Hasbro (HAS) 10-K risk factor changes: FY2020 vs FY2019

*In evaluating our business, the [added: material] risks described below, as well as other information contained in this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission should be considered carefully.

[removed: Risks] [added: Strategic Risks] Related to Our Business

[removed: If] [added: If] we are not successful in developing and expanding [removed: these critical] [added: our owned and our partner] brands [added: across] our [added: brand blueprint our] business will suffer.

We have made a strategic decision to focus on fewer, larger global brands with an emphasis on developing [added: and expanding those of] our [removed: franchise] [added: owned] and key partner brands, which we view as having the largest global potential.

[removed: But this] [added: This] focus [removed: also] means that our [removed: future] success depends disproportionately on our and our partners’ ability to successfully develop this select group of brands across our brand blueprint and to maintain and extend the reach and relevance of these brands to global consumers in a wide array of markets.

This strategy has required us to acquire, build and develop [added: our] competencies in [removed: new areas, including] storytelling, digital [removed: content and] [added: gaming,] consumer [removed: products.][added: products and entertainment.]

If we are unable to successfully [added: develop,] maintain and [removed: develop] [added: expand] our [removed: franchise] [added: owned] and key partner [removed: brands in the future,] [added: brands,] continue to drive their relevance to consumers and grow sales of products and storytelling experiences based on those brands, our [removed: revenues and profits will decline and our] business performance will suffer.

Consumer interests change [removed: rapidly,] [added: rapidly and acceptance of products and entertainment offerings are influenced by outside factors,] making it difficult to create storytelling experiences and to design and develop products and entertainment offerings which [added: are and] will [added: continue to] be popular with children, families and [removed: audiences, or to maintain the popularity of successful products and brands.][added: audiences.]

To be successful, we must correctly anticipate the types of [removed: entertainment content,] [added: entertainment,] products and play patterns which will capture consumers’ interests and imagination, and quickly develop and introduce innovative products and engaging entertainment which can compete successfully for consumers’ limited time, attention and spending.

Evolving consumer tastes and shifting interests, coupled with an ever-changing and expanding pipeline of entertainment and consumer properties and products which compete for consumer interest and acceptance, create an environment in which some products and entertainment offerings can fail to achieve consumer acceptance, and other products and [removed: entertainment offerings can be popular during a certain period of time but then be rapidly replaced.]

As a result, [removed: entertainment] [added: our] products and [removed: properties] [added: entertainment offerings] often have short consumer life cycles.

There can be no assurance that [removed: films and] television programs [added: and films] we produce or distribute will obtain favorable reviews or ratings, that films we [removed: distribute or] produce [added: or distribute] will [added: be popular with consumers and] perform well at the box office or in [removed: ancillary markets] [added: other distribution channels,] or that broadcasters will license the rights to broadcast any of our television programs in development or renew licenses to broadcast programs in our library.

If we devote time and resources to developing and marketing [removed: entertainment and] products [added: or entertainment] that consumers do not accept or do not find interesting enough to buy in sufficient quantities to be profitable to us, our revenues and profits may decline and our business performance may be [removed: damaged.][added: harmed.]

Children are increasingly utilizing electronic [removed: offerings] [added: devices,] such as [removed: tablet devices] [added: computers, tablets] and mobile [removed: phones] [added: phones,] and they are expanding their interests to a wider array of innovative, technology-driven entertainment products and digital and social media offerings at younger and younger ages.

Our products [added: and digital games business] compete with the offerings of consumer electronics companies, [added: gaming,] digital media and social media companies.

To meet this challenge we, and our competitors, are investing in, designing and marketing products [added: and digital games] which incorporate more technology, seek to integrate digital and analog play, and aim to capitalize on new play patterns and increased consumption of digital and social media.

Costs associated with designing, developing and producing [added: digital games and] technologically advanced or sophisticated toy products tend to be higher than for many of our other more traditional products, such as board [added: and trading card] games and action figures.

The ability to sell enough of these advanced products, at prices high enough to recoup our costs and make a profit, is constrained by heavy competition in consumer electronics and entertainment [removed: products] [added: offerings] and can be further constrained by difficult economic conditions.

As a result, we [removed: can] face increased risk of not achieving sales sufficient to recover our costs and we may lose money on the development and sale of these products.

Additionally, designing, developing and producing [added: digital and] technologically advanced or sophisticated products requires different competencies and follows different timelines than traditional toys and games.

Delays in the design, development or production of these products [removed: incorporated into or associated with traditional toys and games] could have a significant impact on our ability to successfully offer such products.

[removed: Technological development, including changes in entertainment delivery formats, drives frequent changes within the film and television industry and our failure] [added: If we fail] to respond to or capitalize on [removed: these] [added: the rapid technological development in the entertainment industry, including] changes [removed: could harm] [added: in entertainment delivery formats,] our [removed: business.][added: business could be harmed.]

The entertainment industry experiences frequent change driven by technological development, including developments with respect to the formats through which films, television [removed: programming] [added: programming, other episodic content] and recorded music are delivered to consumers.

For example, consumers are increasingly accessing [removed: television and] [added: television,] film [added: and other episodic] content on streaming and digital content networks, such as [removed: Netflix and] [added: Netflix,] Amazon Prime Video, [removed: which has caused significant disruption to the retail distribution of films, television programming] [added: Hulu, Disney+] and [removed: recorded music.][added: Apple TV+.]

We may [removed: also] lose opportunities to capitalize on changing market dynamics, technological innovations or consumer tastes if we do not adapt our content offerings or distribution capabilities in a timely manner.

The overall effect that technological development and new digital distribution platforms have on the revenue and profits we derive from our entertainment content, [removed: and the additional costs associated with changing markets, media platforms and technologies, is unpredictable.][added: including from]

[removed: Entertainment] [added: Engaging storytelling offered through entertainment] media, [removed: in forms] such as television, films, digital content and other media, [removed: have] [added: has] become increasingly important [removed: platforms] [added: as a way] for consumers to experience our [removed: brands] and our partners’ [removed: brands and the success,][added: brands.]

[added: The success,] or lack of success, of such [added: entertainment] media efforts can significantly impact the demand for our products and our financial performance.

We spend considerable resources in designing and developing products in conjunction with [removed: planned media releases, both by] our [removed: partners] and our [removed: own] [added: partners’ planned] media releases.

[removed: Not only our efforts, but] [added: We also rely heavily on] the efforts of third parties, such as licensors, film studios, content producers and distribution channels with whom we work, [removed: heavily impact] [added: with respect to] the [removed: amount,] [added: development of] content and timing of media development, release dates and the ultimate consumer interest in and success of these media efforts.

If films, television shows, or any other key entertainment content for which we develop and market products are not as successful as we and our partners anticipate, our revenues and earnings will [removed: fall.][added: decline.]

We do not fully control when or if any particular [removed: film projects] [added: project] will be greenlit, developed or released, and our [removed: licensors or] [added: licensors,] media partners [added: or other third parties] may change their plans with respect to projects and release dates or cancel development all together.

[removed: This] [added: Lack of control] can make it difficult for us to get [removed: feature films] [added: entertainment projects] developed, plan future entertainment slates and to successfully develop and market products in conjunction with [removed: future films and other media releases,] [added: such entertainment projects,] given the lengthy lead times involved in product development and successful marketing [removed: efforts, and the fact that third party partners of ours may decide not to develop such entertainment.][added: efforts.]

Any delay or cancellation of planned product development work, [removed: introductions,] [added: releases,] or media support may decrease the number of products we [removed: sell and] [added: sell, which may] harm our business.

[removed: Outbreaks] [added: The global coronavirus outbreak or other similar outbreaks] of communicable [removed: infections or] [added: infections,] diseases, or [removed: other] public health [removed: pandemics, such as the global coronavirus outbreak currently being experienced,] [added: pandemics] in the markets in which we and our employees, consumers, customers, [added: partners, licensees,] suppliers and manufacturers operate, could substantially harm our business.

[removed: Disease outbreaks and other public health conditions, such as the global outbreak of the coronavirus currently being experienced,] [added: Various economic conditions] in [added: the] markets [removed: in which] we, our employees, consumers, customers, suppliers and manufacturers operate, could have a significant negative impact on our revenues, profitability and business.

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 [removed: both the negative impact to our ability to design, develop, manufacture and ship product (the supply side impact) and the negative impact on consumer purchasing behavior (the demand side impact).][added: a number of factors:]

[removed: The negative impact] [added: During 2020, due] to [added: the coronavirus, we experienced and could experience further disruptions in] supply [added: of product, which has been and] can be driven by: manufacturing and other work stoppages, factory and other business closings, slowdowns or [removed: delays, including] [added: delays] in [removed: China] [added: places] where a substantial portion of our manufacturing occurs; restrictions and limitations placed on workers and factories, including quarantines and other limitations on the ability to travel and return to work; and shortages or delays in production or shipment of products or raw materials.

The negative impact to demand can be caused by delays in or reduced purchases from customers and consumers who may [removed: not] be [removed: able] [added: reluctant or unable] to leave home or otherwise shop in a normal [removed: manner, and may have lower discretionary income] [added: manner] due to [removed: reduced] [added: restrictions on] or [removed: limited work.][added: closure, either temporarily or permanently, of many retail stores and hobby stores in which our products are sold.]

The [added: impact of] coronavirus outbreak continues to be fluid and uncertain, [removed: making] [added: and while vaccines are being rolled out,] it [added: is still] difficult to forecast the final impact it could have on our future operations.

If we or our partners fail to successfully develop and deliver engaging storytelling through entertainment media our ability to build our brands and sell products will suffer.

In 2020, productions and entertainment releases were delayed due to the shutdown of productions and theaters during the Covid-19 pandemic.

These delays and shutdowns had an adverse effect on our results during 2020.

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entertainment offerings can be popular during a certain period of time but then be rapidly replaced.

There can be no assurance our brands, products and digital games will successfully compete with other offerings or will achieve or sustain popularity.

We continue to invest in digital gaming and technology, particularly through our Wizards of the Coast business.

Similarly, as a result of the Covid-19 pandemic, entertainment offerings have gone direct to streaming channels as opposed to theaters or have gone to streaming channels after only a short period of time in the theaters.

Technological as well as other changes caused by the pandemic have caused significant disruption to the retail distribution of entertainment offerings, and have caused and could in the future cause a negative impact on sales of our products and other forms of monetization of content, especially those which are reliant on box office success.

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merchandise sales derived from such content, and the additional costs associated with changing markets, media platforms and technologies, is unpredictable.

The success of our brand blueprint strategy is dependent in part on our ability to produce and distribute entertainment offerings that consumers want to experience and that create further awareness of our brands and products.

Some of these competitors have substantially greater marketing and financial resources than

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Acquisitions can broaden and diversify our brand holdings and product offerings, and allow us to build additional capabilities and competencies around our brand blueprint, such as our acquisition of eOne which added proven television and film capabilities.

In 2020, ecommerce sales represented a significant portion of overall sales to these customers as consumers increasingly purchased our products online as compared to through in-store shopping due to the shutdown and limited access to retail stores during the Covid-19 pandemic.

Ecommerce sales have resulted in retailers holding less inventory,

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which has caused us to adjust our supply chain.

Failure to continue to adapt our supply chain and successfully fulfill ecommerce sales could harm our business.

- Implications or difficulties arising out of the United Kingdom’s exit from the European Union;

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Further, increases in the costs of labor and other costs of doing business in markets where we manufacture, could also have a significant negative impact on our operations, revenues and earnings.

We rely on third party relationships with studios, content producers and distribution channels to develop and distribute entertainment content.

For example, eOne relies on third‑party content producers and distribution channels to sell and distribute films and television programs.

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We have entered into long-term agreements to acquire films with producers.

As these contracts expire, we may choose to renew, renegotiate or terminate them.

These arrangements are also terminable by the counterparty under certain circumstances.

If we fail to develop diverse top talent, we may be unable to compete and our business may be harmed.

To compete successfully, we must continuously develop a diverse group of talented people.

We promote a diverse and inclusive work environment.

To that end, we have set goals and objectives with respect to hiring and retention of talented, diverse employees, which we believe will foster new ideas and perspectives that will benefit our business.

Competition for diverse talent is intense.

We cannot guarantee we will achieve our goals or that our actions will result in expected benefits to our business.

Our business may be harmed if we are unable to protect our critical intellectual property rights.

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Global and Economic Risks Relating to our Business

- 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,* SONY PICTURES *GHOSTBUSTERS AFTERLIFE* and *SNAKE EYES: G.I. JOE ORIGINS*;

Our strategy involves focusing on franchise and key partner brands, and successfully developing, or in the case of partner brands, successfully working with our partners to develop, those brands across our brand blueprint in a wide array of innovative toys and games, consumer products, storytelling and digital experiences.

Our franchise and partner brands account for the substantial majority of our revenues.

In addition to continuing to grow and develop our existing franchise brands, successfully executing our brand strategy requires us to successfully develop other brands, such as POWER RANGERS which was acquired in 2018, and PEPPA PIG, PJ MASKS and RICKY ZOOM, which were acquired as part of our acquisition of eOne as of December 30, 2019.

We cannot guarantee that we will be able to do this successfully.

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With the increasing array of technology and competitive entertainment offerings, we cannot guarantee that:

| | |

| --- | --- |

| • | any of our brands, products or product lines will achieve popularity or continue to be popular; |

| • | any property for which we have a significant license will achieve or sustain popularity; |

| • | any new products or product lines we introduce will be considered interesting to consumers and achieve an adequate market acceptance; or |

| • | any product’s life cycle or sales quantities will be sufficient to permit us to profitably recover our development, manufacturing, marketing, royalties (including royalty advances and guarantees) and other costs of producing, marketing and selling the product. |

Engaging storytelling across media is an increasingly important factor for driving brand awareness and successfully building brands.

In 2019, for example, we developed and marketed significant product lines tied to the film releases by key partners of a number of properties, including DISNEY’S FROZEN II, MARVEL’S AVENGERS: ENDGAME, MARVEL’S CAPTAIN MARVEL, MARVEL’S SPIDER-MAN and STAR WARS: THE RISE OF SKYWALKER.

Those films are developed and released by our partners and our partners control the content and schedule for such films.

Other key partner product lines we offer, such as DISNEY PRINCESS, DISNEY'S DESCENDANTS and BEYBLADE, depend on television support by our partners for their successes.

Similarly, we are developing and marketing products for entertainment in which we play a more active role in developing or develop ourselves, such as TRANSFORMERS, POWER RANGERS and MY LITTLE PONY.

In the future, we expect to have an even greater role in developing our own entertainment offerings for our brands, including those in our vault, through eOne’s expertise, experience and relationships in the entertainment industry, as we work together to unlock value in our brands.

The ultimate timing and success of such projects is critically dependent on the efforts and schedules of our licensors, studio, content, distribution and media partners.

When we say that products or brands will be supported by certain media releases, those statements are based on our current plans and expectations.

Unforeseen factors may increase the cost of these releases, delay these media releases or even lead to their cancellation.

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 completely prevent our business from being adversely affected, and the longer the outbreak impacts supply and demand 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.

Under our relationship with Paramount, and now through our ownership of eOne, we are playing a more significant role in the production and financing of films based on our properties.

This has the advantage of giving us more input as to what and when properties are developed into films, and can allow us to earn a greater return from successful films, but it also increases the money we directly spend on film production and puts that investment at risk.

If our films are not as successful as we anticipate they will be, or if we are not able to produce and distribute films according to the schedule we have planned, due to creative or other difficulties or delays, our financial performance will be negatively impacted.

Additionally, eOne obtains distribution rights for films from third‑party content producers and produce television programs sold through a number of distribution channels.

In 2018, for example, our NERF branded products faced significantly increased competition from both newer entrants into the blaster space, as well as from private label offerings from major retailers.

A number of these competitors sought to gain market share by offering products with less innovation than our products at price points below our products, particularly by offering blasters in the under $20 retail price range.

In recent years, retailers have also developed their own private-label products that directly compete with the products of traditional manufacturers and brand owners.

Some retail chains that are our customers sell private-label children’s and family entertainment products designed, manufactured and branded by the retailers themselves.

These products may be sold at prices lower than our prices for comparable products, which may result in lower purchases of our products by these retailers and may reduce our market share.

Our entertainment business competes with other companies that produce and distribute films and television programs.

For example, the Discovery Family Channel, our cable television joint venture with Discovery Communications, Inc. in the U.S., competes with a number of other children’s television networks for viewers,

advertising revenue and distribution fees.

Our programming distributed both domestically and internationally, and Allspark Animation’s and Allspark Pictures’ releases, compete with content from many other parties.

We cannot guarantee that our entertainment business will be successful.

Lack of consumer interest in and acceptance of content developed by our entertainment business, and products related to that content, could significantly harm our business.

Our success depends on our ongoing ability to successfully evolve our capabilities and business to meet the challenges of a changing retail landscape and to successfully develop new and expanded aspects of our business.

Our success depends on our ability to continue evolving and transforming our business to address a changing global consumer landscape and retail environment, one in which online shopping accounts for an increasing percentage of total sales to consumers, digital first marketing is critical to garner and develop consumer interest, ecommerce focused companies like Amazon.com, Inc. are now among our largest customers, traditional brick and mortar retailers face challenges to their businesses from the disintermediation caused by the expanding prevalence of online shopping, and the presence of specialty toy retailers has been significantly reduced in many of our markets due to bankruptcies, such as that of Toys“R”Us, potentially reducing, at least in the shorter term, physical shelf space available to offer family entertainment properties.

These market conditions require that we drive a digital-first orientation throughout our Company, adapt the way we produce and distribute our products to meet the needs of ecommerce retailers, and continue developing alternate retail channels to reach our consumers and recapture shelf space lost by specialty retailers.

The following discussion should be read in conjunction with the audited consolidated financial statements of the Company included in Part II, Item [removed: 8 of this Form 10-K.][added: 8*.]

[removed: See “Statement Regarding Forward-Looking Statements” and Part I, Item 1A “Risk Factors”] [added: *Risk Factors*, of this Form 10-K] for a discussion of other uncertainties, risks and assumptions associated with these statements.

Hasbro, Inc. [removed: ("Hasbro" or the "Company")] [added: (“Hasbro”)] is a global play and entertainment company committed to Creating the World’s Best Play and Entertainment Experiences.

From toys, games and consumer products to television, movies, digital gaming, [removed: live action, music,] and [removed: virtual reality] [added: other entertainment] experiences, [removed: Hasbro connects] [added: we connect] to global audiences by bringing to life great innovations, stories and brands across established and inventive platforms.

[removed: Hasbro’s] [added: Our] iconic brands include [added: NERF,] MAGIC: THE GATHERING, MY LITTLE PONY, [removed: NERF,] TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, POWER [removed: RANGERS] [added: RANGERS, PEPPA PIG] and [removed: LITTLEST PET SHOP,] [added: PJ MASKS,] as well as premier partner brands.

Through [removed: the Company's entertainment labels, Allspark Pictures and Allspark Animation, and now through the] [added: our recently acquired] global entertainment [removed: studio operated by eOne, the Company is] [added: studio, Entertainment One (“eOne”), we are] building [removed: its] [added: our] brands globally through great storytelling and content on all screens.

[removed: Hasbro is] [added: At Hasbro, we are] committed to making the world a better place for [removed: children and their families through corporate social responsibility] [added: all children, fans] and [removed: philanthropy.][added: families.]

[removed: Hasbro generates revenue and earns cash by developing, marketing and selling products based on global brands in a broad variety of consumer goods categories] [added: The Company also develops, acquires, produces, finances, distributes] and [removed: distribution] [added: sells entertainment content, some] of [removed: television programming] [added: which is] based on the Company’s properties, [removed: as well as through] [added: in addition to] 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.

For the periods presented in this Form 10-K, the Company’s business is separated into [removed: three] [added: four] principal business segments: U.S. and Canada, International, [removed: and] Entertainment, Licensing and [removed: Digital.][added: Digital and eOne.]

The Company’s Entertainment, Licensing and Digital segment includes the Company’s [added: legacy] consumer products licensing, digital licensing and gaming, and movie and television entertainment operations.

In addition to these [removed: three] primary segments, the Company’s product sourcing operations are managed through its Global Operations segment.

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 [removed: this amount to the prior period reported revenues.]

[removed: The Company has also included in this report,] [added: In addition,] the impact on 2019 net earnings and earnings per share, of the termination and settlement of its U.S. defined benefit pension plan and the impact of certain transaction costs, financing transaction fees and net hedge gains in association with the Company's agreement to acquire eOne.

The Company financed the acquisition through a combination of the following debt and equity financings: (i) the issuance of senior unsecured notes in an aggregate principal amount of $2.4 [removed: billion,] [added: billion;] (ii) the issuance of 10,592,106 shares of common stock at a public offering price of $95.00 per [removed: share] [added: share;] and (iii) $1.0 billion in term loans.

The addition of eOne accelerates the Company’s brand blueprint strategy by expanding our brand portfolio with eOne’s [removed: beloved] global preschool brands, [removed: including PEPPA PIG, PJ MASKS and RICKY ZOOM,] adding proven TV and film [removed: expertise,] [added: expertise] and [removed: creating additional opportunities for long-term profitable growth.][added: executive leadership, as well as by enhancing brand building capabilities and our storytelling capabilities to strengthen Hasbro brands.]

[removed: See] [added: Please see] Part I, Item [removed: 1.][added: 1A.]

[removed: 2019 highlights][added: 2019 highlights]

[removed: | • | Net revenues of $4,720.2 million increased 3% from $4,579.6 million in 2018.] The increase in net revenues [removed: includes] [added: included] an unfavorable foreign currency translation of $78.5 million. [removed: |]

[removed: | • | U.S.] [added: ◦U.S.] and Canada segment net revenues increased 3%; International segment net revenues decreased [removed: 1%, including] [added: 1% and included] an unfavorable foreign currency translation impact of $76.5 million; Entertainment, Licensing and Digital segment net revenues increased 22%. [removed: |]

[removed: | • | Partner] [added: ◦Partner] Brands net revenues increased 24%; Emerging Brands net revenues increased 5%; Franchise Brands net revenues declined 1%; Hasbro Gaming net revenues declined 10%. [removed: |]

[removed: | • |] [added: -] Operating profit was $652.1 million, or 13.8% of net revenues in 2019 compared to operating profit of $331.1 million, or 7.2% of net revenues in 2018. [removed: |]

[removed: | • | 2019] [added: ◦2019] operating profit was negatively impacted by $17.8 million [added: ($16.4 million after-tax)] of [removed: pre-tax] acquisition related costs associated with the eOne transaction. [removed: |]

[removed: | • | 2018] [added: ◦2018] operating profit was negatively impacted by [removed: $60.4 million of costs related to] the Toys"R"Us bankruptcy, [removed: $89.3 million associated with] [added: costs related to] the Company’s 2018 restructuring program and impairment charges [removed: of $117.6 million] related to Backflip Studios and other intangible assets. [removed: |]

[removed: | • |] [added: -] Net earnings increased in 2019 to $520.5 million, or $4.05 per diluted share, compared to $220.4 million, or $1.74 per diluted share in 2018. [removed: |]

[removed: | • | 2019] [added: ◦2019] net earnings [removed: were impacted by pension settlement charges, net of tax,] [added: included non-cash charges] of [removed: $86.0 million,] [added: $111.0 million ($86.0 million after-tax),] or $0.67 per diluted share, [added: related to the Company's settlement of its U.S. defined benefit pension plan liability,] partially offset by a net [removed: benefit, net of tax,] [added: benefit] of [removed: $81.8 million,] [added: $75.7 million ($81.8 million after tax),] or $0.64 per diluted share, from [added: eOne transaction related costs including] foreign currency gains related to hedging a portion of the eOne British [removed: pound sterling] [added: Pound] purchase [removed: price and other eOne acquisition related costs. |][added: price.]

[removed: | • | U.S.] [added: ◦U.S.] and Canada segment net revenues [removed: declined 10%;] [added: increased 4%;] International segment net revenues [removed: declined 17% and included] [added: decreased 14%, including] an unfavorable foreign currency translation impact of [removed: $41.7] [added: $15.9] million; [removed: Entertainment and] [added: Entertainment,] Licensing [added: and Digital] segment net revenues [removed: increased 9%. |][added: decreased 14%; eOne segment net revenues in 2020 were $956.5 million.]

[removed: | • | Franchise] [added: ◦Hasbro Gaming net revenues increased 15%; Emerging] Brands net revenues [removed: declined 9%,] [added: increased 27%] Partner Brands net revenues [removed: declined 22%, Hasbro Gaming] [added: decreased 12%; Franchise Brands] net revenues declined [removed: 12%] [added: 5%; TV, Film] and [removed: Emerging Brands] [added: Entertainment portfolio] net revenues [removed: increased 1%. |][added: were $804.8 million and represented 15% of total net revenues in 2020.]

The Company has [removed: historically returned excess] [added: a long history of returning] cash to its shareholders through [added: quarterly] dividends and share repurchases.

[added: In 2020,] Hasbro maintained its [removed: 2019] quarterly dividend rate of $0.68 per [removed: share into 2020 for the Company's dividend payment scheduled for May 2020.][added: share.]

As part of this initiative, since 2005 the Company’s Board of Directors [added: (the "Board")] adopted [removed: nine] [added: numerous] share repurchase authorizations with a cumulative authorized repurchase amount of $4,325.0 million.

The [removed: ninth] [added: most recent] authorization was approved in May 2018 for $500 million.

At December [removed: 29, 2019,] [added: 27, 2020,] Hasbro had $366.6 million remaining available under these share repurchase authorizations.

As a result of the financing activities related to the eOne [removed: acquisition,] [added: Acquisition,] the Company has suspended its [added: current] share repurchase program while it prioritizes [removed: reducing its long-term debt and achieving its gross debt to EBITDA targets.][added: deleveraging.]

| | [added: | | 2020 | | | | | |] 2019 | | [removed: 2018] | | [removed: 2017] | | [added: 2018 | | |]

| Earnings before income taxes | [removed: 12.6] | | [removed: 5.9] [added: 322.1] | | [removed: 15.1] | | [added: | | 594.2 | | | | | | 270.4 | | |]

The fiscal years ended December [added: 27, 2020, December] 29, 2019 and December 30, 2018 were each fifty-two week [removed: periods while the year ended December 31, 2017 was a fifty-three week period.][added: periods.]

Net earnings [removed: increased] [added: attributable] to [removed: $520.5] [added: Hasbro, Inc. decreased to $222.5] million for the fiscal year ended December [removed: 29, 2019] [added: 27, 2020] compared to [removed: $220.4] [added: $520.5] million for the fiscal year ended December [removed: 30, 2018,] [added: 29, 2019,] and [removed: $396.6] [added: were $220.4] million for the fiscal year ended December [removed: 31, 2017.][added: 30, 2018.]

Diluted earnings per share [added: attributable to Hasbro, Inc.] were [removed: $4.05] [added: $1.62] in [removed: 2019, $1.74] [added: 2020, $4.05] in [removed: 2018] [added: 2019] and [removed: $3.12] [added: $1.74] in [removed: 2017.][added: 2018.]

Net earnings and diluted earnings per share [added: attributable to Hasbro, Inc.] for each fiscal year in the three years ended December [removed: 29, 2019] [added: 27, 2020] include certain charges and benefits as described below.

[removed: | • |] [added: -] A net charge of $86.0 million or $0.67 per diluted share associated with the settlement of the Company's U.S. defined benefit pension plan in the second quarter of 2019. [removed: During 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 and commenced the termination process. During the second and fourth quarters of 2019, the Company settled remaining benefits directly with vested participants. |]

Financial Statements,* of this Form 10-K.

See “Statement Regarding Forward-Looking Statements” and Part I, Item 1A.

We believe that doing well includes doing good in the world and for all our constituents.

This is demonstrated in all we do, including through corporate social responsibility and philanthropy.

Our strategic plan is centered around Hasbro’s Brand Blueprint, a framework for bringing compelling and expansive brand experiences to consumers and audiences around the world.

Our brands are story-led consumer franchises brought to life through a wide array of consumer products, compelling content across a multitude of platforms and media, including a variety of digital experiences, as well as music, publishing and location-based entertainment.

Brands and content are at the center of the Hasbro Brand Blueprint.

The development and execution of our brands and content are informed by our proprietary consumer insights, which help us understand the behavior of our consumers, from a consumption of content and play standpoint.

Hasbro generates revenue and earns cash by developing, marketing and selling products based on global brands in a broad variety of consumer goods categories.

The eOne segment, which was added to the Company's reporting structure in the first quarter of 2020, engages in the development, acquisition, production, financing, distribution and sales of entertainment content and is comprised of all legacy eOne operations.

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this amount to the prior period reported revenues.

The Company has also included in this report, the 2020 impact of eOne acquisition and related costs, purchased intangible amortization, other severance costs and income tax expense associated with United Kingdom (“UK”) tax reform.

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 to the consolidated financial statements included in Part II, Item 8.

*Financial Statements,* of this Form 10-K.

The Company’s 2020 results presented in this Form 10-K include eOne's results of operations and financial position beginning on December 30, 2019, the date of acquisition.

The Company’s 2019 and prior years' results are presented as reported and do not include eOne results.

2020 highlights

- Net revenues of $5,465.4 million increased 16% from $4,720.2 million in 2019.

The increase in net revenues includes an unfavorable foreign currency translation of $15.9 million attributable to the Company’s legacy Hasbro business.

- Operating profit was $501.8 million, or 9.2% of net revenues in 2020 compared to operating profit of $652.1 million, or 13.8% of net revenues in 2019.

◦2020 operating profit was negatively impacted by acquisition and related expenses of $218.6 million ($188.6 million after-tax); $97.9 million ($80.7 million after-tax) of eOne acquired intangible asset amortization; and $8.5 million ($7.4 million after-tax) of restructuring charges associated with cost savings initiatives.

- Net earnings attributable to Hasbro, Inc. declined in 2020 to $222.5 million, or $1.62 per diluted share, compared to $520.5 million, or $4.05 per diluted share in 2019.

◦In addition to the negative impacts to operating profit described above, 2020 net earnings were impacted by incremental income tax expense of $15.4 million, or $0.11 per diluted share, related to a change in the UK tax code.

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- Net revenues of $4,720.2 million increased 3% from $4,579.6 million in 2018.

◦2019 operating profit was negatively impacted by $17.8 million ($16.4 million after-tax) of acquisition related costs associated with the eOne transaction.

The Company has continued its quarterly dividend into 2021 with the first quarterly dividend paid in February and declaration of a second cash dividend of $0.68 per share scheduled for May 2021.

Share repurchases are subject to market conditions, the availability of funds and other uses of funds.

Summary of Financial Performance

A summary of the Company’s results of operations for 2020, 2019 and 2018 is illustrated below.

| Net revenues | | | $ | 5,465.4 | | | | | $ | 4,720.2 | | | | | $ | 4,579.6 | |

| Operating profit | | | 501.8 | | | | | | 652.1 | | | | | | 331.1 | | |

| Net earnings | | | 225.4 | | | | | | 520.5 | | | | | | 220.4 | | |

| Net earnings attributable to noncontrolling interests | | | 2.9 | | | | | | — | | | | | | — | | |

| Net earnings attributable to Hasbro, Inc. | | | 222.5 | | | | | | 520.5 | | | | | | 220.4 | | |

| Diluted earnings per share attributable to Hasbro, Inc. | | | 1.62 | | | | | | 4.05 | | | | | | 1.74 | | |

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The fiscal year ended December 27, 2020 results reflect the inclusion of the eOne business following the completion of the acquisition on December 30, 2019.

Through our acquisition of Entertainment One Ltd. ("eOne"), acquired brands PEPPA PIG and PJ MASKS will be

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included in Emerging Brands going forward.

Hasbro's strategic plan is centered around its brand blueprint.

Under the brand blueprint strategy, Hasbro re-imagines, re-invents and re-ignites its owned and controlled brands and imagines, invents and ignites new brands, through product innovation, immersive entertainment offerings, including television and motion pictures, digital gaming and a broad range of consumer products.

As the global consumer landscape, shopping behaviors and the retail environment continue to evolve, the Company continues to transform and reimagine its business strategy.

This transformation includes reexamining the ways Hasbro organizes across its brand blueprint and re-shaping the Company to become a better equipped and adaptive, digitally-driven organization, including the development of an omni-channel retail presence and adding new capabilities through the on-boarding of new skill sets and talent.

More recently, to enhance its long-term competitive position the Company has identified and pursued key growth opportunities through strategic acquisitions, to excel in today’s converged retail environment as a leading global play and entertainment company across all platforms.

With the completion of the acquisition of eOne in fiscal 2020, the results of eOne will be reported as a separate operating segment.

In addition, the Company has included in this report, the impact on 2018 net earnings and earnings per share, of intangible asset and goodwill impairments, organizational restructuring charges, the Toys“R”Us bankruptcy and U.S. tax reform, passed in December 2017.

Business, for a brief description of eOne’s business.

Results discussed herein do not include the results of eOne as the acquisition of eOne was completed in the first quarter of 2020.

| | |

| --- | --- |

| • | 2018 net earnings were negatively impacted by costs related to the Toys"R"Us bankruptcy, net of tax, of $52.8 million or $0.42 per diluted share, impairment charges related to Backflip Studios and other intangible assets, net of tax, of $96.9 million, or $0.76 per diluted share, costs associated with the Company’s 2018 restructuring program, net of tax, of $77.9 million or $0.61 per diluted share and charges related to adjustments to provisional U.S. Tax Reform amounts of $40.7 million or $0.32 per diluted share. |

2018 highlights

| • | Net revenues of $4,579.6 million decreased 12% from 5,209.8 million in 2017. The decline in net revenues included an unfavorable foreign currency translation of $43.0 million. |

| • | Operating profit was $331.1 million, or 7.2% of net revenues in 2018 compared to operating profit of $810.4 million, or 15.6% of net revenues in 2017. |

| • | 2018 operating profit was negatively impacted by: non-cash goodwill and intangible asset impairment charges of $117.6 million related to Backflip Studios and other intangible assets; severance costs of $89.3 million associated with the Company's 2018 restructuring program; and $60.4 million of costs related to the Toys"R"Us bankruptcy. |

| • | 2017 operating profit was negatively impacted by the Toys"R"Us bankruptcy in the U.S. and Canada as a result of incremental bad debt expense recorded during the third quarter of 2017. |

| • | Impact from U.S. tax reform resulted in a net charge of $40.7 million in 2018 due to the remeasurement of liabilities based on additional guidance and regulations issued in 2018. |

| • | Net earnings declined in 2018 to $220.4 million, or $1.74 per diluted share, compared to $396.6 million, or $3.12 per diluted share in 2017. |

The Company seeks to return cash to its shareholders through the payment of quarterly dividends.

In the previous 17 years, the Company has increased its quarterly cash dividend 15 times from $0.03 to $0.68 per share.

During 2019, Hasbro repurchased approximately 0.7 million shares at a total cost of $61.4 million and an average price of $87.41 per share.

Summary

The following table provides a summary of the Company’s condensed consolidated results as a percentage of net revenues for 2019, 2018 and 2017.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Net Revenues | 100.0 | % | 100.0 | % | 100.0 | % |

| Operating profit | 13.8 | | 7.2 | | 15.6 | |

| Net earnings | 11.0 | | 4.8 | | 7.6 | |

*2017*

| • | A net charge of $296.5 million or $2.33 per diluted share related to U.S. tax reform. This net charge includes a $316.4 million charge included in income taxes due to the estimated repatriation tax liability and adjustments to the Company’s deferred tax assets and liabilities; partially offset by a $19.9 million gain within other income due to the change in the value of a long-term liability following the change in the U.S. corporate tax rate beginning in 2018. |

See discussion of brand portfolio below.

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

In 2019,

Higher net revenues from MONOPOLY and MAGIC: THE GATHERING products were more than offset by net revenue declines from NERF products, which were impacted by the loss of sales related to the bankruptcy and subsequent liquidation of Toys“R”Us.

Lower net revenues from STAR WARS, DISNEY PRINCESS and DREAMWORKS’ TROLLS products, as well as net revenue declines from DISNEY FROZEN and DISNEY’S DECENDANTS products were partially offset by net revenue increases from BEYBLADE and MARVEL products.

The information required by this item is included in [removed: Item 7 of] Part [removed: II of this Form 10-K and is incorporated herein by reference.][added: II, Item 7.]

*Management’s Discussion and Analysis of Financial Condition and Results of Operation,* of this Form 10-K and is incorporated herein by reference.

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[removed: We are] [added: Hasbro, Inc. (“Hasbro”) is] a global play and entertainment company committed to Creating the World’s Best Play and Entertainment Experiences.

From toys, games and consumer products to television, movies, digital gaming, [removed: live action, music,] and [removed: virtual reality] [added: other entertainment] experiences, [removed: Hasbro connects] [added: we connect] to global audiences by bringing to life great innovations, stories and brands across established and inventive platforms.

[removed: Hasbro’s] [added: Our] iconic brands include [added: NERF,] MAGIC: THE GATHERING, MY LITTLE PONY, [removed: NERF,] TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, POWER [removed: RANGERS] [added: RANGERS, PEPPA PIG] and [removed: FURREAL FRIENDS,] [added: PJ MASKS,] as well as [removed: our] premier partner brands.

Through our [added: recently acquired] global entertainment [removed: studios,] [added: studio, Entertainment One (“eOne”),] we are building our brands globally through great storytelling and content on all screens.

[removed: Hasbro is] [added: At Hasbro, we are] committed to making the world a better place for [removed: children and their families through corporate social responsibility] [added: all children, fans] and [removed: philanthropy.][added: families.]

As the global consumer landscape, shopping behaviors and the retail [removed: environment] [added: and entertainment environments] continue to evolve, we continue to [removed: transform] [added: adapt] and [removed: reimagine] [added: refine] our business strategy.

[removed: Recent Acquisition] [added: - *Acquisition] of Entertainment [removed: One Ltd.][added: One*.]

[removed: eOne] [added: Our entertainment business] is [added: now] a [added: fully operational,] global [removed: independent studio] [added: studio,] that specializes in the development, acquisition, production, financing, distribution and sales of entertainment content.

[removed: eOne] [added: eOne’s family brands team] develops, produces and distributes [removed: a portfolio of] [added: animation content for] children’s properties on a worldwide basis.

The principal brand is PEPPA PIG, which was launched in the United Kingdom [removed: (“UK”)] in May 2004.

This brand entertains [removed: pre-school] [added: preschool] children worldwide with much of its historical revenue generated through licensing and merchandising programs across multiple retail categories.

eOne’s portfolio of [removed: pre-school] [added: preschool] brands also includes PJ MASKS, CUPCAKE & DINO: GENERAL SERVICES, and RICKY ZOOM.

[removed: eOne’s global independent film business] [added: eOne] focuses on the [added: production and co-production of a growing number of films, some of which are based on Hasbro brands, as well as the] acquisition and development of film production rights and the exploitation of these rights on a multi‑territory basis across all media channels, including cinema, physical home [removed: entertainment,] [added: entertainment] and broadcast and [removed: digital, as well as the production of a growing number of films.][added: digital.]

[removed: In addition to eOne’s film business,] eOne [removed: is a major independent producer of television content in North America focusing] [added: focuses] on the development, production and acquisition of high-quality television programming for sale to broadcasters and digital platforms globally.

[removed: eOne has its own] [added: Through our acquisition of eOne, we operate a] music label, which produces and releases music tracks and albums from artists across a wide variety of genres, and [added: we own rights to] a [removed: significant] [added: sizable] catalog of music.

[removed: The] [added: Our] music business provides a source of music content for film and television productions and allows [removed: eOne] [added: us] to monetize some of the music produced from [removed: its] [added: our] films and television programs.

[removed: eOne] [added: We] also [removed: has] [added: have] a global music business specializing in management, publishing and live events across a wide variety of genres.

[removed: Music] [added: The music business] also includes UK-based Audio Network, an independent creator and publisher of original high quality music for use in film, television, advertising and digital media.

[removed: Our brand blueprint focuses] [added: As described earlier, the Hasbro Brand Blueprint strategy includes focusing] on reinforcing storylines associated with our brands through several mediums, including television, film, digital gaming and live action experiences.

Domestically, [removed: Allspark Animation primarily distributes] [added: we distribute] programming to Discovery Family Channel (the “Network”), a joint venture between Discovery Communications, Inc. (“Discovery”) and Hasbro which operates a cable television network in the United States dedicated to high-quality children’s and family entertainment and educational programming.

Internationally, [removed: Allspark Animation distributes] [added: we distribute] to various broadcasters and cable networks.

[removed: Allspark Animation] [added: We] also [removed: distributes] [added: distribute] programming globally on various digital platforms, including Netflix.

In 2016, Hasbro acquired Boulder Media, an animation studio based in Dublin, Ireland that produces a variety of [removed: projects] [added: animation projects, including those] for [removed: Allspark Animation and Allspark Pictures.][added: third parties.]

In October [removed: 2017 the Company] [added: 2017, we] entered into an agreement with Paramount Pictures (“Paramount”) to produce and distribute live action and animated films, as well as television programming based on Hasbro brands over a five-year period.

Hasbro’s Allspark Pictures, Allspark Animation and [added: now] eOne [removed: will] play an active role alongside Paramount in content development and production under this relationship and Hasbro [removed: will play] [added: plays] a more significant role in financing the films.

Jointly, [removed: Allspark Pictures and] [added: with] Paramount [removed: Pictures] [added: Pictures, we] have several upcoming feature length films with planned release dates in [removed: 2020] [added: 2021] and [removed: 2021.][added: 2022, including *SNAKE EYES: G.I. JOE ORIGINS*, expected to be released in the fall of 2021, a TRANSFORMERS feature length film expected in 2022 as well as a planned *DUNGEONS & DRAGONS* feature length film.]

[removed: In addition to film and television initiatives, Hasbro understands] [added: We understand] the importance of digital content to drive fan engagement, including in gaming and across other media, and of integrating such content with our products.

Digital media encompasses digital gaming applications and the creation of digital environments for analog products through the use of complementary digital [removed: applications] [added: applications, social media] and websites which extend storylines and enhance play.

[removed: Hasbro organizes] [added: We organize] and [removed: markets] [added: market] owned, controlled and licensed intellectual properties within our brand architecture under the following [removed: four] [added: five] brand portfolios: [removed: (1) Franchise Brands; (2) Partner Brands; (3) Hasbro Gaming; and (4) Emerging Brands.]

[removed: In addition, Hasbro’s games portfolio] [added: Our gaming business] also includes new social games brands as well as many other well-known game brands.

To successfully execute our gaming strategy, we consider brands which [removed: may] capitalize on existing trends while evolving our approach to gaming using consumer insights and offering gaming experiences relevant to consumer demand for [removed: face to face,] [added: face-to-face,] trading card and digital game experiences played as board, off-the-board, digital, card, electronic, trading card and role-playing games.

[removed: Segments][added: Reportable Segments]

[removed: Our] [added: | U.S. and Canada | | | •Engaged in the marketing and sale of] toy and game products [added: in the U.S. and Canada, including our Wizards of the Coast business. Toy and game products] are primarily developed by cross-functional teams, including members of our global development and marketing groups, to establish a cohesive brand direction and assist the segments in establishing certain local marketing programs. [added: | | |]

[removed: Our] [added: We also have a] Global Operations segment [added: which] is responsible for arranging product manufacturing and sourcing for the U.S. and Canada and International segments.

[removed: *International* The] [added: |] International [removed: segment engages] [added: | | | •Engaged] in the marketing and sale of [removed: our product categories] [added: toy and game products] to retailers and wholesalers [removed: in most countries in] [added: across] Europe, Latin [removed: and South] America, [added: South America] and the Asia Pacific region and through distributors in those countries where we have no direct presence. [added: As of December 27, 2020, we had offices in more than 35 countries contributing to sales in more than 120 countries. •We seek to further grow our international business through expansion in Eastern Europe, Asia, Africa and Latin and South America. | | |]

[removed: Our consumer products licensing category seeks to promote our brands through the out-licensing of our intellectual properties to third parties for promotional and merchandising uses in businesses which do not compete directly with our own product offerings, such as] [added: These include] apparel, publishing, home goods and electronics, or in certain situations, [removed: to utilize them for] toy products where we consider the out-licensing of brands to be more effective and profitable than developing and marketing the products ourselves.

Cartamundi continues to manufacture significant quantities of game products for us [removed: in their two facilities] under a multi-year manufacturing agreement.

[removed: *Other Information* To] [added: ◦To] further extend our range of products in the various segments of our business, we sell a portion of our toy and game products to retailers on a direct import basis from the Far East.

[removed: Certain] [added: ◦Certain] of our products are licensed to other companies for sale in selected countries where we do not otherwise have a direct business presence.

[removed: For] [added: ◦For] more [removed: information, including the amount of net revenues attributable to each of] [added: financial information regarding] our [removed: four product categories,] [added: segments, please] see note 21 to our consolidated financial statements, [removed: which is] included in Part II, Item [removed: 8 of this Form 10-K.][added: 8.]


We believe that doing well includes doing good in the world and for all our constituents.

This is demonstrated in all we do, including through our corporate social responsibility and philanthropy initiatives.

We were ranked among the 2020 100 Best Corporate Citizens by 3BL Media, and have been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past ten years, and one of America’s Most JUST Companies by Forbes and JUST Capital for the past four years.

The terms “Hasbro,” “Company”, “we”, “our” and “us” are used in this report to refer collectively to Hasbro and the subsidiaries through which our businesses are conducted.

Fiscal 2020 Developments

Fiscal 2020 began with the completion of our acquisition of eOne, a global entertainment company.

eOne adds global children’s brands, such as PEPPA PIG and PJ MASKS to our portfolio, and brings experienced talent, expertise and capabilities across television, film and other

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forms of entertainment.

Throughout 2020 we successfully integrated many parts of our business and have started to achieve synergies as a combined company.

- *Coronavirus Pandemic*.

During fiscal 2020 and continuing into fiscal 2021, the world has been significantly impacted by the novel coronavirus (COVID-19) pandemic.

Overall we experienced accelerated growth in our ecommerce, and in particular, sales of games, as consumers did more shopping on-line and families were playing more games while at home.

We also experienced increased interest in our Wizards of the Coast table-top gaming and entertainment content, as consumers were searching for entertainment options during the pandemic.

The pandemic did, however, have a substantial adverse impact on our business, as well as our employees, consumers, customers, partners, licensees, suppliers and manufacturers, due in part to the preventative measures taken to reduce the spread of the virus.

These preventative measures included restrictions on business operations, temporary closures or limited reopening of many retail, manufacturing and entertainment production businesses, shelter-in-place and stay-at-home orders, and other voluntary and government imposed restrictions.

We experienced:

◦Strong consumer and audience demand for games and content;

◦disruptions in supply of products due to closures or reductions in operations at third-party manufacturing facilities across several geographies including, but not limited to, China, India, the United States and Ireland, as well as increased costs and difficulties in shipping and distributing products;

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

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

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

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

◦challenges of working remotely.

In response to these challenges, we developed and continue to develop and execute plans to mitigate the negative impact of COVID-19 to the business.

Our responses included:

◦utilizing our global supply chain and existing inventory to work to meet demand, as our manufacturing facilities returned to varying levels of operation;

◦creatively finding ways to accelerate our business online and expand omni-channel to get products to customers;

◦developing innovative ways to enable players to continue to play MAGIC: THE GATHERING games remotely; and

◦continuing to develop new entertainment, including working on animation productions and post-production work, which were able to be worked on remotely.

We have maintained sufficient liquidity and access to capital resources.

We also continue to closely manage expenses to further preserve liquidity and we continually monitor customer health and collectability of receivables.

The COVID-19 outbreak continues to be fluid and it is difficult to forecast the impact it could have on our future operations.

Please see Part I, Item 1A.

Risk Factors, of this Form 10-K for further information.

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Brand Blueprint Strategy

Our strategic plan is centered around Hasbro’s Brand Blueprint, a framework for bringing compelling and expansive brand experiences to consumers and audiences around the world.

Our brands are story-led consumer franchises brought to life through a wide array of consumer products, compelling content offered across a multitude of platforms and media, including a variety of digital experiences, as well as music, publishing and live entertainment.

Completion of Acquisition

On December 30, 2019, we 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.

The financial results of eOne are not included in the consolidated financial statements included in this Form 10-K, as the acquisition of eOne was completed in fiscal 2020.

General Development and Description of Business and Business Segments

Through our acquisition of eOne, we’ve enhanced our brand portfolios with the addition of beloved children’s brands, including PEPPA PIG and PJ MASKS.

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Our strategic plan is centered around our brand blueprint.

Under our brand blueprint strategy, we re-imagine, re-invent and re-ignite our owned and controlled brands and imagine, invent and ignite new brands, through product innovation, immersive entertainment offerings, including television and motion pictures, digital gaming and a broad range of consumer products.

This transformation includes reexamining the ways Hasbro organizes across its brand blueprint and re-shaping the Company to become a better equipped and adaptive, digitally-driven organization, including the development of an omni-channel retail presence and adding new capabilities through the on-boarding of new skill sets and talent.

More recently, to enhance our long-term competitive position we have identified and pursued key growth opportunities through strategic acquisitions, to excel in today’s converged retail environment as a leading global play and entertainment company across all platforms.

Overview of eOne's Business

eOne’s diversified expertise spans across film, television and music production and sales, family programming, merchandising and licensing, and digital content.

Through its global reach and expansive scale, powered by deep local market knowledge, eOne delivers premium content to the world.

eOne also produces and co‑produces a growing number of feature films.

*Strategic Rational of the Acquisition*

We believe the addition of eOne accelerates our brand blueprint strategy by:

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| --- | --- |

| • | expanding our brand portfolio with eOne’s beloved global preschool brands, including PEPPA PIG, PJ MASKS and RICKY ZOOM; |

| • | adding proven TV and film expertise and executive leadership; |

| • | enhancing brand building capabilities, our storytelling capabilities and franchise economics in TV, film and other mediums to strengthen Hasbro brands; and |

| • | creating additional opportunities for long-term profitable growth through in-sourcing and cost-synergies, as well as future revenue growth opportunities. |

Storytelling and Other Entertainment Initiatives

As part of our brand blueprint strategy, we seek to build our brands through entertainment-based storytelling.

Historically, Allspark Pictures and Allspark Animation have been responsible for Hasbro's entertainment-driven brand storytelling, including the development and global distribution of television programming and motion pictures primarily based on our brands.

As we integrate eOne's creative talent and network of studios we expect eOne to lead the Company's entertainment-driven brand storytelling with the addition of production studios that span film, television and music, and include family programming, digital content distribution, international feature film distribution and live entertainment.

Beginning in 2015, Allspark Animation began distributing certain programming domestically to other outlets, including Cartoon Network.

During 2014, we introduced Allspark Pictures, Hasbro’s film label, as a vehicle to produce both animated and live action theatrical releases based on our brands.

Beginning in 2020, we plan to leverage eOne's production expertise to enhance the Company's film, television and animated production initiatives.

The Company’s storytelling initiatives, which we believe will be enhanced through the expertise and creative talent of eOne, support its strategy of growing its brands well beyond traditional toys and games and providing entertainment experiences for consumers of all ages accessible anytime in many forms and formats.

Recent films released by Allspark Pictures include the following:

| • | In October 2017, Allspark Pictures released M*Y LITTLE PONY: THE MOVIE.* |

| • | In December 2018, Hasbro and Paramount released *BUMBLEBEE*, a film centered on the TRANSFORMERS character. |

In 2018, the Company launched MAGIC: THE GATHERING ARENA, the free-to-play online adaptation of the MAGIC: THE GATHERING card game, which launched out of open beta late in the third quarter of 2019.

During the fourth quarter of 2019, to support the Company's Wizards of the Coast's digital gaming business, the Company acquired Tuque Games ("Tuque"), an independent digital game development studio based in Montreal, Canada.

Tuque will focus on the development of digital games for brands such as DUNGEONS & DRAGONS.

In October 2019, the Company made the decision to close our wholly owned subsidiary, Backflip Studios, LLC (“Backflip”), a mobile game developer and producer of digital applications.

The Company plans to continue to support Backflip’s existing mobile gaming apps in the near-term.

As we begin to leverage the immersive entertainment capabilities gained through the eOne acquisition, we will aim to strengthen our competencies around the brand blueprint, such as in storytelling and digital, complement our current product offerings, enter into areas which are adjacent or complementary to our existing business, add to our brand portfolio, and further develop awareness of our brands and expand the ability of consumers to experience our brands in different forms and formats.

The Company is currently party to certain legal proceedings, none of which we believe to be material to our business or financial condition.

[removed: Form 10-K][added: Form 10-K]

For the fiscal year [removed: ended December 29, 2019][added: ended December 27, 2020]

Commission file [removed: number 1-6682][added: number 1-6682]

| Rhode Island | | [added: | | | |] 05-0155090 | [added: | |]

| *(State of Incorporation)* | | [added: | | | |] *(I.R.S. Employer* *Identification No.)* | [added: | |]

| 1027 Newport Avenue | | | [added: | | | | | |]

| Pawtucket, | [added: | |] Rhode Island | [added: | |] 02861 | [added: | |]

| *(Address of Principal Executive Offices)* | | [added: | | | |] *(Zip Code)* | [added: | |]

Registrant’s telephone number, including area code [removed: (401) 431-8697][added: (401) 431-8697]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common Stock | [added: | |] HAS | [added: | |] The NASDAQ Global Select Market | [added: | |]

| Large Accelerated Filer | [added: | |] ☒ | [added: | |] Accelerated Filer | [added: | |] ☐ | [added: | |] Non-Accelerated Filer | [added: | |] ☐ | [added: | |] Smaller Reporting Company | [added: | |] ☐ | [added: | |]

| Emerging Growth Company | [added: | |] ☐ | | | | | | | [added: | | | | | | | | | | | | | |]

The aggregate market value on June [removed: 30, 2019] [added: 28, 2020] (the last business day of the Company’s most recently completed second quarter) of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of the stock on that date, was approximately [removed: $12,056,921,330.][added: $8,825,964,312.]

The number of shares of common stock outstanding as of February [removed: 11, 2020] [added: 8, 2021] was [removed: 136,876,923.][added: 137,351,697.]

Portions of our definitive proxy statement for our [removed: 2020] [added: 2021] Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.

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These “forward-looking statements” may relate to matters such [removed: as] [added: as:] our business and marketing [removed: strategies,] [added: strategies;] anticipated financial performance or business prospects in future [removed: periods,] [added: periods;] expected technological and product [removed: developments,] [added: developments;] relationships with customers and [removed: suppliers,] [added: suppliers;] purchasing patterns of our customers and [removed: consumers,] [added: consumers; efforts to expand ecommerce capabilities;] the expected [removed: content of and] timing for scheduled new product introductions or our expectations concerning the future acceptance of products by [removed: customers,] [added: customers;] expected benefits and plans relating to acquired brands, properties and businesses, such as Entertainment One [removed: Ltd.,] [added: Ltd.;] the content and timing of planned entertainment releases including motion pictures, television and digital [removed: products,] [added: gaming products; changes in the methods of content distribution, including developing and increased reliance on streaming outlets;] marketing and promotional [removed: efforts,] [added: efforts; goals relating to our CSR and ESG activities;] research and development [removed: activities,] [added: activities;] geographic plans, adequacy of [removed: supply,] [added: supply;] manufacturing capacity and expectations [added: related] to [removed: reduce] [added: our sources of] manufacturing in [removed: China, tariffs, impact of] [added: China;] the [removed: outbreak] [added: potential for tariffs and their impact on our business; impact] of the coronavirus [added: pandemic] and other public health [removed: conditions,] [added: conditions;] adequacy of our [removed: properties,] [added: properties;] expected benefits and cost-reductions from certain restructuring [removed: actions,] [added: actions;] capital [removed: expenditures,] [added: expenditures;] working [removed: capital, liquidity,] [added: capital; liquidity] and other financial, tax, accounting and similar matters.

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

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| | | | [PART I](#ibc53b260961b41689ca1fb5368889d3e_13) | | | | | |

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| | | | [PART II](#ibc53b260961b41689ca1fb5368889d3e_34) | | | | | |

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| | | | [PART IV](#ibc53b260961b41689ca1fb5368889d3e_211) | | | | | |

| | | | [Signatures](#ibc53b260961b41689ca1fb5368889d3e_220) | | | [141](#ibc53b260961b41689ca1fb5368889d3e_220) | | |

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

The factors listed in the risk factors below and in Part I, Item 1A.

RISK FACTORS SUMMARY

We are subject to a variety of risks and uncertainties, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

These include strategic, operational, global and economic, financial, governmental and legal related risks related to our business.

Risks that we deem material are described under “Risk Factors” in Item 1A of this Form 10-K.

These risks include, but are not limited to, the following:

Strategic Risks

- We may not successfully develop and expand our owned and our partner brands across our brand blueprint.

- Our ability to build our brands and sell products will suffer if we or our partners fail to successfully develop and deliver engaging storytelling.

- Our competitors may develop and market products and entertainment that is more popular than ours and more sought after by consumers.

- Consumer interests change quickly, making it difficult to develop successful products and entertainment.

- The sophistication of today’s children and array of technology and entertainment offerings available to them create challenges to develop sought after products and storytelling experiences.

- A key to our future success will be our ability to further grow our digital gaming businesses.

- Rapid technological changes occurring in the entertainment industry may harm our business.

- We may lose rights to existing partner content or fail to secure such rights in the future.

- Our third-party licenses may not be profitable if the licensed material does not achieve market appeal.

- The play and entertainment industry is highly competitive, with low barriers to entry.

- Our entertainment business faces significant competition from large and independent studios and producers.

[Table of Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)

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| | [PART I](#s5DAE5C5851995ACDAF8A4B77230830DD) | |

| | [PART II](#sC6820EEA03A35A4D84504FDB20FFE6DE) | |

| | [PART IV](#s0DBDFFA128D852FEBB6DB54E9515A0B6) | |

| | [Signatures](#s9A406AAC82235AB3825994465F962036) | [121](#s9A406AAC82235AB3825994465F962036) |

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[Table of Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)

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The [removed: Company leases] [added: Company's significant leased properties include] a facility in Providence, Rhode Island consisting of approximately 136,000 square feet which is used primarily by the U.S. and Canada segment, as well as the Entertainment, Licensing and Digital and Global Operations segments.

In [removed: addition to the above facilities,] [added: addition,] the Company [removed: also] leases office space consisting of approximately 126,000 square feet in Renton, Washington as well as warehouse space aggregating approximately 3,270,000 square feet in Georgia, California, [added: Texas,] Illinois and Quebec that are also used by the U.S. and Canada segment.

The Company leases approximately 80,000 square feet in Burbank, California, [removed: 24,500 square feet in Boulder Colorado] and [removed: 26,000] [added: 27,000] square feet in Dublin, Ireland that are used by the Entertainment, Licensing and Digital segment.

The Global Operations segment [removed: also] leases an aggregate of [removed: 81,700] [added: 85,100] square feet of office and warehouse space in Hong Kong as well as [removed: 68,500] [added: 59,400] square feet of office space leased in the People’s Republic of China.

The primary locations for facilities in the International segment are in Australia, Brazil, France, Germany, [removed: Hong Kong,] Mexico, Russia, Spain, [removed: the People’s Republic of China, and the United Kingdom, all of which are comprised of both office and warehouse space.]

The Company also leases approximately 95,000 square feet in Toronto used primarily by the eOne segment for office space.

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

the People’s Republic of China, and the United Kingdom, all of which are comprised of both office and warehouse space.

eOne leases its properties and has principal office locations in Canada, the United Kingdom, and the U.S.

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| Item 3. | Legal Proceedings. |

The Company is currently party to certain legal proceedings, none of which we believe to be material to our business or financial condition.

[Tabl](#ibc53b260961b41689ca1fb5368889d3e_7)[e](#ibc53b260961b41689ca1fb5368889d3e_7) [of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

[Table of Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)

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As of February [removed: 11, 2020,] [added: 8, 2021,] there were approximately [removed: 7,862] [added: 7,765] shareholders of record of the Company’s Common Stock.

In May 2018, the Company announced that its Board of Directors authorized the repurchase of up to [added: an additional] $500 million in Common Stock.

The [removed: Company has no obligation to repurchase shares under the authorization, and the] timing, actual [removed: number,] [added: number] and value of the shares that are repurchased, if any, 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.

Following the Company’s acquisition of eOne, the Company suspended its share repurchase program while it prioritizes [removed: achieving its target debt to EBITDA levels.][added: deleveraging.]

For further discussion related to the eOne [removed: acquisition,] [added: Acquisition,] see note [removed: 22] [added: 3] to our consolidated financial statements, which are included in Part II, Item [removed: 8 of this Form10-K.][added: 8.]

The Company has no obligation to repurchase shares under this authorization.

There were no share repurchases made in the fourth quarter of 2020.

*Financial Statements* of this Form 10-K.

Repurchases made in the fourth quarter of 2019 (in whole numbers of shares and dollars):

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| | (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 Program | | |

| October 2019 9/30/19 — 10/27/19 | 12,484 | $ | 100.12 | | 12,484 | | $ | 366,592,558 | |

| November 2019 10/28/19 — 12/01/19 | — | $ | — | | — | | $ | — | |

| December 2019 12/02/19 — 12/29/19 | — | $ | — | | — | | $ | — | |

| Total | 12,484 | $ | 100.12 | | 12,484 | | $ | 366,592,558 | |

[Table of Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)

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[removed: (Thousands] [added: (Millions] of dollars and shares except per share data)

| | [added: | |] Fiscal Year | | | | | | | | | | | [added: | | | |]

| | [added: | | 2020 | | |] 2019 | | | 2018 | | [added: |] 2017 | | [removed: 2016] | [added: 2016] | [removed: 2015] | |

| Consolidated Statements of Operations Data: | | | | | | | | | | | | [added: | | | | | |]

| Net [removed: loss] [added: earnings (loss)] attributable to noncontrolling interests | [added: | |] $ | [added: 2.9 | |] — | | [added: |] — | | [added: |] — | | [removed: (18,229] | [removed: )] [added: (18.2)] | [removed: (4,966] | [removed: )] |

| Per Common Share Data: | | | | | | | | | | | | [added: | | | | | |]

| Net Earnings Attributable to Hasbro, Inc. | | | | | | | | | | | | [added: | | | | | |]

| Basic | [added: | |] $ | [added: 1.62 | |] 4.07 | | [added: |] 1.75 | | [added: |] 3.17 | | [removed: 4.40] | [added: 4.40] | [removed: 3.61] | |

| Diluted | [added: | |] $ | [added: 1.62 | |] 4.05 | | [added: |] 1.74 | | [added: |] 3.12 | | [removed: 4.34] | [added: 4.34] | [removed: 3.57] | |

| Cash dividends declared | [added: | |] $ | 2.72 | | [added: 2.72 | | |] 2.52 | | [added: |] 2.28 | | [removed: 2.04] | [added: 2.04] | [removed: 1.84] | |

| Consolidated Balance Sheets Data: | | | | | | | | | | | | [added: | | | | | |]

| Weighted Average Number of Common Shares: | | | | | | | | | | | | [added: | | | | | |]

[removed: | (1) | Represents] [added: (1)Represents] principal balance of long-term debt. [removed: Excludes related deferred debt expenses. |]

[removed: See “Risk Factors” contained in Part I, Item 1A] [added: Risk Factors,*] of this Form 10-K for a discussion of risks and uncertainties that may affect future results.

[removed: Also see “Management’s] [added: Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations” contained in Part II, Item 7] [added: Operation,*] of this Form 10-K for a discussion of factors affecting the comparability of information contained in this Item 6.

The Company’s 2020 results presented in this Form 10-K include eOne's results of operations and financial position beginning on December 30, 2019, the date of acquisition.

The Company’s 2019 - 2016 results are presented as reported and do not include eOne results.

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| Net revenues | | | $ | 5,465.4 | | 4,720.2 | | | 4,579.6 | | | 5,209.8 | | | 5,019.8 | | |

| Operating profit | | | $ | 501.8 | | 652.1 | | | 331.1 | | | 810.4 | | | 788.0 | | |

| Net earnings | | | $ | 225.4 | | 520.5 | | | 220.4 | | | 396.6 | | | 533.2 | | |

| Net earnings attributable to Hasbro, Inc. | | | $ | 222.5 | | 520.5 | | | 220.4 | | | 396.6 | | | 551.4 | | |

| Total assets | | | $ | 10,818.4 | | 8,855.6 | | | 5,263.0 | | | 5,290.0 | | | 5,091.4 | | |

| Total long-term debt (1) | | | $ | 5,127.9 | | 4,084.9 | | | 1,709.9 | | | 1,709.9 | | | 1,559.9 | | |

| Basic | | | 137.3 | | | 127.9 | | | 126.1 | | | 125.0 | | | 125.3 | | |

| Diluted | | | 137.6 | | | 128.5 | | | 126.9 | | | 127.0 | | | 127.0 | | |

Excludes related deferred debt expenses.

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See “Risk Factors” contained in Part I, Item 1A*.

Also see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7*.

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| Net revenues | $ | 4,720,227 | | 4,579,646 | | 5,209,782 | | 5,019,822 | | 4,447,509 | |

| Operating Profit | $ | 652,050 | | 331,052 | | 810,359 | | 788,048 | | 691,933 | |

| Net earnings | $ | 520,454 | | 220,434 | | 396,607 | | 533,151 | | 446,872 | |

| Net earnings attributable to Hasbro, Inc. | $ | 520,454 | | 220,434 | | 396,607 | | 551,380 | | 451,838 | |

| Total assets | $ | 8,855,628 | | 5,262,988 | | 5,289,983 | | 5,091,366 | | 4,720,717 | |

| Total long-term debt (1) | $ | 4,084,895 | | 1,709,895 | | 1,709,895 | | 1,559,895 | | 1,559,895 | |

| Basic | 127,896 | | | 126,132 | | 125,039 | | 125,292 | | 125,006 | |

| Diluted | 128,499 | | | 126,890 | | 127,031 | | 126,966 | | 126,688 | |

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We have audited the accompanying consolidated balance sheets of Hasbro, Inc. and subsidiaries (the Company) as of December [removed: 29, 2019] [added: 27, 2020] and December [removed: 30, 2018,] [added: 29, 2019,] the related consolidated statements of operations, comprehensive earnings, cash flows, and shareholders’ equity and redeemable noncontrolling interests for each of the years in the [removed: three-year] [added: three year] period ended December [removed: 29, 2019,] [added: 27, 2020,] and the related notes and financial statement schedule II - [removed: Valuation] [added: valuation] and [removed: Qualifying Accounts] [added: qualifying accounts] (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December [removed: 29, 2019] [added: 27, 2020] and December [removed: 30, 2018,] [added: 29, 2019,] and the results of its operations and its cash flows for each of the years in the [removed: three-year] [added: three year] period ended December [removed: 29, 2019,] [added: 27, 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December [removed: 29, 2019,] [added: 27, 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 27, 2020] [added: 24, 2021] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of December 31, 2018 due to the adoption of Accounting Standards Update 2016-02, *Leases (Topic [removed: 842)* and Accounting Standards Update 2018-11, *Leases (Topic 842): Targeted Improvements*.][added: 842).*]

*Critical Audit [removed: Matter*][added: Matters*]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex [removed: judgment.][added: judgments.]

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

[removed: [Table] [added: [Table] of [removed: Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)][added: Contents](#ibc53b260961b41689ca1fb5368889d3e_7)]

[removed: *Assessing] [added: *Assessment of] the carrying value of the investment in Discovery Family Channel*

As discussed in Note [removed: 6] [added: 7] to the consolidated financial statements, the Company’s equity method investment in Discovery Family Channel, Inc. (DFC) at December [removed: 29, 2019] [added: 27, 2020] was [removed: $223.8 million.][added: $216,567 thousand.]

We identified [removed: assessing] the [added: assessment of the] carrying value of the investment in DFC as a critical audit matter.

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

[removed: We tested certain internal controls over the Company’s impairment evaluation process for equity method investments, including] [added: This included] controls related to the review of forecasted revenue, discount rate, and terminal growth rate assumptions.

[removed: | • | evaluating] [added: –evaluating] the discount rate by comparing it against a discount rate range that was independently developed using publicly available [removed: market] data for comparable [removed: entities; |][added: entities]

[removed: | • | evaluating] [added: –evaluating] the terminal growth rate by comparing it against publicly available industry reports and to DFC’s historical revenue [removed: growth; and |][added: growth]

[removed: | • | developing] [added: –developing] an estimate of the fair value of the investment using (1) DFC’s forecasted cash flows and estimated terminal growth rate and (2) an independently developed discount rate, which was then compared to the Company’s fair value estimate. [removed: |]

December [added: 27, 2020 and December] 29, 2019 [removed: and December 30, 2018]

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | [added: |]

| ASSETS | | | | | | | [added: | | | | |]

| Current assets | | | | | | | [added: | | | | |]

| [removed: Cash and] [added: Cash,] cash equivalents [added: and restricted cash at beginning of year] | [removed: $] | [added: |] 4,580,369 | | | [added: | | |] 1,182,371 | | [added: | | | | 1,581,234 | | |]

| Accounts receivable, less allowance for [removed: doubtful accounts] [added: credit losses] of [removed: $17,200] [added: $28,100] in [removed: 2019] [added: 2020] and [removed: $9,100] [added: $17,200] in [removed: 2018] [added: 2019] | [removed: 1,410,597] | | [added: 1,391,726] | | [removed: 1,188,052] | | [added: | | 1,410,597 | | |]

| Inventories | [removed: 446,105] | | [added: 395,633] | | [removed: 443,383] | | [added: | | 446,105 | | |]

| Prepaid expenses and other current assets | [removed: 310,450] | | [added: 609,610] | | [removed: 268,698] | | [added: | | 310,450 | | |]

| Total current assets | [removed: 6,747,521] | | [added: 3,846,645] | | [removed: 3,082,504] | | [added: | | 6,747,521 | | |]

| Property, plant and equipment, net | [removed: 382,248] | | [added: 489,041] | | [removed: 256,473] | | [added: | | 382,248 | | |]

| Other assets | | | | | | | [added: | | | | |]

| Goodwill | [removed: 494,584] | | [added: 3,691,709] | | [removed: 485,881] | | [added: | | 494,584 | | |]

| Other intangibles, net | [removed: 646,305] | | [added: 1,530,835] | | [removed: 693,842] | | [added: | | 646,305 | | |]

| Other | [removed: 584,970] | | [added: 1,260,155] | | [removed: 744,288] | | [added: | | 584,970 | | |]

| Total other assets | [removed: 1,725,859] | | [added: 6,482,699] | | [removed: 1,924,011] | | [added: | | 1,725,859 | | |]

| Total assets | [added: | |] $ | [removed: 8,855,628] [added: 10,818,385] | | | [removed: 5,262,988] | | [added: 8,855,628 | | |]

| [removed: LIABILITIES] [added: LIABILITIES, NONCONTROLLING INTERESTS] AND SHAREHOLDERS’ EQUITY | | | | | | | [added: | | | | |]

| Current liabilities | | | | | | | [added: | | | | |]

| Short-term borrowings | [added: | |] $ | [removed: 503] [added: 6,642] | | | [removed: 9,740] | | [added: 503 | | |]

| Accounts payable | [removed: 343,927] | | [added: 425,500] | | [removed: 333,521] | | [added: | | 343,927 | | |]

| Accrued liabilities | [removed: 912,652] | | [added: 1,538,644] | | [removed: 931,063] | | [added: | | 912,652 | | |]

| Total current liabilities | [removed: 1,257,082] | | [added: 2,403,341] | | [removed: 1,274,324] | | [added: | | 1,257,082 | | |]

| Long-term debt | [removed: 4,046,457] | | [added: 4,660,015] | | [removed: 1,695,092] | | [added: | | 4,046,457 | | |]

| Other liabilities | [removed: 556,559] | | [added: 793,866] | | [removed: 539,086] | | [added: | | 556,559 | | |]

The Company tests it equity

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method investment in DFC annually or whenever an event or circumstance occurs that indicates that the carrying value may not be recoverable.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the impairment evaluation process.

*Assessment of the initial fair value measurement of intangible and content assets acquired through the business combination of eOne*

As discussed in Note 3 to the consolidated financial statements, on December 30, 2019 the Company completed its acquisition of eOne for total consideration of $4,587,642 thousand.

The Company measured the identifiable assets acquired and liabilities assumed at fair value, which resulted in the recognition of $1,056,000 thousand of intangible assets and $564,828 thousand of content assets.

The fair value of the acquired intangible and content assets was determined based on the estimated future cash flows to be generated from the acquired assets.

We identified the assessment of the initial fair value of the *acquired* intangible and content assets as a critical audit matter.

The forecasted revenue, attrition rates and discount rates used to estimate the fair value of the acquired intangible and content assets involved a high degree of auditor judgment and effort due to the significant measurement uncertainty in the assumptions.

The forecasted attrition rates are assumptions for which there was limited observable market information.

In addition, the estimated fair values were sensitive to possible changes to the above assumptions.

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

We evaluated the design and tested the operating effectiveness of certain internal controls related to the valuation of the identified intangible and content assets.

This included controls related to the review of forecasted revenue, attrition rates, and discount rates.

We assessed the Company’s ability to accurately estimate forecasted revenue growth by comparing forecasted revenue growth to the acquiree’s historical revenue results and/or publicly available data.

To assess the Company’s forecasted attrition rates we compared them to publicly available data.

We also involved a valuation professional with specialized skills and knowledge who assisted in:

–evaluating the discount rates by comparing it against discount rates that were independently developed using publicly available data

–developing an estimate of the fair value of the acquired intangible and content assets using (1) the Company’s forecasted cash flows and (2) independently developed discount rates, which were then compared to the Company’s fair value estimate.

*Assessment of the amortization of content assets*

As discussed in Notes 1 and 8 to the consolidated financial statements, total investments in content assets were approximately $727,186 thousand at December 27, 2020.

These amounts are being amortized to program cost amortization using the individual film forecast method.

This method estimates amortization based on the ratio of current period revenues to the estimated remaining total revenues (“ultimate revenues”) over a period not exceeding 10 years.

The Company estimates ultimate revenues based on the historical performance of similar films and

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television programs, expected distribution platforms, and factors unique to the Company’s film and television content.

We identified the assessment of the amortization of investments in content assets as a critical audit matter.

The forecasted ultimate revenues used to estimate program cost amortization required a high degree of auditor judgment.

Evaluating the assumptions used to forecast ultimate revenues, including historical performance of similar film and television programs and expected distribution platforms, required subjective auditor judgment.

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

We evaluated the design of certain internal controls related to the amortization of content assets.

This included controls related to forecasted ultimate revenue.

For a sample of content assets, we evaluated the assumptions noted above used to forecast ultimate revenues by comparing to contractual agreements and publicly available data, where available.

February 24, 2021

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| Cash and cash equivalents including restricted cash of $73,200 in 2020 and $0 in 2019 | | | $ | 1,449,676 | | | | | 4,580,369 | | |

| Current portion of long-term debt | | | 432,555 | | | | | | — | | |

Difficulties in increasing subscribers to DFC has led to a fair value estimate of the Company’s investment in DFC that approximates its carrying value.

This indicated a higher risk that the fair value of the investment may be less than its carrying value and the decline may be other than temporary.

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February 27, 2020

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Impairment of intangible assets | — | | | | 31,303 | | | — | |

| Program production costs, net of tax rebates received | (33,851 | | ) | | (131,984 | ) | | (48,003 | ) |

| Other, including long-term advances | (19,532 | | ) | | (35,218 | ) | | (5,613 | ) |

| Deferred financing fees paid | (26,653 | | ) | | — | | | — | |

| Cash and cash equivalents at beginning of year | 1,182,371 | | | | 1,581,234 | | | 1,282,285 | |

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| Balance, December 25, 2016 | $ | 104,847 | | | 985,418 | | | 4,148,722 | | | (194,570 | ) | | (3,181,681 | ) | | $ | 1,862,736 | | | | $ | 22,704 | |

| Net earnings | — | | | | — | | | 396,607 | | | — | | | — | | | 396,607 | | | | | — | | |

| Impact of adoption of ASU 2016-09 | — | | | | 916 | | | (697 | ) | | — | | | — | | | 219 | | | | | | | |

| Acquisition of remaining interest in Backflip | — | | | | 22,704 | | | — | | | — | | | — | | | 22,704 | | | | | (22,704 | | ) |

| Dividends declared | — | | | | — | | | (284,410 | ) | | — | | | — | | | (284,410 | | ) | | | — | | |

| Purchases of common stock | — | | | | — | | | — | | | — | | | (61,387 | ) | | (61,387 | | ) | | | — | | |

At December 29, 2019, the Company had no majority-owned subsidiaries.

each reporting date.

Prior to the adoption of Accounting Standards Update No. 2017-04 ("ASU 2017-04"), the quantitative assessment consisted of a two-step process beginning with an estimation of fair value of the reporting unit using an income approach, which looked to the present value of expected future cash flows.

The first step was a screen for potential impairment while the second step was to determine the implied fair value of the goodwill and compare it to its carrying amount on the balance sheet.

Under ASU 2017-04, the Step 2 test was eliminated.

As a result, once it has been determined that the carrying amount of a reporting unit exceeds its fair value, the excess carrying amount is recognized as an impairment loss.

The Company performed the first step of the quantitative two-step annual impairment test on the goodwill associated with Backflip and on the goodwill associated with the Company’s Entertainment reporting unit.

As a result of the 2017 assessment the Company concluded that no impairments were indicated as the estimated fair values were in excess of the carrying values of the related reporting units.

On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, *Revenue from Contracts with Customers* (ASC 606 or the “New Revenue Standard”) using the modified retrospective method.

ASC 606 superseded the revenue recognition requirements in ASC 605 – *Revenue Recognition* and most industry-specific guidance in U.S. GAAP.

The New Revenue Standard provides a five-step model for analyzing contracts and transactions to determine when, how, and if revenue is recognized.

Revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.

The cumulative impact of the adoption of the New Revenue Standard was not material to the Company therefore the Company did not record any adjustments to retained earnings.

This was determined by analyzing contracts not completed as of January 1, 2018.

The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Revenue recognition from the sale of finished products to customers, which is the majority of the Company’s revenues, did not change under the new standard and the Company does not expect material changes in the future as a result of the New Revenue Standard related to the sale of finished products to its customers.

Within the Company’s Entertainment, Licensing and Digital segment, the timing of revenue recognition for minimum guarantees that the Company receives from licensees was impacted by the New Revenue Standard.

Prior to the adoption of ASC 606, for licenses of the Company’s brands that are subject to minimum guaranteed license fees, the Company recognized the difference between the minimum guaranteed amount and the actual royalties earned from licensee merchandise sales (“shortfalls”) at the end of the contract period, which was in the fourth quarter for most of the Company’s licensee arrangements.

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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 December [removed: 29, 2019.][added: 27, 2020.]

Hasbro’s management assessed the effectiveness of its internal control over financial reporting as of December [removed: 29, 2019.][added: 27, 2020.]

Based on this assessment, Hasbro’s management concluded that, as of December [removed: 29, 2019,] [added: 27, 2020,] its internal control over financial reporting is effective based on those criteria.

[removed: [Table] [added: [Table] of [removed: Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)][added: Contents](#ibc53b260961b41689ca1fb5368889d3e_7)]

We have audited Hasbro, [removed: Inc.] [added: Inc.'s] and subsidiaries’ (the Company) internal control over financial reporting as of December [removed: 29, 2019,] [added: 27, 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December [removed: 29, 2019,] [added: 27, 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December [removed: 29, 2019] [added: 27, 2020] and December [removed: 30, 2018,] [added: 29, 2019,] the related consolidated statements of operations, comprehensive earnings, cash flows, and shareholders’ equity and redeemable noncontrolling interests for each of the years in the three-year period ended December [removed: 29, 2019,] [added: 27, 2020,] and the related notes and financial statement schedule II - [removed: Valuation] [added: valuation] and [removed: Qualifying Accounts] [added: qualifying accounts] (collectively, the consolidated financial statements), and our report dated February [removed: 27, 2020] [added: 24, 2021] expressed an unqualified opinion on those consolidated financial statements.

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 December [removed: 29, 2019,] [added: 27, 2020,] that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

In accordance with the general guidance issued by the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from management's report on internal control over financial reporting in the year of acquisition, management excluded an assessment of the effectiveness of the Company’s internal control over financial reporting related to eOne with total assets and total net revenues representing approximately 53% and 18%, respectively, of the Company’s related consolidated financial statement amounts as of and for the year ended December 27, 2020.

The Company acquired Entertainment One Ltd. during 2020, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 27, 2020, Entertainment One Ltd.’s internal control over financial reporting associated with 53% of total assets and 18% of total revenues included in the consolidated financial statements of the Company as of and for the year ended December 27, 2020.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Entertainment One Ltd.

[Table of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

February 24, 2021

[Table of Contents](#ibc53b260961b41689ca1fb5368889d3e_7)

February 27, 2020

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[removed: [Table] [added: [Table] of [removed: Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)][added: Contents](#ibc53b260961b41689ca1fb5368889d3e_7)]

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Certain of the information required by this item is contained under the captions “Election of Directors”, “Governance of the Company” and, if applicable, under “Delinquent Section 16(a) Reports” in the Company’s definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders and is incorporated herein by reference.

The information required by this item with respect to executive officers of the Company is included in Part I, Item [removed: 1 of this Form 10-K under the caption “Executive Officers of the Registrant” and is incorporated herein by reference.][added: 1*.]

The Company’s [added: investor] website address is [removed: http://www.hasbro.com.][added: http://hasbro.gcs-web.com.]

Business,* of this Form 10-K under the caption “Executive Officers of the Registrant” and is incorporated herein by reference.

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The information required by this item is contained under the captions “Compensation of Directors”, “Executive Compensation”, “Compensation Committee Report”, “Compensation Discussion and Analysis” and “Compensation Committee Interlocks and Insider Participation” in the Company’s definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders and is incorporated herein by reference.

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The information required by this item is contained under the captions “Voting Securities and Principal Holders Thereof”, “Security Ownership of Management” and “Equity Compensation Plans” in the Company’s definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders and is incorporated herein by reference.

The information required by this item is contained under the captions “Governance of the Company” and “Certain Relationships and Related Party Transactions” in the Company’s definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders and is incorporated herein by reference.

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The information required by this item is contained under the caption “Additional Information Regarding Independent Registered Public Accounting Firm” in the Company’s definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders and is incorporated herein by reference.

[removed: [Table] [added: [Table] of [removed: Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)][added: Contents](#ibc53b260961b41689ca1fb5368889d3e_7)]

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Consolidated Balance Sheets at December [removed: 29, 2019] [added: 27, 2020] and December [removed: 30, 2018][added: 29, 2019]

Consolidated Statements of Operations for the Three Fiscal Years Ended in December [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Comprehensive Earnings for the Three Fiscal Years Ended in December [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Cash Flows for the Three Fiscal Years Ended in December [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interests for the Three Fiscal Years Ended in December [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

For the Three Fiscal Years Ended in December [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017:][added: 2018:]

[removed: [Table] [added: [Table] of [removed: Contents](#s414DD768A23C57F8A3FEEBDDD60936BD)][added: Contents](#ibc53b260961b41689ca1fb5368889d3e_7)]

| Exhibit | | | | [added: | | | | | | | |]

| 2. | | [added: | | | |] Plan of Acquisition | | [added: | | | |]

| | | [added: | | | |] (a) | [added: | |] [Arrangement Agreement by and among Hasbro, Inc., 11573390 Canada Inc. and eOne, dated as of August 22, 2019. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 23, 2019, File No. 1-6682.)](http://www.sec.gov/Archives/edgar/data/46080/000095015719000917/ex2-1.htm) | [added: | |]