0001628280-21-016137 | 10-Q | XBRL Viewer

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Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2021	Jul. 26, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document period end date	Jun. 30, 2021
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		348,970,305
Amendment Flag	false
Document Fiscal Year Focus	2021
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, 2021	Dec. 31, 2020	Jun. 30, 2020
Current Assets
Cash and equivalents	$ 384,743	$ 762,181	$ 461,557
Accounts receivable, net of allowances for credit losses of $12.3 million, $18.7 million and $15.9 million, respectively	784,084	1,033,966	650,502
Inventories	818,037	528,474	727,864
Prepaid expenses and other current assets	186,965	172,070	174,218
Total current assets	2,173,829	2,496,691	2,014,141
Noncurrent Assets
Property, plant, and equipment, net	459,828	473,794	471,866
Right-of-use assets, net	343,793	291,601	282,474
Goodwill	1,392,779	1,393,834	1,382,858
Other noncurrent assets	870,829	878,970	847,366
Total Assets	5,241,058	5,534,890	4,998,705
Current Liabilities
Short-term borrowings	214	969	400,000
Accounts payable	438,913	495,363	402,220
Accrued liabilities	647,425	831,922	541,833
Income taxes payable	35,838	27,125	15,732
Total current liabilities	1,122,390	1,355,379	1,359,785
Noncurrent Liabilities
Long-term debt	2,839,119	2,854,664	2,850,841
Noncurrent lease liabilities	306,094	249,353	246,414
Other noncurrent liabilities	445,736	465,350	435,565
Total noncurrent liabilities	3,590,949	3,569,367	3,532,820
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	1,848,201	1,842,680	1,844,075
Treasury stock at cost: 92.4 million shares, 94.4 million shares and 93.2 million shares, respectively	(2,262,223)	(2,282,939)	(2,314,967)
Retained earnings	1,435,688	1,553,610	1,113,220
Accumulated other comprehensive loss	(935,316)	(944,576)	(977,597)
Total stockholders’ equity	527,719	610,144	106,100
Total Liabilities and Stockholders’ Equity	$ 5,241,058	$ 5,534,890	$ 4,998,705

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
Statement of Financial Position [Abstract]
Accounts receivable, allowances for credit losses	$ 12.3	$ 15.9	$ 18.7
Common stock, par value (USD per share)	$ 1.00	$ 1.00	$ 1.00
Common stock authorized (in shares)	1,000,000,000.0	1,000,000,000.0	1,000,000,000.0
Common stock issued (in shares)	441,400,000	441,400,000	441,400,000
Treasury stock (in shares)	92,400,000	93,200,000	94,400,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Net Sales	$ 1,026,366	$ 732,136	$ 1,900,558	$ 1,326,206
Cost of sales	538,361	413,225	1,000,716	747,073
Gross Profit	488,005	318,911	899,842	579,133
Advertising and promotion expenses	88,328	60,172	162,424	136,454
Other selling and administrative expenses	350,537	306,817	654,407	635,529
Operating Income (Loss)	49,140	(48,078)	83,011	(192,850)
Interest expense	38,144	49,615	168,627	98,595
Interest (income)	(584)	(1,025)	(1,403)	(3,108)
Other non-operating expense (income), net	533	2,662	(555)	5,684
Income (Loss) Before Income Taxes	11,047	(99,330)	(83,658)	(294,021)
Provision for income taxes	20,644	12,839	40,949	24,732
Income from equity method investments	4,060	1,060	6,685	1,941
Net Loss	$ (5,537)	$ (111,109)	$ (117,922)	$ (316,812)
Net Loss Per Common Share - Basic (USD per share)	$ (0.02)	$ (0.32)	$ (0.34)	$ (0.91)
Weighted average number of common shares (in shares)	349,441	346,875	349,244	346,778
Net Loss Per Common Share - Diluted (USD per share)	$ (0.02)	$ (0.32)	$ (0.34)	$ (0.91)
Weighted average number of common and potential common shares (in shares)	349,441	346,875	349,244	346,778

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net Loss	$ (5,537)	$ (111,109)	$ (117,922)	$ (316,812)
Other Comprehensive Income (Loss), Net of Tax
Currency translation adjustments	20,932	26,843	(7,201)	(118,791)
Employee benefit plan adjustments	2,221	518	4,569	3,578
Net unrealized gains (losses) on available-for-sale security	1,268	(80)	3,232	115
Net unrealized gains on derivative instruments:
Unrealized holding (losses) gains	(771)	2,594	9,331	16,022
Reclassification adjustments included in net loss	2,060	(1,589)	(671)	(9,037)
Net unrealized gains on derivative instruments	1,289	1,005	8,660	6,985
Other Comprehensive Income (Loss), Net of Tax	25,710	28,286	9,260	(108,113)
Comprehensive Income (Loss)	$ 20,173	$ (82,823)	$ (108,662)	$ (424,925)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash Flows From Operating Activities:
Net Loss	$ (117,922)	$ (316,812)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Depreciation	72,727	81,984
Amortization	19,058	19,652
Share-based compensation	30,280	23,414
Bad debt expense	877	6,460
Inventory obsolescence	21,263	20,929
Deferred income taxes	7,588	5,784
Income from equity method investments	(6,685)	(1,941)
Loss on extinguishment of long-term borrowings	83,213	0
(Gain) loss on sale of assets/business, net	(21,839)	2,572
Changes in assets and liabilities:
Accounts receivable	239,567	248,008
Inventories	(338,313)	(244,935)
Prepaid expenses and other current assets	(14,700)	(19,423)
Accounts payable, accrued liabilities, and income taxes payable	(211,295)	(318,005)
Other, net	(5,189)	23,048
Net cash flows used for operating activities	(241,370)	(469,265)
Cash Flows From Investing Activities:
Purchases of tools, dies, and molds	(34,355)	(26,384)
Purchases of other property, plant, and equipment	(40,317)	(27,574)
Proceeds from (payments of) foreign currency forward exchange contracts, net	4,402	(21,746)
Proceeds from sale of assets/business	43,075	1,029
Other, net	0	(24)
Net cash flows used for investing activities	(27,195)	(74,699)
Cash Flows From Financing Activities:
(Payments of) proceeds from short-term borrowings, net	(755)	400,000
Payments of long-term borrowings	(1,287,022)	0
Proceeds from long-term borrowings, net	1,185,117	0
Other, net	(5,115)	(693)
Net cash flows (used for) provided by financing activities	(107,775)	399,307
Effect of Currency Exchange Rate Changes on Cash and Equivalents	(1,098)	(23,814)
Decrease in Cash and Equivalents	(377,438)	(168,471)
Cash and Equivalents at Beginning of Period	762,181	630,028
Cash and Equivalents at End of Period	$ 384,743	$ 461,557

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, 2019	$ 508,564	$ 441,369	$ 1,825,569	$ (2,318,921)	$ 1,430,031	$ (869,484)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(205,702)				(205,702)
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	179,772	441,369	1,836,067	(2,316,110)	1,224,329	(1,005,883)
Beginning balance at Dec. 31, 2019	508,564	441,369	1,825,569	(2,318,921)	1,430,031	(869,484)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(316,812)
Other comprehensive income (loss), net of tax	(108,113)
Ending balance at Jun. 30, 2020	106,100	441,369	1,844,075	(2,314,967)	1,113,220	(977,597)
Beginning balance at Mar. 31, 2020	179,772	441,369	1,836,067	(2,316,110)	1,224,329	(1,005,883)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(111,109)				(111,109)
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	106,100	441,369	1,844,075	(2,314,967)	1,113,220	(977,597)
Beginning balance at Dec. 31, 2020	610,144	441,369	1,842,680	(2,282,939)	1,553,610	(944,576)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(112,385)				(112,385)
Other comprehensive income (loss), net of tax	(16,450)					(16,450)
Issuance of treasury stock for stock option exercises	1,110		(803)	1,913
Issuance of treasury stock for restricted stock units vesting	(6,966)		(20,031)	13,065
Share-based compensation	15,112		15,112
Ending balance at Mar. 31, 2021	490,565	441,369	1,836,958	(2,267,961)	1,441,225	(961,026)
Beginning balance at Dec. 31, 2020	610,144	441,369	1,842,680	(2,282,939)	1,553,610	(944,576)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(117,922)
Other comprehensive income (loss), net of tax	9,260
Ending balance at Jun. 30, 2021	527,719	441,369	1,848,201	(2,262,223)	1,435,688	(935,316)
Beginning balance at Mar. 31, 2021	490,565	441,369	1,836,958	(2,267,961)	1,441,225	(961,026)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss	(5,537)				(5,537)
Other comprehensive income (loss), net of tax	25,710					25,710
Issuance of treasury stock for stock option exercises	2,154		(676)	2,830
Issuance of treasury stock for restricted stock units vesting	(529)		(3,212)	2,683
Deferred compensation	188		(37)	225
Share-based compensation	15,168		15,168
Ending balance at Jun. 30, 2021	$ 527,719	$ 441,369	$ 1,848,201	$ (2,262,223)	$ 1,435,688	$ (935,316)

- 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, 2021
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, 2020 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 2020 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation. Revision of Previously Issued Consolidated Financial Statements During the quarter ended June 30, 2021, Mattel identified a misstatement in its accounting for inventory tooling expenses, which were expensed to cost of sales rather than first being capitalized into the cost of inventory, which resulted in an understatement of inventory balances and a misstatement of cost of sales. Mattel also identified a misstatement related to the timing of disbursements for certain capital expenditures, that resulted in a cash flow misclassification between operating activities and investing activities. Mattel evaluated the misstatements and concluded that the misstatements were not material, either individually or in aggregate, to its current or previously issued consolidated financial statements. To correct the immaterial misstatements, Mattel has elected to revise its previously issued consolidated financial statements as of December 31, 2020 and 2019, and for each of the three years ended December 31, 2020, 2019, and 2018 and its unaudited consolidated financial statements as of and for the quarters and year-to-date periods ended March 31, 2020 and 2021, June 30, 2020, and September 30, 2020. The revision of the historical consolidated financial statements also includes the correction of other immaterial misstatements in its consolidated statement of operations that Mattel had previously recorded as out of period adjustments, as well as other previously identified balance sheet misclassifications. Mattel had previously determined that these misstatements did not, either individually or in the aggregate, result in a material misstatement of its previously issued consolidated financial statements and reached the same conclusion when aggregating with the recently identified misstatements. Further information regarding the misstatements and related revision is included in Note 24 - Revision for Immaterial Misstatements. Accordingly, the accompanying financial statements and relevant footnotes to the consolidated financial statements in this Quarterly Report on Form 10-Q have been revised to correct for such misstatements. Mattel will present the revision of its previously issued consolidated financial statements as of December 31, 2020 and for the years ended December 31, 2020 and 2019 in connection with the future filing of its 2021 Annual Report on Form 10-K. Additionally, Mattel will present the revision of its previously issued consolidated financial statements as of and for the three months ended March 31, 2021 and as of and for the three and nine months ended September 30, 2020 in connection with the future filings of its Quarterly Reports on Form 10-Q.

Accounts Receivable	6 Months Ended
Accounts Receivable	Jun. 30, 2021
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, and accounts receivable aging that may impact the level of future credit losses. Accounts receivable are net of allowances for credit losses of $12.3 million, $18.7 million, and $15.9 million as of June 30, 2021, June 30, 2020, and December 31, 2020, respectively.

Inventories

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories include the following:


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Raw materials and work in process	$	169,794	$	139,256	$	110,010
Finished goods	648,243		588,608		418,464
	$	818,037	$	727,864	$	528,474

Property, Plant, and Equipment

6 Months Ended

Jun. 30, 2021

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

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


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Land	$	21,969	$	24,938	$	24,913
Buildings	321,540		332,067		335,407
Machinery and equipment	768,758		753,388		772,349
Software	348,983		342,150		344,268
Tools, dies, and molds	614,597		601,811		607,915
Leasehold improvements	116,473		143,427		131,578
	2,192,320		2,197,781		2,216,430
Less: accumulated depreciation	(1,732,492)		(1,725,915)		(1,742,636)
	$	459,828	$	471,866	$	473,794

During the three months ended March 31, 2021, Mattel completed the sale of a manufacturing plant based in Mexico, which included land and buildings, resulting in a pre-tax gain of $15.8 million. The assets sold were previously designated as held for sale, and included within property, plant, and equipment, net in the consolidated balance sheets as of December 31, 2020 and June 30, 2020.

Goodwill

6 Months Ended

Jun. 30, 2021

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. 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.

The change in the carrying amount of goodwill by operating segment for the six months ended June 30, 2021 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America segment, thereby causing a foreign currency translation impact. During the first quarter of 2021, Mattel sold its arts, crafts, and stationery business resulting in a reduction of goodwill of approximately $2 million.


	December 31, 2020		Dispositions		Currency Exchange Rate Impact		June 30, 2021
	(In thousands)
North America	$	733,401	$	(1,290)	$	371	$	732,482
International	452,862		(1,056)		920		452,726
American Girl	207,571		—		—		207,571
	$	1,393,834	$	(2,346)	$	1,291	$	1,392,779

Other Noncurrent Assets

6 Months Ended

Jun. 30, 2021

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

Other Noncurrent Assets

Other noncurrent assets include the following:


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Identifiable intangible assets (net of accumulated amortization of $306.0 million, $267.7 million, and $286.9 million, respectively)	$	500,811	$	524,153	$	518,190
Deferred income taxes	73,744		59,827		72,682

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, 2021 and 2020.

Accrued Liabilities

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities include the following:


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Current lease liabilities	$	71,481	$	81,225	$	79,540
Incentive compensation	69,850		46,177		126,601
Advertising and promotion	61,370		53,025		163,181
Royalties	34,165		30,998		54,442

Seasonal Financing	6 Months Ended
Seasonal Financing	Jun. 30, 2021
Debt Disclosure [Abstract]
Seasonal Financing	Seasonal Financing On December 20, 2017, Mattel entered into a syndicated facility agreement, which was subsequently amended in 2018, 2019, and 2021 (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. On March 19, 2021, Mattel entered into the fourth amendment to the Credit Agreement, which amended certain terms, including, but not limited to, certain components of the borrowing base, a reduction of the aggregate principal commitments of the senior secured revolving credit facilities (the "senior secured revolving credit facilities") from $1.60 billion to $1.40 billion, and an extension of the maturity date from November 18, 2022 to March 19, 2024. The senior secured revolving credit facilities consist of (i) an asset based lending facility with aggregate commitments up to $1.11 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. 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 1.75% per annum or (b) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% 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 no borrowings under the senior secured revolving credit facilities as of June 30, 2021, $400.0 million of borrowings as of June 30, 2020, and no borrowings under the senior secured revolving credit facilities as of December 31, 2020. Outstanding letters of credit under the senior secured revolving credit facilities totaled approximately $10 million, $13 million, and $11 million as of June 30, 2021, June 30, 2020, and December 31, 2020, respectively. As of June 30, 2021, 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, 2021

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt includes the following:


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
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
2017/2018 Senior Notes due December 2025	275,000		1,500,000		1,500,000
2019 Senior Notes due December 2027	600,000		600,000		600,000
2021 Senior Notes due April 2026	600,000		—		—
2021 Senior Notes due April 2029	600,000		—		—
Debt issuance costs and debt discount	(35,881)		(49,159)		(45,336)
	$	2,839,119	$	2,850,841	$	2,854,664

On March 19, 2021, Mattel issued (i) $600 million aggregate principal amount of 3.375% Senior Notes due 2026 (the "2026 Notes") and (ii) $600 million aggregate principal amount of 3.750% Senior Notes due 2029 (the "2029 Notes" and, together with the 2026 Notes, the "Notes"). The 2026 Notes will mature on April 1, 2026 and the 2029 Notes will mature on April 1, 2029, unless earlier redeemed in accordance with their respective terms. The Notes are guaranteed by Mattel’s existing and, subject to certain exceptions, future wholly owned domestic restricted subsidiaries that guarantee Mattel’s senior secured revolving credit facilities or certain other indebtedness.

The net proceeds from the offering, together with cash on hand, were used to redeem $1,225 million in aggregate principal amount of Mattel’s outstanding 6.750% Senior Notes due December 2025 (the "2025 Notes") and pay related prepayment premiums and transaction fees and expenses. As a result of the partial redemption of the 2025 Notes, Mattel incurred a loss on extinguishment of $83.2 million, comprised of $62.0 million of prepayment premium costs and a $21.2 million write-off of the unamortized debt issuance costs, which was recorded within interest expense in the consolidated statements of operations. Following completion of the partial redemption of the 2025 Notes, $275 million aggregate principal amount of the 2025 Notes remained outstanding.

On June 21, 2021, Mattel issued a conditional notice of redemption to holders of its 2025 Notes for the redemption of the remaining $275 million outstanding aggregate principal amount of the 2025 Notes on July 1, 2021 (the "Redemption Date") at a price equal to 105.063% of the principal amount of the 2025 Notes redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. The conditional notice was subject to the condition precedent that Mattel receive funds from the senior secured revolving credit facilities sufficient to consummate the redemption (the "Condition Precedent") and provided Mattel the right to delay the Redemption Date or modify or rescind such notice in the event the Condition Precedent was not satisfied or waived by the Redemption Date, which, consequently, gave Mattel the right to defer settlement of the 2025 Notes for a period greater than one year after June 30, 2021. The Condition Precedent was satisfied and Mattel fully redeemed the 2025 Notes on the Redemption Date using cash on hand and funds from the senior secured revolving credit facilities.

Other Noncurrent Liabilities

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Other Noncurrent Liabilities

Other noncurrent liabilities include the following:


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Benefit plan liabilities	$	210,048	$	209,501	$	225,957
Deferred income tax liability	69,374		58,007		60,892
Noncurrent income tax payable	67,161		71,037		71,342

Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2021

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, 2021
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Loss, Net of Tax, as of March 31, 2021	$	(7,998)	$	(5,558)	$	(184,506)	$	(762,964)	$	(961,026)
Other comprehensive (loss) income before reclassifications	(771)		1,268		(254)		20,932		21,175
Amounts reclassified from accumulated other comprehensive loss	2,060		—		2,475		—		4,535
Net increase in other comprehensive (loss) income	1,289		1,268		2,221		20,932		25,710
Accumulated Other Comprehensive Loss, Net of Tax, as of June 30, 2021	$	(6,709)	$	(4,290)	$	(182,285)	$	(742,032)	$	(935,316)


	For the Six Months Ended June 30, 2021
	Derivative Instruments		Available-for-Sale Security		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2020	$	(15,369)	$	(7,522)	$	(186,854)	$	(734,831)	$	(944,576)
Other comprehensive income (loss) before reclassifications	9,331		3,232		(259)		(7,201)		5,103
Amounts reclassified from accumulated other comprehensive loss	(671)		—		4,828		—		4,157
Net increase (decrease) in other comprehensive income (loss)	8,660		3,232		4,569		(7,201)		9,260
Accumulated Other Comprehensive Loss, Net of Tax, as of June 30, 2021	$	(6,709)	$	(4,290)	$	(182,285)	$	(742,032)	$	(935,316)


	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	2,594		(80)		(1,203)		26,843		28,154
Amounts reclassified from accumulated other comprehensive income (loss)	(1,589)		—		1,721		—		132
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	16,022		115		499		(118,791)		(102,155)
Amounts reclassified from accumulated other comprehensive income (loss)	(9,037)		—		3,079		—		(5,958)
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)

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, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Derivative Instruments
(Loss) gain on foreign currency forward exchange and other contracts	$	(1,969)	$	1,512	Cost of sales
Tax effect of net (loss) gain	(91)		77		Provision for income taxes
	$	(2,060)	$	1,589	Net loss
Employee Benefit Plans
Amortization of prior service credit (a)	$	390	$	466	Other non-operating expense (income), net
Recognized actuarial loss (a)	(2,773)		(2,337)		Other non-operating expense (income), net
	(2,383)		(1,871)
Tax effect of net (loss) gain	(92)		150		Provision for income taxes
	$	(2,475)	$	(1,721)	Net loss


	For the Six Months Ended
	June 30, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Derivative Instruments
Gain on foreign currency forward exchange and other contracts	$	870	$	8,942	Cost of sales
Tax effect of net (loss) gain	(199)		95		Provision for income taxes
	$	671	$	9,037	Net loss
Employee Benefit Plans
Amortization of prior service credit (a)	$	789	$	932	Other non-operating expense (income), net
Recognized actuarial loss (a)	(5,555)		(4,677)		Other non-operating expense (income), net
	(4,766)		(3,745)
Tax effect of net (loss) gain	(62)		666		Provision for income taxes
	$	(4,828)	$	(3,079)	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 16 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 loss within stockholders' equity. Currency translation adjustments resulted in a net loss of $7.2 million for the six months ended June 30, 2021, primarily due to the weakening of the Turkish lira against the U.S. dollar. 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

Foreign Currency Transaction Exposure

6 Months Ended

Jun. 30, 2021

Foreign Currency [Abstract]

Foreign Currency Transaction Exposure

Foreign Currency Transaction ExposureCurrency exchange rate fluctuations 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 income (loss) 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 (income), 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, Australian dollar, British pound sterling, Canadian dollar, Russian ruble, and Brazilian real were the primary transactions that caused foreign currency transaction exposure for Mattel during the six months ended June 30, 2021.

Currency transaction gains (losses) included in the consolidated statements of operations are as follows:


	For the Three Months Ended
	June 30, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Currency transaction gains (losses)	$	1,069	$	(4,328)	Operating income/loss
Currency transaction (losses)	(1,501)		(1,603)		Other non-operating income/expense, net
Currency transaction (losses), net	$	(432)	$	(5,931)


	For the Six Months Ended
	June 30, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Currency transaction (losses)	$	(2,503)	$	(5,917)	Operating income/loss
Currency transaction (losses)	(4,809)		(2,435)		Other non-operating income/expense, net
Currency transaction (losses), net	$	(7,312)	$	(8,352)

Derivative Instruments

6 Months Ended

Jun. 30, 2021

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 (loss) ("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 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. Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not material. As of June 30, 2021, June 30, 2020, and December 31, 2020, Mattel held foreign currency forward exchange contracts and other commodity derivative instruments, with notional amounts of $1.29 billion, $1.17 billion, and $855.0 million, respectively.

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


	Derivative Assets
	Balance Sheet Classification	Fair Value
		June 30, 2021		June 30, 2020		December 31, 2020
		(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contracts	Prepaid expenses and other current assets	$	5,405	$	11,731	$	3,641
Foreign currency forward exchange and other contracts	Other noncurrent assets	1,774		1,237		50
Total derivatives designated as hedging instruments		$	7,179	$	12,968	$	3,691
Derivatives not designated as hedging instruments
Foreign currency forward exchange and other contracts	Prepaid expenses and other current assets	$	1,624	$	786	$	1,982
Foreign currency forward exchange and other contracts	Other noncurrent assets	—		—		38
Total derivatives not designated as hedging instruments		$	1,624	$	786	$	2,020
		$	8,803	$	13,754	$	5,711

	Derivative Liabilities
	Balance Sheet Classification	Fair Value
		June 30, 2021		June 30, 2020		December 31, 2020
		(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contracts	Accrued liabilities	$	10,774	$	1,973	$	20,330
Foreign currency forward exchange and other contracts	Other noncurrent liabilities	270		1,241		4,361
Total derivatives designated as hedging instruments		$	11,044	$	3,214	$	24,691
Derivatives not designated as hedging instruments
Foreign currency forward exchange and other contracts	Accrued liabilities	$	5,187	$	5,280	$	803
Foreign currency forward exchange and other contracts	Other noncurrent liabilities	—		185		—
Total derivatives not designated as hedging instruments		$	5,187	$	5,465	$	803
		$	16,231	$	8,679	$	25,494

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

Derivatives Designated As Hedging Instruments

For the Three Months Ended

June 30,
2021

June 30,
2020

Statements of
Operations
Classification

(In thousands)

Foreign currency forward exchange contracts:

Amount of (losses) gains recognized in OCI

(771)

2,594

Amount of (losses) gains reclassified from accumulated OCI to consolidated statements of operations

(2,060)

1,589

Cost of sales

Derivatives Designated As Hedging Instruments

For the Six Months Ended

June 30,
2021

June 30,
2020

Statements of
Operations
Classification

(In thousands)

Foreign currency forward exchange contracts:

Amount of gains recognized in OCI

9,331

16,022

Amount of gains reclassified from accumulated OCI to consolidated statements of operations

671

9,037

Cost of sales

The net (losses) gains reclassified from accumulated other comprehensive loss to the consolidated statements of operations during the three and six months ended June 30, 2021 and 2020, respectively, were offset by the changes in cash flows associated with the underlying hedged transactions.


	Derivatives Not Designated As Hedging Instruments
	For the Three Months Ended
	June 30, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Amount of net gains recognized in the Statements of Operations
Foreign currency forward exchange and other contract gains	$	7,673	$	8,121	Other non-operating expense (income), net
Foreign currency forward exchange and other contract gains	—		—		Cost of sales
	$	7,673	$	8,121


	Derivatives Not Designated As Hedging Instruments
	For the Six Months Ended
	June 30, 2021		June 30, 2020		Statements of Operations Classification
	(In thousands)
Amount of net losses recognized in the Statements of Operations
Foreign currency forward exchange and other contract (losses)	$	(963)	$	(30,247)	Other non-operating expense (income), net
Foreign currency forward exchange and other contract gains	639		—		Cost of sales
	$	(324)	$	(30,247)

The net losses recognized in the consolidated statements of operations during the three and six months ended June 30, 2021 and June 30, 2020, respectively, were offset by foreign currency transaction gains and losses on the related hedged balances.

Fair Value Measurements

6 Months Ended

Jun. 30, 2021

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, 2021, June 30, 2020, and December 31, 2020 and indicate 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, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Foreign currency forward exchange contracts and other (a)	$	—	$	8,803	$	—	$	8,803
Available-for-sale (b)	7,500		—		—		7,500
Total assets	$	7,500	$	8,803	$	—	$	16,303
Liabilities:
Foreign currency forward exchange contracts and other (a)	$	—	$	16,231	$	—	$	16,231

	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 (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

	December 31, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Foreign currency forward exchange contracts and other (a)	$	—	$	5,711	$	—	$	5,711
Available-for-sale (b)	4,268		—		—		4,268
Total assets	$	4,268	$	5,711	$	—	$	9,979
Liabilities:
Foreign currency forward exchange contracts and other (a)	$	—	$	25,494	$	—	$	25,494

____________________________________________

(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 $3.09 billion (compared to a carrying value of $2.88 billion) as of June 30, 2021, $2.87 billion (compared to a carrying value of $2.90 billion) as of June 30, 2020, and $3.11 billion (compared to a carrying value of $2.90 billion) as of December 31, 2020. 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, 2021

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, 2021 and 2020:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands, except per share amounts)
Basic:
Net loss	$	(5,537)	$	(111,109)	$	(117,922)	$	(316,812)
Weighted-average number of common shares	349,441		346,875		349,244		346,778
Basic net loss per common share	$	(0.02)	$	(0.32)	$	(0.34)	$	(0.91)

Diluted:
Net loss	$	(5,537)	$	(111,109)	$	(117,922)	$	(316,812)
Weighted-average number of common shares	349,441		346,875		349,244		346,778
Dilutive stock options and restricted stock units ("RSUs") (a)	—		—		—		—
Weighted-average number of common and potential common shares	349,441		346,875		349,244		346,778
Diluted net loss per common share	$	(0.02)	$	(0.32)	$	(0.34)	$	(0.91)

_______________________________________

(a)Mattel was in a net loss position for the three and six months ended June 30, 2021 and 2020, 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, 2021

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 2020 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, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)				(In thousands)
Service cost	$	1,293	$	1,112	$	2,586	$	2,221
Interest cost	2,530		3,737		5,070		7,518
Expected return on plan assets	(4,637)		(4,902)		(9,264)		(9,823)
Amortization of prior service cost	119		43		230		86
Recognized actuarial loss	2,775		2,356		5,560		4,715
	$	2,080	$	2,346	$	4,182	$	4,717

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


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)				(In thousands)

Interest cost	$	19	$	35	$	39	$	70
Amortization of prior service credit	(509)		(509)		(1,019)		(1,018)
Recognized actuarial gain	(2)		(19)		(5)		(38)
	$	(492)	$	(493)	$	(985)	$	(986)

During the six months ended June 30, 2021, Mattel made cash contributions totaling approximately $4 million related to its defined benefit pension and postretirement benefit plans. During the remainder of 2021, Mattel expects to make additional cash contributions of approximately $13 million.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Share-Based Payments

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Payments

Mattel has various stock compensation plans, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 8 to the Consolidated Financial Statements—Share-Based Payments" in the 2020 Annual Report on Form 10-K. Under the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, RSUs, performance awards, dividend equivalent rights, and shares of common stock to officers, employees, and other persons providing services to Mattel. Stock options are granted with exercise prices at the fair market value of Mattel's common stock on the applicable grant date and expire no later than ten years from the date of grant. Stock options, RSUs, and performance awards generally provide for vesting over, or at the end of, a period of three years from the date of grant.

As of June 30, 2021, three long-term incentive programs were in place with the following performance cycles: (i) a January 1, 2019–December 31, 2021 performance cycle, (ii) a January 1, 2020–December 31, 2022 performance cycle, and (iii) a January 1, 2021–December 31, 2023 performance cycle.

Compensation expense, included within other selling and administrative expenses in the consolidated statements of operations, related to stock options, RSUs, and performance awards is as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Stock option compensation expense	$	2,662	$	2,376	$	5,444	$	5,507
RSU compensation expense	7,673		6,588		14,031		13,950
Performance award compensation expense	4,833		174		10,805		3,957
	$	15,168	$	9,138	$	30,280	$	23,414

As of June 30, 2021, total unrecognized compensation expense related to unvested share-based payments totaled $66.7 million and is expected to be recognized over a weighted-average period of 1.9 years.

Mattel uses treasury shares purchased under its share repurchase program to satisfy stock option exercises and the vesting of RSUs and performance awards. For the six months ended June 30, 2021, cash received for stock option exercises was $3.3 million. For the six months ended June 30, 2020, no cash was received for stock option exercises.

Other Selling and Administrative Expenses

6 Months Ended

Jun. 30, 2021

Other Income and Expenses [Abstract]

Other Selling and Administrative Expenses

Other selling and administrative expenses include the following:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Design and development	$	46,747	$	46,486	$	90,728	$	91,113
Identifiable intangible asset amortization	9,544		9,687		19,058		19,652

Restructuring Charges

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring Charges

Optimizing for Growth (formerly Capital Light)

On February 9, 2021, Mattel announced the Optimizing for Growth program, a multi-year cost savings program which integrates and expands upon the previously announced Capital Light program (the "Program").

In connection with the Program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within the consolidated statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Cost of sales (a)	$	(151)	$	1,407	$	1,782	$	4,464
Other selling and administrative expenses (b)	11,444		1,374		17,154		4,120
	$	11,293	$	2,781	$	18,936	$	8,584

_______________________________________

(a)Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations include charges associated with the consolidation of manufacturing facilities.

(b)Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 22 to the Consolidated Financial Statements—Segment Information."

The following table summarizes Mattel's severance and other restructuring charges activity related to the Program for the six months ended June 30, 2021:


	Liability at December 31, 2020		Charges (a)		Payments/Utilization		Liability at June 30, 2021
	(In thousands)
Severance	$	5,294	$	10,374	$	(4,537)	$	11,131
Other restructuring charges	30		8,562		(5,417)		3,175
	$	5,324	$	18,936	$	(9,954)	$	14,306

_______________________________________

(a)Other restructuring charges consist primarily of charges associated with the consolidation of manufacturing facilities and commercial and corporate functions.

As of June 30, 2021, Mattel has recorded cumulative severance and other restructuring charges related to the Program of approximately $69 million, which include approximately $18 million of non-cash charges. Furthermore, cumulatively, in conjunction with previous actions taken under the Program, total expected cash expenditures are approximately $140 to $165 million and total expected non-cash charges are $40 to $45 million.

During the three months ended March 31, 2021, in conjunction with the Program, Mattel completed the sale of a manufacturing plant based in Mexico, which included land and buildings, resulting in a pre-tax gain of $15.8 million.

Other Cost Savings Actions

During the first half of 2020, Mattel recorded severance charges of approximately $15 million, primarily related to actions taken to further streamline its organizational structure.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Mattel's provision for income taxes was $20.6 million and $40.9 million for the three and six months ended June 30, 2021, respectively, and $12.8 million and $24.7 million for the three and six months ended June 30, 2020, respectively. During the three and six months ended June 30, 2021, Mattel recognized a net discrete tax expense of $12.2 million and discrete tax expense of $19.5 million, respectively, primarily related to income taxes recorded on a discrete basis in various jurisdictions, tax rate changes impacting deferred tax assets and reassessments of prior year's tax liabilities. During the three and six months ended June 30, 2020, Mattel recognized a net discrete tax expense of $3.2 million and $9.6 million, respectively, primarily related to income taxes recorded on a discrete basis in various jurisdictions and reassessments of prior years' tax liabilities. As a result of the establishment of a valuation allowance on U.S. deferred tax assets in 2017, there was no U.S. tax benefit provided for U.S. losses during the six months ended June 30, 2021 or 2020. Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realized. Mattel maintains a valuation allowance on its deferred tax assets until there is sufficient evidence to support the release of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of a portion of these deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount, if any, of the valuation allowance release are subject to change depending on the level of earnings that Mattel is able to achieve in the tax jurisdictions in which a valuation allowance has been recorded. In the normal course of business, Mattel is regularly audited by federal, state, and foreign tax authorities. Based on the current status of federal, state, and foreign audits, Mattel believes it is reasonably possible that in the next twelve months, the total unrecognized tax benefits could decrease by approximately $35.8 million related to the settlement of tax audits and/or the expiration of statutes of limitations. The ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel's consolidated financial statements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Contingencies	6 Months Ended
Contingencies	Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies Litigation Related to Yellowstone do Brasil Ltda. Yellowstone do Brasil Ltda. (formerly known as Trebbor Informática Ltda.) was a customer of Mattel's subsidiary Mattel do Brasil Ltda. when a commercial dispute arose between Yellowstone and Mattel do Brasil regarding the supply of product and related payment terms. As a consequence of the dispute, in April 1999, Yellowstone filed a declarative action against Mattel do Brasil before the 15th Civil Court of Curitiba – State of Parana (the "Trial Court"), requesting the annulment of its security bonds and promissory notes given to Mattel do Brasil as well as requesting the Trial Court to find Mattel do Brasil liable for damages incurred as a result of Mattel do Brasil’s alleged abrupt and unreasonable breach of an oral exclusive distribution agreement between the parties relating to the supply and sale of toys in Brazil. Yellowstone's complaint sought alleged loss of profits of approximately $1 million, plus an unspecified amount of damages consisting of: (i) compensation for all investments made by Yellowstone to develop Mattel do Brasil's business; (ii) reimbursement of the amounts paid by Yellowstone to terminate labor and civil contracts in connection with the business; (iii) compensation for alleged unfair competition and for the goodwill of trade; and (iv) compensation for non-pecuniary damages. Mattel do Brasil filed its defenses to these claims and simultaneously presented a counterclaim for unpaid accounts receivable for goods supplied to Yellowstone in the approximate amount of $4 million. During the evidentiary phase a first accounting report was submitted by a court-appointed expert. Such report stated that Yellowstone had invested approximately $3 million in its business. Additionally, the court-appointed expert calculated a loss of profits compensation of approximately $1 million. Mattel do Brasil challenged the report since it was not made based on the official accounting documents of Yellowstone and since the report calculated damages based only on documents unilaterally submitted by Yellowstone. The Trial Court accepted the challenge and ruled that a second accounting examination should take place in the lawsuit. Yellowstone appealed the decision to the Court of Appeals of the State of Parana (the "Appeals Court"), but it was upheld by the Appeals Court. The second court-appointed expert’s report submitted at trial did not assign a value to any of Yellowstone’s claims and found no evidence of causation between Mattel do Brasil's actions and such claims. In January 2010, the Trial Court ruled in favor of Mattel do Brasil and denied all of Yellowstone’s claims based primarily on the lack of any causal connection between the acts of Mattel do Brasil and Yellowstone’s alleged damages. Additionally, the Trial Court upheld Mattel do Brasil's counterclaim and ordered Yellowstone to pay Mattel do Brasil approximately $4 million. The likelihood of Mattel do Brasil recovering this amount was uncertain due to the fact that Yellowstone was declared insolvent and filed for bankruptcy protection. In February 2010, Yellowstone filed a motion seeking clarification of the decision which was denied. In September 2010, Yellowstone filed a further appeal with the Appeals Court. Under Brazilian law, the appeal was de novo and Yellowstone restated all of the arguments it made at the Trial Court level. Yellowstone did not provide any additional information supporting its unspecified alleged damages. The Appeals Court held hearings on the appeal in March and April 2013. On July 26, 2013, the Appeals Court awarded Yellowstone approximately $17 million in damages, plus attorney's fees, as adjusted for inflation and interest. The Appeals Court also awarded Mattel do Brasil approximately $7.5 million on its counterclaim, as adjusted for inflation. On August 2, 2013, Mattel do Brasil filed a motion with the Appeals Court for clarification since the written decision contained clear errors in terms of amounts awarded and interest and inflation adjustments. Mattel do Brasil's motion also asked the Appeals Court to decide whether Yellowstone’s award could be offset by the counterclaim award, despite Yellowstone's status as a bankrupt entity. Yellowstone also filed a motion for clarification on August 5, 2013. A decision on the clarification motions was rendered on November 11, 2014, and the Appeals Court accepted partially the arguments raised by Mattel do Brasil. As a result, the Appeals Court awarded Yellowstone approximately $14.5 million in damages, as adjusted for inflation and interest, plus attorney's fees. The Appeals Court also awarded Mattel do Brasil approximately $7.5 million on its counterclaim, as adjusted for inflation. The decision also recognized the existence of legal rules that support Mattel do Brasil's right to offset its counterclaim award of approximately $7.5 million. Mattel do Brasil filed a new motion for clarification with the Appeals Court on January 21, 2015, due to the incorrect statement made by the reporting judge of the Appeals Court, that the court-appointed expert analyzed the "accounting documents" of Yellowstone. On April 26, 2015, a decision on the motion for clarification was rendered. The Appeals Court ruled that the motion for clarification was denied and imposed a fine on Mattel do Brasil equal to 1% of the value of the claims made for the delay caused by the motion. On July 3, 2015, Mattel do Brasil filed a special appeal to the Superior Court of Justice based upon both procedural and substantive grounds. This special appeal sought to reverse the Appeals Court's decision of July 26, 2013, and to reverse the fine as inappropriate under the law. This special appeal was submitted to the Appeals Court. Yellowstone also filed a special appeal with the Appeals Court in February 2015, which was made available to Mattel do Brasil on October 7, 2015. Yellowstone's special appeal sought to reverse the Appeals Court decision with respect to: (a) the limitation on Yellowstone's loss of profits claim to the amount requested in the complaint, instead of the amount contained in the first court-appointed experts report, and (b) the award of damages to Mattel do Brasil on the counterclaim, since the specific amount was not requested in Mattel do Brasil's counterclaim brief. On October 19, 2015, Mattel do Brasil filed its answer to the special appeal filed by Yellowstone and Yellowstone filed its answer to the special appeal filed by Mattel do Brasil. On April 4, 2016, the Appeals Court rendered a decision denying the admissibility of Mattel's and Yellowstone's special appeals. On May 11, 2016, both Mattel and Yellowstone filed interlocutory appeals. On August 31, 2017, the reporting justice for the Appeals Court denied Yellowstone’s interlocutory appeal. As to Mattel, the reporting justice reversed the fine referenced above that had been previously imposed on Mattel for filing a motion for clarification. However, the reporting justice rejected Mattel’s arguments on the merits of Yellowstone’s damages claims. On September 22, 2017, Mattel filed a further appeal to the full panel of five appellate justices to challenge the merits of Yellowstone's damages claims. Yellowstone did not file a further appeal. In April 2018, Mattel do Brasil entered into a settlement agreement to resolve this matter, but the settlement was later rejected by the courts, subject to a pending appeal by Mattel. On October 2, 2018, the Appeals Court rejected Mattel's merits appeal, and affirmed the prior rulings in favor of Yellowstone. In October 2019, Mattel reached an agreement with Yellowstone's former counsel regarding payment of the attorney's fees portion of the judgment. In November 2019, Yellowstone initiated an action to enforce its judgment against Mattel, but did not account for an offset for Mattel's counterclaim. On January 27, 2020, Mattel obtained an injunction, staying Yellowstone's enforcement action pending resolution of Mattel's appeal to enforce the parties' April 2018 settlement. As of June 30, 2021, Mattel assessed its probable loss related to the Yellowstone matter and has accrued a reserve, which was not material. Litigation Related to the Fisher-Price Rock 'n Play Sleeper A number of putative class action lawsuits are pending against Fisher-Price, Inc. and/or Mattel, Inc. asserting claims for false advertising, negligent product design, breach of warranty, fraud, and other claims in connection with the marketing and sale of the Fisher-Price Rock 'n Play Sleeper (the "Sleeper"). In general, the lawsuits allege that the Sleeper should not have been marketed and sold as safe and fit for prolonged and overnight sleep for infants. The putative class action lawsuits propose nationwide and over 15 statewide consumer classes comprised of those who purchased the Sleeper as marketed as safe for prolonged and overnight sleep. The class actions have been consolidated before a single judge for pre-trial purposes pursuant to the federal courts’ Multi-District Litigation program. Forty-one additional lawsuits are pending against Fisher-Price, Inc. and Mattel, Inc. alleging that a product defect in the Sleeper caused the fatalities of or injuries to forty-five children. Several lawsuits have been settled and/or dismissed. Additionally, Fisher-Price, Inc. and/or Mattel, Inc. have also received letters from lawyers purporting to represent additional plaintiffs who are threatening to assert similar claims. In addition, a stockholder has filed a derivative action in the Court of Chancery for the State of Delaware (Kumar v. Bradley, et al., filed July 7, 2020) alleging breach of fiduciary duty and unjust enrichment related to the development, marketing, and sale of the Sleeper. The defendants in the derivative action are certain of Mattel's current and former officers and directors. In August 2020, the derivative action was stayed pending further developments in the class action lawsuits. The lawsuits seek compensatory damages, punitive damages, statutory damages, restitution, disgorgement, attorneys’ fees, costs, interest, declaratory relief, and/or injunctive relief. Mattel believes that the allegations in the lawsuits are without merit and intends to vigorously defend against them. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. Litigation and Investigations Related to Whistleblower Letter In December 2019 and January 2020, two stockholders filed separate complaints styled as class actions against Mattel, Inc., and certain of its current and former officers, alleging violations of federal securities laws. The complaints rely on the results of an investigation announced by Mattel in October 2019 regarding allegations in a whistleblower letter and claim that Mattel misled the market in several of its financial statements beginning in the third quarter of 2017. The lawsuits allege that the defendants' conduct caused the plaintiff and other stockholders to purchase Mattel common stock at artificially inflated prices. In addition, a stockholder has filed a derivative action in the United States District Court for the District of Delaware (Moher v. Kreiz, et al., filed April 9, 2020) making allegations that are substantially identical to, or are based upon, the allegations of the class action lawsuits. The defendants in the derivative action are certain of Mattel's current and former officers and directors, Mattel, Inc., and PricewaterhouseCoopers LLP. Subsequently, a nearly identical derivative action was filed by a different stockholder against the same defendants. The second lawsuit is styled as an amended complaint and replaces a complaint making unrelated allegations in a previously filed lawsuit already pending in Delaware federal court (Lombardi v. Kreiz, et al., amended complaint filed April 16, 2020). In May 2020, the Moher and Lombardi derivative actions were consolidated and stayed pending further developments in the class action lawsuits. In June 2021, a third similar derivative action was filed in the United States District Court for the District of Delaware (Chagnon v. Kreiz, et al., filed June 22, 2021). Three additional derivative actions asserting similar claims are also pending in Delaware Chancery Court (Owen v. Euteneuer, et al., filed May 12, 2021; Andersen v. Georgiadis, et al., filed May 18, 2021; and Armon v. Euteneuer, et al., filed June 29, 2021). The lawsuits seek unspecified compensatory damages, attorneys' fees, expert fees, costs and/or injunctive relief. Mattel believes that the allegations in the lawsuits are without merit and intends to vigorously defend against them. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. Mattel has also received subpoenas from the Securities and Exchange Commission (the "SEC") seeking documents related to the whistleblower letter and subsequent investigation, and is responding to those subpoenas. Mattel is also responding to requests from the United States Attorney's Office for the Southern District of New York ("SDNY") related to this matter. Mattel cannot predict the eventual scope, duration or outcome of potential legal action by the SEC or SDNY, if any, or whether any such action could have a material impact on Mattel's financial condition, results of operations or cash flows.

Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

Mattel designs, manufactures, and markets a broad variety of toy products worldwide, which are sold to its customers and directly to consumers.

Segment Data

Mattel's operating segments are: (i) North America, which consists of the U.S. and Canada; (ii) International; and (iii) American Girl. The North America and International segments sell products across categories, although some products are developed and adapted for particular international markets.

The following tables present information regarding net sales, operating income (loss), and assets by segment. The corporate and other expense category includes operating costs not allocated to individual segments, including charges related to incentive and share-based compensation, corporate headquarters functions managed on a worldwide basis, the impact of changes in foreign currency exchange rates on intercompany transactions, and certain severance and other restructuring costs. The prior period presentation of operating income by segment and assets by segment has been conformed to the current period's presentation.

It is impracticable for Mattel to present net sales by categories, brands, or products, as trade discounts and other allowances are generally recorded in the financial accounting systems by customer.


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Net Sales by Segment
North America	$	560,830	$	432,892	$	1,040,489	$	720,446
International	424,897		271,065		774,252		540,421
American Girl	40,639		28,179		85,817		65,339
Net sales	$	1,026,366	$	732,136	$	1,900,558	$	1,326,206


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Operating Income (Loss) by Segment
North America (a)	$	149,600	$	81,838	$	274,451	$	98,686
International (a)	50,758		(4,420)		87,018		(31,444)
American Girl	(9,725)		(13,886)		(19,290)		(30,987)
	190,633		63,532		342,179		36,255
Corporate and other expense (b)	(141,493)		(111,610)		(259,168)		(229,105)
Operating Income (Loss)	49,140		(48,078)		83,011		(192,850)
Interest expense	38,144		49,615		168,627		98,595
Interest (income)	(584)		(1,025)		(1,403)		(3,108)
Other non-operating expense (income), net	533		2,662		(555)		5,684
Income (Loss) Before Income Taxes	$	11,047	$	(99,330)	$	(83,658)	$	(294,021)

_______________________________________

(a)Segment operating income (loss) included severance and restructuring expenses of $(0.2) million and $1.8 million, for the three and six months ended June 30, 2021, respectively, and $1.4 million and $4.5 million, for the three and six months ended June 30, 2020, respectively, which were allocated to the North America and International segments.

(b)Corporate and other expense included severance and restructuring charges of $10.7 million and $16.5 million, for the three and six months ended June 30, 2021, respectively, and $16.2 million and $23.8 million, for the three and six months ended June 30, 2020, respectively. Corporate and other expense also included expenses related to inclined sleeper product recall litigation of $6.8 million and $12.1 million for the three and six months ended June 30, 2021, respectively, and $2.9 million and $9.1 million, for the three and six months ended June 30, 2020, respectively, and incentive and share-based compensation for all periods presented.

Segment assets are comprised of accounts receivable and inventories, net of applicable allowances and reserves.


	June 30, 2021		June 30, 2020		December 31, 2020
	(In thousands)
Assets by Segment
North America	$	686,959	$	615,180	$	658,404
International	644,450		528,510		715,043
American Girl	51,453		47,028		40,414
	1,382,862		1,190,718		1,413,861
Corporate and other	219,259		187,648		148,579
Accounts receivable and inventories, net	$	1,602,121	$	1,378,366	$	1,562,440

Geographic Information

The table below presents information by geographic area. Net sales are attributed to countries based on location of the customer.


	For the Three Months Ended				For the Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(In thousands)
Net Sales by Geographic Area
North America	$	601,469	$	461,071	$	1,126,306	$	785,785
International
EMEA	246,816		151,948		484,985		325,271
Latin America	92,477		57,719		148,755		108,994
Asia Pacific	85,604		61,398		140,512		106,156
Total International	424,897		271,065		774,252		540,421
Net sales	$	1,026,366	$	732,136	$	1,900,558	$	1,326,206