Mattel 2009 Annual Report Download - page 76

Deferred income taxes are provided principally for tax credit carryforwards, research and development
expenses, net operating loss carryforwards, employee compensation-related expenses and certain other reserves
that are recognized in different years for financial statement and income tax reporting purposes. Mattel’s deferred
income tax assets (liabilities) are composed of the following:
December 31,
2009 2008
(In thousands)
Tax credit carryforwards .................................................. $209,173 $ 258,671
Research and development expenses ......................................... 187,010 190,615
Loss carryforwards ....................................................... 56,228 92,153
Allowances and reserves .................................................. 122,219 84,777
Deferred compensation .................................................... 111,237 73,522
Postretirement benefits .................................................... 66,220 81,092
Other .................................................................. 37,122 24,270
Gross deferred income tax assets ........................................ 789,209 805,100
Intangible assets ......................................................... (100,839) (83,245)
Other .................................................................. (9,255) (16,360)
Gross deferred income tax liabilities ..................................... (110,094) (99,605)
Deferred income tax asset valuation allowances ................................ (112,048) (150,963)
Net deferred income tax assets .............................................. $567,067 $ 554,532
Net deferred income tax assets are reported in the consolidated balance sheets as follows:
December 31,
2009 2008
(In thousands)
Prepaid expenses and other current assets ..................................... $131,402 $ 78,531
Other noncurrent assets ................................................... 481,240 524,451
Accrued liabilities ........................................................ (775) (850)
Other noncurrent liabilities ................................................. (44,800) (47,600)
$ 567,067 $ 554,532
As of December 31, 2009, Mattel has federal and foreign loss carryforwards totaling $143.8 million and tax
credit carryforwards of $209.2 million, which does not include carryforwards that do not meet the threshold for
recognition in the financial statements. Utilization of these loss and tax credit carryforwards is subject to annual
limitations. Mattel’s loss and tax credit carryforwards expire in the following periods:
Loss
Carryforwards
Tax Credit
Carryforwards
(In thousands)
2010 – 2014 ........................................................ $ 55,885 $ 69,471
Thereafter ......................................................... 6,606 130,258
No expiration date ................................................... 81,276 9,443
Total ......................................................... $ 143,767 $ 209,172
Management considered all available evidence under existing tax law and anticipated expiration of tax
statutes and determined that a valuation allowance of $112.0 million was required as of December 31, 2009 for
those loss and tax credit carryforwards that are not expected to provide future tax benefits. Changes in the
valuation allowance for 2009 include increases in the valuation allowance for 2009 foreign losses without
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