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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
__________________
FORM 10-Q
__________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6682
__________________
HASBRO, INC.
(Exact name of registrant as specified in its charter)
Rhode Island
05-0155090
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1027 Newport Avenue

Pawtucket,
Rhode Island
02861
(Address of Principal Executive Offices)
(Zip Code)
(401) 431-8697
Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.50 par value per shareHASThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x]  No  [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x]  No  [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes  No  [x]
The number of shares of Common Stock, par value $.50 per share, outstanding as of October 26, 2023 was 138,764,146.



Forward Looking Statement Safe Harbor
Certain statements in this Form 10-Q contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: our business strategies and plans; expectations relating to inventory; expectations relating to products, gaming and entertainment; anticipated cost savings; financial targets; and expectations relating to the announced sale of the non-core eOne film and TV business, including the timing of completion and use of proceeds. Our actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties.
Factors that might cause such a difference include, but are not limited to:
our ability to successfully execute on our Blueprint 2.0 strategy, including to focus on and scale select business initiatives and brands to drive profitability and to achieve anticipated cost savings;
our ability to successfully compete in the play and entertainment industry, including to design and offer products that are sought after by consumers and retailers;
our ability to successfully evolve and transform our business and capabilities to address the global consumer landscape;
our ability to design, develop, manufacture, and ship products on a timely, cost-effective and profitable basis;
risks relating to our ability to successfully complete the announced sale of the eOne Film and Television business, including uncertainty as to whether the transaction will be completed in a timely manner or at all; the conditions precedent to completion of the transaction will be satisfied; risks of unexpected costs, liabilities or delays; the effect of ongoing actors’ strikes; and the effect of the announcement, pendency or consummation of the transaction on customers, employees, actors, writers, producers and operating results;
risks and challenges of selling products at retail, including lower consumer discretionary spending due to economic conditions, which could lead to increased promotions, discounts and other actions in the short term in an effort to reduce inventory;
inflation and downturns in global and regional economic conditions or other events, such as government shutdowns, impacting one or more of the markets in which we sell products, which can negatively impact our retail customers and consumers, result in lower employment levels, consumer disposable income, retailer inventories and spending, including lower spending on purchases of our products;
our dependence on third party relationships, including with third party manufacturers, licensors of brands, studios, content producers and entertainment distribution channels;
the risk that any prolonged strike by, or lockout of, one or more of the unions that provide personnel essential to the production of films or television programs, such as the ongoing strike by the actors' unions, could delay or halt our ongoing development, production and distribution activities; halts or delays, depending on the length of time, could cause a delay or interruption in our release of new films and television programs, which could impact our entertainment business;
risks relating to the concentration of manufacturing for many of our products in the People’s Republic of China and our ability to successfully diversify sourcing of our products to reduce reliance on sources of supply in China;
risks related to economic and public health conditions or regulatory changes in the markets in which we and our customers, partners, licensees, suppliers and manufacturers operate, such as inflation, rising interest rates, higher commodity prices, labor costs or transportation costs, the coronavirus or other outbreaks of illness or disease, the occurrence of which could create work slowdowns, delays or shortages in production or shipment of products, increases in costs or delays in revenue;
risks associated with international operations, such as conflict in territories in which we operate, currency conversion, currency fluctuations, the imposition of tariffs, quotas, shipping delays or difficulties, border adjustment taxes or other protectionist measures, and other challenges in the territories in which we operate;
the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives;
risks related to our leadership changes;
our ability to attract and retain talented and diverse employees;



our ability to realize the benefits of cost-savings and efficiency and/or revenue and operating profit enhancing initiatives;
risks relating to the impairment and/or write-offs of businesses, products and content we acquire and/or produce;
the risk that acquisitions, dispositions and other investments we complete may not provide us with the benefits we expect, or the realization of such benefits may be significantly delayed. We may not achieve a successful or timely sale of non-core assets;
our ability to protect our assets and intellectual property, including as a result of infringement, theft, misappropriation, cyber-attacks or other acts compromising the integrity of our assets or intellectual property;
fluctuations in our business due to seasonality;
the risk of product recalls or product liability suits and costs associated with product safety regulations;
changes in tax laws or regulations, or the interpretation and application of such laws and regulations, which may cause us to alter tax reserves or make other changes which significantly impact our reported financial results;
the impact of litigation or arbitration decisions or settlement actions;
the concentration of our customers, potentially increasing the negative impact to our business of difficulties experienced by any of our customers or changes in their purchasing or selling patterns;
the bankruptcy or other lack of success of one or more of our significant retailers, licensees and other partners; and
other risks and uncertainties as may be detailed in our public announcements and U.S. Securities and Exchange Commission (“SEC”) filings.
The statements contained herein are based on our current beliefs and expectations. We undertake no obligation to make any revisions to the forward-looking statements contained in this Form 10-Q or to update them to reflect events or circumstances occurring after the date of this Form 10-Q.



PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of Dollars Except Share Data)
(Unaudited)
October 1,
2023
September 25,
2022
December 25,
2022
ASSETS
Current assets
Cash and cash equivalents including restricted cash of $1.1 million, $6.1 million and $14.5 million
$185.5 $551.6 $513.1 
Accounts receivable, less allowance for doubtful accounts of $20.8 million, $21.8 million and $20.0 million
1,102.0 1,188.8 1,132.4 
Inventories617.7 844.5 676.8 
Prepaid expenses and other current assets286.2 658.8 676.8 
Assets held for sale1,048.7 16.8  
Total current assets3,240.1 3,260.5 2,999.1 
Property, plant and equipment, less accumulated depreciation of $603.3 million, $640.3 million and $654.5 million
474.6 411.8 422.8 
Other assets
Goodwill3,238.8 3,469.8 3,470.1 
 Other intangible assets, net of accumulated amortization of $1,229.3 million, $1,094.6 million and $1,137.2 million
655.1 1,079.7 814.6 
Other731.6 1,404.3 1,589.3 
Total other assets4,625.5 5,953.8 5,874.0 
Total assets$8,340.2 $9,626.1 $9,295.9 
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings
$ $122.3 $142.4 
Current portion of long-term debt
60.0 122.6 113.2 
Accounts payable
371.4 559.5 427.3 
Accrued liabilities
985.4 1,537.5 1,506.8 
Liabilities held for sale607.4 15.0  
Total current liabilities
2,024.2 2,356.9 2,189.7 
Long-term debt
3,654.6 3,725.1 3,711.2 
Other liabilities
438.2 545.1 533.1 
Total liabilities
$6,117.0 $6,627.1 $6,434.0 
Redeemable noncontrolling interests
   
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 October 1, 2023, September 25, 2022, and December 25, 2022
110.1 110.1 110.1 
Additional paid-in capital
2,574.1 2,530.1 2,540.6 
Retained earnings
3,348.3 4,297.8 4,071.4 
Accumulated other comprehensive loss
(208.4)(324.9)(254.9)
Treasury stock, at cost; 81,541,637 shares at October 1, 2023; 82,178,615 shares at September 25, 2022; and 82,106,383 shares at December 25, 2022
(3,626.3)(3,637.1)(3,634.4)
Noncontrolling interests
25.4 23.0 29.1 
Total shareholders' equity
2,223.2 2,999.0 2,861.9 
Total liabilities, noncontrolling interests and shareholders' equity
$8,340.2 $9,626.1 $9,295.9 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Millions of Dollars Except Per Share Data)
(Unaudited)
Quarter EndedNine Months Ended
October 1,
2023
September 25,
2022
October 1,
2023
September 25,
2022
Net revenues$1,503.4 $1,675.9 $3,714.4 $4,178.2 
Costs and expenses:
Cost of sales494.5 586.6 1,132.0 1,331.2 
Program cost amortization68.4 146.5 325.3 365.7 
Royalties106.9 135.1 295.8 335.3 
Product development76.7 82.4 232.4 231.2 
Advertising81.9 115.2 249.8 277.0 
Amortization of intangibles19.2 26.9 65.1 81.2 
Selling, distribution and administration352.3 365.8 1,050.0 1,000.1 
Loss on assets held for sale473.0 23.1 473.0 23.1 
Impairment of goodwill  231.2  
Total costs and expenses1,672.9 1,481.6 4,054.6 3,644.8 
Operating profit (loss)(169.5)194.3 (340.2)533.4 
Non-operating expense (income):
Interest expense47.1 41.9 140.0 125.2 
Interest income(3.8)(3.2)(15.6)(8.0)
Other (income) expense, net2.2 (10.0)(0.7)(9.5)
Total non-operating expense, net45.5 28.7 123.7 107.7 
Earnings (loss) before income taxes(215.0)165.6 (463.9)425.7 
Income tax expense (benefit)
(44.6)37.4 (36.9)94.1 
Net earnings (loss)(170.4)128.2 (427.0)331.6 
Net earnings (loss) attributable to noncontrolling interests0.7 (1.0)1.2 (0.8)
Net earnings (loss) attributable to Hasbro, Inc.$(171.1)$129.2 $(428.2)$332.4 
Net earnings (loss) per common share:
Basic$(1.23)$0.93 $(3.09)$2.39 
Diluted$(1.23)$0.93 $(3.09)$2.39 
Cash dividends declared per common share$0.70 $0.70 $2.10 $2.10 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings (Loss)
(Millions of Dollars)
(Unaudited)
Quarter EndedNine Months Ended
October 1,
2023
September 25,
2022
October 1,
2023
September 25,
2022
Net earnings (loss)$(170.4)$128.2 $(427.0)$331.6 
Other comprehensive earnings (loss):
Foreign currency translation adjustments, net of tax
(2.7)(72.0)46.4 (103.0)
Unrealized holding losses on available-for-sale securities, net of tax (0.1) (0.3)
Net gains (losses) on cash flow hedging activities, net of tax5.0 12.6 (2.2)20.6 
Reclassifications to earnings, net of tax:
Net losses (gains) on cash flow hedging activities
2.9 (5.9)2.5 (7.2)
Amortization of unrecognized pension and postretirement amounts(0.1)0.1 (0.2)0.3 
Total other comprehensive earnings (loss), net of tax$5.1 $(65.3)$46.5 $(89.6)
Total comprehensive earnings (loss) attributable to noncontrolling interests0.7 (1.0)1.2 (0.8)
Total comprehensive earnings (loss) attributable to Hasbro, Inc.$(166.0)$63.9 $(381.7)$242.8 
See accompanying condensed notes to consolidated financial statements.                                                




HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
Nine months ended
October 1,
2023
September 25,
2022
Cash flows from operating activities:
Net earnings (loss)$(427.0)$331.6 
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation of plant and equipment88.0 94.4 
Amortization of intangibles65.1 81.2 
Impairment of goodwill231.2  
Impairment of intangible assets65.0  
Loss on assets held for sale
473.0 23.1 
Program cost amortization325.3 365.7 
Deferred income taxes(47.1)(66.6)
Stock-based compensation55.9 66.2 
Other non-cash items(6.6)3.1 
Change in operating assets and liabilities net of acquired balances:
(Increase) decrease in accounts receivable
(86.3)201.8 
Decrease (increase) in inventories
53.0 (327.2)
Decrease in prepaid expenses and other current assets
17.0 34.4 
Program spend, net(337.5)(498.1)
Decrease in accounts payable and accrued liabilities(127.5)(22.7)
Change in net deemed repatriation tax(34.4)(18.4)
Other27.8 (6.3)
Net cash provided by operating activities334.9 262.2 
Cash flows from investing activities:
Additions to property, plant and equipment(160.4)(130.7)
Acquisitions (146.3)
Other(2.2)11.2 
Net cash utilized by investing activities(162.6)(265.8)
Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months2.5 3.3 
Repayments of borrowings with maturity greater than three months(107.0)(182.0)
Net proceeds from other short-term borrowings0.3 121.6 
Purchases of common stock (125.0)
Stock-based compensation transactions 74.2 
Dividends paid(290.9)(288.6)
Payments related to tax withholding for share-based compensation(15.7)(21.1)
Other(7.2)(25.4)
Net cash utilized by financing activities(418.0)(443.0)
Effect of exchange rate changes on cash(11.5)(16.2)
Net decrease in cash, cash equivalents and restricted cash(257.2)(462.8)
Net change due to cash classified as held for sale(70.4)(4.8)
Net decrease in cash, cash equivalents and restricted cash(327.6)(467.6)
Cash, cash equivalents and restricted cash at beginning of year513.1 1,019.2 
Cash, cash equivalents and restricted cash at end of period$185.5 $551.6 
Supplemental information
Cash paid during the period for:
Interest$126.7 $107.1 
Income taxes$96.9 $157.2 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests
(Millions of Dollars)
(Unaudited)
Three Months Ended October 1, 2023
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, July 2, 2023$110.1 2,554.6 3,618.1 (213.5)(3,626.3)27.2 $2,470.2 $ 
Net loss attributable to Hasbro, Inc.— — (171.1)— — — (171.1)— 
Net earnings attributable to noncontrolling interests— — — — — 0.7 0.7 — 
Other comprehensive earnings— — — 5.1 — — 5.1 — 
Stock-based compensation transactions— (1.3)— — (0.1)— (1.4)— 
Stock-based compensation expense— 19.2 — — 0.1 — 19.3 — 
Dividends declared— 1.6 (98.7)— — — (97.1)— 
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (2.5)(2.5)— 
Balance, October 1, 2023$110.1 2,574.1 3,348.3 (208.4)(3,626.3)25.4 $2,223.2 $ 
Three Months Ended September 25, 2022
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comprehensive Loss
Treasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, June 26, 2022$110.1 2,503.4 4,265.9 (259.6)(3,636.2)29.2 $3,012.8 $23.0 
Net earnings attributable to Hasbro, Inc.— — 129.2 — — — 129.2 — 
Net loss attributable to noncontrolling interests— — — — — (1.0)(1.0)— 
Other comprehensive loss— — — (65.3)— — (65.3)— 
Stock-based compensation transactions— (1.5)— — (0.1)— (1.6)— 
Purchases of common stock— — — — (1.0)— (1.0)— 
Stock-based compensation expense— 23.0 — — 0.2 — 23.2 — 
Dividends declared— 0.7 (97.3)— — — (96.6)— 
Buyout of redeemable noncontrolling interest— 4.5 — — — — 4.5 (23.0)
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (5.2)(5.2)— 
Balance, September 25, 2022$110.1 2,530.1 4,297.8 (324.9)(3,637.1)23.0 $2,999.0 $ 




Nine Months Ended October 1, 2023
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, December 25, 2022$110.1 2,540.6 4,071.4 (254.9)(3,634.4)29.1 $2,861.9 $ 
Net loss attributable to Hasbro, Inc.— (428.2)— — — (428.2)— 
Net earnings attributable to noncontrolling interests— — — — — 1.2 1.2 — 
Other comprehensive earnings— — — 46.5 — — 46.5 — 
Stock-based compensation transactions— (21.4)— — 5.6 — (15.8)— 
Stock-based compensation expense— 53.4 — — 2.5 — 55.9 — 
Dividends declared— 3.6 (294.9)— — — (291.3)— 
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (4.9)(4.9)— 
Renegade buyout— (2.1)— — — — (2.1)— 
Balance, October 1, 2023$110.1 2,574.1 3,348.3 (208.4)(3,626.3)25.4 $2,223.2 $ 
Nine Months Ended September 25, 2022
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comprehensive Loss
Treasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, December 26, 2021$110.1 2,428.0 4,257.8 (235.3)(3,534.7)37.2 $3,063.1 $23.9 
Net earnings attributable to Hasbro, Inc.— — 332.4 — — — 332.4 — 
Net earnings (loss) attributable to noncontrolling interests— — — — — (1.4)(1.4)0.6 
Change in put option value— (0.4)— — — — (0.4)— 
Other comprehensive loss— — — (89.6)— — (89.6)— 
Stock-based compensation transactions— 31.0 — — 22.1 — 53.1 — 
Purchases of common stock— — — — (125.0)— (125.0)— 
Stock-based compensation expense— 65.8 — — 0.5 — 66.3 — 
Dividends declared— 1.2 (292.4)— — — (291.2)— 
Buyout of redeemable noncontrolling interest— 4.5 — — — — 4.5 (23.0)
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (12.8)(12.8)(1.5)
Balance, September 25, 2022$110.1 2,530.1 4,297.8 (324.9)(3,637.1)23.0 $2,999.0 $ 




HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(Unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all majority-owned subsidiaries ("Hasbro" or the "Company") as of October 1, 2023 and September 25, 2022, and the results of its operations and cash flows and shareholders' equity for the periods then ended in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes thereto. Actual results could differ from those estimates.
The quarters ended October 1, 2023 and September 25, 2022 were each 13-week periods. The nine-month periods ended October 1, 2023 and September 25, 2022 were 40-week and 39-week periods, respectively.
The results of operations for the quarter ended October 1, 2023 are not necessarily indicative of results to be expected for the full year 2023, nor were those of the comparable 2022 period representative of those actually experienced for the full year 2022.
Significant Accounting Policies
The Company's significant accounting policies are summarized in note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 25, 2022 ("2022 Form 10-K"). An update and supplement to these accounting policies for the treatment of assets and liabilities held for sale associated with our planned sale of the non-core eOne Film and TV business is below.
Assets and Liabilities Held for Sale
We classify assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the sale price of the net assets is comparable to current fair value and (vi) actions required to complete the plan indicate it is unlikely that significant changes will be made or that management will withdraw from the sale. Assets and liabilities held for sale are presented separately on our consolidated balance sheets at the lower of cost or fair value, less costs to sell. Depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets are not recorded while these assets are classified as held for sale. For each period that assets are classified as being held for sale, they are tested for recoverability. Unless otherwise specified, the amounts and information in the notes presented do not include assets and liabilities that have been reclassified as held for sale as of October 1, 2023. See note 15 — Assets held for sale, for additional information.
Impairment of Film and TV Reporting Unit
During the second quarter of 2023, the Company determined that a triggering event occurred following a downward revision of the Company's financial forecast for its Film and TV business, driven by challenging industry conditions that included the strike by the Writers Guild of America. As a result, the Company performed a quantitative impairment test and determined that the Film and TV reporting unit within the Company's Entertainment segment, was impaired. During the second quarter of 2023, the Company recorded pre-tax non-cash impairment charges of $296.2 million as the carrying value of the Film and TV reporting unit exceeded its expected fair value, as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates. These impairment charges consisted of a $231.2 million goodwill impairment charge associated with goodwill assigned to the Company's Film and TV reporting unit, recorded within Impairment of Goodwill and a $65.0 million intangible asset impairment charge related to the Company's definite-lived intangible eOne Trademark, recorded in Selling, Distribution and Administration costs, within the Consolidated Statements of Operations for the nine months ended October 1, 2023.
Blueprint 2.0 and Operational Excellence
In October 2022, following a several months long strategic review of our business led by our CEO, the Company announced a new strategic plan guided by our new Blueprint 2.0, a consumer-centric framework for bringing compelling and expansive brand experiences to audiences around the world. During the review, with the assistance of a third party consultant, the Company identified opportunities to focus and scale its business, enhance operational excellence, including through specialized organizational programs and supply chain transformation, to drive growth and profit and enhance shareholder value. The


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Company is increasing strategic investment in its most valuable and profitable franchises across toys, games, entertainment and licensing, and exiting certain non-core aspects of the business.
Brand Portfolio Realignment
Effective for the first quarter 2023, we realigned our brand portfolios to correspond with the evolution of our Blueprint 2.0 strategy. We are focusing on fewer, bigger, more profitable brands that showcase our leadership in preschool toys, action figures and accessories, games, arts & crafts, and outdoor action brands.
Our new product categories beginning in the first quarter of 2023 are as follows:
Franchise Brands - A refreshed group of our most financially significant brands which we consider to have the greatest long-term potential including DUNGEONS & DRAGONS, Hasbro Gaming, MAGIC: THE GATHERING, NERF, PEPPA PIG, PLAY-DOH, and TRANSFORMERS.
Partner Brands - The Partner Brands category includes those brands we license from other parties such as Disney's STAR WARS and MARVEL brands as well as other partners, for which we develop toy and game products, with a focus on those key Partner Brands that give us the largest growth potential and where we can lead and innovate in the category.
Portfolio Brands - Our Portfolio Brands category includes those brands we own or control which we feel have upside in revenue and profitability that have not yet grown to the significance of a franchise brand.
Non-Hasbro Branded Film & TV - The Non-Hasbro Branded Film & TV category includes non-Hasbro-branded film, TV and other entertainment related revenues. All Hasbro-branded content is included in the portfolios noted above.
These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed with the SEC audited consolidated financial statements for the fiscal year ended December 25, 2022 in its 2022 Form 10-K, which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein.
Recently Adopted Accounting Standards
As of October 1, 2023, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.
Issued Accounting Pronouncements
As of October 1, 2023, there were no recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial statements.
(2) Revenue Recognition
Contract Assets and Liabilities
In the ordinary course of business, the Company’s Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment segments enter into contracts to license certain of the Company’s intellectual property, providing licensees right-to-use or access to such intellectual property for use in the production and sale of consumer products and digital game development, and for use within content for distribution over streaming platforms and for television and film. The Company also licenses owned television and film content for distribution to third parties in formats that include broadcast, digital streaming and theatrical. Through these arrangements, the Company may receive advanced royalty payments from licensees, either in advance of a licensees’ subsequent sales to customers or, prior to the completion of the Company’s performance obligation. In addition, the Company’s Wizards of the Coast and Digital Gaming segment may receive advanced payments from end users of its digital games at the time of the initial purchase or through in-application purchases. These digital gaming revenues are recognized over a period of time, determined based on player usage patterns or the estimated playing life of the user or when additional downloadable content is made available. The Company defers revenues on all licensee and digital gaming advanced payments until the respective performance obligations are satisfied. The Company records the aggregate deferred revenues as contract liabilities, with the current portion recorded within Accrued Liabilities and the long-term portion recorded as Other Non-current Liabilities in the Company’s consolidated balance sheets. The Company records contract assets, primarily related to (1) minimum guarantees being recognized in advance of contractual invoicing, which are recognized ratably over the terms of the respective license periods, and (2) film and television distribution revenues recorded for content delivered, where payment will occur over the license term. The current portion of contract assets is recorded in Prepaid Expenses and Other Current Assets, respectively, and the long-term portion is recorded within Other Long-Term Assets.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The changes in carrying amounts of contract assets and liabilities for the nine months ended October 1, 2023 are as follows:
October 1, 2023
Assets
Balance at beginning of the year$594.4 
Recognized in current year389.4 
Amounts reclassified to accounts receivable(427.4)
Reclassified to assets held for sale (1)
(384.6)
Foreign currency impact(5.3)
Ending Balance$166.5 
Liabilities
Balance at beginning of the year$113.0 
Recognized in current year254.5 
Amounts in beginning balance reclassified to revenue(68.3)
Current year amounts reclassified to revenue(156.6)
Reclassified to liabilities held for sale (1)
(27.5)
Foreign currency impact(2.1)
Ending Balance$113.0 
(1) See note 15 for additional information on assets and liabilities held for sale.
Unsatisfied performance obligations
Unsatisfied performance obligations relate primarily to in-production television content to be delivered in the future under existing agreements with partnering content providers such as broadcasters, distributors, television networks and subscription video on demand services. As of October 1, 2023, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future was $137.3 million of which $120.5 million is attributable to the Company's non-core entertainment business, expected to be sold to Lionsgate. Of the performance obligations expected to be retained following the pending sale, we expect to recognize $6.4 million in the remainder of 2023, $5.5 million in 2024 and $5.0 million in 2025. These amounts include only fixed consideration.
Accounts Receivable and Allowance for Credit Losses
The Company’s balance for accounts receivable on the consolidated balance sheets as of October 1, 2023 and September 25, 2022 are primarily from contracts with customers. The Company had no material expense for credit losses for the quarters ended October 1, 2023 and September 25, 2022.
Disaggregation of revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment. The Company further disaggregates revenues within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; within its Wizards of the Coast and Digital Gaming segment by category: Tabletop Gaming and Digital and Licensed Gaming; and within its Entertainment segment by category: Film & TV, Family Brands, and Other. Finally, the Company disaggregates its revenues by brand portfolio into four brand categories: Franchise Brands, Partner Brands, Portfolio Brands, and Non-Hasbro Branded Film & TV. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See note 13 for further information.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(3) Earnings (Loss) Per Share
Net earnings (loss) per share data for the quarters and nine months ended October 1, 2023 and September 25, 2022 were computed as follows:
20232022
QuarterBasicDilutedBasicDiluted
Net (loss) earnings attributable to Hasbro, Inc.$(171.1)(171.1)$129.2 129.2 
Average shares outstanding138.8 138.8 138.3 138.3 
Effect of dilutive securities:
Options and other share-based awards—  — 0.2 
Equivalent Shares$138.8 138.8 $138.3 138.5 
Net (loss) earnings attributable to Hasbro, Inc. per common share$(1.23)(1.23)$0.93 0.93 
20232022
Nine Months
BasicDilutedBasicDiluted
Net (loss) earnings attributable to Hasbro, Inc.$(428.2)(428.2)$332.4 332.4 
Average shares outstanding138.7 138.7 138.9 138.9 
Effect of dilutive securities:
Options and other share-based awards—  — 0.2 
Equivalent Shares$138.7 138.7 $138.9 139.1 
Net (loss) earnings attributable to Hasbro, Inc. per common share$(3.09)(3.09)$2.39 2.39 
For the quarter and nine months ended October 1, 2023, options and restricted stock units totaling 2.1 million and 2.5 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. For the quarter and nine months ended September 25, 2022, options and restricted stock units totaling 2.9 million and 2.8 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. Of the fiscal 2023 amount, 1.9 million and 1.7 million shares, respectively, would have been included in the calculation of diluted shares had the Company not had a net loss for the quarter and nine months ended October 1, 2023. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 0.4 million and 0.2 million shares, respectively, being included in the diluted earnings per share calculation for the quarter and nine months ended October 1, 2023.
(4) Goodwill
Changes in the carrying amount of goodwill, by operating segment, for the nine months ended October 1, 2023 and September 25, 2022 are as follows:
Consumer ProductsWizards of the Coast and Digital GamingEntertainmentTotal
2023
Balance as of December 25, 2022$1,584.7371.51,513.9$3,470.1
Foreign exchange translation(0.1)(0.1)
Impairment during the period (1)
(231.2)(231.2)
Balance as of October 1, 2023$1,584.6371.51,282.7$3,238.8
(1) See note 1 for discussion of goodwill impairment recorded during the second quarter of 2023.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)

Consumer ProductsWizards of the Coast and Digital GamingEntertainmentTotal
2022
Balance as of December 26, 2021$1,584.9307.31,527.4$3,419.6
Acquired during the period64.764.7
Foreign exchange translation(0.4)(0.5)(1.8)(2.7)
Impairment during the period
(11.8)(11.8)
Balance as of September 25, 2022
$1,584.5371.51,513.8$3,469.8

During the third quarter of 2022, the Company determined to exit certain non-core businesses within the Entertainment segment resulting in the classification of certain assets as Assets held for sale. A revaluation of the effected businesses resulted in a pre-tax non-cash goodwill impairment charge of $11.8 million, recorded within Loss on assets held for sale in the Consolidated Statement of Operations, and within the Entertainment segment for the quarter ended September 25, 2022.
On May 19, 2022, the Company completed its acquisition of D&D Beyond for $146.3 million, which was funded with cash on hand. Based on the valuation of these assets, $64.7 million was allocated to goodwill within the Wizards of the Coast and Digital Gaming segment during the second quarter of 2022.
(5) Other Comprehensive Earnings (Loss)
Components of other comprehensive earnings (loss) are presented within the consolidated statements of comprehensive earnings (loss). The following table presents the related tax effects on changes in other comprehensive earnings (loss) for the quarters and nine months ended October 1, 2023 and September 25, 2022.
Quarter EndedNine Months Ended
October 1,
2023
September 25,
2022
October 1,
2023
September 25,
2022
Other comprehensive earnings (loss), tax effect:
Tax expense on unrealized holding losses
$ $ $ 0.1 
Tax (expense) benefit on cash flow hedging activities
(0.7)(1.7)1.6 (2.1)
Reclassifications to earnings, tax effect:
Tax (benefit) expense on cash flow hedging activities(0.9)0.6 (1.4)0.5 
Amortization of unrecognized pension and postretirement amounts
  0.1 (0.1)
Total tax effect on other comprehensive earnings (loss)$(1.6)$(1.1)$0.3 (1.6)


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)

Changes in the components of accumulated other comprehensive earnings (loss), net of tax for the nine months ended October 1, 2023 and September 25, 2022 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
2023
Balance at December 25, 2022$(3.0)(12.0)(0.1)(239.8)$(254.9)
Current period other comprehensive earnings (loss)(0.2)0.3  46.4 46.5 
Balance at October 1, 2023$(3.2)(11.7)(0.1)(193.4)$(208.4)
2022
Balance at December 26, 2021$(35.1)(6.0)0.2 (194.4)$(235.3)
Current period other comprehensive earnings (loss)0.3 13.4 (0.3)(103.0)(89.6)
Balance at September 25, 2022$(34.8)7.4 (0.1)(297.4)$(324.9)
Gains (Losses) on Derivative Instruments
At October 1, 2023, the Company had remaining net deferred gains on foreign currency forward contracts, net of tax, of $2.7 million in accumulated other comprehensive earnings (loss) ("AOCE"). These instruments hedge payments related to inventory purchased in the third quarter of 2023 or forecasted to be purchased during the remainder of 2023 and throughout 2024, intercompany expenses expected to be paid or received during 2023, television and movie production costs paid in 2023 or expected to be paid in 2024, and cash receipts for sales made at the end of the third quarter of 2023 or forecasted to be made in the remainder of 2023 and throughout 2024. These amounts will be reclassified into the consolidated statements of operations upon the sale of the related inventory, the recognition of the related production costs or the recognition of the related sales or intercompany expenses to be paid or received.
In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 3.15% Notes that were repaid in full in the aggregate principal amount of $300.0 million in 2021 (See note 7), and the 5.10% Notes due 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related notes using the effective interest rate method. At October 1, 2023, deferred losses, net of tax of $14.4 million related to these instruments remained in AOCE. For the quarters ended October 1, 2023 and September 25, 2022, previously deferred losses of $0.2 million related to these instruments were reclassified from AOCE to net earnings. For the nine months ended October 1, 2023 and September 25, 2022, previously deferred losses of $0.5 million were reclassified from AOCE to net earnings, respectively.
Of the net deferred losses included in AOCE at October 1, 2023, the Company expects net losses of approximately $0.4 million to be reclassified to the consolidated statements of operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.
See note 11 for additional discussion on reclassifications from AOCE to earnings.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(6) Accrued Liabilities
Components of accrued liabilities for the periods ended October 1, 2023, September 25, 2022 and December 25, 2022 were as follows:

October 1, 2023
September 25, 2022
December 25, 2022
Royalties$148.9 $238.4 $195.4 
Deferred revenue112.1 132.2 111.3 
Dividends97.1 96.7 96.7 
Cancellation charges83.0 65.5 89.2 
Other taxes63.8 69.2 82.1 
Payroll and management incentives62.9 98.4 66.7 
General vendor accruals57.9 44.1 44.3 
Severance55.5 39.1 100.3 
Advertising52.3 103.5 53.2 
Interest38.1 38.7 31.0 
Freight32.3 47.7 28.5 
Participations and residuals30.4 266.7 300.2 
Lease liability - current28.1 40.4 39.6 
Accrued income taxes27.3 58.6 44.8 
Defined contributions plans27.3 26.7 30.0 
Accrued expenses - IIP & IIC2.7 51.9 80.8 
Production payables0.9 23.8 23.8 
Other64.8 95.9 88.9 
Total accrued liabilities (1)
$985.4 $1,537.5 $1,506.8 

(1) For the nine-month period ended October 1, 2023, liabilities of $607.4 million attributable to the Film & TV business, which were previously classified within Accrued liabilities, have been transferred to Liabilities held for sale. For the nine-month period ended September 25, 2022, liabilities of $15.0 million attributable to non-core entertainment businesses, which were previously classified within Accrued liabilities, were transferred to Liabilities held for sale.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(7) Financial Instruments
The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At October 1, 2023, September 25, 2022 and December 25, 2022, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at October 1, 2023, September 25, 2022 and December 25, 2022 also include certain assets and liabilities measured at fair value (see notes 10 and 11) as well as long-term borrowings. The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of October 1, 2023, September 25, 2022 and December 25, 2022 are as follows:
October 1, 2023September 25, 2022December 25, 2022
Carrying
Cost
Fair
Value
Carrying
Cost
Fair
Value
Carrying
Cost
Fair
Value
3.90% Notes Due 2029
$900.0 797.4 $900.0 804.6 $900.0 808.2 
3.55% Notes Due 2026
675.0 629.3 675.0 633.4 675.0 635.3 
3.00% Notes Due 2024
500.0 483.2 500.0 481.1 500.0 482.2 
6.35% Notes Due 2040
500.0 483.7 500.0 497.8 500.0 498.4 
3.50% Notes Due 2027
500.0 461.4 500.0 461.5 500.0 465.8 
5.10% Notes Due 2044
300.0 245.1 300.0 258.3 300.0 261.1 
6.60% Debentures Due 2028
109.9 113.0 109.9 114.1 109.9 112.1 
Variable % Notes Due December 30, 2024 250.0 250.0 325.0 325.0 310.0 310.0 
Production Financing Facilities(1)
 62.6 62.6 53.2 53.2 
Total long-term debt$3,734.9 3,463.1 $3,872.5 3,638.4 $3,848.1 3,626.3 
Less: Deferred debt expenses20.3 — 24.8 — 23.7 — 
Less: Current portion60.0 — 122.6 — 113.2 — 
Long-term debt$3,654.6 3,463.1 $3,725.1 3,638.4 $3,711.2 3,626.3 
(1) During the third quarter of 2023, all production financing facilities attributable to the non-core eOne Film and TV business, which were previously classified within Current portion of long-term debt, have been transferred to Liabilities held for sale.
In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches: $300.0 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, $500.0 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, $675.0 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55% and $900.0 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. Net proceeds from the issuance of the Notes, after deduction of $20.0 million of underwriting discount and fees, totaled $2.4 billion. These costs are being amortized over the life of the Notes outstanding, which range from five years to ten years from the date of issuance.
The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poors. The adjustment can be from 0.25% to 2.00% based on the extent of the ratings decrease. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus (1) 25 basis points (in the case of the 2024 Notes); (2) 30 basis points (in the case of the 2026 Notes); and (3) 35 basis points (in the case of the 2029 Notes). In addition, on and after October 19, 2024 for the 2024 Notes, September 19, 2026 for the 2026 Notes and August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.



Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
In September 2019, the Company entered into a $1.0 billion Term Loan Agreement (the "Term Loan Agreement”) with Bank of America N.A. (“Bank of America”), as administrative agent, and certain financial institutions as lenders, pursuant to which such lenders committed to provide, contingent upon the completion of the eOne Acquisition and certain other customary conditions to funding, (1) a three-year senior unsecured term loan facility in an aggregate principal amount of $400.0 million (the “Three-Year Tranche”) and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of $600.0 million (the “Five-Year Tranche” and together with the Three-Year Tranche, the “Term Loan Facilities”). The full amount of the Term Loan Facilities was drawn down on December 30, 2019, the closing date of the eOne Acquisition. As of September 25, 2022, the Company has fully repaid the Three-Year Tranche $400.0 million principal term loan, and of the Five-Year Tranche $600.0 million principal balance, the Company has repaid a total of $350.0 million in the following increments: $22.5 million in 2020; $180.0 million in 2021; $87.5 million in 2022; and $60.0 million of principal amortization payments in the first nine months of 2023.

Loans under the remaining Five-Year Tranche bear interest at the Company’s option, at either the adjusted Term Secured Overnight Financing Rate ("SOFR"), plus an applicable margin, or the Base Rate, plus a per annum applicable rate that fluctuates between 100.0 basis points and 187.5 basis points, in the case of loans priced at the SOFR, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Base Rate, in each case, based upon the non-credit enhanced, senior unsecured long-term debt ratings of the Company by Fitch Ratings Inc., Moody’s Investor Service, Inc. and S&P Global Rankings, subject to certain provisions taking into account potential differences in ratings issued by the relevant rating agencies or a lack of ratings issued by such rating agencies. Loans under the Five-Year Tranche require principal amortization payments that are payable in equal quarterly installments of 5.0% per annum of the original principal amount thereof for each of the first two years after funding, increasing to 10.0% per annum of the original principal amount thereof for each subsequent year. The Term Loan Agreement contains affirmative and negative covenants typical of this type of facility, including: (i) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (ii) restrictions on the incurrence of indebtedness, (iii) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (iv) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (v) the requirement that the Company maintain a Consolidated Total Leverage Ratio of no more than, depending on the gross proceeds of equity securities issued after the effective date of the acquisition of eOne, 5.65:1.00 or 5.40:1.00 for each of the first, second and third fiscal quarters ended after the funding of the Term Loan Facilities, with periodic step downs to 3.50:1.00 for the fiscal quarter ending December 31, 2023 and thereafter. As of October 1, 2023, the Company was in compliance with the financial covenants contained in the Term Loan Agreement.
The Company may redeem its 5.10% notes due in 2044 (the "2044 Notes") at its option, at the greater of the principal amount of the notes or the present value of the remaining scheduled payments, discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase.
Current portion of long-term debt at October 1, 2023 of $60.0 million, as shown on the consolidated balance sheet, represents the current portion of required quarterly principal amortization payments for the Five-Year Tranche of the Term Loan Facilities. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2023 with the exception of annual principal payments related to the Term Loan Facilities.
The fair values of the Company's long-term debt are considered Level 3 fair values (see note 10 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement.
Financing Arrangements
In September 2023, the Company entered into a third amended and restated revolving credit agreement 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 Agreement"), which provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion. 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.
Loans under the revolving credit facility bear interest, at the Company’s option, at either the Adjusted Term Benchmark Rate (determined in accordance with the Amended Revolving Credit Agreement), the Base Rate (determined in accordance with the Amended Revolving Credit Agreement) or the Daily Benchmark Rate (determined in accordance with the Amended Revolving Credit Agreement). In each case there is also a spread added to the rate, which fluctuates based upon the more favorable of the Company’s long-term debt ratings and the Company’s leverage. The Company is also required to pay a commitment fee in


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
respect to the unused commitments under the facility, the rate for which is also determined based upon the more favorable of the Company's long-term debt ratings and leverage.
The Amended Revolving Credit Agreement contains affirmative and negative covenants typical of this type of facility, including: (a) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (b) restrictions on the incurrence of indebtedness, (c) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (d) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (e) the requirement that the Company maintain: prior to the date on which the disposition of the Company’s eOne film and television business pursuant to the Equity Purchase Agreement, dated as of August 3, 2023, by and among the Company, Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.À.R.L. is consummated (the “EOne Disposition Date”), a Consolidated Total Leverage Ratio of no more than (1) 4.10:1.00 for the quarter ended September 30, 2023 and (2) 3.50:1.00 for the quarter ended December 31, 2023 and thereafter and on and after the EOne Disposition Date, a Consolidated Net Total Leverage Ratio of no more than (1) 4.00:1.00 for each of the quarters ended September 30, 2023 and December 31, 2023, (2) 3.75:1.00 for each of the first, second and fourth fiscal quarters of each year (other than 2023) and (3) 4.00:1:00 for the third fiscal quarter of each year (other than 2023).
Production Financing
In addition to the Company's financial instruments, the Company uses production financing facilities to fund its film and television productions which are arranged on an individual production basis by either special purpose production subsidiaries, each secured by future revenues of such production subsidiaries, which are non-recourse to the Company's assets, or through a senior revolving credit facility dedicated to production financing obtained in November 2021. The Company's senior revolving film and television production credit facility (the “RPCF”) with MUFG Union Bank, N.A., as administrative agent and lender and certain other financial institutions, as lenders thereto (the “Revolving Production Financing Agreement”) provides the Company with commitments having a maximum aggregate principal amount of $250.0 million. The Revolving Production Financing Agreement also provides the Company with the option to request a commitment increase up to an aggregate additional amount of $150.0 million subject to agreement of the lenders. The Revolving Production Financing Agreement extends through November 22, 2024. The Company uses the RPCF to fund certain of the Company’s original film and TV production costs. Borrowings under the RPCF are non-recourse to the Company's assets. Going forward, the Company expects to utilize the RPCF for the majority of its production financing needs.
Production financing facilities typically have maturities of less than two years, while the titles are in production, and are repaid once delivered and all credits, broadcaster pre-sales and international sales have been received. The production financing facilities as of October 1, 2023, September 25, 2022 and December 25, 2022 are as follows:
October 1, 2023
September 25, 2022December 25, 2022
Production financing facilities included in the consolidated balance sheet as:
Current liabilities (1)
$ $184.9 $195.6 
(1) During the third quarter of 2023, production financing facilities of $150.9 million attributable to the non-core eOne Film and TV business, which were previously classified within Current portion of long-term debt, have been transferred to Liabilities held for sale.
The following table represents the movements in production financing loans during the first nine months of 2023:
Production Financing
December 25, 2022$195.6 
Drawdowns117.9 
Repayments(162.0)
Reclass to Liabilities held for sale (2)
(150.9)
Foreign exchange differences(0.6)
Balance at October 1, 2023
$ 
(2) See note 15 for additional information on assets and liabilities held for sale.
(8) Investments in Productions and Investments in Acquired Content Rights
Investments in productions and investments in acquired content rights are predominantly monetized on a title-by-title basis and are recorded within other assets in the Company's consolidated balance sheets, to the extent they are considered recoverable against future revenues. These amounts are being amortized to program cost amortization using a model that reflects the


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
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 and investments in acquired content rights consisted of the following at October 1, 2023, September 25, 2022, and December 25, 2022:
October 1, 2023 (1)
September 25, 2022December 25, 2022
Investment in Films and Television Programs:
Individual Monetization
Released, net of amortization (2)
$78.3 $486.3 $584.5 
Completed and not released 1.2 23.3 
In production27.2 176.9 199.4 
Pre-production18.4 109.7