Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 18, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-05647 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-1567322 | |
Entity Address, Address Line One | 333 Continental Blvd. | |
Entity Address, City or Town | El Segundo, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90245-5012 | |
City Area Code | 310 | |
Local Phone Number | 252-2000 | |
Title of 12(b) Security | Common stock, $1.00 per share | |
Trading Symbol | MAT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Small Business | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 354,401,538 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | MATTEL INC /DE/ | |
Entity Central Index Key | 0000063276 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Current Assets | |||
Cash and equivalents | $ 348,970 | $ 731,362 | $ 148,508 |
Accounts receivable, net of allowances for credit losses of $12.5 million, $11.3 million and $10.7 million, respectively | 1,381,534 | 1,072,684 | 1,437,904 |
Inventories | 1,083,769 | 777,184 | 854,477 |
Prepaid expenses and other current assets | 268,886 | 293,299 | 274,262 |
Total current assets | 3,083,159 | 2,874,529 | 2,715,151 |
Noncurrent Assets | |||
Property, plant, and equipment, net | 444,442 | 455,966 | 455,889 |
Right-of-use assets, net | 323,490 | 325,484 | 325,871 |
Goodwill | 1,370,986 | 1,390,207 | 1,389,715 |
Deferred income tax assets | 439,965 | 526,906 | 579,950 |
Intangible assets, net | 426,283 | 476,858 | 487,769 |
Other noncurrent assets | 379,850 | 343,944 | 308,690 |
Total Assets | 6,468,175 | 6,393,894 | 6,263,035 |
Current Liabilities | |||
Short-term borrowings | 0 | 0 | 128,000 |
Current portion of long-term debt | 250,000 | 0 | 0 |
Accounts payable | 495,221 | 579,152 | 538,170 |
Accrued liabilities | 780,522 | 991,592 | 919,047 |
Income taxes payable | 50,366 | 27,509 | 101,619 |
Total current liabilities | 1,576,109 | 1,598,253 | 1,686,836 |
Noncurrent Liabilities | |||
Long-term debt | 2,324,459 | 2,570,992 | 2,569,835 |
Noncurrent lease liabilities | 279,525 | 283,626 | 288,232 |
Other noncurrent liabilities | 320,618 | 372,174 | 404,454 |
Total noncurrent liabilities | 2,924,602 | 3,226,792 | 3,262,521 |
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 | 1,795,720 | 1,832,144 | 1,821,106 |
Treasury stock at cost: 87.0 million shares, 91.0 million shares and 90.7 million shares, respectively | (2,130,163) | (2,219,990) | (2,228,910) |
Retained earnings | 2,831,572 | 2,456,597 | 2,230,764 |
Accumulated other comprehensive loss | (971,034) | (941,271) | (950,651) |
Total stockholders’ equity | 1,967,464 | 1,568,849 | 1,313,678 |
Total Liabilities and Stockholders’ Equity | $ 6,468,175 | $ 6,393,894 | $ 6,263,035 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowances for credit losses | $ 12.5 | $ 10.7 | $ 11.3 |
Common stock, par value (USD per share) | $ 1 | $ 1 | $ 1 |
Common stock authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock issued (in shares) | 441,400,000 | 441,400,000 | 441,400,000 |
Treasury stock (in shares) | 87,000,000 | 90,700,000 | 91,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net Sales | $ 1,755,780 | $ 1,762,293 | $ 4,032,767 | $ 3,662,851 |
Cost of sales | 908,902 | 919,754 | 2,154,076 | 1,920,470 |
Gross Profit | 846,878 | 842,539 | 1,878,691 | 1,742,381 |
Advertising and promotion expenses | 127,600 | 117,650 | 291,545 | 280,074 |
Other selling and administrative expenses | 327,906 | 335,815 | 990,627 | 990,221 |
Operating Income | 391,372 | 389,074 | 596,519 | 472,086 |
Interest expense | 33,870 | 52,062 | 99,730 | 220,689 |
Interest (income) | (1,903) | (753) | (5,064) | (2,156) |
Other non-operating (income) expense, net | (4,293) | 3,901 | 11,966 | 3,347 |
Income Before Income Taxes | 363,698 | 333,864 | 489,887 | 250,206 |
Provision (Benefit) for income taxes | 80,035 | (456,754) | 130,530 | (415,805) |
(Income) from equity method investments | (6,219) | (4,458) | (18,419) | (11,143) |
Net income | $ 289,882 | $ 795,076 | $ 377,776 | $ 677,154 |
Net Income Per Common Share - Basic (USD per share) | $ 0.82 | $ 2.27 | $ 1.07 | $ 1.94 |
Weighted-average number of common shares (in shares) | 354,471 | 350,424 | 353,394 | 349,642 |
Net Income Per Common Share - Diluted (USD per share) | $ 0.80 | $ 2.24 | $ 1.05 | $ 1.91 |
Weighted average number of common and potential common shares (in shares) | 360,229 | 354,178 | 359,731 | 354,313 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 289,882 | $ 795,076 | $ 377,776 | $ 677,154 |
Other Comprehensive Loss, Net of Tax | ||||
Currency translation adjustments | (72,643) | (29,316) | (78,212) | (36,517) |
Employee benefit plan adjustments | 1,354 | 3,624 | 4,065 | 8,193 |
Available-for-sale security adjustments | 0 | (1,320) | 3,646 | 1,912 |
Net unrealized gains on derivative instruments: | ||||
Unrealized holding gains | 24,715 | 13,900 | 58,604 | 23,230 |
Reclassification adjustments included in net income | (11,312) | (2,223) | (20,667) | (2,893) |
Net unrealized gains (losses) on derivative instruments | 13,403 | 11,677 | 37,937 | 20,337 |
Net increase (decrease) in other comprehensive income | (57,886) | (15,335) | (32,564) | (6,075) |
Comprehensive Income | $ 231,996 | $ 779,741 | $ 345,212 | $ 671,079 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | |||||||
Net Income | $ 289,882 | $ 21,454 | $ 795,076 | $ (112,385) | $ 377,776 | $ 677,154 | |
Adjustments to reconcile net income to net cash flows used for operating activities: | |||||||
Depreciation | 108,450 | 108,848 | |||||
Amortization | 28,304 | 28,572 | |||||
Share-based compensation | 55,941 | 46,493 | |||||
Bad debt expense | 7,029 | 1,191 | |||||
Inventory obsolescence | 35,410 | 27,411 | |||||
Deferred income taxes | 82,673 | (39,064) | |||||
(Income) from equity method investments | (18,419) | (11,143) | |||||
Loss on extinguishment of long-term borrowings | 0 | 101,695 | |||||
(Gain) on sale of assets/business, net | (15,960) | (22,965) | |||||
Release of valuation allowances on deferred tax assets | (492,200) | 0 | (492,191) | $ (540,800) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable, net | (348,229) | (431,337) | |||||
Inventories | (401,845) | (393,349) | |||||
Prepaid expenses and other current assets | (38,985) | (11,252) | |||||
Accounts payable, accrued liabilities, and income taxes payable | (126,552) | 161,884 | |||||
Other, net | (20,360) | (7,823) | |||||
Net cash flows used for operating activities | (274,767) | (255,876) | |||||
Cash Flows From Investing Activities: | |||||||
Purchases of tools, dies, and molds | (57,955) | (53,678) | |||||
Purchases of other property, plant, and equipment | (69,373) | (61,531) | |||||
Proceeds from (payments of) foreign currency forward exchange contracts, net | 3,247 | (1,229) | |||||
Proceeds from sale of assets/business | 25,839 | 43,479 | |||||
Other, net | 749 | 1,479 | |||||
Net cash flows used for investing activities | (97,493) | (71,480) | |||||
Cash Flows From Financing Activities: | |||||||
Proceeds from short-term borrowings, net | 0 | 127,031 | |||||
(Payments of) long-term borrowings | 0 | (1,575,997) | |||||
Proceeds from long-term borrowings, net | 0 | 1,184,913 | |||||
Tax withholdings for share-based compensation | (30,327) | (19,745) | |||||
Proceeds from stock option exercises | 27,658 | 5,522 | |||||
Other, net | (6,795) | (1,640) | |||||
Net cash flows used for financing activities | (9,464) | (279,916) | |||||
Effect of Currency Exchange Rate Changes on Cash and Equivalents | (668) | (6,401) | |||||
Decrease in Cash and Equivalents | (382,392) | (613,673) | |||||
Cash and Equivalents at Beginning of Period | $ 731,362 | $ 762,181 | 731,362 | 762,181 | 762,181 | ||
Cash and Equivalents at End of Period | $ 348,970 | $ 148,508 | $ 348,970 | $ 148,508 | $ 731,362 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2020 | $ 610,144 | $ 441,369 | $ 1,842,680 | $ (2,282,939) | $ 1,553,610 | $ (944,576) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (112,385) | (112,385) | ||||
Other comprehensive income (loss), net of tax | (16,450) | (16,450) | ||||
Issuance of treasury stock for stock option exercises | 1,110 | (803) | 1,913 | |||
Issuance of treasury stock for restricted stock units vesting | (6,966) | (20,031) | 13,065 | |||
Share-based compensation | 15,112 | 15,112 | ||||
Ending balance at Mar. 31, 2021 | 490,565 | 441,369 | 1,836,958 | (2,267,961) | 1,441,225 | (961,026) |
Beginning balance at Dec. 31, 2020 | 610,144 | 441,369 | 1,842,680 | (2,282,939) | 1,553,610 | (944,576) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 677,154 | |||||
Other comprehensive income (loss), net of tax | (6,075) | |||||
Ending balance at Sep. 30, 2021 | 1,313,678 | 441,369 | 1,821,106 | (2,228,910) | 2,230,764 | (950,651) |
Beginning balance at Mar. 31, 2021 | 490,565 | 441,369 | 1,836,958 | (2,267,961) | 1,441,225 | (961,026) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (5,537) | (5,537) | ||||
Other comprehensive income (loss), net of tax | 25,710 | 25,710 | ||||
Issuance of treasury stock for stock option exercises | 2,154 | (676) | 2,830 | |||
Issuance of treasury stock for restricted stock units vesting | (529) | (3,212) | 2,683 | |||
Deferred compensation | 188 | (37) | 225 | |||
Share-based compensation | 15,168 | 15,168 | ||||
Ending balance at Jun. 30, 2021 | 527,719 | 441,369 | 1,848,201 | (2,262,223) | 1,435,688 | (935,316) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 795,076 | 795,076 | ||||
Other comprehensive income (loss), net of tax | (15,335) | (15,335) | ||||
Issuance of treasury stock for stock option exercises | 2,258 | (1,585) | 3,843 | |||
Issuance of treasury stock for restricted stock units vesting | (12,252) | (41,722) | 29,470 | |||
Share-based compensation | 16,212 | 16,212 | ||||
Ending balance at Sep. 30, 2021 | 1,313,678 | 441,369 | 1,821,106 | (2,228,910) | 2,230,764 | (950,651) |
Beginning balance at Dec. 31, 2021 | 1,568,849 | 441,369 | 1,832,144 | (2,219,990) | 2,456,597 | (941,271) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 21,454 | 21,454 | ||||
Other comprehensive income (loss), net of tax | 12,061 | 12,061 | ||||
Issuance of treasury stock for stock option exercises | 13,935 | (3,183) | 17,118 | |||
Issuance of treasury stock for restricted stock units vesting | (17,555) | (43,523) | 25,968 | |||
Share-based compensation | 19,323 | 19,323 | ||||
Adjustment of accumulated other comprehensive loss to retained earnings for available-for-sale securities | 0 | (2,801) | 2,801 | |||
Ending balance at Mar. 31, 2022 | 1,618,067 | 441,369 | 1,804,761 | (2,176,904) | 2,475,250 | (926,409) |
Beginning balance at Dec. 31, 2021 | 1,568,849 | 441,369 | 1,832,144 | (2,219,990) | 2,456,597 | (941,271) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 377,776 | |||||
Other comprehensive income (loss), net of tax | (32,564) | |||||
Ending balance at Sep. 30, 2022 | 1,967,464 | 441,369 | 1,795,720 | (2,130,163) | 2,831,572 | (971,034) |
Beginning balance at Mar. 31, 2022 | 1,618,067 | 441,369 | 1,804,761 | (2,176,904) | 2,475,250 | (926,409) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 66,440 | 66,440 | ||||
Other comprehensive income (loss), net of tax | 13,261 | 13,261 | ||||
Issuance of treasury stock for stock option exercises | 12,347 | (2,792) | 15,139 | |||
Issuance of treasury stock for restricted stock units vesting | (763) | (3,997) | 3,234 | |||
Deferred compensation | 131 | (12) | 143 | |||
Share-based compensation | 18,566 | 18,566 | ||||
Ending balance at Jun. 30, 2022 | 1,728,049 | 441,369 | 1,816,526 | (2,158,388) | 2,541,690 | (913,148) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 289,882 | 289,882 | ||||
Other comprehensive income (loss), net of tax | (57,886) | (57,886) | ||||
Issuance of treasury stock for stock option exercises | 1,376 | (998) | 2,374 | |||
Issuance of treasury stock for restricted stock units vesting | (12,010) | (37,861) | 25,851 | |||
Share-based compensation | 18,053 | 18,053 | ||||
Ending balance at Sep. 30, 2022 | $ 1,967,464 | $ 441,369 | $ 1,795,720 | $ (2,130,163) | $ 2,831,572 | $ (971,034) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included. The December 31, 2021 balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. As Mattel's business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with Mattel's consolidated financial statements and related notes in the 2021 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Mattel estimates current expected credit losses based on collection history and management’s assessment of the current economic trends, business environment, customers’ financial condition, and accounts receivable aging that may impact the level of future credit losses. Accounts receivable are net of allowances for credit losses of $12.5 million, $11.3 million, and $10.7 million as of September 30, 2022, September 30, 2021, and December 31, 2021, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories include the following: September 30, September 30, December 31, (In thousands) Raw materials and work in process $ 163,962 $ 183,070 $ 176,400 Finished goods 919,807 671,407 600,784 $ 1,083,769 $ 854,477 $ 777,184 |
Property, Plant, and Equipment,
Property, Plant, and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment, Net | Property, Plant, and Equipment, Net Property, plant, and equipment, net includes the following: September 30, September 30, December 31, (In thousands) Land $ 19,198 $ 21,817 $ 21,811 Buildings 303,862 315,222 317,114 Machinery and equipment 711,000 754,440 762,462 Software 343,172 344,427 348,062 Tools, dies, and molds 526,639 587,886 537,499 Leasehold improvements 105,223 117,692 115,844 Construction in progress 61,938 53,060 55,559 2,071,032 2,194,544 2,158,351 Less: accumulated depreciation (1,626,590) (1,738,655) (1,702,385) $ 444,442 $ 455,889 $ 455,966 During the three months ended June 30, 2022, Mattel completed the sale of the American Girl corporate offices and a distribution center, located in Middleton, Wisconsin, which included land and buildings. The assets sold were previously designated as held for sale, and included within property, plant, and equipment, net in the consolidated balance sheet. Mattel received net proceeds from the sale of $23.8 million, which resulted in a pre-tax gain of $15.2 million, recorded in other selling and administrative expenses in the consolidated statement of operations. During the three months ended March 31, 2021, Mattel completed the sale of a manufacturing plant, located in Mexico, which included land and buildings. The assets sold were previously designated as held for sale, and included within property, plant, and equipment, net in the consolidated balance sheet. Mattel received net proceeds from the sale of $24.8 million, which resulted in a pre-tax gain of $15.8 million, recorded in other selling and administrative expenses in the consolidated statement of operations. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating whether goodwill is impaired. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value. In the third quarter of 2022, Mattel performed a qualitative assessment to determine whether it was more likely than not that the book value of Mattel's reporting units exceeded their fair value. As a result of Mattel's qualitative assessment, it was determined that goodwill was not impaired. The change in the carrying amount of goodwill by operating segment for the nine months ended September 30, 2022 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America segment, thereby causing a foreign currency translation impact. December 31, Currency September 30, (In thousands) North America $ 731,789 $ (5,456) $ 726,333 International 450,847 (13,765) 437,082 American Girl 207,571 — 207,571 $ 1,390,207 $ (19,221) $ 1,370,986 Intangible Assets, Net Identifiable intangibles were $426.3 million, net of accumulated amortization of $355.3 million, $487.8 million, net of accumulated amortization of $315.5 million, and $476.9 million, net of accumulated amortization of $327.0 million as of September 30, 2022, September 30, 2021, and December 31, 2021, respectively. Mattel's amortizable intangible assets primarily consist of trademarks. Mattel tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Mattel's amortizable intangible assets were not impaired during the three and nine months ended September 30, 2022 and 2021. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities include the following: September 30, September 30, December 31, (In thousands) Advertising and promotion $ 100,091 $ 98,746 $ 179,687 Current lease liabilities 72,591 68,706 73,752 Incentive compensation 66,830 108,633 140,769 |
Seasonal Financing
Seasonal Financing | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Seasonal Financing | Seasonal Financing On September 15, 2022, Mattel entered into a revolving credit agreement (the “Credit Agreement”) as the borrower with Bank of America, N.A., as administrative agent, and the other lenders and financial institutions party thereto, providing for $1.40 billion in aggregate principal amount of senior secured revolving credit facility (the “new senior secured revolving credit facility”). The new senior secured revolving credit facility will mature on September 15, 2025. In connection with the entry into the Credit Agreement, the Company terminated the commitments and satisfied all outstanding obligations under the previous credit agreement, dated December 20, 2017 (as amended), by and among Mattel, certain domestic and foreign subsidiaries of Mattel, as additional borrowers, certain other domestic and foreign subsidiaries of Mattel, as guarantors thereunder, Bank of America, N.A., as global administrative agent, collateral agent, and Australian security trustee, and the other lenders and financial institutions party thereto. Borrowings under the new senior secured revolving credit facility will bear interest at a floating rate, which can be either, at Mattel’s option, (a) adjusted Term Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 1.125% to 2.000% per annum or (b) an alternate base rate plus an applicable margin ranging from 0.125% to 1.000% per annum, in each case, such applicable margins to be determined based on Mattel’s credit ratings. In addition to paying interest on the outstanding principal under the new senior secured revolving credit facility, Mattel will be required to pay (i) an unused line fee per annum of the average daily unused portion of the new senior secured revolving credit facility, (ii) a letter of credit fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit, and (iii) certain other customary fees and expenses of the lenders and agents. The obligations of Mattel under the new senior secured revolving credit facility are guaranteed by each domestic subsidiary of Mattel that guarantees any of Mattel’s senior unsecured notes (collectively, the “Guarantors”). If Mattel achieves a debt rating of BBB-, Baa3, and/or BBB- (or higher) from any two of S&P, Moody’s, and Fitch, respectively, and no event of default has occurred or is continuing at such time and Mattel provides a certification regarding the foregoing to the administrative agent (a “Fall-Away Event”), the obligations of Mattel under the new senior secured revolving credit facility will instead be required to be guaranteed by each existing and future direct and indirect domestic subsidiary of Mattel only to the extent such subsidiary guarantees other indebtedness of Mattel in an aggregate principal or committed amount in excess of $50 million. The new senior secured revolving credit facility is secured by liens on substantially all of Mattel’s and the Guarantors’ present and after-acquired assets (subject to certain exceptions), including domestic accounts receivable, inventory, certain trademarks and patents, and certain equity interests in direct material subsidiaries of Mattel and the Guarantors. If a Fall-Away Event occurs, all collateral securing the new senior secured revolving credit facility shall be permanently released. The Credit Agreement contains customary covenants, including, but not limited to, restrictions on Mattel’s and its subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends, sell or otherwise dispose of assets, amend organizational documents, change accounting policies or reporting practices, or enter into negative pledges with respect to assets that constitute collateral. The restrictive covenants also contain customary exceptions, including the uncapped ability to make investments and pay dividends if, in each case, the pro forma total leverage ratio after giving effect to such investment or dividend will be at least 0.25 to 1.00 inside the then-applicable total leverage ratio financial covenant level. Further, if a Fall-Away Event occurs, the restrictive covenants governing investments, dividends, negative pledges, and changes in accounting policies or reporting practices will no longer apply. The Credit Agreement requires the maintenance of (a) an interest coverage ratio of not less than 2.75 to 1.00 as of the end of each fiscal quarter and (b) a total leverage ratio as of the end of each fiscal quarter, not to exceed 4.50 to 1.00 as of the end of the fiscal quarter ending September 30, 2022, with certain specified step-downs to occur thereafter with respect to subsequent fiscal quarters. As of September 30, 2022, Mattel had no borrowings outstanding under the new senior secured revolving credit facility and no other short-term borrowings outstanding. As of September 30, 2021, Mattel had $128.0 million in borrowings outstanding under the previous senior secured revolving credit facilities and no other short-term borrowings outstanding. As of December 31, 2021, Mattel had no borrowings outstanding under the previous senior secured revolving credit facilities and no other short-term borrowings outstanding. Outstanding letters of credit under the new senior secured revolving credit facility totaled approximately $9 million as of September 30, 2022. Outstanding letters of credit under the previous senior secured revolving credit facilities totaled approximately $10 million as of September 30, 2021, and December 31, 2021, respectively. As of September 30, 2022, Mattel was in compliance with all covenants contained in the Credit Agreement. The Credit Agreement is a material agreement, and failure to comply with its covenants may result in an event of default under the terms of the new senior secured revolving credit facility. If Mattel were to default under the terms of the new senior secured revolving credit facility, its ability to meet its seasonal financing requirements could be adversely affected. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt includes the following: September 30, September 30, December 31, (In thousands) 2010 Senior Notes due October 2040 $ 250,000 $ 250,000 $ 250,000 2011 Senior Notes due November 2041 300,000 300,000 300,000 2013 Senior Notes due March 2023 250,000 250,000 250,000 2019 Senior Notes due December 2027 600,000 600,000 600,000 2021 Senior Notes due April 2026 600,000 600,000 600,000 2021 Senior Notes due April 2029 600,000 600,000 600,000 Debt issuance costs and debt discount (25,541) (30,165) (29,008) $ 2,574,459 $ 2,569,835 $ 2,570,992 Less: current portion (250,000) — — Total long-term debt $ 2,324,459 $ 2,569,835 $ 2,570,992 On March 19, 2021, Mattel issued (i) $600 million aggregate principal amount of 3.375% Senior Notes due 2026 (the "2026 Notes") and (ii) $600 million aggregate principal amount of 3.750% Senior Notes due 2029 (the "2029 Notes" and, together with the 2026 Notes, the "Notes"). The 2026 Notes will mature on April 1, 2026 and the 2029 Notes will mature on April 1, 2029, unless earlier redeemed in accordance with their respective terms. The Notes are guaranteed by Mattel’s existing and, subject to certain exceptions, future wholly-owned domestic restricted subsidiaries that guarantee Mattel’s new senior secured revolving credit facility or certain other indebtedness. The net proceeds from the offering, together with cash on hand, were used to redeem $1.23 billion in aggregate principal amount of Mattel’s outstanding 6.750% Senior Notes due December 2025 (the "2025 Notes") and pay related prepayment premiums and transaction fees and expenses. As a result of the partial redemption of the 2025 Notes, Mattel incurred a loss on extinguishment of $83.2 million, comprised of $62.0 million of prepayment premium costs and a $21.2 million write-off of the unamortized debt issuance costs, which was recorded within interest expense in the consolidated statements of operations in the first quarter of 2021. On July 1, 2021, Mattel redeemed the remaining outstanding $275 million aggregate principal amount of the 2025 Notes. As a result of the redemption, Mattel incurred a loss on extinguishment of $18.5 million, comprised of $14.0 million of prepayment premium costs and a $4.5 million write-off of the unamortized debt issuance costs, which was recorded within interest expense in the consolidated statements of operations in the third quarter of 2021. |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Other Noncurrent Liabilities | Other Noncurrent Liabilities Other noncurrent liabilities include the following: September 30, September 30, December 31, (In thousands) Benefit plan liabilities $ 162,202 $ 202,601 $ 179,857 Income taxes payable 44,181 67,219 62,915 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) for each period: For the Three Months Ended September 30, 2022 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2022 $ 33,330 $ — $ (151,388) $ (795,090) $ (913,148) Other comprehensive income (loss) before reclassifications 24,715 — 63 (72,643) (47,865) Amounts reclassified from accumulated other comprehensive loss (11,312) — 1,291 — (10,021) Net increase (decrease) in other comprehensive income 13,403 — 1,354 (72,643) (57,886) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022 $ 46,733 $ — $ (150,034) $ (867,733) $ (971,034) For the Nine Months Ended September 30, 2022 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2021 $ 8,796 $ (6,447) $ (154,099) $ (789,521) $ (941,271) Other comprehensive income (loss) before reclassifications 58,604 — (35) (78,212) (19,643) Amounts reclassified from accumulated other comprehensive loss (20,667) 3,646 4,100 — (12,921) Net increase (decrease) in other comprehensive income 37,937 3,646 4,065 (78,212) (32,564) Adjustment of accumulated other comprehensive loss to retained earnings — 2,801 — — 2,801 Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022 $ 46,733 $ — $ (150,034) $ (867,733) $ (971,034) For the Three Months Ended September 30, 2021 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Loss, Net of Tax, as of June 30, 2021 $ (6,709) $ (4,290) $ (182,285) $ (742,032) $ (935,316) Other comprehensive income (loss) before reclassifications 13,900 (1,320) 56 (29,316) (16,680) Amounts reclassified from accumulated other comprehensive loss (2,223) — 3,568 — 1,345 Net increase (decrease) in other comprehensive income 11,677 (1,320) 3,624 (29,316) (15,335) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021 $ 4,968 $ (5,610) $ (178,661) $ (771,348) $ (950,651) For the Nine Months Ended September 30, 2021 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2020 $ (15,369) $ (7,522) $ (186,854) $ (734,831) $ (944,576) Other comprehensive income (loss) before reclassifications 23,230 1,912 (203) (36,517) (11,578) Amounts reclassified from accumulated other comprehensive loss (2,893) — 8,396 — 5,503 Net increase (decrease) in other comprehensive income 20,337 1,912 8,193 (36,517) (6,075) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021 $ 4,968 $ (5,610) $ (178,661) $ (771,348) $ (950,651) The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations: For the Three Months Ended September 30, September 30, Statements of Operations (In thousands) Derivative Instruments Gain on foreign currency forward exchange and other contracts $ 11,292 $ 2,322 Cost of sales Tax effect 20 (99) Provision (Benefit) for income taxes $ 11,312 $ 2,223 Net income Employee Benefit Plans Amortization of prior service credit (a) $ 504 $ 455 Other non-operating (income) expense, net Recognized actuarial loss (a) (2,108) (2,830) Other non-operating (income) expense, net Settlement loss (a) — (3,375) Other non-operating (income) expense, net $ (1,604) $ (5,750) Tax effect 313 2,182 Provision (Benefit) for income taxes $ (1,291) $ (3,568) Net income (a) The amortization of prior service credit, recognized actuarial loss, and settlement loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost. For the Nine Months Ended September 30, 2022 September 30, 2021 Statements of Operations (In thousands) Derivative Instruments Gain on foreign currency forward exchange and other contracts $ 20,764 $ 3,191 Cost of sales Tax effect (97) (298) Provision (Benefit) for income taxes $ 20,667 $ 2,893 Net Income Employee Benefit Plans Amortization of prior service credit (a) $ 1,409 $ 1,253 Other non-operating (income) expense, net Recognized actuarial loss (a) (6,649) (8,394) Other non-operating (income) expense, net Settlement loss (a) — (3,375) Other non-operating (income) expense, net (5,240) (10,516) Tax effect 1,140 2,120 Provision (Benefit) for income taxes $ (4,100) $ (8,396) Net Income (a) The amortization of prior service credit, recognized actuarial loss, and settlement loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost. During the three months ended March 31, 2022, Mattel adjusted accumulated other comprehensive loss by $6.4 million in relation to previously recorded available-for-sale equity securities. This amount was adjusted in order to account for such securities in a manner consistent with ASC 321, Investments—Equity Securities. The adjustment includes $3.6 million of accumulated other comprehensive loss reclassified to other non-operating expense (income) in the statement of operations and $2.8 million reclassified to retained earnings in the statement of stockholders' equity. The adjustment, including tax effect, was immaterial to the financial statements. Currency Translation Adjustments Mattel's reporting currency is the U.S. dollar. The translation of its net investments in subsidiaries with non-U.S. dollar functional currencies subjects Mattel to the impact of foreign currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at fiscal period-end exchange rates. Income and expense items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Currency translation adjustments resulted in a net loss of $78.2 million for the nine months ended September 30, 2022, primarily due to the weakening of the British pound sterling and Euro against the U.S. dollar, offset by the strengthening of the Russian ruble against the U.S. dollar. Currency translation adjustments resulted in a net loss of $36.5 million for the nine months ended September 30, 2021, primarily due to the weakening of the Mexican peso, Chilean peso, Turkish lira, British pound sterling, and Euro against the U.S. dollar. |
Foreign Currency Transaction Ex
Foreign Currency Transaction Exposure | 9 Months Ended |
Sep. 30, 2022 | |
Foreign Currency [Abstract] | |
Foreign Currency Transaction Exposure | Foreign Currency Transaction ExposureCurrency exchange rate fluctuations impact Mattel's results of operations and cash flows. Mattel's currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income in the consolidated statements of operations. Gains and losses on unhedged intercompany loans and advances are recorded as a component of other non-operating (income) expense, net in the consolidated statements of operations in the period in which the currency exchange rate changes. Transactions denominated in the Chinese yuan, Euro, Mexican peso, and Russian ruble were the primary transactions that caused foreign currency transaction exposure for Mattel during the nine months ended September 30, 2022. Currency transaction losses included in the consolidated statements of operations are as follows: For the Three Months Ended September 30, September 30, Statements of Operations Classification (In thousands) Currency transaction (losses) $ (6,689) $ (4,855) Operating income Currency transaction (losses) (41) (326) Other non-operating (income) expense, net Currency transaction (losses), net $ (6,730) $ (5,181) For the Nine Months Ended September 30, September 30, Statements of Operations Classification (In thousands) Currency transaction (losses) $ (14,948) $ (7,358) Operating income Currency transaction (losses) (18,832) (5,135) Other non-operating (income) expense, net Currency transaction (losses), net $ (33,780) $ (12,493) |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative InstrumentsMattel seeks to mitigate its exposure to foreign currency transaction risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts. Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. These contracts generally have maturity dates of up to 24 months. These derivative instruments have been designated as effective cash flow hedges, whereby the unsettled hedges are reported in Mattel's consolidated balance sheets at fair value, with changes in the fair value of the hedges reflected in other comprehensive income (loss) ("OCI"). Realized gains and losses for these contracts are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not material. As of September 30, 2022, September 30, 2021, and December 31, 2021, Mattel held foreign currency forward exchange contracts and other commodity derivative instruments, with notional amounts of approximately $771 million, $861 million, and $925 million, respectively. The following tables present Mattel's derivative assets and liabilities: Derivative Assets Balance Sheet Classification Fair Value September 30, September 30, December 31, (In thousands) Derivatives designated as hedging instruments Foreign currency forward exchange and other contracts Prepaid expenses and other current assets $ 41,832 $ 11,624 $ 13,361 Foreign currency forward exchange and other contracts Other noncurrent assets 8,320 2,775 1,000 Total derivatives designated as hedging instruments $ 50,152 $ 14,399 $ 14,361 Derivatives not designated as hedging instruments Foreign currency forward exchange and other contracts Prepaid expenses and other current assets $ 3,424 $ 1,165 $ 3,714 $ 53,576 $ 15,564 $ 18,075 Derivative Liabilities Balance Sheet Classification Fair Value September 30, September 30, December 31, (In thousands) Derivatives designated as hedging instruments Foreign currency forward exchange and other contracts Accrued liabilities $ 1,981 $ 4,046 $ 2,301 Foreign currency forward exchange and other contracts Other noncurrent liabilities 194 7 280 Total derivatives designated as hedging instruments $ 2,175 $ 4,053 $ 2,581 Derivatives not designated as hedging instruments Foreign currency forward exchange and other contracts Accrued liabilities $ 3,609 $ 2,247 $ 1,229 Foreign currency forward exchange and other contracts Other noncurrent liabilities $ 44 $ — $ — Total derivatives not designated as hedging instruments $ 3,653 $ 2,247 $ 1,229 $ 5,828 $ 6,300 $ 3,810 The following tables present the classification and amount of gains and losses, net of tax, from derivatives reported in the consolidated statements of operations: Derivatives Designated As Hedging Instruments For the Three Months Ended September 30, September 30, Statements of (In thousands) Foreign currency forward exchange contracts: Amount of gains recognized in OCI $ 24,715 $ 13,900 Amount of gains reclassified from accumulated OCI to consolidated statements of operations 11,312 2,223 Cost of sales Derivatives Designated As Hedging Instruments For the Nine Months Ended September 30, September 30, Statements of (In thousands) Foreign currency forward exchange contracts: Amount of gains recognized in OCI $ 58,604 $ 23,230 Amount of gains reclassified from accumulated OCI to consolidated statements of operations 20,667 2,893 Cost of sales The net gains reclassified from accumulated other comprehensive loss to the consolidated statements of operations during the three and nine months ended September 30, 2022 and 2021, respectively, were offset by the changes in cash flows associated with the underlying hedged transactions. Derivatives Not Designated As Hedging Instruments For the Three Months Ended September 30, September 30, Statements of (In thousands) Amount of net (losses) recognized in the Statements of Operations Foreign currency forward exchange and other contract (losses) $ (2,279) $ (2,900) Other non-operating (income) expense, net Foreign currency forward exchange and other contract gains — — Cost of sales $ (2,279) $ (2,900) Derivatives Not Designated As Hedging Instruments For the Nine Months Ended September 30, September 30, Statements of (In thousands) Amount of net gains (losses) recognized in the Statements of Operations Foreign currency forward exchange and other contract gains (losses) $ 843 $ (3,863) Other non-operating (income) expense, net Foreign currency forward exchange and other contract gains — 639 Cost of sales $ 843 $ (3,224) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present information about Mattel's assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of September 30, 2022, September 30, 2021, and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value. The three levels of the fair value hierarchy are as follows: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities, either directly or indirectly. • Level 3 – Valuations based on inputs that are unobservable, supported by little or no market activity, and that are significant to the fair value of the assets or liabilities. Mattel's financial assets and liabilities include the following: September 30, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 53,576 $ — $ 53,576 Equity securities (b) 3,360 — — 3,360 Total assets $ 3,360 $ 53,576 $ — $ 56,936 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 5,828 $ — $ 5,828 September 30, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 15,564 $ — $ 15,564 Equity securities (b) 6,180 — — 6,180 Total assets $ 6,180 $ 15,564 $ — $ 21,744 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 6,300 $ — $ 6,300 December 31, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 18,075 $ — $ 18,075 Equity securities (b) 5,343 — — 5,343 Total assets $ 5,343 $ 18,075 $ — $ 23,418 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 3,810 $ — $ 3,810 (a) The fair value of the foreign currency forward exchange contracts and other commodity derivative instruments is based on dealer quotes of market forward rates and reflects the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates. (b) The fair value of the equity securities is based on the quoted price on an active public exchange. Other Financial Instruments Mattel's financial instruments include cash and equivalents, accounts receivable, accounts payable, accrued liabilities, short-term borrowings, and long-term debt. The fair values of these instruments, excluding long-term debt, approximate their carrying values because of their short-term nature. Cash and equivalents are classified as Level 1 and all other financial instruments are classified as Level 2 within the fair value hierarchy. The estimated fair value of Mattel's long-term debt was $2.35 billion (compared to a carrying value of $2.60 billion) as of September 30, 2022, $2.83 billion (compared to a carrying value of $2.60 billion) as of September 30, 2021, and $2.82 billion (compared to a carrying value of $2.60 billion) as of December 31, 2021. 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, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table reconciles basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands, except per share amounts) Basic: Net income $ 289,882 $ 795,076 $ 377,776 $ 677,154 Weighted-average number of common shares 354,471 350,424 353,394 349,642 Basic net income per common share $ 0.82 $ 2.27 $ 1.07 $ 1.94 Diluted: Net income $ 289,882 $ 795,076 $ 377,776 $ 677,154 Weighted-average number of common shares 354,471 350,424 353,394 349,642 Dilutive share-based awards (a) 5,758 3,754 6,337 4,671 Weighted-average number of common and potential common shares 360,229 354,178 359,731 354,313 Diluted net income per common share $ 0.80 $ 2.24 $ 1.05 $ 1.91 (a) For the three and nine months ended September 30, 2022, share-based awards totaling 10.4 million and 10.8 million were excluded from the calculation of diluted net income per common share because their effect would be antidilutive. For the three and nine months ended September 30, 2021, share-based awards totaling 12.6 million and 11.7 million were excluded from the calculation of diluted net income per common share because their effect would be antidilutive. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Mattel and certain of its subsidiaries have qualified and nonqualified retirement plans covering substantially all employees of these companies, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 4 to the Consolidated Financial Statements–Employee Benefit Plans" in the 2021 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, (In thousands) (In thousands) Service cost $ 980 $ 1,194 $ 3,046 $ 3,780 Interest cost 2,996 2,525 9,112 7,595 Expected return on plan assets (4,776) (4,627) (14,480) (13,891) Amortization of prior service cost 5 54 118 275 Recognized actuarial loss 2,133 2,832 6,724 8,401 Settlement loss — 3,375 — 3,375 $ 1,338 $ 5,353 $ 4,520 $ 9,535 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, (In thousands) (In thousands) Interest cost $ 22 $ 19 $ 66 $ 59 Amortization of prior service credit (509) (509) (1,527) (1,528) Recognized actuarial gain (25) (2) (75) (7) $ (512) $ (492) $ (1,536) $ (1,476) Mattel's service cost component is recorded within operating income while other components of net periodic pension cost and postretirement benefit cost are recorded outside of operating income, presented in other non-operating (income) expense, net. During the nine months ended September 30, 2022, Mattel made cash contributions totaling approximately $3 million related to its defined benefit pension and postretirement benefit plans. During the remainder of 2022, Mattel expects to make additional cash contributions of approximately $3 million. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments Mattel has various stock compensation plans, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 8 to the Consolidated Financial Statements—Share-Based Payments" in the 2021 Annual Report on Form 10-K. Under the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance RSUs ("performance awards"), dividend equivalent rights, and shares of common stock to officers, employees, and other persons providing services to Mattel. Stock options are granted with exercise prices at the fair market value of Mattel's common stock on the applicable grant date and expire no later than ten years from the date of grant. Stock options, RSUs, and performance awards generally provide for vesting over, or at the end of, a period of three years from the date of grant. As of September 30, 2022, three long-term incentive programs were in place with the following performance cycles: (i) a January 1, 2020–December 31, 2022 performance cycle, (ii) a January 1, 2021–December 31, 2023 performance cycle, and (iii) a January 1, 2022–December 31, 2024 performance cycle. Compensation expense, included within other selling and administrative expenses in the consolidated statements of operations, related to stock options, RSUs, and performance awards is as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Stock option compensation expense $ 5,170 $ 2,407 $ 10,064 $ 7,851 RSU compensation expense 9,643 6,633 27,810 20,664 Performance award compensation expense 3,240 7,172 18,067 17,978 $ 18,053 $ 16,212 $ 55,941 $ 46,493 As of September 30, 2022, total unrecognized compensation expense related to unvested share-based payments totaled $118.0 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 and performance awards. Cash received for stock option exercises was $27.7 million and $5.5 million for the nine months ended September 30, 2022 and 2021, respectively. |
Other Selling and Administrativ
Other Selling and Administrative Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Selling and Administrative Expenses | 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, (In thousands) Design and development $ 52,204 $ 47,739 $ 144,145 $ 138,466 Identifiable intangible asset amortization 9,308 9,514 28,304 28,572 |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges Optimizing for Growth (formerly Capital Light) In February 2021, Mattel announced the Optimizing for Growth program, a multi-year cost savings program that integrates and expands upon the previously announced Capital Light program, which commenced in 2019 (the "Program"). In connection with the Program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within the consolidated statements of operations: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Cost of sales (a) $ 1,366 $ 148 $ 9,795 $ 1,930 Other selling and administrative expenses (b) 4,441 9,258 16,602 26,411 $ 5,807 $ 9,406 $ 26,397 $ 28,341 (a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment operating income (loss) in "Note 21 to the Consolidated Financial Statements—Segment Information." (b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 21 to the Consolidated Financial Statements—Segment Information." The following tables summarize Mattel's severance and other restructuring charges activity related to the Program for the nine months ended September 30, 2022 and 2021, respectively: Liability at December 31, 2021 Charges (a) Payments/Utilization Liability at (In thousands) Severance $ 12,411 $ 14,021 $ (12,290) $ 14,142 Other restructuring charges 2,834 12,376 (14,278) 932 $ 15,245 $ 26,397 $ (26,568) $ 15,074 Liability at December 31, 2020 Charges (a) Payments/Utilization Liability at (In thousands) Severance $ 5,294 $ 15,277 $ (7,716) $ 12,855 Other restructuring charges 30 13,064 (10,179) 2,915 $ 5,324 $ 28,341 $ (17,895) $ 15,770 (a) Other restructuring charges consist primarily of charges associated with the consolidation of manufacturing facilities and restructuring of commercial and corporate functions. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Mattel's provision for income taxes was $80.0 million and $130.5 million for the three and nine months ended September 30, 2022, respectively, and a benefit of $456.8 million and $415.8 million for the three and nine months ended September 30, 2021, respectively. During the three and nine months ended September 30, 2022, Mattel recognized a net discrete tax benefit of $19.4 million and $4.8 million, respectively, primarily related to income taxes recorded on a discrete basis in various jurisdictions and reassessments of prior years' tax liabilities. During the three and nine months ended September 30, 2021, Mattel recognized a net discrete tax benefit of $465.3 million and $445.8 million, respectively, primarily related to the release of valuation allowances on certain U.S. and foreign deferred tax assets, income taxes recorded on a discrete basis in various jurisdictions, and reassessments of prior years' tax liabilities. Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. During the three and nine months ended September 30, 2021, Mattel continued to see improved and sustained profitability, which presented objective positive evidence for the realizability of certain deferred tax assets. As such, based on the overall analysis of the positive and negative evidence in each tax jurisdiction, in the third quarter of 2021, Mattel released the valuation allowances related to certain U.S. and foreign deferred tax assets, except for certain tax assets that are primarily expected to expire before utilization. Valuation allowance releases in the third quarter of 2021 resulted in the recognition of a portion of these deferred tax assets and a benefit to Mattel's provision for income taxes of $492.2 million. Additional valuation allowance releases resulted in the aggregate recognition of $540.8 million of deferred tax assets during the year ended December 31, 2021. Mattel's valuation allowance position has remained unchanged as of September 30, 2022. In the normal course of business, Mattel is regularly audited by federal, state, and foreign tax authorities. Based on the current status of federal, state, and foreign audits, Mattel believes it is reasonably possible that in the next 12 months, the total unrecognized tax benefits could decrease by approximately $15.5 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. During the nine months ended September 30, 2022, Mattel has recorded on a discrete basis a deferred tax liability related to undistributed earnings of certain foreign subsidiaries of approximately $12.4 million. For remaining undistributed foreign earnings, Mattel has not provided any deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss that would be due when cash is actually repatriated to the U.S. because those foreign earnings are considered indefinitely reinvested in the business or may be remitted substantially free of any additional local taxes. The determination of any incremental tax liability associated with these earnings is not practicable due to the complexity of local country withholding rules and interactions with tax treaties, foreign exchange considerations, and the diversity of state income tax treatment on actual distribution. Mattel will remit reinvested earnings of its foreign subsidiaries for which a deferred tax liability has been recorded when Mattel determines that it is advantageous for business operations or cash management purposes. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation Related to Yellowstone do Brasil Ltda. In April 1999, Yellowstone do Brasil Ltd. (formerly known as Trebbor Informática Ltda.) filed a lawsuit against Mattel do Brasil before the 15 th Civil Court of Curitiba, State of Parana, requesting the annulment of its security bonds and promissory notes given to Mattel do Brasil as well as damages due to an alleged breach of an oral exclusive distribution agreement between the parties relating to the supply and sale of toys in Brazil. Yellowstone's complaints sought alleged loss of profits plus an unspecified amount of 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 April 2018, Mattel do Brasil entered into a settlement agreement to resolve this matter, but the settlement was later rejected by the courts, subject to a pending appeal by Mattel. In October 2018, the Superior Court of Justice issued a final ruling in favor of Yellowstone on the merits of Yellowstone's claims. Previously, the courts had ruled in Mattel's favor on its counterclaim. In October 2019, Mattel reached an agreement with Yellowstone's former counsel regarding payment of the attorney's fees portion of the judgment. In November 2019, Yellowstone initiated an action to enforce its judgment against Mattel, but did not account for an offset for Mattel's counterclaim. In January 2020, Mattel obtained an injunction, staying Yellowstone's enforcement action pending resolution of Mattel's appeal to enforce the parties' April 2018 settlement. As of September 30, 2022, Mattel assessed its probable loss related to the Yellowstone matter and has accrued a reserve, which is not material. Litigation Related to the Fisher-Price Rock 'n Play Sleeper A number of putative class action lawsuits filed between April 2019 and October 2019 are pending against Fisher-Price, Inc. and/or Mattel, Inc. asserting claims for false advertising, negligent product design, breach of warranty, fraud, and other claims in connection with the marketing and sale of the Fisher-Price Rock 'n Play Sleeper (the "Sleeper"). In general, the lawsuits allege that the Sleeper should not have been marketed and sold as safe and fit for prolonged and overnight sleep for infants. The putative class action lawsuits propose nationwide and over 10 statewide consumer classes comprised of those who purchased the Sleeper as marketed as safe for prolonged and overnight sleep. The class actions have been consolidated before a single judge in the United States District Court for the Western District of New York for pre-trial purposes pursuant to the federal courts’ Multi-District Litigation program. In June 2022, the court denied the plaintiffs' motion to certify damages and injunctive relief classes under New York law, but granted plaintiffs' request to certify a New York issue class to resolve two issues on a class-wide basis. In October 2022, the United States Court of Appeals for the Second Circuit denied plaintiffs’ petition to appeal the denial of certification of the damages and injunctive relief classes. Thirty-four additional lawsuits filed between April 2019 and July 2022 are pending against Fisher-Price, Inc. and Mattel, Inc. alleging that a product defect in the Sleeper caused the fatalities of or injuries to thirty-eight children. Several lawsuits have been settled and/or dismissed. Additionally, Fisher-Price, Inc. and/or Mattel, Inc. have also received letters from lawyers purporting to represent additional plaintiffs who are threatening to assert similar claims. In addition, a stockholder has filed a derivative action in the Court of Chancery for the State of Delaware (Kumar v. Bradley, et al., filed July 7, 2020) alleging breach of fiduciary duty and unjust enrichment related to the development, marketing, and sale of the Sleeper. The defendants in the derivative action are certain of Mattel's current and former officers and directors. In August 2020, the derivative action was stayed pending further developments in the class action lawsuits. In August 2021, a second similar derivative action was filed in the Court of Chancery for the State of Delaware (Armon v. Bradley, et al., filed August 30, 2021), which is also stayed. The lawsuits seek compensatory damages, punitive damages, statutory damages, restitution, disgorgement, attorneys' fees, costs, interest, declaratory relief, and/or injunctive relief. Mattel believes that the allegations in the lawsuits are without merit and intends to vigorously defend against them. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. Litigation and Investigations Related to Whistleblower Letter In December 2019 and January 2020, two stockholders filed separate complaints styled as class actions against Mattel, Inc. and certain of its former officers (the "Mattel Defendants"), as well as others, in the United States District Court for the Central District of California, alleging violations of federal securities laws. The two complaints were consolidated in April 2020 and an amended complaint was filed in May 2020. The complaints rely on the results of an investigation announced by Mattel in October 2019 regarding allegations in a whistleblower letter and claim that Mattel misled the market in several of its financial statements beginning in the third quarter of 2017. The lawsuits allege that the defendants' conduct caused the plaintiffs and other stockholders to purchase Mattel common stock at artificially inflated prices. The court granted plaintiffs' motion for class certification in September 2021. Following a mediation on October 25, 2021, the parties reached an agreement in principle to settle the class action lawsuits, which was later approved by the court. In February 2022, the Mattel Defendants paid $86 million in settlement of the claims against them, which was funded in full by Mattel’s insurers. A single stockholder has appealed the court’s approval of the settlement, and the appeal is now pending in the United States Court of Appeals for the Ninth Circuit. The settlement does not entail any admission of fault or liability by the Mattel Defendants, which the Mattel Defendants have expressly contested throughout the pendency of the litigation. In addition, a stockholder has filed a derivative action in the United States District Court for the District of Delaware (Moher v. Kreiz, et al., filed April 9, 2020) making allegations that are substantially identical to, or are based upon, the allegations of the class action lawsuits. The defendants in the derivative action are certain of Mattel's current and former officers and directors, and PricewaterhouseCoopers LLP ("PwC"), with Mattel, Inc. named as a nominal defendant. Subsequently, a nearly identical derivative action was filed by a different stockholder against the same defendants. The second lawsuit is styled as an amended complaint and replaces a complaint making unrelated allegations in a previously filed lawsuit already pending in Delaware federal court (Lombardi v. Kreiz, et al., amended complaint filed April 16, 2020). In May 2020, the Moher and Lombardi derivative actions were consolidated and stayed pending further developments in the class action lawsuits. In June 2021, a third similar derivative action was filed in the United States District Court for the District of Delaware (Chagnon v. Kreiz, et al., filed June 22, 2021). Seven additional derivative actions asserting similar claims are also pending in the Court of Chancery for the State of Delaware (Owen v. Euteneuer, et al., filed May 12, 2021; Andersen v. Georgiadis, et al., filed May 18, 2021; Armon v. Euteneuer, et al., filed June 29, 2021; Haag v. Euteneuer, et al., filed September 9, 2021; Shumacher v. Kreiz, et al., filed October 19, 2021; Mizell v. PricewaterhouseCoopers LLP, et al., filed October 29, 2021; and Behrens v. Euteneuer, et al., filed November 18, 2021). An additional derivative action was also filed in United States District Court for the Central District of California (City of Pontiac Police and Fire Retirement System v. PricewaterhouseCoopers LLP, et al. filed October 27, 2021). On March 11, 2022, the parties to the above actions engaged in a private mediation, after which defendants and certain of the plaintiffs reached an agreement in principle to settle the derivative claims asserted in certain of the actions. Pursuant to the terms of the stipulation of settlement, which was filed with the Court of Chancery on July 1, 2022 and remains subject to court approval, Mattel will receive a settlement payment in the amount of $7 million, less attorneys' fees, to be paid by Mattel's insurers and PwC, and further agreed to institute certain governance enhancements requested by the plaintiffs. A hearing on the plaintiffs' motion to approve the settlement, and consider objections to the settlement, is scheduled for November 2, 2022. The settlement does not entail any admission of fault or liability by any of the defendants. The lawsuits seek unspecified compensatory and punitive damages, attorneys' fees, expert fees, costs, equitable relief and/or injunctive relief. Mattel believes that the allegations in the lawsuits are without merit and intends to vigorously defend against them. Mattel believes that the estimated loss, if any, will be immaterial. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Mattel designs, manufactures, and markets a broad variety of toy products worldwide, which are sold to its customers and directly to consumers. Segment Data Mattel's operating segments are: (i) North America, which consists of the U.S. and Canada; (ii) International; and (iii) American Girl. The North America and International segments sell products across categories, although some products are developed and adapted for particular international markets. The following tables present information regarding net sales, operating income (loss), and assets by segment. The corporate and other expense category includes operating costs not allocated to individual segments, including charges related to incentive and share-based compensation, corporate headquarters functions managed on a worldwide basis, the impact of changes in foreign currency exchange rates on intercompany transactions, and certain severance and other restructuring costs. It is impracticable for Mattel to present net sales by categories, brands, or products, as trade discounts and other allowances are generally recorded in the financial accounting systems by customer. For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Net Sales by Segment North America $ 1,002,126 $ 1,037,004 $ 2,330,747 $ 2,077,493 International 704,640 673,295 1,584,878 $ 1,447,547 American Girl 49,014 51,994 117,142 137,811 Net sales $ 1,755,780 $ 1,762,293 $ 4,032,767 $ 3,662,851 For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Operating Income (Loss) by Segment (a) North America $ 337,305 $ 372,015 $ 707,605 $ 646,466 International 162,828 150,598 268,012 237,616 American Girl (8,964) (6,535) (20,426) (25,825) 491,169 516,078 955,191 858,257 Corporate and other expense (b) (99,797) (127,004) (358,672) (386,171) Operating Income 391,372 389,074 596,519 472,086 Interest expense 33,870 52,062 99,730 220,689 Interest (income) (1,903) (753) (5,064) (2,156) Other non-operating (income) expense, net (4,293) 3,901 11,966 3,347 Income Before Income Taxes $ 363,698 $ 333,864 $ 489,887 $ 250,206 (a) Segment operating income (loss) included (i) severance and restructuring expenses of $1.4 million and $9.8 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $1.9 million, for the three and nine months ended September 30, 2021, respectively, which were allocated to the North America and International segments, and (ii) a gain on sale of assets of $15.2 million from the sale of the American Girl corporate office and distribution center for the nine months ended September 30, 2022, which was recorded in the American Girl segment. (b) Corporate and other expense included (i) severance and restructuring charges of $4.5 million and $17.1 million for the three and nine months ended September 30, 2022, respectively, and $9.2 million and $25.7 million for the three and nine months ended September 30, 2021, respectively, (ii) inclined sleeper product recall litigation expense of $0.7 million and $1.2 million for the three and nine months ended September 30, 2022, respectively, and $2.8 million and $14.9 million, for the three and nine months ended September 30, 2021, respectively, and (iii) a gain on sale of assets of $15.8 million from the sale of a manufacturing plant in Mexico for the nine months ended September 30, 2021. Segment assets are comprised of accounts receivable and inventories, net of applicable allowances and reserves. September 30, September 30, December 31, (In thousands) Assets by Segment North America $ 1,233,835 $ 1,073,657 $ 784,836 International 961,097 925,626 798,833 American Girl 85,705 70,356 52,168 2,280,637 2,069,639 1,635,837 Corporate and other 184,666 222,742 214,031 Accounts receivable and inventories, net $ 2,465,303 $ 2,292,381 $ 1,849,868 Geographic Information The table below presents information by geographic area. Net sales are attributed to countries based on location of the customer. For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Net Sales by Geographic Area North America $ 1,051,140 $ 1,088,998 $ 2,447,889 $ 2,215,304 International EMEA 410,187 420,833 958,839 905,818 Latin America 221,805 180,798 418,531 329,553 Asia Pacific 72,648 71,664 207,508 212,176 Total International 704,640 673,295 1,584,878 1,447,547 Net sales $ 1,755,780 $ 1,762,293 $ 4,032,767 $ 3,662,851 |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, which requires business entities to disclose information about certain government assistance by applying the grant or contribution model. Mattel adopted the guidance on January 1, 2022. The adoption of this new accounting standard did not have a material impact on Mattel's consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01, Reference Rate Reform (Topic 848): Scope, respectively. ASU 2020-04 and ASU 2021-01 provide optional expedients and exceptions for applying U.S. GAAP, to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The adoption of these new accounting standards did not have a material impact on Mattel's consolidated financial statements. Accounting Pronouncements Not Yet Adopted In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 requires that buyers in a supplier finance program disclose sufficient information for a user of the financial statements to understand the program's nature, activity, changes since prior period, and potential magnitude. The guidance in ASU 2022-04 is effective for interim and fiscal years beginning after December 15, 2022. Once adopted, it should be applied retrospectively to each period in which a balance sheet is presented, excluding the amendment on roll forward information, which should be presented prospectively. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included. |
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Recently Adopted In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, which requires business entities to disclose information about certain government assistance by applying the grant or contribution model. Mattel adopted the guidance on January 1, 2022. The adoption of this new accounting standard did not have a material impact on Mattel's consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01, Reference Rate Reform (Topic 848): Scope, respectively. ASU 2020-04 and ASU 2021-01 provide optional expedients and exceptions for applying U.S. GAAP, to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The adoption of these new accounting standards did not have a material impact on Mattel's consolidated financial statements. Accounting Pronouncements Not Yet Adopted In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 requires that buyers in a supplier finance program disclose sufficient information for a user of the financial statements to understand the program's nature, activity, changes since prior period, and potential magnitude. The guidance in ASU 2022-04 is effective for interim and fiscal years beginning after December 15, 2022. Once adopted, it should be applied retrospectively to each period in which a balance sheet is presented, excluding the amendment on roll forward information, which should be presented prospectively. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories include the following: September 30, September 30, December 31, (In thousands) Raw materials and work in process $ 163,962 $ 183,070 $ 176,400 Finished goods 919,807 671,407 600,784 $ 1,083,769 $ 854,477 $ 777,184 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment | Property, plant, and equipment, net includes the following: September 30, September 30, December 31, (In thousands) Land $ 19,198 $ 21,817 $ 21,811 Buildings 303,862 315,222 317,114 Machinery and equipment 711,000 754,440 762,462 Software 343,172 344,427 348,062 Tools, dies, and molds 526,639 587,886 537,499 Leasehold improvements 105,223 117,692 115,844 Construction in progress 61,938 53,060 55,559 2,071,032 2,194,544 2,158,351 Less: accumulated depreciation (1,626,590) (1,738,655) (1,702,385) $ 444,442 $ 455,889 $ 455,966 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill by operating segment for the nine months ended September 30, 2022 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America segment, thereby causing a foreign currency translation impact. December 31, Currency September 30, (In thousands) North America $ 731,789 $ (5,456) $ 726,333 International 450,847 (13,765) 437,082 American Girl 207,571 — 207,571 $ 1,390,207 $ (19,221) $ 1,370,986 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities include the following: September 30, September 30, December 31, (In thousands) Advertising and promotion $ 100,091 $ 98,746 $ 179,687 Current lease liabilities 72,591 68,706 73,752 Incentive compensation 66,830 108,633 140,769 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt includes the following: September 30, September 30, December 31, (In thousands) 2010 Senior Notes due October 2040 $ 250,000 $ 250,000 $ 250,000 2011 Senior Notes due November 2041 300,000 300,000 300,000 2013 Senior Notes due March 2023 250,000 250,000 250,000 2019 Senior Notes due December 2027 600,000 600,000 600,000 2021 Senior Notes due April 2026 600,000 600,000 600,000 2021 Senior Notes due April 2029 600,000 600,000 600,000 Debt issuance costs and debt discount (25,541) (30,165) (29,008) $ 2,574,459 $ 2,569,835 $ 2,570,992 Less: current portion (250,000) — — Total long-term debt $ 2,324,459 $ 2,569,835 $ 2,570,992 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities include the following: September 30, September 30, December 31, (In thousands) Benefit plan liabilities $ 162,202 $ 202,601 $ 179,857 Income taxes payable 44,181 67,219 62,915 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) for each period: For the Three Months Ended September 30, 2022 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2022 $ 33,330 $ — $ (151,388) $ (795,090) $ (913,148) Other comprehensive income (loss) before reclassifications 24,715 — 63 (72,643) (47,865) Amounts reclassified from accumulated other comprehensive loss (11,312) — 1,291 — (10,021) Net increase (decrease) in other comprehensive income 13,403 — 1,354 (72,643) (57,886) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022 $ 46,733 $ — $ (150,034) $ (867,733) $ (971,034) For the Nine Months Ended September 30, 2022 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2021 $ 8,796 $ (6,447) $ (154,099) $ (789,521) $ (941,271) Other comprehensive income (loss) before reclassifications 58,604 — (35) (78,212) (19,643) Amounts reclassified from accumulated other comprehensive loss (20,667) 3,646 4,100 — (12,921) Net increase (decrease) in other comprehensive income 37,937 3,646 4,065 (78,212) (32,564) Adjustment of accumulated other comprehensive loss to retained earnings — 2,801 — — 2,801 Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022 $ 46,733 $ — $ (150,034) $ (867,733) $ (971,034) For the Three Months Ended September 30, 2021 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Loss, Net of Tax, as of June 30, 2021 $ (6,709) $ (4,290) $ (182,285) $ (742,032) $ (935,316) Other comprehensive income (loss) before reclassifications 13,900 (1,320) 56 (29,316) (16,680) Amounts reclassified from accumulated other comprehensive loss (2,223) — 3,568 — 1,345 Net increase (decrease) in other comprehensive income 11,677 (1,320) 3,624 (29,316) (15,335) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021 $ 4,968 $ (5,610) $ (178,661) $ (771,348) $ (950,651) For the Nine Months Ended September 30, 2021 Derivative Available-for-Sale Securities Employee Benefit Plans Currency Total (In thousands) Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2020 $ (15,369) $ (7,522) $ (186,854) $ (734,831) $ (944,576) Other comprehensive income (loss) before reclassifications 23,230 1,912 (203) (36,517) (11,578) Amounts reclassified from accumulated other comprehensive loss (2,893) — 8,396 — 5,503 Net increase (decrease) in other comprehensive income 20,337 1,912 8,193 (36,517) (6,075) Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021 $ 4,968 $ (5,610) $ (178,661) $ (771,348) $ (950,651) |
Schedule 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 (loss) to the consolidated statements of operations: For the Three Months Ended September 30, September 30, Statements of Operations (In thousands) Derivative Instruments Gain on foreign currency forward exchange and other contracts $ 11,292 $ 2,322 Cost of sales Tax effect 20 (99) Provision (Benefit) for income taxes $ 11,312 $ 2,223 Net income Employee Benefit Plans Amortization of prior service credit (a) $ 504 $ 455 Other non-operating (income) expense, net Recognized actuarial loss (a) (2,108) (2,830) Other non-operating (income) expense, net Settlement loss (a) — (3,375) Other non-operating (income) expense, net $ (1,604) $ (5,750) Tax effect 313 2,182 Provision (Benefit) for income taxes $ (1,291) $ (3,568) Net income (a) The amortization of prior service credit, recognized actuarial loss, and settlement loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost. For the Nine Months Ended September 30, 2022 September 30, 2021 Statements of Operations (In thousands) Derivative Instruments Gain on foreign currency forward exchange and other contracts $ 20,764 $ 3,191 Cost of sales Tax effect (97) (298) Provision (Benefit) for income taxes $ 20,667 $ 2,893 Net Income Employee Benefit Plans Amortization of prior service credit (a) $ 1,409 $ 1,253 Other non-operating (income) expense, net Recognized actuarial loss (a) (6,649) (8,394) Other non-operating (income) expense, net Settlement loss (a) — (3,375) Other non-operating (income) expense, net (5,240) (10,516) Tax effect 1,140 2,120 Provision (Benefit) for income taxes $ (4,100) $ (8,396) Net Income (a) The amortization of prior service credit, recognized actuarial loss, and settlement loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost. |
Foreign Currency Transaction _2
Foreign Currency Transaction Exposure (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Foreign Currency [Abstract] | |
Schedule of Currency Transaction Exposure | Currency transaction losses included in the consolidated statements of operations are as follows: For the Three Months Ended September 30, September 30, Statements of Operations Classification (In thousands) Currency transaction (losses) $ (6,689) $ (4,855) Operating income Currency transaction (losses) (41) (326) Other non-operating (income) expense, net Currency transaction (losses), net $ (6,730) $ (5,181) For the Nine Months Ended September 30, September 30, Statements of Operations Classification (In thousands) Currency transaction (losses) $ (14,948) $ (7,358) Operating income Currency transaction (losses) (18,832) (5,135) Other non-operating (income) expense, net Currency transaction (losses), net $ (33,780) $ (12,493) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets and Liabilities | The following tables present Mattel's derivative assets and liabilities: Derivative Assets Balance Sheet Classification Fair Value September 30, September 30, December 31, (In thousands) Derivatives designated as hedging instruments Foreign currency forward exchange and other contracts Prepaid expenses and other current assets $ 41,832 $ 11,624 $ 13,361 Foreign currency forward exchange and other contracts Other noncurrent assets 8,320 2,775 1,000 Total derivatives designated as hedging instruments $ 50,152 $ 14,399 $ 14,361 Derivatives not designated as hedging instruments Foreign currency forward exchange and other contracts Prepaid expenses and other current assets $ 3,424 $ 1,165 $ 3,714 $ 53,576 $ 15,564 $ 18,075 Derivative Liabilities Balance Sheet Classification Fair Value September 30, September 30, December 31, (In thousands) Derivatives designated as hedging instruments Foreign currency forward exchange and other contracts Accrued liabilities $ 1,981 $ 4,046 $ 2,301 Foreign currency forward exchange and other contracts Other noncurrent liabilities 194 7 280 Total derivatives designated as hedging instruments $ 2,175 $ 4,053 $ 2,581 Derivatives not designated as hedging instruments Foreign currency forward exchange and other contracts Accrued liabilities $ 3,609 $ 2,247 $ 1,229 Foreign currency forward exchange and other contracts Other noncurrent liabilities $ 44 $ — $ — Total derivatives not designated as hedging instruments $ 3,653 $ 2,247 $ 1,229 $ 5,828 $ 6,300 $ 3,810 |
Schedule of 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: Derivatives Designated As Hedging Instruments For the Three Months Ended September 30, September 30, Statements of (In thousands) Foreign currency forward exchange contracts: Amount of gains recognized in OCI $ 24,715 $ 13,900 Amount of gains reclassified from accumulated OCI to consolidated statements of operations 11,312 2,223 Cost of sales Derivatives Designated As Hedging Instruments For the Nine Months Ended September 30, September 30, Statements of (In thousands) Foreign currency forward exchange contracts: Amount of gains recognized in OCI $ 58,604 $ 23,230 Amount of gains reclassified from accumulated OCI to consolidated statements of operations 20,667 2,893 Cost of sales |
Schedule of Derivatives Not Designated as Hedging Instruments by Classification and Amount of Gains and Losses | The net gains reclassified from accumulated other comprehensive loss to the consolidated statements of operations during the three and nine months ended September 30, 2022 and 2021, respectively, were offset by the changes in cash flows associated with the underlying hedged transactions. Derivatives Not Designated As Hedging Instruments For the Three Months Ended September 30, September 30, Statements of (In thousands) Amount of net (losses) recognized in the Statements of Operations Foreign currency forward exchange and other contract (losses) $ (2,279) $ (2,900) Other non-operating (income) expense, net Foreign currency forward exchange and other contract gains — — Cost of sales $ (2,279) $ (2,900) Derivatives Not Designated As Hedging Instruments For the Nine Months Ended September 30, September 30, Statements of (In thousands) Amount of net gains (losses) recognized in the Statements of Operations Foreign currency forward exchange and other contract gains (losses) $ 843 $ (3,863) Other non-operating (income) expense, net Foreign currency forward exchange and other contract gains — 639 Cost of sales $ 843 $ (3,224) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | Mattel's financial assets and liabilities include the following: September 30, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 53,576 $ — $ 53,576 Equity securities (b) 3,360 — — 3,360 Total assets $ 3,360 $ 53,576 $ — $ 56,936 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 5,828 $ — $ 5,828 September 30, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 15,564 $ — $ 15,564 Equity securities (b) 6,180 — — 6,180 Total assets $ 6,180 $ 15,564 $ — $ 21,744 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 6,300 $ — $ 6,300 December 31, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Foreign currency forward exchange contracts and other (a) $ — $ 18,075 $ — $ 18,075 Equity securities (b) 5,343 — — 5,343 Total assets $ 5,343 $ 18,075 $ — $ 23,418 Liabilities: Foreign currency forward exchange contracts and other (a) $ — $ 3,810 $ — $ 3,810 (a) The fair value of the foreign currency forward exchange contracts and other commodity derivative instruments is based on dealer quotes of market forward rates and reflects the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates. (b) The fair value of the equity securities is based on the quoted price on an active public exchange. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table reconciles basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands, except per share amounts) Basic: Net income $ 289,882 $ 795,076 $ 377,776 $ 677,154 Weighted-average number of common shares 354,471 350,424 353,394 349,642 Basic net income per common share $ 0.82 $ 2.27 $ 1.07 $ 1.94 Diluted: Net income $ 289,882 $ 795,076 $ 377,776 $ 677,154 Weighted-average number of common shares 354,471 350,424 353,394 349,642 Dilutive share-based awards (a) 5,758 3,754 6,337 4,671 Weighted-average number of common and potential common shares 360,229 354,178 359,731 354,313 Diluted net income per common share $ 0.80 $ 2.24 $ 1.05 $ 1.91 (a) For the three and nine months ended September 30, 2022, share-based awards totaling 10.4 million and 10.8 million were excluded from the calculation of diluted net income per common share because their effect would be antidilutive. For the three and nine months ended September 30, 2021, share-based awards totaling 12.6 million and 11.7 million were excluded from the calculation of diluted net income per common share because their effect would be antidilutive. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of 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, (In thousands) (In thousands) Service cost $ 980 $ 1,194 $ 3,046 $ 3,780 Interest cost 2,996 2,525 9,112 7,595 Expected return on plan assets (4,776) (4,627) (14,480) (13,891) Amortization of prior service cost 5 54 118 275 Recognized actuarial loss 2,133 2,832 6,724 8,401 Settlement loss — 3,375 — 3,375 $ 1,338 $ 5,353 $ 4,520 $ 9,535 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, (In thousands) (In thousands) Interest cost $ 22 $ 19 $ 66 $ 59 Amortization of prior service credit (509) (509) (1,527) (1,528) Recognized actuarial gain (25) (2) (75) (7) $ (512) $ (492) $ (1,536) $ (1,476) |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option and Restricted Stock Unit Compensation Expense | Compensation expense, included within other selling and administrative expenses in the consolidated statements of operations, related to stock options, RSUs, and performance awards is as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Stock option compensation expense $ 5,170 $ 2,407 $ 10,064 $ 7,851 RSU compensation expense 9,643 6,633 27,810 20,664 Performance award compensation expense 3,240 7,172 18,067 17,978 $ 18,053 $ 16,212 $ 55,941 $ 46,493 |
Other Selling and Administrat_2
Other Selling and Administrative Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of 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, (In thousands) Design and development $ 52,204 $ 47,739 $ 144,145 $ 138,466 Identifiable intangible asset amortization 9,308 9,514 28,304 28,572 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | In connection with the Program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within the consolidated statements of operations: For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Cost of sales (a) $ 1,366 $ 148 $ 9,795 $ 1,930 Other selling and administrative expenses (b) 4,441 9,258 16,602 26,411 $ 5,807 $ 9,406 $ 26,397 $ 28,341 (a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment operating income (loss) in "Note 21 to the Consolidated Financial Statements—Segment Information." (b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 21 to the Consolidated Financial Statements—Segment Information." The following tables summarize Mattel's severance and other restructuring charges activity related to the Program for the nine months ended September 30, 2022 and 2021, respectively: Liability at December 31, 2021 Charges (a) Payments/Utilization Liability at (In thousands) Severance $ 12,411 $ 14,021 $ (12,290) $ 14,142 Other restructuring charges 2,834 12,376 (14,278) 932 $ 15,245 $ 26,397 $ (26,568) $ 15,074 Liability at December 31, 2020 Charges (a) Payments/Utilization Liability at (In thousands) Severance $ 5,294 $ 15,277 $ (7,716) $ 12,855 Other restructuring charges 30 13,064 (10,179) 2,915 $ 5,324 $ 28,341 $ (17,895) $ 15,770 (a) Other restructuring charges consist primarily of charges associated with the consolidation of manufacturing facilities and restructuring of commercial and corporate functions. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenues from Segment to Consolidated | The following tables present information regarding net sales, operating income (loss), and assets by segment. The corporate and other expense category includes operating costs not allocated to individual segments, including charges related to incentive and share-based compensation, corporate headquarters functions managed on a worldwide basis, the impact of changes in foreign currency exchange rates on intercompany transactions, and certain severance and other restructuring costs. It is impracticable for Mattel to present net sales by categories, brands, or products, as trade discounts and other allowances are generally recorded in the financial accounting systems by customer. For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Net Sales by Segment North America $ 1,002,126 $ 1,037,004 $ 2,330,747 $ 2,077,493 International 704,640 673,295 1,584,878 $ 1,447,547 American Girl 49,014 51,994 117,142 137,811 Net sales $ 1,755,780 $ 1,762,293 $ 4,032,767 $ 3,662,851 For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Operating Income (Loss) by Segment (a) North America $ 337,305 $ 372,015 $ 707,605 $ 646,466 International 162,828 150,598 268,012 237,616 American Girl (8,964) (6,535) (20,426) (25,825) 491,169 516,078 955,191 858,257 Corporate and other expense (b) (99,797) (127,004) (358,672) (386,171) Operating Income 391,372 389,074 596,519 472,086 Interest expense 33,870 52,062 99,730 220,689 Interest (income) (1,903) (753) (5,064) (2,156) Other non-operating (income) expense, net (4,293) 3,901 11,966 3,347 Income Before Income Taxes $ 363,698 $ 333,864 $ 489,887 $ 250,206 (a) Segment operating income (loss) included (i) severance and restructuring expenses of $1.4 million and $9.8 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $1.9 million, for the three and nine months ended September 30, 2021, respectively, which were allocated to the North America and International segments, and (ii) a gain on sale of assets of $15.2 million from the sale of the American Girl corporate office and distribution center for the nine months ended September 30, 2022, which was recorded in the American Girl segment. (b) Corporate and other expense included (i) severance and restructuring charges of $4.5 million and $17.1 million for the three and nine months ended September 30, 2022, respectively, and $9.2 million and $25.7 million for the three and nine months ended September 30, 2021, respectively, (ii) inclined sleeper product recall litigation expense of $0.7 million and $1.2 million for the three and nine months ended September 30, 2022, respectively, and $2.8 million and $14.9 million, for the three and nine months ended September 30, 2021, respectively, and (iii) a gain on sale of assets of $15.8 million from the sale of a manufacturing plant in Mexico for the nine months ended September 30, 2021. |
Schedule of Segment Assets | Segment assets are comprised of accounts receivable and inventories, net of applicable allowances and reserves. September 30, September 30, December 31, (In thousands) Assets by Segment North America $ 1,233,835 $ 1,073,657 $ 784,836 International 961,097 925,626 798,833 American Girl 85,705 70,356 52,168 2,280,637 2,069,639 1,635,837 Corporate and other 184,666 222,742 214,031 Accounts receivable and inventories, net $ 2,465,303 $ 2,292,381 $ 1,849,868 |
Schedule of Revenues by Geographic Area | The table below presents information by geographic area. Net sales are attributed to countries based on location of the customer. For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) Net Sales by Geographic Area North America $ 1,051,140 $ 1,088,998 $ 2,447,889 $ 2,215,304 International EMEA 410,187 420,833 958,839 905,818 Latin America 221,805 180,798 418,531 329,553 Asia Pacific 72,648 71,664 207,508 212,176 Total International 704,640 673,295 1,584,878 1,447,547 Net sales $ 1,755,780 $ 1,762,293 $ 4,032,767 $ 3,662,851 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Receivables [Abstract] | |||
Accounts receivable, allowances for credit losses | $ 12.5 | $ 10.7 | $ 11.3 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Inventory Disclosure [Abstract] | |||
Raw materials and work in process | $ 163,962 | $ 176,400 | $ 183,070 |
Finished goods | 919,807 | 600,784 | 671,407 |
Inventories | $ 1,083,769 | $ 777,184 | $ 854,477 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | $ 2,071,032 | $ 2,194,544 | $ 2,158,351 | ||
Less: accumulated depreciation | (1,626,590) | (1,738,655) | (1,702,385) | ||
Property, plant, and equipment, net | 444,442 | 455,889 | 455,966 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 19,198 | 21,817 | 21,811 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 303,862 | 315,222 | 317,114 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 711,000 | 754,440 | 762,462 | ||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 343,172 | 344,427 | 348,062 | ||
Tools, dies, and molds | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 526,639 | 587,886 | 537,499 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 105,223 | 117,692 | 115,844 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment, gross | 61,938 | 53,060 | $ 55,559 | ||
American Girl Corporate Offices and Distribution Center | Middleton, Wisconsin | |||||
Property, Plant and Equipment [Line Items] | |||||
Proceeds from sale of property, plant, and equipment | $ 23,800 | ||||
Gain on sale of assets | $ 15,200 | $ 15,200 | |||
Land and Building | Mexico | |||||
Property, Plant and Equipment [Line Items] | |||||
Proceeds from sale of property, plant, and equipment | $ 24,800 | ||||
Gain on sale of assets | $ 15,800 | $ 15,800 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 1,390,207 |
Currency Exchange Rate Impact | (19,221) |
Balance at end of period | 1,370,986 |
North America | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 731,789 |
Currency Exchange Rate Impact | (5,456) |
Balance at end of period | 726,333 |
International | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 450,847 |
Currency Exchange Rate Impact | (13,765) |
Balance at end of period | 437,082 |
American Girl | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 207,571 |
Currency Exchange Rate Impact | 0 |
Balance at end of period | $ 207,571 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangible assets, net | $ 426,283,000 | $ 487,769,000 | $ 426,283,000 | $ 487,769,000 | $ 476,858,000 |
Intangible assets, accumulated amortization | 355,300,000 | 315,500,000 | 355,300,000 | 315,500,000 | $ 327,000,000 |
Impairment of amortizable intangible assets | $ 0 | $ 0 | $ 0 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Payables and Accruals [Abstract] | |||
Advertising and promotion | $ 100,091 | $ 179,687 | $ 98,746 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities | Accrued liabilities |
Current lease liabilities | $ 72,591 | $ 73,752 | $ 68,706 |
Incentive compensation | $ 66,830 | $ 140,769 | $ 108,633 |
Seasonal Financing (Details)
Seasonal Financing (Details) | Sep. 15, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) |
Debt Instrument [Line Items] | ||||
Short-term borrowings | $ 0 | $ 0 | $ 128,000,000 | |
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Outstanding letters of credit | 9,000,000 | 10,000,000 | 10,000,000 | |
Other Bank Loans | ||||
Debt Instrument [Line Items] | ||||
Short-term borrowings | 0 | 0 | 0 | |
New Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Aggregate commitment under the credit facility | $ 50,000,000 | |||
Outstanding borrowings | $ 0 | |||
New Senior Secured Revolving Credit Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Aggregate commitment under the credit facility | $ 1,400,000,000 | |||
Covenant, pro forma total leverage ratio, minimum | 0.25 | |||
Covenant, interest coverage ratio, minimum | 2.75 | |||
Covenant, leverage ratio, maximum | 4.50 | |||
New Senior Secured Revolving Credit Facility | Credit Agreement | Minimum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin for loans (as a percent) | 1.125% | |||
New Senior Secured Revolving Credit Facility | Credit Agreement | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin for loans (as a percent) | 0.125% | |||
New Senior Secured Revolving Credit Facility | Credit Agreement | Maximum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin for loans (as a percent) | 2% | |||
New Senior Secured Revolving Credit Facility | Credit Agreement | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin for loans (as a percent) | 1% | |||
Previous Senior Secured Revolving Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 0 | $ 128,000,000 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 2,600,000 | $ 2,600,000 | $ 2,600,000 |
Debt issuance costs and debt discount | (25,541) | (29,008) | (30,165) |
Long-term debt, net | 2,574,459 | 2,570,992 | 2,569,835 |
Less: current portion | (250,000) | 0 | 0 |
Total long-term debt | 2,324,459 | 2,570,992 | 2,569,835 |
Senior Notes | 2010 Senior Notes due October 2040 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 250,000 | 250,000 | 250,000 |
Senior Notes | 2011 Senior Notes due November 2041 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 300,000 | 300,000 | 300,000 |
Senior Notes | 2013 Senior Notes due March 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 250,000 | 250,000 | 250,000 |
Senior Notes | 2019 Senior Notes due December 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 600,000 | 600,000 | 600,000 |
Senior Notes | 2021 Senior Notes due April 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 600,000 | 600,000 | 600,000 |
Senior Notes | 2021 Senior Notes due April 2029 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 600,000 | $ 600,000 | $ 600,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 9 Months Ended | |||
Jul. 01, 2021 | Mar. 19, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Redemption of debt | $ 0 | $ 1,575,997,000 | ||
Loss on extinguishment of long-term borrowings | $ 0 | $ 101,695,000 | ||
Senior Notes | 2021 Senior Notes due April 2026 | ||||
Debt Instrument [Line Items] | ||||
Principal of debt instrument | $ 600,000,000 | |||
Interest rate | 3.375% | |||
Senior Notes | 2021 Senior Notes due April 2029 | ||||
Debt Instrument [Line Items] | ||||
Principal of debt instrument | $ 600,000,000 | |||
Interest rate | 3.75% | |||
Senior Notes | Senior Notes 2017 And 2018 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.75% | |||
Redemption of debt | $ 275,000,000 | $ 1,230,000,000 | ||
Loss on extinguishment of long-term borrowings | 18,500,000 | 83,200,000 | ||
Debt prepayment premium costs | 14,000,000 | 62,000,000 | ||
Write-off of unamortized debt issuance costs | $ 4,500,000 | $ 21,200,000 |
Other Noncurrent Liabilities (D
Other Noncurrent Liabilities (Details) - Other noncurrent liabilities - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Other Commitments [Line Items] | |||
Benefit plan liabilities | $ 162,202 | $ 179,857 | $ 202,601 |
Income taxes payable | $ 44,181 | $ 62,915 | $ 67,219 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 1,728,049 | $ 1,618,067 | $ 1,568,849 | $ 527,719 | $ 490,565 | $ 610,144 | $ 1,568,849 | $ 610,144 |
Other comprehensive income (loss) before reclassifications | (47,865) | (16,680) | (19,643) | (11,578) | ||||
Amounts reclassified from accumulated other comprehensive loss | (10,021) | 1,345 | (12,921) | 5,503 | ||||
Net increase (decrease) in other comprehensive income | (57,886) | 13,261 | 12,061 | (15,335) | 25,710 | (16,450) | (32,564) | (6,075) |
Adjustment of accumulated other comprehensive loss to retained earnings | 2,801 | |||||||
Ending balance | 1,967,464 | 1,728,049 | 1,618,067 | 1,313,678 | 527,719 | 490,565 | 1,967,464 | 1,313,678 |
Total | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (913,148) | (926,409) | (941,271) | (935,316) | (961,026) | (944,576) | (941,271) | (944,576) |
Net increase (decrease) in other comprehensive income | (57,886) | 13,261 | 12,061 | (15,335) | 25,710 | (16,450) | ||
Ending balance | (971,034) | (913,148) | (926,409) | (950,651) | (935,316) | (961,026) | (971,034) | (950,651) |
Derivative Instruments | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | 33,330 | 8,796 | (6,709) | (15,369) | 8,796 | (15,369) | ||
Other comprehensive income (loss) before reclassifications | 24,715 | 13,900 | 58,604 | 23,230 | ||||
Amounts reclassified from accumulated other comprehensive loss | (11,312) | (2,223) | (20,667) | (2,893) | ||||
Net increase (decrease) in other comprehensive income | 13,403 | 11,677 | 37,937 | 20,337 | ||||
Adjustment of accumulated other comprehensive loss to retained earnings | 0 | |||||||
Ending balance | 46,733 | 33,330 | 4,968 | (6,709) | 46,733 | 4,968 | ||
Available-for-Sale Securities | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | 0 | (6,447) | (4,290) | (7,522) | (6,447) | (7,522) | ||
Other comprehensive income (loss) before reclassifications | 0 | (1,320) | 0 | 1,912 | ||||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 3,646 | 0 | ||||
Net increase (decrease) in other comprehensive income | 0 | (3,600) | (1,320) | 3,646 | 1,912 | |||
Adjustment of accumulated other comprehensive loss to retained earnings | 2,800 | 2,801 | ||||||
Ending balance | 0 | 0 | (5,610) | (4,290) | 0 | (5,610) | ||
Employee Benefit Plans | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (151,388) | (154,099) | (182,285) | (186,854) | (154,099) | (186,854) | ||
Other comprehensive income (loss) before reclassifications | 63 | 56 | (35) | (203) | ||||
Amounts reclassified from accumulated other comprehensive loss | 1,291 | 3,568 | 4,100 | 8,396 | ||||
Net increase (decrease) in other comprehensive income | 1,354 | 3,624 | 4,065 | 8,193 | ||||
Adjustment of accumulated other comprehensive loss to retained earnings | 0 | |||||||
Ending balance | (150,034) | (151,388) | (178,661) | (182,285) | (150,034) | (178,661) | ||
Currency Translation Adjustments | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (795,090) | $ (789,521) | (742,032) | $ (734,831) | (789,521) | (734,831) | ||
Other comprehensive income (loss) before reclassifications | (72,643) | (29,316) | (78,212) | (36,517) | ||||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 | ||||
Net increase (decrease) in other comprehensive income | (72,643) | (29,316) | (78,212) | (36,517) | ||||
Adjustment of accumulated other comprehensive loss to retained earnings | 0 | |||||||
Ending balance | $ (867,733) | $ (795,090) | $ (771,348) | $ (742,032) | $ (867,733) | $ (771,348) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Provision (Benefit) for income taxes | $ 80,035 | $ (456,754) | $ 130,530 | $ (415,805) | ||||
Other non-operating (income) expense, net | (4,293) | 3,901 | 11,966 | 3,347 | ||||
Loss before income taxes | (363,698) | (333,864) | (489,887) | (250,206) | ||||
Net income | (289,882) | $ (66,440) | $ (21,454) | (795,076) | $ 5,537 | $ 112,385 | (377,776) | (677,154) |
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Derivative Instruments | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Cost of sales | 11,292 | 2,322 | 20,764 | 3,191 | ||||
Provision (Benefit) for income taxes | 20 | (99) | (97) | (298) | ||||
Net income | 11,312 | 2,223 | 20,667 | 2,893 | ||||
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Employee Benefit Plans | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Provision (Benefit) for income taxes | 313 | 2,182 | 1,140 | 2,120 | ||||
Loss before income taxes | (1,604) | (5,750) | (5,240) | (10,516) | ||||
Net income | (1,291) | (3,568) | (4,100) | (8,396) | ||||
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Amortization of prior service credit | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other non-operating (income) expense, net | 504 | 455 | 1,409 | 1,253 | ||||
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Recognized actuarial loss | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other non-operating (income) expense, net | (2,108) | (2,830) | (6,649) | (8,394) | ||||
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Settlement loss | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other non-operating (income) expense, net | $ 0 | $ (3,375) | $ 0 | $ (3,375) |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Currency translation adjustments loss | $ 57,886 | $ (13,261) | $ (12,061) | $ 15,335 | $ (25,710) | $ 16,450 | $ 32,564 | $ 6,075 |
Adjustment of accumulated other comprehensive loss to retained earnings | 2,801 | |||||||
Available-for-Sale Securities | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Reclassification adjustment from AOCI and subsequent reclassification for write-down of securities | 6,400 | |||||||
Currency translation adjustments loss | 0 | 3,600 | 1,320 | (3,646) | (1,912) | |||
Adjustment of accumulated other comprehensive loss to retained earnings | $ 2,800 | 2,801 | ||||||
Currency Translation Adjustments | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Currency translation adjustments loss | $ 72,643 | $ 29,316 | 78,212 | $ 36,517 | ||||
Adjustment of accumulated other comprehensive loss to retained earnings | $ 0 |
Foreign Currency Transaction _3
Foreign Currency Transaction Exposure (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Currency Transaction Gains (Losses) [Line Items] | ||||
Currency transaction (losses), net | $ (6,730) | $ (5,181) | $ (33,780) | $ (12,493) |
Operating income | ||||
Currency Transaction Gains (Losses) [Line Items] | ||||
Currency transaction (losses), net | (6,689) | (4,855) | (14,948) | (7,358) |
Other non-operating (income) expense, net | ||||
Currency Transaction Gains (Losses) [Line Items] | ||||
Currency transaction (losses), net | $ (41) | $ (326) | $ (18,832) | $ (5,135) |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - Foreign currency forward exchange and other contracts - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | $ 771 | $ 925 | $ 861 |
Maximum | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Maximum term for foreign currency forward exchange contracts | 24 months |
Derivative Instruments - Assets
Derivative Instruments - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | $ 53,576 | $ 18,075 | $ 15,564 |
Derivative Liabilities | 5,828 | 3,810 | 6,300 |
Derivatives designated as hedging instruments | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 50,152 | 14,361 | 14,399 |
Derivative Liabilities | 2,175 | 2,581 | 4,053 |
Derivatives designated as hedging instruments | Foreign currency forward exchange and other contracts | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 41,832 | 13,361 | 11,624 |
Derivatives designated as hedging instruments | Foreign currency forward exchange and other contracts | Other noncurrent assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 8,320 | 1,000 | 2,775 |
Derivatives designated as hedging instruments | Foreign currency forward exchange and other contracts | Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | 1,981 | 2,301 | 4,046 |
Derivatives designated as hedging instruments | Foreign currency forward exchange and other contracts | Other noncurrent liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | 194 | 280 | 7 |
Derivatives not designated as hedging instruments | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | 3,653 | 1,229 | 2,247 |
Derivatives not designated as hedging instruments | Foreign currency forward exchange and other contracts | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 3,424 | 3,714 | 1,165 |
Derivatives not designated as hedging instruments | Foreign currency forward exchange and other contracts | Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | 3,609 | 1,229 | 2,247 |
Derivatives not designated as hedging instruments | Foreign currency forward exchange and other contracts | Other noncurrent liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | $ 44 | $ 0 | $ 0 |
Derivative Instruments - Design
Derivative Instruments - Designated as Hedging Instruments by Classification and Amount of Gains and Losses (Details) - Derivatives Designated As Hedging Instruments - Foreign Exchange Forward - Cost of sales - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gains recognized in OCI | $ 24,715 | $ 13,900 | $ 58,604 | $ 23,230 |
Amount of gains reclassified from accumulated OCI to consolidated statements of operations | $ 11,312 | $ 2,223 | $ 20,667 | $ 2,893 |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments by Classification and Amount of Gains and Losses (Details) - Derivatives Not Designated As Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of net (losses) gains recognized in the Statements of Operations | $ (2,279) | $ (2,900) | $ 843 | $ (3,224) |
Foreign Exchange Forward | Other non-operating (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of net (losses) gains recognized in the Statements of Operations | (2,279) | (2,900) | 843 | (3,863) |
Foreign Exchange Forward | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of net (losses) gains recognized in the Statements of Operations | $ 0 | $ 0 | $ 0 | $ 639 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Assets: | |||
Foreign currency forward exchange contracts and other | $ 53,576 | $ 18,075 | $ 15,564 |
Equity securities | 3,360 | 5,343 | 6,180 |
Total assets | 56,936 | 23,418 | 21,744 |
Liabilities: | |||
Foreign currency forward exchange contracts and other | 5,828 | 3,810 | 6,300 |
Level 1 | |||
Assets: | |||
Foreign currency forward exchange contracts and other | 0 | 0 | 0 |
Equity securities | 3,360 | 5,343 | 6,180 |
Total assets | 3,360 | 5,343 | 6,180 |
Liabilities: | |||
Foreign currency forward exchange contracts and other | 0 | 0 | 0 |
Level 2 | |||
Assets: | |||
Foreign currency forward exchange contracts and other | 53,576 | 18,075 | 15,564 |
Equity securities | 0 | 0 | 0 |
Total assets | 53,576 | 18,075 | 15,564 |
Liabilities: | |||
Foreign currency forward exchange contracts and other | 5,828 | 3,810 | 6,300 |
Level 3 | |||
Assets: | |||
Foreign currency forward exchange contracts and other | 0 | 0 | 0 |
Equity securities | 0 | 0 | 0 |
Total assets | 0 | 0 | 0 |
Liabilities: | |||
Foreign currency forward exchange contracts and other | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Fair Value Disclosures [Abstract] | |||
Estimated fair value of long-term debt | $ 2,350 | $ 2,820 | $ 2,830 |
Carrying value of long-term debt | $ 2,600 | $ 2,600 | $ 2,600 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic: | ||||||||
Net income | $ 289,882 | $ 66,440 | $ 21,454 | $ 795,076 | $ (5,537) | $ (112,385) | $ 377,776 | $ 677,154 |
Weighted-average number of common shares (in shares) | 354,471 | 350,424 | 353,394 | 349,642 | ||||
Basic net income per common share (USD per share) | $ 0.82 | $ 2.27 | $ 1.07 | $ 1.94 | ||||
Diluted: | ||||||||
Net income | $ 289,882 | $ 66,440 | $ 21,454 | $ 795,076 | $ (5,537) | $ (112,385) | $ 377,776 | $ 677,154 |
Weighted-average number of common shares (in shares) | 354,471 | 350,424 | 353,394 | 349,642 | ||||
Dilutive share-based awards (in shares) | 5,758 | 3,754 | 6,337 | 4,671 | ||||
Weighted-average number of common and potential common shares (in shares) | 360,229 | 354,178 | 359,731 | 354,313 | ||||
Diluted net income per common share (USD per share) | $ 0.80 | $ 2.24 | $ 1.05 | $ 1.91 | ||||
Antidilutive securities excluded from calculation of earnings per share (in shares) | 10,400 | 12,600 | 10,800 | 11,700 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 980 | $ 1,194 | $ 3,046 | $ 3,780 |
Interest cost | 2,996 | 2,525 | 9,112 | 7,595 |
Expected return on plan assets | (4,776) | (4,627) | (14,480) | (13,891) |
Amortization of prior service cost | 5 | 54 | 118 | 275 |
Recognized actuarial loss | 2,133 | 2,832 | 6,724 | 8,401 |
Settlement loss | 0 | 3,375 | 0 | 3,375 |
Net periodic benefit cost (credit) | 1,338 | 5,353 | 4,520 | 9,535 |
Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 22 | 19 | 66 | 59 |
Amortization of prior service cost | (509) | (509) | (1,527) | (1,528) |
Recognized actuarial loss | (25) | (2) | (75) | (7) |
Net periodic benefit cost (credit) | $ (512) | $ (492) | $ (1,536) | $ (1,476) |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Retirement Benefits [Abstract] | |
Cash contributions made during the period | $ 3 |
Expected additional cash contributions | $ 3 |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) program | Sep. 30, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of incentive programs | program | 3 | |
Proceeds from stock option exercises | $ 27,658 | $ 5,522 |
Stock Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period of stock option expiration from date of grant | 10 years | |
Stock Options, RSUs, and Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General vesting period | 3 years | |
Total unrecognized compensation expense related to unvested share-based payments | $ 118,000 | |
Weighted-average period for unrecognized compensation expense expected to be recognized | 2 years 1 month 6 days |
Share-Based Payments - Compensa
Share-Based Payments - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 18,053 | $ 16,212 | $ 55,941 | $ 46,493 |
Stock option compensation expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 5,170 | 2,407 | 10,064 | 7,851 |
RSU compensation expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 9,643 | 6,633 | 27,810 | 20,664 |
Performance award compensation expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3,240 | $ 7,172 | $ 18,067 | $ 17,978 |
Other Selling and Administrat_3
Other Selling and Administrative Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | ||||
Design and development | $ 52,204 | $ 47,739 | $ 144,145 | $ 138,466 |
Identifiable intangible asset amortization | $ 9,308 | $ 9,514 | $ 28,304 | $ 28,572 |
Restructuring Charges - Schedul
Restructuring Charges - Schedule of Capital Light Restructuring Charges (Details) - Optimizing for Growth (formerly Capital Light Initiative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 5,807 | $ 9,406 | $ 26,397 | $ 28,341 |
Cost of sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1,366 | 148 | 9,795 | 1,930 |
Other selling and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 4,441 | $ 9,258 | $ 16,602 | $ 26,411 |
Restructuring Charges - Severan
Restructuring Charges - Severance and Other Restructuring Charges Activity (Details) - Optimizing for Growth (formerly Capital Light Initiative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||||
Remaining liability at beginning of period | $ 15,245 | $ 5,324 | ||
Charges | $ 5,807 | $ 9,406 | 26,397 | 28,341 |
Payments/Utilization | (26,568) | (17,895) | ||
Remaining liability at end of period | 15,074 | 15,770 | 15,074 | 15,770 |
Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Remaining liability at beginning of period | 12,411 | 5,294 | ||
Charges | 14,021 | 15,277 | ||
Payments/Utilization | (12,290) | (7,716) | ||
Remaining liability at end of period | 14,142 | 12,855 | 14,142 | 12,855 |
Other restructuring charges | ||||
Restructuring Reserve [Roll Forward] | ||||
Remaining liability at beginning of period | 2,834 | 30 | ||
Charges | 12,376 | 13,064 | ||
Payments/Utilization | (14,278) | (10,179) | ||
Remaining liability at end of period | $ 932 | $ 2,915 | $ 932 | $ 2,915 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) - Optimizing for Growth (formerly Capital Light Initiative) $ in Millions | Sep. 30, 2022 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Severance and other restructuring charges incurred to date | $ 112 |
Restructuring and related cost, cost incurred to date, non-cash charges | 26 |
Minimum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring costs | 165 |
Expected non-cash restructuring costs | 70 |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring costs | 190 |
Expected non-cash restructuring costs | $ 75 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Provision (Benefit) for income taxes | $ 80,035 | $ (456,754) | $ 130,530 | $ (415,805) | |
Discrete tax (benefit) expense | (19,400) | (465,300) | (4,800) | (445,800) | |
Release of valuation allowances on deferred tax assets | $ 492,200 | 0 | $ 492,191 | $ 540,800 | |
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 | $ 15,500 | 15,500 | |||
Deferred tax liabilities, undistributed foreign earnings, increase (decrease) | $ 12,400 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 1 Months Ended | 2 Months Ended | 9 Months Ended | ||
Oct. 21, 2022 USD ($) | Jul. 01, 2022 USD ($) | Feb. 28, 2022 USD ($) | Jan. 31, 2020 stockholder | Sep. 30, 2022 lawsuit child class | |
Sleeper | |||||
Loss Contingencies [Line Items] | |||||
Number of additional lawsuits pending | lawsuit | 34 | ||||
Number of children with injuries or fatalities related to lawsuits | child | 38 | ||||
Whistleblower Letter | |||||
Loss Contingencies [Line Items] | |||||
Number of additional lawsuits pending | lawsuit | 7 | ||||
Number of stockholders who filed complaints | stockholder | 2 | ||||
Litigation settlement, amount awarded from other party | $ 7 | ||||
Litigation settlement, amount awarded to other party | $ 86 | ||||
Whistleblower Letter | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount awarded to other party | $ 3.5 | ||||
Minimum | Sleeper | |||||
Loss Contingencies [Line Items] | |||||
Number of consumer classes | class | 10 |
Segment Information - Revenues
Segment Information - Revenues and Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 1,755,780 | $ 1,762,293 | $ 4,032,767 | $ 3,662,851 | ||
Operating Income | 391,372 | 389,074 | 596,519 | 472,086 | ||
Interest expense | 33,870 | 52,062 | 99,730 | 220,689 | ||
Interest (income) | (1,903) | (753) | (5,064) | (2,156) | ||
Other non-operating (income) expense, net | (4,293) | 3,901 | 11,966 | 3,347 | ||
Income Before Income Taxes | 363,698 | 333,864 | 489,887 | 250,206 | ||
Middleton, Wisconsin | American Girl Corporate Offices and Distribution Center | ||||||
Segment Reporting Information [Line Items] | ||||||
Gain on sale of assets | $ 15,200 | 15,200 | ||||
Mexico | Land and Building | ||||||
Segment Reporting Information [Line Items] | ||||||
Gain on sale of assets | $ 15,800 | 15,800 | ||||
Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating Income | 491,169 | 516,078 | 955,191 | 858,257 | ||
Operating Segments | North America and International | ||||||
Segment Reporting Information [Line Items] | ||||||
Restructuring charges | 1,400 | 100 | 9,800 | 1,900 | ||
Operating Segments | North America | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 1,002,126 | 1,037,004 | 2,330,747 | 2,077,493 | ||
Operating Income | 337,305 | 372,015 | 707,605 | 646,466 | ||
Operating Segments | International | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 704,640 | 673,295 | 1,584,878 | 1,447,547 | ||
Operating Income | 162,828 | 150,598 | 268,012 | 237,616 | ||
Operating Segments | American Girl | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 49,014 | 51,994 | 117,142 | 137,811 | ||
Operating Income | (8,964) | (6,535) | (20,426) | (25,825) | ||
Corporate and Other Expense | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating Income | (99,797) | (127,004) | (358,672) | (386,171) | ||
Restructuring charges | 4,500 | 9,200 | 17,100 | 25,700 | ||
Total product recall charges | $ 700 | $ 2,800 | $ 1,200 | $ 14,900 |
Segment Information - Assets (D
Segment Information - Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | $ 2,465,303 | $ 1,849,868 | $ 2,292,381 |
Operating Segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 2,280,637 | 1,635,837 | 2,069,639 |
Operating Segments | North America | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 1,233,835 | 784,836 | 1,073,657 |
Operating Segments | International | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 961,097 | 798,833 | 925,626 |
Operating Segments | American Girl | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | 85,705 | 52,168 | 70,356 |
Corporate and Other Expense | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Accounts receivable and inventories, net | $ 184,666 | $ 214,031 | $ 222,742 |
Segment Information - Revenue_2
Segment Information - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,755,780 | $ 1,762,293 | $ 4,032,767 | $ 3,662,851 |
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,002,126 | 1,037,004 | 2,330,747 | 2,077,493 |
Operating Segments | North America | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,051,140 | 1,088,998 | 2,447,889 | 2,215,304 |
Operating Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 704,640 | 673,295 | 1,584,878 | 1,447,547 |
Operating Segments | International | EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 410,187 | 420,833 | 958,839 | 905,818 |
Operating Segments | International | Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 221,805 | 180,798 | 418,531 | 329,553 |
Operating Segments | International | Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 72,648 | $ 71,664 | $ 207,508 | $ 212,176 |