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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For the quarterly period ended March 31, 2019.
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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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¨
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Smaller reporting company
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¨
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Emerging growth 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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March 31,
2019 |
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March 31,
2018 |
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December 31,
2018 |
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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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$
|
380,107
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$
|
526,724
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$
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594,481
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Accounts receivable, net
|
624,477
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676,119
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970,083
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Inventories
|
615,828
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677,732
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542,889
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Prepaid expenses and other current assets
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274,674
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341,095
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244,987
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Total current assets
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1,895,086
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2,221,670
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2,352,440
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Noncurrent Assets
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Property, plant, and equipment, net
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622,251
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756,684
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657,595
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Right-of-use assets, net
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327,419
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—
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—
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Goodwill
|
1,388,758
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1,397,217
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1,386,424
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Other noncurrent assets
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848,853
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928,519
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847,006
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Total Assets
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$
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5,082,367
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$
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5,304,090
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$
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5,243,465
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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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4,176
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Accounts payable
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324,949
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398,360
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537,965
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Accrued liabilities
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661,911
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578,909
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700,421
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Income taxes payable
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19,409
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9,910
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10,046
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Total current liabilities
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1,006,269
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987,179
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1,252,608
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Noncurrent Liabilities
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Long-term debt
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2,853,454
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2,871,771
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2,851,723
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Noncurrent lease liabilities
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294,812
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—
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—
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Other noncurrent liabilities
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409,315
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462,674
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469,669
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Total noncurrent liabilities
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3,557,581
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3,334,445
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3,321,392
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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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1,822,718
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1,817,139
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1,812,682
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Treasury stock at cost: 95.9 million shares, 97.4 million shares, and 96.1 million shares, respectively
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(2,353,175
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)
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(2,385,850
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)
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(2,354,617
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)
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Retained earnings
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1,445,539
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1,848,957
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1,629,257
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Accumulated other comprehensive loss
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(837,934
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)
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(739,149
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)
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(859,226
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)
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Total stockholders’ equity
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518,517
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982,466
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669,465
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Total Liabilities and Stockholders’ Equity
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$
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5,082,367
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$
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5,304,090
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$
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5,243,465
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For the Three Months Ended
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||||||
March 31,
2019 |
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March 31,
2018 |
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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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689,246
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$
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708,372
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Cost of sales
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449,456
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489,499
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Gross Profit
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239,790
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218,873
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Advertising and promotion expenses
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69,465
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70,837
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Other selling and administrative expenses
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301,284
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424,617
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Operating Loss
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(130,959
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)
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(276,581
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)
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Interest expense
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46,958
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41,079
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Interest (income)
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(2,272
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)
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(3,147
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)
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Other non-operating expense (income), net
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1,904
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(608
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)
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Loss Before Income Taxes
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(177,549
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)
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(313,905
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)
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Provision for (benefit from) income taxes
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6,169
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(2,652
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)
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Net Loss
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$
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(183,718
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)
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$
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(311,253
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)
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Net Loss Per Common Share - Basic
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$
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(0.53
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)
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$
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(0.90
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)
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Weighted average number of common shares
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345,852
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344,434
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Net Loss Per Common Share - Diluted
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$
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(0.53
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)
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$
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(0.90
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)
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Weighted average number of common and potential common shares
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345,852
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344,434
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For the Three Months Ended
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||||||
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March 31,
2019 |
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March 31,
2018 |
||||
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(Unaudited; in thousands)
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Net Loss
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$
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(183,718
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)
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$
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(311,253
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)
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Other Comprehensive Income, Net of Tax
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Currency translation adjustments
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14,133
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41,989
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Defined benefit pension plan adjustments
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223
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1,616
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Net unrealized gains (losses) on available-for-sale security
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1,877
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(80
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)
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Net unrealized gains (losses) on derivative instruments:
|
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|
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Unrealized holding gains (losses)
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5,818
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(5,319
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)
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Reclassification adjustment for realized (losses) gains included in net loss
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(759
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)
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4,431
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5,059
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(888
|
)
|
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Other Comprehensive Income, Net of Tax
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21,292
|
|
|
42,637
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Comprehensive Loss
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$
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(162,426
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)
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$
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(268,616
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)
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For the Three Months Ended
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||||||
March 31,
2019 |
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March 31,
2018 |
|||||
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(Unaudited; in thousands)
|
||||||
Cash Flows From Operating Activities:
|
|
|
|
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Net loss
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$
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(183,718
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)
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$
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(311,253
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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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52,071
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58,539
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Amortization
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10,429
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10,198
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Share-based compensation
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11,865
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14,423
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Bad debt expense
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2,745
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58,837
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Inventory obsolescence
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21,452
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19,949
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Deferred income taxes
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(66
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)
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(1,026
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)
|
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Increase (decrease) from changes in assets and liabilities:
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|
||||
Accounts receivable
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351,450
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|
402,927
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Inventories
|
(94,698
|
)
|
|
(100,347
|
)
|
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Prepaid expenses and other current assets
|
(28,417
|
)
|
|
(40,052
|
)
|
||
Accounts payable, accrued liabilities, and income taxes payable
|
(327,821
|
)
|
|
(367,298
|
)
|
||
Other, net
|
(8,102
|
)
|
|
(18,629
|
)
|
||
Net cash flows used for operating activities
|
(192,810
|
)
|
|
(273,732
|
)
|
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Cash Flows From Investing Activities:
|
|
|
|
||||
Purchases of tools, dies, and molds
|
(10,706
|
)
|
|
(21,013
|
)
|
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Purchases of other property, plant, and equipment
|
(13,409
|
)
|
|
(26,424
|
)
|
||
Proceeds from foreign currency forward exchange contracts, net
|
4,703
|
|
|
23,250
|
|
||
Other, net
|
212
|
|
|
(6,675
|
)
|
||
Net cash flows used for investing activities
|
(19,200
|
)
|
|
(30,862
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Payments of short-term borrowings
|
(4,176
|
)
|
|
—
|
|
||
Payments of long-term borrowings
|
—
|
|
|
(250,000
|
)
|
||
Other, net
|
(173
|
)
|
|
(1,516
|
)
|
||
Net cash flows used for financing activities
|
(4,349
|
)
|
|
(251,516
|
)
|
||
Effect of Currency Exchange Rate Changes on Cash
|
1,985
|
|
|
3,613
|
|
||
Decrease in Cash and Equivalents
|
(214,374
|
)
|
|
(552,497
|
)
|
||
Cash and Equivalents at Beginning of Period
|
594,481
|
|
|
1,079,221
|
|
||
Cash and Equivalents at End of Period
|
$
|
380,107
|
|
|
$
|
526,724
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Treasury
Stock |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders’ Equity |
||||||||||||
|
(Unaudited; in thousands)
|
||||||||||||||||||||||
Balance, December 31, 2018
|
$
|
441,369
|
|
|
$
|
1,812,682
|
|
|
$
|
(2,354,617
|
)
|
|
$
|
1,629,257
|
|
|
$
|
(859,226
|
)
|
|
$
|
669,465
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(183,718
|
)
|
|
—
|
|
|
(183,718
|
)
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,292
|
|
|
21,292
|
|
||||||
Issuance of treasury stock for restricted stock units vesting
|
—
|
|
|
(1,829
|
)
|
|
1,442
|
|
|
—
|
|
|
—
|
|
|
(387
|
)
|
||||||
Share-based compensation
|
—
|
|
|
11,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,865
|
|
||||||
Balance, March 31, 2019
|
$
|
441,369
|
|
|
$
|
1,822,718
|
|
|
$
|
(2,353,175
|
)
|
|
$
|
1,445,539
|
|
|
$
|
(837,934
|
)
|
|
$
|
518,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, December 31, 2017
|
$
|
441,369
|
|
|
$
|
1,808,391
|
|
|
$
|
(2,389,877
|
)
|
|
$
|
2,179,358
|
|
|
$
|
(781,786
|
)
|
|
$
|
1,257,455
|
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,148
|
)
|
|
—
|
|
|
(19,148
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(311,253
|
)
|
|
—
|
|
|
(311,253
|
)
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,637
|
|
|
42,637
|
|
||||||
Issuance of treasury stock for restricted stock units vesting
|
—
|
|
|
(5,675
|
)
|
|
4,027
|
|
|
—
|
|
|
—
|
|
|
(1,648
|
)
|
||||||
Share-based compensation
|
—
|
|
|
14,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,423
|
|
||||||
Balance, March 31, 2018
|
$
|
441,369
|
|
|
$
|
1,817,139
|
|
|
$
|
(2,385,850
|
)
|
|
$
|
1,848,957
|
|
|
$
|
(739,149
|
)
|
|
$
|
982,466
|
|
1.
|
Basis of Presentation
|
2.
|
Accounts Receivable
|
3.
|
Inventories
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Raw materials and work in process
|
$
|
118,143
|
|
|
$
|
119,704
|
|
|
$
|
115,966
|
|
Finished goods
|
497,685
|
|
|
558,028
|
|
|
426,923
|
|
|||
|
$
|
615,828
|
|
|
$
|
677,732
|
|
|
$
|
542,889
|
|
4.
|
Property, Plant, and Equipment
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Land
|
$
|
25,071
|
|
|
$
|
25,197
|
|
|
$
|
25,023
|
|
Buildings
|
298,022
|
|
|
298,780
|
|
|
294,227
|
|
|||
Machinery and equipment
|
885,178
|
|
|
896,388
|
|
|
875,308
|
|
|||
Software
|
398,071
|
|
|
387,551
|
|
|
400,488
|
|
|||
Tools, dies, and molds
|
814,078
|
|
|
877,181
|
|
|
831,743
|
|
|||
Capital leases
|
—
|
|
|
23,927
|
|
|
23,927
|
|
|||
Leasehold improvements
|
241,769
|
|
|
245,299
|
|
|
240,636
|
|
|||
|
2,662,189
|
|
|
2,754,323
|
|
|
2,691,352
|
|
|||
Less: accumulated depreciation
|
(2,039,938
|
)
|
|
(1,997,639
|
)
|
|
(2,033,757
|
)
|
|||
|
$
|
622,251
|
|
|
$
|
756,684
|
|
|
$
|
657,595
|
|
|
March 31,
2019 |
||
|
(In thousands, except years and percentage information)
|
||
Right-of-use assets, net
|
$
|
327,419
|
|
|
|
||
Accrued liabilities
|
$
|
77,092
|
|
Noncurrent lease liabilities
|
294,812
|
|
|
Total lease liabilities, net
|
$
|
371,904
|
|
|
|
||
Weighted average remaining lease term
|
6.8 years
|
|
|
|
|
||
Weighted average discount rate
|
8.3
|
%
|
|
March 31,
2019 |
||
|
(In thousands)
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows
|
$
|
26,426
|
|
Years Ending December 31,
|
|
Lease Liabilities
|
||
|
|
(In thousands)
|
||
2019 (excluding the three months ended March 31, 2019)
|
|
$
|
78,289
|
|
2020
|
|
91,791
|
|
|
2021
|
|
76,050
|
|
|
2022
|
|
56,502
|
|
|
2023
|
|
42,406
|
|
|
Thereafter
|
|
149,099
|
|
|
Total lease payments
|
|
494,137
|
|
|
Less: imputed interest
|
|
(122,233
|
)
|
|
Total
|
|
$
|
371,904
|
|
|
Capital
Leases |
|
Operating
Leases |
||||
|
(In thousands)
|
||||||
2019
|
$
|
294
|
|
|
$
|
110,794
|
|
2020
|
25
|
|
|
83,566
|
|
||
2021
|
—
|
|
|
72,606
|
|
||
2022
|
—
|
|
|
59,191
|
|
||
2023
|
—
|
|
|
56,123
|
|
||
Thereafter
|
—
|
|
|
133,716
|
|
||
|
$
|
319
|
|
(a)
|
$
|
515,996
|
|
(a)
|
Includes minimal imputed interest.
|
6.
|
Goodwill
|
|
December 31,
2018 |
|
Currency
Exchange Rate Impact |
|
March 31,
2019 |
||||||
|
(In thousands)
|
||||||||||
North America
|
$
|
731,234
|
|
|
$
|
632
|
|
|
$
|
731,866
|
|
International
|
447,619
|
|
|
1,702
|
|
|
449,321
|
|
|||
American Girl
|
207,571
|
|
|
—
|
|
|
207,571
|
|
|||
|
$
|
1,386,424
|
|
|
$
|
2,334
|
|
|
$
|
1,388,758
|
|
7.
|
Other Noncurrent Assets
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Identifiable intangibles (net of accumulated amortization of $218.3 million, $179.0 million, and $207.9 million, respectively)
|
$
|
580,497
|
|
|
$
|
635,143
|
|
|
$
|
587,528
|
|
Deferred income taxes
|
50,510
|
|
|
78,922
|
|
|
49,937
|
|
|||
Other
|
217,846
|
|
|
214,454
|
|
|
209,541
|
|
|||
|
$
|
848,853
|
|
|
$
|
928,519
|
|
|
$
|
847,006
|
|
8.
|
Accrued Liabilities
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Current lease liabilities
|
$
|
77,092
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Advertising and promotion
|
56,553
|
|
|
72,179
|
|
|
86,935
|
|
|||
Royalties
|
46,483
|
|
|
46,698
|
|
|
108,109
|
|
|||
Taxes other than income taxes
|
28,202
|
|
|
28,281
|
|
|
54,317
|
|
|||
Other
|
453,581
|
|
|
431,751
|
|
|
451,060
|
|
|||
|
$
|
661,911
|
|
|
$
|
578,909
|
|
|
$
|
700,421
|
|
9.
|
Seasonal Financing
|
10.
|
Long-Term Debt
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
2010 Senior Notes due October 2020 and October 2040
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
2011 Senior Notes due November 2041
|
300,000
|
|
|
300,000
|
|
|
300,000
|
|
|||
2013 Senior Notes due March 2023
|
250,000
|
|
|
250,000
|
|
|
250,000
|
|
|||
2014 Senior Notes due May 2019
|
—
|
|
|
500,000
|
|
|
—
|
|
|||
2016 Senior Notes due August 2021
|
350,000
|
|
|
350,000
|
|
|
350,000
|
|
|||
2017/2018 Senior Notes due December 2025
|
1,500,000
|
|
|
1,000,000
|
|
|
1,500,000
|
|
|||
Debt issuance costs and debt discount
|
(46,546
|
)
|
|
(28,229
|
)
|
|
(48,277
|
)
|
|||
|
2,853,454
|
|
|
2,871,771
|
|
|
2,851,723
|
|
|||
Less: current portion
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total long-term debt
|
$
|
2,853,454
|
|
|
$
|
2,871,771
|
|
|
$
|
2,851,723
|
|
11.
|
Other Noncurrent Liabilities
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Benefit plan liabilities
|
$
|
183,294
|
|
|
$
|
186,114
|
|
|
$
|
166,289
|
|
Noncurrent tax liabilities
|
143,723
|
|
|
127,912
|
|
|
150,960
|
|
|||
Other
|
82,298
|
|
|
148,648
|
|
|
152,420
|
|
|||
|
$
|
409,315
|
|
|
$
|
462,674
|
|
|
$
|
469,669
|
|
12.
|
Accumulated Other Comprehensive Income (Loss)
|
|
For the Three Months Ended March 31, 2019
|
||||||||||||||||||
|
Derivative
Instruments |
|
Available-for-Sale Security
|
|
Defined Benefit
Pension Plans |
|
Currency
Translation Adjustments |
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2018
|
$
|
11,411
|
|
|
$
|
(6,547
|
)
|
|
$
|
(142,763
|
)
|
|
$
|
(721,327
|
)
|
|
$
|
(859,226
|
)
|
Other comprehensive income (loss) before reclassifications
|
5,818
|
|
|
1,877
|
|
|
(1,206
|
)
|
|
14,133
|
|
|
20,622
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(759
|
)
|
|
—
|
|
|
1,429
|
|
|
—
|
|
|
670
|
|
|||||
Net increase in other comprehensive income (loss)
|
5,059
|
|
|
1,877
|
|
|
223
|
|
|
14,133
|
|
|
21,292
|
|
|||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2019
|
$
|
16,470
|
|
|
$
|
(4,670
|
)
|
|
$
|
(142,540
|
)
|
|
$
|
(707,194
|
)
|
|
$
|
(837,934
|
)
|
|
For the Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Derivative
Instruments |
|
Available-for-Sale Security
|
|
Defined Benefit
Pension Plans |
|
Currency
Translation Adjustments |
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2017
|
$
|
(21,098
|
)
|
|
$
|
(2,799
|
)
|
|
$
|
(143,213
|
)
|
|
$
|
(614,676
|
)
|
|
$
|
(781,786
|
)
|
Other comprehensive (loss) income before reclassifications
|
(5,319
|
)
|
|
(80
|
)
|
|
(208
|
)
|
|
41,989
|
|
|
36,382
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
4,431
|
|
|
—
|
|
|
1,824
|
|
|
—
|
|
|
6,255
|
|
|||||
Net (decrease) increase in other comprehensive (loss) income
|
(888
|
)
|
|
(80
|
)
|
|
1,616
|
|
|
41,989
|
|
|
42,637
|
|
|||||
Accumulated Other Comprehensive Loss, Net of Tax, as of March 31, 2018
|
$
|
(21,986
|
)
|
|
$
|
(2,879
|
)
|
|
$
|
(141,597
|
)
|
|
$
|
(572,687
|
)
|
|
$
|
(739,149
|
)
|
|
For the Three Months Ended
|
|
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
Statements of Operations
Classification
|
||||
|
(In thousands)
|
|
|
||||||
Derivative Instruments
|
|
||||||||
Gain (loss) on foreign currency forward exchange contracts
|
$
|
927
|
|
|
$
|
(4,383
|
)
|
|
Cost of sales
|
Tax effect of net gain (loss)
|
(168
|
)
|
|
(48
|
)
|
|
Provision for (benefit from) income taxes
|
||
|
$
|
759
|
|
|
$
|
(4,431
|
)
|
|
Net loss
|
Defined Benefit Pension Plans
|
|
|
|
|
|
||||
Amortization of prior service credit (a)
|
$
|
493
|
|
|
$
|
501
|
|
|
Other non-operating expense (income), net
|
Recognized actuarial loss (a)
|
(1,737
|
)
|
|
(2,317
|
)
|
|
Other non-operating expense (income), net
|
||
Settlement loss
|
—
|
|
|
(42
|
)
|
|
Other non-operating expense (income), net
|
||
|
(1,244
|
)
|
|
(1,858
|
)
|
|
|
||
Tax effect of net loss
|
(185
|
)
|
|
34
|
|
|
Provision for (benefit from) income taxes
|
||
|
$
|
(1,429
|
)
|
|
$
|
(1,824
|
)
|
|
Net loss
|
(a)
|
The amortization of prior service credit and recognized actuarial loss are included in the computation of net periodic benefit cost. Refer to "Note 16 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.
|
13.
|
Derivative Instruments
|
|
Derivative Assets
|
||||||||||||
|
Fair Value
|
|
Balance Sheet Classification
|
||||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
|
|||||||
|
(In thousands)
|
|
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
$
|
16,703
|
|
|
$
|
1,787
|
|
|
$
|
12,122
|
|
|
Prepaid expenses and other
current assets |
Foreign currency forward exchange contracts
|
3,041
|
|
|
390
|
|
|
1,613
|
|
|
Other noncurrent assets
|
|||
Total derivatives designated as hedging instruments
|
$
|
19,744
|
|
|
$
|
2,177
|
|
|
$
|
13,735
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
$
|
377
|
|
|
$
|
1,424
|
|
|
$
|
2,357
|
|
|
Prepaid expenses and other
current assets |
Total
|
$
|
20,121
|
|
|
$
|
3,601
|
|
|
$
|
16,092
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Derivative Liabilities
|
||||||||||||
|
Fair Value
|
|
Balance Sheet Classification
|
||||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
|
|||||||
|
(In thousands)
|
|
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
$
|
1,045
|
|
|
$
|
17,456
|
|
|
$
|
954
|
|
|
Accrued liabilities
|
Foreign currency forward exchange contracts
|
146
|
|
|
1,419
|
|
|
185
|
|
|
Other noncurrent liabilities
|
|||
Total derivatives designated as hedging instruments
|
$
|
1,191
|
|
|
$
|
18,875
|
|
|
$
|
1,139
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward exchange contracts
|
$
|
4,992
|
|
|
$
|
4,663
|
|
|
$
|
1,771
|
|
|
Accrued liabilities
|
Total
|
$
|
6,183
|
|
|
$
|
23,538
|
|
|
$
|
2,910
|
|
|
|
|
For the Three Months Ended
|
|
|
||||||||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
Statements of
Operations
Classification
|
||||||||||||
|
Amount of Gain Recognized in OCI
|
|
Amount of Gain Reclassified from Accumulated OCI to Statement of Operations
|
|
Amount of (Loss) Recognized in OCI
|
|
Amount of (Loss) Reclassified from Accumulated OCI to Statement of Operations
|
|
|||||||||
|
(In thousands)
|
|
|
||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
5,818
|
|
|
$
|
759
|
|
|
$
|
(5,319
|
)
|
|
$
|
(4,431
|
)
|
|
Cost of sales
|
|
Amount of (Loss) Gain Recognized in the Statements of Operations
|
|
Statements of Operations
Classification
|
||||||
|
For the Three Months Ended
|
|
|||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||
|
(In thousands)
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
(498
|
)
|
|
$
|
14,688
|
|
|
Other non-operating expense (income), net
|
14.
|
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, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
20,121
|
|
|
$
|
—
|
|
|
$
|
20,121
|
|
Available-for-sale security (b)
|
7,150
|
|
|
—
|
|
|
—
|
|
|
7,150
|
|
||||
Total assets
|
$
|
7,150
|
|
|
$
|
20,121
|
|
|
$
|
—
|
|
|
$
|
27,271
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
6,183
|
|
|
$
|
—
|
|
|
$
|
6,183
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
3,601
|
|
|
$
|
—
|
|
|
$
|
3,601
|
|
Available-for-sale security (b)
|
8,911
|
|
|
—
|
|
|
—
|
|
|
8,911
|
|
||||
Total assets
|
$
|
8,911
|
|
|
$
|
3,601
|
|
|
$
|
—
|
|
|
$
|
12,512
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
23,538
|
|
|
$
|
—
|
|
|
$
|
23,538
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
16,092
|
|
|
$
|
—
|
|
|
$
|
16,092
|
|
Available-for-sale security (b)
|
5,243
|
|
|
—
|
|
|
—
|
|
|
5,243
|
|
||||
Total assets
|
$
|
5,243
|
|
|
$
|
16,092
|
|
|
$
|
—
|
|
|
$
|
21,335
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts (a)
|
$
|
—
|
|
|
$
|
2,910
|
|
|
$
|
—
|
|
|
$
|
2,910
|
|
(a)
|
The fair value of the foreign currency forward exchange contracts is based on dealer quotes of market forward rates and reflects the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates.
|
(b)
|
The fair value of the available-for-sale security is based on the quoted price on an active public exchange.
|
15.
|
Earnings Per Share
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands, except per share amounts)
|
||||||
Basic:
|
|
|
|
||||
Net loss
|
$
|
(183,718
|
)
|
|
$
|
(311,253
|
)
|
Less: Net loss allocable to participating RSUs (a)
|
—
|
|
|
—
|
|
||
Net loss available for basic common shares
|
$
|
(183,718
|
)
|
|
$
|
(311,253
|
)
|
Weighted average common shares outstanding
|
345,852
|
|
|
344,434
|
|
||
Basic net loss per common share
|
$
|
(0.53
|
)
|
|
$
|
(0.90
|
)
|
Diluted:
|
|
|
|
||||
Net loss
|
$
|
(183,718
|
)
|
|
$
|
(311,253
|
)
|
Less: Net loss allocable to participating RSUs (a)
|
—
|
|
|
—
|
|
||
Net loss available for diluted common shares
|
$
|
(183,718
|
)
|
|
$
|
(311,253
|
)
|
Weighted average common shares outstanding
|
345,852
|
|
|
344,434
|
|
||
Weighted average common equivalent shares arising from:
|
|
|
|
||||
Dilutive stock options and non-participating RSUs (b)
|
—
|
|
|
—
|
|
||
Weighted average number of common and potential common shares
|
345,852
|
|
|
344,434
|
|
||
Diluted net loss per common share
|
$
|
(0.53
|
)
|
|
$
|
(0.90
|
)
|
(a)
|
Mattel did not have participating RSUs for the three months ended March 31, 2019. For the three months ended March 31, 2018, Mattel did not allocate its net loss to its participating RSUs as its participating RSUs were not obligated to share in the losses of the Company.
|
(b)
|
Mattel was in a net loss position for the three months ended March 31, 2019 and 2018, and, accordingly, all outstanding nonqualified stock options and non-participating RSUs were excluded from the calculation of diluted earnings per common share because their effect would be antidilutive.
|
16.
|
Employee Benefit Plans
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Service cost
|
$
|
956
|
|
|
$
|
1,084
|
|
Interest cost
|
4,840
|
|
|
4,642
|
|
||
Expected return on plan assets
|
(5,444
|
)
|
|
(5,674
|
)
|
||
Amortization of prior service cost
|
16
|
|
|
8
|
|
||
Recognized actuarial loss
|
1,833
|
|
|
2,397
|
|
||
Settlement loss
|
—
|
|
|
42
|
|
||
|
$
|
2,201
|
|
|
$
|
2,499
|
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Interest cost
|
$
|
50
|
|
|
$
|
52
|
|
Amortization of prior service credit
|
(509
|
)
|
|
(509
|
)
|
||
Recognized actuarial gain
|
(96
|
)
|
|
(80
|
)
|
||
|
$
|
(555
|
)
|
|
$
|
(537
|
)
|
17.
|
Share-Based Payments
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Stock option compensation expense
|
$
|
2,406
|
|
|
$
|
2,684
|
|
RSU compensation expense (a)
|
9,459
|
|
|
11,739
|
|
||
|
$
|
11,865
|
|
|
$
|
14,423
|
|
(a)
|
Includes compensation expense of $0.8 million associated with Mattel's long-term incentive programs for the three months ended March 31, 2019.
|
18.
|
Other Selling and Administrative Expenses
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Design and development
|
$
|
42,445
|
|
|
$
|
52,140
|
|
Identifiable intangible asset amortization
|
10,429
|
|
|
10,198
|
|
19.
|
Foreign Currency Transaction Exposure
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Operating (loss) income
|
$
|
(3,770
|
)
|
|
$
|
7,731
|
|
Other non-operating (expense) income, net
|
(1,668
|
)
|
|
587
|
|
||
Net transaction (losses) gains
|
$
|
(5,438
|
)
|
|
$
|
8,318
|
|
20.
|
Restructuring Charges
|
•
|
Reducing manufacturing complexity, including SKU reduction, and implementing process improvement initiatives at owned and co-manufacturing facilities;
|
•
|
Streamlining the organizational structure and reducing headcount expense to better align with the revenue base; and
|
•
|
Optimizing advertising spend.
|
|
Liability at December 31, 2018
|
|
Charges
|
|
Payments/Utilization
|
|
Liability at March 31, 2019
|
||||||||
|
(In thousands)
|
||||||||||||||
Severance
|
$
|
27,670
|
|
|
$
|
2,958
|
|
|
$
|
(12,673
|
)
|
|
$
|
17,955
|
|
Other restructuring costs (a)
|
13,722
|
|
|
5,773
|
|
|
(7,689
|
)
|
|
11,806
|
|
||||
|
$
|
41,392
|
|
|
$
|
8,731
|
|
|
$
|
(20,362
|
)
|
|
$
|
29,761
|
|
(a)
|
Consists primarily of consulting fees.
|
21.
|
Income Taxes
|
22.
|
Contingencies
|
23.
|
Segment Information
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Segment Loss
|
|
|
|
||||
North America (a)
|
$
|
(21,585
|
)
|
|
$
|
(106,750
|
)
|
International (a)
|
(24,303
|
)
|
|
(72,265
|
)
|
||
American Girl (a)
|
(14,254
|
)
|
|
(14,843
|
)
|
||
|
(60,142
|
)
|
|
(193,858
|
)
|
||
Corporate and other expense (b)
|
(70,817
|
)
|
|
(82,723
|
)
|
||
Operating loss
|
(130,959
|
)
|
|
(276,581
|
)
|
||
Interest expense
|
46,958
|
|
|
41,079
|
|
||
Interest (income)
|
(2,272
|
)
|
|
(3,147
|
)
|
||
Other non-operating expense (income), net
|
1,904
|
|
|
(608
|
)
|
||
Loss before income taxes
|
$
|
(177,549
|
)
|
|
$
|
(313,905
|
)
|
(a)
|
Segment loss for the three months ended March 31, 2019 included a $27.3 million charge attributable to the Rock 'n Play product recall, all of which was recorded in the North America segment. For additional information, see "Note 25 to the Consolidated Financial Statements—Subsequent Event." Segment loss for the three months ended March 31, 2018 included $86.8 million of net sales reversal and bad debt expense attributable to the Toys "R" Us liquidation. Of the $86.8 million of charges recognized for the three months ended March 31, 2018, $71.6 million, $12.1 million, and $3.1 million was recorded in the North America, International, and American Girl segments, respectively.
|
(b)
|
Corporate and other expense included severance and restructuring expenses of $8.7 million and $24.9 million for the three months ended March 31, 2019 and 2018, respectively, and share-based compensation expense of $11.9 million and $14.4 million for the three months ended March 31, 2019 and 2018, respectively.
|
|
March 31,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
||||||
|
(In thousands)
|
||||||||||
Assets by Segment
|
|
|
|
|
|
||||||
North America
|
$
|
520,812
|
|
|
$
|
523,535
|
|
|
$
|
615,654
|
|
International
|
569,214
|
|
|
620,718
|
|
|
728,870
|
|
|||
American Girl
|
39,998
|
|
|
94,592
|
|
|
43,748
|
|
|||
|
1,130,024
|
|
|
1,238,845
|
|
|
1,388,272
|
|
|||
Corporate and other
|
110,281
|
|
|
115,006
|
|
|
124,700
|
|
|||
Accounts receivable and inventories, net
|
$
|
1,240,305
|
|
|
$
|
1,353,851
|
|
|
$
|
1,512,972
|
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Worldwide Revenues by Categories (a)
|
|
|
|
||||
Dolls
|
$
|
252,886
|
|
|
$
|
257,357
|
|
Infant/Toddler/Preschool
|
193,626
|
|
|
226,646
|
|
||
Vehicles
|
183,361
|
|
|
188,933
|
|
||
Action Figures/Building Sets/Games
|
150,253
|
|
|
127,075
|
|
||
Gross sales
|
780,126
|
|
|
800,011
|
|
||
Sales adjustments
|
(90,880
|
)
|
|
(91,639
|
)
|
||
Net sales
|
$
|
689,246
|
|
|
$
|
708,372
|
|
(a)
|
Mattel modified its reporting structure for revenues in the first quarter of 2019 to disclose revenues by categories.
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Worldwide Revenues by Top 3 Power Brands
|
|
|
|
||||
Barbie
|
$
|
163,478
|
|
|
$
|
152,691
|
|
Hot Wheels
|
150,536
|
|
|
144,940
|
|
||
Fisher-Price and Thomas & Friends
|
172,398
|
|
|
187,795
|
|
||
Other
|
293,714
|
|
|
314,585
|
|
||
Gross sales
|
780,126
|
|
|
800,011
|
|
||
Sales adjustments
|
(90,880
|
)
|
|
(91,639
|
)
|
||
Net sales
|
$
|
689,246
|
|
|
$
|
708,372
|
|
|
For the Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
|
(In thousands)
|
||||||
Revenues
|
|
|
|
||||
North America
|
$
|
414,948
|
|
|
$
|
415,877
|
|
International (a)
|
|
|
|
||||
EMEA
|
216,349
|
|
|
229,544
|
|
||
Latin America
|
75,250
|
|
|
74,468
|
|
||
Asia Pacific
|
73,579
|
|
|
80,122
|
|
||
Total International
|
365,178
|
|
|
384,134
|
|
||
Gross sales
|
780,126
|
|
|
800,011
|
|
||
Sales adjustments
|
(90,880
|
)
|
|
(91,639
|
)
|
||
Net sales
|
$
|
689,246
|
|
|
$
|
708,372
|
|
(a)
|
Mattel reorganized its regional sales reporting structure in the first quarter of 2019. As a result, the new regions are Europe, the Middle East, and Africa ("EMEA"), Latin America, and Asia Pacific. The Middle East, Africa, Russia, and Turkey were previously included in the Asia Pacific region (previously Global Emerging Markets) and are now included in EMEA (previously Europe). Prior period amounts have been reclassified to conform to the current period presentation.
|
24.
|
New Accounting Pronouncements
|
25.
|
Subsequent Event
|
•
|
In the short- to mid-term, restore profitability by reshaping operations and regain topline growth by growing Mattel's Power Brands (Barbie, Hot Wheels, Fisher-Price and Thomas & Friends, and American Girl) and expanding Mattel's brand portfolio.
|
•
|
In the mid- to long-term, capture the full value of Mattel's IP through franchise management and the development of Mattel's online retail and e-commerce capabilities.
|
|
For the Three Months Ended
|
|
Year/Year Change
|
||||||||||||||||
March 31, 2019
|
|
March 31, 2018
|
|
||||||||||||||||
Amount
|
|
% of Net
Sales |
|
Amount
|
|
% of Net
Sales |
|
%
|
|
Basis Points
of Net Sales |
|||||||||
|
(In millions, except percentage and basis point information)
|
||||||||||||||||||
Net sales
|
$
|
689.2
|
|
|
100.0
|
%
|
|
$
|
708.4
|
|
|
100.0
|
%
|
|
-3
|
%
|
|
—
|
|
Gross profit
|
$
|
239.8
|
|
|
34.8
|
%
|
|
$
|
218.9
|
|
|
30.9
|
%
|
|
10
|
%
|
|
390
|
|
Advertising and promotion expenses
|
69.5
|
|
|
10.1
|
%
|
|
70.8
|
|
|
10.0
|
%
|
|
-2
|
%
|
|
10
|
|
||
Other selling and administrative expenses
|
301.3
|
|
|
43.7
|
%
|
|
424.6
|
|
|
59.9
|
%
|
|
-29
|
%
|
|
-1,620
|
|
||
Operating loss
|
(131.0
|
)
|
|
-19.0
|
%
|
|
(276.6
|
)
|
|
-39.0
|
%
|
|
-53
|
%
|
|
2,000
|
|
||
Interest expense
|
47.0
|
|
|
6.8
|
%
|
|
41.1
|
|
|
5.8
|
%
|
|
14
|
%
|
|
100
|
|
||
Interest (income)
|
(2.3
|
)
|
|
-0.3
|
%
|
|
(3.1
|
)
|
|
-0.4
|
%
|
|
-28
|
%
|
|
10
|
|
||
Other non-operating expense (income), net
|
1.9
|
|
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
||||||
Loss before income taxes
|
$
|
(177.5
|
)
|
|
-25.8
|
%
|
|
$
|
(313.9
|
)
|
|
-44.3
|
%
|
|
-43
|
%
|
|
1,850
|
|
|
For the Three Months Ended
|
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Revenues by Categories (a)
|
|
|
|
|
|
|
|
||||||
Dolls
|
$
|
252.9
|
|
|
$
|
257.4
|
|
|
-2
|
%
|
|
-5
|
%
|
Infant/Toddler/Preschool
|
193.6
|
|
|
226.6
|
|
|
-15
|
%
|
|
-4
|
%
|
||
Vehicles
|
183.4
|
|
|
188.9
|
|
|
-3
|
%
|
|
-5
|
%
|
||
Action Figures/Building Sets/Games
|
150.3
|
|
|
127.1
|
|
|
18
|
%
|
|
-4
|
%
|
||
Gross Sales
|
$
|
780.1
|
|
|
$
|
800.0
|
|
|
-2
|
%
|
|
-4
|
%
|
Sales Adjustments
|
(90.9
|
)
|
|
(91.6
|
)
|
|
|
|
|
||||
Net Sales
|
$
|
689.2
|
|
|
$
|
708.4
|
|
|
-3
|
%
|
|
-4
|
%
|
|
|
|
|
|
|
|
|
||||||
Supplemental Revenue Disclosure:
|
|
|
|
|
|
|
|
||||||
Revenues by Top 3 Power Brands
|
|
|
|
|
|
|
|
||||||
Barbie
|
$
|
163.5
|
|
|
$
|
152.7
|
|
|
7
|
%
|
|
-6
|
%
|
Hot Wheels
|
150.5
|
|
|
144.9
|
|
|
4
|
%
|
|
-5
|
%
|
||
Fisher-Price and Thomas & Friends
|
172.4
|
|
|
187.8
|
|
|
-8
|
%
|
|
-3
|
%
|
||
Other
|
293.7
|
|
|
314.6
|
|
|
-7
|
%
|
|
-4
|
%
|
||
Gross Sales
|
$
|
780.1
|
|
|
$
|
800.0
|
|
|
-2
|
%
|
|
-4
|
%
|
|
For the Three Months Ended
|
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Revenues by Categories (a)
|
|
|
|
|
|
|
|
||||||
Dolls
|
$
|
80.3
|
|
|
$
|
69.3
|
|
|
16
|
%
|
|
—
|
%
|
Infant/Toddler/Preschool
|
108.0
|
|
|
118.8
|
|
|
-9
|
%
|
|
—
|
%
|
||
Vehicles
|
85.0
|
|
|
83.2
|
|
|
2
|
%
|
|
—
|
%
|
||
Action Figures/Building Sets/Games
|
96.2
|
|
|
77.2
|
|
|
25
|
%
|
|
—
|
%
|
||
Gross Sales
|
$
|
369.4
|
|
|
$
|
348.4
|
|
|
6
|
%
|
|
—
|
%
|
Sales Adjustments
|
(28.0
|
)
|
|
(22.2
|
)
|
|
|
|
|
||||
Net Sales
|
$
|
341.4
|
|
|
$
|
326.2
|
|
|
5
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
||||||
Supplemental Revenue Disclosure:
|
|
|
|
|
|
|
|
||||||
Revenues by Top 3 Power Brands
|
|
|
|
|
|
|
|
||||||
Barbie
|
$
|
69.3
|
|
|
$
|
60.5
|
|
|
15
|
%
|
|
—
|
%
|
Hot Wheels
|
67.1
|
|
|
63.5
|
|
|
6
|
%
|
|
—
|
%
|
||
Fisher-Price and Thomas & Friends
|
96.6
|
|
|
99.8
|
|
|
-3
|
%
|
|
—
|
%
|
||
Other
|
136.5
|
|
|
124.6
|
|
|
10
|
%
|
|
—
|
%
|
||
Gross Sales
|
$
|
369.4
|
|
|
$
|
348.4
|
|
|
6
|
%
|
|
—
|
%
|
|
% Change in Net Sales as Reported
|
|
Currency Exchange Rate Impact
|
||
Total International Segment (a)
|
-4
|
%
|
|
-8
|
%
|
EMEA
|
-6
|
%
|
|
-10
|
%
|
Latin America
|
2
|
%
|
|
-7
|
%
|
Asia Pacific
|
-5
|
%
|
|
-5
|
%
|
|
% Change in Gross Sales as Reported
|
|
Currency Exchange Rate Impact
|
||
Total International Segment (a)
|
-5
|
%
|
|
-9
|
%
|
EMEA
|
-6
|
%
|
|
-10
|
%
|
Latin America
|
1
|
%
|
|
-8
|
%
|
Asia Pacific
|
-8
|
%
|
|
-5
|
%
|
(a)
|
Mattel reorganized its regional sales reporting structure in the first quarter of 2019. As a result, the new regions are Europe, the Middle East, and Africa ("EMEA"), Latin America, and Asia Pacific. The Middle East, Africa, Russia, and Turkey were previously included in the Asia Pacific region (previously Global Emerging Markets) and are now included in EMEA (previously Europe). Prior period amounts have been reclassified to conform to the current period presentation. Refer to "Note 23 to the Consolidated Financial Statements - Segment Information" of this Quarterly Report on Form 10-Q for additional information.
|
|
For the Three Months Ended
|
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Revenues by Categories (a)
|
|
|
|
|
|
|
|
||||||
Dolls
|
$
|
127.1
|
|
|
$
|
120.7
|
|
|
5
|
%
|
|
-11
|
%
|
Infant/Toddler/Preschool
|
85.6
|
|
|
107.9
|
|
|
-21
|
%
|
|
-7
|
%
|
||
Vehicles
|
98.4
|
|
|
105.8
|
|
|
-7
|
%
|
|
-9
|
%
|
||
Action Figures/Building Sets/Games
|
54.1
|
|
|
49.8
|
|
|
9
|
%
|
|
-8
|
%
|
||
Gross Sales
|
$
|
365.2
|
|
|
$
|
384.1
|
|
|
-5
|
%
|
|
-9
|
%
|
Sales Adjustments
|
(61.8
|
)
|
|
(66.9
|
)
|
|
|
|
|
||||
Net Sales
|
$
|
303.4
|
|
|
$
|
317.2
|
|
|
-4
|
%
|
|
-8
|
%
|
|
|
|
|
|
|
|
|
||||||
Supplemental Revenue Disclosure:
|
|
|
|
|
|
|
|
||||||
Revenues by Top 3 Power Brands
|
|
|
|
|
|
|
|
||||||
Barbie
|
$
|
94.2
|
|
|
$
|
92.2
|
|
|
2
|
%
|
|
-10
|
%
|
Hot Wheels
|
83.5
|
|
|
81.5
|
|
|
2
|
%
|
|
-10
|
%
|
||
Fisher-Price and Thomas & Friends
|
75.8
|
|
|
88.0
|
|
|
-14
|
%
|
|
-7
|
%
|
||
Other
|
111.7
|
|
|
122.5
|
|
|
-9
|
%
|
|
-8
|
%
|
||
Gross Sales
|
$
|
365.2
|
|
|
$
|
384.1
|
|
|
-5
|
%
|
|
-9
|
%
|
|
For the Three Months Ended
|
|
% Change as
Reported |
|
Currency
Exchange Rate Impact |
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
American Girl Segment:
|
|
|
|
|
|
|
|
||||||
Total Gross Sales
|
$
|
45.6
|
|
|
$
|
67.5
|
|
|
-32
|
%
|
|
—
|
%
|
Sales Adjustments
|
(1.1
|
)
|
|
(2.5
|
)
|
|
|
|
|
||||
Total Net Sales
|
$
|
44.4
|
|
|
$
|
65.0
|
|
|
-32
|
%
|
|
-1
|
%
|
•
|
Reducing manufacturing complexity, including SKU reduction, and implementing process improvement initiatives at owned and co-manufacturing facilities;
|
•
|
Streamlining the organizational structure and reducing headcount expense to better align with the revenue base; and
|
•
|
Optimizing advertising spend.
|
|
March 31, 2019
|
|
March 31, 2018
|
|
December 31, 2018
|
|||||||||||||||
|
(In millions, except percentage information)
|
|||||||||||||||||||
Cash and equivalents
|
$
|
380.1
|
|
|
|
|
|
$
|
526.7
|
|
|
|
|
|
$
|
594.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term borrowings
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4.2
|
|
|
—
|
%
|
|||
2010 Senior Notes due October 2020 and October 2040
|
500.0
|
|
|
15
|
|
|
500.0
|
|
|
13
|
|
|
500.0
|
|
|
14
|
|
|||
2011 Senior Notes due November 2041
|
300.0
|
|
|
9
|
|
|
300.0
|
|
|
8
|
|
|
300.0
|
|
|
8
|
|
|||
2013 Senior Notes due March 2023
|
250.0
|
|
|
6
|
|
|
250.0
|
|
|
6
|
|
|
250.0
|
|
|
7
|
|
|||
2014 Senior Notes due May 2019
|
—
|
|
|
—
|
|
|
500.0
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|||
2016 Senior Notes due August 2021
|
350.0
|
|
|
10
|
|
|
350.0
|
|
|
9
|
|
|
350.0
|
|
|
10
|
|
|||
2017/2018 Senior Notes due December 2025
|
1,500.0
|
|
|
45
|
|
|
1,000.0
|
|
|
26
|
|
|
1,500.0
|
|
|
42
|
|
|||
Debt issuance costs and debt discount
|
(46.5
|
)
|
|
—
|
|
|
(28.2
|
)
|
|
—
|
|
|
(48.3
|
)
|
|
—
|
|
|||
Total debt
|
2,853.5
|
|
|
85
|
|
|
2,871.8
|
|
|
75
|
|
|
2,855.9
|
|
|
81
|
|
|||
Stockholders’ equity
|
518.5
|
|
|
15
|
|
|
982.5
|
|
|
25
|
|
|
669.5
|
|
|
19
|
|
|||
Total capitalization (debt plus equity)
|
$
|
3,372.0
|
|
|
100
|
%
|
|
$
|
3,854.3
|
|
|
100
|
%
|
|
$
|
3,525.4
|
|
|
100
|
%
|
|
For the Three Months Ended
|
|
% Change as Reported
|
|
Currency Exchange Rate Impact
|
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Net sales
|
$
|
689.2
|
|
|
$
|
708.4
|
|
|
-3
|
%
|
|
-4
|
%
|
Sales adjustments
|
90.9
|
|
|
91.6
|
|
|
|
|
|
||||
Gross sales
|
$
|
780.1
|
|
|
$
|
800.0
|
|
|
-2
|
%
|
|
-4
|
%
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change as Reported
|
|
Currency Exchange Rate Impact
|
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Net sales
|
$
|
341.4
|
|
|
$
|
326.2
|
|
|
5
|
%
|
|
—
|
%
|
Sales adjustments
|
28.0
|
|
|
22.2
|
|
|
|
|
|
||||
Gross sales
|
$
|
369.4
|
|
|
$
|
348.4
|
|
|
6
|
%
|
|
—
|
%
|
|
For the Three Months Ended
|
|
% Change as Reported
|
|
Currency Exchange Rate Impact
|
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Net sales
|
$
|
303.4
|
|
|
$
|
317.2
|
|
|
-4
|
%
|
|
-8
|
%
|
Sales adjustments
|
61.8
|
|
|
66.9
|
|
|
|
|
|
||||
Gross sales
|
$
|
365.2
|
|
|
$
|
384.1
|
|
|
-5
|
%
|
|
-9
|
%
|
|
For the Three Months Ended
|
|
% Change as Reported
|
|
Currency Exchange Rate Impact
|
||||||||
|
March 31,
2019 |
|
March 31,
2018 |
|
|||||||||
|
(In millions, except percentage information)
|
||||||||||||
Net sales
|
$
|
44.4
|
|
|
$
|
65.0
|
|
|
-32
|
%
|
|
-1
|
%
|
Sales adjustments
|
1.1
|
|
|
2.5
|
|
|
|
|
|
||||
Gross sales
|
$
|
45.6
|
|
|
$
|
67.5
|
|
|
-32
|
%
|
|
—
|
%
|
Period
|
Total Number of
Shares (or Units)
Purchased (a)
|
|
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 (b)
|
||||||
Jan 1—31
|
16,944
|
|
|
$
|
11.84
|
|
|
—
|
|
|
$
|
203,016,273
|
|
Feb 1—28
|
10,722
|
|
|
14.42
|
|
|
—
|
|
|
203,016,273
|
|
||
March 1—31
|
2,311
|
|
|
13.00
|
|
|
—
|
|
|
203,016,273
|
|
||
Total
|
29,977
|
|
|
$
|
12.85
|
|
|
—
|
|
|
$
|
203,016,273
|
|
(a)
|
The total number of shares purchased relates to 29,977 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.
|
(b)
|
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, 2019, 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
|
|
Restated Certificate of Incorporation of Mattel, Inc.
|
|
8-K
|
|
001-05647
|
|
99.0
|
|
May 21, 2007
|
|
|
Amended and Restated Bylaws of Mattel, Inc.
|
|
8-K
|
|
001-05647
|
|
3.1
|
|
August 28, 2018
|
|
|
Specimen Stock Certificate with respect to Mattel, Inc.
|
|
10-Q
|
|
001-05647
|
|
4.0
|
|
August 3, 2007
|
|
|
Letter Agreement between Mattel, Inc. and Yoon Hugh, dated April 15, 2019, regarding an offer of employment for the position of SVP and Corporate Controller
|
|
8-K
|
|
001-05647
|
|
10.1
|
|
April 19, 2019
|
|
31.0*
|
|
Certification of Principal Executive Officer dated April 25, 2019 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
31.1*
|
|
Certification of Principal Financial Officer dated April 25, 2019 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
32.0**
|
|
Certifications of Principal Executive Officer and Principal Financial Officer dated April 25, 2019 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/ Joseph J. Euteneuer
|
|
|
|
Joseph J. Euteneuer
Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
|
|
Date:
|
April 25, 2019
|
|
|
By:
|
|
/s/ Ynon Kreiz
|
|
|
|
|
|
|
Ynon Kreiz
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
Date:
|
April 25, 2019
|
|
|
By:
|
|
/s/ Joseph J. Euteneuer
|
|
|
|
|
|
|
Joseph J. Euteneuer
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 25, 2019
|
|
|
By:
|
|
/s/ Ynon Kreiz
|
|
|
|
|
|
|
Ynon Kreiz
|
|
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|||
|
|
|
|
|
|
/s/ Joseph J. Euteneuer
|
|
|
|
|
|
|
Joseph J. Euteneuer
|
|
|
|
|
|
|
Chief Financial Officer
|