SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
\X\ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007.
OR
\ \ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-6682
A. FULL TITLE OF THE PLAN AND ADDRESS OF THE PLAN, IF DIFFERENT
FROM THAT OF ISSUER NAMED BELOW:
HASBRO, INC. RETIREMENT SAVINGS PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND
THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
HASBRO, INC.
1027 NEWPORT AVENUE
PAWTUCKET, RI 02862-1059
REQUIRED INFORMATION
I. FINANCIAL STATEMENTS
The following Plan financial statements and schedule prepared in accordance
with the financial reporting requirements of the Employee Retirement Income
Security Act of 1974 are filed herewith, as permitted by Item 4 of Form 11-K:
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Plan Benefits as of
December 31, 2007 and 2006
Statements of Changes in Net Assets Available for Plan Benefits for
the years ended December 31, 2007 and 2006
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Other schedules are omitted as the required information is not applicable.
II. EXHIBITS
23 Consent of Independent Registered Public Accounting Firm
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee appointed by the Board of Directors of Hasbro, Inc. to administer the
Plan has duly caused this Annual Report on Form 11-K to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: June 20, 2008 /s/ David D. R. Hargreaves
------------- --------------------------
David D. R. Hargreaves
Chief Operating Officer and
Chief Financial Officer
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Hasbro, Inc. Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Hasbro, Inc. Retirement Savings Plan (the Plan) as of
December 31, 2007 and 2006, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 2007 and 2006, and the changes in net assets available for
plan benefits for the years ended December 31, 2007 and 2006, in conformity
with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, Line 4i -
Schedule of Assets (Held at End of Year) as of December 31, 2007 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Providence, Rhode Island
June 13, 2008
HASBRO, INC. RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2007 and 2006
2007 2006
---- ----
Assets:
Cash $ 199,604 176,492
Investments, at fair value 316,518,663 296,264,214
----------- -----------
Total investments and cash (note 3) 316,718,267 296,440,706
----------- -----------
Receivables:
Loans to participants 5,257,464 4,982,777
Investment income 735 700
Due from brokers for securities sold 4,097 -
----------- -----------
Total receivables 5,262,296 4,983,477
----------- -----------
Total assets 321,980,563 301,424,183
----------- -----------
Liabilities:
Due to brokers for securities purchased 21,127 -
Other liabilities 11,165 -
----------- -----------
Total liabilities 32,292 -
----------- -----------
Net assets, reflecting investments at
fair value 321,948,271 301,424,183
Adjustment from fair value to contract
value for fully benefit-responsive
investment contracts 233,839 484,389
----------- -----------
Net assets available for plan benefits $322,182,110 301,908,572
=========== ===========
See accompanying notes to financial statements.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2007 and 2006
2007 2006
----- -----
Additions to net assets attributed to:
Investment income:
Net appreciation in fair
value of investments $ 11,586,244 22,490,999
Dividends and interest 13,410,245 11,585,443
----------- -----------
Total investment income (note 3) 24,996,489 34,076,442
----------- -----------
Contributions:
Rollovers 1,068,893 1,171,478
Employee contributions 14,681,244 13,715,951
Employer matching contributions 9,191,005 8,560,970
----------- -----------
Total contributions 24,941,142 23,448,399
----------- -----------
Total additions 49,937,631 57,524,841
----------- -----------
Deductions from net assets attributed to:
Termination, withdrawal and retirement
payments directly to participants 29,575,801 30,747,710
Administrative expenses 88,292 82,990
---------- -----------
Total deductions 29,664,093 30,830,700
---------- -----------
Net increase 20,273,538 26,694,141
Net assets available for plan benefits:
Beginning of year 301,908,572 275,214,431
------------ -----------
End of year $ 322,182,110 301,908,572
============ ===========
See accompanying notes to financial statements.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
(1) Description of Plan
The following brief description of the Hasbro, Inc. Retirement Savings Plan
(the Plan) is provided for general information purposes only. Participants
should refer to the Plan agreement for more complete information.
(a) General
The Plan is a defined contribution plan subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA) and is
available to substantially all domestic employees of Hasbro, Inc. and
certain subsidiaries (collectively the Company or Plan Administrator).
Participation in the Plan is voluntary and eligibility provisions
apply.
(b) Contributions
Eligible employees could contribute up to 50% of their eligible pay,
limited to an annual maximum of $15,500 and $15,000, respectively, in
2007 and 2006. Contributions may be limited to less than the maximum
percentage of eligible pay to enable the Company to meet IRS
discrimination regulations. The Company makes a matching contribution,
except for Milton Bradley union employees, of 200% of the first 2% of
the participants' eligible pay that they contribute per pay period,
plus a 50% match of the next 4% of participants' eligible pay that they
contribute per pay period up to a maximum matching contribution of 6%
of a participant's eligible pay per pay period. For Milton Bradley
union employees, from January 1, 2006 to February 4, 2007 the Company
made a 30% matching contribution, up to a maximum of 6% of a
participant's eligible pay per pay period. For the remainder of 2007,
the Company's matching contribution was 35%, up to a maximum of 6% of a
participant's eligible pay per pay period.
All eligible employees at least age 50 by the end of the calendar year
are permitted to make additional pre-tax deferrals over and above the
otherwise applicable limits. These additional deferrals are called
"catch-up contributions." The Company does not make a matching
contribution. Catch-up contributions may be made up to an additional
$5,000 for 2007 and 2006.
Effective at the end of December 2007, the Company froze pension
benefits being accrued for its non-union employees in the United
States. These pension benefits will be replaced by additional employer
contributions made to this Plan beginning in 2008.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
(c) Benefits
All participants currently employed by the Company own, or are vested
in, 100% of the total value of their Plan account, including the
Company's matching contribution to the Plan. A participant's entire
vested account will be paid upon retirement, disability, or termination
of employment. The account balance will be paid to a beneficiary upon
death of the participant.
Participants in the Plan have the option of receiving their account
either in a lump sum or in periodic installments. Participants, except
for terminated participants, may also make in-service withdrawals from
their Pre-Tax Savings Contribution Account in the event of a
demonstrated severe financial hardship as defined by the IRS Safe
Harbor rules. Participants who have reached age 59 1/2 may make in-
service withdrawals from their vested accounts in the Plan for any
reason.
(d) Participant Loans
The maximum loan available to each participant is the lesser of (1)
$50,000 reduced by the highest outstanding loan balance due from the
participant during the preceding twelve months, or (2) 50% of the
participant's vested account balance, reduced by the current
outstanding loan balance due from the participant. The minimum loan
amount available to participants is $500. Each loan shall bear a fixed
interest rate on the 1st day of the month (for each month) at prime as
published in the Wall Street Journal on the prior day. Repayment of the
loan must be made over a period not to exceed five years, unless it is
for the purchase of a primary residence, then the loan period cannot
exceed ten years.
(2) Summary of Accounting Policies
(a) Basis of Accounting
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the Plan Administrator to make estimates and assumptions that affect
the reported amounts in the financial statements and accompanying
notes. Actual results could differ from those estimates. The
accompanying financial statements are presented on the accrual basis of
accounting. Benefits payable at year end are not accrued for as they
are considered to be a component of the net assets available for plan
benefits.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
(b) Investments
Investments are stated at fair value. Company stock held in the Hasbro
Stock Fund is valued at the composite closing price on the New York
Stock Exchange. The fair value of other investments is determined daily
by Fidelity Management Trust Company (the Trustee) on a per share basis
using security prices quoted on national exchanges.
One of the investment options offered by the Plan, the Stable Asset
Fund for Employee Benefit Plans, is a common collective trust that is
fully invested in contracts deemed to be fully benefit-responsive
within the meaning of Financial Accounting Standards Board Staff
Position (FSP) AAG INV-1 and Statement of Position 94-4-1, Reporting of
Fully Benefit-Responsive Investment Contracts Held by Certain
Investment Companies Subject to the AICPA Investment Company Audit
Guide and Defined-Contribution Health and Welfare and Pension Plans
(the "FSP"). The FSP requires that this investment be reported at fair
value. However, contract value is the relevant measure to the Plan
because it is the amount that is available for Plan benefits.
Accordingly, investments as reflected in the Statements of Net Assets
Available for Plan Benefits state the Stable Asset Fund for Employee
Benefit Plans at its fair value, with a corresponding adjustment to
reflect the investment at contract value.
Participant notes receivable are valued at cost, which approximates
fair value.
Security transactions received prior to 4:00 pm Eastern time by the
Trustee are recognized on that business day. Transactions received
after 4:00 pm Eastern time are valued as of the next business day.
Interest income is recorded on the accrual basis and dividend income is
recorded on the ex-dividend date.
Net appreciation in the fair value of investments includes both
realized and unrealized gains and losses.
(c) Contributions
Contributions from employees are accounted for when deducted from
employees' wages. The Company's matching contributions are accrued at
the time the employee's contributions are deducted. For years ended
December 31, 2007 and 2006, employer and employee contributions for the
last pay period of the year were paid to the Plan prior to the Plan's
year end.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
(d) Payments of Benefits
Benefits are recorded when paid.
(e) Administrative Expenses
The Plan bears all costs and general expenses incurred with regard to
investment consulting, audit, legal and communication fees, other
professional fees, independent fund managers and the purchase and sale
of investments. Other costs of administration are paid for by the Plan
Administrator.
3) Investment Information
Participants may elect to have their accounts invested in one or more of the
investment funds offered by the Plan. Investment funds offered by the Plan
include the following nationally traded mutual funds: the Fidelity Equity
Income Fund, the Fidelity Growth Company Fund, the Fidelity Freedom 2000
Fund, the Fidelity Freedom 2010 Fund, the Fidelity Freedom 2020 Fund, the
Fidelity Freedom 2030 Fund, the Fidelity Freedom 2040 Fund, the Fidelity
Freedom Income Fund, the PIMCO Total Return Fund, the Spartan US Equity
Index Fund, the Fidelity Diversified International Fund, the Vanguard Small-
Cap Index Fund, and the Vanguard Mid-Cap Index Fund. The Standish Mellon
High Yield Bond Fund was replaced by the Dreyfus Premier Limited Term High
Yield Fund effective October 31, 2007.
Participants can elect to invest up to 25% of their contributions in the
Hasbro Stock Fund which is a unitized stock fund that invests in the stock
of Hasbro, Inc. and other short term investments designed to allow
participants to buy and sell without the usual trade settlement period for
individual stock transactions. Ownership is measured in units of the fund
instead of shares of stock. In addition, participants cannot elect to
reallocate their investment funds that would result in 25% or more of their
account invested in the Hasbro Stock Fund. The fair value of the cash and
investments of the Hasbro Stock Fund was $3,545,519 as of December 31, 2007
and $2,957,082 as of December 31, 2006.
Participants may also elect to invest their funds in the Stable Asset Fund
for Employee Benefit Plans. This fund is managed by Columbia Management
Advisors, LLC and invests in fixed income contracts. In the Statements of
Net Assets Available for Plan Benefits, the Plan is required to reflect this
investment at fair value, with a corresponding adjustment to contract value
(see Note 2(b)). The fair value of this fund as of December 31, 2007 and
2006 was $49,561,320 and $47,616,514, respectively. The contract value of
the fund as of December 31, 2007 and 2006, which is a component of net
assets available for plan benefits, totaled $49,795,159 and $48,100,903,
respectively. This fund yielded approximately 4.82% and 4.59% for 2007 and
2006, respectively.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
The following table represents the carrying value of investments, which
were 5% or more of the Plan's net assets as of December 31, 2007 and
December 31, 2006:
2007 2006
------ ------
Fidelity Growth Company Fund $52,115,894 45,876,056
Stable Asset Fund for Employee Benefit Plans 49,795,159 48,100,903
Spartan US Equity Index Fund 48,035,796 50,777,082
Fidelity Equity Income Fund 39,490,871 41,877,454
Fidelity Diversified International Fund 39,247,849 32,639,330
During 2007 and 2006, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $11,586,244 and $22,490,999, respectively, as follows:
Year Ended December 31,
2007 2006
------ ------
Shares in Registered Investment Companies $ 11,764,956 21,719,327
Hasbro Stock Fund (196,712) 771,672
----------- ----------
$ 11,586,244 22,490,999
=========== ==========
(4) Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management and Research Company, an affiliate of the Trustee, and,
therefore, qualify as party-in-interest transactions. Additionally, the
Plan holds investments in shares of Hasbro, Inc. common stock. The Plan had
130,802 and 102,040 shares of Hasbro, Inc. common stock valued at
$3,345,915 and $2,780,590, respectively, as of December 31, 2007 and 2006.
These transactions qualify as exempt party-in-interest transactions.
(5) Plan Termination
Upon termination of the Plan and trust, each Participant shall be entitled
to receive the vested amount standing to the credit of their account as of
the final valuation date. The Trustee shall make payments of such amounts
as directed by the Plan Administrator.
Although the Company has not expressed any intent to do so, it reserves the
right to terminate the Plan at any time subject to ERISA provisions.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2007 and 2006
(6) Risks and Uncertainties
The Plan provides for investments in various funds, which invest in equity
and debt securities and other investments. Such investments are exposed to
risks and uncertainties, such as interest rate risk, credit risk, economic
and political risks, regulatory changes, and foreign currency risk. In
addition, participants may elect to invest up to 25% of their contributions
in the Hasbro Stock Fund. The underlying performance of this fund is
dependent upon the performance of the Company and the market's evaluation
of such performance. The Plan's exposure to a concentration of credit risk
is subject to the Plan's investment funds selected by participants. These
risks and uncertainties could impact participants' account balances and the
amounts reported in the financial statements.
(7) Federal Income Taxes
The Internal Revenue Service issued a determination letter on January 21,
2003, which stated that the Plan and its underlying trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC), and
therefore, are exempt from federal income taxes. Although the Plan has been
amended since receiving the determination letter, the Plan Administrator
and the Plan's tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
(8) New Accounting Pronouncement
In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157, "Fair Value Measurements," ("SFAS No. 157") which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosure
requirements about fair value measurements. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15,
2007.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Year ended December 31, 2007
Issuer Investment Description Current Value
------ ----------------------- -------------
Stable Asset Fund for
Employee Benefit Plans*** 4,979,516 shares in $ 49,795,159 **
common/collective trusts
Fidelity Growth Company Fund* 628,054 shares in registered 52,115,894 **
investment company
Spartan US Equity Index Fund* 925,545 shares in registered 48,035,796 **
investment company
Fidelity Equity Income Fund* 715,933 shares in registered 39,490,871 **
investment company
Fidelity Diversified 983,655 shares in registered 39,247,849 **
International Fund* investment company
Fidelity Freedom 2020 Fund* 921,671 shares in registered 14,571,620
Investment company
Fidelity Freedom 2010 Fund* 960,354 shares in registered 14,232,442
investment company
PIMCO Total Return Fund 1,247,914 shares in registered 13,340,196
investment company
Vanguard Small-Cap Index 382,258 shares in registered 12,461,614
Fund investment company
Vanguard Mid-Cap Index Fund 393,645 shares in registered 11,675,518
investment company
Fidelity Freedom 2030 Fund* 577,530 shares in registered 9,540,798
investment company
Fidelity Freedom 2040 Fund* 417,689 shares in registered 4,064,118
investment company
Hasbro Stock Fund * 130,802 shares of Hasbro, Inc. 3,345,915
common stock
Dreyfus Premier Limited Term 396,877 shares in registered 2,746,388
High Yield Fund investment company
Fidelity Freedom Income Fund* 93,484 shares in registered 1,070,394
investment company
Fidelity Freedom 2000 Fund* 82,290 shares in registered 1,017,930
investment company
Hasbro Stock Fund * Cash 199,604
-----------
Investments and Cash $ 316,952,106
===========
Loans to Participants* Interest rate 4.0% to 8.5% $ 5,257,464
===========
*Party-in-interest
**Represents greater than 5% of Plan assets at December 31, 2007.
***Represents the contract value. The fair value of this investment as of
December 31, 2007 was $49,561,320.
See accompanying report of independent registered public accounting firm.