolidated net revenues by brand and entertainment portfolio for the quarters ended March 29, 2020 and ~~nine month periods ended September 29, 2019 and September 30, 2018:~~

March 31, 2019:


	Quarter Ended				Nine Months Ended				Quarter Ended
	September 29, 2019		September 30, 2018		September 29, 2019		September 30, 2018		March 29, 2020		March 31, 2019
Franchise Brands	$	779,659	$	847,745	$	1,749,948	$	1,715,986	$	396,497	$	393,574
Partner Brands	427,029		305,827		812,466		714,424		182,331		171,989
Hasbro Gaming(1)	232,287		280,832		463,272		520,334		140,084		107,565
Emerging Brands(2)	136,198		135,282		266,534		239,741		94,145		59,382
TV/Film/Entertainment ⁽³⁾									292,513		—
Total	$	1,575,173	$	1,569,686	$	3,292,220	$	3,190,485	$	1,105,570	732,510

⁽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, totaled ~~$449,393~~$340,480 and ~~$1,086,151~~$243,390, respectively, for the quarters ended March 29, 2020 and March 31, 2019.

⁽²⁾ First quarter 2020 balance in Emerging Brands portfolio includes eOne brands PEPPA PIG, PJ MASKS and ~~nine months ended September 29, 2019, respectively. For~~RICKY ZOOM.

⁽³⁾ TV/Film/Entertainment represents eOne revenues not allocated to the ~~quarter and nine months ended September 30, 2018, total gaming revenues were $447,844 and $964,159, respectively.~~Emerging Brands portfolio.

~~(12)~~(13) Restructuring Actions

During 2018, the Company announced a comprehensive restructuring plan which consists 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 the global consumer landscape, shopping behaviors and the retail environment continue to evolve, the Company continues to transform and re-imagine its business to make sure it has the right talent and capabilities to stay competitive. This includes adding new capabilities based on our understanding of the consumer and how our retailers are going to market, while also changing many of the ways we organize across our Brand Blueprint. As part of this process the Company took certain actions, which ~~will continue~~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 connection with the eOne Acquisition, in the first quarter of ~~2018,~~2020, the Company recorded ~~a pre-tax~~ severance ~~expense of $17,349, primarily outside of the U.S., related to this 2018 restructuring program. During the fourth quarter of 2018, the Company recorded an additional $72,000 of pre-tax severance~~and other employee charges related to the ~~program. These charges~~integration of eOne.

Charges related to the 2018 restructuring were included within selling, distribution and administration costs on the Consolidated Statements of Operations for the year ended December 30, ~~2018~~2018. Charges related to the eOne restructuring costs were recorded within acquisition and related charges on the Consolidated Statements of Operations for the quarter ended March 29, 2020, and reported within Corporate and Eliminations. ~~NaN additional charges were taken in the first nine months of 2019.~~ The detail of activity related to the ~~program~~programs for the first quarter of 2020 is as follows:

Remaining amounts to be paid as of December 30, 2018 $ 69,192
Payments made in first quarter of 2019 (7,620 )
Payments made in the second quarter of 2019 (7,932 )
Payments made in the third quarter of 2019 (6,696 )
Remaining amounts as of September 29, 2019 $ 46,944



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

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~~ concerning: the impact of, and actions and initiatives taken and planned to be taken to try and manage the negative impact of, the global coronavirus outbreak on our business, including the negative impact on supply of products and production of entertainment content, demand for our products and entertainment, our liquidity and our community; the expected adequacy of supply and operation of our manufacturing facilities; the ability to achieve our financial and business goals and objectives; the Company's product and entertainment ~~plans,~~plans; anticipated product and entertainment ~~performance, business opportunities~~ performance; anticipated expenses; and ~~strategies, financial~~working capital and business goals and objectives, anticipated expenses, cost savings and efficiency enhancing initiatives and other objectives, anticipated impact of, and any actions taken in response to, the imposition of tariffs in certain markets, anticipated uses of cash, and expectations relating to the Company’s proposed acquisition of Entertainment One.liquidity. See Item 1A, in Part II of this report and Item 1A, in Part I of the Annual Report on Form 10-K for the year ended December ~~30, 2018~~29, 2019 (“~~2018~~2019 Form 10-K”), for a discussion of factors which may cause the Company's actual results or experience to differ materially from that anticipated in these forward-looking statements. The Company undertakes no obligation to revise the forward-looking statements in this report after the date of the filing. Unless otherwise specifically indicated, all dollar or share amounts herein are expressed in millions of dollars or shares, except for per share amounts.

EXECUTIVE SUMMARY

Completion of Acquisition

On December 30, 2019, Hasbro, Inc. ("Hasbro" or the "Company") completed the acquisition of Entertainment One Ltd. ("eOne") for an aggregate purchase price of approximately $4.6 billion, comprised of $3.8 billion of cash consideration for shares outstanding and $0.8 billion related to the redemption of eOne’s outstanding senior secured notes and the payoff of eOne’s revolving credit facility. We financed the acquisition through a combination of debt and equity financings, including (i) the issuance of senior unsecured notes in an aggregate principal amount of $2.4 billion, (ii) the issuance of 10,592,106 shares of common stock at a public offering price of $95.00 per share and (iii) $1.0 billion in term loans. eOne's results of operations and financial position are included in the Company's consolidated financial statements and accompanying condensed footnotes since the date of acquisition. The addition of eOne accelerates the Company's brand blueprint strategy by expanding our brand portfolio with eOne's global preschool brands, adding proven TV and film expertise and executive leadership as well as by enhancing brand building capabilities and our storytelling capabilities to strengthen Hasbro brands.

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

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

Hasbro, Inc. is a global play and entertainment company ~~dedicated~~committed to Creating the World's Best Play and Entertainment Experiences. The Company strives to do this through deep consumer engagement and the application of consumer insights, the use of immersive storytelling to build brands, product innovation and development of global business reach. Hasbro applies these principles to leverage its owned and controlled brands, including Franchise Brands BABY ALIVE, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH and TRANSFORMERS, Emerging Brands, such as POWER RANGERS and LITTLEST PET SHOP, as well as the brands of our partners included in our Partner Brands portfolio. From toys, games and ~~games,~~consumer products to television, movies, digital gaming, live action, music, and ~~other forms~~virtual reality experiences, Hasbro connects to global audiences by bringing to life great innovations, stories and brands and developing and delivering the very best content across established and inventive platforms. Hasbro’s iconic brands include MAGIC: THE GATHERING, MY LITTLE PONY, NERF, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, POWER RANGERS, and through the acquisition of ~~digital~~eOne, Hasbro expanded its portfolio with popular pre-school brands including PEPPA PIG, PJ MASKS and RICKY ZOOM. In addition, Hasbro leverages its portfolio of premier partner brands. Through our global entertainment studio, we are building our brands worldwide through great storytelling and content on all screens, as well as offering the production and distribution of a ~~comprehensive consumer products licensing program,~~broad spectrum of live action scripted and unscripted entertainment content that is not based on our children’s and family entertainment brands. Hasbro ~~fulfills~~is committed to making the ~~fundamental need for play and connection~~world a better place for children and their families ~~around the world. The Company's entertainment labels, Allspark Pictures~~through corporate social responsibility and ~~Allspark Animation, create entertainment-driven brand storytelling across mediums, including television, film, digital and more.~~philanthropy.

~~Each of these principles is executed globally in alignment with~~ Hasbro's strategic plan is centered around its brand blueprint. AtUnder the ~~center of this~~brand blueprint strategy, Hasbro re-imagines, re-invents and re-ignites its owned and controlled brands and imagines, invents and ignites new brands, through product innovation, immersive entertainment offerings, including television, film and ~~motion pictures,~~music, digital gaming and a broad range of consumer products. As the global consumer landscape, shopping behaviors and the retail ~~environment~~and entertainment environments continue to evolve, ~~we continue~~the Company continues to transform and ~~re-imagine our~~reimagine its business strategy. This transformation includes ~~changing many of~~reexamining the ways ~~we organize~~Hasbro organizes across ~~our~~its brand blueprint and re-shaping usthe Company to become a better equipped and adaptive, digitally-driven organization, including ~~investing in~~ the development of an omni-channel retail ~~presence. More recently the Company has also focused on~~presence and adding new capabilities through the on-boarding of new skill sets and ~~talent~~talent. More recently, to ~~lead~~enhance its long-term competitive position the Company has identified and pursued key growth opportunities through strategic acquisitions, to excel in today’s converged retail environment ~~based on Hasbro’s understanding of the consumer~~as a leading global play and ~~how its retailers are going to market.~~entertainment company across all platforms.

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

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

Coronavirus Outbreak

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

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

During the first quarter of ~~2019,~~2020, the Company's supply chain experienced lower than planned production levels in certain of its third-party manufacturing facilities located in China, due to the impact of COVID-19. After operating at lower than planned production levels during the first quarter due to COVID-19, these facilities are currently operating at planned capacity for this time of year. Outside of China, manufacturing operated at varying levels depending on local government action and overall safety considerations. In response, the Company ~~realigned~~utilized its ~~financial reporting segments~~global supply chain and existing inventory to ~~include all digital gaming businesses within the re-named Entertainment, Licensing and Digital reporting segment. As a result of the realignment, U.S. and Canada~~work to meet demand and the ~~former Entertainment~~Company currently expects to make up for any lost production in the second and ~~Licensing segment results~~third quarters, to be well positioned for holiday demand later in the year. However, if significant manufacturing facilities remained closed or limited in operation for longer than expected, or are impacted by a resurgence in COVID-19, we may not be able to make up for the disruption in supply in the nearer term.

During the first quarter, as more of our consumers remained at home, we creatively found ways to accelerate our business online, expand omni-channel and ~~nine month periods ended September 30, 2018 have been restated~~skip the shopping cart to ~~reflect~~get our products into cars and homes. For example, we launched Bring Home the ~~change. In addition~~Fun, a global initiative created to ~~these three primary segments,~~further the ~~Company's product sourcing operations are managed through its Global Operations segment.~~Company’s purpose to make the world a better place for children and their families. The initiative provides parents and caregivers resources to help keep kids occupied and engaged during

~~Third~~extended time at home and indoors. Another example is the initiative our Wizards of the Coast team undertook to enable players to play MAGIC: THE GATHERING games while in person play events are not happening. Markets with more developed e-comm and omni-channel business operations performed relatively well during the quarter ~~2019~~whereas markets that rely more heavily on physical stores for reaching consumers are being negatively impacted to a greater degree. Our top three customers during the first quarter were Walmart, Target and Amazon. The negative impact to future periods from store closures is unknown: however, we expect a greater impact to the second quarter of 2020. As of the close of the first quarter, we remain focused on managing credit risk and are taking steps to manage expenses, bad debt exposures and preserve cash in the near term.

Beginning late in the first quarter, production and delivery of television and film projects for Hasbro's eOne TV and Film business were delayed, negatively impacting the level and timing of revenues. The eOne team continues to develop new projects and work on animation production, which can be done remotely. The team now expects to deliver finished episodes and film projects later in the year than planned. Additionally, several film release dates have moved to later in 2020, into 2021 and in some instances are going straight to video on demand/electronic sell-through windows impacting the timing and level of anticipated revenues. As more people are home, content viewership is high, which we believe bodes well for long-term brand engagement.

The health and safety of Hasbro employees, stakeholders and communities is a top priority. In China, Hasbro's offices reopened in late March following shutdowns earlier in the first quarter. Hasbro's global offices, outside of China, were closed in March due to the COVID-19 outbreak and remain closed today. Hasbro employees have been working virtually since the closure and the timing of re-opening offices will be based on local governmental, health and safety guidelines.

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

First quarter 2020 highlights:

~~Third~~First quarter net revenues of ~~$1,575.2~~$1,105.6 million increased ~~slightly~~51% compared to ~~$1,569.7~~$732.5 million in the ~~third~~first quarter of ~~2018. Excluding $20.5 million~~2019 and reflects the 2020 acquisition of eOne. The increase in net revenues included an unfavorable foreign currency translation ~~net revenues grew 2%.~~

Net revenues in the Entertainment, Licensing and Digital segment increased 20%, U.S. and Canada segment net revenues decreased 2% while the International segment net revenues remained flat during the third quarter of 2019 compared to the third quarter of 2018. International segment net revenues were unfavorably impacted by $19.9 million in foreign currency translation. Absent the impact of foreign exchange, International segment net revenues increased 4%.

Net revenues from Partner Brands increased 40%, Franchise Brands and Hasbro Gaming net revenues declined 8% and 17%, respectively, while Emerging Brands net revenues increased slightly during the third quarter of 2019 compared to the third quarter of 2018.

Operating profit decreased to $297.2 million, or 18.9% of net revenue, in the third quarter of 2019 compared to operating profit of $313.3 million, or 20.0% of net revenue, in the third quarter of 2018.

~~Net earnings of $212.9 million, or $1.67 per diluted share, in the third quarter of 2019 compared to net earnings of $263.9 million, or $2.06 per diluted share, in the third quarter of 2018.~~

Net earnings for the third quarter of 2019 included 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.

Net earnings for the third quarter of 2018 included a $17.3 million, or $0.14 per share tax benefit within income tax expense, from the interpretation of additional guidance released during the quarter related to U.S. tax reform.

~~First nine months 2019 highlights:~~

Net revenues increased 3% to $3,292.2 million in first nine months of 2019 compared to $3,190.5 million in the first nine months of 2018. Excluding $65.5 million of unfavorable foreign currency translation, net revenues grew 5%.$11.7 million.

Net revenues in the U.S. and Canada ~~and~~segment increased 20% to $428.6 million; International segment net revenues decreased 11% to $250.4 million, including an unfavorable foreign currency translation impact of $9.3 million; Entertainment, Licensing and Digital ~~segments increased 3% and 23%, respectively, while International~~ segment net revenues ~~declined 1%. International~~decreased 9% to $84.0 million; and eOne segment net revenues were ~~unfavorably impacted by $63.4 million in foreign currency translation. Absent the impact of foreign exchange, International segment net revenues increased 5%.~~$342.5 million.

Net revenues from Hasbro Gaming increased 30%; Partner Brands increased ~~14%,~~6%; Franchise Brands increased 1%; Emerging Brands net revenues increased ~~11%~~58% and ~~Franchise Brands~~include the addition of preschool brands, PEPPA PIG, PJ MASKS and RICKY ZOOM, acquired as part of the eOne Acquisition; and eOne TV Film and Entertainment portfolio net revenues ~~increased 2%, while Hasbro Gaming net revenues declined by 11% during the first nine months~~were $292.5 and represented 26% of ~~2019 compared to the first nine months of 2018.~~

~~Operating profit increased to $461.7 million, or 14.0% of~~total net revenues in the first ~~nine months~~quarter of ~~2019~~2020.

Operating losses were $23.3 million, or 2.1% of net revenue, in the first quarter of 2020 compared to operating profit of ~~$320.5~~$36.1 million, or ~~10.0%~~4.9% of net ~~revenues,~~revenue, in the first ~~nine months~~quarter of ~~2018.~~2019.

~~Operating profit for the first nine months of 2018 was~~First quarter 2020 operating losses were negatively impacted by ~~pre-tax~~acquisition and related expenses of ~~$70.4~~$149.8 million ~~related~~($127.5 million after-tax) and $25.0 million ($19.9 million after-tax) of eOne acquired intangible asset amortization.

The net loss attributable to ~~the Toys“R”Us bankruptcy and severance costs~~Hasbro, Inc. of ~~$17.3 million associated with the Company's 2018 restructuring program.~~

~~Net earnings of $253.1~~$69.6 million, or ~~$1.99~~$0.51 per diluted share, in the first ~~nine months~~quarter of ~~2019~~2020 compared to a net earnings of ~~$211.7~~$26.7 million, or ~~$1.67~~$0.21 per diluted share, in the first ~~nine months~~quarter of ~~2018.~~

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 net earnings for the first nine months of 2018 included the pre-tax expenses of $87.7 million relating to the Toys"R"Us bankruptcy and severance costs described above ($77.1 million after-tax), as well as income tax expense of $30.5 million related to guidance issued on U.S. tax reform in 2018.

2019.

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. 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.

~~Recent Events~~

During the third quarter of 2019, the Company and Entertainment One Ltd. ("eOne") entered into a definitive agreement under which Hasbro will acquire all of the outstanding shares of stock of eOne in an all-cash transaction valued at approximately £3.3 billion, or $4 billion based on exchange rates on the agreement date. Under the terms of the agreement, eOne shareholders will receive £5.60 in cash for each common share of eOne. To finance the acquisition, the Company plans to:

~~Issue $1.0 to $1.25 billion of Hasbro common stock~~

~~Issue floating rate term loans and fixed rate notes for the remaining cash consideration~~

The acquisition of eOne is expected to accelerate the Company’s brand blueprint strategy by adding eOne’s family brands, including PEPPA PIG, PJ MASKS and RICKY ZOOM and brands in development, to Hasbro’s brand portfolio, enhancing Hasbro’s brand development capabilities, and onboarding eOne’s proven television and film expertise and veteran executive leadership.

On August 22, 2019, the Company entered into a debt commitment letter with Bank of America, N.A. (“BofA”) and BofA Securities Inc., pursuant to which BofA (and certain of its affiliates) committed to provide a 364-day senior unsecured bridge loan facility in an aggregate principal amount of up to £3.6 billion to finance the cash consideration and other amounts payable in connection with the Company’s acquisition of eOne.

•

~~On September 20, 2019, the Company entered into a $1.0 billion Term Loan Agreement with Bank of America, N.A., as administrative agent and~~ certain financial institutions, as lenders, pursuant to which such lenders committed to provide, contingent upon the completion of the acquisition and certain other customary conditions to funding, the Term Loan Facilities in an aggregate principal amount of up to $1.0 billion. Borrowings under the Term Loan Facilities will be used to pay a portion of the cash consideration and other amounts payable in connection with the Company’s acquisition of eOne. ~~See further discussion in Liquidity and Capital Resources section of Item 2 as well as Footnote 1, “Basis of Presentation,” to the Consolidated Financial Statements.~~

The Company hedged a portion of its exposure to fluctuations in the British pound sterling in relation to the acquisition using a series of both foreign exchange forward and option contracts. These contracts do not qualify for hedge accounting and as such, were marked to market through the Company's Consolidated Statement of Operations. The Company recorded net losses of $25.5 million on these instruments to other (income) expense, net for the quarter and nine month periods ended September 29, 2019.

The transaction, which is structured as a statutory plan of arrangement under the Canada Business Corporations Act, remains subject to receipt of certain regulatory approvals and other customary closing conditions. The transaction has received approval by eOne’s shareholders as well early termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act in the U.S. and antitrust approval in Germany. The transaction is expected to close during the fourth quarter of 2019.

Amounts Returned to Shareholders

The Company ~~is committed to~~has a long history of returning ~~excess~~ cash to its shareholders through quarterly dividends and share repurchases. Hasbro ~~increased the~~maintained its quarterly dividend rate ~~from $0.63 per share to~~of $0.68 per share ~~effective~~ for the dividend scheduled to be paid in May ~~2019.~~2020. In addition to the dividend, the Company ~~returns~~historically has returned cash through its share repurchase program. As part of this initiative, ~~from~~since 2005, ~~to 2018,~~ the Company's Board of Directors (the "Board") adopted nine ~~successive~~ 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. ~~During the first nine months of 2019, Hasbro repurchased approximately 0.7 million shares at a total cost of $60.1 million and at an average price of $87.18 per share.~~ As of ~~September~~March 29, ~~2019,~~2020, the Company had ~~$367.8~~$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 ~~Company's anticipated~~ financing ~~for its proposed acquisition of~~activities related to the eOne Acquisition, the Company ~~plans to suspend~~has suspended its current share repurchase program ~~for the time being. See Footnote 1, “Basis of Presentation,”~~while it prioritizes reducing its long-term debt and achieving its gross debt to ~~the Consolidated Financial Statements for further discussion.~~earnings before interest, taxes, depreciation and amortization ("EBITDA") targets.

SUMMARY OF FINANCIAL PERFORMANCE

A summary of the results of operations is illustrated below for the ~~quarter and nine month periods~~quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018~~March 31, 2019.

Quarter Ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018
Net revenues $ 1,575.2
$ 1,569.7
$ 3,292.2
$ 3,190.5
Operating profit 297.2
313.3
461.7
320.5
Earnings before income taxes 259.7
295.8
295.4
275.5
Income tax expense 46.8
31.9
42.3
63.9
Net earnings 212.9
263.9
253.1
211.7
Diluted earnings per share 1.67
2.06
1.99
1.67



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

RESULTS OF OPERATIONS – CONSOLIDATED

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

~~Third Quarter of 2019~~

Consolidated net revenues for the ~~third~~first quarter of 2020 increased $373.1 million, or 51% compared to the first quarter of 2019 ~~increased slightly compared to~~and reflect the ~~third~~inclusion of eOne revenues which represent 31.0% of consolidated net revenues for quarter. First quarter ~~of 2018 and included the~~2020 net revenues include an $11.7 million unfavorable impact ~~of an unfavorable $20.5 million~~from foreign currency translation as a result of ~~weaker~~weakening currencies compared to the U.S. dollar, primarily in the European, Latin American and Asia Pacific markets in ~~2019~~2020 compared to ~~2018. Absent~~2019.

Operating losses for the ~~impact of foreign exchange during the third~~first quarter of ~~2019, net revenues grew 2%.~~

~~Operating profit for the third quarter of 2019 was $297.2~~2020 were $23.3 million, or ~~18.9%~~2.1% of net revenues, compared to operating profit of ~~$313.3~~$36.1 million, or ~~20.0%~~4.9% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. Operating ~~profit results~~losses during the ~~third~~first quarter of ~~2019 included an unfavorable $4.1~~2020 reflect the consolidation of eOne results of operations and were negatively impacted by acquisition and related costs of $149.8 million ($127.5 million after-tax) and $25.0 million ($19.9 million after-tax) of expenses related to eOne acquired intangible asset amortization.

Net losses, including the impact ~~from foreign exchange translation.~~

~~The quarters ended~~ ~~September 29, 2019~~ ~~and~~ ~~September 30, 2018~~of noncontrolling interests were ~~each 13-week periods. Net earnings decreased to $212.9~~$67.8 million for the ~~third~~first quarter of ~~2019~~2020 compared to net earnings of ~~$263.9~~$26.7 million for the ~~third~~first quarter of ~~2018. Diluted earnings~~2019. The diluted loss per share attributable to Hasbro, Inc. for the ~~third~~first quarter of 2020 was $0.51, down from $0.21 in the first quarter of 2019 ~~was $1.67, down from diluted earnings per share~~and reflects the negative impact of ~~$2.06 in the third quarter~~acquisition related costs and eOne acquired intangible asset amortization of ~~2018. Net earnings for the three months ended September 29, 2019 includes a net of tax loss of $20.9 million, or $0.16~~$0.93 per diluted share and $0.14 per diluted share, respectively.

As a result of the 2020 acquisition of eOne, the Company's brand architecture reflects the addition of the TV, Film and Entertainment brand portfolio which consists of legacy eOne film and TV revenues. Revenues related to ~~foreign exchange forward~~eOne brands, including PEPPA PIG, PJ MASKS and ~~option contracts that were entered into, to limit~~RICKY ZOOM, are reported in the Company's exposure to foreign currency fluctuations associated with the proposed eOne acquisition purchase price. Net earnings for the three months ended September 30, 2018 included a tax benefit of $17.3 million, or $0.14 per share, related to the interpretation of additional guidance released on U.S. tax reform in 2018.Emerging Brands portfolio.

The following table presents net revenues by brand and entertainment portfolio for the quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018~~March 31, 2019.


	Quarter Ended					Quarter Ended
	September 29, 2019		September 30, 2018	% Change		March 29, 2020		March 31, 2019	% Change
Franchise Brands	$	779.7	847.7	-8	%	$	396.5	393.6	1	%
Partner Brands	427.0		305.8	40	%	182.3		172.0	6	%
Hasbro Gaming	232.3		280.8	-17	%	140.1		107.6	30	%
Emerging Brands	136.2		135.3	1	%	94.1		59.4	58	%
TV, Film and Entertainment						292.5		—	100	%
Total	$	1,575.2	1,569.7	0	%	$	1,105.6	732.5	51	%

FRANCHISE BRANDS: Net revenues in the Franchise Brands portfolio ~~decreased 8%~~increased 1% in the ~~third~~first quarter of ~~2019~~2020 compared to the ~~third~~first quarter of ~~2018. Lower net revenues from NERF, MY LITTLE PONY and BABY ALIVE products were partially offset by higher~~2019. Higher net revenues from MAGIC: THE GATHERING and MONOPOLY products were offset by lower net revenues from PLAY-DOH, TRANSFORMERS, MY LITTLE PONY and to a lesser extent, NERF and Baby Alive products during the ~~third~~first quarter of ~~2019.~~2020.

PARTNER BRANDS: Net revenues from the Partner Brands portfolio increased ~~40%~~6% in the ~~third~~first quarter of ~~2019~~2020 compared to the ~~third~~first quarter of ~~2018.~~2019. Partner Brands net revenues are reliant on related entertainment, including television and movie releases. During the ~~third~~first quarter of ~~2019,~~2020, the Company’s Partner Brands portfolio was supported by ~~MARVEL’S April~~fourth quarter 2019 theatrical ~~release,~~ ~~AVENGERS: END GAME~~ ~~. In addition to this film, the Company’s 2019 Partner Brand theatrical~~ releases ~~include~~ DISNEY’S FROZEN 2 ~~expected~~ in November and STAR WARS: THE RISE OF SKYWALKERin December. In addition to these 2019 films, the Company’s 2020 Partner Brand entertainment releases include TROLLS WORLD TOUR, which was released in the premium video-on-demand formatin April, asa sequel to the 2016 film, TROLLS from DREAMWORKS and BLACK WIDOW from DISNEY'S MARVEL franchise expected in theaters in November, as well as continuous entertainment provided by the subscription video on-demand streaming service, Disney+.

Net revenue increases from DISNEY FROZEN and ~~MARVEL~~DREAMWORKS' TROLLS products as well as increases from STAR WARS ~~and DISNEY’S DECENDANTS~~ products, were partially offset by net revenue declines from MARVEL and DISNEY PRINCESS ~~BEYBLADE and DREAMWORKS’ TROLLS~~ products during the ~~third~~first quarter of ~~2019.~~2020.

HASBRO GAMING: Net revenues in the Hasbro Gaming portfolio ~~decreased 17%~~increased 30% in the ~~third~~first quarter of ~~2019~~2020 compared to the ~~third~~first quarter of ~~2018. Lower net revenues from PIE FACE and SPEAK OUT and certain other Hasbro Gaming products were partially offset by higher~~2019. Higher net revenues from DUNGEONS & DRAGONS ~~products~~as well as classic games including, THE GAME OF LIFE, JENGA and ~~certain other games~~OPERATION were partially offset by lower net revenues from PIE FACE in the ~~third~~first quarter of ~~2019.~~2020.

Net revenues for Hasbro’s total gaming category, including the Hasbro Gaming portfolio as reported above and all other gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, which are included in the Franchise Brands portfolio, totaled ~~$449.4~~$340.5 million for the ~~third~~first quarter of ~~2019, increasing slightly when~~2020, an increase of 40%, as compared to ~~$447.8~~$243.4 million in the ~~third~~first quarter of ~~2018.~~2019.

EMERGING BRANDS: Net revenues from the Emerging Brands portfolio increased 1%58% during the ~~third~~first quarter of ~~2019~~2020 compared to the ~~third~~first quarter of ~~2018.~~2019. Contributing to the net revenue increases ~~during~~were the ~~third quarter~~inclusion of ~~2019 were POWER RANGERS products,~~brands acquired through the eOne Acquisition including PEPPA PIG and PJ MASKS, as well as net revenue increases from ~~PLAYSKOOL, including MR. POTATO HEAD~~POWER RANGERS products. These increases were partially offset by declines in LITTLEST PET SHOP and LOST KITTIES ~~and FURREAL FRIENDS products during the third quarter of 2019.~~

~~First Nine Months of 2019~~

For the first nine months of 2019, consolidated net revenues increased 3% compared to the first nine months of 2018. The net revenue increase in the first nine months of 2019 included an unfavorable variance of $65.5 million as a result of foreign currency translation due to weaker currencies across the Company's international markets when compared to the first nine months of 2018. Absent the impact of foreign exchange, consolidated net revenues increased 5% in the first nine months of 2019.

Operating profit for the first nine months of 2019 increased to $461.7 million, or 14.0% of net revenues, from $320.5 million, or 10.0% of net revenues, for the first nine months of 2018. Operating profit results during the first nine months of 2019 included an unfavorable $10.0 million impact from foreign exchange translation. Operating profit in the first nine months of 2018 was negatively impacted by the loss of revenues and incremental bad debt expense associated with the Toys“R”Us liquidations in the U.S. and U.K., as well as severance costs associated with the Company’s 2018 restructuring program.

~~The nine month periods ended~~ ~~September 29, 2019~~ ~~and~~ ~~September 30, 2018~~ were each 39-week periods. Net earnings for the first nine months of 2019 were $253.1 million compared to a net earnings of $211.7 million for the first nine months of 2018. Diluted earnings per share was $1.99 in the first nine months of 2019, up from diluted earnings per share of $1.67 in 2018. Net earnings for the nine months ended September 29, 2019 includes 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 Entertainment One Ltd. Net earnings for the first nine months of 2018 includes incremental bad debt expense and other costs, net of tax, of $61.4 million, or $0.49 per diluted share, related to Toys“R”Us, $15.7 million, or $0.12 per diluted share, of severance costs related to the Company's 2018 restructuring program, and tax expense of $30.5 million, or $0.24 per diluted share, related to U.S. tax reform and additional guidance issued in 2018.

~~The following table presents net revenues by product category for the first nine months of 2019 and 2018.~~

Nine Months Ended
September 29, 2019 September 30, 2018 %
Change
Franchise Brands $ 1,749.9
1,716.0
2 %
Partner Brands 812.5
714.4
14 %
Hasbro Gaming 463.3
520.3
(11 )%
Emerging Brands 266.5
239.7
11 %
Total $ 3,292.2
3,190.5
3 %

~~FRANCHISE BRANDS:~~ Net revenues in the Franchise Brands portfolio increased 2% in the first nine months of 2019 compared to 2018. Higher net revenues from MAGIC: THE GATHERING and MONOPOLY products, and to a lesser extent, PLAY-DOH and TRANSFORMERS products, were partially offset by lower net revenues from NERF, MY LITTLE PONY and BABY ALIVE products.

~~PARTNER BRANDS:~~ Net revenues from the Partner Brands portfolio increased 14% during the first nine months of 2019 compared to 2018. Partner Brands net revenues are reliant on related entertainment, including television and movie releases. During the first nine months of 2019, the Company’s Partner Brands portfolio was supported by MARVEL’S theatrical release, ~~AVENGERS: END GAME~~ ~~in APRIL. In addition to this film, the Company’s 2019 Partner Brand theatrical releases include~~ ~~DISNEY’S FROZEN 2~~ ~~expected in November and~~ ~~STAR WARS: THE RISE OF SKYWALKER~~ in December. During the first nine months of 2019, the increase was driven by higher net revenues from DISNEY FROZEN and MARVEL products, as well as net revenue contributions from the introduction of the Company's line of UGLY DOLLS and OVERWATCH products during the first ~~nine months~~quarter of ~~2019 compared~~2020.

TV, FILM and ENTERTAINMENT: The TV, Film and Entertainment portfolio includes eOne revenues not allocated to the ~~same period in 2018. These increases were partially offset by lower~~Emerging Brands portfolio. Operations contributing to the TV, Film and Entertainment portfolio focus on high quality, premium film, television and music production and content rights around the world and selling this content globally.

During the first quarter of 2020, net revenues from ~~STAR WARS products ahead~~the TV, Film and Entertainment portfolio were approximately 26% of total Company net revenues and included theatrical contributions from the ~~planned fourth quarter~~Amblin Partners film 1917, released in December 2019 ~~film release described above, as well as net revenue declines from DREAMWORKS’ TROLLS~~ and ~~DISNEY PRINCESS products.~~

~~HASBRO GAMING:~~ ~~Net revenues in the Hasbro Gaming portfolio decreased 11% in the first nine months of 2019 compared to the first nine months of 2018. Increased~~broadcast and licensing net revenues from ~~DUNGEONS & DRAGONS products were more than offset by lower~~key scripted deliveries including season two of THE ROOKIE, a television drama series currently airing on ABC. In addition to these offerings, net revenues ~~from PIE FACE and SPEAK OUT products.~~

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, increased to $1,086.2 million in the first nine months of 2019 versus $964.2 million in the first nine months of 2018.

~~EMERGING BRANDS:~~ ~~Net revenues from theEmerging Brands portfolio grew 11% for the first nine months of 2019 compared to the first nine months of 2018.Net revenues~~benefited from the ~~introduction~~Company's lineup of ~~the Company's POWER RANGERS products, as well as net revenue increases from PLAYSKOOL products, were partially offset by net revenue declines from LITTLEST PET SHOP and LOST KITTIES products.~~unscripted television programming.

SEGMENT RESULTS

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

As a result of the realignment of the Company’s financial reporting segments, 2018 net revenues and operating profit were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment to conform to current year presentation.

The table below presents net external revenues and operating profit for the Company’s U.S. and Canada segment and Entertainment, Licensing and Digital segment for each 2018 quarter and the 2018 fiscal year, restated for the reclassification.

Quarter Ended
Fiscal Year
Ended

April 1,
2018

July 1,
2018

Sept. 30,
2018

Dec. 30,
2018

Dec. 30,
2018
Net Revenues

U.S. and Canada segment $ 353.9
$ 448.4
$ 912.2
$ 661.1
$ 2,375.7
Entertainment, Licensing and Digital segment 74.4
75.5
96.8
109.6
356.3

Operating Profit (Loss)

U.S. and Canada segment $ (26.6 ) $ 73.1
$ 223.1
$ 100.7
$ 370.2
Entertainment, Licensing and Digital segment 17.1
21.8
37.1
(46.9 ) 29.1

~~Third Quarter of 2019~~

The following table presents net external revenues and operating profit data for the Company's ~~three~~ principal segments for the quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018:~~March 31, 2019:

Quarter Ended
September 29, 2019 September 30, 2018 %
Change
Net Revenues *

U.S. and Canada segment $ 898.3
$ 912.2
-2 %
International segment 561.1
560.7
— %
Entertainment, Licensing and Digital segment 115.8
96.8
20 %

Operating Profit *

U.S. and Canada segment $ 193.7
$ 223.1
-13 %
International segment 67.2
66.3
1 %
Entertainment, Licensing and Digital segment 24.6
37.1
-34 %

*For the quarter ended September 30, 2018, revenues of $12.0 million, and operating profit of $3.5 million, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment.



	Quarter Ended
	March 29, 2020			March 31, 2019			% Change
Net Revenues
U.S. and Canada segment	$	428.6		$	357.9		20	%
International segment	250.4			282.6			-11	%
Entertainment, Licensing and Digital segment	84.0			92.0			-9	%
eOne segment	342.5			—			100	%

Operating Profit
U.S. and Canada segment	$	71.8		$	13.5		>100%
International segment	(26.7		)	(30.4		)	12	%
Entertainment, Licensing and Digital segment	5.2			30.0			-83	%
eOne segment	(33.1		)	—			-100	%

U.S. and Canada Segment

The U.S. and Canada segment net revenues for the ~~third~~first quarter of ~~2019 declined 2%~~2020 increased 20% compared to the ~~third~~first quarter of ~~2018.~~2019. Net ~~revenues declined in the~~revenue increases from Franchise Brands, ~~and~~ Hasbro Gaming ~~portfolios, partially offset by net revenue increases in the Partner Brands,~~ and to a lesser extent the Company's Partner Brands portfolio, were partially offset by lower net revenues from the Emerging Brands ~~portfolios~~portfolio during the ~~third~~first quarter of ~~2019. The implemented and proposed tariffs on certain U.S. products negatively impacted revenues in the third quarter of 2019.~~2020.

In the Franchise Brands portfolio, ~~lower~~higher net revenues from ~~NERF, BABY ALIVE, TRANSFORMERS~~MAGIC: THE GATHERING and ~~MY LITTLE PONY~~MONOPOLY products were partially offset by net revenue ~~increases~~decreases from ~~MAGIC: THE GATHERING~~PLAY-DOH, TRANSFORMERS and MY LITTLE PONY products. In the Partner Brands portfolio, higher net revenues from DISNEY FROZEN, ~~STAR WARS~~DREAMWORKS' TROLLS and ~~MARVEL~~BEYBLADE products ~~and to a lesser extent,~~ ~~DISNEY’S DECENDANTS products,~~ were partially offset by net revenue decreases from ~~BEYBLADE~~MARVEL and DISNEY PRINCESS products during the ~~third~~first quarter of ~~2019.~~2020. In the Hasbro Gaming portfolio, ~~lower~~higher net revenues ~~from PIE FACE and certain other Hasbro Gaming~~were delivered across many brands ~~products were partially offset by increased net revenues~~in the portfolio, most notably from DUNGEONS & DRAGONS, THE GAME OF LIFE, OPERATION and JENGA products. In the Emerging Brands portfolio, ~~the addition of~~lower net revenues from ~~the Company’s POWER RANGERS products, as well as net revenue increases from~~FURREAL FRIENDS and PLAYSKOOL products, were partially offset by higher net ~~revenue declines~~revenues from ~~LITTLEST PET SHOP and FURREAL FRIENDS~~POWER RANGERS products during the ~~third~~first quarter of ~~2019.~~2020.

U.S. and Canada segment operating profit for the ~~third~~first quarter of ~~2019~~2020 was ~~$193.7~~$71.8 million or 16.7% of segment net revenues, compared to segment operating profit of ~~$223.1~~$13.5 million or 3.8% of segment net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The operating profit ~~decrease~~increase in the ~~third~~first quarter of ~~2019~~2020 was driven by ~~lower~~higher revenues and lower administrative and warehousing expenses offset by higher royalty expenses associated with increases in Partner Brand sales ~~which carry~~and higher ~~royalty expenses and result in lower operating profit.~~freight costs.

~~In addition, the segment recorded higher shipping and warehousing expenses as a result of implemented and proposed tariffs on U.S. products.~~

International Segment

International segment net revenues ~~were essentially flat~~declined 11% in the ~~third~~first quarter of 2020 to $250.4 million from $282.6 million in the first quarter of 2019. Absent the impact of foreign exchange, International segment net revenues ~~increased $20.3~~decreased $22.9 million or 4%8% during the ~~third~~first quarter of ~~2019.~~2020. The following table presents net revenues by geographic region for the Company's International segment for the quarters ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018.~~March 31, 2019.


	Quarter Ended					Quarter Ended
	September 29, 2019		September 30, 2018	% Change		March 29, 2020		March 31, 2019	% Change
Europe	$	319.3	331.4	-4	%	$	162.2	153.4	6	%
Latin America	152.0		145.7	4	%	33.9		62.8	-46	%
Asia Pacific	89.9		83.6	7	%	54.2		66.5	-18	%
Net revenues	$	561.1	560.7	—	%	$	250.4	282.6	-11	%

The decline in International segment net revenues during the first quarter of 2020 was partially driven by unfavorable foreign currency translation of $9.3 million. Unfavorable foreign currency translation impacted the Company's major geographic regions as follows: Europe - ~~$11.7~~$3.8 million, Latin America - ~~$6.1~~$3.8 million and Asia Pacific - ~~$2.1~~$1.7 million. Absent the ~~unfavorable~~impact of foreign ~~currency translation,~~exchange, net revenues for the ~~third~~first quarter of ~~2019 were flat~~2020 increased 8% in Europe ~~up 9% in Latin America~~ and ~~up 10%~~decreased 40% and 16% in the Company’s Latin American and Asia Pacific ~~region.~~regions, respectively. International segment net revenues from Partner Brands grew while net revenues from Franchise Brands, ~~and~~ Hasbro Gaming ~~declined while~~and Emerging Brands ~~net revenues remained relatively flat~~declined during the ~~third~~first quarter of ~~2019~~2020 compared to the ~~third~~first quarter of ~~2018.~~2019. In the Franchise Brands portfolio, lower net revenues from TRANSFORMERS, PLAY-DOH, MY LITTLE PONY and NERF products, were partially offset by higher net revenues from MAGIC: THE GATHERING ~~and MONOPOLY products, were more than offset by lower net revenues from MY LITTLE PONY, TRANSFORMERS and BABY ALIVE~~ products. In the Partner Brands portfolio, net revenue increases from DISNEY FROZEN and ~~MARVEL~~DREAMWORKS' TROLLS products were partially offset by net revenue declines ~~in DISNEY PRINCESS~~from MARVEL and BEY BLADE products. In the Hasbro Gaming portfolio, higher net ~~revenue declines in PIE FACE products were partially offset by net revenue increases~~revenues from DUNGEONS & DRAGONS products and certain other Hasbro Gaming products were more than offset by lower net revenues from PIE FACE products. In the Emerging Brands portfolio, ~~net revenue contributions from POWER RANGERS products were offset by~~ lower net revenues from LITTLEST PET SHOP and LOST KITTIES products were partially offset by higher net revenues from POWER RANGERS and FURREAL FRIENDS ~~and certain other Emerging Brands~~ products in the ~~third~~first quarter of ~~2019.~~2020.

International segment operating ~~profit was $67.2~~losses were $26.7 million, or 10.7% of segment net revenues for the ~~third~~first quarter of ~~2019,~~2020, compared to operating ~~profit~~losses of ~~$66.3~~$30.4 million, or 10.8% of segment net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The ~~increase~~decrease in International segment operating ~~profit~~losses during the ~~third~~first quarter of ~~2019~~2020 was the result of lower cost of sales due to improved inventory management, lower advertising and ~~product development~~marketing costs as well as lower administrative costs. These decreases were partially offset by increased royalty expenses associated with higher ~~royalty expense as a result~~sales of ~~increased Partner Brand sales and higher intangible asset amortization expense.~~partner brand products.

Entertainment, Licensing and Digital Segment

Entertainment, Licensing and Digital segment net revenues ~~increased 20%~~declined 9% to ~~$115.8~~$84.0 million for the ~~third~~first quarter of ~~2019,~~2020, compared to ~~$96.8~~$92.0 million for the ~~third~~first quarter of ~~2018. Revenue growth was~~2019. Net revenue declines were primarily driven by ~~MAGIC: THE GATHERING ARENA, which launched out~~lower digital gaming revenues during the first quarter of ~~open beta late~~2020 due to the timing of game releases combined with the closure of the Backflip business in the ~~third~~fourth quarter of 2019. ~~In addition, the segment realized film revenues from~~ ~~Transformers:Bumblebee~~ ~~which were partially offset by lower television programming revenues for Hasbro television programming during the third quarter of 2019.~~

Entertainment, Licensing and Digital segment operating profit decreased to ~~$24.6~~$5.2 million, or 6.2% of segment net revenues for the ~~third~~first quarter of ~~2019,~~2020, from ~~$37.1~~$30.0 million, or 32.6% of segment net revenues for the ~~third~~first quarter of ~~2018.~~2019. The decrease in Entertainment, Licensing and Digital segment operating profit was primarily driven by ~~higher program~~asset impairment charges of $20.8 million in production ~~amortization~~assets driven by the change in entertainment strategy as a result of the eOne Acquisition.

eOne Segment

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



	Three Months Ended
	March 29, 2020
eOne Segment Net Revenues
Film and TV	$	259.5
Family Brands	50.8
Music and Other	32.2
Segment Total	$	342.5

In the first quarter of 2020, drivers of the eOne segment net revenues include; (i) broadcast and licensing revenues associated with internationally recognized brands, PEPPA PIG and PJ MASKS, (ii) theatrical contributions from the Amblin Partners film 1917, released in December 2019, (iii) broadcast and licensing contributions from key scripted deliveries including season two of THE ROOKIE, a television drama series currently airing on ABC as well as ~~increased advertising, development~~the Company's strong lineup of unscripted television programming. In addition to these entertainment driven revenues, the Company's music business benefited from both strong streaming and ~~administration costs for~~ ~~MAGIC: THE GATHERING ARENA~~ ~~and other digital gaming initiatives. During~~publishing revenues during the ~~third~~first quarter of ~~2018, Entertainment, Licensing and Digital~~2020.

eOne segment operating ~~profit benefited from higher~~losses were $33.1 million, or 9.7% of segment net revenues for the first quarter of 2020. This loss was driven by $77.7 million of acquisition and ~~resulting higher operating profit~~integration costs, including $47.4 million of expense associated with the acceleration of eOne stock-based compensation and $24.5 million of advisor fees settled at the closing of the acquisition. Also contributing to the loss is $25.0 million of incremental intangible amortization costs related to ~~content delivered under a multi-year digital streaming deal signed~~the intangible assets acquired in the ~~third quarter.~~eOne Acquisition.

Global Operations

The Global Operations segment operating profit of ~~$11.1~~$4.6 million for the ~~third~~first quarter of ~~2019~~2020 compared to an operating profit of ~~$3.2~~$1.3 million for the ~~third~~first quarter of ~~2018.~~2019.

Corporate and Eliminations

~~The operating profit~~Operating losses in Corporate and Eliminations totaled $0.6 million for the third quarter of 2019 compared to operating losses of $16.3 million for the third quarter of 2018 driven by cost-saving initiatives implemented as a result of the Company's 2018 restructuring program.

~~First Nine Months of 2019~~

~~The following table presents net revenues and operating profit for the Company's three principal segments for each of the nine months ended September 29, 2019 and September 30, 2018.~~

Nine Months Ended
September 29, 2019 September 30, 2018 %
Change
Net Revenues*
U.S. and Canada segment $ 1,766.6
$ 1,714.5
3 %
International segment 1,221.2
1,229.1
-1 %
Entertainment, Licensing and Digital segment 304.3
246.7
23 %

Operating Profit *

U.S. and Canada segment $ 313.8
$ 269.5
16 %
International segment 51.4
10.4
>100%
Entertainment, Licensing and Digital segment 62.6
76.0
-18 %

*For the nine months ended September 30, 2018, revenues of $33.3 million, and operating profit of $9.8 million, were reclassified from the U.S. and Canada segment to the Entertainment, Licensing and Digital segment.

~~U.S. and Canada Segment~~

The U.S. and Canada segment net revenues for the nine months ended September 29, 2019 increased 3% compared to 2018. In the first nine months of 2019, net revenue increases in the Partner Brands and Emerging Brands portfolios were partially offset by lower net revenues in the Franchise Brands and Hasbro Gaming portfolios.

In the Franchise Brands portfolio, net revenue increases from MAGIC: THE GATHERING, PLAY-DOH, MONOPOLY and TRANSFORMERS products were more than offset by lower net revenues from NERF, BABY ALIVE and MY LITTLE PONY products. In the Partner Brands portfolio, higher net revenues from DISNEY FROZEN and MARVEL products, as well as net revenue contributions from the introduction of the Company's UGLYDOLL and OVERWATCH products were partially offset by net revenue declines from DREAMWORKS’ TROLLS products. In the Hasbro Gaming portfolio, lower net revenues from PIE FACE, SPEAK OUT and certain other Hasbro Gaming products were partially offset by higher net revenues from DUNGEONS & DRAGONS and DUEL MASTERS products. In the Emerging Brands portfolio, net revenue contributions from the introduction of the Company's POWER RANGERS products, as well as net revenue increases from PLAYSKOOL products were partially offset by net revenue decreases from LITTEST PET SHOP products.

~~U.S. and Canada segment operating profit for the nine months ended September 29, 2019 increased to $313.8 million, or 17.8% of segment net revenues, compared to $269.5 million, or~~ ~~15.7%~~ of segment net revenues, for the nine months ended September 30, 2018. The increase in operating profit in the first nine months of 2019 was driven by higher revenues and favorable product mix, partially offset by higher royalty expenses from increased Partner Brands sales, higher warehousing and shipping costs associated with opening a new Midwestern U.S. warehouse and increased domestic shipping in 2019, as well as higher intangible asset amortization costs associated with the Power Rangers brand acquisition. The operating profit in the first nine months of 2018 included expenses of $52.3 million related to the Toys“R”Us liquidation in the U.S.

~~International Segment~~

International segment net revenues decreased 1% to $1,221.2 million for the nine months ended September 29, 2019 from $1,229.1 million for the nine months ended September 30, 2018. Absent an unfavorable $63.4 million impact of foreign exchange, International segment net revenues increased $55.5 million or 5% during the first nine months of 2019. The following table presents net revenues by geographic region for the Company's International segment for the nine month periods ended September 29, 2019 and September 30, 2018.

Nine Months Ended
September 29, 2019 September 30, 2018 %
Change
Europe $ 673.7
686.5
-2 %
Latin America 305.1
308.1
-1 %
Asia Pacific 242.4
234.5
3 %
Net revenues $ 1,221.2
1,229.1
-1 %

Foreign currency translation negatively impacted the major geographic regions as follows: Europe - $37.4 million, Latin America - $16.1 million and Asia Pacific - $9.9 million. Absent foreign currency translation, the underlying business grew across all major geographic regions, up 4% in Europe, 4% in Latin America and 8% in Asia Pacific. International segment net revenues from Partner Brands and Emerging Brands grew while Franchise Brands and Hasbro Gaming net revenues declined during the first nine months of 2019 compared to 2018. The declines in Franchise Brands were driven by lower sales from MY LITTLE PONY and NERF products partially offset by higher net revenues from MAGIC: THE GATHERING and MONOPOLY products. In the Partner Brands portfolio, higher net revenues from MARVEL and DISNEY FROZEN products were partially offset by lower net revenues from STAR WARS and DISNEY PRINCESS products. In the Hasbro Gaming portfolio, lower net revenues from PIE FACE and SPEAK OUT products were partially offset by net revenue increases from CONNECT 4 and certain other Hasbro Gaming products. In the Emerging Brands portfolio, contributions from the introduction of the Company's POWER RANGERS products, as well as net revenue increases from PLAYSKOOL products were partially offset by lower net revenues from LITTLEST PET SHOP and FURREAL FRIENDS products in the first nine months of 2019.

~~International segment operating profit was $51.4~~$45.1 million for the first ~~nine months~~quarter of ~~2019, up from~~2020 compared to operating profit of ~~$10.4~~$21.7 million for the first ~~nine months~~quarter of ~~2018. The improvement~~2019. Operating losses in ~~International segment operating results for~~2020 were driven primarily by charges related to the ~~first nine months~~eOne Acquisition; including acquisition and integration costs of ~~2019 was the result~~$17.1 million and restructuring and related costs of ~~lower administrative, advertising~~$34.1 million, comprised of severance and ~~product development~~retention costs, as well as ~~lower distribution costs offset~~impairment charges for certain definite-lived intangible assets driven by ~~higher intangible asset amortization costs. Operating profit~~the change in strategy for the ~~first nine months of 2018 includes $11.2 million of expenses related to the Toys“R”Us liquidation, primarily within in the United Kingdom.~~

~~Entertainment, Licensing and Digital Segment~~

Entertainment, Licensing and Digital segment net revenues for the nine months ended September 29, 2019 increased 23% to $304.3 million from $246.7 million for the nine months ended September 30, 2018. Revenue growth was driven by ~~MAGIC: THE GATHERING ARENA~~ ~~and the Company's share of revenues related to~~ ~~Transformers:Bumblebee, the 2018 theatrical release produced jointly with Paramount Pictures.~~

Entertainment, Licensing and Digital segment operating profit was $62.6 million, or 20.6% of net revenues, for the nine months ended September 29, 2019 down from $76.0 million, or 30.8% of segment net revenues, for the nine months ended September 30, 2018. The decline in operating profit in the Entertainment, Licensing and Digital segment was driven by higher program production expense and amortization costs as well as increased advertising, development and administration costs for ~~MAGIC: THE GATHERING ARENA~~ ~~and other digital gaming initiatives. These increases were partially offset by lower royalty expenses during the first nine months of 2019.~~

~~Global Operations~~

~~The Global Operations segment operating profit of $6.3 million for the first nine months of 2019 compares to an operating loss of $4.6 million for the first nine months of 2018.~~

~~Corporate and Eliminations~~

Operating profit in Corporate and Eliminations for the first nine months of 2019 was $27.6 million, compared to operating losses of $30.8 million for the first nine months of 2018. The Corporate and Eliminations operating loss in the first nine months of 2018 was driven by $7 million of expenses associated with the Toys“R”Us liquidation and $17.3 million of severance related to the Company’s 2018 restructuring plan. In the first nine months of 2019, operating profit benefited from cost reductions associated with the implementation of the Company’s 2018 restructuring program.

combined company’s entertainment assets.

OPERATING COSTS AND EXPENSES

~~Third Quarter 2019~~

~~The~~Overall, the Company's costs and expenses in the first quarter of 2020 increased compared to the first 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~~March 29, ~~2019~~2020 and ~~September 30, 2018.~~March 31, 2019.


	Quarter Ended				Quarter Ended
	September 29, 2019		September 30, 2018		March 29, 2020		March 31, 2019
Cost of sales	39.8	%	41.8	%	23.8	%	35.5	%
Program cost amortization					12.0		0.9
Royalties	8.1		6.7		10.2		8.2
Product development	4.3		4.2		4.9		7.7
Advertising	8.9		8.6		9.2		10.5
Amortization of intangibles	0.8		0.6		3.3		1.6
Program production cost amortization	1.8		0.9
Selling, distribution and administration	17.5		17.4		25.2		30.8
Acquisition and related costs					13.5		0.0

Cost of sales for the ~~third~~first quarter of ~~2019~~2020 was ~~$627.1~~$262.7 million, or ~~39.8%~~23.8% of net revenues, compared to $~~655.6~~260.0 million, or ~~41.8%~~35.5% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The decrease as a percentage of net revenues is primarily related to higher revenues as a result of the acquisition of eOne, which experiences lower costs of sales sold as a percentage of net sales. To a lesser extent, the cost of sales decrease ~~in dollars and~~ as a percent of net revenues was driven by a favorable ~~brand~~product mix from strong MAGIC:THE GATHERING revenues combined with higher ~~sales of~~ Partner Brand products, ~~as well as savings related to improved inventory costing,~~ partially offset by higher costs to bring inventory into the U.S. during the ~~third~~first quarter of ~~2019~~2020 as compared to ~~2018.~~2019.

Program cost amortization increased to $132.1 million or 12.0% of net revenues, for the first quarter of 2020 from $6.6 million, or 0.9% of net revenues, for the first quarter of 2019. The increase in this expense both in dollars and as a percentage of net revenues is primarily related to eOne, which experiences higher program cost amortization as a percentage of net sales. Program costs are capitalized as incurred and amortized using the individual-film-forecast method which matches costs to the related recognized revenue.

Royalty expense for the ~~third~~first quarter of ~~2019 was~~2020 increased to $~~128.0~~112.8 million, or ~~8.1%~~10.2% of net revenues, compared to $~~105.3~~59.9 million, or ~~6.7%~~8.2% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The increase in royalty expense in dollars and as a percent of net revenues was driven by eOne combined with higher sales of Partner Brand products in the ~~third~~first quarter of 2020 as compared to the first quarter of 2019.

Product development expense for the ~~third~~first quarter of ~~2019~~2020 was $~~67.4~~53.8 million, or ~~4.3%~~4.9% of net revenues, compared to $~~65.8~~56.3 million, or ~~4.2%~~7.7% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The ~~increase in dollars~~decrease as a percent of net revenues was ~~driven~~primarily related to eOne, which experiences lower product development expense as a percentage of net sales combined with lower spending as a result of global cost savings initiatives partially offset by increased investments in digital gaming.

Advertising expense for the ~~third~~first quarter of ~~2019~~2020 was $~~140.3~~101.6 million, or ~~8.9%~~9.2% of net revenues, compared to $~~134.4~~76.6 million, or ~~8.6%~~10.5% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The advertising expense increase in dollars was driven by ~~net revenue increases~~eOne advertising expenses and higher costs ~~associated with~~in support of the ~~Company’s digital and e-sports initiatives, primarily~~first quarter MAGIC: THE GATHERING ~~ARENA~~. tabletop set release, partially offset by reduced advertising levels across the regions reflecting the current environment due to COVID-19 impacts.

Amortization of intangible assets ~~was~~increased to $36.8 million, or 3.3% of net revenues for the first quarter of 2020, compared to $11.8 million, or ~~0.8%~~1.6% of net revenues, for the ~~third~~first quarter of ~~2019, compared to $8.8~~ ~~million, or 0.6% of net revenues, for the third quarter of 2018.~~2019. The increase in dollars and as a percent of net revenues ~~reflects amortization~~is primarily related to the ~~licensed property rights,~~acquisition of eOne, which ~~began amortizing in 2019.~~

~~Program production~~contributed $25.0 million to amortization. Excluding the intangible asset amortization ~~increased to $28.0~~ ~~million or 1.8% of net revenues, for the third quarter of 2019 from $14.1~~ million, or 0.9% of net revenues, for the third quarter of 2018. Program production costs are capitalized as incurred and amortized using the individual-film-forecast method. The increase in dollars, and as a percent of net revenues, reflectsassociated with eOne, amortization of ~~the~~ ~~Transformers: Bumblebee~~ ~~film production asset during the third quarter of~~intangible assets was consistent with 2019.

For the ~~third~~first quarter of ~~2019,~~2020, the Company's selling, distribution and administration expenses increased to $~~275.4~~279.1 million, or ~~17.5%~~25.2% of net revenues, from $~~272.4~~225.3 million, or ~~17.4%~~30.8% of net revenues, for the ~~third~~first quarter of ~~2018.~~2019. The increase in selling, distribution and administration expenses in dollars was driven primarily by the inclusion and consolidation of eOne's operations during the first quarter. In addition, the increase in selling, distribution and administration expenses reflects higher shipping ~~and warehousing~~ costs in the ~~third~~first quarter of ~~2019 as a result~~2020 due to an increase in domestic sales of ~~implemented~~Hasbro Gaming products and ~~proposed tariffs on its products in the U.S. which resulted in shifting orders from import to domestic delivery. In addition, the Company incurred~~ higher ~~selling and administrative costs in support of the Company’s Wizards of the Coast business.~~stock compensation expense. These increases were partially offset by lower warehousing expenses and decreased general and administrative spending due to the Company’s ongoing cost-reduction efforts in the first quarter of 2020 as compared to the first quarter of 2019.

~~First Nine Months of 2019~~

~~The Company's costs and expenses, stated as percentages of net revenues, are illustrated below for~~During the ~~nine~~ ~~month periods ended September 29, 2019 and September 30, 2018.~~

Nine Months Ended
September 29, 2019 September 30, 2018
Cost of sales 37.4 % 39.2 %
Royalties 7.9
7.6
Product development 5.7
5.7
Advertising 9.4
9.1
Amortization of intangibles 1.1
0.6
Program production cost amortization 1.8
1.0
Selling, distribution and administration 22.7
26.8

~~Cost of sales for the~~ ~~nine~~three months ended ~~September~~March 29, ~~2019 decreased~~2020, the Company incurred $149.8 million of acquisition and related costs in connection with the eOne Acquisition. These expenses comprised of $95.7 million of acquisition and integration costs, primarily related to $~~1,230.8~~$47.4 million ~~or 37.4%~~ of ~~net revenues, from $1,249.1~~expense associated with the acceleration of eOne stock-based compensation and $38.2 million ~~or 39.2%~~ of ~~net revenues for~~advisor fees settled at the ~~nine~~ ~~months ended September 30, 2018. The cost~~closing of ~~sales decrease~~the acquisition. Also included in ~~dollars~~the acquisition and ~~as a percent~~related costs were $54.1 million of ~~net revenues during the first nine months~~restructuring and related costs including severance and retention costs of ~~2019 was driven by a favorable brand mix from higher sales of Partner Brand products~~$13.2 million as well as ~~savings related to improved inventory costing, partially offset~~$40.9 million in impairment charges for certain definite-lived intangible and production assets. The impairment charges of $40.9 million were driven by ~~higher costs to bring inventory into~~ the ~~U.S.~~

~~Royalty expense~~change in strategy for the ~~nine~~ ~~months ended September 29, 2019 was $259.0 million, or 7.9% of net revenues, compared to $241.0 million, or 7.6% of net revenues, for the~~ ~~nine~~ ~~months ended September 30, 2018. The increase in royalty expense in dollars, and as a percent of net revenues, was driven by increased partner brand net revenues during the first nine months of 2019.~~combined company’s entertainment assets.

~~Product development expense for the~~ ~~nine~~ ~~months ended September 29, 2019 increased to $189.2 million, or 5.7% of net revenues, from $183.1 million, or 5.7% of net revenues for the~~ ~~nine~~ ~~months ended September 30, 2018. The increase in dollars during the first~~ ~~nine~~ ~~months of 2019 was driven by increased investments in digital gaming, primarily related to~~ ~~MAGIC: THE GATHERING ARENA,~~ ~~and other digital gaming initiatives.~~

~~Advertising expense for the~~ ~~nine~~ ~~months ended September 29, 2019 was $309.7 million, or 9.4% of net revenues, compared to $290.0 million, or 9.1% of net revenues, for the~~ ~~nine~~ ~~months ended September 30, 2018. The increase in advertising expense was primarily due to higher costs related to the Company’s digital and e-sports initiatives, primarily~~ ~~MAGIC: THE GATHERING ARENA.~~

~~Amortization of intangibles was $35.4 million, or 1.1% of net revenues, for the~~ ~~nine~~ ~~months ended September 29, 2019 compared to $19.9 million, or 0.6% of net revenues, in the first~~ ~~nine~~ months of 2018. The increase reflects amortization related to the POWER RANGERS property rights acquired during the second quarter of 2018 as well as the licensed property rights, which began amortizing in 2019.

~~Program production expense and amortization increased in the first~~ ~~nine~~ ~~months of 2019 to $58.1 million, or 1.8% of net revenues, from $33.4 million, or 1.0% of net revenues, in the first~~ ~~nine~~ months of 2018. Program production costs are capitalized as incurred and amortized using the individual-film-forecast method. The increase in dollars, and as a percent of net revenues, reflects expense related to film production assets, offset by lower television programming amortization during the first nine months of 2019.

~~For the~~ ~~nine~~ months ended September 29, 2019, the Company's selling, distribution and administration expenses decreased to $748.3 million or 22.7% of net revenues from $853.6 million or 26.8% of net revenues for the ~~nine~~ ~~months ended September 30, 2018. In the first~~ ~~nine~~ months of 2018, the Company’s selling, distribution and administration expenses included $60.3 million of bad debt and other expenses related to Toys“R”Us, as well as $17.3 million of severance costs related to the Company’s 2018 restructuring program. The remaining decrease in selling, distribution and administration expenses was driven by cost-savings initiatives including lower compensation expense. These decreases were partially offset by increased expenses related to opening a new Midwestern U.S. warehouse, higher shipping and warehousing costs in 2019 as a result of implemented and proposed tariffs in the U.S., which resulted in shifting orders from import to domestic delivery. In addition, the Company incurred higher selling and administrative costs in support of the Company’s Wizards of the Coast business.

NON-OPERATING (INCOME) EXPENSE

Interest expense for the ~~third~~first quarter ~~and first nine months~~ of ~~2019~~2020 totaled ~~$22.8~~$54.7 million ~~and $67.1 million, respectively,~~ compared to ~~$22.8 million and $68.4~~$22.3 million in the ~~third quarter and~~ first ~~nine months of 2018, respectively. Interest expense for the third~~ quarter of 2019, ~~was consistent~~respectively. During November 2019, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities in connection with ~~2018.~~the financing of the acquisition of eOne. The ~~decrease~~increase in interest expense for the first ~~nine months~~quarter of ~~2019 primarily~~2020 reflects interest related to these notes and other borrowings associated with the eOne business, partially offset by lower ~~levels of~~average short-term ~~borrowing in 2019 compared to 2018.~~borrowings during the quarter.

Interest income was ~~$5.5 million and $19.2~~$4.7 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2019, respectively,~~2020, compared to ~~$4.7 million and $17.2~~$7.7 million in the ~~third~~first quarter ~~and first nine months~~ of ~~2018, respectively. Higher~~2019. Lower average interest rates in ~~2019~~2020 compared to ~~2018~~2019 contributed to the ~~nine month increase offset by lower levels of invested cash in 2019.~~decrease.

Other ~~expense,~~income, net was ~~$20.2 million and $118.3~~$1.5 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2019, respectively,~~2020 compared to other income, net of ~~$0.6 million and $6.2~~$8.1 million in the ~~third~~first quarter ~~and first nine months~~ of ~~2018, respectively. Included within~~2019. The decrease in other ~~expense,~~income, net in the first ~~nine months~~quarter was driven by foreign currency losses in 2020 compared to foreign currency gains in 2019, partially offset by lower pension expense as a result of ~~2019 was a $110.8 million non-cash pension charge from~~ the ~~settlement~~termination of the Company's U.S. ~~defined benefit~~ pension ~~plan liability during~~plans in the second quarter of 2019. Included within other expense, net in the third quarter of 2019 was 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.

INCOME TAXES

~~On December 22, 2017, the U.S. government enacted comprehensive~~Income tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code including, but not limited to, reducing the U.S. federal corporate tax rate and requiring a one-time taxbenefit totaled $4.1 million on ~~certain unrepatriated earnings~~pre-tax loss of ~~foreign subsidiaries.~~

On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) established a one-year measurement period to complete the accounting for the income tax effects of the Tax Act according to standards provided by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 740, Accounting for Income Taxes (ASC 740). An entity recognizes the impact of those amounts for which the accounting is complete. For$71.9 million in the first quarter of 2018, the Company obtained additional information affecting the provisional amount initially recorded in the fourth quarter of 2017. As a result, the Company recorded a one-time tax expense of $47.8 million which reversed certain discrete benefits recorded in 2017 as well as increased our provisional deemed repatriation tax liability. In the third quarter of 2018, the estimate was further revised based on additional guidance and a one-time tax benefit of $17.3 was recorded. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company has completed its analysis based on legislative updates relating to the Tax Act.

~~Income tax expense totaled $46.8 million on pre-tax earnings of $259.7 million in the third quarter of 2019~~2020 compared to income tax expense of ~~$31.9~~$2.9 million on pre-tax earnings of ~~$295.8~~$29.6 million in the ~~third~~first quarter of 2018. For the nine month period, income tax expense totaled $42.3 million on pre-tax earnings of $295.4 million in 2019 compared to income tax expense of $63.9 million on pre-tax earnings of $275.5 million in 2018.2019. Both periods were impacted by discrete tax events including the accrual of potential interest and penalties on uncertain tax positions. During the first ~~nine months~~quarter of ~~2019,~~2020, favorable discrete tax adjustments were a net benefit of ~~$31.7~~$20.1 million compared to a net ~~expense~~benefit of ~~$10.6~~$2.6 million in the first ~~nine months~~quarter of ~~2018.~~2019. The favorable discrete tax adjustments for the first ~~nine months~~quarter of ~~2019~~2020 primarily relate to the ~~settlement~~costs related to the acquisition of ~~the U.S. defined benefit pension plan liability, excess tax benefits on share-based payments and expiration of statutes of limitation for uncertain tax positions.~~eOne. The ~~unfavorable~~favorable discrete tax adjustments for the first ~~nine months~~quarter of ~~2018~~2019 primarily related to ~~changes in guidance on U.S.~~expiration of statutes of limitations for uncertain tax reform, which resulted in the reversal of a tax benefit recorded in 2017 and additional repatriation tax liability, partially offset by excess tax benefits on share-based payments and audit settlements.positions. Absent discrete items, the adjusted tax rates for the first ~~nine months~~quarters of 2020 and 2019 were 20.6% and ~~2018 were 18.2% and 17.6%~~18.5%, respectively. The increase in the adjusted tax rate of ~~18.2%~~20.6% for the ~~nine months ended September 29, 2019~~first quarter of 2020 is primarily due to the mix of jurisdictions where the Company earned its ~~profits.~~profits and the impact of the eOne Acquisition.

OTHER INFORMATION

Brexit Referendum

On June 23, 2016, the United Kingdom (“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 ~~Company's~~ revenue pattern of Hasbro’s legacy business has shown the second half of the year to be more significant to its overall business than the first half. The Company expects that this concentration will continue, particularly as more of its business has shifted to larger customers with order patterns concentrated in the second half of the year around the holiday season. The concentration of

sales in the second half of the year increases the risk of (a) underproduction of popular items, (b) overproduction of less popular items, and (c) failure to achieve tight and compressed shipping schedules.

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

time. As production typically builds to peak levels during the summer months, the Company anticipates making up lost production during the second quarter of 2020, unless a resurgence of COVID-19 cases were to cause further manufacturing shutdowns or restrictions, to be well positioned to meet shipping schedule demands in the second half of the year.

Accounting Pronouncement Updates

In ~~February~~June 2016, the ~~FASB issued~~Financial Accounting Standards ~~Update 2016-02 (ASU 2016-02),~~ ~~Leases (Topic 842)~~, which requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The liability is based on the present value of lease payments and the asset is based on the liability. For income statement purposes, a dual model was retained requiring leases to be either classified as operating or finance. Operating leases result in straight-line expense while finance leases result in a front-loaded expense pattern. Certain other quantitative and qualitative disclosures are also required. ASU 2016-02 is required for public companies for fiscal years beginning after December 15, 2018. ASU 2016-02 as originally issued required modified retrospective adoption. In July 2018, the FASB issued ASU 2018-11, which provides an alternative transition method in addition to the existing method by allowing entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASU-2016-02 on December 31, 2018 using the retrospective basis as provided in ASU 2018-11. No cumulative effect was recorded to retained earnings. The Company also elected certain practical expedients as provided under the standard. These included (i) the election not to reassess whether contracts existing at the adoption date contain a lease under the new definition of a lease under the standard; (ii) the election not to reassess the lease classification for existing leases as of the adoption date; (iii) the election not to reassess whether previously capitalized initial direct costs would qualify for capitalization under the standard; (iv) the election to use hindsight in determining the relevant lease terms for use in the capitalization of the lease liability; and (v) the election to use hindsight in reviewing the right-of-use assets for impairment. For all leases, the terms were evaluated, including extension and renewal options as well as the lease payments associated with the leases. As a result of the adoption of the standard, in the first quarter of 2019, the Company recorded right-of-use assets of $121.2 million and lease liabilities of $139.5 million. The Company’s results of operations were not impacted by this standard. The adoption of this standard did not have an impact on the Company’s cash flows. For further details, see Note 10 to the consolidated financial statements, which are included in Part I of this Form 10-Q.

~~In August 2017, the FASB~~Board ("FASB") issued Accounting Standards Update No. ~~2017-12~~2016-13 (ASU ~~2017-12),~~2016-13) Financial Instruments – Credit Losses (Topic 326): ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~Measurement of Credit Losses on Financial Instruments. . The amendments ~~expand~~in this update provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and ~~refine hedge accounting for both nonfinancial and financial risk components and align~~other commitments to extend credit held by a reporting entity at each reporting date. The standard update replaces the recognition and presentation of the effects of the hedging instrument and the underlying hedged item in the financial statements. The impact of the standard includes elimination of the requirement to separately measure and recognize hedge ineffectivenessincurred loss impairment methodology with a methodology that reflects expected credit losses and requires ~~the presentation~~consideration of ~~fair value adjustments~~a broader range of reasonable and supportable information to ~~hedging instruments to be included in the same income statement line as the hedged item.~~inform credit loss estimates. For public companies, this standard is effective for annual reporting periods beginning after December 15, ~~2018,~~2019, and early adoption iswas permitted. The Company adopted ~~ASU 2017-12~~the standard in the first quarter of ~~2019~~2020 and the adoption of ~~this~~the standard did not have a material impact on ~~the Company’s results or~~its consolidated financial statements.

~~Recently Issued~~In August 2018, the FASB issued Accounting ~~Pronouncements~~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~~Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and ~~Entertainment—Broadcasters—Intangibles—Goodwill~~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 iswas permitted. The Company ~~is currently evaluating~~adopted the standard in the first quarter of 2020 and the adoption of the standard did not have a material impact ~~if any, to~~on its consolidated financial statements.

Recently Issued Accounting Pronouncements

~~Recent Securities and Exchange Commission Rulings~~

In August 2018, the ~~U.S. Securities and Exchange Commission (“SEC”)~~FASB issued ~~a final ruling amending numerous SEC rules covering a diverse group of topics. One noteworthy rule change expands~~Accounting Standards Update No. 2018-14 (ASU 2018-14) Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements related to changes in shareholders’ equity by extending to interim periods, the annual requirement of SEC Regulation S-X, Rule 3-04, of presenting changes in stockholders’ equity. An analysis of changes in stockholders’ equity in the form of a reconciliationfor employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is ~~required for the current and comparative year-to-date interim periods~~ effective for ~~all filings submitted~~annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The standard relates to financial statement disclosure only and will not have an impact on ~~or after November 5, 2018. As a result of~~ the ~~adoption of this ruling, the Company has included a~~Company's consolidated statement of ~~stockholders’ equity for the quarters and year-to-date periods ending September 29, 2019 and September 30, 2018, in Part I, Item 1~~financial position, statement of ~~this Form 10-Q.~~operations or statement of cash flows.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically generated a significant amount of cash from operations. In the first ~~nine~~three months of ~~2019~~2020 and ~~2018~~2019 the Company funded its operations and liquidity needs primarily through cash flows from operations, and when needed, used borrowings under its available lines of credit.

In August 2019, the Company entered into a definitive agreement under which Hasbro will acquire all of the outstanding shares of stock of eOne in an all cash transaction valued at approximately £3.3 billion or $4 billion based on exchange rates on the agreement date. Under the terms of the agreement, eOne shareholders will receive £5.60 in cash for each common share of eOne. The Company expects to ~~finance~~continue to fund its working capital needs primarily through available cash and cash flows from operations and, when needed, by issuing commercial paper or borrowing under its revolving credit agreement. In the ~~transaction~~event that the Company is not able to issue commercial paper, the Company intends to utilize its available lines of credit. In addition, beginning in 2020 with the ~~proceeds from debt~~acquisition of eOne, the Company commenced funding certain of its television and equity financing. The Company has entered into a debt commitment letter with BofA to provide a 364-day senior unsecured bridge loan facility in an aggregate principal amount of up to £3.6 billion to secure fundingfilm productions using production financing facilities which are secured by the assets and future revenues of the ~~purchase price (the "Bridge Facility"). Costs associated with~~individual production subsidiaries. Under these facilities, the ~~Bridge Facility in~~cash generated by the ~~amount of approximately $19 million are being capitalized and are included in prepaid expenses and other current assets in~~production may be restricted until the Company’s consolidated balance sheets. In addition, subsequent to the agreement described above, the Company entered into the Term Loan Agreement with BofA as administrative agent and certain financial institutions, as lenders, pursuant to which such lenders committed to provide, contingent upon completion of the acquisition and certain other customary conditions of funding, the Term Loan Facilities in an aggregate principal amount of up to $1,000.0 million. ~~Borrowings under the Term Loan Facilities will be used to pay a portion of the consideration and other amounts payable in connection with the Company’s acquisition of eOne.~~

production financing is paid. The Company believes that the funds available to it, including cash expected to be generated from operations and funds available through its available lines of credit and commercial paper program are adequate to meet its working capital needs

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

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

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

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

As of ~~September~~March 29, ~~2019,~~2020, the Company's cash and cash equivalents totaled ~~$1,060.4 million.~~$1,237.9 million, of which $86.2 million is restricted under the Company’s production financing facilities. Prior to 2017, deferred income taxes had not been provided on the majority of undistributed earnings of international subsidiaries as such earnings were considered indefinitely reinvested by the Company. The Tax Act provided significant changes to the U.S. tax system including the elimination of the ability to defer U.S. income tax on unrepatriated earnings by imposing a one-time mandatory deemed repatriation tax on undistributed foreign earnings. As of ~~September~~March 29, ~~2019,~~2020, the Company has a total liability of $192.9 million related to this tax, $18.4 million is reflected in current liabilities while the remaining long-term payable related to the Tax Act of $174.5 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~~March 29, ~~2019~~2020 is denominated in the U.S. dollar.

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

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


	September 29, 2019		September 30, 2018	% Change		March 29, 2020		March 31, 2019	% Change
Cash and cash equivalents	$	1,060.4	907.1	17	%
Cash and cash equivalents (including restricted cash of $86.2 and $0)						$	1,237.9	1,196.6	3	%
Accounts receivable, net	1,416.9		1,391.2	2	%	963.8		638.4	51	%
Inventories	589.1		610.9	-4	%	444.4		491.8	-10	%
Prepaid expenses and other current assets	346.7		283.2	22	%	672.4		305.1	>100%
Other assets	626.2		743.1	-16	%	1,461.5		739.7	98	%
Accounts payable and accrued liabilities	1,458.8		1,301.6	12	%	1,664.7		935.3	78	%
Other liabilities	550.8		591.4	-7	%	739.0		636.1	16	%

Accounts receivable increased 2% to ~~$1,416.9~~$963.8 million at ~~September~~March 29, ~~2019,~~2020, compared to ~~$1,391.2~~$638.4 million at ~~September 30, 2018.~~March 31, 2019. Absent the ~~$28.7 million~~unfavorable foreign currency impact of ~~foreign currency translation,~~$36.7 million, accounts receivable increased ~~approximately 4%. Accounts~~57%, or $362.1 million. The increase in accounts receivable ~~net at September 30, 2018 included a $77.0~~was primarily driven by the inclusion of eOne balances in the first quarter of 2020 of $224.2 million ~~allowance for doubtful~~combined with higher U.S. and Canada segment accounts ~~related~~receivable balances driven by the increase in domestic revenues in the quarter ended March 29, 2020 compared to ~~Toys“R”Us.~~the quarter ended March 31, 2019. Days sales outstanding ~~increased~~remained flat at 79 days in the first quarter of 2020 compared to ~~82 days at September 29, 2019 from 81 days at September 30, 2018.~~the first quarter of 2019.

Inventories decreased 4% to ~~$589.1~~$444.4 million at ~~September~~March 29, ~~2019~~2020 from ~~$610.9~~$491.8 million at ~~September 30, 2018.~~March 31, 2019. Absent the ~~$15.1 million~~unfavorable foreign currency impact of ~~foreign currency translation,~~$22.5 million, inventories ~~would have~~ decreased ~~1%.~~5%, or $24.8 million. The decrease at ~~September~~March 29, ~~2019~~2020 reflects improved inventory management initiatives ~~implemented across~~and lower shipments from China due to the ~~Company's international markets~~impact of COVID-19 in the first quarter, partially offset by higher inventory levels ~~held~~ in the ~~U.S~~Company's Latin American markets as ~~a result~~the Company works through higher than normal inventory levels remaining from the fourth quarter of ~~the proposed U.S. tariffs.~~2019.

Prepaid expenses and other current assets increased ~~22%~~ to ~~$346.7~~$672.4 million at ~~September~~March 29, ~~2019~~2020 from ~~$283.2~~$305.1 million at ~~September 30, 2018.~~March 31, 2019. The increase was due to higher accrued royalty and licensing balances, primarily attributable to accrued revenue balances associated with eOne's intellectual property of $245.0, higher accrued foreign tax credits related to film and television production costs, the majority of which are attributable to eOne productions and higher unrealized gains on foreign exchange contracts, higher prepaid royalty balances as well as approximately $19 million of deferred financing costs recorded to current assets in relation to the Bridge Facility, used to secure funding for the proposed purchase of eOne. At September 29, 2019, there are no borrowings under these facilities. In addition, ascontracts. As a result of the settlement of the Company's U.S. defined benefit pension plan liability, the Company ~~had~~has remaining excess assets of approximately ~~$19~~$12.5 million of which $8$8.0 million is recorded as a current asset and will be used to fund future Company contributions to the Company's 401(k) plan in the U.S. These increases were partially offset by lower prepaid ~~advertising~~value-added taxes in the first quarter of 2020.

Other assets increased to approximately $1,461.5 million at March 29, 2020 from $739.7 million at March 31, 2019. The increase was primarily due to the inclusion of assets obtained through the eOne Acquisition including investments in acquired content of $471.3 million, investments in film and television productions of $209.3 million and investment in development of $42.2 million. Also contributing to the increase are higher accrued royalty income balances primarily driven by eOne balances, increased non-current royalty advances due to payments made in the first quarter of 2020 relating to the extension of the agreements related to certain of the Company’s partner brands. These increases were partially offset by lower capitalized television production costs, net of related production rebates in the legacy Hasbro business, primarily related to impairment charges recorded on certain production assets during the first quarter of 2020, lower capitalized film production costs in the legacy Hasbro business, net of related production rebates, as a result of ~~the timing~~higher amortization of ~~payments~~film production assets in ~~2019 compared to 2018~~2020 and ~~lower value-added taxes.~~

Other assets decreased approximately 16% to $626.2 million at September 29, 2019 from $743.1 million at September 30, 2018. The decrease was primarily due to lower deferred tax asset balances as a result of a reclassification of certain deferred tax assets to reduce the Company's transition tax liability, lower long-term receivable balances related to third-party production studio rebates, lower capitalized movie production costs as a result of amortization of certain production assets during the fourth quarter of 2018 and the first nine months of 2019. These decreases were partially offset by the above mentioned pension surplus as a result of the settlement of the Company's U.S. defined benefit pension plan liability of which approximately $12 million is recorded in other assets, higher capitalized television production costs, net of production rebates and higher long-term accrued royalty income balances in 2019.rebates.

Accounts payable and accrued liabilities increased ~~12%~~ to ~~$1,458.8~~$1,664.7 million at ~~September~~March 29, ~~2019~~2020 from ~~$1,301.6~~$935.3 million at ~~September 30, 2018. Increases include higher accrued advertising~~March 31, 2019. The increase was primarily ~~related to~~ ~~MAGIC: THE GATHERING ARENA,~~ ~~deferred option premiums of approximately $34 million, recorded to accrued liabilities, to hedge a portion of the Company's exposure to fluctuations in the British pound sterling in relation~~attributable to the acquisition of eOne ~~higher severance accrual~~and inclusion of significant accrued participation balances, deferred revenue balances primarily related to broadcast licensing obligations and the ~~restructuring actions taken in the fourth quarter~~addition of ~~2018, the Company’s~~eOne's current lease liability ~~balance of $29.3 million~~and account payable balances. In addition, increases included inhigher accrued ~~liabilities as the result of the adoption of ASU 2016-02~~royalty balances and higher accrued ~~royalty balances~~interest as a result of higher ~~sales~~debt levels in 2020 from the issuance of ~~Partner Brands products during the third quarter of 2019.~~notes in November 2019 and January 2020. These increases were partially offset by lower severance accruals from payments made in relation to restructuring actions accrued in 2018, lower accrued advertising balances due to COVID-19 related shutdowns late in the ~~payment~~first quarter of 2020, lower accrued liabilities due to payments made in 2019 for remaining amounts due to Saban Properties for the ~~Power Rangers~~POWER RANGERS brand acquisition and lower accrued ~~value added~~income tax balances in the first ~~nine months~~quarter of ~~2019.~~2020.

Other liabilities ~~decreased 7%~~increased to ~~$550.8~~$739.0 million at ~~September~~March 29, ~~2019~~2020 from ~~$591.4~~$636.1 million at ~~September 30, 2018.~~March 31, 2019. The ~~decrease includes~~increase was primarily driven by deferred tax liabilities recorded as a ~~decrease~~result of the eOne Acquisition accounting adjustments during the first quarter of 2020 as well as higher long-term lease liability balances resulting from the eOne Acquisition, and higher deferred revenue balances as a result of the inclusion of eOne operations in the Company's consolidated financial statements beginning in the first quarter of 2020. In addition to these increases, there were higher long-term pension balances due to the 2019 year-end actuarial valuations and higher reserves for uncertain tax positions. These increases were offset by a lower transition tax liability balance reflecting the reclassification of certain deferred tax assets in 2019, to reduce the transition tax liability as well as the ~~2019~~reclassification of the 2020 installment ~~payment, a decrease~~payment.

Cash Flow

The following table summarizes the changes in the ~~liability~~Consolidated Statement of Cash Flows, expressed in millions of dollars, for ~~uncertain tax positions~~the quarters ended March 29, 2020 and ~~lower long-term pension balances as a result of the settlement of the Company's U.S. defined benefit pension plan liability in~~March 31, 2019. ~~These decreases were partially offset by the adoption of ASU 2016-02 in 2019 which requires the recognition of long-term lease liability balances, which were $115.0 million as of September 29, 2019.~~

~~Cash Flow~~



	March 29, 2020			March 31, 2019
Net cash provided by (used in)
Operating activities	$	291.6		$	264.5
Investing activities	(4,430.5		)	(27.0		)
Financing activities	819.5			(220.4		)

Net cash provided by operating activities in the first ~~nine~~three months of ~~2019~~2020 was ~~$389.6~~$291.6 million compared to ~~$174.7~~$264.5 million in the first ~~nine~~three months of ~~2018.~~2019. The $27.1 million increase in net cash ~~flow from~~provided by operating activities was primarily attributable to an increase in earnings before depreciation, intangible amortization and program cost amortization, partially offset by higher film and television production spend as a result of the inclusion of eOne operations ~~primarily reflects higher earnings, adjusted for non-cash items,~~during the first quarter of 2020 as well as long-term royalty advances paid in the first ~~nine months~~quarter of ~~2019 as compared~~2020 related to the ~~first nine months~~extension of ~~2018. To a lesser extent the increase~~certain license agreements that were due to expire in ~~operating cash flows resulted from lower film production costs in 2019 as well as lower inventory purchases in 2019.~~2020.

Net cash utilized by investing activities was ~~$86.5~~$4,430.5 million in the first ~~nine~~three months of ~~2019~~2020 compared to ~~$250.9~~$27.0 million in the first ~~nine~~three months of ~~2018.~~ 2019. The increase in 2020 reflects $4.4 billion of cash utilized to acquire eOne, net of cash acquired. As discussed in the Executive Summary, the cash used for the purchase of eOne consisted of the net proceeds from the issuance of an aggregate principal amount of $2.4 billion in senior secured notes, net proceeds $975.2 million from of the issuance of approximately 10.6 million shares of common stock and $1.0 billion in term loans drawn in the first quarter of 2020.

Additions to property, plant and equipment were ~~$90.8~~$30.8 million in the first ~~nine~~three months of ~~2019~~2020 compared to ~~$104.0~~$25.2 million in the first ~~nine~~three months of ~~2018. Cash utilized by investing activities in 2018 reflects the cash portion of the Power Rangers brand acquisition of $155.5 million.~~2019.

Net cash ~~utilized~~provided by financing activities was ~~$417.2~~$819.5 million in the first ~~nine~~three months of ~~2019~~2020 compared to ~~$578.6~~net cash utilized of $220.4 million, in the first ~~nine~~three months of ~~2018.~~2019. The ~~decline~~increase in cash ~~utilized in~~provided by financing activities was primarily driven ~~by:~~

~~Decline in repayments~~by the proceeds of ~~short-term borrowings of $130.2 million~~the Company's $1.0 billion term loan. Also, in the first ~~nine months~~quarter of ~~2019, compared to 2018, due to lower short-term borrowings in 2019.~~

~~Lower cash payments~~2020, the Company had repayments of $50.2 million related to ~~purchases~~eOne production financing loans and paid $47.4 million associated with the redemption of eOne stock awards that were accelerated as a result of the ~~Company's common stock which were $60.1 million in the first nine months of 2019 compared to $187.9 million in the first nine months of 2018.~~

Lower tax payments made to tax authorities for which shares were withheld from employees’ share-based payment awards, which were $13.1 million in the first nine months of 2019, compared to $58.3 million in 2018.

~~Partially offset by:~~

Higher dividends paid in the first nine months of 2019 of $250.8 million compared to $229.6 million in the first nine months of 2018 reflecting a higher dividend rate commencing with the May 2019 dividend payments.

acquisition. During the first ~~nine months~~quarter of 2019, the Company paid ~~$100.0~~$87.5 million to Saban Properties related to the 2018 ~~Power Rangers brand~~POWER RANGERS acquisition which consisted of a $75.0 million deferred purchase price payment and ~~$25.0~~$12.5 million ~~release~~released from escrow. ~~There are no remaining~~Cash payments ~~due to Saban Properties~~ related to the ~~Power Rangers brand acquisition.~~

~~Debt acquisition costs~~purchases of ~~$21.5~~the Company’s common stock were $47.5 million in the first ~~nine months~~quarter of 2019 compared to $0 in the first quarter of 2020 as the Company suspended the program to prioritize the reduction in long-term debt and achieving its gross debt to EBITDA targets. Dividends paid in the first quarter of 2020 totaled $93.2 million compared to $79.3 million in the first quarter of 2019 primarily ~~related to~~reflecting the ~~Bridge Facility and~~additional shares issued in the ~~Term Loan Agreement.~~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. ~~Under the Program the~~The Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1,000.0 million. The maturities of the notes may vary but may not exceed 397 days. The notes are sold under customary terms in the commercial paper market and are issued at a discount to par, or alternatively, sold at par and bear varying interest rates based on a fixed or floating rate basis. The interest rates vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time 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~~March 29, ~~2019,~~2020, the Company had no outstanding borrowings related to the Program.

~~During the third quarter of 2019, the~~The Company ~~entered into~~has a second amended and restated revolving credit agreement with ~~BofA,~~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 ~~"Revolving~~"Amended Revolving Credit Agreement"), which provides the Company with commitments having a maximum aggregate principal amount of $1,500.0 million. The Amended Revolving Credit Agreement also provides for a potential additional incremental commitment increase of up to $500.0 million ~~comprised of (1) $1,100.0 million of commitments effective as of September 20, 2019, and (2) $400.0 million of commitments that may become effective upon completion~~subject to agreement of the ~~acquisition of eOne.~~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 ~~also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders. Prior to the~~extends through September ~~2019 amendment, the Revolving Credit Agreement provided for a $1,100.0 million revolving credit facility.~~20, 2024. The Company was in compliance with all covenants as of and for the quarter ended ~~September~~March 29, ~~2019.~~2020. The Company had no borrowings outstanding under its committed revolving credit facility as of ~~September~~March 29, ~~2019.~~2020. However, ~~the Company had~~ letters of credit outstanding under this facility as of ~~September~~March 29, ~~2019 of~~2020 were approximately $2.7 million. Amounts available and unused under the committed line, ~~as of September~~at March 29, ~~2019~~2020 were approximately $1,497.3 ~~million.~~million, inclusive of borrowings under the Company’s commercial paper program. The Company also has other uncommitted lines from various banks, of which approximately ~~$22.4~~$22.2 million was utilized ~~as of September~~at March 29, ~~2019, including $14.5~~2020. Of the amount utilized under, or supported by, the uncommitted lines, approximately $9.4 million ofand $12.8 million represent outstanding short-term borrowings and letters of credit, ~~and $7.9 million of outstanding borrowings.~~respectively.

~~As noted above, on~~In September ~~20,~~of 2019, the Company entered into a $1.0 billion Term Loan Agreement ~~providing for~~(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 ~~Term Loan Facility~~three-year senior unsecured term loan facility in an aggregate principal amount of ~~up to $1,000.0 million.~~$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 ~~will~~ bear interest, at the Company’s option, at either the Eurocurrency Rate ~~(determined in accordance with the Term Loan Agreement)~~ or the Base Rate, ~~(determined in accordance with the Term Loan Agreement),~~ in each case plus a per annum applicable rate that fluctuates (1) in the case of the Three-Year Tranche, between 87.5 basis points and 175.0 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 75.0 basis points, in the case of loans priced at the Base Rate, and (2) in the case of the Five-Year Tranche, between 100.0 basis points and 187.5 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Base Rate, in each case, based upon the non-credit enhanced, senior unsecured long-term debt ratings of the Company by Fitch Ratings Inc., Moody’s ~~Investors~~Investor Service, Inc. and S&P Global ~~Ratings,~~Rankings, subject to certain provisions taking into account potential differences in ratings issued byto the relevant ~~ratings~~rating agencies or a lack of ratings issued by such ratings agencies. ~~There were~~Loans under the Five-Year Tranche require principal amortization payments, payable in equal quarterly installments of 5.0% per annum of the original principal amount thereof for each of the first two years after funding, increasing to 10.0% per annum of the original principal amount thereof for each subsequent year. The Term Loan Agreement contains affirmative and negative covenants typical of this type of facility, including: (i) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (ii) restrictions on the incurrence of indebtedness, (iii) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (iv) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no ~~borrowings under~~less than 3.00:1.00 as of the end of any fiscal quarter and (v) the requirement that the Company maintain a Consolidated Total Leverage Ratio of no more than, depending on the gross proceeds of equity securities issued after the effective date of the eOne Acquisition, 5.65:1.00 or 5.40:1.00 for each of the first, second and third fiscal quarters ended after the funding of the Term Loan ~~Agreement as of September 29, 2019. Borrowings under these Term Loan~~ Facilities, ~~will be used~~with periodic step downs to ~~pay a portion of~~3.50:1.00 for the ~~consideration in connection with~~fiscal quarter ending December 31, 2023 and thereafter. The loans were drawn down on December 30, 2019 to fund the ~~Company's~~ acquisition of eOne. The 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 Company has principal amounts of long-term debt at ~~September~~March 29, ~~2019~~2020 of ~~$1,709.9 million,~~$5.3 billion, due at varying times from 2021 through 2044. As described above, the Company issued an aggregate of $2.4 billion of senior unsecured long-term debt securities in November 2019 and borrowed $1.0 billion under its term loan facilities on December 30, 2019 in connection with the financing of the eOne Acquisition. Of the total principal amount, $30 million is current at March 29, 2020 related to the 5-year term loans due December 2024. Additionally, the Company has outstanding production financing facilities at March 29, 2020 of $175.5 million of which $141.1 million is included in long-term debt and $34.4 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.

The Company also had letters of credit and other similar instruments of approximately ~~$17.2~~$15.5 million and purchase commitments of approximately ~~$763.8~~$763.1 million outstanding at ~~September~~March 29, ~~2019.~~2020.

~~During 2019,~~

Through the eOne Acquisition, the Company ~~amended its manufacturing agreement with Cartamundi NV (“Cartamundi”). The amended agreement extends the term of the agreement from 2020 to 2023~~assumed eOne's existing future obligations for film and ~~increases the~~television content, future minimum contractual ~~purchase commitments~~royalty payment obligations and operating lease commitments. Future payments required under ~~the agreement to the following amounts: 2019: $130.0 million; 2020: $120.0 million; 2021: $105.0 million; 2022: $95.0 million; and 2023: $85.0 million.~~these obligations, expressed in millions of dollars as of March 29, 2020, are as follows:



	Remainder 2020		2021	2022	2023	2024	Thereafter	Total
Future film and television obligations	$	75.7	17.1	1.7	—	—	—	94.5
First-look commitments	18.7		15.9	7.7	—	—	—	42.3
Operating lease commitments	15.8		13.2	8.9	7.5	6.2	21.7	73.3
	$	110.2	46.2	18.3	7.5	6.2	21.7	210.1

Other contractual obligations and commercial commitments, as detailed in the Company's ~~Annual Report on~~2019 Form 10-K, ~~for the year ended December 30, 2018,~~ 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 ~~Annual Report on~~2019 Form 10-K ~~for the year ended December 30, 2018~~ does not include certain tax liabilities related to uncertain tax positions. See Note 3 to our consolidated financial statements, which is included in Part I of this Form 10-Q for contractual commitments assumed in the eOne Acquisition.

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 recoverability of goodwill, intangible assets, income taxes and ~~income taxes.~~the valuation of the Company’s equity method investment in Discovery Family Channel. These critical accounting policies are the same as those detailed in the ~~2018~~2019 Form ~~10-K.~~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.

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 interest 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 interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interest 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 interest, 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.

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 ~~2019~~2020 through 2022 using foreign exchange forward ~~contracts and zero-cost collar options.~~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 ~~its proposed acquisition~~the eOne Acquisition purchase price and other transaction related costs using series of ~~eOne using~~ 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 quarter 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.

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~~March 29, ~~2019,~~2020, these contracts had net unrealized gains of ~~$42.5~~$33.6 million, of which ~~$43.6~~$39.6 million of unrealized gains are recorded in prepaid expenses and other current assets, ~~$10.4~~$7.1 million of unrealized gains are recorded in other assets and ~~$11.5~~$13.1 million of unrealized losses are recorded in accrued liabilities. Included in accumulated other comprehensive loss at ~~September~~March 29, ~~2019~~2020 are deferred gains, net of tax, of ~~$23.7~~$33.7 million, related to these derivatives.

At ~~September~~March 29, ~~2019,~~2020, the Company had fixed rate long-term debt of ~~$1,709.9 million.~~$5.3 billion. Of this long-term debt, $600 million represents the aggregate issuance of long-term debt in May 2014 which consists of $300 million of 3.15% Notes Due 2021 and $300 million of 5.10% Notes 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~~March 29, ~~2019~~2020 are deferred losses, net of tax, of ~~$18.3~~$17.6 million related to these derivatives.

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 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~~March 29, ~~2019.~~2020. 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.

~~There~~

Changes in internal control over financial reporting

Except for the acquisition of eOne described below, 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~~March 29, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. However, on December 30, 2019, the Company completed the acquisition of eOne. 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 will not include eOne.

PART II. OTHER INFORMATION


Item 1.	Legal Proceedings.

On or about September 28, 2018, a putative securities class action complaint was filed against the Company and certain of our officers and/or directors (the “Defendants”) in the U.S. District Court for the District of Rhode Island, on behalf of all purchasers of Hasbro common stock between April 24, 2017 and October 23, 2017, inclusive. The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, alleging that Defendants purportedly made materially false and misleading statements in connection with the financial condition of Toys“R”Us, Inc. and its impact on the Company, as well as the financial impact on the Company’s business of economic conditions in the United Kingdom and Brazil. ~~On October 18, 2019, the lead plaintiff in this matter voluntarily dismissed the action without prejudice against the Defendants.~~

The Company is currently party to certain ~~other~~ 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 ~~Annual Report on~~2019 Form 10-K ~~for the fiscal year ended December 30, 2018 (the “Annual Report”),~~ should be considered, ~~in addition~~together with the discussion below, which includes a supplement to the ~~discussion~~risk factors in our 2019 Form 10-K relating to the impact of the coronavirus on our business. The risks set forth ~~below. These risks~~in our 2019 Form 10-K, as supplemented in this Form 10-Q, could materially and adversely affect our business, financial condition, and results of operations.

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

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

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


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

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

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

closures of, or restrictions on businesses, such as retail stores, in which our products and/or the products or 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, delays in payment and negotiations with customers or licensees over payment terms or the ability to perform under contracts or licenses.

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

Our entertainment business has been adversely affected by the coronavirus. For example, scheduled productions have been delayed or postponed due to the shutdown of production work and the closure of studios, theatrical releases have been delayed due to the closure of theaters, and in some cases, global releases have moved to different media platforms, such as streaming services. While we have seen increased interest in our content library as consumers increase watching content at home, such interest is unlikely to offset declines in our entertainment business due the shutdown of production and closure of studios and theaters.

The negative impact to demand can be caused by delays in or reduced purchases from customers and consumers who may not be able 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.

We believe we have sufficient liquidity and capital resources available at this time, including approximately $1.2 billion of cash on hand and availability under our $1.5 billion revolving credit facility. During this time of uncertainty, however, we are carefully monitoring our expenses to further preserve our liquidity.

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

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

Forward Looking Statement Safe Harbor

~~This Quarterly Report on~~Certain statements in this Form 10-Q ~~contains~~contain "forward-looking ~~statements,"~~statements" within the meaning of the Private Securities Litigation Reform Act of ~~1995, concerning management's expectations, goals, objectives, and similar matters.~~1995. These ~~forward-looking~~ statements, may include statements concerning: the Company's product and entertainment plans; anticipated product and entertainment performance; business opportunities and strategies; financial and business goals and objectives; anticipated expenses, cost savings and efficiency enhancing initiatives and other objectives; anticipated impact of, and actions taken in response to, the imposition of tariffs in certain markets; anticipated uses of cash; and ~~expectations relating to the Company’s proposed acquisition of eOne. These statements~~which may be identified by the use of forward-looking words or phrases, ~~such as "anticipate," "believe," "could," "expect," "intend," "look forward," "may," "planned," "potential," "should," "will,"~~include statements relating to: the impact of, and ~~"would"~~actions and initiatives taken and planned to be taken, to try and manage the negative impact of the global coronavirus outbreak on our business, including the negative impact on supply of products and production of entertainment content, demand for our products and entertainment, our liquidity and our community; the expected adequacy of supply and operation of our manufacturing facilities; the ability to achieve our financial and business goals and objectives; the Company's product and entertainment plans, including anticipated entertainment production; anticipated product and entertainment performance; anticipated expenses; and working capital and liquidity. Our actual actions or ~~any variations of words with similar meanings. These forward-looking statements are inherently subject to known and unknown risks and uncertainties.~~

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

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

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

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

our ability to successfully ~~develop~~compete in the global play and ~~grow its franchise~~entertainment industry, including with manufacturers, marketers, and ~~key partner brands, which constitute a substantial majority~~sellers of ~~the Company’s total revenues;~~toys and games, digital gaming products and digital media, as well as with film studios, television production companies and independent distributors and content producers;

~~the Company's~~our ability to successfully ~~re-imagine, re-invent~~evolve and ~~re-ignite its existing brands, products~~transform our business and ~~product lines,~~capabilities to address a changing global consumer landscape and retail environment, including ~~through the use~~changing inventory policies and practices of ~~immersive entertainment experiences and progressive technology integrating digital and analog play, to keep them fresh and relevant and to maintain and further their success;~~our customers;

~~the Company's~~our ability to ~~successfully design,~~ develop ~~produce, introduce, market~~new and sell innovative new brands, products, product lines and entertainment offerings in a timely and cost-effective manner, which achieve and sustain interest from retailers and consumers and keep pace with changes in consumer preferences and technology and the increasing sophisticationexpanded areas of ~~today’s children;~~

the Company's ability to offer products that (i) expand consumer demand for its product offerings and do not significantly compete with the Company's other existing product offerings and (ii) consumers want to purchase and select over competitors' products;

~~concentration of manufacturing~~our business, such as through eOne, Wizards of the ~~substantial majority of the Company's products by third party vendors in the People's Republic of China~~Coast, and ~~the associated impact to the Company of social, economic or public health conditions~~our other entertainment, digital gaming and other factors affecting China, the movement of people and products into and out of China, the cost of producing products in China and the cost of exporting them to the Company's other markets or affecting the exchange rates for the Chinese Renminbi, including, without limitation, the potential application of tariffs or other trade restrictions to some or all of the goods manufactured for the Company in China and exported to other markets, which could significantly increase the price of the Company’s products and substantially harm sales if applied to any significant amount of the Company’s products;esports initiatives;

the ability of the Company to successfully diversify sourcing of its products to reduce reliance on sources of supply in China, including challenges associated with identifying and onboarding new vendors who may not be as experienced as our historical vendors in producing the types of products manufactured for us and in meeting the quality and compliance needs of our products, potentially exposing us to delayed supply, increased costs or product non-compliance, as well as risks associated with ~~sourcing products from countries where~~international operations, such as currency conversion, currency fluctuations, the ~~infrastructure is not as developed as it is in eastern China;~~

~~the application~~imposition of tariffs, quotas, border adjustment taxes or other protectionist measures, and other trade restrictions impacting the cost of producing our products and importing them into markets around the world for sale, which could significantly increase the price of the Company’s products and substantially harm sales, including, without limitation, through the elimination of direct import orders where our customers take ownership of products at ports near the source of supply, and the shift to domestic orders, which require us to ship the products to the market, import them and warehouse them, thus raising costs to us, delaying the time of sale, and resultingchallenges in the ~~potential loss of some orders entirely due to lack of timely supply or other matters;~~territories in which we operate;

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

~~the success of the Company’s key partner brands,~~downturns in global and ~~the Company’s ability to maintain, renew and extend solid relationships with its key partners;~~

~~successful brand and/or product introductions from competitors that capture market share and sales from the Company;~~

the Company's ability to source and ship products in a timely and cost-effective manner and customers' and consumers' acceptance and purchase of those products in quantities and at prices that will be sufficient to profitably recover the Company's costs for developing, marketing and selling those products;

the Company’s ability to successfully evolve and transform its business to address a changing global consumer landscape and retail environment, one in which online shopping and digital first marketing are becoming more and more critical and traditional retailers face challenges from disintermediation, and difficulties or delays the Company may experience in successfully implementing and developing new capabilities and making the changes to its business that are required to be successful under these changing marketplace conditions;

~~recessions, other economic downturns, challenging~~regional economic conditions ~~unfavorable changes in exchange rates or economic uncertainty affecting~~impacting one or more of the ~~Company's significant~~ markets ~~including, without limitation, the U.K., Brazil and Russia,~~in which we sell products, which can negatively impact ~~the financial health of the Company's~~our retail customers and consumers, ~~and which can~~ result in lower employment levels, consumer disposable income, ~~and consumer spending, including lower~~ retailer inventories and spending, including lower spending on purchases of ~~the Company's~~our products;

~~currency fluctuations, including movements in foreign exchange rates, which can lower the Company's net revenues and earnings, and significantly impact the Company's costs;~~

other economic and public health conditions or regulatory changes in the markets in which ~~the Company~~we and ~~its~~our customers, partners, licensees, suppliers and ~~suppliers~~manufacturers operate, ~~which could create delays or increase the Company's costs,~~ such as higher commodity prices, labor costs or ~~higher~~ transportation costs, or outbreaks of ~~diseases;~~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;

~~other risks associated~~the success of our key partner brands, including the ability to secure, maintain and extend agreements with ~~international operations, including in emerging markets which have unique consumer preferences and business climates;~~

our key partners or the risk of delays, increased costs ~~lack of consumer acceptance~~ or ~~other~~ difficulties associated with ~~the development and offering~~any of our or our ~~partners' entertainment,~~partners’ planned digital applications or media initiatives;

~~the risk that the market appeal of the Company's licensed products will be less than expected or that sales revenue generated by these products will be insufficient~~fluctuations in our business due to ~~cover the minimum guaranteed royalties or other commitments;~~seasonality;

the concentration of ~~the Company's~~our customers, potentially increasing the negative impact to ~~the Company~~our business of difficulties ~~including bankruptcies,~~ experienced by any of ~~the Company's~~our customers or changes in their purchasing or selling patterns;

~~an adverse change in purchasing policies or promotional programs, or~~ the bankruptcy or other ~~economic difficulties~~lack of success of one of our significant retailers, such as the bankruptcy of Toys“R”Us in the United States and Canada;

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

risks relating to the ~~Company's significant retailers comprising its relatively concentrated retail customer base, which could negatively impact the Company's revenues or bad debt exposure;~~

~~the impact~~use of the bankruptcy of Toys“R”Us in the U.S., Canada and the U.K., and the subsequent liquidation of the Toys“R”Us business in the U.S. and the U.K., as well as the economic difficulty of Toys“R”Us in other markets, or the bankruptcy or lack of success of a smaller retail customer of the Company, such as Sears Holdings Corporation, any of which could negatively impact the Company’s revenues, result in lost sales to customers, create bad debt expense and create other challengesthird party manufacturers for the ~~Company and its financial performance as the Company attempts to recapture this lost business through other customers or channels, and any inability or delay~~manufacturing of ~~the Company in recapturing all of the lost business;~~

~~uncertainty as to the future of the Toys“R”Us business elsewhere in the world, and associated reductions in sales to Toys“R”Us;~~

the Company's ability to generate sales during the second half of the year, particularly during the relatively brief holiday shopping season, which is the period in which the Company derives a substantial portion of its revenues and earnings;

~~the inventory policies of the Company's retail and e-commerce customers,~~our products, including ~~potential decisions to lower their inventories, even if it results in lost sales, as well as~~ the concentration of the Company's revenues in the second half of the year, which coupled with reliance by retailers on quick response inventory management techniques, increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules;

~~the impact of retail inventory overhang in one or more of our key markets, which can reduce purchases~~manufacturing for many of our products ~~from~~in the People’s Republic of China and our ~~customers and lower~~ability to successfully diversify sourcing of our ~~revenues and profitability;~~products to reduce reliance on sources of supply in China;

our ability to ~~evolve~~ attract and retain talented employees;

our ~~business quickly~~ability to realize the benefits of cost-savings and ~~efficiently~~efficiency and/or revenue enhancing initiatives, including initiatives to ~~respond~~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 ~~challenges~~impairment and/or write-offs of ~~today’s converged retail environment;~~products and films and television programs we acquire and produce;

~~work stoppages or disruptions~~risks relating to investments and acquisitions, such as our acquisition of eOne, which ~~may impact the Company's ability~~risks include: integration difficulties; inability to ~~manufacture or deliver products in a timely and cost-effective manner;~~

the ability of the Company to successfully develop, produce and distribute movies under its relationship with Paramount Pictures Corporation, and consumer interest in those movies and related merchandise;

consumer interest in and acceptance of programming and entertainment created by Hasbro Studios and/or Allspark Pictures, as well as products related to such programming and entertainment, and other factors impacting the financial performance of Hasbro Studios, Allspark Pictures and the Discovery Family Channel;

the ability to develop and distribute compelling entertainment, including television, movies and digital content, based on our brands, in a timely and financially profitable manner, and the success of that entertainment in driving consumer interest in and engagement with our brands;

•

the risk that anticipated benefits of acquisitions or investments may not occur, or may be delayed or reduced in their realization; specifically, in the case of our proposed acquisition of Entertainment One, the Company faces risks and uncertainties as to whether the transaction will be completed in a timely manner or at all; uncertainty as to whether the conditions precedent to completion of the transaction, including applicable regulatory approvals, will be satisfied in a timely manner, on expected terms or at all; uncertainty as to whether the Company will achieve the expected benefits and synergies from the transaction within the anticipated time frame or at all; risks of unexpected costs, liabilities or delays; integration difficulties, including the ability to retain key personnel and to effectively manage a significantly expanded business following the completion of the transaction; risks relating to the Company’s ability to complete financings on satisfactory terms or at all; risks relating to the additional indebtedness that Hasbro may incur in connection with the transaction; risks related to fluctuations in foreign exchange rates, particularly given that the purchase price for the proposed acquisition is denominated in pounds sterling; other unexpected factors that may impact or alter Hasbro’s anticipated business plans, strategies and objectives if the transaction is completed; and the effect of the announcement, pendency or consummation of the transaction on customers, employees, suppliers, partners and operating results, including the diversion of our management’s time and resources;

~~the ability of the Company to hire and~~ retain key ~~officers~~personnel; diversion of management time and ~~employees who are critical~~resources; failure to achieve anticipated benefits or synergies of acquisitions or investments; and risks relating to the ~~Company's success;~~

~~the ability of the Company to successfully protect its intellectual property rights;~~

~~the costs of complying~~additional indebtedness incurred in connection with product safety and consumer protection requirements worldwide, including the risk that greater regulation in the future may increase such costs, may require changes in the Company's products and/or may impact the Company's ability to sell some products in particular markets in the absence of making changes to such products;a transaction;

the risk ~~that one~~ of the Company's third-party manufacturers will not comply with applicable labor, consumer protection, product safety or other laws or regulations, or with aspects of the Company's Global Business Ethics Principles, and that such noncompliance will not be promptly detected, either of which could cause damage to the Company's reputation, harm sales of its products, result in product recalls and potentially create other liabilities for the Company;

~~the risk the Company will lose rights to a significant licensed property or properties, which will harm the Company's revenues and earnings;~~

~~the risk that the Company may face~~ product recalls or product liability suits ~~relating to products it manufactures~~and costs associated with product safety regulations;

changes in tax laws or ~~distributes~~regulations, or the interpretation and application of such laws and regulations, which may ~~have significant direct costs~~cause us to ~~the Company and~~alter tax reserves or make other changes which ~~may also harm the reputation of the Company and its products, potentially harming future product sales;~~

would significantly impact our reported financial results;

the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitor’s products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain employees;

~~the risk that any~~ litigation or arbitration ~~disputes~~decisions or ~~government~~settlement actions; and ~~regulatory investigations could entail significant resources and expense and result in significant fines or other harm to the Company's business or reputation;~~

~~the Company's ability to maintain or obtain external financing on terms acceptable to it in order to meet working capital needs;~~

the risk that one or more of the counterparties to the Company's financing arrangements may experience financial difficulties or otherwise be unable or unwilling to allow the Company to access financing under such arrangements;

unforeseen circumstances, such as severe softness in or collapse of the retail and/or banking environment that may result in a significant decline in revenues and operating results of the Company, thereby causing the Company to be in non-compliance with its debt covenants and the Company being unable to utilize borrowings under its revolving credit facility, a circumstance likely to occur when operating shortfalls would result in the Company being in the greatest need of such supplementary borrowings;

market conditions, third party actions or approvals, the impact of competition and other factors that could delay or increase the cost of implementation of the Company's programs, or alter the Company's actions and reduce actual results;

the risk that the Company may be subject to governmental penalties, fines, sanctions or additional taxes for failure to comply with applicable laws or regulations in any of the markets in which it operates, or that governmental regulations or requirements will require changes in the manner in which the Company does business and/or increase the costs of doing business;

failure to operate our information systems and implement new technology effectively, as well as maintain the systems and processes designed to protect our electronic data and the data of our customers, consumers and employees, including the damage that could result from a breach of any of that data;

~~changes in, or different interpretations of, income tax laws and rules, and changes in our geographic operating results, may impact our effective tax rate;~~

~~the risk that the Company's reported goodwill may become impaired, requiring the Company to take a charge against its income;~~

changes in regulations, increased costs and/or economic uncertainty associated with the U.K. vote to leave the European Union (“EU”), commonly referred to as Brexit, which may make it more difficult and/or costly for us to supply products to the UK or other parts of the EU, harm our sales and lower the profitability of our business in the U.K. and the EU; or

other risks and uncertainties as ~~are or~~ may be detailed from time to time in ~~the Company's~~our public announcements and ~~filings with the~~ SEC ~~such as filings on Forms 8-K, 10-Q and 10-K.~~filings.

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


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

~~Repurchases Made~~There were no share repurchases made in the ~~Quarter (in whole dollars and number~~first quarter of ~~shares)~~2020. Following the Company’s acquisition of eOne, the Company suspended its share repurchase program while it prioritizes achieving its target debt to EBITDA levels. 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.

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

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

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

(d)
Maximum
Number (or
Approximate
Dollar
Value) of
Shares (or
Units) that
May Yet Be
Purchased
Under the
Plans or
Programs
July 2019
7/1/19 – 7/28/19 9,500
$ 104.85
9,500
$ 368,350,052
August 2019
7/29/19 – 9/1/19 4,845
$ 104.76
4,845
$ 367,842,467
September 2019
9/2/19 – 9/29/19 —
$ —
—
$ 367,842,467
Total 14,345
$ 104.82
14,345
$ 367,842,467



Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 2020
12/30/19 – 1/26/20	—	$	—	—	$	366,592,558
February 2020
1/27/20 – 3/1/20	—	$	—	—	$	366,592,558
March 2020
3/2/20 – 3/29/20	—	$	—	—	$	366,592,558
Total	—	$	—	—	$	366,592,558

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. As a result of the Company's equity financing plan related to its proposed acquisition of eOne, the Company plans to suspend its share repurchase program for the time being. See Footnote 1, “Basis of Presentation,” to the Consolidated Financial Statements for further discussion.


Item 3.	Defaults Upon Senior Securities.

None.


Item 4.	Mine Safety Disclosures.

Not applicable.


Item 5.	Other Information.

None.


Item 6.	Exhibits



~~2.1~~		Arrangement Agreement by and among Hasbro, Inc., 11573390 Canada Inc. and eOne, dated as of August 22, 2019. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 23, 2019, File No. 1-6682).

~~2.2~~		Form of Voting Agreement by and among Hasbro, Inc., 11573390 Canada Inc. and the following directors and officers of eOne: Darren Throop, Joseph Sparacio, Margaret O’Brien, Steve Bertram, Olivier Dumont, Mark Trachuk, Allan Leighton, Linda Robinson, Mark Opzoomer, Michael Friisdahl, Mitzi Reaugh, Robert McFarlane, Scott Lawrence. (Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on August 23, 2019, File No. 1-6682).

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.)

~~10.1~~4.8		~~Term Loan Agreement,~~Sixth Supplemental Indenture dated as of ~~September 20,~~November 19, 2019, byamong the Company and ~~among Hasbro, Inc.,~~The Bank of ~~America,~~New York Mellon Trust Company, N.A., and U.S. Bank, National Association, supplementing the ~~other financial institutions party thereto.~~Indenture dated as of March 15, 2000. (Incorporated by reference to Exhibit ~~10.1~~1.2 to the Company’s Current Report on Form 8-K filed ~~on September 24,~~November 19, 2019, File No. ~~1-6682).~~1-6682.)

~~10.2~~10.1*		~~Second Amended and~~Form of 2020 Stock Option Agreement under the Hasbro, Inc. Restated ~~Revolving Credit~~ 2003 Stock Incentive Performance Plan for Deborah Thomas.



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

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

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

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

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

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

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

10.9*		Agreement dated as of September 20, 2019, by and among Hasbro, Inc., Hasbro SA, Bank of America, N.A., and the other financial institutions party thereto. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 24, 2019, File No. 1-6682).January 21, 2020 with Wiebe Tinga.

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

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

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

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

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

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

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

*Indicates Management Contract or Compensatory Plan, Contract or Arrangement

** Furnished ~~herewith.~~herewith

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: ~~October 22, 2019~~May 7, 2020	By: /s/ Deborah Thomas
	Deborah Thomas

	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)



Nine Months Ended September 29, 2019
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Shareholders' Equity
Balance, December 30, 2018	$	104,847	1,275,059			4,184,374			(294,514		)	(3,515,280		)	$	1,754,486
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		)	$	1,840,907

Nine Months Ended September 30, 2018
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Shareholders' Equity
Balance, December 31, 2017	104,847		1,050,605			4,260,222			(239,425		)	(3,346,292		)	1,829,957
Net earnings	—		—			211,668			—			—			211,668
Impact of adoption of ASU 2018-02	—		—			21,503			(21,503		)	—			—
Issuance of shares for Saban purchase	—		198,853			—			—			81,544			280,397
Other comprehensive loss	—		—			—			(35,810		)	—			(35,810		)
Stock-based compensation transactions	—		(2,660		)	—			—			(1,272		)	(3,932		)
Purchases of common stock	—		—			—			—			(192,348		)	(192,348		)
Stock-based compensation expense	—		35,607			—			—			216			35,823
Dividends declared	—		—			(238,474		)	—			—			(238,474		)
Balance, September 30, 2018	$	104,847	$	1,282,405		$	4,254,919		$	(296,738	)	$	(3,458,152	)	$	1,887,281



	2019			2018
Nine Months	Basic		Diluted	Basic	Diluted
Net earnings	$	253,109	253,109	211,668	211,668

Average shares outstanding	126,356		126,356	125,982	125,982
Effect of dilutive securities:
Options and other share-based awards	—		600	—	792
Equivalent Shares	126,356		126,956	125,982	126,774

Net earnings per common share	$	2.00	1.99	1.68	1.67



	Quarter Ended
	Pension					Postretirement
	September 29, 2019			September 30, 2018		September 29, 2019	September 30, 2018
Service cost	$	325		678		311	189
Interest cost	821			3,997		316	292
Expected return on assets	(476		)	(5,190	)	—	—
Settlement	—			—		—	—
Net amortization and deferrals	598			2,971		5	42
Net periodic benefit cost	$	1,268		2,456		632	523



Remaining amounts to be paid as of December 30, 2018	$	69,192
Payments made in first quarter of 2019	(7,620		)
Payments made in the second quarter of 2019	(7,932		)
Payments made in the third quarter of 2019	(6,696		)
Remaining amounts as of September 29, 2019	$	46,944



	Quarter Ended										Fiscal Year Ended
	April 1, 2018			July 1, 2018		Sept. 30, 2018		Dec. 30, 2018			Dec. 30, 2018
Net Revenues
U.S. and Canada segment	$	353.9		$	448.4	$	912.2	$	661.1		$	2,375.7
Entertainment, Licensing and Digital segment	74.4			75.5		96.8		109.6			356.3

Operating Profit (Loss)
U.S. and Canada segment	$	(26.6	)	$	73.1	$	223.1	$	100.7		$	370.2
Entertainment, Licensing and Digital segment	17.1			21.8		37.1		(46.9		)	29.1