0001628280-19-013975 | 10-K/A | XBRL Viewer

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Feb. 08, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-K/A
Amendment Flag	true
Amendment Description	This Amendment No. 1 to Form 10-K (this "Amendment" or "Form 10-K/A") amends the Annual Report on Form 10-K for the year ended December 31, 2018 originally filed with the Securities and Exchange Commission ("SEC") on February 22, 2019 (the "Original Filing") by Mattel, Inc. (the "Company," "Mattel," "we," "our" or "us"). The purpose of this Amendment is to restate the Company’s previously issued unaudited consolidated financial statements as of and for the three and nine month periods ended September 30, 2017, respectively, and the Company’s previously reported unaudited consolidated financial information for the three months ended December 31, 2017, to correct for material tax misstatements. In connection with such restatement, the Company has also elected to revise the Company’s previously issued consolidated financial statements as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018, and relevant interim periods, to correct for other misstatements which the Company has determined to be immaterial, both individually and in the aggregate.
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	MATTEL INC /DE/
Entity Central Index Key	0000063276
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Emerging Growth Company	false
Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		345,396,232
Entity Public Float			$ 5,650,844

CONSOLIDATED BALANCE SHEETS	Dec. 31, 2018 USD ($)
Current Assets
Cash and equivalents	$ 594,481,000
Accounts receivable, net of allowances of $22.0 million and $25.4 million in 2018 and 2017, respectively	970,083,000
Inventories	542,889,000
Prepaid expenses and other current assets	239,747,000
Total current assets	2,347,200,000
Noncurrent Assets
Property, plant, and equipment, net	657,595,000
Goodwill	1,386,424,000
Other noncurrent assets	847,006,000
Total Assets	5,238,225,000
Current Liabilities
Short-term borrowings	4,176,000
Current portion of long-term debt	0
Accounts payable	537,965,000
Accrued liabilities	704,369,000
Income taxes payable	13,520,000
Total current liabilities	1,260,030,000
Noncurrent Liabilities
Long-term debt	2,851,723,000
Other noncurrent liabilities	469,669,000
Total noncurrent liabilities	3,321,392,000
Commitments and Contingencies
Stockholders’ Equity
Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued	441,369,000
Additional paid-in capital	1,812,682,000
Treasury stock at cost: 96.1 million shares and 97.6 million shares in 2018 and 2017, respectively	(2,354,617,000)
Retained earnings	1,616,595,000
Accumulated other comprehensive loss	(859,226,000)
Total stockholders’ equity	656,803,000
Total Liabilities and Stockholders’ Equity	$ 5,238,225,000

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 22.0	$ 25.4
Common stock, par value (USD per share)	$ 1.00	$ 1.00
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	441,400,000	441,400,000
Treasury stock, shares	96,100,000	97,600,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended								9 Months Ended	12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net Sales	$ 1,524,281	$ 1,437,451	$ 844,706	$ 708,372	$ 1,606,915	$ 1,560,983	$ 976,177	$ 737,418	$ 3,274,578	$ 4,514,810	$ 4,881,493	$ 5,453,150
Cost of sales	814,687	824,395	587,546	489,499	1,115,736	911,234	574,712	455,240	1,941,186	2,716,127	3,056,922	2,906,459
Gross Profit	709,594	613,056	257,160	218,873	491,179	649,749	401,465	282,178	1,333,392	1,798,683	1,824,571	2,546,691
Advertising and promotion expenses	205,750	165,308	82,393	70,837	293,534	179,691	95,499	73,562	348,752	524,288	642,286	634,947
Other selling and administrative expenses	398,253	325,874	360,000	424,617	452,644	381,214	353,296	330,829	1,065,339	1,508,744	1,517,983	1,391,769
Operating (Loss) Income	105,591	121,874	(185,233)	(276,581)	(254,999)	88,844	(47,330)	(122,213)	(80,699)	(234,349)	(335,698)	519,975
Interest expense						24,646			68,557	181,886	105,214	95,118
Interest (income)						(1,575)			(6,337)	(6,463)	(7,777)	(9,144)
Other non-operating expense, net						1,910			7,532	7,331	68,110	31,959
(Loss) Income Before Income Taxes	54,274	72,592	(230,064)	(313,905)	(350,794)	63,863	(72,043)	(142,271)	(150,451)	(417,103)	(501,245)	402,042
Provision for income taxes						777,308			728,835	116,196	553,334	89,134
Net (Loss) Income	$ 9,639	$ 6,278	$ (237,963)	$ (311,253)	$ (175,293)	$ (713,445)	$ (54,885)	$ (110,956)	$ (879,286)	$ (533,299)	$ (1,054,579)	$ 312,908
Net (Loss) Income Per Common Share - Basic (USD per share)	$ 0.03	$ 0.02	$ (0.69)	$ (0.90)	$ (0.51)	$ (2.07)	$ (0.16)	$ (0.32)	$ (2.56)	$ (1.55)	$ (3.07)	$ 0.91
Weighted average number of common shares (in shares)	345,720	345,285	344,584	344,434	344,294	343,870	343,116	342,914	343,304	345,012	343,564	341,480
Net (Loss) Income Per Common Share - Diluted (USD per share)	$ 0.03	$ 0.02	$ (0.69)	$ (0.90)	$ (0.51)	$ (2.07)	$ (0.16)	$ (0.32)	$ (2.56)	$ (1.55)	$ (3.07)	$ 0.91
Weighted average number of common and potential common shares (in shares)	345,846	345,672	344,584	344,434	344,294	343,870	343,116	342,914	343,304	345,012	343,564	344,233

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended								9 Months Ended	12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net (Loss) Income	$ 9,639	$ 6,278	$ (237,963)	$ (311,253)	$ (175,293)	$ (713,445)	$ (54,885)	$ (110,956)	$ (879,286)	$ (533,299)	$ (1,054,579)	$ 312,908
Other Comprehensive (Loss) Income, Net of Tax
Currency translation adjustments						36,912			142,248	(106,651)	191,267	(101,539)
Defined benefit pension plan adjustments						1,106			3,185	450	14,491	2,154
Net unrealized (losses) gains on available-for-sale security						(3,848)			(7,585)	(3,748)	(5,948)	3,149
Net unrealized gains (losses) on derivative instruments:
Unrealized holding gains (losses)						(24,009)			(63,999)	24,082	(55,377)	18,733
Amounts reclassified from accumulated other comprehensive loss						9,241			6,648	8,427	16,810	(16,627)
Net unrealized gains (losses) on derivative instruments						(14,768)			(57,351)	32,509	(38,567)	2,106
Other Comprehensive (Loss) Income, Net of Tax						19,402			80,497	(77,440)	161,243	(94,130)
Comprehensive (Loss) Income						$ (694,043)			$ (798,789)	$ (610,739)	$ (893,336)	$ 218,778

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash Flows From Operating Activities:
Net (Loss) Income	$ (533,299)	$ (1,054,579)	$ 312,908
Adjustments to reconcile net (loss) income to net cash flows (used for) provided by operating activities:
Depreciation	232,837	240,818	235,797
Amortization	39,095	33,949	26,543
Share-based compensation	48,915	67,119	53,950
Bad debt expense	40,894	17,568	9,165
Inventory obsolescence	74,974	127,592	31,455
Asset impairments	18,203	56,324	0
Deferred income taxes	13,349	(18,010)	(1,350)
Indefinite reinvestment assertion and U.S. Tax Act	18,275	(107,049)	0
Valuation allowance on deferred tax assets	0	566,346	0
Loss on discontinuation of Venezuelan operations	0	58,973	0
Increase (decrease) from changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	72,415	(3,484)	(29,698)
Inventories	(53,840)	(91,644)	(68,650)
Prepaid expenses and other current assets	54,230	33,681	34,754
Accounts payable, accrued liabilities, and income taxes payable	(47,397)	93,844	13,206
Other, net	(5,968)	(49,062)	(23,571)
Net cash flows (used for) provided by operating activities	(27,317)	(27,614)	594,509
Cash Flows From Investing Activities:
Purchases of tools, dies, and molds	(74,662)	(128,940)	(140,124)
Purchases of other property, plant, and equipment	(77,752)	(168,219)	(122,069)
(Payments for) proceeds from foreign currency forward exchange contracts	(18,615)	60,993	(6,103)
Payments for acquisition, net of cash acquired	0	0	(33,154)
Other, net	10,271	503	(10,460)
Net cash flows used for investing activities	(160,758)	(235,663)	(311,910)
Cash Flows From Financing Activities:
Payments of short-term borrowings, net	0	(1,611,586)	(83,914)
Proceeds from short-term borrowings, net	4,176	1,419,418	259,168
Payments of long-term borrowings	(750,000)	0	(300,000)
Proceeds from long-term borrowings, net	471,797	988,622	350,000
Payments of dividends on common stock	0	(311,973)	(518,529)
Proceeds from exercise of stock options	0	1,775	34,065
Other, net	(11,130)	(27,806)	(22,261)
Net cash flows (used for) provided by financing activities	(285,157)	458,450	(281,471)
Effect of Currency Exchange Rate Changes on Cash	(11,508)	14,517	(24,411)
(Decrease) Increase in Cash and Equivalents	(484,740)	209,690	(23,283)
Cash and Equivalents at Beginning of Period	1,079,221	869,531	892,814
Cash and Equivalents at End of Period	594,481	1,079,221	869,531
Cash paid during the year for:
Income taxes, gross	99,586	117,690	113,022
Interest	$ 173,951	$ 103,339	$ 84,763

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Accumulated Foreign Currency Adjustment Attributable to Parent	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at beginning of period at Dec. 31, 2015	$ 2,628,755	$ (704,404)	$ 441,369	$ 1,789,870	$ (2,494,901)	$ 3,741,316	$ (848,899)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	312,908					312,908
Other comprehensive loss, net of tax	(94,130)	(101,539)					(94,130)
Issuance of treasury stock for stock option exercises	34,055			(3,854)	37,909
Issuance of treasury stock for restricted stock units vesting	(17,848)			(47,516)	29,668
Deferred compensation	385			385	575	(575)
Share-based compensation	53,950			53,950
Dividend equivalents for restricted stock units	(1,377)			(2,003)		626
Dividends	(518,529)					(518,529)
Balance at end of period at Dec. 31, 2016	2,398,169	(805,943)	441,369	1,790,832	(2,426,749)	3,535,746	(943,029)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	(879,286)
Other comprehensive loss, net of tax	80,497
Balance at end of period at Sep. 30, 2017	1,323,329
Balance at beginning of period at Dec. 31, 2016	2,398,169	(805,943)	441,369	1,790,832	(2,426,749)	3,535,746	(943,029)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	(1,054,579)					(1,054,579)
Other comprehensive loss, net of tax	161,243	191,267					161,243
Issuance of treasury stock for stock option exercises	1,775			(286)	2,061
Issuance of treasury stock for restricted stock units vesting	(14,351)			(48,528)	34,177
Deferred compensation	(34)			(288)	634	(380)
Share-based compensation	67,119			67,119
Dividend equivalents for restricted stock units	(270)			(458)		188
Dividends	(311,973)					(311,973)
Balance at end of period at Dec. 31, 2017	1,247,099	(614,676)	441,369	1,808,391	(2,389,877)	2,169,002	(781,786)
Balance at beginning of period at Sep. 30, 2017	1,323,329
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	(175,293)
Balance at end of period at Dec. 31, 2017	1,247,099	(614,676)	441,369	1,808,391	(2,389,877)	2,169,002	(781,786)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income	(533,299)					(533,299)
Other comprehensive loss, net of tax	(77,440)	(106,651)					(77,440)
Issuance of treasury stock for restricted stock units vesting	(9,488)			(44,547)	35,059
Deferred compensation	124			(77)	201
Share-based compensation	48,915			48,915
Dividend equivalents for restricted stock units	41					41
Balance at end of period at Dec. 31, 2018	$ 656,803	$ (721,327)	$ 441,369	$ 1,812,682	$ (2,354,617)	$ 1,616,595	$ (859,226)

Property, Plant, and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

Property, plant, and equipment, net includes the following:



	December 31, 2018			December 31, 2017
	(In thousands)
Land	$	25,023		$	25,114
Buildings	294,227			303,495
Machinery and equipment	875,308			902,861
Software	400,488			384,568
Tools, dies, and molds	831,743			887,442
Capital leases	23,927			24,279
Leasehold improvements	240,636			213,238
	2,691,352			2,740,997
Less: accumulated depreciation	(2,033,757		)	(1,955,712		)
	$	657,595		$	785,285

During 2017, Mattel recorded an asset impairment charge of $21.2 million within other selling and administrative expenses in the consolidated statements of operations to reduce the carrying value of certain retail store leasehold improvements to their estimated fair value, which was determined based on discounted expected future cash flows. Additionally, Mattel recorded an asset impairment charge of $20.6 million in 2017 within cost of sales in the consolidated statements of operations for capitalized costs related to tools, dies, and molds for discontinued products which were no longer considered to be recoverable.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Preparation

The consolidated financial statements include the accounts of Mattel, Inc. and its subsidiaries. All wholly and majority-owned subsidiaries are consolidated and included in Mattel’s consolidated financial statements. Mattel does not have any minority stock ownership interests in which it has a controlling financial interest that would require consolidation. All significant intercompany accounts and transactions have been eliminated upon consolidation.

On January 1, 2018, Mattel adopted ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. As a result, other selling and administrative expenses, operating income (loss), and other non-operating expense, net have been retrospectively restated. The impact to Mattel’s consolidated financial statements was not material. See further discussion in "Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies—New Accounting Pronouncements" and "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans."

Restatement of Quarterly Financial Information

On August 6, 2019, Mattel was made aware of an anonymous whistleblower letter. An independent investigation by the Audit Committee was initiated in August 2019 on matters discussed in the letter. Based on the independent investigation, management determined that it had failed to properly consider an indefinite-lived intangible asset in Mattel’s tax valuation allowance calculation for the three months ended September 30, 2017, which resulted in the restatement of the Company’s financial results for the third and fourth quarters of 2017, as further described in "Note 17 to the Consolidated Financial Statements—Restatement of Quarterly Financial Information (Unaudited)".

Revision of Consolidated Financial Statements

Mattel’s consolidated financial statements have been revised to correct certain other prior period misstatements which were not material, both individually or in the aggregate, to the previously issued consolidated financial statements. These misstatements relate to improper capitalization of certain advertising costs, the under-accrual of sales adjustments, freight and logistics costs, employee related costs, the provision for income taxes, and other information disclosed in the notes to the Consolidated Financial Statements. The provision for income taxes misstatement was unrelated to the restated income tax matter described in "Note 17 to the Consolidated Financial Statements—Restatement of Quarterly Financial Information (Unaudited)".

The following tables present the impact of the revisions on Mattel’s previously issued Consolidated Statements of Operations (including Comprehensive (Loss) Income), and Cash Flows for the years ended December 31, 2018, 2017, and 2016, its Consolidated Balance Sheets as of December 31, 2018 and 2017, and its Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017, and 2016. The presentation of the revised Consolidated Balance Sheets only presents those line items which were impacted as a result of the revisions. The effect of the revisions to the Consolidated Statements of Cash Flows was to components within operating cash flows. There were no effects on total operating activities, investing activities, financing activities, or cash and cash equivalents as a result of the revisions. All relevant footnotes to the consolidated financial statements have also been revised to reflect the items above.

CONSOLIDATED BALANCE SHEETS



	December 31, 2018
	As Previously Reported		Adjustments			As Revised
	(in thousands)
Consolidated Balance Sheet
Prepaid expenses and other current assets	$	244,987	$	(5,240	)	$	239,747
Total current assets	$	2,352,440	$	(5,240	)	$	2,347,200
Total Assets	$	5,243,465	$	(5,240	)	$	5,238,225
Accrued liabilities	$	700,421	$	3,948		$	704,369
Income taxes payable	$	10,046	$	3,474		$	13,520
Total current liabilities	$	1,252,608	$	7,422		$	1,260,030
Retained earnings	$	1,629,257	$	(12,662	)	$	1,616,595
Total stockholders’ equity	$	669,465	$	(12,662	)	$	656,803
Total Liabilities and Stockholders’ Equity	$	5,243,465	$	(5,240	)	$	5,238,225



	December 31, 2017
	As Previously Reported		Adjustments			As Revised
	(in thousands)
Consolidated Balance Sheet
Accounts receivable, net	$	1,128,610	$	(3,958	)	$	1,124,652
Prepaid expenses and other current assets	$	303,053	$	(7,388	)	$	295,665
Total current assets	$	3,111,588	$	(11,346	)	$	3,100,242
Other noncurrent assets	$	944,961	$	990		$	945,951
Total Assets	$	6,238,503	$	(10,356	)	$	6,228,147
Retained earnings	$	2,179,358	$	(10,356	)	$	2,169,002
Total stockholders’ equity	$	1,257,455	$	(10,356	)	$	1,247,099
Total Liabilities and Stockholders’ Equity	$	6,238,503	$	(10,356	)	$	6,228,147

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



	Year Ended December 31, 2018
	As Previously Reported			Adjustments			As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net Sales	$	4,510,852		$	3,958		$	4,514,810
Cost of sales	2,716,127			—			2,716,127
Gross Profit	1,794,725			3,958			1,798,683
Advertising and promotion expenses	526,436			(2,148		)	524,288
Other selling and administrative expenses	1,504,796			3,948			1,508,744
Operating Loss	(236,507		)	2,158			(234,349		)
Interest expense	181,886			—			181,886
Interest (income)	(6,463		)	—			(6,463		)
Other non-operating expense, net	7,331			—			7,331
Loss Before Income Taxes	(419,261		)	2,158			(417,103		)
Provision for income taxes	111,732			4,464			116,196
Net Loss	$	(530,993	)	$	(2,306	)	$	(533,299	)
Comprehensive Loss	$	(608,433	)	$	(2,306	)	$	(610,739	)
Net Loss Per Common Share - Basic	$	(1.54	)	$	(0.01	)	$	(1.55	)
Weighted average number of common shares	345,012			—			345,012
Net Loss Per Common Share - Diluted	$	(1.54	)	$	(0.01	)	$	(1.55	)
Weighted average number of common and potential common shares	345,012			—			345,012



	Year Ended December 31, 2017
	As Previously Reported			Adjustments			As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net Sales	$	4,881,951		$	(458	)	$	4,881,493
Cost of sales	3,061,122			(4,200		)	3,056,922
Gross Profit	1,820,829			3,742			1,824,571
Advertising and promotion expenses	642,286			—			642,286
Other selling and administrative expenses	1,517,983			—			1,517,983
Operating Loss	(339,440		)	3,742			(335,698		)
Interest expense	105,214			—			105,214
Interest (income)	(7,777		)	—			(7,777		)
Other non-operating expense, net	68,110			—			68,110
Loss Before Income Taxes	(504,987		)	3,742			(501,245		)
Provision for income taxes	548,849			4,485			553,334
Net Loss	$	(1,053,836	)	$	(743	)	$	(1,054,579	)
Comprehensive Loss	$	(892,593	)	$	(743	)	$	(893,336	)
Net Loss Per Common Share - Basic	$	(3.07	)	$	—		$	(3.07	)
Weighted average number of common shares	343,564			—			343,564
Net Loss Per Common Share - Diluted	$	(3.07	)	$	—		$	(3.07	)
Weighted average number of common and potential common shares	343,564			—			343,564



	Year Ended December 31, 2016
	As Previously Reported			Adjustments			As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Income
Net Sales	$	5,456,650		$	(3,500	)	$	5,453,150
Cost of sales	2,902,259			4,200			2,906,459
Gross Profit	2,554,391			(7,700		)	2,546,691
Advertising and promotion expenses	634,947			—			634,947
Other selling and administrative expenses	1,391,769			—			1,391,769
Operating Income	527,675			(7,700		)	519,975
Interest expense	95,118			—			95,118
Interest (income)	(9,144		)	—			(9,144		)
Other non-operating expense, net	31,959			—			31,959
Income Before Income Taxes	409,742			(7,700		)	402,042
Provision for income taxes	91,720			(2,586		)	89,134
Net Income	$	318,022		$	(5,114	)	$	312,908
Comprehensive Income	$	223,892		$	(5,114	)	$	218,778
Net Income Per Common Share - Basic	$	0.93		$	(0.02	)	$	0.91
Weighted average number of common shares	341,480			—			341,480
Net Income Per Common Share - Diluted	$	0.92		$	(0.01	)	$	0.91
Weighted average number of common and potential common shares	344,233			—			344,233

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31, 2018
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(530,993	)	$	(2,306	)	$	(533,299	)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Depreciation	232,837			—			232,837
Amortization	39,095			—			39,095
Share-based compensation	48,915			—			48,915
Bad debt expense	40,894			—			40,894
Inventory obsolescence	74,974			—			74,974
Asset impairments	18,203			—			18,203
Deferred income taxes	12,359			990			13,349
Indefinite reinvestment assertion and U.S. Tax Act	18,275			—			18,275
Increase (decrease) from changes in assets and liabilities:
Accounts receivable	76,373			(3,958		)	72,415
Inventories	(53,840		)	—			(53,840		)
Prepaid expenses and other current assets	56,378			(2,148		)	54,230
Accounts payable, accrued liabilities, and income taxes payable	(54,819		)	7,422			(47,397		)
Other, net	(5,968		)	—			(5,968		)
Net cash flows used for operating activities	$	(27,317	)	$	—		$	(27,317	)



	Year Ended December 31, 2017
	As Previously Reported			Adjustments			As Revised
	(in thousands)
Consolidated Statement of Cash Flows
Net loss	$	(1,053,836	)	$	(743	)	$	(1,054,579	)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Depreciation	240,818			—			240,818
Amortization	33,949			—			33,949
Share-based compensation	67,119			—			67,119
Bad debt expense	17,568			—			17,568
Inventory obsolescence	127,592			—			127,592
Asset impairments	56,324			—			56,324
Deferred income taxes	(19,840		)	1,830			(18,010		)
Indefinite reinvestment assertion and U.S. Tax Act	(105,279		)	(1,770		)	(107,049		)
Valuation allowance on deferred tax assets	561,921			4,425			566,346
Loss on discontinuation of Venezuelan operations	58,973			—			58,973
Increase (decrease) from changes in assets and liabilities:
Accounts receivable	(3,942		)	458			(3,484		)
Inventories	(91,644		)	—			(91,644		)
Prepaid expenses and other current assets	33,681			—			33,681
Accounts payable, accrued liabilities, and income taxes payable	98,044			(4,200		)	93,844
Other, net	(49,062		)	—			(49,062		)
Net cash flows used for operating activities	$	(27,614	)	$	—		$	(27,614	)



	Year Ended December 31, 2016
	As Previously Reported			Adjustments			As Revised
	(in thousands)
Consolidated Statement of Cash Flows
Net income	$	318,022		$	(5,114	)	$	312,908
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation	235,797			—			235,797
Amortization	26,543			—			26,543
Share-based compensation	53,950			—			53,950
Bad debt expense	9,165			—			9,165
Inventory obsolescence	31,455			—			31,455
Deferred income taxes	1,236			(2,586		)	(1,350		)
Increase (decrease) from changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	(33,198		)	3,500			(29,698		)
Inventories	(68,650		)	—			(68,650		)
Prepaid expenses and other current assets	34,754			—			34,754
Accounts payable, accrued liabilities, and income taxes payable	9,006			4,200			13,206
Other, net	(23,571		)	—			(23,571		)
Net cash flows provided by operating activities	$	594,509		$	—		$	594,509

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY



	December 31, 2018
	As Previously Reported		Adjustments			As Revised
	(in thousands)
Retained earnings	$	1,629,257	$	(12,662	)	$	1,616,595
Total stockholders’ equity	$	669,465	$	(12,662	)	$	656,803



	December 31, 2017
	As Previously Reported		Adjustments			As Revised
	(in thousands)
Retained earnings	$	2,179,358	$	(10,356	)	$	2,169,002
Total stockholders’ equity	$	1,257,455	$	(10,356	)	$	1,247,099



	December 31, 2016
	As Previously Reported		Adjustments			As Revised
	(in thousands)
Retained earnings at beginning of period^(a)	$	3,745,815	$	(4,499	)	$	3,741,316
Total stockholders’ equity at beginning of period^(a)	$	2,633,254	$	(4,499	)	$	2,628,755
Retained earnings at end of period	$	3,545,359	$	(9,613	)	$	3,535,746
Total stockholders’ equity at end of period	$	2,407,782	$	(9,613	)	$	2,398,169


(a)	Adjustments represent the cumulative effect of immaterial revisions originating in periods prior to 2016.

Use of Estimates

Preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could ultimately differ from those estimates.

Cash and Equivalents

Cash and equivalents include short-term investments, which are highly liquid investments with maturities of three months or less when purchased. Such investments are stated at cost, which approximates market value.

Accounts Receivable and Allowance for Doubtful Accounts

Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews performed as necessary, based on the customers’ financial condition and the level of credit being extended. For customers who are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers on credit. Mattel uses a variety of financial arrangements to ensure collectibility of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, factoring, or requiring cash in advance of shipment.

Mattel records an allowance for doubtful accounts based on management’s assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes.

Inventories

Inventories, net of allowance for obsolescence, are stated at the lower of cost or net realizable value. Expense associated with the allowance for obsolescence is recognized in cost of sales and establishes a lower cost basis for the inventory. Cost is determined by the first-in, first-out method.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 10 to 30 years for buildings, 3 to 15 years for machinery and equipment, 3 to 10 years for software, and 10 to 20 years, not to exceed the lease term, for leasehold improvements. Tools, dies, and molds are depreciated using the straight-line method over 3 years. Estimated useful lives are periodically reviewed and, where appropriate, changes are made prospectively. The carrying value of property, plant, and equipment is reviewed when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Any potential impairment identified is assessed by evaluating the operating performance and future undiscounted cash flows of the underlying assets. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is included in the statements of operations.

Goodwill and Intangible Assets

Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating whether goodwill is impaired. Mattel’s reporting units are: (i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

Mattel had no nonamortizable intangible assets as of and for the year ended December 31, 2018. Prior to 2018, Mattel tested nonamortizable intangible assets for impairment annually in the third quarter or whenever events or changes in circumstances indicated that the carrying value may have exceeded its fair value.

Mattel also tests its amortizable intangible assets, which are primarily comprised of trademarks and trade names, for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recovered. Amortization is computed primarily using the straight-line method over the estimated useful lives of the amortizable intangible assets.

Foreign Currency Translation Exposure

Mattel’s reporting currency is the U.S. dollar. The translation of its net investments in subsidiaries with non-U.S. dollar functional currencies subjects Mattel to the impact of currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at year-end exchange rates. Net income (loss) and cash flow items are translated at weighted-average exchange rates prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders’ equity. Mattel’s primary currency translation exposures in 2018 were related to its net investments in entities having functional currencies denominated in the Euro, British pound sterling, Russian ruble, and Brazilian real.

Foreign Currency Transaction Exposure

Currency exchange rate fluctuations may impact Mattel’s results of operations and cash flows. Mattel’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating (loss) income in the consolidated statements of operations. Gains and losses on unhedged intercompany loans and advances are recorded as a component of other non-operating expense, net in the consolidated statements of operations in the period in which the currency exchange rate changes. Inventory transactions denominated in the Euro, Mexican peso, British pound sterling, Canadian dollar, Chinese renminbi, Australian dollar, Russian ruble, and Brazilian real were the primary transactions that caused foreign currency transaction exposure for Mattel in 2018.

Derivative Instruments

Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. At the inception of the contracts, Mattel designates these derivatives as cash flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the statements of operations. Changes in fair value of cash flow hedge derivatives are deferred and recorded as part of accumulated other comprehensive loss in stockholders’ equity until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, Mattel recognizes the change in fair value of the derivative in its statements of operations in the period the determination is made.

Additionally, Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations.

Revenue Recognition and Sales Adjustments

Revenue is recognized when control of the goods is transferred to the customer, which is either upon shipment or upon receipt of finished goods by the customer, depending on the contract terms. Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns or defective merchandise. Such programs, which can be either contractual or discretionary in nature, are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as customer sales volume. Mattel bases its estimates for these programs on agreed upon customer contract terms as well as historical experience. The costs of these programs are considered variable consideration and are recorded as sales adjustments that reduce gross sales in the period the related sale is recognized.

Advertising and Promotion Costs

Costs of media advertising are expensed the first time the advertising takes place, except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits. Direct-response advertising consists primarily of catalog production and mailing costs, which are generally amortized within three months from the date the catalogs are mailed.

Product Recalls and Withdrawals

Mattel establishes a reserve for product recalls and withdrawals on a product-specific basis when circumstances giving rise to the recall or withdrawal become known. Facts and circumstances related to the recall or withdrawal, including where the product affected by the recall or withdrawal is located (e.g., with consumers, in customers’ inventory, or in Mattel’s inventory), cost estimates for shipping and handling for returns, cost estimates for communicating the recall or withdrawal to consumers and customers, and cost estimates for parts and labor if the recalled or withdrawn product is deemed to be repairable, are considered when establishing a product recall or withdrawal reserve. These factors are updated and reevaluated each period, and the related reserves are adjusted when these factors indicate that the recall or withdrawal reserve is either not sufficient to cover or exceeds the estimated product recall or withdrawal expenses.

Design and Development Costs

Product design and development costs primarily include employee compensation and outside services and are charged to the results of operations as incurred.

Employee Benefit Plans

Mattel and certain of its subsidiaries have retirement and other postretirement benefit plans covering substantially all employees of these entities. Actuarial valuations are used in determining amounts recognized in the financial statements for certain retirement and other postretirement benefit plans (see "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans").

Share-Based Payments

Mattel recognizes the cost of employee share-based payment awards on a straight-line attribution basis over the requisite employee service period, net of estimated forfeitures.

Determining the fair value of share-based awards at the measurement date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility, and the expected dividends. With the exception of certain performance options granted in 2018, which are valued using a Monte Carlo valuation methodology, Mattel estimates the fair value of options granted using the Black-Scholes valuation model. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience. Expected stock price volatility is based on the historical volatility of Mattel’s stock for a period approximating the expected life, the expected dividend yield is based on Mattel’s most recent actual annual dividend payout, and the risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues approximating the expected life. Judgment is also required in estimating the amount of share-based awards that will be forfeited prior to vesting.

Mattel determines the fair value of RSUs, excluding performance RSUs, based on the closing market price of Mattel’s common stock on the date of grant, adjusted by the present value of the expected dividends for RSUs that are not entitled to a dividend during the vest period.

Mattel determines the fair value of the performance-related components of its performance RSUs based on the closing market price of Mattel's common stock on the date of grant. It determines the fair value of the market-related components of its performance RSUs based on a Monte Carlo valuation methodology.

In 2016, Mattel early adopted Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting, which required companies to recognize all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled. Upon adoption in the fourth quarter of 2016, Mattel recognized $4.3 million in discrete tax benefits related to share-based payment accounting. Mattel also elected to apply the change in presentation of excess tax benefits in the statements of cash flows on a prospective basis, and as a result, prior periods were not retrospectively restated. Excess tax benefits (deficits) in 2018, 2017, and 2016 were classified as an operating activity in the statements of cash flows.

Income Taxes

Certain income and expense items are accounted for differently for financial reporting and income tax purposes. Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, applying enacted statutory income tax rates in effect for the year in which the differences are expected to reverse.

In the normal course of business, Mattel is regularly audited by federal, state, local, and foreign tax authorities. The ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel’s consolidated financial statements.

Venezuelan Operations

Since January 1, 2010, Mattel has accounted for Venezuela as a highly inflationary economy as the three-year cumulative inflation rate for Venezuela exceeded 100%. Accordingly, Mattel’s Venezuelan subsidiary used the U.S. dollar as its functional currency, and monetary assets and liabilities denominated in Venezuelan bolívar fuerte ("BsF") generated income or expense for changes in value associated with foreign currency exchange rate fluctuations against the U.S. dollar.

During the first quarter of 2016, Mattel changed its remeasurement rate, which resulted in an unrealized foreign currency exchange loss of approximately $26 million, which was recognized in other non-operating expense, net in the consolidated statements of operations.

During December 2017, Mattel initiated actions to discontinue operations in Venezuela and concluded that its Venezuelan subsidiary had been substantially liquidated. In connection with the substantial liquidation, Mattel recognized a $59.0 million loss in other non-operating expense, net in the consolidated statements of operations related to the associated cumulative translation adjustments.

Argentina Operations

Effective July 1, 2018, Mattel accounted for Argentina as a highly inflationary economy, as the projected three-year cumulative inflation rate exceeded 100%. As such, beginning July 1, 2018, Mattel's Argentina subsidiary has designated the U.S. dollar as its functional currency. For the year ended December 31, 2018, Mattel’s Argentina subsidiary represented less than 1% of Mattel's consolidated net sales.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and most industry specific guidance. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance establishes a five-step model to achieve that core principle and also requires additional disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. For additional information, see "Note 7 to the Consolidated Financial Statements—Revenues."

In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Mattel adopted ASU 2016-16 on January 1, 2018 and recognized a cumulative effect increase to the opening balance of its retained earnings of $9.4 million. For additional information, see "Note 15 to the Consolidated Financial Statements—Income Taxes."

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities that sponsor defined benefit plans to (i) present service cost within operations, if such a subtotal is presented, (ii) other components of net benefit costs should be presented separately outside of income from operations, if such a subtotal is presented, and (iii) only the service cost component should be capitalized, when applicable. If a separate line item is not used, the line item in the income statement where the other components of net benefit costs are included must be disclosed. Further, gains and losses from curtailments and settlements, and the cost of certain termination benefits should be reported in the same manner as other components of net benefit cost. Mattel adopted ASU 2017-07 on January 1, 2018 and retrospectively restated its interim and annual results accordingly. The retrospective adoption of ASU 2017-07 did not have a material impact on Mattel’s consolidated financial statements, as discussed in "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans."

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirement for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Mattel early adopted ASU 2018-15 in the fourth quarter of 2018 and elected to apply the amendments prospectively to implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 did not have a material impact on Mattel's consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended, which requires a lessee to recognize a lease asset and lease liability on its balance sheet for all leases with a term greater than 12 months. Mattel will adopt ASU 2016-02 and its related amendments on January 1, 2019 using the modified retrospective transition method, and record a cumulative effect adjustment in the first quarter of 2019. Prior periods will not be retrospectively adjusted and will continue to be reported under the accounting standards in effect for the periods. Mattel expects the adoption of ASU 2016-02 will have a material impact on its consolidated balance sheet.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities, which expands the hedging strategies eligible for hedge accounting and changes both how companies assess hedge effectiveness and presentation and disclosure requirements. Mattel will adopt ASU 2017-12 on January 1, 2019 and does not expect the adoption to have a material impact on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification of disproportionate tax effects in accumulated other comprehensive income caused by the U.S. Tax Act to retained earnings. Mattel will adopt ASU 2018-02 on January 1, 2019 and does not expect the adoption to have a material impact on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of current stock compensation recognition standards to include share-based payment transactions for acquiring goods and services from nonemployees. Mattel will adopt ASU 2018-07 on January 1, 2019 and does not expect the adoption to have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 will become effective for interim and annual reporting periods beginning on January 1, 2020. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty will be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. In addition, early adoption of any removed or modified disclosures, but delayed adoption of any additional disclosures until their effective date, is permitted. Mattel is currently evaluating the impact of the adoption of ASU 2018-13 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU 2018-14 will become effective for the fiscal year beginning on January 1, 2021. Early adoption is permitted and the amendments will be applied on a retrospective basis to all periods presented. Mattel is currently evaluating the impact of the adoption of ASU 2018-14 on its consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities, which improves the accounting for variable interest entities by considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 will become effective for interim and annual reporting periods beginning on January 1, 2020. Early adoption is permitted. The amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Mattel is currently evaluating the impact of the adoption of ASU 2018-17 on its consolidated financial statements.

Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

The change in the carrying amount of goodwill by operating segment for 2018 and 2017 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America and American Girl operating segments selling those brands, thereby causing a foreign currency translation impact for these operating segments.



	North America			International			American Girl			Total
	(In thousands)
Balance at December 31, 2016	$	730,139		$	445,008		$	212,481		$	1,387,628
Currency Exchange Rate Impact	2,895			7,144			(998		)	9,041
Balance at December 31, 2017	733,034			452,152			211,483			1,396,669
Dispositions	—			—			(4,018		)	(4,018		)
Currency Exchange Rate Impact	(1,800		)	(4,533		)	106			(6,227		)
Balance at December 31, 2018	$	731,234		$	447,619		$	207,571		$	1,386,424

In the third quarter of 2018, Mattel performed its annual impairment tests and determined that goodwill was not impaired since each reporting unit's fair value exceeded its carrying value.

Other Intangibles

Identifiable intangibles were $587.5 million, net of accumulated amortization of $207.9 million, and $639.2 million, net of accumulated amortization of $168.8 million, as of December 31, 2018 and 2017, respectively. The estimated future amortization expense is as follows:



	Amortization Expense
	(In thousands)
2019	$	40,013
2020	39,496
2021	38,316
2022	37,633
2023	37,153

Mattel had no nonamortizable intangible assets as of and for the year ended of December 31, 2018. Prior to 2018, Mattel tested nonamortizable intangible assets, including trademarks and trade names, for impairment annually in the third quarter and whenever events or changes in circumstances indicated that the carrying values may have exceeded the fair values.

During the third quarter of 2017, Mattel discontinued the use of a trademark which resulted in an asset impairment charge of $9.2 million. The asset impairment charge was recorded within other selling and administrative expenses in the consolidated statements of operations.

Mattel performed its annual impairment assessment during the third quarter of 2017 and determined that its remaining nonamortizable intangible asset was not impaired. In the fourth quarter of 2017, Mattel concluded that a triggering event had occurred related to its nonamortizable intangible asset, and performed an impairment analysis. Based on the result of the interim impairment analysis, it was determined that the nonamortizable intangible asset was not impaired, but that the intangible asset was no longer nonamortizable, and should be amortized starting in the fourth quarter of 2017.

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. Mattel determined that its amortizable intangible assets were not impaired during 2017. During 2018, Mattel discontinued the use of certain brands and products, which resulted in asset impairments of $4.3 million. Mattel's remaining amortizable intangible assets were not impaired during the year ended December 31, 2018.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

Employee Benefit Plans

Mattel and certain of its subsidiaries have qualified and nonqualified retirement plans covering substantially all employees of these companies. These plans include defined benefit pension plans, defined contribution retirement plans, postretirement benefit plans, and deferred compensation and excess benefit plans. In addition, Mattel makes contributions to government-mandated retirement plans in countries outside the U.S. where its employees work.

A summary of retirement plan expense, net is as follows:



	For the Year Ended
	December 31, 2018			December 31, 2017		December 31, 2016
	(In thousands)
Defined benefit pension plans	$	12,366		$	7,428	$	13,999
Defined contribution retirement plans	35,318			38,508		37,661
Postretirement benefit plans	(2,148		)	963		1,343
Deferred compensation and excess benefit plans	(2,599		)	10,015		5,093
	$	42,937		$	56,914	$	58,096

In accordance with ASU 2017-07, which went into effect for interim and annual reporting periods beginning on January 1, 2018, Mattel's service cost component is recorded within operating (loss) income, presented in the same line items as other employee compensation costs arising from employee services rendered in the period, while other components of net periodic pension cost and postretirement benefit cost are recorded in other non-operating expense, net. Prior period amounts have been retrospectively adjusted, which resulted in a reclassification of $3.4 million and $8.4 million of expense, net from other selling and administrative expenses to other non-operating expense, net for the year ended December 31, 2017 and 2016, respectively.

Defined Benefit Pension and Postretirement Benefit Plans

Mattel provides defined benefit pension plans for eligible domestic employees, which are intended to comply with the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). Some of Mattel’s foreign subsidiaries have defined benefit pension plans covering substantially all of their eligible employees. Mattel funds these plans in accordance with the terms of the plans and local statutory requirements, which differ for each of the countries in which the subsidiaries are located. Mattel also has unfunded postretirement health insurance plans covering certain eligible domestic employees.

A summary of the components of Mattel’s net periodic benefit cost (credit) and other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income for the years ended December 31 is as follows:



	Defined Benefit Pension Plans									Postretirement Benefit Plans
	2018			2017			2016			2018			2017			2016
	(In thousands)
Net periodic benefit cost (credit):
Service cost	$	4,223		$	4,045		$	5,557		$	1		$	2		$	52
Interest cost	18,117			17,961			24,526			208			812			1,143
Expected return on plan assets	(22,508		)	(23,072		)	(25,726		)	—			—			—
Amortization of prior service cost (credit)	29			29			461			(2,037		)	—			—
Recognized actuarial loss (gain)	8,518			8,362			6,994			(320		)	149			148
Settlement loss	3,248			—			1,772			—			—			—
Curtailment loss	739			103			415			—			—			—
Net periodic benefit cost (credit)	$	12,366		$	7,428		$	13,999		$	(2,148	)	$	963		$	1,343
Other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income:
Net actuarial (gain) loss	$	(4,433	)	$	46		$	(1,531	)	$	(276	)	$	(2,746	)	$	(1,833	)
Prior service cost (credit)	114			—			505			—			(16,261		)	—
Amortization of prior service (cost) credit	(29		)	(29		)	(461		)	2,037			—			—
Total recognized in other comprehensive (loss) income (a)	$	(4,348	)	$	17		$	(1,487	)	$	1,761		$	(19,007	)	$	(1,833	)
Total recognized in net periodic benefit cost (credit) and other comprehensive (loss) income	$	8,018		$	7,445		$	12,512		$	(387	)	$	(18,044	)	$	(490	)


(a)	Amounts exclude related tax expense of $2.1 million, $4.5 million, and $1.2 million, during 2018, 2017, and 2016, respectively, which are also included in other comprehensive (loss) income.

Net periodic benefit cost (credit) for Mattel’s domestic defined benefit pension and postretirement benefit plans was calculated on January 1 of each year using the following assumptions:



	For the Year Ended
	December 31, 2018		December 31, 2017		December 31, 2016
Defined benefit pension plans:
Discount rate	3.4	%	3.9	%	4.2	%
Weighted-average rate of future compensation increases	N/A		N/A		N/A
Long-term rate of return on plan assets	6.0	%	6.3	%	6.5	%
Postretirement benefit plans:
Discount rate	3.4	%	3.9	%	4.2	%
Annual increase in Medicare Part B premium	6.0	%	6.0	%	6.0	%
Health care cost trend rate:
Pre-65	7.3	%	7.0	%	7.0	%
Post-65	7.3	%	7.8	%	8.3	%
Ultimate cost trend rate:
Pre-65	4.5	%	4.5	%	4.5	%
Post-65	4.5	%	4.5	%	4.5	%
Year that the rate reaches the ultimate cost trend rate:
Pre-65	2025		2024		2023
Post-65	2025		2024		2024

Discount rates, weighted-average rates of future compensation increases, and long-term rates of return on plan assets for Mattel’s foreign defined benefit pension plans differ from the assumptions used for Mattel’s domestic defined benefit pension plans due to differences in local economic conditions in the locations where the non-U.S. plans are based. The rates shown in the preceding table are indicative of the weighted-average rates of all of Mattel’s defined benefit pension plans given the relative insignificance of the foreign plans to the consolidated total.

The estimated net actuarial loss for the domestic defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2019 is $6.3 million. The estimated net actuarial gain and prior service credit for the domestic postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit credit in 2019 is $2.4 million.

Mattel used a measurement date of December 31, 2018 for its defined benefit pension and postretirement benefit plans. A summary of the changes in benefit obligation and plan assets is as follows:



	Defined Benefit Pension Plans						Postretirement Benefit Plans
	December 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
	(In thousands)
Change in Benefit Obligation:
Benefit obligation, beginning of year	$	639,319		$	605,851		$	7,752		$	27,614
Service cost	4,223			4,045			1			2
Interest cost	18,117			17,961			208			812
Impact of currency exchange rate changes	(7,793		)	12,932			—			—
Actuarial (gain) loss	(34,214		)	32,817			(596		)	(2,597		)
Benefits paid	(50,211		)	(34,314		)	(1,164		)	(1,818		)
Plan amendments	809			27			—			(16,261		)
Settlements	(2,748		)	—			—			—
Benefit obligation, end of year	$	567,502		$	639,319		$	6,201		$	7,752
Change in Plan Assets:
Plan assets at fair value, beginning of year	$	460,952		$	433,780		$	—		$	—
Actual return on plan assets	(18,162		)	47,727			—			—
Employer contributions	18,216			4,807			1,164			1,818
Impact of currency exchange rate changes	(5,554		)	8,952			—			—
Benefits paid	(50,211