Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2013

A summary of retirement plan expense is as follows:


	For the Year
	2013		2012		2011
	(In thousands)
Defined contribution retirement plans	$	43,694	$	40,266	$	36,873
Defined benefit pension plans		30,747		33,597		37,597
Deferred compensation and excess benefit plans		9,298		5,740		730
Postretirement benefit plans		2,245		1,607		1,601

	$	85,984	$	81,210	$	76,801

Summary of Components of Net Periodic Benefit Cost and Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

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


	Defined Benefit Pension Plans									Postretirement Benefit Plans
	2013			2012			2011			2013		2012		2011
	(In thousands)
Net periodic benefit cost:
Service cost	$	12,982		$	13,285		$	13,610		$	82	$	79	$	73
Interest cost		25,580			29,530			28,433			1,585		1,411		1,576
Expected return on plan assets		(29,786	)		(31,270	)		(25,714	)		—		—		—
Amortization of prior service (credit) cost		(1,057	)		(502	)		1,776			—		—		—
Recognized actuarial loss (gain)		21,193			19,020			19,492			578		117		(48	)
Settlement loss		1,835			3,534			—			—		—		—

Net periodic benefit cost	$	30,747		$	33,597		$	37,597		$	2,245	$	1,607	$	1,601

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial (gain) loss	$	(95,744	)	$	27,144		$	62,687		$	3,470	$	4,755	$	(1,249	)
Prior service cost (credit)		—			(11,789	)		2			—		—		—
Amortization of prior service credit (cost)		1,057			501			(1,776	)		—		—		—

Total recognized in other comprehensive income (a)	$	(94,687	)	$	15,856		$	60,913		$	3,470	$	4,755	$	(1,249	)

Total recognized in net periodic benefit cost and other comprehensive income	$	(63,940	)	$	49,453		$	98,510		$	5,715	$	6,362	$	352

(a)

Amounts exclude related tax expense (benefit) of $32.5 million, $(2.3) million, and $(21.6) million, during 2013, 2012, and 2011, respectively, which are also included in other comprehensive income.

Assumptions Used to Calculate Net Periodic Benefit Cost for Domestic Defined Benefit Pension and Postretirement Benefit Plans

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


	For the Year
	2013		2012		2011
Defined benefit pension plans:
Discount rate		4.0%		4.5%		5.2%
Weighted average rate of future compensation increases		3.8%		3.8%		3.8%
Long-term rate of return on plan assets		8.0%		8.0%		8.0%

Postretirement benefit plans:
Discount rate		4.0%		4.5%		5.2%
Annual increase in Medicare Part B premium		6.0%		6.0%		6.0%

Health care cost trend rate:
Pre-65		8.5%		7.5%		8.0%
Post-65		7.5%		7.5%		8.0%
Ultimate cost trend rate:
Pre-65		6.1%		5.0%		5.0%
Post-65		5.4%		5.0%		5.0%
Year that the rate reaches the ultimate cost trend rate:
Pre-65		2030		2017		2017
Post-65		2030		2017		2017

Summary of Changes in Benefit Obligation and Plan Assets for Defined Benefit Pension and Postretirement Benefit Plans

A summary of the changes in benefit obligation and plan assets is as follows:


	Defined Benefit Pension Plans						Postretirement Benefit Plans
	2013			2012			2013			2012
	(In thousands)
Change in Benefit Obligation:
Benefit obligation, beginning of year	$	669,351		$	610,016		$	35,433		$	32,334
Service cost		12,982			13,285			82			79
Interest cost		25,580			29,530			1,585			1,411
Plan amendments		—			(11,791	)		—			—
Impact of currency exchange rate changes		(2,206	)		1,713			—			—
Actuarial (gain) loss		(57,418	)		74,433			4,048			4,872
Benefits paid		(31,351	)		(47,835	)		(3,234	)		(3,263	)

Benefit obligation, end of year	$	616,938		$	669,351		$	37,914		$	35,433

Change in Plan Assets:
Plan assets at fair value, beginning of year	$	406,163		$	338,081		$	—		$	—
Actual return on plan assets (a)		47,529			57,028			—			—
Employer contributions		32,078			55,752			3,234			3,263
Impact of currency exchange rate changes		2,026			3,137			—			—
Benefits paid		(31,351	)		(47,835	)		(3,234	)		(3,263	)

Plan assets at fair value, end of year	$	456,445		$	406,163		$	—		$	—

Net Amount Recognized in Consolidated Balance Sheets:
Funded status, end of year	$	(160,493	)	$	(263,188	)	$	(37,914	)	$	(35,433	)

Current accrued benefit liability		(2,661	)		(11,407	)		(2,700	)		(2,600	)
Noncurrent accrued benefit liability		(157,832	)		(251,781	)		(35,214	)		(32,833	)

Total accrued benefit liability	$	(160,493	)	$	(263,188	)	$	(37,914	)	$	(35,433	)

Amounts Recognized in Accumulated Other Comprehensive Loss (b):
Net actuarial loss	$	205,091		$	300,835		$	7,119		$	3,649
Prior service (credit)		(10,093	)		(11,150	)		—			—

	$	194,998		$	289,685		$	7,119		$	3,649

(a)

The 2012 actual return on plan assets from defined benefit pension plan includes an increase of approximately $12 million related to assets transferred to the Fisher-Price Pension Plan resulting from its conversion to a cash balance plan.

(b)

Amounts exclude related tax benefits of $70.2 million and $102.7 million for December 31, 2013 and 2012, respectively, which are also included in accumulated other comprehensive loss.

Assumptions Used to Determine Projected and Accumulated Benefit Obligations of Domestic Defined Benefit Pension and Postretirement Benefit Plans

The assumptions used in determining the projected and accumulated benefit obligations of Mattel’s domestic defined benefit pension and postretirement benefit plans are as follows:


	December 31,
	2013		2012
Defined benefit pension plans:
Discount rate		4.7%		4.0%
Weighted average rate of future compensation increases		3.8%		3.8%

Postretirement benefit plans:
Discount rate		4.7%		4.0%
Annual increase in Medicare Part B premium		6.0%		6.0%

Health care cost trend rate:
Pre-65		8.5%		8.5%
Post-65		7.5%		7.5%

Ultimate cost trend rate:
Pre-65		6.1%		6.1%
Post-65		5.4%		5.4%
Year that the rate reaches the ultimate cost trend rate:
Pre-65		2030		2030
Post-65		2030		2030

Estimated Future Benefit Payments for Defined Benefit Pension and Postretirement Benefit Plans

The estimated future benefit payments for Mattel’s defined benefit pension and postretirement benefit plans are as follows:


	Defined Benefit Pension Plans		Postretirement Benefit Plans
	(In thousands)
2014	$	32,289	$	2,700
2015		36,071		2,600
2016		42,815		2,500
2017		34,583		2,500
2018		35,934		2,500
2019 – 2023		203,523		11,100

Plan Assets Measured and Reported in Financial Statements at Fair Value

Mattel’s defined benefit pension plan assets are measured and reported in the financial statements at fair value using inputs, which are more fully described in “Note 10 to the Consolidated Financial Statements—Fair Value Measurements,” as follows:


	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(In thousands)
Collective trust funds:
US equity securities	$	—	$	174,735	$	—	$	174,735
International equity securities		—		164,998		—		164,998
International fixed income		—		41,523		—		41,523
US government and US government agency securities		—		31,434		—		31,434
US corporate debt instruments		—		21,171		—		21,171
International corporate debt instruments		—		4,996		—		4,996
Mutual funds		1,520		7,221		—		8,741
Other		—		8,847		—		8,847

Total	$	1,520	$	454,925	$	—	$	456,445


	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Collective trust funds:
US equity securities	$	—	$	148,435	$	—	$	148,435
International equity securities		—		147,756		—		147,756
International fixed income		—		36,580		—		36,580
US government and US government agency securities		—		35,944		—		35,944
US corporate debt instruments		—		20,514		—		20,514
International corporate debt instruments		—		5,455		—		5,455
Mutual funds		1,422		3,661		—		5,083
Other		—		6,396		—		6,396

Total	$	1,422	$	404,741	$	—	$	406,163