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Long-Term Debt and Other Financing | 12 Months Ended
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Dec. 29, 2024
Debt Disclosure [Abstract] |
Long-Term Debt and Other Financing | Long-Term Debt and Other Financing Components of Long-term debt are as follows:
(In millions) | 2024 |  | 2023
| Carrying Cost |  | Fair Value |  | Carrying Cost |  | Fair Value
3.90% Notes Due 2029 | $ | 900.0 |  |  | $ | 845.6 |  |  | $ | 900.0 |  |  | $ | 839.8 |
3.55% Notes Due 2026 | 591.9 |  |  | 578.0 |  |  | 675.0 |  |  | 641.0 |
3.00% Notes Due 2024 | — |  |  | — |  |  | 500.0 |  |  | 488.4 |
6.35% Notes Due 2040 | 500.0 |  |  | 507.5 |  |  | 500.0 |  |  | 520.1 |
3.50% Notes Due 2027 | 500.0 |  |  | 481.5 |  |  | 500.0 |  |  | 472.2 |
6.05% Notes Due 2034 | 500.0 |  |  | 502.2 |  |  | — |  |  | — |
5.10% Notes Due 2044 | 300.0 |  |  | 261.3 |  |  | 300.0 |  |  | 271.6 |
6.60% Debentures Due 2028 | 109.9 |  |  | 114.4 |  |  | 109.9 |  |  | 116.0 |
Total long-term debt | 3,401.8 |  |  | 3,290.5 |  |  | 3,484.9 |  |  | 3,349.1 |
Less: Deferred debt expenses | 21.0 |  |  | — |  |  | 19.1 |  |  | — |
Less: Current portion | — |  |  | — |  |  | 500.0 |  |  | — |
Long-term debt | $ | 3,380.8 |  |  | $ | 3,290.5 |  |  | $ | 2,965.8 |  |  | $ | 3,349.1 |
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. During fiscal year 2021 and fiscal year 2024, the Company repaid in full its 2022 Notes and 2024 Notes, respectively. 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 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. In May 2024, the Company issued an aggregate $500.0 million of senior unsecured debt securities that bear a fixed interest rate of 6.05% due 2034 (the "2034 Notes"). In connection with the issuance of the 2034 Notes, the 2034 Notes were issued with an original issuance discount of $1.4 million and the Company capitalized $5.3 million of debt issuance costs. The original issuance discount and debt issuance costs will be amortized over the term of the 2034 Notes. During 2024, the Company repurchased $83.1 million of its 2026 Notes and recorded a gain on extinguishment of $1.8 million, which was recorded in Other expense (income), net in the Consolidated Statements of Operations. The Company's long-term borrowings have the following future contractual maturities:
Future long-term borrowings contractual payments | (In millions)
2025 | $ | — |
2026 | 591.9 |
2027 | 500.0 |
2028 | 109.9 |
2029 | 900.0 |
2030 and thereafter | 1,300.0 |
Total | $ | 3,401.8 |
The fair values of the Company’s long-term debt are considered Level 3 fair values (see Note 14, Fair Value of Financial Instruments, 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. Other Financing Arrangements As of December 29, 2024, Hasbro had available an unsecured revolving credit agreement (see Amended Revolving Credit Agreement below) in the amount of $1.25 billion and unsecured uncommitted lines of credit from various banks approximating $88.1 million. The Company had no outstanding short-term borrowings under, or supported by, these lines of credit as of December 29, 2024 and December 31, 2023. During 2024 and 2023, Hasbro’s working capital needs were primarily fulfilled by cash available and cash generated from operations. 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, the Base Rate, or the Daily Benchmark Rate (each 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 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 extends through September 20, 2028. 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: a Consolidated Total Leverage Ratio of no more than (i) 3.50:1.00 for the quarter ended December 31, 2023 (ii) 4.00:1.00 for each of the quarters ended September 30, 2023 and December 31, 2023, (iii) 3.75:1.00 for each of the first, second and fourth fiscal quarters of each year (other than 2023) and (iv) 4.00:1:00 for the third fiscal quarter of each year (other than 2023). The Company was in compliance with all covenants as of and for the year ended December 29, 2024. The Company had no borrowings outstanding under its committed revolving credit facility as of December 29, 2024. The Company also has an agreement with a group of banks providing a commercial paper program (the “Program”). Under the Program, at the Company’s request and subject to market conditions, the banks may either purchase from the Company, or arrange for the sale by the Company of, unsecured commercial paper notes. Borrowings under the Program are supported by the aforementioned unsecured committed line of credit and the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1.0 billion. The maturities of the notes may vary but may not exceed 397 days. The notes are sold under customary terms in the commercial paper market and will be issued at a discount to par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis. The interest rates will vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time of issuance. Subject to market conditions, the Company intends to utilize the Program as its primary short-term borrowing facility and does not intend to sell unsecured commercial paper notes in excess of the available amount under the revolving credit agreement discussed below. If, for any reason, the Company is unable to access the commercial paper market, the Company intends to use the revolving credit agreement to meet the Company's short-term liquidity needs. As of December 29, 2024 and December 31, 2023, the Company did not have any notes outstanding under the Program. Hasbro had unused open letters of credit and related instruments of approximately $11.3 million and $13.3 million at December 29, 2024 and December 31, 2023, respectively. Supplier Finance Program The Company also has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice. The amount of obligations confirmed under the program that remain unpaid by the Company were $66.2 million, and $43.3 million as of December 29, 2024 and December 31, 2023, respectively. These obligations are presented within Accounts payable in our Consolidated Balance Sheets and the activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows. A summary of the activity related to the obligations are as follows:
(In millions) |  | 2024 |  | 2023
Balance at beginning of the year |  | $ | 43.3 |  |  | $ | 76.1 |
Additions |  | 387.7 |  |  | 415.7 |
Settled |  | (364.8) |  |  | (448.5) |
Balance at end of the year |  | $ | 66.2 |  |  | $ | 43.3 |

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