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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.  20549
__________________
FORM 10-Q
__________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 2021
or
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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.50 par value per shareHASThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x]  No  [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x]  No  [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes  No  [x]
The number of shares of Common Stock, par value $.50 per share, outstanding as of April 27, 2021 was 137,568,617.



PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of Dollars Except Share Data)
(Unaudited)
March 28,
2021
March 29,
2020
December 27,
2020
ASSETS
Current assets
Cash and cash equivalents including restricted cash of $72.1 million, $86.2 million and $73.2 million
$1,430.4 $1,237.9 $1,449.7 
Accounts receivable, less allowance for doubtful accounts of $32.5 million, $16.9 million and $28.1 million
810.4 963.8 1,391.7 
Inventories
429.2 444.4 395.6 
Prepaid expenses and other current assets
566.0 672.4 609.6 
Total current assets
3,236.0 3,318.5 3,846.6 
Property, plant and equipment, less accumulated depreciation of $563.5 million, $513.2 million and $553.0 million
482.7 455.9 489.0 
Other assets
Goodwill
3,691.4 3,572.7 3,691.7 
Other intangible assets, net of accumulated amortization of $999.7 million, $932.0 million and $964.6 million
1,513.0 1,615.8 1,530.8 
Other
1,266.0 1,461.5 1,260.2 
Total other assets
6,470.4 6,650.0 6,482.7 
Total assets
$10,189.1 $10,424.4 $10,818.3 
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings
$8.8 $9.4 $6.6 
Current portion of long-term debt
148.9 64.5 432.6 
Accounts payable
312.1 308.5 425.5 
Accrued liabilities
1,283.6 1,356.2 1,538.6 
Total current liabilities
1,753.4 1,738.6 2,403.3 
Long-term debt
4,674.1 5,156.3 4,660.0 
Other liabilities
777.7 739.0 793.9 
Total liabilities
$7,205.2 $7,633.9 $7,857.2 
Redeemable noncontrolling interests
24.0 26.0 24.4 
Shareholders' equity
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued
   
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at March 28, 2021, March 29, 2020, and December 27, 2020
110.1 110.1 110.1 
Additional paid-in capital
2,339.6 2,282.4 2,329.1 
Retained earnings
4,226.8 4,191.8 4,204.2 
Accumulated other comprehensive loss
(206.4)(294.8)(195.0)
Treasury stock, at cost; 82,724,111 shares at March 28, 2021; 83,279,734 shares at March 29, 2020; and 82,979,403 shares at December 27, 2020
(3,550.6)(3,560.3)(3,551.7)
Noncontrolling interests
40.4 35.3 40.0 
Total shareholders' equity
2,959.9 2,764.5 2,936.7 
Total liabilities, noncontrolling interests and shareholders' equity
$10,189.1 $10,424.4 $10,818.3 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Millions of Dollars Except Per Share Data)
(Unaudited)
Quarter Ended
March 28,
2021
March 29,
2020
Net revenues$1,114.8 $1,105.6 
Costs and expenses:
Cost of sales289.9 262.7 
Program cost amortization97.5 132.2 
Royalties108.9 112.8 
Product development61.8 53.8 
Advertising87.9 101.7 
Amortization of intangibles32.9 36.8 
Selling, distribution and administration288.6 279.1 
Acquisition and related costs 149.8 
Total costs and expenses967.5 1,128.9 
Operating profit (loss)147.3 (23.3)
Non-operating expense (income):
Interest expense47.9 54.7 
Interest income(1.2)(4.7)
Other income, net(28.9)(1.3)
Total non-operating expense, net17.8 48.7 
Earnings (loss) before income taxes129.5 (72.0)
Income tax expense (benefit)12.0 (4.1)
Net earnings (loss)117.5 (67.9)
Net earnings attributable to noncontrolling interests1.3 1.8 
Net earnings (loss) attributable to Hasbro, Inc.$116.2 $(69.7)
Net earnings (loss) per common share:
Basic$0.84 $(0.51)
Diluted$0.84 $(0.51)
Cash dividends declared per common share$0.68 $0.68 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings
(Millions of Dollars)
(Unaudited)
Quarter Ended
March 28,
2021
March 29,
2020
Net earnings (loss)$117.5 $(67.9)
Other comprehensive earnings (losses):
Foreign currency translation adjustments, net of tax
(16.1)(131.8)
Unrealized holding losses on available-for-sale securities, net of tax (0.4)
Net gains on cash flow hedging activities, net of tax5.6 25.0 
Reclassifications to earnings, net of tax:
Net gains on cash flow hedging activities
(1.1)(3.7)
Amortization of unrecognized pension and postretirement amounts
0.2 0.3 
Total other comprehensive loss, net of tax$(11.4)$(110.6)
Total comprehensive earnings attributable to noncontrolling interests1.3 1.8 
Total comprehensive earnings (loss) attributable to Hasbro, Inc.$104.8 $(180.3)
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
Quarter Ended
March 28,
2021
March 29,
2020
Cash flows from operating activities:
Net earnings (loss)$117.5 $(67.9)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of plant and equipment25.0 23.8 
Amortization of intangibles32.9 36.8 
Asset impairments 40.9 
Program cost amortization97.5 132.2 
Deferred income taxes16.3 (3.2)
Stock-based compensation16.7 10.7 
Other non-cash items5.4 8.3 
Change in operating assets and liabilities net of acquired balances:
Decrease in accounts receivable592.0 653.7 
Increase in inventories(42.1)(13.9)
Decrease (increase) in prepaid expenses and other current assets44.9 (23.0)
Program spend, net(147.1)(168.0)
Decrease in accounts payable and accrued liabilities(382.6)(315.8)
Other1.2 (23.0)
Net cash provided by operating activities377.6 291.6 
Cash flows from investing activities:
Additions to property, plant and equipment(23.9)(30.8)
Acquisitions, net of cash acquired (4,403.9)
Other(1.6)4.2 
Net cash utilized by investing activities(25.5)(4,430.5)
Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months72.4 1,017.7 
Repayments of borrowings with maturity greater than three months(344.9)(50.2)
Net proceeds from (repayments of) other short-term borrowings2.0 (1.4)
Stock-based compensation transactions4.7 1.8 
Dividends paid(93.4)(93.1)
Payments related to tax withholding for share-based compensation(9.3)(5.3)
Redemption of equity instruments (47.4)
Other(2.3)(2.6)
Net cash (utilized) provided by financing activities(370.8)819.5 
Effect of exchange rate changes on cash(0.6)(23.1)
Decrease in cash, cash equivalents and restricted cash(19.3)(3,342.5)
Cash, cash equivalents and restricted cash at beginning of year1,449.7 4,580.4 
Cash, cash equivalents and restricted cash at end of period$1,430.4 $1,237.9 
Supplemental information
Cash paid during the period for:
Interest$34.5 $13.5 
Income taxes$18.3 $19.9 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests
(Millions of Dollars)
(Unaudited)
Quarter Ended March 28, 2021
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, December 27, 2020$110.1 2,329.1 4,204.2 (195.0)(3,551.7)40.0 $2,936.7 $24.4 
Net earnings attributable to Hasbro, Inc.— — 116.2 — — — 116.2 — 
Net earnings attributable to noncontrolling interests— — — — — 1.3 1.3 — 
Other comprehensive earnings— — — (11.4)— — (11.4)— 
Stock-based compensation transactions— (5.8)— — 1.1 — (4.7)— 
Stock-based compensation expense— 16.7 — — — — 16.7 — 
Dividends declared— — (93.6)— — — (93.6)— 
Distributions paid to noncontrolling owners and other foreign exchange— (0.4)— — — (0.9)(1.3)(0.4)
Balance, March 28, 2021$110.1 2,339.6 4,226.8 (206.4)(3,550.6)40.4 $2,959.9 $24.0 
Quarter Ended March 29, 2020
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comprehensive Loss
Treasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, December 29, 2019$110.1 2,275.7 4,354.6 (184.2)(3,560.7) $2,995.5 $ 
Noncontrolling interests related to acquisition of Entertainment One Ltd.— — — — — 39.9 39.9 23.6 
Net loss attributable to Hasbro, Inc.— — (69.7)— — — (69.7)— 
Net earnings attributable to noncontrolling interests— — — — — 1.8 1.8 — 
Other comprehensive loss— — — (110.6)— — (110.6)— 
Stock-based compensation transactions— (4.0)— — 0.4 — (3.6)— 
Stock-based compensation expense— 10.7 — — — — 10.7 — 
Dividends declared— — (93.1)— — — (93.1)— 
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (6.4)(6.4)2.4 
Balance, March 29, 2020$110.1 2,282.4 4,191.8 (294.8)(3,560.3)35.3 $2,764.5 $26.0 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(Unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of March 28, 2021 and March 29, 2020, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates.
The quarters ended March 28, 2021 and March 29, 2020 were each 13-week periods.
The results of operations for the quarter ended March 28, 2021 are not necessarily indicative of results to be expected for the full year 2021, nor were those of the comparable 2020 period representative of those actually experienced for the full year 2020.
Segment Realignment
Beginning with the first quarter of 2021, the Company realigned its financial reporting segments and business units, in order to align its reportable segments more closely with its current business structure. Reclassifications of certain prior year financial information has been made to conform to the current-year presentation. None of the changes impact the Company's previously reported consolidated net revenue, operating profits (losses), net earnings (losses) or net earnings (losses) per share. See note 14 for more information on the Company’s 2021 segment realignment.
Legal Settlement
During the first quarter of 2021, the Company realized a gain of $25.6 million from a legal settlement related to a dispute associated with historical eOne foreign exchange hedging activities. The gain is included in other income, net within the Company's consolidated financial statements, included in Part I of this Form 10-Q.
Significant Accounting Policies
The Company's significant accounting policies are summarized in Note 1 to the consolidated financial statements included in the Company's Form 10-K for the year ended December 27, 2020.

These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the 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 27, 2020 in its Annual Report on Form 10-K ("2020 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
In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14) Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20)- Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated financial statements.
In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (ASU 2019-12), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update remove certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. ASU 2019-12 is effective for fiscal years beginning after


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
December 15, 2020 and early adoption is permitted. The Company adopted the standard in the first quarter of 2021 and the adoption of the standard did not have a material impact on its consolidated financial statements.
Issued Accounting Pronouncements
In March of 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04) Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in this update apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. An entity may elect to apply the amendments provided by this update beginning March 12, 2020 through December 31, 2022. The Company does not currently expect the change from LIBOR to an alternate rate to have a material impact on its consolidated financial statements, and is continuing to evaluate the standard's potential impact to its consolidated financial statements.
(2) Revenue Recognition
Revenue Recognition
Revenue is recognized when control of the promised goods or content is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or content. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.
Contract Assets and Liabilities
Within our Consumer Products and Entertainment segments the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation being satisfied. In addition, the Company may receive payments from its digital gaming business in advance of the recognition of the revenues. The Company defers revenues on these advanced payments until its performance obligation is satisfied and records the aggregate deferred revenues as contract liabilities. The current portion of contract liabilities were recorded within Accrued Liabilities and the long-term portion were recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets. The Company records contract assets in the case of (1) minimum guarantees, which are recognized ratably over the term of the respective license period, being recognized in advance of contractual invoicing, and (2) film and television distribution revenue recorded for content delivered but for which payment will occur over the license term. The current portion of contract assets were recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion were recorded as Other Long-Term Assets.

At March 28, 2021, March 29, 2020 and December 27, 2020 the Company had the following contract assets and liabilities in its consolidated balance sheets:
March 28, 2021March 29, 2020December 27, 2020
Assets
     Contract assets - current$257.9 $271.0 $284.4 
     Contract assets - long term70.0 87.5 77.0 
           Total $327.9 $358.5 $361.4 
Liabilities
     Contract liabilities - current$146.9 $185.6 $161.0 
     Contract liabilities - long term16.6 20.6 18.2 
          Total$163.5 $206.2 $179.2 

For the quarter ended March 28, 2021, the Company collected $78.6 million of the contract assets and recognized $53.3 million of contract liabilities that were included in the December 27, 2020 balances.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Unsatisfied performance obligations relate primarily to in-production television content to be delivered in the future under existing agreements with partnering content providers such as broadcasters, distributors, television networks and subscription video on demand services. As of March 28, 2021, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future was $329.7 million. Of this amount, we expect to recognize approximately $219.9 million in the remainder of 2021, $89.1 million in 2022, and 15.8 million in 2023. These amounts include only fixed consideration.

Disaggregation of revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Consumer Products, Entertainment and Wizards of the Coast & Digital Gaming. The Company further disaggregates revenues within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; and within its Entertainment segment by category: Film & TV; Family Brands; and Music. Finally, the Company disaggregates its revenues by brand portfolio into five brand categories: Franchise Brands, Partner Brands, Hasbro Gaming, Emerging Brands, and 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 14 for further information.
(3) Business Combination
On December 30, 2019, the Company completed its acquisition of eOne, a global independent studio that specializes in the development, acquisition, production, financing, distribution and sales of entertainment content. The aggregate purchase price of $4.6 billion was comprised of $3.8 billion of cash consideration for shares outstanding and $0.8 billion related to the redemption of eOne's outstanding senior secured notes and the payoff of eOne's revolving credit facility. The Company financed the acquisition with proceeds from the following debt and equity financings: (1) the issuance of senior unsecured notes in an aggregate principal amount of $2.4 billion in November 2019, (2) the issuance of 10.6 million shares of common stock at a public offering price of $95.00 per share in November 2019 (resulting in net proceeds of $975.2 million) and (3) $1.0 billion in term loans provided by a term loan agreement, which were borrowed on the date of closing. See Note 8 for further discussion of the issuance of the senior unsecured notes and term loan agreement.
The addition of eOne accelerates the Company's brand blueprint strategy by expanding our brand portfolio with eOne's global preschool brands, adding proven TV and film expertise and executive leadership as well as by enhancing brand building capabilities and our storytelling capabilities to strengthen Hasbro brands.
eOne's results of operations and financial position have been included in the Company's consolidated financial statements and accompanying condensed footnotes since the date of the acquisition.
The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations (“Topic 805”). Pursuant to Topic 805, the Company allocated the eOne purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 30, 2019. The excess of the purchase price over those fair values was recorded to goodwill.
The following table summarizes the intangible assets acquired as part of the eOne Acquisition:
Weighted Average
Intangible assets acquiredAmortization PeriodFair Value
Established brands10 years$615.0 
Trade names15 years100.0 
Artist relationships14 years100.0 
Music catalogs12 years120.0 
Other8 years121.0 
Total intangible assets acquired11 years$1,056.0 


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Intangible assets consist of intellectual property associated with established brands, eOne artist relationships, eOne music catalogs and trademarks and tradenames with estimated useful lives ranging from 7 to 15 years, determined based on when the related cash flows are expected to be realized. The fair value of the intangible assets acquired was determined based on the estimated future cash flows to be generated from the acquired assets, considering assumptions related to contract renewal rates and estimated brand franchise revenue growth. eOne acquired intangible asset amortization expense for the quarters ended March 28, 2021 and March 29, 2020 were $24.9 million and $25.0 million, respectively.
Deferred tax liabilities within other liabilities were adjusted to record the deferred tax impact of purchase price accounting adjustments, primarily related to intangible assets.
Investments in productions and content, or IIP and IIC, were valued at $564.8 million on the acquisition date, and include the fair value of completed films and television programs which have been produced by eOne or for which eOne has acquired distribution rights, as well as the fair value of films and television programs in production, pre-production and development. For films and television programs, fair values were estimated based on forecasted cash flows, discounted to present value. For titles less than 3 years old and titles in development, the content assets will be amortized using the individual film forecast method, wherein the amortization will phase to the revenues incurred. For titles over 3 years old, the estimated useful life is 10 years, and will be amortized straight-line over that period.
Goodwill of $3.2 billion represents the excess of the purchase price over the fair value of the underlying tangible and identifiable intangible assets acquired and liabilities assumed. The acquisition goodwill represents the value placed on the combined company’s brand building capabilities, our storytelling capabilities and franchise economics in TV, film and other mediums to strengthen Hasbro brands. In addition, the acquisition goodwill depicts added benefits of long-term profitable growth through in-sourcing toy and game production for the acquired preschool brands and cost-synergies, as well as future revenue growth opportunities. The goodwill recorded as part of this acquisition was included within the Entertainment and Consumer Products segments for the year ended December 27, 2020. The goodwill associated with the acquisition will not be amortized for financial reporting purposes and will not be deductible for federal tax purposes. See note 5 for information on the Company's goodwill reallocation during the first quarter of 2021.
For the quarter ended March 29, 2020, the Company incurred $149.8 million of charges related to the eOne Acquisition, which were recorded in acquisition and related costs within the Company’s Consolidated Statement of Operations. Included within the Entertainment segment results for the quarter ended March 29, 2020 were $98.5 million of acquisition and related charges. The remaining charges were included in Corporate and Other.
The acquisition and related costs for the quarter ended March 29, 2020 consisted of the following:
Acquisition and integration costs of $95.7 million, including $47.4 million of expense associated with the acceleration of eOne stock-based compensation and $38.2 million of advisor fees settled at the closing of the acquisition, as well as integration costs; and
Restructuring and related costs of $54.1 million, including severance and retention costs of $13.2 million as well as $40.9 million in impairment charges for certain definite-lived intangible and production assets. The impairment charges of $40.9 million were driven by the change in strategy for the combined company’s entertainment assets.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(4) Earnings Per Share
Net earnings per share data for the quarters ended March 28, 2021 and March 29, 2020 were computed as follows:
20212020
QuarterBasicDilutedBasicDiluted
Net earnings (loss) attributable to Hasbro, Inc.$116.2 116.2 $(69.7)(69.7)
Average shares outstanding137.7 137.7 137.1 137.1 
Effect of dilutive securities:
Options and other share-based awards— 0.4 —  
Equivalent Shares137.7 138.1 137.1 137.1 
Net earnings (loss) attributable to Hasbro, Inc. per common share$0.84 0.84 $(0.51)(0.51)
For the quarters ended March 28, 2021 and March 29, 2020, options and restricted stock units totaling 2.2 million and 4.1 million respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. Of the 2020 amount, 1.2 million shares 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 0.4 million shares being included in the diluted earnings per share calculation for the quarter ended March 29, 2020.
(5) Goodwill
During the first quarter of 2021, the Company realigned its financial reporting structure creating the following three principal reportable segments: Consumer Products, Wizards of the Coast & Digital Gaming and Entertainment. In our realignment, some, but not all, of our reporting units were changed. As a result of these changes, the Company reallocated its goodwill among the revised reporting units based on the change in relative fair values of the respective reporting units.
Consumer ProductsWizards of the Coast & Digital GamingEntertainmentTotal
2021
Balance at December 27, 2020$1,385.753.12,252.9$3,691.7
Goodwill allocation199.4254.2(453.6)
Foreign exchange translation(0.1)0.2(0.4)(0.3)
Balance at March 28, 2021$1,585.0307.51,798.9$3,691.4

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


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(6) Other Comprehensive Earnings (Loss)
Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss). The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarters ended March 28, 2021 and March 29, 2020.
Quarter Ended
March 28,
2021
March 29,
2020
Other comprehensive earnings (loss), tax effect:
Tax benefit on unrealized holding gains$ $0.1 
Tax expense on cash flow hedging activities(1.0)(7.2)
Reclassifications to earnings, tax effect:
Tax expense on cash flow hedging activities0.2 0.3 
Amortization of unrecognized pension and postretirement amounts
(0.1)(0.1)
Total tax effect on other comprehensive earnings (loss)$(0.9)$(6.9)

Changes in the components of accumulated other comprehensive earnings (loss) for the three months ended March 28, 2021 and March 29, 2020 are as follows:
Pension and
Postretirement
Amounts
Gains
(Losses) on
Derivative
Instruments
Unrealized
Holding
Gains
(Losses) on
Available-
for-Sale
Securities
Foreign
Currency
Translation
Adjustments
Total
Accumulated
Other
Comprehensive
Loss
2021
Balance at December 27, 2020$(40.7)(22.1)0.4 (132.6)(195.0)
Current period other comprehensive earnings (loss)0.2 4.5  (16.1)(11.4)
Balance at March 28, 2021$(40.5)(17.6)0.4 (148.7)(206.4)
2020
Balance at December 29, 2019$(36.2)(5.2)(0.2)(142.6)(184.2)
Current period other comprehensive earnings (loss)0.3 21.3 (0.4)(131.8)(110.6)
Balance at March 29, 2020$(35.9)16.1 (0.6)(274.4)(294.8)
Gains (Losses) on Derivative Instruments
At March 28, 2021, the Company had remaining net deferred losses on foreign currency forward contracts, net of tax, of $1.4 million in accumulated other comprehensive loss ("AOCE"). These instruments hedge payments related to inventory purchased in the first quarter of 2021 or forecasted to be purchased during the remainder of 2021 through 2022, intercompany expenses expected to be paid or received during 2021, television and movie production costs paid in 2021, and cash receipts for sales made at the end of the first quarter of 2021 or forecasted to be made in the remainder of 2021 and, to a lesser extent, 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 3.15% Notes, that were repaid in full in the aggregate principal amount of $300.0 million during the first quarter of 2021 (See Note 8) and, the 5.10% Notes due 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 March 28, 2021, deferred losses, net of tax of $16.2 million related to these instruments remained in AOCE. For the quarters ended March 28, 2021 and March 29, 2020, previously deferred losses of $0.5 million, were reclassified from AOCE to net earnings.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Of the amount included in AOCE at March 28, 2021, the Company expects net losses of approximately $3.8 million to be reclassified to the consolidated statements of operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.
(7) Accrued Liabilities
Components of accrued liabilities for the periods ended March 28, 2021, March 29, 2020 and December 27, 2020 were as follows:
March 28, 2021
March 29, 2020
December 27, 2020
Participations and residuals$289.8 $375.4 $295.6 
Royalties126.7 120.8 229.2 
Deferred revenue146.9 185.6 161.0 
Payroll and management incentives36.2 36.5 132.4 
Dividends93.5 93.2 93.4 
Other taxes67.5 49.6 81.9 
Advertising69.7 44.1 58.6 
Severance44.0 43.9 49.7 
Other409.3 407.1 436.8 
Total accrued liabilities$1,283.6 $1,356.2 $1,538.6 


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(8) Financial Instruments
The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At March 28, 2021, March 29, 2020 and December 27, 2020, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at March 28, 2021, March 29, 2020 and December 27, 2020 also include certain assets and liabilities measured at fair value (see Notes 11 and 12) as well as long-term borrowings. The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of March 28, 2021, March 29, 2020 and December 27, 2020 are as follows:
March 28, 2021March 29, 2020December 27, 2020
Carrying
Cost
Fair
Value
Carrying
Cost
Fair
Value
Carrying
Cost
Fair
Value
3.90% Notes Due 2029
$900.0 961.9 $900.0 774.5 $900.0 1,011.2 
3.55% Notes Due 2026
675.0 731.2 675.0 641.6 675.0 752.7 
3.00% Notes Due 2024
500.0 533.9 500.0 480.6 500.0 540.6 
6.35% Notes Due 2040
500.0 639.6 500.0 498.2 500.0 636.5 
3.50% Notes Due 2027
500.0 535.8 500.0 465.4 500.0 544.5 
2.60% Notes Due 2022
300.0 309.6 300.0 295.3 300.0 311.5 
5.10% Notes Due 2044
300.0 333.8 300.0 251.7 300.0 338.1 
3.15% Notes Due 2021 (1)
  300.0 299.9 300.0 302.3 
6.60% Debentures Due 2028
109.9 134.4 109.9 122.6 109.9 137.4 
Variable % Notes Due December 30, 2022300.0 300.0 400.0 400.0 300.0 300.0 
Variable % Notes Due December 30, 2024570.0 570.0 600.0 600.0 577.5 577.5 
Production Financing Facilities201.8 201.8 175.6 175.6 165.5 165.5 
Total long-term debt$4,856.7 5,252.0 $5,260.5 5,005.4 $5,127.9 5,617.8 
Less: Deferred debt expenses33.7 — 39.7 — 35.3 — 
Less: Current portion148.9 — 64.5 — 432.6 — 
Long-term debt$4,674.1 5,252.0 $5,156.3 5,005.4 $4,660.0 5,617.8 
(1) During the first quarter of 2021 the Company repaid in full its 3.15% Notes, in the aggregate amount of $300.0 million due in May 2021.
In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches: $300.0 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, $500.0 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, $675.0 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55% and $900.0 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. Net proceeds from the issuance of the Notes, after deduction of $20.0 million of underwriting discount and fees, totaled $2.4 billion. These costs are being amortized over the life of the Notes, which range from three to ten years. The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poors. The adjustment can be from 0.25% to 2.00% based on the extent of the ratings decrease. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus (1) 15 basis points (in the case of the 2022 Notes); (2) 25 basis points (in the case of the 2024 Notes); (3) 30 basis points (in the case of the 2026 Notes); and (4) 35 basis points (in the case of the 2029 Notes). In addition, on and after October 19, 2024 for the 2024 Notes, September 19, 2026 for the 2026 Notes and August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
In September 2019, the Company entered into a $1.0 billion Term Loan Agreement (the "Term Loan Agreement”) with Bank of America N.A. (“Bank of America”), as administrative agent, and certain financial institutions as lenders, pursuant to which such lenders committed to provide, contingent upon the completion of the eOne Acquisition and certain other customary conditions to funding, (1) a three-year senior unsecured term loan facility in an aggregate principal amount of $400.0 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”). Loans under the Term Loan Facilities bear interest at the Company’s option, at either the Eurocurrency Rate or the Base Rate, in each case plus a per annum applicable rate that fluctuates (1) in the case of the Three-Year Tranche, between 87.5 basis points and 175.0 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 75.0 basis points, in the case of loans priced at the Base Rate, and (2) in the case of the Five-Year Tranche, between 100.0 basis points and 187.5 basis points, in the case of loans priced at the Eurocurrency Rate, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Base Rate, in each case, based upon the non-credit enhanced, senior unsecured long-term debt ratings of the Company by Fitch Ratings Inc., Moody’s Investor Service, Inc. and S&P Global Rankings, subject to certain provisions taking into account potential differences in ratings issued by the relevant rating agencies or a lack of ratings issued by such rating agencies. Loans under the Five-Year Tranche require principal amortization payments that are payable in equal quarterly installments of 5.0% per annum of the original principal amount thereof for each of the first two years after funding, increasing to 10.0% per annum of the original principal amount thereof for each subsequent year. The Term Loan Agreement contains affirmative and negative covenants typical of this type of facility, including: (i) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (ii) restrictions on the incurrence of indebtedness, (iii) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (iv) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (v) the requirement that the Company maintain a Consolidated Total Leverage Ratio of no more than, depending on the gross proceeds of equity securities issued after the effective date of the acquisition of eOne, 5.65:1.00 or 5.40:1.00 for each of the first, second and third fiscal quarters ended after the funding of the Term Loan Facilities, with periodic step downs to 3.50:1.00 for the fiscal quarter ending December 31, 2023 and thereafter. The notes were drawn down on December 30, 2019, the closing date of the eOne Acquisition. During the first quarter of 2021, the Company made its required quarterly principal amortization payment of $7.5 million on the Five-Year Tranche loans. As of March 28, 2021, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.
The Company may redeem its 5.10% notes due in 2044 (the "2044 Notes") at its option, at the greater of the principal amount of the notes or the present value of the remaining scheduled payments, discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase.
Current portion of long-term debt at March 28, 2021 of $148.9 million, as shown on the consolidated balance sheet, represents the current portion of required quarterly principal amortization payments for the Term Loan Facilities and production financing facilities. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to the first quarter of 2022.
The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 11 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.



Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Production financing facilities typically have maturities of less than two years, while the titles are in production, and are repaid once delivered and all credits, broadcaster pre-sales and international sales have been received. The production financing facilities as of March 28, 2021, March 29, 2020 and December 27, 2020 are as follows:
March 28, 2021
March 29, 2020December 27, 2020
Production financing held by production subsidiaries$201.8 $175.6 $165.5 
Other loans (1)
7.9 9.4 5.4 
          Total$209.7 $185.0 $170.9 
Production financing included in the consolidated balance sheet as:
Non-current$82.9 $141.1 $62.9 
Current118.9 34.5 102.6 
          Total$201.8 $175.6 $165.5 
(1) Other loans consist of production related demand loans, and are recorded within Short-term Borrowings in the Company's consolidated balance sheets.
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 28, 2021 was 2.8%.
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 DollarsU.S. DollarsTotal
As of March 28, 2021
$52.1 149.7 $201.8 
The following table represents the movements in production financing and other related loans during the first quarter of 2021: