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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 June 26, 2022
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 July 19, 2022 was 138,091,266.



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; the ability to achieve our financial and business goals and objectives; anticipated financial performance or business prospects in future periods; our expectations relating to our accelerated inventory purchases and supply of products; the expected timing for scheduled new product introductions or our expectations concerning the future acceptance of products by customers; expected benefits and plans relating to acquired brands, properties and businesses; the development and timing of planned consumer and digital gaming products and entertainment releases; marketing and promotional efforts; research and development activities; the impact of the coronavirus pandemic and other public health conditions on our business; actions taken to mitigate the impact of inflation; capital expenditures; working capital; liquidity; financing sources; timing of and amount of repayment of indebtedness; capital allocation strategy, including plans for dividends and share repurchases; and other financial, tax, accounting and similar matters. 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 design, develop, manufacture, and ship products on a timely, cost-effective and profitable basis;
our ability to execute on our brand blueprint strategy, including focus on and scale select business initiatives and brands to drive profitability;
our ability to successfully grow our digital gaming and consumer direct businesses;
our ability to build on multi-generational brands;
our ability to develop and timely distribute engaging storytelling across media to drive brand awareness;
our ability to navigate through inflation and downturns in global and regional economic conditions 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 ability to successfully evolve and transform our business and capabilities to address a changing global consumer landscape and retail environment, including due to consumer preferences, changing inventory and sales policies and practices of our customers and increased emphasis on ecommerce;
our ability to successfully implement strategies to lessen the impact of any increased shipping costs, shipping delays or changes in required methods of shipping, as well as our ability to take any price increases to offset increased shipping costs, increases in prices of raw materials or other increases in costs of our products;
risks related to other 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, or outbreaks of 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;
our ability to successfully compete in the global play and entertainment industry, including with manufacturers, marketers, and sellers of toys and games, digital gaming products and digital media, as well as with film studios, television production companies and independent distributors and content producers;
our dependence on third party relationships, including with third party manufacturers, licensors of brands, studios, content producers and entertainment distribution channels;
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;
our ability to successfully develop and continue to execute plans to mitigate the negative impact of the coronavirus on our business, including, without limitation, negative impacts to our supply chain and costs that have occurred and could continue to occur in countries where we source significant quantities of product;



risks associated with international operations, such as 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 continuing impact of the crisis between Russia and Ukraine on our business, including lost revenue and collection of receivables;
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;
fluctuations in our business due to seasonality;
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;
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 enhancing initiatives;
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;
risks relating to the impairment and/or write-offs of products and content we acquire and produce;
risks relating to investments, acquisitions and dispositions, including the ability to realize the anticipated benefits of acquired assets or businesses;
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; and
other risks and uncertainties as may be detailed from time to time 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)
June 26,
2022
June 27,
2021
December 26,
2021
ASSETS
Current assets
Cash and cash equivalents including restricted cash of $41.9 million, $83.1 million and $35.8 million
$628.2 $1,228.2 $1,019.2 
Accounts receivable, less allowance for doubtful accounts of $24.9 million, $30.5 million and $22.9 million
870.5 865.9 1,500.4 
Inventories867.5 499.6 552.1 
Prepaid expenses and other current assets719.2 543.2 656.4 
Assets held for sale 479.5  
Total current assets3,085.4 3,616.4 3,728.1 
Property, plant and equipment, less accumulated depreciation of $644.2 million, $589.1 million and $630.0 million
409.9 466.2 421.1 
Other assets
Goodwill3,483.2 3,420.8 3,419.6 
 Other intangible assets, net of accumulated amortization of $1,089.4 million, $1,002.5 million and $1,050.4 million
1,156.9 1,248.3 1,172.0 
Other1,367.6 1,350.5 1,297.0 
Total other assets6,007.7 6,019.6 5,888.6 
Total assets$9,503.0 $10,102.2 $10,037.8 
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings
$98.0 $0.8 $0.8 
Current portion of long-term debt
137.0 189.6 200.1 
Accounts payable
543.8 382.4 580.2 
Accrued liabilities
1,379.4 1,396.5 1,674.8 
Liabilities held for sale 76.3  
Total current liabilities
2,158.2 2,045.6 2,455.9 
Long-term debt
3,739.0 4,388.7 3,824.2 
Other liabilities
570.0 753.0 670.7 
Total liabilities
$6,467.2 $7,187.3 $6,950.8 
Redeemable noncontrolling interests
23.0 24.5 23.9 
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 June 26, 2022, June 27, 2021, and December 26, 2021
110.1 110.1 110.1 
Additional paid-in capital
2,503.4 2,361.2 2,428.0 
Retained earnings
4,265.9 4,110.3 4,257.8 
Accumulated other comprehensive loss
(259.6)(183.5)(235.3)
Treasury stock, at cost; 82,199,298 shares at June 26, 2022; 82,617,426 shares at June 27, 2021; and 82,066,136 shares at December 26, 2021
(3,636.2)(3,547.6)(3,534.7)
Noncontrolling interests
29.2 39.9 37.2 
Total shareholders' equity
3,012.8 2,890.4 3,063.1 
Total liabilities, noncontrolling interests and shareholders' equity
$9,503.0 $10,102.2 $10,037.8 
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 EndedSix Months Ended
June 26,
2022
June 27,
2021
June 26,
2022
June 27,
2021
Net revenues$1,339.2 $1,322.2 $2,502.3 $2,437.0 
Costs and expenses:
Cost of sales411.5 345.0 744.6 634.9 
Program cost amortization80.7 110.7 219.2 208.2 
Royalties110.1 111.5 200.2 220.4 
Product development79.2 87.2 148.8 149.0 
Advertising84.2 105.4 161.8 193.3 
Amortization of intangibles27.2 29.7 54.3 62.6 
Loss on assets held for sale 101.8  101.8 
Selling, distribution and administration327.2 354.3 634.3 642.9 
Total costs and expenses1,120.1 1,245.6 2,163.2 2,213.1 
Operating profit219.1 76.6 339.1 223.9 
Non-operating expense (income):
Interest expense41.7 46.1 83.3 94.0 
Interest income(2.7)(1.2)(4.8)(2.4)
Other income (expense), net0.2 (9.4)0.5 (38.3)
Total non-operating expense, net39.2 35.5 79.0 53.3 
Earnings before income taxes179.9 41.1 260.1 170.6 
Income tax expense39.4 63.0 56.7 75.0 
Net earnings (loss)140.5 (21.9)203.4 95.6 
Net earnings (loss) attributable to noncontrolling interests(1.5)1.0 0.2 2.3 
Net earnings (loss) attributable to Hasbro, Inc.$142.0 $(22.9)$203.2 $93.3 
Net earnings (loss) per common share:
Basic$1.02 $(0.17)$1.46 $0.68 
Diluted$1.02 $(0.17)$1.46 $0.68 
Cash dividends declared per common share$0.70 $0.68 $1.40 $1.36 
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings
(Millions of Dollars)
(Unaudited)
Quarter EndedSix Months Ended
June 26,
2022
June 27,
2021
June 26,
2022
June 27,
2021
Net earnings (loss)$140.5 $(21.9)$203.4 $95.6 
Other comprehensive earnings:
Foreign currency translation adjustments, net of tax
(20.2)24.0 (31.0)7.9 
Unrealized holding gains (losses) on available-for-sale securities, net of tax(0.5)0.1 (0.1)0.2 
Net gains (losses) on cash flow hedging activities, net of tax10.6 (3.2)7.9 2.4 
Reclassifications to earnings, net of tax:
Net gains (losses) on cash flow hedging activities(2.7)1.8 (1.3)0.6 
Amortization of unrecognized pension and postretirement amounts
0.1 0.2 0.2 0.4 
Total other comprehensive earnings (loss), net of tax$(12.7)$22.9 $(24.3)$11.5 
Total comprehensive earnings (loss) attributable to noncontrolling interests(1.5)1.0 0.2 2.3 
Total comprehensive earnings attributable to Hasbro, Inc.$129.3 $ $178.9 $104.8 
                                                                                        
See accompanying condensed notes to consolidated financial statements.



HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
Six months ended
June 26,
2022
June 27,
2021
Cash flows from operating activities:
Net earnings$203.4 $95.6 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of plant and equipment61.7 67.6 
Amortization of intangibles54.3 62.6 
Loss on assets held for sale 101.8 
Program cost amortization219.2 208.2 
Deferred income taxes(45.4)43.6 
Stock-based compensation43.0 37.1 
Other non-cash items4.5 0.2 
Change in operating assets and liabilities net of acquired balances:
Decrease in accounts receivable517.5 533.9 
Increase in inventories(324.7)(109.5)
Increase in prepaid expenses and other current assets13.9 38.8 
Program spend, net(296.2)(308.3)
Decrease in accounts payable and accrued liabilities(273.0)(169.3)
Change in net deemed repatriation tax(18.4)(18.4)
Other(12.0)(6.8)
Net cash provided by operating activities147.8 577.1 
Cash flows from investing activities:
Additions to property, plant and equipment(75.8)(63.1)
Acquisitions(146.3) 
Other9.5 (3.2)
Net cash utilized by investing activities(212.6)(66.3)
Cash flows from financing activities:
Proceeds from borrowings with maturity greater than three months2.1 114.7 
Repayments of borrowings with maturity greater than three months(152.5)(635.0)
Net proceeds from other short-term borrowings97.2 (6.3)
Purchases of common stock(124.0) 
Stock-based compensation transactions74.2 9.4 
Dividends paid(191.9)(187.5)
Payments related to tax withholding for share-based compensation(19.6)(9.5)
Other(5.4)(4.2)
Net cash utilized by financing activities(319.9)(718.4)
Effect of exchange rate changes on cash(6.3)4.3 
Net increase (decrease) in cash, cash equivalents and restricted cash(391.0)(203.3)
Net change due to cash classified as held for sale (18.2)
Net decrease in cash, cash equivalents and restricted cash(391.0)(221.5)
Cash, cash equivalents and restricted cash at beginning of year1,019.2 1,449.7 
Cash, cash equivalents and restricted cash at end of period$628.2 $1,228.2 
Supplemental information
Cash paid during the period for:
Interest$75.4 $90.2 
Income taxes$95.1 $70.8 
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 June 26, 2022
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, March 27, 2022$110.1 2,475.7 4,220.9 (246.9)(3,513.8)34.7 $3,080.7 $23.5 
Net earnings attributable to Hasbro, Inc.— — 142.0 — — — 142.0 — 
Net earnings (loss) attributable to noncontrolling interests— — — — — (1.6)(1.6)0.1 
Change in put option value—  — 
Other comprehensive loss— — — (12.7)— — (12.7)— 
Stock-based compensation transactions— 2.5 — — 1.3 — 3.8 — 
Purchases of common stock— — — — (124.0)— (124.0)— 
Stock-based compensation expense— 24.7 — — 0.3 — 25.0 — 
Dividends declared— 0.5 (97.0)— — — (96.5)— 
Distributions paid to noncontrolling owners — — — — — (3.9)(3.9)(0.6)
Balance, June 26, 2022$110.1 2,503.4 4,265.9 (259.6)(3,636.2)29.2 $3,012.8 $23.0 
Three Months Ended June 27, 2021
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comprehensive Loss
Treasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, March 28, 2021$110.1 2,339.6 4,226.8 (206.4)(3,550.6)40.4 $2,959.9 $24.0 
Net loss attributable to Hasbro, Inc.— — (22.9)— — — (22.9)— 
Net earnings attributable to noncontrolling interests— — — — — 0.7 0.7 0.3 
Other comprehensive earnings— — — 22.9 — — 22.9 — 
Stock-based compensation transactions— 2.6 — — 1.9 — 4.5 — 
Stock-based compensation expense— 19.3 — — 1.1 — 20.4 — 
Dividends declared— — (93.6)— — — (93.6)— 
Distributions paid to noncontrolling owners— (0.3)— — — (1.2)(1.5)0.2 
Balance, June 27, 2021$110.1 2,361.2 4,110.3 (183.5)(3,547.6)39.9 $2,890.4 $24.5 






HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interests
(Millions of Dollars)
(Unaudited)
Six Months Ended June 26, 2022
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
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.— 203.2 — — — 203.2 — 
Net earnings (loss) attributable to noncontrolling interests— — — — — (0.4)(0.4)0.6 
Change in put option value— (0.4)— — — — (0.4)— 
Other comprehensive loss— — — (24.3)— — (24.3)— 
Stock-based compensation transactions— 32.5 — — 22.2 — 54.7 — 
Purchases of common stock— — — — (124.0)— (124.0)— 
Stock-based compensation expense— 42.8 — — 0.3 — 43.1 — 
Dividends declared— 0.5 (195.1)— — — (194.6)— 
Distributions paid to noncontrolling owners and other foreign exchange— — — — — (7.6)(7.6)(1.5)
Balance, June 26, 2022$110.1 2,503.4 4,265.9 (259.6)(3,636.2)29.2 $3,012.8 $23.0 
Six Months Ended June 27, 2021
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comprehensive Loss
Treasury
Stock
Noncontrolling InterestsTotal
Shareholders'
Equity
Redeemable Noncontrolling Interests
Balance, December 27, 2020$110.1 2,329.1 4,204.2 (195.0)(3,551.7)40.0 $2,936.7 $24.4 
Net earnings attributable to Hasbro, Inc.— — 93.3 — — — 93.3 — 
Net earnings attributable to noncontrolling interests— — — — — 2.0 2.0 0.3 
Other comprehensive earnings— — — 11.5 — — 11.5 — 
Stock-based compensation transactions— (3.2)—  3.0 — (0.2)— 
Stock-based compensation expense— 36.0 — — 1.1 — 37.1 — 
Dividends declared— — (187.2)— — — (187.2)— 
Distributions paid to noncontrolling owners and other foreign exchange— (0.7)— — — (2.1)(2.8)(0.2)
Balance, June 27, 2021$110.1 2,361.2 4,110.3 (183.5)(3,547.6)39.9 $2,890.4 $24.5 



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 June 26, 2022 and June 27, 2021, 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 June 26, 2022 and June 27, 2021 were each 13-week periods. The six-month periods ended June 26, 2022 and June 27, 2021 were each 26-week periods.
The results of operations for the quarter ended June 26, 2022 are not necessarily indicative of results to be expected for the full year 2022, nor were those of the comparable 2021 period representative of those actually experienced for the full year 2021.
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 26, 2021 ("2021 Form 10-K").
D&D Beyond Acquisition
On May 19, 2022, the Company acquired D&D Beyond, a strategic, complementary acquisition of the premier digital content platform for DUNGEONS & DRAGONS, which is expected to substantially accelerate our direct-to-fans capability for DUNGEONS & DRAGONS in physical and digital play. The all-cash transaction in the amount of $146.3 million was funded with cash on hand. The preliminary allocation of assets acquired includes $81.4 million to intangible assets, $64.7 million to goodwill, with the remainder allocated to property, plant, and equipment, all of which are included in the Company's consolidated balance sheets as of June 26, 2022.
eOne Music Sale
On June 29, 2021, the Company completed the sale of eOne Music for net proceeds of $397.0 million, including the sales price of $385.0 million and $12.0 million of closing adjustments related to working capital and net debt calculations. The final proceeds were subject to further adjustment upon completion of closing working capital, which resulted in a net outflow of $0.9 million in the fourth quarter of 2021. Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne Acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $101.8 million within Loss on Assets Held for Sale on the consolidated statements of operations for the quarter ended June 27, 2021. The Company also recorded pre-tax cash transaction expenses of $9.5 million within Selling, Distribution and Administration expenses on the consolidated statements of operations for the quarter ended June 27, 2021. The impairment charge was recorded within the Entertainment segment and the transaction costs were recorded within the Corporate and Other segment. Fiscal year 2021 includes two quarters of financial results for the eOne Music Business.
Dividend Equivalent Units
Beginning with employee stock incentive awards granted in 2022, the payment of cash dividends to shareholders also results in the crediting of Dividend Equivalent Units (“DEUs”) to holders of restricted stock units ("RSUs") and contingent stock performance awards ("PSUs") granted under the Company's Restated 2003 Stock Incentive Plan, as amended, for employees as defined and described in Note 15 in the Company's Annual Report on Form 10-K for the year ended December 26, 2021. The DEUs will be credited as additional RSUs or PSUs and settled concurrently with the vesting of associated awards. The forfeitable DEUs and dividends payable in cash are treated as a reduction of retained earnings or, if the Company is in a retained deficit position, as a reduction of additional paid-in capital.
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 26,


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
2021 in its 2021 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 June 26, 2022, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.
Issued Accounting Pronouncements
In March of 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04) Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in this update apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. An entity may elect to apply the amendments provided by this update beginning March 12, 2020 through December 31, 2022. The change from LIBOR to an alternate rate has not had a material impact on the Company's consolidated 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 access 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 in the case of (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.
At June 26, 2022, June 27, 2021 and December 26, 2021 the Company had the following contract assets and liabilities in its consolidated balance sheets:
June 26, 2022June 27, 2021December 26, 2021
Assets
     Contract assets - current$419.7 $257.9 $286.9 
     Contract assets - long term148.2 72.6 104.2 
           Total$567.9 $330.5 $391.1 
Liabilities
     Contract liabilities - current$106.8 $174.7 $114.1 
     Contract liabilities - long term2.5 21.3 7.1 
          Total $109.3 $196.0 $121.2 
For the six months ended June 26, 2022, the Company collected $3.8 million of the contract assets and recognized $48.7 million of contract liabilities that were included in the December 26, 2021 balances.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
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 June 26, 2022, unrecognized revenue attributable to unsatisfied performance obligations expected to be recognized in the future were $313.1 million. Of this amount, we expect to recognize $187.4 million in the remainder of 2022, $109.4 million in 2023, $7.2 million in 2024 and $9.1 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 June 26, 2022 and June 27, 2021 are primarily from contracts with customers. Of the Company’s accounts receivable, less allowance for doubtful accounts, of $870.5 million, approximately $4.3 million relates to accounts receivable held in Russia. The Company has insurance coverage for over 90% of Russian receivables. The Company had no material expense for credit losses for the quarters or six months ended June 26, 2022 and June 27, 2021.
Disaggregation of revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Consumer Products, Entertainment, and Wizards of the Coast and Digital Gaming. The Company further disaggregates revenues within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; within its Entertainment segment by category: Film & TV, Family Brands, and Other; and within its Wizards of the Coast and Digital Gaming segment by line of business: Tabletop Gaming and Digital and Licensed Gaming. Finally, the Company disaggregates its revenues by brand portfolio into five brand categories: Franchise Brands, Partner Brands, Hasbro Gaming, Emerging Brands, and TV/Film/Entertainment. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See note 13 for further information.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(3) Earnings Per Share
Net earnings (loss) per share data for the quarters and six months ended June 26, 2022 and June 27, 2021 were computed as follows:
20222021
QuarterBasicDilutedBasicDiluted
Net earnings (loss) attributable to Hasbro, Inc.$142.0 142.0 $(22.9)(22.9)
Average shares outstanding139.0 139.0 137.8 137.8 
Effect of dilutive securities:
Options and other share-based awards— 0.2 —  
Equivalent Shares139.0 139.2 137.8 137.8 
Net earnings (loss) attributable to Hasbro, Inc. per common share$1.02 1.02 $(0.17)(0.17)
20222021
Six MonthsBasicDilutedBasicDiluted
Net earnings attributable to Hasbro, Inc.$203.2 $203.2 $93.3 $93.3 
Average shares outstanding139.2 139.2 137.8 137.8 
Effect of dilutive securities:
Options and other share-based awards— 0.2 — 0.4 
Equivalent Shares139.2 139.4 137.8 138.2 
Net earnings attributable to Hasbro, Inc. per common share$1.46 $1.46 $0.68 $0.68 
For the quarter and six months ended June 26, 2022, options and restricted stock units totaling 3.0 million and 3.8 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 six months ended June 27, 2021, options and restricted stock units totaling 4.6 million and 2.2 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. Of the second quarter 2021 amount, 2.5 million shares would have been included in the calculation of diluted shares had the Company not had a loss for the quarter ended June 27, 2021. Assuming that these options and restricted stock units were included, under the treasury stock method, they would have resulted in an additional 0.4 million shares being included in the diluted earnings per share calculation for the quarter ended June 27, 2021.


Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(4) Goodwill
During the first quarter of 2021, the Company realigned its financial reporting structure creating the following three principal reportable segments: Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment. In our realignment, some, but not all, of our reporting units were changed. As a result of these changes, during 2021, the Company reallocated its goodwill among the revised reporting units based on the change in relative fair values of the respective reporting units.
Changes in the carrying amount of goodwill, by operating segment, for the quarters ended June 26, 2022 and June 27, 2021 are as follows:
Consumer ProductsWizards of the Coast and Digital GamingEntertainmentTotal
2022
Balance at December 26, 2021$1,584.9307.31,527.4$3,419.6
Acquired during the period