Hasbro 2006 Annual Report Download - page 77

Expected benefit payments under the defined benefit pension plans and expected gross benefit payments
and subsidy receipts under the postretirement benefit plan for the next five years subsequent to 2006 and in
the aggregate for the following five years are as follows:
Pension
Gross
Benefit
Payments
Subsidy
Receipts
Postretirement
2007. . . ............................................ $ 17,685 2,666 271
2008. . . ............................................ 19,283 2,750 282
2009. . . ............................................ 19,346 2,815 290
2010. . . ............................................ 18,977 2,887 292
2011. . . ............................................ 19,614 2,937 290
2012-2016 .......................................... 118,325 14,577 1,285
Assumptions used to determine the net periodic benefit cost of the postretirement plans for the year to
date period are as follows:
2006 2005 2004
Health care cost trend rate assumed for next year .................... 10.00% 9.00% 10.00%
Rate to which the cost trend rate is assumed to decline (ultimate trend
rate) ................................................... 5.00% 5.00% 5.00%
Year that the rate reaches the ultimate trend rate..................... 2012 2011 2009
If the health care cost trend rate were increased one percentage point in each year, the accumulated
postretirement benefit obligation at December 31, 2006 and the aggregate of the benefits earned during the
period and the interest cost would have each increased by approximately 5% and 5%, respectively.
International Plans
Pension coverage for employees of Hasbro’s international subsidiaries is provided, to the extent deemed
appropriate, through separate defined benefit and defined contribution plans. At December 31, 2006 and
December 25, 2005, the defined benefit plans had total projected benefit obligations of $73,333 and $58,206,
respectively, accumulated benefit obligations of $62,893 and $46,557, respectively, and fair values of plan
assets of $55,429 and $40,397, respectively. Substantially all of the plan assets are invested in equity and fixed
income securities. The pension expense related to these plans was $3,702 for fiscal 2006 and $3,073 for fiscal
2005. In connection with the adoption of SFAS 158 at December 31, 2006 described above, the Company’s
unamortized prior service costs of $443, unrecognized net loss of $9,710 and unrecognized transition
obligation of $277 were recorded as a reduction of accumulated other comprehensive earnings. In fiscal 2007,
the Company expects amortization of $96, $231 and $45, respectively, of these amounts to be included as a
component of net periodic benefit cost. At December 25, 2005, the Company had recorded an additional
minimum pension liability related to these international plans of $3,100. This additional minimum pension
liability was partially offset by an intangible asset in the amount of $206 at December 25, 2005. The
remaining amount of $2,894 was recorded as a separate component of accumulated other comprehensive
earnings, along with related deferred taxes of $902. Assumptions used to calculate the benefit obligations and
pension expense for these plans vary depending on each plan and are based on factors specific to each
country.
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)