Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 18, 2013 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MAT | |
Entity Registrant Name | MATTEL INC /DE/ | |
Entity Central Index Key | 63276 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 338,434,453 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Current Assets | |||
Cash and equivalents | $406,461 | $1,335,711 | $282,095 |
Accounts receivable, net | 1,885,181 | 1,226,833 | 1,828,211 |
Inventories | 807,209 | 465,057 | 796,352 |
Prepaid expenses and other current assets | 538,659 | 529,204 | 366,680 |
Total current assets | 3,637,510 | 3,556,805 | 3,273,338 |
Noncurrent Assets | |||
Property, plant, and equipment, net | 634,773 | 593,213 | 575,288 |
Goodwill | 1,080,090 | 1,080,798 | 1,079,979 |
Other noncurrent assets | 1,343,882 | 1,295,969 | 1,390,124 |
Total Assets | 6,696,255 | 6,526,785 | 6,318,729 |
Current Liabilities | |||
Short-term borrowings | 77,814 | 9,844 | 154,503 |
Current portion of long-term debt | 50,000 | 400,000 | 350,000 |
Accounts payable | 394,857 | 385,375 | 376,896 |
Accrued liabilities | 883,092 | 887,748 | 734,715 |
Income taxes payable | 65,806 | 33,045 | 47,296 |
Total current liabilities | 1,471,569 | 1,716,012 | 1,663,410 |
Noncurrent Liabilities | |||
Long-term debt | 1,600,000 | 1,100,000 | 1,150,000 |
Other noncurrent liabilities | 616,517 | 643,729 | 601,461 |
Total noncurrent liabilities | 2,216,517 | 1,743,729 | 1,751,461 |
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 | 1,769,396 | 1,727,682 | 1,704,358 |
Treasury stock at cost; 101.1 million shares, 99.1 million shares, and 98.6 million shares, respectively | -2,387,663 | -2,152,702 | -2,122,438 |
Retained earnings | 3,672,646 | 3,515,181 | 3,316,642 |
Accumulated other comprehensive loss | -487,579 | -464,486 | -436,073 |
Total stockholders' equity | 3,008,169 | 3,067,044 | 2,903,858 |
Total Liabilities and Stockholders' Equity | $6,696,255 | $6,526,785 | $6,318,729 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Millions, except Per Share data, unless otherwise specified | |||
Common stock, par value | $1 | $1 | $1 |
Common stock, shares authorized | 1,000 | 1,000 | 1,000 |
Common stock, shares issued | 441.4 | 441.4 | 441.4 |
Treasury stock, shares | 101.1 | 99.1 | 98.6 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net Sales | $2,206,961 | $2,077,816 | $4,371,676 | $4,164,976 |
Cost of sales | 1,018,981 | 962,445 | 2,043,637 | 1,981,712 |
Gross Profit | 1,187,980 | 1,115,371 | 2,328,039 | 2,183,264 |
Advertising and promotion expenses | 249,386 | 234,793 | 467,329 | 445,047 |
Other selling and administrative expenses | 410,419 | 393,211 | 1,171,914 | 1,090,681 |
Operating Income | 528,175 | 487,367 | 688,796 | 647,536 |
Interest expense | 19,576 | 22,723 | 58,172 | 65,352 |
Interest (income) | -1,394 | -1,472 | -4,083 | -5,158 |
Other non-operating (income), net | -4,350 | -731 | -2,530 | -1,034 |
Income Before Income Taxes | 514,343 | 466,847 | 637,237 | 588,376 |
Provision for income taxes | 91,507 | 100,910 | 102,542 | 118,392 |
Net Income | $422,836 | $365,937 | $534,695 | $469,984 |
Net Income Per Common Share-Basic | $1.22 | $1.06 | $1.54 | $1.36 |
Weighted average number of common shares | 343,279 | 342,595 | 344,733 | 341,006 |
Net Income Per Common Share-Diluted | $1.21 | $1.04 | $1.52 | $1.35 |
Weighted average number of common and potential common shares | 346,695 | 347,122 | 348,626 | 345,390 |
Dividends Declared Per Common Share | $0.36 | $0.31 | $1.08 | $0.93 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income | $422,836 | $365,937 | $534,695 | $469,984 |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Currency translation adjustments | 34,757 | 28,944 | -30,005 | 10,593 |
Defined benefit pension plans net prior service credit and net actuarial loss | 3,877 | 2,854 | 10,742 | 6,705 |
Net unrealized (losses) gains on derivative instruments: | ||||
Unrealized holding (losses) gains | -10,614 | 3,933 | -3,348 | 14,713 |
Reclassification adjustment for realized losses (gains) included in net income | 321 | -12,573 | -482 | -21,439 |
Net unrealized (losses) gains on derivative instruments | -10,293 | -8,640 | -3,830 | -6,726 |
Other Comprehensive Income (Loss), Net of Tax | 28,341 | 23,158 | -23,093 | 10,572 |
Comprehensive Income | $451,177 | $389,095 | $511,602 | $480,556 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash Flows From Operating Activities: | ||
Net income | $534,695 | $469,984 |
Adjustments to reconcile net income to net cash flows used for operating activities: | ||
Depreciation | 132,407 | 113,961 |
Amortization | 12,743 | 12,474 |
Asset impairment | 14,000 | |
Deferred income taxes | 11,287 | 38,692 |
Tax benefits from share-based payment arrangements | -47,807 | -30,222 |
Share-based compensation | 47,213 | 42,822 |
(Decrease) increase from changes in assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | -662,845 | -541,715 |
Inventories | -352,518 | -288,903 |
Prepaid expenses and other current assets | -21,209 | -16,247 |
Accounts payable, accrued liabilities, and income taxes payable | 35,528 | 106,537 |
Other, net | -24,749 | -8,526 |
Net cash flows used for operating activities | -321,255 | -101,143 |
Cash Flows From Investing Activities: | ||
Purchases of tools, dies, and molds | -90,432 | -74,433 |
Purchases of other property, plant, and equipment | -88,214 | -82,117 |
Payments for acquisition, net of cash acquired | -684,522 | |
Proceeds from foreign currency forward exchange contracts | 4,839 | 6,943 |
Other, net | -2,076 | 844 |
Net cash flows used for investing activities | -175,883 | -833,285 |
Cash Flows From Financing Activities: | ||
Payments of short-term borrowings, net | -9,844 | -8,018 |
Proceeds from short-term borrowings, net | 77,814 | 154,503 |
Payment of credit facility renewal costs | -4,003 | |
Payments of long-term borrowings | -350,000 | -50,000 |
Proceeds from long-term borrowings, net | 495,260 | |
Share repurchases | -400,161 | -38,902 |
Payment of dividends on common stock | -372,341 | -317,021 |
Proceeds from exercise of stock options | 116,143 | 104,889 |
Tax benefits from share-based payment arrangements | 47,807 | 30,222 |
Other, net | -21,991 | -29,456 |
Net cash flows used for financing activities | -421,316 | -153,783 |
Effect of Currency Exchange Rate Changes on Cash | -10,796 | 1,193 |
Decrease in Cash and Equivalents | -929,250 | -1,087,018 |
Cash and Equivalents at Beginning of Period | 1,335,711 | 1,369,113 |
Cash and Equivalents at End of Period | $406,461 | $282,095 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | |
Sep. 30, 2013 | ||
Basis of Presentation | 1 | 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 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 presentation of the financial position and interim results of Mattel, Inc. and its subsidiaries (“Mattel” or the “Company”) as of and for the periods presented have been included. Because Mattel’s business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. | ||
The year-end balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. | ||
The financial information included herein should be read in conjunction with Mattel’s consolidated financial statements and related notes in its 2012 Annual Report on Form 10-K. |
Accounts_Receivable
Accounts Receivable | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounts Receivable | 2 | Accounts Receivable |
Accounts receivable are net of allowances for doubtful accounts of $21.5 million, $20.6 million, and $33.5 million as of September 30, 2013, September 30, 2012, and December 31, 2012, respectively. |
Inventories
Inventories | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Inventories | 3 | Inventories | |||||||||||
Inventories include the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Raw materials and work in process | $ | 110,256 | $ | 112,555 | $ | 79,216 | |||||||
Finished goods | 696,953 | 683,797 | 385,841 | ||||||||||
$ | 807,209 | $ | 796,352 | $ | 465,057 | ||||||||
Property_Plant_and_Equipment
Property, Plant, and Equipment | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Property, Plant, and Equipment | 4 | Property, Plant, and Equipment | |||||||||||
Property, plant, and equipment, net includes the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Land | $ | 26,990 | $ | 26,703 | $ | 26,692 | |||||||
Buildings | 268,961 | 266,653 | 268,381 | ||||||||||
Machinery and equipment | 975,886 | 911,985 | 931,732 | ||||||||||
Tools, dies, and molds | 710,521 | 663,532 | 674,119 | ||||||||||
Capital leases | 23,271 | 23,271 | 23,271 | ||||||||||
Leasehold improvements | 222,397 | 205,929 | 208,900 | ||||||||||
2,228,026 | 2,098,073 | 2,133,095 | |||||||||||
Less: accumulated depreciation | (1,593,253 | ) | (1,522,785 | ) | (1,539,882 | ) | |||||||
$ | 634,773 | $ | 575,288 | $ | 593,213 | ||||||||
Goodwill
Goodwill | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Goodwill | 5 | Goodwill | |||||||||||
Goodwill is allocated to various reporting units, which are at the operating segment level, for purposes 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 amount may exceed its fair value. | |||||||||||||
In the third quarter of 2013, Mattel assessed its goodwill for impairment by evaluating qualitative factors for each of its reporting units in accordance with Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment, and determined that it was not more likely than not that the fair values of its reporting units were less than the carrying amounts. As a result of this determination, the quantitative two-step goodwill impairment test was deemed unnecessary. | |||||||||||||
The change in the carrying amount of goodwill by operating segment for the nine months ended September 30, 2013 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America and American Girl operating segments selling those brands, thereby causing a foreign currency translation impact for these operating segments. | |||||||||||||
December 31, | Currency | September 30, | |||||||||||
2012 | Exchange Rate | 2013 | |||||||||||
Impact | |||||||||||||
(In thousands) | |||||||||||||
North America | $ | 546,898 | $ | (160 | ) | $ | 546,738 | ||||||
International | 320,169 | (704 | ) | 319,465 | |||||||||
American Girl | 213,731 | 156 | 213,887 | ||||||||||
Total goodwill | $ | 1,080,798 | $ | (708 | ) | $ | 1,080,090 | ||||||
Acquisition of HIT Entertainment™ | |||||||||||||
On February 1, 2012, Mattel acquired Helium Holdings 1A Ltd, a private limited company existing under the laws of Jersey (“HIT Entertainment”), pursuant to the Stock Purchase Agreement dated as of October 23, 2011, between Mattel’s wholly-owned subsidiary, Mattel Entertainment Holdings Limited, a private limited company existing under the laws of England and Wales (the “Purchasing Sub”), HIT Entertainment’s parent company, HIT Entertainment Scottish Limited Partnership, a limited partnership existing under the laws of Scotland and majority-owned by a consortium of funds led by Apax Partners, LLP and its affiliates (the “Selling Stockholder”) and, with respect to certain provisions thereof, Mattel (the “Purchase Agreement”). Pursuant to the terms set forth in the Purchase Agreement, Mattel indirectly acquired, through the Purchasing Sub, 100% of the issued and outstanding shares of HIT Entertainment from the Selling Stockholder for total cash consideration of $713.5 million, including payment for acquired cash, subject to customary adjustments. HIT Entertainment owns and licenses a diverse portfolio of pre-school entertainment brands, including Thomas & Friends®. | |||||||||||||
The total consideration was allocated to the assets acquired and liabilities assumed based on their estimated fair values. As a result of the acquisition, Mattel recognized $510.7 million of identifiable intangible assets (primarily related to intellectual property rights), $49.4 million of net liabilities assumed (primarily related to deferred tax liabilities), and $252.2 million of goodwill, which is not deductible for tax purposes. The fair values of the identifiable intangible assets were estimated based on the multi-period excess earnings method, using Level 3 inputs within the fair value hierarchy, which included forecasted future cash flows, long-term revenue growth rates, and the weighted average cost of capital. Goodwill relates to a number of factors built into the purchase price, including the future earnings and cash flow potential of the business, as well as the complementary strategic fit and the resulting synergies it brings to Mattel’s existing operations. | |||||||||||||
Mattel finalized the valuation of the assets acquired and liabilities assumed in the fourth quarter of 2012, which resulted in adjustments to the purchase price allocation during the measurement period. As such, Mattel has retrospectively adjusted the provisional amounts recorded in its consolidated balance sheet as of September 30, 2012 as if the valuation of the assets acquired and liabilities assumed was finalized as of the acquisition date. The retrospective adjustments resulted in an increase to the net liabilities assumed of approximately $9 million and goodwill of approximately $9 million, including an adjustment to the consideration paid to acquire HIT Entertainment of less than $0.1 million, which was also recognized as a decrease to Mattel’s other current assets in the consolidated balance sheet. The adjustment to the consideration paid also resulted in a retrospective adjustment to the consolidated statement of cash flows, which increased cash flows used for investing activities and decreased cash flows used for operating activities by less than $0.1 million for the nine months ended September 30, 2012. No retrospective adjustments have been made to the consolidated statements of operations for the three and nine months ended September 30, 2012. | |||||||||||||
Additionally, during the three and nine months ended September 30, 2013, Mattel recognized approximately $2 million and $5 million of integration costs, respectively. During the three and nine months ended September 30, 2012, Mattel recognized approximately $3 million and $14 million of integration costs, respectively. Mattel also recognized approximately $6 million of transaction costs during the nine months ended September 30, 2012. No transaction costs were incurred during the three months ended September 30, 2012 or during the three and nine months ended September 30, 2013. Integration and transaction costs are recorded within other selling and administrative expenses in the consolidated statements of operations. The pro forma and actual results of operations for this acquisition have not been presented because they are not material. |
Other_Noncurrent_Assets
Other Noncurrent Assets | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Noncurrent Assets | 6 | Other Noncurrent Assets | |||||||||||
Other noncurrent assets include the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Nonamortizable identifiable intangibles | $ | 504,241 | $ | 617,223 | $ | 617,223 | |||||||
Deferred income taxes | 407,756 | 465,662 | 374,667 | ||||||||||
Identifiable intangibles (net of amortization of $72.3 million, $61.8 million, and $64.9 million, respectively) | 178,569 | 91,369 | 88,786 | ||||||||||
Other | 253,316 | 215,870 | 215,293 | ||||||||||
$ | 1,343,882 | $ | 1,390,124 | $ | 1,295,969 | ||||||||
In connection with the acquisition of HIT Entertainment, as more fully described in “Note 5 to the Consolidated Financial Statements—Goodwill” of this Quarterly Report on Form 10-Q, Mattel recognized $495.0 million of nonamortizable identifiable intangible assets and $15.7 million of amortizable identifiable intangible assets, primarily related to intellectual property rights. | |||||||||||||
During the second quarter of 2013, Mattel changed its brand strategy for Polly Pocket®, which includes a more focused allocation of resources to support the Polly Pocket brand in specific markets, resulting in a reduction of the forecasted future cash flows of the brand. As a result of the change, Mattel tested the Polly Pocket trade name for impairment. The Polly Pocket trade name, which had a carrying value of approximately $113 million, was previously determined to be a nonamortizable intangible asset. Its fair value was determined to be approximately $99 million based on a discounted cash flow analysis using the multi-period excess earnings method. Level 3 inputs, including forecasted future cash flows, an estimated useful life, and a discount rate, were used in the valuation. Since the fair value of the asset was below the carrying value, Mattel recorded an impairment charge of approximately $14 million, which is reflected within other selling and administrative expenses for the North America and International operating segments. | |||||||||||||
In conjunction with the Polly Pocket trade name impairment test, Mattel reassessed the intangible asset’s nonamortizable classification and determined that the nonamortizable classification could no longer be supported. During the second quarter of 2013, the Polly Pocket trade name was reclassified as an amortizable intangible asset, and the remaining fair value of the asset is being amortized over its estimated remaining useful life. | |||||||||||||
Mattel tests nonamortizable intangible assets, including trademarks and trade names, for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying values may exceed the fair values. During the third quarter of 2013, Mattel performed annual quantitative impairment assessments and determined that the remaining nonamortizable intangible assets were not impaired. | |||||||||||||
Mattel also tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Amortizable intangible assets were determined to not be impaired during the three and nine months ended September 30, 2013. |
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Accrued Liabilities | 7 | Accrued Liabilities | |||||||||||
Accrued liabilities include the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Litigation accrual | $ | 137,800 | $ | — | $ | 137,800 | |||||||
Advertising and promotion | 112,013 | 138,036 | 87,878 | ||||||||||
Royalties | 110,463 | 91,003 | 97,051 | ||||||||||
Taxes other than income taxes | 93,665 | 87,132 | 80,673 | ||||||||||
Other | 429,151 | 418,544 | 484,346 | ||||||||||
$ | 883,092 | $ | 734,715 | $ | 887,748 | ||||||||
Seasonal_Financing
Seasonal Financing | 9 Months Ended | |
Sep. 30, 2013 | ||
Seasonal Financing | 8 | Seasonal Financing |
Mattel maintains and periodically amends or replaces its domestic unsecured committed revolving credit facility with a commercial bank group. The facility is used as a back-up to Mattel’s commercial paper program, which is used as the primary source of financing for the seasonal working capital requirements of its domestic subsidiaries. The agreement governing the credit facility was amended and restated on March 11, 2013 to, among other things, (i) extend the maturity date of the credit facility to March 12, 2018, (ii) increase aggregate commitments under the credit facility to $1.60 billion, with an “accordion feature,” which allows Mattel to increase the aggregate availability under the credit facility to $1.85 billion under certain circumstances, (iii) decrease the applicable interest rate margins to a range of 0.00% to 0.75% above the applicable base rate for base rate loans and 0.88% to 1.75% above the applicable London Interbank Borrowing Rate (“LIBOR”) for Eurodollar rate loans, in each case depending on Mattel’s senior unsecured long-term debt rating, and (iv) decrease commitment fees to a range of 0.08% to 0.28% of the unused commitments under the credit facility. | ||
The amended facility has a borrowing capacity of up to $1.60 billion over a term of five years. Prior to the amendment, the facility permitted Mattel to borrow up to $1.40 billion and had two years remaining to maturity. The proportion of unamortized debt issuance costs from the prior facility renewal related to creditors involved in both the prior facility and amended facility and borrowing costs incurred as a result of the amendment were deferred and will be amortized over the term of the amended facility. | ||
Mattel is required to meet financial ratio covenants at the end of each quarter and fiscal year, using the formulae specified in the credit facility agreement to calculate the ratios. Mattel was in compliance with such covenants at September 30, 2013. | ||
The credit agreement is a material agreement and failure to comply with the financial ratio covenants may result in an event of default under the terms of the credit facility. If Mattel defaulted under the terms of the credit facility, its ability to meet its seasonal financing requirements could be adversely affected. |
Longterm_Debt
Long-term Debt | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Long-term Debt | 9 | Long-term Debt | |||||||||||
Long-term debt includes the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Medium-term notes due November 2013 | $ | 50,000 | $ | 50,000 | $ | 50,000 | |||||||
2008 Senior Notes | — | 350,000 | 350,000 | ||||||||||
2010 Senior Notes due October 2020 and October 2040 | 500,000 | 500,000 | 500,000 | ||||||||||
2011 Senior Notes due November 2016 and November 2041 | 600,000 | 600,000 | 600,000 | ||||||||||
2013 Senior Notes due March 2018 and March 2023 | 500,000 | — | — | ||||||||||
1,650,000 | 1,500,000 | 1,500,000 | |||||||||||
Less: current portion | (50,000 | ) | (350,000 | ) | (400,000 | ) | |||||||
Total long-term debt | $ | 1,600,000 | $ | 1,150,000 | $ | 1,100,000 | |||||||
In March 2013, Mattel issued $250.0 million aggregate principal amount of 1.70% senior unsecured notes (“1.70% Senior Notes”) due March 15, 2018 and $250.0 million aggregate principal amount of 3.15% senior unsecured notes (“3.15% Senior Notes”) due March 15, 2023 (collectively, “2013 Senior Notes”). Interest on the 2013 Senior Notes is payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2013. Mattel may redeem all or part of the 1.70% Senior Notes at any time or from time to time at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to but excluding the redemption date, and (ii) a “make-whole” amount based on the yield of a comparable US Treasury security plus 15 basis points. Mattel may redeem all or part of the 3.15% Senior Notes at any time or from time to time prior to December 15, 2022 (three months prior to the maturity date of the 3.15% Senior Notes) at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to but excluding the redemption date, and (ii) a “make-whole” amount based on the yield of a comparable US Treasury security plus 20 basis points. Mattel may redeem all or part of the 3.15% Senior Notes at any time or from time to time on or after December 15, 2022 (three months prior to the maturity date for the 3.15% Senior Notes) at its option, at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to but excluding the redemption date. | |||||||||||||
During the first quarter of 2013, Mattel repaid $350.0 million aggregate principal amount of its 5.625% senior unsecured notes due March 15, 2013 (“2008 Senior Notes”) in connection with their scheduled maturity using proceeds from the issuance of the 2013 Senior Notes. |
Other_Noncurrent_Liabilities
Other Noncurrent Liabilities | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Noncurrent Liabilities | 10 | Other Noncurrent Liabilities | |||||||||||
Other noncurrent liabilities include the following: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Benefit plan liabilities | $ | 270,482 | $ | 263,529 | $ | 284,614 | |||||||
Noncurrent tax liabilities | 188,122 | 192,143 | 213,658 | ||||||||||
Other | 157,913 | 145,789 | 145,457 | ||||||||||
$ | 616,517 | $ | 601,461 | $ | 643,729 | ||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | 11 | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
In 2013, Mattel adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires an entity to present either on the face of the statement where net income is presented or in the notes to the financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The following tables present changes in the accumulated balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income: | |||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2013 | $ | 3,880 | $ | (183,791 | ) | $ | (336,009 | ) | $ | (515,920 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (10,614 | ) | 236 | 34,757 | 24,379 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 321 | 3,641 | — | 3,962 | |||||||||||||
Net (decrease) increase in other comprehensive income | (10,293 | ) | 3,877 | 34,757 | 28,341 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2013 | $ (6,413 | ) | $ (179,914 | ) | $ (301,252 | ) | $ (487,579 | ) | |||||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2012 | $ | (2,583 | ) | $ | (190,656 | ) | $ | (271,247 | ) | $ | (464,486 | ) | |||||
Other comprehensive (loss) income before reclassifications | (3,348 | ) | 861 | (30,005 | ) | (32,492 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (482 | ) | 9,881 | — | 9,399 | ||||||||||||
Net (decrease) increase in other comprehensive income | (3,830 | ) | 10,742 | (30,005 | ) | (23,093 | ) | ||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2013 | $ | (6,413 | ) | $ | (179,914 | ) | $ | (301,252 | ) | $ | (487,579 | ) | |||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2012 | $ | 26,530 | $ | (168,547 | ) | $ | (317,214 | ) | $ | (459,231 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 3,933 | (3,286 | ) | 28,944 | 29,591 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (12,573 | ) | 6,140 | — | (6,433 | ) | |||||||||||
Net (decrease) increase in other comprehensive income | (8,640 | ) | 2,854 | 28,944 | 23,158 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2012 | $ | 17,890 | $ (165,693 | ) | $ (288,270 | ) | $ (436,073 | ) | |||||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2011 | $ | 24,616 | $ | (172,398 | ) | $ | (298,863 | ) | $ | (446,645 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 14,713 | (7,597 | ) | 10,593 | 17,709 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (21,439 | ) | 14,302 | — | (7,137 | ) | |||||||||||
Net (decrease) increase in other comprehensive income | (6,726 | ) | 6,705 | 10,593 | 10,572 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2012 | $ | 17,890 | $ | (165,693 | ) | $ | (288,270 | ) | $ | (436,073 | ) | ||||||
The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income to the statement of operations: | |||||||||||||||||
For the Three | For the Three | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
(Loss) gain on foreign currency forward exchange contracts | $ | (589 | ) | $ | 12,540 | Cost of sales | |||||||||||
268 | 33 | Provision for income taxes | |||||||||||||||
$ | (321 | ) | $ | 12,573 | Net income | ||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||
Prior service credit | $ | 541 | $ | 398 | (a) | ||||||||||||
Actuarial loss | (4,406 | ) | (5,950 | ) | (a) | ||||||||||||
Settlement loss | (1,835 | ) | (3,534 | ) | (a) | ||||||||||||
(5,700 | ) | (9,086 | ) | ||||||||||||||
2,059 | 2,946 | Provision for income taxes | |||||||||||||||
$ | (3,641 | ) | $ | (6,140 | ) | Net income | |||||||||||
For the Nine | For the Nine | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
Gain on foreign currency forward exchange contracts | $ | 224 | $ | 21,572 | Cost of sales | ||||||||||||
258 | (133 | ) | Provision for income taxes | ||||||||||||||
$ | 482 | $ | 21,439 | Net income | |||||||||||||
For the Nine | For the Nine | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||
Prior service credit | $ | 793 | $ | 377 | (a) | ||||||||||||
Actuarial loss | (14,698 | ) | (17,490 | ) | (a) | ||||||||||||
Settlement loss | (1,835 | ) | (3,534 | ) | (a) | ||||||||||||
(15,740 | ) | (20,647 | ) | ||||||||||||||
5,859 | 6,345 | Provision for income taxes | |||||||||||||||
$ | (9,881 | ) | $ | (14,302 | ) | Net income | |||||||||||
(a) | The amortization of prior service credit and actuarial loss and the settlement 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 US dollar. The translation of its net investments in subsidiaries with non-US dollar functional currencies subjects Mattel to currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-US dollar functional currencies are translated into US dollars at fiscal period-end exchange rates. Income, expense, and cash flow 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 $30.0 million for the nine months ended September 30, 2013, primarily due to the weakening of the Brazilian real, Indonesian rupiah, and Australian dollar against the US dollar, partially offset by the strengthening of the Euro against the US dollar. Currency translation adjustments resulted in a net gain of $10.6 million for the nine months ended September 30, 2012, primarily due to the strengthening of the Mexican peso and British pound sterling against the US dollar. | |||||||||||||||||
Derivative_Instruments
Derivative Instruments | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Instruments | 12 | Derivative Instruments | |||||||||||||||||
Mattel 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. Additionally, Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. As of September 30, 2013, September 30, 2012, and December 31, 2012, Mattel held foreign currency forward exchange contracts with notional amounts of approximately $1.46 billion, $1.33 billion, and $1.36 billion, respectively. | |||||||||||||||||||
The following table presents Mattel’s derivative assets and liabilities: | |||||||||||||||||||
Asset Derivatives | |||||||||||||||||||
Balance Sheet Classification | Fair Value | ||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Prepaid expenses and | $ | 1,146 | $ | 19,403 | $ | 3,064 | ||||||||||||
other current assets | |||||||||||||||||||
Foreign currency forward exchange contracts | Other noncurrent | — | 465 | 4 | |||||||||||||||
assets | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 1,146 | $ | 19,868 | $ | 3,068 | |||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Prepaid expenses and | $ | 2,224 | $ | — | $ | — | ||||||||||||
other current assets | |||||||||||||||||||
Total | $ | 3,370 | $ | 19,868 | $ | 3,068 | |||||||||||||
Liability Derivatives | |||||||||||||||||||
Balance Sheet Classification | Fair Value | ||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Accrued liabilities | $ | 13,171 | $ | 8,528 | $ | 8,093 | ||||||||||||
Foreign currency forward exchange contracts | Other noncurrent | 1,234 | 394 | 177 | |||||||||||||||
liabilities | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 14,405 | $ | 8,922 | $ | 8,270 | |||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | Accrued liabilities | $ | 703 | $ | 2,821 | $ | 487 | ||||||||||||
Total | $ | 15,108 | $ | 11,743 | $ | 8,757 | |||||||||||||
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 | For the Three Months Ended | Statements of | |||||||||||||||||
September 30, 2013 | September 30, 2012 | Operations | |||||||||||||||||
Amount of Gain | Amount of | Amount of Gain | Amount of | Classification | |||||||||||||||
(Loss) Recognized | Gain (Loss) | (Loss) Recognized | Gain (Loss) | ||||||||||||||||
in OCI | Reclassified from | in OCI | Reclassified from | ||||||||||||||||
Accumulated OCI | Accumulated OCI | ||||||||||||||||||
to Statements of | to Statements of | ||||||||||||||||||
Operations | Operations | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | (10,614 | ) | $ | (321 | ) | $ | 3,933 | $ | 12,573 | Cost of sales | ||||||||
For the Nine Months Ended | For the Nine Months Ended | Statements of | |||||||||||||||||
30-Sep-13 | 30-Sep-12 | Operations | |||||||||||||||||
Amount of Gain | Amount of | Amount of Gain | Amount of | Classification | |||||||||||||||
(Loss) Recognized | Gain (Loss) | (Loss) Recognized | Gain (Loss) | ||||||||||||||||
in OCI | Reclassified from | in OCI | Reclassified from | ||||||||||||||||
Accumulated OCI | Accumulated OCI | ||||||||||||||||||
to Statements of | to Statements of | ||||||||||||||||||
Operations | Operations | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | (3,348 | ) | $ | 482 | $ | 14,713 | $ | 21,439 | Cost of sales | |||||||||
The net loss of $0.3 million and net gain of $0.5 million reclassified from accumulated other comprehensive loss to the consolidated statements of operations for the three and nine months ended September 30, 2013, respectively, and the net gains of $12.6 million and $21.4 million reclassified from accumulated other comprehensive loss to the consolidated statements of operations for the three and nine months ended September 30, 2012, respectively, are offset by the changes in cash flows associated with the underlying hedged transactions. | |||||||||||||||||||
Amount of Gain | Statements of Operations | ||||||||||||||||||
(Loss) Recognized in the | Classification | ||||||||||||||||||
Statements of Operations | |||||||||||||||||||
For the Three | For the Three | ||||||||||||||||||
Months Ended | Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | 27,911 | $ | 15,796 | Non-operating income/expense | ||||||||||||||
Foreign currency forward exchange contracts | (3,775 | ) | (102 | ) | Cost of sales | ||||||||||||||
Total | $ | 24,136 | $ | 15,694 | |||||||||||||||
Amount of Gain | Statements of Operations | ||||||||||||||||||
(Loss) Recognized in the | Classification | ||||||||||||||||||
Statements of Operations | |||||||||||||||||||
For the Nine | For the Nine | ||||||||||||||||||
Months Ended | Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | 10,590 | $ | 7,689 | Non-operating income/expense | ||||||||||||||
Foreign currency forward exchange contracts | (3,744 | ) | (637 | ) | Cost of sales | ||||||||||||||
Total | $ | 6,846 | $ | 7,052 | |||||||||||||||
The net gains of $24.1 million and $6.8 million recognized in the consolidated statements of operations for the three and nine months ended September 30, 2013, respectively, and the net gains of $15.7 million and $7.1 million recognized in the consolidated statements of operations for the three and nine months ended September 30, 2012, respectively, are offset by foreign currency transaction gains and losses on the related hedged balances. | |||||||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Measurements | 13 | Fair Value Measurements | |||||||||||||||
The following table presents information about Mattel’s assets and liabilities measured and reported in the financial statements at fair value 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. | ||||||||||||||||
• | 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 measured and reported at fair value on a recurring basis include the following: | |||||||||||||||||
September 30, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 3,370 | $ | — | $ | 3,370 | |||||||||
Auction rate securities (b) | — | — | 26,758 | 26,758 | |||||||||||||
Total assets | $ | — | $ | 3,370 | $ | 26,758 | $ | 30,128 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 15,108 | $ | — | $ | 15,108 | |||||||||
September 30, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 19,868 | $ | — | $ | 19,868 | |||||||||
Auction rate securities (b) | — | — | 13,656 | 13,656 | |||||||||||||
Total assets | $ | — | $ | 19,868 | $ | 13,656 | $ | 33,524 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 11,743 | $ | — | $ | 11,743 | |||||||||
December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 3,068 | $ | — | $ | 3,068 | |||||||||
Auction rate securities (b) | — | — | 19,256 | 19,256 | |||||||||||||
Total assets | $ | — | $ | 3,068 | $ | 19,256 | $ | 22,324 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 8,757 | $ | — | $ | 8,757 | |||||||||
(a) | The fair value of the foreign currency forward exchange contracts 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 auction rate securities is estimated using a discounted cash flow model based on (i) estimated interest rates, timing, and amount of cash flows, (ii) credit spreads, recovery rates, and credit quality of the underlying securities, (iii) illiquidity considerations, and (iv) market correlation. | ||||||||||||||||
The following table presents information about Mattel’s assets measured and reported at fair value on a recurring basis using significant Level 3 inputs: | |||||||||||||||||
Level 3 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2012 | $ | 19,256 | |||||||||||||||
Unrealized gain | 7,502 | ||||||||||||||||
Balance at September 30, 2013 | $ | 26,758 | |||||||||||||||
Other Financial Instruments | |||||||||||||||||
Mattel’s financial instruments include cash and equivalents, accounts receivable and payable, short-term borrowings, and accrued liabilities. The carrying values of these instruments approximate their fair values because of their short-term nature. | |||||||||||||||||
The estimated fair value of Mattel’s long-term debt, including the current portion, was $1.69 billion (compared to a carrying value of $1.65 billion) as of September 30, 2013, $1.63 billion (compared to a carrying value of $1.50 billion) as of September 30, 2012, and $1.63 billion (compared to a carrying value of $1.50 billion) as of December 31, 2012. 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. | |||||||||||||||||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share | 14 | Earnings Per Share | |||||||||||||||
Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Certain of Mattel’s restricted stock units (“RSUs”) are considered participating securities because they contain nonforfeitable rights to dividend equivalents. | |||||||||||||||||
Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic earnings per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income allocable to common shares by the weighted average number of common shares for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table reconciles earnings per common share for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Basic: | |||||||||||||||||
Net income | $ | 422,836 | $ | 365,937 | $ | 534,695 | $ | 469,984 | |||||||||
Less net income allocable to participating RSUs (a) | (3,642 | ) | (3,301 | ) | (4,889 | ) | (4,517 | ) | |||||||||
Net income available for basic common shares | $ | 419,194 | $ | 362,636 | $ | 529,806 | $ | 465,467 | |||||||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | |||||||||||||
Basic net income per common share | $ | 1.22 | $ | 1.06 | $ | 1.54 | $ | 1.36 | |||||||||
Diluted: | |||||||||||||||||
Net income | $ | 422,836 | $ | 365,937 | $ | 534,695 | $ | 469,984 | |||||||||
Less net income allocable to participating RSUs (a) | (3,615 | ) | (3,266 | ) | (4,872 | ) | (4,497 | ) | |||||||||
Net income available for diluted common shares | $ | 419,221 | $ | 362,671 | $ | 529,823 | $ | 465,487 | |||||||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | |||||||||||||
Weighted average common equivalent shares arising from: | |||||||||||||||||
Dilutive stock options and non-participating RSUs | 3,416 | 4,527 | 3,893 | 4,384 | |||||||||||||
Weighted average number of common and potential common shares | 346,695 | 347,122 | 348,626 | 345,390 | |||||||||||||
Diluted net income per common share | $ | 1.21 | $ | 1.04 | $ | 1.52 | $ | 1.35 | |||||||||
(a) | During the three and nine months ended September 30, 2013 and 2012, Mattel allocated a proportionate share of both dividends and undistributed earnings to participating RSUs. | ||||||||||||||||
The calculation of potential common shares assumes the exercise of dilutive stock options and vesting of non-participating RSUs, net of assumed treasury share repurchases at average market prices. Nonqualified stock options and non-participating RSUs totaling 1.0 million and 1.1 million shares were excluded from the calculation of diluted net income per common share for the three months ended September 30, 2013 and 2012, respectively, because they were antidilutive. Nonqualified stock options and non-participating RSUs totaling 0.3 million and 0.4 million shares were excluded from the calculation of diluted net income per common share for the nine months ended September 30, 2013 and 2012, respectively, because they were antidilutive. |
Employee_Benefit_Plans
Employee Benefit Plans | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Employee Benefit Plans | 15 | 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 “Note 4 to the Consolidated Financial Statements—Employee Benefit Plans” in its 2012 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 Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 2,835 | $ | 3,326 | $ | 10,523 | $ | 9,827 | |||||||||
Interest cost | 6,150 | 7,501 | 19,415 | 22,472 | |||||||||||||
Expected return on plan assets | (7,630 | ) | (7,837 | ) | (22,288 | ) | (23,361 | ) | |||||||||
Amortization of prior service credit | (541 | ) | (398 | ) | (793 | ) | (377 | ) | |||||||||
Recognized actuarial loss | 4,053 | 5,923 | 14,265 | 17,403 | |||||||||||||
Settlement loss | 1,835 | 3,534 | 1,835 | 3,534 | |||||||||||||
$ | 6,702 | $ | 12,049 | $ | 22,957 | $ | 29,498 | ||||||||||
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 Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 17 | $ | 21 | $ | 61 | $ | 59 | |||||||||
Interest cost | 512 | 369 | 1,188 | 1,059 | |||||||||||||
Recognized actuarial loss | 353 | 27 | 433 | 87 | |||||||||||||
$ | 882 | $ | 417 | $ | 1,682 | $ | 1,205 | ||||||||||
During the nine months ended September 30, 2013, Mattel made cash contributions totaling approximately $23 million and $1 million to its defined benefit pension and postretirement benefit plans, respectively. | |||||||||||||||||
ShareBased_Payments
Share-Based Payments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Share-Based Payments | 16 | Share-Based Payments | |||||||||||||||
Mattel has various stock compensation plans, which are more fully described in “Note 7 to the Consolidated Financial Statements—Share-Based Payments” in its 2012 Annual Report on Form 10-K. Under the Mattel, Inc. 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. Both stock options and time-vesting RSUs generally provide for vesting over a period of three years from the date of grant. | |||||||||||||||||
Compensation expense, included within other selling and administrative expenses, related to stock options and RSUs is as follows: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Stock option compensation expense | $ | 3,493 | $ | 3,701 | $ | 7,711 | $ | 9,192 | |||||||||
RSU compensation expense | 16,139 | 13,928 | 39,502 | 33,630 | |||||||||||||
$ | 19,632 | $ | 17,629 | $ | 47,213 | $ | 42,822 | ||||||||||
As of September 30, 2013, total unrecognized compensation cost related to unvested share-based payments totaled $90.5 million and is expected to be recognized over a weighted-average period of 2.1 years. | |||||||||||||||||
Mattel uses treasury shares purchased under its share repurchase program to satisfy stock option exercises and the vesting of RSUs. Cash received for stock option exercises for the nine months ended September 30, 2013 and 2012 was $116.1 million and $104.9 million, respectively. |
Other_Selling_and_Administrati
Other Selling and Administrative Expenses | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Other Selling and Administrative Expenses | 17 | Other Selling and Administrative Expenses | |||||||||||||||
Other selling and administrative expenses include the following: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Design and development | $ | 52,659 | $ | 52,070 | $ | 148,043 | $ | 146,231 | |||||||||
Identifiable intangible asset amortization | 3,468 | 3,081 | 9,199 | 8,797 |
Foreign_Currency_Transaction_G
Foreign Currency Transaction Gains and Losses | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Foreign Currency Transaction Gains and Losses | 18 | Foreign Currency Transaction Gains and Losses | |||||||||||||||
Currency exchange rate fluctuations may impact Mattel’s results of operations and cash flows. Mattel’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income to which they relate in the consolidated statements of operations. For hedges of intercompany loans and advances, which do not qualify for hedge accounting treatment, the gains or losses on the hedges resulting from changes in fair value as well as the offsetting transaction gains or losses on the related hedged items, along with unhedged items, are recognized in non-operating income (expense), net in the consolidated statements of operations. Inventory purchase and sale transactions denominated in the Euro, British pound sterling, Mexican peso, Brazilian real, and Indonesian rupiah are the primary transactions that cause foreign currency transaction exposure for Mattel. | |||||||||||||||||
Currency transaction gains (losses) included in the consolidated statements of operations are as follows: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Operating income | $ | 13,260 | $ | 20,086 | $ | 27,375 | $ | 42,559 | |||||||||
Other non-operating income (expense), net | 224 | 1,308 | (698 | ) | 1,713 | ||||||||||||
Net transaction gains | $ | 13,484 | $ | 21,394 | $ | 26,677 | $ | 44,272 | |||||||||
Income_Taxes
Income Taxes | 9 Months Ended | |
Sep. 30, 2013 | ||
Income Taxes | 19 | Income Taxes |
Mattel’s provision for income taxes was $102.5 million and $118.4 million for the nine months ended September 30, 2013 and 2012, respectively. During the three and nine months ended September 30, 2013, Mattel recognized net discrete tax benefits of $17.0 million and $32.2 million, respectively, primarily related to reassessments of prior years’ tax liabilities based on the status of current audits and tax filings in various jurisdictions, settlements, and enacted tax law changes. During the three and nine months ended September 30, 2012, Mattel recognized net discrete tax benefits of $5.5 million and $16.0 million, primarily related to reassessments of prior years’ tax liabilities based on the status of audits and tax filings in various jurisdictions, settlements, and enacted tax law changes. | ||
In August of 2013, Mattel reached a settlement with the Internal Revenue Service (“IRS”) Office of Appeals regarding all unresolved issues in the IRS’s examination of Mattel’s 2008 and 2009 federal income tax returns. As a result, Mattel’s total unrecognized tax benefits decreased by $190.0 million. A majority of the decrease related to a capital loss for which Mattel recognized no financial statement benefit. | ||
In the normal course of business, Mattel is regularly audited by the IRS. The IRS is currently auditing Mattel’s 2010 and 2011 federal income tax returns. The IRS audit plan calls for the completion of the current examination in the first quarter of 2014. While it is reasonably possible that a significant increase or decrease in Mattel’s unrecognized tax benefits may occur in the next twelve months related to this IRS audit, a current estimate of the range of reasonably possible outcomes cannot be made at this time. | ||
Mattel is also regularly audited by state and foreign tax authorities. Based on the current status of 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 $5 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. |
Contingencies
Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Contingencies | 20 | Contingencies |
Litigation Related to Carter Bryant and MGA Entertainment, Inc. | ||
In April 2004, Mattel filed a lawsuit in Los Angeles County Superior Court against Carter Bryant (“Bryant”), a former Mattel design employee. The suit alleges that Bryant aided and assisted a Mattel competitor, MGA Entertainment, Inc. (“MGA”), during the time he was employed by Mattel, in violation of his contractual and other duties to Mattel. In September 2004, Bryant asserted counterclaims against Mattel, including counterclaims in which Bryant sought, as a putative class action representative, to invalidate Mattel’s Confidential Information and Proprietary Inventions Agreements with its employees. Bryant also removed Mattel’s suit to the United States District Court for the Central District of California. In December 2004, MGA intervened as a party-defendant in Mattel’s action against Bryant, asserting that its rights to Bratz properties are at stake in the litigation. | ||
Separately, in November 2004, Bryant filed an action against Mattel in the United States District Court for the Central District of California. The action sought a judicial declaration that Bryant’s purported conveyance of rights in Bratz was proper and that he did not misappropriate Mattel property in creating Bratz. | ||
In April 2005, MGA filed suit against Mattel in the United States District Court for the Central District of California. MGA’s action alleges claims of trade dress infringement, trade dress dilution, false designation of origin, unfair competition, and unjust enrichment. The suit alleges, among other things, that certain products, themes, packaging, and/or television commercials in various Mattel product lines have infringed upon products, themes, packaging, and/or television commercials for various MGA product lines, including Bratz. The complaint also asserts that various alleged Mattel acts with respect to unidentified retailers, distributors, and licensees have damaged MGA and that various alleged acts by industry organizations, purportedly induced by Mattel, have damaged MGA. MGA’s suit alleges that MGA has been damaged in an amount “believed to reach or exceed tens of millions of dollars” and further seeks punitive damages, disgorgement of Mattel’s profits and injunctive relief. | ||
In June 2006, the three cases were consolidated in the United States District Court for the Central District of California. On July 17, 2006, the Court issued an order dismissing all claims that Bryant had asserted against Mattel, including Bryant’s purported counterclaims to invalidate Mattel’s Confidential Information and Proprietary Inventions Agreements with its employees, and Bryant’s claims for declaratory relief. | ||
In November 2006, Mattel asked the Court for leave to file an Amended Complaint that included not only additional claims against Bryant, but also included claims for copyright infringement, Racketeer Influenced and Corrupt Organizations (“RICO”) violations, misappropriation of trade secrets, intentional interference with contract, aiding and abetting breach of fiduciary duty and breach of duty of loyalty, and unfair competition, among others, against MGA, its Chief Executive Officer Isaac Larian, certain MGA affiliates and an MGA employee. The RICO claim alleged that MGA stole Bratz and then, by recruiting and hiring key Mattel employees and directing them to bring with them Mattel confidential and proprietary information, unfairly competed against Mattel using Mattel’s trade secrets, confidential information, and key employees to build their business. On January 12, 2007, the Court granted Mattel leave to file these claims as counterclaims in the consolidated cases, which Mattel did that same day. | ||
Mattel sought to try all of its claims in a single trial, but in February 2007, the Court decided that the consolidated cases would be tried in two phases, with the first trial to determine claims and defenses related to Mattel’s ownership of Bratz works and whether MGA infringed those works. On May 19, 2008, Bryant reached a settlement agreement with Mattel and is no longer a defendant in the litigation. In the public stipulation entered by Mattel and Bryant in connection with the resolution, Bryant agreed that he was and would continue to be bound by all prior and future Court Orders relating to Bratz ownership and infringement, including the Court’s summary judgment rulings. | ||
The first phase of the first trial, which began on May 27, 2008, resulted in a unanimous jury verdict on July 17, 2008 in favor of Mattel. The jury found that almost all of the Bratz design drawings and other works in question were created by Bryant while he was employed at Mattel; that MGA and Isaac Larian intentionally interfered with the contractual duties owed by Bryant to Mattel, aided and abetted Bryant’s breaches of his duty of loyalty to Mattel, aided and abetted Bryant’s breaches of the fiduciary duties he owed to Mattel, and converted Mattel property for their own use. The same jury determined that defendants MGA, Larian, and MGA Entertainment (HK) Limited infringed Mattel’s copyrights in the Bratz design drawings and other Bratz works, and awarded Mattel total damages of approximately $100 million against the defendants. On December 3, 2008, the Court issued a series of orders rejecting MGA’s equitable defenses and granting Mattel’s motions for equitable relief, including an order enjoining the MGA party defendants from manufacturing, marketing, or selling certain Bratz fashion dolls or from using the “Bratz” name. The Court stayed the effect of the December 3, 2008 injunctive orders until further order of the Court and entered a further specified stay of the injunctive orders on January 7, 2009. | ||
The parties filed and argued additional motions for post-trial relief, including a request by MGA to enter judgment as a matter of law on Mattel’s claims in MGA’s favor and to reduce the jury’s damages award to Mattel. Mattel additionally moved for the appointment of a receiver. On April 27, 2009, the Court entered an order confirming that Bratz works found by the jury to have been created by Bryant during his Mattel employment were Mattel’s property and that hundreds of Bratz female fashion dolls infringe Mattel’s copyrights. The Court also upheld the jury’s award of damages in the amount of $100 million and ordered an accounting of post-trial Bratz sales. The Court further vacated the stay of the December 3, 2008 orders, except to the extent specified by the Court’s January 7, 2009 modification. | ||
MGA appealed the Court’s equitable orders to the Court of Appeals for the Ninth Circuit. On December 9, 2009, the Ninth Circuit heard oral argument on MGA’s appeal and issued an order staying the District Court’s equitable orders pending a further order to be issued by the Ninth Circuit. The Ninth Circuit opinion vacating the relief ordered by the District Court was issued on July 22, 2010. The Ninth Circuit stated that, because of several jury instruction errors it identified, a significant portion—if not all—of the jury verdict and damage award should be vacated. | ||
In its opinion, the Ninth Circuit found that the District Court erred in concluding that Mattel’s Invention agreement unambiguously applied to “ideas;” that it should have considered extrinsic evidence in determining the application of the agreement; and if the conclusion turns on conflicting evidence, it should have been up to the jury to decide. The Ninth Circuit also concluded that the District Judge erred in transferring the entire brand to Mattel based on misappropriated names and that the Court should have submitted to the jury, rather than deciding itself, whether Bryant’s agreement assigned works created outside the scope of his employment and whether Bryant’s creation of the Bratz designs and sculpt was outside of his employment. The Court then went on to address copyright issues which would be raised after a retrial, since Mattel “might well convince a properly instructed jury” that it owns Bryant’s designs and sculpt. The Ninth Circuit stated that the sculpt itself was entitled only to “thin” copyright protection against virtually identical works, while the Bratz sketches were entitled to “broad” protection against substantially similar works; in applying the broad protection, however, the Ninth Circuit found that the lower court had erred in failing to filter out all of the unprotectable elements of Bryant’s sketches. This mistake, the Court said, caused the lower court to conclude that all Bratz dolls were substantially similar to Bryant’s original sketches. | ||
Judge Stephen Larson, who presided over the first trial, retired from the bench during the course of the appeal, and the case was transferred to Judge David O. Carter. After the transfer, Judge Carter granted Mattel leave to file a Fourth Amended Answer and Counterclaims which focused on RICO, trade secret and other claims, and added additional parties, and subsequently granted in part and denied in part a defense motion to dismiss those counterclaims. Later, on August 16, 2010, MGA asserted several new claims against Mattel in response to Mattel’s Fourth Amended Answer and Counterclaims, including claims for alleged trade secret misappropriation, an alleged violation of RICO, and wrongful injunction. Mattel moved to strike and/or dismiss these claims, as well as certain MGA allegations regarding Mattel’s motives for filing suit. The Court granted that motion as to the wrongful injunction claim, which it dismissed with prejudice, and as to the allegations about Mattel’s motives, which it struck. The Court denied the motion as to MGA’s trade secret misappropriation claim and its claim for violations of RICO. | ||
The Court resolved summary judgment motions in late 2010. Among other rulings, the Court dismissed both parties’ RICO claims; dismissed Mattel’s claim for breach of fiduciary duty and portions of other claims as “preempted” by the trade secrets act; dismissed MGA’s trade dress infringement claims; dismissed MGA’s unjust enrichment claim; dismissed MGA’s common law unfair competition claim; and dismissed portions of Mattel’s copyright infringement claim as to “later generation” Bratz dolls. | ||
Trial of all remaining claims began in early January 2011. During the trial, and before the case was submitted to the jury, the Court granted MGA’s motions for judgment as to Mattel’s claims for aiding and abetting breach of duty of loyalty and conversion. The Court also granted a defense motion for judgment on portions of Mattel’s claim for misappropriation of trade secrets relating to thefts by former Mattel employees located in Mexico. | ||
The jury reached verdicts on the remaining claims in April 2011. In those verdicts, the jury ruled against Mattel on its claims for ownership of Bratz-related works, for copyright infringement, and for misappropriation of trade secrets. The jury ruled for MGA on its claim of trade secret misappropriation as to 26 of its claimed trade secrets and awarded $88.5 million in damages. The jury ruled against MGA as to 88 of its claimed trade secrets. The jury found that Mattel’s misappropriation was willful and malicious. | ||
In early August 2011, the Court ruled on post-trial motions. The Court rejected MGA’s unfair competition claims and also rejected Mattel’s equitable defenses to MGA’s misappropriation of trade secrets claim. The Court reduced the jury’s damages award of $88.5 million to $85.0 million. The Court awarded MGA an additional $85.0 million in punitive damages and approximately $140 million in attorney’s fees and costs. The Court entered a judgment which totaled approximately $310 million in favor of MGA. | ||
Mattel appealed the judgment, challenging on appeal the entirety of the District Court’s monetary award in favor of MGA, including both the award of $170 million in damages for alleged trade secret misappropriation and approximately $140 million in attorney’s fees and costs. On January 24, 2013, the Ninth Circuit Court of Appeals issued a ruling on Mattel’s appeal. In that ruling, the Court found that MGA’s claim for trade secrets misappropriation was not compulsory to any Mattel claim and could not be filed as a counterclaim-in-reply. Accordingly, the Court of Appeals vacated the portion of the judgment awarding damages and attorney’s fees and costs to MGA for prevailing on its trade secrets misappropriation claim, totaling approximately $172.5 million. It ruled that, on remand, the District Court must dismiss MGA’s trade secret claim without prejudice. In its ruling, the Court of Appeals also affirmed the District Court’s award of attorney’s fees and costs under the Copyright Act. Accordingly, Mattel recorded a litigation accrual of $137.8 million during the fourth quarter of 2012 to cover these fees and costs. | ||
On February 27, 2013, MGA filed a motion to amend its complaint to reassert the trade secret claim that the Court of Appeals ordered dismissed without prejudice. Mattel believes that it has strong arguments that such an amendment is improper in federal court because the claim is purely one of state law and that even if amendment is allowed, or if MGA were to file the claim in state court, the claim is barred by the statute of limitations, among other defenses, and should be dismissed without a trial. | ||
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 requesting the annulment of its security bonds and promissory notes given to Mattel as well as requesting the 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 $0.5 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 $3.5 million. | ||
During the evidentiary phase a first accounting report was submitted by a court-appointed expert. Such report stated that Yellowstone had invested approximately $2.8 million in its business. Additionally, the court-appointed expert calculated a loss of profits compensation of approximately $1.2 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 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 court upheld Mattel do Brasil’s counterclaim and ordered Yellowstone to pay Mattel do Brasil approximately $3.8 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. 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 $19 million in damages, as adjusted for inflation and interest. The court also awarded Mattel approximately $8 million on its counterclaim, as adjusted for inflation. On August 2, 2013, Mattel filed a motion for clarification since the written decision contained clear errors in terms of amounts awarded and interest and inflation adjustments. Mattel’s motion also asked the court to decide whether Yellowstone’s award could be offset by the counterclaim award, despite Yellowstone’s status as a bankrupt entity. A decision on the clarification motion is expected in the fourth quarter of 2013. Mattel intends to appeal the decision to the Superior Court based on both procedural and substantive grounds. | ||
Mattel believes that it is reasonably possible that a loss in this matter could range from $0 to approximately $19 million. The high end of this range, approximately $19 million, is based on the calculation of the current amount of the damages and loss of profits, including interest and inflation adjustments, reported in the first court-appointed examination report submitted in the lawsuit, plus attorney’s fees. Mattel do Brasil may be entitled to offset its counterclaim award of approximately $8 million, including inflation adjustment, against such loss. The existence of pending motions for clarification filed by both parties and the resulting clarification decision expected to be issued in the fourth quarter of 2013, as well as the procedural aspects of an appeal to the Superior Court, adds some uncertainty to the final outcome of the matter. Mattel believes however that it has good legal grounds for appeal of the decision and does not believe that a loss is probable for this matter. Accordingly, a liability has not been accrued as of September 30, 2013. Mattel may be required to place the full amount of the damage award in escrow pending an appeal decision by the Superior Court. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Information | 21 | Segment Information | |||||||||||||||
Mattel sells a broad variety of toy products which are grouped into three major brand categories: | |||||||||||||||||
Mattel Girls & Boys Brands—including Barbie® fashion dolls and accessories (“Barbie”), Polly Pocket, Little Mommy®, Disney Classics®, and Monster High® (collectively “Other Girls Brands”), Hot Wheels®, Matchbox®, and Tyco R/C® vehicles and play sets (collectively “Wheels”), and CARS®, Disney Planes™, Radica®, Toy Story®, Max Steel®, WWE® Wrestling, Batman®, and games and puzzles (collectively “Entertainment”). | |||||||||||||||||
Fisher-Price Brands—including Fisher-Price®, Little People®, BabyGear™, Laugh & Learn®, and Imaginext® (collectively “Core Fisher-Price”), Dora the Explorer®, Thomas & Friends, Mickey Mouse® Clubhouse, and Disney Jake and the Never Land Pirates® (collectively “Fisher-Price Friends”), and Power Wheels®. | |||||||||||||||||
American Girl Brands—including My American Girl®, the historical collection, and Bitty Baby®. American Girl Brands products are sold directly to consumers via its catalog, website, and proprietary retail stores. Its children’s publications are also sold to certain retailers. | |||||||||||||||||
Mattel’s operating segments are: (i) North America, which consists of the US and Canada, (ii) International, and (iii) American Girl. The North America and International segments sell products in the Mattel Girls & Boys Brands and Fisher-Price Brands categories, although some are developed and adapted for particular international markets. | |||||||||||||||||
Segment Data | |||||||||||||||||
The following tables present information about revenues, income, and assets by segment. Mattel does not include sales adjustments such as trade discounts and other allowances in the calculation of segment revenues (referred to as “gross sales” and reconciled to net sales in Part I, Item 2 “Non-GAAP Financial Measure” of this Quarterly Report on Form 10-Q). Mattel records these adjustments in its financial accounting systems at the time of sale to each customer, but the adjustments are not allocated to individual products. For this reason, Mattel’s chief operating decision maker uses gross sales by segment as one of the metrics to measure segment performance. Such sales adjustments are included in the determination of segment income from operations based on the adjustments recorded in the financial accounting systems. Segment income represents each segment’s operating income, while consolidated operating income represents income from operations before net interest, other non-operating income, and income taxes as reported in the consolidated statements of operations. The corporate and other expense category includes costs not allocated to individual segments, including charges related to incentive compensation, share-based payments, and corporate headquarters functions managed on a worldwide basis, and the impact of changes in foreign currency rates on intercompany transactions. | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues by Segment | |||||||||||||||||
North America | $ | 1,211,544 | $ | 1,190,946 | $ | 2,234,484 | $ | 2,228,979 | |||||||||
International | 1,061,829 | 973,590 | 2,216,736 | 2,063,776 | |||||||||||||
American Girl | 128,951 | 109,204 | 317,658 | 264,877 | |||||||||||||
Gross sales | 2,402,324 | 2,273,740 | 4,768,878 | 4,557,632 | |||||||||||||
Sales adjustments | (195,363 | ) | (195,924 | ) | (397,202 | ) | (392,656 | ) | |||||||||
Net sales | $ | 2,206,961 | $ | 2,077,816 | $ | 4,371,676 | $ | 4,164,976 | |||||||||
Segment Income | |||||||||||||||||
North America | $ | 358,171 | $ | 334,540 | $ | 510,264 | $ | 503,285 | |||||||||
International | 250,170 | 225,297 | 389,265 | 348,731 | |||||||||||||
American Girl | 16,144 | 10,286 | 23,307 | 4,936 | |||||||||||||
624,485 | 570,123 | 922,836 | 856,952 | ||||||||||||||
Corporate and other expense (a) | (96,310 | ) | (82,756 | ) | (234,040 | ) | (209,416 | ) | |||||||||
Operating income | 528,175 | 487,367 | 688,796 | 647,536 | |||||||||||||
Interest expense | 19,576 | 22,723 | 58,172 | 65,352 | |||||||||||||
Interest (income) | (1,394 | ) | (1,472 | ) | (4,083 | ) | (5,158 | ) | |||||||||
Other non-operating (income), net | (4,350 | ) | (731 | ) | (2,530 | ) | (1,034 | ) | |||||||||
Income before income taxes | $ | 514,343 | $ | 466,847 | $ | 637,237 | $ | 588,376 | |||||||||
(a) | Corporate and other expense includes share-based compensation expense of $19.6 million and $47.2 million for the three and nine months ended September 30, 2013, respectively, and $17.6 million and $42.8 million for the three and nine months ended September 30, 2012, respectively, and severance expense of $2.4 million and $15.9 million for the three and nine months ended September 30, 2013, respectively, and $1.1 million and $9.2 million for the three and nine months ended September 30, 2012, respectively. | ||||||||||||||||
Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances. | |||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||
(In thousands) | |||||||||||||||||
Assets by Segment | |||||||||||||||||
North America | $ | 1,097,763 | $ | 1,104,314 | $ | 694,479 | |||||||||||
International | 1,385,467 | 1,322,520 | 807,911 | ||||||||||||||
American Girl | 142,648 | 128,681 | 90,335 | ||||||||||||||
2,625,878 | 2,555,515 | 1,592,725 | |||||||||||||||
Corporate and other | 66,512 | 69,048 | 99,165 | ||||||||||||||
Accounts receivable and inventories, net | $ | 2,692,390 | $ | 2,624,563 | $ | 1,691,890 | |||||||||||
The table below presents worldwide revenues by brand category: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Worldwide Revenues by Brand Category | |||||||||||||||||
Mattel Girls & Boys Brands | $ | 1,480,696 | $ | 1,371,130 | $ | 2,965,294 | $ | 2,775,016 | |||||||||
Fisher-Price Brands | 789,303 | 790,416 | 1,473,298 | 1,507,854 | |||||||||||||
American Girl Brands | 122,302 | 101,972 | 300,931 | 246,681 | |||||||||||||
Other | 10,023 | 10,222 | 29,355 | 28,081 | |||||||||||||
Gross sales | 2,402,324 | 2,273,740 | 4,768,878 | 4,557,632 | |||||||||||||
Sales adjustments | (195,363 | ) | (195,924 | ) | (397,202 | ) | (392,656 | ) | |||||||||
Net sales | $ | 2,206,961 | $ | 2,077,816 | $ | 4,371,676 | $ | 4,164,976 | |||||||||
Subsequent_Event
Subsequent Event | 9 Months Ended | |
Sep. 30, 2013 | ||
Subsequent Event | 22 | Subsequent Event |
On October 16, 2013, Mattel announced that its Board of Directors declared a fourth quarter dividend of $0.36 per common share. The dividend is payable on December 13, 2013 to stockholders of record on November 27, 2013. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Goodwill Policy | Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying amount may exceed its fair value. |
Intangible Assets, Indefinite-Lived, Policy | Mattel tests nonamortizable intangible assets, including trademarks and trade names, for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying values may exceed the fair values. |
Intangible Assets, Finite-Lived, Policy | Mattel also tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. |
Debt Policy | The proportion of unamortized debt issuance costs from the prior facility renewal related to creditors involved in both the prior facility and amended facility and borrowing costs incurred as a result of the amendment were deferred and will be amortized over the term of the amended facility. |
Foreign Currency Translations Policy | Mattel’s reporting currency is the US dollar. The translation of its net investments in subsidiaries with non-US dollar functional currencies subjects Mattel to currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-US dollar functional currencies are translated into US dollars at fiscal period-end exchange rates. Income, expense, and cash flow 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. |
Derivatives Policy | 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. Additionally, Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. |
Earnings Per Share Policy | Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Certain of Mattel’s restricted stock units (“RSUs”) are considered participating securities because they contain nonforfeitable rights to dividend equivalents. |
Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic earnings per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income allocable to common shares by the weighted average number of common shares for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. | |
Foreign Currency Transaction Gains and Losses Policy | Currency exchange rate fluctuations may impact Mattel’s results of operations and cash flows. Mattel’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income to which they relate in the consolidated statements of operations. For hedges of intercompany loans and advances, which do not qualify for hedge accounting treatment, the gains or losses on the hedges resulting from changes in fair value as well as the offsetting transaction gains or losses on the related hedged items, along with unhedged items, are recognized in non-operating income (expense), net in the consolidated statements of operations. |
Segment Reporting Policy | Mattel does not include sales adjustments such as trade discounts and other allowances in the calculation of segment revenues (referred to as “gross sales” and reconciled to net sales in Part I, Item 2 “Non-GAAP Financial Measure” of this Quarterly Report on Form 10-Q). Mattel records these adjustments in its financial accounting systems at the time of sale to each customer, but the adjustments are not allocated to individual products. For this reason, Mattel’s chief operating decision maker uses gross sales by segment as one of the metrics to measure segment performance. Such sales adjustments are included in the determination of segment income from operations based on the adjustments recorded in the financial accounting systems. Segment income represents each segment’s operating income, while consolidated operating income represents income from operations before net interest, other non-operating income, and income taxes as reported in the consolidated statements of operations. The corporate and other expense category includes costs not allocated to individual segments, including charges related to incentive compensation, share-based payments, and corporate headquarters functions managed on a worldwide basis, and the impact of changes in foreign currency rates on intercompany transactions. |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Inventories | Inventories include the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Raw materials and work in process | $ | 110,256 | $ | 112,555 | $ | 79,216 | |||||||
Finished goods | 696,953 | 683,797 | 385,841 | ||||||||||
$ | 807,209 | $ | 796,352 | $ | 465,057 | ||||||||
Property_Plant_and_Equipment_T
Property, Plant, and Equipment (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Property, Plant, and Equipment | Property, plant, and equipment, net includes the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Land | $ | 26,990 | $ | 26,703 | $ | 26,692 | |||||||
Buildings | 268,961 | 266,653 | 268,381 | ||||||||||
Machinery and equipment | 975,886 | 911,985 | 931,732 | ||||||||||
Tools, dies, and molds | 710,521 | 663,532 | 674,119 | ||||||||||
Capital leases | 23,271 | 23,271 | 23,271 | ||||||||||
Leasehold improvements | 222,397 | 205,929 | 208,900 | ||||||||||
2,228,026 | 2,098,073 | 2,133,095 | |||||||||||
Less: accumulated depreciation | (1,593,253 | ) | (1,522,785 | ) | (1,539,882 | ) | |||||||
$ | 634,773 | $ | 575,288 | $ | 593,213 | ||||||||
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Goodwill | The change in the carrying amount of goodwill by operating segment for the nine months ended September 30, 2013 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America and American Girl operating segments selling those brands, thereby causing a foreign currency translation impact for these operating segments. | ||||||||||||
December 31, | Currency | September 30, | |||||||||||
2012 | Exchange Rate | 2013 | |||||||||||
Impact | |||||||||||||
(In thousands) | |||||||||||||
North America | $ | 546,898 | $ | (160 | ) | $ | 546,738 | ||||||
International | 320,169 | (704 | ) | 319,465 | |||||||||
American Girl | 213,731 | 156 | 213,887 | ||||||||||
Total goodwill | $ | 1,080,798 | $ | (708 | ) | $ | 1,080,090 | ||||||
Other_Noncurrent_Assets_Tables
Other Noncurrent Assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Noncurrent Assets | Other noncurrent assets include the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Nonamortizable identifiable intangibles | $ | 504,241 | $ | 617,223 | $ | 617,223 | |||||||
Deferred income taxes | 407,756 | 465,662 | 374,667 | ||||||||||
Identifiable intangibles (net of amortization of $72.3 million, $61.8 million, and $64.9 million, respectively) | 178,569 | 91,369 | 88,786 | ||||||||||
Other | 253,316 | 215,870 | 215,293 | ||||||||||
$ | 1,343,882 | $ | 1,390,124 | $ | 1,295,969 | ||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Accrued Liabilities | Accrued liabilities include the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Litigation accrual | $ | 137,800 | $ | — | $ | 137,800 | |||||||
Advertising and promotion | 112,013 | 138,036 | 87,878 | ||||||||||
Royalties | 110,463 | 91,003 | 97,051 | ||||||||||
Taxes other than income taxes | 93,665 | 87,132 | 80,673 | ||||||||||
Other | 429,151 | 418,544 | 484,346 | ||||||||||
$ | 883,092 | $ | 734,715 | $ | 887,748 | ||||||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Long-term Debt | Long-term debt includes the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Medium-term notes due November 2013 | $ | 50,000 | $ | 50,000 | $ | 50,000 | |||||||
2008 Senior Notes | — | 350,000 | 350,000 | ||||||||||
2010 Senior Notes due October 2020 and October 2040 | 500,000 | 500,000 | 500,000 | ||||||||||
2011 Senior Notes due November 2016 and November 2041 | 600,000 | 600,000 | 600,000 | ||||||||||
2013 Senior Notes due March 2018 and March 2023 | 500,000 | — | — | ||||||||||
1,650,000 | 1,500,000 | 1,500,000 | |||||||||||
Less: current portion | (50,000 | ) | (350,000 | ) | (400,000 | ) | |||||||
Total long-term debt | $ | 1,600,000 | $ | 1,150,000 | $ | 1,100,000 | |||||||
Other_Noncurrent_Liabilities_T
Other Noncurrent Liabilities (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Noncurrent Liabilities | Other noncurrent liabilities include the following: | ||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Benefit plan liabilities | $ | 270,482 | $ | 263,529 | $ | 284,614 | |||||||
Noncurrent tax liabilities | 188,122 | 192,143 | 213,658 | ||||||||||
Other | 157,913 | 145,789 | 145,457 | ||||||||||
$ | 616,517 | $ | 601,461 | $ | 643,729 | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income/Loss | The following tables present changes in the accumulated balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income: | ||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2013 | $ | 3,880 | $ | (183,791 | ) | $ | (336,009 | ) | $ | (515,920 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (10,614 | ) | 236 | 34,757 | 24,379 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 321 | 3,641 | — | 3,962 | |||||||||||||
Net (decrease) increase in other comprehensive income | (10,293 | ) | 3,877 | 34,757 | 28,341 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2013 | $ (6,413 | ) | $ (179,914 | ) | $ (301,252 | ) | $ (487,579 | ) | |||||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2012 | $ | (2,583 | ) | $ | (190,656 | ) | $ | (271,247 | ) | $ | (464,486 | ) | |||||
Other comprehensive (loss) income before reclassifications | (3,348 | ) | 861 | (30,005 | ) | (32,492 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (482 | ) | 9,881 | — | 9,399 | ||||||||||||
Net (decrease) increase in other comprehensive income | (3,830 | ) | 10,742 | (30,005 | ) | (23,093 | ) | ||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2013 | $ | (6,413 | ) | $ | (179,914 | ) | $ | (301,252 | ) | $ | (487,579 | ) | |||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2012 | $ | 26,530 | $ | (168,547 | ) | $ | (317,214 | ) | $ | (459,231 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 3,933 | (3,286 | ) | 28,944 | 29,591 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (12,573 | ) | 6,140 | — | (6,433 | ) | |||||||||||
Net (decrease) increase in other comprehensive income | (8,640 | ) | 2,854 | 28,944 | 23,158 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2012 | $ | 17,890 | $ (165,693 | ) | $ (288,270 | ) | $ (436,073 | ) | |||||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Derivative | Defined Benefit | Currency | Total | ||||||||||||||
Instruments | Pension Plans | Translation | |||||||||||||||
Adjustments | |||||||||||||||||
(In thousands) | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2011 | $ | 24,616 | $ | (172,398 | ) | $ | (298,863 | ) | $ | (446,645 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 14,713 | (7,597 | ) | 10,593 | 17,709 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (21,439 | ) | 14,302 | — | (7,137 | ) | |||||||||||
Net (decrease) increase in other comprehensive income | (6,726 | ) | 6,705 | 10,593 | 10,572 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2012 | $ | 17,890 | $ | (165,693 | ) | $ | (288,270 | ) | $ | (436,073 | ) | ||||||
Summary of Consolidated Statement of Operations Line Items Affected by Reclassifications from Accumulated Other Comprehensive Income/Loss | The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income to the statement of operations: | ||||||||||||||||
For the Three | For the Three | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
(Loss) gain on foreign currency forward exchange contracts | $ | (589 | ) | $ | 12,540 | Cost of sales | |||||||||||
268 | 33 | Provision for income taxes | |||||||||||||||
$ | (321 | ) | $ | 12,573 | Net income | ||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||
Prior service credit | $ | 541 | $ | 398 | (a) | ||||||||||||
Actuarial loss | (4,406 | ) | (5,950 | ) | (a) | ||||||||||||
Settlement loss | (1,835 | ) | (3,534 | ) | (a) | ||||||||||||
(5,700 | ) | (9,086 | ) | ||||||||||||||
2,059 | 2,946 | Provision for income taxes | |||||||||||||||
$ | (3,641 | ) | $ | (6,140 | ) | Net income | |||||||||||
For the Nine | For the Nine | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
Gain on foreign currency forward exchange contracts | $ | 224 | $ | 21,572 | Cost of sales | ||||||||||||
258 | (133 | ) | Provision for income taxes | ||||||||||||||
$ | 482 | $ | 21,439 | Net income | |||||||||||||
For the Nine | For the Nine | Statements of Operations | |||||||||||||||
Months Ended | Months Ended | Classification | |||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||
Prior service credit | $ | 793 | $ | 377 | (a) | ||||||||||||
Actuarial loss | (14,698 | ) | (17,490 | ) | (a) | ||||||||||||
Settlement loss | (1,835 | ) | (3,534 | ) | (a) | ||||||||||||
(15,740 | ) | (20,647 | ) | ||||||||||||||
5,859 | 6,345 | Provision for income taxes | |||||||||||||||
$ | (9,881 | ) | $ | (14,302 | ) | Net income | |||||||||||
(a) | The amortization of prior service credit and actuarial loss and the settlement 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. |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Assets and Liabilities | The following table presents Mattel’s derivative assets and liabilities: | ||||||||||||||||||
Asset Derivatives | |||||||||||||||||||
Balance Sheet Classification | Fair Value | ||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Prepaid expenses and | $ | 1,146 | $ | 19,403 | $ | 3,064 | ||||||||||||
other current assets | |||||||||||||||||||
Foreign currency forward exchange contracts | Other noncurrent | — | 465 | 4 | |||||||||||||||
assets | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 1,146 | $ | 19,868 | $ | 3,068 | |||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Prepaid expenses and | $ | 2,224 | $ | — | $ | — | ||||||||||||
other current assets | |||||||||||||||||||
Total | $ | 3,370 | $ | 19,868 | $ | 3,068 | |||||||||||||
Liability Derivatives | |||||||||||||||||||
Balance Sheet Classification | Fair Value | ||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward exchange contracts | Accrued liabilities | $ | 13,171 | $ | 8,528 | $ | 8,093 | ||||||||||||
Foreign currency forward exchange contracts | Other noncurrent | 1,234 | 394 | 177 | |||||||||||||||
liabilities | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 14,405 | $ | 8,922 | $ | 8,270 | |||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | Accrued liabilities | $ | 703 | $ | 2,821 | $ | 487 | ||||||||||||
Total | $ | 15,108 | $ | 11,743 | $ | 8,757 | |||||||||||||
Derivatives Designated as Hedging Instruments by Classification and Amount of Gains and Losses | 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 | For the Three Months Ended | Statements of | |||||||||||||||||
September 30, 2013 | September 30, 2012 | Operations | |||||||||||||||||
Amount of Gain | Amount of | Amount of Gain | Amount of | Classification | |||||||||||||||
(Loss) Recognized | Gain (Loss) | (Loss) Recognized | Gain (Loss) | ||||||||||||||||
in OCI | Reclassified from | in OCI | Reclassified from | ||||||||||||||||
Accumulated OCI | Accumulated OCI | ||||||||||||||||||
to Statements of | to Statements of | ||||||||||||||||||
Operations | Operations | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | (10,614 | ) | $ | (321 | ) | $ | 3,933 | $ | 12,573 | Cost of sales | ||||||||
For the Nine Months Ended | For the Nine Months Ended | Statements of | |||||||||||||||||
30-Sep-13 | 30-Sep-12 | Operations | |||||||||||||||||
Amount of Gain | Amount of | Amount of Gain | Amount of | Classification | |||||||||||||||
(Loss) Recognized | Gain (Loss) | (Loss) Recognized | Gain (Loss) | ||||||||||||||||
in OCI | Reclassified from | in OCI | Reclassified from | ||||||||||||||||
Accumulated OCI | Accumulated OCI | ||||||||||||||||||
to Statements of | to Statements of | ||||||||||||||||||
Operations | Operations | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | (3,348 | ) | $ | 482 | $ | 14,713 | $ | 21,439 | Cost of sales | |||||||||
Derivatives Not Designated as Hedging Instruments by Classification and Amount of Gains and Losses | |||||||||||||||||||
Amount of Gain | Statements of Operations | ||||||||||||||||||
(Loss) Recognized in the | Classification | ||||||||||||||||||
Statements of Operations | |||||||||||||||||||
For the Three | For the Three | ||||||||||||||||||
Months Ended | Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | 27,911 | $ | 15,796 | Non-operating income/expense | ||||||||||||||
Foreign currency forward exchange contracts | (3,775 | ) | (102 | ) | Cost of sales | ||||||||||||||
Total | $ | 24,136 | $ | 15,694 | |||||||||||||||
Amount of Gain | Statements of Operations | ||||||||||||||||||
(Loss) Recognized in the | Classification | ||||||||||||||||||
Statements of Operations | |||||||||||||||||||
For the Nine | For the Nine | ||||||||||||||||||
Months Ended | Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward exchange contracts | $ | 10,590 | $ | 7,689 | Non-operating income/expense | ||||||||||||||
Foreign currency forward exchange contracts | (3,744 | ) | (637 | ) | Cost of sales | ||||||||||||||
Total | $ | 6,846 | $ | 7,052 | |||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Measurements | Mattel’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following: | ||||||||||||||||
September 30, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 3,370 | $ | — | $ | 3,370 | |||||||||
Auction rate securities (b) | — | — | 26,758 | 26,758 | |||||||||||||
Total assets | $ | — | $ | 3,370 | $ | 26,758 | $ | 30,128 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 15,108 | $ | — | $ | 15,108 | |||||||||
September 30, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 19,868 | $ | — | $ | 19,868 | |||||||||
Auction rate securities (b) | — | — | 13,656 | 13,656 | |||||||||||||
Total assets | $ | — | $ | 19,868 | $ | 13,656 | $ | 33,524 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 11,743 | $ | — | $ | 11,743 | |||||||||
December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 3,068 | $ | — | $ | 3,068 | |||||||||
Auction rate securities (b) | — | — | 19,256 | 19,256 | |||||||||||||
Total assets | $ | — | $ | 3,068 | $ | 19,256 | $ | 22,324 | |||||||||
Liabilities: | |||||||||||||||||
Foreign currency forward exchange contracts (a) | $ | — | $ | 8,757 | $ | — | $ | 8,757 | |||||||||
(a) | The fair value of the foreign currency forward exchange contracts 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 auction rate securities is estimated using a discounted cash flow model based on (i) estimated interest rates, timing, and amount of cash flows, (ii) credit spreads, recovery rates, and credit quality of the underlying securities, (iii) illiquidity considerations, and (iv) market correlation. | ||||||||||||||||
Fair Value Measurements - Level 3 | The following table presents information about Mattel’s assets measured and reported at fair value on a recurring basis using significant Level 3 inputs: | ||||||||||||||||
Level 3 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2012 | $ | 19,256 | |||||||||||||||
Unrealized gain | 7,502 | ||||||||||||||||
Balance at September 30, 2013 | $ | 26,758 | |||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share | The following table reconciles earnings per common share for the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Basic: | |||||||||||||||||
Net income | $ | 422,836 | $ | 365,937 | $ | 534,695 | $ | 469,984 | |||||||||
Less net income allocable to participating RSUs (a) | (3,642 | ) | (3,301 | ) | (4,889 | ) | (4,517 | ) | |||||||||
Net income available for basic common shares | $ | 419,194 | $ | 362,636 | $ | 529,806 | $ | 465,467 | |||||||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | |||||||||||||
Basic net income per common share | $ | 1.22 | $ | 1.06 | $ | 1.54 | $ | 1.36 | |||||||||
Diluted: | |||||||||||||||||
Net income | $ | 422,836 | $ | 365,937 | $ | 534,695 | $ | 469,984 | |||||||||
Less net income allocable to participating RSUs (a) | (3,615 | ) | (3,266 | ) | (4,872 | ) | (4,497 | ) | |||||||||
Net income available for diluted common shares | $ | 419,221 | $ | 362,671 | $ | 529,823 | $ | 465,487 | |||||||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | |||||||||||||
Weighted average common equivalent shares arising from: | |||||||||||||||||
Dilutive stock options and non-participating RSUs | 3,416 | 4,527 | 3,893 | 4,384 | |||||||||||||
Weighted average number of common and potential common shares | 346,695 | 347,122 | 348,626 | 345,390 | |||||||||||||
Diluted net income per common share | $ | 1.21 | $ | 1.04 | $ | 1.52 | $ | 1.35 | |||||||||
(a) | During the three and nine months ended September 30, 2013 and 2012, Mattel allocated a proportionate share of both dividends and undistributed earnings to participating RSUs. |
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Defined benefit pension plans | |||||||||||||||||
Components of Net Periodic Benefit Cost | 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 Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 2,835 | $ | 3,326 | $ | 10,523 | $ | 9,827 | |||||||||
Interest cost | 6,150 | 7,501 | 19,415 | 22,472 | |||||||||||||
Expected return on plan assets | (7,630 | ) | (7,837 | ) | (22,288 | ) | (23,361 | ) | |||||||||
Amortization of prior service credit | (541 | ) | (398 | ) | (793 | ) | (377 | ) | |||||||||
Recognized actuarial loss | 4,053 | 5,923 | 14,265 | 17,403 | |||||||||||||
Settlement loss | 1,835 | 3,534 | 1,835 | 3,534 | |||||||||||||
$ | 6,702 | $ | 12,049 | $ | 22,957 | $ | 29,498 | ||||||||||
Postretirement benefit plans | |||||||||||||||||
Components of Net Periodic Benefit Cost | 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 Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 17 | $ | 21 | $ | 61 | $ | 59 | |||||||||
Interest cost | 512 | 369 | 1,188 | 1,059 | |||||||||||||
Recognized actuarial loss | 353 | 27 | 433 | 87 | |||||||||||||
$ | 882 | $ | 417 | $ | 1,682 | $ | 1,205 | ||||||||||
ShareBased_Payments_Tables
Share-Based Payments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stock Option and Restricted Stock Unit Compensation Expense | Compensation expense, included within other selling and administrative expenses, related to stock options and RSUs is as follows: | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Stock option compensation expense | $ | 3,493 | $ | 3,701 | $ | 7,711 | $ | 9,192 | |||||||||
RSU compensation expense | 16,139 | 13,928 | 39,502 | 33,630 | |||||||||||||
$ | 19,632 | $ | 17,629 | $ | 47,213 | $ | 42,822 | ||||||||||
Other_Selling_and_Administrati1
Other Selling and Administrative Expenses (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Other Selling and Administrative Expenses | Other selling and administrative expenses include the following: | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Design and development | $ | 52,659 | $ | 52,070 | $ | 148,043 | $ | 146,231 | |||||||||
Identifiable intangible asset amortization | 3,468 | 3,081 | 9,199 | 8,797 |
Foreign_Currency_Transaction_G1
Foreign Currency Transaction Gains and Losses (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Currency Transaction Gains (Losses) | Currency transaction gains (losses) included in the consolidated statements of operations are as follows: | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Operating income | $ | 13,260 | $ | 20,086 | $ | 27,375 | $ | 42,559 | |||||||||
Other non-operating income (expense), net | 224 | 1,308 | (698 | ) | 1,713 | ||||||||||||
Net transaction gains | $ | 13,484 | $ | 21,394 | $ | 26,677 | $ | 44,272 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Revenues and Segment Income | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues by Segment | |||||||||||||||||
North America | $ | 1,211,544 | $ | 1,190,946 | $ | 2,234,484 | $ | 2,228,979 | |||||||||
International | 1,061,829 | 973,590 | 2,216,736 | 2,063,776 | |||||||||||||
American Girl | 128,951 | 109,204 | 317,658 | 264,877 | |||||||||||||
Gross sales | 2,402,324 | 2,273,740 | 4,768,878 | 4,557,632 | |||||||||||||
Sales adjustments | (195,363 | ) | (195,924 | ) | (397,202 | ) | (392,656 | ) | |||||||||
Net sales | $ | 2,206,961 | $ | 2,077,816 | $ | 4,371,676 | $ | 4,164,976 | |||||||||
Segment Income | |||||||||||||||||
North America | $ | 358,171 | $ | 334,540 | $ | 510,264 | $ | 503,285 | |||||||||
International | 250,170 | 225,297 | 389,265 | 348,731 | |||||||||||||
American Girl | 16,144 | 10,286 | 23,307 | 4,936 | |||||||||||||
624,485 | 570,123 | 922,836 | 856,952 | ||||||||||||||
Corporate and other expense (a) | (96,310 | ) | (82,756 | ) | (234,040 | ) | (209,416 | ) | |||||||||
Operating income | 528,175 | 487,367 | 688,796 | 647,536 | |||||||||||||
Interest expense | 19,576 | 22,723 | 58,172 | 65,352 | |||||||||||||
Interest (income) | (1,394 | ) | (1,472 | ) | (4,083 | ) | (5,158 | ) | |||||||||
Other non-operating (income), net | (4,350 | ) | (731 | ) | (2,530 | ) | (1,034 | ) | |||||||||
Income before income taxes | $ | 514,343 | $ | 466,847 | $ | 637,237 | $ | 588,376 | |||||||||
(a) | Corporate and other expense includes share-based compensation expense of $19.6 million and $47.2 million for the three and nine months ended September 30, 2013, respectively, and $17.6 million and $42.8 million for the three and nine months ended September 30, 2012, respectively, and severance expense of $2.4 million and $15.9 million for the three and nine months ended September 30, 2013, respectively, and $1.1 million and $9.2 million for the three and nine months ended September 30, 2012, respectively. | ||||||||||||||||
Segment Assets | Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances. | ||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||
(In thousands) | |||||||||||||||||
Assets by Segment | |||||||||||||||||
North America | $ | 1,097,763 | $ | 1,104,314 | $ | 694,479 | |||||||||||
International | 1,385,467 | 1,322,520 | 807,911 | ||||||||||||||
American Girl | 142,648 | 128,681 | 90,335 | ||||||||||||||
2,625,878 | 2,555,515 | 1,592,725 | |||||||||||||||
Corporate and other | 66,512 | 69,048 | 99,165 | ||||||||||||||
Accounts receivable and inventories, net | $ | 2,692,390 | $ | 2,624,563 | $ | 1,691,890 | |||||||||||
Worldwide Revenues by Brand Category | The table below presents worldwide revenues by brand category: | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Worldwide Revenues by Brand Category | |||||||||||||||||
Mattel Girls & Boys Brands | $ | 1,480,696 | $ | 1,371,130 | $ | 2,965,294 | $ | 2,775,016 | |||||||||
Fisher-Price Brands | 789,303 | 790,416 | 1,473,298 | 1,507,854 | |||||||||||||
American Girl Brands | 122,302 | 101,972 | 300,931 | 246,681 | |||||||||||||
Other | 10,023 | 10,222 | 29,355 | 28,081 | |||||||||||||
Gross sales | 2,402,324 | 2,273,740 | 4,768,878 | 4,557,632 | |||||||||||||
Sales adjustments | (195,363 | ) | (195,924 | ) | (397,202 | ) | (392,656 | ) | |||||||||
Net sales | $ | 2,206,961 | $ | 2,077,816 | $ | 4,371,676 | $ | 4,164,976 | |||||||||
Accounts_Receivable_Additional
Accounts Receivable - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Millions, unless otherwise specified | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, allowances for doubtful accounts | $21.50 | $33.50 | $20.60 |
Inventories_Detail
Inventories (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Inventory [Line Items] | |||
Raw materials and work in process | $110,256 | $79,216 | $112,555 |
Finished goods | 696,953 | 385,841 | 683,797 |
Inventories | $807,209 | $465,057 | $796,352 |
Property_Plant_and_Equipment_D
Property, Plant, and Equipment (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | $2,228,026 | $2,133,095 | $2,098,073 |
Less: accumulated depreciation | -1,593,253 | -1,539,882 | -1,522,785 |
Property, plant, and equipment, net | 634,773 | 593,213 | 575,288 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 26,990 | 26,692 | 26,703 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 268,961 | 268,381 | 266,653 |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 975,886 | 931,732 | 911,985 |
Tools, dies, and molds | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 710,521 | 674,119 | 663,532 |
Capital leases | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 23,271 | 23,271 | 23,271 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | $222,397 | $208,900 | $205,929 |
Goodwill_Detail
Goodwill (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Goodwill [Line Items] | ||
Goodwill, beginning balance | $1,080,798 | $1,079,979 |
Currency Exchange Rate Impact | -708 | |
Goodwill, ending balance | 1,080,090 | 1,079,979 |
North America | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 546,898 | |
Currency Exchange Rate Impact | -160 | |
Goodwill, ending balance | 546,738 | |
International | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 320,169 | |
Currency Exchange Rate Impact | -704 | |
Goodwill, ending balance | 319,465 | |
American Girl | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 213,731 | |
Currency Exchange Rate Impact | 156 | |
Goodwill, ending balance | $213,887 |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (HIT Entertainment, USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Feb. 01, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
HIT Entertainment | |||||
Business Acquisition [Line Items] | |||||
Percentage of ownership acquired | 100.00% | ||||
Total cash consideration paid, including payment for acquired cash, subject to customary adjustments | $713.50 | ||||
Identifiable intangible assets | 510.7 | ||||
Net liabilities assumed | 49.4 | ||||
Goodwill relating to acquisition | 252.2 | ||||
Retrospective adjustment to net liabilities assumed | 9 | ||||
Retrospective adjustment to goodwill | 9 | ||||
Adjustment to consideration paid for acquisition | 0.1 | ||||
Retrospective adjustment to prior period cash flows | 0.1 | ||||
Integration costs for acquisition | 2 | 3 | 5 | 14 | |
Transaction costs for acquisition | $6 |
Other_Noncurrent_Assets_Detail
Other Noncurrent Assets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Other Noncurrent Assets Disclosure [Line Items] | |||
Nonamortizable identifiable intangibles | $504,241 | $617,223 | $617,223 |
Deferred income taxes | 407,756 | 374,667 | 465,662 |
Identifiable intangibles (net of amortization of $72.3 million, $64.9 million, and $61.8 million, respectively) | 178,569 | 88,786 | 91,369 |
Other | 253,316 | 215,293 | 215,870 |
Total other noncurrent assets | $1,343,882 | $1,295,969 | $1,390,124 |
Other_Noncurrent_Assets_Parent
Other Noncurrent Assets (Parenthetical) (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Millions, unless otherwise specified | |||
Other Noncurrent Assets Disclosure [Line Items] | |||
Accumulated amortization of identifiable intangibles | $72.30 | $64.90 | $61.80 |
Other_Noncurrent_Assets_Additi
Other Noncurrent Assets - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Feb. 01, 2012 | Jun. 30, 2013 |
Other Noncurrent Assets Disclosure [Line Items] | ||
Nonamortizable identifiable intangible assets acquired | $495 | |
Amortizable identifiable intangible assets acquired | 15.7 | |
Carrying amount of nonamortizable identifiable intangible asset prior to impairment | 113 | |
Remaining fair value of intangible asset | 99 | |
Impairment charge | $14 |
Accrued_Liabilities_Detail
Accrued Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Schedule of Accrued Liabilities [Line Items] | |||
Litigation accrual | $137,800 | $137,800 | |
Advertising and promotion | 112,013 | 87,878 | 138,036 |
Royalties | 110,463 | 97,051 | 91,003 |
Taxes other than income taxes | 93,665 | 80,673 | 87,132 |
Other | 429,151 | 484,346 | 418,544 |
Total accrued liabilities | $883,092 | $887,748 | $734,715 |
Seasonal_Financing_Additional_
Seasonal Financing - Additional Information (Detail) (USD $) | 9 Months Ended |
In Billions, unless otherwise specified | Sep. 30, 2013 |
2013 Credit Facility | |
Debt Disclosure [Line Items] | |
Terms of credit facility | The agreement governing the credit facility was amended and restated on March 11, 2013 to, among other things, (i) extend the maturity date of the credit facility to March 12, 2018, (ii) increase aggregate commitments under the credit facility to $1.60 billion, with an "accordion feature," which allows Mattel to increase the aggregate availability under the credit facility to $1.85 billion under certain circumstances, (iii) decrease the applicable interest rate margins to a range of 0.00% to 0.75% above the applicable base rate for base rate loans and 0.88% to 1.75% above the applicable London Interbank Borrowing Rate ("LIBOR") for Eurodollar rate loans, in each case depending on Mattel's senior unsecured long-term debt rating, and (iv) decrease commitment fees to a range of 0.08% to 0.28% of the unused commitments under the credit facility. |
Maturity date | 12-Mar-18 |
Aggregate commitment under the credit facility | $1.60 |
Aggregate commitment under the credit facility, including the accordion feature | 1.85 |
2013 Credit Facility | Minimum | |
Debt Disclosure [Line Items] | |
Interest rate margin for base rate loans | 0.00% |
Interest rate margin for Eurodollar rate loans | 0.88% |
Commitment fee rate for unused commitments | 0.08% |
2013 Credit Facility | Maximum | |
Debt Disclosure [Line Items] | |
Interest rate margin for base rate loans | 0.75% |
Interest rate margin for Eurodollar rate loans | 1.75% |
Commitment fee rate for unused commitments | 0.28% |
2011 Credit Facility | |
Debt Disclosure [Line Items] | |
Aggregate commitment under the credit facility | $1.40 |
LongTerm_Debt_Detail
Long-Term Debt (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Long-term debt | $1,650,000 | $1,500,000 | $1,500,000 |
Less: current portion | -50,000 | -400,000 | -350,000 |
Total long-term debt | 1,600,000 | 1,100,000 | 1,150,000 |
Medium-Term Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 50,000 | 50,000 | 50,000 |
2008 Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 350,000 | 350,000 | |
2010 Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 500,000 | 500,000 | 500,000 |
2011 Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 600,000 | 600,000 | 600,000 |
2013 Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $500,000 |
LongTerm_Debt_Parenthetical_De
Long-Term Debt (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Medium-Term Notes | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2013-11 |
2010 Senior Notes due October 2020 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2020-10 |
2010 Senior Notes due October 2040 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2040-10 |
2011 Senior Notes due November 2016 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2016-11 |
2011 Senior Notes due November 2041 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2041-11 |
2013 Senior Notes due March 2018 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2018-03 |
2013 Senior Notes due March 2023 | |
Debt Instrument [Line Items] | |
Debt instrument maturity date, month and year | 2023-03 |
Longterm_Debt_Additional_Infor
Long-term Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 |
2013 Senior Notes due March 2018 | 2013 Senior Notes due March 2023 | 2008 Senior Notes | |
Debt Disclosure [Line Items] | |||
Principal of debt instrument | $250 | $250 | |
Debt instrument maturity date | 15-Mar-18 | 15-Mar-23 | 15-Mar-13 |
Issuance date | 2013-03 | 2013-03 | |
Interest rate | 1.70% | 3.15% | 5.63% |
Interest terms of Senior Notes | Interest on the 2013 Senior Notes is payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2013. | Interest on the 2013 Senior Notes is payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2013. | |
Redemption terms of 2013 Senior Notes | Mattel may redeem all or part of the 1.70% Senior Notes at any time or from time to time at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to but excluding the redemption date, and (ii) a "make-whole" amount based on the yield of a comparable US Treasury security plus 15 basis points. | Mattel may redeem all or part of the 3.15% Senior Notes at any time or from time to time prior to December 15, 2022 (three months prior to the maturity date of the 3.15% Senior Notes) at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to but excluding the redemption date, and (ii) a bmake-wholeb amount based on the yield of a comparable US Treasury security plus 20 basis points. Mattel may redeem all or part of the 3.15% Senior Notes at any time or from time to time on or after December 15, 2022 (three months prior to the maturity date for the 3.15% Senior Notes) at its option, at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to but excluding the redemption date. | |
Redemption price option one | 100.00% | 100.00% | |
Redemption price option two | 0.15% | 0.20% | |
Repayment of senior notes | $350 |
Other_Noncurrent_Liabilities_D
Other Noncurrent Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Other Liabilities [Line Items] | |||
Benefit plan liabilities | $270,482 | $284,614 | $263,529 |
Noncurrent tax liabilities | 188,122 | 213,658 | 192,143 |
Other | 157,913 | 145,457 | 145,789 |
Total other noncurrent liabilities | $616,517 | $643,729 | $601,461 |
Changes_in_Accumulated_Balance
Changes in Accumulated Balances for Each Component of Other Comprehensive Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of beginning period | ($515,920) | ($459,231) | ($464,486) | ($446,645) |
Other comprehensive income (loss) before reclassifications | 24,379 | 29,591 | -32,492 | 17,709 |
Amounts reclassified from accumulated other comprehensive income (loss) | 3,962 | -6,433 | 9,399 | -7,137 |
Other Comprehensive Income (Loss), Net of Tax | 28,341 | 23,158 | -23,093 | 10,572 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of end period | -487,579 | -436,073 | -487,579 | -436,073 |
Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of beginning period | 3,880 | 26,530 | -2,583 | 24,616 |
Other comprehensive income (loss) before reclassifications | -10,614 | 3,933 | -3,348 | 14,713 |
Amounts reclassified from accumulated other comprehensive income (loss) | 321 | -12,573 | -482 | -21,439 |
Other Comprehensive Income (Loss), Net of Tax | -10,293 | -8,640 | -3,830 | -6,726 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of end period | -6,413 | 17,890 | -6,413 | 17,890 |
Defined Benefit Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of beginning period | -183,791 | -168,547 | -190,656 | -172,398 |
Other comprehensive income (loss) before reclassifications | 236 | -3,286 | 861 | -7,597 |
Amounts reclassified from accumulated other comprehensive income (loss) | 3,641 | 6,140 | 9,881 | 14,302 |
Other Comprehensive Income (Loss), Net of Tax | 3,877 | 2,854 | 10,742 | 6,705 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of end period | -179,914 | -165,693 | -179,914 | -165,693 |
Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of beginning period | -336,009 | -317,214 | -271,247 | -298,863 |
Other comprehensive income (loss) before reclassifications | 34,757 | 28,944 | -30,005 | 10,593 |
Other Comprehensive Income (Loss), Net of Tax | 34,757 | 28,944 | -30,005 | 10,593 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of end period | ($301,252) | ($288,270) | ($301,252) | ($288,270) |
Classification_and_Amount_of_R
Classification and Amount of Reclassifications from Accumulated Other Comprehensive Income to Statement of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Cost of sales | ($1,018,981) | ($962,445) | ($2,043,637) | ($1,981,712) | ||||
Income Before Income Taxes | 514,343 | 466,847 | 637,237 | 588,376 | ||||
Provision for income taxes | -91,507 | -100,910 | -102,542 | -118,392 | ||||
Net income | 422,836 | 365,937 | 534,695 | 469,984 | ||||
Reclassification Out of Accumulated Other Comprehensive Income | Derivative Instruments | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Provision for income taxes | 268 | 33 | 258 | -133 | ||||
Net income | -321 | 12,573 | 482 | 21,439 | ||||
Reclassification Out of Accumulated Other Comprehensive Income | Derivative Instruments | Foreign Currency Forward Exchange Contracts | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Cost of sales | -589 | 12,540 | 224 | 21,572 | ||||
Reclassification Out of Accumulated Other Comprehensive Income | Defined Benefit Pension Plans | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Prior service credit | 541 | [1] | 398 | [1] | 793 | [1] | 377 | [1] |
Actuarial loss | -4,406 | [1] | -5,950 | [1] | -14,698 | [1] | -17,490 | [1] |
Settlement loss | -1,835 | [1] | -3,534 | [1] | -1,835 | [1] | -3,534 | [1] |
Income Before Income Taxes | -5,700 | -9,086 | -15,740 | -20,647 | ||||
Provision for income taxes | 2,059 | 2,946 | 5,859 | 6,345 | ||||
Net income | ($3,641) | ($6,140) | ($9,881) | ($14,302) | ||||
[1] | The amortization of prior service credit and actuarial loss and the settlement 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. |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Comprehensive Income (Loss) [Line Items] | ||||
Currency translation adjustments | $34,757 | $28,944 | ($30,005) | $10,593 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Not Designated As Hedging Instrument | Not Designated As Hedging Instrument | Not Designated As Hedging Instrument | Not Designated As Hedging Instrument | Foreign Exchange Forward | Foreign Exchange Forward | Foreign Exchange Forward | Foreign Exchange Forward | Foreign Exchange Forward | Foreign Exchange Forward | Foreign Exchange Forward | ||
Designated As Hedging Instrument | Designated As Hedging Instrument | Designated As Hedging Instrument | Designated As Hedging Instrument | |||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||||||
Maximum term for foreign currency forward exchange contracts | 18 months | |||||||||||
Notional amount of foreign currency forward exchange contracts | $1,460,000,000 | $1,360,000,000 | $1,330,000,000 | |||||||||
Net (loss) gain reclassified from accumulated other comprehensive loss to the consolidated statements of operations for derivatives designated as hedging instruments | -321,000 | 12,573,000 | 482,000 | 21,439,000 | ||||||||
Net gain (loss) recognized in the consolidated statements of operations for derivatives not designated as hedging instruments | $24,136,000 | $15,694,000 | $6,846,000 | $7,052,000 |
Derivative_Assets_and_Liabilit
Derivative Assets and Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | $3,370 | $3,068 | $19,868 |
Derivative liability, fair value | 15,108 | 8,757 | 11,743 |
Designated As Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 1,146 | 3,068 | 19,868 |
Derivative liability, fair value | 14,405 | 8,270 | 8,922 |
Designated As Hedging Instrument | Foreign Exchange Forward | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 1,146 | 3,064 | 19,403 |
Designated As Hedging Instrument | Foreign Exchange Forward | Other noncurrent assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 4 | 465 | |
Designated As Hedging Instrument | Foreign Exchange Forward | Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | 13,171 | 8,093 | 8,528 |
Designated As Hedging Instrument | Foreign Exchange Forward | Other noncurrent liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | 1,234 | 177 | 394 |
Not Designated As Hedging Instrument | Foreign Exchange Forward | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 2,224 | ||
Not Designated As Hedging Instrument | Foreign Exchange Forward | Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | $703 | $487 | $2,821 |
Derivatives_Designated_as_Hedg
Derivatives Designated as Hedging Instruments by Classification and Amount of Gains and Losses (Detail) (Designated As Hedging Instrument, Foreign Exchange Forward, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Designated As Hedging Instrument | Foreign Exchange Forward | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in OCI | ($10,614) | $3,933 | ($3,348) | $14,713 |
Amount of gain (loss) reclassified from accumulated OCI to statements of operations | ($321) | $12,573 | $482 | $21,439 |
Derivatives_Not_Designated_as_
Derivatives Not Designated as Hedging Instruments by Classification and Amount of Gains and Losses (Detail) (Not Designated As Hedging Instrument, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) recognized in the statements of operations for derivatives not designated as hedging instruments | $24,136 | $15,694 | $6,846 | $7,052 |
Foreign Exchange Forward | Non-Operating Income Expense Classification | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) recognized in the statements of operations for derivatives not designated as hedging instruments | 27,911 | 15,796 | 10,590 | 7,689 |
Foreign Exchange Forward | Cost of Sales Classification | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) recognized in the statements of operations for derivatives not designated as hedging instruments | ($3,775) | ($102) | ($3,744) | ($637) |
Financial_Assets_and_Liabiliti
Financial Assets and Liabilities Measured and Reported at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | |||
In Thousands, unless otherwise specified | ||||||
Assets: | ||||||
Foreign currency forward exchange contracts | $3,370 | [1] | $3,068 | [1] | $19,868 | [1] |
Auction rate securities | 26,758 | [2] | 19,256 | [2] | 13,656 | [2] |
Total assets | 30,128 | 22,324 | 33,524 | |||
Liabilities: | ||||||
Foreign currency forward exchange contracts | 15,108 | [1] | 8,757 | [1] | 11,743 | [1] |
Level 2 | ||||||
Assets: | ||||||
Foreign currency forward exchange contracts | 3,370 | [1] | 3,068 | [1] | 19,868 | [1] |
Total assets | 3,370 | 3,068 | 19,868 | |||
Liabilities: | ||||||
Foreign currency forward exchange contracts | 15,108 | [1] | 8,757 | [1] | 11,743 | [1] |
Level 3 | ||||||
Assets: | ||||||
Auction rate securities | 26,758 | [2] | 19,256 | [2] | 13,656 | [2] |
Total assets | $26,758 | $19,256 | $13,656 | |||
[1] | The fair value of the foreign currency forward exchange contracts 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. | |||||
[2] | The fair value of the auction rate securities is estimated using a discounted cash flow model based on (i) estimated interest rates, timing, and amount of cash flows, (ii) credit spreads, recovery rates, and credit quality of the underlying securities, (iii) illiquidity considerations, and (iv) market correlation. |
Assets_Measured_and_Reported_a
Assets Measured and Reported at Fair Value on Recurring Basis Using Significant Level 3 Inputs (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at beginning of period | $19,256 |
Unrealized gain | 7,502 |
Balance at end of period | $26,758 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
Financial Instruments [Line Items] | |||
Estimated fair value of long-term debt, including the current portion | $1,690,000,000 | $1,630,000,000 | $1,630,000,000 |
Long-term debt | $1,650,000,000 | $1,500,000,000 | $1,500,000,000 |
Earnings_Per_Share_Detail
Earnings Per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Basic: | ||||||||
Net income | $422,836 | $365,937 | $534,695 | $469,984 | ||||
Less net income allocable to participating RSUs | -3,642 | [1] | -3,301 | [1] | -4,889 | [1] | -4,517 | [1] |
Net income available for basic common shares | 419,194 | 362,636 | 529,806 | 465,467 | ||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | ||||
Basic net income per common share | $1.22 | $1.06 | $1.54 | $1.36 | ||||
Diluted: | ||||||||
Net income | 422,836 | 365,937 | 534,695 | 469,984 | ||||
Less net income allocable to participating RSUs | -3,615 | [1] | -3,266 | [1] | -4,872 | [1] | -4,497 | [1] |
Net income available for diluted common shares | $419,221 | $362,671 | $529,823 | $465,487 | ||||
Weighted average common shares outstanding | 343,279 | 342,595 | 344,733 | 341,006 | ||||
Weighted average common equivalent shares arising from: | ||||||||
Dilutive stock options and non-participating RSUs | 3,416 | 4,527 | 3,893 | 4,384 | ||||
Weighted average number of common and potential common shares | 346,695 | 347,122 | 348,626 | 345,390 | ||||
Diluted net income per common share | $1.21 | $1.04 | $1.52 | $1.35 | ||||
[1] | During the three and nine months ended September 30, 2013 and 2012, Mattel allocated a proportionate share of both dividends and undistributed earnings to participating RSUs. |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Nonqualified stock options and non-participating RSUs excluded from the calculation of diluted net income per common share | 1 | 1.1 | 0.3 | 0.4 |
Components_of_Net_Periodic_Ben
Components of Net Periodic Benefit Cost (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Defined benefit pension plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $2,835 | $3,326 | $10,523 | $9,827 |
Interest cost | 6,150 | 7,501 | 19,415 | 22,472 |
Expected return on plan assets | -7,630 | -7,837 | -22,288 | -23,361 |
Amortization of prior service credit | -541 | -398 | -793 | -377 |
Recognized actuarial loss | 4,053 | 5,923 | 14,265 | 17,403 |
Settlement loss | 1,835 | 3,534 | 1,835 | 3,534 |
Total net periodic benefit cost | 6,702 | 12,049 | 22,957 | 29,498 |
Postretirement benefit plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 17 | 21 | 61 | 59 |
Interest cost | 512 | 369 | 1,188 | 1,059 |
Recognized actuarial loss | 353 | 27 | 433 | 87 |
Total net periodic benefit cost | $882 | $417 | $1,682 | $1,205 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Employee Benefits Disclosure [Line Items] | |
Cash contributions for defined benefit pension plans | $23 |
Cash contributions for postretirement benefit plans | $1 |
ShareBased_Payments_Additional
Share-Based Payments - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General vesting period | 3 years | |
Total unrecognized compensation cost related to unvested share-based payments | $90,500,000 | |
Weighted average period for unrecognized compensation cost expected to be recognized (in years) | 2 years 1 month 6 days | |
Cash received for stock option exercises | $116,143,000 | $104,889,000 |
Equity Option | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option expire from date of grant, period | 10 years |
Stock_Option_and_Restricted_St
Stock Option and Restricted Stock Unit Compensation Expense (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $19,632 | $17,629 | $47,213 | $42,822 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 3,493 | 3,701 | 7,711 | 9,192 |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $16,139 | $13,928 | $39,502 | $33,630 |
Other_Selling_and_Administrati2
Other Selling and Administrative Expenses (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Component of Operating Other Cost and Expense [Line Items] | ||||
Design and development | $52,659 | $52,070 | $148,043 | $146,231 |
Identifiable intangible asset amortization | $3,468 | $3,081 | $9,199 | $8,797 |
Currency_Transaction_Gains_Los
Currency Transaction Gains (Losses) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Currency Transaction Gains (Losses) [Line Items] | ||||
Net transaction gains (losses) | $13,484 | $21,394 | $26,677 | $44,272 |
Operating income | ||||
Currency Transaction Gains (Losses) [Line Items] | ||||
Net transaction gains (losses) | 13,260 | 20,086 | 27,375 | 42,559 |
Other non-operating income (expense), net | ||||
Currency Transaction Gains (Losses) [Line Items] | ||||
Net transaction gains (losses) | $224 | $1,308 | ($698) | $1,713 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Line Items] | |||||
Provision for income taxes | $91,507,000 | $100,910,000 | $102,542,000 | $118,392,000 | |
Net discrete tax benefits | 17,000,000 | 5,500,000 | 32,200,000 | 16,000,000 | |
Decrease in unrecognized tax benefits related to IRS settlement | 190,000,000 | ||||
Reasonably possible changes to unrecognized tax benefits related to settlement of tax audits and/or expiration of statutes of limitations within the next twelve months | $5,000,000 | $5,000,000 |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Jan. 24, 2013 | Aug. 31, 2011 | Apr. 30, 2011 | Apr. 27, 2009 | Jul. 17, 2008 | Jul. 26, 2013 | Jan. 31, 2010 | Apr. 30, 1999 | Sep. 30, 2013 |
MGA | MGA | MGA | MGA | MGA | Yellowstone | Yellowstone | Yellowstone | Yellowstone | |||
LegalMatter | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Historical jury verdict | $100,000,000 | $100,000,000 | $8,000,000 | ||||||||
Claimed trade secrets | 26 | ||||||||||
Other claimed trade secrets | 88 | ||||||||||
Compensatory damages awarded by jury | 88,500,000 | ||||||||||
Reduced compensatory damages awarded by court | 85,000,000 | ||||||||||
Punitive damages awarded | 85,000,000 | ||||||||||
Attorney fees and costs awarded | 140,000,000 | ||||||||||
Compensatory damages, punitive damages, and attorney fees and costs awarded by court | 310,000,000 | ||||||||||
Damages for alleged trade secret misappropriation appealed | 170,000,000 | ||||||||||
Attorney fees and costs appealed | 140,000,000 | ||||||||||
Amount of damages and attorney's fees and costs vacated by the appeals court | 172,500,000 | ||||||||||
Litigation accrual | 137,800,000 | 137,800,000 | 137,800,000 | ||||||||
Alleged loss of profits | 500,000 | ||||||||||
Unpaid accounts receivable | 3,500,000 | ||||||||||
Alleged business investments | 2,800,000 | ||||||||||
Initial court appointed expert estimated loss of profits | 1,200,000 | ||||||||||
Court awarded damages from counterclaim | 3,800,000 | ||||||||||
Damages awarded by Appeals Court including inflation and interest | 19,000,000 | ||||||||||
Reasonably possible range of loss, minimum | 0 | ||||||||||
Reasonably possible range of loss, maximum | 19,000,000 | ||||||||||
Counterclaim Awarded By Appeals Court | $8,000,000 |
Segment_Revenues_and_Segment_I
Segment Revenues and Segment Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Segment Reporting Information [Line Items] | ||||||||
Gross sales | $2,402,324 | $2,273,740 | $4,768,878 | $4,557,632 | ||||
Sales adjustments | -195,363 | -195,924 | -397,202 | -392,656 | ||||
Net Sales | 2,206,961 | 2,077,816 | 4,371,676 | 4,164,976 | ||||
Operating income | 528,175 | 487,367 | 688,796 | 647,536 | ||||
Interest expense | 19,576 | 22,723 | 58,172 | 65,352 | ||||
Interest (income) | -1,394 | -1,472 | -4,083 | -5,158 | ||||
Other non-operating (income), net | -4,350 | -731 | -2,530 | -1,034 | ||||
Income before income taxes | 514,343 | 466,847 | 637,237 | 588,376 | ||||
Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Gross sales | 2,402,324 | 2,273,740 | 4,768,878 | 4,557,632 | ||||
Operating income | 624,485 | 570,123 | 922,836 | 856,952 | ||||
Operating Segments | North America | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Gross sales | 1,211,544 | 1,190,946 | 2,234,484 | 2,228,979 | ||||
Operating income | 358,171 | 334,540 | 510,264 | 503,285 | ||||
Operating Segments | International | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Gross sales | 1,061,829 | 973,590 | 2,216,736 | 2,063,776 | ||||
Operating income | 250,170 | 225,297 | 389,265 | 348,731 | ||||
Operating Segments | American Girl | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Gross sales | 128,951 | 109,204 | 317,658 | 264,877 | ||||
Operating income | 16,144 | 10,286 | 23,307 | 4,936 | ||||
Corporate and Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Operating income | ($96,310) | [1] | ($82,756) | [1] | ($234,040) | [1] | ($209,416) | [1] |
[1] | Corporate and other expense includes share-based compensation expense of $19.6 million and $47.2 million for the three and nine months ended September 30, 2013, respectively, and $17.6 million and $42.8 million for the three and nine months ended September 30, 2012, respectively, and severance expense of $2.4 million and $15.9 million for the three and nine months ended September 30, 2013, respectively, and $1.1 million and $9.2 million for the three and nine months ended September 30, 2012, respectively. |
Segment_Revenues_and_Segment_I1
Segment Revenues and Segment Income (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | $19,632,000 | $17,629,000 | $47,213,000 | $42,822,000 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | 19,600,000 | 17,600,000 | 47,200,000 | 42,800,000 |
Severance expense | $2,400,000 | $1,100,000 | $15,900,000 | $9,200,000 |
Segment_Assets_Detail
Segment Assets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | $2,692,390 | $1,691,890 | $2,624,563 |
Operating Segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 2,625,878 | 1,592,725 | 2,555,515 |
Operating Segments | North America | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 1,097,763 | 694,479 | 1,104,314 |
Operating Segments | International | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 1,385,467 | 807,911 | 1,322,520 |
Operating Segments | American Girl | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 142,648 | 90,335 | 128,681 |
Corporate and Other | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | $66,512 | $99,165 | $69,048 |
Worldwide_Revenues_by_Brand_Ca
Worldwide Revenues by Brand Category (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Gross sales | $2,402,324 | $2,273,740 | $4,768,878 | $4,557,632 |
Sales adjustments | -195,363 | -195,924 | -397,202 | -392,656 |
Net Sales | 2,206,961 | 2,077,816 | 4,371,676 | 4,164,976 |
Mattel Girls And Boys Brands | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Gross sales | 1,480,696 | 1,371,130 | 2,965,294 | 2,775,016 |
Fisher-Price Brands | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Gross sales | 789,303 | 790,416 | 1,473,298 | 1,507,854 |
American Girl Brands | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Gross sales | 122,302 | 101,972 | 300,931 | 246,681 |
Other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Gross sales | $10,023 | $10,222 | $29,355 | $28,081 |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 16, 2013 | |
Subsequent Event | |||||
Dividend Declared | |||||
Subsequent Event [Line Items] | |||||
Dividends declared | $0.36 | $0.31 | $1.08 | $0.93 | $0.36 |
Dividend payable date | 13-Dec-13 | ||||
Dividend payable, stockholders of record date | 27-Nov-13 | ||||
Dividend declared date | 16-Oct-13 |