Sale of Non-Core Entertainment One Film and TV Business

9 Months Ended

Sep. 29, 2024

Discontinued Operations and Disposal Groups [Abstract]

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

The Company recorded a pre-tax non-cash charge of $539.0 million within Loss on disposal of business on the Consolidated Statements of Operations for the year ended December 31, 2023, of which $473.0 million was recorded during the three and nine months ended October 1, 2023. The Company also recorded pre-tax cash transaction expenses of $35.1 million within Selling, distribution and administration expense on the Consolidated Statements of Operations for the year ended December 31, 2023. See Note 3 of the Company's 2023 Annual Report for further detail of the Company's sale of the eOne Film and TV business.

The Company determined that the non-core eOne Film and TV business met the criteria to be classified as held for sale at October 1, 2023, but did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities were included in the separate assets and liabilities held-for-sale line items of the asset and liability sections of the consolidated balance sheets. The following table summarizes the assets and liabilities held for sale at October 1, 2023:


	October 1, 2023
Assets:
Cash and cash equivalents including restricted cash of $4.1 million	$	70.4
Accounts receivable, less allowance for doubtful accounts of $1.4 million	85.2
Inventories	2.7
Prepaid expenses and other current assets	402.6
Property, plant and equipment, less accumulated depreciation of $21.3 million	53.6
Other assets	891.5
Write-down loss allowance (1)	(457.3)
Total assets held for sale	$	1,048.7

Liabilities:
Short-term borrowings	$	141.9
Current portion of long-term debt	8.2
Accounts payable and accrued liabilities	404.4
Long-term debt	0.8
Other liabilities	52.1
Total liabilities held for sale	$	607.4

(1) In addition to the write-down loss allowance of $457.3 million, the Company also recognized $15.7 million of currency translation losses on the classification of held for sale. The pre-tax non-cash loss on assets held for sale of $473.0 million includes both the write-down allowance and the currency translation losses.