Mattel 2011 Annual Report Download - page 75

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In October 2010, Mattel acquired the intellectual property rights related to Phase 10®for $15.8 million,
including acquisition costs, which is included within amortizable identifiable intangibles.
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 value
may exceed its fair value. During 2011 and 2010, Mattel performed the annual impairment tests and determined
that its nonamortizable intangible assets were not impaired. However, during 2011, for one of Mattel’s
nonamortizable intangible assets with a carrying value of approximately $113 million, the fair value did not
exceed the carrying value by a significant margin. Future changes in estimates resulting in lower than currently
anticipated future cash flows and fair value could negatively affect the valuation, which may result in Mattel
recognizing an impairment charge in the future.
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. As a result of these
impairment tests, Mattel recorded an impairment charge of approximately $8 million during 2010, which is
reflected within other selling and administrative expenses. Amortizable intangible assets were determined to not
be impaired during 2011.
Note 3—Income Taxes
Consolidated pre-tax income consists of the following:
For the Year
2011 2010 2009
(In thousands)
US operations ................................................... $169,706 $124,160 $107,593
Foreign operations ............................................... 800,967 722,665 552,454
$970,673 $846,825 $660,047
The provision (benefit) for current and deferred income taxes consists of the following:
For the Year
2011 2010 2009
(In thousands)
Current
Federal .................................................... $ 15,933 $ 14,057 $ 9,251
State ...................................................... 5,268 8,686 9,975
Foreign .................................................... 131,596 143,090 134,088
152,797 165,833 153,314
Deferred
Federal .................................................... 49,853 (10,894) 564
State ...................................................... (2,629) 10,599 (8,828)
Foreign .................................................... 2,144 (3,576) (13,707)
49,368 (3,871) (21,971)
Provision for income taxes ......................................... $202,165 $161,962 $131,343
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