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, 2001.
OR
\ \ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-66852
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:
Independent Auditors' Report
Statement of Net Assets Available for Plan Benefits as of
December 31, 2001 and 2000.
Statement of Changes in Net Assets Available for Plan Benefits for
each of the years in the two-year period ended December 31, 2001.
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes at End of Year
Other schedules are omitted as the required information is not applicable.
II. EXHIBITS
23 Consent of Independent Auditors
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 26, 2002 /s/ DAVID D. R. HARGREAVES
------------- --------------------------
David D. R. Hargreaves
Senior Vice President and
Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
To the Plan Trustees
Hasbro, Inc. Retirement Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the Hasbro, Inc. Retirement Savings Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statement of changes in net assets
available for benefits for the years 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 accounting principles generally
accepted in the United States of America. 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 benefits of the Plan as of
December 31, 2001 and 2000, and the changes in net assets available for
benefits for the years ended December 31, 2001 and 2000 in conformity with
accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at end of year 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 7, 2002
HASBRO, INC. RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2001 and 2000
2001 2000
---- ----
Assets:
Cash $ 24,908 5,547
Investments 223,240,406 274,436,298
----------- -----------
Total investments and cash (note 3) 223,265,314 274,441,845
----------- -----------
Receivables:
Employer contribution - 109
Loans to participants 3,917,205 4,607,496
Investment income 58 4,010
----------- -----------
Total receivables 3,917,263 4,611,615
----------- -----------
Total assets 227,182,577 279,053,460
Liabilities:
Accounts payable - 4,580
------------ -----------
Total liabilities - 4,580
------------ -----------
Net assets available for plan benefits $ 227,182,577 279,048,880
============ ===========
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, 2001 and 2000
2001 2000
------ ------
Additions to net assets attributed to:
Investment (loss) income:
Net depreciation in fair
value of investments $ (33,385,005) (28,130,525)
Dividends and interest 6,669,908 18,463,614
----------- ----------
Total investment loss (note 3) (26,715,097) (9,666,911)
----------- ----------
Contributions:
Rollovers 997,033 1,567,853
Employee contributions 11,635,107 12,725,417
Employer matching contributions 7,792,965 8,800,361
----------- ----------
Total contributions 20,425,105 23,093,631
----------- ----------
Transfer from Wizards of the Coast 401(k)
Profit Sharing Plan and Trust (note 1) - 16,078,101
----------- ----------
Total additions (6,289,992) 29,504,821
Termination, withdrawal and retirement
payments directly to participants 45,439,299 35,165,096
Administrative expenses 137,012 231,254
----------- ----------
Net decrease (51,866,303) (5,891,529)
Net assets available for plan benefits:
Beginning of year 279,048,880 284,940,409
----------- -----------
End of year $ 227,182,577 279,048,880
=========== ===========
See accompanying notes to financial statements.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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). The
401(k) feature is available to substantially all domestic employees of
Hasbro, Inc. (the Company). Participation in the Plan is voluntary
and eligibility provisions apply.
Effective August 16, 2000, the Wizards of the Coast 401(k) Profit
Sharing Plan and Trust (WOTC Plan) was merged into the Plan. On July
1, 2000, participants of the WOTC Plan were eligible to make
contributions to the Plan.
(b) Contributions
Eligible employees may contribute up to 18% of their gross pay,
limited to an annual maximum of $10,500 in 2001 and 2000.
Contributions may be limited to less than 18% 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 participants' contributions, plus a 50% match of the
next 4% of participants' contributions up to 6% of their gross pay.
Effective January 31, 2000 for Milton Bradley union employees the
Company makes a 25% matching contribution of the participants'
contributions up to 6% of their gross pay. During January 2000 for
Milton Bradley union employees the Company made a matching
contribution of 15% of participants' contributions up to 6% of their
gross pay.
(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 401(k) matching contribution to the Plan except for Milton
Bradley union employees who become 100% vested in Company
contributions on January 1 following one year of service. For those
participants who retired or left the Company prior to January 1, 2000
(July 1, 2000 for Wizards of the Coast), vesting is determined by the
Plan document in effect at that time. 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.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001 and 2000
Participants of 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 lessor 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 based on the prime rate published in the Wall
Street Journal. 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
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses. 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.
(b) Investments
Investments are stated at fair value. Company stock held in the
Hasbro Stock Fund is valued at the composite closing price of the New
York Stock Exchange. The fair value for all other investments is
determined daily by the trustee on a per share basis using security
prices quoted on national exchanges, and amortized cost in the case of
any short-term and money market securities held. Participant notes
receivable are valued at cost, which approximates fair value.
Security transactions received prior to 4:00 pm Eastern time by
Fidelity 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.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001 and 2000
Net appreciation (depreciation) in the fair value of investments
includes both realized and unrealized gains and losses.
(c) Contributions
Contributions from employees are accounted for when such contributions
are deducted from wages. The Company's matching contributions are
accrued at the time the employee's contributions are deducted.
(d) Payments of Benefits
Benefits are recorded when paid.
(e) Administrative Expenses
The Plan bears all costs and general expenses incurred with regard to
legal and communication fees, independent fund managers and the
purchase and sale of investments. The Company bears the
administrative expenses, principally payroll costs of Plan
administration.
(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
Magellan Fund, Fidelity Freedom Income Fund, the Fidelity Equity Income
Fund, the Fidelity Growth Company Fund, the Fidelity Freedom 2000, the
Fidelity Freedom 2010, the Fidelity Freedom 2020, the Fidelity Freedom
2030, the Fidelity Freedom 2040, the Dreyfus Emerging Leaders Fund, the
PIMCO Total Return Fund, the Spartan US Equity Index Fund, and the
Fidelity Diversified International Fund.
Participants can elect to invest in the Hasbro Stock Fund which is a
unitized company 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.
Participants may also elect to invest their funds in the Fleet Stable
Asset Fund. This fund is managed by Fleet Investment Advisors, Inc. and
invests in fixed income contracts. This fund yielded approximately 6.34%
and 6.5% for 2001 and 2000, respectively.
The following table represents the fair values of investments which are 5
percent or more of the Plan's net assets as of December 31, 2001.
Fidelity Magellan Fund $ 64,550,097
Fidelity Equity Income Fund 34,559,375
Fidelity Growth Company Fund 42,206,912
Fidelity Stable Asset Fund 49,653,167
-----------
$190,969,551
===========
HASBRO, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001 and 2000
During 2001 and 2000, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
depreciated in value by $(33,385,005) and $(28,130,525), respectively as
follows:
Year Ended December 31,
2001 2000
------ ------
Shares in Registered Investment Companies $(33,620,275) (28,132,624)
Hasbro, Inc. Common Stock Fund 235,270 2,099
----------- ----------
$(33,385,005) (28,132,624)
=========== ==========
(4) Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management and Research Company. Fidelity Management Trust Company is the
trustee as defined by the Plan and, therefore, these transactions qualify
as party-in-interest.
(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.
(6) Federal Income Taxes
The Internal Revenue Service issued a determination letter on August 17,
1995, 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. The Plan has been
amended since receiving the determination letter. However, 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.
HASBRO, INC. RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Statements of Assets Held for Investment
Purposes at End of Year
Year ended December 31, 2001
Issuer Investment Description Current Value
------ ----------------------- -------------
Fidelity Magellan Fund Shares in registered $ 64,550,097 **
investment company
Fidelity Equity Income Fund Shares in registered 34,559,375 **
investment company
Fidelity Growth Company Fund Shares in registered 42,206,912 **
investment company
Fleet Stable Asset Fund Common/collective trusts 49,653,167 **
Fidelity Freedom Income Fund Shares in registered 708,901
investment company
Fidelity Freedom 2000 Shares in registered 189,457
investment company
Fidelity Freedom 2010 Shares in registered 10,068,071
investment company
Fidelity Freedom 2020 Shares in registered 1,774,343
investment company
Fidelity Freedom 2030 Shares in registered 1,691,724
investment company
Fidelity Freedom 2040 Shares in registered 84,281
investment company
Dreyfus Emerging Leaders Fund Shares in registered 4,409,257
investment company
PIMCO Total Return Fund Shares in registered 3,515,956
investment company
Spartan US Equity Index Fund Shares in registered 4,243,265
investment company
Fidelity Diversified Shares in registered 4,466,655
International Fund investment company
Hasbro Stock Fund Common Stock of Hasbro, Inc. 1,118,945
and other short-term
investments
-----------
Investments $223,240,406
===========
Loans to Participants Interest rate 8.5% to 9.5% $ 3,917,205 *
*Party-in-interest
**Represents greater than 5% of Plan assets at December 31, 2001.
See accompanying independent auditors' report.