ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-1567322
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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333 Continental Blvd.
El Segundo, CA
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90245-5012
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I
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PART II
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Item 1.
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Financial Statements.
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March 31,
2016 |
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March 31,
2015 |
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December 31,
2015 |
||||||
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(Unaudited; in thousands, except share data)
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||||||||||
ASSETS
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Current Assets
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||||||
Cash and equivalents
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$
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599,708
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$
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682,908
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$
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892,814
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Accounts receivable, net
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748,074
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699,703
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1,145,099
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Inventories
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698,316
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640,320
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587,521
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Prepaid expenses and other current assets
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349,859
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377,403
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375,625
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Total current assets
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2,395,957
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2,400,334
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3,001,059
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Noncurrent Assets
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Property, plant, and equipment, net
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732,667
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715,608
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741,147
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Goodwill
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1,401,567
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1,385,895
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1,384,520
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Other noncurrent assets
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1,438,754
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1,583,861
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1,408,417
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Total Assets
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$
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5,968,945
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$
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6,085,698
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$
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6,535,143
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||
Current Liabilities
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||||||
Short-term borrowings
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$
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—
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$
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—
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$
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16,914
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Current portion of long-term debt
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300,000
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—
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300,000
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Accounts payable
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424,349
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287,599
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651,681
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Accrued liabilities
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495,383
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496,638
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658,182
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Income taxes payable
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14,393
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10,537
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18,752
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Total current liabilities
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1,234,125
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794,774
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1,645,529
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Noncurrent Liabilities
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Long-term debt
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1,785,427
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2,082,603
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1,784,721
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Other noncurrent liabilities
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474,273
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541,678
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471,639
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Total noncurrent liabilities
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2,259,700
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2,624,281
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2,256,360
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Stockholders’ Equity
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Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued
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441,369
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441,369
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441,369
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Additional paid-in capital
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1,797,967
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1,774,748
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1,789,870
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Treasury stock at cost: 101.0 million shares, 103.0 million shares, and 101.7 million shares, respectively
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(2,476,006
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)
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(2,528,722
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)
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(2,494,901
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)
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Retained earnings
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3,542,486
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3,708,274
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3,745,815
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Accumulated other comprehensive loss
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(830,696
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)
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(729,026
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)
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(848,899
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)
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Total stockholders’ equity
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2,475,120
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2,666,643
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2,633,254
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Total Liabilities and Stockholders’ Equity
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$
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5,968,945
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$
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6,085,698
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$
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6,535,143
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For the Three Months Ended
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March 31,
2016 |
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March 31,
2015 |
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(Unaudited; in thousands,
except per share amounts)
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||||||
Net Sales
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$
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869,399
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$
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922,749
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Cost of sales
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480,728
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472,301
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Gross Profit
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388,671
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450,448
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Advertising and promotion expenses
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86,943
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102,428
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Other selling and administrative expenses
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350,874
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402,487
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Operating Loss
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(49,146
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)
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(54,467
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)
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Interest expense
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22,520
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20,401
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Interest (income)
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(2,360
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)
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(1,668
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)
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Other non-operating expense (income), net
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24,173
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(53
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)
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Loss Before Income Taxes
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(93,479
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)
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(73,147
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)
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Benefit from income taxes
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(20,520
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)
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(14,970
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)
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Net Loss
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$
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(72,959
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)
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$
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(58,177
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)
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Net Loss Per Common Share—Basic
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$
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(0.21
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)
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$
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(0.17
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)
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Weighted average number of common shares
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340,369
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338,579
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Net Loss Per Common Share—Diluted
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$
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(0.21
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)
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$
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(0.17
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)
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Weighted average number of common and potential common shares
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340,369
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338,579
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Dividends Declared Per Common Share
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$
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0.38
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$
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0.38
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For the Three Months Ended
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||||||
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March 31,
2016 |
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March 31,
2015 |
||||
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(Unaudited; in thousands)
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||||||
Net Loss
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$
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(72,959
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)
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$
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(58,177
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)
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Other Comprehensive Income (Loss), Net of Tax:
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Currency translation adjustments
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40,021
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(126,692
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)
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Defined benefit pension plan adjustments
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1,085
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2,855
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Net unrealized (losses) gains on derivative instruments:
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|
||||
Unrealized holding (losses) gains
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(15,893
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)
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25,751
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Reclassification adjustment for realized gains included in net income
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(7,010
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)
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(8,851
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)
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(22,903
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)
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16,900
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|
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Other Comprehensive Income (Loss), Net of Tax
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18,203
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(106,937
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)
|
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Comprehensive Loss
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$
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(54,756
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)
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$
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(165,114
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)
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For the Three Months Ended
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||||||
March 31,
2016 |
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March 31,
2015 |
|||||
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(Unaudited; in thousands)
|
||||||
Cash Flows From Operating Activities:
|
|
||||||
Net loss
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$
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(72,959
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)
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$
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(58,177
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)
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Adjustments to reconcile net loss to net cash flows used for operating activities:
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|
||||
Depreciation
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60,002
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56,682
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Amortization
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6,338
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8,103
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Deferred income taxes
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(35,197
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)
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(22,103
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)
|
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Share-based compensation
|
12,364
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11,603
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Increase (decrease) from changes in assets and liabilities, net of acquired assets and liabilities:
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||||
Accounts receivable
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402,501
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361,084
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|
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Inventories
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(96,132
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)
|
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(98,709
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)
|
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Prepaid expenses and other current assets
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20,833
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(3,106
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)
|
||
Accounts payable, accrued liabilities, and income taxes payable
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(358,700
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)
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(329,228
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)
|
||
Other, net
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(28,303
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)
|
|
20,741
|
|
||
Net cash flows used for operating activities
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(89,253
|
)
|
|
(53,110
|
)
|
||
Cash Flows From Investing Activities:
|
|
||||||
Purchases of tools, dies, and molds
|
(31,077
|
)
|
|
(21,896
|
)
|
||
Purchases of other property, plant, and equipment
|
(14,232
|
)
|
|
(16,852
|
)
|
||
Payments for acquisitions
|
(32,606
|
)
|
|
—
|
|
||
Proceeds from (payments for) foreign currency forward exchange contracts
|
19,379
|
|
|
(53,606
|
)
|
||
Other, net
|
3,792
|
|
|
322
|
|
||
Net cash flows used for investing activities
|
(54,744
|
)
|
|
(92,032
|
)
|
||
Cash Flows From Financing Activities:
|
|
||||||
Payments of short-term borrowings, net
|
(16,914
|
)
|
|
—
|
|
||
Payments of dividends on common stock
|
(129,202
|
)
|
|
(128,530
|
)
|
||
Proceeds from exercise of stock options
|
12,421
|
|
|
2,405
|
|
||
Other, net
|
(670
|
)
|
|
(2,663
|
)
|
||
Net cash flows used for financing activities
|
(134,365
|
)
|
|
(128,788
|
)
|
||
Effect of Currency Exchange Rate Changes on Cash
|
(14,744
|
)
|
|
(14,812
|
)
|
||
Decrease in Cash and Equivalents
|
(293,106
|
)
|
|
(288,742
|
)
|
||
Cash and Equivalents at Beginning of Period
|
892,814
|
|
|
971,650
|
|
||
Cash and Equivalents at End of Period
|
$
|
599,708
|
|
|
$
|
682,908
|
|
1.
|
Basis of Presentation
|
2.
|
Accounts Receivable
|
3.
|
Inventories
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Raw materials and work in process
|
$
|
126,511
|
|
|
$
|
132,307
|
|
|
$
|
105,917
|
|
Finished goods
|
571,805
|
|
|
508,013
|
|
|
481,604
|
|
|||
|
$
|
698,316
|
|
|
$
|
640,320
|
|
|
$
|
587,521
|
|
4.
|
Property, Plant, and Equipment
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Land
|
$
|
27,125
|
|
|
$
|
27,448
|
|
|
$
|
27,049
|
|
Buildings
|
276,413
|
|
|
275,392
|
|
|
275,266
|
|
|||
Machinery and equipment
|
777,831
|
|
|
725,694
|
|
|
764,657
|
|
|||
Software
|
337,147
|
|
|
319,379
|
|
|
331,251
|
|
|||
Tools, dies, and molds
|
842,136
|
|
|
789,443
|
|
|
840,586
|
|
|||
Capital leases
|
23,970
|
|
|
23,970
|
|
|
23,970
|
|
|||
Leasehold improvements
|
250,556
|
|
|
240,878
|
|
|
245,082
|
|
|||
|
2,535,178
|
|
|
2,402,204
|
|
|
2,507,861
|
|
|||
Less: accumulated depreciation
|
(1,802,511
|
)
|
|
(1,686,596
|
)
|
|
(1,766,714
|
)
|
|||
|
$
|
732,667
|
|
|
$
|
715,608
|
|
|
$
|
741,147
|
|
5.
|
Goodwill
|
|
December 31,
2015 |
|
Acquisitions
|
|
Currency
Exchange Rate Impact |
|
March 31,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
North America
|
$
|
718,999
|
|
|
$
|
9,634
|
|
|
$
|
(868
|
)
|
|
$
|
727,765
|
|
International
|
452,879
|
|
|
10,230
|
|
|
(2,191
|
)
|
|
460,918
|
|
||||
American Girl
|
212,642
|
|
|
—
|
|
|
242
|
|
|
212,884
|
|
||||
Total goodwill
|
$
|
1,384,520
|
|
|
$
|
19,864
|
|
|
$
|
(2,817
|
)
|
|
$
|
1,401,567
|
|
6.
|
Other Noncurrent Assets
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Nonamortizable identifiable intangibles
|
$
|
483,506
|
|
|
$
|
489,155
|
|
|
$
|
488,144
|
|
Deferred income taxes
|
548,184
|
|
|
597,594
|
|
|
510,928
|
|
|||
Identifiable intangibles (net of amortization of $136.8 million, $110.6 million, and $131.5 million, respectively)
|
218,032
|
|
|
233,124
|
|
|
212,161
|
|
|||
Other
|
189,032
|
|
|
263,988
|
|
|
197,184
|
|
|||
|
$
|
1,438,754
|
|
|
$
|
1,583,861
|
|
|
$
|
1,408,417
|
|
7.
|
Accrued Liabilities
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Royalties
|
$
|
48,170
|
|
|
$
|
49,328
|
|
|
$
|
122,153
|
|
Taxes other than income taxes
|
24,108
|
|
|
25,320
|
|
|
66,848
|
|
|||
Advertising and promotion
|
21,533
|
|
|
35,606
|
|
|
75,991
|
|
|||
Other
|
401,572
|
|
|
386,384
|
|
|
393,190
|
|
|||
|
$
|
495,383
|
|
|
$
|
496,638
|
|
|
$
|
658,182
|
|
8.
|
Seasonal Financing
|
9.
|
Long-Term Debt
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
2010 Senior Notes due October 2020 and October 2040
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
2011 Senior Notes due November 2016 and November 2041
|
600,000
|
|
|
600,000
|
|
|
600,000
|
|
|||
2013 Senior Notes due March 2018 and March 2023
|
500,000
|
|
|
500,000
|
|
|
500,000
|
|
|||
2014 Senior Notes due May 2019
|
500,000
|
|
|
500,000
|
|
|
500,000
|
|
|||
Debt issuance costs
|
(14,573
|
)
|
|
(17,397
|
)
|
|
(15,279
|
)
|
|||
|
2,085,427
|
|
|
2,082,603
|
|
|
2,084,721
|
|
|||
Less: current portion
|
(300,000
|
)
|
|
—
|
|
|
(300,000
|
)
|
|||
Total long-term debt
|
$
|
1,785,427
|
|
|
$
|
2,082,603
|
|
|
$
|
1,784,721
|
|
10.
|
Other Noncurrent Liabilities
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Benefit plan liabilities
|
$
|
204,025
|
|
|
$
|
210,012
|
|
|
$
|
195,916
|
|
Noncurrent tax liabilities
|
107,148
|
|
|
166,083
|
|
|
106,584
|
|
|||
Other
|
163,100
|
|
|
165,583
|
|
|
169,139
|
|
|||
|
$
|
474,273
|
|
|
$
|
541,678
|
|
|
$
|
471,639
|
|
11.
|
Accumulated Other Comprehensive Income (Loss)
|
|
For the Three Months Ended March 31, 2016
|
||||||||||||||
|
Derivative
Instruments
|
|
Defined Benefit
Pension Plans
|
|
Currency
Translation
Adjustments
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2015
|
$
|
15,363
|
|
|
$
|
(159,858
|
)
|
|
$
|
(704,404
|
)
|
|
$
|
(848,899
|
)
|
Other comprehensive (loss) income before reclassifications
|
(15,893
|
)
|
|
(1,024
|
)
|
|
40,021
|
|
|
23,104
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(7,010
|
)
|
|
2,109
|
|
|
—
|
|
|
(4,901
|
)
|
||||
Net (decrease) increase in other comprehensive income (loss)
|
(22,903
|
)
|
|
1,085
|
|
|
40,021
|
|
|
18,203
|
|
||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2016
|
$
|
(7,540
|
)
|
|
$
|
(158,773
|
)
|
|
$
|
(664,383
|
)
|
|
$
|
(830,696
|
)
|
|
For the Three Months Ended March 31, 2015
|
||||||||||||||
|
Derivative
Instruments
|
|
Defined Benefit
Pension Plans
|
|
Currency
Translation
Adjustments
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2014
|
$
|
30,025
|
|
|
$
|
(161,507
|
)
|
|
$
|
(490,607
|
)
|
|
$
|
(622,089
|
)
|
Other comprehensive income (loss) before reclassifications
|
25,751
|
|
|
(139
|
)
|
|
(126,692
|
)
|
|
(101,080
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(8,851
|
)
|
|
2,994
|
|
|
—
|
|
|
(5,857
|
)
|
||||
Net increase (decrease) in other comprehensive income (loss)
|
16,900
|
|
|
2,855
|
|
|
(126,692
|
)
|
|
(106,937
|
)
|
||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2015
|
$
|
46,925
|
|
|
$
|
(158,652
|
)
|
|
$
|
(617,299
|
)
|
|
$
|
(729,026
|
)
|
|
For the Three Months Ended March 31, 2016
|
|
For the Three Months Ended March 31, 2015
|
|
Statements of Operations
Classification
|
||||
|
(In thousands)
|
|
|
||||||
Derivative Instruments
|
|
||||||||
Gain on foreign currency forward exchange contracts
|
$
|
7,212
|
|
|
$
|
8,820
|
|
|
Cost of sales
|
|
(202
|
)
|
|
31
|
|
|
Provision for income taxes
|
||
|
$
|
7,010
|
|
|
$
|
8,851
|
|
|
Net income
|
Defined Benefit Pension Plans
|
|
|
|
|
|
||||
Amortization of prior service (cost) credit
|
$
|
(8
|
)
|
|
$
|
264
|
|
|
(a)
|
Recognized actuarial loss
|
(1,873
|
)
|
|
(4,931
|
)
|
|
(a)
|
||
|
(1,881
|
)
|
|
(4,667
|
)
|
|
|
||
|
(228
|
)
|
|
1,673
|
|
|
Provision for income taxes
|
||
|
$
|
(2,109
|
)
|
|
$
|
(2,994
|
)
|
|
Net income
|
(a)
|
The amortization of prior service (cost) credit and recognized actuarial loss are included in the computation of net periodic benefit cost. Refer to “Note 15 to the Consolidated Financial Statements—Employee Benefit Plans” of this Quarterly Report on Form 10-Q for additional information regarding Mattel’s net periodic benefit cost.
|
12.
|
Derivative Instruments
|
|
Derivative Assets
|
||||||||||||
|
Balance Sheet Classification
|
|
Fair Value
|
||||||||||
|
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
|
|
(In thousands)
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
Prepaid expenses and other
current assets
|
|
$
|
3,748
|
|
|
$
|
53,253
|
|
|
$
|
15,279
|
|
Foreign currency forward exchange contracts
|
Other noncurrent assets
|
|
82
|
|
|
608
|
|
|
1,611
|
|
|||
Total derivatives designated as hedging instruments
|
|
|
$
|
3,830
|
|
|
$
|
53,861
|
|
|
$
|
16,890
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
Prepaid expenses and other
current assets
|
|
$
|
4,739
|
|
|
$
|
8
|
|
|
$
|
1,216
|
|
Total
|
|
|
$
|
8,569
|
|
|
$
|
53,869
|
|
|
$
|
18,106
|
|
|
|
|
|
|
|
|
|
||||||
|
Derivative Liabilities
|
||||||||||||
|
Balance Sheet Classification
|
|
Fair Value
|
||||||||||
|
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
|
|
(In thousands)
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
Accrued liabilities
|
|
$
|
11,352
|
|
|
$
|
7,040
|
|
|
$
|
1,214
|
|
Foreign currency forward exchange contracts
|
Other noncurrent liabilities
|
|
3,852
|
|
|
101
|
|
|
219
|
|
|||
Total derivatives designated as hedging instruments
|
|
|
$
|
15,204
|
|
|
$
|
7,141
|
|
|
$
|
1,433
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
Accrued liabilities
|
|
$
|
472
|
|
|
$
|
11,279
|
|
|
$
|
2,287
|
|
Total
|
|
|
$
|
15,676
|
|
|
$
|
18,420
|
|
|
$
|
3,720
|
|
|
For the Three Months Ended
March 31, 2016 |
|
For the Three Months Ended
March 31, 2015 |
|
Statements of
Operations
Classification
|
||||||||||||
|
Amount of Gain
(Loss) Recognized
in OCI
|
|
Amount of
Gain (Loss)
Reclassified from
Accumulated OCI
to Statements of
Operations
|
|
Amount of Gain
(Loss) Recognized
in OCI
|
|
Amount of
Gain (Loss)
Reclassified from
Accumulated OCI
to Statements of
Operations
|
|
|||||||||
|
(In thousands)
|
|
|
||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
(15,893
|
)
|
|
$
|
7,010
|
|
|
$
|
25,751
|
|
|
$
|
8,851
|
|
|
Cost of sales
|
|
Amount of Gain
(Loss) Recognized in the
Statements of Operations
|
|
Statements of Operations
Classification
|
||||||
|
For the Three Months Ended March 31, 2016
|
|
For the Three Months Ended March 31, 2015
|
|
|||||
|
(In thousands)
|
|
|
||||||
Derivatives not designated as hedging instruments
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
23,592
|
|
|
$
|
(53,249
|
)
|
|
Other non-operating income/expense
|
Foreign currency forward exchange contracts
|
1,125
|
|
|
(992
|
)
|
|
Cost of sales
|
||
Total
|
$
|
24,717
|
|
|
$
|
(54,241
|
)
|
|
|
13.
|
Fair Value Measurements
|
•
|
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
|
•
|
Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 – Valuations based on inputs that are unobservable, supported by little or no market activity, and that are significant to the fair value of the assets or liabilities.
|
|
March 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
8,569
|
|
|
$
|
—
|
|
|
$
|
8,569
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
15,676
|
|
|
$
|
—
|
|
|
$
|
15,676
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
53,869
|
|
|
$
|
—
|
|
|
$
|
53,869
|
|
Auction rate security (b)
|
—
|
|
|
—
|
|
|
31,587
|
|
|
31,587
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
53,869
|
|
|
$
|
31,587
|
|
|
$
|
85,456
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
18,420
|
|
|
$
|
—
|
|
|
$
|
18,420
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
18,106
|
|
|
$
|
—
|
|
|
$
|
18,106
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
3,720
|
|
|
$
|
—
|
|
|
$
|
3,720
|
|
(a)
|
The fair values of the foreign currency forward exchange contracts are based on dealer quotes of market forward rates and reflect the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates.
|
(b)
|
The fair value of the auction rate security was estimated using a discounted cash flow model based on (i) estimated interest rates, timing, and amount of cash flows, (ii) credit spreads, recovery rates, and credit quality of the underlying securities, (iii) illiquidity considerations, and (iv) market correlation.
|
14.
|
Earnings Per Share
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands, except per share amounts)
|
||||||
Basic:
|
|
|
|
||||
Net loss
|
$
|
(72,959
|
)
|
|
$
|
(58,177
|
)
|
Less: net loss allocable to participating RSUs (a)
|
—
|
|
|
—
|
|
||
Net loss available for basic common shares
|
$
|
(72,959
|
)
|
|
$
|
(58,177
|
)
|
Weighted average common shares outstanding
|
340,369
|
|
|
338,579
|
|
||
Basic net loss per common share
|
$
|
(0.21
|
)
|
|
$
|
(0.17
|
)
|
Diluted:
|
|
|
|
||||
Net loss
|
$
|
(72,959
|
)
|
|
$
|
(58,177
|
)
|
Less: net loss allocable to participating RSUs (a)
|
—
|
|
|
—
|
|
||
Net loss available for diluted common shares
|
$
|
(72,959
|
)
|
|
$
|
(58,177
|
)
|
Weighted average common shares outstanding
|
340,369
|
|
|
338,579
|
|
||
Weighted average common equivalent shares arising from:
|
|
|
|
||||
Dilutive stock options and non-participating RSUs
|
—
|
|
|
—
|
|
||
Weighted average number of common and potential common shares
|
340,369
|
|
|
338,579
|
|
||
Diluted net loss per common share
|
$
|
(0.21
|
)
|
|
$
|
(0.17
|
)
|
(a)
|
During the
three
months ended
March 31, 2016
and
2015
, Mattel did not allocate its net loss to its participating RSUs as its participating RSUs are not obligated to share in Mattel's losses.
|
15.
|
Employee Benefit Plans
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Service cost
|
$
|
1,422
|
|
|
$
|
2,178
|
|
Interest cost
|
6,141
|
|
|
6,272
|
|
||
Expected return on plan assets
|
(6,473
|
)
|
|
(7,633
|
)
|
||
Amortization of prior service cost (credit)
|
8
|
|
|
(264
|
)
|
||
Recognized actuarial loss
|
1,836
|
|
|
4,892
|
|
||
|
$
|
2,934
|
|
|
$
|
5,445
|
|
A summary of the components of net periodic benefit cost for Mattel’s postretirement benefit plans is as follows:
|
|||||||
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Service cost
|
$
|
13
|
|
|
$
|
21
|
|
Interest cost
|
286
|
|
|
313
|
|
||
Recognized actuarial loss
|
37
|
|
|
39
|
|
||
|
$
|
336
|
|
|
$
|
373
|
|
16.
|
Share-Based Payments
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Stock option compensation expense
|
$
|
2,379
|
|
|
$
|
2,799
|
|
RSU compensation expense
|
9,985
|
|
|
8,804
|
|
||
|
$
|
12,364
|
|
|
$
|
11,603
|
|
17.
|
Other Selling and Administrative Expenses
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Design and development
|
$
|
51,836
|
|
|
$
|
52,916
|
|
Identifiable intangible asset amortization
|
5,293
|
|
|
6,463
|
|
18.
|
Foreign Currency Transaction Gains and Losses
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Operating income
|
$
|
(11,842
|
)
|
|
$
|
11,904
|
|
Other non-operating income (expense), net
|
(26,989
|
)
|
|
(925
|
)
|
||
Net transaction (losses) gains
|
$
|
(38,831
|
)
|
|
$
|
10,979
|
|
19.
|
Income Taxes
|
20.
|
Contingencies
|
21.
|
Segment Information
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Segment Income (Loss)
|
|
|
|
||||
North America
|
$
|
41,149
|
|
|
$
|
25,049
|
|
International
|
(17,362
|
)
|
|
(4,436
|
)
|
||
American Girl
|
3,387
|
|
|
5,528
|
|
||
|
27,174
|
|
|
26,141
|
|
||
Corporate and other expense (a)
|
(76,320
|
)
|
|
(80,608
|
)
|
||
Operating loss
|
(49,146
|
)
|
|
(54,467
|
)
|
||
Interest expense
|
22,520
|
|
|
20,401
|
|
||
Interest (income)
|
(2,360
|
)
|
|
(1,668
|
)
|
||
Other non-operating expense (income), net
|
24,173
|
|
|
(53
|
)
|
||
Loss before income taxes
|
$
|
(93,479
|
)
|
|
$
|
(73,147
|
)
|
(a)
|
Corporate and other expense includes severance and restructuring expenses of
$9.8 million
and
$28.0 million
for the
three
months ended
March 31, 2016
and
2015
, respectively, and share-based compensation expense of
$12.4 million
and
$11.6 million
for the
three
months ended
March 31, 2016
and
2015
, respectively.
|
|
March 31,
2016 |
|
March 31,
2015 |
|
December 31,
2015 |
||||||
|
(In thousands)
|
||||||||||
Assets by Segment
|
|
|
|
|
|
||||||
North America
|
$
|
590,939
|
|
|
$
|
550,807
|
|
|
$
|
764,945
|
|
International
|
594,507
|
|
|
552,981
|
|
|
759,709
|
|
|||
American Girl
|
114,026
|
|
|
105,278
|
|
|
108,414
|
|
|||
|
1,299,472
|
|
|
1,209,066
|
|
|
1,633,068
|
|
|||
Corporate and other
|
146,918
|
|
|
130,957
|
|
|
99,552
|
|
|||
Accounts receivable and inventories, net
|
$
|
1,446,390
|
|
|
$
|
1,340,023
|
|
|
$
|
1,732,620
|
|
|
For the Three Months Ended
|
||||||
|
March 31,
2016 |
|
March 31,
2015 |
||||
|
(In thousands)
|
||||||
Worldwide Revenues by Brand Category
|
|
|
|
||||
Mattel Girls & Boys Brands
|
$
|
527,854
|
|
|
$
|
605,183
|
|
Fisher-Price Brands
|
272,612
|
|
|
263,968
|
|
||
American Girl Brands
|
93,286
|
|
|
106,083
|
|
||
Construction and Arts & Crafts Brands
|
61,915
|
|
|
38,283
|
|
||
Other
|
6,438
|
|
|
6,673
|
|
||
Gross sales
|
962,105
|
|
|
1,020,190
|
|
||
Sales adjustments
|
(92,706
|
)
|
|
(97,441
|
)
|
||
Net sales
|
$
|
869,399
|
|
|
$
|
922,749
|
|
22.
|
New Accounting Pronouncements
|
23.
|
Subsequent Event
|
•
|
Exploiting the franchise strength of its core brands;
|
•
|
Re-establishing toy leadership;
|
•
|
Strengthening its global supply chain;
|
•
|
Achieving distinctiveness and excellence in its commercial organization;
|
•
|
Rapidly expanding into emerging markets; and
|
•
|
Continuously driving cost improvement.
|
•
|
Gross sales in the
first
quarter of
2016
were down
6%
as reported, and down
1%
in constant currency, compared to the
first
quarter of
2015
.
|
•
|
Net sales in the
first
quarter of
2016
were down
6%
as reported, and down
2%
in constant currency, compared to the
first
quarter of
2015
.
|
•
|
Gross margin in the
first
quarter of
2016
was
44.7%
, a decrease of
410
basis points from the
first
quarter of
2015
.
|
•
|
Operating loss, as reported, in the
first
quarter of
2016
was
$49.1 million
compared to operating loss of
$54.5 million
in the
first
quarter of
2015
. Adjusted operating loss was
$36.0 million
in the
first
quarter of
2016
, as compared to adjusted operating loss of
$14.6 million
in the
first
quarter of
2015
.
|
•
|
Loss per share, as reported, in the
first
quarter of
2016
was
$0.21
compared to loss per share of
$0.17
in the
first
quarter of
2015
. Adjusted loss per share was
$0.13
in the
first
quarter of
2016
, as compared to adjusted loss per share of
$0.08
in the
first
quarter of
2015
.
|
|
For the Three Months Ended March 31,
|
|
Year/Year Change
|
||||||||||||||||
2016
|
|
2015
|
|
||||||||||||||||
Amount
|
|
% of Net
Sales |
|
Amount
|
|
% of Net
Sales |
|
%
|
|
Basis Points
of Net Sales |
|||||||||
Net sales
|
$
|
869.4
|
|
|
100.0
|
%
|
|
$
|
922.7
|
|
|
100.0
|
%
|
|
-6
|
%
|
|
—
|
|
Gross profit
|
$
|
388.7
|
|
|
44.7
|
%
|
|
$
|
450.4
|
|
|
48.8
|
%
|
|
-14
|
%
|
|
-410
|
|
Advertising and promotion expenses
|
86.9
|
|
|
10.0
|
%
|
|
102.4
|
|
|
11.1
|
%
|
|
-15
|
%
|
|
-110
|
|
||
Other selling and administrative expenses
|
350.9
|
|
|
40.4
|
%
|
|
402.5
|
|
|
43.6
|
%
|
|
-13
|
%
|
|
-320
|
|
||
Operating loss
|
(49.1
|
)
|
|
(5.7
|
)%
|
|
(54.5
|
)
|
|
(5.9
|
)%
|
|
-10
|
%
|
|
20
|
|
||
Interest expense
|
22.5
|
|
|
2.6
|
%
|
|
20.4
|
|
|
2.2
|
%
|
|
10
|
%
|
|
40
|
|
||
Interest (income)
|
(2.4
|
)
|
|
(0.3
|
)%
|
|
(1.7
|
)
|
|
(0.2
|
)%
|
|
41
|
%
|
|
-10
|
|
||
Other non-operating expense (income), net
|
24.3
|
|
|
|
|
—
|
|
|
|
|
|
|
|
||||||
Loss before income taxes
|
$
|
(93.5
|
)
|
|
(10.8
|
)%
|
|
$
|
(73.2
|
)
|
|
(7.9
|
)%
|
|
28
|
%
|
|
-290
|
|
|
For the Three Months Ended
March 31, |
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
|
% Change in
Constant Currency |
|||||||||
|
2016
|
|
2015
|
|
||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||
Mattel Girls & Boys Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Barbie
|
$
|
141.1
|
|
|
$
|
146.0
|
|
|
-3
|
%
|
|
-3
|
%
|
|
—
|
%
|
Other Girls
|
72.4
|
|
|
189.6
|
|
|
-62
|
%
|
|
-4
|
%
|
|
-58
|
%
|
||
Wheels
|
134.9
|
|
|
132.1
|
|
|
2
|
%
|
|
-7
|
%
|
|
9
|
%
|
||
Entertainment
|
179.5
|
|
|
137.5
|
|
|
30
|
%
|
|
-6
|
%
|
|
36
|
%
|
||
|
527.9
|
|
|
605.2
|
|
|
-13
|
%
|
|
-5
|
%
|
|
-8
|
%
|
||
Fisher-Price Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Core Fisher-Price
|
178.3
|
|
|
169.7
|
|
|
5
|
%
|
|
-5
|
%
|
|
10
|
%
|
||
Fisher-Price Friends
|
79.6
|
|
|
78.4
|
|
|
1
|
%
|
|
-8
|
%
|
|
9
|
%
|
||
Other Fisher-Price
|
14.7
|
|
|
15.9
|
|
|
-7
|
%
|
|
—
|
%
|
|
-7
|
%
|
||
|
272.6
|
|
|
264.0
|
|
|
3
|
%
|
|
-6
|
%
|
|
9
|
%
|
||
American Girl Brands
|
93.3
|
|
|
106.1
|
|
|
-12
|
%
|
|
-1
|
%
|
|
-11
|
%
|
||
Construction and Arts & Crafts Brands
|
61.9
|
|
|
38.3
|
|
|
62
|
%
|
|
-16
|
%
|
|
78
|
%
|
||
Other
|
6.4
|
|
|
6.6
|
|
|
|
|
|
|
|
|||||
Total Gross Sales
|
$
|
962.1
|
|
|
$
|
1,020.2
|
|
|
-6
|
%
|
|
-5
|
%
|
|
-1
|
%
|
|
For the Three Months Ended
March 31, |
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
|
% Change in
Constant Currency |
|||||||||
|
2016
|
|
2015
|
|
||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||
Mattel Girls & Boys Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Barbie
|
$
|
69.0
|
|
|
$
|
62.3
|
|
|
11
|
%
|
|
—
|
%
|
|
11
|
%
|
Other Girls
|
36.6
|
|
|
94.2
|
|
|
-61
|
%
|
|
—
|
%
|
|
-61
|
%
|
||
Wheels
|
69.0
|
|
|
63.9
|
|
|
8
|
%
|
|
-1
|
%
|
|
9
|
%
|
||
Entertainment
|
110.2
|
|
|
79.6
|
|
|
38
|
%
|
|
-1
|
%
|
|
39
|
%
|
||
|
284.8
|
|
|
300.0
|
|
|
-5
|
%
|
|
—
|
%
|
|
-5
|
%
|
||
Fisher-Price Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Core Fisher-Price
|
105.0
|
|
|
97.8
|
|
|
7
|
%
|
|
-1
|
%
|
|
8
|
%
|
||
Fisher-Price Friends
|
40.6
|
|
|
42.4
|
|
|
-4
|
%
|
|
-3
|
%
|
|
-1
|
%
|
||
Other Fisher-Price
|
14.5
|
|
|
15.5
|
|
|
-6
|
%
|
|
-1
|
%
|
|
-5
|
%
|
||
|
160.1
|
|
|
155.7
|
|
|
3
|
%
|
|
-1
|
%
|
|
4
|
%
|
||
Construction and Arts & Crafts Brands
|
42.8
|
|
|
30.1
|
|
|
42
|
%
|
|
-1
|
%
|
|
43
|
%
|
||
Other
|
2.8
|
|
|
2.4
|
|
|
|
|
|
|
|
|||||
Total Gross Sales
|
$
|
490.5
|
|
|
$
|
488.2
|
|
|
—
|
%
|
|
-1
|
%
|
|
1
|
%
|
|
% Change in
Gross Sales as Reported
|
|
Currency Exchange
Rate Impact
|
|
% Change in
Gross Sales in
Constant Currency
|
|||
Total International Segment
|
-11
|
%
|
|
-10
|
%
|
|
-1
|
%
|
Europe
|
-7
|
%
|
|
-9
|
%
|
|
2
|
%
|
Latin America
|
-23
|
%
|
|
-16
|
%
|
|
-7
|
%
|
Asia Pacific
|
-10
|
%
|
|
-5
|
%
|
|
-5
|
%
|
|
For the Three Months Ended
March 31, |
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
|
% Change in
Constant Currency |
|||||||||
|
2016
|
|
2015
|
|
||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||
Mattel Girls & Boys Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Barbie
|
$
|
72.1
|
|
|
$
|
83.7
|
|
|
-14
|
%
|
|
-7
|
%
|
|
-7
|
%
|
Other Girls
|
35.7
|
|
|
95.4
|
|
|
-63
|
%
|
|
-8
|
%
|
|
-55
|
%
|
||
Wheels
|
65.9
|
|
|
68.2
|
|
|
-3
|
%
|
|
-12
|
%
|
|
9
|
%
|
||
Entertainment
|
69.4
|
|
|
57.9
|
|
|
20
|
%
|
|
-12
|
%
|
|
32
|
%
|
||
|
243.1
|
|
|
305.2
|
|
|
-20
|
%
|
|
-8
|
%
|
|
-12
|
%
|
||
Fisher-Price Brands:
|
|
|
|
|
|
|
|
|
|
|||||||
Core Fisher-Price
|
73.3
|
|
|
71.9
|
|
|
2
|
%
|
|
-10
|
%
|
|
12
|
%
|
||
Fisher-Price Friends
|
39.0
|
|
|
36.0
|
|
|
8
|
%
|
|
-11
|
%
|
|
19
|
%
|
||
Other Fisher-Price
|
0.2
|
|
|
0.4
|
|
|
-61
|
%
|
|
-10
|
%
|
|
-51
|
%
|
||
|
112.5
|
|
|
108.3
|
|
|
4
|
%
|
|
-10
|
%
|
|
14
|
%
|
||
Construction and Arts & Crafts Brands
|
19.1
|
|
|
8.2
|
|
|
135
|
%
|
|
-56
|
%
|
|
191
|
%
|
||
Other
|
0.1
|
|
|
0.4
|
|
|
|
|
|
|
|
|||||
Total Gross Sales
|
$
|
374.8
|
|
|
$
|
422.1
|
|
|
-11
|
%
|
|
-10
|
%
|
|
-1
|
%
|
|
For the Three Months Ended
March 31, |
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
|
% Change in
Constant Currency |
|||||||||
|
2016
|
|
2015
|
|
||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||
American Girl Segment:
|
|
|
|
|
|
|
|
|
|
|||||||
American Girl Brands
|
$
|
93.3
|
|
|
$
|
106.1
|
|
|
-12
|
%
|
|
-1
|
%
|
|
-11
|
%
|
Other Brands
|
3.5
|
|
|
3.8
|
|
|
-8
|
%
|
|
-3
|
%
|
|
-5
|
%
|
||
Total American Girl Segment
|
$
|
96.8
|
|
|
$
|
109.9
|
|
|
-12
|
%
|
|
-1
|
%
|
|
-11
|
%
|
•
|
To maintain approximately $800 million to $1 billion in year-end cash available to fund a substantial portion of seasonal working capital;
|
•
|
To maintain a year-end debt-to-capital ratio of about 35%;
|
•
|
To invest approximately $180 million to $200 million in capital expenditures annually to maintain and grow the business;
|
•
|
To make strategic opportunistic acquisitions; and
|
•
|
To return excess funds to stockholders through dividends and share repurchases.
|
|
March 31, 2016
|
|
March 31, 2015
|
|
December 31, 2015
|
|||||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||||||
2010 Senior Notes
|
$
|
500.0
|
|
|
11
|
%
|
|
$
|
500.0
|
|
|
9
|
%
|
|
$
|
500.0
|
|
|
10
|
%
|
2011 Senior Notes
|
300.0
|
|
|
5
|
|
|
600.0
|
|
|
12
|
|
|
300.0
|
|
|
6
|
|
|||
2013 Senior Notes
|
500.0
|
|
|
11
|
|
|
500.0
|
|
|
9
|
|
|
500.0
|
|
|
10
|
|
|||
2014 Senior Notes
|
500.0
|
|
|
11
|
|
|
500.0
|
|
|
9
|
|
|
500.0
|
|
|
10
|
|
|||
Debt issuance costs
|
(14.6
|
)
|
|
—
|
|
|
(17.4
|
)
|
|
—
|
|
|
(15.3
|
)
|
|
—
|
|
|||
Total noncurrent long-term debt
|
1,785.4
|
|
|
38
|
|
|
2,082.6
|
|
|
39
|
|
|
1,784.7
|
|
|
36
|
|
|||
Other noncurrent liabilities
|
474.3
|
|
|
10
|
|
|
541.7
|
|
|
10
|
|
|
471.6
|
|
|
10
|
|
|||
Stockholders’ equity
|
2,475.1
|
|
|
52
|
|
|
2,666.6
|
|
|
51
|
|
|
2,633.3
|
|
|
54
|
|
|||
|
$
|
4,734.8
|
|
|
100
|
%
|
|
$
|
5,290.9
|
|
|
100
|
%
|
|
$
|
4,889.6
|
|
|
100
|
%
|
|
For the Three Months Ended
March 31, |
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
|
% Change in
Constant Currency |
|||||||||
|
2016
|
|
2015
|
|
||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||
Net Sales
|
$
|
869.4
|
|
|
$
|
922.7
|
|
|
-6
|
%
|
|
-4
|
%
|
|
-2
|
%
|
Sales adjustments
|
92.7
|
|
|
97.5
|
|
|
|
|
|
|
|
|||||
Gross Sales
|
$
|
962.1
|
|
|
$
|
1,020.2
|
|
|
-6
|
%
|
|
-5
|
%
|
|
-1
|
%
|
|
For the Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Operating Loss
|
$
|
(49.1
|
)
|
|
$
|
(54.5
|
)
|
Adjustments:
|
|
|
|
||||
Integration & Acquisition Costs (1)
|
0.7
|
|
|
7.7
|
|
||
Intangible Asset Amortization Expense (2)
|
2.6
|
|
|
4.2
|
|
||
Severance and Restructuring Expenses
|
9.8
|
|
|
28.0
|
|
||
Adjusted Operating Loss
|
$
|
(36.0
|
)
|
|
$
|
(14.6
|
)
|
____________________________________________
|
|
|
|
||||
(1) Includes Integration & Acquisition Costs for Fuhu and Sproutling in 2016 and MEGA Brands in 2015.
|
|||||||
(2) Includes Intangible Asset Amortization Expense for MEGA Brands, Fuhu, and Sproutling.
|
Period
|
Total Number of
Shares (or Units)
Purchased (1)
|
|
Average Price Paid
per Share (or Unit)
|
|
Total Number of Shares
(or Units) Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Number (or
Approximate Dollar Value)
of Shares (or Units) that
May Yet Be Purchased
Under the Plans or
Programs (2)
|
||||||
January 1—31
|
29,693
|
|
|
$
|
27.58
|
|
|
—
|
|
|
$
|
203,016,273
|
|
February 1—29
|
25,346
|
|
|
31.90
|
|
|
—
|
|
|
203,016,273
|
|
||
March 1—31
|
1,680
|
|
|
33.08
|
|
|
—
|
|
|
203,016,273
|
|
||
Total
|
56,719
|
|
|
$
|
29.67
|
|
|
—
|
|
|
$
|
203,016,273
|
|
(1)
|
The total number of shares purchased relates to 56,719 shares withheld from employees to satisfy minimum tax withholding obligations that occur upon vesting of restricted stock units. These shares were not purchased as part of a publicly announced repurchase plan or program.
|
(2)
|
Mattel’s share repurchase program was first announced on July 21, 2003. On July 17, 2013, the Board of Directors authorized Mattel to increase its share repurchase program by $500.0 million. At
March 31, 2016
, share repurchase authorizations of
$203.0 million
had not been executed. Repurchases under the program will take place from time to time, depending on market conditions. Mattel’s share repurchase program has no expiration date.
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
3.0
|
|
Restated Certificate of Incorporation of Mattel, Inc.
|
|
8-K
|
|
001-05647
|
|
99.0
|
|
May 21, 2007
|
3.1
|
|
Amended and Restated Bylaws of Mattel, Inc.
|
|
8-K
|
|
001-05647
|
|
3.1
|
|
September 1, 2015
|
4.0
|
|
Specimen Stock Certificate with respect to Mattel, Inc.’s Common Stock
|
|
10-Q
|
|
001-05647
|
|
4.0
|
|
August 3, 2007
|
10.1*+
|
|
Form of Grant Agreement for Long-Term Incentive Program Performance-Based Restricted Stock Units for Senior Executives under the Amended and Restated 2010 Equity and Long-Term Compensation Plan (“Amended 2010 Plan”) for Certain Executive Officers Participating in the Mattel, Inc. Executive Severance Plan and the Mattel, Inc. Executive Severance Plan B
|
|
|
|
|
|
|
|
|
10.2*+
|
|
Form of Grant Agreement for Long-Term Incentive Program Performance-Based Restricted Stock Units for Senior Executives under the Amended 2010 Plan
|
|
|
|
|
|
|
|
|
12.0*
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
31.0*
|
|
Certification of Principal Executive Officer dated April 28, 2016 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
31.1*
|
|
Certification of Principal Financial Officer dated April 28, 2016 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
32.0**
|
|
Certifications of Principal Executive Officer and Principal Financial Officer dated April 28, 2016 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
+
|
Management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith. This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.
|
|
MATTEL, INC.
Registrant
|
||
|
|
|
|
|
By:
|
|
/s/ J
OSEPH
B. J
OHNSON
|
|
|
|
Joseph B. Johnson
Senior Vice President and Corporate
Controller (Duly authorized officer and
chief accounting officer)
|
i.
|
In the case of a termination of the Holder’s employment with the Company (a “
Termination of Employment
”) by the Company for Cause, the Units shall be forfeited as of the date of the Termination of Employment. For purposes of this Grant Agreement, the Holder’s Termination of Employment shall be considered to be for “
Cause
” if it is a termination for “Cause” pursuant to an Individual Agreement to which the Holder is a party that is then in effect or, if there is no Individual Agreement in effect that defines “Cause”, “Cause” shall have the meaning set forth in the Plan.
|
ii.
|
In the case of a Termination of Employment as a result of the Holder’s death or Disability after June 30, 2016, the number of Units earned shall be determined based on actual achievement of the Company Performance Measure through the most recently completed fiscal year prior to such Termination of Employment and TSR (calculated as if the most recently completed fiscal year prior to such Termination of Employment had been the end of the Performance Cycle). Any Units which become earned pursuant to this Section 4.ii shall be settled on or within 60 days after the date of such Termination of Employment, but in no event later than the Settlement Date, in accordance with Section 7. Notwithstanding anything in this Section 4.ii to the contrary, in the case of a Termination of Employment as a result of the Holder’s death or Disability on or after July 1, 2016 and before 2017, the number of Units earned shall be based on 100% of the target award level payout for the 2016 fiscal year, to be settled on or within 60 days after such Termination of Employment, but in no event later than March 15, 2017.
|
iii.
|
In the case of a Termination of Employment (a) at a time when the Holder has attained at least 55 years of age and completed at least five Years of Service, other than as a result of the Holder’s death or termination by the Company for Cause (b) by the Company other than for Cause (as defined in Section 4.i, above), or (c) by the Holder for Good Reason (as defined below), the number of Units earned shall be determined as follows: first, the Committee shall determine the number of Units earned based on actual achievement of the Company Performance Measure and TSR following the end of the Performance Cycle; and second, the number of Units so obtained shall be multiplied by a fraction, the numerator of which is the total number of full months elapsed from the first day of the Performance Cycle to the date of the Holder’s Termination of Employment and the denominator of which is the total number of months in the Performance Cycle. Such number of Units shall then be settled in accordance with Section 7 as for all other holders whose awards are settled on the Settlement Date. For purposes of this Grant Agreement, the Holder’s Termination of Employment shall be considered to be for “Good Reason” if it is a termination for “Good Reason” pursuant to an Individual Agreement to which the Holder is a party that is then in effect.
|
iv.
|
In all other cases, the Units shall be forfeited as of the date of the Termination of Employment.
|
i.
|
If the Committee reasonably determines in good faith, prior to the occurrence of the Change in Control, that the Units will not be honored or assumed, or new rights that substantially preserve the terms of the Units substituted therefor, by the Holder’s employer (or the parent of such employer) immediately following the Change in Control, the number of Units earned shall equal the greater of (a) the number that equals 100% of the target award level payout and (b) the number that would have been earned based on actual achievement of the Company Performance Measure through the most recently completed fiscal year prior to such Change in Control and TSR (calculated as if the most recently completed fiscal year prior to such Change in Control had been the end of the Performance Cycle).
|
ii.
|
If the Committee determines that the Units have been assumed and, before the Settlement Date, the Holder has a Termination of Employment by the Company without Cause or by the Holder for Good Reason within the 24-month period immediately following a Change in Control, the number of Units earned shall equal the greater of (a) the number that equals 100% of the target award level payout and (b) the number that would have been earned based on actual achievement of the Company Performance Measure through the most recently completed fiscal year prior to such Termination of Employment and TSR (calculated as if the most recently completed fiscal year prior to such Termination of Employment had been the end of the Performance Cycle).
|
i.
|
No shares of Common Stock shall be issued and delivered pursuant to a vested Unit unless and until all applicable registration requirements of the Securities Act of 1933, as amended, all applicable listing requirements of any national securities exchange on which the Common Stock is then listed, and all other requirements of law or of any regulatory bodies having jurisdiction over such issuance and delivery, shall have been complied with and are in full force. In particular, the Committee may require certain investment (or other) representations and undertakings in connection with the issuance of securities in connection with the Plan in order to comply with applicable law.
|
ii.
|
If any provision of this Grant Agreement is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by applicable law, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law. Furthermore, if any provision of this Grant Agreement is determined to be illegal under any applicable law, such provision shall be null and void to the extent necessary to comply with applicable law, but the other provisions of this Grant Agreement shall remain in full force and effect.
|
i.
|
Neither the granting of the Units nor their vesting or settlement shall (i) affect or restrict in any way the power of Mattel to take any and all actions otherwise permitted under applicable law, (ii) confer upon the Holder the right to continue in the employment of or performing services for the Company, or (iii) interfere in any way with the right of the Company to terminate the services of the Holder at any time, with or without Cause.
|
ii.
|
The Holder acknowledges that (i) this is a one-time grant, (ii) the making of this grant does not mean that the Holder will receive any similar grant or grants in the future, or any future grants at all, (iii) the Plan and the benefits the Holder may derive from participation in the Plan are not part of the employment conditions and/or benefits provided by the Company, (iv) any modifications or amendments of the Plan by Mattel, or a termination of the Plan by Mattel, shall not constitute a change or impairment of the terms and conditions of the Holder’s employment with the Company, and (v) this grant does not in any way entitle the Holder to future grants under the Plan, if any, and Mattel retains sole and absolute discretion as to whether to make any additional grants to the Holder in the future and, if so, the quantity, terms, conditions and provisions of any such grants.
|
iii.
|
Without limiting the generality of subsections (a) and (b) immediately above and subject to Section4 above, if there is a Termination of Employment of the Holder, the Holder shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit relating to the Units or under the Plan which he or she might otherwise have enjoyed, whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.
|
iv.
|
The Holder's participation in the Plan is voluntary. The value of the Units and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Holder's employment (and the Holder's employment contract, if any). Any grant under the Plan, including the grant of the Units, is not part of the Holder's normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension, or retirement benefits or similar payments.
|
i.
|
The Company hereby notifies the Holder of the following in relation to the Holder's personal data and the collection, processing and transfer of such data in relation to the grant of the Units and the Holder's participation in the Plan, pursuant to applicable personal data protection laws. The collection, processing and transfer of the Holder's personal data is necessary for Mattel’s administration of the Plan and the Holder's participation in the Plan, and the Holder's denial and/or objection to the collection, processing and transfer of personal data may affect the Holder's ability to participate in the Plan. As such, the Holder voluntarily acknowledges, consents and agrees (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein.
|
ii.
|
The Company holds certain personal information about the Holder, including (but not limited to) the Holder's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all Units or any other entitlement to shares of Common Stock awarded, canceled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by the Holder or collected, where lawful, from third parties, and the Company will process the Data for the exclusive purpose of implementing, administering and managing the Holder's participation in the Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Holder's country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Holder's participation in the Plan.
|
iii.
|
The Company will transfer Data as necessary for the purpose of implementation, administration and management of the Holder's participation in the Plan, and the Company may further transfer Data to any third parties assisting Mattel in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, the United States or elsewhere throughout the world. The Holder hereby authorizes (where required under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Holder's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Holder's behalf to a broker or other third party with whom the Holder may elect to deposit any shares of Common Stock acquired pursuant to the Plan.
|
iv.
|
The Holder may, at any time, exercise the Holder's rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c)
|
i.
|
In the case of a termination of the Holder’s employment with the Company (a “
Termination of Employment
”) by the Company for Cause, the Units shall be forfeited as of the date of the Termination of Employment.
|
ii.
|
In the case of a Termination of Employment as a result of the Holder’s death or Disability after June 30, 2016, the number of Units earned shall be determined based on actual achievement of the Company Performance Measure through the most recently completed fiscal year prior to such Termination of Employment and TSR (calculated as if the most recently completed fiscal year prior to such Termination of Employment had been the end of the Performance Cycle). Any Units which become earned pursuant to this Section 4.ii shall be settled on or within 60 days after the date of such Termination of Employment, but in no event later than the Settlement Date, in accordance with Section 7. Notwithstanding anything in this Section 4.ii to the contrary, in the case of a Termination of Employment as a result of the Holder’s death or Disability on or after July 1, 2016 and before 2017, the number of Units earned shall be based on 100% of the target award level payout for the 2016 fiscal year, to be settled on or within 60 days after such Termination of Employment, but in no event later than March 15, 2017.
|
iii.
|
In the case of a Termination of Employment at a time when the Holder has attained at least 55 years of age and completed at least five Years of Service, other than as a result of the Holder’s death or termination by the Company for Cause, the number of Units earned shall be determined as follows: first, the Committee shall determine the number of Units earned based on actual achievement of the Company Performance Measure and TSR following the end of the Performance Cycle; and second, the number of Units so obtained shall be multiplied by a fraction, the numerator of which is the total number of full months elapsed from the first day of the Performance Cycle to the date of the Holder’s Termination of Employment and the denominator of which is the total number of months in the Performance Cycle. Such number of Units shall then be settled in accordance with Section 7 as for all other holders whose awards are settled on the Settlement Date.
|
iv.
|
In all other cases, the Units shall be forfeited as of the date of the Termination of Employment.
|
i.
|
If the Committee reasonably determines in good faith, prior to the occurrence of the Change in Control, that the Units will not be honored or assumed, or new rights that
|
ii.
|
If the Committee determines that the Units have been assumed and, before the Settlement Date, the Holder has a Termination of Employment by the Company without Cause or by the Holder for Good Reason (as defined below) within the 24-month period immediately following a Change in Control, the number of Units earned shall equal the greater of (a) the number that equals 100% of the target award level payout and (b) the number that would have been earned based on actual achievement of the Company Performance Measure through the most recently completed fiscal year prior to such Termination of Employment and TSR (calculated as if the most recently completed fiscal year prior to such Termination of Employment had been the end of the Performance Cycle).
|
i.
|
No shares of Common Stock shall be issued and delivered pursuant to a vested Unit unless and until all applicable registration requirements of the Securities Act of 1933, as amended, all applicable listing requirements of any national securities exchange on which the Common Stock is then listed, and all other requirements of law or of any regulatory bodies having jurisdiction over such issuance and delivery, shall have been complied with and are in full force. In particular, the Committee may require certain investment (or other) representations and undertakings in connection with the issuance of securities in connection with the Plan in order to comply with applicable law.
|
ii.
|
If any provision of this Grant Agreement is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by applicable law, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law. Furthermore, if any provision of this Grant Agreement is determined to be illegal under any applicable law, such provision shall be null and void to the extent necessary to comply with applicable law, but the other provisions of this Grant Agreement shall remain in full force and effect.
|
iii.
|
If the Holder is a resident of or employed in a country other than the United States, the Holder agrees, as a condition to the grant of the Units, to repatriate all payments attributable to the shares of Common Stock and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the shares of Common Stock acquired pursuant to this Units) in accordance with local foreign exchange rules and regulations in the Holder’s country of residence (and country of employment, if different). In addition, the Holder agrees to take any and all actions, and consents to any and all actions taken by Mattel, as may be required to allow Mattel to comply with local laws, rules and regulations in the Holder’s country of residence (and country of employment, if different). Finally, the Holder agrees to take any and all actions that may be required to comply with the Holder’s personal legal and tax obligations under local laws, rules and regulations in the Holder’s country of residence (and country of employment, if different).
|
iv.
|
provisions of this Grant Agreement shall remain in full force and effect.
|
i.
|
Neither the granting of the Units nor their vesting or settlement shall (i) affect or restrict in any way the power of Mattel to take any and all actions otherwise permitted under applicable law, (ii) confer upon the Holder the right to continue in the employment of or performing services for the Company, or (iii) interfere in any way with the right of the Company to terminate the services of the Holder at any time, with or without Cause.
|
ii.
|
The Holder acknowledges that (i) this is a one-time grant, (ii) the making of this grant does not mean that the Holder will receive any similar grant or grants in the future, or any future grants at all, (iii) the Plan and the benefits the Holder may derive from participation in the Plan are not part of the employment conditions and/or benefits provided by the Company, (iv) any modifications or amendments of the Plan by Mattel, or a termination of the Plan by Mattel, shall not constitute a change or impairment of the terms and conditions of the Holder’s employment with the Company, and (v) this grant does not in any way entitle the Holder to future grants under the Plan, if any, and Mattel retains sole and absolute discretion as to whether to make any additional grants to the Holder in the future and, if so, the quantity, terms, conditions and provisions of any such grants.
|
iii.
|
Without limiting the generality of subsections (a) and (b) immediately above and subject to Section4 above, if there is a Termination of Employment of the Holder, the Holder shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit relating to the Units or under the Plan which he or she might otherwise have enjoyed, whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.
|
iv.
|
The Holder's participation in the Plan is voluntary. The value of the Units and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Holder's employment (and the Holder's employment contract, if any). Any grant under the Plan, including the grant of the Units, is not part of the Holder's normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension, or retirement benefits or similar payments.
|
i.
|
The Company hereby notifies the Holder of the following in relation to the Holder's personal data and the collection, processing and transfer of such data in relation to the grant of the Units and the Holder's participation in the Plan, pursuant to applicable personal data protection laws. The collection, processing and transfer of the Holder's personal data is necessary for Mattel’s administration of the Plan and the Holder's participation in the Plan, and the Holder's denial and/or objection to the collection, processing and transfer of personal data may affect the Holder's ability to participate in the Plan. As such, the Holder voluntarily acknowledges, consents and agrees (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein.
|
ii.
|
The Company holds certain personal information about the Holder, including (but not limited to) the Holder's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all Units or any other entitlement to shares of Common Stock awarded, canceled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by the Holder or collected, where lawful, from third parties, and the Company will process the Data for the exclusive purpose of implementing, administering and managing the Holder's participation in the Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Holder's country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Holder's participation in the Plan.
|
iii.
|
The Company will transfer Data as necessary for the purpose of implementation, administration and management of the Holder's participation in the Plan, and the Company may further transfer Data to any third parties assisting Mattel in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, the United States or elsewhere throughout the world. The Holder hereby authorizes (where required under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Holder's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Holder's behalf to a broker or other third party with whom the Holder may elect to deposit any shares of Common Stock acquired pursuant to the Plan.
|
iv.
|
The Holder may, at any time, exercise the Holder's rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, and (d) to oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and the Holder's participation in the Plan. The Holder may seek to exercise these rights by contacting the Holder's local HR manager.
|
Canada
|
China
|
France
|
Hong Kong
|
Mexico
|
Netherlands
|
Russia
|
Spain
|
(Unaudited; in thousands, except ratios)
|
For the Three
Months Ended
March 31,
2016
|
|
For the Years Ended December 31,
|
||||||||||||||||||||
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
(Loss) Earnings Available for Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) Income from continuing operations before income taxes
|
$
|
(93,479
|
)
|
|
$
|
463,915
|
|
|
$
|
586,910
|
|
|
$
|
1,099,128
|
|
|
$
|
945,045
|
|
|
$
|
970,673
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
22,520
|
|
|
85,270
|
|
|
79,271
|
|
|
78,505
|
|
|
88,835
|
|
|
75,332
|
|
||||||
Appropriate portion of rents (a)
|
9,094
|
|
|
38,297
|
|
|
40,291
|
|
|
37,006
|
|
|
33,736
|
|
|
30,696
|
|
||||||
(Loss) Earnings available for fixed charges
|
$
|
(61,865
|
)
|
|
$
|
587,482
|
|
|
$
|
706,472
|
|
|
$
|
1,214,639
|
|
|
$
|
1,067,616
|
|
|
$
|
1,076,701
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
22,520
|
|
|
$
|
85,270
|
|
|
$
|
79,271
|
|
|
$
|
78,505
|
|
|
$
|
88,835
|
|
|
$
|
75,332
|
|
Appropriate portion of rents (a)
|
9,094
|
|
|
38,297
|
|
|
40,291
|
|
|
37,006
|
|
|
33,736
|
|
|
30,696
|
|
||||||
Fixed charges
|
$
|
31,614
|
|
|
$
|
123,567
|
|
|
$
|
119,562
|
|
|
$
|
115,511
|
|
|
$
|
122,571
|
|
|
$
|
106,028
|
|
Ratio of (loss) earnings to fixed charges
|
(b)
|
|
|
4.75 X
|
|
|
5.91 X
|
|
|
10.52 X
|
|
|
8.71 X
|
|
|
10.15 X
|
|
(a)
|
Portion of rental expenses that is deemed representative of an interest factor, which is one-third of total rental expense.
|
(b)
|
Earnings for the three months ended March 31, 2016 were inadequate to cover fixed charges by $93.5 million.
|
|
|
|
|
|
|
|
Date: April 28, 2016
|
|
|
|
By:
|
|
/
S
/ C
HRISTOPHER
A. S
INCLAIR
|
|
|
|
|
|
|
Christopher A. Sinclair
Chairman and Chief Executive Officer
(Principal executive officer)
|
|
|
|
|
|
|
|
Date: April 28, 2016
|
|
|
|
By:
|
|
/
S
/ K
EVIN
M. F
ARR
|
|
|
|
|
|
|
Kevin M. Farr
Chief Financial Officer
(Principal financial officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
|
|
Date: April 28, 2016
|
|
|
|
By:
|
|
/
S
/ C
HRISTOPHER
A. S
INCLAIR
|
|
|
|
|
|
|
Christopher A. Sinclair
|
|
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|||
|
|
|
|
|
|
/s/ K
EVIN
M. F
ARR
|
|
|
|
|
|
|
Kevin M. Farr
|
|
|
|
|
|
|
Chief Financial Officer
|