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Other Noncurrent Assets
6 Months Ended
Jun. 30, 2013
Other Noncurrent Assets
6. Other Noncurrent Assets

Other noncurrent assets include the following:

 

     June 30,
2013
     June 30,
2012
     December 31,
2012
 
     (In thousands)  

Nonamortizable identifiable intangibles

   $       504,241       $       617,223       $       617,223   

Deferred income taxes

     439,937         506,598         374,667   

Identifiable intangibles (net of amortization of $68.8 million, $58.7 million, and $64.9 million, respectively)

     182,005         94,450         88,786   

Other

     249,796         214,865         215,293   
  

 

 

    

 

 

    

 

 

 
   $ 1,375,979       $ 1,433,136       $ 1,295,969   
  

 

 

    

 

 

    

 

 

 

In connection with the acquisition of HIT Entertainment, as more fully described in “Note 5 to the Consolidated Financial Statements—Goodwill” of this Quarterly Report on Form 10-Q, Mattel recognized $495.0 million of nonamortizable identifiable intangible assets and $15.7 million of amortizable identifiable intangible assets, primarily related to intellectual property rights.

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 values may exceed the fair values. 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.

During the second quarter of 2013, Mattel changed its brand strategy for Polly Pocket®, which includes a more focused allocation of resources to support the Polly Pocket brand in specific markets, resulting in a reduction of the forecasted future cash flows of the brand. As a result of the change, Mattel tested the Polly Pocket trade name for impairment. The Polly Pocket trade name, which had a carrying value of approximately $113 million, was previously determined to be a nonamortizable intangible asset. The fair value of the Polly Pocket trade name was determined to be approximately $99 million based on a discounted cash flow analysis using the multi-period excess earnings method. Level 3 inputs, including forecasted future cash flows, an estimated useful life, and a discount rate, were used in the valuation. Since the fair value of the asset was below the carrying value, Mattel recorded an impairment charge of approximately $14 million, which is reflected within other selling and administrative expenses for the North America and International operating segments.

In conjunction with the Polly Pocket trade name impairment test, Mattel also reassessed the intangible asset’s nonamortizable classification and determined that the nonamortizable classification could no longer be supported. The Polly Pocket trade name has been reclassified as an amortizable intangible asset, and the remaining fair value of the asset will be amortized over its estimated remaining useful life.