0001628280-20-012331 | 10-Q | XBRL Viewer

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Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2020	Jul. 15, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document period end date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-05647
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-1567322
Entity Address, Address Line One	333 Continental Blvd.
Entity Address, City or Town	El Segundo,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90245-5012
City Area Code	310
Local Phone Number	252-2000
Title of 12(b) Security	Common stock, $1.00 per share
Trading Symbol	MAT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Small Business	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		346,897,357
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Registrant Name	MATTEL INC /DE/
Entity Central Index Key	0000063276
Current Fiscal Year End Date	--12-31

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Current Assets
Cash and equivalents	$ 461,557	$ 630,028	$ 194,125
Accounts receivable, net of allowances for credit losses of $18.7 million, $21.3 million, and $18.5 million, respectively	650,502	936,359	755,698
Inventories	702,592	495,504	722,394
Prepaid expenses and other current assets	211,418	186,083	243,305
Total current assets	2,026,069	2,247,974	1,915,522
Noncurrent Assets
Property, plant, and equipment, net	506,555	550,139	595,838
Right-of-use assets, net	282,474	303,187	317,085
Goodwill	1,382,858	1,390,714	1,386,057
Other noncurrent assets	794,724	833,212	832,127
Total Assets	4,992,680	5,325,226	5,046,629
Current Liabilities
Short-term borrowings	400,000	0	45,000
Accounts payable	402,220	459,357	416,430
Accrued liabilities	563,633	769,513	585,674
Income taxes payable	15,732	48,037	22,618
Total current liabilities	1,381,585	1,276,907	1,069,722
Noncurrent Liabilities
Long-term debt	2,850,841	2,846,751	2,855,194
Noncurrent lease liabilities	246,414	270,853	284,947
Other noncurrent liabilities	427,692	439,001	410,571
Total noncurrent liabilities	3,524,947	3,556,605	3,550,712
Stockholders' Equity
Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued	441,369	441,369	441,369
Additional paid-in capital	1,844,075	1,825,569	1,831,952
Treasury stock at cost: 94.4 million shares, 95.9 million shares, and 94.6 million shares, respectively	(2,314,967)	(2,318,921)	(2,349,874)
Retained earnings	1,093,268	1,413,181	1,342,410
Accumulated other comprehensive loss	(977,597)	(869,484)	(839,662)
Total stockholders' equity	86,148	491,714	426,195
Total Liabilities and Stockholders' Equity	$ 4,992,680	$ 5,325,226	$ 5,046,629

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Statement of Financial Position [Abstract]
Accounts receivable, allowances for credit losses	$ 18.7	$ 18.5	$ 21.3
Common stock, par value (USD per share)	$ 1.00	$ 1.00	$ 1.00
Common stock authorized (in shares)	1,000,000,000	1,000,000,000	1,000,000,000
Common stock issued (in shares)	441,400,000	441,400,000	441,400,000
Treasury stock (in shares)	94,400,000	94,600,000	95,900,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net Sales	$ 732,136	$ 860,063	$ 1,326,206	$ 1,549,309
Cost of sales	411,288	518,679	750,175	968,135
Gross Profit	320,848	341,384	576,031	581,174
Advertising and promotion expenses	60,172	84,489	136,454	153,954
Other selling and administrative expenses	306,817	308,311	635,529	605,647
Operating Loss	(46,141)	(51,416)	(195,952)	(178,427)
Interest expense	49,615	46,234	98,595	93,192
Interest (income)	(1,025)	(1,532)	(3,108)	(3,804)
Other non-operating expense (income), net	1,602	(294)	3,743	1,610
Loss Before Income Taxes	(96,333)	(95,824)	(295,182)	(269,425)
Provision for income taxes	12,839	12,163	24,732	14,858
Net Loss	$ (109,172)	$ (107,987)	$ (319,914)	$ (284,283)
Net Loss Per Common Share - Basic (USD per share)	$ (0.31)	$ (0.31)	$ (0.92)	$ (0.82)
Weighted average number of common shares (in shares)	346,875	345,941	346,778	345,946
Net Loss Per Common Share - Diluted (USD per share)	$ (0.31)	$ (0.31)	$ (0.92)	$ (0.82)
Weighted average number of common and potential common shares (in shares)	346,875	345,941	346,778	345,946

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net Loss	$ (109,172)	$ (107,987)	$ (319,914)	$ (284,283)
Other Comprehensive Income (Loss), Net of Tax
Currency translation adjustments	26,843	(1,170)	(118,791)	12,963
Employee benefit plan adjustments	518	624	3,578	847
Net unrealized (losses) gains on available-for-sale security	(80)	(1,944)	115	(67)
Net unrealized gains on derivative instruments:
Unrealized holding gains	4,704	3,254	13,894	9,072
Amounts reclassified from accumulated other comprehensive loss	(3,699)	(2,492)	(6,909)	(3,251)
Net unrealized gains on derivative instruments	1,005	762	6,985	5,821
Other Comprehensive Income (Loss), Net of Tax	28,286	(1,728)	(108,113)	19,564
Comprehensive Loss	$ (80,886)	$ (109,715)	$ (428,027)	$ (264,719)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows From Operating Activities
Net loss	$ (319,914)	$ (284,283)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Depreciation	81,984	103,580
Amortization	19,652	20,338
Asset impairments	4,716	6,845
Share-based compensation	23,414	24,310
Bad debt expense	6,460	2,487
Inventory obsolescence	20,929	35,351
Deferred income taxes	5,784	36
Changes in assets and liabilities:
Accounts receivable	248,008	217,754
Inventories	(241,833)	(207,984)
Prepaid expenses and other current assets	(30,923)	(8,154)
Accounts payable, accrued liabilities, and income taxes payable	(305,316)	(301,942)
Other, net	24,007	(8,857)
Net cash flows used for operating activities	(463,032)	(400,519)
Cash Flows From Investing Activities
Purchases of tools, dies, and molds	(25,824)	(20,933)
Purchases of other property, plant, and equipment	(34,367)	(27,248)
(Payments for) proceeds from foreign currency forward exchange contracts, net	(21,746)	3,992
Other, net	1,005	484
Net cash flows used for investing activities	(80,932)	(43,705)
Cash Flows From Financing Activities
Proceeds from short-term borrowings, net	400,000	40,824
Other, net	(693)	(158)
Net cash flows provided by financing activities	399,307	40,666
Effect of Currency Exchange Rate Changes on Cash	(23,814)	3,202
Decrease in Cash and Equivalents	(168,471)	(400,356)
Cash and Equivalents at Beginning of Period	630,028	594,481
Cash and Equivalents at End of Period	$ 461,557	$ 194,125

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2018	$ 666,901	$ 441,369	$ 1,812,682	$ (2,354,617)	$ 1,626,693	$ (859,226)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(176,296)				(176,296)
Other comprehensive income (loss), net of tax	21,292					21,292
Issuance of treasury stock for restricted stock units vesting	(387)		(1,829)	1,442
Share-based compensation	11,865		11,865
Ending balance at Mar. 31, 2019	523,375	441,369	1,822,718	(2,353,175)	1,450,397	(837,934)
Beginning balance at Dec. 31, 2018	666,901	441,369	1,812,682	(2,354,617)	1,626,693	(859,226)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(284,283)
Other comprehensive income (loss), net of tax	19,564
Ending balance at Jun. 30, 2019	426,195	441,369	1,831,952	(2,349,874)	1,342,410	(839,662)
Beginning balance at Mar. 31, 2019	523,375	441,369	1,822,718	(2,353,175)	1,450,397	(837,934)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(107,987)				(107,987)
Other comprehensive income (loss), net of tax	(1,728)					(1,728)
Issuance of treasury stock for restricted stock units vesting	(35)		(3,060)	3,025
Deferred compensation	125		(151)	276
Share-based compensation	12,445		12,445
Ending balance at Jun. 30, 2019	426,195	441,369	1,831,952	(2,349,874)	1,342,410	(839,662)
Beginning balance at Dec. 31, 2019	491,714	441,369	1,825,569	(2,318,921)	1,413,181	(869,484)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(210,741)				(210,741)
Other comprehensive income (loss), net of tax	(136,399)					(136,399)
Issuance of treasury stock for restricted stock units vesting	(966)		(3,777)	2,811
Share-based compensation	14,275		14,275
Ending balance at Mar. 31, 2020	157,883	441,369	1,836,067	(2,316,110)	1,202,440	(1,005,883)
Beginning balance at Dec. 31, 2019	491,714	441,369	1,825,569	(2,318,921)	1,413,181	(869,484)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(319,914)
Other comprehensive income (loss), net of tax	(108,113)
Ending balance at Jun. 30, 2020	86,148	441,369	1,844,075	(2,314,967)	1,093,268	(977,597)
Beginning balance at Mar. 31, 2020	157,883	441,369	1,836,067	(2,316,110)	1,202,440	(1,005,883)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(109,172)				(109,172)
Other comprehensive income (loss), net of tax	28,286					28,286
Issuance of treasury stock for restricted stock units vesting	(111)		(944)	833
Deferred compensation	124		(186)	310
Share-based compensation	9,138		9,138
Ending balance at Jun. 30, 2020	$ 86,148	$ 441,369	$ 1,844,075	$ (2,314,967)	$ 1,093,268	$ (977,597)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included. The December 31, 2019 balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. As Mattel's business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with Mattel's consolidated financial statements and related notes in the 2019 Annual Report on Form 10-K.

Accounts Receivable	6 Months Ended
Accounts Receivable	Jun. 30, 2020
Receivables [Abstract]
Accounts Receivable	Accounts Receivable Mattel estimates current expected credit losses based on collection history and management’s assessment of the current economic trends, business environment, customers’ financial condition, accounts receivable aging, and customer disputes that may impact the level of future credit losses. Accounts receivable are net of allowances for credit losses of $18.7 million, $21.3 million, and $18.5 million as of June 30, 2020, June 30, 2019, and December 31, 2019, respectively.

Inventories

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories include the following:


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Raw materials and work in process	$	139,256	$	129,937	$	103,123
Finished goods	563,336		592,457		392,381
	$	702,592	$	722,394	$	495,504

Property, Plant, and Equipment

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

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


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Land	$	24,938	$	25,133	$	25,112
Buildings	295,948		298,768		302,956
Machinery and equipment	753,388		873,294		812,509
Software	370,392		409,209		364,391
Tools, dies, and molds	601,811		818,166		747,706
Leasehold improvements	179,545		237,150		183,250
	2,226,022		2,661,720		2,435,924
Less: accumulated depreciation	(1,719,467)		(2,065,882)		(1,885,785)
	$	506,555	$	595,838	$	550,139

During the three months ended December 31, 2019, in conjunction with the Capital Light program, as further discussed in "Note 19 to the Consolidated Financial Statements—Restructuring Charges," Mattel discontinued production at one of its plants based in Mexico and has committed to a plan to dispose of the land and building. These assets meet the held for sale criteria and are actively being marketed for sale. The estimated fair value of the land and building, less costs to dispose, was determined to exceed its net book value of $8.4 million and $12.1 million as of June 30, 2020 and December 31, 2019, respectively, and are included within property, plant and equipment, net in the consolidated balance sheets.

Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

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. 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.

The change in the carrying amount of goodwill by operating segment for the six months ended June 30, 2020 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America segment, thereby causing a foreign currency translation impact.


	December 31, 2019		Currency Exchange Rate Impact		June 30, 2020
	(In thousands)
North America	$	732,430	$	(1,957)	$	730,473
International	450,713		(5,899)		444,814
American Girl	207,571		—		207,571
	$	1,390,714	$	(7,856)	$	1,382,858

Other Noncurrent Assets

6 Months Ended

Jun. 30, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Noncurrent Assets

Other noncurrent assets include the following:


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Identifiable intangible assets (net of accumulated amortization of $267.7 million, $228.2 million, and $248.0 million, respectively)	$	524,153	$	566,737	$	553,114
Deferred income taxes	59,827		49,937		67,900

Mattel's amortizable intangible assets primarily consist of trademarks. Mattel 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's amortizable intangible assets were not impaired during the three and six months ended June 30, 2020 and 2019.

Accrued Liabilities

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities include the following:


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)

Current lease liabilities	$	81,225	$	75,071	$	74,065
Advertising and promotion	62,025		63,516		93,804
Royalties	30,998		52,683		94,228

Seasonal Financing	6 Months Ended
Seasonal Financing	Jun. 30, 2020
Debt Disclosure [Abstract]
Seasonal Financing	Seasonal Financing On December 20, 2017, Mattel entered into a syndicated facility agreement, which was subsequently amended in 2018 and 2019 (as amended, the "Credit Agreement"), as a borrower (in such capacity, the "Borrower") and guarantor thereunder, along with certain of the Borrower's domestic and foreign subsidiaries as additional borrowers and/or guarantors thereunder, Bank of America, N.A., as global administrative agent, collateral agent and Australian security trustee, and the other lenders and financial institutions from time to time party thereto, providing up to $1.60 billion in aggregate principal amount of senior secured revolving credit facilities (the "senior secured revolving credit facilities"). The senior secured revolving credit facilities consist of (i) an asset based lending facility with aggregate commitments up to $1.31 billion, subject to borrowing base capacity, secured by substantially all of the accounts receivable and inventory of the Borrower and certain of its subsidiaries who are borrowers and/or guarantors under the Credit Agreement, as well as (ii) a revolving credit facility with $294.0 million in aggregate commitments secured by certain fixed assets and intellectual property of the U.S. borrowers under the Credit Agreement, and certain equity interests in the borrower and guarantor subsidiaries under the Credit Agreement. The senior secured revolving credit facilities will mature on November 18, 2022. Borrowings under the senior secured revolving credit facilities (i) are limited by jurisdiction-specific borrowing base calculations based on the sum of specified percentages of eligible accounts receivable, eligible inventory and certain fixed assets and intellectual property, as applicable, minus the amount of any applicable reserves, and (ii) bear interest at a floating rate, which can be either, at the Borrower's option, (a) an adjusted LIBOR rate plus an applicable margin ranging from 1.25% to 2.75% per annum or (b) an alternate base rate plus an applicable margin ranging from 0.25% to 1.75% per annum, in each case, such applicable margins to be determined based on the Borrower's average borrowing availability remaining under the senior secured revolving credit facilities. In addition to paying interest on the outstanding principal under the senior secured revolving credit facilities, the Borrower is required to pay (i) an unused line fee per annum of the average daily unused portion of the senior secured revolving credit facilities, (ii) a letter of credit fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit, and (iii) certain other customary fees and expenses of the lenders and agents. Mattel had borrowings under the senior secured revolving credit facilities of $400 million and $45 million as of June 30, 2020 and June 30, 2019, respectively, and had no borrowings under the senior secured revolving credit facilities as of December 31, 2019. Outstanding letters of credit under the senior secured revolving credit facilities totaled approximately $13 million, $70 million, and $55 million as of June 30, 2020, June 30, 2019, and December 31, 2019, respectively. The Credit Agreement contains customary covenants, including, but not limited to, restrictions on the Borrower's and its subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends, sell or otherwise transfer assets outside of the ordinary course, optionally prepay or modify terms of any junior indebtedness, enter into transactions with affiliates, or change their line of business. The Credit Agreement requires the maintenance of a fixed charge coverage ratio of 1.00 to 1.00 at the end of each fiscal quarter when excess availability under the senior secured revolving credit facilities is less than the greater of (x) $100 million and (y) 10% of the aggregate amount available thereunder (the "Availability Threshold") and on the last day of each subsequent fiscal quarter ending thereafter until no event of default exists and excess availability is greater than the Availability Threshold for at least 30 consecutive days. Since the execution of the Credit Agreement, the fixed charge coverage ratio covenant has not been in effect, as no event of default has occurred and Mattel's excess availability has been greater than $100 million and the Availability Threshold. As of June 30, 2020, Mattel was in compliance with all covenants contained in the Credit Agreement. The Credit Agreement is a material agreement, and failure to comply with the covenants may result in an event of default under the terms of the senior secured revolving credit facilities. If Mattel were to default under the terms of the senior secured revolving credit facilities, its ability to meet its seasonal financing requirements could be adversely affected.

Long-Term Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt includes the following:


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
2010 Senior Notes due October 2020	$	—	$	250,000	$	—
2010 Senior Notes due October 2040	250,000		250,000		250,000
2011 Senior Notes due November 2041	300,000		300,000		300,000
2013 Senior Notes due March 2023	250,000		250,000		250,000

2016 Senior Notes due August 2021	—		350,000		—
2017/2018 Senior Notes due December 2025	1,500,000		1,500,000		1,500,000
2019 Senior Notes due December 2027	600,000		—		600,000
Debt issuance costs and debt discount	(49,159)		(44,806)		(53,249)
	$	2,850,841	$	2,855,194	$	2,846,751

Other Noncurrent Liabilities

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Other Noncurrent Liabilities

Other noncurrent liabilities include the following:


	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Benefit plan liabilities	$	209,501	$	184,220	$	212,280
Noncurrent income tax liabilities	125,944		138,018		125,515

Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) for each period:


	For the Three Months Ended June 30, 2020
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2020	$	17,021	$	(8,065)	$	(166,797)	$	(848,042)	$	(1,005,883)
Other comprehensive income (loss) before reclassifications	4,704		(80)		(1,203)		26,843		30,264
Amounts reclassified from accumulated other comprehensive income (loss)	(3,699)		—		1,721		—		(1,978)
Net increase (decrease) in other comprehensive income (loss)	1,005		(80)		518		26,843		28,286
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2020	$	18,026	$	(8,145)	$	(166,279)	$	(821,199)	$	(977,597)


	For the Six Months Ended June 30, 2020
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2019	$	11,041	$	(8,260)	$	(169,857)	$	(702,408)	$	(869,484)
Other comprehensive income (loss) before reclassifications	13,894		115		499		(118,791)		(104,283)
Amounts reclassified from accumulated other comprehensive income (loss)	(6,909)		—		3,079		—		(3,830)
Net increase (decrease) in other comprehensive income (loss)	6,985		115		3,578		(118,791)		(108,113)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2020	$	18,026	$	(8,145)	$	(166,279)	$	(821,199)	$	(977,597)


	For the Three Months Ended June 30, 2019
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2019	$	16,470	$	(4,670)	$	(142,540)	$	(707,194)	$	(837,934)
Other comprehensive income (loss) before reclassifications	3,254		(1,944)		(618)		(1,170)		(478)
Amounts reclassified from accumulated other comprehensive income (loss)	(2,492)		—		1,242		—		(1,250)
Net increase (decrease) in other comprehensive income (loss)	762		(1,944)		624		(1,170)		(1,728)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2019	$	17,232	$	(6,614)	$	(141,916)	$	(708,364)	$	(839,662)


	For the Six Months Ended June 30, 2019
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2018	$	11,411	$	(6,547)	$	(142,763)	$	(721,327)	$	(859,226)
Other comprehensive income (loss) before reclassifications	9,072		(67)		(1,824)		12,963		20,144
Amounts reclassified from accumulated other comprehensive income (loss)	(3,251)		—		2,671		—		(580)
Net increase (decrease) in other comprehensive income (loss)	5,821		(67)		847		12,963		19,564
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2019	$	17,232	$	(6,614)	$	(141,916)	$	(708,364)	$	(839,662)

The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations:


	For the Three Months Ended
	June 30, 2020		June 30, 2019		Statements of Operations Classification
	(In thousands)
Derivative Instruments
Gain on foreign currency forward exchange contracts and other	$	3,622	$	2,675	Cost of sales
Tax effect	77		(183)		Provision for income taxes
	$	3,699	$	2,492	Net loss
Employee Benefit Plans
Amortization of prior service credit (a)	$	466	$	493	Other non-operating expense (income), net
Recognized actuarial loss (a)	(2,337)		(1,735)		Other non-operating expense (income), net
	(1,871)		(1,242)
Tax effect	150		—		Provision for income taxes
	$	(1,721)	$	(1,242)	Net loss


	For the Six Months Ended
	June 30, 2020		June 30, 2019		Statements of Operations Classification
	(In thousands)
Derivative Instruments
Gain on foreign currency forward exchange contracts and other	$	6,814	$	3,602	Cost of sales
Tax effect	95		(351)		Provision for income taxes
	$	6,909	$	3,251	Net loss
Employee Benefit Plans
Amortization of prior service credit (a)	$	932	$	986	Other non-operating expense (income), net
Recognized actuarial loss (a)	(4,677)		(3,472)		Other non-operating expense (income), net


	(3,745)		(2,486)
Tax effect	666		(185)		Provision for income taxes
	$	(3,079)	$	(2,671)	Net loss

_______________________________________

(a)The amortization of prior service credit and recognized actuarial loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" of this Quarterly Report on Form 10-Q for additional information regarding Mattel's net periodic benefit cost.

Currency Translation Adjustments

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 foreign 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 fiscal period-end exchange rates. Income and expense items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity. Currency translation adjustments resulted in a net loss of $118.8 million for the six months ended June 30, 2020, primarily due to the weakening of the Mexican peso, Brazilian real, British pound sterling, and the Russian ruble against the U.S. dollar. Currency translation adjustments resulted in a net gain of $13.0 million for the six months ended June 30, 2019, primarily due to the strengthening of the Russian ruble, Hong Kong dollar, and Mexican peso against the U.S. dollar, partially offset by the weakening of the Euro against the U.S. dollar.

Derivative Instruments

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative InstrumentsMattel seeks to mitigate its exposure to foreign currency transaction risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts. Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. These contracts generally have maturity dates of up to 18 months. These derivative instruments have been designated as effective cash flow hedges, whereby the unsettled hedges are reported in Mattel's consolidated balance sheets at fair value, with changes in the fair value of the hedges reflected in other comprehensive income ("OCI"). Realized gains and losses for these contracts are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. Mattel also 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. Additionally, Mattel utilizes derivative contracts to hedge commodities including certain raw materials. As of June 30, 2020, June 30, 2019, and December 31, 2019, Mattel held foreign currency forward exchange contracts and other commodity derivative instruments, with notional amounts of $1.17 billion, $1.06 billion, and $742.0 million, respectively.

The following tables present Mattel's derivative assets and liabilities:


	Derivative Assets
	Fair Value							Balance Sheet Classification
	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange contracts and other	$	11,731	$	13,620	$	10,227	Prepaid expenses and other current assets
Foreign currency forward exchange contracts and other	1,237		2,573		715		Other noncurrent assets
Total derivatives designated as hedging instruments	$	12,968	$	16,193	$	10,942
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts and other	$	786	$	929	$	4,060	Prepaid expenses and other current assets
	$	13,754	$	17,122	$	15,002

	Derivative Liabilities
	Fair Value							Balance Sheet Classification
	June 30, 2020		June 30, 2019		December 31, 2019
	(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange contracts and other	$	1,973	$	949	$	2,500	Accrued liabilities
Foreign currency forward exchange contracts and other	1,241		363		213		Other noncurrent liabilities
Total derivatives designated as hedging instruments	$	3,214	$	1,312	$	2,713
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts and other	$	5,280	$	467	$	263	Accrued liabilities
Foreign currency forward exchange contracts and other	185		—		—		Other noncurrent liabilities
Total derivatives not designated as hedging instruments	$	5,465	$	467	$	263
	$	8,679	$	1,779	$	2,976

The following tables present the classification and amount of gains and losses, net of tax, from derivatives reported in the consolidated statements of operations:


	For the Three Months Ended
	June 30, 2020						June 30, 2019			Statements of Operations Classification
	Amount of Gain Recognized in OCI		Amount of Gain Reclassified from Accumulated OCI to Statement of Operations		Amount of Gain Recognized in OCI		Amount of Gain Reclassified from Accumulated OCI to Statement of Operations
	(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange contracts and other	$	4,704	$	3,699	$	3,254	$	2,492	Cost of sales


	For the Six Months Ended
	June 30, 2020						June 30, 2019
	Amount of Gain Recognized in OCI		Amount of Gain Reclassified from Accumulated OCI to Statement of Operations		Amount of Gain Recognized in OCI		Amount of Gain Reclassified from Accumulated OCI to Statement of Operations		Statements of Operations Classification
	(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange contracts and other	$	13,894	$	6,909	$	9,072	$	3,251	Cost of sales

The net gains are offset by the changes in cash flows associated with the underlying hedged transactions.

Amount of Gain Recognized in the Statements of Operations

Statements of Operations
Classification

For the Three Months Ended

June 30,
2020

June 30,
2019

(In thousands)

Derivatives not designated as hedging instruments

Foreign currency forward exchange contracts and other

8,121

4,366

Other non-operating expense (income), net

Amount of (Loss) Gain Recognized in the Statements of Operations

Statements of Operations
Classification

For the Six Months Ended

June 30,
2020

June 30,
2019

(In thousands)

Derivatives not designated as hedging instruments

Foreign currency forward exchange contracts and other

(30,247)

3,868

Other non-operating expense (income), net

The net gains (loss) are offset by gains and losses on the related transactions.

Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

The following tables present information about Mattel's assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of June 30, 2020, June 30, 2019, and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. The three levels of the fair value hierarchy are as follows:

•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

•Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities, either directly or indirectly.

•Level 3 – Valuations based on inputs that are unobservable, supported by little or no market activity, and that are significant to the fair value of the assets or liabilities.

Mattel's financial assets and liabilities include the following:


	June 30, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets
Foreign currency forward exchange contracts and other (a)	$	—	$	13,754	$	—	$	13,754
Available-for-sale security (b)	3,645		—		—		3,645
Total assets	$	3,645	$	13,754	$	—	$	17,399
Liabilities
Foreign currency forward exchange contracts and other (a)	$	—	$	8,679	$	—	$	8,679

	June 30, 2019
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets
Foreign currency forward exchange contracts and other (a)	$	—	$	17,122	$	—	$	17,122
Available-for-sale security (b)	5,206		—		—		5,206
Total assets	$	5,206	$	17,122	$	—	$	22,328
Liabilities
Foreign currency forward exchange contracts and other (a)	$	—	$	1,779	$	—	$	1,779

	December 31, 2019
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets
Foreign currency forward exchange contracts and other (a)	$	—	$	15,002	$	—	$	15,002
Available-for-sale security (b)	3,530		—		—		3,530
Total assets	$	3,530	$	15,002	$	—	$	18,532
Liabilities
Foreign currency forward exchange contracts and other (a)	$	—	$	2,976	$	—	$	2,976

____________________________________________

(a)The fair value of the foreign currency forward exchange contracts and other commodity derivative instruments is based on dealer quotes of market forward rates and reflects the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates.

(b)The fair value of the available-for-sale security is based on the quoted price on an active public exchange.

Other Financial Instruments

Mattel's financial instruments include cash and equivalents, accounts receivable and payable, accrued liabilities, short-term borrowings, and long-term debt. The fair values of these instruments, excluding long-term debt, approximate their carrying values because of their short-term nature. Cash and equivalents are classified as Level 1 and all other financial instruments are classified as Level 2 within the fair value hierarchy.

The estimated fair value of Mattel's long-term debt was $2.87 billion (compared to a carrying value of $2.90 billion) as of June 30, 2020, $2.81 billion (compared to a carrying value of $2.90 billion) as of June 30, 2019, and $3.00 billion (compared to a carrying value of $2.90 billion) as of December 31, 2019. The estimated fair values have been calculated based on broker quotes or rates for the same or similar instruments and are classified as Level 2 within the fair value hierarchy.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

The following table reconciles basic and diluted earnings per common share for the three and six months ended June 30, 2020 and 2019:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(In thousands, except per share amounts)
Basic
Net loss	$	(109,172)	$	(107,987)	$	(319,914)	$	(284,283)
Weighted-average number of common shares	346,875		345,941		346,778		345,946
Basic net loss per common share	$	(0.31)	$	(0.31)	$	(0.92)	$	(0.82)

Diluted
Net loss	$	(109,172)	$	(107,987)	$	(319,914)	$	(284,283)
Weighted-average number of common shares	346,875		345,941		346,778		345,946
Dilutive stock options and restricted stock units ("RSUs") (a)	—		—		—		—
Weighted-average number of common and potential common shares	346,875		345,941		346,778		345,946
Diluted net loss per common share	$	(0.31)	$	(0.31)	$	(0.92)	$	(0.82)

_______________________________________

(a)Mattel was in a net loss position for the three and six months ended June 30, 2020 and 2019, and, accordingly, all outstanding nonqualified stock options and RSUs were excluded from the calculation of diluted net loss per common share because their effect would be antidilutive.

Employee Benefit Plans

6 Months Ended

Jun. 30, 2020

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, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 4 to the Consolidated Financial Statements–Employee Benefit Plans" in the 2019 Annual Report on Form 10-K.

A summary of the components of net periodic benefit cost for Mattel's defined benefit pension plans is as follows:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(In thousands)
Service cost	$	1,112	$	1,678	$	2,221	$	2,634
Interest cost	3,737		4,826		7,518		9,666
Expected return on plan assets	(4,902)		(5,434)		(9,823)		(10,878)
Amortization of prior service cost	43		16		86		32
Recognized actuarial loss	2,356		1,831		4,715		3,664
	$	2,346	$	2,917	$	4,717	$	5,118