Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive Income (Loss)

The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) for each period:


	For the Three Months Ended September 30, 2022
	Derivative Instruments		Available-for-Sale Securities		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2022	$	33,330	$	—	$	(151,388)	$	(795,090)	$	(913,148)
Other comprehensive income (loss) before reclassifications	24,715		—		63		(72,643)		(47,865)
Amounts reclassified from accumulated other comprehensive loss	(11,312)		—		1,291		—		(10,021)
Net increase (decrease) in other comprehensive income	13,403		—		1,354		(72,643)		(57,886)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022	$	46,733	$	—	$	(150,034)	$	(867,733)	$	(971,034)


	For the Nine Months Ended September 30, 2022
	Derivative Instruments		Available-for-Sale Securities		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2021	$	8,796	$	(6,447)	$	(154,099)	$	(789,521)	$	(941,271)
Other comprehensive income (loss) before reclassifications	58,604		—		(35)		(78,212)		(19,643)
Amounts reclassified from accumulated other comprehensive loss	(20,667)		3,646		4,100		—		(12,921)
Net increase (decrease) in other comprehensive income	37,937		3,646		4,065		(78,212)		(32,564)
Adjustment of accumulated other comprehensive loss to retained earnings	—		2,801		—		—		2,801
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2022	$	46,733	$	—	$	(150,034)	$	(867,733)	$	(971,034)


	For the Three Months Ended September 30, 2021
	Derivative Instruments		Available-for-Sale Securities		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Loss, Net of Tax, as of June 30, 2021	$	(6,709)	$	(4,290)	$	(182,285)	$	(742,032)	$	(935,316)
Other comprehensive income (loss) before reclassifications	13,900		(1,320)		56		(29,316)		(16,680)
Amounts reclassified from accumulated other comprehensive loss	(2,223)		—		3,568		—		1,345
Net increase (decrease) in other comprehensive income	11,677		(1,320)		3,624		(29,316)		(15,335)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021	$	4,968	$	(5,610)	$	(178,661)	$	(771,348)	$	(950,651)


	For the Nine Months Ended September 30, 2021
	Derivative Instruments		Available-for-Sale Securities		Employee Benefit Plans		Currency Translation Adjustments		Total
	(In thousands)
Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2020	$	(15,369)	$	(7,522)	$	(186,854)	$	(734,831)	$	(944,576)
Other comprehensive income (loss) before reclassifications	23,230		1,912		(203)		(36,517)		(11,578)
Amounts reclassified from accumulated other comprehensive loss	(2,893)		—		8,396		—		5,503
Net increase (decrease) in other comprehensive income	20,337		1,912		8,193		(36,517)		(6,075)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2021	$	4,968	$	(5,610)	$	(178,661)	$	(771,348)	$	(950,651)

The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations:


	For the Three Months Ended
	September 30, 2022		September 30, 2021		Statements of Operations Classification
	(In thousands)
Derivative Instruments
Gain on foreign currency forward exchange and other contracts	$	11,292	$	2,322	Cost of sales
Tax effect	20		(99)		Provision (Benefit) for income taxes
	$	11,312	$	2,223	Net income
Employee Benefit Plans
Amortization of prior service credit (a)	$	504	$	455	Other non-operating (income) expense, net
Recognized actuarial loss (a)	(2,108)		(2,830)		Other non-operating (income) expense, net
Settlement loss (a)	—		(3,375)		Other non-operating (income) expense, net
	$	(1,604)	$	(5,750)
Tax effect	313		2,182		Provision (Benefit) for income taxes
	$	(1,291)	$	(3,568)	Net income

(a)The amortization of prior service credit, recognized actuarial loss, and settlement loss are included in the computation of net periodic benefit cost. Refer to "Note 15 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost.


	For the Nine Months Ended
	September 30, 2022		September 30, 2021		Statements of Operations Classification
	(In thousands)
Derivative Instruments
Gain on foreign currency forward exchange and other contracts	$	20,764	$	3,191	Cost of sales
Tax effect	(97)		(298)		Provision (Benefit) for income taxes
	$	20,667	$	2,893	Net Income
Employee Benefit Plans
Amortization of prior service credit (a)	$	1,409	$	1,253	Other non-operating (income) expense, net
Recognized actuarial loss (a)	(6,649)		(8,394)		Other non-operating (income) expense, net
Settlement loss (a)	—		(3,375)		Other non-operating (income) expense, net
	(5,240)		(10,516)
Tax effect	1,140		2,120		Provision (Benefit) for income taxes
	$	(4,100)	$	(8,396)	Net Income

During the three months ended March 31, 2022, Mattel adjusted accumulated other comprehensive loss by $6.4 million in relation to previously recorded available-for-sale equity securities. This amount was adjusted in order to account for such securities in a manner consistent with ASC 321, Investments—Equity Securities. The adjustment includes $3.6 million of accumulated other comprehensive loss reclassified to other non-operating expense (income) in the statement of operations and $2.8 million reclassified to retained earnings in the statement of stockholders' equity. The adjustment, including tax effect, was immaterial to the financial statements.

Currency Translation Adjustments

Mattel's reporting currency is the U.S. dollar. The translation of its net investments in subsidiaries with non-U.S. dollar functional currencies subjects Mattel to the impact of foreign currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at fiscal period-end exchange rates. Income and expense items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Currency translation adjustments resulted in a net loss of $78.2 million for the nine months ended September 30, 2022, primarily due to the weakening of the British pound sterling and Euro against the U.S. dollar, offset by the strengthening of the Russian ruble against the U.S. dollar. Currency translation adjustments resulted in a net loss of $36.5 million for the nine months ended September 30, 2021, primarily due to the weakening of the Mexican peso, Chilean peso, Turkish lira, British pound sterling, and Euro against the U.S. dollar.