Hasbro 2010 Annual Report Download - page 71

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(10) Income Taxes
Income taxes attributable to earnings before income taxes are:
2010 2009 2008
Current
United States ...................................... $ 35,232 87,053 68,514
State and local ..................................... 1,931 4,142 251
International....................................... 47,633 44,436 40,530
84,796 135,631 109,295
Deferred
United States ...................................... 26,269 17,387 22,917
State and local ..................................... 901 993 1,964
International....................................... (1,998) 756 113
25,172 19,136 24,994
$109,968 154,767 134,289
Certain income tax (benefits) expenses, not reflected in income taxes in the consolidated statements of
operations totaled $(87,367) in 2010, $(2,905) in 2009, and $(29,287) in 2008. These income tax (benefits)
expenses relate primarily to the reversal through additional paid in capital of deferred tax liabilities relating to
the Company’s contingent convertible debentures upon the conversion of these debentures in 2010. These
amounts also include derivative and pension amounts recorded in AOCE and stock options. In 2010, 2009, and
2008, the deferred tax portion of the total (benefit) expense was $(64,700), $(1,041), and $(26,555),
respectively.
A reconciliation of the statutory United States federal income tax rate to Hasbro’s effective income tax
rate is as follows:
2010 2009 2008
Statutory income tax rate ....................................... 35.0% 35.0% 35.0%
State and local income taxes, net .................................. 0.4 0.7 1.0
Investment of foreign earnings in U.S. . ............................ — — 3.5
Tax on international earnings .................................... (11.2) (7.5) (7.9)
Exam settlements and statute expirations ............................ (4.4) (0.5) (0.8)
Other, net ................................................... 1.9 1.5 (0.4)
21.7% 29.2% 30.4%
During 2010 and 2009, the Company indefinitely reinvested all current year international net earnings
outside the U.S. In 2008, the Company designated $60,000 of the international net earnings during that year
that will not be indefinitely reinvested outside of the U.S. The incremental income tax on these amounts,
representing the difference between the U.S. federal income tax rate and the income tax rates in the applicable
international jurisdictions, is a component of deferred income tax expense.
61
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)