Mattel 2014 Annual Report Download - page 78

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method. Level 3 inputs, including forecasted future cash flows, an estimated useful life, and a discount rate, were
used in the valuation. As the fair value of the asset was below the carrying value, Mattel recorded an impairment
charge of approximately $14 million, which was reflected within other selling and administrative expenses in the
consolidated statement of operations for the North America and International operating segments during 2013.
In conjunction with the Polly Pocket trade name impairment test, Mattel reassessed the intangible asset’s
nonamortizable classification and determined that the nonamortizable classification could no longer be
supported. During the second quarter of 2013, the Polly Pocket trade name was reclassified as an amortizable
intangible asset, and the remaining fair value of the asset is being amortized over its estimated remaining useful
life.
Mattel tests nonamortizable intangible assets, including trademarks and trade names, for impairment
annually in the third quarter and whenever events or changes in circumstances indicate that the carrying values
may exceed the fair values. During 2014, Mattel performed the annual impairment tests and determined that its
nonamortizable intangible assets were not impaired.
Mattel also tests its amortizable intangible assets for impairment whenever events or changes in
circumstances indicate that the carrying value of the asset may not be recoverable. Mattel determined that its
amortizable intangible assets were not impaired during 2014.
Note 3—Income Taxes
Consolidated pre-tax income consists of the following:
For the Year
2014 2013 2012
(In thousands)
US operations .............................................. $ 39,149 $ 231,372 $ 104,707
Foreign operations ........................................... 547,761 867,756 840,338
$ 586,910 $1,099,128 $ 945,045
The provision (benefit) for current and deferred income taxes consists of the following:
For the Year
2014 2013 2012
(In thousands)
Current
Federal ................................................ $ (25,075) $ 38,227 $ 69,639
State .................................................. (2,029) 6,447 8,660
Foreign ............................................... 106,998 130,878 126,465
79,894 175,552 204,764
Deferred
Federal ................................................ 21,987 30,342 (26,489)
State .................................................. 8,233 (512) 520
Foreign ............................................... (22,078) (10,198) (10,214)
8,142 19,632 (36,183)
Provision for income taxes .................................... $ 88,036 $ 195,184 $ 168,581
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