Table of Contents represented a significant portion of overall sales to these customers as consumers increasingly purchased our products online as compared to in- store shopping due to the shutdown and limited access to retail stores during the COVID-19 pandemic. Due to our supply chain and logistics investments in recent years, we were better positioned to handle the increasing amount of ecommerce sales resulting from customers’ changing shopping patterns due to the COVID-19 pandemic. In the U.S. and Canada segment, approximately 59% of our net revenues were derived from our top three customers. Please see Part I, Item 1A.  Risk Factors,  of this Form 10-K for a further discussion of risks relating to customer concentration. We advertise many of our products extensively and brands through digital marketing and on television. Products are strategically cross-promoted by spotlighting specific products alongside related offerings in a manner that promotes the sale of not only the selected item, but also those complementary products. As described earlier, the Hasbro Brand Blueprint strategy includes focusing on reinforcing storylines associated with our brands through several mediums, including television, film, digital gaming and live action experiences. Our brands obtain marketing and advertising support through entertainment appearing on major networks globally as well as on various other digital platforms, such as Netflix. In addition, through the leadership of eOne, our brands are supported through animated and live action theatrical releases. The creative talent at eOne will help activate and re-ignite our brands, including brands from our vault, by leading the creation of branded-content. The most current example of this is the  MY LITTLE PONY animated film produced by the eOne Family Brands team, which is expected to be released in late 2021. Many of our new toy and game products are introduced to major customers within one to two years leading up to their year of retail introduction. We have historically showcased certain new products through international toy shows, including New York City, Hong Kong and Nuremburg, Germany. The toy fairs we have attended in the past were either canceled or postponed for 2021 due to the pandemic. Our advertising expenditures are impacted by our product mix in any given year. For example, brands based on major motion picture releases generally require less advertising as a result of the promotional activities around the motion picture release, whereas leading into a major digital gaming launch, our Wizards of the Coast business will have substantial increases to advertising, marketing and promotional expenses to acquire players and promote gaming releases. Producing, marketing and distributing films and television programming can involve significant costs and the timing of a film’s release can cause our financial results to vary. For instance, marketing costs are generally incurred before and throughout the theatrical release of a film and, to a lesser extent, other distribution windows, and are expensed as incurred. Therefore, we typically incur losses with respect to a particular film prior to and during the film’s theatrical release and profitability for the film may not be realized until after its theatrical release window. During 2020, the majority of our products were manufactured in third party facilities in the Far East, primarily China, India and Vietnam, as well as in two of our previously owned facilities now operated by Cartamundi, which are located in East Longmeadow, Massachusetts and Waterford, Ireland. Cartamundi continues to manufacture significant quantities of game products for us under a multi-year manufacturing agreement. We are continuing our efforts to diversify our global sourcing mix and decrease our dependence on Chinese manufacturing by increasing production of our products in other countries, including India and Vietnam. As of December 27, 2020, 45% of third-party product manufacturing was sourced outside of China. Certain eOne products, such as products relating to PEPPA PIG and PJ MASKS, are currently managed and distributed through third-party licensing agents. Beginning in second half 2021, we plan to in-source production, distribution and licensing of certain toy and game products associated with these acquired brands. During the first part of 2020, we faced manufacturing challenges where operations were either shut down for a period of time due to the COVID-19 pandemic or were operating at limited capacity. Fortunately, during that period, our supply needs were at a lower point of the seasonality of our sales, which are more heavily weighted to the third and fourth quarter of the year. At this time, we believe the manufacturing capacity of our third- party manufacturers, as well as the supply of components, accessories and completed products which we purchase from unaffiliated manufacturers, are adequate to meet the anticipated demand in 2021 for our products. However, if we or our suppliers suffer prolonged manufacturing disruptions due to public health conditions, such as the coronavirus, manufacturing capacity of our third-party manufacturers as well as supply of components, accessories and our products may be adversely impacted. See Part I, Item 1A.  Risk Factors , of this Form 10-K for further information. Manufacturing and Supply Chain Advertising 18