HASBRO, INC.
For the period ended Dec 28, 2025. Filed Feb 25, 2026.
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FY2025 · Filed Feb 25, 2026
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. Derivative Financial Instruments
(19)Derivative Financial Instruments
The Company uses foreign currency forward and option contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales, and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling.
All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative financial instruments for speculative purposes. Cash flow activity associated with the Company's derivative financial instruments is recorded within cash flows from operating activities on the Consolidated Statement of Cash Flows.
Cash Flow Hedges
All of the Company’s designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company’s currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions.
As of December 28, 2025 and December 29, 2024, the notional amounts and fair values of the Company’s foreign currency forward and option contracts designated as cash flow hedging instruments were as follows:
| 2025 | 2024 | |||
|---|---|---|---|---|
| (In millions) | NotionalAmount | FairValue | NotionalAmount | FairValue |
| Inventory purchases | $199.9 | $(9.5) | $131.5 | $8.0 |
| Sales | 76.0 | 3.1 | 86.0 | (1.4) |
| Other | 35.4 | (0.7) | 22.8 | 0.9 |
| Total | $311.3 | $(7.1) | $240.3 | $7.5 |
Undesignated Hedges
The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. As of December 28, 2025 and December 29, 2024, the total notional amounts of the Company’s undesignated derivative financial instruments were $191.5 million and $289.6 million, respectively.
Fair Value Measurement
The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company’s foreign currency forward contracts are recorded in the Consolidated Balance Sheets as follows:
| Designated Hedges | Undesignated Hedges | |||
|---|---|---|---|---|
| (In millions) | 2025 | 2024 | 2025 | 2024 |
| Prepaid expenses and other current assets: | ||||
| Unrealized gains | $1.4 | $9.1 | $0.6 | $1.9 |
| Unrealized losses | (0.7) | (1.1) | (0.2) | (0.2) |
| Net unrealized gains | $0.7 | $8.0 | $0.4 | $1.7 |
| Other assets: | ||||
| Unrealized gains | $1.2 | $— | $— | $— |
| Unrealized losses | (0.3) | — | — | — |
| Net unrealized gains | $0.9 | $— | $— | $— |
| Accrued liabilities: | ||||
| Unrealized gains | $1.5 | $0.5 | $— | $— |
| Unrealized losses | (9.5) | (1.0) | — | (1.2) |
| Net unrealized losses | $(8.0) | $(0.5) | $— | $(1.2) |
| Other liabilities: | ||||
| Unrealized gains | $— | $— | $— | $— |
| Unrealized losses | (0.7) | — | — | — |
| Net unrealized losses | $(0.7) | $— | $— | $— |
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss), net of tax, to net earnings as follows:
| (In millions) | 2025 | 2024 | 2023 |
|---|---|---|---|
| Consolidated Statements of Operations Classification: | |||
| Cost of sales | $(0.4) | $2.1 | $(1.1) |
| Sales | 1.1 | (2.0) | 0.2 |
| Royalties and other | (0.5) | 0.2 | (2.2) |
| Net realized gains (losses) | $0.2 | $0.3 | $(3.1) |
In addition, the Company recorded net losses of $14.4 million and $3.3 million, and net gains of $23.4 million, on its undesignated derivative financial instruments for 2025, 2024 and 2023, respectively, relating to the change in fair value of such derivative financial instruments, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate. Such amounts are recorded within Other (income) expense, net within the Consolidated Statements of Operations.
For additional information related to the Company’s derivative financial instruments refer to Note 5, Other Comprehensive Earnings (Loss), and Note 15, Fair Value of Financial Instruments.
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