Mattel 2001 Annual Report Download - page 55

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one-time transition adjustment of $2.1 million in accumulated other comprehensive income (loss) related to
unrealized gains on derivative instruments.
New Accounting Pronouncements
In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which
addresses financial accounting and reporting for obligations associated with the retirement of tangible long-
lived assets and the associated asset retirement costs. This statement requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair
value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. All provisions of this statement will be effective at the beginning of fiscal 2003. Mattel is in
the process of determining the impact of this standard on its financial results when effective.
In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-
Lived Assets. This statement supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of, and amends APB No. 30, Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. This
statement requires that long-lived assets that are to be disposed of by sale be measured at the lower of book
value or fair value less costs to sell. SFAS No. 144 retains the fundamental provisions of SFAS No. 121 for
(a) recognition and measurement of the impairment of long-lived assets to be held and used and
(b) measurement of long-lived assets to be disposed of by sale. This statement also retains APB No. 30’s
requirement that companies report discontinued operations separately from continuing operations. All
provisions of this statement will be effective the first quarter of 2002. The adoption of this statement is not
expected to have a significant impact on Mattel’s consolidated financial position and results of operations.
Note 2—Income Taxes
Consolidated income from continuing operations before income taxes consists of the following (in
thousands):
For the Year
2001 2000 1999
US operations ............................................ $ 29,431 $(140,747) $(126,675)
Foreign operations ......................................... 400,579 366,171 296,839
$ 430,010 $ 225,424 $ 170,164
The provision for current and deferred income taxes consists of the following (in thousands):
For the Year
2001 2000 1999
Current
Federal ................................................. $ 28,748 $ 2,860 $ 9,816
State ................................................... 4,700 3,500 7,400
Foreign ................................................. 75,786 52,900 58,150
109,234 59,260 75,366
Deferred
Federal ................................................. 787 (9,890) (30,109)
State ................................................... 5,500 (13,400) 3,420
Foreign ................................................. 3,569 19,277 13,100
9,856 (4,013) (13,589)
Total provision for income taxes .................................. $119,090 $55,247 $61,777
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