Mattel 2013 Annual Report Download - page 77

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,
2013 2012
(In thousands)
Tax credit carryforwards ............................................. $ 77,396 $ 59,372
Research and development expenses .................................... 187,477 181,449
Loss carryforwards .................................................. 124,201 131,989
Allowances and reserves ............................................. 202,141 229,056
Deferred compensation .............................................. 111,850 118,878
Postretirement benefits ............................................... 37,479 72,912
Other ............................................................. 66,599 67,942
Gross deferred income tax assets ................................... 807,143 861,598
Intangible assets .................................................... (282,737) (279,592)
Other ............................................................. (5,555) (8,262)
Gross deferred income tax liabilities ................................ (288,292) (287,854)
Deferred income tax asset valuation allowances ........................... (64,641) (67,705)
Net deferred income tax assets ......................................... $454,210 $ 506,039
The table of deferred tax assets and liabilities as shown above does not include deferred tax assets for net
operating losses as of December 31, 2013 that arose directly from tax deductions attributable to windfall income
tax benefits. Additional paid-in-capital will be increased by $4.6 million when the deferred tax assets are
realized. Mattel uses tax law ordering when determining when excess tax benefits have been realized.
Net deferred income tax assets are reported in the consolidated balance sheets as follows:
December 31,
2013 2012
(In thousands)
Prepaid expenses and other current assets ................................ $ 195,872 $ 253,664
Other noncurrent assets .............................................. 373,638 374,667
Accrued liabilities .................................................. (109) (152)
Other noncurrent liabilities ........................................... (115,191) (122,140)
$ 454,210 $ 506,039
As of December 31, 2013, Mattel has federal and foreign loss carryforwards totaling $445.8 million and tax
credit carryforwards of $77.4 million, which excludes 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)
2014 – 2018 ....................................................... $ 60,363 $ 27,678
Thereafter ......................................................... 180,756 43,502
No expiration date .................................................. 204,681 6,220
Total ......................................................... $ 445,800 $ 77,400
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