Hasbro 2014 Annual Report Download - page 90

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 28, 2014 and December 29, 2013 are:
2014 2013
Deferred tax assets:
Accounts receivable ............................................ $ 20,874 20,853
Inventories .................................................... 14,698 16,272
Loss and credit carryforwards ..................................... 32,393 27,870
Operating expenses ............................................. 48,998 54,255
Pension ...................................................... 53,789 31,533
Other compensation ............................................. 48,498 46,206
Postretirement benefits .......................................... 10,092 12,873
Interest rate hedge .............................................. 11,638 —
Tax sharing agreement .......................................... 18,840 24,835
Other ........................................................ 27,817 30,338
Gross deferred tax assets ....................................... 287,637 265,035
Valuation allowance ............................................ (26,319) (21,474)
Net deferred tax assets ......................................... 261,318 243,561
Deferred tax liabilities:
Depreciation and amortization of long-lived assets .................... 59,895 66,856
Equity method investment ........................................ 2,001 18,571
Other ........................................................ 13,447 5,455
Deferred tax liabilities ......................................... 75,343 90,882
Net deferred income taxes .......................................... $185,975 152,679
Hasbro has a valuation allowance for certain deferred tax assets at December 28, 2014 of $26,319, which is
an increase of $4,845 from $21,474 at December 29, 2013. The valuation allowance pertains to certain U.S. state
and international loss and credit carryforwards, some of which have no expiration and others that would expire
beginning in 2015.
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.
At December 28, 2014 and December 29, 2013, the Company’s net deferred income taxes are recorded in
the consolidated balance sheets as follows:
2014 2013
Prepaid expenses and other current assets ............................. $ 75,595 86,634
Other assets ..................................................... 118,280 67,773
Accrued liabilities ................................................ (3,250) (183)
Other liabilities .................................................. (4,650) (1,545)
Net deferred income taxes .......................................... $185,975 152,679
76