Download the 2019 Annual Report

2019 ANNUAL REPORT CORP.SPIN MASTER

1 Spin Master Corp. TABLE OF CONTENTS

Growth Strategies 1 Financial Highlights 2 1 Letter to Shareholders 3

2019 CORPORATE SOCIAL RESPONSIBILITY 8 CSR at Spin Master 8

2019 ANNUAL REPORT Management’s Discussion and Analysis of Financial Results 11 10 Independent Auditor’s Report 52 Consolidated Statements of Financial Position 55 Consolidated Statements of Earnings & Comprehensive Income 56 Consolidated Statement of Changes in Equity 57 Consolidated Statements of Cash Flows 58 Notes to the Consolidated Financial Statements 59

Spin Master (TSX:TOY; www.spinmaster.com) is a leading global children’s entertainment company that creates, designs, manufactures, licenses and markets a diversified portfolio of innovative toys, games, products and entertainment properties. Spin Master is best known for award-winning brands including Zoomer®, Bakugan®, Erector® by Meccano®, Hatchimals®, Air Hogs® and PAW Patrol®. Since 2000, Spin Master has received 110 TIA Toy of The Year (TOTY) nominations with 30 wins across a variety of product categories, including 13 TOTY nominations for Innovative Toy of the Year. To date, Spin Master has produced nine television series, including the relaunched Bakugan: Battle Planet and current hit PAW Patrol, which is broadcast in over 160 countries and territories globally. Spin Master employs over 1,800 people in countries around the world including Canada, United States, Mexico, France, Italy, United Kingdom, Russia, Slovakia, Poland, Germany, Sweden, the Netherlands, China, Hong Kong, Japan, Vietnam and Australia. • EMERGING MARKETS INTERNATIONAL DEVELOPING AND INCREASE SALESIN • • • R&D NETWORK GLOBAL INTERNALANDEXTERNAL CONTINUE TO INNOVATE USINGOUR GROWTH STRATEGIES America toAmerica 45%inthemediumterm ofsalesoutsideNorth Increase proportion licenses Continue to invest inadvanced technology, and Continue to focus onstrategic brand building tonetworks buildarobust pipeline Leverage competitive strengths andglobal THROUGH STRATEGIC ACQUISITIONS LEVERAGE GLOBAL PLATFORM • • • • • TOY PROPERTIES ENTERTAINMENT ANDDIGITAL DEVELOP EVERGREENGLOBAL • • revenue streams Generate newlicensing andmerchandising Continue to buildbroadcast relationships value ofowned content library Strategically to relaunch capitalize on properties peryear Launch at leastonenewproperty Leverage current properties Strong balance sheetwithfinancialflexibility consolidation forFragmented withopportunities industry

1 Spin Master Corp. 2 Spin Master Corp. month periodandyear endedDecember 31, 2019for more information ontheimplementation of IFRS16. three the for MD&A Company’s the of Policies” Accounting in “Changes section been restated. See not have year results 16. Prior IFRS under results accounting reflect2019 lease result,Company’s a the 2. Spin Master adopted International Financial Reporting Standard 16 Leases (“IFRS 16”), effective January 1, 2019. The Company implemented the standard using the modified retrospective approach. As public discussion of thedefinition, components anduses of such non-IFRS measures, Master’s as well asa reconciliation of suchnon-IFRS measuresSpin toIFRSmeasures (wherewithin acomparable IFRSmeasureAnalysis exists). and Discussion Management the in Measures” Financial IFRS “Non entitled section the to refer Please issuers. other by presented measures similar to 1. Non-IFRSFinancial measures. Non-IFRS measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and are therefore unlikely to be comparable ADJUSTED NET INCOME GROSS PRODUCT SALES US$ millions FINANCIAL INFORMATION 2015 $99 2015 $983 2016 $120 2016 $1,255 2017 $173 2017 $1,657 2018 $164 2018 $1,708 1,2 1 2019 $93 2019 $1,691 ADJUSTED EBITDA FREE CASH FLOW $160 2015 2015 $67 $206 2016 2016 $119 $292 2017 $193 2017 1 1,2 $304 2018 2018 $130 $219 2019 2019 $85 lings for a for filings growth driven by innovation. strength of ourcore businessandourfinancialstabilitycontinue tofuelourdedicationlong-term Innovation hasalways beenakey DNA. Asourindustryevolves, component of SpinMaster’s theunderlying TOSHAREHOLDERS LETTER to higher inventory levels. The combination oflower Gross Product Sales customers, costs to move finishedgoodsbetween warehouses andincreased inventory storage costs due 2020. We incurred significantly higher, warehousing anddistribution costs inorder to expedite deliveries to spending ascustomers shoppedlater andto ensure we keptretail inventories aslow aspossibleheadinginto chargesnon-compliance for late orincomplete shipments, highermarkdowns andincreased levels ofpromotional significantly increased salesallowances over prior years, which reduced our gross margin. This was driven by we faced in2019resulted insignificant costs to ensure the continued success ofourbusiness. We incurred Althoughremained ourefforts focused oninitiatives to expand gross andEBITDA margins, thechallenges growth rate ofapproximately 10%,whichisatestament to thesuccess ofourbrand innovation process. to reduce ourAdjusted EBITDA Margin warehousing costs, anddistribution highersellingexpenses anddeleveraging offixed operating costs combined basis, Gross Product Sales Sales IFRS measure exists). public comparable to similarmeasures presented by other issuers. Pleaserefer to the sectionentitled “NonIFRSFinancialMeasures” inthe Management Discussion andAnalysis withinSpinMaster’s 1. Non-IFRSFinancialmeasures. Non-IFRSmeasures donot have any standardized meaningprescribed by International FinancialReporting Standards (“IFRS”)andare therefore unlikely tobe Despite this, we Gross reported Product Sales poor performance. addition,we chargeschain in2019.In incurred non-compliance from heavy ourcustomers asaresult ofthis resulted insignificant order processing disruptionandmaterially increased and delivery costs inour U.S. supply warehouses inherited undertheGUND, Cardinal and Swimways acquisitions into the newwarehouse. This Q3 oftheestablishmentcenter ofanewdistribution ontheUSEastCoast andtheconsolidation offour existing We alsodealtwithseveral internal operational challengesin2019. The keyissuerelated to thepoorexecution in Fortunately, thesetariffs were notimplemented. political environment characterized by trade tensions between theU.S. andChinathethreat oftariffs on toys. affected consumer purchasing behavior mix. andourmarketing amplified bya These factors were further has continued from to traditional shift linearmodelsto SVOD, AVOD andmobiledigital platforms, whichhas requirements,and distribution withcustomers shoppinglater eachyear. Furthermore, content consumption growth ofon-lineshopping, atrend that continues to accelerate, challengesinorder hascreated patterns further last two years, amajorretailer, Toys RUs, exited to forcingthat themarket absorb volume. theindustry The retail locations are faced withdecliningcustomer traffic andwhere the content Inthe landscapehasshifted. The macro environment hasbecome more complex, especiallyintheUnited States where andmortar brick unable to achieve ourfinancialgoals for 2019. ofretail 2019U.S. toy softness theshortened salesduring industry-wide holiday shoppingseason,meant we were ofmanydespite ofourbrands thesolidperformance andfranchises, supplychainchallenges, combined with our strategies designed to achieve long-term success. overall Our for theyear performance was oneofcontrasts: landscape. Against thisbackdrop, we invested to positionourbusinessfor thefuture whileremaining focused on 2019,weIn faced several challengesaswe continued to navigate anevolving retail andcontent consumption FELLOW SHAREHOLDERS, Hatchimals products. thepast10years, Over ourGross Product Sales filings for a discussion of the definition, components and uses of such non-IFRS measures, as well as a reconciliation of such non-IFRS measures to IFRS measures (where a comparable 1 growing approximately 16%over 2018,excluding the$230millionyear over year declineinthesalesof 1 were flat compared Our to 2018. coreremains strong, portfolio with Gross Product 1 . 1 of$1,691million,down only1%from 2018.Onaconstant currency 1 have increased at acompound annual 1 , highersalesallowances, higher

LETTER TO SHAREHOLDERS 3 Spin Master Corp. LETTER TO SHAREHOLDERS 4 Spin Master Corp. for kids aroundfor theworld in2020andbeyond. kids with DCComics isanincredible testament to ourteam andwe lookforward to bringingto theDCcharacters life category, includingremote control androbotic vehicles, water toys, andgamespuzzles. This multi-year deal . Beginning in2020,weDollhouse are now thenewtoy licensee for Warner Brothers’ Boys Action DCEntertainment onNetflix,which airing series we announced this early year andthenewanimated preschool series, Gabby’s Hilda,theaward 2019, we to theGUNDportfolio: In addedtwo strong winninganimation license partnerships licenses whichweseek highquality cancombine innovation withourproduct capabilities. andglobaldistribution another pillarofoursuccess. While we continue to develop original ideasbasedonourown IP, we continue to withthelicensor community. strongpartnerships hasbeen relationships Supporting withlicensing partners ofourfocus ongrowth,As part we continue to oflicensed buildastrong andinvest products portfolio in our core demographic. innovation, capitalize ongrowing trends, fillgapsinourbusinesssegments growth targets anddiversify within pipeline. We regularly to review commercialize our36-month pipelineto product identify opportunities consumers. ofourinnovationThe sustainability from isachieved, ourrolling 36-month inpart, brand innovation teams, complemented inventor by our3rd consistently party network creates innovation product for our broadcasters, studios, production distributors, andlicensors. global internal Our R&D, engineering anddesign create andlicense evergreen content; entertainment andgrow withinventors, internationally inpartnerships growthOur isdriven to by identify, ourability develop, andacquire newandinnovative andbrands; products across all11categories ofthetoy industry, maintaining abalanced anddiversified portfolio. are theengine ofourlong-term growth. We have innovated ofbrands anddiversified andproducts ourportfolio mobile games. These varioustouch points strengthen consumers’ attachments to ourbrands andfranchises and we have withourconsumers, includingphysical products, traditional andinnovative content, entertainment and our 36-month brand innovation pipeline, whichremains robust. This pipelineisfed by themultipletouch points inception, beenoneofourcore competencies andakeycompetitive advantage. ofourgrowth At is theheart Success demandscontinuous innovation. inthetoy industry SpinMaster’s to innovate ability has, since our INNOVATION focus ofSpinMaster’sprimary management team. strategic acquisitions. These strategies continue to bethedrivers ofourlong-term growth modelandare the creating increasingof products; international successful properties; sales;andmaking globalentertainment remains intact. We executed well againstourfour growth strategies, whichinclude:innovating ourcore portfolio Despite theseoperational challenges, we believe strength intheunderlying ofourbusinessstrategy, which GROWTH STRATEGIES Sales toSales 45%ofourGross Product Sales growth opportunity. We solidprogress are making toward ourgoalofincreasing ourInternationalGross Product strong ourinternational performance, platform remains under-leveraged andprovides meaningful uswithavery some ofourkeyEuropean territories, whileGross Product Sales makes sensestrategically for usto doso. in thesegeographies. to distributor saleswhere markets direct We it 3rd party planto convert selectively further The return oninvestment inconvertingwell isstrong amarket above andwe performed ourinternal expectations In 2019,International GrossIn Product Sales INTERNATIONAL EXPANSION the mobiledigital space andallowed usto develop aleadershippositioninthekid’s digital toy space. platforms. The acquisition ofToca Boca patterns, which have beenconverging between physical brands, franchises andmobiledigital entertainment which includesourmobiledigital presence withToca Boca andgaming.entertainment We have strategically invested andfocused in allareas ofcontent consumption, We want are are to increasingly bewhere andwe kids to connected kids mobiledevices, know bothfor MOBILE DIGITAL content markets.entertainment andmobiledigital direct-to-consumer as well ashighermargins. This allows usto diversify andbuildbroader recurring revenue streams across ourtoy, drives andinturn highergrowth,brand equity alternative revenue streams from licensing andmerchandising, contentcompelling andengaging kids andcombining that withretail initiatives suchastoys helpsoptimize Through suchasPAW thesuccess ofourproperties Patrol andothers, we have proven that creating evergreen, At thecore to create ofSpinMaster isourability engaging kids’ for storytelling multiplatform consumption. Paramount. We hopethat PAW Patrol willbethefirstofmany feature filmsinthefuture. film, withtheannouncement ofthePAW Patrol Movie plannedto launchintheatres in2021anddistributed by SVOD,Nickelodeon; suchasNetflixand AVOD, suchas YouTube. onourfirstWe are foray embarking into feature ofourstrategy willcontinuepart to expand into more content for bothtelevision withbroadcasters suchas with thebestcontent intheindustry. creators properties As ofdiverse to andcomplementary buildaportfolio arenaentertainment through multipleavenues, brands andthrough includingourown partnerships proprietary successful franchise development suchasBakugan andPAW Patrol. We continue to grow ourpresence inthe for SpinMaster.ongoing priority through Compelling amulti-platform storytelling content strategy hasledto Telling stories andcreating engagingthat characters resonate andendearing around theworld isan withkids ENTERTAINMENT Gross Product Sales 1 outside North America to America 39.3%ofGross Product outsideNorth Sales Sago Mini three Mini years andSago agoprovided uswithastrong brand presence in 1 , upfrom 35-40%whenwe went publicin2015 1 increased approximately strong salescontributions 7%,withvery from . For Mini andSago years, we’ve beenstudyingplay 1 in North America declined 5.4%. In 2019,we declined5.4%.In grew America in North 1 from 36.5%in2018.Despite this

LETTER TO SHAREHOLDERS 5 Spin Master Corp. LETTER TO SHAREHOLDERS 6 Spin Master Corp. u w ae nhrd y h psin n cmimn dmntae b or em ars te organization. the across teams our by demonstrated commitment and passion the by anchored are we but employees. We are at thebeginning andwe ofourCSRjourney recognize that there ismore work to bedone, we havereport, chosento focus onfour keyareas: ourproducts, ourenvironment, andour ourcommunity develop andcommunicate withinthearea of ourefforts (“CSR”). CorporateResponsibility Social For ourfirst for ourlong-term sustainability. Lastyear, we madeacommitment to ourshareholders that we would formally andultimately ourplanet. our vendor partners The needto operate inasociallyresponsible manneriscritical ourdecisions andoperations havemindful oftheimpact onouremployees, ourcustomers, consumers and addition, we have always hadastrong senseofcorporate socialresponsibility andrecognize that we mustbe we do,everything we have always challengedourselves to offunandimagination. pushtheboundaries In As aglobalorganization, we understandthat operating businesscomes athriving withresponsibilities. In CORPORATE SOCIALRESPONSIBILITY cash flow profile. We continue to seeksmall, mediumandlarge acquisitions leveraging ourstrong balance sheetandattractive free Spin Master’s ofgamesever since. portfolio rights to Hedbanzfor theUSandMexico in2011,whichhasbecome oneofthemostsuccessful titleswithin Also, theyear during we completed theacquisition oftheglobalrightsto Hedbanz. We originally acquired the company was founded in1994andthe11thsince itsinitialpublicoffering in2015. lines,product innovation. aswell asfor further The our21stacquisition marks since acquisition the ofOrbeez our vibrant business, Activities providing for recurring revenue integration andopportunities into ourexisting pattern that hasstimulated theimaginations ofmillionschildren globally. strengthened The acquisition further theyearDuring we completed theacquisition oftheaward-winning brand, Orbeez™ auniversally appealingplay ACQUISITIONS expanded licensing, now includingthelaunchavailable ofplushby GUNDandananimated on short YouTube. promotes playful for learning preschoolers. Toca Boca ended play at home. School, whichwilllaunchthisspring, Sago isanewdigital education platform that product initiative opensupaninnovativenew direct-to-consumer way for familiesto promote creative, quirky, open- launchedanewphysical Mini Sago box that subscription complements thedigital products. subscription This 2020,weIn are brand. February, Mini excited undertheSago In to services belaunchingnewsubscription digital toys content. andentertainment contententertainment creators andappteams work together to to merge lookfor physical opportunities toys, franchises that havecross-category astrong presence inboth physical anddigital products. toy Our developers, encompassing physical anddigital products, toys. entertainment We are developing Toca Boca into Mini and Sago combine itwiththedigital capabilitiesofToca Boca base ofusersto visionisto buildon.Our takeourproven capabilitiesintoys, and gamesandentertainment Together, Toca Boca Sago Mini have Mini andSago more than20millionmonthly usersworldwide, active giving usastrong to provide an end-to-end experience to for Mini provide kids andSago anend-to-end willcontinue to expand the Toca LifeWorld universe, with record ofsuccessful innovation, gives usconfidence indelivering ourlong-term organic Gross Sales Product and depthofourinnovative brands, franchises andmobiledigital entertainment portfolio, alongwithourtrack businesswithtoysentertainment andgames, franchises anddigital entertainment toys. The strength, diversity As we lookforward, we encourage you to thinkofusnotonlyasatoy company, butasanintegrated consumption landscape. position putsusonsolidground aswe navigate andanever-evolving content through achallenging industry We are confident inourstrategy and remain grounded inourvision for long-term growth.Our strong financial operating leverage. we investments willcontinue making to drive longterm operational excellence even aswe continue to lookfor employees from around theglobe, whoare already identifying ways to improve theway we operate. addition, In 2020,weIn willfocus onstrengthening ourcore. We have teams, working establishedcross-functional leveraging achieve sustainableandprofitable growth. andconsumers at thehighestlevel ourretail possible, partners weservice mustdosoinaway that allows usto growing complexities ofourglobalbusinessandaevolving consumer landscape.. While that itiscritical we As we lookaheadto 2020,we recognize that ourprocesses, systems, needto structure evolve basedonthe LOOKING AHEAD Lead Director WinogradCharles Chair andCo-CEO Harary Ronnen Director andCo-CEO Anton Rabie memorable experiences andfamiliesglobally. for kids we strive to buildoneoftheworld’s great children’s companies andto entertainment create everlasting and On behalfoftheboard andmanagement team, we thankyou for ofSpinMasteras your continued support execution andemployees focused ondelivering ourvision. growth target ofmidto highsingledigits. We have adisciplinedfinancialplan,leadership team focused on 1

LETTER TO SHAREHOLDERS 7 Spin Master Corp. 8 Spin Master Corp. SPIN MASTER CSR AT in andminimize our environmental impacts. employer, enhance the communities we operate to grow our business, we seek to beaninclusive through the timeless magicof play. As we continue Spin Master bringskidsand families together CSR VISION

CSR FOCUS AREAS CSR families today and for generations to come. impact of our operations, for children and minimizeof the environmentand to the We recognize the need to actinsupport OUR ENVIRONMENT the highest product quality andsafety. regulated industry andare committed to company, we operate inahighly As aleadingchildren’s entertainment OUR PRODUCTS

plastic by 2025. reduction in 50% footprint in2020. of our self-generated emissions 100% OFFSET of children and families. and toy donations we helpenrich the lives Through philanthropic giving, volunteering Giving back isanintegral partof our culture. OUR COMMUNITIES inclusive work environment. them to develop andgrow inasafe and and we are onajourney to better enable People are oneof our greatest assets OUR PEOPLE pulp trays by 2025. ofblister forms to 100% Move HIGHLIGHTS 2019 CSR www.spinmaster.com2020. inApril company’s inaugural report will beavailable on targets against which to mapour progress. The areas of opportunity and,insomepillars,set transparency onour four CSRpillars,identified developed aCSR framework, took steps to provide the organization. This past year, the company 2019 with cross-functional representation across Spin Master embarked onitsCSRjourney in wins since2000. nominations and30 Toy of the Year (TOTY) Industry Association 110 ToyReceived AWARDS TOTY 2019 2018 2019 2017 2019 2018 had arecall inover adecade. past three years andhasnot overrecalls the any consumer has not had The company RECALLS ZERO produced annually. and toysGames 248M executed our first diversity survey to an inclusive workplace. In2019, we Spin Master iscommitted to cultivating our diversity andinclusionplansin2020. furtherplan to findings, on thesewe Based employees are appropriately represented. our current team andensure that all better understand the compositionof FAVOURABLE ENGAGEMENT SURVEY HIGHLIGHTS 2019 EMPLOYEE ENGAGEMENT 2019 2018 2019 2017 2019 2018

2019 2018 2019 2017 2019 2018 2019 2018

70%

in 2019. Program audit Ethical Toyan facilities underwent of manufacturing 100% 77%

2019 2018 (number of offices participating) SHARINGCARING AND (number of products) IN-KIND DONATIONS CASH DONATIONS as CaringandSharing. in anannualevent known during the holiday season to provide toy donations offices around the globe with localcharitiesat its Spin Master partners conflict or natural disasters. disadvantagedto war,due who have beendisplacedor 450,000 toysfor children Movement, we have donated ofinception Thethe Toy philanthropic giving.Since important partof our overall In-kind donations are an of children. dedicated tothe well-being support organizations have increased 36% YoY, Our cashdonations, which 2019 2018 2019 2017 2019 2018 2019 2018 2019 2018 $720,000 6 106,694 $978,000 238,000 11 2019 2018 2019 2018 2019 2018 2019 2018 SPIN MASTER CSR AT in andminimize our environmental impacts. employer, enhance the communities we operate to grow our business, we seek to beaninclusive through the timeless magicof play. As we continue Spin Master bringskidsand families together CSR VISION

plastic by 2025. reduction in 50% footprint in2020. of our self-generated emissions 100% OFFSET of children and families. and toy donations we helpenrich the lives Through philanthropic giving, volunteering Giving back isanintegral partof our culture. OUR COMMUNITIES inclusive work environment. them to develop andgrow inasafe and and we are onajourney to better enable People are oneof our greatest assets OUR PEOPLE pulp trays by 2025. ofblister forms to 100% Move HIGHLIGHTS 2019 CSR www.spinmaster.com2020. inApril company’s inaugural report will beavailable on targets against which to mapour progress. The areas of opportunity and,insomepillars,set transparency onour four CSRpillars,identified developed aCSR framework, took steps to provide the organization. This past year, the company 2019 with cross-functional representation across Spin Master embarked onitsCSRjourney in wins since2000. nominations and30 Toy of the Year (TOTY) Industry Association 110 ToyReceived AWARDS TOTY 2019 2018 2019 2017 2019 2018 had arecall inover adecade. past three years andhasnot overrecalls the any consumer has not had The company RECALLS ZERO produced annually. and toysGames 248M our diversity andinclusionplansin2020. furtherplan to findings, on thesewe Based employees are appropriately represented. our current team andensure that all better understand the composition of executed our first diversity survey to an inclusive workplace. In2019, we Spin Master iscommitted to cultivating FAVOURABLE ENGAGEMENT SURVEY HIGHLIGHTS 2019 EMPLOYEE ENGAGEMENT 2019 2018 2019 2017 2019 2018

2019 2017 2019 2018 2019 2018 2019 2018

70%

in 2019. Program audit Ethical Toyan facilities underwent of manufacturing 100% 77%

2019 2018 CASH DONATIONS (number of offices participating) SHARINGCARING AND (number of products) IN-KIND DONATIONS of children. dedicated tothe well-being support organizations have increased 36% YoY, Our cashdonations, which as CaringandSharing. in anannualevent known during the holiday season to provide toy donations offices around the globe with localcharitiesat its Spin Master partners conflict or natural disasters. disadvantagedto war,due who have beendisplacedor 450,000 toysfor children Movement, we have donated ofinception Thethe Toy philanthropic giving.Since important partof our overall In-kind donations are an 2018 2019 2018 2019 2017 2019 2019 2018 2019 2018 $720,000 6 106,694 $978,000 238,000 11 9

Spin Master Corp. 2018

2019 2019 2018 2019 2018 2019 2018 10 10 Spin Master Corp. 2019 ANNUAL REPORT SPIN MASTER CORP.

2019 ANNUAL REPORT SPIN MASTER CORP.

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or in this year ef disappointing the terms consolidation redistribution fort 58.5% the in Company's 2017 of 1,551.4 1,465.6 1,657.1 its Company new , V the as 365.4 191.5 750.9 593.4 312.2 800.5 112.1 251.9 493.1 220.5 161.1 in (11.4 season. towards Austria, to 85.8 51.6 10.4 ietnam, 10.2 93.1 59.4 (a plan 2 6.7 gains/ Gross these trend

drive from non- East % ) to 3 13 Spin Master Corp. 14 Spin Master Corp. (US$ millions, Highlights 2019 was losses Adjusted Spin Master partially million Gross compound The Consolidated Results December 31, For FINANCIAL compound December 31, Net (loss)income Income tax(recovery)expense (Loss) incomebeforetax Finance costs Other expenses(income) Depreciation expenses Administrative expenses development Selling, marketing,distributionandproduct Foreign exchangegain Gross profit Cost ofsales IFRS 16.Prioryearresultshavenotbeenrestated. retrospective approach. 1) (All amountsinUS$millions) Revenue The CompanyadoptedInternationalFinancialReportingStandard16Leases("IFRS16"),ef following the

and Product or of • • • • • • • three 18.6% EBITDA fset $92.8 million other annual annual growth for PERFORMANCE increased Adjusted adjusted Adjusted 34.8% earnings non-IFRS measure), Administrative Gross profitasapercentage million Net Selling, Revenue tables by lower except pershareinformation) months 2018: 2019 and2018 Sales the threemonthsendedDecember31,2019

in As aresult,theCompany'sconsolidatedfinancialstatementsforthreemonthsandyearendedDecember31,2019reflectleaseaccountingunder non-recurring loss

2018, (a growth or8.5% ofrevenuefrom$122.6 provide non-IFRS marketing, (a was Net Income per share EBITDA Net of its , adecrease and administrative expenses. primarily non-IFRS $473.5 revenue rate. rate. Loss $17.2 expenses . a year summary : items,

Over (a measure) (a of $0.1 distribution million driven million ended non-IFRS revenue from of $6.2million non-IFRS measure) the of $70.7 Adjusted increased $1,551.4 1 (diluted). of

past by

increased or December 31, decreased Spin Master of decreased increased loss million measure) and 10 revenue

million measure) have Net years, to per orearnings million product Income $66.6 or29.6% by increased or43.2% share to

by gross decreased to ’ 14.3% 164.8 226.1 247.4 473.5 the decreased s (17.2 (24.7

66.6 $219.0 in was (7.5) (0.1) 2019 14.7%. consolidated 2019 3.2 7.5 8.8 million development (a 2017 Company’ of ) )

profit non-IFRS . $7.8

fective January1,2019andimplementedthestandardusingmodified per share from from$163.5million Three MonthsEndedDecember31 from $0.17 ascomparedtothesame compared million

to or and million $1,581.6 to 14.1% $414.3 $1,657.1

47.8% from48.0% s compared $6.7 increased results

Gross measure) or 122.6 199.0 215.3 414.3 expenses of $0.06 2018 (13.4

11.4 68.2 14.1

or 13.8% (0.7) of 2.7 2.9 5.3 million to million million loss revenue Product ) million for the 1

distribution the (diluted). of for

per or three . in2018.

net increased in In revenue, the

three 1.4% to 2019 from share Sales constant $ Change income . $1,691.2 year months (28.6 (10.2 (38.8

13.3 42.2 27.1 32.1 59.2 months $68.2 . (1.6) of 0.3 8.2 3.5 Over of have and period in ended revenue, compared to ) ) ) $0.08 of currency selling $164.8 million

and the million grown $1 and December 31,

1.4 same compared year year 2018: from % Change

expenses,

(1,171.4 , or to at million million terms a (250.9 (377.8 (275.2 (99.3 16.5% $303.6 period, a 34.4 10.3 66.0 13.6 14.9 14.3 10.5% ended ended (2.3)% $35.2 7.4%

)% )% )% )% )% (a or or to % % % % % % 4 .

Highlights (US$ millions, Net income Income taxexpense Income beforeincometaxexpense Finance costs Foreign exchangeloss(gain) Other expenses(income) Depreciation expenses Administrative expenses development Selling, marketing,distributionandproduct Gross profit Cost ofsales IFRS 16.Prioryearresultshavenotbeenrestated. retrospective approach. 1) Revenue (All amountsinUS$millions) The CompanyadoptedInternationalFinancialReportingStandard16Leases("IFRS16"),ef • • • • • • • • • • • for 25.0% Gross profitasapercentage (a non-IFRSmeasure), Revenue Adjusted share (diluted). Net Administrative Free Selling, & PuzzlesandPlush The assetsareincluded agreement property to $163.5 Free Cash to $303.6 brand, On percentage In Adjusted except pershareinformation) the year addition As aresult,theCompany'sconsolidatedfinancialstatementsforthreemonthsandyearendedDecember31,2019reflectleaseaccountingunder December income Cash ofrevenuefrom$331.9 pursuant marketing, EBITDA associated Net of million million Flow for Flow (anon-IFRSmeasure) to ended December31, of revenue,administrative was $1,581.6 Income the total 4, expenses (a

to $64.3 or 18.6% or $1.60

2019, Orbeez (a non-IFRS cash an distribution non-IFRS with (a product category million asset million the non-IFRS revenue consideration in the pershare(diluted). acquisition decreased the . Company measure)

purchase decreased of

Hedbanz measure) or Activities, million and revenue decreased by $0.62 measure) 2019 ascomparedtothesame product on by or20.3% acquired of . was expenses agreement

was $84.6million 1,581.6 per $9.4 brand decreased by December decreased to $30.5 Games & 247.9 395.4 785.0 796.6 negative 64.3 20.7 85.0 11.7 32.6 2019 3.1% 5.8 6.6 share was development million. 2.1%. on the . million fective January1,2019andimplementedthestandardusingmodified $92.8

decreased to from for (diluted) August intellectual Puzzles to $22.6 4, The Y total $219.0

2019, ear EndedDecember31 49.6% from50.2% $1,631.5 million to 1,631.5 assets comparedto million $247.9 expenses 154.9 208.4 278.4 331.9 818.8 812.7 9, purchase (14.7 2018 compared 53.5 14.7 and Plushproduct (9.3) 9.4 the million

2019, or property 15.7% from17.1% ) 1 are

$0.90 million compared Company million included

or pursuant period in increased consideration to per 13.8% . $129.5 million associated

In $ Change $154.9 from . (123.4 share constant to (90.6 (32.8 (30.5 (33.8 (16.1 (49.9 acquired 15.1 21.3 17.9 63.5 in 2.3

negative of to the 2018 $278.4 category to ) ) ) ) ) ) ) revenue, (diluted) million a . Activities, $395.4 of share with : currency the . $15.2 $1 million

. the or intellectual 1.5 % Change compared compared purchase million 1.51 (162.4 (144.9 121.8 Orbeez Games (58.5 (61.3 (59.2 (11.0 million. million 24.5 19.1 . (4.1)% (2.0)% (3.1)% terms As per

)% )% )% )% )% )% or % % % 5 a . 15 Spin Master Corp. 16 Spin Master Corp. Other marketed bythird percentage revenue compliance the Sales Gross ProductSalesin in Party was Gross 1 The For Revenue months ended Gross million impact Gross million Gross Puzzles portfolio, million products, of Gross increase Gross ProductSales Outdoor Pre-School andGirls Boys Remote ControlandInteractiveCharacters T Other revenue T Sales Activities, Games&PuzzlesandPlush (All amountsinUS$millions)

See “Non-IFRSFinancialMeasures”. otal Revenue otal NetSales fset continued the threemonthsendedDecember31,2019 driven following Action andConstruction Allowances by Allowances , . Product revenue Product Product Product Product or 18.9% of primarily The Popteenies and was sales partiallyof $2.6 primarily of GrossProductSales,Sales increase charges app primarily expansion table million Sales 1 December 31, Sales of Owleez Sales Sales Sales decreased 1 to $553.3 due revenue partially parties usingSpinMaster increased andT provides by fset 1 increased to or in in in in was from driven increases lower Boys Remote 0.6%. Outdoor Pre Activities, by decreases in , Monster from wisty of driven million. by Europe customers School fset by a by Action

sales 2019 Excluding $1.3 T summary by oca Petz. $24.7 increases Control by in decreased primarily $85.2 Games P and2018: and Jam RC,JunoandP million of lower sales Boca and A and W Hatchimals million in Russia, attributable Patrol million Girls and the Construction of Boxer and

in Allowances or & Puzzles by Spin Master ’ by $0.5million impact Bakugan s owned

Interactive or Sago increased 3.9% and increases

or which of Bunchems. and Fugglers 29.3% , 18.3% while sales Mini, ascomparedtothesame of to to intellectual foreign and and have increased

$31.9 increased to the 152.4 114.8 106.5 473.5 162.1 441.6 109.1 550.7 ’ Characters , 2019 by A Zoomer, of s partially 14.9 31.9 to in W Patrol $109.1 Monster revenue Plush Candylocks or $13.3 higher $550.7 Company's Kinetic . million exchange, 3.2% Three MonthsEndedDec31 by of property increased million Luvabella million 1.7% to Sales fset Jam million to$14.9million RC and Sand , $56.9 decreased driven . by and as details ,

Gross Allowance operational 139.1 107.9 414.3 145.2 381.1 465.5 or , 2018 primarily .

increased 15.4 57.9 33.2 84.4 with 19.8% from18.1% million Cool well Universe 9.6% by and by an as Product $16.9 by by decreased Maker, period in Air

or to unfavourable initial product $1.4 driven . rates Hogs 98.3% royalty $152.4 , partially performance $ Change million shipments Sales million Gund and by also

2018: 13.3 56.9 59.2 16.9 60.5 24.7 85.2 category to (0.5) (1.4) (1.3) income television million

higher or . of an $1 increased

and declined, or fset foreign 1 14.8 increase 1.6% 1.3% . of from the issues. by The

for markdowns, DC million distribution % Change decreases

exchange Games to to the products increase by

licensed partially $106.5 $162.1 in 98.3 14.3 11.6 15.9 29.3 18.3 (3.2)% (1.3)% (3.9)%

$87.8 9.6 As three . non- The % % % % % % % & 6 a ended The For Luvabella P Gross in partby exchange DreamWorks Gross T exchange Action andConstruction product driven Gross sales Gross 1 0.3% to As 1 three monthsended The followingtableprovidesasummaryofSpinMaster decrease impact to T T Other revenue Sales Outdoor Pre-School andGirls Boys Remote ControlandInteractiveCharacters Activities, Games&PuzzlesandPlush (All amountsinUS$millions) Gross ProductSales See“Non-IFRSFinancialMeasures”. See“Non-IFRSFinancialMeasures”. North Europe (All amountsinUS$millions) Rest ofW Gross ProductSales wisty Petz. A otal NetSales otal Revenue 55.8% W a the year following percentage Action andConstruction Patrol of Allowances America Product Product Product by Product December 31, of category 43.9% compared Owleez

increases in orld , Party was declines in $16.7 impact impact the and ended December31, Dragons table Sales primarily Sales 1 Sales Sales prior 1 million , and Popteenies of initial of partially of in provides total $0.6 1 decreased Hatchimals,Bunchems 1 December 31,2019 year in in initial $3.2 in 2019 and2018 Monster , Europe Rest shipments attributed or Monster North product category million. Gross . to 44.2% International 1.0%. of million. shipments

fset of and a America Jam increased W summary by Product

The Jam by Excluding orld Boxer. to $16.8 of The intheprior products, increases 2019 ascomparedtothesame lower increase :

increased DC products, of increased sales, increase Sales, million and2018: DC 308.8 164.2 550.7 by of . 2019 licensed 77.7 sales the Spin Master $35.1 andBoxer licensed Bakugan, was comprised in

year or the Kinetic impact by of Bakugan, 1.0% was by % ofGPS million primarily Hatchimals $1.2 North products, . $48.9 100.0 products, 56.1 29.8 14.1 1,581.6 1,463.7 1,691.2 primarily to of Kinetic Sand ’ . s GrossProductSalesbygeographicsegmentforthe million ’ 117.9 227.5 516.2 331.4 299.3 457.7 s

2019 or America of $1,691.2 86.6 foreign % % % % revenue Monster million Three MonthsEndedDec31 due 27.2% the and of

Sand in or fset Europe to which driven the 1.6%

exchange, Cool

segment or increases million to 259.9 129.1 465.5 and 2018 , in Jam 76.5 Remote P $164.2 18.8% Y period in A part was ear endedDec31 Maker to 1,631.5 1,509.6 1,708.0 and by W details and 121.9 198.4 517.5 133.1 505.4 455.5 , 2018 $77.7 with 96.5 Patrol increases of by

increased Rest % ofGPS to million in Gross fset DreamWorks Control as an $308.8 declines Bakugan, 100.0 by million 55.8 27.7 16.5 2018 , of well unfavourable the by product , W Product with % % % % declines Games : $ Change and orld as in 0.3% , million with in an Bakugan, (206.1 $ Change sales Monster 198.3 Interactive (49.9 (45.9 (16.8 segments, 29.1 Hatchimals category (4.0) (1.3) (9.9) Dragons unfavourable 2.2 a to Sales . & in favourable The 48.9 35.1 85.2 ) ) ) ) 56.1% foreign Puzzles of 1.2 Hatchimals Owleez Jam increase was P

for in A Characters

% Change decreased % Change compared , exchange W products, the portfolio, Zoomer, the flat. 149.0 (40.8 (10.2 foreign foreign , 14.7 Patrol (3.1)% (3.3)% (3.0)% (1.0)% (0.2)% 18.8 27.2 18.3 0.5 of Boys 1.6 year was The and fset )% )% % % % % % % % 7 , 17 Spin Master Corp. 18 Spin Master Corp. Popteenies foreign Gross Gross of Hatchimals exchange and compliance Zoomer, Gross Rock andtheGames&Puzzlesportfolio. Gross merchandise. Allowances, DreamWorks foreign Gross As 1 Gross million Other the 2.8% to to Gross million primarily DC year ended products Gross ProductSalesin Universe in Juno andP The from Sales T Rest ofworld Europe North (All amountsinUS$millions) See “Non-IFRSFinancialMeasures”. otal GrossProductSales fset Party 63.5% a continued licensed increases following T percentage by America Allowances oca BocaandSago , , Product Product Product Product revenue Product Product Product exchange exchange primarily primarily Popteenies 39.3% compared

driven increases the marketed and increases in impact , BunchemsPartyPopteenies A December 31, the and charges as W Games products, Dragons expansion table Sales Sales Sales Sales in Sales Sales Sales decreased Patrol RCandincreases by a percentage prior due due Luvabella of DreamWorks of impact impact increased increases by in MonsterJam total provides and $14.3. to in in in in in & year in in to from third . Remote Pre declines North Europe Activities, Puzzles Boys Rest partially Outdoor increases in T Rusty Gross in of of . 1 to 36.5% International Mini 2019 and2018 , parties by Growth School Europe $1.9. $0.5. customers wisty Petz. of in of America Action by a of GrossProductSalesincreased $4.0 fset Rivets Gund, increased Dragons Control W

summary Product and increased in portfolio, $29.1 of decreased The The Games orld Hatchimals using fset in and was and in intheprior million products, and Bakugan, , decrease Kinetic decrease decreased decreased part partially million Girls and by attributable Russia, 1,026.3 1,691.2 primarily , sales, Sales, High Spin Master in & Cool 234.5 430.4 by Star of 2019

: decreases and Boxer or by Puzzles Interactive Monster

decreased by $9.9million $54.1 Spin Master Sand

, T or Bakugan 3.3% Zoomer, sales W Maker, television comprised ech of the year Monster was was which 14.7% ars fset by driven by % ofGPS million and North Construction . $58.9 and to to primarily driven $12.0 Jam RC. licensed ’ of by . 100.0 s in have P Characters 13.9 25.4 60.7 $1 owned Cool , DreamWorks by

the Luvabella A to Bakugan by sales Plush Jam ’ Flush distribution

America 17.9 W s or

$1.3 million of % % % % $227.5 million or sales primarily Gross Company's higher 14.4% Patrol Maker, the driven and merchandise, of intellectual 10.2% increased million million Force, Y

Candylocks Europe increased 1.9% to13.5% or of

ear endedDec31 and or 1,085.2 1,708.0 DreamWorks and decreased Product million segment

Sales and to 5.4% Bakugan, 246.5 376.3 of 2018 by by 4.9% revenue. to$86.6 ,

$430.4 fset or Air Dragons, Owleez driven Boxer increases declines declines T 0.2% operational wisty

and , Allowance by to Hogs

property in primarily to Sales by $1,026.3 $2.2 decreased part , Rusty $234.5 % ofGPS million , Rest by

A by

Owleez to $198.3 Petz, million , Fugglers wesome partially from1 100.0 $206.1 in $516.2 Dragons in by million 63.5 14.5 22.0 decreased by in , Hatchimals Hatchimals of partially Rivets declines , with driven rates partially million Monster geographic million % % % % performance . W million and 1.6%. 2.8%

orld million million or of , Kinetic Bloss'ems, and

an and and fset $ Change and 0.5% Monster by , , of segments, with in

unfavourable with royalty or of to Star fset higher , by an ,

Jam initial , Bunchems, (58.9 (12.0 (16.8 or fset Fugglers, P Party 54.1 driven 149.0%

60.7% to A an sales an segment 40.8% Sand andJuno increase by W

W $457.7 issues. ) ) ) by Jam products unfavourable unfavourable Pre shipments income app ars Patrol markdowns, Popteenies, by declines

% Change of compared

increased

to to Cool products licensed declines Owleez revenue partially million foreign $331.4 $299.3

in Kinetic for , 14.4 (5.4)% (4.9)% (1.0)% Sales Party non- from and and the of % in 8 . , , revenue Selling For For Gross Profit 2018: domestic increased Product projects attributable Marketing Pre-School expenses Distribution expenses percentage Selling, of As a into East expenses expenses, expenses Gross profitas%ofrevenue Gross profit (All amountsinUS$millions) Revenue (All amountsinUS$millions) T Product development Distribution Marketing Selling Gross profitas%ofrevenue Gross profit Revenue (All amountsinUS$millions) otal fset the the this Coast percentage by expenses three year in development Marketing, increased new higher sales and and as apercentage attributable to expenses the higher distribution and Girlsproduct to expenses of

ended 7.9% from5.7%,dueto months as comparedtothesame facility higher Remote higher experiential revenue, compared gross margins of increased Sales to revenue, December 31, . Distribution Sales increased ended Contributing domestic 9.8% from5.4% to expenses increased centre Control Allowances, start-up gross to Allowances, initiatives, of by December 31, gross direct in categories. revenue $13.9 and due tochanges inventory by profit the increased by and performance and to $3.8 2019, profit Interactive U.S. import $24.0 million higher the increased partially decreased . decreased to Product partially 164.8 million and 46.5 72.6 37.5 decreased gross increase 2019 levels period in 8.2 million 2019

sales or by repackaging the 58.9%

$0.5 Characters or in product of profit , fset sales Development in consolidation gross

primarily fset to or 5.5% anticipation were issues revenue million 2018: by

49.6% 106.7% to to 15.3% from16.6% 1,581.6 decreased by 15.3 34.8 of licensed 226.1 473.5 profit % of 785.0 $37.5

47.8% lower 1.7 9.8 7.9 to 47.8 49.6 2019 increased 2019 costs higher % % % % % mix. associated $72.6

product in or Three MonthsEndedDec31 % % from increased

million to merchandising the

6.5% from of and

of Expenses $46.5 inventory Three MonthsEndedDec31 million by the U.S. 50.2% products. 122.6 U.S./China net categories, 22.5 68.8 23.6 increased . 48.0%, 2018 to $33.8 7.7 Selling Gund, Y with 1,631.5 million margin $8.2 Distribution by ear endedDec31 , 199.0 414.3 . 818.8 , primarily 48.0 50.2

2018 2018 $27.1 primarily storage million the establishment as primarily SwimW million expenses , % and % duties from revenue tarif primarily compared of million fset 16.6 29.6

influencer % of 5.4 5.7 1.9 fs or as , television expenses and ays due primarily and and 4.1% % % % % % due in a $ Change $ Change as

or part result and due transportation to brokerage the a 13.6% to $ Change to to (33.8 (49.9 percentage 27.1 59.2 N/A higher Cardinal N/A by higher expenses. to distribution the shift $785.0 due of of as 24.0 13.9 42.2 higher lower 3.8 0.5 ) ) a to increased same a to towards new $226.1 percentage freight-related freight-related fees, the warehouses million expenses operational % Change % Change % Change of expenses, third Marketing period revenue. timing revenue partially 106.7 million 13.6 14.3 higher (0.2)% media 58.9 34.4 (0.6)% (4.1)% (3.1)% . party 5.5 6.5 As % % % % % % % in of of in 9 a . 19 Spin Master Corp. 20 Spin Master Corp. expenses revenue revenue Distribution expenses domestic Marketing Adjusted $66.6 Product For attributable Selling of revenue decreased related Administrative Expensesascomparedtothesameperiodin expenses of expenses higher into East (All amountsinUS$millions) Selling Marketing T Product development Distribution Adjusted administrativeexpenses (All amountsinUS$millions) 5) See“Non-IFRSFinancialMeasures”. of 2018. Prior yearresultshavenotbeenrestated.Onaproformabasis,theimpactofIFRS16on administrativeexpenseswouldbeadecreaseof$3.3millionforthefourthquarter retrospective approach. 4) 3) Netbaddebtrecoveryrelatedtothebankruptcydeclarationandliquidationproceedings of August 1,2018,sharebasedcompensationincludesexpensesrelatedtotheCompany's Long-T 2) Relatedtoexpensesassociatedwithsubordinatevotingsharesgrantedequityparticipantsatthetimeofinitialpublic 1) Restructuringexpenseprimarilyrelatestopersonnelrelatedcosts. Restructuring expense Adjustments: Administrative expenses Bad debtrecovery Share basedcompensation otal The CompanyadoptedInternationalFinancialReportingStandard16Leases("IFRS16"), ef projects the this Coast million professional expenses expenses three development increased increased new administrative sales and as apercentage in theBoys attributable expenses to 14.1% decreased distribution in to expenses . The months facility the experiential higher compared As aresult,theCompany'sconsolidatedfinancialstatementsforthreemonthended December31,2019reflectleaseaccountingunderIFRS16. 3 and decrease Remote increased to to services . from16.5%. increased 1 Contributing lower domestic ended 7.1% from5.5% 6.2% from3.7% Action expenses to to 13.4% increased centre expenses start-up 2 initiatives, to Control of bad was expenses. December 31, by and Construction direct in revenue by debt inventory from14.9% primarily the $23.0 increased and performance by 5

increased $0.8 to and U.S.

import recovery $36.9 partially the , . million increased Adjusted due million 112.0 155.0 395.4 Interactive and 30.3 98.1 due increase 2019 levels million sales by 2019 to increased . by the to

of related

or $2.8 or and fset lower $1.6 in consolidation administrative , 25.8% primarily 0.6% to 9.8%

administrative or anticipation were issues Characters revenue Activities, Games&PuzzlesandPlushproduct by million to million 60.3% restructuring 25.0 lower

% of to 7.1 9.8 1.9 6.2 TRU.

to higher sales from9.5%. $155.0 63.3 66.6 % % % % %

(3.5) (0.7) 2019 associated in or 0.9 $1

or influencer TRU. to Administrative fective January1,2019andimplementedthestandardusingmodified the 12.0 10.2% erm IncentivePlan("L of 2.6% of licensed $98.1 of and expenses Y inventory the expenses U.S. ear endedDec31 million 154.2 331.9 U.S./China Three MonthsEndedDec31 2018 expenses, million 89.0 27.5 61.2 2018 Outdoor

to Gund, to million with Distribution expenses $63.3 : $30.3 , primarily . 2018 (a 61.7 68.2 storage (4.5) (5.0) products. the establishment Selling 3.0 SwimW decreased expenses , non-IFRS TIP"). product of million primarily revenue million tarif 4 fset 20.3 and % of 5.5 1.7 3.7 9.5 fs as fering ("IPO")andshareoptionexpense. expenses expenses and ays in . and , % % % % % The market part a categories,

as primarily $ Change measure) by due and result transportation the a $ Change increase by $1.6 percentage Cardinal to (2.1) (1.6) increased shift research. 1.0 4.3 1.6 as of as 23.0 36.9 63.5 of higher 2.8 0.8 million due a increased a a as towards of new percentage percentage was fset a category to warehouses percentage operational

% Change % Change of or expenses, third Marketing personnel the driven by revenue 2.3% (70.0 (22.2 (86.0 higher media timing 25.8 10.2 60.3 19.2 (2.3)% lower 2.6 party 0.6 . As of 10

)% )% )% by % % % % % to of of % liabilities related million For to For ef Income tax(recovery) $13.4 million December 31, For Foreign interest income. due For Finance Costsas to administrative December 31, from Net Net (loss) driven year Adjusted Administrative acquisition incurred gains/losses of due Bad debtrecovery(expense) Restructuring expense Adjustments: Share basedcompensation 5) See“Non-IFRSFinancialMeasures”. year resultshavenotbeenrestated.Onaproformabasis,theimpactofIFRS16onadministrativeexpenseswouldbedecrease$1 retrospective approach. 4) the thirdquarterof2017. 3) Netbaddebtrecovery(expense)relatedtothebankruptcydeclarationandliquidationproceedingsof based compensationincludesexpensesrelatedtotheCompany'sL 2) RelatedtoexpensesassociatedwithsubordinatevotingsharesgrantedequityparticipantsatthetimeofIPOandshareoptionexpense. related tofacilityclosures. 1) Restructuringexpenseprimarilyrelatestopersonnelrelatedcosts.Inthesecondquarterof2019andfourth2018,restructuringexpensesalsoincludedcosts Administrative expenses (All amountsinUS$millions) Adjusted administrativeexpenses fective The CompanyadoptedInternationalFinancialReportingStandard16Leases("IFRS16"),ef an a the the the the the three loss to gain to ended net income million . . by dif finance three Gund, lower to theCompany'shedging year three The for income exchange in income administrative denominated of income of December 31, 2018, the $9.3 ferent tax decrease . ended months and tax months property months For Gund SwimW expenses expenses 2019 2019 costs three As aresult,theCompany'sconsolidatedfinancialstatementsforyearendedDecember31,2019reflectleaseaccountingunderIFRS16.Prior expense of tax million other the a $1 compared as December 31, in decrease (gain) lossas

rate ended the 1 was months year relating 1.4 ended ended 2018. ays rates ofsubsidiaries was compared and non-recurring in expenses . expense Company (a is Foreign million 2 as apercentage a $7.8 of ended 2019, 3 and 24.4% December 31, primarily operations currency non-IFRS $2.7 During December 31, December 31, ended to in million to . Cardinal lease finance incentive Excluding December 31, million 5 exchange the same decreased as comparedtothesame to compared 2019 programs. had compared the December 31, due other the same items, , measure) as liabilities a related year . , an costs The decrease administrative to business 2019 of compensation than income operating share-based 2019, TIP Adjusted 2019, bad (gains) period in ended by revenue ef to . increased fective expenses to thesameperiodin2018: the $22.1 arising 25.7%. period in 2019 the debt there finance 2019 of Company December tax a percentage units functional losses , Net in other million $14.0 decreased to tax there expense 2018 from expense The expenses was

by 224.8 247.9 was compensation, (15.2 Loss rate attributed and in (8.8) 2019 2018 costs 0.9 $2.3 are was : change

million the a or order fective January1,2019andimplementedthestandardusingmodified $17.2 had ) was jurisdictions. period in higher foreign 31, currency (a 9.0% : generated (net million a increased adoption of non-IFRS an of revenuedecreased foreign decreased 2019, 30.3%

TRU duringthefourthquarterof2019,first2018and to $20.7 million or 15.7% from17.1% to in of income to administrative exchange position

223.0% the Y to the $224.8 recovery) ear EndedDec31 of restructuring the 2018: 246.9 278.4 $1 (12.2 (12.1 2018 compared exchange million of , ef by (7.2) the implementation by a 1.7 measure) fective tax Company IFRS decrease by the $0.3 4 ) ) million applicable from million the recovery

$30.5 gain compared related translation 16, million income Company loss to adjusted expenses . . of expense, The for $ Change of The 19.1%. executed . million of 1.3 millionfor2018. $0.1 fset of to 14.2% of the to $28.6

entity decrease to increase $5.8 (22.1 (30.5 $7.5 of tax 13.0 TRU to (3.0) (1.6) in of three $3.2 million million

As of net or IFRS For for $53.5 attributable rate part monetary foreign ) ) million million and million the 1 August 1,2018,share of from15.1% 1.0% income the future months was

was was by $12.1 16. restructuring compared gains/losses million year % Change

or compared compared

increased exchange to Adjusted primarily primarily primarily (107.4 . For 250.9% growth. (11.0 assets/ of $247.9 24.6 22.2 million ended ended (9.0)% to . $6.2 The the the . )% )% 11 % % to 21 Spin Master Corp. 22 Spin Master Corp. other was $92.8 Seasonality The OUTLOOK $154.9 in On a 68-70% SELECTED QUARTERL 1 Net Sales currently any of theCompany’ with thefinancialstatementsofCompany The followingtableprovidesselectedhistoricalinformationandotherdata,whichshouldbereadinconjunction

1 (All amountsinUS$millionsexceptEPS) Adjusted EBITDA Basic adjustedEPS Free cashflow Diluted adjustedEPS Basic EPS Net (loss)income Diluted EPS Revenue Gross ProductSales Adjusted Net(Loss)Income Adjusted EBITDA See “Non-IFRSFinancialMeasures”. See “Non-IFRSFinancialMeasures". particular income Company supply full yearcomparative 1 non-recurring

toward million in H2. known million . chain for factors The 1 . the expects Excluding the margin s annual 1 factors, seasonality , a higher and 1 year cause 1 1 items, decrease other 2020 1 ended end Y to share-based Spin sales occurduring 1 FINANCIAL Adjusted basis, further Gross of disruptions of the Master of $70.7million December 31, Gross the Company mid-single Product reduce Net ’ Product s compensation, INFORMA operating resulting $(0.08) $(0.08) $(0.17) $(0.17) Income (22.6) (17.2) 550.7 473.5 1.4% 2019 (7.8) 6.7 Q4 Sales 2020 digit the thirdandfourth . or 2019 Sales expects todeliver 1 (a Gross

43.2% range. results to from 27.4% 128.6 $0.90 $0.91 150.1 583.3 $0.90 $0.89 548.1 TION 2019 93.2 92.1 Q3 was non-IFRS decline 1

for restructuring COVID-19. from$163.5 Product COVID-19 $64.3 to 2020 fluctuate 17.2% in $0.19 $0.19 316.8 $0.10 $0.10 321.0 2019 18.5 55.2 19.9 10.2 Q2 the measure) is million expected quarters oftheCompany’ Sales mid-single Adjusted EBITDA is The expense, significantly $(0.12) $(0.12) $(0.21) $(0.21) (39.8) (12.5) (20.9) 240.5 239.0 2.9% expected 2019 , million 7.0 Q1 a 1 , Company decrease for resulting to . digit the be foreign (11.5) $0.06 $0.06 $0.11 465.5 $0.11 414.3 8.5% 2018 35.2 11.4 to 6.2 Q4 approximately from year range af in of expects fect Margin $90.6 quarter a exchange ended 29.0% relative second decline 149.8 179.9 117.8 $1.15 $1.16 107.9 $1.06 658.2 $1.06 620.0 2018 Q3 s fiscal COVID-19, million 1 December 31, inline to to quarter 30-32% quarter in gains/losses 14.6% $0.17 $0.17 $0.26 296.2 $0.26 31 2018 2019, 19.5 45.3 17.6 26.9 Q2

Gross year or 1.5 with 58.5% . shipments . A excluding in based

2019. majority Product 15.2% H1 (28.3) $0.22 $0.22 $0.09 288.0 $0.09 285.7 2018 43.2 21.9 8.7 Q1

2019 from and and 12 on indebtedness, also in the in Europe. On As at (Loss) Income. Facility") The LIQUIDITY The followingtableprovidesreconciliationsofnet(loss)incometoEBITDA, Income tax(recovery)expense EBITDA Income tax(recovery)expense T Depreciation andamortization Depreciation andamortization Finance costs Finance costs Bad debt(recovery)expense compensation Acquisition relatedincentive Foreign exchange(gain)loss Adjusted EBITDA adjustments Amortization offairmarketvalue Footnotes: Impairment ofintangibleassets Net (loss)income Legal settlement Share basedcompensation Restructuring expense Adjustments 1 10) 9) 8) LegalsettlementintheCompany’ 2018. 7) Baddebt(recovery)expenserelatedtothebankruptcydeclarationandliquidationproceedingsof 6) Impairmentchargesforintangibleassetsrelatingtolicenses,contentdevelopment,brandsandtrademarks. 5) RemunerationexpenseassociatedwithcontingentconsiderationfortheCardinalandSwimW 2018, sharebasedcompensationincludesexpensesrelatedtotheCompany'sL 4) RelatedtoexpensesassociatedwithsubordinatevotingsharesgrantedequityparticipantsatthetimeofCompany'sIPOandshareoptionexpense. applicable entityand(gains)lossesrelatedtotheCompany'shedgingprograms. 3) Includesforeignexchange(gains)lossesgeneratedbythetranslationofmonetaryassets/liabilitiesdenominatedinacurrencyotherthanfunctionalcurrency related tofacilityclosures. 2) Restructuringexpenseprimarilyrelatestopersonnelrelatedcosts.Inthesecondquarterof2019andfourth2018,restructuringexpensesalsoincludedcosts 1) See"Non-IFRSFinancialMeasures". (All amountsinUS$millions) would beanincreaseof$2.4million,$2.2$3.4millionand$3.3forthefirst,second,thirdfourthquarters2018,respectively Adjusted Net(Loss)Income 1) ax ef Amortization offairmarketvalueadjustmentstoinventoryrelatingtheacquisitionGundinsecondquarter2018. July The comparativeinformationpresentedfor2018hasnotbeenrestatedtheadoptionofIFRS16.Onaproformabasis,impact16on T December Company ax ef Company’ has December 31, fect ofadjustments fect ofadjustments(Footnotes2-9). 2023. 1 an for As at

9 AND CAPIT option $16.8 5 had The funding 19, s 8 December 31, primary 1, 1 $510 2018, million which Credit 1 2019, theCreditFacilitywasundrawn. 2 working 10 million s favourinthesecondquarterof2018. AL the permits source ( 4 € Facility 7 RESOURCES 3 15.0 1 Company 6 Adjustments aretaxef available capital 2019 million). of the may liquidity Company , the requirements, Q4 2019 entered be under The (17.2 Credit 16.2 16.2 (7.5) (7.5) (7.8) (0.9) (0.1) (5.3) 3.2 3.2 2.6 6.7 5.6 3.2 3.5 0.7 used is — — fected attheef European ) cash its to into Q3 2019 Facility was secured for increase 150.1 150.5 an 33.0 22.2 33.0 22.2 92.1 93.2 flow permitted TIP (4.0) (1.5) 3.2 3.2 3.4 0.2 general — — — — — fective taxrateofthegivenyear-to-dateperiod. . uncommitted Facility from Q2 2019 revolving the 24.8 24.8 10.3 55.2 19.9 40.5 undrawn. corporate acquisitions operations. ays acquisition. 2.8 2.8 2.6 2.6 3.9 7.2 3.6 5.1 total — — — — — may TRU duringthefourthquarterof2019andfirstquarters Q1 2019 capital credit be Overdraft (20.9 (12.5 21.4 21.4 (7.6) (7.6) (4.4) used 2.7 2.7 4.4 0.7 7.0 6.3 3.0 — — — — — purposes facility In and available ) ) Q4 2018 to addition, Adjusted EBITDA Facility permitted fund (13.4 25.4 25.4 11.4 35.2 42.4 (0.3) (3.0) (2.0) ("Credit 2.7 2.7 2.9 2.9 4.5 5.0 6.2 — — — including ) by working Q3 2018 Agreement as an 107.9 179.9 117.8 166.5 distributions. Facility"), 17.7 38.2 17.7 38.2 at additional 2.7 2.7 3.6 0.4 3.7 5.4 0.3 3.5 — — — December 31, capital refinancing . and Q2 2018 Adjusted EBITDA (the (15.5 which 19.6 19.6 26.9 45.3 17.6 58.2 (1.3) (3.6) Adjusted Net requirements 9.5 9.5 2.2 2.2 2.1 0.6 1.2 $200 — — — As of The "European ) Q1 2018 matures August 1, existing Facility million. 2019, 11.5 11.5 43.2 21.9 15.1 24.9 3.1 3.1 1.6 1.6 8.7 2.0 1.2 5.1 — — — — — 13 23 Spin Master Corp. 24 Spin Master Corp. through and inventory associated industries, confidence from operations television Credit ended The CASH process and Company’ The Management As at Production a Company Spin Master acquisitions. related quarter Over Capital andInvestment fourth quarter Cash atendofperiod Cash atbeginningofperiod Ef Cash atendofperiod Ef Net (decrease)increaseincash Cash atbeginningofperiod Net (decrease)increaseincash Net cashflowsusedinfinancingactivities Net cashflows(usedin)provided byfinancingactivities Net cashflowsusedininvestingactivities Net cashflowsusedininvestingactivities Net cashflowsprovidedbyoperatingactivities (All amountsinUS$millions) Net cashflowsprovidedbyoperatingactivities (All amountsinUS$millions) variable fect offoreigncurrencyexchange ratechangesoncash fect offoreigncurrencyexchangeratechangesoncash Company following to factors the December 31, Facility December 31, FLOW . fund to The the long financing, and s does product rate working could with Facility wasundrawn. by annual first such Company’ strategic primarily entertainment . believes tables term, provide has film the referenced not manufacturing three be as a production. Company’ sales, capital capital have accounts the Credit provide 2019, unamortized negatively adverse 2019 and2018 uses suf acquisitions. that quarters s Company cash to ficient Framework television expenses to Facility requirements cash property production. third incur a s the payable economic flows The summary principal and liquidity impacted as flows parties lending material plans (the interest inventories As distribution from shows, are : funding, "Production from a to conditions customers generally debt issuance to to of are institution’ operating result by investments support use manufacture, Spin Master rate its short-form decreased variable debt ongoing its are of of on products. comprised free ongoing the Facility") and amounts s activities in built servicing Canadian throughout the cash seasonal in costs were$1.0million. content, changes ’ operations, s up demand warehouse property consolidated Company operations for The with flows drawn are of and the the dollar mobile a Company’ in typically nature capital for , the to limit plant public purchase peak under (116.2 plus 115.3 143.5 115.3 151.4 and fund (31.5 (37.9 (13.7 (43.2 2019 2019 the and year 10.8 98.4 prime (5.5) Three MonthsEndedDec31 over 3.3 1.8 of cash digital of and expenditures cash Company’ its $7.7 sales at ) ) ) ) ) seasonal and . distribute the Y s the W the ear endedDec31 their product rate. primary flows equipment of orking Production million consumer on development periods toy tooling next highest hand As for s and working its capital 12 months. lines, ($10 capital products, at the for used (159.5 products. and 143.5 117.3 143.5 192.9 for (18.1 December 31, 2018 2018 children’ on 33.6 95.4 53.0 71.2 preferences, (7.4) (5.0) (0.1) levels tooling, Facility three 0.2 CAD or retailers an availability needs capital in needs ) ) as by the annual million) which months of well Cash s increased As film bear manufacturing the entertainment typically are requirements in a as production, may year basis. the flows $ Change $ Change result, interest the to under 2019, related and strategic finance loss fourth (28.2 (28.2 (65.1 (90.9 (13.9 (25.1 result (60.4 (94.5 in costs grow 26.2 10.7 56.0 43.3 from (5.4) year The 6.8 the the the the 14 to of at ) ) ) ) ) ) ) ) the million. T Cash Cash fromOperating T warehouse towards Inventories were compared continued to and higher Accrued million, primarily million The tablebelowoutlineskeyfinancialinformationpertainingtotheCompany'snetworkingcapital: Accrued liabilities T T T T Prepaid expenses Provisions andcontingentliabilities details. 3) 2) Otherreceivablesincludefilmandvideoproductiontaxcredits,royalties,commodityotherbalances.RefertoNote9ofthefinancialstatements. Advances onroyalties Inventories Contract liabilities Other receivables 1) T (All amountsinUS$millions) rade receivables, rade otal networkingcapital otal currentassets otal currentliabilities rade receivables,net rade payables Accrued liabilitiesarecomprisedofemployeecompensationliabilities,royaltiesandcommoditytaxbalances.RefertoNote14thefinancialstatementsforadditional T $266.8 rade receivablesarenetofallowancefordoubtfulaccountsandprovisionssalesallowances.RefertoNote9thefinancialstatementsadditionaldetails. purchase $98.4 flows payables at The domestic liabilities

December 31, million, growth to

investment from fourwarehousesintoone. provided increased million increase $71.2 of inventories increased 3 2 due to increased into due orders, compared net, million. 1 by at international to by in networkingcapital, Activities as increased higher 2018, primarily operating December 31, the the $ by 75.2 For in anticipation by shift $55.2 tighter to inventory purchases $13.6 the million $192.9 in by activities markets. year million sales management compared million $ 103.9 million

2019 or due toanincrease million. ended from of U.S. or 68.3% or were

34.4% of reflects 1 fset the 1.7% December 31, The to thesameperiodin2018:

$10.8 to tarif of third

in partby and the or 38.9%to$370.7million to decrease portfolio $185.3

to the fs $215.8 $129.8 and the million quarter evolving in distribution

timing million brands

lower cashincometaxespaid.

million was 2019 million for of consolidation of payments. retailer the 2019 primarily at , using at cash at December 31, three December 31, December 31, to related trend flows domestic the driven months of theCompany’ at fourth provided away accruals. December 31, by Dec 31,2019 replenishment, ended 2019 quarter 2019 lower from 2019 by 266.0 215.8 645.4 379.4 185.3 129.8 370.7 14.4 26.2 18.0 57.0 compared

December 31, compared direct 7.6 compared cash operating of s U.S. 2019 2019 compared from import Dec 31,2018 the east coast as to to to earnings activities timing well $160.6 165.6 160.6 478.6 313.0 110.1 116.2 266.8 $1 $1 orders 14.5 29.2 18.4 68.8 2019 7.0 10.1 16.2 15 as of 25 Spin Master Corp. 26 Spin Master Corp. current year Cash Financing strategy to improvements, Hedbanz million. development. to For $18.1 Cash the threemonthsand The Investing to Intangible assets Cash usedininvestingactivities T T T T Property (All amountsinUS$millions) Property (All amountsinUS$millions) T Intangible assets T Cash usedininvestingactivities otal intangibleassets otal property otal capitalexpenditures otal property otal intangibleassets otal capitalexpenditures Computer software Content development Business acquisitions Proceeds fromdisposals Other T Other T Computer software Content development Business acquisitions nil. cash ooling ooling the following flows For used million. The year flows , plantandequipment , plantandequipment the and Activities ascomparedtothesame develop Activities ascomparedtothesame used in . decrease ended year provided The investing , plantandequipment , plantandequipment tables Orbeez partially in ended increase financing December 31, evergreen entertainment provide year endedDecember31, was in by activities of December 31, 2019 fset financing primarily was activities a by summary compared primarily was increased 2019, activities driven $43.2 were 2019, of cash driven to by $5.5 Spin Master investment million the of properties. cash lower used $0.2 by million acquisition 2019 period in period in the for flows in cash million, investing and2018: the acquisition for in ’ s used outflows consolidated content the three 2018 of 2018: primarily three in Gund activities months : financing of development for 116.2 2019 2019 months 48.1 40.9 53.3 22.5 94.2 16.2 24.7 20.5 22.1 30.1 43.2 13.1 Orbeez (0.5) Three MonthsEndedDec31 5.2 5.2 8.0 2.8 1.6 in driven acquisitions cash 2018 ended was Y activities ear endedDec31 ended and by flows and $1 December 31, payment driven 16.2 increased December 31, lower attributed used were million 159.5 by 2018 2018 25.5 53.5 29.0 77.0 82.5 32.6 20.9 10.4 12.9 18.1 18.1 in investment 3.5 5.2 2.4 2.8 2.5 of $13.7 — — the investing investment lease compared to Company's 2019

the million 2019 liabilities acquisition compared in activities $ Change $ Change compared compared in leasehold to content $159.5 growth (43.3 (12.6 (54.5 (16.4 in 22.6 24.3 11.7 10.1 12.0 13.1 25.1 (0.5) (0.9) 1.7 2.8 2.8 3.8 9.2 the — 16 for of to ) ) ) ) purchases Spin Master In COMMITMENTS to cashfromoperations enters for royalty by lower of The which excluding For F 2 Free CashFlow The payments. activities $1 to licensors The Free CashFlow Cash usedforlicense,brandandbusinessacquisitions T working capitalchanges Net cashflowsprovidedbyoperatingactivitiesbeforenet Guaranteed paymentsduetolicensors Cash flowsusedininvestingactivities Changes innetworkingcapital Lease obligations-undiscounted Cash flowsprovidedbyoperatingactivities (All amountsinUS$millions) (All amountsinUS$millions) Non-IFRS FinancialMeasure.See"Non-IFRSMeasures". Free CashFlow Cash usedforlicense,brandandbusinessacquisitions Cash flowsusedininvestingactivities working capitalchanges Net cashflowsprovidedbyoperatingactivitiesbeforenet Changes innetworkingcapital Cash flowsprovidedbyoperatingactivities (All amountsinUS$millions) ree otal commitments 1.5 $44.9 the guarantees the following following leases Cash are million. normal year payments into million cash before primarily license, brand Flow of have are primarily ’ ended non s table goods tables The right flow . course 2 or 2 was net The cancellable been as compared pursuant minimum for summarizes December 31, used ininvesting reduction to provide working and negative decrease the create entered of for services. and business due within leasing business, to the threemonths a expenditures capital and lease in $22.6 reconciliation licensing

in into Spin Master's to Free of market Free 2019, These the same of with agreements million changes 24 months,butcan activities. Spin Master fices Cash Cash acquisitions. agreements. Free terms certain arrangements and during for of Flow Flow Cash period in and yearended and contractual the Spin Master related of products for <1 between three the was lower was enters Flow Y premises Certain ear of terms driven primarily months fice 2018 was include cash extend 24.0 15.7 commitments into 8.3 and ’ two s Less than1yeartogreater 5years equipment of consolidated $ : of flow 84.6 December 31, by to contractual and the and ended beyond commitments these driven ensure higher 1-5 used million contracts. ten equipment, Y (116.2 ears December 31, commitments 178.3 and (43.2 (22.6 2019 2019 years by and Three MonthsEndedDec31 13.1 10.8 22.5 79.9 98.4 84.6 24 (3.3) for 7.5 cash availability

compared 63.4 18.4 45.0 Free lower minimum arrangements months. business ) ) obligations ) Y 2019 and2018 in ear endedDec31 Additionally for flows Cash length cash which future > 5 and to guarantees used routinely Flow acquisitions, 2019 Y flow $129.5 and as ears contain services, (159.5 timely 212.0 192.9 129.5 (18.1 (64.6 (11.5 2018 2018 , 71.2 at 77.0 19.1 (a to

in 60.6 54.6 provided 6.6 compared Spin Master minimum — 6.0 December 31, : non-IFRS investing obtain ) ) ) ) million contain delivery minimum due purchases partially by , to and guarantees T a to provisions $ Change otal $ Change measure) licensors. operating decrease activities, of routinely negative protect

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Net income Reconciliation ofNon-IFRSFinancialMeasures Adjusted NetIncome Adjusted EBITDA 10) quarters of2017,respectively;andSwimW 9) 8) LegalsettlementintheCompany'sfavoursecondquarterof2018. third quarterof2017. 7) Netbaddebt(recovery)expenserelatedtothebankruptcydeclarationandliquidation proceedingsof 6) RemunerationexpenseassociatedwithcontingentconsiderationfortheCardinaland SwimW 5) Impairmentofintangibleassetsrelatedtocontentdevelopment,licenses,brandsand trademarks. based compensationincludesexpensesrelatedtotheCompany'sL 1) Royaltyincomerecoveryrelatedto2017. Amortization offairmarketvalueadjustmentstoinventoryrelatingtheacquisitionGund inthesecondquarterof2018;Marblesand The comparativeinformationpresentedfor2018 and2017hasnotbeenrestatedfortheadoptionofIFRS16.Onaproformabasis,impact16on T T ax ef ransaction costsrelatingtoMarblesacquisitioninthesecondquarterof2017. following Cash T Depreciation andamortization Depreciation andamortization Finance costs Finance costs Income taxexpense Bad debt(recovery)expense Acquisition relatedincentivecompensation Share basedcompensation Foreign exchangeloss(gain) Impairment ofintangibleassets Royalty recovery T Amortization offairmarketvalueadjustments Restructuring expense Income taxexpense Legal settlement for2018and2017wouldbeanincreaseof $1 ax ef ransaction costs fect ofadjustments(Footnotes2-1 1 from fect ofadjustments table 1 Operations 1, 13 ables presents 8 1 1 1 10 2 to 12 ays inthethirdquarterof2016. a 1). reconciliation 4 Free Adjustments aretaxef 7 3 5 1.3 millionand$8.8million,respectively Cash Flow of TIP 6 fected attheef Net . 9 for Income the fective taxrateofthegivenperiod. fiscal to EBITDA, . years ays acquisition,respectively TRU duringthefourthquarterof2019,first2018and ended Adjusted December EBITDA . 2019 (116.2 178.3 181.3 219.0 22.5 84.6 84.6 11.7 79.9 11.7 20.7 98.4 20.7 64.3 15.2 84.6 92.8 (0.9) 31, 3.2 5.6 5.8 8.8 9.2 Y

— — — — and ear endedDec31 ) Aerobie inthesecondandthird 2019 Adjusted 2018 As of (159.5 , 212.0 192.9 154.9 129.5 163.5 292.0 303.6 (15.5 77.0 74.2 74.2 19.1 53.5 53.5 12.2 12.1 2018 (9.3) 13 9.4 9.4 1.2 7.2 3.0 3.7 August 1,2018,share — — — ) ) Net and 2017 Adjusted Income, 250.6 267.4 161.1 193.4 173.0 275.8 292.2 2017 (81.6 (16.8 (11.4 24.4 44.9 44.9 10.4 10.4 59.4 59.4 10.1 13 (2.2) 9.0 1.7 4.5 1.0 2.8 5.4 — — 37 ) ) ) : 47 Spin Master Corp. 48 Spin Master Corp. and Forward-looking and theseasonality of could will the uncertainties conditions slowdowns, resolution Company earlier considered or which future looking platform of relationships; practices; successfully to of in expressions, on information” Certain these represent territory; will and will By do not specific FOR include, forth result inherently “outlook”, words continue on development and tooling, “might” or employees, this delayed the its transportation its statements an expectations, its not Annual not expand; entertainment successfully available W above strategies products international Company MD&A cause in we and growth nature, ARD have a “plans”, than prove or be statements. raw statements, and but the to the to and “potential”, the a subject “can”, of will delivery and other grow achieved. MD&A reasonable in are forward-looking LOOKING ST complete material delays its

which create within suppliers access actual include, logistics Company secure identify to requirements; include, expectations; the our expansion under forward-looking this material be that expected will competitors; be “expects”, not for will sales factors, statements or estimates costs, license Company customers,

able to properties MD&A, and platform; accurate, dates; give the have growth; limited certain results support negative or acquisition of financial other significant statements of broader the “prospects”, without and Known problems; from without shortages list and the meaning impact on to entertainment will rise or by Company's future of a uncertainties it the component of maintain A the than outbreaks to: “projected”, to Company's to acquired level future management be other sales and its and TEMENTS the retailers; financial will to statements that limitation, the are

will versions expanded and licenses dif suppliers third the the material limitation, growth; the able information developments, business, Company statements results andperformance. maintain fer the opportunities; projections containing impact be of factors of necessarily assumptions in economic ability “seek”, and the Company unknown conditions, possibility parties; materially certain launched Company's success its production to brands; profile position, of Company availability the marketing content thereof, the from successfully statements distribution and most factors and “estimated”, use of of disease, ultimately that the “strategy”, its economic as will current Company factories acquisitions securities is forward-looking use potential of manufacturers of on third risk and as status the will consistent factors recent based could as of that be subject from actions, advanced may cash historical on and as “be the SEDAR of or . key of scheduled the Company factors, , able public be of parties such expectations, business well the ability shipment mobile advanced with being fices as capabilities; taken”, not the assumptions Company personnel af to “targets” AIF flows identify upon date able and discussed “forecasts”, events

fect will laws, date to to a manufacture as be events as respect forward-looking , on health preferred (www expand with in fact, to inherent filed competitive technology many incorrect. for a to on platforms continue the correct and management’ COVID-19, future new will “occur”, on and number shift operate, strategies information. including of and continue major or carefully technology which its contained with .sedar Company will which be will conditions financial or products, to: that of “believes”, markets in the forecasts, its between past integrate used financial able and “anticipates”, continue results risks collaborator; which the the the be portfolio In entertainment the “continue” of products, , to the .com). will Company such the robotics uncertainties experiences; the addition Company’ that of specific to to the securities Company's and able to attract risk and performance; information Statements statements s expand; the in will are recognize statements and build and increases develop “will”, Securities or product as perceptions objectives, occurrence performance; or strategic predictions, to this factors not These of Company to uncertainties increase regulatory higher beyond variations be and investors robotics including owned factors to or qualified and maintain will to MD&A the “may”, “indicative”, involved s regulatory any fragmentation “be outlook innovation put the mix, properties noted risk disclosure and culture be and maintain the in commodity in of are acquisition Act are branded the factors achieved”, strategic and the undue

forward-looking drivers costs forward-looking will in this of of constitute able factors “could”, contingencies and of projections changes are labour capitalize Company personnel (Ontario), in made the made its the in which historical control for sales such continue that assumptions this MD&A. and the cautioned customer authorities to or relationships successful 2020 the “intend”, Company’ and strong, reliance consistent for materials, intellectual are size MD&A, Company leverage may goals words delays business in in prices, of could “would”, opportunities; of Company and in of such assumptions “forward-looking on this this (see products will not Such the and trends, and or to the the to be opportunities and collaborative other and be conclusions create which MD&A. on acceptance collectively “guidance”, MD&A, intended continue in to information growth; information support labor market “Outlook”); s markets in general allocation, Company are that, execution desirable its risks with including revenue; structure “should”, products products priorities consider forward- property phrases Canada with applies current similar based in global could costs while work past The and that are the the will set 38 its its or to to in , , result events actual eventsandsuch Company for There the of can purpose could new disclaims be dif information, no fer of assurance materially providing any forward-looking intention future that information from forward-looking events those or obligation anticipated statements, or about otherwise, management’ to statements update in except to such or to or statements. explain will revise s the expectations prove extent required any any to forward-looking Forward-looking material be accurate, and dif plans by applicable ference as relating statements statements actual between to results law the whether . are subsequent future. and provided future as The 39 a 49 Spin Master Corp. 50 Spin Master Corp. For theyearsendedDecember31,2019and2018 Annual consolidatedfinancialstatements Spin MasterCorp. governance. governance. with charged that fact those report to to we are required this other of information, misstatement a is we conclude that there information, material other this on perform on will workthe based we report. If, of toavailable us auditor’s made is to the the date be expected after Report The Annual thisin regard. have report nothing to We report. auditor’s this in fact that report to required are we information, other this of misstatement a is we conclude there that material information, on this other haveon the work we performed If, of this to auditor’s report. date Management’s based the prior and Discussion Analysis We obtained misstated. in appears bematerially the or otherwise obtained to audit, knowledge or our statements with financial inconsistent materially the whether is other the consider information so, doing and, in above identified information other the read to is responsibility our statements, financial the of our audit with In express anyconnection not form assuranceof conclusion thereon. does coverwill information andnot and we not the other do statements the financial Ouron opinion ● ● comprises: information. information for the The other other responsible Management is Information Other for a ouropinion. basis provide to is sufficient we and that appropriate evidence haveWe believe the audit requirements. obtained in with responsibilities accordance ourthese other ethical Canada,in we have statements fulfilled and financial the of ouraudit to relevant are that requirements ethical the with in accordance Company the of for Audit Financial Statements the the Responsibilities in the underare standards further described those responsibilities Our (“Canadian GAAS”). standards auditing accepted generally Canadian with accordance in audit our conducted We Opinion for Basis (“IFRS”). Standards Reporting Financial in then International and cash flows years with accordance forended the its financialand its performance and 2018, 31, of the 2019 asCompany December financial at position respects, the fairly, material present in all statements accompanying financial Inthe our opinion, referred to asthe (collectively “financial statements”). policies accounting a financial including consolidated statements, ofsignificant summary tothe and notes ended, years then the for of cashflows statements andconsolidated equity in shareholders’ changes statements of statements consolidated of earnings income, and comprehensive consolidated the and 31, and 2018, position 2019 financial of the consolidated as at December statements comprise of Spin financial Corp. the consolidated statements Master We have audited Opinion Corp. Master Spin of Shareholders the To Report Auditor’s Independent

Annual Report. Annual Report. thereon, in report the and our auditor’s than statements other the financial The information, Management’s and AnalysisDiscussion

section of of our report. We are independent section

(the “Company”),which www.deloitte.ca 416-601-6150 Fax: 416-601-6150 Tel: Canada 0A9 M5H ON Toronto 200 Suite West, Street 8 Adelaide East Adelaide Bay LLP Deloitte Auditor’s Auditor’s

51 Spin Master Corp. 52 Spin Master Corp. process. Company’sthe financial overseeing for reporting with charged Those are responsible governance so. do butto alternative realistic no has operations, or cease to or Company the to liquidate intends either management unless accounting of basis concern going the going to related matters and concern using as concern,as applicable, continue a going to disclosing, for assessing Company’s the responsible ability is management statements, In financial the preparing fraud or error. misstatement, from whetherfree material due to that are preparation statements financial of the enable necessaryto is determines management as control internal such for and IFRS, with accordance in of statements financial presentation the and fair for the preparation responsible Management is ● ● ● ● ● ● the audit. skepticism throughout We also: maintain professional and judgment professional exercise we GAAS, Canadian with accordance in audit of an As part financial statements. taken these of on the basis influence decisions expectedthe reasonably to ofuserseconomic be they could or in aggregate, the if, material individually frauderror and considered from are or whencan arise exists. Misstatements it misstatement a material always will GAASdetect accordance with Canadian anin that conducted audit is a guarantee assurance not assurance, of but high is Reasonable opinion. level includes a our that issuewhether due misstatement, an report to fraud and to auditor’s or error, material are free from statements as a arewhether the whole to assurancefinancial obtain reasonable Our objectives about Statements Financial the of Audit the for Responsibilities Auditor’s Statements Financial the for Governance with Charged those and Management of Responsibilities responsible for opinion. our audit responsible remain solely We and group performance the audit. of for direction, the supervision responsible We are financial within the on statements. the opinion express an Company activities business to or of the entities evidencefinancial theaudit regarding information sufficient appropriate Obtain fair presentation. events a in that achieves manner and the underlying represent transactions statements and whether financial disclosures, the the including financialstructure and the presentation, of statements, content Evaluate the overall concern. going as a continue to cease Company the to However, may of our conditions report. cause date or futureauditor’s the events up to onevidence modify audit based obtained the our to are inadequate, Ouropinion. conclusions or, the such are disclosures if in financial report the to related statements disclosures our auditor’s in draw to uncertainty exists, we are aattention required material concern. Ifwe conclude that continue to a on as Company’sgoing the doubt ability significant maythat or conditions cast events to related exists uncertainty whether obtained, a material on evidence and, audit the based basis concern accounting of the going of ofmanagement’s use on appropriateness Conclude the made by and disclosures management. related estimates of and used accounting reasonableness of accounting the policies Evaluate the appropriateness control. internal on the opinion of the effectiveness Company’s in of expressing an the circumstances, for the purpose not but are appropriate that procedures design audit to order in audit to the relevant control internal of anunderstanding Obtain control. internal of override the or misrepresentations, omissions, intentional forgery, collusion, involve fraudas may error, from resulting fraud from misstatement a onefor higher than resulting is material detecting risk not of provide a basis to that is sufficient The for our opinion. and appropriate evidence audit those risks, and obtain to procedures responsive audit perform and fraud or error, design dueto whether of misstatement statements, the financial Identify and the risks of material assess

March 4, 2020 2020 4, March Accountants Public Licensed Accountants Professional Chartered Lawrenson. Steven auditor’s is onreport in independent this resulting partner The the engagement audit safeguards. related applicable, where and independence, on our bear to thought be reasonably may that matters other and relationships all towith them communicate and requirements regarding independence, ethical with relevant complied that we have with with charged governance a statement provide those We also wethat control during identify ourinternal audit. in deficiencies any audit of thesignificant findings, including significant audit and andtiming scope the planned matters, amongother governance regarding, with charged those with We communicate 53 Spin Master Corp. 54 Spin Master Corp. The accompanyingnotesonpages5to41areanintegralpart oftheseconsolidatedfinancialstatements. Approved bytheBoardofDirectorson Consolidated statementsoffinancialposition Spin MasterCorp. T Contributed

T Share Shareholders’ T Lease Non-current Deferred Provisions Lease Non-current Right-of-use Goodwill Intangible Prepaid T Income Provisions Contract Inventories

Current Liabilities Otherreceivables Cash Current Assets Property Deferred (US$ millions) Accumulated Accumulated Advances Advances otal liabilities T T otal otal otal rade receivables rade shareholders’ liabilities assets payables capital liabilities liabilities liabilities assets tax payable expenses , liabilities income taxliabilities income taxassets plant assets on on and contingent and contingent liabilities assets surplus assets other deficit royalties royalties

equity and shareholders’ and equipment and accrued comprehensive

equity liabilities liabilities liabilities equity income March 4,2020 .

Notes 17 21 21 21 16 12 13 16 14 14 10 1 8 8 9 9 8

Dec 31, 1,256.4 1,256.4 714.5 760.4 496.0 399.0 760.7 182.4 138.8 495.7 345.6 185.3 370.7 115.3 (28.1 2019 38.2 35.8 97.0 67.6 20.4 78.3 15.1 14.4 18.0 26.2 57.0 26.2 66.8 9.0 4.5 3.2 7.6

)

Dec 31, 694.1 662.5 999.2 336.7 319.5 622.1 165.8 124.2 377.1 276.8 110.1 999.2 143.5 266.8 (92.4 2018 19.9 40.9 17.2 15.5 14.5 18.4 10.1 29.2 68.8 21.0 56.0 1.7 6.5 7.0 — — — 1 )

The accompanying Consolidated statementsofearningsandcomprehensiveincome Spin MasterCorp. T Other comprehensiveincome(loss) Foreigncurrencytranslationgain(loss)onforeignoperations Items thatmaybesubsequentlyreclassifiedtonetincome Net income (US$ millions,exceptearningspershare) Diluted Basic Earnings pershare Netincome Income taxexpense Income beforeincometaxexpense Financecosts Foreignexchangeloss(gain) Otherexpenses(income) Depreciationandamortizationexpenses Selling,marketing,distributionandproductdevelopment Expenses Gross profit Cost ofsales Revenue (US$ millions,exceptearningspershare) Administrative expenses otal comprehensiveincome notes on pages 5to41 are an integral part ofthese consolidated financial statements. Notes 18 18 8 6 5 7 7 7 4 Dec 31, 1,581.6 785.0 796.6 247.9 395.4 2019 2019 20.7 11.7 32.6 64.3 85.0 82.6 18.3 18.3 64.3 0.63 0.62 6.6 5.8 Dec 31, 1,631.5 154.9 208.4 129.0 154.9 818.8 812.7 278.4 331.9 (25.9 (25.9 (14.7 2018 2018 53.5 14.7 1.52 1.51 (9.3) 9.4 2 ) ) ) 55 Spin Master Corp. 56 Spin Master Corp. The accompanying Consolidated statementsofchangesinshareholders'equity Spin MasterCorp. Exercise ofshareoptions Shares releasedfromequityparticipation Share-based compensation Other comprehensiveloss,netoftax Net income January 1,2018 (US$ millions) Shares issueduponsettlementofL Exercise ofshareoptions Shares releasedfromequityparticipation Share-based compensation Other comprehensiveincome,netoftax Net income January 1,2019 December 31,2018 Change inL December 31,2019 Shares issueduponsettlementofL TIP settlementmethod notes on pages 5to41 TIP TIP are an integral Note 17 17 17 17 17 17 17 17 17 part ofthese capital Share 681.3 694.1 694.1 714.5 consolidated 11.8 0.4 8.5 3.9 0.2 8.4 — — — — — — — Accumulated deficit (247.3 financial 154.9 (92.4 (92.4 (28.1 64.3 — — — — — — — — — — — ) ) ) ) Contributed statements. surplus (11.8 12.2 20.3 17.0 40.9 40.9 15.2 35.8 (0.1 (8.5 (0.1 (8.4 — — — — — ) ) ) ) ) comprehensive Accumulated income other (25.9 45.8 19.9 19.9 18.3 38.2 — — — — — — — — — — — ) 154.9 500.1 662.5 662.5 760.4 T (25.9 12.2 17.0 15.2 18.3 64.3 otal 0.3 3.9 0.1 — — — 3 ) The accompanying Consolidated statementsofcashflows Spin MasterCorp. Cash, endofperiod Cash, beginningofperiod Effect offoreigncurrencyexchangeratechangesoncash Repayment ofborrowings Proceeds fromborrowings Issuance ofcommonsharesfromexerciseshareoptions Payment ofleaseliabilities Financing activities Net (decrease)increaseincashduringtheperiod Cash (usedin)providedbyfinancingactivities

Cash usedininvestingactivities Business acquisitions Proceeds fromdisposal Investment inintangible Interest received(paid) Net changeinprovisionsandcontingentconsiderationliabilities Net changeinnon-cashworkingcapitalbalances Share-basedcompensationexpense Impairmentofintangibleassetandproperty Depreciationandamortization Investment inproperty Investing activities Cash providedbyoperatingactivities Share-based compensationpayments Income taxespaid Interest(income)expense Netincome Operating activities Incometaxexpense (US$ millions) Adjustments toreconcilenetincomecashprovidedbyoperatingactivities Amortization offairvalueincrementstoinventoriespreviouslyacquired Accretion expense-leaseliabilities Accretion expense-other Amortization offinancingcosts notes , plantandequipment of property assets on pages 5to41 , plant and equipment are , plantandequipment an integral part ofthese consolidated financial 5, 1 Notes 15 15 21 12 23 1 1 19 17 1, 12 7 6 6 6 6 8 statements. Dec 31, (116.2 115.3 143.5 (28.2 (13.7 (13.8 (53.3 (22.5 (40.9 (27.0 (79.9 2019 84.6 15.2 98.4 20.7 64.3 (1.6) 3.3 0.1 4.8 1.7 0.9 5.6 0.5 1.9 7.2 — — — — ) ) ) ) ) ) ) ) ) Dec 31, (159.5 143.5 117.3 192.9 154.9 (45.0 (29.0 (77.0 (53.5 (76.0 (19.1 (10.6 2018 26.2 45.0 74.2 12.2 53.5 (7.4) (0.5) (4.0) 0.2 0.2 3.7 2.3 0.9 1.1 0.3 — — — 4 ) ) ) ) ) ) ) ) 57 Spin Master Corp. 58 Spin Master Corp. 2.

Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Company’ of All International The (A) Statement Summary Hungary hundred Standards instruments published The The M5V 3M2. The March 4,2020. These ef IFRS IFRS 16Leases of on the (B) and desire diversified contract conveysa IFRIC Canada. The is Previously assets or previously change its obligation recognized Spin Description ofbusiness and asset asset The value 1, made. The primarily in fect the or 2019 the Hong financial Application lease adjusted Company digital Company North Company consolidated consolidated contains Master United equal is of on theCompany'sfinancial 16 lease 4 to It fair valueof consolidated is in theestimate of initially , Determining the is Kong, uses thousand, The challenge Romania, introduced lease s distribution liability nil. , financial American reported portfolio of remeasured (“IFRS”) content. the right-of-use information to that lease or Kingdom, Corp., Financial to Accordingly for significant accountingpolicies Company a its , the recognizes has has of Company China, measured if make leasepayments. liabilities lease are of certain incremental is that compliance andbasis lease financial payments financial the applied new andrevised subsequently right to three statements except of under (the Czech and The as measured financial segment Whether a rate based innovative V France, Reporting consideration issued network. single, when is assets liability ietnam, re-measurements is “Company”) expand Company’ for short-termleasesand , reportable determined presented the IAS a the at cannot a Republic, control as IFRS statements statements right-of-use cost, on that children’ borrowing statements there amount comparative otherwise is 17 an by . Italy at on-balance representing due The the India, traditional comprised 16 Interpretations Committee fair increased toys, are and Arrangement the statements. be and the s , is the new to using cumulative operating in headquarters value, Poland, provided was not readily s IFRS at International a related expected use ofanidentified subsequently Australia rounding. games, millions entertainment have Netherlands, rate change have asset contract definition indicated. paid were incorporated of the information of play sheet as by of as its determined, been preparation andmeasurement Russia interpretations. the been at and modified the explained the in exchange segments: the products of contains approved rights in ef to bepayable and patterns the The inception lease United fect interest accounting future United a discount of prepared is Accounting As prepared lease commencement at Mexico, Germany and a located impact of to company a presented lease. cost on liability retrospective initial a result, lease and use in States through Greece. the and States cost North asset for for liability Lease. June whether the rate. for goodsandservices. less ("IFRIC"). on The the entertainment of Company's as at which Under , in model application . under authorized on payments accounting Austria, Standards The some dollars these that 225 the America, 9, The any well accordance and underlying for Company the at the The The 2004, a an lease the underlying the historical 2018 a residual IFRS creates, King accumulated weighted lease as date, for method Canada. period creation prior rounding Company Rest arrangement ("US$") Switzerland, lease all lessees. arising incremental under recognized for Street Europe liability Board policies has 16, discounted liability year other properties. of has assets of timeinexchange issuance designs, with and commencement cost W a average not of The value guarantee, and adjustments the elected contract results from orld now W ("IASB") innovative areas is has been and depreciation and below The International asset isoflow est, basis European and has initially Belgium, laws was segment in determines a borrowing elected decreased using Rest manufactures by discount The Company Suite change retained may restated been of to lease . is or except of Historical the with not the or measured contained the Company products, of the not do Luxembourg, 200, rounded segment contains Board liabilities is recognize world to date. W interpretations or in Province rate Financial not earnings primarily interest and rate. for agree for consideration. or asappropriate, , orld set whether by impairment value. an as T cost oronto, certain The have lease used serviced the is of index and (see Note The a at entertainment a to is presented a to is representing Directors is lessee, lease right-of-use right-of-use rate right-of-use the driven the lease of at comprised comprised was previously a markets measured a Reporting payments Company Slovakia, or Canada, financial material contract Ontario, January nearest present implicit losses rate, by of under 6.1%. if by 25 has the the the on as ). a a a 5

Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Company term amount incremental lease termination The In The All leaseswererecognized (B) of changes retrospective specifically consolidated On million IFRIC Summary • • • expenses date theCompany during Company The • • • • controlled The (C) Basisofpreparation comprehensive Consolidation changes Lease liabilities Lease liabilitiesrecognized Contracts Discounted Operating lease Reconciliation of Adjustments for June IAS Application transition How How The assumptions Whether an has the is exposed, has powerovertheinvestee; Company interpretation Company consolidated and contracts 23 Uncertainty 12 the on 2017, of leaseliabilities in to oneormoreof an an similar Income is loses and by January assessed asleasesunderIFRS16 year of addresses: option the using theincremental ability borrowing entity considers entity determinestaxable reasonably financial statementsorresults. the application. significant accountingpolicies(continued) to the has of

of new reassesses accretion assessment are in income recognized renewal or has commitments control entity considers IFRS security a Company International T is is IFRS 16 applied financial to which axes gains controluntil subsidiary 1, included reasonably ef use over income an entitymakesabouttheexaminationof fective 2019. and revisedIFRSs(continued) 16, rate rights, to options reasonablycertain of for the should , certain it its power expense and right-of-use The the judgment transitional impact the the the is and as operating whether and itssubsidiaries in theconsolidated statements The of changes as atDecember in for a funds subsidiary begins Company Accounting amendments three year ended the whether lessee certain reflects be borrowing to variable annual uncertain Company tax treatments of exercise to af applied consolidated to or necessary elements the datewhenCompany ceases $4.8 when in facts profit (orloss),taxbases,unused determine that not not fect itsreturns. the incorporate periods . a leases. recognized returns rate atthedate Specifically assets Standards purchase to million tax treatmentsseparately; it December 31, when rate include 31, the has renewal and controls be and circumstances. of controllisted 2018 statement of to (the “Group”).Control Company beginning to be exercised. of recognized statement from itsinvolvement both there recognized. additions in obtain interest renewal the finance or right-of-use , options exercised Board an the income is extension of initial financial investee an applicable uncertainty 2019. obtains on The the of to ("IASB") depreciation options. costs financial asset impacts or operations and IFRIC above. Company application Company tax treatmentsbytaxation after assets statement option if control expenses in of discount facts issued the The January over 23 similar position with theinvestee;and the is achieved and tax losses,creditsandrates; do consolidated is would and did expense and lease discount over to controlthesubsidiary income reasonably IFRIC not accounts value. corresponding of not rate other 1, on circumstances the a have term, have 2019, have the dateoftransition: subsidiary as when the 23 tax of subsidiary rate comprehensive The well to to $13.0 any an treatments. which statements of with certain clarify pay is assessment as the impact finance based authorities; modified the Company: lease million to acquired significantly Company indicate and how borrow lease to on on leases be The . of liabilities ceases the in income retrospective the the operations term of exercised or administrative that over requirements interpretation whether and Jan 1,2019 disposed Company's Company's historically af for when there fects a from of entities certain similar $83.4 83.4 69.5 19.8 56.5 or 7.1 and are the the the the or of a 6 . 59 Spin Master Corp. 60 Spin Master Corp. 2.

Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. provisional combination If are notrecognized. recognized, consideration corresponding a Goodwill At the if knownwouldhaveaf business for additional contingent transferred and liabilities All date) about combination Acquisitions (D) Businesscombinations of theGroupareeliminated All into line When profit orlossas interests When (C) Basisofpreparation Summary A (E) Generating indication impairment recognized other assetsof when The Sale of (F) Revenuerecognition Any distributors in thedetermination is The which shipping

contingent CGU the not other intragroup in Goodwill impairment majority included Company accordance reversed initial the an entity the acquisition necessary Goods to subsequent with theGroup’ terms issued assumed. arising consideration less information that which Company of amounts by as Units ("CGUs")(orgroups consideration loss in facts to accounting of occurs, is of consideration assets significant accountingpolicies(continued) as transferred, select reflect the the the businesses measured accumulated in recognizes adjustment the the unit and expects to incurred. loss by is , goodwill on part and circumstancesthatexistedat subsequent date, theidentifiable adjustments with consideration Company unit allocated Company’ the For certain the an changes and of for are new international has of obtained fected the may the the Company pro-rata based s accounting goodwill acquisition Group transferred for the (continued) liabilities, the adjusted at has information satisfied are be over that relevant profit orloss revenue arrangement, additional against a be , in full fair purposes consideration first impairment liabilities s in entitled business periods. been accounted reports are revenue impaired. during the value, the qualify is is to amounts in on during equity markets. unconditional recognized made fair of its by policy reduce allocated exchange net goodwill. when policies. consolidation. obtained in exchange considerations. provisional a the the of incurred value which of CGUs) On performance assets acquired on combination is on of as , business impairment to If for income, . the losses, the “measurement Group derived the carrying disposal control Changes the recognized disposal. transferred the the the measurement Revenue using of is measurement contingent is

directly for contingent acquisition-date about recoverable Measurement carrying calculated by financial tested and that areexpectedto in amounts expenses control if is from the of the for transferring a of the acquisition any in obligations carried business only is facts the testing, the acquisition in is Invoices Company at thattime. amount the in for the and theliabilities incomplete . amount profit recognized statements consideration goods period” of Goodwill relevant consideration the a as and impairment for fair sales period amount business the and period at the passage goodwill the or period combination circumstances value of eachassetintheunit. cost are amounts acquiree. cash has of loss, under to sum (which of method. items CGU, goods orservicesto (see any adjustments date. the is generally toys by of as of at transferred, of flows benefit fromthecombination. and combination. adjustments of measured annually is of the the subsidiaries former for is goodwill an classified the contingent established cannot above), and the the allocated time assumed arerecognized of Acquisition-related costs The measured an which CGU amount relating end includes arrangement). the acquisition-date attributed related impairment issued that is consideration owners , exceed of identifiable required or is allocated or the are as which as existed the less consideration to more to are additional that Changes to an at assets accounting products at at the transactions adjusted each amount bring of reporting the asset its the a customer than one adjustments reflects is frequently loss the before excess at to acquisition-date determined date As or time of assets year their transferred the its fair or acquiree the recognized in to liabilities assets the of such, liability carrying is retrospectively acquisition retail payment of the the of values period unit from goodwill classified accounting of incomplete. between Company’ . at theirfairvalue. acquisition delivery are acquired when consideration fair the that and or a customers the and are resulting by recognized receivable in of liabilities in value amount, sum for is then acquisition there is a arise accounted respective the which the members fair date as business (which due. included goodwill s and policies

assets Those of , equity equity Cash- of of to value is from from that, with The and are the the the the the the the an to in is is 7 2. Significant Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. through to a accordance with being the property determining the For performance produced based T T are af Remote Customer subsequent records (F) Revenue estimates outlines Company Rest as is Company based This The Digital obligations revenues adjustments users are The Disaggregation additional administrating includes judgments, and of The goods purchases, promotion quantify Revenue necessarily elevision elevision 'right-to-use' recognized use the the foregoing recorded license is royalty revenues Company Company Company condition of fected by can fulfilled on apps timing applications excluding on the W sales-based the the over control estimates represents the from sale content. believes orld. performance advances distribution does make distribution, the and and Company's under contractual accounting policies(continued) stipulated customer sale orusage. delivered the variable production to within recognition revenue obligations dif classification assessed aseither the are are consideration receipt at is develops routinely licensing disaggregates or both provides The economic factors.See ference between of not and appropriate in-app the sales typically term a the contract. 'right-to-access' recorded protective revenue Revenue additional these cost ("apps") of goods Company point-in-time for sales have on relevant agreements. the or interactive consideration. recognition sales, in thecustomerscontract. from of to performance royalty andlicense tax brands terms usage-based obligations contracts, purchases of defective of revenues enters apps amount allowances the associated with (continued) collectively the discounts performance met sales. determined. and television in the is license which classification. for details are recognizedupon to end and other its which recognized further when and into end after which both characters, Revenue of conditions when revenues providing or user products, licensing that conditions license are and other thandelivery consideration revenue other arrangements and users. The and on of depict for are over the the royalty and parties disaggregates . are Note generated the the specified sales The the The obligations returns is returns hosted Company end-user application the deliveryof intellectual upon generated associated sales time streaming and considered The license The how customer Company the The from Company and/or have license 25 third on sales revenues Boys of and allowances. Segment customer the a based Company delivery the license and a by accruals contracts been to gross promotional by party historical contract, passing of television action purchases with allowances applicable third-party nature, monitors subsequent to which defective the of by advances are revenues programming with property expects recognizes distribute a met. of appsto for agreement is on the its basis. the platform the of right-to-access of use with a‘right-to-use’ information forfurtherinformation. as and right-to-access the has the the the the customers with amount, This variable use programs. data. to required. of distribution, periodic sale control tothecustomer . and Company revenue platform The television protect construction, merchandise. Company’ activities determined to classifications the The by and the customers does television to providers the The be revenue of category: downloads fees Company's Company’ delivery recorded timing for licensee consideration returns apps assessed aseither third-party entitled not results to Note Company against providers. is license licensing charged or expects and provide give s are licenses recognized are and and at brands that by streaming are 3 on

Pre-school by Activities, or recorded Such and rise the pays - s against other to recognized determined. segment: the failure streaming Significant uncertainty brands brands of providing the ‘right-to-access’ it platform providers. customers upon by uses sales to time to is to intellectual the The app constraint. upon provide programs a sale be a the specified the third . significant fixed revenue of historical programming at the of and and Company delivery in entitled from incentives, games third-party principal occurrence completion and North of a providing sale. contract programming when the parties, accounting expected of point-in-time other other fee access goods Judgment made the revenue property girls are service V factors . recognition The to America, & for ariable

control data financing There license and intellectual third-party intellectual controls in

puzzles based through liabilities and platform are to the the based support to Company the and value of of and . customers judgments and of the which The customer is recognized license is the are consideration some Outdoor grants arrangement or is hosting Europe primarily transferred. component required makes all intellectual and cash on the conditions method measured licensees’ . Company over until providers customer no property The property revenue aspects are of has certain sale a plush, of future . flows all right their time with The and and and end and any the not no on of of to in in 8 ,

61 Spin Master Corp. 62 Spin Master Corp. 2. Significant Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. • • Lease payments V a similar from theleasedassetsareassumed. of that The Company The depreciation Right-of-use those costsareincurred would to For the lease a Whenever • its which accumulated except The (using • • date, a The (G) Leases • whenever: The • of operations at The Right-of-use The Lease liability • ariable provision right-of-use exercise the or incremental right-of-use these triggers lease variable fixed leasepayments the leaseliability a case arevised commencement the residual the exerciseof the amountexpected the the lease. payments the case the Company Company lease right-of-use discounted transfers before lease it lease have the for lease initial lease is rents value totheright-of-use liability leases, short-term liability located ef the is a accounting policies(continued) to those contract fective interestmethod) unless value, assets asset purchase lease the depreciation lease recognized payments and comprehensive discount asset term pay that assesses remeasures of applies Company ownership asset. borrowing assets is included by commencement penalties starts at the is payments or to do initially in discount rateisused). has liability payments purchase another subsequently and are using date; leases is restore borrow is remeasured Company The which not IAS rate option, modified change changed comprise depreciated whether a to produceinventories. and incurs of depend to the commencement (including related rate. in measured corresponding and impairmentlosses. the 36 is remeasured the for (unless the (defined occurs systematic cases be the the over measured options, ifthelesseeisreasonably Impairment rate the that terminating lease due The underlying payable recognizes an measurement underlying and a or asset payments the a measured related income. on day contract the implicit the and depend obligation to similar there incremental by in-substance liability over and byreducing at as the an initial changes lease lease the and are in discounting leases basis under by thelesseeunder index lease lease right-of-use the is a similareconomic by discounting of the in asset present term included is the measurement asset are on (and any a Assets todetermine by liability the payments or shorter is for change lease, IAS date ofthelease. with in or of leases modification an liability recognized increasing contains and more or initial lease. borrowing makes an costs the rate to fixed value 37. the index a the revisedleasepayments index in is the with if lease period lease the carrying asset representative the are The as cost remeasured in direct the with to change If payments), a condition of a the a the an or this or line corresponding dismantle of not the the lease, costs lease of term similar as liability is rate respect rate is of operating rate, the assessment residual revised the costs. environment. administrative rate depreciated an included lease carrying not lease is of or is corresponding are right-of-use expense term certain toexercise at whether due amount initially required security cannot accounted 12 a defined comprise: by less anyleaseincentives; inception to payments They change included and term lease payments of value guarantees; months to reflects discounting all expense amount in the a adjustment remove lease the of be measured in and a right-of-use over are to reflecttheleasepayments change the as by time expenses in the exercise asset readily of in or for measurement the that expected the the useful funds subsequently the to agreements a on lease the period less) using arevised pattern as contract. a reflect terms exercise rate are the in reflects a useful leased related a the options;and determined, to straight-line necessary a using life and of using arevised liability not separate in revised in floating the of payment asset isimpaired. a the and interest in which of life paid interest leases purchase that related The asset, right-of-use which the of the consolidated in of , conditions of measured lease an lease at which the interest the Company the underlying the lease, index to discount rate. the on of under basis the option restore economic that right-of-use Company obtain event lease underlying low the payments commencement payments option, Company it discount rate. or in the rate, is over asset, value a lease of made. at to or guaranteed which liability statements an the recognizes rate the the asset. Company terminate cost condition in the in benefits asset expects assets. lessee, liability site unless asset) lease, asset. at which which made using case uses term less and If the on of a 9 2. Significant Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. expense the operations temporary tax temporary dif income cost at For At in netincome end entity’ As (G) Leases(continued) items Basic (I) Earningspershare Japan yen,theSwedish or substantively consolidated Deferred Deferred tax For Current the if any that any currency outstanding taxable from In including The (H) Foreign practical income The Company Income tax (J) Incometaxes ("PSUs"). number period. preparing that December a rates Euro, the liabilities each of period, lease in Company assets “income , arerecognized practical s are earnings each a date. Securities purposes functional or because and accumulatedin tax of foreign items expedient. of prevailing entity the tax translated goodwill deductible. is theCanadian dif and common are Canadian expense in accounting policies(continued) reporting and during the Non-monetary currencies ferences financial ferences canbe are Great before is 31, which or expedient, are reports translated in associated per currency recognized enacted by financial liabilities loss. of of recognized the 2019 refer currency translated and the items presenting when Britain share at shares income case represents thesum Group, period, The dollars statements to in theforeign period. the to its and fair the krona, the are all statements IFRS of the the into Company’ financial of average (“EPS”) pound, dollar non-lease are value outstanding, items 2018, extent outstanding income tax the on equity foreign monetary the using not in fair exchange for Diluted utilized. US$ these recognized the 16 expense” temporary end of . tax retranslated. taxable value and carried adjustments . the the that permits exchange is same exchange results using Australian currency or currently s operations consolidated of calculated earnings the current components Hong functional expense items it the was each rates stock is assuming manner of corresponding temporary as exchange at probable in reporting a dif at the determined. Kong reported fair denominated lessee rates ferences United tax individual payable translation the rates at The options, dollar per arising taxes currently that the that value by currencies expense as rates dollar financial resulting share prevailing for as the dividing that , theIndianrupee, dates rates above not are period. dif States have on is that the a Restricted ferences. on between of conversion , Group taxable to tax the based taxable Non-monetary single the adjustment aspartof is exchange prevailing is of period, in acquisition, a separate with are statements, calculated foreign basis consolidated of Dollars calculated net the Mexican functional foreign at the entity denominated on payable the exchange arrangement. profits transactions income or the Deferred Share used unless taxable Groups currency deductible of end ("US$"); , prevailing currencies non-lease at carrying transactions all peso, by will in using are the Polish zloty currency of the items and deferredtaxes. Units by dilutive dividing exchange the statement each dif be income subsidiaries end assets translated tax the the exchange ferences computation income in available however are ("RSUs") that amount The in at other comprehensive reporting assets components, are foreign of Chinese weighted securities other dif used. net the each for and are in , andtheRussian Company retranslated ferent rates of tax currencies income dates the impacting , measured operations into years liabilities of against gains are the currencies Exchange included and reporting rates period. yuan, year fluctuate assets of average from were the recognized functional of Performance taxable and or by and . has that the which T the Company’ losses that the of axable at other other Income exercised the and in items and period. instead transactions. dif the have elected the significantly are V number weighted terms income. of ietnam ferences Canadian those income. ruble. comprehensive comprehensive Group’ liabilities currency rates than are retranslated the income that for been and Income s Share of account recognized to deductible deductible Company during the prevailing functional are of dong, historical Deferred expense s average enacted use arising, foreign shares during Group dif dollar At in of never Units and fers this the the the the the for 10 at , , 63 Spin Master Corp. 64 Spin Master Corp. 2. Significant Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Current The following with theef The in profitorloss useful of theassetandisrecognizedin of Deferred (J) Incometaxes(continued) that Current Cash (K) Cash combination. An or that Deferred the recognized in Depreciation if any Property (L) Property (other that which The arises fromtheinitial expected settle the Machinery andequipment Computer hardware Leasehold improvements Of Moulds, diesandtools Buildings Land property other net fice equipment item it initial estimated have carrying would . is is netofoutstandingbankoverdrafts,if lives, than income the no and deferredtax and , comprehensive of plant tax tax to carrying been fect ofanychangesin liability , accounting longer follow property a plant in accounting policies(continued) using arise deferred , plantandequipment amount business liabilities assets is other are the before useful and as incurred. enacted recognized and probable from the from is amount equipment comprehensive , expected and plant equipment straight-line tax of lives, recognition income estimated for and the combination) the deferred or income expense for liabilities a continued that and of itsassetsandliabilities. manner residual substantively assets so the period business taxes. are to suf as equipment is useful lives or tax be estimate accounted profit orloss. of goodwill. method ficient stated are determined to are are income in directly values settled In of assets use depreciate recognized which measured combination, assets addition, not 30% decliningbalance 3 years Lesser ofleasetermor5years 3 years 2 years 30 years Not depreciated taxable at enacted of or and cost, is recognized or the in is or declining for the the derecognized applicable. directly reviewed and equity as the depreciation asset. income net deferred Company the the in at at liabilities asset major of profit , the the cost dif the balance in in for onaprospective Any accumulated ference if will at equity which income end realized, the tax or tax or classes the gain expects, be in loss, upon method valuation of liabilities temporary ef method. , a end available case respectively between fect or the transaction tax except disposal loss of property based of reporting depreciation is rates are the at each Repairs arising are of included the to reviewed when the current dif on assets that allow basis. not reporting ference . or end that Where sales income , plant period, on when they recognized are and all of does and and in less the proceeds at the or expected maintenance relate current arises the and equipment: no period the accumulated reflecting disposal tax part deferred not their reporting future accounting end rates of af to from if deferred residual fect and the items and the of to or economic tax (and the each asset either apply reduced the the temporary period, retirement costs that impairment expenses tax carrying income initial values taxes for reporting to in taxable are are consequences be the to the to benefits recognized recognized recognition arises recovered. recover dif the of over tax business period amounts are ference an income losses, period, extent laws) from their item also are 1 or in 1 2. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. amortization • the accumulated Subsequent at theirfairvalues • • Subsequent they areincurred. Computer software Content development Intellectual property Customer lists Character trademarks production that areacquired Intangible Capitalized T T Expenditures Internally-generated Intangible Intangible Brands • development intangible The The following (M) Intangible Significant Company Amortization and accumulated Intangible assurance • demonstrated: • episodes accumulated Intangible in estimate useful elevision elevision date how the ability the the intention the technicalfeasibility sell the ability amount life availability the the when are delivered and production asset can assets assets has assets acquired assets acquired

production assets assets and that being accounted costs intangible accounting policies initially and intangible is to to (or impairment losses. amortization on are the to useor to measurereliably amortization access distribution recognized the assets the initial initial from research accumulated to complete acquired with net separately impairment losses,ifany with Company ("IP") of intangible recognized be intangible the of assets estimated the adequate finite recognition, asset; recognition, to indefinite asset willgenerateprobable on apro-rata expected recognized, sell acquisition government development activities in if in on in separately useful of completing 10years method . the are applicable Canada. for a and will a businesscombination the a asset impairment business assets straight-line for a intangible technical, useful lives on aprospective comply useful federal component intangible lives (continued) the intangible internally-generated internally-generated are are date (which first development 2-5 years 2-5 years 5 years 5 years Indefinite basis The programs, in expenditure - that phase and recognized research anddevelopment lives, reviewed combination an asset with and meets the intangible federal losses, asset; financial . over the are basis accumulated asset for the of provincial the assets of such acquired intangible the an is regarded conditions including and over basis. on at acquisition for useorsale; expenditures attributable major internal as and as recognition total numberofepisodes future economic the the and acquired provincial the incurred. brands tax intangible other asset sothatitwillbe end same separately intangible impairment assets recognized classes estimated credits tax project) attached as theirinitial of resources basis to theintangible credits that in each tax are criteria An and of intangible business are assets credits internally-generated is are are expenditures recognized assets as useful are reporting to separately benefits; losses, recognized charged that intangible carried listed them acquired recorded to is are cost). are life complete the are combinations on and above. for theseason. not of available period, to designed assets: at sum asset during in reported from the the amortization assets separately cost only recognized at that profit cost same of intangible the goodwill Where the less if with the all or intangible for use as that to development tax at loss basis of are expenditure accumulated the content assist are its development. are the no cost until credits expense are assets. ef reported in or sale; acquired internally-generated as following fect carried the there initially film less asset development.The intangible will of period The and and as incurred is any accumulated amortization be at arising at reasonable recognized separately have completed estimated television received. cost cost to changes in assets use which been from from less less 12 or . 65 Spin Master Corp. 66 Spin Master Corp. 2. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Future royaltyobligations Amounts The (N) reversal in that group useful recoverable to If cash flowshavenotbeenadjusted. carrying estimate of can When market estimated Recoverable indication the asset Where on the revenue When At Impairment Contract (M) Intangible Significant the Company Inventories (O) Inventories or loss. and through inventories includes demand the legal (P) to A amount

the provision its settle the determine the Provisions Advances onroyalties sale. be would Company rebates products. or recoverable of an asset end lives it Company’ identified, the assessments constructive expected future the CGUs of animpairment and recordedamounts from forecast the is of impairment liabilities Reserves paid is estimated that the future of Company have its not are in or is of tangible obligation accounting policies (or amount purchase are whether each amount the fulfilling recoverable the a that These assets (continued) use in enters for stated possible CGU) and contingent liability been deducted cash s estimate corporate advance and net related amount to berequiredsettletheobligation ordinary which asset maybe related are of reporting for of loss obligation agreements the is of into is there its obligations. at is and determined in flows not price and intangible excess the committed of the a the reduced the order to rights to products subsequently realizable reasonable of loss isrecognized license uncertain to yet amount, the are course from CGU assets time is estimate of therelatedbrands and higher are lower period, an television available any amount initially and obtained as asset is recognized discounted impaired. the liabilities other value to determine theextentofimpairment may to agreements (continued) a of are had of indication to is provided of obsolete which its value. the timing result purchase recognized. cost business, pay and the assets otherthangoodwill (or call fair also can recorded costs, of recoverable no production reverses, for Company under CGU) royalties money consistent recoverable and for the value impairment of be use allocated or The impactofchanges to that immediately of payment inventory past such amount. reliably immediately asset net with price. license, their are less impairment. is as less the the and If future estimated realizable events, reviews assets on as tested all inventors amount. an present all belongs. increased allocation carrying to individual Net costs the estimated. sales import in or loss amount Provisions are the asset estimated and arere-measured sales, advance a realizable risks in profitorloss. arises for it the carrying non-recoverable portion in based been to of is If An to value. value duties, amount impairment profit or and and When any acquired sell probable basis discounted carrying specific be of impairment as Provisions recognized CGUs, or licensors costs are less subsequently upon an of such using and Cost in inventory future a value can taxes a an of loss. individual result recognized reasonable than to value amounts amount the brands, that quantities of indication advance be is otherwise, a loss (if at the payment represents for and completion determined pre-tax asset identified. for least its loss are portion of an for each reporting asset in the timingofexpected carrying the consideration transportation reserves does measured outflow the use. the asset, any). expensed equal of (or annually does when exists, and on use discount of its is they future for asset CGU) not minimum In Intangible expensed hand, the tangible and on to consistent of which not amount, the of the assessing are exceed is reflected the , their the a estimated royalty resources (or at is and appear costs to Company standard Company rate allocated projected increased date. the received dif recoverable costs. the CGU) net intellectual and guaranteed whenever ference assets immediately the the present that necessary obligation estimates income basis to value intangible carrying carrying T in in costof payments. selling will reflects cost be rade to estimates has volumes in with prior to between of the recoverable value be advance the in there basis, amount or properties allocation discounts a amounts. indefinite is of price smallest required use, years. to amount amount present in revised loss current assets based sales. future of make profit is from and the the the the for an as 13 of of A

2. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. of are nolonger market 1, Pursuant Supplier to Financial provisions Financial (Q) Financialinstruments at using Rights discretion not purchased, information Fair represents Supplier reduction consumer a an shares As Share-based Defectives Provision fordefectives which (P) Significant financial increase The of grant through profitorloss(“FVTPL”)amortizedcost. of thesupplier The entitled plan. fixed equity 2018, fair the employee part Provisions contractually Company Company value Under value acquisition the the ("SARs"), each allowance through to theshares. of and the the obligations shares. liabilities obligations in to assets . to assets ef from grants the of therespective estimates refer The a contributed and the resulting through fective accounting policies the period. revenue Company constructive payments was marked to ’ has Company’ and contingent s excessrawmaterialand has L time estimate equity information plan, and to options TIP As restricted stockand or required, and will for at fairvaluethrough one entitled when an interest

a issue

Ef profit financial represent plans, to in in theconsolidated defectives be are result, the The amount fective financial share equity participation settled the time, surplus market. have amaximum the s made of exercise obligation made of or to Initial the the supplier about defectives method. instrument. financial loss) end ef option receive liabilities August grant based L liabilities fective the awards Company TIP by over liabilities are at consumer Public are the (continued) estimated the price

expensed the share plan awards arrangements. having due eligible compensation the 1, T is assets August any financial included are ransaction Company may profit or is 2018, consolidated recognized (continued) Of for of to vesting statements ofoperations made are regularly finished goods options, initially other fering term of past key each excess returns in be for and 1, compensation settlements is adjusted recognized cash, instrument. in settled employees, a loss 2018, equity basedawards. practices. based . period, option financial (the measured the credit Under costs ten share raw defective The compensates as plan are recognizedimmediately resulting initial statement “Initial the years. Optionsvest in an on material for equals Initial directly at providing cash the units inventory for of expense liabilities L when The the All carrying the the TIP which at existing to Of forfeitures as long-term goods financial in or fair Of class

cost (in end supplier be fering”), liabilities the of their and attributable fering shares the forms value. suppliers paid the . for financial and comprehensive market (other in of value of to and and finished Company recognition administrative the which, the form the instruments price to incentive obligation part employees at T were new nature ransaction of than suppliers issuance product Company’ the between zero required. price of to of the position to multiplied L the goods reclassified TIP option their RSUs maintain financial the related becomes of of in profitorloss. employees as plan

is awards if are the the long-term acquisition were of for returned based inventories. costs liabilities, s expenses, date of and customers. securities ("L classified Company’ lower product by instrument the income. assets supplier and fouryears. TIP"), granted PSUs), occur to that a based the on Company party shareholders become incentive than as an are number which and of and with the through defective While into from relationships, s estimate on Stock directly Customers subordinate financial expected to and share financial Board is a . either: relevant were the unconditionally Prior treasury corresponding recorded compensation of are payments Appreciation the on shares attributable contractual by equity of marked may amortized assets to fair issuance liabilities volumes the the the without August market voting which under value at as date cost and that end are its 14 or to a 67 Spin Master Corp. 68 Spin Master Corp. 2. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. cash price) • • (unless When exception • A Financial Impairment Financial Financial Financial Financial the time The (R) Financialassets The the investmenthave one reporting The Company (Q) Financial Significant of recoveries objective to from all For interest method, not beenrecognized. and at recognized T Cash T Other long-termassets Foreign exchangeforwardcontracts Other long-termliabilities Interest payable Borrowings financial rade andotherreceivables rade payablesandotherliabilities its the the financial and hasarecent the on it isaderivative it hasbeenacquired or classification carrying acquisition. flows date allowance is a more initial decrease it possible default initially of trade assets period. is assets assets, assets atamortizedcost assets atFVTPL is of trade of asset isclassifiedasheldfortrading the initial that impairment of financialassets to a accounting policies assets events recognition amount amounts instruments (continued) trade hold impairment has madethefollowingclassifications: receivable are measured are at less account recognition. Subsequent Financial other can of receivables, measured amortized assets receivable solely that classified financial that isnotdesignated been decreased. of any actual pattern be previously than loss the events overthe occurred it related principally are impairment. is is is payments at assets to financial is those reversed part considered fair assets recognized collect to at cost as reversed without where thecarrying amortized initial objectively FVTPL of value written after are (continued) classified are a for of depends contractual asset of portfolio recognition, considered does non-derivative short-term profit-taking; a the plus, the purpose principal through

when of expected significant uncollectible, in cost, f and ef initial is are not to profit as for reduced on an of the exceed of if, FVTPL, an profit if: cash identified recognition and event fset the fective as or in to financial financial life amount item a financing loss. of selling be Amortized cost Amortized cost Amortized cost FVTPL Amortized cost Amortized cost Amortized cost Amortized cost nature subsequent against financial interest or flows of thetradereceivable, by occurring what it impaired are not loss Loss is the financial asset assets is reduced a hedging assessed written and and at the of to the impairment component it inthenearterm;or on assets FVTPL, allowances the or the amortized purpose is its when allowance after the period, are either financial instruments extent contractual of principal f which measured for the instrument. through theuse there transaction against the held loss of indicators that impairment that are cost account. asset, the amount are is for directly using thesimplified is amount the based objective the terms would financial that held initially at trading carrying the costs amortized allowance of the of Changes within on was for give have impairment estimated the outstanding. of Company measured or the evidence assets that all an impairment recognized, it rise amount been a is financial lifetime allowance are business cost designated in account. on and the future had directly manages approach. at using that, specified at of A carrying ECLs is the

assets the the loss the financial the determined model cash account. as Subsequent the end attributable impairment transaction investment as decreases previously that a ef together dates result with FVTPL. flows amount of whose fective result asset each the 15 to of at of

2. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. • • making to The Fair (U) Fairvaluehierarchy loss. The IFRS 3Business (V) provisions. re-measured business • Derivatives The the ef at with its future acquisitions. The (T) Derivative appropriate) Other Other financial An Equity instruments Debt Classification costs. beginning acquired (S) Significant interest cash transaction fair maturity liabilities. equity Accounting standardsissuedbutnotyetadopted Financial liabilitiesandequity Level 2 Level 1- (unobservable for the Level 3 fair Company the IASB value ef and payments fective interestmethod. financial value, fective the value expense substance equity or and instrument on published . measurements asset orliability Fair valueamounts are measurements. costs - if accounting policies These - Equity a shorterperiod, or net at valuation valuation valuation of interest as debtorequity an outputs. enters liabilities financial instruments initially liabilities after instruments their (including short-term over of acquired Combinations and of inputs). include instruments transaction January fair amendments is the into the method recognized other techniques based onquoted techniques The any (including value contractual relevant and liquidity foreign all , either are set financial cash, issued contract The fairvaluehierarchy amendment 1, premiums fees to thenet is of at classified 2020. represent point-in-time costs. issued a the activities exchange at trade (continued) loans and period. directly (i.e.asprices)orindirectly by using to based method instruments fair instruments that end arrangements The the IFRS Subsequently points by value risk and and carrying or inputs Company prices (unadjusted) using evidences of also Company The on the and discounts) of 3 each forward borrowings disclosure other inputs at paid "Business Company ef calculating adds a assets for the approximates fective amount reporting fair or the are receivables, date and will other a , contracts guidance has thefollowinglevels: received value other residual interest asset through classified is estimates andmaynot interest apply and the the are Combinations". a on initial than the period. business. financial derivative hierarchy definitions trade recognized or in these amortized to their that that quoted liability rate the active as manage as payables recognition. The form carrying amendments either determines expected well is liabilities (i.e. The contracts that the markets prices of in that resulting as an as The cost a the its financial rate derived amendments reflects financial the are integral and amounts trade exposure assets included amendment are of life that reflect fairvaluein proceeds for not are if other gain a and substantive of measured liabilities payables from prices); identical exactly the financial based entered part liability of the additions due or liabilities) to in significance an loss of are foreign received, financial Level 1 to on entity discounts clarifies the or and into assets or the liability and ef is observable at as fective processes to ef recognized relatively and are amortized and an after equity exchange fective IFRS that other the liability equity net the initially of are and estimated liabilities; deducting all are for future. inputs 3 of in definition subsequently liabilities interest to of market short accordance , fiscal direct instrument. observable have cost applicable measured in or rate allocating profit used (where period future years using risks. issue been rate, data of and 16 or of in a 69 Spin Master Corp. 70 Spin Master Corp. 3. Significant (A)Determination Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Components (A) expected conditions, assumptions The these to when assumptions assets The In judgment Critical judgmentsin in theperiod Adjustments recognized process annually The Significant labour the Determining reporting (B) A (B) prospectively due Goodwill trends indication rates T of The assets usingdiscounted actual term cost of value Inventories (C) competitive ransactions

CGU be the the currencies Useful Functional Impairment Provision forinventories to Company process Company Company nature relevant, as determining as estimates , application cash operating seasonality and inventories with materials is of of the and or date areretranslated defined use in of the applying life of company-specific and which are in theconsolidated inflows and economic estimates finite identifying regarding accounting judgmentsandestimates amount the when impairment. . the estimateismodified are of about of in indefinite are and actual and employs dates has currency an has stated foreign determining appropriate and testing ofgoodwill results recognized and other property as of useful of CGUs depreciation made, item review ofassetlives. less country-specific is estimated circumstances from the identified identified the the associated the at results the at may materially discount of which applying currencies which assetsorgroups life estimated carrying and assumptions significant Company’ smallest Company’ and other the cash flowmodels transactions lives, property The where , plantandequipment intangible market conditions costs ofproviding functional may lower these budgets. in inventories factors. the Company the assets methods, considering to thefunctionalcurrency financial the to beunrecoverable assumptions rates, amounts actual dif accounting policies identifiable , costs following s are plant estimates following s of change fair and indefinite period factors fer accounting accounting cost assets af and futureperiods or The occur . translated currencies These projected values The fect and required results statements. groups determines depreciation are of and in Company that corroborated by . estimates and industry judgments, equipment the Company'sfinancial assets accounting are group Monetary to which expected are estimates or changes goods orservices. requires estimated mainly determine of assetsareCGUs policies, may of policies, assessed and adjusts, revenues, to to based for life intangible assets. of the and sell. the entities trends the due intangible

reviews dif assets rates and influence to respective may assets estimate the liabilities fer on Inventories apart and policies fair management if therevision net to obsolescence, damage be and at in business if useful underlying for Determining historical and Company from royalty have other valuation such necessary in the sold, assumptions value that realizable depreciation which impairment from the and assets with assets useful sales exchange lives is dif that generates under these as taking Group functional liabilities of modified rates ferent estimates, are have experience results or technological assumptions are its of strategies. prices, to lives, , the Company is af value. written the estimates which its property CGU into requires make and required fects not useful at may the rate at methods, finite depreciation techniques. impact cash which denominated currencies least if consideration readily and margins The most groupings the both currentandfutureperiods. which significant down estimates financial change lives. and , useful lives analysis inflows the plant that annually to change require Company are under of advancements, significant or . apparent other make useful to currencies The management impairment date. derived reviewed declining and in of net position that and methods and taking dif Group Company the of in judgments, , factors af judgments, fluctuations realizable and equipment lives ferent various fects foreign estimates are indefinite future from assumptions from ef whenever on that into selling fect in futureperiods. entities largely and that requires only and assumptions an other past has factors, currencies past makes due account mainly on residual value are ongoing estimates estimates that and in net life prices. assumptions the independent made at to experience, experience, sources. retail considered there significant exchange intangible intangible estimates realizable period, uncertain when influence including of amounts industry values a prices basis. in at is long and and and the the the As an 17 or 5. 3. 4. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp.

cannot bereliably Changes in tax filings consolidated tax Revenue allowance inherent (E) or whenfacts to The historical Company products. future reduction The Company The expenses Other expenses(income) negotiated A (D) Salesallowances Significant 31, 2018. tax authorities. Revenue Other revenue Revenue fromsaleofgoods (US$ millions) Other expenses(income) Other Impairment ofnon-currentassets • (US$ millions) •

a sales exercise balances change Income andother calculation Company of television Sales of Royalties operating allowance in or experience

are subjectto to Certain (income) considers is those discounts, judgment dif in accounting judgmentsandestimates revenue. statement based on toys andrelated ferences the and circumstancesusedin was earns revenue and of results, the balances, programs (“Otherrevenue”) Company’ allowances current estimated. licensing in successful is on consolidated various and regarding the Other established customer taxes in the of audits andreassessments.Changes the consolidated existing underlying and earnings the Company’ allowances s timing fees factors income, are from the deferred in products; interpretation the audits, a or fixed earned statements to lawsuit carrying of and expected estimates including reflect s reversal capital statement and following income can evaluation defective may and for the estimationprocess as determinable vary values the allowances of the result or market of or customer of taxes income commodity use of primary depending plaintif assumptions financial temporary products earnings of of in (continued) of requires conditions. assets cash the tax intellectual f and terms, requested sources: at likelihood position, legislation payments tax and the on and dif and agreed in the may provisions ferences future time historical interpretations comprehensive costs The liabilities may change. Company property result a by of of to Company across outcomes charge or incurred sale the a customers and receipts. in settlement experience, in which , outcome changes and application to the various possible or make or judgments adjusts by future. such income are credit are All customers relating recorded of to jurisdictions, estimates of subject income, as audits any to the $15.5 The its' revenues sales for customer income current estimate expected the to amount to million of may result 1,581.6 1,463.7 allowance capital at contractual to year and accounting 117.9 income 2019 2019 the sell and 6.6 1.0 5.6 expectations tax or sales assumptions ended of at included time deferred deviations and the expense the least such tax volume. claims. of Company’ commodity distribution December discounts, estimates quarterly a sale filings change in 1,631.5 1,509.6 income in about 121.9 (14.7 (15.8 2018 2018 other from as The The and 1.1 the by 18 a s , ) ) 71 Spin Master Corp. 72 Spin Master Corp. 7. Expenses 6. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp.

Finance costs Selling, marketing,distributionandproductdevelopmentexpenses administrative Included Employee compensationand benefits Employee compensationand benefitsinadministrativeexpenses Employee benefits Restructuring Share-based Salaries, wages Employee compensation Employee Salaries, wagesandbonuses (US$ millions) Employee compensationandbenefits Administrative expenses Selling, marketing,distributionandproductdevelopmentexpenses Product development Distribution Marketing Selling (US$ millions) Administrative expenses Other Restructuring Recruiting andtraining T Professional services Property andoperations Employee compensationandbenefits (US$ millions) Bank Accretion expense Accretion expense (US$ millions) Interest (income) Amortization offinancing Finance echnology fees costs benefits within compensation expenses, including and bonuses expenses expense - - other lease liabilities costs and benefitsexpensesincostof are the employee following: benefit expenses, selling, marketing, sales property andoperations distribution and Note product and professional development 172.1 247.9 395.4 178.6 172.1 130.5 155.0 112.0 2019 2019 2019 2019 12.2 22.8 27.6 20.3 15.2 30.3 98.1 11.7 (1.6) 3.6 2.7 6.9 6.1 6.5 5.6 0.9 5.9 0.9 1.7 4.8 expenses, fees. 179.9 278.4 331.9 184.9 179.9 133.9 154.2 2018 2018 2018 2018 11.2 24.4 34.9 20.7 26.5 12.2 27.5 61.2 89.0 7.3 7.2 5.0 4.1 0.9 5.9 0.9 2.3 0.3 9.4 — — 19 8. 7. Expenses(continued) Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp.

Income tax Depreciation Depreciation and Right-of-use assets Computer software Content development, Moulds, Property (US$ millions) T Intangible Computer hardware Land and Equipment entities The The income The As atDecember31,2019,the Companyhadanincometaxpayableof$4.5million (2018 -$6.5million). Current taxassetsand Income taxexpense (US$ millions) Current Deferred income Income taxexpense (US$ millions) Income Income Ef rademarks, fect Expenses notdeductibleindeterminingtaxableincome Other Dif recognized Previously unrecognizedandunusedtaxlossesotherdeferred taxassetsdif Unused taxlossesandattributesnotrecognizedasdeferred taxassets income tax ferent taxratesofsubsidiariesoperatinginotherjurisdictions of: dies and income taxexpense before incometax tax expense in rates , leasehold plant and assets the licenses, tax tax expense and amortizationexpense used Group, expense tools, tax (recovery) amortization expense improvements for equipment at Canadian IP included included on the

& customer liabilities recognized expense taxable reconciliations is calculated in costofsales expense in costofsales statutory taxrateof profits lists in - definite the as follows: under above statement tax are 26.5% (2018-26.5%) laws the of Canadian earnings in the respective and statutory comprehensive jurisdictions tax ferences now rates of income in the which parent comprise the 2019 payable 84.6 31.1 40.1 13.0 31.5 20.9 Company 2.2 6.8 1.4 3.4 5.8 2019 2019 20.7 22.9 20.7 85.0 22.5 (2.2) (4.2) (0.4) 0.8 1.5 0.5 of the by corporate following: operates. 208.4 2018 2018 2018 74.2 38.9 47.2 27.0 20.5 53.5 45.3 53.5 55.2 (4.1) (0.7) 2.0 6.3 1.0 2.0 3.5 8.2 0.9 1.4 0.8 — 20 73 Spin Master Corp. 74 Spin Master Corp. 8. Incometax(continued)

liabilities Thesourcesof Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. indefinitely $0.3 nil). Unrecognized As Unused taxlosses The Deferred incometaxbalances financial The Net deferredtaxassets (US$ millions) Net deferredtaxassets (US$ millions) Provisions andcontingentliabilities Intangible assets Property Intangible assets Property Allowance fordoubtfulaccounts Provisions andcontingentliabilities Benefits oftaxlosscarryforwards Allowance fordoubtfulaccounts Benefits oftaxlosscarryforwards Other temporarydif Other temporarydif Net deferredincometaxassets (US$ millions) Deferred incometaxassets Deferred incometaxliabilities at following million aggregate amount December , plantandequipment , plantandequipment position: were notrecognized . There will is taxable expire deferred 31, the were ferences inbasis ferences inbasis 2019 analysis between temporary differencesassociated no of temporary income tax , unrecognized the of Company 2020 as atDecember deferred and balances dif 2029, deductible ferences had income unused $2.0 are asfollows: 31, tax associated temporary million 2019 tax assets losses 2018 , are$236.2million with (7.9) (1.6) (1.2) will 5.5 9.6 0.3 6.4 0.2 and with investments expire dif investments of ferences Recognized net income liabilities $5.7 beyond million 2017 13.9 (4.5) (1.5) (1.7) 2.2 0.6 1.8 3.2 3.5 4.7 0.4 8.2 0.4 7.4 1.8 for — in presented 2029 the (2018 ( 2018 Recognized net income in subsidiaries translation year and currency Foreign -

- ended $203.1 $3.4 in $2.9 (0.2) (8.2) (2.2) (3.4) (0.1) (0.1) (4.3) (0.1) (0.1) (0.9) (3.0) 1.4 the — — — — in million million). December consolidated combination on business Recognized million). translation for whichdeferred currency Foreign may Unused (1.7) (0.2) (1.7) (1.7) (0.1) (0.1) (0.1) (20.4 2019 be 26.2 — — — — — — — — — 31, 5.8 carried statements ) 2019 tax

losses

forward ( 2018 tax (15.5 2018 (11.1 2019 2018

21.0 11.3 (1.6) (7.9) (2.9) (1.2) 5.5 5.8 5.5 1.6 9.6 0.2 2.0 0.3 0.2 6.7 6.4 21 of of

- ) )

9. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. T Movement intheallowancefordoubtfulaccounts T the amountsarestill the In T During trade receivable Inc. bad Amounts writtenof End ofyear Foreign currency Impairment Impairment Beginning (US$ millions) T > 120days 91-120 60-90 days (US$ millions) Provisions T T (US$ millions) Net tradeand Other Royalty Sales Investment taxcreditsreceivable Other receivables Allowance rade andotherreceivables rade receivables rade otal tradereceivablespastduebutnotimpaired rade rade determining Company on March15,2018,to debt tax receivables receivables receivables receivables the days receivables expense of for doubtfulaccounts for sales year losses reversed losses recognized year has other receivables the ended translation from the f duringtheyearasuncollectible not past disclosed allowances recoverability of considered recoverable. $12.1 recognized December due butnotimpaired date credit wind million) on above receivables down andliquidate of an 31, a in include allowance trade was initially 2019, administrative receivable, amounts the because Company granted uptotheendofreportingperiod. certain of expenses that the there are Company recognized past T has (other), oys due not R UsInc.'sglobalbusinesses. considers a as been related bad at the a debt significant to any end the recovery change of legal the change motion reporting of in Dec 31, Dec 31, Dec 31, (174.9 $0.9 546.2 427.7 370.7 the (10.7 2019 2019 2019 16.7 57.0 12.0 24.2 14.2 (0.8) (0.6) 9.9 0.6 4.8 2.3 9.6 2.2 6.6 — in credit quality filed million ) ) credit period by quality (2018 T Dec 31, Dec 31, Dec 31, oys for (135.0 404.0 335.6 266.8 (21.0 2018 2018 2018 20.4 17.0 68.8 39.1 15.5 which of (0.2) (2.2) R 2.2 0.2 9.4 2.2 5.4 2.8 6.7 7.5 - and the net Us 22 ) ) 75 Spin Master Corp. 76 Spin Master Corp. 10. 1 Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. 1. included Impairment recoverable For During million). The Inventories Property Finished Raw (US$ millions) December 31,2018 December 31,2019 December 31,2018 Net carryingamount Accumulated depreciation Inventories December 31,2019 December 31,2019 December 31,2018 Cost (US$ millions) Foreign currencytranslation Asset retirements Depreciation Foreign currencytranslation Asset retirements Depreciation December 31,2017 Foreign currencytranslation Asset retirements Additions Asset impairments Foreign currencytranslation Asset retirements Additions December 31,2017 the cost of materials 2019, year goods within , plantandequipment inventories losses ended amount $9.0 cost ofsales million December are was based recognized as recorded of inventories in 31, the on 2019, where consolidated the asset'svaluein an were the Moulds, dies expense incost the Company and tools written carrying (104.3 128.9 114.0 112.3 statements of (15.4 (20.9 (93.5 (20.5 (90.8 24.7 20.9 24.6 20.5 15.4 (1.1) (8.7) (1.1) (2.7) 1.4 8.7 2.4 down ) ) ) ) ) ) recorded amount use. of salesduringthe Equipment to net earnings no of (15.2 (13.2 (16.4 realizable 29.7 24.4 18.1 13.3 (2.3) (0.7) (3.4) (0.1) (2.0) 7.6 7.0 2.3 9.2 impairment the — — — — — ) ) ) improvements asset and comprehensive leasehold value Land and year exceeds losses (10.4 (14.8 39.1 33.8 22.8 12.9 23.4 24.3 (1.9) (1.9) (5.8) (0.5) (3.5) (7.8) (2018 1.6 5.6 1.9 0.9 was $686.9million — — — ) ) ( 2018 its

- $1.9 recoverable Computer hardware Dec 31, - income. $1.1 185.3 171.1 million). 2019 14.2 14.2 11.3 (0.2) (1.3) (1.4) (8.4) (1.0) (8.2) (9.6) 0.1 3.0 2.8 9.8 0.2 0.8 2.9 4.6 million — — — — ( This 2018 amount. in 6 Dec 31, charge - CGUs). 110.1 $71 2018 (127.5 (120.0 (145.1 11.0 99.1 21 183.5 153.1 T (13.1 (15.4 (31.5 (27.0 40.9 53.5 13.1 56.0 15.4 66.8 otal (6.6) (1.1) The 0.6 1.9 4.1 0.8 1.7 23 is ) ) ) ) ) ) ) 12. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. projections rate of8.9% The Management is using price Cash Intangible (US$ millions) Cost December 31,2018 Net carryingamount

December 31,2019 December 31,2019 Foreigncurrencytranslation December 31,2018 combinations

Foreigncurrencytranslation Foreigncurrencytranslation combinations December 31,2018 Foreigncurrencytranslation December 31,2019 Accumulated amortization Assets acquiredthroughbusiness Assets acquiredthroughbusiness Additions Amortization Additions Amortization Asset impairments December 31,2017 December 31,2017 based recoverable inflation flow a steady would projections assets based per annum believes throughout not 1.0% amount on

cause financial (2018 during that (2018: 10.8% the of the any : the the 1.0%) aggregate forecast forecasts reasonable CGUs forecast per per annum). Note period. 23 are approved annum carrying period possible determined The growth indefinite are amount Brands - by cash change 113.4 115.7 113.4 115.7 management based 83.0 33.9 (3.5) (5.6) 6.5 1.4 — — — — — — — — — rate based flows to in on exceed T which & customer licenses, IP rademarks, the beyond the on definite key lists - a covering same (18.5 is (11.9 the 36.0 34.0 33.2 45.9 51.7 (6.8) (6.3) (5.8) value 0.2 0.4 9.5 0.2 5.5 0.3 assumptions the — — — the aggregate ) ) expected development projected in five-year a five-year use Content (136.7 113.2 164.5 (31.1 (97.3 (38.9 (63.9 calculation recoverable 94.7 15.9 25.5 27.8 48.1 (8.3) (7.0) gross on 5.5 3.2 long-term — — — period which ) ) ) ) ) period margins Computer have software the and which average amount recoverable (20.2 (17.2 (16.9 18.1 19.7 25.9 (0.8) (2.2) (1.9) (2.0) been 2.5 3.5 5.7 5.2 1.7 1.0 and a — — — pre-tax uses ) ) ) raw of extrapolated growth the cash materials discount amount CGUs. (175.4 (126.4 231.8 165.8 182.4 292.2 357.8 T (40.1 (12.0 (47.2 (86.6 29.0 43.4 53.3 12.0 otal rate. (8.9) (5.6) flow 7.4 5.9 24 ) ) ) ) ) ) 77 Spin Master Corp. 78 Spin Master Corp. 13. 12. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Intangible goodwill its recoverable of indefinite The The carrying Goodwill For Impairment The carrying Goodwill Spin Etch T Swimways Games andPuzzles Gund (US$ millions) T Meccano Etch Orbeez T Gund Swimways Games andPuzzles (US$ millions) Balance, beginning (US$ millions) T Spy Gear Meccano Additions Balance, Foreign currency otal oca Boca ech oca Boca the the recoverable A A Master Deck Sketch

Spy Sketch year during during end

lived Gear assets UK losses ended amount amount of year intangible amount. the year 2019 (2018 translation CGU amount (continued) of December year of goodwill of indefinite (2018 The recoverable of assets - the

- nil). 31, nil). CGUs was allocated (see 2019, life intangible Impairment for Note the amount was goodwill Company 12). losses to theseCGUs assets, There have recorded are based ontheCGU's have comprised been recorded been determined as follows: impairment of brands, no where impairment on the losses value in the was allocated carrying same of losses use. $5.6 basis amount million recognized to CGUs and Dec 31, Dec 31, Dec 31, 138.8 115.7 124.2 138.8 2019 2019 2019 of (2018 13.0 27.8 31.6 33.9 11.5 20.3 42.1 48.2 13.6 assumptions 1.2 2.2 0.2 9.0 4.1 2.2 7.2 1.0 — the as follows: with

- CGU nil) respect in exceeds Dec 31, Dec 31, Dec 31, respect as 124.2 113.4 105.5 124.2 2018 2018 2018 13.0 27.8 24.3 33.9 11.5 19.6 42.1 43.7 19.6 (0.9) 1.2 0.2 2.1 3.8 5.2 2.2 7.0 the — 25 to 14. 15. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. (ii) (i) Production The better in A indebtedness, also On prime under T million and During On Bank Facilities Secured Debt Loans andborrowings 2019, theCompanyhadcontractliabilitiesof arise asaresultofconsiderationreceivedinadvancetheCompanyfulfillingitsobligations. Contract liabilitiesarecomprisedofadvancesoncontractsrelatingtolicensingandtelevisiondistribution,which Accrued liabilitiesarecomprisedofpayrollrelatedliabilities,accruedroyalties,commoditytaxandotherbalances. December 31,2019(December T Accrued liabilities T (US$ millions) rade payablesandaccrued vailable borrowing rade rade July July December other • • • • • • • Company has rate. payables aligns the payables CAD) 2023. the 10, Bankers’ Base RateLoans; Prime RateLoans; Letters ofCredit Swing Loans;or LIBOR Loanswith days, subjecttoavailability; BA subject toavailability; an option business Production year facility was

2018, Equivalent to Advances with 2, funding has better ended and 2019,

Acceptances the the which a units. accrued options under secured Company align Company's Facility December Loans working nil. the under

Included permits theCompany with Company an interestperiod liabilities from revolving bear the Facility liabilities from the capital reduced 31, 2018-$3.4million). 31, within borrowing the the Facilityinclude: Company's interest BA 2019, reduced Non-BA requirements,

credit Lenders accrued the

may the at limit needs $7.6 million(2018- facility of one,two,

the a Lenders be used Company borrowing to increase variable of with liabilities limit the under (the a permitted Credit on maturity with for executed rate “Facility”) needs its is three orsixmonths,subjectto the general the a a Production Facility maturity restructuring referenced facility total capitalavailable of acquisitions under $7.0 million). thirty the corporate with (the . As of restructuring the , the sixty Facility thirty "Production at to facility provision amount December 31, the , and purposes , ninety sixty to . lending permitted The $7.7 , of of ninety or of by Facility") interest the $510.0 $2.1 one million including an institution’ availability; Gund, or hundred distributions. 2019, additional million one Dec 31, rate million, As atDecember31, ($10.0 to 345.6 129.8 215.8 2019 Swimways, $15.4 refinancing hundred the on s for and Canadian amounts million the $200.0 which balance million eighty The year and Cardinal matures CAD) Dec 31, existing million. Facility ($20.0 ended drawn eighty of 276.8 116.2 160.6 dollar days, 2018 the 26 to 79 Spin Master Corp. 80 Spin Master Corp. 16. 15.

Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. (iii) As The Company of thefollowingfinancialcovenants: and futurepersonalproperty The obligationundertheFacilityissecuredbyageneralsecurityandpledgeagreementinrespectofallpresent Loans andborrowings Europe. On Bank OverdraftFacility Unsecured Debt letters ofcredit. nil Facility") Provisions December 31,2019 Revaluation Reductions

Provisions December 31,2018 Revaluation Reductions

Provisions December Supplier Defectives (US$ millions) Contingent Provisions andcontingent Non-current Current Provisions andcontingentliabilities ( at December 31, December Accretion Accretion • • December 31, As at Interest coverageratio,calculatedonaconsolidated,rollingfourquarterbasis,at3.00:1.00orgreater 3.50 to1.00orless;and used T immediately month than for otal liabilities and contingent $16.8 recognized recognized (i) 31, 2017 consideration, acquisitions $100.0 recognized recognized leverage proceeds December 31, arising from arising from was in 19, of provisions of provisions period, 2018 million (ii) 2018, 2019, million following compliance is ratio,

of (continued) - calculated the payments payments (€15.0 nil) a the borrowing during , assetsandundertakingofthecreditparties. liabilities defined 2019, theoutstandingbalance liabilities Company drawn Company such million). with any on as permitted in (iii) to a all covenants two LIBOR the quarterly entered complete had The consecutive ratio utilized European Defectives (i) Loans acquisition, of into basis, a (a) single as atDecember31, an $0.7 and total (11.8 (14.3 13.8 15.8 15.1 fiscal of 9.8 9.0 Facility uncommitted — — — — 3.00 $0.7 permitted million debt ) ) the was quarters to borrower million at will nil (December 1.00 (December 31, such liabilities (ii) be acquisition falling or Overdraft (December 31, Supplier used time, less, 2019 must This facilityissubjecttothemaintenance (1.8) (1.0) within 4.9 0.5 6.2 1.4 5.8 to to — — — — provided andDecember31, only (b) 31, fund with Facility 2018 the EBITDA 2018 maintain aggregate working acquisitions (iii) twelve-month 2018 that, - consideration, Agreement $0.4 - Contingent nil).

for in - Dec 31, the capital the million) $0.4 the consideration 2019 16.5 14.9 16.4 13.8 16.5 35.2 26.2 35.2 (4.4) (0.2) (4.3) 2.2 1.7 2.1 2.3 0.7 4.9 9.0 total event 2018. applicable million) reporting requirements (the of leverage the the "European borrower drawn Dec 31, Facility: greater twelve- period T (18.0 . (19.6 2018 35.2 18.4 30.9 17.2 31.2 14.9 30.9 29.2 30.9 otal (0.2) ratio 2.2 1.7 2.3 9.8 6.2 1.7 27 in in ) ) 16. 17. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp.

The Company nature the uncertainties adverse (a) Share capital Provisions Provisions Common shares Balance, Issuance under Balance, Issuance ofcommon Balance, beginning Subordinate Issuance under Conversion Balance, beginning Multiple voting Conversion Company’ Company Unlimited Unlimited Unlimited Authorized (iii) (ii) (i) of theliability ef end end believes fect comprehensive royalty of Sales Business excess The million) Supplier product relationships. defective payments without volumes Defectives to subordinatevoting from multiple voting shares: and contingent involved of year of year s shares: on is secondary secondary fair number ofpreferred number ofsubordinate number ofmultiple operating results as atDecember31, issued and involved the raw of of a and is that and reduces value on purchased, liabilities shares combinations by fixed imposed year year are Company’ recorded refer in material the consolidated the is the voting legal The of of of not based allowance in outcome fering income. fering to end the outstanding, end various legally represent liabilities (continued) shares supplier when and the proceedings shares and total resulting s consumer the in on for business, as voting shares; finished other of the net sales contingent shares issuable required, the a routine for described 2019 all level particular obligation voting shares; the end statements in achievement defectives pending . The expense andDecember31,2018 the generally estimated of financial goods consumer legal of year figure onthestatements the supplier the consideration estimate in period dependingon, is legal Company Company’ Note proceedings inventory of are based (income) , condition in series. the and compensation of operations andcomprehensive having proceedings returns 23 eligible certain of ultimate (millions) include Shares on defectives . s income will The on excess and/or the faulty in incidental for 102.2 regularly December 31, financial 31.6 70.6 31.1 70.7 provision (0.1) the outcome a 0.1 0.4 Company’ — — a 2019 in royalty goods to raw credit its the for among other consolidated is (US$ millions) of be results made material that particularperiod. operations andcomprehensive aggregate compensate Amount to performance for paid payable of to for the s a the supplier estimate the based of 2019 354.0 714.5 360.5 333.3 360.8 particular to ordinary 20.4 (0.3) and Company’ 0.3 operations. — — suppliers cost over things, is

statements was finished on income. not obligations suppliers criteria. of of the (millions) course the matter probable $16.5 Shares the the the s next for class However customers. goods product cost size 101.8 The lower million 31.1 70.7 28.2 73.5 to of could (2.8) five of 2.8 0.1 is — — 2018 to and maintain its of of recorded accretion operations inventory calendar have (US$ millions) than the business. , be the if (2018 nature in returned Amount income. Customers material loss or light a supplier expected material supplier

- in . years. of or 333.3 694.1 360.8 306.2 375.1 $14.9 While of (14.3 Cost 14.3 12.8 The and the the the the — — as 28 to ’ s ) 81 Spin Master Corp. 82 Spin Master Corp. 17. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. into shares associated shares On relating 31, 2018- Share As Arrangements, cash recorded which arrangement, 2019 (December The Long-T year ended Of compensation an The being encourage The Participation arrangements (b) Share-based 2018. share one former Included Below RSUs andPSUs The settlements Share capital(continued) The any otherequitybased Outstanding, beginning (number ofunits) Outstanding, endofyear Forfeited Exercised Granted fering at August aggregate an Company Company Company Company December 31, settlement. entitled tosomeorall options, the is based equal at erm to a (the in a in grants summary the $23.5 15, the retention. price employee December 31, administrative Incentive number "Initial compensation as satisfied Participation of 2018, expense above settled share had has which will resulted of plans million) determined 4,790,178 31, 2018- The with equity $41.98 an of Of be 2019, the units The table of of is between pursuant vested the equity fering") Plan Company the this of made awards. subordinate for year three based onthe in atransferof$1 terms participation activity (in expenses participants’ are per 1,068,258 2019. the Arrangements ("L 229,588). of theirsharesbetween subordinate expense L by fering. based the by founders TIP grants share. of Participation TIP") to of the the form the related six monthsandyears. recognizes which

the grants Company compensation value voting in of Company The (December Participation of of arrangements weighted

entitlements the 453,246 of they to $3.3 RSUs voting during Company the of with 1.8 shares RSUs consolidated Arrangements the were . compensation Company million million Under . a and PSUs shares The the average Company weighted 31, and of entitled Arrangements plan by PSUs), year did six months the Participation 2018 (“Participation ( the PSUs from contributedsurplus 2018 to making not immediately providing converted Company statement certain ended L of the

TIP to

average is - at receive Stock outstanding - 1,683,370) receive expense calculated , $5.6 the a the contractual December 31, key one-time and sixyearsfollowing dif closing Appreciation Arrangements for Board and an million) of any grant Arrangements”) employees fer a prior the operations aggregate cash over closed between proceeds based as subordinate may cash issuance of date to at relating life remaining payment the the December 31, the at an payment fair 2019 on to share Rights during Initial its participants vesting of and served closing from of the value discretion of to 2.8 fering

with through voting and comprehensive securities fair Participation Of the ("SARs"), the million to the capital. fering, of to period nine senior of of 12months. value of year shares participants sale $14.9 shares reward Initial 2019 such the with the from (413,088 713,908 460,559 708,090 multiple (41,653 ended of less of from of Initial restricted issuance 2019 on vested Of subordinate and subordinate million each time were past the Arrangements fering. the the employees treasury

) ) income December 31, December 31, and voting Of to Participation participation Initial value outstanding service participants (December fering. time, of by stock (371,325 708,090 315,51 807,217 (43,313 shares. issuing shares for Public voting voting under of 2018 grant The and and and the the 29 1 is ) ) 17. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. estimated The maximum The following August price The Share Purchase income Below Deferred ShareUnits shares. marked of administrative to December 31, Share Share Share capital(continued) Black-Scholes fairvalue Dividend yield Expected volatility Expected optionlife(inyears) Risk-free interestrate Exercise price(inCanadiandollars) Share price(inCanadiandollars) W Outstanding, endofyear Exercised Granted Outstanding, beginning (number ofunits) Outstanding, beginning Exercised Granted Outstanding, endofyear eighted averagefairvalueperoption grantedatgrantdate(inCanadiandollars) $4.9 DSUs Company weighted of based based is asummaryoftheactivityrelated million 1, for As aresult,theL to each is at thegrantdatebased term oftenyears. 2018, market the yearended recorded compensation compensation is asummaryoftheactivity option average has 2019 expenses and Options (“Options”) the each one $6.4

with equals Company of of ("DSUs") in share fair period. year year million corresponding administrative TIP in December 31, value expense, the expense liabilities the The Optionsvest option were Ef settled consolidated market of fective on plan the recorded (net of the Black-Scholes were reclassified L entries expenses Options $ price for TIP August 10.1 of 2019. to DSUsoutstanding key mark

the awards statement of million ratably recorded in employees, A granted outstanding the 1, contributed to corresponding in 2018, market Company’ in the ( 2018 over fouryears. cash, to shareholders in of option during consolidated settlements contributed earnings adjustment) which - Options: $1 surplus resulting s pricing model 1.3 the as atDecember31, share amount was forms million) year and and surplus. of statement on was in part equity andarenolongermarked L comprehensive ended in TIP their the relating Number of $0.6 of accrued using thefollowingassumptions: Options

685,741 158,544 836,596 awards recorded in date In their recognition (7,689 December 31, million the of to L of prior TIP 2019 operations liabilities, ) RSUs occur grant ( . 2018 Under income year andDecember31, accrued liabilities. $37.96 $37.96 $13.29 as 35.0 31.9 and 2019 and through 6.25 1.5 — , - liabilities, corresponding $(0.3) respectively 2019 the exercise price(CAD) 78,311 17,918 60,393 % % % and PSUs the 2019 for W plan, — eighted average Options the the comprehensive and million) is the which issuance year recorded 2018 to . exercise market.

(18,349 relating Prior $51.97 $51.97 $18.19 $33.70 $37.96 $22.94 $34.60 60,393 11,098 67,644 have entries 2018. ended 35.0 31.7 2018 2018 were were 6.25 2.1 — 30 % % % to of in a ) 83 Spin Master Corp. 84 Spin Master Corp. 17. 18. 19. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. The in thefollowing the The Share Share Share capital(continued) in Earnings pershare corresponding 2019. expenses are included they Basic Diluted Changes T Provisions Contract Other Increase (decrease) Prepaid Inventories (Increase) decrease (US$ millions) Equity-settled Participation Equity-settled RSUsandPSUs (US$ millions) Share purchaseoptions T Advances otal changes otal sharebasedcompensationexpense T T the rade rade consolidated total Participation are issuance based based payables and not expense expenses liabilities in in on other and contingent included in thecomputation compensation the net workingcapital compensation royalties in networkingcapital amount was of table: and accrued receivables consolidated fewer Arrangements statement recognized in: in: in the multiple Arrangements transactions liabilities W number ofshares computation expense eighted average liabilities recorded in expense of for statement operations voting of diluted employee issued of of 102.1 102.9 shares $1.8 of to $15.2 contributed surplus. of 2019 diluted earnings employees services and million earnings to

Per shareamount($) million the comprehensive earnings ( 2018 per share. principal received ( and upon 2018 - $1.7 comprehensive per - the shareholders. during $12.2 share. 0.63 0.62 million) Initial income million) the Ef Of relating fective period fering for income As W number ofshares is the eighted average recorded these August for to as Options year equity-settled subordinate for share 1, the ended 101.7 102.3 in 2018, is administrative year issuances recorded 2018 (122.2 2019 15.2 10.1 December 31, (79.9 (74.0 (57.1 2019 all 35.7 42.3 3.3 1.8 voting (3.1) ended transactions 0.6 9.1 8.0 0.9 Per shareamount($) L TIP ) ) ) ) in are shares

related December 31, administrative anti-dilutive, expenses is (126.2 (121.2 resulted 107.1 2019. (19.1 (12.6 2018 awards 91.1 16.9 15.0 shown (3.5) (7.4) 2.6 2018 1.52 1.51 12.2 4.9 5.6 1.7 ) ) ) ) 31 in A

21. 20. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. These Leases Related partytransactions Extension and termination lease On Amounts recognized During The The compensation Compensation million). transactions December 31, is in remainder T T Employee Share-based Salaries, wages (US$ millions) December 31,2019 Lease payments Accretion Lease Liabilities,non-current Lease Liabilities,current Other Depreciation andamortization Disposals andmodifications Additions Depreciation expense Net carryingamount otal compensationofkeymanagementpersonnel ransition, January1,2019 the also January Company amount term terms the a benefits member and year comprised of is 1, compensation included are 1 of leases termination 2019 areas 2019, 1 of key and bonuses ended options areexercisable $83.4 years. used of directors of the in thebalance several management in the December 31, to million. The leases ofdistribution the Company maximize Company's options follows: consolidated carrying assets Leased and other are recognized personnel operational sheet including 2019, value included buildings Board only by key management statements the of buildings, centres, of right-of-use Company right-of-use in the flexibility represented Directors. a Company number of information technology distribution the engaged in assets assets personnel For terms Company of approximately and notbytherespective property Building the and of in the centres, 12.0 75.4 year the managing during services depreciation were and amount ended Right-of-use 88.0% IT equipment $0.5 the

("IT") equipment, of contracts. year was of December 31, a million of Equipment law $83.4 by equipment, the Assets class firm leases lessor ( (13.0 right-of-use December 31, 78.3 83.4 million and (0.4) (1.5) The as follows: 1.0 2.9 9.8 whose — — of ) . vehicles. across majority 2019 underlying and vehicles. 12.2 2019 and 0.2 6.6 5.4 managing Lease Liabilities assets , lease the related The of 2018 Company extension assets liabilities average with partner - T (13.8 2018 party 13.0 78.3 11.3 82.7 83.4 67.6 15.1 $0.8 otal (1.5) 0.3 4.8 6.2 4.8 9.8 the — — 32 at ) . 85 Spin Master Corp. 86 Spin Master Corp. 23. Businesscombinations 22. Commitmentsfor 21. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. with also Pursuant On Acquisition Amounts recognizedinthestatementofearningsandcomprehensiveincome Leases market Assets acquiredatthedateofacquisition royalties. are estimated through theacquisition ef Included The were earnings $32.7 million Licensing T Guaranteed paymentsduetolicensors Lease liabilities-undiscounted T Expense relatingtovariableleasepaymentsnotincludedinmeasurementofliability Expense relatingtoleasesoflowvalueassets Expense relatingtoshort-termleases Accretion expenseonleaseliabilities Depreciation expenseonright-of-useassets Fair valueofidentifiablenetassets acquired Assets acquired otal commitments otal fective December4, Intangible assets Inventories December included pro The allows $0.1 and (continued) forma in and comprehensive Maya to The and fair million the license Spin Master the in of Orbeez (2018 4, values and total similar the total Group. terms 2019, in Activities, for actual expenditures - purchase purchase transaction $23.4 million). of agreements further the 2019. set of certain The $5.5 to incorporate

results Company forth acquisition Games penetration million income fortheyearendedDecember consideration consideration in related of assets the in operations (related acquired ef & agreement, fect Puzzles Orbeez products secures costs of into at The MayaGroup of has to existing December 31, the included for $15.2 the and the rights been this the brands Plush Company million markets <1 acquisition Company allocated to in Y into newand ear the product administrative and is 2019 24.0 15.7 Orbeez for total as 8.3 $2.1 Less than1yeartogreater5years the trademarks), well acquired to have

contain category global million the 31, as brand, purchase 1-5 existing product not expansion identifiable 2019. Y expenses provisions intellectual ears related control been , pursuant belonging and 63.4 18.4 45.0 consideration presented $9.0 to of into intangible in the the for to property million > 5 the new to lines. an future estimated Orbeez the Fair V Y asset consolidated and territories. ears North of of assets minimum 60.6 54.6 and alue asatDec4,2019 are 6.0 purchase goodwill. $15.2 million. intellectual fair America immaterial. the The based value ability statement payments The T agreement acquisition otal segment property of on to assets 148.0 115.3 There future 2019 32.7 13.0 22.9 their sell, 3.4 1.1 0.6 4.8 6.2 5.5 0.7 33 of of 23. Businesscombinations Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. the The into new a On Acquisition assets. distribution values ended included amounts Goodwill Goodwill Assets acquired Goodwill Goodwill arisingonacquisition from goodwill this not of million belonging Goodwill arisingfromtransaction Fair valueofidentifiablenetassetsacquired Consideration paidincash Intangible Assets Deferred Liabilities assumed Fair valueofidentifiablenetassetsacquired Goodwill arisingfromtransaction Fair valueofidentifiablenetassetsacquired T Present valueoffutureroyalties Consideration paidincash otal purchaseconsideration share expected August ability recognized acquisition total December 31,2019. of of acquired in purchase territories. arose purchase arising arose for goodwill acquired. $6.5 to tax liability to assets administrative 9, rights synergies, sell, the of Hedbanz the 2019, as theydo million on separately on have benefit on acquisition North and liabilities market to the the consideration agreement Hedbanz the acquisition not (related America acquisition revenue Company of and not meettherecognition (continued) expenses been expected from The assets license for recognized at to for presented growth segment goodwill of the the has of acquired Orbeez total in U.S for synergies, Hedbanz brands been the and further are included cash and because ef consolidated and as fective allocated future the and the Mexico the consideration as penetration are intellectual revenue date of trademarks), cost market the August criteria foridentifiable they immaterial. to in in consideration of statement the 201 do the the acquisition growth development. 9, not into 1. property identifiable Activities, Games&PuzzlesandPlush consideration 2019. of The $1.7 meet markets There $9.4 and of acquisition The million earnings paid associated the future million. were intangible pro These presently recognition intangible ef paid fectively related forma market $0.1 secures and The for benefits with assets the million comprehensive and under to Company assets. development. included criteria the combination a the actual are deferred based license Hedbanz in Fair V Company not transaction for results amounts originally recognized alue asat on identifiable as tax income These ef their brand, well product category fectively the liability of for operations estimated as related global acquired Aug 9,2019 benefits pursuant for the separately expansion intangible and included the benefit IP costs 15.2 13.1 $4.6 year

4.6 4.8 9.4 6.5 6.5 1.7 1.7 4.8 and 9.0 6.2 2.1 are the fair for 34 to , 87 Spin Master Corp. 88 Spin Master Corp. 23.

Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. future consideration million acquisition design. has Business combinations(continued) Included 30, 2018. the Pursuant distribution, Goodwill be collected. contractual The Assets acquired On Acquisition Prior year is The ef of earnings There Goodwill arisingfromtransaction W Fair valueofidentifiablenetassets acquired T Present valueoffutureroyaltypayments W Consideration paidincash Intangible Prepaid Inventories Assets Fair valueofidentifiablenetassetsacquired Liabilities assumed Accounts otal purchaseconsideration fective Accrued royalties Accounts payable a orking capitaladjustmentduring measurementperiod orking capitaladjustments April Company manufacturer a trade assets 120-year royalty were (related acquired The 2, April in arising expenses to and receivable 2018, assets acquisitions of amounts the and comprehensive $0.5 are driving the of Gund acquisition payments certain has 2, 2018. has other to total history included on acquisition and liabilities million terms the and agreed the been international receivables purchase assets, totaling Company

brand, distributor as set in as allocated will to in transaction a at forth pay the market for $6.8 further customer the recognized at consideration acquired a royalties, acquired Activities, income fortheyearended growth. of in acquisition total million, to plush the leader diversify the related purchase relationships agreement, certain identifiable toys (which calculated equal Games and date the of costs and the $77.3 toy to assets consideration principally date of and is Company's the and included industry the for best intangible and million $0.5 fair relating each Puzzles acquisition Company known non-competition value comprised million December 31,2018. in pioneer quarter is administrative of product assets to $0.8 for category as $77.3 the of acquired at its widely working of million Gund April trade line based the million. line , agreement) of belonging three 2, known receivables) related line and control expenses teddy capital on 2018. As of year their open part business for bears. to The adjustments. of royalty to estimated the of its and in up the the in the total high the Fair V Established estimated opportunities this $19.6 Gund from North purchase term, consolidated balance quality transaction alue asat fair Enesco The million brand commencing America fair values and total consideration, in is value through 1898, expected Apr 2,2018 for of LLC. innovative statement had purchase goodwill. segment of broader of $42.4 Gund gross Gund (57.7 June 20.3 77.3 76.0 10.5 59.9 42.4 57.7 0.7 0.5 0.8 0.2 6.8 2.2 0.5 1.7 the the 35 to ) 24. 23. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp.

Financialinstrumentsandriskmanagement January asset been the On Acquisition over 15years. $19.6 from expected Goodwill Business combinations(continued) Management includesthefollowingitemsinitsdefinitionofcapital: Capital management The ended Management approach in or obtainadditional Financial December 31, concerns, currency vary from Due Foreign currency rate risk, Management’ operations The The the Company’ exposures”) Market risk economic In The Capital Contributed Sharecapital (US$ millions) Accumulated exchange order January acquisition Company Company to Company Company goodwill on allocated transactions million is the December 31, translation to included 1, 2018. arose credit risk. synergies, risk management is exposures while nature maintain of 1, reasonable. of Fuggler and surplus of rates. as s s earnings reviews deficit 2018, the manages of makes 2019, theCompany uses is to goodwill risk andliquidity on objective maximizing they certain because of subject risk in the business denominated the into Risk the financing or pursuant the derivative revenue do and identifiable 2019. adjustments its modify acquisition Company’ the is its not Boys assets, arises There and cashflows. to the capital is expected the capital US objectives meet capital and to the variability to through othermeans. growth the Action non-US dollar protect financial because were the return tostakeholders for risk. to management in intangible the s capital structure, of to international requirements was in terms total ensure foreign to no recognition Gund presentation and and its be the of dollar changes instruments purchase capital the structure, results deductible set future Construction compliance Company as that asset and currencies value forth denominated the strategy based may operations, the market from criteria in under (trade in consideration currency consideration of the the subsidiaries the for such make monetary and various on Company with through theoptimization category Company’ may income agreement, for the development. for name) the as its adjustments identifiable reasonability all financial financial (“translation it credit vary foreign is funds subsidiaries financial exposed assets, based tax , of paid may in belonging s facility due $1.0 purposes approach available the the statements exchange arrange ef These on risks intangible to to covenants. liabilities, Company million. fectively Company exposures”). to on agreement, it its changes on foreign in that to an estimated and to light benefits to a new the The ongoing forward the of include consolidated capital of included assets. revenues is acquired of currency the will North debt the Company being in total changes as These are debt andequitybalances. be exchange fair Company’ management foreign contracts with basis As described purchase America amortized amounts able not control value risk and at exposures existing Dec 31, , in basis recognized the in and 722.2 714.5 currency to economic driven (28.1 2019 expenditures 35.8 order of s rates date to continue of segment consideration believes subsidiaries in for $1.0 against ) for manage Fuggler or during Note by to of the tax new could (“transaction risk, million. fluctuations acquisition, support conditions. separately benefit purposes 15 as ef the that lenders, material Dec 31, through interest foreign arising impact fective . 642.6 694.1 going (92.4 As 2018 40.9 year may The has this the 36 of at ) 89 Spin Master Corp. 90 Spin Master Corp. 24. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. variable adjusts theirtranslation For exposed. resulted customers may $, representing The As Credit risk The Interest raterisk Interest Interest raterisk of The Foreign currency to customer This As Financial instrumentsandriskmanagement of thereasonably management’ reviewed For when 2019 ( major requiring In rates The Liquidity risk government credit-ratings The provincial As As receivables. repayment which T of to pay o addition, the a 5.0% the at the at at the the Company sensitivity Company Company change following risk would December 31, December 31, reporting . reporting December 31, retail 2018 - the Companycanberequired to extent Company year year rate rate. in a is ’ is letters at leastannually s and federal the periods. financial customers used managed have agencies. risk ended in decrease ended 47.9%). that s assigned is Company details analysis mitigates is interest interest assessment period. total experience of primarily - - is resulted usually exposed risk - when interest possible change sensitivity management credit, the December 31, The December 31, performance, 2019, purchase 2019, 2019 The Company's through governments the which to netassets The sensitivity risk rate rates. includes by as reporting tables credit uses grants cash in , exposed rates , the Company’ to at theendofreportingperiod international with approximately that contractual financial approximately risk a of analysis represent interest decrease a The Company commitments the reflect the in risk are variety internally more frequentreviews the credit only advance analysis ability foreign establishment 2019, Company reasonably in interest 2019 to on floating, Company’ of Canada. of dif s the outstanding the rate to credit insurance its of $4.2 million approximately ficulty andmaybeunable maturity remaining pay to , credit-rating to customers is a financial Canadian undiscounted to with cash interest 46.5% currency risk 42.5% of generate committed , including 5.0% key the of approximately shipment is rates to s all on possible balance (continued) financial exposed is management undiscounted amount strengthening (2018 other of arrangements foreign income (2018 based financial contractual (2018 dollar on risk credit cash, agencies 48.0% which both interestand under an performed

provides variables and cash -

by change - internally on assets - , to 44.9%) currency of unsecured the 34.0%) financing limits an increase ensuring instruments. through the interest $0.3 the Company outstanding for a5.0% of flows personnel, Peso, $15.8 million maturities gross and of earliest and in coverage to and held million of to fulfill the as necessary of of ensure foreign denominated to the ensuring the availability rate the liabilities deposits the financial product payment basis, above key constant, is to netassets date principal. Company’ change in purchase British for A derived foreign risk and Company’ their financialobligations. for

collectability for allof exchange is exposed. management sensitivity the (2018 credit on currencies as represents its sales that are will liabilities year terms Pound and . which a exchange its financial monetary from - increase s with of 50 the risk foreign these customers. for s liquidity $39.3 million). loan trade (2018 insurance of rates rate other basis based the and counterparties interest arises the financial institutions of based $0.8 million). against facilities management’ personnel, trade receivables

Company currency of - year liabilities the contracts assets to or receivables no point status. on 50 from which decrease on Euro. rate impact receivables, on ended the an basis increase the bears

and material the These curves evaluation rates. US$ with A may the and to earliest

are to are sensitivity December 31, possibility points s liabilities, purchase are in net interest assessment Company would be contractual represents banks factors from at in value customer with including income). from required the date interest is of three have used high at rate and due that and end are the US the on 37 is a 24. 25. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. 2019 Segment information rates observable 2 The Information (v) (iv) (iii) (ii) (i) major Spin the assessment or liabilities financial With Fair valuemeasurements Financing facilities The Company'scontractualmaturities Financial instrumentsandriskmanagement (ii) the T As atDecember31,2018 T As atDecember31,2019 Provisions Provisions Bank (US$ millions) Bank loan Amount rade rade of Europe, Company’ Company fair Outdoor Pre-school Boys actionandconstruction Remote control Activities, games the the Master and loan facilities payables payables categories value fair exception information andstrategic unused is and and facilities at and recorded value reported ’ s of s of have portfolio contingent contingent fair and accrued and accrued segment business and girls foreign (iii) at theendofreportingperiod as follows: value in hierarchy of chosen Rest and interactive foreign to in & includes exchange other the puzzles andplush liabilities liabilities performance activities, of the financialstatementsandtheircarrying liabilities liabilities . to Chief world. exchange

The liabilities organize children’ fair Operating forward the priorities Factors characters focuses value management are as (2018 forward the s products, contracts Company considered within of

Decision - follows: on foreign liability contracts, (continued) geographical the and contract structure brands generated around organizational of Maker exchange in $1.0 Less than Less than the determining 1 year 1 year and directly the Company (“CODM”) million). areas an 276.8 345.6 306.0 371.8 entertainment forward rates. 29.2 26.2 3 contracts unrealized operating accountable structure. rather amounts These the does for 1-5 years 1-5 years operating is the than not segments fair estimated loss properties approximate purposes currently product values to 1.7 1.7 9.0 9.0 of — — the $0.5 segments CODM, 5 yearsand 5 yearsand as based are thereafter thereafter category which million record of follows: categorized their fair resource Dec 31, on 534.5 534.5 availability include 2019 are as any . — — — — — — forward The (i) at grouped financial values. North December 31, allocation executives the within of T T exchange nature otal otal America, discrete Dec 31, into assets 276.8 345.6 307.7 380.8 541.8 541.8 Level 2018 30.9 35.2 and five 38 of of 91 Spin Master Corp. 92 Spin Master Corp. 25. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Segment information(continued) segment The Company’ Segment revenue Revenues Revenue year ended and otherallowances The purposes of Note Segment assets North (US$ millions) Restofworld Europe Corporate T T Income beforeincometaxexpense Corporate andother T Restofworld North Revenue bysegment Europe North Segment incomebeforetaxexpense T Other revenue T Sales allowances Gross productsales Restofworld Europe (US$ millions) otal assets otal otal segmentincomebeforetaxexpense otal revenue otal netsales other accounting 2 segment . America America America Segment expenses, sales reported of resource and for December 31, other North assets s revenueandresultsfromoperationsbyreportablesegmentareasfollows in policies the income and results by foreign America current allocation segment in reporting of represents the 2019. exchange year include reportable above and assessmentof (2018 revenue income revenues loss represents

- nil). segments by segment (gain) before The attributable Company and revenue income are segment finance (referred the tax does to generated same Canada performance. expense costs. not to as"gross as include the This measure of from earned $158.3 Company’ sales external product sales”). by million adjustments each s is customers. accounting reported segment ( 2018 : Dec 31, such - 1,581.6 1,463.7 1,691.2 1,026.3 1,204.6 1,256.4 $180.6 117.9 227.5 234.5 430.4 120.7 21 872.7 to prior 2019 2019 There policies 85.0 94.5 18.7 23.9 51.9 51.8 (9.5) 1.2 the as to trade CODM million) were any described discounts allocation no Dec 31, 1,631.5 1,509.6 1,708.0 1,085.2 for for 208.4 214.3 175.6 121.9 198.4 246.5 376.3 143.2 720.9 941.2 999.2 2018 2018 inter- 11.8 26.9 77.1 58.0 (5.9) the the 39 in 25. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Non-current Segment information(continued) For thepurposes (December Non-current Segment liabilities • Depreciation • Capital expenditures North (US$ millions) North (US$ millions) North (US$ millions) North (US$ millions) T Restofworld Europe T Restofworld Europe T Corporate andother Corporate T T Corporate T Restofworld Europe T Restofworld Europe otal capitalexpenditures otal depreciationandamortization otal liabilities otal non-current otal segmentdepreciationand amortization otal otal on the software. all all in proportion other segment segment assets liabilities America America America America liabilities) and and basis 31, assets assets byreportable and amortizationby are Goodwill other other non-current assets liabilities 2018 are of therevenues allocated of monitoring to assets for and allocated segment assets. - by North $91.0 million). is deferred reportable allocated to America reportable to segment reportable tax segment earned reportable to segment liabilities. include cash segments performance by segments generating are detailed individual segment assets Liabilities other attributable other units. and allocating reportable as follows: than for than which Assets deferred to royalties segments; Canada reportable used resources between tax assets, payable jointly of and $140.2 segments by other (included reportable million long-term are segments: within jointly as Dec 31, Dec 31, segments at 435.4 513.4 496.0 387.6 395.1 495.7 (17.4 2019 2019 2019 2019 assets 66.9 81.1 94.2 80.9 84.6 60.3 56.9 68.9 13.4 26.9 December 31, 4.6 9.4 5.6 7.5 3.7 trade liable ) and payables are are computer allocated allocated Dec 31, Dec 31, 316.3 360.2 336.7 271.4 295.5 377.1 (23.5 2018 2018 2018 2018 2019 62.5 73.4 82.5 72.0 74.2 60.8 40.7 48.1 13.3 and 3.2 6.3 3.7 5.4 2.2 7.5 40 ) 93 Spin Master Corp. 94 Spin Master Corp. 26. 25. Consolidated financialstatementsfortheyearsendedDecember31,2019and2018 Spin MasterCorp. Certain prioryearcomparativeshavebeenreclassifiedtoconformwithcurrentpresentation. Prior yearcomparatives Segment information(continued) The Company’ Revenue respect ofproperty In additiontothedepreciationandamortizationreportedabove,$5.6millionimpairmentlosseswererecognizedin sales Sales Major December 31, sales. (US$ millions) T Other revenue T Sales allowances Gross productsales Outdoor Pre-schoolandgirls Boysactionandconstruction Remotecontrolandinteractivecharacters T Gross productsales (US$ millions) Activities, games&puzzlesandplush otal revenue otal netsales otal Customer 3 Customer 2 Customer 1 for customers to No the the from majorproduct other Company's year s worldwide 2019. single ended , plantandequipmentintangibleassetsforyearended customer three December 31, revenues categories largest contributed based customer 2019. on 10% its major The accounted or top more three product to for gross customers 48.0% categories product (2018 contributed sales are asfollows: - 47.9%) December 31,2019 of the 10% of Company consolidated or 1,581.6 1,691.2 1,463.7 more 457.7 117.9 227.5 516.2 331.4 299.3 2019 86.6 812.4 168.5 240.8 403.1 2019 for ( to 2018 the gross gross year -$0). product product 1,631.5 1,708.0 1,509.6 ended 817.3 455.5 121.9 198.4 517.5 133.1 505.4 161.4 246.4 409.5 2018 2018 96.5 41 CORPORATE DIRECTORY Board of Directors Charles Winograd Lead Director Ronnen Harary Chairman and Co-Chief Executive Officer Anton Rabie Director and Co-Chief Executive Officer Ben Varadi Director, Executive Vice President and Chief Creative Officer Jeffrey I. Cohen Non-Executive Director Dina Howell Non-Executive Director Todd Tappin Non-Executive Director Senior Management Ronnen Harary Co-Founder and Co-Chief Executive Officer Anton Rabie Co-Founder and Co-Chief Executive Officer Ben Varadi Executive Vice President and Chief Creative Officer Mark Segal Executive Vice President and Chief Financial Officer Chris Beardall Executive Vice President of Global Sales Tara Deakin Executive Vice President and Chief People Officer Christopher Harrs Executive Vice President and General Counsel, Corporate Secretary Laura Henderson Executive Vice-President, Marketing and Ecommerce Jennifer Dodge Executive Vice President, Entertainment Adam Beder Executive Vice President, Strategic Partnership and Franchise Development Ben Dermer Senior Vice President, Creative Development Head Office Toronto Stock Exchange Listing 225 King Street West Trading Symbol: TOY Toronto, ON M5V 3M2 Securities listed: Subordinate Voting Shares Auditor Registrar & Transfer Agent Deloitte LLP Computershare Investor Services Inc. 8 Adelaide Street West, Suite 200 100 University Avenue, 8th Floor Toronto, ON M5H 0A9 Toronto, ON M5J 2Y1

Legal Counsel Annual Meeting of Shareholders Torkin Manes LLP May 7, 2020 1500 – 151 Yonge Street Toronto, ON M5C 2W7

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FORWARD-LOOKING STATEMENTS Certain statements, other than statements of historical fact, contained in this document constitute “forward-looking information” within the meaning of certain securities laws, including the Securities Act (Ontario). The words “plans”, “expects”, “projected”, “estimated”, “forecasts”, “anticipates”, “indicative”, “intend”, “guidance”, “outlook”, “potential”, “prospects”, “seek”, “strategy”, “targets” or “believes”, or variations of such words and phrases or statements that certain future conditions, actions, events or results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “be taken”, “occur”, “continue” or “be achieved”, and other similar expressions, identify statements containing forward-looking information. Statements of forward-looking information may include, without limitation, statements with respect to: the toy industry; the Company’s growth strategies and objectives, drivers for such growth and the successful execution of its strategies for growth; innovation; development of evergreen global entertainment and digital toy properties; international sales expansion; acquisitions; marketing and corporate social responsibility initiatives; partnering with others; new products and entertainment properties to be introduced in 2020 and beyond; the Company’s direct to consumer initiatives and the potential benefits; the Company’s operating momentum, financial position, cash flows and financial performance; and shareholder returns. Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this document, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. In addition to any factors and assumptions set forth in this document, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the innovation the Company applies to its products will have a level of success consistent with its past experiences; the Company will continue to successfully secure broader licenses from third parties for major entertainment properties consistent with past practices; the expansion of sales and marketing offices in new markets will increase the sales of products in that territory; the Company will be able to successfully identify and integrate strategic acquisition opportunities; the ability of the Company to maintain its distribution capabilities; the Company’s ability to continue to build and maintain strong, collaborative relationships; the Company’s status as a preferred collaborator; the culture and business structure of the Company will support its growth; the ability to expand the Company’s portfolio of owned branded intellectual property and successfully license it to third parties; the expanded use of advanced technology and robotics in the Company’s products; the increased access of entertainment content on mobile platforms; fragmentation of the market creates acquisition opportunities; maintenance of the Company’s relationships with its employees; and the continued involvement of the Company’s founders and that the risk factors noted below, collectively, do not have a material impact on the Company. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this document. Such risks and uncertainties include, without limitation, the factors discussed under “Risk Factors” in the Company’s most recent Annual Information Form and under “Risks Relating to Spin Master’s Business” in the Company’s most recent annual Management Discussion & Analysis, filed with the Canadian securities regulators and available at www.sedar.com. These risk factors are not intended to represent a complete list of the factors that could affect the Company and investors are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All forward-looking statements in this document are qualified by these cautionary statements.