Hanesbrands Inc
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
or
     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from       to
Commission file number: 333-137143
Full title of the plan and the address of the plan, if different from that of the issuer named below:
Hanesbrands Inc. Hourly Retirement Savings Plan of Puerto Rico
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Hanesbrands Inc.
1000 East Hanes Mill Road
Winston-Salem, North Carolina 27105
 
 

 


 

TABLE OF CONTENTS
         
    Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    2  
 
       
FINANCIAL STATEMENTS
       
 
       
    3  
 
       
    4  
 
       
    5  
 
       
SUPPLEMENTAL SCHEDULES
       
 
       
    15  
 
       
    16  
 Exhibit 23.1
Note: Other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations For Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 (“ERISA”) have been omitted because they are not applicable.

 


Table of Contents

Report of Independent Registered Public Accounting Firm
Plan Committee
Hanesbrands Inc. Hourly Retirement Savings Plan of Puerto Rico
We have audited the accompanying statements of net assets available for benefits of Hanesbrands Inc. Hourly Retirement Savings Plan of Puerto Rico as of December 31, 2006 and 2005, and the related statement of changes in net assets available for benefits for the year ended December 31, 2006. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.
As described in Note B, these financial statements and supplemental schedules were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles.
The opinion expressed herein on the statement of net assets available for benefits as of December 31, 2005, is different from our previous report dated July 2, 2007. In that report, we included a disclaimer of opinion. As permitted by Department of Labor rules and regulations, we were instructed not to audit information certified by the Trustee. We have since performed the auditing procedures necessary to render an unqualified opinion on the statement of net assets available for benefits as of December 31, 2005.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2006 and 2005, and the changes in its net assets available for benefits for the year ended December 31, 2006 on the basis of accounting described in Note B.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules (modified cash basis) of assets (held at end of year) and delinquent participant contributions as of December 31, 2006, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are 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. These supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
As discussed in Note A, the Plan adopted Financial Accounting Standards Board Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans, as of December 31, 2006 and 2005.
/s/ GRANT THORNTON LLP
Greensboro, North Carolina
July 3, 2007

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
 
                 
    December 31,  
    2006     2005  
Assets
               
Investment (Notes B and C)
               
Plan interest in Hanesbrands Inc. Master Investment Trust for Defined Contribution Plans
  $ 2,669,690     $  
 
               
Plan interest in Sara Lee Corporation Master Investment Trust for Defined Contribution Plans
          2,440,545  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
    2,669,690       2,440,545  
 
               
Adjustment from fair value to contract value for interest in collective trust relating to fully benefit- responsive investment contracts (Note A)
    7,688       2,285  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS
  $ 2,677,378     $ 2,442,830  
 
           
The accompanying notes are an integral part of these statements.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
 
         
    For the Year  
    Ended  
    December 31,  
    2006  
Additions
       
Contributions
       
Employers
  $ 319,350  
Participants
    207,771  
Plan interest in Hanesbrands Inc. Master Investment Trust for Defined Contribution Plans’ net investment income and Sara Lee Corporation Master Investment Trust for Defined Contribution Plans’ net investment income (Note C)
    122,016  
 
     
 
       
Total additions
    649,137  
 
       
Deductions
       
Benefits paid to participants
    414,589  
 
     
 
       
NET INCREASE
    234,548  
 
       
Net assets available for benefits
       
Beginning of year
    2,442,830  
 
     
 
       
End of year
  $ 2,677,378  
 
     
The accompanying notes are an integral part of this statement.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE A – DESCRIPTION OF PLAN
The following brief description of the Hanesbrands Inc. Hourly Retirement Savings Plan of Puerto Rico (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
Hanesbrands Inc. (the “Company”) was spun off from Sara Lee Corporation (“Sara Lee”) on September 5, 2006. In connection with the spin off, Sara Lee contributed its branded apparel Americas and Asia business to the Company and distributed all of the outstanding shares of the Company’s common stock to its stockholders on a pro rata basis. As a result of such distribution, Sara Lee ceased to own any equity interest in the Company and the Company became an independent, separately traded, publicly held company. Effective as of January 1, 2006, the Company became the sponsoring employer of the Plan, and the Plan name was subsequently changed from Sara Lee Corporation Personal Products Hourly Retirement Plan of Puerto Rico to Hanesbrands Inc. Hourly Retirement Savings Plan of Puerto Rico.
On July 24, 2006, the assets of the Plan were moved from the Sara Lee Corporation Master Investment Trust for Defined Contribution Plans (the “SLC Investment Trust”) to the Hanesbrands Inc. Master Investment Trust for Defined Contribution Plans (the “HB Investment Trust”).
As of December 31, 2005, the Playtex Apparel Retirement Savings Plan for Hourly Employees the (“Playtex Plan”) was merged into and continued in the form of the Plan.
As of April 1, 2006, certain assets of the Hanesbrands Inc. Salaried Retirement Savings Plan of Puerto Rico were transferred to the Plan, for the benefit of eligible employees whose employment status changed such that they became eligible to participate in the Plan. During 2006, the amount transferred to the Plan was approximately $11,000.
General
The Plan is a defined contribution plan covering eligible hourly employees of participating divisions and subsidiaries of the Company (the “Employers”), located in Puerto Rico, who have attained age 21 and completed 90 days of credited service, as defined in the Plan document; bargaining unit employees are covered, however, only if the applicable collective bargaining agreement provides for their participation in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.
Contributions
Eligible employees can contribute between 1% and 10% of their compensation, as defined in the Plan document. Prior to April 1, 2006, participant contributions were made on an after-tax basis, except that prior participants in the Playtex Plan made their contributions on a pre-tax basis . Effective April 1, 2006, all contributions to the Plan are made on a pre-tax basis. Contributions are subject to limitations under the Internal Revenue Code (“IRC”) and the Puerto Rico Internal Revenue Code of 1994 (“PRIRC”).
Effective April 1, 2006, the Employers will contribute an amount equal to 100% of the portion of a participant’s contribution that does not exceed 2% of a participant’s eligible compensation subject to certain limitations defined in the Plan document. The Employers may also make a discretionary Employer contribution in the amount of 2% of a participant’s eligible compensation.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE A – DESCRIPTION OF PLAN — Continued
Prior to April 1, 2006, for employees other than prior participants in the Playtex Plan, the Employers made basic and supplemental contributions on behalf of eligible participants, in an amount from .25% to 2% of eligible compensation, depending on participants’ years of credited service and the Employers’ level of earnings. Eligible former Playtex Plan participants received a matching contribution of 20% of the portion of the participant’s contribution that did not exceed 5% of the participant’s eligible compensation.
Participant Accounts
Individual accounts are maintained for each of the Plan’s participants to reflect Employer contributions, the participant’s contributions and any rollover contributions, as well as the participant’s related share of the Plan’s income, losses and certain related administrative expenses. Allocations of income and losses are made within each separate investment fund in proportion to each participant’s investment in those funds. Allocations of certain related administrative expenses are made based on the proportion that each participant’s account balance has to the total of all participants’ account balances.
Vesting
Participants’ after-tax, pre-tax, Employer matching and rollover contribution accounts are 100% vested at all times. Vesting in the annual discretionary Employer contribution accounts (and prior basic and supplemental Employer contribution accounts) is 100% after completing five years of service, or in the case of termination due to death, disability or normal retirement without regard to years of credited service.
Investment Options
Participants may direct their total account balances among the various investment options currently available to the Plan through the HB Investment Trust in 10% increments. Participants may change their investment elections quarterly.
Forfeitures
If a participant leaves the Employers for reasons other than death, disability or normal retirement age before his or her annual discretionary Employer contribution account is vested, his or her annual discretionary Employer contribution account is forfeited. Prior to April 1, 2006, forfeited balances were first allocated to participants who were reemployed and were entitled to reinstatement of their annual discretionary Employer contribution account and then the remainder was allocated among and credited to the Employer contribution accounts of eligible participants (other than former Playtex Plan participants). Effective April 1, 2006, the Plan was amended such that forfeited balances shall first be allocated to participants who are reemployed and are entitled to reinstatement of their annual discretionary Employer contribution account and then the remainder may be used to reduce future Employer matching contributions or pay administrative expenses of the Plan.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE A – DESCRIPTION OF PLAN — Continued
Forfeitures for the plan year ended December 31, 2006 were $54,238. At December 31, 2006, $24,087 of forfeitures had not been reallocated to participant accounts, nor used to offset employer matching contributions or administrative expenses of the Plan.
Benefit Payments
Upon termination of service due to death, disability, retirement or resignation/dismissal, distribution of the vested balance in the participant’s accounts will be made to the participant or, in the case of the participant’s death, to his or her beneficiary by a lump-sum payment in cash (or stock, if elected, for amounts invested in the Sara Lee Corporation Common Stock Fund or the Hanesbrands Inc. Common Stock Fund of the HB Investment Trust).
Withdrawals
Participants may withdraw all or a portion of their vested account balances, provided they have attained age 59-1/2; participants may also withdraw their after-tax accounts at any time. Participants who have an immediate and substantial financial need may take a hardship withdrawal from their accounts, subject to certain limitations defined in the Plan document. No more than two withdrawals of any type may be made in any calendar year.
New Accounting Pronouncements
As of December 31, 2006, the Plan adopted Financial Accounting Standards Board (FASB) Staff Position FSP AAG INV-1 and Statement of Position No. 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP). The FSP requires that the Statement of Net Assets Available for Benefits present the fair value of the Plan’s investments as well as the adjustment from fair value to contract value for the fully benefit-responsive investment contracts. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis for the fully benefit-responsive investment contracts. The FSP was applied retroactively to the prior period presented on the Statement of Net Assets Available for Benefits as of December 31, 2005.
In September 2006, the FASB issued Statement on Financial Accounting Standards No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurement. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact, if any, SFAS 157 will have on the Plan’s financial statements.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE B – SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared using the modified cash basis of accounting, which is a comprehensive basis of accounting other than U.S. generally accepted accounting principles. Under the modified cash basis of accounting, investments are recorded at fair value (or contract value when appropriate), income is recorded as earned, and benefit payments, administrative expenses, and contributions are recorded as the cash is paid or received. In addition, purchases and sales of securities are recorded on a trade-date basis.
If the Plan’s financial statements had been prepared using the accrual basis of accounting in accordance with U.S. generally accepted accounting principles, receivables (including Company and participant contributions) of approximately $341,000 and $179,000 would have been recorded in the accompanying statements of net assets available for benefits as of December 31, 2006 and 2005, respectively.
Use of Estimates
The preparation of financial statements requires the Plan’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
Valuation of Investments
The Plan’s sole investments are an interest in the HB Investment Trust and the SLC Investment Trust. The Plan’s interest in the HB Investment Trust and the SLC Investment Trust is based on the Plan’s relative aggregate contributions, benefit payments and other relevant factors.
The investments of each of the HB Investment Trust and the SLC Investment Trust consist of investments in registered investment companies, corporate common stocks, common/collective trusts and investment contracts. Investments in registered investment companies and corporate common stocks are valued using quoted market prices. Common/collective trusts are valued at fair value of participant units owned by the HB Investment Trust and SLC Investment Trust based on quoted redemption values. Investment contracts are valued at contract value, as they are fully benefit-responsive. Contract value represents the principal balance of the underlying investment contracts, plus accrued interest at the stated contract rates, less withdrawals and administrative charges by the insurance companies. There are no material reserves against contract value for credit risk of the contract issuers or otherwise. Under the terms of the contracts, the crediting interest rates are fixed rates negotiated by the Company with the insurance companies. The average crediting interest rate of the investment contracts as of December 31, 2006 and 2005 was approximately 5.21% and 4.80%, respectively. The average yield for the investment contracts for the year ended December 31, 2006 was approximately 5.13%. Purchases and sales of securities in the HB Investment Trust and the SLC Investment Trust are recorded on a trade-date basis. Interest is recorded in the period earned. Dividends are recorded on the ex-dividend date.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE B – SUMMARY OF ACCOUNTING POLICIES — Continued
In general, the investments provided by the Plan are exposed to various risks, such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investments, it is reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits and participants’ individual account balances.
Administrative Expenses
Administrative expenses associated with the Plan are paid by the Plan, unless paid by the Employers at their discretion.
 
NOTE C – PLAN INTEREST IN MASTER TRUSTS
The Plan’s investments are in the HB Investment Trust, which was established for the investment of assets of the Plan and two other defined contribution plans sponsored by the Company (the “Participating Plans”). Each Participating Plan has an interest in the HB Investment Trust based on each Participating Plan’s participants’ account balances within each investment fund. The assets of the HB Investment Trust are held by The Northern Trust Company.
At December 31, 2006, the Plan’s interest in the net assets of the HB Investment Trust was approximately .50%. At December 31, 2005, the Plan’s interest in the net assets of the SLC Investment Trust was approximately .18%. Investment income and certain administrative expenses relating to the HB Investment Trust are allocated to the individual plans based on the balances invested by each plan.
The Plan’s interest in the net assets of the HB Investment Trust and the SLC Investment Trust is included in the accompanying statements of net assets available for benefits.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE C – PLAN INTEREST IN MASTER TRUSTS — Continued
A summary of the net assets of the HB Investment Trust as of December 31, 2006 is as follows:
         
Investments, at fair value
       
Corporate stocks - common
  $ 31,136,725  
Investment in common/collective trusts
    2,101,600  
Investment in registered investment companies
    272,356,469  
Participant loans
    11,303,364  
Investment contracts
    195,079,652  
 
     
 
       
Total investments
    511,977,810  
 
       
Receivables
    20,801,864  
Liabilities
    (999,270 )
 
     
 
       
Net assets of HB Investment Trust at fair value
    531,780,404  
 
       
Adjustment from fair value to contract value for interest in collective trust relating to fully benefit-responsive investment contracts
  1,537,565  
 
     
 
       
Net assets of HB Investment Trust
  $ 533,317,969  
 
     

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE C – PLAN INTEREST IN MASTER TRUSTS — Continued
A summary of the net assets of the SLC Investment Trust as of December 31, 2005 is as follows:
                         
    Allocated     Unallocated     Total  
Investments, at fair value
                       
Corporate stocks - common
  $ 280,891,012     $ 175,111,216     $ 456,002,228  
Investment in common/collective trusts
    34,250,541             34,250,541  
Investment in registered investment companies
    464,336,886             464,336,886  
Participant loans
    30,544,811             30,544,811  
Other
    1,909,140             1,909,140  
Investment contracts
    291,995,298             291,995,298  
 
                 
 
                       
Total investments
    1,103,927,688       175,111,216       1,279,038,904  
 
                       
Receivables
    5,301,971       1,911,391       7,213,362  
Liabilities
    (9,663 )     (1,908,448 )     (1,918,111 )
Notes payable
          (149,207,062 )     (149,207,062 )
 
                 
 
                       
Net assets of SLC Investment Trust at fair value
  $ 1,109,219,996     $ 25,907,097     $ 1,135,127,093  
 
                       
Adjustment from fair value to contract value for interest in collective trust relating to fully benefit-responsive investment contracts
    1,265,231           1,265,231
 
                 
 
                       
Net assets of SLC Investment Trust
  $ 1,110,485,227     $ 25,907,097     $ 1,136,392,324  
 
                 

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE C – PLAN INTEREST IN MASTER TRUSTS — Continued
For the year ended December 31, 2006, net investment income was allocated to the three Participating Plans as follows: (i) for the period from January 1, 2006 through July 23, 2006, net investment income was allocated to two of the Participating Plans, including the Plan, from the SLC Investment Trust, and (ii) for the period from July 24, 2006 through December 31, 2006, net investment income was allocated to all three of the Participating Plans from the HB Investment Trust. The aggregate net investment income allocated to the Participating Plans by the SLC Investment Trust and the HB Investment Trust during such periods is as follows:
         
Interest and dividend income
  $ 5,142,490  
Net appreciation in fair value of investments
       
Corporate stocks — common
    7,491,208  
Investment in common/collective trusts
    4,228,645  
Investment in registered investment companies
    28,426,184  
 
     
 
       
Net investment income
  $ 45,288,527  
 
     
At December 31, 2006, the HB Investment Trust held 772,091 shares of Hanesbrands Inc. common stock. These shares had a fair value of $18,236,790 as of December 31, 2006.
At December 31, 2006, the HB Investment Trust held 757,483 shares of Sara Lee Corporation common stock. These shares had a fair value of $12,899,936 as of December 31, 2006.
At December 31, 2005, the SLC Investment Trust held 23,796,701 shares of Sara Lee Corporation common stock. These shares had a fair value of $449,757,649 as of December 31, 2005.
 
NOTE D – PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE E – TAX STATUS
By letter dated October 22, 2003, the Internal Revenue Service (“IRS”) last determined that the Plan, which was formerly known as the Sara Lee Corporation Personal Products Hourly Retirement Plan of Puerto Rico, (as amended) and trust met the qualification requirements set forth in Sections 401(a) and 501(a) of the IRC. The Company has requested a new determination letter from the IRS. A response has not been received, although the Plan administrator believes that the Plan has been operated in compliance with the IRC.
 
NOTE F – PARTY-IN-INTEREST TRANSACTIONS
Certain assets of the HB Investment Trust are invested in investments managed by The Northern Trust Company (the “Trustee” of the Plan); therefore, these transactions qualify as party-in-interest transactions. Fees paid by the plan during 2006 for legal, accounting, and other professional services rendered by parties in interest were based on customary and reasonable rates for such services.
Certain Plan assets that are in the HB Investment Trust are invested in investments managed by the Trustee of the Plan; therefore, these transactions qualify as party-in-interest. A portion of the Plan’s assets (approximately 4.4% and 6.2% as of December 31, 2006 and December 31, 2005, respectively) is invested in Hanesbrands Inc. common stock and Sara Lee Corporation common stock, through participant-directed account balances.
 
NOTE G – NON-EXEMPT TRANSACTIONS
Certain 2006 employee contributions were temporarily held by the Company and not deposited to employee accounts maintained by the trustee within the timeframe mandated by Department of Labor regulations. The Company intends to contribute all late contributions to the Plan and reimburse the Plan for interest on the funds borrowed.
 
NOTE H – RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2006 and 2005 to the Form 5500:

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 
NOTE H – RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 — Continued
                 
    2006     2005  
Net assets available for benefits per the financial statements
  $ 2,677,378     $ 2,442,830  
Adjustment from fair value to contract value for fully benefit-responsive investment contracts
    (7,688 )    
Amounts due to participants
    (37,661 )     (75,464 )
 
           
 
               
Net assets available for benefits per the Form 5500
  $ 2,632,029     $ 2,367,366  
 
           
The following is a reconciliation of investment income according to the financial statements for the year ended December 31, 2006 to the Form 5500:
         
Investment income per the financial statements
  $ 122,016  
Adjustment from fair value to contract value for fully benefit-responsive investment contracts
    (7,688 )
 
     
Investment income per the Form 5500
  $ 114,328  
 
     
The following is a reconciliation of benefits paid to participants according to the financial statements for the year ended December 31, 2006 to the Form 5500:
         
Benefits paid per the financial statements
  $ 414,589  
Amounts allocated to withdrawing participants at
       
December 31, 2006
    37,661  
December 31, 2005
    (75,464 )
 
     
 
       
Benefits paid per the Form 5500
  $ 376,786  
 
     
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
SCHEDULE H, LINE 4a — DELINQUENT DEPOSITS OF PARTICIPANT CONTRIBUTIONS
Year ended December 31, 2006
 
Name of plan sponsor: Hanesbrands Inc.
Employer identification number: 20-3552316
Three-digit plan number: 005
         
Participant Contributions of the Current Plan Year Not Deposited Into the Plan Within the Time Period Described in 29CFR 2510.3-102
  $ 34,806  
 
Amount fully corrected under the DOL’s Voluntary Fiduciary Correction Program (VFC Program) and PTE 2002-51
     
 
Delinquent deposits of current Plan year participant contributions constituting prohibited transactions
    34,806 (1)
 
Delinquent deposits of prior year participant contributions not fully corrected
    30,433
 
     
 
Total delinquent deposits of participant contributions constituting prohibited transactions
  $ 65,239  
 
     
 
(1)   Of this amount, $7,914 has been fully corrected outside the VFC Program.

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Hanesbrands Inc. Hourly Retirement
Savings Plan of Puerto Rico
SCHEDULE H, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2006
 
Name of plan sponsor: Hanesbrands Inc.
Employer identification number: 20-3552316
Three-digit plan number: 005
                     
                (e)  
    (b)   (c)   (d)   Current  
(a)   Identity of issuer   Description of investment   Cost   value  
*
  Hanesbrands Inc.   Corporate stock - common   **   $ 8,887  
 
  Sara Lee Corporation   Corporate stock - common   **     1,337  
 
                 
 
                10,224  
 
                 
 
                   
*
  Short-term Investments   Common/collective trust   **     71,117  
 
                 
 
                   
*
  Hanesbrands Fixed Income   Investment contracts   **     2,496,363  
 
                 
 
                   
 
  Vanguard Balanced Index Fund   Registered investment companies   **     22,107  
 
  Vanguard Index   Registered investment companies   **     13,653  
 
  Vanguard Instl Index Fund   Registered investment companies   **     35,318  
 
  Vanguard Star Fund   Registered investment companies   **     28,596  
 
                 
 
                99,674  
 
                 
 
              $ 2,677,378  
 
                 
 
*   Party-in-interest as defined by ERISA Section 3(14).
 
**   Cost information is not required for participant-directed investments and therefore is not included.

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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
         
Date: July 3, 2007  HANESBRANDS INC. HOURLY RETIREMENT
SAVINGS PLAN OF PUERTO RICO
 
 
  By:   /s/ Dale W. Boyles   
    Dale W. Boyles  
    Authorized Member of the Hanesbrands Inc.
Employee Benefits Administrative Committee
 
 

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INDEX TO EXHIBITS
     
Exhibit    
Number   Description
23.1
  Consent of Grant Thornton LLP