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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2016
Compensation and Retirement Disclosure [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. These plans include defined benefit pension plans, defined contribution retirement plans, postretirement benefit plans, and deferred compensation and excess benefit plans. In addition, Mattel makes contributions to government-mandated retirement plans in countries outside the US where its employees work. A summary of retirement plan expense is as follows:
| For the Year Ended
| December 31, 2016 |  | December 31, 2015 |  | December 31, 2014
| (In thousands)
Defined contribution retirement plans | $ | 37,661 |  |  | $ | 40,673 |  |  | $ | 43,819 |
Defined benefit pension plans | 13,999 |  |  | 14,779 |  |  | 18,124 |
Deferred compensation and excess benefit plans | 5,093 |  |  | 225 |  |  | 4,840 |
Postretirement benefit plans | 1,343 |  |  | 1,396 |  |  | 1,461 |
| $ | 58,096 |  |  | $ | 57,073 |  |  | $ | 68,244 |
Defined Benefit Pension and Postretirement Benefit Plans Mattel provides defined benefit pension plans for eligible domestic employees, which are intended to comply with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). Some of Mattel’s foreign subsidiaries have defined benefit pension plans covering substantially all of their eligible employees. Mattel funds these plans in accordance with the terms of the plans and local statutory requirements, which differ for each of the countries in which the subsidiaries are located. Mattel also has unfunded postretirement health insurance plans covering certain eligible domestic employees. 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
| 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
| (In thousands)
Net periodic benefit cost: |  |  |  |  |  |  |  |  |
Service cost | $ | 5,557 |  |  | $ | 6,105 |  |  | $ | 7,515 |  |  | $ | 52 |  |  | $ | 54 |  |  | $ | 67 |
Interest cost | 24,526 |  |  | 26,007 |  |  | 27,708 |  |  | 1,143 |  |  | 1,194 |  |  | 1,377 |
Expected return on plan assets | (25,726 | ) |  | (29,850 | ) |  | (31,833 | ) |  | — |  |  | — |  |  | — |
Amortization of prior service cost (credit) | 461 |  |  | (465 | ) |  | (1,037 | ) |  | — |  |  | — |  |  | — |
Recognized actuarial loss | 6,994 |  |  | 15,168 |  |  | 15,771 |  |  | 148 |  |  | 148 |  |  | 17 |
Settlement loss | 1,772 |  |  | 6,453 |  |  | — |  |  | — |  |  | — |  |  | — |
Curtailment loss (gain) | 415 |  |  | (8,639 | ) |  | — |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost | $ | 13,999 |  |  | $ | 14,779 |  |  | $ | 18,124 |  |  | $ | 1,343 |  |  | $ | 1,396 |  |  | $ | 1,461 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |
Net actuarial (gain) loss | $ | (1,531 | ) |  | $ | (8,813 | ) |  | $ | 48,502 |  |  | $ | (1,833 | ) |  | $ | (3,130 | ) |  | $ | (2,205 | )
Prior service cost | 505 |  |  | 8,691 |  |  | 20 |  |  | — |  |  | — |  |  | — |
Amortization of prior service (cost) credit | (461 | ) |  | 465 |  |  | 1,037 |  |  | — |  |  | — |  |  | — |
Total recognized in other comprehensive income (a) | $ | (1,487 | ) |  | $ | 343 |  |  | $ | 49,559 |  |  | $ | (1,833 | ) |  | $ | (3,130 | ) |  | $ | (2,205 | )
Total recognized in net periodic benefit cost and other comprehensive income | $ | 12,512 |  |  | $ | 15,122 |  |  | $ | 67,683 |  |  | $ | (490 | ) |  | $ | (1,734 | ) |  | $ | (744 | )
(a) | Amounts exclude related tax expense (benefit) of $1.2 million, $1.1 million, and $(17.8) million, during 2016, 2015, and 2014, respectively, which are also included in other comprehensive income.
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 Ended
| December 31, 2016 |  | December 31, 2015 |  | December 31, 2014
Defined benefit pension plans: |  |  |  |  |
Discount rate | 4.2 | % |  | 3.8 | % |  | 4.7 | %
Weighted average rate of future compensation increases | N/A |  |  | 3.8 | % |  | 3.8 | %
Long-term rate of return on plan assets | 6.5 | % |  | (a) |  |  | 8.0 | %
Postretirement benefit plans: |  |  |  |  |
Discount rate | 4.2 | % |  | 3.8 | % |  | 4.7 | %
Annual increase in Medicare Part B premium | 6.0 | % |  | 6.0 | % |  | 6.0 | %
Health care cost trend rate: |  |  |  |  |
Pre-65 | 7.0 | % |  | 7.5 | % |  | 8.5 | %
Post-65 | 8.3 | % |  | 8.8 | % |  | 7.5 | %
Ultimate cost trend rate: |  |  |  |  |
Pre-65 | 4.5 | % |  | 4.5 | % |  | 6.1 | %
Post-65 | 4.5 | % |  | 4.5 | % |  | 5.4 | %
Year that the rate reaches the ultimate cost trend rate: |  |  |  |  |
Pre-65 | 2023 |  |  | 2023 |  |  | 2030 |
Post-65 | 2024 |  |  | 2024 |  |  | 2030 |
(a) | A long-term rate of return on plan assets of 7.5% was used for the first half of 2015. A long-term rate of return on plan assets of 6.8% was used for the second half of 2015, resulting from a change in the plans' target asset allocation.
Discount rates, weighted average rates of future compensation increases, and long-term rates of return on plan assets for Mattel’s foreign defined benefit pension plans differ from the assumptions used for Mattel’s domestic defined benefit pension plans due to differences in local economic conditions in the locations where the non-US plans are based. The rates shown in the preceding table are indicative of the weighted average rates of all Mattel’s defined benefit pension plans given the relative insignificance of the foreign plans to the consolidated total. The estimated net actuarial loss and prior service cost for the domestic defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2017 is $6.5 million. The estimated net actuarial loss for the domestic postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2017 is $0.2 million. Mattel used a measurement date of December 31, 2016 for its 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
| December 31, 2016 |  | December 31, 2015 |  | December 31, 2016 |  | December 31, 2015
| (In thousands)
Change in Benefit Obligation: |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 611,490 |  |  | $ | 677,641 |  |  | $ | 30,416 |  |  | $ | 34,402 |
Service cost | 5,557 |  |  | 6,105 |  |  | 52 |  |  | 54 |
Interest cost | 24,526 |  |  | 26,007 |  |  | 1,143 |  |  | 1,194 |
Impact of currency exchange rate changes | (14,535 | ) |  | (11,016 | ) |  | — |  |  | — |
Actuarial loss (gain) | 25,164 |  |  | (14,604 | ) |  | (1,686 | ) |  | (2,981 | )
Benefits paid | (46,425 | ) |  | (67,994 | ) |  | (2,311 | ) |  | (2,253 | )
Plan amendments | 74 |  |  | (4,649 | ) |  | — |  |  | — |
Benefit obligation, end of year | $ | 605,851 |  |  | $ | 611,490 |  |  | $ | 27,614 |  |  | $ | 30,416 |
Change in Plan Assets: |  |  |  |  |  |  |
Plan assets at fair value, beginning of year | $ | 435,274 |  |  | $ | 475,940 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets | 43,292 |  |  | (690 | ) |  | — |  |  | — |
Employer contributions | 17,617 |  |  | 33,353 |  |  | 2,311 |  |  | 2,253 |
Impact of currency exchange rate changes | (15,978 | ) |  | (5,335 | ) |  | — |  |  | — |
Benefits paid | (46,425 | ) |  | (67,994 | ) |  | (2,311 | ) |  | (2,253 | )
Plan assets at fair value, end of year | $ | 433,780 |  |  | $ | 435,274 |  |  | $ | — |  |  | $ | — |
Net Amount Recognized in Consolidated Balance Sheets: |  |  |  |  |  |  |
Funded status, end of year | $ | (172,071 | ) |  | $ | (176,216 | ) |  | $ | (27,614 | ) |  | $ | (30,416 | )
Current accrued benefit liability | (4,519 | ) |  | (7,416 | ) |  | (2,700 | ) |  | (3,300 | )
Noncurrent accrued benefit liability | (167,552 | ) |  | (168,800 | ) |  | (24,914 | ) |  | (27,116 | )
Total accrued benefit liability | $ | (172,071 | ) |  | $ | (176,216 | ) |  | $ | (27,614 | ) |  | $ | (30,416 | )
Amounts Recognized in Accumulated Other Comprehensive Loss (a): |  |  |  |  |  |  |
Net actuarial loss (gain) | $ | 243,249 |  |  | $ | 244,780 |  |  | $ | (49 | ) |  | $ | 1,784 |
Prior service cost | 164 |  |  | 120 |  |  | — |  |  | — |
| $ | 243,413 |  |  | $ | 244,900 |  |  | $ | (49 | ) |  | $ | 1,784 |
(a) | Amounts exclude related tax benefits of $85.7 million and $86.8 million for December 31, 2016 and 2015, respectively, which are also included in accumulated other comprehensive loss.
The accumulated benefit obligation differs from the projected benefit obligation in that it assumes future compensation levels will remain unchanged. Mattel’s accumulated benefit obligation for its defined benefit pension plans as of December 31, 2016 and 2015 totaled $588.4 million and $589.2 million, respectively. 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, 2016 |  | December 31, 2015
Defined benefit pension plans: |  |  |
Discount rate | 3.9 | % |  | 4.2 | %
Weighted average rate of future compensation increases | N/A |  |  | 3.8 | %
Postretirement benefit plans: |  |  |
Discount rate | 3.9 | % |  | 4.2 | %
Annual increase in Medicare Part B premium | 6.0 | % |  | 6.0 | %
Health care cost trend rate: |  |  |
Pre-65 | 7.0 | % |  | 7.0 | %
Post-65 | 7.8 | % |  | 8.3 | %
Ultimate cost trend rate: |  |  |
Pre-65 | 4.5 | % |  | 4.5 | %
Post-65 | 4.5 | % |  | 4.5 | %
Year that the rate reaches the ultimate cost trend rate: |  |  |
Pre-65 | 2024 |  |  | 2023 |
Post-65 | 2024 |  |  | 2024 |
A one percentage point increase/(decrease) in the assumed health care cost trend rate for each future year would impact the postretirement benefit obligation as of December 31, 2016 by $2.1 million and $(1.9) million, respectively, and the service and interest cost recognized for 2016 by $0.1 million and $(0.1) million, respectively. 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)
2017 | $ | 54,051 |  |  | $ | 2,700 |
2018 | 37,833 |  |  | 2,600 |
2019 | 37,997 |  |  | 2,600 |
2020 | 37,901 |  |  | 2,600 |
2021 | 37,466 |  |  | 2,600 |
2022 – 2026 | 185,012 |  |  | 11,300 |
Mattel expects to make cash contributions totaling approximately $10 million to its defined benefit pension and postretirement benefit plans in 2017, which includes approximately $9 million for benefit payments for its unfunded plans. Mattel periodically commissions a study of the plans’ assets and liabilities to determine an asset allocation that would best match expected cash flows from the plans’ assets to expected benefit payments. Mattel monitors the returns earned by the plans’ assets and reallocates investments as needed. Mattel’s overall investment strategy is to achieve an adequately diversified asset allocation mix of investments that provides for both near-term benefit payments as well as long-term growth. The assets are invested in a combination of indexed and actively managed funds. The target allocations for Mattel’s domestic plan assets, which comprise 79% of Mattel’s total plan assets, are 42% in US equities, 28% in non-US equities, 20% in fixed income securities, and 10% in real estate securities. The US equities are benchmarked against the S&P 500, and the non-US equities are benchmarked against a combination of developed and emerging markets indices. Fixed income securities are long-duration bonds intended to closely match the duration of the liabilities and include US government treasuries and agencies, corporate bonds from various industries, and mortgage-backed and asset-backed securities. 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, 2016
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
US government and US government agency securities | $ | — |  |  | $ | 1,568 |  |  | $ | — |  |  | $ | 1,568 |
US corporate debt instruments | — |  |  | 33,787 |  |  | — |  |  | 33,787 |
International corporate debt instruments | — |  |  | 8,689 |  |  | — |  |  | 8,689 |
Mutual funds | 582 |  |  | — |  |  | — |  |  | 582 |
Money market funds | 2,531 |  |  | — |  |  |  |  | 2,531 |
Other | — |  |  | 6,640 |  |  | — |  |  | 6,640 |
Collective trust funds: |  |  |  |  |  |  |
US equity securities (a) |  |  |  |  |  |  | 96,487 |
International equity securities (a) |  |  |  |  |  |  | 239,177 |
International fixed income (a) |  |  |  |  |  |  | 44,319 |
Total | $ | 3,113 |  |  | $ | 50,684 |  |  | $ | — |  |  | $ | 433,780 |
| December 31, 2015
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
US government and US government agency securities | $ | — |  |  | $ | 1,540 |  |  | $ | — |  |  | $ | 1,540 |
US corporate debt instruments | — |  |  | 31,254 |  |  | — |  |  | 31,254 |
International corporate debt instruments | — |  |  | 5,612 |  |  | — |  |  | 5,612 |
Mutual funds | 567 |  |  | — |  |  | — |  |  | 567 |
Other | — |  |  | 10,023 |  |  | — |  |  | 10,023 |
Collective trust funds: |  |  |  |  |  |  |
US equity securities (a) |  |  |  |  |  |  | 86,466 |
International equity securities (a) |  |  |  |  |  |  | 255,694 |
International fixed income (a) |  |  |  |  |  |  | 44,118 |
Total | $ | 567 |  |  | $ | 48,429 |  |  | $ | — |  |  | $ | 435,274 |
(a) These investments consist of privately placed funds that are valued based on net asset value per share. With the adoption of ASU 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position and its related disclosures. The fair value of collective trust funds are determined based on the net asset value per share held at year-end. The fair value of mutual funds, money market funds, US government securities, US government agency securities, and corporate debt instruments are determined based on quoted market prices or are estimated using pricing models with observable inputs or quoted prices of securities with similar characteristics. Mattel’s defined benefit pension plan assets are not directly invested in Mattel common stock. Mattel believes that the long-term rate of return on plan assets of 6.5% as of December 31, 2016 is reasonable based on historical returns. Defined Contribution Retirement Plans Domestic employees are eligible to participate in a 401(k) savings plan, the Mattel, Inc. Personal Investment Plan (the “Plan”), sponsored by Mattel, which is a funded defined contribution plan intended to comply with ERISA’s requirements. Contributions to the Plan include voluntary contributions by eligible employees and employer automatic and matching contributions by Mattel. The Plan allows employees to allocate both their voluntary contributions and their employer automatic and matching contributions to a variety of investment funds, including a fund that is invested in Mattel common stock (the “Mattel Stock Fund”). Employees are not required to allocate any of their Plan account balance to the Mattel Stock Fund, allowing employees to limit or eliminate their exposure to market changes in Mattel’s stock price. Furthermore, the Plan limits the percentage of the employee’s total account balance that may be allocated to the Mattel Stock Fund to 25%. Employees may generally reallocate their account balances on a daily basis. However, pursuant to Mattel’s insider trading policy, employees classified as insiders and restricted personnel under Mattel’s insider trading policy are limited to certain periods in which they may make allocations into or out of the Mattel Stock Fund. Certain non-US employees participate in other defined contribution retirement plans with varying vesting and contribution provisions. Deferred Compensation and Excess Benefit Plans Mattel maintains a deferred compensation plan that permits certain officers and key employees to elect to defer portions of their compensation. The deferred compensation plan, together with certain contributions made by Mattel and participating employees to an excess benefit plan, earns various rates of return. The liability for these plans as of December 31, 2016 and 2015 was $70.0 million and $71.7 million, respectively, and is primarily included in other noncurrent liabilities in the consolidated balance sheets. Changes in the market value of the participant-selected investment options are recorded as retirement plan expense within other selling and administrative expenses in the consolidated statements of operations. Separately, Mattel has purchased group trust-owned life insurance contracts designed to assist in funding these programs. The cash surrender value of these policies, valued at $70.9 million and $67.3 million as of December 31, 2016 and 2015, respectively, are held in an irrevocable grantor trust, the assets of which are subject to the claims of Mattel’s creditors and are included in other noncurrent assets in the consolidated balance sheets. Incentive Compensation Plans Mattel has annual incentive compensation plans under which officers and key employees may earn incentive compensation based on Mattel’s performance and are subject to certain approvals of the Compensation Committee of the Board of Directors. For 2016, 2015, and 2014, $16.5 million, $50.2 million, and $25.2 million, respectively, was charged to expense for awards under these plans. Mattel had two long-term incentive program (“LTIP”) performance cycles in place for the time period between 2014 and 2016: (i) a January 1, 2014—December 31, 2016 performance cycle, which was established by the Compensation Committee of the Board of Directors in March 2014, and (ii) a January 1, 2016—December 31, 2018 performance cycle, which was established by the Compensation Committee of the Board of Directors in March 2016. For the January 1, 2014—December 31, 2016 LTIP performance cycle, Mattel granted performance-based restricted stock units ("Performance RSUs") under the Mattel, Inc. 2010 Equity and Long-Term Compensation Plan to officers and certain employees providing services to Mattel. Performance RSUs granted under this program could be earned based on an initial target number with the final number of Performance RSUs payable being determined based on the product of the initial target number of Performance RSUs multiplied by a performance factor based on measurements of Mattel’s performance with respect to: (i) annual operating result targets for each year in the performance cycle using a net operating profit after taxes less capital charge measure and a net sales performance measure (“the 2014-2016 performance-related components”), and (ii) Mattel’s total stock return ("TSR") for the three-year performance cycle relative to the TSR realized by companies comprising the S&P 500 as of the first day of the performance cycle (“the 2014-2016 market-related component”), adjusted for dividends declared during the three-year performance cycle. The Performance RSUs also had dividend equivalent rights that could be converted to shares of Mattel common stock only when and to the extent the underlying Performance RSUs were earned and paid in shares of Mattel common stock. For the January 1, 2014—December 31, 2016 LTIP performance cycle, no shares were earned relating to the 2014-2016 performance-related components, market-related component, or dividend equivalent rights. For the January 1, 2014—December 31, 2016 LTIP performance cycle, the weighted average grant date fair values of the performance-related and market-related components of the Performance RSUs were $32.60 and ($3.57) per share, respectively, for 2016, $23.14 and $(3.57) per share, respectively, for 2015, and $39.03 and ($3.57) per share, respectively, for 2014. During 2016, 2015, and 2014, no expense was recognized related to the 2014-2016 performance cycle, as no shares were earned. For the January 1, 2016—December 31, 2018 LTIP performance cycle, Mattel granted Performance RSUs under the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan to officers and certain employees providing services to Mattel. Performance RSUs granted under this program are also earned based on an initial target number with the final number of Performance RSUs payable being determined based on the product of the initial target number of Performance RSUs multiplied by a performance factor based on measurements of Mattel's performance with respect to (i) a cumulative three-year EPS target for the performance cycle (the "2016-2018 performance-related component") and (ii) Mattel's TSR for the three-year performance cycle relative to the TSR realized by companies comprising the S&P 500 as of the first day of the performance cycle (the "2016-2018 market-related component"), adjusted for dividends declared during the three-year performance cycle. The Performance RSUs also have dividend equivalent rights that are converted to shares of Mattel common stock only when and to the extent the underlying Performance RSUs are earned and paid in shares of Mattel common stock. For the 2016-2018 performance-related component, the range of possible outcomes is that between zero and 0.5 million shares could be earned. For the 2016-2018 market-related component, the possible outcomes range from an upward adjustment of 0.2 million shares to a downward adjustment of 0.2 million shares to the result of the performance-related component. For the January 1, 2016—December 31, 2018 LTIP performance cycle, the weighted average grant date fair value of the performance-related and market-related components of the Performance RSUs were $32.60 and $5.10 per share, respectively, for 2016. During 2016, Mattel recognized share-based compensation expense of $2.8 million relating to the 2016-2018 performance-related component and $0.4 million relating to the 2016-2018 market-related component. The fair values of the performance-related components were based on the closing stock prices of Mattel’s common stock on each of the grant dates. The fair values of the market-related components were estimated at the grant dates using a Monte Carlo valuation methodology.

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