Hasbro 2011 Annual Report Download - page 73

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
The components of deferred income tax expense (benefit) arise from various temporary differences and
relate to items included in the consolidated statements of operations as well as items recognized in other
comprehensive earnings. The tax effects of temporary differences that give rise to significant portions of the
deferred tax assets and liabilities at December 25, 2011 and December 26, 2010 are:
2011 2010
Deferred tax assets:
Accounts receivable ............................................ $ 22,007 21,095
Inventories ................................................... 18,398 18,723
Loss carryforwards ............................................. 27,943 29,348
Operating expenses ............................................ 39,623 40,835
Pension ...................................................... 35,969 29,823
Other compensation ............................................ 49,780 50,619
Postretirement benefits .......................................... 15,723 15,435
Tax sharing agreement .......................................... 25,991 26,276
Other ........................................................ 17,749 20,033
Gross deferred tax assets ...................................... 253,183 252,187
Valuation allowance ............................................ (18,145) (17,729)
Net deferred tax assets ........................................ 235,038 234,458
Deferred tax liabilities:
International earnings not indefinitely reinvested ..................... 7,846 25,903
Depreciation and amortization of long-lived assets .................... 73,301 61,274
Equity method investment ....................................... 21,396 23,617
Other ........................................................ 3,075 4,715
Deferred tax liabilities ........................................ 105,618 115,509
Net deferred income taxes ......................................... $129,420 118,949
Hasbro has a valuation allowance for certain deferred tax assets at December 25, 2011 of $18,145, which is
an increase of $416 from $17,729 at December 26, 2010. The valuation allowance pertains to certain U.S. state
and international loss carryforwards, some of which have no expiration and others that would expire beginning in
2014.
Based on Hasbro’s history of taxable income and the anticipation of sufficient taxable income in years when
the temporary differences are expected to become tax deductions, the Company believes that it will realize the
benefit of the deferred tax assets, net of the existing valuation allowance.
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