Skechers U.S.A., Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011


	2011			2010			2009

Federal:
Current	$	(54,231	)	$	45,304		$	9,227
Deferred		(1,361	)		(2,090	)		5,902
Total federal		(55,592	)		43,214			15,129
State:
Current		(346	)		8,535			1,498
Deferred		(10,417	)		473			1,268
Total state		(10,763	)		9,008			2,766
Foreign:
Current		(1,027	)		11,529			3,088
Deferred		3,915			(3,553	)		(755	)
Total foreign		2,888			7,976			2,333
Total income taxes (benefit)	$	(63,467	)	$	60,198		$	20,228

Summary of Earnings before income taxes


	2011			2010			2009

Expected income tax expense (benefit)	$	(45,866	)	$	68,811		$	24,888
State income tax, net of federal benefit		(7,320	)		6,590			2,051
Rate differential on foreign income		(11,808	)		(16,398	)		(6,162	)
Change in unrecognized tax benefits		2,906			(160	)		455
Exempt income		0			0			(207	)
Non-deductible expenses		168			569			441
Prior year R&D credit claims		(6,253	)		0			0
Adjustment to tax benefit - 2008 advanced pricing agreement		0			0			(1,952	)
Other		304			(197	)		(1,049	)
Change in valuation allowance		4,402			983			1,763

Total provision (benefit) for income taxes	$	(63,467	)	$	60,198		$	20,228

Deferred Tax Assets


DEFERRED TAX ASSETS:	2011			2010

Deferred tax assets - current:
Inventory adjustments	$	8,741			$ 4,785
Accrued legal settlement		19,344			0
Accrued expenses		13,664			8,808
Allowances for bad debts and chargebacks		5,867			5,492
Total current assets		47,616			19,085
Deferred tax assets - long term:
Depreciation on property, plant and equipment		0			10,321
Loss carryforwards		37,177			7,334
Business credit carryforward		5,452			0
Stock-based compensation		1,131			1,348
Valuation allowance		(11,082	)		(6,680	)
Total long term assets		32,678			12,323
Total deferred tax assets		80,294			31,408
Deferred tax liabilities - current:
Prepaid expenses		8,475			7,365
Deferred tax liabilities – long term:
Depreciation on property, plant and equipment		36,512			0
Total deferred tax liabilities		44,987			7,365
Net deferred tax assets	$	35,307		$	24,043

Reconciliation of unrecognized tax benefits


	2011			2010

Beginning balance	$	9,325		$	9,769
Additions for current year tax positions		595			346
Additions for prior year tax positions		2,206			325
Reductions for prior year tax positions		(177	)		0
Settlement of uncertain tax positions		(1,001	)		(315	)
Reductions related to lapse of statute of limitations		0			(800	)
Ending balance	$	10,948		$	9,325

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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