Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Consolidated pre-tax income consists of the following:


	For the Year
	2013		2012		2011
	(In thousands)
US operations	$	231,372	$	104,707	$	169,706
Foreign operations		867,756		840,338		800,967

	$	1,099,128	$	945,045	$	970,673

Provision (Benefit) for Current and Deferred Income Taxes

The provision (benefit) for current and deferred income taxes consists of the following:


	For the Year
	2013			2012			2011
	(In thousands)
Current
Federal	$	38,227		$	69,639		$	15,933
State		6,447			8,660			5,268
Foreign		130,878			126,465			131,596

		175,552			204,764			152,797

Deferred
Federal		30,342			(26,489	)		49,853
State		(512	)		520			(2,629	)
Foreign		(10,198	)		(10,214	)		2,144

		19,632			(36,183	)		49,368

Provision for income taxes	$	195,184		$	168,581		$	202,165

Deferred Income Tax Assets (Liabilities)

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

Balance Sheet Classification of Deferred Income Tax Assets (Liabilities)

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

Expiration of Loss and Tax Credit Carryforwards

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

Reconciliation of Provision for Income Taxes at US Federal Statutory Rate to Provision in Statements of Operations

Differences between the provision for income taxes at the US federal statutory income tax rate and the provision in the consolidated statements of operations are as follows:


	For the Year
	2013			2012			2011
	(In thousands)
Provision at US federal statutory rate	$	384,695		$	330,766		$	339,736
(Decrease) increase resulting from:
Foreign earnings taxed at different rates, including withholding taxes		(165,768	)		(157,488	)		(139,476	)
Foreign losses without income tax benefit		3,215			1,047			2,883
State and local taxes, net of US federal benefit		4,854			6,856			4,833
Adjustments to previously accrued taxes		(32,200	)		(16,000	)		(6,800	)
Other		388			3,400			989

Provision for income taxes	$	195,184		$	168,581		$	202,165

Reconciliation of Unrecognized Tax Benefits

A reconciliation of unrecognized tax benefits is as follows:


	For the Year
	2013			2012			2011
	(In thousands)
Unrecognized tax benefits at January 1	$	285,560		$	262,560		$	252,570
Increases for positions taken in current year		12,997			14,800			13,480
Increases for positions taken in a prior year		14,289			21,030			2,280
Decreases for positions taken in a prior year		(186,555	)		(700	)		(980	)
Decreases for settlements with taxing authorities		(5,135	)		(800	)		(1,390	)
Decreases for lapses in the applicable statute of limitations		(9,786	)		(11,330	)		(3,400	)

Unrecognized tax benefits at December 31	$	111,370		$	285,560		$	262,560