Item 1. Financial Statements.

118K characters. Original on sec.gov · Markdown

Item 1. Financial Statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Millions of Dollars Except Share Data)

(Unaudited)


	September 28, 2025		September 29, 2024		December 29, 2024
ASSETS
Current assets
Cash and cash equivalents, including restricted cash of $0.3, $0.3 and $0.3	$	620.9	$	696.1	$	695.0
Short-term investments	—		489.3		—
Accounts receivable, net	995.2		1,069.2		919.8
Inventories	396.7		375.4		274.2
Prepaid expenses and other current assets	397.2		391.6		353.5
Total current assets	2,410.0		3,021.6		2,242.5
Property, plant and equipment, net of accumulated depreciation of $1,075.8, $1,100.8 and $1,026.7	243.0		331.6		302.6
Goodwill (Note 5)	1,256.5		2,278.9		2,278.2
Other intangible assets, net of accumulated amortization of $476.1, $1,350.5 and $421.2	470.9		539.5		518.4
Other assets	1,141.4		1,058.3		998.6
Total assets	$	5,521.8	$	7,229.9	$	6,340.3
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities

Current portion of long-term debt	$	—	$	500.0	$	—
Accounts payable	381.4		420.3		341.5
Accrued liabilities	1,032.2		1,132.5		1,059.8
Total current liabilities	1,413.6		2,052.8		1,401.3
Long-term debt	3,318.8		3,462.6		3,380.8
Other liabilities	355.6		404.8		373.2
Total liabilities	5,088.0		5,920.2		5,155.3
Commitments and contingencies (Note 14)
Shareholders' equity
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued	—		—		—
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at September 28, 2025, September 29, 2024, and December 29, 2024	110.1		110.1		110.1
Additional paid-in capital	2,670.4		2,609.5		2,632.2
Retained earnings	1,452.4		2,408.2		2,274.2
Accumulated other comprehensive loss	(222.4)		(227.8)		(246.4)
Treasury stock, at cost; 79,963,865 shares at September 28, 2025; 80,798,468 shares at September 29, 2024; and 80,758,045 shares at December 29, 2024	(3,604.1)		(3,612.8)		(3,612.5)
Noncontrolling interests	27.4		22.5		27.4
Total shareholders' equity	433.8		1,309.7		1,185.0
Total liabilities, noncontrolling interests and shareholders' equity	$	5,521.8	$	7,229.9	$	6,340.3

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Millions of Dollars Except Per Share Data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Net revenues	$	1,387.5	$	1,281.3	$	3,255.4	$	3,033.9
Costs and expenses:
Cost of sales	414.3		378.9		844.1		820.8
Program cost amortization	7.4		7.9		21.0		24.5
Royalties	114.3		98.0		255.8		204.2
Product development	97.6		76.3		255.6		212.2
Advertising	108.3		101.9		227.3		213.8
Amortization of intangible assets	17.2		17.1		51.4		51.2
Impairment of goodwill (Note 5)	—		—		1,021.9		—
Loss on disposal of business	—		—		25.0		24.4
Selling, distribution and administration	287.3		299.3		839.7		852.6
Total costs and expenses	1,046.4		979.4		3,541.8		2,403.7
Operating profit (loss)	341.1		301.9		(286.4)		630.2
Non-operating expense:
Interest expense	40.8		46.2		123.0		127.7
Interest income	(6.3)		(14.7)		(20.6)		(36.0)
Other expense (income), net	1.4		(19.9)		(15.9)		(15.7)
Total non-operating expense, net	35.9		11.6		86.5		76.0
Earnings (loss) before income taxes	305.2		290.3		(372.9)		554.2
Income tax expense	71.3		67.0		148.4		133.3
Net earnings (loss)	233.9		223.3		(521.3)		420.9
Net earnings attributable to noncontrolling interests	0.7		0.1		2.7		1.0
Net earnings (loss) attributable to Hasbro, Inc.	$	233.2	$	223.2	$	(524.0)	$	419.9

Net earnings (loss) per common share:
Basic	$	1.66	$	1.60	$	(3.74)	$	3.01
Diluted	$	1.64	$	1.59	$	(3.74)	$	3.00
Cash dividends declared per common share	$	0.70	$	0.70	$	2.10	$	1.40

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings (Loss)

(Millions of Dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Net earnings (loss)	$	233.9	$	223.3	$	(521.3)	$	420.9
Other comprehensive earnings (loss):
Foreign currency translation adjustments	2.3		(1.4)		36.6		(28.1)
Net gains (losses) on hedging activities, net of tax	1.3		(4.2)		(11.8)		0.7
Reclassifications to earnings, net of tax:
Net losses (gains) on hedging activities	0.7		0.1		(0.7)		1.2
Amortization of unrecognized pension and postretirement amounts	(0.1)		(0.1)		(0.1)		(0.1)
Total other comprehensive earnings (loss), net of tax	4.2		(5.6)		24.0		(26.3)
Total comprehensive earnings attributable to noncontrolling interests	0.7		0.1		2.7		1.0
Total comprehensive earnings (loss) attributable to Hasbro, Inc.	$	237.4	$	217.6	$	(500.0)	$	393.6

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)


	Nine months ended
	September 28, 2025		September 29, 2024
Cash flows from operating activities:
Net (loss) earnings	$	(521.3)	$	420.9
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment	55.7		74.0
Loss on disposal of business	25.0		24.4
Impairment of goodwill	1,021.9		—
Amortization of intangible assets	51.4		51.2
Program cost amortization	21.0		24.5
Deferred income taxes	71.5		21.0
Inventory obsolescence	25.9		(1.6)
Stock-based compensation	55.5		28.8
Other non-cash items	9.2		(13.7)
Change in operating assets and liabilities:
Increase in accounts receivable	(74.1)		(49.7)
Increase in inventories	(135.6)		(43.9)
(Increase) decrease in prepaid expenses and other current assets	(76.1)		8.2
Program production costs	(7.2)		(20.7)
Increase in accounts payable and accrued liabilities	27.2		72.7
Change in net deemed repatriation tax	(57.4)		(45.9)
Other	(2.6)		37.4
Net cash provided by operating activities	490.0		587.6
Cash flows from investing activities:
Additions to property, plant and equipment	(49.6)		(67.9)
Additions to software development	(98.6)		(78.3)
Purchases of investments	(55.2)		(571.0)
Net settlement from sale of business	—		(12.0)
Proceeds from sale of investments	—		91.0
Other	11.6		2.8
Net cash utilized by investing activities	(191.8)		(635.4)
Cash flows from financing activities:
Proceeds from long-term debt	—		498.6
Repayments of borrowings	(63.5)		—
Dividends paid	(294.2)		(292.2)
Payments related to tax withholding for share-based compensation	(21.8)		(13.0)
Stock-based compensation transactions	8.9		7.6
Payments of financing costs	—		(5.3)
Other	(4.5)		(4.9)
Net cash (utilized) provided by financing activities	(375.1)		190.8
Effect of exchange rate changes on cash	2.8		7.7
Net (decrease) increase in cash, cash equivalents and restricted cash	(74.1)		150.7
Cash, cash equivalents and restricted cash at beginning of year	695.0		545.4
Cash, cash equivalents and restricted cash at end of period	$	620.9	$	696.1

Supplemental information
Interest paid	$	108.1	$	101.8
Income taxes paid, net	$	175.6	$	70.2

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity

(Millions of Dollars)

(Unaudited)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Shareholders' Equity
Balance, December 29, 2024	$	110.1	$	2,632.2	$	2,274.2	$	(246.4)	$	(3,612.5)	$	27.4	$	1,185.0
Net earnings attributable to Hasbro, Inc.	—		—		98.6		—		—		—		98.6
Net earnings attributable to noncontrolling interests	—		—		—		—		—		0.9		0.9
Other comprehensive gain	—		—		—		6.8		—		—		6.8
Stock-based compensation transactions	—		(19.3)		—		—		5.6		—		(13.7)
Stock-based compensation expense	—		18.4		—		—		—		—		18.4
Dividends declared	—		0.6		(98.4)		—		—		—		(97.8)
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		(0.7)		(0.7)
Balance, March 30, 2025	$	110.1	$	2,631.9	$	2,274.4	$	(239.6)	$	(3,606.9)	$	27.6	$	1,197.5
Net (loss) attributable to Hasbro, Inc.	—		—		(855.8)		—		—		—		(855.8)
Net earnings attributable to noncontrolling interests	—		—		—		—		—		1.1		1.1
Other comprehensive gain	—		—		—		13.0		—		—		13.0
Stock-based compensation transactions	—		(1.3)		—		—		0.6		—		(0.7)
Stock-based compensation expense	—		12.5		—		—		0.4		—		12.9
Dividends declared	—		1.1		(99.3)		—		—		—		(98.2)
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		(0.1)		(0.1)
Balance, June 29, 2025	$	110.1	$	2,644.2	$	1,319.3	$	(226.6)	$	(3,605.9)	$	28.6	$	269.7
Net earnings attributable to Hasbro, Inc.	—		—		233.2		—		—		—		233.2
Net earnings attributable to noncontrolling interests	—		—		—		—		—		0.7		0.7
Other comprehensive gain	—		—		—		4.2		—		—		4.2
Stock-based compensation transactions	—		0.1		—		—		1.8		—		1.9
Stock-based compensation expense	—		24.2		—		—		—		—		24.2
Dividends declared	—		1.9		(100.1)		—		—		—		(98.2)
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		(1.9)		(1.9)
Balance, September 28, 2025	$	110.1	$	2,670.4	$	1,452.4	$	(222.4)	$	(3,604.1)	$	27.4	$	433.8


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Shareholders' Equity
Balance, December 31, 2023	$	110.1	$	2,590.6	$	2,188.4	$	(201.5)	$	(3,625.7)	$	25.1	$	1,087.0
Net earnings attributable to Hasbro, Inc.	—		—		58.2		—		—		—		58.2
Net earnings attributable to noncontrolling interests	—		—		—		—		—		0.9		0.9
Other comprehensive loss	—		—		—		(1.8)		—		—		(1.8)
Stock-based compensation transactions	—		(16.9)		—		—		6.9		—		(10.0)
Stock-based compensation expense	—		(5.0)		—		—		—		—		(5.0)
Dividends declared	—		1.2		(98.6)		—		—		—		(97.4)
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		(2.0)		(2.0)
Balance, March 31, 2024	$	110.1	$	2,569.9	$	2,148.0	$	(203.3)	$	(3,618.8)	$	24.0	$	1,029.9
Net earnings attributable to Hasbro, Inc.	—		—		138.5		—		—		—		138.5

Other comprehensive loss	—		—		—		(18.9)		—		—		(18.9)
Stock-based compensation transactions	—		2.9		—		—		2.4		—		5.3
Stock-based compensation expense	—		17.5		—		—		2.3		—		19.8
Dividends declared	—		1.8		(1.8)		—		—		—		—
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		(1.7)		(1.7)
Balance, June 30, 2024	$	110.1	$	2,592.1	$	2,284.7	$	(222.2)	$	(3,614.1)	$	22.3	$	1,172.9
Net earnings attributable to Hasbro, Inc.	—		—		223.2		—		—		—		223.2
Net earnings attributable to noncontrolling interests	—		—		—		—		—		0.1		0.1
Other comprehensive loss	—		—		—		(5.6)		—		—		(5.6)
Stock-based compensation transactions	—		0.6		—		—		2.0		—		2.6
Stock-based compensation expense	—		14.7		—		—		(0.7)		—		14.0
Dividends declared	—		2.1		(99.7)		—		—		—		(97.6)
Distributions paid to noncontrolling owners and other foreign exchange	—		—		—		—		—		0.1		0.1
Balance, September 29, 2024	$	110.1	$	2,609.5	$	2,408.2	$	(227.8)	$	(3,612.8)	$	22.5	$	1,309.7

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(Unaudited)

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all consolidated subsidiaries ("Hasbro" or the "Company") as of September 28, 2025, September 29, 2024, and December 29, 2024, and the results of its operations and cash flows and shareholders' equity for the periods ended September 28, 2025 and September 29, 2024 in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and condensed notes thereto. Actual results could differ from those estimates.

The three months ended September 28, 2025 and September 29, 2024 were 13-week periods. The nine months ended September 28, 2025 and September 29, 2024 were 39-week periods.

The results of operations for the three and nine months ended September 28, 2025 are not necessarily indicative of results to be expected for the full year 2025, nor were those of the comparable 2024 periods representative of those actually experienced for the full year 2024.

These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed with the SEC audited consolidated financial statements for the fiscal year ended December 29, 2024 in the Company's Annual Report on Form 10-K for the year ended December 29, 2024 ("2024 Form 10-K"), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein. Certain amounts have been reclassified to conform to current year presentation.

Other Adjustments

During the nine months ended September 29, 2024, the Company corrected prior period errors associated with an $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that should have been recorded during fiscal year 2023 (recorded in Selling, distribution and administration on the Consolidated Statements of Operations), a $31.1 million expense and associated liability related to historical environmental liabilities in accordance with Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") Topic 410, Asset Retirement and Environmental Obligations (recorded in Selling, distribution and administration on the Consolidated Statements of Operations), and a $26.7 million benefit related to an over-accrual of vendor commitment liabilities (recorded in Cost of sales on the Consolidated Statements of Operations). The recording of these items was not considered to be material, individually or in the aggregate, to the Company's prior year consolidated financial statements.

For the period ending September 29, 2024, the Company reclassified capitalized software development costs of $232.6 million from Property, plant and equipment, net into Other assets to conform with current year presentation.

Significant Accounting Policies

The Company's significant accounting policies are summarized in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company's 2024 Form 10-K.

Recently Adopted Accounting Standards

During the three and nine months ended September 28, 2025, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.

Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements in Income Tax Disclosures. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This amendment requires public companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, under the amendment, entities are required to disclose the amount of income taxes paid disaggregated

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

by federal, state and foreign taxes, as well as disaggregated by material individual jurisdictions. Finally, the amendment requires entities to disclose income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state and foreign. The new rules are effective for annual periods beginning after December 15, 2024. We are assessing the impact of this ASU and upon adoption expect that any impact would be limited to additional income tax disclosures in the footnotes to our consolidated financial statements. We expect to adopt the standard beginning with our 2025 Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The new standard requires enhanced additional disclosures related to certain expense categories. The new standard is effective for fiscal years beginning after December 15, 2026. We are currently assessing the impact of this ASU on our consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—

Internal-Use Software (Subtopic 350-40). The amendments in this update remove all references to the previously existing software development project stages and require entities to start capitalizing software costs when management has authorized and committed funding to a software project and it is probable that the project will be completed with its intended functionality. The new standard is effective for fiscal years beginning after December 15, 2027. Early adoption is permitted and can be applied prospectively, retrospectively, or utilizing a modified transition approach. We are currently assessing the impact of this ASU on our consolidated financial statements.

There were no other recently issued accounting pronouncements which would have a material effect on the Company’s condensed consolidated financial statements.

(2) Revenue Recognition

Revenue is recognized when control of the promised goods, functional intellectual property or production is transferred to the customers or licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. The majority of the Company’s revenues are derived from sales of finished products to customers. See Note 1, Summary of Significant Accounting Policies, of the Company's 2024 Annual Report for the Company's revenue recognition accounting policy.

Contract Assets and Liabilities

In the ordinary course of business, the Company enters into arrangements that result in the recognition of contract assets and contract liabilities. The opening and closing balances of contract assets and contract liabilities are as follows:


	September 28, 2025		September 29, 2024
Assets
Balance at beginning of the year	$	241.4	$	213.3
Ending Balance	$	266.9	$	242.5

Liabilities
Balance at beginning of the year	$	236.8	$	230.8
Ending Balance	$	213.5	$	256.9

For the nine months ended September 28, 2025, the Company recognized revenue of $193.2 million that was included in the December 29, 2024 contract liability balance. For the nine months ended September 29, 2024, the Company recognized revenue of $53.1 million that was included in the December 31, 2023 contract liability balance.

Unsatisfied performance obligations

As of September 28, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $989.4 million, primarily for intellectual property to be made available in the future under existing agreements with merchandise and co-branding licensees and television station affiliates. Of this amount, we expect to recognize approximately $113.8 million in the remainder of 2025, $200.8 million in 2026, $151.6 million in 2027, and $523.2 million thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of intellectual property that are solely based on the sales of the licensee.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Accounts Receivable and Allowance for Credit Losses

The Company’s balance for accounts receivable on the Consolidated Balance Sheets as of September 28, 2025 and September 29, 2024 are primarily from contracts with customers. A summary of the activity in the allowance for credit losses are as follows:


	September 28, 2025		September 29, 2024
Balance at beginning of the year	$	25.8	$	12.7
Provisions/charges to income	29.7		4.6
Amounts charged off and other	(2.6)		(0.5)
Foreign currency impact	0.8		(0.6)
Ending balance	$	53.7	$	16.2

Disaggregation of revenues

The Company disaggregates its revenues from contracts with customers by reportable segment: Wizards of the Coast and Digital Gaming, Consumer Products, and Entertainment. The Company further disaggregates revenues within its Wizards of the Coast and Digital Gaming segment by category: Tabletop Gaming and Digital and Licensed Gaming; within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; and within its Entertainment segment by category: Film & TV and Family Brands. Finally, the Company disaggregates its revenues by brand portfolio into three brand categories: Grow Brands, Optimize Brands, and Reinvent Brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Tabletop Gaming	$	441.8	$	296.8	$	1,191.9	$	832.6
Digital and Licensed Gaming	130.2		107.2		364.6		339.7
Net revenues	$	572.0	$	404.0	$	1,556.5	$	1,172.3

The following table represents consolidated Consumer Products segment net revenues by major geographic region:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
North America	$	483.0	$	526.8	$	950.4	$	1,072.0
Europe	181.1		162.3		361.8		341.8
Asia Pacific	61.2		81.9		178.6		193.3
Latin America	71.6		89.1		146.8		190.5
Net revenues	$	796.9	$	860.1	$	1,637.6	$	1,797.6

The following table represents consolidated Entertainment segment net revenues by category:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Film and TV	$	1.9	$	1.6	$	7.7	$	3.4
Family Brands	16.7		15.6		53.6		60.6
Net revenues	$	18.6	$	17.2	$	61.3	$	64.0

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The following table represents consolidated net revenues by brand portfolio:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Grow Brands	$	1,006.0	$	839.0	$	2,391.6	$	2,065.0
Optimize Brands	221.9		223.2		509.5		530.0
Reinvent Brands	159.6		219.1		354.3		438.9
Net revenues	$	1,387.5	$	1,281.3	$	3,255.4	$	3,033.9

(3) Sale of Non-Core Entertainment One Film and TV Business

On December 27, 2023, the Company completed the sale of its Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate"), pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate. The Company sold eOne Film and TV for a sales price of $375.0 million in cash, subject to the satisfaction of customary net working capital closing conditions and holdbacks for certain retained liabilities, plus the assumption by Lionsgate of production financing loans.

The Equity Purchase Agreement also included a holdback amount that was retained by Lionsgate upon the execution of the sale but remained recoverable by Hasbro if certain terms were not satisfied by Lionsgate within 30 days of the first anniversary of the agreement. During the nine months ended September 28, 2025, the Company was informed by Lionsgate of the satisfaction of the requirements under the agreement and the final holdback amount was settled, resulting in a $25.0 million expense recorded within Loss on disposal of business on the Consolidated Statements of Operations.

During the nine months ended September 29, 2024, the Company recorded $24.4 million expense in Loss on disposal of business on the Consolidated Statements of Operations associated with certain purchase price and related adjustments.

(4) Earnings (Loss) Per Common Share

Net earnings (loss) per share data were computed as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Net earnings (loss) attributable to Hasbro, Inc.	$	233.2	$	223.2	$	(524.0)	$	419.9

Average shares outstanding	140.4		139.5		140.1		139.3
Effect of dilutive securities:
Options and other share-based awards	1.8		1.0		—		0.7
Equivalent Shares	142.2		140.5		140.1		140.0

Net earnings (loss) attributable to Hasbro, Inc. per common share
Basic	$	1.66	$	1.60	$	(3.74)	$	3.01
Diluted	$	1.64	$	1.59	$	(3.74)	$	3.00

For the three and nine months ended September 28, 2025, options and other share-based awards totaling 0.5 million and 3.6 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. For the three and nine months ended September 29, 2024 options and other share-based awards totaling 1.1 million and 1.9 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. With respect to the nine months ended September 28, 2025, 2.9 million awards would have been included in the calculation of diluted shares had the Company not reported a net loss. Assuming that these options and other share-based awards were included, under the treasury stock method, this would have resulted in an additional 1.3 million shares being included in the diluted earnings per share calculation for the nine months ended September 28, 2025.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(5) Goodwill

Changes in the carrying amount of goodwill, by operating segment, are as follows:


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Total
2025
Balance as of December 29, 2024	$	371.0	$	1,582.0	$	325.2	$	2,278.2
Impairment of goodwill	—		(1,021.9)		—		(1,021.9)
Foreign exchange translation	(0.7)		0.9		—		0.2
Balance as of September 28, 2025	$	370.3	$	561.0	$	325.2	$	1,256.5


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Total
2024
Balance as of December 31, 2023	$	371.7	$	1,582.3	$	325.2	$	2,279.2
Foreign exchange translation	(0.2)		(0.1)		—		(0.3)
Balance as of September 29, 2024	$	371.5	$	1,582.2	$	325.2	$	2,278.9

We assess goodwill and other intangible assets with indefinite lives for impairment each year, or more frequently if events or changes in circumstances indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, our policy is to assess for impairment as of the beginning of each fiscal fourth quarter. The Company may perform a qualitative assessment and bypass the quantitative impairment testing process, if it is not more likely than not that the carrying value of a reporting unit exceeds its fair value.

Due to increased tariffs, including reciprocal tariffs, announced by the U.S. government in April 2025, the escalation of ongoing trade policy disputes between international governments, the financial performance of certain reporting units being lower than previously forecasted, and other macroeconomic headwinds, during the second quarter of 2025, the Company noted downward revisions to operating income and cash flow forecasts for certain of its reporting units within the Consumer Products and Entertainment segments. As a result, during the second quarter of 2025, the Company performed an interim quantitative impairment test for the North America, Europe, Asia Pacific, and Latin America Consumer Products reporting units, as well as the Family Brands reporting unit within the Entertainment segment. Additionally, due to our ongoing transformation, we concluded that, as of the second quarter of 2025, the North America, Europe, Asia Pacific, and Latin America reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in ASC Topic 280, Segment Reporting, and in FASB ASC Topic 350, Intangibles - Goodwill and Other. These reporting units serve similar clients and have similar products, and as of the second quarter of 2025 had similar sourcing and distribution methods that along with our ongoing transformation has resulted in similar economic characteristics.

As a result of the quantitative tests performed prior to and following the aggregation, the Company determined that the carrying values of our regional Consumer Products reporting units exceeded their expected fair values and recorded pre-tax non-cash impairment charges of $1,021.9 million within the Consolidated Statements of Operations for the nine months ended September 28, 2025. The fair values of North America and Europe were determined considering a discounted cash flow model which is primarily based on management’s future revenue and cost estimates, which included the estimated impact of tariff policies in effect and the related macroeconomic environment, and a discount rate. The fair value of the Asia Pacific and Latin America reporting units was determined considering a discounted cash flow model weighted equally with the market approach, which is primarily based on multiples of comparable public companies. No impairments were recorded related to the Family Brands reporting unit.

At September 28, 2025, $325.2 million of goodwill is allocated to the Family Brands reporting unit. As of the date of the most recent test, which occurred during the second quarter of 2025, the fair value of our Family Brands reporting unit, within the Entertainment segment, exceeded the carrying value of that reporting unit by approximately 15%. The fair value of the Family Brands reporting unit was determined considering a discounted cash flow model weighted equally with the market approach which is primarily based on multiples of comparable public companies. For the Family Brands reporting unit, critical assumptions included a discount rate approximating 9.5%, a terminal value revenue growth rate of 3.0%, and a terminal operating profit margin consistent with levels achieved in recent

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

historical periods when excluding one-time impairment and disposal charges. Although we believe the assumptions and estimates made were reasonable and appropriate, these estimates are based on a number of factors including historical experience and information obtained from reporting unit management. Actual results could differ from these estimates, especially given uncertainty related to tariffs, global trade policy, and global macroeconomic conditions.

(6) Other Comprehensive Earnings (Loss)

Components of Other comprehensive earnings (loss) are presented within the Consolidated Statements of Comprehensive Earnings (Loss). The following table presents the related tax effects on changes in Other comprehensive earnings (loss):


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Other comprehensive earnings (loss), tax effect:
Tax (expense) benefit on hedging activities	$	(0.4)	$	0.4	$	2.4	$	(0.8)
Reclassifications to earnings (loss), tax effect:
Tax expense (benefit) on hedging activities	—		—		0.3		(0.5)

Total tax effect on Other comprehensive earnings (loss)	$	(0.4)	$	0.4	$	2.7	$	(1.3)

Changes in the components of Accumulated other comprehensive loss, net of tax are as follows:


	Pension and Postretirement Amounts		Gains (Losses) on Derivative Instruments		Unrealized Holding Gains (Losses) on Available- for-Sale Securities		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Loss
2025
Balance at December 29, 2024	$	(8.0)	$	(9.1)	$	(0.1)	$	(229.2)	$	(246.4)
Current period other comprehensive earnings (loss)	(0.1)		(12.5)		—		36.6		24.0
Balance at September 28, 2025	$	(8.1)	$	(21.6)	$	(0.1)	$	(192.6)	$	(222.4)

2024
Balance at December 31, 2023	$	(4.2)	$	(16.8)	$	(0.1)	$	(180.4)	$	(201.5)
Current period other comprehensive earnings (loss)	(0.1)		1.9		—		(28.1)		(26.3)
Balance at September 29, 2024	$	(4.3)	$	(14.9)	$	(0.1)	$	(208.5)	$	(227.8)

Gains (Losses) on Derivative Instruments

At September 28, 2025, the Company had remaining deferred losses on foreign currency forward contracts, net of tax, of $8.6 million in Accumulated other comprehensive loss ("AOCL"). These instruments hedge payments related to inventory purchased in the nine months ended September 28, 2025 or forecasted to be purchased during the remainder of 2025, intercompany expenses expected to be paid or received during 2025 and cash receipts for sales made at the end of the third quarter of 2025 or forecasted to be made in the remainder of 2025. These amounts will be reclassified into the Consolidated Statements of Operations upon the sale of the related inventory or recognition of the related sales or expenses.

In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 5.10% Notes due 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCL and is being amortized to interest expense over the life of the related Notes using the effective interest rate method. At September 28, 2025, deferred losses, net of tax of $13.0 million related to these instruments remained in AOCL. For each of the three months ended September 28, 2025 and September 29, 2024, previously deferred losses, net of tax, of $0.2 million related to these instruments were reclassified from AOCL to net earnings. For each of the nine months ended September 28, 2025 and

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

September 29, 2024, previously deferred losses, net of tax, of $0.6 million related to these instruments were reclassified from AOCL to net earnings.

Of the amounts included in AOCL at September 28, 2025, the Company expects net loss of approximately $5.9 million to be reclassified to the Consolidated Statements of Operations within the next twelve months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.

See Note 12, Derivative Financial Instruments, to the consolidated financial statements for additional discussion on reclassifications from AOCL to earnings.

(7) Additional Balance Sheet Information

Components of accrued liabilities were as follows:


	September 28, 2025		September 29, 2024		December 29, 2024
Contract liabilities - current	$	213.5	$	255.6	$	236.5
Accrued royalties expense	207.2		183.0		160.5
Payroll and management incentives	105.8		79.8		121.1
Advertising	97.6		70.0		58.7
Other taxes	57.5		60.5		60.9
Accrued income taxes	42.6		99.3		93.3
Interest	41.0		49.5		31.3
General vendor accruals	40.1		57.8		46.1
Freight	40.1		34.7		27.0
Lease liability - current	27.5		32.2		29.8
Lag & cancellation charges	26.9		51.2		48.9
Defined contributions plans	23.0		16.0		21.4
Severance	22.7		51.0		50.2
Professional fees	15.6		18.6		18.2
Participations and residuals	8.9		18.3		8.8
Insurance	8.2		12.3		11.3
Accrued expenses - productions	0.7		0.5		0.7

Other	53.3		42.2		35.1
Total accrued liabilities	$	1,032.2	$	1,132.5	$	1,059.8

Prepaid expenses and other current assets include contract assets, current of $129.8 million, $173.6 million, and $179.5 million as of September 28, 2025, September 29, 2024, and December 29, 2024, respectively.

Other assets include deferred tax assets of $376.5 million, $407.1 million, and $424.6 million as of September 28, 2025, September 29, 2024, and December 29, 2024, respectively, and unamortized software development costs of $359.9 million, $232.6 million, and $264.4 million as of September 28, 2025, September 29, 2024, and December 29, 2024, respectively.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(8) Long-Term Debt and Other Financing

The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings are as follows:


	September 28, 2025				September 29, 2024				December 29, 2024
	Carrying Cost		Fair Value		Carrying Cost		Fair Value		Carrying Cost		Fair Value
3.90% Notes Due 2029	$	900.0	$	875.3	$	900.0	$	869.5	$	900.0	$	845.6
3.55% Notes Due 2026	551.9		547.0		675.0		662.4		591.9		578.0
6.05% Notes Due 2034	500.0		522.6		500.0		526.5		500.0		502.2
6.35% Notes Due 2040	500.0		521.9		500.0		536.5		500.0		507.5
3.50% Notes Due 2027	475.0		468.2		500.0		486.6		500.0		481.5
5.10% Notes Due 2044	300.0		265.5		300.0		279.7		300.0		261.3
6.60% Debentures Due 2028	109.9		116.7		109.9		117.5		109.9		114.4
3.00% Notes Due 2024	—		—		500.0		498.2		—		—
Total long-term debt	3,336.8		3,317.2		3,984.9		3,976.9		3,401.8		3,290.5
Less: Deferred debt expenses	18.0		—		22.3		—		21.0		—
Less: Current portion	—		—		500.0		—		—		—
Long-term debt	$	3,318.8	$	3,317.2	$	3,462.6	$	3,976.9	$	3,380.8	$	3,290.5

For the nine months ended September 28, 2025, the Company repurchased $65.0 million of its 2026 and 2027 Notes. For the three and nine months ended September 28, 2025, the Company recorded a gain on extinguishment of $0.1 million and $1.5 million, respectively, which were recorded in Other expense (income), net in the Consolidated Statements of Operations.

Other Financing Arrangements

The Company's third amended and restated revolving credit facility with Bank of America, as administrative agent, swing line lender, a letter of credit issuer and a lender and certain other financial institutions as lenders thereto (the "Amended Revolving Credit Facility") provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion, of which the Company has zero outstanding borrowings as of September 28, 2025. The Amended Revolving Credit Agreement contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. It also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders.

The Company also has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice. The amount of obligations confirmed under the program that remain unpaid by the Company were $100.1 million, $118.7 million, and $66.2 million as of September 28, 2025, September 29, 2024, and December 29, 2024, respectively. These obligations are presented within Accounts payable in our Consolidated Balance Sheets. The activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows.

In June 2025, the Company entered into an uncommitted money market line of credit agreement (the “Money Market Credit Facility”) to provide the Company with access to short-term cash advances with an aggregate principal amount of up to $100.0 million. The Money Market Credit Facility is intended to support the Company’s short-term liquidity needs, including working capital and general corporate purposes.

Under the terms of the Money Market Credit Facility, each loan borrowing is subject to the lender’s sole and absolute discretion with no obligation to fund and bears interest at a variable rate agreed upon at the time of each borrowing.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The Money Market Credit Facility has no commitment fee or termination fee. Each advance under the Money Market Credit Facility has a maturity date of less than 90 days from the borrowing date, and the Company may voluntarily prepay any outstanding advances without premium or penalty, subject to reimbursement of actual breakage costs, if any. The Money Market Credit Facility may be terminated by the lender at any time upon written notice and is subject to customary representations, warranties, and covenants. There was no outstanding balance as of September 28, 2025.

(9) Investments in Productions

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

The Company's unamortized investments in productions consisted of the following:


	September 28, 2025		September 29, 2024		December 29, 2024
Investment in Films and Television Programs:
Individual Monetization
Released, net of amortization	$	60.7	$	73.7	$	62.4

In production	1.8		12.3		10.8
Pre-production	8.6		4.8		7.4
	71.1		90.8		80.6
Film/TV Group Monetization
Released, net of amortization	30.3		42.5		37.5



Investment in Other Programming
Released, net of amortization	7.6		5.0		6.0

In production	1.4		5.9		0.7
Pre-production	0.1		0.9		—
	9.1		11.8		6.7
Total Program Investments	$	110.5	$	145.1	$	124.8

The Company's program cost amortization that related to investments in production that were released during the three and nine months ended September 28, 2025 were $7.4 million and $21.0 million, respectively. The Company's program cost amortization that related to investments in production that were released during the three and nine months ended September 29, 2024 were $7.9 million and $24.5 million, respectively.

(10) Income Taxes

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

The effective tax rate ("ETR") was 23.4% and (39.8%) for the three and nine months ended September 28, 2025, respectively, and 23.1% and 24.1% for the three and nine months ended September 29, 2024, respectively. The following items impacted the ETR for 2025 and 2024:

During the three months ended September 28, 2025 the Company recorded a net discrete tax benefit of $5.7 million, primarily associated with the second quarter of 2025 non-cash impairment of goodwill.
During the three months ended September 29, 2024 the Company recorded a net discrete tax expense of $1.1 million, primarily associated with the interest accruals on uncertain tax positions.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

During the nine months ended September 28, 2025 the Company recorded a non-cash goodwill impairment of $1,021.9 million within the Consumer Products segment with a tax benefit of $5.4 million and an unfavorable adjustment to the Loss on disposal of the eOne Film and TV business of $25.0 million with no tax benefit. The Company also recorded a net discrete tax benefit of $6.5 million, primarily associated with the release of a valuation allowance.
During the nine months ended September 29, 2024 the Company recorded unfavorable adjustments to the Loss on disposal of the eOne Film and TV business of $24.4 million with no tax benefit. The Company also recorded a net discrete tax expense of $1.8 million, primarily associated with stock-based compensation.

On July 4, 2025, President Donald Trump signed into law the One Big Beautiful Bill Act ("OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC Topic 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. While these changes did not have a significant impact to our annual effective tax rate, it is expected that our U.S. cash taxes will decrease in 2025 as a result of the legislation.

(11) Fair Value of Financial Instruments

The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels:

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

The Company had the following assets and liabilities measured at fair value in its Consolidated Balance Sheets:


	Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 28, 2025
Assets:

Available-for-sale securities	$	55.9	$	55.9	$	—	$	—
Derivatives	1.0		—		1.0		—
Total assets	$	56.9	$	55.9	$	1.0	$	—

Liabilities:
Derivatives	$	8.6	$	—	$	8.6	$	—
Total liabilities	$	8.6	$	—	$	8.6	$	—

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)


	Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 29, 2024
Assets:
Short-term investments	$	489.3	$	489.3	$	—	$	—
Available-for-sale securities	0.6		0.6		—		—
Derivatives	3.4		—		3.4		—
Total assets	$	493.3	$	489.9	$	3.4	$	—

Liabilities:
Derivatives	$	5.9	$	—	$	5.9	$	—
Option agreement	1.7		—		—		1.7
Total liabilities	$	7.6	$	—	$	5.9	$	1.7

December 29, 2024
Assets:
Available-for-sale securities	$	0.6	$	0.6	$	—	$	—
Derivatives	9.7		—		9.7		—
Total assets	$	10.3	$	0.6	$	9.7	$	—

Liabilities:
Derivatives	$	1.7	$	—	$	1.7	$	—
Total Liabilities	$	1.7	$	—	$	1.7	$	—

At September 28, 2025, the Company held $55.9 million of available-for-sale securities, of which $55.2 million consisted of U.S. Treasury bills. These investments, which are classified as available-for-sale, are recorded at fair value within Other assets in the Company's Consolidated Balance Sheet, with unrealized gains and losses excluded from net income and deferred as components of Other comprehensive earnings (loss), net of related tax effects, until realized. At September 29, 2024, the Company held $489.3 million of U.S. Treasury bills which were classified as held-to-maturity and carried at amortized cost, and were recorded in Short-term investments in the Company's Consolidated Balance Sheet. This amount reflects the proceeds from the Company's $500.0 million debt offering completed in May 2024, which the proceeds, together with available cash, were used to repay the 2024 Notes.

The Company's derivatives primarily consist of foreign currency forward and option contracts. The Company uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. There were no changes in these valuation techniques during the nine months ended September 28, 2025. There were no material changes to fair value measurements of the Company's financial instruments which use significant unobservable inputs (Level 3) for nine months ended September 29, 2024.

Other Fair Value Measurements

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At September 28, 2025, September 29, 2024, and December 29, 2024, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at September 28, 2025, September 29, 2024, and December 29, 2024 also include certain assets and liabilities measured at fair value, as described above. See Note 8, Long-Term Debt and Other Financing, to the consolidated financial statements for the fair value of the Company's outstanding debt.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

(12) Derivative Financial Instruments

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

Cash Flow Hedges

All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions, primarily for the remainder of 2025 and into 2026.

The notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:


	September 28, 2025				September 29, 2024				December 29, 2024
Hedged transaction	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Inventory purchases	$	208.7	$	(9.9)	$	164.7	$	1.3	$	131.5	$	8.0
Sales	106.7		2.4		104.6		(3.2)		86.0		(1.4)
Other	51.8		(0.7)		26.4		1.5		22.8		0.9
Total	$	367.2	$	(8.2)	$	295.7	$	(0.4)	$	240.3	$	7.5

The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the Consolidated Balance Sheets as follows:


	September 28, 2025		September 29, 2024		December 29, 2024
Prepaid expenses and other current assets
Unrealized gains	$	0.5	$	3.1	$	9.1
Unrealized losses	(0.2)		(0.2)		(1.1)
Net unrealized gains	$	0.3	$	2.9	$	8.0

Other assets
Unrealized gains	$	0.3	$	0.5	$	—
Unrealized losses	(0.2)		—		—
Net unrealized gains	$	0.1	$	0.5	$	—

Accrued liabilities
Unrealized gains	$	2.6	$	1.0	$	0.5
Unrealized losses	(8.7)		(4.0)		(1.0)
Net unrealized losses	$	(6.1)	$	(3.0)	$	(0.5)

Other liabilities
Unrealized gains	$	0.5	$	0.1	$	—
Unrealized losses	(3.0)		(1.0)		—
Net unrealized losses	$	(2.5)	$	(0.9)	$	—

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings (loss) as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Statements of Operations Classification
Cost of sales	$	(0.6)	$	(0.6)	$	1.2	$	(0.7)
Net revenues	0.4		0.8		0.3		1.4
Other	(0.3)		(0.3)		(0.3)		—
Net realized (losses) gains	$	(0.5)	$	(0.1)	$	1.2	$	0.7

Undesignated Hedges

The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. As of September 28, 2025, September 29, 2024 and December 29, 2024, the total notional amounts of the Company's undesignated derivative instruments were $242.7 million, $267.4 million, and $289.6 million, respectively.

The fair values of the Company's undesignated derivative financial instruments were recorded in the Consolidated Balance Sheets as follows:


	September 28, 2025		September 29, 2024		December 29, 2024
Prepaid expenses and other current assets
Unrealized gains	$	1.2	$	—	$	1.9
Unrealized losses	(0.6)		—		(0.2)
Net unrealized gains	$	0.6	$	—	$	1.7

Accrued liabilities
Unrealized gains	$	—	$	0.2	$	—
Unrealized losses	—		(2.2)		(1.2)
Net unrealized losses	$	—	$	(2.0)	$	(1.2)

The Company recorded a net gain of $4.2 million and $13.4 million for three and nine months ended September 28, 2025, respectively, and a net gain of $4.5 million and $8.7 million for three and nine months ended September 29, 2024, respectively, on these instruments to Other expense (income), net relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate.

For additional information related to the Company's derivative financial instruments see Note 6, Other Comprehensive Earnings (Loss) and Note 11, Fair Value of Financial Instruments, to the consolidated financial statements).

(13) Restructuring Actions

Starting in 2022, the Company implemented its Operational Excellence program ("the Program"), an ongoing enterprise-wide initiative intended to improve our business through programs that include targeted cost-savings, supply chain transformation and certain other restructuring actions designed to drive growth and enhance shareholder value. The Company's organizational structure changes have resulted and will further result in workforce reductions as well as the reallocation of people and resources. The Company currently anticipates that these changes will be substantially complete over the next six to nine months.

Charges related to the Program were recorded in Selling, distribution and administration expense within Corporate and Other. Going forward, the Company may implement further cost-saving initiatives under the Program that could result in additional restructuring charges including severance and other employee charges.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The liability balance associated with the Program related restructuring actions consisted of severance payments recorded within Accrued liabilities in the Consolidated Balance Sheets as follows:


	Nine Months Ended
	September 28, 2025		September 29, 2024
Balance at beginning of the year	$	46.9	$	81.2
Charges	5.2		7.8
Payments	(29.4)		(40.1)
Ending Balance	$	22.7	$	48.9

The following table presents the restructuring charges incurred to date under the Program, along with the estimated charges expected to be incurred on approved initiatives under the Program as of September 28, 2025:


	Total
Charges incurred to date	$	159.7
Estimated charges to be incurred on approved initiatives	—
Total expected charges on approved initiatives	$	159.7

(14) Commitments and Contingencies

Contingencies – The Company is subject to claims related to product and other commercial matters. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.

Litigation and Other Claims – The Company from time to time may be subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters in the normal course of business. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.

Environmental Liabilities – The Company monitors for any estimated environmental contingencies related to its current physical locations and former owned or leased facilities in which it is responsible for environmental matters. The Company has estimated a $31.1 million environmental liability related to a previously owned manufacturing facility (environmental liability assumed as part of a historical acquisition), in which the Company is solely responsible for the mitigation and remediation activities.

Significant Not Yet Commenced Leases – During the three and nine months ended September 28, 2025, the Company entered into significant new leases that have not yet commenced with estimated aggregated future lease payments of approximately $207.3 million. These leases are expected to commence between the fourth quarter of 2025 through 2026, with initial lease terms ranging from 10 years to 12 years.

Contractual obligations and commercial commitments, as detailed in the Company's 2024 Form 10-K, did not materially change outside of certain payments made in the normal course of business, except as disclosed above and in Note 8, Long-Term Debt and Other Financing, to the consolidated financial statements.

(15) Segment Reporting

The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because the business requires different technology and marketing strategies. The Company's reportable segments are as follows:

The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games. Additionally, we license certain of our brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands.
The Entertainment segment engages in the development and production of Hasbro-branded entertainment content including film, television, children’s programming, digital content and live entertainment focused on Hasbro-owned properties.

Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's principal reporting segments described above and consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance as well as certain assets benefiting more than one segment.

Segment performance is measured at the operating profit level. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Other.

Information by segment and a reconciliation to reported amounts for the three months ended September 28, 2025 are as follows:


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Corporate and Other		Total
Revenues	$	631.3	$	867.3	$	30.9	$	60.6	$	1,590.1
Less: Intersegment revenue	59.3		70.4		12.3		60.6		202.6
Total net revenues	572.0		796.9		18.6		—		1,387.5
Cost of sales	99.4		312.8		1.7		0.4		414.3
Program cost amortization	—		—		7.4		—		7.4
Royalties	36.0		87.1		(10.8)		2.0		114.3
Advertising	43.4		64.6		0.2		0.1		108.3
Amortization of intangible assets	2.2		10.8		4.7		(0.5)		17.2
Distribution (1)	13.5		41.3		—		0.2		55.0
Managed expense (2)	126.0		200.2		7.9		(4.2)		329.9
Operating profit	$	251.5	$	80.1	$	7.5	$	2.0	$	341.1

Reconciliation to Earnings before income taxes:
Interest expense									40.8
Interest income									(6.3)
Other expense, net									1.4
Earnings before income taxes									$	305.2

(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.

(2) Managed expenses consist of product development and selling and administrative expense. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Information by segment and a reconciliation to reported amounts for the three months ended September 29, 2024 are as follows:


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Corporate and Other		Total
Revenues	$	450.0	$	935.7	$	34.4	$	51.0	$	1,471.1
Less: Intersegment revenue	46.0		75.6		17.2		51.0		189.8
Total net revenues	404.0		860.1		17.2		—		1,281.3
Cost of sales	72.0		305.7		1.5		(0.3)		378.9
Program cost amortization	—		—		7.9		—		7.9
Royalties	9.5		101.9		(15.7)		2.3		98.0
Advertising	22.2		78.9		0.5		0.3		101.9
Amortization of intangible assets	2.1		11.2		3.8		—		17.1
Distribution (1)	9.3		48.5		—		0.9		58.7
Managed expense (2)	107.7		192.9		9.4		6.9		316.9
Operating profit (loss)	$	181.2	$	121.0	$	9.8	$	(10.1)	$	301.9

Reconciliation to Earnings before income taxes:
Interest expense									46.2
Interest income									(14.7)
Other income, net									(19.9)
Earnings before income taxes									$	290.3

(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.

Information by segment and a reconciliation to reported amounts for the nine months ended September 28, 2025 are as follows:


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Corporate and Other		Total
Revenues	$	1,708.2	$	1,794.1	$	97.0	$	130.6	$	3,729.9
Less: Intersegment revenue	151.7		156.5		35.7		130.6		474.5
Total net revenues	1,556.5		1,637.6		61.3		—		3,255.4
Cost of sales	251.4		588.1		4.4		0.2		844.1
Program cost amortization	—		—		21.0		—		21.0
Royalties	86.8		194.5		(30.7)		5.2		255.8
Advertising	96.5		131.7		0.4		(1.3)		227.3
Amortization of intangible assets	6.4		31.1		14.3		(0.4)		51.4
Distribution (1)	33.5		106.4		—		0.4		140.3
Managed expense (2)	358.6		1,579.2		49.3		14.8		2,001.9
Operating profit (loss)	$	723.3	$	(993.4)	$	2.6	$	(18.9)	$	(286.4)

Reconciliation to Loss before income taxes:
Interest expense									123.0
Interest income									(20.6)
Other income, net									(15.9)
Loss before income taxes									$	(372.9)

(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.

(2) Managed expenses consist of product development, selling and administrative expense, impairment of goodwill, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Impairment of goodwill is included in the Impairment of goodwill in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Consumer Products segment included a $1,021.9 million non-cash loss associated with the impairment of the reporting units within the Consumer Products segment. See Note 5, Goodwill, to the consolidated financial statements for further information. Managed expenses for the Entertainment segment included a $25.0 million non-cash loss associated with the sale of the eOne Film and TV business.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Information by segment and a reconciliation to reported amounts for the nine months ended September 29, 2024 are as follows:


	Wizards of the Coast and Digital Gaming		Consumer Products		Entertainment		Corporate and Other		Total
Revenues	$	1,292.2	$	1,977.2	$	101.7	$	114.4	$	3,485.5
Less: Intersegment revenue	119.9		179.6		37.7		114.4		451.6
Total net revenues	1,172.3		1,797.6		64.0		—		3,033.9
Cost of sales (1)	201.1		641.9		4.8		(27.0)		820.8
Program cost amortization	—		—		24.5		—		24.5
Royalties	30.7		211.3		(40.9)		3.1		204.2
Advertising	66.7		144.5		0.8		1.8		213.8
Amortization of intangible assets	6.2		33.4		11.4		0.2		51.2
Distribution (2)	23.7		121.1		—		0.9		145.7
Managed expense (1) (3)	292.8		580.6		48.8		21.3		943.5
Operating profit (loss)	$	551.1	$	64.8	$	14.6	$	(0.3)	$	630.2

Reconciliation to Earnings before income taxes:
Interest expense									127.7
Interest income									(36.0)
Other income, net									(15.7)
Earnings before income taxes									$	554.2

(1) During the nine months ended September 29, 2024, the Company recorded three non-recurring prior year adjustments: (i) a $31.1 million expense related to historical environmental liabilities that was recorded in managed expense, (ii) a $26.7 million benefit related to over-accrual of vendor commitment liabilities that was recorded in Cost of sales, and (iii) an $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that was recorded in managed expense within Corporate and Other. See Note 1, Basis of Presentation, to the consolidated financial statements for further information. Items (i) and (ii) originally related to the Consumer Products segment; however, because the non-recurring nature of these adjustments are related to historical periods and not associated with the on-going future operations of the Consumer Products segment, the Company recorded the error corrections within Corporate and Other.

(2) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.

(3) Managed expenses consist of product development, selling and administrative expense, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $24.4 million loss associated with the sale of the eOne Film and TV business.

Total assets information by segments is as follows:


	September 28, 2025		September 29, 2024		December 29, 2024
Total Assets
Wizards of the Coast and Digital Gaming	$	7,394.2	$	5,479.9	$	5,778.4
Consumer Products	9,100.8		7,558.8		7,785.2
Entertainment	1,429.9		2,884.7		2,857.8
Corporate and Other (1)	(12,403.1)		(8,693.5)		(10,081.1)
Total	$	5,521.8	$	7,229.9	$	6,340.3

(1) Corporate and Other consists of investments in subsidiary and intercompany receivables.

Condensed Notes to Consolidated Financial Statements

(Millions of Dollars and Shares Except Per Share Data)

Other supplemental information by segments are as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Depreciation and intangible asset amortization (1)
Wizards of the Coast and Digital Gaming	$	4.7	$	4.5	$	13.6	$	13.1
Consumer Products	29.6		31.6		72.6		81.8
Entertainment	5.2		4.1		15.5		12.5
Corporate and Other	1.3		1.3		5.4		17.8
Total	$	40.8	$	41.5	$	107.1	$	125.2
Additions to property, plant and equipment
Wizards of the Coast and Digital Gaming	$	3.3	$	2.1	$	10.4	$	17.1
Consumer Products	14.2		13.8		36.5		38.4
Entertainment	0.1		—		0.1		—
Corporate and Other	2.1		2.5		2.6		12.4
Total	$	19.7	$	18.4	$	49.6	$	67.9

(1) The amounts of depreciation disclosed by reportable segments are included within cost of sales, distribution and managed expense. Intangible asset amortization is included within amortization of intangible assets.

Previous: Cover and table of contents · Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.