Hasbro 2015 Annual Report Download - page 89

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 27, 2015 and December 28, 2014 are:
2015 2014
Deferred tax assets:
Accounts receivable .............................................. $ 23,568 20,874
Inventories ...................................................... 15,168 14,698
Loss and credit carryforwards ....................................... 28,893 32,393
Operating expenses ............................................... 43,029 48,998
Pension ........................................................ 49,746 53,789
Other compensation ............................................... 62,587 48,498
Postretirement benefits ............................................ 9,253 10,092
Interest rate hedge ................................................ 10,937 11,638
Tax sharing agreement ............................................ 18,379 18,840
Other .......................................................... 31,441 27,817
Gross deferred tax assets ........................................... 293,001 287,637
Valuation allowance .............................................. (23,593) (26,319)
Net deferred tax assets ............................................. 269,408 261,318
Deferred tax liabilities:
Depreciation and amortization of long-lived assets ...................... 53,755 59,895
Equity method investment .......................................... 8,205 2,001
Other .......................................................... 16,632 13,447
Deferred tax liabilities ............................................. 78,592 75,343
Net deferred income taxes .......................................... $190,816 185,975
Hasbro has a valuation allowance for certain deferred tax assets at December 27, 2015 of $23,593, which is
a decrease of $2,726 from $26,319 at December 28, 2014. 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 2016.
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 27, 2015 and December 28, 2014, the Company’s net deferred income taxes are recorded in
the consolidated balance sheets as follows:
2015 2014
Other assets ..................................................... $199,563 193,875
Other liabilities .................................................. (8,747) (7,900)
Net deferred income taxes .......................................... $190,816 185,975
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